Pulsing in a Discrete Model of Advertising Competition

Abstract

To investigate the effects of pulsing for a firm responding to its competitor's even or pulsed advertising, the authors use a discrete version of the Lanchester model. They show that pulsing can be superior to the even strategy even if the change in market shares is a concave function of advertising. Also, if the advertising response is linear or convex, (1) pulsing is superior to the even strategy and (2) it is more beneficial for the firm to advertise at the high (low) level when its rival advertises at the low (high) level if the firm has stronger brand power, greater net pulsing effect, or a more convex advertising response than its rival firm.