Competitive reactions and the cross-sales effects of advertising and promotion.

Abstract: How do competitors react to each other's price-promotion and advertising actions? How do these reactions influence the net sales impact we observe? We answer these questions by performing a large-scale empirical study of the short-run and long-run reactions to promotion and advertising shocks in over 400 consumer product categories, over a four-year time span.Competitive reaction can be passive, accommodating or retaliatory. We first develop a series of expectations on the type and intensity of reaction behavior, and on the moderators of this behavior. These expectations are assessed in two ways. First, vector-autoregressive models quantify the short-run and long-run effect of a promotion or advertising action on competitive sales and on competitive reactions. By cataloging the numerical results, we are able to formulate empirical generalizations of reaction behavior ('how do they react?'). Second, we estimate structural models of reaction intensity, in function of various market and competitive characteristics ('what are the drivers of reaction?'). Finally, by comparing our findings on reaction behavior with those on promotion and advertising effectiveness, we are able to evaluate competitive reaction behavior ('are they reacting as they should?').A major finding is that competitive reaction is predominantly passive. When it is present, it is usually retaliatory in the same instrument, but accommodating or retaliatory in a different instrument. There are very few long-run consequences of any type of reaction behavior. We also report on several moderating effects that are in line with expectations, and that support the presence of a certain amount of rationality in competitive reaction behavior.The net impact of the over-time effects of advertising and price-promotion attacks, competitive reactions and the sales effectiveness of each, is that competitors' sales are generally not affected, and especially not in the long run. We weigh the evidence that this sales neutrality is 'natural' (i.e., due to the nature of consumer response) versus 'managed' (i.e., due to the vigilance and effectiveness of competitors), and conclude in favor of the former.

Sales promotions and channel coordination

Consumer sales promotions are usually the result of the decisions of two marketing channel parties, the manufacturer and the retailer. In making these decisions, each party normally follows its own interest: i.e. maximizes its own profit. Unfortunately, this results in a suboptimal outcome for the channel as a whole. Independent profit maximization by channel parties leads to a lack of channel coordination with the implication of leaving money on the table. This may well contribute to the notoriously low profitability of sales promotions. This paper first shows analytically why the suboptimality occurs, and then presents an empirical demonstration, using a unique dataset from an Efficient Consumer Response (ECR) project; ECR is a movement in which parties work together to optimize the distribution channel). In this dataset, actual profit is only a small fraction of potential profit, implying that there is a large degree of suboptimality. It is important that (1) channel parties are aware of this suboptimality; and (2) that they have tools to deal with it. Solutions to the channel coordination problem should ensure that the goals of the individual channel parties are aligned with the goals of the channel as a whole. The paper proposes one particular agreement for this purpose, called proportional discount sharing. Application to the ECR data shows a win-win result for both the manufacturer and the retailer. Recognition of the channel coordination problem by the manufacturer and the retailer is the necessary starting point for agreeing on a way of solving it in a win-win fashion

RsmW, Pseudomonas aeruginosa small non-coding RsmA-binding RNA upregulated in biofilm versus planktonic growth conditions

BACKGROUND: Biofilm development, specifically the fundamentally adaptive switch from acute to chronic infection phenotypes, requires global regulators and small non-coding regulatory RNAs (sRNAs). This work utilized RNA-sequencing (RNA-seq) to detect sRNAs differentially expressed in Pseudomonas aeruginosa biofilm versus planktonic state. RESULTS: A computational algorithm was devised to detect and categorize sRNAs into 5 types: intergenic, intragenic, 5′-UTR, 3′-UTR, and antisense. Here we report a novel RsmY/RsmZ-type sRNA, termed RsmW, in P. aeruginosa up-transcribed in biofilm versus planktonic growth. RNA-Seq, 5’-RACE and Mfold predictions suggest RsmW has a secondary structure with 3 of 7 GGA motifs located on outer stem loops. Northern blot revealed two RsmW binding bands of 400 and 120 bases, suggesting RsmW is derived from the 3’-UTR of the upstream hypothetical gene, PA4570. RsmW expression is elevated in late stationary versus logarithmic growth phase in PB minimal media, at higher temperatures (37°C versus 28°C), and in both gacA and rhlR transposon mutants versus wild-type. RsmW specifically binds to RsmA protein in vitro and restores biofilm production and reduces swarming in an rsmY/rsmZ double mutant. PA4570 weakly resembles an RsmA/RsmN homolog having 49% and 51% similarity, and 16% and 17% identity to RsmA and RsmN amino acid sequences, respectively. PA4570 was unable to restore biofilm and swarming phenotypes in ΔrsmA deficient strains. CONCLUSION: Collectively, our study reveals an interesting theme regarding another sRNA regulator of the Rsm system and further unravels the complexities regulating adaptive responses for Pseudomonas species

