An Empirical Investigation of the Spillover Effects of Advertising and Sales Promotions in Umbrella Branding

Abstract

The authors investigate and find evidence for advertising and sales promotion spillover effects for umbrella brands in frequently purchased packaged product categories. The authors also capture the impact of advertising (as well as use experience) on both utility mean and variance across two categories. They show that variance of the random component of utility declines over time on the basis of advertising (and use experience) in either category. This constitutes the first empirical evidence for the uncertainty-reducing role of advertising across categories for umbrella brands.