Marketing FAQs

Click on a link below to access that FAQ (frequently-asked question) topic.


Customer Buying Behavior
Demand Drivers
Design Quality Perception Variations Across Regions
First-Mover Advantages
Marketing Decisions and Their Impacts
Marketing Spending for an Inactive Service
Marketing Spending of Zero
Pre-Launch Marketing Spending
Price of an Inactive Service
Profitability of Demand Drivers
Services in All Regions
Unfilled Orders Exceed Regional Demand




Customer Buying Behavior

“Do some customers purchase both Household and Major Accounts support services?”

Yes.

revised 05/31/2006
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Demand Drivers

“We're interested in understanding the key drivers of our business based on price, perceived design quality, perceived experience quality, and perceived accessibility for our support services. Do you have any suggestions on how we might approach this issue?”

Great question! Understanding how your "controllables" (price, perceived design quality, perceived experience quality, and perceived accessibility) influence your results (market share, volume) is central to sales forecasting and running your business. Please view the following video for more details.


revised 07/18/2017
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listed under "Advice"
listed under "Forecasting"
listed under "Marketing"





Design Quality Perception Variations Across Regions

“Why do design quality perceptions vary across regions? After all, it's the same service everywhere (i.e., same configuration).”

You are correct that a single support service only has one configuration anywhere it is sold. However, customer preferences may vary across regions. Thus, preference for particular configurations don't have to be identical from region to region.

revised 09/12/2013
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listed under "Configuration"
listed under "Marketing"
listed under "Research Studies"





First-Mover Advantages

“Are there first-mover advantages in LINKS?”

Many people talk about first-mover advantages as if they are the answer to everything in life. Being first certainly has some advantages if you're better than what's out there already (i.e., if your have differential advantage over existing offerings on the market) and if you continue to innovate. If there's any customer loyalty in LINKS, then early entrants continue to benefit from their earlier customer acceptance. Followers must "buy their way" into markets, to overcome the market presence and the customer acceptance of early entrants. But, first-mover advantages can be overcome with meaningful innovation that's valued by customers. Being first is good, but being better is best.

revised 01/05/2007
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listed under "Generate Demand"
listed under "Marketing"
listed under "Reconfigurations"
listed under "Strategy"





Marketing Decisions and Their Impacts

“Do the various marketing decisions (marketing spending, marketing mix allocation, etc.) affect performance outcomes other than awareness/accessibility? Marketing spending seems like a weaker driver of market share than most other decisions.”

Marketing decisions mostly affect awareness/accessibility perceptions. But, the positioning decision presumably has some impact on perceived service design quality and perceived service experience quality, if positioning includes those elements and if the positioning is consistent with the actual standing of the service in the marketplace.

There may also be some prioritization issues (stage-wise processing) underlying customer choices for support services. Until a firm offers a "good enough" service with an appropriate benefits-related price, why would service experience quality or awareness/accessibility matter that much? All the accessibility or service experience quality in the world can't matter that much for a "poor" over-priced service. ("I know about it and it's lousy. which is why I don’t buy it.") Once a "good enough" service is offered, then perhaps service experience quality and accessibility become meaningful differentiators.

Moral: first, get service design and pricing sorted out; then, work on service experience quality and awareness/accessibility.

revised 04/19/2009
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listed under "Advice"
listed under "Marketing"
listed under "Strategy"





Marketing Spending for an Inactive Service

“When we drop a service (i.e., deactivate a service in a particular region), do we have to change it's marketing spending to 0?”

To drop a service (i.e., to deactivate a service in a particular region), change its active status to "No" and change its marketing spending to 0. If you don't change marketing spending to 0, marketing spending will continue at the current level in anticipation of a re-launch of the service.

All LINKS decisions are independent of each other, so deactivating a service doesn't change anything else automatically (like marketing spending or CSRs being assigned to that service or forecasts).

revised 08/09/2015
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listed under "Marketing"





Marketing Spending of Zero

“If marketing spending for a service product in a particular region is changed to $0, do sales in that region for that service go to zero?”

Probably not and certainly not immediately. Other drivers of sales exist beyond just marketing spending. Price, design quality perceptions, and experience quality perceptions matter, in addition to accessibility (which is driven principally by marketing spending). Marketing spending presumably has some carryover effect, with previous marketing spending still having some impact today even in the absence of current marketing spending.

revised 05/25/2010
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Pre-Launch Marketing Spending

“Does it ever make sense to have marketing spending before launching? We still have to do a reconfiguration before launching in a particular region and we could have some marketing spending now ahead of the launch, if it makes good business sense.”

Pre-launch marketing support spending (e.g., advertising, promotion, and sales force) is possible and presumably does have some residual value beyond the time period of the marketing spending. Of course, just because there is long-term value in marketing support spending doesn't imply that pre-launch spending is the most profitable thing to do. This is one of the great questions in marketing, what's the long-term impact of marketing spending?

revised 04/15/2000
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Price of an Inactive Service

“When we drop a service (i.e., deactivate a service in a particular region), do we have to change its price to 0?”

To drop a service (i.e., to deactivate a service in a particular region), change its active status to "No" and change its marketing spending to 0. You can't change price to 0, but price is irrelevant if a service isn't active.

revised 11/21/2004
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listed under "Generate Demand"
listed under "Marketing"





Profitability of Demand Drivers

“What can we do to assess the relative importance and potential profitability of all of the elements that drive our firm's demand?”

The following video provides advice for your LINKS team about assessing the profitability of the wide range of potential demand drivers that might affect your LINKS business.


revised 08/03/2017
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listed under “Advice”
listed under “Financial and Operating Reports”
listed under “Generate Demand”
listed under “Information Technology”
listed under ”Marketing”
listed under "Service"





Services in All Regions

“Is it required to have all services actively marketed in all regions?”

No, your services don't have to be actively marketed in all regions. It's your decision completely on how your services are deployed in the available regions. You wouldn't normally actively market a service in a region that didn't provide positive profits, unless there were other compelling side benefits from doing so. The bottom line is clear: manage your business to maximize your long-run profitability.

revised 09/12/2013
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listed under "Marketing"
listed under "Performance Evaluation"
listed under "Strategy"





Unfilled Orders Exceed Regional Demand

“Unfilled orders for one of our products exceed industry demand in that region. Is that really possible?”

Sure, why not. Unfilled orders have nothing to do with actual "filled orders" (i.e., sales). Unfilled orders represent additional potential demand that might have been realized beyond "filled orders" (i.e., sales) if sufficient product supply had been available to meet all customer purchase requests.

A high level of unfilled orders could also reflect industry-wide double-counting if multiple firms' products in a region simultaneously have unfilled orders. If two products simultaneously have unfilled orders in a region, then some customers undoubtedly would have wished to purchase first one of the products and then the other product when the stockout situation for the first product was encountered. In such a situation, this single customer would have been counted as an unfilled order by both stocked-out products.

Such a high level of unfilled orders is certainly suggestive of lots of accessible market potential in that region with the current marketing programs (including the current configurations and prices) of all of the actively-distributed products in that region. Presumably, there needs to be some increases in supply (i.e., increased production levels) for those products with unfilled orders, perhaps combined with appropriate price increases to maximize those firms' overall margins in that region.

revised 11/21/2004
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listed under "Generate Demand"
listed under "Research Studies"




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