Is Persuasive Advertising Always Combative in a Distribution Channel?

Chi-Cheng Wu (), Ying-Ju Chen () and Chih-Jen Wang ()
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Chi-Cheng Wu: Department of Business Management, National Sun Yat-Sen University, Kaohsiung 80424, Taiwan, Republic of China
Ying-Ju Chen: Industrial Engineering and Operations Research Department, University of California, Berkeley, Berkeley, California 94720
Chih-Jen Wang: Department of Business Management, Cheng Shiu University, Kaohsiung County 83347, Taiwan, Republic of China

Marketing Science, 2009, vol. 28, issue 6, 1157-1163

Abstract: The existing marketing literature suggests that persuasive advertising elicits counteractions from competing manufacturers and consequently leads to wasteful cancellation of the advertising effects. Thus, persuasive advertising is widely perceived to be combative in nature. A series of previously published papers demonstrates that appropriate targeting may partially mitigate the combative nature of persuasive advertising in that either the rival manufacturer or the retailer may benefit. In this paper, we complement their results by demonstrating the possibility that every channel member may benefit from persuasive advertising, i.e., a Pareto improvement along the distribution channel, thereby leading to the conclusion that persuasive advertising need not result in channel conflict.

Keywords: persuasive advertising; product substitutability; channel conflict; game theory (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (13)

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