The Marketing Communications Process 31

MARCOM’S CHALLENGES: ENHANCING Chapter 2 BRAND EQUITY, INFLUENCEING BEHAV- IOR, AND BEING ACCOUNTABLE

Chapter Objectives  To explain the concept of brand equity from both the company’s and the customer’s perspectives.  To describe the positive outcomes that result from enhancing brand equity.  To present a model of brand equity from the customer’s perspective.  To examine how marcom efforts must influence behavior and achieve financial accountability.

Chapter Overview The basic issues addressed in this chapter are these: What can marketing communicators do to enhance the equity of their brands and, beyond this, affect the behavior of their present and prospective customers? Also, how can marketing communicators justify their investments in advertising, promotions, and other marcom elements and demon- strate financial accountability? The concept of brand equity is explained from both the company’s perspective and the consumer’s perspective. The firm-based viewpoint of brand equity focuses on outcomes extending from efforts to enhance a brand’s value to its various stakeholders and discusses various outcomes: (1) achieving a higher market share, (2) increasing brand loyalty, (3) being able to charge premium prices, and (4) earning a revenue premium. From the perspective of the customer, a brand possesses equity to the extent that they are familiar with the brand and have stored in their memory favorable, strong, and unique brand associations. Brand equity from the customer’s perspective consists of two forms of brand- related knowledge: (1) brand awareness and (2) brand image. The chapter covers three ways by which brand equity is enhanced and labels these the (1) speak-for-itself approach, (2) message-driven approach, and (3) leveraging approach. The chapter then discusses ten traits shared by the world’s strongest brands. The latter portion of the chapter covers the concept of ROMI, or return on marketing investments. Several difficulties of measuring marcom effectiveness are discussed: (1) choosing a metric, (2) gaining agreement, (3) collecting accurate data, and (4) calibrating specific effects. The chapter then discusses marketing-mix modeling (i.e., multivariate regression analysis) and how it can assist managers in determining the effect of each marcom element on sales volume.

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 Marcom Challenge: Harley-Davidson – An Iron Horse for Rugged Individuals An advertisement that depicted a driver-less Harley-Davidson motorcycle does not tout product features for which the Harley-Davidson is known or functional benefits such as power and performance. It simply represents the sense of freedom, independence, and even rebelliousness that a prospective purchaser might desire in owning this brand and driving the open roads. What makes Harley-Davidson motorcycles such a unique and strong brand? It’s the deep emotional connection with present and prospective owners. Harley has positioned the brand as virtually synonymous with American culture and values of personal freedom, rebelliousness, and rugged indi- vidualism. Its reputation for producing high-quality and reliable products was estab- lished during World Wars I and II, and returning GIs passed along their feelings to fellow Americans. Harley also has created a sense of brand community among owners through a variety of efforts, such as bike rallies and the Harley Owners Group (H.O.G.), that have touched its customers in many ways. These efforts have led Harley-Davidson to be rated as a top brand by business leaders.

When Brand Marketers Must Deal With Unfavorable Country Images Many brands are marketed by companies that typically are identified with the identities and images of the countries in which they originate (e.g., Volkswagen/Germany). How- ever, consider the case of China, which is well-known and much admired for making low-cost and good-quality products that are outsourced by companies in other countries, but it is not known for its domestic companies that produce and market branded products of their own. Most people cannot name a single product that holds a Chinese brand name, but many Chinese companies are in the process of dealing with their country’s image problem and attempting to market products globally under their own brand names. The example of TCL Corporation, which is a large electronics firm, is highlighted in which the company first plans to expand with their own, lower-priced, high-quality TV brands in Indonesia and then the rest of Asia and the world. They plan on selling directly to consumers, offer a three-year warranty (longest on the market), and provide excellent customer service. However, it may take years before a Chinese company can successful- ly market its brands around the world.

Neuromarketing and the Case of Why Coca-Cola Outsells Pepsi The infamous “Pepsi Challenge” was conducted with the use of neuromarketing, which is a specific application of the field of brand research called neuroscience. Functional mag- netic resonance images (fMRIs) can scan the brains of individuals employing their various senses upon exposure to stimuli. Brain scans reveal which areas of the brain are most The Marketing Communications Process 20 activated in response to external stimuli. In the new-fangled Pepsi Challenge, the reward center of the brain revealed a much stronger preference for Pepsi versus Coke when study participants were unaware of which brand they had tasted. However, the result was op- posite when participants knew the name of the brand they were about to taste. In the non- blind taste test, a different region of the brain was more activated and Coca-Cola was the winner. Activation of the area of the brain associated with cognitive functions revealed that participants now preferred Coke. The inferred explanation is a difference in brand images, with Coke possessing the more attractive image earned through years of effective marketing and advertising effort.

