The Category-Demand Effects of Price Promotions

For your marketing

Possible founder application

When discounting, separate category growth from switching between vendors or purchase timing. For software, define the analogous incremental outcome and test it against a non-discounted control.

Reported result

What the study found

The research estimates category-demand expansion effects rather than only brand switching and tests how marketing intensity and competition moderate promotion response. The abstract emphasizes that category expansion is conditional on market context.

Research question

What the authors investigated

Under what conditions do price promotions expand demand for an entire product category in the short and long run?

Design

The authors analyze national sales across 560 Dutch supermarket product categories over four years with multivariate time-series models, accounting for marketing mix and competition.

Sample and setting

560 consumer product categories in Dutch supermarkets; the data include prices, promotions, advertising, distribution and new-product activity.

Scope and transfer

Limitations to keep in view

Retail packaged-goods data from one national market and historical period; estimated category-level effects do not predict SaaS discount outcomes or the profitability of a particular promotion.

Research sources

INFORMS bibliographic record and IDEAS/RePEc abstract. This profile does not add unverified numerical effect sizes.

Additional research source ↗