Price promotions and popular events

Managers often use popular events, such as the Olympics, to advertise their brands more heavily. But can manufacturers and retailers also capitalize on these events to enhance the response to their price promotions? This study empirically examines whether the sales response to price promotions is stronger or weaker around events than at non-event times, and what factors drive this relative promotion response. Studying 242 brands from 30 CPG categories in the Netherlands over more than four years, the authors find that a price promotion offered around a popular event often generates a stronger sales response than the same promotion at non-event times, with a price promotion elasticity that is 9.3% larger, on average, during events. Still, the variance in relative promotion response across brands and events is high, and the authors identify several drivers that managers should consider before shifting promotions towards event times. Currently, managers often do not take these drivers into account. This study provides guidelines how to improve promotional timing decisions in relation to popular events.