Show and Sell: Studying the Effects of Branded Cigarette Product Placement in TV Shows on Cigarette Sales

51 Pages Posted: 6 Jul 2021 Last revised: 3 Aug 2021

See all articles by Ali Goli

Ali Goli

University of Washington - Michael G. Foster School of Business

Simha Mummalaneni

University of Washington - Michael G. Foster School of Business

Pradeep K. Chintagunta

University of Chicago

Sanjay K. Dhar

University of Chicago - Marketing Management

Date Written: June 21, 2021

Abstract

We evaluate whether and how branded TV product placement affects sales for cigarette brands. We use data on product placement from TV shows and data on retail sales of cigarettes to estimate a demand model that incorporates the level of product placement exposure for each cigarette brand. We find that product placement has a small yet positive and statistically significant effect on both own-brand sales and competitor-brand sales: both of these elasticities are roughly 0.02. These results indicate that cigarette product placement affects demand for individual cigarette brands and that it also leads to greater overall cigarette use. This issue is of particular importance to policymakers because product placement is one of the few remaining ways that cigarette brands can reach a mass audience. To illustrate how these results could be used by policymakers, we use our model estimates to evaluate how cigarette sales would be affected by two hypothetical kinds of regulations. Limiting brands’ ability to be displayed on TV and forcing TV networks to instead use generic, unbranded cigarettes on screen would only reduce cigarette sales by about 2 percent, while forcing TV networks to eliminate all on-screen smoking activity would reduce cigarette sales by about 7 percent.

Keywords: Tobacco Marketing, Product Placement, Public Policy, Border Strategy, TV Advertising.

JEL Classification: D04, L38, M37, M38, M31

Suggested Citation

Goli, Ali and Mummalaneni, Simha and Chintagunta, Pradeep K. and Dhar, Sanjay K., Show and Sell: Studying the Effects of Branded Cigarette Product Placement in TV Shows on Cigarette Sales (June 21, 2021). Available at SSRN: https://ssrn.com/abstract=3871361 or http://dx.doi.org/10.2139/ssrn.3871361

Ali Goli (Contact Author)

University of Washington - Michael G. Foster School of Business ( email )

Box 353200
Seattle, WA 98195-3200
United States

Simha Mummalaneni

University of Washington - Michael G. Foster School of Business ( email )

Box 353200
Seattle, WA 98195-3200
United States

Pradeep K. Chintagunta

University of Chicago ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-8015 (Phone)
773-702-0458 (Fax)

Sanjay K. Dhar

University of Chicago - Marketing Management ( email )

Rosenwald 331C
Chicago, IL 60637
United States
773-702-3005 (Phone)
773-702-0458 (Fax)

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