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EMAC 2024 Annual


Marketing Mix Effectiveness in a Retail Setting
(A2024-119237)

Published: May 28, 2024

AUTHORS

Els Breugelmans, KU Leuven; Lieve Heyrman, KU Leuven; David de Jong, Vrije Universiteit Amsterdam; Stijn Maesen, Imperial College Business School; Nick Bombaij, University of Amsterdam

ABSTRACT

There is a well-established understanding that marketing mix instruments play a fundamental role in retailing and yield important effects on consumer behavior (Ataman et al., 2010). Successful retailers and manufacturers carefully balance the different instruments and assess which levers to pull to stay competitive in a dynamic retail environment. On the one hand, technological evolutions and changes in shopping patterns have led them to consider new marketing mix instruments, whose effectiveness in driving sales needs to be evaluated. Examples include digital signage (signs and screens that display videos ads and other messages throughout a store visit) and Buy Now Pay Later (BNPL) payment methods (payments with interest-free installments over a relatively short period of time, typically within four to six weeks). On the other hand, many open-ended questions remain about the effectiveness of the popular, well-established instrument of temporary price promotions: practitioners and academics are still in the dark about the heterogenous effectiveness of promotions for certain types of products (e.g., healthy versus unhealthy products), or whether a world without promotions could prove worthwhile. Throughout this session, we cover the effectiveness of new marketing mix instruments implemented in the retail market (digital signage, BNPL payment), and investigate the heterogeneous impact of price promotions (on healthy versus unhealthy products), or an absence thereof. In a first paper, titled “Advertising Effectiveness at the Point of Sale: A Large Scale Study of Digital Signage”, de Jong, Herhausen and Grewal employ an empirics-first approach to investigate whether advertising through digital signage systems at the point of sales in physical stores works and if so, under which conditions it is most effective. Their results reveal that being exposed to an ad at the point of sale increases the purchase probability, but this effect depends on the context (time of the day, weather, product), as well as the content of the advertisement (price promotion, appeal, message). In a second paper, titled “Buy Now Pay Later: Impact of Installment Payments on Customer Purchases”, Maesen and Ang study the impact of BNPL installment payments on retail sales, using both transactional data from a major retailer that introduced NBPL installment payments and four experiments to provide causal evidence for the positive effect of BNPL installment payments on spending and to explain why the effect occurs. In a third paper, titled “Nutritional Quality and Marketing Conduct in the CPG Industry”, Bombaij, van Ewijk, Keller and Guyt aim to investigate whether and to what extent the nutritional quality of a product influences promotion effectiveness, by using 10+ years of weekly store-level scanner data from 100,000+ products across 50+ product categories across 35,000+ stores that include information on sales, prices, and promotions. In a last, fourth paper, titled “Promotions: Pain or Gain? The differential impact of a price promotion ban across brands”, Heyrman, Breugelmans, Kotschedoff and Gielens analyze how the competitive landscape in grocery retailing is altered when all promotions are abandoned. Specifically, they use a difference-in-differences approach to investigate the effect of an all (retailer and category) encompassing price promotion ban on brand shares to assess who benefits from a retail environment without price promotions, and who risks losing it all?