Topic: Effects of Channel Power on Trade Promotion Budget and Allocation: A Market Experimental Analysis
Speaker: Vithala R. Rao, (website: //www.johnson.cornell.edu/faculty/profiles/Rao/)
Deane W. Malott ,Professor of Management and Professor of Marketing and Quantitative Methods
Johnson Graduate School of Management ,Cornell University
Time: 1:30 -3:00 pm. May 20, 2009
Location: Room 111, New Building of GSM,Peking University
Abstract:
We design a market experiment to examine the impact of channel power on trade promotion
budget and its allocation. Our experimental results show that a manufacturer with higher channel
power offers a smaller percentage trade promotion budget and decreases allocation to discount-based
promotions such as off-invoices. Conversely, a retailer with higher channel power tends to
receive larger trade promotion budgets and to increase allocation to discount-based promotions.
We validate these findings with econometric analysis of industry data. Overall, results suggest
that market experiments can shed light on complex negotiations in the distribution channel for
which industry data are often hard to obtain. We discuss implications of our results for managers
and policy makers.
Welcome to attend!
