The suite of analysis of market response models such as for promotions, includes:
- Discount Elasticity: Price elasticity (discount elasticity) is a measure of the
responsiveness of sales quantity demanded to a (temporary) change in price.
- Cannibalization: When a product drops price, increases advertising, improves
product quality or expands distribution, it cannibalizes competing products. Cross elasticity of
demand is the measure for these competitive effects.
- Displays and Cooperative Advertisement: The impact of
displays, co-op advertising and seasonal effects is usually presented as sales lift, the percentage increase in sales volume
due to the incidence of the marketing effort.
- Sales Decomposition and Due-To Analysis:
Market Mix Models can decompose sales into the baseline and each of the factors driving sales.
- What-if Analysis: The output of a market model is a set of equations that spell
out the relationship between sales and the variables of the market mix. These equations can predict
what will happen if changes are made to the mix variables.
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