Evaluating the Effects of

Advertising and Sales

Promotion Campaigns
C. Whan Park
Martin S. Roth
Philip F. Jacques

Traditional approaches of accounting for advertising ex-
penditures have focused primarily on the campaign’s direct
communication effects. In this paper we develop a frame-
work in which advertising is conceptualized as having mul-
tiple effects. These multiple effects account for the various
ways an advertising campaign can facilitate ,favorable
brand evaluations and subsequent purchase decisions. The
framework is examined empirically using field research
conducted by a major industrial manufacturer. This re-
search includes data collected from three distribution chan-
nel groups in an industrial market. The results ident&
these multiple effects of advertising and their relative im-
portance in facilitating sales. These findings are concep-
tually extended to other sales promotional mix elements,
Address correspondence to C. Whan Park, Josebh M. Katz Graduate
School of Business, University of Pittsburgh, 340 Mervis Hall, Pittsburgh, PA
15260.
and a process is proposed for the implementation and ac-
countability of marketing communication efforts.
INTRODUCTION
Accounting for the effectiveness of promotional ex-
penditures continues to be a central issue in marketing
management. As markets continue to become increas-
ingly competitive during an age of escalating promotional
costs, managers must more than ever be able to account
for a promotional campaign’s effect on the firm’s market
performance. The issue of accountability is particularly
important in the case of industrial marketing where the
promotional mix often includes the use of many mar-
keting tools (e.g., advertising, trade shows, sales pro-
motions, training support, personal selling).
In accounting for the contribution of various pro-

