Title

The Effect of Competitive Advertising Interference on Sales for Packaged Goods

Publication Type

Journal Article

Publication Date

4-2008

Abstract

Competitive advertising interference can occur when viewers of advertising for a focal brand are also exposed to advertising messages for competing brands within a short period (e.g., one week for television advertising). Although competitive advertising interference has been shown to reduce advertising recall and recognition and brand evaluation measures, no studies have examined its impact on brand sales. In this research, the authors use a market response model of sales for two grocery categories for a large grocery chain in the Chicago area to study the extent to which competitive advertising interference influences sales. The model enables the authors to capture the pure own-brand advertising elasticities that would arise if there were no competitive interference. The results show that competitive interference effects on sales are strong. When one or more competing brands advertise in the same week as the focal brand, the advertising elasticity diminishes for the focal brand. The decrease depends on the number of competing brands advertising in a particular week and their total advertising volume. The authors find that having one more competitor advertise is often more harmful to a focal brand's advertising effectiveness than if the current number of advertising brands increase their total advertising volume

Discipline

Marketing

Research Areas

Marketing

Publication

Journal of Marketing Research

Volume

45

Issue

2

First Page

211

Last Page

225

ISSN

0022-2437

Identifier

10.1509/jmkr.45.2.211