File(s) under permanent embargo
Quantitatively evaluating the effects of price promotions using data mining
chapterposted on 2013-01-01, 00:00 authored by Min Gan, Honghua Dai
Price promotions (also called discount promotions), i.e. short-term temporary price reductions for selected items (Hermann 1989), are frequently used in sales promotions. The main objective of price promotions is to boost sales and increase profits. Quantitative evaluation of the effects of price promotions (QEEPP) is essential and important for sales managers to analyse historical price promotions and informative for devising more effective promotional strategies in the future. However, most previous studies only provide insights into the effects of discount promotions from some specific prospectives, and no approaches have been proposed for comprehensive evaluation of the effects of discount promotions. For example, Hinkle  discovered that price promotions in the off-season are more favourable, and the effects of price promotions are stronger for new products. Peckham  found that price promotions have no impact on long-term trend. Blattberg et al.  identified that different segments respond to price promotions in different ways. Rockney  discovered three basic types of effects: effects on discounted items, effects on substitutes and effects on complementary items.