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Can Retail Sales Volatility be Curbed Through Marketing Actions?

Author

Listed:
  • Mercedes Esteban-Bravo

    (Department of Business Administration, Universidad Carlos III de Madrid, 28903 Getafe, Madrid, Spain)

  • Jose M. Vidal-Sanz

    (Department of Business Administration, Universidad Carlos III de Madrid, 28903 Getafe, Madrid, Spain)

  • Gökhan Yildirim

    (Department of Management, Imperial College Business School, Imperial College London, London SW7 2AZ, United Kingdom)

Abstract

For many years, marketing managers have used dynamic sales response models to compute expected sales conditional on the available information. These models fail to recognize that the volatility (conditional variance) of sales can vary over time. Moreover, the covolatilities (conditional covariances) between sales and marketing-mix variables can be time varying. Both concepts introduce a new range of strategic and tactical considerations for product and brand managers. Using a multivariate volatility model, we investigate the covolatility of sales and the marketing mix of a focal brand and competing brands in the market. We also examine carryover effects from a volatility perspective. The methodology is applied to six product categories sold by Dominick’s Finer Foods. The results reveal valuable implications for marketing managers.

Suggested Citation

  • Mercedes Esteban-Bravo & Jose M. Vidal-Sanz & Gökhan Yildirim, 2017. "Can Retail Sales Volatility be Curbed Through Marketing Actions?," Marketing Science, INFORMS, vol. 36(2), pages 232-253, March.
    • Handle: RePEc:inm:ormksc:v:36:y:2017:i:2:p:232-253
    DOI: 10.1287/mksc.2016.1013
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    References listed on IDEAS

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    Cited by:

    1. Patel, Pankaj C. & Struckell, Elisabeth M. & Ojha, Divesh, 2020. "Calorie labeling law and fast food chain performance: The value of capital responsiveness under sales volatility," Journal of Business Research, Elsevier, vol. 117(C), pages 346-356.

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