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Untangling the Effects of Purchase Reinforcement and Advertising Carryover

Author

Listed:
  • Moshe Givon

    (Tel Aviv University)

  • Dan Horsky

    (University of Rochester)

Abstract

The dynamic evolvement of market share of a brand in a frequently purchased product category can be driven by two effects, purchase reinforcement, and advertising carryover. The first depends on the actual experience with the brand while the second on the retention of its producer's messages. We present a model to estimate simultaneously the relative magnitude of these two forces. The model also formally treats the issue of temporal aggregation. Our empirical results with several product categories indicate that for monthly and bi-monthly measurement periods, purchase reinforcement dominates carryover of advertising in affecting the evolution of market share.

Suggested Citation

  • Moshe Givon & Dan Horsky, 1990. "Untangling the Effects of Purchase Reinforcement and Advertising Carryover," Marketing Science, INFORMS, vol. 9(2), pages 171-187.
    • Handle: RePEc:inm:ormksc:v:9:y:1990:i:2:p:171-187
    DOI: 10.1287/mksc.9.2.171
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    Cited by:

    1. Bronnenberg, Bart & Dube, Jean-Pierre & Sanders, Robert, 2018. "Consumer Misinformation and the Brand Premium: A Private Label Blind Taste Test," CEPR Discussion Papers 13283, C.E.P.R. Discussion Papers.
    2. Marshall Freimer & Dan Horsky, 2008. "Try It, You Will Like It—Does Consumer Learning Lead to Competitive Price Promotions?," Marketing Science, INFORMS, vol. 27(5), pages 796-810, 09-10.
    3. Marshall Freimer & Dan Horsky, 2012. "Periodic Advertising Pulsing in a Competitive Market," Marketing Science, INFORMS, vol. 31(4), pages 637-648, July.
    4. Leonardo Bursztyn & Davide Cantoni, 2016. "Tear in the Iron Curtain: The Impact of Western Television on Consumption Behavior," The Review of Economics and Statistics, MIT Press, vol. 98(1), pages 25-41, March.
    5. Bart Bronnenberg & Jean-Pierre H. Dubé & Robert E. Sanders, 2018. "Consumer Misinformation and the Brand Premium: A Private Label Blind Taste Test," NBER Working Papers 25214, National Bureau of Economic Research, Inc.
    6. Landry, Peter, 2022. "Pricing, advertising, and endogenous consideration of an “insistent” product," International Journal of Industrial Organization, Elsevier, vol. 80(C).
    7. repec:zwi:journl:v:6:y:2011:i:4:p:335-353 is not listed on IDEAS
    8. Eelco Kappe & Ashley Stadler Blank & Wayne S. DeSarbo, 2014. "A General Multiple Distributed Lag Framework for Estimating the Dynamic Effects of Promotions," Management Science, INFORMS, vol. 60(6), pages 1489-1510, June.
    9. Randolph E. Bucklin & Sunil Gupta, 1999. "Commercial Use of UPC Scanner Data: Industry and Academic Perspectives," Marketing Science, INFORMS, vol. 18(3), pages 247-273.
    10. Becker, Maren & Gijsenberg, Maarten J., 2023. "Consistency and commonality in advertising content: Helping or Hurting?," International Journal of Research in Marketing, Elsevier, vol. 40(1), pages 128-145.
    11. Gür Ali, Özden & Gürlek, Ragıp, 2020. "Automatic Interpretable Retail forecasting with promotional scenarios," International Journal of Forecasting, Elsevier, vol. 36(4), pages 1389-1406.
    12. Lu, Shuya & Wu, Jianan & Tseng, Shih-Lun (Allen), 2018. "How Online Reviews Become Helpful: A Dynamic Perspective," Journal of Interactive Marketing, Elsevier, vol. 44(C), pages 17-28.
    13. H-Y Tsao & P-C Lin & L Pitt & C Campbell, 2009. "The impact of loyalty and promotion effects on retention rate," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 60(5), pages 646-651, May.
    14. Bart J. Bronnenberg & Jean-Pierre Dubé & Robert E. Sanders, 2020. "Consumer Misinformation and the Brand Premium: A Private Label Blind Taste Test," Marketing Science, INFORMS, vol. 39(2), pages 382-406, March.
    15. H-Y Tsao & L Pitt & C Campbell, 2010. "Analysing consumer segments to budget for loyalty and promotion programmes and maximize market share," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 61(10), pages 1523-1529, October.
    16. Hailiang Chen & Prabuddha De & Yu Jeffrey Hu, 2015. "IT-Enabled Broadcasting in Social Media: An Empirical Study of Artists’ Activities and Music Sales," Information Systems Research, INFORMS, vol. 26(3), pages 513-531, September.
    17. Doug J. Chung, 2013. "The Dynamic Advertising Effect of Collegiate Athletics," Marketing Science, INFORMS, vol. 32(5), pages 679-698, September.
    18. Tongil “TI” Kim & Diwas KC, 2020. "The Impact of Hospital Advertising on Patient Demand and Health Outcomes," Marketing Science, INFORMS, vol. 39(3), pages 612-635, May.
    19. Ma, Xuejing & Wang, Zetao & Liu, Hongju, 2022. "Do long-life customers pay more in pay-what-you-want pricing? Evidence from live streaming," Journal of Business Research, Elsevier, vol. 142(C), pages 998-1009.

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