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A Theoretical And Empirical Evaluation Of Price Deals For Consumer Nondurables

In: Perspectives On Promotion And Database Marketing The Collected Works of Robert C Blattberg

Author

Listed:
  • ROBERT C. BLATTBERG

    (Graduate School of Business of the University of Chicago, USA)

  • GARY D. EPPEN

    (Graduate School of Business of the University of Chicago, USA)

  • JOSHUA LIEBERMAN

    (Bar-Ilan University, Ramat-Gan, Israel)

Abstract

Food retailers regularly offer products for less than normal market price in special sales or deals. This paper briefly examines several common explanations for this phenomenon and finds the analyses to be less than complete. It then presents an explanation for dealing of storable products based on the idea of transfering inventory carrying costs from the retailer to the consumer. An inventory control model is described in which both consumers and the retailer act so as to minimize their own costs. Results derived from this model are then presented. Data relevant to both the consumer and the retailer model are presented and analyzed. The conclusion is that the data are consistent with the predictions of the models. Finally, the strategic implications of the model for manufacturers and retailers are discussed.

Suggested Citation

  • Robert C. Blattberg & Gary D. Eppen & Joshua Lieberman, 2010. "A Theoretical And Empirical Evaluation Of Price Deals For Consumer Nondurables," World Scientific Book Chapters, in: Greg M Allenby (ed.), Perspectives On Promotion And Database Marketing The Collected Works of Robert C Blattberg, chapter 7, pages 101-114, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789814287067_0007
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    More about this item

    Keywords

    Quantitative Marketing; Tracker Model; Customer Level Data; Marketing-Mix Modeling;
    All these keywords.

    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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