publication . Article . 2007

When do price thresholds matter in retail categories?

Koen Pauwels; Shuba Srinivasan; Philip Hans Franses;
Open Access English
  • Published: 01 Jan 2007
  • Country: Netherlands
Abstract
textabstractMarketing literature has long recognized that brand price elasticity need not be monotonic and symmetric, but has yet to provide generalizable market-level insights on threshold-based price elasticity, asymmetric thresholds, and the sign and magnitude of elasticity transitions. This paper introduces smooth transition regression models to study threshold-based price elasticity of the top 4 brands across 20 fast-moving consumer good categories. Threshold-based price elasticity is found for 76% of all brands: 29% reflect historical benchmark prices, 16% reflect competitive benchmark prices, and 31% reflect both types of benchmarks. The authors demonstra...
Subjects
free text keywords: kinked demand curve, smooth-transition regression models, time-series analysis, asymmetric price thresholds, empirical generalizations, Asymmetric price thresholds, Empirical generalizations, Kinked demand curve, Smooth-transition regression models, Time-series analysis, Price discrimination, Marketing, Limit price, Cross elasticity of demand, Price elasticity of supply, Economics, Mid price, Price elasticity of demand, Wealth elasticity of demand, Price level, Microeconomics
Powered by OpenAIRE Research Graph
Any information missing or wrong?Report an Issue