Nov. 28? 1980 Maricetihs News Page 5 Brand awareness ... · PDF fileL r. Nov. 28? 1980...
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L r. Nov. 28? 1980 Maricetihs News Page 5 Brand awareness increiases market share, profits: study PROGRAMS THAT BUILD and maintain brand awareness increase market share and profit levels, accord- ing to a recent study by the Strategic Planning Institute (SPI), a not-for- profit research organization based in Cambridge, Mass. While the impact, of market share on profitability (as measured by pre- tax return on investment) has ldng^ been identified (see Exhibit 1), SPI said its research provides evidence that brand awareness is the "critical first link in the chain." "Aggressive" marketing and adver- tising, the SPI said, are the key factors— Engineer. Plastics World arid Profes- 1973-1978 data from firms participat- ing in the Profit Impact of Marketing Strategy (PIMS) program, which is operated by SPI and contains the stra.- tegic experiences of 2,(X)0 separate business units managed by the 250 member companies. The brand awareness link in the study wasi)rovid^ by^ahners Pub- lishing Co., Boston, publisher of 31 specialized business magazines and directories. Cahners regularly surveys its readers to determine brand prefer- ence levels. Data was collected from readers of Design News, Specifying in increasing brand awareness and ih converting awareness to market share. Results from the 73 businesses evaluated in the study show that the more spent on adyertisiog and pro- motion as a percent of sales, the more the increase in brand awareness levels. Brand awareness, as it relates to profits and share, has been dismissed by some companies as a measure dreamed up by their ad agencies, 2il- Jhough many marketers havl sup- ported the'theory based on their expe- rience and intuition. "Marketers and advertisers can now heave a collective sijgh of relief," said SPI executive Sidney Schoeffler. "The programs that increase brand awareness and the programs that convert it into market share should be a hiajor concern of senior manage- ment." RESEARCH' WAS BASED on sional Builder magazines. "The overall effect of the study un- derlies a belief and working philos- ophy already followed and accepted by most top corporate managements, marketers, and advertisers," said'J. Allan Sheehan, president of Cahners, which coordinated! and sponsored the research. ' — "Now we have empirical proof that these people have been right aU along in using advertising and other market- ing strategies^, to. increase brand awareness, which in turn can be con- verted into market sbare apd ultimate- ly into increased return on invest- ment." A major feature of the study is the flow chart (see Exhibit 2) which out- lines the sequence of events that oc- curs in using ^rand awareness to in- crease pro|lts. . - • How Brand Awareness aids Proffitdbility The Sequence of Events Exhibn2 Previous Level ot Brand Awareness Changes in Brand Awareness Current Levei dt Brand Awareness • • I Bfand tuvarencss cJecfeases by tf>e rtBfmat P'ocess and increases by I n I dotnq ^n abovr p«r vd'uTie ot E «penaiiu'es Sates Conversion Rate ot Brand Awareness into Market Share e c<yivers«>n rate t Level ot Achieved Market Share which stnsngly I influences I ROIor Protitabilitv q recently successKj! m conwefii Feb. 9-11 In Oriando, Fla. —-^-. AMA's Conference Oil BUT BRAND AWARENESS can "decay" unless stimulated by above- average spending on advertising, marketing, and promotion, the'study warns. "Highly visible market leaders cannot feel complacent and rest on their coiporate laurels or their compe- ^ion will ^ i n in awareness • and market share," Sheehan explains. The next step on the chart, he said, is the most critical in increasiog profits—the conversion of brand awareness into market share (see Ex- hibit 3). ^<!^3(ir study shows that undifferen- tiated or 'me too' suppliers have the most difficulty in converting aware- ness to market share, and generally in competing profitably," said Schoeff- ler. "Besides^ increasing competitive levels of awareness, it pays to establish a clear product or capability unique- Marketing featar)R practitioner, educator perspectives Neil Beckwith THE AMA s SPECIAL Conference "oilServices Marketing,^eb. 9-11,Or- lando, Fla., will feature a diversified program of practitioner and educator perspectives, according to cochair- men Jim Donnelly, University of Kentucky, and Bill George, Rutgers University. When attendees gather for the con- ference's first general session on Monday morning, Feb. 9, they'll hear a debate on "The Validity of a Se'p- arate Approach for Services Market-\ •. r» ..