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Empirically, we ?nd that advertising and promotion not only
affect the brand shares (own and competitors’) but also exert interaction effects, i.e., each activity ampli?es or
attenuates the effectiveness of the other activity. Normatively, we ?nd that large brands underadvertise and
overspend on promotion, while small brands underadvertise and underpromote...
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Normatively, we ?nd that large brands underadvertise and
overspend on promotion, while small brands underadvertise and underpromote. Finally, comparative statics
reveal managerial insights into how a speci?c brand should respond optimally to the changes in a competing
brand’s situation; more generally, we ?nd evidence that competitive responsiveness is asymmetric...
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