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Do promotions increase store expenditures? A descriptive study of household shopping behavior

Drèze, Xavier, Nisol, Patricia and Vilcassim, Naufel J. (2004) Do promotions increase store expenditures? A descriptive study of household shopping behavior. Quantitative Marketing and Economics, 2 (1). pp. 59-95. ISSN 1573-711X

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Identification Number: 10.1023/B:QMEC.0000017035.35940.60

Abstract

An important question for retailers is whether promotions induce households to increase their in-store expenditures or merely reallocate a predetermined shopping budget. Should expenditures be fixed, retailers might decrease their profitability when running promotions by displacing expenditures from high margin to lower margin products. Using household level store receipts and an extended AIDS model, we provide evidence that while household expenditures do increase with promotions, there is also a significant reallocation of expenditures among the different categories. This implies that retailers have to choose carefully which products are promoted, if promotions are to increase profits.

Item Type: Article
Official URL: http://link.springer.com/journal/11129
Additional Information: © 2004 Kluwer Academic Publishers
Divisions: Management
Subjects: H Social Sciences > HG Finance
Sets: Departments > Management
Date Deposited: 26 Jan 2017 15:08
Last Modified: 31 Jul 2020 23:29
URI: http://eprints.lse.ac.uk/id/eprint/68971

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