The rational effect of price promotions on sales and consumption

Article Abstract:

The rational effect of price variation on sales and consumption given uncertainty in the market is modeled. An optimal ordering policy is developed wherein a consumer's purchases and consumption per period depends on the good's observed price, future price distribution, and inventory nature. The model is an extension of previous normative inventory control frameworks to the situation wherein consumption per period is an explicit decision variable and prices follow a first-order stochastic process. The model describes how price promotion correlations affect the simultaneous relationship between, purchase, consumption and price. The model indicates that consumption and the size of existing inventories increase rationally together, while sales sensitvity to price is greater than consumption sensitivity to price. The latter differentialis inversely related to thre temporal correlation and long-term relative frequency of price deals.

Models, Consumption (Economics), Inventory control

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Consumer choice

Article Abstract:

The trend in marketing has moved away from mass-marketing towards a customized approach that focuses on particular individuals. This marketing strategy shift is part of the move away from the commonly held view that customers are homogeneous groups. As part of the process, the role of advertising in relation to mass-marketing was also evaluated. Research conducted by T. Ambler and D. Vakratsas suggest advertising affects brand equity, but not necessarily sales. Retailing strategies that promote the concepts of 'one stop shopping' and 'under one roof' could actually backfire by overwhelming customers with choices, making decision-making difficult. To control the shopping experience, retailers must present information to shoppers in such a way that they are will be able to learn the key attributes of a product and the alternatives without being overwhelmed.

Analysis, Marketing research, Market research, Shopping

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Store choice and shopping behavior: how price format works

Article Abstract:

This article examines the pricing strategies of retail stores, focusing on how different pricing methods influence consumer behavior. Topics addressed include 'every day low price' and 'promotional pricing' strategies, models of perceived shopping utility, market segmentation, and online shopping.

United States, Consumer Behavior, Statistical Data Included, Management, Retail industry, Retail trade, Marketing, Online shopping, Market segmentation

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