Advertising Effect on Consideration Set Formation

Abstract

Most empirial studies using scanner panel data have not found short-term effects of advertising exposure on brand choice. This study suggest phased model of brand choice which consider brand choice as two stage process(consideration set formation by using disjunctive rule choice by using compensatory rule), and examine short-term effect of advertising on consideration set formation appling the phased model to scanner panel deta. Estimation results show that advartising has short-term effect on consideration set formation.