The Feldwick Factor: Long-term effectiveness of discounted beer promotions
Is there any (semi) scientific evidence around the long-term effectiveness of discounted beer promotions?
Tom Wilms, manager, strategy, media and insights marketing, Royal Grolsch NV
There certainly is some science on this, much of it based on the work of the late Andrew Ehrenberg and his colleagues, and helpfully summarised in chapter 10 of Byron Sharp's recent book, How Brands Grow. The conclusions are that price promotions don't usually bring in new buyers, so they aren't an engine of brand growth. They do bring in infrequent buyers during the promotional period, but these drop out again as soon as the promotion is over.
Other research suggests some forward buying can take place, but the main reason for the sales spike is brand substitution. Your figures for beer promotions in the Netherlands, which show volume growth of four to seven times for a 25% price discount, are at the high end of normal for deep price cuts with heavy in-store display.