Journal of Marketing Research · 1997 · 264 citations · 0 references
BusinessMarketingMarketing ManagementAdvertisingBrand ManagementConsumer BehaviorBrand AdvertisingBrand PromotionConsumer Demand AnalysisConsumer TheoryPromotional PricingSales PromotionConsumer Purchase Response To PromotionsLong-term ObservationPanel Data EstimationPanel Data RegressionPrice Promotion EffectsPromotion PoliciesPromotion Sensitivity AnalysisPromotional Advertising
The study investigates how promotion and advertising influence consumers’ brand choice over time, specifically whether responses to price and other marketing mix variables evolve and whether such changes relate to manufacturers’ advertising and retailers’ promotional policies. The authors analyze 8¼ years of panel data on a frequently purchased packaged good using a two‑stage model to estimate both medium‑term (quarterly) and long‑term effects of advertising and promotion. The findings show that over time consumers grow more sensitive to price and promotions, a shift attributed to declining advertising and rising promotional activity.
The authors examine the long-term effects of promotion and advertising on consumers’ brand choice behavior. They use 8 1/4 years of panel data for a frequently purchased packaged good to address two questions: (1) Do consumers’ responses to marketing mix variables, such as price, change over a long period of time? (2) If yes, are these changes associated with changes in manufacturers’ advertising and retailers’ promotional policies? Using these results, the authors draw implications for manufacturers’ pricing, advertising, and promotion policies. The authors use a two-stage approach, which permits them to assess the medium-term (quarterly) effects of advertising and promotion as well as their long-term (i.e., over an infinite horizon) effects. Their results are consistent with the hypotheses that consumers become more price and promotion sensitive over time because of reduced advertising and increased promotions.