Reference-based transitions in short-run price elasticity

Marketing literature has long recognized that price response need not be monotonic and symmetric, but has yet to provide generalizable market-level insights on reference price type, asymmetric thresholds and sign and magnitude of elasticity transitions. In this paper, we introduce smooth transition models to study reference-based price response across 25 fast moving consumer good categories. Our application to 100 brands shows that 77% demonstrate reference-based price response, of which 36% reflects historical reference prices, 31% reflects competitive reference prices, and 33% reflects both types of reference prices. This reference-based price response shows asymmetry for gains versus losses on three levels: the threshold size, the sign and the magnitude of the elasticity difference. For historical reference prices, the threshold size is larger for gains (20%) than for losses (12%) and the assimilation/contrast effects for gains (-0.41) are smaller than the saturation effects for losses (0.81). For competitive reference prices, the threshold size is smaller for gains (3%) than for losses (16%), and the saturation effects are larger for gains (0.33) than for losses (0.15). These results are moderated by both brand and category characteristics that affect reference price accessibility and diagnosticity. Historical reference prices more often play a role for national brands, for planned purchases and in inexpensive categories with low price volatility and high purchase frequency. When price discounting, high-share brands face larger latitudes of acceptance. When raising prices, saturation effects set in later for brands with high price volatility and for categories with high price spread and for planned purchases. As for competitive reference prices, saturation effects set in later for expensive brands with high price volatility and in categories with lower price volatility, higher price spread and higher concentration. Sales, revenue and margin implications are illustrated for price changes typically observed in consumer markets.asymmetric price thresholds;competitive versus historical reference prices;empirical generalizations;kinked demand curve;saturation versus assimilation/contrast effects;smooth-transition regression models

Do promotions benefit manufacturers, retailers or both ?.

While there has been strong managerial and academic interest in price promotions, much of the focus has been on the impact of such promotions on category sales, brand sales and brand choice. In contrast, little is known about the long-run impact of price promotions on manufacturer and retailer revenues and margins, although both marketing researchers and practitioners consider this a priority area (Marketing Science Institute 2000). Do promotions generate additional revenue and for whom? Which brand, category and market conditions influence promotional benefits and their allocation across manufacturers and retailers?To answer these questions, we conduct a large-scale econometric investigation of the effects of price promotions on manufacturer revenues, retailer revenues and margins. This investigation proceeds in two steps. First, persistence modeling reveals the short- and long-run effects of price promotions on these performance measures. Second, weighted least-squares analysis shows to what extent brand and promotion policies, as well as market-structure and category characteristics, influence promotional impact. A first major finding of our paper is that price promotions do not have permanent monetary effects for either party. Second, in terms of the cumulative, over-time, promotional impact on their revenues, we find significant differences between the manufacturer and retailer. Price promotions have a predominantly positive impact on manufacturer revenues, but their effects on retailer revenues are mixed. Retailer (category) margins, in contrast, are typically reduced by price promotions. Even when accounting for cross-category and store-traffic effects, we still find evidence that price promotions are typically not beneficial to the retailer. Third, our results indicate that manufacturer revenue elasticities are higher for promotions of small-share brands and for frequently promoted brands. Moreover, they are higher for storable products and lower in categories with a high degree of brand proliferation. Retailer revenue elasticities, in turn, are higher for brands with frequent and shallow promotions, for storable products and in categories with a low extent of brand proliferation. As such, from a revenue-generating point of view, manufacturer and retailer interests are often aligned in terms of which categories and brands to promote. Finally, retailer margin elasticities are higher for promotions of small-share brands and for brands with infrequent and shallow promotions. Thus, the implications with respect to the frequency of promotions depend upon the performance measure the retailer chooses to emphasize. The paper discusses the managerial implications of our results for both manufacturers and retailers and suggests various avenues for future research.

Do Promotions Benefit Manufacturers, Retailers or Both?

While there has been strong managerial and academic interest in price promotions, much of the focus has been on the impact of such promotions on category sales, brand sales and brand choice. In contrast, little is known about the long-run impact of price promotions on manufacturer and retailer revenues and margins, although both marketing researchers and practitioners consider this a priority area (Marketing Science Institute 2000). Do promotions generate additional revenue and for whom? Which brand, category and market conditions influence promotional benefits and their allocation across manufacturers and retailers?To answer these questions, we conduct a large-scale econometric investigation of the effects of price promotions on manufacturer revenues, retailer revenues and margins. This investigation proceeds in two steps. First, persistence modeling reveals the short- and long-run effects of price promotions on these performance measures. Second, weighted least-squares analysis shows to what extent brand and promotion policies, as well as market-structure and category characteristics, influence promotional impact. A first major finding of our paper is that price promotions do not have permanent monetary effects for either party. Second, in terms of the cumulative, over-time, promotional impact on their revenues, we find significant differences between the manufacturer and retailer. Price promotions have a predominantly positive impact on manufacturer revenues, but their effects on retailer revenues are mixed. Retailer (category) margins, in contrast, are typically reduced by price promotions. Even when accounting for cross-category and store-traffic effects, we still find evidence that price promotions are typically not beneficial to the retailer. Third, our results indicate that manufacturer revenue elasticities are higher for promotions of small-share brands and for frequently promoted brands. Moreover, they are higher for storable products and lower in categories with a high degree of brand proliferation. Retailer revenue elasticities, in turn, are higher for brands with frequent and shallow promotions, for storable products and in categories with a low extent of brand proliferation. As such, from a revenue-generating point of view, manufacturer and retailer interests are often aligned in terms of which categories and brands to promote. Finally, retailer margin elasticities are higher for promotions of small-share brands and for brands with infrequent and shallow promotions. Thus, the implications with respect to the frequency of promotions depend upon the performance measure the retailer chooses to emphasize. The paper discusses the managerial implications of our results for both manufacturers and retailers and suggests various avenues for future research.empirical generalizations;category management;long-term profitability;sales promotions;vector-autoregressive models

