The battle for health and beauty: What drives supermarket and drugstore category-promotion lifts?

Research output: Contribution to journalArticleScientificpeer-review

Abstract

This paper studies promotion-induced competition between supermarkets and drugstores, resulting from increased channel blurring and category overlap. It documents the relative impact of price cuts and feature ads at the two channels, and establishes substantive factors underlying their differences in promotion effectiveness. Estimates from a household-level model of category purchase incidence, store choice, and quantity, in five large health and beauty-care categories, show that the promotion effects are much larger for supermarket than drugstore chains. Though this partly follows from asymmetries in the channels’ drawing power and from differences in in store response, a key driver is the accessibility of promotional price information: because they are visited more frequently than drugstores and their store flyers are read more often, supermarkets gain relatively more from price cuts and feature ads than drug chains. Managerial implications are discussed.
Original languageEnglish
Pages (from-to)557-577
JournalInternational Journal of Research in Marketing
Volume33
Issue number3
Early online date25 Sep 2015
DOIs
Publication statusPublished - Sep 2016

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Supermarkets
Health
Purchase incidence
Drugs
Household
Store choice
Asymmetry
Factors
Accessibility

Keywords

  • promotion competition
  • channel blurring
  • supermarkets
  • drugstores
  • store flyers
  • feature ads

Cite this

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title = "The battle for health and beauty: What drives supermarket and drugstore category-promotion lifts?",
abstract = "This paper studies promotion-induced competition between supermarkets and drugstores, resulting from increased channel blurring and category overlap. It documents the relative impact of price cuts and feature ads at the two channels, and establishes substantive factors underlying their differences in promotion effectiveness. Estimates from a household-level model of category purchase incidence, store choice, and quantity, in five large health and beauty-care categories, show that the promotion effects are much larger for supermarket than drugstore chains. Though this partly follows from asymmetries in the channels’ drawing power and from differences in in store response, a key driver is the accessibility of promotional price information: because they are visited more frequently than drugstores and their store flyers are read more often, supermarkets gain relatively more from price cuts and feature ads than drug chains. Managerial implications are discussed.",
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The battle for health and beauty : What drives supermarket and drugstore category-promotion lifts? / van Lin, Arjen; Gijsbrechts, Els.

In: International Journal of Research in Marketing, Vol. 33, No. 3, 09.2016, p. 557-577.

Research output: Contribution to journalArticleScientificpeer-review

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AB - This paper studies promotion-induced competition between supermarkets and drugstores, resulting from increased channel blurring and category overlap. It documents the relative impact of price cuts and feature ads at the two channels, and establishes substantive factors underlying their differences in promotion effectiveness. Estimates from a household-level model of category purchase incidence, store choice, and quantity, in five large health and beauty-care categories, show that the promotion effects are much larger for supermarket than drugstore chains. Though this partly follows from asymmetries in the channels’ drawing power and from differences in in store response, a key driver is the accessibility of promotional price information: because they are visited more frequently than drugstores and their store flyers are read more often, supermarkets gain relatively more from price cuts and feature ads than drug chains. Managerial implications are discussed.

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