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Performance Regimes and Marketing Policy Shifts

Author

Listed:
  • Koen Pauwels

    (Tuck School of Business at Dartmouth, 100 Tuck Drive, Hanover, New Hampshire 03755)

  • Dominique M. Hanssens

    (Anderson School of Management, University of California, Los Angeles, 110 Westwood Plaza, Los Angeles, California 90095-1481)

Abstract

Even in mature markets, managers are expected to improve their brands' performance year after year. When successful, they can expect to continue executing on an established marketing strategy. However, when the results are disappointing, a change or turnaround strategy may be called for to help performance get back on track. In such cases, performance diagnostics are needed to identify turnarounds and to quantify the role of marketing policy shifts in this process. This paper proposes a framework for such a diagnosis and applies several methods to provide converging evidence for two main findings. First, contrary to prevailing beliefs, the performance of brands in mature markets is not always stable. Instead, brands systematically improve or deteriorate their performance outlook in clearly identifiable time windows that are relatively short compared to windows of stability. Second, these shifts in performance regimes are associated with the brand's marketing actions and policy shifts, as opposed to competitive marketing. Promotion-oriented marketing policy shifts are particularly potent in improving a brand's performance outlook.

Suggested Citation

  • Koen Pauwels & Dominique M. Hanssens, 2007. "Performance Regimes and Marketing Policy Shifts," Marketing Science, INFORMS, vol. 26(3), pages 293-311, 05-06.
    • Handle: RePEc:inm:ormksc:v:26:y:2007:i:3:p:293-311
    DOI: 10.1287/mksc.1060.0267
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