Marketing Metrics, 4th Edition

9

Promotion

Introduction

Key concepts covered in this chapter:

Baseline Sales, Incremental Sales, and Promotional Lift

Redemption Rates for Coupons/Rebates

Percent Sales on Deal, Percent Time on Deal, and Average Deal Depth

Pass-Through and Price Waterfall

Price promotions can be divided into two broad categories:

• Temporary price reductions

• Permanent features of pricing systems¹

With both of these types of price promotions, firms seek to change the behavior of consumers and trade customers in ways that increase sales and profits over time, although a promotion’s short-term effect on profits will often be negative. There are multiple routes to sales and profit growth, and there are many potential reasons for offering price promotions. Such ...