Brand-Pack Size Cannibalization Arising from Temporary Price Promotions

John G. Dawes

Journal of Retailing, 2012, vol. 88, issue 3, 343-355

Abstract: This study investigates how price promotions for one pack-size of a brand steal sales from the other pack-sizes of the same brand. To do so, the study examines twelve grocery product categories (seven US, three UK, two Australian). The analysis finds heavy cross-pack cannibalization. On average, 22 percent of the sales uplift for a promoted brand-pack size comes from other pack sizes of the same brand. Cross-pack cannibalization most typically occurs in the week of the promotion, but also transfers future week's sales away from the non-promoted pack size in 31 percent of cases. The study finds higher cannibalization is associated with packs that sell for a higher dollar value than others sold under the same brand; whereas higher price-per-weight, a packaging difference, and the item having a larger relative share of sales in the brand portfolio, are linked to lower cannibalization. Also examined is the impact of pack-size cannibalization on promotion profitability for retailer PLs. That analysis finds PL price promotions have generally negative impacts on PL profits, and that pack-size cannibalization exacerbates this negative outcome. The results suggest both retailers and manufacturers should carefully consider pack-size cannibalization when evaluating the outcome of temporary price promotions. The study also provides some evidence-based recommendations from which managers can attempt to minimize such cannibalization.

Keywords: Price promotions; Cannibalization; Pack sizes (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S002243591200005X
Full text for ScienceDirect subscribers only

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:eee:jouret:v:88:y:2012:i:3:p:343-355

DOI: 10.1016/j.jretai.2012.01.004

Access Statistics for this article

Journal of Retailing is currently edited by A. Roggeveen

More articles in Journal of Retailing from Elsevier
Bibliographic data for series maintained by Catherine Liu ().