Long-term Profitability: Advertising versus Sales Promotion
Alex Biel
This study examines the allocation of funds between advertising and sales promotion. In recent years, marketers have been increasingly turning to sales promotion as a seemingly attractive strategy.
Although many marketers agree that resource allocated to advertising is an investment in long-term brand building, there is far less confidence that advertising is an effective tool in the short or intermediate term. While it is generally accepted that promotions generate short-term sales, some of those sales are simply stolen from future purchases by the same consumer.
I am concerned that this short-term...