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Product Innovation and Advertising

Product Innovation and Advertising

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Published by smh9662
Product innovation and advertising, strategies for product innovation
Product innovation and advertising, strategies for product innovation

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Categories:Types, Business/Law
Published by: smh9662 on Jan 30, 2013
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06/05/2015

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Effect on Stock Returns

Impact of…

Pauwels et al.
variables
(Table 7, col. 5)

Focal model

(Table 7, col.7)

New-Product Introductions

Level 1

.47%

.55%

Level 2

.23%

.43%

Level 3

.20%

.38%

Level 4

.16%

.34%

Level 5

.65%

.98%

Pioneering innovations

4.28%

Advertising support for new-product introductions

.10%

Advertising support for pioneering innovations

.91%

Promotional support for new-product introductions

-.20%

Improvement in customer liking for new-product
introductions

n.s.

Improvement in perceived quality for new-product
introductions

2.10%

Note:

The numerical simulations examine the impact of a) introducing a new product, b) introducing a
pioneering innovation, c) increasing advertising support for a level-1 innovation by $1 million, d)
increasing promotional support for a level-1 innovation by $1000, e) increasing the customer liking for
a level-1 innovation by 100 points, f) increasing the perceived quality for a level-1 innovation (i.e.,
reducing the number of defects) by 100 points; n.s. denotes that the estimate is not significant.

The simulation for the impact of a pioneering innovation is based on the assumption that when a
pioneering innovation is introduced, the level of innovation increases from level 0 to level 5.

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