The optimal advertising-allocation rules for sequentially released products: The case of the motion picture industry

Jooseop Lim and Tieshan Li

This study investigates the optimal advertising-allocation rules for sequentially released products. The authors used both analytical and empirical approaches to derive and validate the rules using theatrical prerelease, postrelease, and DVD advertising and sales data in the movie industry.
Lim and Li

MANAGEMENT SLANT

  • Although product release through sequential stages has become more common, relatively little is known about advertising-budget allocation rules for sequentially released products.
  • Movies are released through the theatrical box office as well as DVDs, which is a typical example of sequentially released products.
  • The direct effect of advertising, as well as the carryover effect...

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