TITLE

Retailer Promotion Pass-Through: A Measure, Its Magnitude, and Its Determinants

AUTHOR(S)
Ailawadi, Kusum L.; Harlam, Bari A.
PUB. DATE
July 2009
SOURCE
Marketing Science;Jul/Aug2009, Vol. 28 Issue 4, p782
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
We use data on all manufacturer funding and promotion activity by a major U.S. retailer during a two-year period to compute promotion pass-through and assess its magnitude. Then, we estimate a two-tiered probit and lognormal regression model to study drivers of the large variation we observe in pass-through rates. Although our analysis is based on data from a single retailer, it provides a much more complete picture of the magnitude and variability of pass-through than has been available to date. Some key insights from our work are as follows. First, the retailer passes through more than 100% of the total manufacturer funding it receives in aggregate, but the median pass-through rate for individual manufacturers is much lower than 100%. Second, some manufacturers are promoted even without funding. This is more likely for private label and high-share manufacturers in high-lift and high-margin categories. Third, a small number of manufacturer and category characteristics explain a significant amount of the variation in pass-through. In particular, pass-through is higher for private label. It increases with the share of the manufacturer in the focal category but also with the sales of that manufacturer in other categories. Categories with high sales, high promotion lift, low concentration, and low margin get more pass-through. We corroborate some recent conclusions in the literature, e.g., that some pass-through rates are much higher than 100% and that high-share manufacturers get more pass-through. We add several new insights, e.g., on the magnitude of aggregate pass-through, on cross-pass-through across and within categories, on pass-through for private label, and on the category drivers of pass-through.
ACCESSION #
43930836

 

Related Articles

  • Correction.  // Contract Management;Sep2015, Vol. 55 Issue 9, p65 

    A correction is presented to the article "DOD, GSA, and NASA Issue Final Rule Requiring Increased Scrutiny of Pass-Through Contracts" in the August 2015 issue.

  • Market research for your export operations: Part I--using secondary sources of research. Czinkota, Michael R.; Ronkainen, Ilkka A. // International Trade Forum;1994, Issue 3, p22 

    Part I. Emphasizes the importance of market research in the improvement of export operations. Nine steps in the preliminary research process; Attitudes that research proponents might encounter; Research objectives; Information requirements; Sources of information; Evaluation of gathered...

  • A NOTE FROM THE EDITOR-IN-CHIEF. LEVUN, CHARLES R.; COHEN, MICHAEL J.; Levun, Chuck // Journal of Passthrough Entities;Jul/Aug2014, Vol. 17 Issue 4, p5 

    An introduction is presented in which the editor discusses various reports within the issue on topics including retention of employer identity in cross-species mergers, Tax Court decision in Frank Aragona Trust v. Commissioner, and impact of the Camp Tax Proposal on passthrough entities in the U.S.

  • A Note From the Editor-in-Chief. Levun, Chuck // Journal of Passthrough Entities;Sep/Oct2012, Vol. 15 Issue 5, p5 

    An introduction is presented in which the editor discusses various reports within the issue on topics including tax incentives, passthrough entities and developments related to the cancellation of indebtedness (COD) income.

  • A Note From the Editor-in-Chief. Levun, Charles R.; Cohen, Michael J. // Journal of Passthrough Entities;Jul/Aug2010, Vol. 13 Issue 4, p5 

    The article discusses various reports published within the issue, including one on the regulations that address the impact of a decline in a debt issuer's financial status, one on whether sale-based royalty costs be capitalized, and how to deal with S corporation built-in gains tax.

  • Is Organic Biting Into Retails? J. W. // SN: Supermarket News;9/20/2010, Vol. 58 Issue 38, Special Section p8 

    The article discusses the lesser profit margins reported by the U.S. retail industry in organic foods segments than the conventional produce.

  • Unlimited Possibilities. Battersby, Mark E. // American Nurseryman;7/15/2007, Vol. 206 Issue 2, p30 

    The article discusses the features of a limited liability company (LLC) designation in the U.S. that offer flexibility to new and existing green industry businesses. The LLC format is good for nurseries and horticultural businesses because the format provides owners with limited liability for...

  • INTEREST EXPENSE ON DEBT-FINANCED ACQUISITIONS OF PASS-THROUGH ENTITIES. Greenfield, Richard; Morris, Edwin B.; Inemer, Ira H.; Tipograph, Neil; Ip, Kamcheung T. // CPA Journal;Apr2000, Vol. 70 Issue 4, p55 

    Deals with the classifications of interest expense in the United States on debt-financed acquisitions of pass-through entities. Role of deductibility in how interest expense is classified; Definition of investment interest; Passive interest expense; Active interest expense; Allocation of...

  • The Investment Snags Of Pass-Throughs: A Junior Capital View. Boyko, Stephen A.; May, Arnold P. // Bank Loan Report;3/13/2006, Vol. 21 Issue 10, p6 

    The article discusses the benefits and disadvantages of investing in companies organized as pass-throughs in the U.S. Some benefits of investing in this type of company are tax efficiency, tax advantages on exit, the ability to increase tax basis of investment and a simple management structure....

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics