ISSN:
1573-059X
Keywords:
Price
;
Lags
;
Advertising
;
Interaction
;
Consumer Nondurable
;
Econometrics
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
Abstract This paper investigates the interaction effect of advertising and price on the market share of a consumer nondurable product. We postulate a model in which local advertising is thought to primarily affect the consumers' purchase by making the demand more price sensitive, and national advertising to affect the consumers' preference, thus making the demand less price sensitive. Moreover, we hypothesize that local advertising interaction will have more immediate effect, while national advertising interaction will have longer term interaction effects. We apply these ideas empirically, and find support for our hypotheses. Thus, the interaction effect of advertising and price can be characterized by both increased and decreased price sensitivity, depending on the type of advertising. Moreover, these effects may be present simultaneously for the same product.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1007/BF00435298
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