The Effect of Marketing Breadth and Competitive Spread on Category Growth

• 成果类型: Article
• 署名作者: Xiang, Yi; Soberman, David; Gatignon, Hubert
• 署名单位: China Europe International Business School; University of Toronto; INSEAD Business School
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.13570
• 发表日期: 2022
• 页码: 622-644
• 关键词: competitive spread; diffusion; marketing breadth; Pharmaceutical industry; Product life cycle

摘要

Understanding the patterns of demand evolution for a new category is important for firms to effectively manage capacity planning, market and service operations, and research and development. Our objective is to analyze how marketing at the industry level affects the evolution of primary demand in different stages of the product life cycle. We characterize the aggregate marketing activities in two constructs: marketing breadth and competitive spread. The first construct reflects the spread of spending across different marketing instruments at the industry level, and the second construct reflects the spread of spending across different firms. Though both constructs are related to the spread of spending within a category, we find that they have qualitatively different effects on category growth. An econometric model making use of the hierarchical nature of time observations within countries is estimated for each category. First, we find that high degrees of spending breadth impede market growth when the number of competitors is small (the category is young) but accelerate market growth when the number of competitors is higher (the category is maturing). Second, we find that high levels of competitive spread decrease category growth when spending levels are relatively low. However, as spending levels increase, the negative effect of competitive spread on demand growth all but evaporates.