Advertising and Price

This paper considers three separate advertising issues relating to price. First, that short-term price promotions are taken up only by the brand's existing customers.

Advertising and Price

Andrew Ehrenberg, John Scriven and Neil Barnard

A pervasive idea in marketing and economics is that the rational consumer will choose a brand on price unless given a reason not to. Brand differentiation is therefore expected to give a respite from the apparently relentless pressure of price competition. A functional advantage is, however, usually not easy to sustain (if successful, the competition will copy it). Marketing people therefore look to advertising to play a key part in achieving the desired brand differentiation. But is this view justified? Is there systematic evidence...

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