Practice Prize Paper–Managing Advertising Campaigns for New Product Launches: An Application at Mercedes-Benz

Marc Fischer ()
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Marc Fischer: Faculty of Management, Economics, and Social Sciences, University of Cologne, 50923 Cologne, Germany; UTS Business School, University of Technology Sydney, Broadway, New South Wales 2007, Australia

Marketing Science, 2019, vol. 38, issue 2, 343-359

Abstract: The launch of a new product is one of the most critical activities that product and brand managers are faced with. It requires a substantial communications budget to introduce the new product to the market. As the number of media channels proliferates, however, managers are increasingly held accountable to demonstrate the efficient use of resources. This article introduces a new decision support tool to optimize advertising campaigns for new product launches based on lessons learned from an ex post analysis of prior campaigns. The tool builds on a distinct data collection approach combined with econometric modeling to produce advertising elasticities, which is the key information in the media mix optimization. The approach was implemented at Mercedes-Benz and applied to four major new car launches in Germany in 2012 and 2013. It revealed estimated savings of 15%–30% or EUR 2 million per campaign from a more efficient use of resources.

Keywords: advertising effectiveness; resource allocation; new product launch campaign; ordered logit models; single-source data (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:38:y:2019:i:2:p:343-359

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