Previous research on marketing budget decisions has shown that profit improvement from better allocation across products or regions is much higher than from improving the overall budget. However, despite its high managerial relevance contributions by marketing scholars are rare. In practice, the allocation is very often based on gut feeling and subject to politics and tension. To close this research gap, an innovative and feasible solution to the dynamic marketing allocation budget problem for multi-product, multi-country firms is introduced. Specifically, our decision support model allows determining near-optimal marketing budgets at the country-product-marketing-activity level in an Excel-supported environment each year. The model accounts for marketing dynamics and a product’s growth potential as well as for trade-offs with respect to marketing effectiveness and profit contribution. The model has been successfully implemented at Bayer, one the world’s largest firms in the pharmaceutical and chemical business. The application shows a large profit improvement potential of more than 50%. The model is applicable for any company that faces an allocation problem of marketing spendings.
To register please send an email to: email@example.com
The Lecture Series
The KLU Lecture Series is a forum for scientists and practitioners to talk and discuss on state-of-the art topics related loosely to logistics and entrepreneurship.