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Spatial Retail Pricing Strategies For Beer In Germany


  • Empen, Janine
  • Glauben, Thomas
  • Loy, Jens-Peter


The market for beer in Germany is special for many reasons, e.g. the purity law, the large number of breweries, or consumers who are highly loyal to local brands. To what extent brand loyalty affects spatial pricing strategies, is the main question of this article. We employ weekly retail scanner data for Germany from 2000 to 2001. We find that discounts are higher and offered more often the closer the brands are sold to the brewery they originate from. In addition, average prices are also lower on home markets. According to Anderson and Kumar (2007) this strategy is chosen because promotions generate new loyal customers who repay in periods of regular prices. Thus, loyalty of consumers may be endogenous. Alternatively, retailers use local beer brands as loss leaders, which can also explain the observed regional pricing strategies.

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  • Empen, Janine & Glauben, Thomas & Loy, Jens-Peter, 2012. "Spatial Retail Pricing Strategies For Beer In Germany," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 137150, German Association of Agricultural Economists (GEWISOLA).
  • Handle: RePEc:ags:gewi12:137150

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    References listed on IDEAS

    1. Margaret E. Slade, 2004. "Market Power and Joint Dominance in U.K. Brewing," Journal of Industrial Economics, Wiley Blackwell, vol. 52(1), pages 133-163, March.
    2. Daniel Hosken & David Reiffen, 2001. "Multiproduct retailers and the sale phenomenon," Agribusiness, John Wiley & Sons, Ltd., vol. 17(1), pages 115-137.
    3. Eric Anderson & Nanda Kumar, 2007. "Price competition with repeat, loyal buyers," Quantitative Marketing and Economics (QME), Springer, vol. 5(4), pages 333-359, December.
    4. William James Adams, 2006. "Markets: Beer in Germany and the United States," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 189-205, Winter.
    5. Bing Jing & Zhong Wen, 2008. "Finitely Loyal Customers, Switchers, and Equilibrium Price Promotion," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 17(3), pages 683-707, September.
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    More about this item


    Spatial Pricing; Regional Brands; Brand Loyalty; Beer; Germany; Räumliche Preissetzung; Regionale Marken; Markentreue; Bier; Deutschland; Agricultural Finance; Consumer/Household Economics; Food Consumption/Nutrition/Food Safety; Marketing;

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