The authors propose a dynamic direct mailing response model with competitive effects. Purchase and promotion history are incorporated to map the dynamic competitive interactions among the firms sending the mailings. The authors investigate the impact of direct mailings on the revenues of each firm and its competitors over time. The model accounts for endogeneity of the mailing decision and for …
Indirect network effects are of prime interest to marketers because they affect the growth and takeoff of software availability for and hardware sales of a new product. Although prior work on indirect network effects in the economics and marketing literature is valuable, there are two main shortcomings. First, empirical analysis of indirect network effects is rare. Second, in contrast to the im…
Among the marketing-mix variables, price and price promotions have the greatest impact on short-term consumer purchase behavior. Systematic relationships between market characteristics and the magnitude of price elasticities have been the focus of many studies. Because the profitability of a promotion largely depends on the long-term effects, providing insights into the determinants of the cumu…
Marketing problems sometimes pertain to the analysis of dichotomous dependent variables, such as "buy" and "not buy" or "respond" and "not respond." One outcome can strongly outnumber the other, such as when many households do not respond (e.g., to a direct mailing). In such situations, an efficient data-collection strategy is to sample disproportionately more from the smaller group. However, s…
For econometric models to be really useful to answer managerially relevant "what if" questions, three important issues must be addressed. The first concerns the statistical properties of the econometric model. There are several such properties, and sometimes it seems that some of these are overlooked in practical work. The second issue recognizes that consumers and competitors might make predic…
Managers can use econometric models to obtain possible answers to what-if questions. These models should summarize the available data in an adequate way, such that they allow for learning about the effects of the marketing mix on relevant performance measures. When these effects are quantified, the models can be used to generate outcomes of alternative marketing-mix scenarios. Managers can choo…
Includes bibliographies, index and tables