The Effect of Promotion on Consumption: Buying More and Consuming It Faster,”

Abstract This paper empirically demonstrates the existence of flexible consumption rates in packaged goods products, how this phenomenon can be modeled, and its importance in assessing the effectiveness of sales promotion. We specify an incidence, choice and quantity model, where category consumption varies with the level of household inventory. We use two different functions to relate consumption rates to household inventory, and estimate the models using scanner panel data from two product categories --yogurt and ketchup. Both provide a significantly better fit than a conventional model, which assumes a constant daily usage rate. They also have strong discriminant validity --yogurt consumption is found to be much more flexible with respect to inventory than ketchup consumption. We use a Monte Carlo simulation to decompose the long-term impact of promotion into brand switching and consumption effects, and conclude with the implications of our findings for researchers and managers

Editorial: Who Is Afraid to Give Freedom of Speech to Marketing Folks?

Despite the invaluable contribution of marketing folks (e.g., making markets work), they fail to enjoy the same freedom of speech as others. This fact is particularly egregious because unlike other groups that can use threats, force, or coercion, marketing folks rely only on speech. Although the U.S. Constitution never mentions commercial speech, the courts invented the concept to censor marketing folks. The cloudy rational was that consumers need special protection from marketing folks (e.g., advertising). Naturally, censorship leads to abuse. Powerful incumbents use censorship covertly against new entrants. Politicians use censorship surreptitiously to promote their own political goals. If consumers need protection, it is certainly from the misleading statements of those with freedom of speech—politicians, attorneys, the news media, and the censors.freedom of speech, commercial speech, censorship, advertising, marketing, regulation, branding