Hot Tuna? Not After Price Cuts

Price promotions may not be the best marketing strategy after all. In Decomposing Promotional Effects With a Dynamic Structural Model of Flexible Consumption, marketing professors from the University of Texas-Dallas and Washington University in St. Louis used A. C. Nielsen data to study how 1,000 households in South Dakota purchased canned tuna over a two-year period. The study, which will appear in the Journal of Marketing Research, showed that some consumers switched tuna brands to take advantage of sales, while others simply stocked up on their favorite brand when its price fell. Researchers also found that while consumers bought more tuna at a lower price, the stockpiling effect among brand loyalists hurt future sales of full-price tuna.