The Impacts of Retail Promotions on the Demand for Orange Juice: A Study of a Retail Chain

This study examined the impacts of retail promotions on the demand for five brands of orange juices for a retail chain (referred to as Retailer X) and its competitors using the Rotterdam model. Results show that the combination of feature ads and displays had the largest impacts on retail revenue among the four promotional tactics considered, while temporary price reductions had no additional advertising impacts other than price impacts on retail revenues. Results also show that when Retailer X promotes an OJ brand using any of the tactics studied, a larger portion of the increased demand for the promoted brand came from reduced demand for other brands of OJ in the same store and a smaller portion came from the decreased demand in competing stores in the same trading area.