| If brands are built over years, why are they managed over quarters? | |
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MedLine Citation:
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PMID: 17642129 Owner: NLM Status: MEDLINE |
Abstract/OtherAbstract:
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Brands are on the wane. Many consumer-goods companies blame the big-box discount retailers, but the Wharton School's Leonard Lodish and the Fuqua School's Carl Mela have a different explanation. Their research suggests that companies have damaged their brands by investing too much in short-term price promotions and too little in long-term brand building. To rescue their brands and increase profitability, corporate managers must arm themselves with long-term measures of brand performance and use them to make smarter marketing decisions. Several factors explain the short-sightedness of brand management: the increased availability of weekly, or even hourly, scanner data, which show a clear link between discounts and immediate boosts in sales; the relative difficulty of measuring the effects of advertising, new-product development, and distribution--all of which can contribute to a brand's long-term health; the short tenure of most brand managers; and the near-term orientation of Wall Street analysts. Although discounts do increase sales in the short-term, they ultimately lower profit margins. If a product is often discounted, consumers learn to buy it only when it's on sale. Moreover, when one firm increases its discounts, others usually follow suit, lowering everyone's margins. Executives can monitor a brand's long-term performance by watching a dashboard of measures. Only after examining such measures, for example, did managers at Clorox discover that the company's heavy discounting and decreased advertising had caused a steady decline in overall bleach sales and profit margins. In response, Clorox reduced discounting and increased television advertising, moves that ultimately strengthened the brand and reversed the firm's downward trends. |
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Authors:
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Leonard M Lodish; Carl F Mela |
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Publication Detail:
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Type: Journal Article |
Journal Detail:
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Title: Harvard business review Volume: 85 ISSN: 0017-8012 ISO Abbreviation: Harv Bus Rev Publication Date: 2007 Jul-Aug |
Date Detail:
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Created Date: 2007-07-23 Completed Date: 2007-12-20 Revised Date: - |
Medline Journal Info:
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Nlm Unique ID: 9875796 Medline TA: Harv Bus Rev Country: United States |
Other Details:
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Languages: eng Pagination: 104-12, 192 Citation Subset: H |
Affiliation:
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Wharton School, University of Pennsylvania, Philadelphia, USA. lodish@wharton.upenn.edu |
Export Citation:
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| MeSH Terms | |
Descriptor/Qualifier:
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Advertising as Topic Consumer Satisfaction* Employment / psychology Humans Interprofessional Relations* Marketing / organization & administration* Persuasive Communication* Product Line Management* United States |
From MEDLINE®/PubMed®, a database of the U.S. National Library of Medicine
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