Introduction

Daniela Wiehenbrauk ()

Chapter Chapter 1 in Collaborative Promotions, 2010, pp 1-4 from Springer

Abstract: Abstract Promotions are at the same time beloved and feared by both traditional food retailers and branded goods manufacturers in today’s competitive retail environment. While retailers use promotions to attract customers and retain their market position against discounters, the branded good manufacturers see potential to win the price competition against private labels. Promotions are beloved due to their large, measurable and immediate effect on a brand’s sale (Blattberg et al. 1981). Despite only serving the loyal customer segment, promotions allow the retailer to additionally serve smart customers, who switch between retailers and stockpile in order to find the best deal. Promotions are feared because they come along with the cost of excess inventory in the supply chain. The demand of the smart customers does not only depend on the price of a retailer but also on the prices of the competitors and thereby is highly volatile. Hence, the customer demand in the case of promotions is difficult to forecast and has not yet been mastered, despite few first success stories (Arminger 2003). The associated forecast error of demand during promotion periods increases the inventory required to support a promotion and therefore counteracts the prospected profit gains from increased sales.

Keywords: Supply Chain; Customer Satisfaction; Inventory Cost; Private Label; Customer Segment (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-642-13393-0_1

Ordering information: This item can be ordered from
http://www.springer.com/9783642133930

DOI: 10.1007/978-3-642-13393-0_1

Access Statistics for this chapter

More chapters in Lecture Notes in Economics and Mathematical Systems from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().