Recommended
Recommended
More Related Content
What's hot
What's hot (20)
Similar to Marketing strategy- powerpoint
Similar to Marketing strategy- powerpoint (20)
Recently uploaded
Recently uploaded (20)
Marketing strategy- powerpoint
- 1. © Palmatier 1 Marketing Strategy: Based on First Principles and Data Analytics All Customers Differ All Competitors React All Resources are Limited All Customers Change First Principles: The foundational concepts or assumptions on which a theory, system, or method is based (Oxford Dictionaries )
- 2. First Principle #1: All Customers Differ Customers' wishes and demands are quite diverse when it comes to the majority of goods and services. Even for “commodities” (e.g., coffee, water) Over 9000 mutual fund options, Grocery stores carry 60,000+ SKUs Thus, corporations are targeting smaller & smaller portions Competitive race as firms target smaller segments Mass marketing → niche marketing → 1-to-1 marketing Retail (Sears vs. Eurosport), cars (Model T vs. today) Why? Matches inherent customer desires (real, perceived) Faster response to customer trends and changes Only limited by tradeoff in efficiency (cost) versus benefit of better match to need (solution) Technology enabled (more economical to target/customize) 2
- 3. Input-Output Framework for Managing Customer Heterogeneity Segmentation, targeting, and positioning of prospective clients need three inputs to the framework. Despite the fact that the second and third inputs are identical, they each concentrate on a different firm, in this case a rival of the first. The 3C's of scenario analysis include the inputs for managing customer heterogeneity: Customers, the Business, and the Enemy It is from these outcomes that the framework derives its first principles. 3
- 4. Marketing Principle #1: All Customers Differ Managing Customer Heterogeneity 4 Managing Customer Heterogeneity Approaches & Processes Segmenting, targeting, and positioning (STP) Perceptual/positional maps Customer-centric view Analyses Discriminant analysis Classification Factor analysis Cluster analysis GE matrix Inputs (3Cs) Outputs (STP) All Potential Customers • Needs • Size, growth, perceptions • Demographics Your Company • Strengths and weaknesses • Opportunities and threats Your Competitors • Strengths and weaknesses • Opportunities and threats Industry Segmentation • Needs, demographics, and opportunity of each segment • Customer segments Target Segment • Discriminant function • Detailed needs, demographics, and value of target segment(s) • Relative perceptions Positioning Statement • Who (target segments) • Why (relative advantage & support) • What needs/benefits
- 5. First Principle # 2: All Customers Change Customer’s desires/needs for most products and services change overtime or due to specific events Consumer needs change: cars (Buick), clothes, financial services, food, and healthcare as consumers age Trigger events: kids, graduation, marriage, job change, finances, move, new managers, acquisition, legal changes Industries/markets change: experience curve, competitive responses, diffusion, overproduction Variety, as well as changes in people and marketplaces, affects the wants of the customers (dynamics) As a result, consumer dynamics and lifecycle changes must be taken into consideration when doing segmentation and targeting. 5
- 6. Marketing Principle #2: All Customers Change Managing Customer Dynamics 6 Managing Customer Dynamics Approaches & Processes Lifecycle approach Dynamic segmentation approach Acquisition, expansion, retention (AER) model Lost customer approach Analyses Customer lifetime value (CLV) Hidden Markov model (HMM) Choice models Factor, cluster, discriminant analyses Inputs (CRM data) Outputs (AER) Your Customers • Behaviors/needs over time/events • Individual customers’ sales, margins, costs Past Marketing Programs • Past programs targeted at specific customers • Source of customers Lost Customers • Characteristics of lost customers • Cause of defection Segmentation of Customers • Customer personas • Needs and CLV of personas • Why and how they migrate AER Positioning Statements • How to position the company in each step of the persona/AER AER Strategies • What are the ideal marketing tactics for each step of the AER?