tndustrinl Marketing Management 17, 129-140 (1988) 129

0 Elsevier Science Publishing Co., Inc., 1988
52 Vanderbilt Ave., New York, NY 10017 0019-8501/88/$3.50
 Three important effects of industrial
advertising.
motion tools to product performance, the traditional
focus has been on direct eflects-that is, the impact
of a promotion on an exposed individual’s attitudes,
beliefs, and actions. However, marketing communica-
tions may also affect individuals via indirect routes as
well. Hence, analyses which rely solely on main ef-
fects provide only a limited understanding of the im-
portant interactions that take place among promotional
tools. As such, the effectiveness of a promotional
campaign is difficult to measure as multiple interac-
tion effects are left unaccounted for.
Furthermore, the interactions between promotional
tools are also important since most industrial firms utilize
multiple communication tools in their markets. While the
term mix implies interaction among the parts, achieving
positive synergy [ 1 l] can only be accomplished by un-
derstanding fully both the main and interactive effects
among and between the various promotional tools. How-
ever, management practices do not always reflect these
concerns when designing and accounting for promotional
mix strategies.
While, for example, advertising may have multiple
effects on the product’s market performance, effective-
ness measures have not fully reflected the campaign’s
total contribution to such performance. Consider the tra-
ditional approaches of relating advertising’s effects to
sales or recognition/recall measures. Measuring adver-
tising effectiveness from sales figures is difficult to justify
both conceptually and in a measurement sense due to the
myriad of possible intervening factors which may also
have influenced sales. In addition, sales measures do not
account for the ad’s interaction with other elements of
C. WHAN PARK is Distinguished Professor of Marketing and
MARTIN S. ROTH is a doctoral candidate in the Joseph M. Katz
Graduate School of Business at the University of Pittsburgh.
PHILIP F. JACQUES IS Director of Corporate Advertising for the
Rockwell International Corporation.
130
the communication mix. Gauging effectiveness based on
recognition and/or recall measures is also quite limited
as only the ad’s direct communication effects are reflected
in the analysis.
The present study was conducted by the Rockwell In-
ternational Corporation in an attempt to address some of
the shortcomings discussed above. Specifically, the pur-
pose of the research was to (1) illuminate the multiple
effects of advertising; (2) using data collected from three
different distribution channel members (end-users, inter-
mediaries, and company salespeople) examine empiri-
cally the relative importance of these multiple effects as
well as the sources of such effects; (3) extend this in-
formation to other promotional mix elements; and (4)
propose a general framework for the implementation and
accountability of marketing communication efforts. With
this information, Rockwell would then be able to enhance
its marketing control systems and improve its promotion
effectiveness.
In the following sections we will discuss the multiple
effects of advertising, the methodology used for exam-
ining the relative importance of such effects, and the key
research findings. Particular attention will be paid to the
development and measurement of the multiple effects of
advertising. The concepts discussed will then be extended
from the particular case of advertising to the more general
domain of promotional campaigns. A four step research
program is then introduced as a model for developing,
evaluating, and monitoring industrial communication
efforts.
INDUSTRIAL ADVERTISING’S MULTIPLE
EFFECTS
The present section identifies and describes three im-
portant effects of industrial advertising: (1) direct com-
munication effects, (2) indirect communication effects,
and (3) indirect sales facilitating effects. The distinctions
between these three types of effects emanate from the
 1 INTEREST
pgg@q
FIGURE 1. Direct Communication Effects of Advertising
various paths through which advertised information
flows.
Direct communication effects
Traditional models of advertising effectiveness have
followed the pioneering work of Lavidge and Steiner.
These models commonly contain a hierarchy of effects
[ 10,13,14] in that exposure to an ad follows a step-wise
process. The ad is believed to progressively affect pur-
chase decisions by first creating brand-level awareness
and interest which lead to perceived differences between
the advertised brand and others in its product class. Once
a brand is perceived to be different from its competitors,
favorable brand evaluations will be facilitated. The pro-
cess culminates with the purchase of the product, and
favorable usage experience and continued ad reinforce-
ment lead to repeat purchases [6]. These models represent
advertising’s direct communication efSects--that is, they
measure the impact of an ad’s direct exposure on the
individual. Figure 1 displays the process through which
the direct effects of communication occur.
Indirect communication effects
Another important effect of advertising is its ability to
stimulate word-of-mouth communications [2]. These
(
communications are initiated by the recipient of the ad-
vertised information (e.g., end-users and intermediaries)
and disseminated into the marketplace. There are multiple
paths these communications may take. For example, in-
formation may be transferred between end-users, among
end-users and intermediaries, or between intermediaries.
Although advertising will not be the exclusive source of
word-of-mouth communications (for example, product
usage experiences or personal selling communications
would also be likely to stimulate word-of-mouth), an
effective ad should certainly be an important contributor.
These indirect communication effects of advertising
can occur along multiple dimensions. Transferred infor-
mation may enhance the brand’s awareness or help to
differentiate the brand from its competitors. Or, an in-
direct communication may even help to develop a clearly
felt need for the brand in the mind of the recipient. In-
direct communication effects created through advertising
may, therefore, have substantial market impact. Account-
ing for these effects is an important issue that becomes
overlooked when recall or recognition effectiveness
measures are used. For example, two ad campaigns may