Chapter Outline 1. Desired Outcomes of Marcom Efforts  Recall from Chapter 1 the framework for thinking about all aspects of the marcom process (Figure 1-3):  Fundamental decisions (positioning, targeting, objective setting, and bud- geting)  Implementation decisions (mixing elements, creating messages, selecting media, and establishing momentum)  Outcomes (enhancing brand equity and affecting behavior)  Program Evaluation  This chapter focuses on the desired outcomes of marcom efforts. 2. The Concept of Brand Equity  A brand represents a “name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.”  Without a recognizable brand, a product is but a mere commodity.  It’s more than just a name, term, symbol, etc. – a brand is everything that one company’s particular offering stands for in comparison to other brands in a category of competitive products.  Brand equity can be considered either from the perspective of the organization that owns a brand or from the vantage point of the customer. A Firm-Based Perspective on Brand Equity  Focuses on outcomes extending from efforts to enhance a brand’s value to its various stakeholders.  As the value, or equity, of a brand increases, various positive outcomes result: . achieving a higher market share . increasing brand loyalty 21 Chapter 2

. being able to charge premium prices . earning a revenue premium, which is defined as the revenue differential between a branded item and a corresponding private labeled item A Customer-Based Perspective on Brand Equity  Brand equity exists to the extent that consumers are familiar with the brand and have favorable, strong, and unique associations with the brand.  Brand equity has two main forms of consumer knowledge: brand awareness and brand image. . Figure 2.1 portrays the two dimensions of brand knowledge and delineates each dimension into its specific components.  Brand awareness: when a consumer thinks about a product category and a brand name comes to mind. Awareness is the basic dimension of brand equity and has three dimensions: . Brand recognition: consumer is able to identify a brand if it is present- ed to them on a list or if hints/cues are provided. . Brand recall: consumer can retrieve a brand name from memory without any reminders. . Top-of-mind-awareness (TOMA): brand is first that consumer thinks of when asked about product category. . The failure of dot-coms can be seen in part as a failure of not building successful brand equity such that consumers could remember and know what their businesses did. Indeed, the dot-coms assumed that basic brand awareness was all they needed, when in fact the brand must ultimately be tied to some benefit.  Brand Image: the types of associations that come to mind when contemplating a particular brand. . An association is simply the particular thoughts and feelings that a consumer has about a brand.  Associations can be based on attributes (product-related and non-product-related), benefits, and overall evaluation (attitude).  Associations derived from brand benefits stem from functional, symbolic, or experiential needs. (Note: These needs are explained in Chapter 5) . Four main kinds of associations are type, favorability, strength, and uniqueness.  Five dimensions have been identified for different brands’ “personalities.” 1. Sincerity—brand is seen as down to earth, wholesome and cheerful (e.g., Mr. Goodwrench). The Marketing Communications Process 22

2. Excitement—brand is seen as daring, spirited, imaginative, and up-to-date (e.g., Hummer). 3. Competence—brand is seen as reliable, intelligent, and successful (e.g., Toyota). 4. Sophistication—brand is seen as upper class and charming (e.g., Rolex). 5. Ruggedness—brand is seen as tough and outdoorsy (e.g., Timberland)

How Can Brand Equity Be Enhanced?  Efforts to enhance a brand’s equity are accomplished through the initial choice of a positive brand identity but mostly through marketing and marcom programs that forge favorable, strong, and unique associations with the brand in the consumer’s mind.  Three ways by which brand equity is enhanced: 1. Speak-For-Itself Approach: by trying and using brands, consumers learn how good (or bad) they are and what benefits they are (in)capable of delivering. 2. Message-Driven Approach: marcom practitioners can build advantageous associations via the dint of repeated claims about the features a brand possesses and/or benefits it delivers. This tack is effective if the marcom message is creative, at- tention getting, and believable. 3. Leveraging Approach: brand associations can be shaped and equity enhanced by leveraging positive associations already contained in the world of people, places, and “things” that are available to consumers.

