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Measuring Sales Promotion Effectiveness

In: Handbook of Market Research

Author

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  • Karen Gedenk

    (University of Hamburg)

Abstract

Sales promotions are an important marketing tool for both manufacturers and retailers. They include, for example, temporary price reductions, coupons, features, displays, sampling, and premiums. The bad news about promotions is that many of them are not profitable. The good news is that promotion effectiveness can be measured so that managers can identify the promotions which generate a profit and eliminate the ones that do not. This chapter presents data and models that can be used for this purpose. It focuses on panel data which is available at the aggregate (i.e., store) level and at the disaggregate (i.e., consumer) level. While aggregate data is more readily available and easier to analyze, disaggregate data allows for more detailed analyses. Several examples illustrate how models build on these data to measure promotion effectiveness. Since panel data has its limitations, it is often useful to complement it with surveys and/or experiments.

Suggested Citation

  • Karen Gedenk, 2022. "Measuring Sales Promotion Effectiveness," Springer Books, in: Christian Homburg & Martin Klarmann & Arnd Vomberg (ed.), Handbook of Market Research, pages 1055-1071, Springer.
    • Handle: RePEc:spr:sprchp:978-3-319-57413-4_32
    DOI: 10.1007/978-3-319-57413-4_32
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