Decomposing the Sales Promotion Bump with Store Data

Van Heerde, Harald J.; Leeflang, Peter S. H.; Wittink, Dick R.
June 2004
Marketing Science;Summer2004, Vol. 23 Issue 3, p317
Academic Journal
Sales promotions generate substantial short-term sales increases. To determine whether the sales promotion bump is truly beneficial from a managerial perspective, we propose a system of store-level regression models that decomposes the sales promotion bump into three parts: cross-brand effects (secondary demand), cross-period effects (primary demand borrowed from other time periods), and category-expansion effects (remaining primary demand). Across four store-level scanner datasets, we find that each of these three parts contribute about one third on average. One extension we propose is the separation of the category-expansion effect into cross-store and market-expansion effects. Another one is to split the cross-item effect (total across all other items) into cannibalization and between-brand effects. We also allow for a flexible decomposition by allowing all effects to depend on the feature/display support condition and on the magnitude of the price discount. The latter dependence is achieved by local polynomial regression. We find that feature-supported price discounts are strongly associated with cross-period effects while display-only supported price discounts have especially strong category-expansion effects. While the role of the category-expansion effect tends to increase with higher price discounts, the roles of cross-brand and cross-period effects both tend to decrease.


Related Articles

  • Clever Marketing Tactics?  // Wearables;Mar2010, Vol. 14 Issue 3, p30 

    The article focuses on several marketing strategies that could improve a business. It says that specials and sales of various products and services could be offered to their Facebook online network friends. Scott Gringold, owner of Confidential Consultant, mentions that field promotions are done...

  • Steps to behavioral targeting. Zawadzki, Joe // B to B;7/19/2004, Vol. 89 Issue 8, p11 

    The online medium has often relied on broad strokes with a dull knife to optimize campaigns. Without behavioral targeting, companies constantly battle low accuracy rates and ROI for campaigns. It's critical to assign values to various events that can be tracked. While offline marketers generally...

  • Want some more? All you have to do is up-sell. Gitomer, Jeffrey // Grand Rapids Business Journal;10/4/2010, Vol. 28 Issue 41, p15 

    The author examines the effectiveness of the science of the up-sell as a sales promotion strategy as it relates to volume and profit.

  • A-list to bespoke. Walker, Ted // Marketing Week;5/26/2011, Vol. 34 Issue 21, p15 

    The author reflects on the significance of the emergence of small-scale and bespoke corporate hospitality events that provide opportunities for companies to showcase their products in Great Britain.

  • Let Storytelling Plot Your Sales Course. Houhtailing, Ann Marie // San Diego Business Journal;7/11/2011, Vol. 32 Issue 28, p39 

    In this article the author discusses the significance of sharing meaningful stories as a marketing strategy that informs both the sales process and the relationship between sales consultant and client.

  • Points To Remember.  // Bulverde Standard (Canyon Lake, TX);2/7/2007, Vol. 23 Issue 6, p19 

    The article offers some tips on obtaining a special or trial offers of companies, and how to ensure the customer's bank account when authorizing demand drafts.

  • Rethink of brand trade promotion spend is essential. Hamson, Liz // Grocer;6/22/2013, p26 

    A letter to the editor is presented in response to the article "Deal Volumes Flat in May But Are Still Up 28% on Last Year" in the June 8, 2013 issue.

  • Digital promos make sense in every way for our progressive industry. Ashton, Robert // Music Week;11/6/2010, Issue 44, p4 

    The author reflects on the effects of using digital promotions in the music industry, in which it could be improved to digitize the promotional and marketing strategies of the industry.

  • Expert insight: marking those hallmark days. McCulloch, Mark // Publican's Morning Advertiser;2/19/2015, Issue 181, p19 

    A personal narrative is presented which explores the author's experience of planning its marketing calendar, providing quality content, and giving promotions a twist.


Read the Article


Sign out of this library

Other Topics