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Statistical Inference Using Stochastic Switching Models for the Discrimination of Unobserved Display Promotion from POS Data

Author

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  • Tadahiko Sato
  • Tomoyuki Higuchi
  • Genshiro Kitagawa

Abstract

The execution of price and/or display promotion has a significant effect on the sales of a brand sold in a supermarket. Information on price and/or sales is available from POS data. However, unless an investigator collects information on the execution of display promotions from every retail store, such information is unavailable. This paper presents a method of identifying whether display promotion has been executed without having to visit individual stores. We treat the execution/non-execution of a display promotion as a state variable. An unknown stationary probability matrix is assumed to describe the probability of a transition between states. Each state is characterized by a different stationary time series model with unknown parameters. The objective of the analysis is to identify the model and to assign a probability model for each state at each time instant. Finally, we provide a high precision estimator of a past execution/non-execution of a display promotion based on the proposed model.

Suggested Citation

  • Tadahiko Sato & Tomoyuki Higuchi & Genshiro Kitagawa, 2004. "Statistical Inference Using Stochastic Switching Models for the Discrimination of Unobserved Display Promotion from POS Data," Marketing Letters, Springer, vol. 15(1), pages 37-60, February.
    • Handle: RePEc:kap:mktlet:v:15:y:2004:i:1:p:37-60
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    Cited by:

    1. Taku Moriyama & Masashi Kuwano, 2022. "Causal inference for contemporaneous effects and its application to tourism product sales data," Journal of Marketing Analytics, Palgrave Macmillan, vol. 10(3), pages 250-260, September.
    2. Tomohiro Ando, 2008. "Measuring the baseline sales and the promotion effect for incense products: a Bayesian state-space modeling approach," Annals of the Institute of Statistical Mathematics, Springer;The Institute of Statistical Mathematics, vol. 60(4), pages 763-780, December.

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