Information system support in construction industry with semantic web technologies and/or autonomous reasoning agents

Information technology support is hard to find for the early design phases of the architectural design process. Many of the existing issues in such design decision support tools appear to be caused by a mismatch between the ways in which designers think and the ways in which information systems aim to give support. We therefore started an investigation of existing theories of design thinking, compared to the way in which design decision support systems provide information to the designer. We identify two main strategies towards information system support in the early design phase: (1) applications for making design try-outs, and (2) applications as autonomous reasoning agents. We outline preview implementations for both approaches and indicate to what extent these strategies can be used to improve information system support for the architectural designer

AI EDAM special issue: advances in implemented shape grammars: solutions and applications

This paper introduces the special issue “Advances in Implemented Shape Grammars: Solutions and Applications” and frames the topic of computer implementations of shape grammars, both with a theoretical and an applied focus. This special issue focuses on the current state of the art regarding computer implementations of shape grammars and brings a discussion about how those systems can evolve in the coming years so that they can be used in real life design scenarios. This paper presents a brief state of the art of shape grammars implementation and an overview of the papers included in the current special issue categorized under technical design, interpreters and interface design, and uses cases. The paper ends with a comprehensive outlook into the future of shape grammars implementations.info:eu-repo/semantics/acceptedVersio

Reference-based transitions in short-run price elasticity

Marketing literature has long recognized that price response need not be monotonic and symmetric, but has yet to provide generalizable market-level insights on reference price type, asymmetric thresholds and sign and magnitude of elasticity transitions. In this paper, we introduce smooth transition models to study reference-based price response across 25 fast moving consumer good categories. Our application to 100 brands shows that 77% demonstrate reference-based price response, of which 36% reflects historical reference prices, 31% reflects competitive reference prices, and 33% reflects both types of reference prices. This reference-based price response shows asymmetry for gains versus losses on three levels: the threshold size, the sign and the magnitude of the elasticity difference. For historical reference prices, the threshold size is larger for gains (20%) than for losses (12%) and the assimilation/contrast effects for gains (-0.41) are smaller than the saturation effects for losses (0.81). For competitive reference prices, the threshold size is smaller for gains (3%) than for losses (16%), and the saturation effects are larger for gains (0.33) than for losses (0.15). These results are moderated by both brand and category characteristics that affect reference price accessibility and diagnosticity. Historical reference prices more often play a role for national brands, for planned purchases and in inexpensive categories with low price volatility and high purchase frequency. When price discounting, high-share brands face larger latitudes of acceptance. When raising prices, saturation effects set in later for brands with high price volatility and for categories with high price spread and for planned purchases. As for competitive reference prices, saturation effects set in later for expensive brands with high price volatility and in categories with lower price volatility, higher price spread and higher concentration. Sales, revenue and margin implications are illustrated for price changes typically observed in consumer markets

Cranial osteology of Hypoptophis (Aparallactinae : Atractaspididae: Caenophidia), with a discussion on the evolution of its fossorial adaptations

Fossoriality evolved early in snakes, and has left its signature on the cranial morphology of many extinct Mesozoic and early Caenozoic forms. Knowledge of the cranial osteology of extant snakes is indispensable for associating the crania of extinct lineages with a particular mode of life; this applies to fossorial taxa as well. In the present work, we provide a detailed description of the cranium of Hypoptophis wilsonii, a member of the subfamily Aparallactinae, using micro-computed tomography (CT). This is also the first thorough micro-CT-based description of any snake assigned to this African subfamily of predominantly mildly venomous, fossorial, and elusive snakes. The cranium of Hypoptophis is adapted for a fossorial lifestyle, with increased consolidation of skull bones. Aparallactines show a tendency toward reduction of maxillary length by bringing the rear fangs forward. This development attains its pinnacle in the sister subfamily Atractaspidinae, in which the rear fang has become the "front fang" by a loss of the part of the maxilla lying ahead of the fang. These dentitional changes likely reflect adaptation to subdue prey in snug burrows. An endocast of the inner ear of Hypoptophis shows that this genus has the inner ear typical of fossorial snakes, with a large, globular sacculus. A phylogenetic analysis based on morphology recovers Hypoptophis as a sister taxon to Aparallactus. We also discuss the implications of our observations on the burrowing origin hypothesis of snakes.Peer reviewe