The Effect of Competitive Advertising Interference on Sales for Packaged Goods

Competitive advertising interference arises when viewers of advertising for a focal brand are also exposed to advertising messages for competing brands within a short time period, say one week for TV advertising. Although competitive advertising interference has been shown to reduce ad recall and re...

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Main Authors: Bonfrer, Andre, Danaher, Peter J., Dhar, Sanjay K.
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Language:English
Published: Institutional Knowledge at Singapore Management University 2004
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Online Access:https://ink.library.smu.edu.sg/lkcsb_research/2086
https://ink.library.smu.edu.sg/context/lkcsb_research/article/3085/viewcontent/1004paper.pdf
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spelling sg-smu-ink.lkcsb_research-30852018-07-09T07:44:02Z The Effect of Competitive Advertising Interference on Sales for Packaged Goods Bonfrer, Andre Danaher, Peter J. Dhar, Sanjay K. Competitive advertising interference arises when viewers of advertising for a focal brand are also exposed to advertising messages for competing brands within a short time period, say one week for TV advertising. Although competitive advertising interference has been shown to reduce ad recall and recognition and brand evaluation measures, no studies have examined the impact on sales. In this research we use a market response model of sales for two grocery categories in the Chicago area to investigate possible advertising interference effects. The results show that competitive interference effects 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 rate of decrease depends on the number of competing brands advertising in a particular week and their total GRPs broadcast. We are able to derive optimal advertising levels for the brands within a category so that they all have the maximum sales response from advertising. It transpires that the current level of television advertising within the two categories is much higher than this optimum level, indicating that these grocery brands are likely to be over advertising at present. Curtailing advertising for all the brands would increase the response to advertising for each of them. 2004-05-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/lkcsb_research/2086 https://ink.library.smu.edu.sg/context/lkcsb_research/article/3085/viewcontent/1004paper.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University Marketing
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Marketing
spellingShingle Marketing
Bonfrer, Andre
Danaher, Peter J.
Dhar, Sanjay K.
The Effect of Competitive Advertising Interference on Sales for Packaged Goods
description Competitive advertising interference arises when viewers of advertising for a focal brand are also exposed to advertising messages for competing brands within a short time period, say one week for TV advertising. Although competitive advertising interference has been shown to reduce ad recall and recognition and brand evaluation measures, no studies have examined the impact on sales. In this research we use a market response model of sales for two grocery categories in the Chicago area to investigate possible advertising interference effects. The results show that competitive interference effects 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 rate of decrease depends on the number of competing brands advertising in a particular week and their total GRPs broadcast. We are able to derive optimal advertising levels for the brands within a category so that they all have the maximum sales response from advertising. It transpires that the current level of television advertising within the two categories is much higher than this optimum level, indicating that these grocery brands are likely to be over advertising at present. Curtailing advertising for all the brands would increase the response to advertising for each of them.
format text
author Bonfrer, Andre
Danaher, Peter J.
Dhar, Sanjay K.
author_facet Bonfrer, Andre
Danaher, Peter J.
Dhar, Sanjay K.
author_sort Bonfrer, Andre
title The Effect of Competitive Advertising Interference on Sales for Packaged Goods
title_short The Effect of Competitive Advertising Interference on Sales for Packaged Goods
title_full The Effect of Competitive Advertising Interference on Sales for Packaged Goods
title_fullStr The Effect of Competitive Advertising Interference on Sales for Packaged Goods
title_full_unstemmed The Effect of Competitive Advertising Interference on Sales for Packaged Goods
title_sort effect of competitive advertising interference on sales for packaged goods
publisher Institutional Knowledge at Singapore Management University
publishDate 2004
url https://ink.library.smu.edu.sg/lkcsb_research/2086
https://ink.library.smu.edu.sg/context/lkcsb_research/article/3085/viewcontent/1004paper.pdf
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