A Measure of the Value of Marketing in Packaged Goods

This article presents an econometric methodology for use with scannerpanel data based on the multinomial logit model to estimate theconsumer welfare changes that result from changes in marketingactivity. Two applications of the model are presented: the value toconsumers of the introduction of the first plastic ketchup bottle andthe value of various changes to the choice set for yogurt, including abrand replacement, the addition of a new brand and a line extension.Consumer welfare gains associated with the changes, while statisticallysignificant, are very small.