This paper models some elements of the relationship between the offering of trade promotions and subsequent retailer pass through. The points are: 1) manufacturers offer deals even when retailer pass through is negligible, 2) manufacturers will deal when even retailers forward buy, 3) forward buying by the retailer can intensify future competition in the absence of merchandising requirements, 4) retailers should not stockpile to capacity in order to intensify future brand competition, 5) store competition increases pass through for the manufacturers and 6) retailers may engage in greater than 100% pass through under store competition without loss-leader type restrictions.Key Words: Channel Promotions, Deal Pass Through, Brand Competition, Retail Competition
MKT
24 pages
Complete Text (Acrobat PDF Version)[HBS Only]
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