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The Power of Before and After

How the Dirichlet Can Analyze The Sales Impact of a Promotional Activity

Jim McCabe, Philip Stern, Scott G. Dacko
DOI: 10.2501/JAR-52-2-214-224 Published 1 June 2012
Jim McCabe
ABB, Daresbury, UK,
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  • For correspondence: jim.mccabe@gb.abb.com
Philip Stern
Loughborough University and Ehrenberg-Bass Institute, University of South Australia,
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  • For correspondence: p.stern@lboro.ac.uk
Scott G. Dacko
Warwick Business School,
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  • For correspondence: scott.dacko@wbs.ac.uk
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ABSTRACT

The Dirichlet is a well-established theoretical model that describes and predicts patterns of purchasing behavior in stationary markets. This paper uses data from a highly nonstationary market to demonstrate that the Dirichlet norms also provide a baseline to interpret change in purchasing behavior—in particular, change wrought by sustained promotional activity. The empirical analysis of industrial purchasing data describes how one supplier more than doubled its share of the market. This share increase was achieved by, first, securing a higher share of the category purchases made by heavy buyers (increasing purchase frequency) before adopting a more typical growth strategy of attracting more buyers (increasing penetration).

  • © Copyright 2012 The ARF. All rights reserved.

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Vol 52 Issue 2

Journal of Advertising Research: 52 (2)
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The Power of Before and After
Jim McCabe, Philip Stern, Scott G. Dacko
Journal of Advertising Research Jun 2012, 52 (2) 214-224; DOI: 10.2501/JAR-52-2-214-224

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The Power of Before and After
Jim McCabe, Philip Stern, Scott G. Dacko
Journal of Advertising Research Jun 2012, 52 (2) 214-224; DOI: 10.2501/JAR-52-2-214-224
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