Title: Misconceptions of sales promotions
Authors : Schlaeger, Daniel
Fuchs, Rainer
Conference details: IABE International Academy of Business & Economics Conference, Orlando, 2013
Issue Date: 2013
License (according to publishing contract) : Licence according to publishing contract
Type of review: Not specified
Language : English
Subjects : Sale; Misconception; Promotion
Subject (DDC) : 658.8: Marketing management
Abstract: Nowadays substantial shares of marketing budgets are rather spent on short-term sales promotions than on long-term advertising measures. For both manufacturers and retailers price promotions have gained huge importance in the competitive battle in the past decades. The opinion is widespread that price promotions if not increase profitability short-term then at least generate long-term benefits. But is this statement tenable? Investigating sales promotions based on the behavioral economic Prospect Theory, the psychological Weber-Fechner Law of perception of changes and the reference price theory this study concludes that consumers perceive price increases back to the initial level after a sales promotion period as higher as price decreases at the beginning of the according period. Furthermore the extensive use of price promotions over time shifts the anchor prices from the initial reference price down to the discounted price. Both conclusions suggest the need for managerial implications how to reduce the described effects and help to achieve long-term profitable growth of manufacturers and retailers in a highly competitive environment. 
Departement: School of Management and Law
Publication type: Conference paper
URI: https://digitalcollection.zhaw.ch/handle/11475/16018
Appears in Collections:Publikationen School of Management and Law

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