Modeling Marketing Dynamics by Time Series Econometrics

Pauwels, Koen; Currim, Imran S.; Dekimpe, Marnik G.; Hanssens, Dominique M.; Mizik, Natalie; Ghysels, Éric; Naik, P. A.

doi:10.1007/s11002-005-0455-0

Cited by 69 publications

(41 citation statements)

References 57 publications

(64 reference statements)

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“…This distinction led Pauwels et al (2005) to call for more spectral-based time-series applications in marketing, which could lead to novel insights into a wide variety of substantive marketing problems.…”

Section: Spectral Analysismentioning

confidence: 99%

Consumer confidence in Europe: United in diversity?

Lemmens

Croux

Dekimpe

2007

International Journal of Research in Marketing

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The ongoing unification taking place in the European political scene, along with recent advances in consumer mobility and communication technology, raises the question of whether the European Union can be treated as a single market to exploit potential synergy effects from panEuropean marketing strategies. Previous research, which mostly used domain-specific segmentation bases, has resulted in mixed conclusions.In this paper, a more general segmentation basis is adopted, as we consider the homogeneity in the European countries' Consumer Confidence Indicators. Moreover, rather than analyzing more traditional static similarity measures, we adopt the concepts of dynamic correlation and cohesion between countries. The short-run fluctuations in consumer confidence are found to be largely country specific. A myopic focus on these fluctuations may inspire management to adopt multicountry strategies, forgoing the potential longer-run benefits from more standardized marketing strategies. Indeed, the Consumer Confidence Indicators become much more homogeneous as the planning horizon is extended. Moreover, this homogeneity is inversely related to the economic and cultural distance among the various member states. Hence, pan-regional rather than pan-European strategies are called for.

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Section: Spectral Analysismentioning

confidence: 99%

Consumer confidence in Europe: United in diversity?

Lemmens

Croux

Dekimpe

2007

International Journal of Research in Marketing

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“…For example, the carryover effect, the decay advertising pattern (Tellis 2006), the new product diffusion (Bass 1995), none of them fits the simplistic market assumptions. In general, real markets evolve stochastically, continuously, and nonstationarily (Pauwels et al 2004); the simplistic market assumptions (e.g., static, binary, and IID) become increasingly untenable. 1 The gap between modeling and reality greatly limits the applicability of many existing channel results (Bronnenberg et al 2005).…”

Section: Introductionmentioning

confidence: 99%

“…Markets in different time behave differently: IID dynamics is the exception, not the norm (Hamilton 1994, Pauwels et al 2004. Indeed, 60% of marketing performance variables, and 78% of sales variables, are not stable, bur rather evolve over time (Dekimpe and Hanssens 1995).…”

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confidence: 99%

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The Role of Market Evolution in Channel Contracting

Gao

Mishra

2018

SSRN Journal

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Real markets evolve over time. They often exhibit complex behaviors, such as autocorrelation, continuity, and nonstationarity. How do these behaviors affect channel contracting? We study the problem in a bilateral channel where the retailer has private information on evolving market conditions. We characterize the optimal contract under arbitrary market evolution. The central notion is market inertia: it prices retailer's information advantage, dictates price and quantity response over time, and determines the contract complexity. Using market inertia, we identify a general property-stochastic linearity-that justifies the use of simple contracts for a much larger class of channel conditions. For practitioners, we offer refined guidance: (i) when the market has linear dynamics, simple contracts are sufficient; (ii) when the market is continuous, the quantity distortion should be pervasive; (iii) when the market is nonstationary, the distortion can vanish, intensify, stay constant, or even go non-monotonic over time. By highlighting the central role of realistic market behaviors, this paper advances our understanding of channel theory and practice.

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“…Over the past decade substantial progress has been made in this field (Pauwels et al 2004). Most notably, vector autoregression (VAR) models have been used to disentangle complex time-dependent relationships among advertising, pricing, distribution, sales, profits, and other key marketing variables.…”

Section: Introductionmentioning

confidence: 99%

Demand and distribution relationships in the ready-to-drink iced tea market: A graphical approach

Krider

Liu

et al. 2007

Market Lett

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The relationship between distribution coverage and market share for an incumbent brand and for new entrants in the ready-to-drink iced tea market during its growth phase is explored using state space diagrams. This graphical visualization method was originally developed to disentangle lead-lag relationships between short nonstationary time series, a situation in which standard econometric methods have difficulty. In this research we show the usefulness of this method for long time series in offering complementary insights to econometric models, in providing a simple and managerially useful tool, and in conducting exploratory data analysis to guide subsequent modeling decisions. In the ready-to-drink iced tea market, usage of this method shows that during introduction of new brands and growth of the category, demand leads distribution, but that as the market matures, the dominant incumbent can defend with a distribution-leading-demand dynamic. Further, distribution coverage eventually becomes relatively stable so that short term fluctuations in demand (probably due to responses to promotion) have minimal impact on distribution.

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Modeling Marketing Dynamics by Time Series Econometrics

Cited by 69 publications

References 57 publications

Consumer confidence in Europe: United in diversity?

Consumer confidence in Europe: United in diversity?

The Role of Market Evolution in Channel Contracting

Demand and distribution relationships in the ready-to-drink iced tea market: A graphical approach

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