The Effects of Advertising on Brand Switching and Repeat Purchasing

Abstract

The authors examine switching and repeat purchase effects of advertising in mature, frequently purchased product categories. They draw on consumer behavior theories of framing and usage dominance to formulate a logit choice model for measuring these effects. They estimate the model using single-source scanner data. Their results suggest that advertising induces brand switching but does not affect the repeat purchase rates of consumers who have just purchased the brand, a result consistent with usage dominance rather than framing. They find the switching influence to be largely confined between the current and previous purchase occasions. They illustrate the magnitude of this effect and explore potential profitability.