TEACHING NOTE: When using the leveraging approach, three factors influence the result (from Keller 2003, chapter endnote #21): o What is the consumer’s knowledge of the other entity (i.e., person, place, or thing)? o How meaningful is that knowledge? o How likely is it that that knowledge will actually affect what they think of the brand?  Co-branding: two brands enter into an alliance that potentially serves to enhance both brands’ equity and profitability. Brands that enter into alliances do so on grounds that their images are similar, that they appeal to the same market segment, and that the co-branding initiative is mutually beneficial. Most important requirement for success is that brands possess a common fit and that the combined marcom efforts maximize the advan- tages of the individual brand while minimizing the disadvantages. 23 Chapter 2

TEACHING NOTE: A recent study examined the impact of co- branding on consumers’ perceptions of brand equity for the co-branded product and the two brands that comprised it and concluded that co- branding represents a “win/win strategy” for both partners. The study found that while low equity brands benefit most from co-branding, the brand equity of the high equity brand was not denigrated even when paired with a low equity partner brand. So the worst case scenario of a high equity brand paired with a low-equity partner results in no loss of equity for the higher equity brand, and the best case scenario is one in which both partners experience substantial benefits from the alliance. (Source: Washburn, Judith H., Brain D. Till, and Randi Priluck (2000), “Co-Branding: Brand Equity and Trial Effects,” Journal of Consumer Marketing, 17(7), 591-604.)  Ingredient branding: pairing a branded ingredient to build equity in a brand (e.g., “Intel Inside”).

TEACHING NOTE: Another example of ingredient branding is The Solae Company, which is trying to increase consumer awareness of its soy protein and products that include it. This company, along with General Mills, created 8th Continent Soymilk, and the Solae soy protein ingredient is prominently featured in the product’s advertising. The man- ufacturers believe that touting the fact that Solae soy protein is an ingredient is a smart strategy because they can provide consumers taste assur- ance and years of nutritional research backing its nutrition claims. This example, as well as a few others, led the author to suggest three things that should be kept in mind when considering ingredient branding: o the ingredient brand and the finished product should each support the other’s positioning, o functional claims need to be backed by research, and the host brand should receive incremental marketing value from the rela- tionship, and o all marketing activity should convey a consistent message to consumers. (Source: “Branding Partnerships: The Combination of Branded Prod- ucts With Branded Ingredients Can Create Consumer Pull,” (2005), Bev- erage Industry, (June), 59-62.)

What Benefits Result From Enhancing Brand Equity?  brand loyalty: that’s the true asset The Marketing Communications Process 24

TEACHING NOTE: Marketers should be aware, however, that care must be taken when enhancing brand equity to avoid the situation called trademark cancella- tion, or “genericide.” This is a condition in which a manufacturer’s brand represents a product category in consumers’ minds, and consequent legal action may result in that brand name being declared a generic term. Examples of brands that have suffered from genericide are aspirin, thermos, yo-yo, shredded wheat, escalator, and trampoline. If this is the case, that brand’s mark can be used by competitors. Taylor and Walsh (2002) reviewed court cases and offer ways to avoid a finding of generic- ness:  select a distinctive, nongeneric name when the product is introduced,  monitor employees’ and advertising’s use of the trademark,  monitor competitors’ and others’ use (i.e., trade) of the trademark,  make use of appropriate survey evidence when a case comes about, and  make use of expert witnesses (p. 165). While marketers want their brand to dominate a product category, it is imperative that a brand’s owner takes actions to preserve the legal protection of the brand’s equity. For more information on this issue, see Oakenfull, Gillian and Betsy Gelb (1996), “Research-Based Advertising to Preserve Brand Equity But Avoid ‘Generi- cide’,” Journal of Advertising Research, (Sept/Oct) 65-73 and Taylor, Charles R. and Michael G. Walsh (2002), “Legal Strategies for Protecting Brands from Generi- cide: Recent Trends in Evidence Weighted in Court Cases,” Journal of Public Policy & Marketing, 21 (Spring), 160-167.

Characteristics of World-Class Brands  The biannual EquiTrend survey uses two main dimensions to determine highly successful brands: quality and salience (type of brand awareness).  Combining the two dimensions gives an “equity score.” (Note: See Discus- sion Question #11 for an example.)  10 world class brands identified in Table 2.1: Smithsonian Institution, Crafts- man Tools, Crayola, Bose, Hershey’s Kisses, Reynolds Wrap, M&M’s, Dis- covery Channel, WD-40, and Ziploc.  All these brands had a straightforward promise of what they deliver and have consistently delivered it.  Traits shared by the world’s strongest brands: 1. Brand excels at delivering benefits customers desire. 2. Brand stays relevant. 3. Pricing system matches consumers’ perceptions of value. 25 Chapter 2

4. Brand is properly positioned. 5. Brand is consistent. 6. Brand portfolio and hierarchy make sense. 7. Brand makes use of and coordinates a full repertoire of marketing activities to build brand equity. 8. Brand’s managers understand what the brand means to consumers. 9. Brand is given proper support over the long run. 10. The company monitors sources of brand equity.

