Can advertising help to maintain dynamic market equilibrium?

Macarena Estevez

This paper utilises the FMCG category in a mature market with sustained equilibrium and a considerable number of well-established products to assess two assumptions: the stability of the system through time, without launch of new products nor significant changes in key variables of currently existing products (distribution, price, promotions); and the instability of the system caused by the launch of a new product or significant change in key variables from any currently existing product.

Can advertising help to maintain dynamic market equilibrium?

Macarena EstévezMindShare, Spain

INTRODUCTION

A system is a unit with an identity that distinguishes it from the rest of the environment, being made up of a set of elements that interact with each other, influencing each other in such a way as to be working towards a common goal.

Bearing in mind the above definition, we can understand a market as a system where each product offered in that market is an element of the system, the common goal being the maximization of sales (or share) for every product within the...

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