Drivers of the synergy between price cuts and store flyer advertising at supermarkets and discounters
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In: International Journal of Research in Marketing, Vol. 40, No. 2, 06.2023, p. 455-474.
Research output: Journal contributions › Journal articles › Research › peer-review
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TY - JOUR
T1 - Drivers of the synergy between price cuts and store flyer advertising at supermarkets and discounters
AU - Widdecke, Kai A.
AU - Keller, Wiebke I.Y.
AU - Gedenk, Karen
AU - Deleersnyder, Barbara
N1 - Publisher Copyright: © 2022 Elsevier B.V.
PY - 2023/6
Y1 - 2023/6
N2 - Despite retailers’ intense use of both price cuts and store flyer advertising, it is still unclear whether and when it is beneficial for retailers to combine the two promotion tools at the same time as opposed to using them separately. We systematically investigate synergies between price cuts and store flyers for a broad set of 488 brands from 44 consumer packaged goods categories across six leading German retailers. We find that a clear majority of the brands benefit from positive synergies and hence, combining price cuts and store flyer advertising is recommended, especially at supermarkets. This synergy can be strong. For instance, a 15 % price cut without store flyer support at a supermarket, on average, increases sales by 11 %, and medium spending on store flyers for the brand at its regular (non-promoted) price results in a sales lift of 8 %. The combined use of both tools, however, increases sales by 52 %, much more than the sum of their separate effects (11 % + 8 % = 19 %). Yet, there is also substantial variance in the synergy, which we explain with retailer format (supermarkets versus discounters) as well as various brand and category characteristics. Our findings have important implications for the coordination of promotion activities by retailers.
AB - Despite retailers’ intense use of both price cuts and store flyer advertising, it is still unclear whether and when it is beneficial for retailers to combine the two promotion tools at the same time as opposed to using them separately. We systematically investigate synergies between price cuts and store flyers for a broad set of 488 brands from 44 consumer packaged goods categories across six leading German retailers. We find that a clear majority of the brands benefit from positive synergies and hence, combining price cuts and store flyer advertising is recommended, especially at supermarkets. This synergy can be strong. For instance, a 15 % price cut without store flyer support at a supermarket, on average, increases sales by 11 %, and medium spending on store flyers for the brand at its regular (non-promoted) price results in a sales lift of 8 %. The combined use of both tools, however, increases sales by 52 %, much more than the sum of their separate effects (11 % + 8 % = 19 %). Yet, there is also substantial variance in the synergy, which we explain with retailer format (supermarkets versus discounters) as well as various brand and category characteristics. Our findings have important implications for the coordination of promotion activities by retailers.
KW - Discounters
KW - Price cuts
KW - Store flyers
KW - Supermarkets
KW - Synergy
KW - Management studies
UR - http://www.scopus.com/inward/record.url?scp=85143484324&partnerID=8YFLogxK
U2 - 10.1016/j.ijresmar.2022.10.001
DO - 10.1016/j.ijresmar.2022.10.001
M3 - Journal articles
AN - SCOPUS:85143484324
VL - 40
SP - 455
EP - 474
JO - International Journal of Research in Marketing
JF - International Journal of Research in Marketing
SN - 0167-8116
IS - 2
ER -