The Effect of Advertising and In-Store Promotion on the Demand for Chocolate

This paper analyzes the effect of TV advertising and in-store displays on the sales of chocolates. I examine which method is more effective in gaining customers and in increasing total sales. Also, I look at the evidence to see whether the lack of advertising by a firm will hurt the industry as a whole. In this essay, I use a nested logit model on scanner data obtained by the Zwick Center for Food and Resource Policy at the University of Connecticut's Department of Agricultural and Resource Economics to examine the effect of TV advertising on chocolate sales. The results show that in-store displays and advertising both help increase the demand for chocolate.