Do Feature and Discount Promotions for National Brands Primarily Drive (National) Brand Choice, Store Choice, or Both? An Exploratory Analysis

Jonne Guyt () and Els Gijsbrechts ()
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Jonne Guyt: University of Amsterdam
Els Gijsbrechts: Tilburg University

A chapter in Advances in National Brand and Private Label Marketing, 2016, pp 97-101 from Springer

Abstract: Abstract Feature and discounts promotions are among the most frequently used marketing instruments in the consumer packaged goods (CPG) landscape. Using a flexible generalized extreme-value model, this study analyses the effect of national brand feature and discount promotions in a multi-retailer and multi-brand setting, in which households can use different decision routes to choose a (national or private label) brand and store. Across nine CPG categories, our results reveal that in each category a mixture of decision routes prevails: about 55 % of households exhibiting a brand focus (i.e. primarily select a brand, and then choose between stores offering that brand), the remaining 45 % showing evidence of a retailer focus (i.e. rather substituting brand offers within a visited store). These decision routes entail different patterns of competition between brands and stores, and come with differences in promotion response: feature ads triggering stronger (weaker) reactions among households with a brand (retailer) focus in almost all categories, and discount depth hardly affecting households with a retailer focus. As such, especially for less-frequently purchased categories, the brand-focus decision route leads to larger net promotion benefits for the retailer and, despite the stronger brand-cannibalization, even for the manufacturer. Managerial implications are discussed.

Keywords: Brand and store choice; Decision structures; National brand promotions; Feature ads; Discounts (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-319-39946-1_12

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DOI: 10.1007/978-3-319-39946-1_12

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