This research attempts to answer one of the pressing questions faced by brand managers today. Specifically, how does consumer choice behavior (defined in terms of consumer response to marketing activity) change over the long run and how do long term{dollar}sp1{dollar} marketing policies such as advertising and promotion affect that change? The primary objectives of this study are to empirically ascertain whether promotions, pricing policy, and advertising (i) impact consumer price sensitivity, and (ii) enhance or detract from a given brand's market strength over time. Based on the results of this research, insights can be developed for marketing managers regarding long run, dynamic strategy for brand positioning. The primary objectives are addressed by building a model which accounts for these long term effects and then tests for them on a mature consumer packaged goods category. To test for these effects, we use an eight year static panel data set and an eight year store data set, supplied jointly by a major packaged goods organization and a leading marketing research company.; The contribution of this research is primarily substantive. The results suggest how long term marketing mix allocations for mature repeat purchase product categories affect market share, market segmentation, cross price competition, and consumer choice (effects that should be considered in long term product positioning). Methodologically, the research develops a means for analyzing long term effects of marketing activity.; The results indicate that sensitivity parameters (consumer responsiveness to marketing activity) appear to change over time. For example, in the face of increased price promotions and decreased advertising, consumers have become more price sensitive. In addition, the nonloyal segment of the market seems to grow. ftn{dollar}sp{lcub}1{rcub}{dollar}We use long term and long run interchangeably throughout this dissertation. The terms from our standpoint and use are synonymous.
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