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How Promotions Work

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TLDR
In this paper, an overview of the research and findings from the sales promotion literature is presented, which is intended to offer direction for future research in the area of sales promotion, as well as important sales promotion topics that have not yet been studied.
Abstract
By synthesizing findings across the sales promotion literature, this article helps the reader understand how promotions work. We identify and explain empirical generalizations related to sales promotion; that is, effects that have been found consistently in multiple studies involving different researchers. We also identify issues which have generated conflicting findings in the research, as well as important sales promotion topics that have not yet been studied. This overview of the research and findings from the sales promotion literature is intended to offer direction for future research in the area.

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Stick or Carrot? Asymmetric Responses to Vehicle Registration Taxes in Norway

TL;DR: In this article, the authors leverage multiple vehicle registration tax (VRT) reforms in Norway to show that new car registrations react to tax cuts and fee-bates significantly more than to tax increases.
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The effect of sales promotions intensity on volume and variability in category sales of large retailers

TL;DR: In this article, the significance of the effect of promotions on the mean level and volatility of category sales trend was investigated. But, the authors did not consider the effects of promotions as an interim activity to dissolve excess stock, starting from the 1980s, promotions had been seen as a critical element in creating a sustainable sales trend.
Journal ArticleDOI

Modeling price response from retail sales: An empirical comparison of models with different representations of heterogeneity

TL;DR: It is demonstrated that models with different representations of heterogeneity provide similar implications for price elasticities, suggesting that there is little benefit from using more complex continuous heterogeneity models from a managerial point of view, at least for the present data.
Posted Content

Profitability of price promotions if stockpilling increases consumption

TL;DR: In this paper, a stylized model with a single shop and a single loyal customer is presented, where price promotions induce consumers to purchase higher-than-usual quantities, resulting in higher stocks that lead to increased consumption.

Planning models for price promotions in multi-level supply chains

Yiqiang Su
TL;DR: It is demonstrated that even though the use of trade promotions can indeed increase a retailer's and supplier’s operations costs, these costs may be more than offset by increased revenues, even in the absence of explicit coordination.
References
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A Probabilistic Choice Model for Market Segmentation and Elasticity Structure

TL;DR: This paper proposed a flexible choice model that partitions the market into consumer segments differing in both brand preference and price sensitivity, and applied it in a study of competition between national brands and private labels in one product category.
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Impact of Sales Promotions on when, what, and how Much to Buy:

TL;DR: In this paper, the effectiveness of a sales promotion can be examined by decomposing the sales "bump" during the promotion period into sales increase due to brand switching, purchase time acceleration, and stockp...
Posted Content

Modeling Loss Aversion and Reference Dependence Effects on Brand Choice

TL;DR: This article developed a multinomial logit formulation of a reference-dependent choice model, calibrating it using scanner data, and found that consumers weigh losses from a reference point more than equivalent sized gains (loss aversion).
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Reference Effects of Price and Promotion on Brand Choice Behavior

TL;DR: When consumers are exposed to pricing and promotional activity by frequently purchased packaged goods, they may develop expectations that are used as points of reference in evaluating future activi... as discussed by the authors,.
Journal ArticleDOI

An Empirical Analysis of Internal and External Reference Prices Using Scanner Data

TL;DR: In this article, single-source yogurt data are used to examine whether both internal and external reference prices affect purchase decisions, and both types of variables have significant effects on purchase probabilities.
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