Impacts of Promotional Tactics in a Conditional Demand System for Beverages

This study examined the impacts of four promotional tactics—features, displays, features and display together, and temporary price reductions—in context of a conditional demand system for 12 beverages. The Rotterdam model with promotion effects specified through the Tintner-Ichimura-Basmann relationship was used in the empirical study. The estimated conditional-demand equations exhibited relatively strong own- and cross-promotional effects, indicating a relatively high level of competition for market share among the beverages studied.