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Sales and Advertising Rivalry in Interwar US Department Stores

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  • Peter Scott

    ()
    (School of Management, University of Reading)

  • James Walker

    ()
    (School of Management, University of Reading)

Abstract

Department stores represented one of the most advertising-intensive sectors of American inter-war retailing. Yet it has been argued that a competitive spiral of high advertising spending, to match the challenge of other local department stores, contributed to a damaging inflation of costs that eroded long-term competitiveness. We test these claims, using both qualitative archival data and establishment-level national data sets. Returns to stores’ advertising are shown to have fallen over the period, while own advertising led to retaliatory advertising by rival department stores, which substantially lowered returns on advertising dollars in the 1930s (but not the 1920s).

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Bibliographic Info

Paper provided by Henley Business School, Reading University in its series Economics & Management Discussion Papers with number em-dp2009-05.

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Length: 44 pages
Date of creation: 01 May 2010
Date of revision:
Handle: RePEc:rdg:emxxdp:em-dp2009-05

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Keywords: Department stores; Interwar U.S. economic history; Advertising; Marketing;

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  1. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
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  11. Peter Scott & James Walker, 2012. "The British ‘failure’ that never was? The Anglo‐American ‘productivity gap’ in large‐scale interwar retailing—evidence from the department store sector," Economic History Review, Economic History Society, vol. 65(1), pages 277-303, 02.
  12. Tremblay, Victor J, 1985. "Strategic Groups and the Demand for Beer," Journal of Industrial Economics, Wiley Blackwell, vol. 34(2), pages 183-98, December.
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