^i ing," by Ben M. Enis, University of James H. Donnelly Missouri, and Christopher Loveli Harvard University. At another general session on Feb. 11, Neil Beck with, chief marketing of- ficer, ARA Services, and Robert Cat- lin, senior vice president, NW Ayer ABH International, will discuss "Practitioners' Perspectives on Ser- vices Marketing." And at4hc day luncheon, Robert M. Krughoff, president, Washington Center for the Study of Services, will speak on "Eval- uating Services." Workshops and-panel discussions will cover a variety of topies such as bank marketing, marketing implica- tions of deregulation, public relations in services marketing, middlemen strategies in nonprofit organizations, teaching nonprofit marketing, and in- ternational perspectives on services marketing. TWO OF THE SPEAKERS for' the International panel will be Chris- tian Gronroos, Swedish School of Economics and Business Administra- tion, and Barbara R. Lewis, Universi" ty of Manchester Institute of Science and Technology. The sessions on the marketing of professional services also will provide many interesting viewpoints, accord- ing to track chairperson Paul N. Bloom, Marketing Science Institute and University of Maryland. Among the presenters at these sessions will be individuals who have considerable experience in consulting to profes- sional orgahizations, he said. A session titled "Evaluating the Marketing of Professional Services" will describe how American society has bee.n affected by the increased use of marketing by professionals, Bloom said. Another session, "Strategies for Marketing' Professional Services, William R. George Christopher Lovelocic Robert Catiin IMIchaei Rothschild ^^ architects, and other profes- sionals ofthe real world," Bloom said. ' papers covering heahh care, educa- tion and arts, and theoretical aspects of marketing aqross nonbusiness areas will be featured in the Public Sector/Nonprofit Services tract, ac- cording to track chairman Michael L. Rothschild, University of Wisconsin. The Commercial Services Track has sessions ranging from concept to empirical resear(;h on-flnancial ser- vices, restaurants, catalogue shoppers, equipment leasing, and organization- al structure in service firms, said track chairman Lynn Shostack, Citibank, Key commercial service sessions, he said, relate to the benefits and limits of traditional goods-oriented tech- niques/concepts^ -and the develop- ment of the marketing discipline in financial services firms. THE SERVICES THEORY track, chaired, by Christopher Lovelock,* Harvard University,-xontaias a variety of coqapetitive papers. An "Environment of Services Mar- keting" session includes a look at the Federal Trade Commission's regula- tion of services and services' role in stagflation. Another session, "Consumer Be- havior in Evaluating and Selecting Services," includes an analysis of ser- vices advertising and the hierarchy ef- fect, as. well as a consumption/ evalua- tion process model for services. "Managing^the Marketing Func- tion in Service Firms" is a session that will consider organizational issues and the communications component of the services marketing mix. In the "Conceptualizing the Goods vs. Ser- vice Dichotomy" session, classifica- tion issues and-human capital theory will be discussed. An optional tour of Disney World will be offered on Tuesday afternoon, Donnelly said. For more information, see the Conference Calendar in this issue. _ ^ Wocniiting will feature papers that touch on var- ious strate^c approaches that profes- sionals can use to improve their mar- keting programs, he said. The final session, "The Practition- ers Speak on the N^rketingof Profes- sional Services," will include papers by full-time practitioners. "It will give conference pactici pants a Teenng ot how 'classcoem^artceting is working ioFdoctors, lawyer^, derttists, accoun- CAREER 6UIDANCE-MANACSEMENT SELECTION . specialists for marifeting peofiie with co|if^ degrees. aiRl other advancof or tedmicandegrees iiltis some practice business experience. RRYANT & RAKiWELL V John Hancock' Suite 1532, 875 N. Michigan Chicago, liiinois 00011 Write or call 312/649-0700 (a) having available ot production capacity and (b) .id>(eriisinq and oiher exhibit 1 Relatidnjship between market share and pretax ROI ROI 30% 20 10 0 Under 10% 10-20°b 20-30 So ' - 30-40 "b Q\iex 40% Market Shar* Market Share (%) 60 ExhibH3 O " » .---20 Awareness (%) . Question - asker, or interviewer? . what a difference! Every feasible measure of quality control is built into an NFO telephone survey. Our intervie^wers are permaneTit and take corporate pride in their work. Training is intense and continuous. Briefings and — rehearsal-are thorough. Performance and production stahdards are strict a n d ^ e constantly monitored and reviewed. Editors go over every completed questionnaire before it is released from the ..i department. The result is a staff of experienced and confident -interviewers (over 150 of them) who know how to maintain rapport and stilj keep an interview on track without rudeness; how to keep a respondent interested to the end of the interview; how to work around switchboard operators and secretaries to reach industrial respondents. In an NFO telephone survey the most critical element is assured — professional executjon^all us at I419)J666-8800, A NAtioNAL EAM!LY OPINION,
Transcript of Nov. 28? 1980 Maricetihs News Page 5 Brand awareness ... · PDF fileL r. Nov. 28? 1980...
Lr.