- 7. First Principle #3: All Competitors React Successful methods are always being copied and new ones are being developed by competitors. Only 1 firm settles in the original Dow 30 firms (GE) Provided adequate funding and time that most techniques can be imitated Therefore, organizations are required to create a barrier to be imitated, providing them the adaptation period of innovation to the others. Some of the hindrances are called Sustainable Competitive Advantage (SCA) and they are very important for long term superior financial performance SCAs should satisfy 3 requirements: 1. Customers care 2. Hard to duplicate 3. Company does “it” better than competitors 7
- 8. Marketing Principle #3: All Competitors React Managing Sustainable Competitive Advantage 8 Managing Sustainable Competitive Advantage Approaches & Processes SCA Brand, offering, relationship equity stack AER strategy and BOR equity grids Brand and relationship mgt. Innovation processes Analyses Field experiments Conjoint analysis Multivariate regression Choice models Inputs (MP #1 & MP #2) Outputs (SCA, BOR) Positioning Statements • AER (internal personas) • Target (external customers) AER Strategies • What is the ideal strategy at each step of the persona/AER? Future Trends • Technology trends • Regulatory trends • Socioeconomic trends SCAs • Existing SCAs, why you win now • Future SCAs, how you will win in future BOR Strategies • Brand strategies • Offering/innovation strategies • Relationship marketing strategies
- 9. First Principle #4: All Resources Are Limited The majority of marketing choices include balancing many goals with limited resources, and these goals are often interconnected. Advertising vs. channel co-ops vs. salespeople vs. discounts vs. R&D vs. online Many "messages" are incompatible (for example, high status and cheap price), or (high performance and economical) Short-term vs. long-term tradeoffs Thus, need to balance marketing resources across: Customers (STP) Acquisition, Expansion, and Retention stages (AER) Marketing mix elements (4 to 7 Ps) Brand, Offering, Relationships (BOR) 9
- 10. Marketing Principle #4: All Resources Are Limited Managing Resource Trade-Offs 10 Managing Resource Trade-Offs Approaches & Processes Attribution approach Heuristic approach Analyses Anchoring-adjustments Experimental models Response models Inputs (MPs 1, 2, & 3) Positioning Statements • Who, what, and why, generally and for each persona, spanning AER phases AER Strategies • What tactics are most effective for each persona at each level of the AER? BOR Strategies • Brand • Relationship marketing • Offering/innovation Plans and Budgets • Budget size • Time horizon • Budget allocation Marketing Metrics • Financial metrics • Marketing metrics Outputs (Metrics & Plans)
- 11. Thank You 11
Editor's Notes
- First Principle: All Customers Differ The first, and most fundamental challenge for marketing mix managers (price, product, promotion, venue) is that all clients are unique. Customers' actual and perceived requirements and tastes are quite diverse. Salt and bottled water are two examples of fundamental commodities that have a wide range of preferences. Customers' preferences are influenced by a variety of elements, including: fundamental, personal distinctions; diverse life experiences; distinctive functional demands for the product; distinct aspirational self-identities; and prior persuasion-based actions aimed on influencing their preferences. Customers' choices are influenced by a wide range of factors from a variety of sources. The short-term benefits of ignoring this fundamental principle of customer differences and offering a single product, especially if competition is weak or the commodity is limited, may outweigh the long-term costs. When a new product or service is in high demand, rivals see an opportunity and begin to provide distinct offerings that are tailored to the needs of certain market groups. In the event that an incumbent business fails to react with improved offers, consumers will look for other options. Sales income is consequently lost for the company. While a result, the incumbent company is left with clients in less attractive, slower-growing, and less lucrative categories, as its rivals have focused on these markets. One of the most common causes of business failure is failing to manage client heterogeneity, which is described as the variety in customer requirements, wants, and consequent behavior. Marketing Decision: Managing Customer Heterogeneity Multiple causes of individual variance interact in complex ways. When building an effective marketing strategy (MP#1), all companies face the difficulty of dealing with consumer heterogeneity, but the methods for doing so aren't always evident. In other words, how should each business deal with the diversity of its customers? First, it might deliver a solution that is tailored to the demands of the majority of clients. A big enough market may have enough average consumers to make the company successful for a short period of time, even if many customers are unsatisfied. However, as the market expands, a rival is likely to target a certain subset of clients who are looking for a more customized service. With an overbuilt infrastructure and the related expenditures, the original corporation is left with nothing. As a result of the decline in sales and earnings, the company's financial position is deteriorating rapidly. As a second option, a company might provide a wide variety of goods and services to cater to the many consumer groups it serves. However, this method has the potential to be both very successful and extremely expensive and complicated. A single company is unlikely to be able to service the demands of all of these clients at once. Third, companies may believe that if a product's price is low enough, buyers are willing to compromise on desired features. Firms use a low-cost approach to identify the essential, must-have features that fulfill customers' functional demands, and then concentrate all their efforts on achieving the lowest cost for a service that fits those criteria. According to its potential to achieve cost advantages over its rivals, this technique may be feasible in the low-cost market. Fourth, to cope with the heterogeneity of consumers, a company may target a specific section of customers by framing its product as the greatest option for that specific category in comparison to those available from any rivals (i.e., segmentation, targeting, and positioning, or an STP approach). As a consequence, people in the market have come to know and trust the brand. An STP method, notwithstanding its efficacy in dealing with client heterogeneity, might impede a company's future development. A customer-centric strategy frequently goes hand in hand because the company identifies and prioritizes its core customer segment in all significant internal business activities and decisions.
