Long-Run Effects of Promotion Depth on New Versus Established Customers: Three Field Studies

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Bibliographische Detailangaben
Beteiligte: Anderson, Eric T., Simester, Duncan I.
In: Marketing Science, 23, 2004, 1, S. 4-20
veröffentlicht:
Institute for Operations Research and the Management Sciences (INFORMS)
Medientyp: Artikel, E-Artikel

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weitere Informationen
Umfang: 4-20
ISSN: 0732-2399
1526-548X
DOI: 10.1287/mksc.1030.0040
veröffentlicht in: Marketing Science
Sprache: Englisch
Schlagwörter:
Kollektion: Institute for Operations Research and the Management Sciences (INFORMS) (CrossRef)
Inhaltsangabe

<jats:p> We use the results of three large-scale field experiments to investigate how the depth of a current price promotion affects future purchasing of first-time and established customers. While most previous studies have focused on packaged goods sold in grocery stores, we consider durable goods sold through a direct mail catalog. The findings reveal different effects for first-time and established customers. Deeper price discounts in the current period increased future purchases by first-time customers (a positive long-run effect) but reduced future purchases by established customers (a negative long-run effect). Overall, the results show evidence of several long-run effects: forward buying, selection, customer learning, and increased deal sensitivity. Short-run metrics that ignore these effects overstate the overall change in demand for established customers. The implication is that if prices are set based on short-run elasticity, then they will be too low. Among first-time customers, the short-run metrics underestimate the total increase in demand. If prices are set based on short-run elasticity, then they will be too high. </jats:p>