| Abstract: | The paper surveys briefly the literature on the shape of the sales-advertising response relationship. Knowledge of this relationship is an important requirement for optimal marketing decisions. The role of theory is to specify the structure of models for testing. The paper presents a plausible model of this relationship based upon the consumer's response to advertising when qualitative uncertainty exists in a market. The relationship is seen to contain a ‘catastrophe change’ or discontinuity when certain assumptions are made about optimizing behaviour. The implications for marketing strategy and optimal levels of promotional outlays are discussed. |