- Input–Output Framework for Managing Customer Heterogeneity The slide contains the input–output framework for managing customer heterogeneity. Managers' decision-making is aided by the methods, procedures, and analyses captured in this document. The three key inputs to the framework are required to conduct segmentation, targeting, and positioning of potential customers. Customers' needs, desires, and preferences (segmentation), perceptions of specific brands in the marketplace across key attributes (targeting), and information to determine segment attractiveness, such as their growth rate or price sensitivity, are all included in the first input. Market segment attractiveness information often comes from multiple sources, such as customer surveys, marketing industry reports, and other secondary sources. Inputs 2 and 3 both focus on the primary company, but input 3 also includes the company's competitors. An inventory of a company's and its rivals' strengths and weaknesses is required to assess the relative competitive strength of the targeted business in each segment in support of targeting and positioning activities. Identifying the strengths and weaknesses of a company and its competitors should include all important areas (including but not limited to those related to the following: the manufacturing, technical, financial, marketing, sales, and research sectors). When doing a SWOT (Strengths Weaknesses Opportunity/Target Study), it is important to include all four aspects in the analysis since they all have a role to play in the firm's targeting and positioning efforts. The 3Cs of scenario analysis: Customers, Company, and Competitors, are the inputs to managing customer heterogeneity. Together, they provide the backdrop for the company's strategy. Customer preferences, market trends, and the firm's strengths all play a role in the firm's marketing strategy, which must "fit" and "leverage," respectively, these factors. As a result, the framework creates three outputs, each of which serves as an input for a new set of First Principles. An industry or product category is first defined using this framework's mapping of important client groups based on individual customer preferences. Using two important questions as a framework, this crucial output illustrates the possible client landscape: Can the market be separated into homogeneous groups, and what does each group of prospective consumers want? After that, a second output focuses on the particular segments of the market that the company is interested in, offering in-depth explanations of each section. In addition to describing the relative strength of the company, these descriptions mention the value or attractiveness of each section. Additional questions are answered in a second output. It's important for a business to decide on a target market segment and how it will identify those customers. An organization can use a positioning statement to guide its internal and external marketing mix activities, and it is the third and final output of the process. A company's target audience is defined by the following questions: What requirements and advantages are being met? When compared to other offerings, what are the advantages of this product? The company as a whole, as well as each of the company's key target segments, should have a position statement developed. The essence of a positioning strategy for a specific market segment is encapsulated in a positioning statement. Summary of Marketing Principle #1 Marketing strategy development begins with the conversion of input from customers, companies, and competitors (3Cs) into a representation of the firm's environment through industry segmentation, target segments, and positioning statements (STPs). Identifying a small but manageable number of homogeneous client groups helps the organization to truly analyze its capabilities and make strategically important choices about how to gain and retain consumers. According to how it accounts for customer diversity, customer attractiveness and the company's relative advantage, almost all subsequent choices are based on this essential initial step.