have indistinguishable recall measures, yet one of the ads
may have been successful in stimulating positive word-
of-mouth communications. In this case, the two ads
should not be considered equally effective in contributing
to the product’s market performance. Figure 2 presents
the indirect communication effects of advertising.
131
 FIGURE 2. Indirect Communication
Indirect sales facilitating effects
The third unique effect of advertising concerns facil-
itating the transaction process between the firm and its
intermediaries and end-users. One facilitating effect re-
lated to advertising is the enhancement of the firm’s name
and reputation [ 171. Although advertising may be geared
toward one specific product, the brand name and its as-
sociation with the firm will undoubtedly make the firm’s
name more visible and trustworthy. This source credi-
bility is, in turn, expected to enhance the receptivity of
end-users and intermediaries toward the product.
Such an effect can legitimize the brand in the minds
of channel members, thereby stimulating selling efforts.
For example, an intermediary’s perception of the firm’s
image may become enhanced (directly or indirectly) by
an ad campaign, which in turn facilitates word-of-mouth
communications, recommendations to end-users, and
even purchases for his own inventory. Likewise, com-
pany salespeople may be more motivated in performing
their selling tasks when they feel the firm is using other
marketing tools (e.g., advertising) to enhance the image
of the company and products they represent.
Advertising also plays an important role in enhancing
intermediaries and salespeople’s selling efforts by low-
ering their customer’s resistance to their persuasive ef-
Indirect sales effects should be
accounted for.
132
Effects of Advertising
forts. To the extent that their customers’ are (through
either direct or indirect communication effects) aware of
the product’s existence, their need for the product, its
performance characteristics, and/or its relative advan-
tages over competing brands, sales will become easier to
make.
The importance of these indirect sales facilitating ef-
fects may be as or perhaps more important than the tra-
ditionally measured direct communication effects.
Therefore, in measuring advertising effectiveness and in
assessing its contributions to market performance, these
indirect sales facilitating effects should be accounted for
along with the other direct and indirect communication
effects. These effects are shown in Figure 3.
RESEARCH METHODS
As noted earlier, Rockwell was interested in addressing
the accountability issue of advertising in particular and
persuasive communication efforts in general. A specific
focus was on identifying the relative importance of the
multiple effects of advertising and the specific sources
from which these effects occur. To examine these issues,
a unique telephone questionnaire was developed for the
three relevant channel members: end-users, intermedi-
 1 IADVERTISING
MOTIVATE
& )
LEGITIMIZE
SELLING
EFFORTS
J
FIGURE 3. Indirect Sales Facilitating Effects of Advertising
aries, and Rockwell salespeople. The data was collected
by a professional, university affiliated marketing research
institute. All of the respondents were screened for their
purchasing experiences with the product. The sample
sizes for the three groups were 25 (end-users), 49 (in-
termediaries) and 20 (salespeople). The small size of
these samples precluded us from conducting tests of sta-
tistical significance. However, the product market studied
in this exploratory research has a very select distribution
system, thus the obtained results provide a representative
sample of the beliefs and attitudes held by the three stake-
holder groups. To maintain confidentiality, the product
and market for which the study was conducted will remain
anonymous.
Collecting data from three unique stakeholder groups
allowed us to get a more complete picture of the attitudes
and beliefs which exist in this market. Specifically, rather
than relying solely on end-users’ self-reported importance
ratings of various market information sources, we asked
both intermediaries and salespeople how they thought
their customers were influenced by these sources. This
strategy enabled us to minimize the possibility of respon-
dents’ biases to reveal their purchase decisions in a ra-
tional and reasoned manner (e.g., responding that they are
not influenced by advertising or personal selling but rather
make choices based on specific product features). The use
of such “perceived” data from multiple groups not only
reduced dangers of relying exclusively on biased re-
sponses but also offered more accurate information that
represents the true picture of the market.
‘Customers of intermediaries are end-users; customers of salespeople
be intermediaries and/or end-users.
I<
AWARENESS
INTEREST
EVALUATION REPUTATION
[] 1
FINDINGS
Direct communication effects
Our findings indicate that advertising was perceived to
have a direct effect on customers’ attitudes and beliefs
toward the brand. Both the intermediaries and salespeople
felt that their customers’ found advertising had some im-
pact on their decision making (see Table 1). However,
the mean scores of 3.27 (intermediaries) and 3.15 (sales-
people) on the five point Like&type scales seem to in-
dicate that advertising alone is perceived to be a
somewhat effective though not a highly influential factor
on customer preference formation and evaluation. In
other words, these measures are encouraging but not quite
satisfying considering the typical cost of an ad campaign.
Indirect communication effects
In addition to advertisements, other types of product
related information were perceived by all three channel
groups to be quite important. All three groups perceived
word-of-mouth communications as influential in affecting
purchase decisions. End-users, intermediaries, and Rock-
well salespeople all confirm either the prevalence of this
type of communication and/or its favorable impact on the
product adoption process. More specifically, as discussed
below, both end-users and intermediaries perceived prod-
uct recommendations (recommendations by an interme-
diary to end-user) to be facilitators of market transactions.
Hence word-of-mouth communications, both in the form
can of specific brand recommendations and more general
product related conversations, translate into indirect com-
133
 Advertising campaigns stimulate favorable
word-of-mouth communication.

