Interesting Results
Sales Promotion Effects
In the past, researchers have broken down increases in sales volumes resulting from sales promotions into three categories: increases in the total quantity of product purchased, acceleration of purchases from later to earlier time periods, and switching from brands not being promoted to those that are being promoted. Previously, it was thought that most of the increase in sales volumes that occurs during sales promotions was due to customers choosing a different brand than they otherwise would; however, an improved approach to modeling the effects of sales promotions shows that this is incorrect. The new approach takes into consideration the way in which sales promotion can influence total sales volumes for a product category. Once this is taken into account, it appears that only about one-third of the increases in sales volumes resulting from sales promotions is due to brand switching.