Carl Mela

Who they are

This page records the public professional record only. Nothing adverse is recorded and no motive is attributed.

The 1999 paper lists him at the University of Notre Dame. His current post and the rest of his record were not surveyed for this page, which concerns the two papers named here. Both used years of consumer purchase data on packaged goods, and the work asks what happens to a brand's customers when it shifts spending from advertising to promotion.

Key papers

• Mela, C. F., Gupta, S., & Lehmann, D. R. (1997). 'The Long-Term Impact of Promotion and Advertising on Consumer Brand Choice.' Journal of Marketing Research, 34(2), 248-261. doi:10.1177/002224379703400205
• Jedidi, K., Mela, C. F., & Gupta, S. (1999). 'Managing Advertising and Promotion for Long-Run Profitability.' Marketing Science, 18(1), 1-22. doi:10.1287/mksc.18.1.1

Key ideas

The 1997 paper used eight and a quarter years of panel data on a frequently purchased packaged good. It found that consumers became more price and promotion sensitive over time, and linked that to reduced advertising and increased promotions.

The 1999 paper estimated a model on more than eight years of panel data from a packaged-goods category. Advertising had a positive long-term effect on brand equity and promotions a negative one, and the long-run effect of promotions on sales was about two-fifths the size of the short-run gain, in the negative direction.

The concept page The Long-Run Promotion Effect sets out both. Neither study concerned luxury goods, and the article Why Luxury Brands Hold Their Prices uses them by analogy. Both were read here at the level of published abstracts.

What the two papers ask

The 1997 paper asks whether shoppers' responses to marketing variables such as price change over time, and whether any change follows shifts in manufacturers' advertising and retailers' promotion. The authors used a two-stage approach to estimate medium-term and long-term effects, on eight and a quarter years of panel data for a frequently purchased packaged good.

The 1999 paper, with Kamel Jedidi and Sunil Gupta, moves from what shoppers do to what the brand earns. It builds a model in which short-term response can change as marketing changes and in which competitors react, and it asks whether advertising or promotion is the better use of money.

How the work is used on this site

The article Why Luxury Brands Hold Their Prices puts the two papers at the head of its table of evidence because they are the only studies in it built on years of real purchase records. They supply the claim that promotion can lift sales now and cost the brand later.

The article is explicit about the distance between the evidence and the case. Both studies concern packaged goods that are bought often, and a luxury purchase is rarer. The papers are used by analogy, and the article says that no study found for it followed real luxury purchases across different markdown policies.

What the work does not show

The 1997 paper reports that sensitivity to price and promotion grew over time and links the drift to reduced advertising and increased promotions. The abstract describes a pattern across the data and not a test on any one firm. The 1999 figure of about two-fifths is a ratio inside a model of one category, and is not a forecast.

How it was read

Both papers were read here at the level of their published abstracts, with Duke Scholars and IDEAS as the sources for the 1997 record. The 1999 paper lists him at the University of Notre Dame. His current post and wider record were not surveyed, nothing adverse is recorded, and no motive is attributed.

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