For the fourth time, the European Marketing Academy (EMAC) and the McKinsey & Company management consultancy have awarded the "EMAC McKinsey Marketing Dissertation Award" for outstanding research in the field of marketing. The award was made public at the EMAC Annual Conference gala dinner in Lisbon on Friday, May 25, 2012.
The first-place winner, Néomie Raassens, earned a EUR 7,000 cash prize for the dissertation she submitted to Tilburg University in the Netherlands. Her research deals with the performance implications of outsourcing, examining conditions under which it may be a successful strategy. While prior research on outsourcing has mainly concentrated on peripheral functions, Raassens' work considers the strategic areas of customer support and new product development as well as manufacturing. She is currently Assistant Professor at Maastricht University, also in the Netherlands. Ernst C. Osinga, who wrote his dissertation at the University of Groningen in the Netherlands and now teaches at Tilburg University, took second place. Osinga's dissertation considers the effects of pharmaceutical advertising from several perspectives, including how marketing aimed at physicians and consumers impacts sales differently. The third place went to Nils Wagner, who wrote his dissertation at Germany's University of Passau and University of Cologne. His dissertation analyzes the marketing budgeting behaviour of managers and it presents an innovative heuristic solution for allocating marketing budgets. The second- and third-place finishers received prizes of EUR 3,000 and EUR 1,000 respectively.
The "EMAC McKinsey Marketing Dissertation Award" honors the authors of outstanding dissertations on marketing topics submitted to universities in Europe, the Middle East, or Africa. This year, 59 young scholars from 17 countries took part in the program. Based on novelty, relevance, and conceptual rigor of their submissions, the award jury selected three finalists. This year, the overall quality of the entrants' dissertations was so high that the jury singled out two additional dissertations for recognition – a first in the program's history.
Néomie Raassens, Tilburg University, the Netherlands
The Performance Implications of Outsourcing
Not only are firms increasingly turning to outsourcing, but they are also outsourcing more and more different types of activities. This dissertation focuses on the performance implications of outsourcing, examining conditions under which it may be a successful strategy. While prior research on outsourcing has mainly concentrated on peripheral functions, this work considers the strategic areas of customer support and new product development, as well as manufacturing. In addition, most existing studies focus on macro-governance, but attention here is on micro-governance decisions: how should companies organize their outsourcing arrangements to increase performance? Although customer support involves direct contact with end customers, expected cost savings are leading a growing number of firms to outsource this function. The performance implications of outsourcing customer support are dependent upon the type of customer support that is outsourced, the institutional context surrounding the outsourcing relationship, and the mechanisms used to govern the outsourcing agreement. Companies are increasingly outsourcing new product development as well, but many such arrangements are not delivering the expected benefits. The dissertation thus also examines the implications of outsourcing new product development for financial performance. It theorizes and tests the effectiveness of minority equity participation and prior tie selection under different levels of external and internal uncertainty, i.e., technological uncertainty and cultural distance, respectively. The analysis then turns to the effect of outsourcing manufacturing on firm innovation, arguing that the relationship between outsourcing and innovation is contingent upon demand volatility, R&D intensity, and marketing intensity. Collectively, these three discussions advance current knowledge on outsourcing by showing that the inconsistent findings regarding the effects of outsourcing on firm performance constitute a systematic and predictable set of contingent effects.
Ernst C. Osinga, University of Groningen, the Netherlands
Pharmaceutical Marketing: Its Effects on Drug Sales and Beyond
Existing studies have mainly focused on the temporary impact of pharmaceutical marketing efforts on drug sales. Scant attention has been paid to the dynamics inherent in the introduction of new branded drugs, the expiration of patents and subsequent entry of generic drugs, and changes in the regulation of pharmaceutical direct-to-consumer advertising. Yet, a thorough understanding of the permanent and temporary effects of pharmaceutical marketing efforts on sales and beyond is essential for both proper allocation of marketing budgets and effective public policy. The first study in this dissertation describes sales effects of marketing efforts over a drug's lifecycle. Permanent sales effects are obtained in the two years after a drug is introduced. Marketing efforts to inform physicians about new drugs should therefore be concentrated in this period. To uncover persistent marketing effects, academics need to specify models that allow for time-varying effects or focus on young brands only. The second study shows that, unlike advertising aimed at physicians, direct-to-consumer advertising both increases stock returns and reduces systematic risk. These results are particularly interesting because several studies demonstrate that such advertising does less to boost sales than marketing efforts aimed at physicians. When evaluating marketing efforts, managers should thus look not only at sales, but consider effects on shareholder value. The third study assesses the consequences of the observed reduction in marketing support for a branded drug toward its patent expiration. We find that this reduction is in line with profit-maximizing behavior by the brand manufacturer. Further, it limits the sales potential of cheap generics that may enter the market after the patent expires, and thus the associated welfare gains for society.
Nils Wagner, University of Passau and University of Cologne, Germany
A Descriptive and Normative Analysis of Marketing Budgeting
Researchers have invested considerable effort in developing models to optimize budget allocation. But since these models are highly complex, managers tend to not use them. This dissertation provides insights about how managers actually determine marketing budgets and how budgeting processes could be improved. First, an empirical analysis determines which rules are applied in budgeting, how they influence the allocation process, and which factors favor the application of specific budgeting rules. The analysis reveals that managers are far more influenced by competitors than expected, while making less use of budgeting methods derived from profit-maximization models – a finding that contradicts one of the main assumptions of structural modeling. We then introduce an innovative, feasible heuristic solution for allocating marketing budgets at multiproduct, multinational firms. Working with the management of Bayer, we successfully implemented this approach for Bayer's Primary Care product portfolio. We also developed a decision support tool that integrates the proposed heuristic into an Excel-based software program. Using the heuristic revealed substantial potential to improve profit by reallocating marketing resources, improved the quality and efficiency of the budget allocation process, and contributed to organizational change. Furthermore, we analyze and compare the performance of several budgeting methods: equal distribution, allocation proportional to product sales (the most common approach in practice), the allocation rule proposed in this dissertation, and a numerical optimization solution. The results of this Monte Carlo study show that our allocation rule performs better than simpler practitioner methods, and may even outperform a numerical optimization approach under the realistic assumption of an unknown demand parameter. This finding belies the conventional wisdom that simpler heuristics deliver allocation solutions at the expense of poorer profit performance.