Assessing the Impact of Retail Price Promotions on Product Substitution, Complementary Purchase, and Interstore Sales Displacement

The impact of retail price promotions on consumer purchasing patterns and the performance of competing retailers is investigated. A conceptual framework for retail promotional effects that includes brand substitution effects, interstore sales displacements, and the effects of promotions on complemen...

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Bibliographic Details
Published in:Journal of marketing 1991-04, Vol.55 (2), p.17
Main Author: Walters, Rockney G.
Format: Article
Language:English
Subjects:
Consumer behavior
Impacts
Prices
Retail stores
Retailing industry
Sales
Sales promotions
Statistical analysis
Studies
Substitution
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Summary:The impact of retail price promotions on consumer purchasing patterns and the performance of competing retailers is investigated. A conceptual framework for retail promotional effects that includes brand substitution effects, interstore sales displacements, and the effects of promotions on complementary goods is developed and tested using store-level scanner data and company records covering a period of 26 weeks for 4 product categories. The results show that retail price promotions created significant complementary and substitution effects within the store. Price promotions had a significant impact on brand sales for all promoted brands in the 4 categories. Instore promotional effects are detected in several cases as the promotions of products in one store significantly decreased sales of substitutes and complements in a competing store. A clear implication of the findings is that accurate documentation of retail promotions must include their effects on sales of substitutes and complements.
ISSN:0022-2429
1547-7185
DOI:10.2307/1252234