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"If Brands Are Built over Years, Why Are They Managed over Quarters?” – in July/August 2007 Harvard Business Review"

In a July/August 2007 HBR article, leading business scholars Len Lodish and Carl Mela point to stagnant sales and profit as a clear signal of decline in market power of CPG brands. They argue an underlying cause is that companies, eager to exploit promotional spikes in scanner data, greatly overspent on price discounts, thus training consumers to wait for the next deal instead of cultivating loyalty. The authors also note that Wall Street pressure to achieve ever-higher quarterly earnings has favored tactics to drive immediate sales spikes at the expense of brand-building investments. To reverse the trend, Lodish and Mela recommend that marketers manage primarily to long-term, leading indicators of brand health, and they propose some specific metrics for this purpose. They also stress updating regularly and retaining more history to put the latest results in context. A case study from Clorox, a Marketing Analytics client since 2001, illustrates how these practices have been successfully implemented.