This research uses Procter & Gamble's value pricing initiative as a context for testing whether actual competitor and retailer response to a major policy change can be predicted using a game-theoretic model. We first estimate demand functions for P&G and competitor brands from the period before...

We estimate the joint impact of the frequency reward and customer tier components of a loyalty program on customer behavior and resultant sales. We provide an integrated analysis of a loyalty program incorporating customers' purchase and cash-in decisions, points pressure and rewarded behavior...

We examine the conditions that enhance the economic viability of frequency reward programs in a strategic competitive environment. We focus particularly on conditions related to consumer behavior, namely the extent to which consumers value the future benefits offered by the reward, the...

The purpose of this paper is to ascertain how collinearity in general, and the sign of correlations in specific, affect parameter inference, variable omission bias, and their diagnostic indices in regression. It is found that collinearity can reduce parameter variance estimates and that positive...

The following sections are included:IntroductionImmediate market responseLonger-term market response to promotionsRetailer response to trade promotionsPromotion planning, optimization, and targetingDirections for future researchReferences

We use data on all manufacturer funding and promotion activity by a major U.S. retailer during a two-year period to compute promotion pass-through and assess its magnitude. Then, we estimate a two-tiered probit and lognormal regression model to study drivers of the large variation we observe in...

Composite variables are those that may be mathematically decomposed into additive and/or multiplicative component variables. Several researchers have noted that the relationship between a composite variable and its components may be a mathematical artifact, but the effect of their inclusion as...

We quantified the net unit and profit impact of each promotion offered in 2003 by CVS, a leading U.S. drug retail chain, and analyzed the key drivers of variation in this net impact. We used this analysis to identify the least effective promotions and conducted a controlled field test to...

Research on optimal bundling strategy has primarily dealt with the case of a monopolist and suggests that mixed bundling be adopted, as it allows for price discrimination. The overwhelming majority of consumer products, however, operate in a competitive arena, so that an adequate description of...