Despite the huge amount of money allocated every year to sales promotions, brand managers still do not know how often and in what circumstances promotions are truly effective. This dissertation proposes an approach that allows managers to assess the impact of individual promotion events rather than the average effect of total promotional efforts. As such, more detailed information is gained on how promotions should be implemented. Moreover, sales promotions are not only evaluated in a business-as-usual environment, but their role and effectiveness during retailer induced price wars is also critically examined. As retailer competition tends to degenerate more often into price wars, this research offers recommendations to brand managers on whether they should accommodate retailers’ wishes to lower regular, list prices rather than focusing on temporary promotions. Finally, a brand manufacturer, when planning his promotional events for a retailer, should consider that a promotion can steal sales from rival supermarket chains. While these cross-chain effects are often negligible for the retailer, they are quite substantial for the manufacturer. Thus, to increase promotional effectiveness, a brand manager should carefully plan the promotional calendar across rival retailers.

cross-chain effects, individual promotion model, multi-break analysis, price war, promotion response, promotional effectiveness, retailing, sales promotions, store switching
Statistical Decision Theory; Operations Research (jel C44), Business Administration and Business Economics; Marketing; Accounting (jel M), Marketing (jel M31)
B. Wierenga (Berend) , M.G. Dekimpe (Marnik)
Erasmus University Rotterdam , Erasmus Research Institute of Management
Rotterdam School of Management (RSM) Erasmus University Rotterdam (EUR) Prof.dr.ir. G. van Bruggen Prof.dr. I. Geyskens Prof.dr. K. H. Pauwels Copromotor: Dr. K. P. Gielens
978-90-5892-238-0
hdl.handle.net/1765/19714
ERIM Ph.D. Series Research in Management
Erasmus Research Institute of Management

Sotgiu, F. (2010, June 9). Not All Promotions are Made Equal: From the Effects of a Price War to Cross-chain Cannibalization (No. EPS-2010-203-MKT). ERIM Ph.D. Series Research in Management. Erasmus Research Institute of Management. Retrieved from http://hdl.handle.net/1765/19714