Measuring the Short-Term Effect of In-Store Promotion and Retail Advertising on Brand Sales: A Factorial Experiment

Albert C. Bemmaor · Dominique Mouchoux

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Consumer Market Behavior and Pricing Supply Chain and Inventory Management Consumer Retail Behavior Studies

Abstract

In a replicated in-store factorial experiment with 12 national brands in six nonperishable consumer goods categories, the authors find price deal elasticities in the [2–11] range, with larger values for smaller brands. Those elasticities increase 20% to 180% when deals are advertised by the retailer; the rates of increase are smaller for the leading brands. The price deal cross-elasticities of the higher priced brands are found to be smaller than those of the other brands; they are in the [2–2.7] range. Optimal retail deal rates are shown to be robust to model specification.

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References

1961The Economics of Information 1976The Economics of Information 1983A Logit Model of Brand Choice Calibrated on Scanner Data 1989Price-Induced Patterns of Competition 1985Consumer Promotions and the Acceleration of Product Purchases 1988Measuring the Effect of Retail Store Promotions on Brand and Store Substitution 1981A Theoretical and Empirical Evaluation of Price Deals for Consumer Nondurables 1974Handbook of Marketing Research

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