A Simple Model for Determining Advertising Appropriations
Open Access
- 1 August 1965
- journal article
- research article
- Published by SAGE Publications in Journal of Marketing Research
- Vol. 2 (3) , 285-292
- https://doi.org/10.1177/002224376500200309
Abstract
This article develops a simple profit-maximizing model that requires knowledge of (a) the sales effect of advertising in the current period at different possible levels of advertising; (b) sales in the prior period; (c) the rate at which sales decline in the absence of advertising; and (d) the interest rate which is the appropriate cost of capital for the firm. This article examines the applicability of the model to general advertisers with and without monopoly power, established and new products, small and large market shares, and in oligopoly.Keywords
This publication has 5 references indexed in Scilit:
- Advertising and CigarettesJournal of Political Economy, 1962
- Optimal Advertising Policy under Dynamic ConditionsEconomica, 1962
- Early Prediction of Market Success for New Grocery ProductsJournal of Marketing, 1960
- A Treatment of Distributed Lags in the Theory of Advertising ExpenditureJournal of Marketing, 1955
- Product Equilibrium under Monopolistic CompetitionPublished by Harvard University Press ,1951