Research Article
A Study on Sales Response to Changes in Advertising Expenditure
Published: January 1994 · Vol. 23, No. 3 · pp. 251-280
Full Text
Abstract
This study developed a generalized dynamic sales response model that properly reflects the patterns of sales response to increases and decreases in advertising expenditure, and presented econometrically testable models for application to actual data. Using actual advertising and sales data for two brands, the proposed models were tested to identify the most valid model. Furthermore, the process of deriving optimal advertising strategies for the proposed models was discussed, and optimal advertising strategies were derived for the actual brands. The derived optimal advertising strategy was a pulsing strategy, which demonstrates that, unlike most existing econometric models, the models proposed in this study are capable of producing pulsing strategies as the optimal advertising strategy.
