The proper interpretation of sales promotion effects: supplement elasticities with absolute sales effects

摘要

Sales promotions such as temporary price reductions are frequently used by managers to stimulate sales in the short run. Marketing academics and practitioners tend to rely on price elasticities to summarize sales promotion effects. Although elasticities have some attractive benefits such as the invariance to measurement units, they have led to three misinterpretations in the marketing literature, as described in this paper. The proper theoretical and managerial interpretation of sales promotion effects is obtained by expressing effects in terms of absolute sales.