Long-run effects of price promotions in scanner markets

Good marketing decisions require managers' understanding of the response function relating performance measures to variations in the marketing mix. Unit-root techniques are used to address market response in evolving markets, with a focus on their response to price promotions. Evolution at the primary-demand versus selective-demand level is distinguished, and 4 consumer product categories are examined for which high-quality scanner records are available. It is found that category and brand sales are 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.