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The effects of price promotion on relative virtue and vice food products

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  • Parreño-Selva, Josefa
  • Mas-Ruiz, Francisco J.
  • Ruiz-Conde, Enar

Abstract

Retailers use price promotion of light and regular products, but not all of these products are perceived as relative virtues and vices, respectively. This paper aims to identify whether consumers distinguish between the two product categories. Survey data is used to distinguish between each product category, and identifies low-fat milk as a light product that gives both immediate and delayed rewards. Daily scanner data from a hypermarket supports the effects of price promotions on sales within and between product categories, as expected. We expect that, (1) due to these light products representing more enduring involvement, demand is less price sensitive compared to demand for regular products; (2) as nonimpulse purchase products, price promotions of light products cannibalize the sales of other light products; and (3) the loss of light product benefits associated with switching means that price promotions of light products hurt regular product sales more than vice versa.

Suggested Citation

  • Parreño-Selva, Josefa & Mas-Ruiz, Francisco J. & Ruiz-Conde, Enar, 2017. "The effects of price promotion on relative virtue and vice food products," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 20(5).
    • Handle: RePEc:ags:ifaamr:266409
    DOI: 10.22004/ag.econ.266409
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    References listed on IDEAS

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