Column 8 · Marketing Programs · Era 4, Orientation and Relationships (1990s)
Long-Term Mix Effects
Implementation, content · Major · Cluster III, Organization and Programs
Description
Dekimpe and Hanssens used persistence modeling to show that marketing actions can have permanent effects on sales, and Mela, Gupta, and Lehmann showed that long-run exposure to promotions increases consumer price sensitivity, establishing that mix effects unfold over years rather than weeks.
Managerial Implications
Marketing actions have effects that persist beyond the quarter, and the long-term effects can differ in sign from the short-term ones. Promotions lift sales now and train customers to wait for deals later; advertising builds brand preference slowly. Evaluate marketing spending over the horizon in which it works, and resist decisions, such as shifting from advertising to promotion, whose costs appear only after the manager has moved on.