3. Effecting Behavior and Achieving Marcom Accountability  Marcom efforts should be directed, ultimately, at affecting behavior rather than stopping with enhancing equity.  Marcom’s objective is to ultimately affect sales volume and revenue.  ROMI: return on marketing investment.

TEACHING NOTE: For a good overview of ROMI and marketing mix modeling, see Cook, William A. and Vijay S. Talluri (2004), “How the Pursuit of ROMI is Changing Marketing Management,” Journal of Advertising Research, 44 (Sept/Oct), 244-254. This article discusses ROMI’s importance, benefits, requirements, integra- tion with core business processes, and barriers to success as well as the role of marketing mix modeling. Another good example that shows the genesis of this approach can be found in Stone, Randy and Mike Duffy (1993), “Measuring the Impact of Ad- vertising,” Journal of Advertising Research, 33 (Nov/Dec), RC-8-RC-12. It provides a case discussion of how Kraft began employing these methods in the early 1990s. It is interesting to note that Kraft was featured as a “best-practice” firm in the Adver- tising Research Foundation’s benchmarking study (2001) as a company recognized for implementing a successful program to improve their ROMI. The ARF benchmarking studies (2001 and 2003) as well as several others are discussed extensively in Cook and Talluri (2004).  Motivations underlying the increased focus on measuring marketing performance:  demands for accountability from the CEO, the Board, and other executives  imperative for CMOs to get better at what they do in light of budget bat- tles

TEACHING NOTE: Another pressure on marketing accountability is the Sar- banes-Oxley Act (Sarbox), which was passed in 2002. In the aftermath of corporate scandals such as WorldCom and Enron, this legislation tightens corporate-governance The Marketing Communications Process 26 and reporting requirements, and it requires CEOs and CFOs to sign off on the validity of corporate accounts. Some claim the impact on marketing could be substantial. First, the additional auditing fees necessary to comply with the act will have to come from budget cuts somewhere else, and marketing is a likely target. Second, corporate boards tend to be made up of finance and audit experts, so more energy may be focused on complying with Sarbox than focusing on marketing and customers. Third, marketing expenditures have been suspect as some marketing service providers have been overbilling clients. In this climate, marketing requires good management and measurement to build credibility. (Source: McGovern, Gail and John Quelch (2005), “Sarbox Still Putting the Squeeze on Marketing,” Advertising Age, (September 19), 28.)

Difficulty of Measuring Marcom Effectiveness  Several reasons account for the complexity of measuring marcom effectiveness:  Choosing a Metric: brand awareness, attitudes, purchase intentions, and sales volume.  Gaining Agreement: individuals from different backgrounds and with varied organizational interests often see the “world” differently or operate with varying ideas of what best indicates suitable performance.  Collecting Accurate Data: data must be reliable and valid.  Calibrating Specific Effects: identify the relative effectiveness of individual program elements. Assessing Effects with Marketing-Mix Modeling  Employs well known statistical techniques (e.g., multivariate regression analysis) to estimate the effects that the various advertising and promotion elements have in driving sales volume.  Relatively long series of longitudinal data (i.e., two years) is required.  Data for each period would include the level of sales during that period (i.e, de- pendent variable) along with corresponding marcom expenditures for each program element (i.e., independent variables).  Can learn which elements outperform others and can shift budgets accordingly.  Widely used by consumer package good companies (e.g., P&G, Clorox), but it is also being used increasingly by other B2C and B2B companies.

TEACHING NOTE: Advertising agencies are adopting this approach as well. For example, one of the world’s largest ad companies, WPP Group, is applying econometrics to help measure the effectiveness of an ad. Changes in media technolo- gies making traditional TV advertising less effective and demands by corporate managers for accountability have put pressure on agencies to show that ads produce sales. WPP is putting resources into econometrics by increasing the number of em- 27 Chapter 2

ployees working on econometric models to 150, up from just 20 employees five years ago. Omnicom Group, another large agency holding company, is also devoting more resources to this type of effort by increasing its staff devoted to econometric modeling to 45 from six just three years ago. Not everyone in the agency world is jumping on this bandwagon, though. For example, at an advertising conference in Cannes, France, one CEO of another agency told WPP Group’s CEO, Sir Martin Sorrell with whom he was sharing the stage, that he didn’t understand what Sir Martin was talk- ing about, and the audience reacted with cheers and clapping. So there might be a long way to go before econometrics is readily accepted in the advertising world. (Source: Patrick, Aaron O. (2005), “Econometrics Buzzes Ad World As a Way of Measuring Results,” The Wall Street Journal, (August 16), B8.)