- First Principle: All Customers Change In addition to accounting for intrinsic variances in consumers (MP#1), managers creating their marketing strategy also must account for variation as a customer’s demands vary over time (MP#2). These modifications could occur at the individual customer level, reflecting distinct customer, product market, and contextual aspects. At any moment in time, clients could be categorized and targeted on the basis of how well their wants and desires fit or resonate with a certain product or service. Soon afterwards however, customers’ requirements start to shift. Even within a well-defined section, members’ particular requirements can grow at various rates or directions. At some time in the future, consumers who were part of a reasonably homogeneous section therefore would demonstrate significantly diverse requirements and goals and no longer fit neatly into a market segment. Consider, for example, the highly homogeneous cohort of recent college graduates. Companies like Ford and GM routinely develop automotive incentives tailored to these well-educated clients, on the edge of commencing their professional life. Fast forward only two or three years, and the varied routes that members of the “new college graduate” sector pursue are practically infinite. Some have invested entirely in their job success. Others have gotten married and are raising or considering having children. Another group has returned to an academic atmosphere by pursuing graduate school. Some are purchasing their first homes, others rent, and still others have moved back into their parents’ residences. The fundamental demands and purchasing preferences that were pretty constant a short time ago therefore have fractured in diverse, separate ways. The methods through which customers’ wishes and demands vary over time called customer dynamics. The changes also might be market-level evolutions in client preferences that follow technology breakthroughs. In these circumstances, virtually all consumers ultimately adapt, although at various speeds, thus the enterprises that lag incur a danger of extinction, along with the old technology. Blockbuster was a strong market leader when viewing a movie at home required the rental of actual VCR tapes, and it moved efficiently to the renting of physical DVDs when that technology debuted. But it failed to adapt to the flexibility and convenience given by rental kiosks (e.g., Redbox) and rentals-by-mail (e.g., Netflix) (e.g., Netflix). When video streaming joined the fray, it just could not compete any longer and suffered a deadly blow. Let’s look more systematically at these changes in individual client wants and preferences over time. Why do they occur? The numerous sources and drivers of consumer dynamics combine to make change unavoidable. Most of these drivers may be divided into five categories: Seminal events. The demands and tastes of individual clients may vary owing to discrete life events, whether foreseen or not, such as a vehicle accident, graduation, a big promotion, or a new job. Life stages. People tend to proceed pretty consistently through conventional lifecycle phases as they develop (e.g., single married children parent of adolescents empty nesters retirement), which impact many of their product and service goals. Knowledge/expertise. Customers' most important features frequently shift systematically depending on their experience with and understanding of a product or service category, a phenomenon known as the learning effect. For example, when a musician's understanding of the variables that determine playability and sound quality (e.g., neck width, fret board material, tone woods utilized) improves and expands, the criterion for a first-time guitar purchase (e.g., price, color, "looks like the one that Slash plays") is replaced over time. Category maturity. The changes brought about by this learning impact affect both individual customers and the product market as a whole. When it comes to digital photography, for example, even first-time buyers are likely to consider features like pixels and zoom speeds that were traditionally reserved for only the most experienced professional photographers. Regular exposure to relevant information. Each customer makes decisions in an environment where they are constantly bombarded with information from a variety of marketers and organizations (e.g., government, industry trade groups, nonprofit organizations), as well as from friends and acquaintances, all of which are attempting to influence the person's needs and preferences. Consider how many health-related messages you've gotten in the last week, such as reminders to eat more veggies and less sweets, quit smoking, and exercise, as well as adverts for exercise equipment or healthy recipes provided by friends. Some of those communications were likely disregarded, but others may have prompted you to take action in one manner or another. A public service commercial encouraging people to get 30 minutes of exercise may motivate you to go for a walk after dinner; nevertheless, a recipe from your mother for a vegetable casserole may irritate you to the point that you rebel by getting the huge order of fries from the drive-through. Because all consumers evolve over time, unless a company's time horizon is exceptionally limited, failing to comprehend and solve customer dynamics will eventually jeopardize almost any marketing plan.
- Marketing Decision: Managing Customer Dynamics Implementing and starting to see benefits from marketing strategy might take a long time. As a result, waiting for signs that consumers have started to shift, such as financial data that show slowing client sales, before reacting is not a successful strategy. So, how should a company deal with consumer dynamics? There are three major techniques that businesses may use to adapt fast to change and successfully manage it for a part of their customers. First, by applying lifecycle views to consumers, goods, or sectors, a company may obtain insight into customer dynamics. The average shift or movement among customers as they age, regardless of product or industry variances, is referred to as a customer lifetime. As a result, these methodologies capture the first two or three sources of consumer dynamics that we mentioned before. Instead, a product or industry lifecycle approach captures normal user experiences as well as industry developmental consequences as the product category evolves. It fails to take into account the unique sources of consumer dynamics. It mostly captures the fourth and fifth causes of change in this way. These lifecycle tactics are straightforward and quick to implement, which is why they are still prevalent in many marketing courses and textbooks. However, implying that all consumers or goods follow a preset lifetime curve in order for businesses to decide the best marketing approach at each stage is problematic. These techniques presume that all consumers and goods progress in the same manner since they employ averages across all customers or items. Furthermore, although the many lifecycles capture impacts at various levels, they often miss or give little insight into other sources of consumer dynamics that may be acting at other levels at the same time. Yet, for understanding and establishing the marketing strategy, every source of consumer dynamics, relevant to the firm's clients and goods, is vital. Second, some of the insights from MP#1 can be applied to the customer dynamics problem, such as segmenting existing customers based on where they expect to see similar migration patterns in the future. Firms may use the acquisition, expansion, and retention (AER) approach to understand customer dynamics, which we explain in detail in Chapter 3. In a nutshell, categorizing existing customers into three stages – newly acquired, long-term customers, and those lost or on the verge of being lost – can provide some insight into customer dynamics, as well as their needs and preferences, allowing the company to create a descriptive "persona" for each group. Third, to improve dynamic segmentation across AER stages, a customer lifetime value (CLV) approach aims to capture each customer's financial contribution by calculating the discounted value of the sales and costs associated with them over the course of their relationship with the company. As a result, CLV accommodates for customer heterogeneity (MP#1) by calculating CLV at the individual customer or segment level rather than assuming that all customers in a firm's portfolio are the same. It also takes into consideration customer dynamics (MP#2) by discounting cash flows (sales and expenses) over the acquisition and expansion phases, and then incorporating the expansion and retention expectations for any given customers' or segments' predicted migration trajectory. CLV's major benefit is that it offers advice on how to make the best trade-offs and resource allocation choices across phases and market mix investments.
