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Applying Multinomial Logit Model To Evaluate The Effects Of Sales Promotion

Posted on:2005-12-28Degree:MasterType:Thesis
Country:ChinaCandidate:Y G JiFull Text:PDF
GTID:2156360152468163Subject:Business Administration
Abstract/Summary:PDF Full Text Request
Going with the rapid development of retail trade in China, companies in FMCG (Fast Moving Consumer Goods) industry are confronting ardent competition. As one of the short-term promotional activities, sales promotion has been adopted by more and more manufactures more and more frequently, and the sales promotion budget accounts for higher and higher percentage in the total marketing budget as well. How to make sales promotion policy scientifically so as to shoot the target of sales volume, to maximize the return on the investment of sales promotion becomes a question that business managers have to answer. Hence, it is essential to answer the question that to quantitatively evaluate the effects of various means of sales promotion.This article is an experimental study about quantitatively evaluating the effects of various means of sales promotion. We will apply Multinomial Logit(MNL)model to analyze the collected panel data ,and then use the outcome of model to quantitatively evaluating the effects of various means of sales promotion on the increase of market share. In this article we expound the contents of model, data, variable and method of analysis.The proof-test shows that the model is suitable to the collected panel data, and this means that applying this model to analyze simple data can effectively evaluate the effectiveness of sales promotion. The results show that the effects of different means of sale promotion on the increase of market share are positive, but the contributions or effects are different. The most effective means of sales promotion has not been adopted most often. This means that the brands in the studied category haven't implemented the optimal sales promotion policy or combination of different means of sale promotion. The method introduced in this paper requires simple data, but can effectively evaluate the effectiveness of sales promotion, and can help decision makers establish optimal sales promotion policies as well.
Keywords/Search Tags:Multinomial Logit model, sales promotion, SP, effectiveness of sales promotion, market share
PDF Full Text Request
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