Kamel Jedidi

Who they are

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

The affiliation is the one the 1999 paper's record gives. His wider career was not surveyed for this page. The paper, written with Carl Mela and Sunil Gupta, asked whether advertising or promotion is better for a brand, whether frequent shallow or infrequent deep promotions work better, and how regular price changes compare with promotions.

Key papers

• 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 model lets consumers' short-term response to marketing change as a brand's marketing changes over time, and it accounts for competitors' reactions. It was estimated on more than eight years of panel data for a consumer packaged-goods category.

The findings: advertising had a positive effect on brand equity and promotions a negative one. Promotion elasticities were larger than regular price elasticities in the short term and smaller once long-term effects were included. The long-term effect of promotions on sales was negative. In profit simulations, regular price decreases generally reduced long-term brand profits, advertising was profitable for two of the brands, and increases in price promotions were unprofitable for all of them.

The concept page The Long-Run Promotion Effect carries the detail. The paper was read here at the level of its published abstract, and it concerns groceries, not luxury goods.

What the work is for

Jedidi's 1999 paper, written with Carl Mela and Sunil Gupta, takes up a question managers face every year: where should a brand put its marketing money? The paper compares advertising with promotion, asks whether frequent shallow promotions or infrequent deep ones work better, and sets regular price changes beside promotions. To answer, it builds a model that lets shoppers' short-term response change as a brand's marketing changes, and that allows for competitors to react.

The model was fitted to more than eight years of panel data from a consumer packaged-goods category. That is the basis for every claim on this page, and it is a basis in groceries, not in luxury goods.

How the paper is used on this site

The article Why Luxury Brands Hold Their Prices takes from the paper the one claim a luxury house would most like to be true: that promotions lower brand equity, and that their long-run effect on sales is negative, about two-fifths the size of the short-run gain. The article uses it by analogy and says so. No luxury brand was in the data.

The article pairs it with the 1997 study led by Carl Mela, which found that shoppers grew more sensitive to price and promotion over time. The two papers share an author and a method of working with long panels, and they answer different questions. One asks what changes in the shopper. The other asks what that costs the brand.

What the paper does not show

The two-fifths figure is a ratio inside one model. It is not a forecast for any firm and it is not a rule of thumb. The profit simulations, which found that regular price decreases generally reduced long-term profit and that increases in price promotions were unprofitable for all the brands modelled, were run on reasonable assumptions about costs and margins. They describe the brands in one category.

The paper also found that advertising was profitable for two of the brands, not all, which is a reminder that the average hides differences between brands.

How it was read

The paper was read here at the level of its published abstract, with Columbia Business School's record of it as the source for his listed affiliation. The model's estimates, robustness checks and discussion were not seen. Nothing adverse is recorded about him, and no motive is attributed.

---