Advertising · Store-level scanner-data analysis of category demand
Cross-Category Demand Effects of Price Promotions
Journal of the Academy of Marketing Science · 2012
Summary
About half of the promotions expanded own-category revenue, particularly deeper supported discounts.
For your marketing
Possible founder application
When promoting one tier or feature, examine whether demand shifts across the rest of the portfolio. For software, test the analogous upgrade, downgrade and add-on outcomes rather than importing retail estimates.
Reported result
What the study found
About half of the promotions expanded own-category revenue, particularly deeper supported discounts. A promotion had a 61% probability of affecting at least one other category, usually no more than two; evidence also linked cross-effects to shelf proximity.
Research question
What the authors investigated
Do price promotions in one category affect revenues in other product categories, and what conditions moderate those spillovers?
Design
The authors develop a category-demand framework with interdependencies and analyze daily store-level scanner data, testing promotion intensity, category characteristics and spatial distance between categories.
Sample and setting
Daily store-level retail scanner data across multiple categories; the accessible abstract reports category-level patterns rather than a single consumer sample.
Scope and transfer
Limitations to keep in view
Retail-store categories and physical shelf locations are specific to the study. Cross-category effects cannot be presumed for software pricing or digital product bundles.
Research sources
Open article in PubMed Central and Springer publisher record; abstract reports the scanner-data method and headline effects.