- First Principle: All Competitors React Because understanding and managing customer heterogeneity and dynamics allows a firm to develop a positioning strategy that matches its targeted customers' needs and manages those needs as the firm engages with those customers over time, the first two marketing principles are focused on potential and existing customers. The firm's long-term success and financial performance are also dependent on how rivals respond now and in the future. Target markets and positioning strategies are chosen based on the firm's relative strengths compared to current competitors. Competitors will strive to duplicate a company's success or reinvent business procedures and services to better fit consumers' wants and desires, regardless of how effectively it solves MP#1 and MP#2. The third principle marketing managers must handle is the continual attempt by other enterprises to imitate and innovate, causing all rivals to respond, by erecting and maintaining barriers to competitive assaults, which together make up MP#3. Competitors might undercut a focused firm's market position in a variety of ways. First, technological advancements give venues for the introduction of new offers, rendering the company's old products or services outdated (e.g., transistor radios). Second, customers' preferences may shift as a result of cultural, environmental, or apparently random reasons that render the firm's brand irrelevant or even detrimental to the firm's success. Third, varied actors' entrepreneurship and creativity are continually tapped to develop new, better, and more innovative solutions to issues and to provide new goods and services (e.g., Uber replacing taxis). In some circumstances, these innovative attempts succeed in displacing the market leader, while in others, they entirely reshape the industry. Fourth, rivals may typically imitate the firm's product while also outperforming it in terms of strategy execution. Three German brothers, Marc, Alexander, and Oliver Samwer, have made billions of dollars by imitating the success formula of companies like Pinterest, Groupon, and Airbnb. As a result, technology, consumers, and business environments are always evolving, and a company's rivals are continually striving to come up with new methods to meet customers' requirements and wishes. These activities have the potential to seriously damage the company's market position. The more successful a company is, as measured by sales, earnings, and stock prices, the more effort its rivals put out to undermine its financial strength. The more successful a company is, as measured by sales, earnings, and stock prices, the more effort its rivals put out to undermine its financial strength.
