The beer market and advertising expenditure
Abstract
Purpose
The purpose of this paper is to examine the impacts of advertising expenditure on brands' market shares, utilizing a novel four‐week advertising‐sales data from the highly competitive oligopolistic Finnish beer market in which price competition among the homogeneous larger‐type beer brands is not allowed during the period of the study.
Design/methodology/approach
Competition is modelled using the Lanchester model. The impacts of advertising on market shares are estimated using the impulse‐response functions from vector autoregression, and the full information maximum likelihood and advertising elasticities.
Findings
Some new insights into beer market dynamics are obtained. First, the impacts of advertising are not similar across brands. Second, overspills of advertising impacts across brands are detected. Third, the reactions to competitors' advertising attacks are mild.
Originality/value
The paper utilizes four‐week brand‐level data on the market shares of the leading beer brands in Finland and the brands' advertising expenditure. During the period of the data, price competition is not allowed, which creates a unique opportunity to study the impacts of advertising on the market shares of brands.
Keywords
Citation
Heimonen, K. and Uusitalo, O. (2009), "The beer market and advertising expenditure", Marketing Intelligence & Planning, Vol. 27 No. 7, pp. 945-975. https://doi.org/10.1108/02634500911000243
Publisher
:Emerald Group Publishing Limited
Copyright © 2009, Emerald Group Publishing Limited