Spillover and Competitive Effects of Advertising in the Carbonated Soft Drink Market

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dc.creatorLopez, Rigoberto
dc.creatorLiu, Yizao
dc.creatorZhu, Chen
dc.date2017-04-01T19:34:22Z
dc.date.accessioned2026-07-09T07:21:44Z
dc.descriptionThis paper examines the spillover effects of television advertising on brand-level consumer demand for carbonated soft drinks (CSDs) and the competition consequences for manufacturers’ and private label CSDs. Using a random coefficients logit model (BLP) with household purchasing and advertising viewing data from five U.S. cities, we find that although brand advertising is important in increasing demand as previous work confirms, company advertising spillovers are nearly as important. Not surprisingly, advertising by competitors undermines demand for a particular manufacturer’s CSD brand but, surprisingly, there are positive spillover effects on the demand for private label brands. Further results show that eliminating all television advertising for CSDs would lower both brand and aggregate market shares (including private labels) as consumers migrate to other beverages. However, the dominant strategy is for leading companies to advertise to avoid losing revenues when competitors advertise or to increase revenues when they do not.
dc.identifierdoi:10.22004/ag.econ.155327
dc.identifierhttps://ageconsearch.umn.edu/record/155327/files/wp18.pdf
dc.identifierhttp://ageconsearch.umn.edu/record/155327
dc.identifier.urihttp://hdl.handle.net/123456789/587471
dc.languageeng
dc.publisher
dc.sourcehttp://ageconsearch.umn.edu/record/155327
dc.titleSpillover and Competitive Effects of Advertising in the Carbonated Soft Drink Market
dc.typeText

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