A review of empirical studies of aggregate marketing costs and productivity in the United States
This article reviews empirical studies of aggregate marketing cost and aggregate marketing productivity in the United States. A methodological comparison is made of five cost studies for 1929 and seven productivity studies covering a period from 1869 to 1968. The cost studies do not clarify—one way or the other—if marketing costs too much or too little. The productivity studies, on the other hand, despite a variety of methodologies, reveal a rising secular trend over the past century. Thus, it may be concluded that irrespective of changes in cost, marketing is becoming more productive.
Shaw aggregate marketing system Revisiting and revising Alderson ' s formula to measure the productivity of the
In response to a swirling controversy over high costs, wastes and inefficiencies in marketing, Wroe Alderson (1948) proposed a novel formula to measure the productivity (or efficiency) of the marketing system. His dual input–output formulation represented a significant conceptual advance over marketing efficiency measures that had gone before or have come after. Alderson’s main contribution was to add a measure of household purchasing productivity to the standard economic formulation of the aggregate marketing productivity of business firms. There were, however, conceptual, operational and empirical problems with the formula, particularly with Alderson’s inclusion of household buying behavior. Because the conceptual challenges appeared so intractable and also because the difficulties of measurement seemed so insurmountable, the formula has long been relegated to the scrapheap of marketing history. Conceptual advances in marketing theory, particularly in light of Alderson’s later theoretical work, along with the availability of data sources hitherto unavailable, now make empirically testing the efficiency formula a realistic possibility. Consequently, it is worth revisiting the formula and reexamining the conceptual challenges so that one of Alderson’s most brilliant theoretical contributions to marketing thought may finally be conceptually resurrected and empirically tested.
Competition and evolution in the distributive trades
The objective of this book is to provide the reader with a comprehensive view of the key factors which have controlled the growth and development of middlemen institutions. Designed for both students and practitioners, the book fills a void in the distribution systems literature. Through the use of both quantitative and verbal models, the author examines the market variables critical to retailers and wholesalers. The most notable feature of the book is the inclusion of two crosssectional studies, employing regression and factor analysis. Another commendable feature is the complete reporting of the data in the appendices. The first chapter presents an overview of the development of the "status and function" of retailers and wholesalers. An interesting feature is the author's use of mathematical models to illustrate the different results of direct vs. middleman distribution systems. The book is then structured into two parallel sections: Chapters 2, 3, and 4 deal with retailing, while Chapters 5, 6, and 7 examine wholesaling. Chapter 2 provides a rapid treatment of the development of retailing from ancient times up to 1929, including the ascendence of chain, department, and catalogue retailers. Chapter 5 covers wholesaling from the same evolutionary perspective, ending with the development of functional specialization. Chapter 3 describes the structural changes in retailing since 1929 and includes a series of regression equations that identify the most relevant variables affecting retail sales performance. The structural changes in wholesaling are covered in Chapter 6, which also includes a series of regression equations concerning wholesale sales performance and market share. Chapter 4 considers the nature of the competitive process in retailing. A review of the basic economic model of monopolistic and oligopolistic competition is included as well as the elements of retail concentration, barriers to entry, fair trade, pricing, profits, and margins. Wholesaling is viewed from this same perspective in Chapter 7. The final chapter provides a rationale for the considerable cost of distribution systems and presents some simple mathematical models for analyzing distribution cost. The overall quality of the book is excellent; the author achieves his objectives and provides statistical substantiation for his choice of relevant variables crucial to the distributive trades. It should be noted that the quantitative methods employed by the author are basic; thus the book can be used in an undergraduate setting and can be understood by the practitioner. Because of the format of most business school programs, the book should find its widest use at the graduate level in courses concerned with distribution. There has long been a shortage of good materials for these classes, and because of its quality, this work will be welcomed by those teaching these courses.