The latest issue of the Wharton Alumni Magazine has an excellent article on the history of marketing at Wharton, focusing on how the school’s unique approach to the discipline has revolutionized the way many businesses assess their marketing efforts.
For those of you looking at top marketing programs like Kellogg, Wharton and U. Michigan, this is a must read! Here’s an excerpt:
Marketing 100
By Nancy Moffitt
Frito Lay had a slew of popular munchies, from Doritos to Sun Chips, and lots of clever, award-winning television ads to peddle them. But the company had an all-too-common problem: it didn’t really know when or if the ads were working.
“When I would talk about this problem to marketing experts, they would tell me that advertising was an aesthetic kind of a field, that it was like philosophy or religion or art,” said Dwight R. Riskey, senior vice president of marketing at Pepsico, Frito Lay’s parent company. “They would tell me that you couldn’t apply the tools of science to measure the effect of advertising. And that is a really interesting approach to something we were spending hundreds of millions of dollars on. It was massively frustrating to me.”
All that changed in the mid-1990s, when Riskey met and began working with Wharton marketing professor Leonard Lodish. In a landmark study called “How TV Advertising Works,” Lodish led a consortium of major consumer packaged goods manufacturers, leading advertising agencies, and the major TV networks in the first comprehensive analysis of long-term advertising effects – research that forever changed the way companies like Frito Lay manage their advertising.
Not only did the research reveal that nearly half of Frito Lay’s ads were ineffective, it also debunked long-held nostrums about television advertising, giving Frito Lay the tools to create guiding principles for managing TV advertising and setting priorities for ad campaigns.
“It was really significant for our company because the most common question any person in the field of consumer insights/market research gets is how advertising works,” said Riskey. “And literally up until this time period, I don’t think we had anything close to adequate answers. Let’s say a company like Frito Lay might spend $100 million on advertising a year. If you follow the principles of Len’s work and my work here, theoretically you could reduce waste by 75 percent, 90 percent, at least 50 percent. Even at 50 percent, that’s huge money. That’s pretty exciting.”
The American Marketing Association agreed. In 1996, Lodish’s research, published in the Journal of Marketing Research, won the AMA’s Paul E. Green award for the article most likely to affect marketing practice. In 2000, the same article was awarded the Odell award for the journal article with the most impact after five years, and was also judged the best article after five years by the American Marketing Association’s Advertising Special Interest Group.
For the full text of the article:
http://www.wharton.upenn.edu/alum_mag/issues/spring2005/feature_2.html
