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A Market Response Model for Coupon Promotions

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  • Scott A. Neslin

    (Dartmouth College)

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    Abstract

    An econometric market response model for measuring the effect of coupon promotions upon market share is developed and estimated. In addition to the brand's own couponing efforts, the model takes into account retailer promotions for the brand as well as competitive couponing activity. The model is multi-equation, simultaneous, and is estimated using scanner panel data. Results indicate that coupons have a pronounced effect upon market share, although the effect varies from brand to brand and may not be strong enough for some brands for couponing to be profitable in the short term.

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    File URL: http://dx.doi.org/10.1287/mksc.9.2.125
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    Bibliographic Info

    Article provided by INFORMS in its journal Marketing Science.

    Volume (Year): 9 (1990)
    Issue (Month): 2 ()
    Pages: 125-145

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    Handle: RePEc:inm:ormksc:v:9:y:1990:i:2:p:125-145

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    Related research

    Keywords: market response models; sales promotion; couponing; coupon profitability;

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    Cited by:
    1. Laroche, Michel & Kalamas, Maria & Huang, Qinchao, 2005. "Effects of coupons on brand categorization and choice of fast foods in China," Journal of Business Research, Elsevier, vol. 58(5), pages 674-686, May.
    2. Aviv Nevo & Catherine Wolfram, 1999. "Prices and Coupons for Breakfast Cereals," NBER Working Papers 6932, National Bureau of Economic Research, Inc.
    3. Gregory K. Price & John M. Connor, 2003. "Modeling coupon values for ready-to-eat breakfast cereals," Agribusiness, John Wiley & Sons, Ltd., vol. 19(2), pages 223-243.
    4. Ajay Kalra & Mengze Shi, 2002. "Consumer Value-Maximizing Sweepstakes & Contests: A Theoretical and Experimental Investigation," Review of Marketing Science Working Papers 1-3-1008, Berkeley Electronic Press.
    5. Guimond, Lisa & Kim, Chankon & Laroche, Michel, 2001. "An investigation of coupon-prone consumers: Their reactions to coupon feature manipulations," Journal of Business Research, Elsevier, vol. 54(2), pages 131-137, November.
    6. Shor, Mikhael & Oliver, Richard L., 2006. "Price discrimination through online couponing: Impact on likelihood of purchase and profitability," Journal of Economic Psychology, Elsevier, vol. 27(3), pages 423-440, June.

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