Cf. Mela et al., ASSESSING LONG-TERM PROMOTIONAL INFLUENCES ON MARKET-STRUCTURE, International journal of research in marketing, 15(2), 1998, pp. 89-107
The allocation of marketing budgets across advertising and sales promo
tions has changed over the past decade with a marked decrease in the p
ercentage of budgets directed towards advertising. Moreover, there has
been much speculation regarding how these changes have affected a bra
nd's positioning vis-a-vis its competitors. In spite of this speculati
on, previous research has not examined the impact of changes in promot
ion and advertising on market structure. The purpose of this paper is
therefore to ascertain how changes in promotional and advertising poli
cy affect market structure over the long-term. The eight and one quart
er years of scanner panel data used for our analysis indicate that bra
nds in the analyzed product category tend to fall into premium/non-pre
mium and attribute-based (mildness) tiers. Furthermore, the data sugge
st that the differentiation between non-premium and premium brands has
diminished during the period of our study (1984-1992). The data also
suggest that increases in price promotions and reductions in advertisi
ng have led to decreased differentiation between brands. These finding
s suggest that shifts in marketing dollars from advertising to promoti
ons have made national brands more vulnerable to store brands' marketi
ng activity. (C) 1998 Elsevier Science B.V.