Nov. 28? 1980 Maricetihs News Page 5
Brand awareness increiases market share, profits: studyPROGRAMS THAT BUILD andmaintain brand awareness increasemarket share and profit levels, accord-ing to a recent study by the StrategicPlanning Institute (SPI), a not-for-profit research organization based inCambridge, Mass.
While the impact, of market shareon profitability (as measured by pre-tax return on investment) has ldng^been identified (see Exhibit 1), SPIsaid its research provides evidencethat brand awareness is the "criticalfirst link in the chain."
"Aggressive" marketing and adver-tising, the SPI said, are the key factors— Engineer. Plastics World arid Profes-
1973-1978 data from firms participat-ing in the Profit Impact of MarketingStrategy (PIMS) program, which isoperated by SPI and contains the stra.-tegic experiences of 2,(X)0 separatebusiness units managed by the 250member companies.
The brand awareness link in thestudy wasi)rovid^ by^ahners Pub-lishing Co., Boston, publisher of 31specialized business magazines anddirectories. Cahners regularly surveysits readers to determine brand prefer-ence levels. Data was collected fromreaders of Design News, Specifying
in increasing brand awareness and ihconverting awareness to marketshare. Results from the 73 businessesevaluated in the study show that themore spent on adyertisiog and pro-motion as a percent of sales, the morethe increase in brand awareness levels.
Brand awareness, as it relates toprofits and share, has been dismissedby some companies as a measuredreamed up by their ad agencies, 2il-
Jhough many marketers havl sup-ported the'theory based on their expe-rience and intuition.
"Marketers and advertisers cannow heave a collective sijgh of relief,"said SPI executive Sidney Schoeffler."The programs that increase brandawareness and the programs thatconvert it into market share should bea hiajor concern of senior manage-ment."
RESEARCH' WAS BASED on
sional Builder magazines."The overall effect of the study un-
derlies a belief and working philos-ophy already followed and acceptedby most top corporate managements,marketers, and advertisers," said'J.Allan Sheehan, president of Cahners,which coordinated! and sponsored theresearch. ' —
"Now we have empirical proof thatthese people have been right aU alongin using advertising and other market-ing strategies^, to. increase brandawareness, which in turn can be con-verted into market sbare apd ultimate-ly into increased return on invest-ment."
A major feature of the study is theflow chart (see Exhibit 2) which out-lines the sequence of events that oc-curs in using ^rand awareness to in-crease pro|lts. . - •
How Brand Awareness aids ProffitdbilityThe Sequence of Events
Exhibn2
Previous Level otBrand Awareness
Changes inBrand Awareness
Current Levei dtBrand Awareness
• • IBfand tuvarencss cJecfeases by tf>e rtBfmatP'ocess and increases byI n I dotnq ^n abovr p«r vd'uTie otE «penaiiu'es Sates
Conversion Rate otBrand Awarenessinto Market Share
e c<yivers«>n rate t
Level ot AchievedMarket Share
whichstnsngly
I influences IROIorProtitabilitv
q recently successKj! m conwefii
Feb. 9-11 In Oriando, Fla. —-^-.
AMA's Conference Oil
BUT BRAND AWARENESS can"decay" unless stimulated by above-average spending on advertising,marketing, and promotion, the'studywarns. "Highly visible market leaderscannot feel complacent and rest ontheir coiporate laurels or their compe-
^ i o n will ^ i n in awareness • andmarket share," Sheehan explains.
The next step on the chart, he said,is the most critical in increasiogprofits—the conversion of brandawareness into market share (see Ex-hibit 3).
<̂!̂ 3(ir study shows that undifferen-tiated or 'me too' suppliers have themost difficulty in converting aware-ness to market share, and generally incompeting profitably," said Schoeff-ler. "Besides^ increasing competitivelevels of awareness, it pays to establisha clear product or capability unique-
Marketingfeatar)R practitioner, educator perspectives
Neil Beckwith
THE AMA s SPECIAL Conference"oilServices Marketing,^eb. 9-11,Or-lando, Fla., will feature a diversifiedprogram of practitioner and educatorperspectives, according to cochair-men Jim Donnelly, University ofKentucky, and Bill George, RutgersUniversity.
When attendees gather for the con-ference's first general session onMonday morning, Feb. 9, they'll heara debate on "The Validity of a Se'p-arate Approach for Services Market-\ •. r» ..̂ iing," by Ben M. Enis, University of James H. DonnellyMissouri, and Christopher LoveliHarvard University.
At another general session on Feb.11, Neil Beck with, chief marketing of-ficer, ARA Services, and Robert Cat-lin, senior vice president, NW AyerABH International, will discuss"Practitioners' Perspectives on Ser-vices Marketing." And at4hcday luncheon, Robert M. Krughoff,president, Washington Center for theStudy of Services, will speak on "Eval-uating Services."
