Kl. Ailawadi et al., SHARE AND GROWTH ARE NOT GOOD PREDICTORS OF THE ADVERTISING AND PROMOTION SALES RATIO, Journal of marketing, 58(1), 1994, pp. 86-97
Researchers have tried for several years to explain variations in adve
rtising and promotion/sales (A&P/S) ratios across brands, product-mark
et categories firms, and industries. Market share (MS) and market grow
th (MG) have been included as explanatory variables in almost all of t
hese studies A recent article by Balasubramanian and Kumar (1 990) pre
sents a parsimonious yet powerful model explaining A&P/S ratios using
these two variables and their interaction. Though the MG-MS matrix pro
vides a possible rationale for the use of these variables in an intera
ction model, the authors argue that it is more consistent with strateg
ic business unit (SBU)-level data than firm data. They attempt to repl
icate the model with two other data sets (SBU and brand data) as well
as a version of the firm data used in the original study. Being unable
to find empirical support for the model with any of the three data se
ts, they argue that further research should rely on other variables.