Advertising and Consumers' Communications

Posted: 13 Nov 2013

See all articles by Dmitri Kuksov

Dmitri Kuksov

University of Texas at Dallas - Naveen Jindal School of Management

Ron Shachar

Interdisciplinary Center (IDC) Herzliyah - Adelson School of Entrepreneuship

Kangkang Wang

University of Alberta

Abstract

Until recently, brand identities were built by firms via brand image advertising. However, the flourishing consumer communication weakened the firms' grip on their brands. The interaction between advertising and consumer communications and their joint impact on brand identity is the focal point of this paper.

We present a model in which consumer preference for functional attributes may correlate with the identity they desire to project of themselves. This correlation is known to the firm but not to the consumers. Both the firm and the consumers can communicate their desired brand identity, although the actual brand identity is determined endogeneously by the composition of consumers who purchase it (i.e., what types of people consume the brand).

We find that sometimes the firm can strengthen the identity of its brand by refraining from advertising. This result is based on the following intermediate finding: advertising can diminish the endogeneous informativeness of consumer communications by making it one-sided. Furthermore, it turns out that refraining from brand image advertising may be optimal for the firm when the product is especially well positioned to create a strong identity — i.e., when consumer preferences for functional and self-expressive attributes are highly correlated.

Keywords: advertising, communication, word of mouth, branding, brand image

Suggested Citation

Kuksov, Dmitri and Shachar, Roni and Wang, Kangkang, Advertising and Consumers' Communications. Marketing Science, Vol. 32, No. 2, 2013; pp. 294-309; DOI: 10.1287/mksc.1120.0753. Available at SSRN: https://ssrn.com/abstract=2328554

Dmitri Kuksov (Contact Author)

University of Texas at Dallas - Naveen Jindal School of Management ( email )

800 W. Campbell Road
Richardson, TX 75080-3021
United States

Roni Shachar

Interdisciplinary Center (IDC) Herzliyah - Adelson School of Entrepreneuship ( email )

P.O. Box 167
Herzliya, 46150
Israel

Kangkang Wang

University of Alberta ( email )

Edmonton, Alberta T6G 2R3
Canada

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