Workshops and-panel discussionswill cover a variety of topies such asbank marketing, marketing implica-tions of deregulation, public relationsin services marketing, middlemenstrategies in nonprofit organizations,teaching nonprofit marketing, and in-ternational perspectives on servicesmarketing.
TWO OF THE SPEAKERS for'the International panel will be Chris-tian Gronroos, Swedish School ofEconomics and Business Administra-tion, and Barbara R. Lewis, Universi"ty of Manchester Institute of Scienceand Technology.
The sessions on the marketing ofprofessional services also will providemany interesting viewpoints, accord-ing to track chairperson Paul N.Bloom, Marketing Science Instituteand University of Maryland. Amongthe presenters at these sessions will beindividuals who have considerableexperience in consulting to profes-sional orgahizations, he said.
A session titled "Evaluating theMarketing of Professional Services"will describe how American societyhas bee.n affected by the increased useof marketing by professionals, Bloomsaid.
Another session, "Strategies forMarketing' Professional Services,
William R. George Christopher Lovelocic
Robert Catiin IMIchaei Rothschild
^ ^ architects, and other profes-sionals ofthe real world," Bloom said.' papers covering heahh care, educa-tion and arts, and theoretical aspectsof marketing aqross nonbusinessareas will be featured in the PublicSector/Nonprofit Services tract, ac-cording to track chairman Michael L.Rothschild, University of Wisconsin.
The Commercial Services Trackhas sessions ranging from concept to
empirical resear(;h on-flnancial ser-vices, restaurants, catalogue shoppers,equipment leasing, and organization-al structure in service firms, said trackchairman Lynn Shostack, Citibank,
Key commercial service sessions, hesaid, relate to the benefits and limits oftraditional goods-oriented tech-niques/concepts^ -and the develop-ment of the marketing discipline infinancial services firms.
THE SERVICES THEORY track,chaired, by Christopher Lovelock,*Harvard University,-xontaias avariety of coqapetitive papers.
An "Environment of Services Mar-keting" session includes a look at theFederal Trade Commission's regula-tion of services and services' role instagflation.
Another session, "Consumer Be-havior in Evaluating and SelectingServices," includes an analysis of ser-vices advertising and the hierarchy ef-fect, as. well as a consumption/ evalua-tion process model for services.
"Managing^the Marketing Func-tion in Service Firms" is a session thatwill consider organizational issuesand the communications componentof the services marketing mix. In the"Conceptualizing the Goods vs. Ser-vice Dichotomy" session, classifica-tion issues and-human capital theorywill be discussed.
An optional tour of Disney Worldwill be offered on Tuesday afternoon,Donnelly said. For more information,see the Conference Calendar in thisissue. _
^ Wocniitingwill feature papers that touch on var-ious strate^c approaches that profes-sionals can use to improve their mar-keting programs, he said.
The final session, "The Practition-ers Speak on the N^rketingof Profes-sional Services," will include papersby full-time practitioners. "It will giveconference pactici pants a Teenng othow 'classcoem^artceting is workingioFdoctors, lawyer^, derttists, accoun-
CAREER 6UIDANCE-MANACSEMENT SELECTION. specialists for marifeting peofiie with co|if^ degrees.
aiRl other advancof or tedmicandegrees iiltis somepractice business experience.
RRYANT & RAKiWELLV John Hancock'Suite 1532, 875 N. Michigan
Chicago, liiinois 00011Write or call 312/649-0700
(a) having available ot
production capacity and
(b) .id>(eriisinq and oiher
exhibit 1Relatidnjship between market share and pretax ROI
ROI
30%
20
10
0
Under 10% 10-20°b 20-30 So '
-
30-40 "b Q\iex 40%
Market Shar*
MarketShare (%)60
ExhibH3
O " » . - - -20
Awareness (%) .
Question -asker, or
interviewer?. what a difference!
Every feasiblemeasure of qualitycontrol is built into anNFO telephone survey. Our intervie^wers arepermaneTit and take corporate pride in their work.Training is intense and continuous. Briefings and —rehearsal-are thorough. Performance and productionstahdards are strict and^e constantly monitored andreviewed. Editors go over every completedquestionnaire before it is released from the ..idepartment.
The result is a staff of experienced and confident-interviewers (over 150 of them) who know how tomaintain rapport and stilj keep an interview on trackwithout rudeness; how to keep a respondentinterested to the end of the interview; how to workaround switchboard operators and secretaries to reachindustrial respondents.
In an NFO telephone survey the most criticalelement is assured — professionalexecutjon^all us at I 4 1 9 ) J 6 6 6 - 8 8 0 0 ,
A
NAtioNAL EAM!LY OPINION,
