Are Brand Promotions Just a Zero‐Sum Game – or Can They Increase the Size of the Pie?

Abstract

Packaged goods companies now “spend” more on promotions – special offers, in‐store displays and the like – than on media advertising. Until recently, it was generally believed that while promotions benefit individual brands, they usually do not result in an increase in overall category sales. Recent research, however, suggests that promotions can increase total category sales in a wide range of circumstances. This article starts by discussing the relationship between brand promotion and category sales, outlines research to date, and then describes the author's own most recent research on this topic. It concludes by pointing to implications for managers.