Long-run effects of price promotions in scanner markets

Good marketing decisions require managersʹ understanding of the response function relating performance measures to variations in the marketing mix. We use unit-root techniques to address market response in evolving markets, with a focus on their response to price promotions. We distinguish between evolution at the primary-demand vs. selective-demand level, and examine four consumer product categories for which high-quality scanner records are available. We find category and brand sales to be predominantly stationary, with differences in promotional impact between national and private-label brands. Even in the rare occurrence of performance evolution, the long-term effects of price promotions are not necessarily positive.