TY - JOUR
T1 - The Dilemma of Pull and Push-Price Promotions
AU - Martín-Herrán, Guiomar
AU - Sigué, Simon Pierre
AU - Zaccour, Georges
N1 - Funding Information:
Research supported by NSERC Canada and Athabasca University. The first author's research was partly supported by MICINN and JCYL under projects ECO2008-01551/ECON and VA045A06, co-financed by FEDER funds.
PY - 2010/3
Y1 - 2010/3
N2 - 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.
AB - 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.
KW - Consumer rebates
KW - Pricing
KW - Trade promotions
UR - http://www.scopus.com/inward/record.url?scp=77949488469&partnerID=8YFLogxK
U2 - 10.1016/j.jretai.2009.12.001
DO - 10.1016/j.jretai.2009.12.001
M3 - Journal Article
AN - SCOPUS:77949488469
SN - 0022-4359
VL - 86
SP - 51
EP - 68
JO - Journal of Retailing
JF - Journal of Retailing
IS - 1
ER -