TABLE 1 TABLE 2
Perceived Effect of Advertising on Customer Decision Making Indirect Communication Effects

Not At All Very Much A Word-Of-Mouth Communications

(1) (2) (3) (4) (5) Mean
Not At All Very Much
Intermediaries: To what (1) (2) (3) (4) (5) Mean
extent does advertising
Intermediaries: How
help your customers
much do favorable word-
form product 6 5 19 8 II 3.21
of-mouth communica-
preferences’? (12%) (10%) (39%) (16%) (22%)
tions help your cus-
Salespeople: To what ex- tomers form their 3 9 II 9 16 3.54
tent does advertising ef- product preferences‘? (6%) (19%) (23%) (19%) (33%)
fect your customers’
Salespeople: How much
evaluation of your 0 3 12 4 I 3.15
do word-of-mouth com-
products’? (15%) (60%) (20%) (5%)
munications affect your
customers’ evaluation of 0 I 3 I 9 4.2
your brand? (5%) (15%) (35%) (45%)
munication effects for a brand, and consequently can be
facilitated through advertising efforts. B intermediary Recommendations

Customers often talk about products with others, par- End-Users“: What No fnfluence 7 (50%)
ticularly members of their own firm and business asso- was the intermedi- Very Little Influence I (7%)
ary’s influence on Good Deal of Influence. 2 (14%)
ciates from other companies. In this particular market, your product Great Deal of Influence. 3 (21%)
48% of the end-users and 57% of the intermediaries re- selection‘? Don’t Know. I (7%)
ported having one or more discussions with others about End-Users: Did the Yes................. 5 (36%)
various brands of the product. Of these, 67% of the end- intermediary provide No 8 (57%)
users and 52% of the intermediaries engaged in such any helpful informa- Don’t Know.. I (7%)
tion related to your
communications frequently. Furthermore, both interme- product choice’?
diaries and salespeople felt that their customers were quite
End-Users: How Not Knowledgeable At All ........ 0
likely to use word-of-mouth communications when mak- knowledgeable are Not Particularly Knowledgeable. ... 3 (21%)
ing brand level decisions (see Table 2A). These results intermediaries about Somewhat Knowledgeable ........ 3 (21%)
suggest that an important opportunity for advertising cam- differences among Very Knowledgeable. ............ 6 (43%)
various brands of the Don’t Know. ................... 2 (14%)
paigns is to stimulate favorable word-of-mouth com- product‘?
munications. For example, a properly designed
“End-user responses in this section are from those who had used an inter-
advertising campaign may motivate an exposed channel
mediary to purchase the product (n = 14).
member to convey to an associate specific brand infor-
mation which was acquired through exposure to an ad.
In this manner, they may share the same information found them, to some extent, to have helpful information
while only one of them was exposed to the campaign. and be knowledgeable about the product. In addition,
Thus, this indirect communication effect can facilitate these end-users reported that the recommendations they
the same progression from brand awareness to purchase received from intermediaries to a certain degree influ-
for an individual who has never been exposed to the ad enced their selection decisions (see Table 2B). These
PI. results suggest that in many instances intermediaries play
Of our sample of end-users, 56% had purchased the an important role in the decisions of end-users. An ad
product from intermediaries. Those using an intermediary that makes a positive impression on the intermediary will

