1. The Nature and Measurement of Marketing Productivity in Consumer Durables Industries: A Firm Level Analysis
Hawkins, Dell I, Roger J. Best and Charles M. Lillis (1987), “The Nature and Measurement of Marketing Productivity in Consumer Durables Industries: A Firm Level Analysis,” Journal of the Academy of Marketing Science, 15 (4), 1-8.

2. Authors Del I. Hawkins Professor of Marketing
Various marketing Journals and Textbooks
Roger J. Best
Associate Professor of Marketing
Journals and Textbooks
Charles M. Lillis
Vice President of Strategic Marketing for US WEST Inc.
Various Journals
Marketing executive

3. Purpose of the Article
Develop a managerially relevant concept of marketing productivity
Construct an operational measurement of marketing productivity-a validity issue
Establish environment specific benchmarks with which to compare the marketing productivity of various businesses

4. Model Development
How the authors develop the model step by step is a good learning exercise (this is one of the reason I have included this article in the reading list)
Define the variables first
Explain conceptualization and limitation of variables
Identify their relevance in the area
Operationalize the variables-validity
Testing the model with credible data
Explain limitations
Model has no meaning in isolation, relative to what is the question

5. The Nature of Marketing Productivity
Concept of Productivity: Output/Input
Marketing productivity = marketing output divided by marketing input
Marketing Output = (Relative market share) x (Relative Price)
Marketing input= (Marketing Expenditures) /(Sales)
Percentage or ratio measures, not in absolute dollars

6. Marketing Productivity
Marketing Productivity Formula:
Relative Market Share x Relative Price
Marketing Expenditures/Sales
Marketing Productivity Score (MPS) – In isolation it has no meaning !
Marketing Productivity Index (MPI)

7. PIMS Database (now Marketing Science Institute)
Sources of data: firms pay a fee to join PIMS
Self reported data, multiplied by an unknown constant when supplied to PIMS
Questionnaire is provided by PIMS
Operational Definitions of Variables (ses Table 1)

9. Variables Influencing Marketing Productivity
Influence
Relative Product Breadth (RPB) +
Number of Competitors (NC) -
Relative Product Quality (RPQ)
Relative Customer Size Range (RCSR)
Served Market Growth (SMG)
Number of Immediate Customer (NIC)
Importance of Auxiliary Services to End User (IASE)
Frequency of Product Changes (FPC)
Purchase Amount Immediate Customers (PAIC)
Customization (C)

10. Construction of the Model
Firms
Durables and Nondurables
135 Firms
Correlation
Correlation between Y and X1,….,X10
Correlation between X1,….,X10
Model
Regression Equation Y= X1+………+X10

11. Correlation Analysis

13. Model Evaluation R² is significant Model is reasonably stable
Durables, nondurables, split-half…..all supports the model
Supports the overall structure of the model developed for the durables industries
Variables that were collinear were removed before implementing the model

14. Critique of the Article
Positive Contribution:
First of its kind
Reasonable model
Credible database
Coming from industry
Questionable Issues
Limitation in variable definition
Variability in the dataset
Collinearity
Future direction

15. Discussion Questions
What is marketing productivity? What problems do we face in measuring productivity? How can we overcome them?
What are the drawbacks/limitations of the Hawkins et al.’s (1987) marketing productivity score/index? Can we apply the index to measure productivity in other industries? How?
Write a critique of the article.