The author uses a dynamic model of oligopolistic advertising competition, in which competitors are assumed to make a series of single-period advertising decisions with salvage values attached to achieved sales in each period, as the foundation for empirical analysis of the competitive situation involving the three largest ready-to-eat cereal manufacturers, Kellogg, General Mills, and the Post Division of Philip Morris’ General Foods. The primary insight of the author's empirical analysis is that General Mills places a higher future value on achieved sales than do the other competitors in the market.
Get full access to this article
View all access options for this article.
References
1.
AakerDavid A., and CarmanJames M. (1982), “Are You Overadvertising?”Journal of Advertising Research, 22(August/September), 57–70.
2.
Advertising Age 100 Leading National Advertisers (1967–1992), A special annual issue.
3.
AssmusGert, FarleyJohn U., and LehmannDonald R. (1984), “How Advertising Affects Sales: Meta-Analysis of Econometric Results,”Journal of Marketing Research, 21(February), 65–74.
4.
BerndtE. K., and HallB. H., and HallR. E., and HausmanJ. A. (1974), “Estimation and Inference in Nonlinear Structural Models,”Annals of Economic and Social Measurement, 3(October), 653–65.
5.
CarpenterGregory S., CooperLee G., HanssensDominique M., and MidgleyDavid F. (1988), “Modeling Asymmetric Competition,”Marketing Science, 7(Fall), 393–412.
6.
ChintaguntaPradeep K., and VilcassimNaufel J. (1992), “An Empirical Investigation of Advertising Strategies in a Dynamic Duopoly,”Management Science, 38(September), 1230–44.
7.
DealKenneth R. (1979), “Optimizing Advertising Expenditures in a Dynamic Duopoly,”Operations Research, 27(July/August), 682–92.
8.
EricksonGary M. (1991), Dynamic Models of Advertising Competition.Boston: Kluwer Academic Publishers.
9.
EricksonGary M. (1992), “Empirical Analysis of Closed-Loop Duopoly Advertising Strategies,”Management Science, 38(December), 1732–49.
10.
HanssensDominique M., ParsonsLeonard J., and SchultzRandall L. (1990), Market Response Models: Econometric and Time Series Analysis.Boston: Kluwer Academic Publishers.
11.
LancasterKent M., and SternJudith A. (1983), “Computer-Based Advertising Budgeting Practices of Leading U.S. Consumer Advertisers,”Journal of Advertising, 12(4), 4–9.
12.
Leading National Advertisers Ad & Summary (1978–1990), An annual publication of Leading National Advertisers, Inc.
13.
LilienGary L., and KotlerPhilip, and Sridhar MoorthyK. (1992), Marketing Models.Englewood Cliffs, NJ: Prentice-Hall.
14.
LittleJohn D. C. (1979), “Aggregate Advertising Models: The State of the Art,”Operations Research, 27(July/August), 629–67.
15.
RobertsMark J., and SamuelsonLarry (1988), “An Empirical Analysis of Dynamic, Nonprice Competition in an Oligopolistic Industry,”RAND Journal of Economics, 19(Summer), 200–20.
16.
VidaleH. L., and WolfeH. B. (1957), “An Operations Research Study of Sales Response to Advertising,”Operations Research, 5(June), 370–81.
