THE LONG-TERM IMPACT OF PROMOTION AND ADVERTISING ON CONSUMER BRAND CHOICE

The authors examine the long-term effects of promotion and advertising on consumers' brand choice behavior. They use 8 1/4 years of panel da ta for a frequently purchased packaged good to address two questions: (1) Do consumers' responses to marketing mix variables, such as price, change over a long period of time? (2) If yes, are these changes asso ciated with changes in manufacturers' advertising and retailers' promo tional policies? Using these results, the authors draw implications fo r manufacturers' pricing, advertising, and promotion policies. The aut hors use a two-stage approach, which permits them to assess the medium -term (quarterly) effects of advertising and promotion as well as thei r long-term (i.e., over an infinite horizon) effects. Their results ar e consistent with the hypotheses that consumers become more price and promotion sensitive over time because of reduced advertising and incre ased promotions.