 Duration of price promotion and product profit: An in-depth study based on point-of-sale dataZhen Li, Katsutoshi Yada and Yusuke Zennyo Journal of Retailing and Consumer Services, 2021, vol. 58, issue C Abstract: Anecdotal evidence has shown that retail price promotions can help small and medium-sized retailers enhance their sales, and thus profits. However, most marketing managers usually stop a promotion after a certain duration. This study aims to explain why these retailers discontinue their price promotion. Our approach posits that overall contributions of a price promotion to the product profit progressively diminish with time. In this study, we present a theoretical framework to explain the relationship between duration and profit effects of price promotion and propose statistical models to empirically examine this framework using point-of-sale (POS) data. Our findings provide empirical support that the effect of price promotion on the product profit has a downward trend with elapsed time. The results are helpful for marketers to understand how price promotions dynamically influence product profit and when the promotion should be terminated. Keywords: Duration of price promotion; Elapsed time; Product profit; Customer traffic; Panel estimation; Point-of-sale data (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:joreco:v:58:y:2021:i:c:s0969698920312856 DOI: 10.1016/j.jretconser.2020.102277 Access Statistics for this article Journal of Retailing and Consumer Services is currently edited by Harry Timmermans More articles in Journal of Retailing and Consumer Services from Elsevier |
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