134
be integrated with their previous product perceptions TABLE 3
Indirect Bales Facilitating Effects
which will, in turn, tend to improve their subsequent
overall brand evaluation [ 121. Moreover, a campaign A Company Name and Reputation
which makes a favorable impression on an intermediary Not At All Very Much
will tend to act as a motivating device in that it will (1) (2) (3) (4) (5) Mean
facilitate their loyalty and commitment toward the brand Intermediaries: How
as well as stimulate recommendations to end-users [ 151. much does company
As such, a successful ad campaign should affect end- name help your cus-
tomers’ form their prod- 4 5 13 12 14 3.56
users’ purchase behavior by enhancing communication
uct preferences? (8%) (10%) (27%) (25%) (29%)
effects both directly and indirectly as well.
Salespeople: How much
Given the prevalence of these indirect communication
does company name af-
effects in this market and their perceived importance with fect your customers’
respect to purchase decisions, accounting for these effects evaluation of your 0 3 6 8 3 3.55
brand? (15%) (30%) (40%) (15%)
should be incorporated into the advertising strategy, mea-
surement of campaign effectiveness, and justification of B Personal Selling Effects
dollar expenditures. Salespeople: To what extent do the following factors about your
customers affect your ability to make a sale?
Indirect sales facilitating effects Much
More Much
Difficult Easier
Two other key effects of advertising were identified
(1) (2) (3) (4) (5) Mean
through this research. First, advertising has the ability to
create a favorable company name and reputation which Appreciate Company’s 0 0 0 9 4.45
Name and Reputation c::w, (45%)
can positively affect customers’ decision-making. Sec-
Aware of Your Product
ond, advertising was perceived as legitimizing the selling
Through Word-Of- 0 I 0 9 9 4.37
efforts of Rockwell salespeople. Mouth Comm. (5%) (47%) (47%)
Our results confirm that company image factors are
Aware of Brand Name 0 I 3 12 4 3.95
very important marketing effects which the firm can ma- Through Advertising (5%) (15%) (60%) (20%)
nipulate to their advantage [ 171. Intermediaries and Rock- Have a Clearly Felt Need 0 0 ‘3 2 17 4.8
well salespeople cited the company’s name as affecting For Your Product (5%) (10%) (85%)
their customers’ evaluations of brands within a product Do Not Believe There
class (see Table 3A). More than half of these respondents Are Differences

(in each group) indicated that the company’s name was
a critical factor in customers’ brand evaluation decisions
(as evidenced by scale values 24).
In addition, another important effect of advertising is
its ability to facilitate salespeople’s selling efforts. Our
findings suggest that in this market, an advertis-
ing/personal selling interaction exists, and in fact per-
forms an important function in facilitating salespeople’s
selling efforts (see Table 3B). One obvious way that
advertising facilitates salespeople’s efforts is through es-
tablishing even a modest level of brand awareness in the
customer. When awareness has been created, the sales-
person’s job will have already been started, leaving them
with one (or more) less step(s) to encounter in the end-
user or intermediary’s purchase process. Rockwell’s
salespeople verified this effect (mean score of 4.45 when
awareness came from word-of-mouth communications
and mean score of 3.95 when awareness was created
Among Competing 4 10 3 2 0 2.16
Brands (21%) (53%) (16%) (11%)
through advertising), and further reinforced it by report-
ing that sales are difficult to make when the customer
has never heard of their brand’ (mean score of
1.68).
Another factor that facilitates the selling efforts of
Rockwell’s salesforce is the presence of customers’ spe-
cific product interests and product needs (mean score of
4.8). This situation reduces the amount of persuasive
efforts the salesperson must exert. As we have seen,
advertising can be used to stimulate brand interests
through its direct and indirect communication effects.
Moreover, when customers do not believe there to be
21nthe event that the customer is aware of yet has negative beliefs or attitudes
toward the ad, the salespeople may find it more difficult to make the sale.

