• An Empirically Derived Taxonomy of Retailer Pricing and Promotion Strategies

    Bolton_Shankar_JR_2003

    by Ruth N. Bolton and Venkatesh Shankar

    This article was published in the Journal of Retailing, 79 (2003), 213-224.

    Most research categorizes grocery retailers as following either an EDLP or a HiLo pricing strategy at a store or chain level, whereas this paper studies retailer pricing and promotions at a brand-store level. It empirically examines 1,364 brand-store combinations from 17 chains, 212 stores and six categories of consumer package goods in five U.S. markets.  Retailer pricing and promotion strategies are found to be based on combinations of four underlying dimensions:  relative price, price variation, deal intensity and deal support.  At the brand-store level, retailers practice five pricing strategies, labeled exclusive, moderately promotional, HiLo, EDLP, and aggressive pricing.  Surprisingly, the most prevalent pricing strategy is characterized by average relative brand price, low price variation, medium deal intensity, and medium deal support.  The findings provide some initial benchmarks and suggest that retailers should closely monitor their competitors’ price decisions at the brand level.

  • Communication and Promotion Decisions in Retailing: A Review and Directions for Future Research

    Ailawadi…Shankar JR 2009

    by Kusum Ailawadi, J. P. Beauchamp, Naveen Donthu, Dinesh Gauri, and Venkatesh Shankar

    Communication and promotion decisions are a fundamental part of retailer customer experience management strategy. In this review paper, we address two key questions from a retailer’s perspective: (1) what have we learned from prior research about promotion, advertising, and other forms of communication and (2) what major issues should future research in this area address. In addressing these questions, we propose and follow a framework that captures the interrelationships among manufacturer and retailer communication and promotion decisions and retailer performance. We examine these questions under four major topics: determination and allocation of promotion budget, trade promotions, consumer promotions and communication and promotion through the new media. Our review offers several useful insights and identifies many fruitful topics and questions for future research.

    Keywords: Communication; Promotion; Advertising; New media: Resource allocation; Trade promotion; Consumer promotion; Accounting; Legal issues.