Nutrient Availability as a Mechanism for Selection of Antibiotic Tolerant Pseudomonas aeruginosa within the CF Airway

Microbes are subjected to selective pressures during chronic infections of host tissues. Pseudomonas aeruginosa isolates with inactivating mutations in the transcriptional regulator LasR are frequently selected within the airways of people with cystic fibrosis (CF), and infection with these isolates has been associated with poorer lung function outcomes. The mechanisms underlying selection for lasR mutation are unknown but have been postulated to involve the abundance of specific nutrients within CF airway secretions. We characterized lasR mutant P. aeruginosa strains and isolates to identify conditions found in CF airways that select for growth of lasR mutants. Relative to wild-type P. aeruginosa, lasR mutants exhibited a dramatic metabolic shift, including decreased oxygen consumption and increased nitrate utilization, that is predicted to confer increased fitness within the nutrient conditions known to occur in CF airways. This metabolic shift exhibited by lasR mutants conferred resistance to two antibiotics used frequently in CF care, tobramycin and ciprofloxacin, even under oxygen-dependent growth conditions, yet selection for these mutants in vitro did not require preceding antibiotic exposure. The selection for loss of LasR function in vivo, and the associated adverse clinical impact, could be due to increased bacterial growth in the oxygen-poor and nitrate-rich CF airway, and from the resulting resistance to therapeutic antibiotics. The metabolic similarities among diverse chronic infection-adapted bacteria suggest a common mode of adaptation and antibiotic resistance during chronic infection that is primarily driven by bacterial metabolic shifts in response to nutrient availability within host tissues

Competitive reactions and the cross-sales effects of advertising and promotion

Abstract: How do competitors react to each other's price-promotion and advertising actions? How do these reactions influence the net sales impact we observe? We answer these questions by performing a large-scale empirical study of the short-run and long-run reactions to promotion and advertising shocks in over 400 consumer product categories, over a four-year time span.Competitive reaction can be passive, accommodating or retaliatory. We first develop a series of expectations on the type and intensity of reaction behavior, and on the moderators of this behavior. These expectations are assessed in two ways. First, vector-autoregressive models quantify the short-run and long-run effect of a promotion or advertising action on competitive sales and on competitive reactions. By cataloging the numerical results, we are able to formulate empirical generalizations of reaction behavior ('how do they react?'). Second, we estimate structural models of reaction intensity, in function of various market and competitive characteristics ('what are the drivers of reaction?'). Finally, by comparing our findings on reaction behavior with those on promotion and advertising effectiveness, we are able to evaluate competitive reaction behavior ('are they reacting as they should?').A major finding is that competitive reaction is predominantly passive. When it is present, it is usually retaliatory in the same instrument, but accommodating or retaliatory in a different instrument. There are very few long-run consequences of any type of reaction behavior. We also report on several moderating effects that are in line with expectations, and that support the presence of a certain amount of rationality in competitive reaction behavior.The net impact of the over-time effects of advertising and price-promotion attacks, competitive reactions and the sales effectiveness of each, is that competitors' sales are generally not affected, and especially not in the long run. We weigh the evidence that this sales neutrality is 'natural' (i.e., due to the nature of consumer response) versus 'managed' (i.e., due to the vigilance and effectiveness of competitors), and conclude in favor of the former.status: publishe