Skip to main content

Estimating the Impact of Displays and Other Merchandising Support on Retail Brand Sales: Partial Pooling with Examples

Abstract

With the advent of scanning data, methodological issues have arisen, in particular as they relate to the reliability of parameter estimates in regression models. This study deals with the reliability of the coefficients of promotion-type dummy variables (e.g., display, leaflet, bonus pack,). Due to a lack of passthrough of trade deals to the end consumer, those coefficients can be typically unidentified or unstable when estimated at the store level and even at the chain level. Assuming that the individual-level coefficients of the dummy variables are draws from a common but arbitrary distribution, the authors suggest to "pool" the data for those variables (partial "pooling") across stores and across chains. They show with three real-life examples the increased reliability (with a correct sign) of the "pooled" coefficients as compared with the store-level or chain-level individual coefficients.

This is a preview of subscription content, access via your institution.

References

  1. Blattberg, Robert C., Richard Briesch, and Edward J. Fox. (1995). “How Promotions Work,” Marketing Science 14, G122–32.

    Google Scholar 

  2. _____ and Edward I. George. (1991). “Shrinkage Estimation of Price and Promotional Elasticities: Seemingly Unrelated Equations,” Journal of the American Statistical Association 86 (June), 304–15.

  3. _____ and Scott A. Neslin. (1990). Sales Promotion: Concepts, Methods and Strategies, Englewood Cliffs, NJ: Prentice-Hall.

    Google Scholar 

  4. _____ and Kenneth J. Wisniewski. (1987). “How Retail Price PromotionsWork: Empirical Results,” Marketing Working Paper No. 42, University of Chicago.

  5. _____ and ______. (1988). “Issues in Modeling Store-Level Scanner Data,” Marketing Working Paper No. 43, University of Chicago.

  6. Chevalier, Michel and Ronald C. Curhan. (1976). “Retail Promotions as a Function of Trade Promotions: A Descriptive Analysis,” Sloan Management Review (Fall), 19–32.

  7. Halvorsen, Robert and Raymond Palmquist. (1980). “The Interpretation of Dummy Variables in Semilogarithmic Equations,” American Economic Review 70 (June), 474–5.

  8. Hill, R. Carter and Philip Cartwright. (1994). “The Statistical Properties of the Equity Estimator,” Journal of Business and Economic Statistics 12 (April), 141–53.

    Google Scholar 

  9. Kennedy, Peter E. (1981). “Estimation With Correctly Interpreted Dummy Variables in Semilogarithmic Equations,” American Economic Review 71 (September), 801.

  10. Kippers, Jeanine, Philip Hans Franses and Albert C. Bemmaor. (1997). “On Pooling Scanning Data,” Rotterdam Institute for Business Economic Studies Report 9714/M, Erasmus University, The Netherlands.

    Google Scholar 

  11. Montgomery, Alan L. (1997). “Creating Micro-Marketing Pricing Strategies Using Supermarket Scanner Data,” Marketing Science 16, 315–37.

    Google Scholar 

  12. Montgomery, David B. (1983). “Trade Response to Promotion: A Preliminary Report,” in F. Zufryden, ed. Proceedings of the Marketing Science Conference, Providence, RI: TIMS.

    Google Scholar 

  13. Robert, Christian P. (1994). The Bayesian Choice, Berlin: Springer.

    Google Scholar 

  14. Tourtoulou, A.-S. (1995a). “Promotion des Ventes: Analyse des Données de Scanner de la Société IRI-SECODIP,” Case Study Written Under the Supervision of Gilles Laurent, HEC, Jouy-en Josas.

  15. _____. (1995b). “National Brands Versus Store Brands: The Impact of Displays on the Pattern of Competition Between Two Groups of Brands,” Working Paper Presented at the Eighth EMAC Colloquium for Doctoral Students, ESSEC, Cergy-Pontoise.

    Google Scholar 

  16. Volle, Pierre. (1996). “Impact du Marketing Promotionnel des Distributeurs sur le Choix du Point de Vente et Rôle Modérateur de Variables Individuelles,” unpublished doctoral dissertation, University of Paris-IX Dauphine.

    Google Scholar 

Download references

Author information

Affiliations

Authors

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Bemmaor, A.C., Franses, P.H. & Kippers, J. Estimating the Impact of Displays and Other Merchandising Support on Retail Brand Sales: Partial Pooling with Examples. Marketing Letters 10, 87–101 (1999). https://doi.org/10.1023/A:1008043325970

Download citation

  • Promotion
  • regression
  • scanning data