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Article: An investigation of the impact of promotions on across-submarket competition

TitleAn investigation of the impact of promotions on across-submarket competition
Authors
KeywordsCompetition
Consumer package goods
Sales promotion
Issue Date2001
PublisherElsevier Inc. The Journal's web site is located at http://www.elsevier.com/locate/jbusres
Citation
Journal Of Business Research, 2001, v. 53 n. 3, p. 137-149 How to Cite?
AbstractThere is a recent trend among manufacturers of consumer packaged goods such as Proctor & Gamble to eliminate sales promotions and replace them with everyday low prices on their products. The objective of this study is to investigate whether and how such a significant change in promotional strategy would affect the competitive patterns in a market. Specifically, what would be the impact of such a move on competition between different brands in a market? Would the competitive structure change significantly as a result? How would this affect specific brands? We propose a methodology based on a dogit model of brand switching to evaluate and test the impact of promotions on competitive structure and to identify the nature of the impact. Our findings reveal that some sales promotions (e.g., displays and price cuts) have a significant impact in shaping competitive patterns characterizing submarkets for crackers. The magnitude of this impact decreases with increased product differentiation and increased intensity of the promotional activities in the market. Our findings help managers determine how the elimination of certain sales promotions may reshape competitive patterns before making such a move. The knowledge of which submarket boundaries are stable and which boundaries can be affected by promotions also helps managers decide which product alternatives to promote (or not to promote) so as to maximize short-term revenues. © 2001 Elsevier Science Inc.
Persistent Identifierhttp://hdl.handle.net/10722/54395
ISSN
2015 Impact Factor: 2.129
2015 SCImago Journal Rankings: 1.682
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorKannan, PKen_HK
dc.contributor.authorYim, CKen_HK
dc.date.accessioned2009-04-03T07:45:35Z-
dc.date.available2009-04-03T07:45:35Z-
dc.date.issued2001en_HK
dc.identifier.citationJournal Of Business Research, 2001, v. 53 n. 3, p. 137-149en_HK
dc.identifier.issn0148-2963en_HK
dc.identifier.urihttp://hdl.handle.net/10722/54395-
dc.description.abstractThere is a recent trend among manufacturers of consumer packaged goods such as Proctor & Gamble to eliminate sales promotions and replace them with everyday low prices on their products. The objective of this study is to investigate whether and how such a significant change in promotional strategy would affect the competitive patterns in a market. Specifically, what would be the impact of such a move on competition between different brands in a market? Would the competitive structure change significantly as a result? How would this affect specific brands? We propose a methodology based on a dogit model of brand switching to evaluate and test the impact of promotions on competitive structure and to identify the nature of the impact. Our findings reveal that some sales promotions (e.g., displays and price cuts) have a significant impact in shaping competitive patterns characterizing submarkets for crackers. The magnitude of this impact decreases with increased product differentiation and increased intensity of the promotional activities in the market. Our findings help managers determine how the elimination of certain sales promotions may reshape competitive patterns before making such a move. The knowledge of which submarket boundaries are stable and which boundaries can be affected by promotions also helps managers decide which product alternatives to promote (or not to promote) so as to maximize short-term revenues. © 2001 Elsevier Science Inc.en_HK
dc.languageengen_HK
dc.publisherElsevier Inc. The Journal's web site is located at http://www.elsevier.com/locate/jbusresen_HK
dc.relation.ispartofJournal of Business Researchen_HK
dc.rightsJournal of Business Research. Copyright © Elsevier Inc.en_HK
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.subjectCompetitionen_HK
dc.subjectConsumer package goodsen_HK
dc.subjectSales promotionen_HK
dc.titleAn investigation of the impact of promotions on across-submarket competitionen_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0148-2963&volume=53&issue=3&spage=137&epage=149&date=2001&atitle=An+investigation+of+the+impact+of+promotions+on+across-submarket+competitionen_HK
dc.identifier.emailYim, CK: yimbck@hkucc.hku.hken_HK
dc.identifier.authorityYim, CK=rp01122en_HK
dc.description.naturepostprinten_HK
dc.identifier.doi10.1016/S0148-2963(99)00114-9en_HK
dc.identifier.scopuseid_2-s2.0-0041870962en_HK
dc.identifier.hkuros67915-
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-0041870962&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume53en_HK
dc.identifier.issue3en_HK
dc.identifier.spage137en_HK
dc.identifier.epage149en_HK
dc.identifier.isiWOS:000170470200003-
dc.publisher.placeUnited Statesen_HK
dc.identifier.scopusauthoridKannan, PK=7005564666en_HK
dc.identifier.scopusauthoridYim, CK=15770531500en_HK

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