The Role of Retail Prices and Promotions in Determining Cigarette Brand Market Shares
AbstractOver the past two decades, two forms of price competition have emerged within the cigarette industry: the introduction and spread of discount and deep discount cigarettes and the increased use of price-related promotions. In this paper, we use quarterly market-level, scanner-based data on cigarette prices, promotions, and sales for 50 US markets over the period from 1994-IV through 2002-II to examine the impact of price and promotions on market shares for premium, discount, and deep discount brand cigarettes. Our estimates indicate that changes in relative prices, including those resulting from promotions, account for much of observed changes in market shares. Copyright Springer 2006
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Bibliographic InfoArticle provided by Springer in its journal Review of Industrial Organization.
Volume (Year): 28 (2006)
Issue (Month): 3 (05)
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Web page: http://www.springerlink.com/link.asp?id=100336
brand choice; cigarettes; master settlement agreement; premium; discount and deep discount brands; price and promotion; JEL classification; L1; L66; M30;
Find related papers by JEL classification:
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
- M30 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - General
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