The effects of mobile promotions on customer purchase dynamics

Chang Hee Park, Young-Hoon Park and David A. Schweidel

International Journal of Research in Marketing, 2018, vol. 35, issue 3, 453-470

Abstract: While mobile promotions have become increasingly popular in recent years, limited research has examined the effects of mobile promotions over time. This research investigates the effects of two popular types of promotional offers, price discount and non-price free sample coupons, on purchase behavior. To this end, we present a dynamic model of customer purchase behavior that incorporates time-varying effects of mobile coupons, enabling us to investigate both the short-term and longer-term effects of mobile promotions. Using transaction and mobile promotion data, we find that both price discount and free sample coupons increase customers' purchase likelihood and expenditures during the coupon redemption period. We also find that free sample coupons have an enduring effect that increases the purchase propensity beyond the promotion period, thereby contributing to incremental purchases over a longer period of time. We demonstrate how our approach can help marketers improve mobile couponing decisions by considering the dynamic effects of mobile promotions that manifest over time.

Keywords: Mobile promotions; Couponing; Targeting; Purchase dynamics; Hidden Markov models; Bayesian estimation (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ijrema:v:35:y:2018:i:3:p:453-470

DOI: 10.1016/j.ijresmar.2018.05.001

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