Do promotions benefit manufacturers, retailers, or both?

• 成果类型: Article
• 署名作者: Srinivasan, S; Pauwels, K; Hanssens, DM; Dekimpe, MG
• 署名单位: University of California System; University of California Riverside; Dartmouth College; Erasmus University Rotterdam - Excl Erasmus MC; Erasmus University Rotterdam; Universite Catholique Louvain
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.1040.0225
• 发表日期: 2004
• 页码: 617-629
• 关键词: long-term profitability; sales promotions; category management; manufacturers versus retailers; empirical generalizations; vector autoregressive models

摘要

Do price promotions generate additional revenue and for whom? Which brand, category, and market conditions influence promotional benefits and their allocation across manufacturers and retailers? To answer these questions, we conduct a large-scale econometric investigation of the effects of price promotions on manufacturer revenues, retailer revenues, and total profits (margins). A first major finding is that a price promotion typically does not have permanent monetary effects for either party. Second, price promotions have a predominantly positive impact on manufacturer revenues, but their effects on retailer revenues are mixed. Moreover, retailer category margins are typically reduced by price promotions. Even when accounting for cross-category and store-traffic effects, we still find evidence that price promotions are typically not beneficial to the retailer. Third, our results indicate that manufacturer revenue elasticities are higher for promotions of small-share brands, for frequently promoted brands and for national brands in impulse product categories with a low degree of brand proliferation and low private-label shares. Retailer revenue elasticities are higher for brands with frequent and shallow promotions, for impulse products, and in categories with a low degree of brand proliferation. Finally, retailer margin elasticities are higher for promotions of small-share brands and for brands with infrequent and shallow promotions. We discuss the managerial implications of our results for both manufacturers and retailers.