The battle for health and beauty: What drives supermarket and drugstore category-promotion lifts?
van Lin,Arjen Gijsbrechts,Els
van Lin,Arjen
Gijsbrechts,Els
Abstract
This paper studies promotion-induced competition between supermarkets and drugstores, resulting from increased channel blurring and category overlap. It documents the relative impact of price cuts and feature ads at the two channels, and establishes substantive factors underlying their differences in promotion effectiveness. Estimates from a household-level model of category purchase incidence, store choice, and quantity, in five large health and beauty-care categories, show that the promotion effects are much larger for supermarket than drugstore chains. Though this partly follows from asymmetries in the channels’ drawing power and from differences in in store response, a key driver is the accessibility of promotional price information: because they are visited more frequently than drugstores and their store flyers are read more often, supermarkets gain relatively more from price cuts and feature ads than drug chains. Managerial implications are discussed.
Description
Date
2016-09
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Volume Title
Publisher
Research Projects
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Keywords
promotion competition, channel blurring, supermarkets, drugstores, store flyers, feature ads
Citation
van Lin, A & Gijsbrechts, E 2016, 'The battle for health and beauty : What drives supermarket and drugstore category-promotion lifts?', International Journal of Research in Marketing, vol. 33, no. 3, pp. 557-577. https://doi.org/10.1016/j.ijresmar.2015.09.002