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Frequency Versus Depth: How Changing the Temporal Process of Promotions Impacts Demand for a Storable Good

Frequency Versus Depth: How Changing the Temporal Process of Promotions Impacts Demand for a... Abstract Is changing the frequency at which promotions are offered more or less effective at increasing quantity and revenue than changing promotional depth? To answer this question, a forward-looking dynamic structural model of consumer stockpiling behaviour is estimated using scanner data for a storable product category. Counterfactual simulations from the model imply that although increasing promotional frequency and depth are both effective tools for increasing quantity sold and revenue, increasing the depth of discounts is a more effective strategy per dollar spent on promotions. Increasing depth while decreasing frequency is even more effective than increasing depth on its own. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Japanese Economic Review Springer Journals

Frequency Versus Depth: How Changing the Temporal Process of Promotions Impacts Demand for a Storable Good

Osborne, Matthew
The Japanese Economic Review , Volume 69 (3): 26 – Sep 1, 2018
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References (29)

Publisher
Springer Journals
Copyright
2018 Japanese Economic Association
ISSN
1352-4739
eISSN
1468-5876
DOI
10.1111/jere.12190
Publisher site
See Article on Publisher Site

Abstract

Abstract Is changing the frequency at which promotions are offered more or less effective at increasing quantity and revenue than changing promotional depth? To answer this question, a forward-looking dynamic structural model of consumer stockpiling behaviour is estimated using scanner data for a storable product category. Counterfactual simulations from the model imply that although increasing promotional frequency and depth are both effective tools for increasing quantity sold and revenue, increasing the depth of discounts is a more effective strategy per dollar spent on promotions. Increasing depth while decreasing frequency is even more effective than increasing depth on its own.

Journal

The Japanese Economic Review – Springer Journals

Published: Sep 1, 2018

Keywords: economics, general; microeconomics; macroeconomics/monetary economics//financial economics; econometrics; development economics; economic history

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