Turning Research into Return on Investment

Mike Mondello1
Celestial Seasonings Inc

This paper is intended to examine the role of marketing research in corporate decision-making. I'd like to share Celestial Seasonings' experiences with turning marketing research into return on investment.

My discussion will be in two parts. First, I'll show you how we used existing studies on profitability to determine how our marketing budget should be allocated. Then I'll introduce a 'Total Quality approach' that we use to increase the profit return for an important part of our marketing budget, television advertising.

MARKETING ACTIVITIES: ALLOCATION AND PROFITABILITY

In the fast-moving consumer goods industry, there are three primary marketing activities that are used in an effort to increase sales and, of course, profits:

  • trade promotion, which accounts for nearly half of marketing expenditures
  • consumer promotion, accounting for almost 28% of expenditures
  • and advertising, accounting for about 25% (See Figure 1)