Price Sensitivity and Television Advertising Exposures: Some Empirical Findings

Empirical research (as well as theoretical reasoning) has led to contradictory findings with regard to whether increases in brand advertising activities lead to increases or decreases in consumer price sensitivity. Lack of data to measure the exposure of individual households to advertisements and to capture competitive activities has been an important limitation to date. This study, using single source data for a midwestern US market, finds that increased advertising exposures are associated with increases in a household's brand choice price sensitivity for two frequently purchased consumer products. However, under high levels of advertising exposure, it is possible for a household's brand choice price sensitivity to decrease.