Advertising sunk costs and credible spatial preemption
Large sunk investments in advertising have been utilized by some companies to prevent potential competitors from entering their market. The investments have enabled managers to launch new products just before expected market growth increases. The effectiveness of such preemptive actions lies in the capability of the advertising in providing brand recognition and loyalty. When the advertising has succeeded in providing a company with a following, a company's product introduction or product line expansion activity benefits from the reduced cost of having to influence consumers. With a brand's following, competitors may have to spend more on advertising to gain customer attention and market share.
Publication Name: Strategic Management Journal
A double-hurdle approach to advertising: the case of cheese
The effect of advertisement on consumer cheese-purchasing behavior is investigated using a double-hurdle model. This approach analyzes the demand for the product on two levels. One is the effectiveness of the advertisement to encourage new buyers in purchasing the product and the other is the efficacy of the advertisement in inducing buyers to purchase more. Evaluation of the effect of cheese advertisement on consumer behavior indicates that promoting the product encourages new buyers but does not cause an increase in consumption among the regular purchasers.
Publication Name: Agribusiness
Direct marketing should encompass a strategic plan that is based on an effective advertising strategy; advertising and direct selling go hand in hand. Marketizing represents the merger of the advertising and marketing concepts. Marketizing involves response probe, permission marketing, and relationship marketing. Market, package, and offer represent the three major elements of most effective advertising and marketing campaigns.
Publication Name: ZIP-Target Marketing
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