Abstract and Keywords
This article is designed to assist managers in understanding the current state of the art of promotional modelling and its managerial applications, and to identify future issues that need to be addressed. It is organized as follows. Section 24.2 describes the major types of sales promotion offered. Section 24.3 discusses the behavioural underpinnings of sales promotions. Specifically, several theories are provided that explain why consumers respond more strongly to sales promotions than to a price decrease and shows the benefits to managers of understanding why sales promotions are used. Section 24.4 describes how promotions affect sales, and discusses the sources of incremental volume associated with a promotion. Section 24.5 discusses strategic issues associated with sales promotions, and provides insight into why firms may still offer promotions even when they are unprofitable. Section 24.6 provides an overview of empirical methods used to estimate sales promotions models. Section 24.7 discusses emerging issues related to sales promotions. The article concludes with a section focused on managerial implications and emerging managerial issues in sales promotions.
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