Answers to Discussion Questions 1. Tom Peters, author and management consultant, describes a brand as “passion made palpable.”42 What do you think he means by this expression? Provide a couple of personal examples that support Peters’s characterization of brands. Answer: Brand equity is closely tied to people’s feelings about the brand and the product. Palpable means something that is obvious or something one can touch. A well managed brand has a set of associations in the consumer’s mind that marcom can build and maintain—a passion within the consumer that centers on the product and can be maintained by successful marcom strategies. 2. Using the framework in Figure 2.1, describe all personal associations that the follow- ing brands hold for you: (a) Harley-Davidson motorcycles, (b) Hummer vehicles, (c) Red Bull energy drink, (d) The Wall Street Journal, and (e) movie star Nicole Kid- man. Answer: Brand image can be thought of in terms of the types of associations that come to the consumer’s mind when contemplating a particular brand. An association is simply the particular thoughts and feelings that a consumer has about a brand, and students’ answers will vary for this question. These associations can be conceptu- alized in terms of type, favorability, strength, and uniqueness. The type of brand associations can be based on the brand’s attributes, both product-related (e.g., col- or, size, design features) and non-product-related (e.g., price, packaging, user and usage imagery), the brand’s benefits (e.g., functional, symbolic, experiential), and consumers’ overall evaluation, or attitude, toward the brand. 3. Roger Enrico, CEO of PepsiCo, was quoted in the text as saying, “In my mind the best thing a person can say about a brand is that it’s their favorite.” Identify two brands that you regard as your favorites. Describe the specific associations that each of these brands holds for you and thus why they are two of your favorites. The Marketing Communications Process 28

Answer: Students should realize that associations are not just with immediate obvious product benefits (most will probably name some snack food as one) such as taste, but also with other product benefits such as packaging (a water bottle with a sports cap), accessibility or convenience (e.g., a candy machine near their dorm room or class), price (e.g., they can afford it), and usage context (e.g., coffee with friends). The ability of products to make the consumer an "expert" is also an interesting benefit for students who name some health and beauty aid, such as a hair shampoo, and give a very specific benefit of how the product works for them (e.g., helps relax tangled hair). 4. Provide examples of brands that in your opinion are positioned in such a way as to re- flect the five personality dimensions: sincerity, excitement, competence, sophistication, and ruggedness. Answer: Examples: Sincerity: Hallmark Greeting Cards Excitement: Victoria’s Secret Competence: Norton Anti Virus Sophistication: Talbots Ruggedness: Timberland boots 5. Provide several examples of co-branding or ingredient branding other than those pre- sented in the chapter. Answer: Some examples of co-branding include: Hershey Foods and General Mills making the breakfast cereal “Reese’s Peanut Butter Puffs,” MicroSoft and NBC (MSNBC), Visa and the United Airlines Mileage Plus Program. Some examples of ingredient branding include: Gore-Tex material in sport and outdoor clothing, Splenda in the new Coke Zero, Teflon in cookware, Thinsulate in clothing, Kevlar in clothing, and NutraSweet in soft drinks. 6. When discussing brand equity from the firm’s perspective, it was explained that as the equity of a brand increases, various positive outcomes result: (1) a higher market share, (2) increased brand loyalty, (3) ability to charge premium prices, and (4) capac- ity to earn a revenue premium. Select a brand you are particularly fond of and explain how its relatively greater equity compared to a lesser brand in the same product category is manifest in terms of each of these four outcomes. Answer: Students can select any number of brands to answer this question, and one they might select is Coca-Cola soft drink. Coke has the highest market share in the cola category, some consumers will only purchase Coke instead of other brands of cola, even if they are on sale, Coke is more expensive than lesser brands, such as 29 Chapter 2

RC Cola and store brands, and thus, Coke enjoys a revenue premium. Revenue premium is defined as the revenue differential between a branded item and a corresponding private labeled item, so students should discuss the brand they select- ed with respect to private label, or store, brands. With revenue equaling the product of a brand’s net price x volume, a branded good enjoys a revenue premium over a corresponding private labeled item to the degree it can charge a higher price and/or generate greater volume. 7. Brand awareness is a necessary but insufficient condition toward building positive brand equity. Explain what this statement means to you and provide a couple of examples of brands that you are aware of but that, for you, do not possess positive brand equity.

