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Advertising'S Effect On The Product Evolutionary Cycle

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  • Holak, Susan L.
  • Tang, Y. Edwin

Abstract

Criticism of the product life cycle (PLC) concept concerns problems with theory, empirical validation, and practical use. It has been suggested that the product evolutionary cycle (PEC), an alternative concept based on the field of biology, provides a more complete picture of marketing mix effects and competition on product sales (Tellis and Crawford 1981 ). In this research, the U.S. cigarette industry is used as the arena in which to assess empirically the PEC framework. Advertising-sales causation is tested on three levels of segment competition: (1) individual brand (2) intracategory, and (3) intercategory competition. Our findings indicate that more distantly related "organisms" compete as well as those closely related in terms of background. Specifically, we demonstrate a gradual but marked decrease in the effect of advertising on sales as products with more distant lineage co-exist and compete. The PEC is demonstrated to be an information-laden framework to use in making marketing mix decisions.

Suggested Citation

  • Holak, Susan L. & Tang, Y. Edwin, 1990. "Advertising'S Effect On The Product Evolutionary Cycle," Department of Economics and Business - Archive 259454, North Carolina State University, Department of Economics.
    • Handle: RePEc:ags:ncbuar:259454
    DOI: 10.22004/ag.econ.259454
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    References listed on IDEAS

    as
    1. Polli, Rolando & Cook, Victor, 1969. "Validity of the Product Life Cycle," The Journal of Business, University of Chicago Press, vol. 42(4), pages 385-400, October.
    2. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    3. Rink, David R. & Swan, John E., 1979. "Product life cycle research: A literature review," Journal of Business Research, Elsevier, vol. 7(3), pages 219-242, September.
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    Cited by:

    1. Koen Pauwels & Richard D’Aveni, 2016. "The formation, evolution and replacement of price–quality relationships," Journal of the Academy of Marketing Science, Springer, vol. 44(1), pages 46-65, January.

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