Advertising, Random Sales Response, and Brand Competition: Some Theoretical and Econometric Implications

Dung Nguyen

The Journal of Business, 1987, vol. 60, issue 2, 259-79

Abstract: This paper examines implications for the firm's advertising decisions under conditions of random sales response to advertising within the context of multibrand competition. The competitive environment assumed is characterized not only by interactions among different companies within a given industry, but also by inter- actions among different brands produced by a single company. A theoretical model is first formulated to examine the effect of uncertainty in the sales-advertising relations and that of the firm's attitude toward risk on its advertising. The theoretical results are then assessed by estimating an econometric model using the cigarette data. Copyright 1987 by the University of Chicago.

Date: 1987
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Persistent link: https://EconPapers.repec.org/RePEc:ucp:jnlbus:v:60:y:1987:i:2:p:259-79

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