135
differences between brands, selling becomes difficult
(mean score of 2.16). Again, all of these factors which
facilitate personal selling efforts can be brought about
through an effective advertising campaign.
It has been pointed out above that advertising is able
to progress customers through the purchasing process and
make them more favorably disposed toward the product,
thus lessening their resistance to salespeople’s efforts.
Moreover, a successful ad campaign generates salespeo-
ple’s confidence in their product. Knowing that their com-
pany is utilizing other promotional efforts (in addition to
personal selling) to enhance the market’s receptivity to-
ward their product leads salespeople to perceive that they
are not the lone factor between customer awareness and
purchase.
These findings strongly suggest that an effective ad-
vertising campaign may have additional sales facilitating
implications. Advertising that enhances the company’s
name and reputation can also be beneficial in retaining
and recruiting top sales personnel [7]. Also, since sales-
people perceive advertising to improve their perfor-
mance, these promotions may contribute to the process
of gaining customers’ trust [ 161. Given advertising’s role
in enhancing saleseople’s performance, models of sales-
force motivation [e.g., 4,5] may benefit from including
the effects of other promotional variables as well.
Thus, in industrial markets, advertising has the ability
to directly and indirectly generate positive attitudes and
beliefs toward the brand and also motivate and increase
salespeople’s effectiveness. Clearly, then, the firm’s ad-
vertising efforts should be evaluated to account for its
effects on facilitating all of the communication and sales.
SUMMARY AND COMPARISON OF THE
EFFECTS OF ADVERTISING
The findings reported here support the relationship be-
tween advertising’s known direct communication effects
and customer purchase decisions. Our findings indicate
that advertising is perceived to affect customer product
evaluations (refer to Table l), thus confirming the pres-
ence of direct communication effects which have been
part of most advertising effects models [e.g., 10, 12, 13,
141.
However, our findings also indicate that the direct com-
munication effects were perceived to have the smallest
market impact among the three types of effects. This first
becomes evident by the fact that the role of word-of-
136
mouth communications was perceived to be a more im-
portant type of market information than that supplied
directly through advertisements. Comparing Table 1 to
Table 2A shows that the mean scores for the perceived
effect of word-of-mouth communications exceed those
for advertising’s perceived effect.
Thus, the indirect communication effects are indeed a
vital part of the communication system in this market
and should not be neglected. These findings support the
notion that word-of-mouth communications can play a
pivotal role in consumer decision-making [2]. Further-
more, Rockwell salespeople indicated that they found it
easier to make a sale when customers were aware of the
product through word-of-mouth communications than
when awareness was created solely through advertising
(refer to Table 3B). As pointed out earlier, advertising
can be an important contributor to such communications.
In further support of the impact of indirect commu-
nication effects, the findings from Table 2B indicate that
intermediaries seem to have some degree of influence
over their customers and are perceived to be quite knowl-
edgeable about their products. Thus, advertising’s ability
to facilitate intermediaries’ brand recommendations may
be as important as its direct effect on end-users. It seems
clear that measuring advertising effectiveness would not
be complete without taking these indirect effects into
account.
However, the indirect communication effects were not
the only persuasive tool which appeared more important
than the direct effects. The additional sales facilitating ef-
fects also seem to be quite effective as evidenced by the
results in Table 3. Personal selling efforts were seen as
being facilitated by both direct communication (e.g., brand
name awareness, interest, and favorable evaluation) and
indirect communication effects (e.g., brand recommenda-
tions and other word-of-mouth communications). Ad-
vertising’s ability to create and sustain these effects can
motivate and legitimize intermediary’s and salespeople’s
persuasive efforts. We believe that an effective advertis-
ing campaign should establish these sales facilitation ef-
fects. Subsequently, it is critical to assess these effects
when addressing the accountability issue of advertising.
An accountability model of advertising effects is il-
lustrated in Figure 4. This model captures the multiple
effects of advertising by illustrating the flow of com-
munications within the distribution channel. The bold
lines in the model represent the communication flows
with the greatest market impact and reflect the ways in
which advertising should and can best be used to facilitate
sales. These are the word-of-mouth communications and
dealer recommendations (i.e., the indirect communica-
tion effects), the enhancement of the company’s name
and reputation and the motivation and legitimization of
company salespeople (i .e . , the indirect sales facilitating
effects). Although this research has found that all three
unique types of effects are present in this market, the
indirect communications and indirect sales facilitating
effects have been shown to have the greatest perceived
impact on affecting the choice decisions of industrial
customers.
CONCEPTUAL EXTENSIONS TO OTHER
PROMOTIONAL STRATEGIES
To successfully promote an industrial product, an ef-
fective marketing communication mix is required. Gen-
erally, personal selling is a vital part of the mix, with
advertising being used more discriminately depending on
the firm and the market. Other frequently used commu-
nication strategies include trade shows, sales promotions,
and customer training and support programs. The exact
composition of the marketing communication mix should
depend on the firm’s specific market objectives.
Trade shows provide an excellent means through which
to shore up any weak aspects of the marketing mix [3].
For example, if the company finds that it is having dif-
ficulty retaining customers (inability to facilitate repeat
purchases), participating in a trade show where many
present and potential customers are likely to attend may
be an appropriate strategy. Conversely, if personal selling
and/or advertising efforts are able to reinforce positive
brand attitudes and beliefs among previous users but seem
ineffective in attracting new customers, a sales promotion
strategy designed to attract non-users may be in order.

