Early Marketing Matters: A Time-Varying Parameter Approach to Persistence Modeling
Publication Type
Journal Article
Publication Date
2-2010
Abstract
Are persistent marketing effects most likely to appear right after the introduction of a product? The authors give an affirmative answer to this question by developing a model that explicitly reports how persistent and transient marketing effects evolve over time. The proposed model provides managers with a valuable tool to evaluate their allocation of marketing expenditures over time. An application of the model to many pharmaceutical products, estimated through (exact initial) Kalman filtering, indicates that both persistent and transient effects occur predominantly immediately after a brand's introduction. Subsequently, the size of the effects declines. The authors theoretically and empirically compare their methodology with methodology based on unit root testing and demonstrate that the need for unit root tests creates difficulties in applying conventional persistence modeling. The authors recommend that marketing models should either accommodate persistent effects that change over time or be applied to mature brands or limited time windows only.
Keywords
persistence modeling, long-term marketing effectiveness, time-varying parameters, Kalman filtering, pharmaceutical marketing
Discipline
Marketing
Research Areas
Marketing
Publication
Journal of Marketing Research
Volume
47
Issue
1
First Page
173
Last Page
185
ISSN
0022-2437
Identifier
10.1509/jmkr.47.1.173
Publisher
American Marketing Association
Citation
OSINGA, Ernst C.; LEEFLANG, Peter S. H.; and WIERINGA, Jaap E..
Early Marketing Matters: A Time-Varying Parameter Approach to Persistence Modeling. (2010). Journal of Marketing Research. 47, (1), 173-185.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/4838
Additional URL
https://doi.org/10.1509/jmkr.47.1.173