Allocating marketing resources
By: Sunil Gupta, Thomas J. Steenburgh
Contributors: Gupta, Sunil, 1958-; Harvard Business School
Series: Working paper / Harvard Business School -- 08-069; Working paper (Harvard Business School) -- 08-069
Publisher: Harvard Business School
Published: 2008
Place of publication: Boston]
Language: eng
Number of pages: 46
Description: Marketing is essential for the organic growth of a company. Not surprisingly, firms spend billions of dollars on marketing. Given these large investments, marketing managers have the responsibility to optimally allocate these resources and demonstrate that these investments generate appropriate returns for the firm. In this chapter we highlight a two-stage process for marketing resource allocation. In stage one, a model of demand is estimated. This model empirically assesses the impact of marketing actions on consumer demand of a company's product. In stage two, estimates from the demand model are used as input in an optimization model that attempts to maximize profits. This stage takes into account costs as well as firm's objectives and constraints (e.g., minimum market share requirement). We discuss pros and cons of these approaches and illustrate them through applications and case studies.
Notes: "February 2008"--Publisher's web site.

Includes bibliographical references.