Take turns or march in sync?: Impact of the national brand promotion calendar on manufacturer and retailer performance
Guyt,J.Y. Gijsbrechts,E.
Guyt,J.Y.
Gijsbrechts,E.
Abstract
Featured price cuts are a popular tool among brand-manufacturers and retailers. Yet, there is growing concern about the net sales and revenue gains from these promotions, as retailers and manufacturers may simply be subsidizing consumers that shop around. This notion has placed the (co-) occurrence of a brand’s promotions across retailers high on the promotion-planning agenda. This paper examines the mechanisms underlying out-of-phase vs. in-phase schedules, and empirically demonstrates their sales and revenue implications in four product categories, covering purchases of a national panel of households across eight years. Our results reveal that calendar effects primarily materialize in categories where the chosen retailer is driven by brand promotions. In those categories, alternating the timing of featured price cuts across chains substantially increases the manufacturer and retailers’ immediate sales lift. However, when it comes to net gains, striving for out-of-phase promotions – the dominant approach among chains – is not necessarily ‘best practice’: retailers see the revenue advantage diminish, and manufacturers may even earn less.
Description
Date
2014-12
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Volume Title
Publisher
Research Projects
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Keywords
promotion effectiveness, calendar, in phase, out of phase
Citation
Guyt, J Y & Gijsbrechts, E 2014, 'Take turns or march in sync? Impact of the national brand promotion calendar on manufacturer and retailer performance', Journal of Marketing Research, vol. 51, no. 6, pp. 753-772. https://doi.org/10.1509/jmr.14.0193