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Temporal Differences in the Role of Marketing Communication in New Product Categories

Sridhar Narayanan, Puneet Manchanda and Pradeep K. Chintagunta
Journal of Marketing Research
Vol. 42, No. 3 (Aug., 2005), pp. 278-290
Stable URL: http://www.jstor.org/stable/30162372
Page Count: 13
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Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Temporal Differences in the Role of Marketing Communication in New Product Categories
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Abstract

The authors investigate the changing role of marketing communication over the life cycle of a new product category. They postulate two effects of marketing communication on consumers' choices: an "indirect effect" through reduction of uncertainty about product quality and a "direct effect" (i.e., more is better). The authors expect that the indirect effect is relatively larger in the early, postlaunch stages. They develop a structural model of demand that allows for such temporal differences in the roles of marketing communication. They use a random coefficients discrete choice model with a Bayesian learning process to model physician learning about new drugs and market-level data for the prescription antihistamines category. They find that marketing communication has a primarily indirect effect 6-14 months after introduction but that the direct effect subsequently dominates. The results suggest that firms should follow a pattern of heavier communication at the introduction phase followed by lower levels.

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