TV advertising spillovers and demand for private labels: the case of carbonated soft drinks

C-Tier
Journal: Applied Economics
Year: 2015
Volume: 47
Issue: 25
Pages: 2563-2576

Score contribution per author:

0.335 = (α=2.01 / 3 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

The expansion of private labels, or store brands, has transformed consumer choice sets and competition in retail markets, prompting manufacturers to fight back with renewed pricing and product and promotion strategies to forestall further private label expansion. This article examines the spillover effects of television advertising on brand-level consumer demand for carbonated soft drinks (CSDs), including private labels, using a random coefficients logit model with household purchasing and advertising viewing Nielsen data. As in previous work, we find that although brand spillover effects significantly increase demand for CSD brands in the same company and undermine demand facing other manufacturers' CSD brands, surprisingly, there are <italic>positive</italic> spillover effects on the demand for private label brands. This indicates that brand advertising is persuasive with respect to manufacturers' brands but complementary with respect to private labels. Further results show that eliminating television advertising for CSDs would lower aggregate CSD sales as consumers migrate to other beverages, although private labels stand to gain, particularly Wal-Mart brands.

Technical Details

RePEc Handle
repec:taf:applec:v:47:y:2015:i:25:p:2563-2576
Journal Field
General
Author Count
3
Added to Database
2026-01-25