The long-term effect of marketing strategy on brand sales

Journal Article (Journal Article)

Few studies have considered the relative role of the integrated marketing mix (advertising, price promotion, product, and place) on the long-term performance of mature brands, instead emphasizing advertising and price promotion. Thus, little guidance is available to firms regarding the relative efficacy of their various marketing expenditures over the long run. To investigate this issue, the authors apply a multivariate dynamic linear transfer function model to five years of advertising and scanner data for 25 product categories and 70 brands in France. The findings indicate that the total (short-term plus long-term) sales elasticity is 1.37 for product and .74 for distribution. Conversely, the total elasticities for advertising and discounting are only .13 and .04, respectively. This result stands in marked contrast to the previous emphasis in the literature on price promotions and advertising. The authors further find that the long-term effects of discounting are one-third the magnitude of the short-term effects. The ratio is reversed from other aspects of the mix (in which long-term effects exceed four times the short-term effects), underscoring the strategic role of these tools in brand sales. © 2010, American Marketing Association.

Full Text

Duke Authors

Cited Authors

  • Ataman, MB; Van Heerde, HJ; Mela, CF

Published Date

  • January 1, 2010

Published In

Volume / Issue

  • 47 / 5

Start / End Page

  • 866 - 882

International Standard Serial Number (ISSN)

  • 0022-2437

Digital Object Identifier (DOI)

  • 10.1509/jmkr.47.5.866

Citation Source

  • Scopus