EXPLAINING VARIATIONS IN THE ADVERTISING AND PROMOTIONAL COSTS SALES RATIO - A REJOINDER/

In 1994, the authors (see Ailawadi, Farris, and Parry 1994) reported t he results of a failed attempt to validate the findings of Balasubrama nian and Kumar's (1990) empirical analysis of the determinants of the firm-level ratio of advertising and promotion to sales (A&P/S). Balasu bramanian and Kumar (1997) have now listed several concerns with the a uthors' 1994 analysis-of which two data preparation errors are valid. However, these errors have no impact on the main thesis of the authors 1994 article-market share and market growth are not good predictors o f A&P/S. The authors also have analyzed currently available COMPUSTAT data, and their findings once again invalidate Balasubramanian and Kum ar's (1990) results. The authors can only reiterate their earlier conc lusion-neither currently available COMPUSTAT data, Profit Impact of Ma rket Strategy data, nor brand-level data show any significant effect o f market share and market growth on A&P/S. The authors conclude that B alasubramanian and Kumar's (1990) findings are simply not valid, and t here is no way to identify what exactly led to their unique results be cause they have not made available their original data set.