The Dilemma of Pull and Push-Price Promotions

Guiomar Martín-Herrán, Simon Pierre Sigué, Georges Zaccour

Research output: Contribution to journalJournal Articlepeer-review

43 Citations (Scopus)

Abstract

Should manufacturers of products such as automobiles and household appliances offer cash rebates to all consumers at the time of purchase, or offer trade deals to retailers? The authors conduct an analytical inquiry that shows that choosing between these two types of price promotion critically depends on the consumer sensitivity to both regular and promotional prices. More specifically, when consumers are more (less) sensitive to promotions than to regular prices, manufacturers are better (worse) off offering trade deals (consumer rebates) rather than consumer rebates (trade deals). Consistent with traditional predictions found in the economic literature, either of the two promotions can be offered indiscriminately if consumers make no difference between promotional offers and regular-price reductions. The theoretical and managerial implications of these findings are discussed.

Original languageEnglish
Pages (from-to)51-68
Number of pages18
JournalJournal of Retailing
Volume86
Issue number1
DOIs
Publication statusPublished - Mar. 2010

Keywords

  • Consumer rebates
  • Pricing
  • Trade promotions

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