Marketing and Regional Sales: Evaluation of Expenditure Strategies by Spatial Sales Response Functions
Non-linear production functions are a common basis for modelling regional sales responses to marketing expenditures. A recent article of Kao et al. (Evaluating the effectiveness of marketing expenditures. Working Paper, 2005) suggests to use such models to estimate the effectiveness of marketing strategies. In this paper the underlying approach is extended: Firstly, a spatial component is explicitly modelled in the production function, and secondly, a hierarchical approach in the clustering of regional sales is used. The developed Cross Sectional Sales Response (CSSR) models use Stochastic Partial Derivatives (SPD) constraints. They are tested using synthetic and pharma marketing data.
KeywordsAcceptance Probability Full Conditional Distribution Stochastic Partial Derivative MCMC Algorithm Sales Response
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