SELLING REPUTATION
EFFORTS

W W
0 0
R R
D D
I I
0 0
F F
I I
M M
0 0
u u
T T
H H
C C
0 0
M M
M M
'U ll
N N
I I
C C
A A
T T
I I I
0 , INTERMEDIARIES 0
N N
S S

FIGURE 4. Accountability of Advertising Model

137
Or, if the firm feels that its present communication mix TABLE 4
Accountability Measures of Promotional Activities
still leaves room for corporate image improvement, cus-
tomer training and support programs may be the answer. Effects Respondents Measures
The important contribution of the present framework
b Measure I. I b End Users And ä Awareness
of advertising accountability is in its application to other Direct Intermediaries b Interest
promotional tools. Specifically, in all of the above situ- Communication b Perceived Brand
Effects Difference
ations, the firm’s specific objectives will be achieved
when the flow of communication is maximized. As we b Measure 2. I b End Users b Extent Of Communi-
Indirect Communi- cations Among End
have seen, maximization occurs when all of the com-
cation Effects- users
munication (direct and indirect) and sales facilitating (in- Word-of-Mouth b Intermediaries b Extent Of Communi-
direct) effects are utilized. Therefore, accounting for the Communications cations Among
Intermediaries
effectiveness of the particular promotional tool used
b End Users and b Extent Of Communi-
should include subsequent measures of the direct (aware- Intermediaries cations Between End
ness, interest, brand differentiation, evaluation, pur- Users And
chase, and repeat purchase) and indirect (word-of-mouth intermediaries

communications, intermediary recommendations) com- b Measure 2.2 b End Users b Perceptions of Inter-
Indirect Communi- mediaries Influence
munication effects as well as its indirect sales facilitating
cation Effects- On End Users Pur-
effects (company name and reputation, motivating and Recommendations chase Decisions
legitimizing intermediary’s and salespeople’s efforts). b Intermediaries b Extent To Which End
Table 4 provides a summary of the accountability mea- Users Seek Product
Information And
sures to be used for analyzing the effectiveness of a pro- Advice From
motional activity. Intermediaries

