Price Promotions

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Written by:

Marybeth R


Date added:

July 12, 2015








No of pages / words:

9 / 2282


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Marketing scientists have called this behavior ‘state dependence’. It captures the idea that after a purchase of a specific good, that consumer is more likely to repeat the purchase of that same good after tastes and other market factors like price and advertising are taken into account. Practitioners have also found similar effects in their activities...
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The term ‘promotion stickiness’ is often used in the manufacturing and retail sector: the fact that a promotion carries an effect on the market after its own duration has expired. Managers are aware of this effect. One manager from a major breakfast cereal company shared that price promotions were a fundamental way to keep market shares up while referring to the inertial effect...
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