Spotts, Weinberger, and Weinberger

MANAGEMENT SLANT

  • For most brands, advertising-media spending, particularly television spending, had the greatest impact on changes in sales performance. The quality of advertising execution was still important, but it played a lesser role for the group of eight nonleading brands.
  • For the category leader, advertising spending at current levels did not drive additional sales. Instead, advertising quality mattered most, perhaps reflecting saturation in awareness. This suggests that this category leader may be able to reallocate resources devoted to exposure. Total promotions also were not related to changes in sales for this market leader.
  • Brands that experienced gains in average sales performance over the five-year period had higher share of voice across media, higher advertising-executional quality, and fewer sales driven by promotions than those that declined in sales performance.
  • Although classic promotion activity was not a significant driver of sales change, menu-based promotion actually had a negative effect on changes in sales. There is some evidence that restaurants increased the use of menu-based promotions when sales were flagging, a strategy that may be counterproductive.