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

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

By
Sridhar Narayanan, Puneet Manchanda, Pradeep K. Chintagunta
Journal of Marketing Research.
2005, Vol. 42, Issue 3, Pages 278-290

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.