b Measure 3. I b End Users, Intenne- b Perceived Effect Of

Indirect Sales Facil- diaries And Sales- Promotion Activities
FOUR STEP EVALUATION MODEL itating Effects- people On Company’s Name
Company Name & And Reputation
Reputation b Perceived Impact Of
Having established that operationalizing the direct, in- The Company’s Name
direct, and indirect sales facilitating effects can provide And Reputation On
Sales
the marketing manager with the means to address the
b Measure 3.2 b Salespeople b Extent To Which Pro-
accountability of promotional efforts issue, we will now
Indirect Sales Facil- motion Activities Fa-
introduce a four step model through which communica- itating Effects- cilitate Intermediary’s
tion efforts can be developed, evaluated, and monitored Motivating And And Salespeople’s
(see Figure 5). Legitimizing Selling Performances
Effects
The first step in the process involves making initial
benchmark assessments of market characteristics with
which to gauge the effects due to subsequent promotion veloped designed to meet the firm’s specitic objectives.
activities. These should include all of the measures from A promotion mix should be designed with the goal of
Table 4, as well as those for estimating current percep- facilitating positive information flow within the distri-
tions of corporate image and past purchase behavior. bution system. Given the measures from step one, em-
These initial measurements should be collected for a par- phasis should be placed on (1) areas where the tirm is
ticular market, with all the relevant stakeholder groups, performing poorly and (2) ways to maximize the direct
and using appropriately designed instruments. These and indirect communication and sales facilitating effects.
benchmarks will illuminate the current status of com- Analysis of these areas will enable the manager to choose
munication flows within the market. Given this infor- the optimal mix of promotional tools with which to fa-
mation, the firm can develop specific ojectives, such as cilitate product communications and thereby enhance
enhancing their company’s name and reputation and/or market performance.
faciliating dealer recomendations. After strategy implementation, the third step should be
In the second step, a communication strategy is de- measuring the effectiveness of the campaign. This can

138

T.
Step 1 Step 2
FIGURE 5. Four Step Promotion Development and Evalua-
tion Model
be done by conducting a tracking study (using the same
stakeholders and instruments) and analyzing the post-
promotion levels for the various communication effects.
Compared to the initial measures, the effectiveness of
the campaign can be accounted for. If the firm is selective
in its use of different promotional tools, they may be
more likely to establish the exact strengths and weak-
nesses of each tool for the specific market on each of the
measures. In this step, the manager should also be iden-
tifying which performance measures continue to need
improvement.
The fourth step includes analyzing the areas where
improvements were needed to see what effects the im-
plemented strategy had on the flow of information. In
the case where overall objectives have been met, the
marketing communication strategy may be modified to a
maintenance position. If the applied mix was able to hit
target objectives for the period but still falls short of the
overall communication goals, the firm should continue
with the current strategy but with increased intensity.
Should the marketing efforts fall short of expectations,
the choice of communication tools should be re-examined
and a more effective mix developed. Finally, as markets
are constantly susceptible to change, the effectiveness
of the promotion mix must be monitored routinely and
the underlying market characteristics monitored
occasionally.
LIMITATIONS AND EXTENSIONS
The present study identified three different effects of
marketing communications. The main thrust behind the
Maintain or
Intensify Strategy
I I
Revise Strategy
I
Step 3 Step 4
findings of the present study is that when designing a
promotional strategy, maximizing both the direct and in-
direct effects should be a key objective, and effectiveness
measures should account for these effects as well. Man-
agers may find examining and tracing back the multiple
effects of promotion tools to be product-market specific.
As found in the case of sales promotions, communication
efforts depend more on the particular market conditions
than on the type of product being promoted [8]. Thus,
knowledge learned from promoting in one market may
be extended to another product class when the markets
are very similar. Managers must, however, be sure of
the inherent similarities between markets before jumping
in with both feet, using measures developed in accounting
for another product. As the data base on promotion ac-
countability grows, fewer resources will have to be spent
on determining which measures are appropriate for which
products.
As with any truly successful accountability program,
constant and faithful monitoring will be required. The
program should be reviewed at least quarterly [l], and
tracking measures should be obtained at least semi-an-
nually when new strategies are being implemented. Also,
the same design should be applied for both the benchmark
and tracking measures [9]. In addition, until the precise
nature of the various effects posited here are identified
and understood, monitoring may have to be done more
frequently and for more products and in more markets.
Also, if more than one promotional tool is implemented
at the same time (aside from the constant interaction of
salespeople with customers), it will be difficult to dif-
ferentiate the effects and infer causality. This drawback
can be overcome by first implementing and monitoring
139
one strategy at a time, then tracing the added effects due
to the introduction of additional promotional tools.
Finally, one should keep the measures propounded here
in perspective-increasing word-of-mouth communica-
tions is only beneficial when what is being communicated
about your product is positive. The same holds true for
intermediary recommendations, company image, and
every other facet of the communication effects. Promo-
tional activities still have to be carefully and effectively
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