Separating dynamic consumer, competitor and company response to marketing actions : exclusion restrictions on VAR-based impulse response functions

Long-term marketing effectiveness is a high priority research topic for managers (Marketing Science Institute 2002), and recent research applied flexible models of dynamic market interactions to measure the net long-term performance impact of marketing actions. Unfortunately, this net long-term impact is challenging to interpret, as it emerges from the complex interplay among dynamic reactions of several market players. This paper introduces and formally compares restricted policy simulations based on structural VAR-models in order to distinguish three dynamic forces: consumer response, competitor response and company response.