Articulos Wharton

Determining anD measuring Your strategY VoL. 1

Wharton on
Marketing

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Determining and Measuring Your Strategy
As the consumer mArket continues to explode and a succession of new

technologies gives rise to entirely new ways of marketing, how can companies plan and weigh the effectiveness of theirmarketing strategies? From the basics of whom to aim for—consumers on the high-end, low-end, in the middle, or embedded in larger networks—to the complicated array of metrics available to measure everything from ROI to customer value, the variety of marketing strategy options and tools can create more confusion than cohesion. The following articles from Knowledge@Wharton look at some key strategyelements that marketing executives should consider, such as the potential downside to pursuing market share, the value of consumer networks, and product diffusion among “influentials” and “imitators. ”



Wharton on Marketing

■ Determining and Measuring Your Strategy, Vol. 1

Contents
The “Myth of Market Share”: Can Focusing Too Much on the Competition Harm Profitability?
Businesshas long been likened to warfare, according to Wharton Marketing Professor Scott Armstrong, so it is hardly surprising that companies strive to beat their competitors and wrest away as much market share as possible. Such efforts not only waste time and energy, but they can actually be detrimental to the firm’s profitability, according to Armstrong’s new research.

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Network-Based Marketing:Using Existing Customers To Help Sell to New Ones
Marketers have long used all sorts of demographic and geographic data to target potential customers—age, sex, education level, income, ZIP code. But there’s another variable that companies may want to consider: Who is connected to whom? A study, co-authored by Wharton Professor of Operations and Information Management Shawndra Hill, found thatconsumers are far more apt to buy a company’s product if they are “network neighbors” with existing customers.

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Death in the Middle: Why Consumers Seek Value at the Top and Bottom of Markets 10
“In the U.S. and around the world, the consumer markets are bifurcating into two fast-growing pools of spending, writes author Michael J. Silverstein in his new book Treasure Hunt: Inside the Mind ofthe New ” Consumer. Between the high end and the low end lies a vast range of mediocre, medium-range products that Silverstein claims is doomed to decline. What implications does this have for companies and their brands? In an interview, Wharton Marketing Professor David Reibstein discusses that question with Silverstein.

How and Why Chinese Firms Excel in “The Art of Price War”
According toWharton Marketing Professor Z. John Zhang, in the West, the outbreak of a price war is viewed as the failure of managerial rationality. In China, the outbreak of a price war is considered a legitimate and effective business strategy. In a recent paper, Zhang and Dongsheng Zhou, a marketing professor at the China Europe International Business School in Shanghai, analyze two price wars that tookplace in China in the mid-1990s.

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Marketing Metrics and Financial Performance
How does a company measure the effectiveness of the various components of its marketing strategy? What metrics are most effective, and how can these help maximize profits? In an interview with Knowledge@ Wharton, Marketing Professor David Reibstein, coauthor (with Paul Farris, Neil Bendle, and Phillip Pfeifer)of the book Metrics Every Executive Should Master (Wharton School Publishing), talks about the pros, cons, and tradeoffs associated with metrics.

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“Influentials” and “Imitators”: How To Better Forecast the Sale of New Products
Two Wharton researchers have developed a mathematical model that they say will allow companies, for the first time, to predict at what pace new products will gain...