Peter J. Danaher, André Bonfrer, and Sanjay Dhar
Executive Summary
Competitive advertising interference can occur when viewers of advertising for a focal brand are also exposed to advertising messages for competing brands within a short period (e.g., one week for television advertising). Although competitive advertising interference has been shown to reduce advertising recall and recognition and brand evaluation measures, no studies have examined the impact on brand sales. In this research, the authors use a rigorous market response model of sales for two grocery categories for a large grocery chain in the Chicago area to study the extent to which sales are influenced by competitive advertising interference. The model enables the authors to capture the sales effect that would arise if there were no competitive interference. The results show that competitive interference effects on sales are strong. When one or more competing brands advertise in the same week as the focal brand, the sales response is less than it could be for the focal brand. This attenuation in sales response depends on the number of competing brands advertising in a particular week and their total advertising volume. The authors find that having one more competitor advertise is often more harmful to a focal brand’s advertising effectiveness than if the current number of advertising brands increase their total advertising volume.
Biography
Peter J. Danaher is Coles Myer Chair of Marketing and Retailing at the Melbourne Business School in Australia. He was previously Professor and Chair of the Marketing Department at the University of Auckland in New Zealand. He has also held visiting positions at London Business School, The Wharton School, and Massachusetts Institute of Technology. He has a PhD in Statistics from Florida State University and an MS in Statistics from Purdue University. His primary research interests are media exposure distributions, advertising effectiveness, television audience measurement and behavior, Internet usage behavior, customer satisfaction measurement, forecasting, and sample surveys. This research has been published in journals such as Journal of Marketing Research, Marketing Science, Journal of Marketing, Journal of Advertising Research, Journal of the American Statistical Association, Journal of Retailing, Journal of Business and Economic Statistics, and American Statistician. He has consulted extensively with Telecom, Australia Post, Optus Communications, Unilever, Nielsen Media Research, and other market research companies. He serves on the editorial boards of Journal of Marketing Research, Marketing Science, and Journal of Marketing and is an area editor for the International Journal of Research in Marketing.
André Bonfrer is Assistant Professor of Marketing in the Lee Kong Chian School of Business at Singapore Management University. He holds a PhD in Business and an MBA from the Graduate School of Business at the University of Chicago. His current research focuses on empirical modeling in retailing, competition, and customer valuation.
Sanjay Dhar is James H. Lorie Professor of Marketing in the Graduate School of Business at the University of Chicago, where he has been a faculty member since 1992. Professor Dhar’s research and teaching focuses on strategic marketing management, advanced marketing strategy, brand management, new product development, pricing strategy, promotion strategy, retail price advertising strategies, retail management best practices, consumer and retail sales promotions, trade promotions, private labels, category management, loyalty reward programs, everyday low pricing, assortment management, purchase incidence, and brand choice. He is on the editorial board of Marketing Science, Quantitative Marketing and Economics, International Journal of Research in Marketing, and Review of Marketing Science, and he also serves as a reviewer for several other journals in marketing. He has published several articles in Marketing Science, Journal of Marketing Research, Journal of Marketing, Journal of Retailing, Management Science, Marketing Letters, Quantitative Marketing and Economics, and Pricing Theory and Practice.
Journal of Marketing Research, Vol. XLV, No. 2, April 2008
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