Interesting Results
Changes in Sales Volume and Timing Resulting from Promotions
Sales promotions are used as a means of boosting sales in many product categories. However, marketing managers and researchers have long recognized that while such promotions may result in an overall increase in sales, they may also simply accelerate or decelerate purchases that would have been made anyway if buyers stockpile products when sales promotions occur or wait for a sales promotion rather than buying a product for the regular price prior to the promotion. A recently published study showed that the extent to which these things occur varies by product category. For example, a sales promotion involving a temporary price reduction of 20% led to an average net sales gain of 67% (after taking into account purchases that would have been made anyway but were accelerated or decelerated to occur during the sales promotion period), but this was only 32% for canned tuna compared to 81% for frozen juices. Overall, the authors found that acceleration and deceleration of purchases were most likely for products that were high-priced, in the maturity stage of their life cycle, frequently promoted, or had a large share of their market.