Answer: Although building brand awareness is a necessary step toward brand equity en- hancement, it is insufficient. Investing in and building a brand is a matter of iden- tifying a reason for the brand’s being – its underlying positioning statement and point of distinction on a consistent basis. While students can give a number of examples, they should explain that, while they are aware of that particular brand, they may not understand the meaning of that brand because they do not have many associations that come to their mind when thinking about that brand or that they have negative associations when thinking about that brand. 8. Select a brand of vehicle (automobile, truck, motorcycle, SUV, etc.) and with this brand illustrate the meaning to you personally of type, favorability, strength, and uniqueness of brand associations. Answer: Students should answer this question along the lines of the illustration given in the chapter of Henry and the McDonald’s fast-food chain. 9. What are your reactions to the application of neuroscience to marketing (neuromarketing) that was described in the IMC Focus? Do you consider this technique ethical? Do you fear that with the knowledge obtained from its application marketers will be able to manipulate consumers? Answer: The application of neuroscience to marketing described in the IMC Focus really serves to illustrate the importance of building brand equity through various marketing and marcom processes. It seems to validate that consumers’ preferences can be influenced by these activities. The IMC Focus illustrated that consumers preferred Pepsi when they did not know the brands they tasted, but they preferred Coke when they did know, seemingly because of all the strong and positive associations they had with the Coke brand. The real ethical question comes down to whether or not it is ethical for marketing to influence consumers’ preferences for a brand they would not have chosen based on actual experience but no knowledge of brand associations. The Marketing Communications Process 30

10. Describe the leveraging strategy for enhancing brand equity. Take a brand of your choice and, with application of Figure 2.8, explain how that brand could build positive associations, thereby enhancing its equity, by linking itself to (a) places, (b) things, (c) people, and (d) other brands. Be specific. Answer: The leveraging strategy for enhancing brand equity holds that brand associations can be shaped and equity enhanced by leveraging positive associations already contained in the world of people, places, and “things” that are available to consumers. The culture and social systems in which marketing communications takes place are loaded with meaning. Through socialization, people learn cultural values, form beliefs, and become familiar with the physical manifestations, or ar- tifacts, of these values and beliefs. Marcom practitioners can leverage meaning, or associations, for their brands by connecting them with other objects that already possess well-known meaning. Students can select any brand to answer this question, and they should be aware that (a) “places” can refer to country of origin or channels, (b) “things” include events, causes, and third party endorsements, (c) “people” refers to employees and endorsers, and (d) “other brands” includes things such as alliances, ingredients, company, and extensions. 11. A certain brand, Brand X, receives an average quality score of 8.3 and a salience score of 68 percent. What is this brand’s equity score based on the EquiTrend procedure? Answer: Using the EquiTrend procedure, an equity score is determined by multiplying the quality and salience scores and dividing the product by 10 so that equity scores range between zero and 100. The equity score in this example would be (8.3 x 68)/10 = 56.4. 12. Why is demonstrating financial accountability an imperative for marcom practitioners? Answer: Two primary motivations underlie the increased focus on measuring marketing performance. The first is from the CEO, the Board, and other executives putting greater demand for accountability on the marketing function. A second reason is that CMOs must get better at what they do because it is becoming increasingly difficult to justify expenditures without knowledge of what works and what does- n’t. 13. Assume that your college or university has had difficulty getting nonstudent residents in the local community to attend football games. Your school’s athletic director re- quests that an organization you belong to (say, a local chapter of the American Mar- keting Association) develop an advertising program that is to be targeted to local residents to encourage them to attend football games. What measures/metrics could you use to assess whether the advertising program you developed has been effective? How might you assess the ad campaign’s ROMI? 31 Chapter 2

Answer: One metric could be the number of non-student tickets sold for each game throughout the season. One way to assess the effects of the marcom program is to use marketing-mix modeling. The data for each period could be the non-student attendance at each game along with corresponding advertising and promotion expenditures for each program element during the time leading up to a given game. While just looking at game attendance will let you know how successful the overall marcom program was, marketing mix modeling will allow you to determine the relative effectiveness of each marcom element.