（5页）AN ADVERTISING MODEL FOR HIERARCHICALLY STRUCTURED MARKETS APPLICATION TO THE AUTOMOBILE INDUSTRY .pdfVIP

Journal of Business Research 57 (2004) 829– 833 An advertising model for hierarchically structured markets: application to the automobile industry Oknam Kima,*, Minhi Hannb,1 aMarketing Center, POSRI, POSRI Building, 147, Samsung-dong, Kangnam-gu, Seoul 135-878, South Korea b Graduate School of Management, KAIST, 207-43 Cheongyangri, Dongdaemun-gu, Seoul 130-012, South Korea Abstract In a hierarchically structured market, marketers should make use of the market structure information for developing effective marketing strategies. The authors present a Lanchester-type advertising competition model for hierarchically structured and oligopolistic markets that incorporates the market structure information. The model enables us to estimate the degree of competitive effects between brands within each submarket as well as that between submarkets. The model helps marketers allocate marketing resources to brands in a product line competing with competitors’ product lines. For an empirical illustration of the model, we used advertising and market share data of the automobile industry in Korea. D 2002 Elsevier Inc. All rights reserved. Keywords: Advertising model; Automobile industry; Hierarchically structured market 1. Introduction grouping most similar or substitutable products into the same subcategories (Kumar and Sashi, 1989). The products In a hierarchically structured market, marketing activities classified in the same category are likely to show more of a product may affect not only the performances of intensive competitive reactions to