IDEAS home Printed from
   My bibliography  Save this paper

Flexible Decomposition of Sales Promotion Effects Using Store-Level Scanner Data


  • Dick Wittink

    () (School of Management)

  • Peter S.H. Leeflang

    () (Faculteit der Economische Wetenschappen)

  • Harald J. van Heerde

    () (Faculty of Economics and Business Administration)


Recent studies in marketing show decompositions of sales promotion effects based on household-level scanner data. Typically, the total elasticity is decomposed into choice, timing, and quantity elasticities. We propose a model that estimates standard, enhanced, and flexible decompositions based on store-level data. The standard decomposition divides the own-brand sales elasticity into a market share ("choice") elasticity, a period share ("timing") elasticity, and a category sales ("quantity") elasticity. The enhanced decomposition includes two extensions. One extension is the separation of the category sales elasticity into a between-store share and a total market elasticity, which allows us to measure cross-store effects of promotions. The other extension is a partition of the market share elasticity into within-brand and between-brand share elasticities. We show that the store-level results for standard decompositions based on four product categories are comparable to extant household-level results. For the two extensions, our empirical results, for one product category each, show small between-store share elasticities but large cannibalization effects between SKUs of the same brand. For improved understanding of promotion effects, we propose flexible decompositions. One is that we allow the decomposition to depend on the type of promotion support, such as feature and/or display. We find that the own-brand sales elasticity increases with more support. Also, for more support, the relative contribution of the period share elasticity increases while the contribution of the market share elasticity decreases. The second type of flexibility is that we allow the decomposition to depend on the magnitude of the discount. We use a flexible, nonparametric, method to account for the latter dependency. We find that with display and/or feature, the own-brand sales elasticities are less negative at higher price discount levels. The decomposition shows that on average, the market share elasticity rapidly becomes less negative while the period share- and the category sales elasticities are fairly constant when the discount increases. Hence, the relative contribution of the latter two elasticities increases at the cost of the relative contribution of the market share elasticity. The flexible estimation of promotion effects, separately for four types of support, provides superior insight into marketplace phenomena relevant to marketing scientists and marketing practitioners.

Suggested Citation

  • Dick Wittink & Peter S.H. Leeflang & Harald J. van Heerde, 2001. "Flexible Decomposition of Sales Promotion Effects Using Store-Level Scanner Data," Yale School of Management Working Papers ysm193, Yale School of Management.
  • Handle: RePEc:ysm:somwrk:ysm193

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Greif, Avner, 1989. "Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 857-882, December.
    2. Lin, Justin Yifu, 1995. "The Needham Puzzle: Why the Industrial Revolution Did Not Originate in China," Economic Development and Cultural Change, University of Chicago Press, vol. 43(2), pages 269-292, January.
    3. Geoffrey Poitras, 2000. "The Early History of Financial Economics, 1478–1776," Books, Edward Elgar Publishing, number 2151.
    4. Graham, John R. & Harvey, Campbell R., 2001. "The theory and practice of corporate finance: evidence from the field," Journal of Financial Economics, Elsevier, vol. 60(2-3), pages 187-243, May.
    5. Alfred E. Lieber, 1968. "Eastern Business Practices and Medieval European Commerce," Economic History Review, Economic History Society, vol. 21(2), pages 230-243, August.
    6. John H. Munro, 1999. "The Low Countries' Export Trade in Textiles with the Mediterranean Basin, 1200-1600: A Cost-Benefit Analysis of Comparative Advantages in Overland and Maritime Trade Routes," Working Papers munro-99-01, University of Toronto, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Econometric Modeling; Nonparametric Estimation; Price Elasticity; Promotion; Regression and Other Statistical Techniques;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ysm:somwrk:ysm193. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.