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The Effect of Advertising and In-Store Promotion on the Demand for Chocolate

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Author Info

  • Jason C. Patalinghug

    ()
    (Wesleyan University)

Abstract

This paper analyzes the effect of TV advertising and in-store displays on the sales of chocolates. I examine which method is more effective in gaining customers and in increasing total sales. Also, I look at the evidence to see whether the lack of advertising by a firm will hurt the industry as a whole. In this essay, I use a nested logit model on scanner data obtained by the Zwick Center for Food and Resource Policy at the University of Connecticut's Department of Agricultural and Resource Economics to examine the effect of TV advertising on chocolate sales. The results show that in-store displays and advertising both help increase the demand for chocolate.

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File URL: http://www.cag.uconn.edu/are/zwickcenter/documents/workingpapers/wp21.pdf
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Bibliographic Info

Paper provided by University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy in its series Working Papers with number 21.

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Length: 36 pages
Date of creation: Oct 2013
Date of revision:
Handle: RePEc:zwi:wpaper:21

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Related research

Keywords: nested logit; scanner data; advertising; in-store promotions;

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References

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  1. Aviv Nevo, 1998. "Measuring Market Power in the Ready-to-Eat Cereal Industry," NBER Working Papers 6387, National Bureau of Economic Research, Inc.
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  3. Jie Zhang, 2006. "An Integrated Choice Model Incorporating Alternative Mechanisms for Consumers' Reactions to In-Store Display and Feature Advertising," Marketing Science, INFORMS, vol. 25(3), pages 278-290, 05-06.
  4. Peter Scott & James Walker, 2010. "Advertising, promotion, and the competitive advantage of interwar British department stores," Economic History Review, Economic History Society, vol. 63(4), pages 1105-1128, November.
  5. Robert C. Blattberg & Richard Briesch & Edward J. Fox, 1995. "How Promotions Work," Marketing Science, INFORMS, vol. 14(3_supplem), pages G122-G132.
  6. Porter, Michael E, 1974. "Consumer Behavior, Retailer Power and Market Performance in Consumer Goods Industries," The Review of Economics and Statistics, MIT Press, vol. 56(4), pages 419-36, November.
  7. Greg Shaffer & Florian Zettelmeyer, 2009. "Comparative Advertising and In-Store Displays," Marketing Science, INFORMS, vol. 28(6), pages 1144-1156, 11-12.
  8. Hernán A. Bruno & Naufel J. Vilcassim, 2008. "—Structural Demand Estimation with Varying Product Availability," Marketing Science, INFORMS, vol. 27(6), pages 1126-1131, 11-12.
  9. Tülin Erdem & Michael P. Keane, 1996. "Decision-Making Under Uncertainty: Capturing Dynamic Brand Choice Processes in Turbulent Consumer Goods Markets," Marketing Science, INFORMS, vol. 15(1), pages 1-20.
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