 A Multiple-discrete/Continuous Model of Price PromotionTimothy J. Richards, Miguel Gomez and Geoffrey Pofahl Journal of Retailing, 2012, vol. 88, issue 2, 206-225 Abstract: Understanding the effect of temporary price reductions, or price promotions, on sales of consumer packaged goods is an area of ongoing interest, both in academia and in practice. Price promotions, however, are becoming an increasingly important method of managing consumer demand for fresh produce items. Modeling the impact of price promotions must take into account the differentiated nature of fresh produce and the fact that consumers tend to purchase multiple items of only a few of the products available to them. Neither a continuous nor a discrete model of demand is appropriate. In this paper, we apply a multiple-discrete/continuous model of fresh produce demand to study the impact of price promotion on retail apple sales. Our findings show that the brand switching/category incidence effect of promotion is closer to 65/35 than the more usual 80/20 rule (80 percent of the effect is brand switching and 20 percent purchase incidence) when the nature of the decision is appropriately taken into consideration. Keywords: Apples; Multiple discrete; Price promotion; Retailing (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:jouret:v:88:y:2012:i:2:p:206-225 DOI: 10.1016/j.jretai.2012.01.002 Access Statistics for this article Journal of Retailing is currently edited by A. Roggeveen More articles in Journal of Retailing from Elsevier |
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