Optimal Advertising and Promotion Budgets in Dynamic Markets with Brand Equity as a Mediating Variable
Optimal Advertising and Promotion Budgets in Dynamic Markets with Brand Equity as a Mediating Variable
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DOI：
10.1287/mnsc.1060.0604
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发表时间：
2007
期刊：
影响因子：
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通讯作者：
S. Sriram;Manohar U. Kalwani;S. Balachander;Pradeep Chintagunta;V. Kumar;Harikesh S. Nair;J. Pancras-J.-Panc
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文献类型：
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作者：
S. Sriram;Manohar U. Kalwani;S. Balachander;Pradeep Chintagunta;V. Kumar;Harikesh S. Nair;J. Pancras-J.-Panc
本文以品牌资产为中介变量，研究动态市场中广告和促销预算的最优水平。为此，我们开发和估计一个状态空间模型的基础上卡尔曼滤波器，捕捉品牌资产的动态影响其驱动程序，如品牌的广告和促销支出。通过将卡尔曼滤波器与随机系数logit需求模型相结合，我们的估计使我们能够捕捉品牌资产的动态，以及使用商店级数据来模拟消费者异质性。利用这些需求模型估计，我们确定马尔可夫完美均衡广告和促销策略。我们的实证分析是基于橙子汁类别的商店级扫描仪数据，其中包括两个主要品牌-纯果乐和美汁源。正如预期的那样，我们发现促销活动对消费者的效用有显著的正向影响，并诱导消费者转向促销品牌。然而，促销对品牌资产也有负面影响，这种影响会随着时间的推移而延续。总体而言，我们发现，虽然促销活动在短期和长期都有净正面影响，但包含长期影响的隐含总利润弹性小于短期利润弹性。相应地，我们期望短视的决策者分配高于最优支出的促销活动。我们的供应方分析结果显示，这两个品牌的实际促销水平确实高于前瞻性（长期导向）和两年规划范围情景的最佳预算。因此，这可能是有利可图的两个品牌，以减少他们的促销水平。此外，我们发现，虽然前瞻性的促销支出水平较高的小品牌，美汁源，这是市场领导者纯果乐，花费更多的促销活动。转向最佳广告预算，我们发现，均衡的前瞻性广告水平较高的纯果乐，品牌，具有较高的品牌资产和较高的响应广告。此外，正如预期的那样，两个品牌的最佳前瞻性广告水平均高于短视水平和两年规划水平。然而，两个品牌的前瞻性广告水平均低于实际广告支出。这意味着，即使我们考虑广告的长期影响，品牌也在广告上超支。
We study the optimal levels of advertising and promotion budgets in dynamic markets with brand equity as a mediating variable. To this end, we develop and estimate a state-space model based on the Kalman filter that captures the dynamics of brand equity as influenced by its drivers, such as the brand's advertising and sales promotion expenditures. By integrating the Kalman filter with the random coefficients logit demand model, our estimation allows us to capture the dynamics of brand equity as well as to model consumer heterogeneity using store-level data. Using these demand model estimates, we determine the Markov perfect equilibrium advertising and promotion strategies. Our empirical analysis is based on store-level scanner data in the orange juice category, which comprises two major brands---Tropicana and Minute Maid. As expected, we find that sales promotions have a significant positive effect on consumers' utility and induce consumers to switch to the promoted brand. However, there is also a negative effect of promotions on brand equity that carries over from period to period. Overall, we find that while sales promotions have a net positive impact both in the short term and in the long term, the implied total profit elasticity including the long-term effect is smaller than the short-term profit elasticity. Correspondingly, we expect myopic decision makers to allocate higher than optimal expenditures to sales promotions. Our results from the supply-side analysis reveal that the actual promotion levels for both brands are indeed higher than the optimal budgets for the forward-looking (long-term orientation) as well as the two-year planning horizon scenarios. Hence, it may be profitable for both brands to reduce their promotion levels. Further, we find that although the forward-looking promotional spending levels are higher for the smaller brand, Minute Maid, it is market leader Tropicana that spends more on sales promotions. Turning to optimal advertising budgets, we find that the equilibrium forward-looking advertising levels are higher for Tropicana, the brand that has higher brand equity and a higher responsiveness to advertising. Further, as expected, the optimal forward-looking advertising levels are higher than the myopic levels and the two-year planning horizon levels for both brands. However, the forward-looking advertising levels are lower than the actual advertising expenditures for both brands. This implies that even when we consider the long-term effects of advertising, the brands are overspending on advertising.