Concave or S-Shaped Sales Response to Advertising: Does It Really Matter? A Mathematical Model Modifies Conventional Wisdom about Ad Budgeting
Paul D. Berger
Bentley University
Bruce D. Weinberg
University of Massachusetts, Amherst
Management slant
- It may be unnecessary to allocate effort and resources to determining whether the form of a sales response to advertising function is concave or S-shaped.
- Advertising expenditures that maximize profit must be on a concave portion of a sales-response curve.
- The above points apply to many problem settings in which optimal advertising decisions are to be made.
INTRODUCTION
There has been much debate in the marketing...