Sales promotion is an instrument whose effectiveness for shortterm sales is proven (Blattberg and Neslin, 1990). But for the long term, researchers have identified adverse effects without managing to actually determine its impact (Van Heerde et al, 2004). While most investigations analyze the effects of promotions on sales, it is important to consider the global impact, i.e. on the customer portfolio. Although several authors have taken up this issue (Fader and Hardie, 2010; Abe, 2009b), no contribution has integrated the entire portfolio development: customer acquisition, activity of existing customers and churn.
This research, therefore, contributes by establishing a long-term vision of the impact of sales promotions on the value of the customer portfolio (customer equity), not just on sales. We combine explanatory and stochastic approaches via the integration of explanatory variables. The second contribution is the application of these models to fast moving consumer goods, a sector that has thus far been over-looked by existing research
