Does the Competition Within a Collective Brand Influence the Advertising Investment of Its Members?

This article analyses whether the advertising investment of members of a collective brand depends on the market structure in which it operates and the moderating role of market growth in the collective brand. The central assumption is that the market concentration in a collective brand has a negative influence on the advertising investments made by its members until a concentration threshold is reached, after which its influence on advertising becomes positive. This is because, in a collective brand with either sufficiently low or high market concentration, firms tend to invest more in advertising, to capitalise on the gains in the marginal effectiveness of firm-level advertising generated by generic advertising, than they do in moderate market concentration situations. Finally, the market growth of the collective brand positively moderates the curvilinear relationship between market concentration and the advertising investment of its members. The results obtained support the proposed relationships. JEL CLASSIFICATION: M30