Measuring the Impact of Promotions on Brand Switching When Consumers Are Forward-Looking

Topics:
Brand Management
Tags:
Brand,
Branding,
Elasticity,
Marketing,
Model,
University Of North Carolina
Source:
University of North Carolina

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Overview: Logit choice models have been used extensively to study promotion response. This paper examines whether brand switching elasticities derived from these models may be over-estimated due to rational consumer adjustment of purchase timing to coincide with promotion schedules, and whether this bias can be addressed by a dynamic structural model. It concludes that reduced form model estimates of brand switching elasticities can be overstated, and that a dynamic structural model is best for addressing the problem.

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Format: PDF | Size: 267KB | Date: Jan 2003 | Pages: 48

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