Correspondence: Óscar González-Benito, Dpto. Administración y Economía de la Empresa, Universidad de Salamanca, Campus Miguel de Unamuno, 37007, Salamanca, Spain. E-mail: oscargb@usal.es

¹has a degree in Mathematics from the University of Salamanca (Spain) (1995), an MSc degree in Marketing from UMIST (UK) (1997) and a PhD in Economics and Management Sciences from the University of Salamanca (Spain) (1999). He is currently Professor of Marketing at the University of Salamanca. In addition to several published articles in some of the most recognized Spanish marketing and management academic journals, he has published articles in international journals such as the Journal of Retailing, the Journal of Business Research, Industrial Marketing Management, the International Journal of Market Research, the British Journal of Management, Marketing Letters, OMEGA and Small Business Economics.

²is a lecturer at the University of Tamaulipas (Mexico) and a PhD student at the University of Salamanca.

³has a degree in Business Administration from the University of Oviedo (Spain) (1981) and a PhD in Economics and Management Sciences from the University of Oviedo (Spain) (1986). He is currently Professor of Marketing at the University of Salamanca. He was President of the Economic and Social Council of Castilla y Leon (Spain), an independent advisory institution for the Regional Government, from 1996 to 2000. In addition to several published articles in some of the most recognized Spanish marketing and management academic journals, he has published articles in international journals such as the Journal of Retailing, Marketing Letters and the Journal of Retailing and Consumer Services.

Received 14 April 2009; Revised 14 April 2009; Published online 2 October 2009.

Abstract

The purpose of this article is to analyze the effects of price and non-price promotional incentives on market shares of brands within a product category, in an attempt to differentiate between cannibalization and competitive effects. The question is to what extent the growth in market share derived from a promotion comes at the expense of other product-sizes of the same brand within the category (cannibalization) or comes at the expense of the other brands within the category (competition). The article proposes a method to quantify these effects from sales data aggregated at store level, and describes an empirical application in a real context. The empirical results show that the modeling proposal is a useful analytical tool to reveal cannibalization and competition effects. Specifically, cannibalization effects across size-based formats of promotional incentives are higher than competitive effects in the product category analyzed, namely, soft drinks. This may be a result of a high degree of brand loyalty in this product category and/or a low degree of differentiation within the product line of each brand in this product category. At present, sales promotion is one of the marketing variables with the greatest scope and competitive potential. Measuring the difference between cannibalization and competitive effects is a major issue for manufacturers to be able to assess the suitability of a promotional campaign.