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Assessing the impact of a very successful price promotion on brand, category and competitor sales

Assessing the impact of a very successful price promotion on brand, category and competitor sales Many studies have examined the short‐term and long‐term effects of price promotions. This study adds to previous research by examining, in some depth, the effects of a massively successful price promotion in a consumer goods category. This study sought to determine if this large price promotion had any: longer‐term effect on brand volume; short‐term effect on total category volume for the retailer; short‐term effect on competing retailers; and longer‐term effect on category sales for the retailer that ran the promotion. The results showed that this promotion did not have any longer‐term (positive or negative) effect on the brand, but it did expand the total category for the retailer, albeit temporarily. Sales dropped slightly for one competing retailer at the time of the promotion, but not for the other two retailers in the market. Finally, the study found that the promotion was followed by a decline in total category volume for the retailer, suggesting some degree of purchase acceleration or stockpiling by consumers. The results suggest that the longer‐term negative effect on category volume cancelled out approximately two thirds of the gains of the price promotion to the retailer. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Product & Brand Management Emerald Publishing

Assessing the impact of a very successful price promotion on brand, category and competitor sales

Journal of Product & Brand Management , Volume 13 (5): 12 – Aug 1, 2004

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References (41)

Publisher
Emerald Publishing
Copyright
Copyright © 2004 Emerald Group Publishing Limited. All rights reserved.
ISSN
1061-0421
DOI
10.1108/10610420410554395
Publisher site
See Article on Publisher Site

Abstract

Many studies have examined the short‐term and long‐term effects of price promotions. This study adds to previous research by examining, in some depth, the effects of a massively successful price promotion in a consumer goods category. This study sought to determine if this large price promotion had any: longer‐term effect on brand volume; short‐term effect on total category volume for the retailer; short‐term effect on competing retailers; and longer‐term effect on category sales for the retailer that ran the promotion. The results showed that this promotion did not have any longer‐term (positive or negative) effect on the brand, but it did expand the total category for the retailer, albeit temporarily. Sales dropped slightly for one competing retailer at the time of the promotion, but not for the other two retailers in the market. Finally, the study found that the promotion was followed by a decline in total category volume for the retailer, suggesting some degree of purchase acceleration or stockpiling by consumers. The results suggest that the longer‐term negative effect on category volume cancelled out approximately two thirds of the gains of the price promotion to the retailer.

Journal

Journal of Product & Brand ManagementEmerald Publishing

Published: Aug 1, 2004

Keywords: Price positioning; Consumer goods; Competitors; Consumer behaviour

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