Marketing Expenditures Over The Product Life Cycle: Asymmetries Between Dominant And Weak Brands
Source: Texas A&M University
Do managers vary their brands' advertising and sales force expenditures as the brands move from the growth to the mature stages of the Product Life Cycle (PLC)? Are these changes different for dominant (high market share) and weak (low market share) brands? How do dominant (weak) brands respond to weak (dominant) brands' marketing spending over the life cycle? The answers to these questions have important implications for marketing resource allocation formulation and the outcome of competition in product-markets. These important questions are answered in this paper. The findings suggest that it may be advantageous to spend aggressively on the high-elasticity marketing variable early to build market share and escalate it over the life cycle to maintain market dominance.