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Modeling Response to Advertising and Pricing Changes for “V-8” Cocktail Vegetable Juice

Author

Listed:
  • Joseph O. Eastlack, Jr.

    (Campbell Soup Company, Camden, New Jersey)

  • Ambar G. Rao

    (New York University)

Abstract

This paper is based on a series of studies undertaken for “V-8” Cocktail Vegetable Juice over a five-year period. The studies were a consequence of management questions regarding the effectiveness of a new advertising campaign, the best media mix for this campaign and the apparent “wear-out” of the advertising copy. The studies included controlled experimentation, estimation of advertising response functions, and exploration of price sensitivity following major price increases by “V-8.” It was found that the short-term response to advertising was S-shaped, and that the new creative approach rather than expenditure levels alone accounted for by far the largest component of the impact of advertising on sales. It was also found that for a short period following the major price increases, “V-8” became extremely price sensitive. However, after about six months, the marginal impact of price returned to historical levels. The application of results at Campbell Soup Company, their relationship to the literature and their implications for both researchers and practitioners are discussed.

Suggested Citation

  • Joseph O. Eastlack, Jr. & Ambar G. Rao, 1986. "Modeling Response to Advertising and Pricing Changes for “V-8” Cocktail Vegetable Juice," Marketing Science, INFORMS, vol. 5(3), pages 245-259.
    • Handle: RePEc:inm:ormksc:v:5:y:1986:i:3:p:245-259
    DOI: 10.1287/mksc.5.3.245
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    Cited by:

    1. Chu, Kyounghee & Lee, Do-Hee & Kim, Ji Yoon, 2019. "The effect of verbal brand personification on consumer evaluation in advertising: Internal and external personification," Journal of Business Research, Elsevier, vol. 99(C), pages 472-480.
    2. George, Jennifer & Mercer, Alan & Wilson, Helen, 1996. "Variations in price elasticities," European Journal of Operational Research, Elsevier, vol. 88(1), pages 13-22, January.
    3. Ganesh Iyer & David Soberman & J. Miguel Villas-Boas, 2005. "The Targeting of Advertising," Marketing Science, INFORMS, vol. 24(3), pages 461-476, May.
    4. Mesak, Hani I. & Ellis, T. Selwyn, 2009. "On the superiority of pulsing under a concave advertising market potential function," European Journal of Operational Research, Elsevier, vol. 194(2), pages 608-627, April.
    5. Bradley T. Shapiro, 2020. "Advertising in Health Insurance Markets," Marketing Science, INFORMS, vol. 39(3), pages 587-611, May.
    6. Kashmiri, Saim & Gala, Prachi & Nicol, Cameron Duncan, 2019. "Seeking pleasure or avoiding pain: Influence of CEO regulatory focus on firms' advertising, R&D, and marketing controversies," Journal of Business Research, Elsevier, vol. 105(C), pages 227-242.
    7. Fred M. Feinberg, 2001. "On Continuous-Time Optimal Advertising Under S-Shaped Response," Management Science, INFORMS, vol. 47(11), pages 1476-1487, November.
    8. Mesak, Hani I., 1999. "On the generalizability of advertising pulsation monopoly results to an oligopoly," European Journal of Operational Research, Elsevier, vol. 117(3), pages 429-449, September.
    9. Dick R. Wittink, 2001. "Market Measurement and Analysis: The First “Marketing Science” Conference," Marketing Science, INFORMS, vol. 20(4), pages 349-356.
    10. Mesak, Hani Ibrahim & Bari, Abdullahel & Lian, Qin, 2015. "Pulsation in a competitive model of advertising-firm's cost interaction," European Journal of Operational Research, Elsevier, vol. 246(3), pages 916-926.
    11. Danaher, Peter J. & Rust, Roland T., 1996. "Determining the optimal return on investment for an advertising campaign," European Journal of Operational Research, Elsevier, vol. 95(3), pages 511-521, December.
    12. van Heerde, H.J. & Dekimpe, M.G. & Putsis, W.P., 2004. "Marketing Models and the Lucas Critique," ERIM Report Series Research in Management ERS-2004-080-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    13. Derek W. Bunn & Stefania Pantelidaki, 2005. "Development of a multifunctional sales response model with the diagnostic aid of artificial neural networks," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 24(7), pages 505-521.
    14. Kalyanaram, Gurumurthy & Winer, Russell S., 2022. "Behavioral response to price: Data-based insights and future research for retailing," Journal of Retailing, Elsevier, vol. 98(1), pages 46-70.

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