Long-Term Marketing Effectiveness in Turkey: Does It Differ from that in
the US and Western Europe?
Prof. Dr.
Koen Pauwels
DEPARTMENT
Economics and
Administrative Sciences
CONTACT
[email protected]
FUNDING SCHEME
TÜBİTAK 1001
START DATE
01.01.2010
DURATION
18 months
2010 National Grants
Throughout economic booms and recessions, Turkish companies aim to sustain and grow their market performance.
Marketing actions such as product innovations, price changes, distribution channels and communication activities all
have the potential to deliver this performance. Unfortunately, very few companies know how much additional sales or
profits are generated by a specific marketing actions – but those that do outperform their competitors in terms of revenue
growth, market share and profitability (CMO Council 2004). In the United States and Western Europe, long-term marketing
effectiveness has been quantified for a wide range of marketing actions and industry sectors. In Turkish marketing literature,
authors have considered manager and consumer perception of sales promotion (Akyüz and Ayyıldız 2008, Tığlı and Pirtini
2003 ), advertising (Gülçubuk 2007), mobile marketing (Akbiyik, Okutan, Altunisik 2008) and packaging (Sütütemiz,
Çiftyıldız and Konuk 2008). These studies survey consumers and/or managers on which marketing actions are perceived to
be more versus less effective. Unfortunately, these stop short of quantifying the actual effectiveness of marketing actions
with market data. It is well documented that consumers often change their purchasing behavior in response to marketing
actions, even though they do not express this in a survey. In sum, companies doing business in Turkey currently lack hard
numbers for long-term marketing effectiveness, which is crucial to making intelligent decisions on where to cut spending
and where to increase it. This project aims to quantify long-term marketing effectiveness in Turkey and compare it with the
marketing effectiveness observed in previous studies on US and Western European companies. The original value of the
project consists of identifying and interpreting differences in long-term marketing effectiveness for an important emerging
market versus mature markets. Differences are expected when compared to current research in mature markets. In the US,
return on marketing investment is highest for new product introductions, then for pricing and promotions, next for pricing
actions, then for distribution actions, and finally for communication (Pauwels 2004). In contrast, the researcher expects
that communication and distribution effects dominate in Turkey, based on conversations and preliminary data analysis
with Sony Eurasia. Moreover, communication effects are expected to far exceed the 0.05 elasticities typically reported in
mature markets. Most importantly, the researcher expects to find several cases of permanent marketing effects, leading to
long-term competitive advantage for the company studied. These findings will require the development of new frameworks
and recommendations for Turkish businesses and policy makers that operate in emerging markets. Besides the important
practical value to Turkish business, knowledge of long-term marketing effectiveness may also provide input to Turkish
long-term economic development plans and European Union development projects. The scientific approach involves the
persistence modeling framework introduced by Dekimpe and Hanssens (1999) and further refined by Pauwels (2004) and
Pauwels and Hanssens (2007). This approach follows 3 steps: unit roots tests reveal the sustainable versus temporary
advantage nature of marketing actions, vector auto-regressive models allow for short-term and long-term marketing effects,
for competitive effects and for complex feedback loops, while i