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Over onsFEBPublication of the Month

Persistent marketing effects most likely to appear right after product introduction

The persistency of marketing effects depends on the stage of the product life cycle. These effects are strongest around the introduction of a new product and decline in the course of the product life cycle. ‘We show that this does not only hold for persistent marketing effects but also for temporary marketing effects. So if you want to make the most out of your marketing budget, make sure you spend a significant portion of it early in the product life cycle’, says dr. Jaap Wieringa. He is co writer of the paper Early marketing matters: a time-varying parameter approach to persistence modeling, published in the Journal of Marketing Research, which is the next FEB Publication of the Month.

Dr. Jaap Wieringa
Dr. Jaap Wieringa

The research of Wieringa, Ernst Osinga and Peter Leeflang focuses on persistency of marketing efforts. ‘This is a highly relevant topic, because it is of interest to know whether and how managers can affect the market permanently’, says Wieringa. ‘It would obviously be fantastic for a company if it would benefit from a marketing campaign for a long time. That makes an investment all the more profitable.’ 

Dynamic effects

Wieringa et al determined the dynamic effects of pharmaceutical marketing expenditures in the United States. They used monthly data related to 89 prescription drugs. ‘We are the first to demonstrate that the persistency of marketing effects depends on the stage of the product life cycle’, says Wieringa. ‘Apparently managers realize that already to a certain extent: it explains typical patterns in their spending behaviour. Especially around the introduction of a new product, managers put a lot of effort into marketing.’

Methodological advantages

In addition to the new insights in the pharmaceutical industry, Wieringa is mostly proud of the methodological side of the research project. ‘An important asset of this paper is the methodological side of our research. We developed a new model to measure persistency of marketing efforts. Our method has several methodological advantages and also explains much more than the existing methods.’

Social debate

Wieringa’s field of research, marketing in the pharmaceutical industry, has repeatedly been subject of debate. That only makes the subject more interesting, the researcher says with a smile. ‘In the pharmaceutical industry, marketing is almost constantly under attack. Talk to a doctor about marketing and he will turn up his nose. However, the fact that marketing in the pharmaceutical industry is subject of so much social debate makes it all the more interesting to explore. Moreover, we are nowhere near knowing everything about the effects of marketing on the pharmaceutical industry. It is fun to investigate the effects of marketing and by doing so contribute to the social debate.’

More information

Early marketing matters: a time-varying parameter approach to persistence modeling

Journal of Marketing Research, 47, 1, 173-185

Ernst C. Osinga, Peter S.H. Leeflang, and Jaap E. Wieringa

Contact: Dr. Jaap Wieringa

Full article (RUG only): Journal of Marketing Research

Laatst gewijzigd:06 februari 2014 10:07