13.11.2009 – Advertising and Price Effectiveness over the Business Cycle

13 novembre 2009

13 novembre 2009Lille

Speaker: Maarten Gijsenberg (Louvain School of Managment/Mons Campus, Belgium)

Date and place: 13/11/2009 at 12:50
IÉSEG School of Management – 3 rue de la Digue – 59000 Lille
Lecture Room: B 254 (B-building, second floor)


  • Firms are under ever increasing pressure to justify their marketing expenditures. Once considered mere costs, these expenditures are more and more treated as investments that should deliver shareholder value. This evolution towards greater accountability is reinforced in times of economic contractions, as every dollar starts to matter more. Firms facing difficult times tighten their belts, and marketing budgets are among the first to be reconsidered (McKinsey, 2009). Prices are increased (e.g. Deleersnyder et al., 2004) and advertising expenditures are reduced (Deleersnyder et al., 2009). Sound decisions on where (not) to cut investments, however, require a correct assessment of the effectiveness of the different marketing-mix instruments. In this study, we therefore conduct a systematic investigation of the evolution in the effectiveness of two important marketing mix instruments, price and advertising, over the business cycle. Analyses are based on 163 branded products in 37 mature CPG categories in the UK, and this for a period of 15 years. The data are a combination of (i) monthly national sales data, (ii) monthly advertising data, (iii) data on the general economic conditions, and (iv) consumer survey data.