IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v25y1979i2p191-204.html
   My bibliography  Save this article

Exceptional Paper--ADVISOR 2: Modeling the Marketing Mix Decision for Industrial Products

Author

Listed:
  • Gary L. Lilien

    (Massachusetts Institute of Technology)

Abstract

This paper reports the results of the ADVISOR 2 study, aimed at providing an understanding of and guidance for marketing mix decisions for industrial products. The study involved 22 companies and 131 products. Although cross-sectional in nature, justification is presented for using the descriptive results as guidelines for marketing mix decisions. Models are presented for advertising expenditures, marketing expenditures, marketing budget allocations, year-to-year changes in advertising spending and for selection of distribution channels. The level of marketing expenditures and the split of marketing into advertising and personal setting are shown to be affected by a few, general product and market characteristics of which product sales and the number of customers are key. It is shown that it is fruitful to study the advertising budget as advertising = (advertising/marketing) \times marketing; i.e., a marketing budget is set and then a split of that budget into personal and impersonal communications is made. This two-stage view clarifies the role of different product and market characteristics in the models. The change in advertising spending is related to changes in market share, changes in product plans and changes in the number of competitors modified by the number of customers, their concentration and the size of the advertising budget. The decision to use a direct channel of distribution (primarily salesforce) is affected by the size of the firm, the size of an average order, the stage in the product's life cycle, the complexity of the product, the fraction of the product's sales made-to-order and the purchase frequency of the product. A discussion of the use of the ADVISOR models both for marketing decision making and for marketing researchers and model builders is included.

Suggested Citation

  • Gary L. Lilien, 1979. "Exceptional Paper--ADVISOR 2: Modeling the Marketing Mix Decision for Industrial Products," Management Science, INFORMS, vol. 25(2), pages 191-204, February.
  • Handle: RePEc:inm:ormnsc:v:25:y:1979:i:2:p:191-204
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.25.2.191
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Erin Anderson, 2008. "The Salesperson as Outside Agent or Employee: A Transaction Cost Analysis," Marketing Science, INFORMS, vol. 27(1), pages 70-84, 01-02.
    2. McNaughton, Rod B., 1996. "Foreign market channel integration decisions of Canadian computer software firms," International Business Review, Elsevier, vol. 5(1), pages 23-52, February.
    3. Svendsen, Mons Freng & Haugland, Sven A., 2011. "Host country institutional pressures and cross-border relationship governance," International Business Review, Elsevier, vol. 20(3), pages 324-337, June.
    4. Fernández Olmos, Marta, 2010. "The performance implications of "grow or buy" decisions in the wine industry," Food Policy, Elsevier, vol. 35(3), pages 256-264, June.
    5. Kim, Keysuk, 2001. "On the effects of customer conditions on distributor commitment and supplier commitment in industrial channels of distribution," Journal of Business Research, Elsevier, vol. 51(2), pages 87-99, February.
    6. repec:zbw:espost:172498 is not listed on IDEAS

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:25:y:1979:i:2:p:191-204. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc). General contact details of provider: http://edirc.repec.org/data/inforea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.