- First Principle: All Resources Are Limited The third difficulty for managers is that all resources are limited. Because the resources available to satisfy these goals are typically interconnected, most marketing choices include trade-offs across many objectives. Thousands of square feet of retail shelf space dedicated to items that service an incorrectly targeted market category may result in significant losses, such as the obsolescence that would ensue if a store stocked pallets full of thin jeans just as wide-leg versions were regaining popularity. When marketing plans devote expenditure to brand promotion, new product development, or increasing the sales organization to strengthen connections, they often draw from the same fixed resource pool. Because a company only has so many resources, crucial trade-offs must be made. Marketing resources provide the levers to apply what the organization has learnt through MPs #1–3. Managing resources properly is also crucial. These complicated resource trade-offs are influenced by a number of variables, but five are likely the most important: -Resource slack refers to a company's available resources that allow it to make modifications to its marketing plan. Firms vary greatly in how much emphasis they place on marketing, but for the most part, the amount of resource slack they have is highly influenced by the economy and the firm's financial success. -As consumers' requirements change, so does the size and attractiveness of segments, as well as the number of targeted segments the business serves, requiring the firm to reallocate resources to reflect its continuous commitment to the different segments. -As a company's product portfolio's lifecycle stages change, it may aim to balance its product portfolio to contain a variety of goods that span different lifecycle stages and serve a variety of target groups. The arrival and departure of rivals cause changes in the product market landscape. When a company gains a competitive advantage, rivals immediately respond with countermoves that might erase the incumbent's advantage, resulting in a scramble for secondary demand. Firms take market share from one another in this way. These competitive behaviors and responses often need resource reallocations. - Because client categories, values, and preferences vary as goods age, as does the competitive environment and economic situations, the efficiency of marketing initiatives fluctuates. Due to variations in the efficacy of the marketing activity, the same quantity of well-targeted resources might be turned more or less successful. Trading off resources in such contexts may be difficult, and companies must continually change their allocations across various planning horizons; in certain situations, they must even reverse their supposedly solid allocation principles. Another First Principle is that these diverse sources combine together to produce a significant demand for complicated trade-offs when companies implement their marketing plan. Companies that overlook the complexities of resource allocation changes may gain sales in the near term, especially if they operate in a monopoly (e.g., daily newspapers from the 1960s to the 1990s). However, in the long term, it seldom works. In a dynamic business environment where several elements impact company performance at the same time, balancing different marketing strategies is unavoidable. Companies that do not establish efficient techniques for managing these complicated trade-offs risk losing whole customer segments or considerable market share to rivals who have improved their resource allocation.
- Marketing Decision: Managing Resource Trade-offs The fourth and final marketing concept is that all resources are finite, and thus a successful marketing plan must handle resource trade-offs. The resource trade-off strategies of a company, which define how much it allocates to each target market segment, AER strategy, and SCA strategy, should be developed to be relevant to the company's current target segments (MP#1), to maintain the company's current AER strategy (MP#2), and to support the company's stated SCA (MP#3). If any of these elements (for example, changes in the makeup of a business's client groups or product portfolio, or changes in the efficacy of marketing initiatives) result in extra resource trade-offs, the firm must alter its strategy to account for them. Two major techniques may be used to inform a company's resource allocation decision framework. First, when enterprises lack concrete data on the desirability of each resource alternative, they employ heuristic-based methods to create resource trade-offs. Simple rules of thumb, guided by intuition and judgment, are used by managers to address the resource trade-off dilemma. Such simple heuristics can recommend dedicating a proportion of sales to marketing, a strategy that can be readily altered and hence desirable in a complicated circumstance. The majority of heuristics, however, are erroneous. They make judgments without any scientific foundation, depending instead on managers' gut opinions about what resource allocations are appropriate. Keeping the average percentages assigned in the past to determine advertising budgets for all segments, for example, would be a violation of MP#1 since it believes that advertising pays off similarly across all consumer groups, neglecting the concept that all customers are unique. If the corporation instead bases advertising on a proportion of sales, it contradicts MP#2 and rejects the premise that all consumers change, since it thinks that advertising pays off as well today and tomorrow. Firms may continuously alter their heuristics to enhance these processes, a process known as "anchoring and adjusting." Managers may, for example, allocate resources based on an initial heuristic (i.e., anchoring), then alter their judgments every period after seeing how their previous option performed. In each period, if a heuristic proposes spending 1% of sales on advertising, the company may either "continue business as usual" and set advertising at 1% of sales, or it can "modify" the heuristic higher or lower. These strategies may be acceptable in somewhat stable markets; but, in extremely unstable markets with significant heterogeneity and sales volatility, simple decision rules can lead to bad trade-off judgments. Second, as contemporary managers take use of better processing power and developments in statistics and data management, attribution-based approaches are becoming more common for making resource trade-off choices. Firms are in a better position to examine historical data and assess the effects of different marketing resource allocations on sales and profitability. Historical data provides valuable insight into whether and how much marketing efforts improve economic results. Marketing managers can answer crucial resource allocation issues with a well-executed attribution methodology, such as: How much would our financial results change if we raised marketing efforts by 1% (marketing elasticity)? When marketing managers employ more than one marketing resource (which is nearly usually the case), they can determine the relative effect of each resource, which is critical to their best allocation. To summarize, all resources are finite, and a company's marketing strategy must properly use those resources in order to optimize its long-term commercial success. All resources are finite, and a company's marketing strategy must properly manage those resources in order to optimize its long-term commercial success.