15. Designing Marketing Experiments

Introduction

In his quarterly budget presentation, Larry Culp, brand manager for BigHoney cereal, requests funds for an advertising campaign highlighting new packaging that retains freshness better and longer. In response, Mark Weinberg, BigHoney CFO, asks Culp, “Can you convince me that sales of BigHoney will be hurt if you do not advertise?” As a follow-up, he asks, “You have requested $500,000 for a national campaign? Is that the right amount? Can you get the same result for $250,000?” How can Culp convince Weinberg?

Culp’s challenge is typical for marketing managers who need to invest money in the marketing mix with the expectation that sales will increase in the future. Attributing an increase in sales ...

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