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When Do Price Promotions Make Sense

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  • Davis, Scott

Abstract

Price promotions are frequently used to increase the sales volume of a product. however, it is not always true that price promotions increase profits. This paper summarizes key factors that make price promotions profitable for retailers and Manufacturers. There can be some significant problems with the implementation of effective price promotion policies due to conflicting incentives of manufacturers and retailers. The conditions under which promotions are the most attractive to the Manufacturers are often the conditions in which retailers are least likely to provide suPPort for the promotion, and vice versa.

Suggested Citation

  • Davis, Scott, 1994. "When Do Price Promotions Make Sense," Promotion in the Marketing Mix: What Works, Where and Why, April 28-29, 1994, Toronto, Canada 279599, Regional Research Projects > NECC-63: Research Committee on Commodity Promotion.
    • Handle: RePEc:ags:rr6394:279599
    DOI: 10.22004/ag.econ.279599
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    References listed on IDEAS

    as
    1. J. Jeffrey Inman & Leigh McAlister, 1993. "A Retailer Promotion Policy Model Considering Promotion Signal Sensitivity," Marketing Science, INFORMS, vol. 12(4), pages 339-356.
    2. Armstrong, Marcia K. & Gerstner, Eitan & Hess, James D., 1994. "Pocketing The Trade Deal," Promotion in the Marketing Mix: What Works, Where and Why, April 28-29, 1994, Toronto, Canada 279598, Regional Research Projects > NECC-63: Research Committee on Commodity Promotion.
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    Keywords

    Demand and Price Analysis; Marketing;

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