Brand Portfolio Promotions

Abstract

Large firms implement brand portfolio promotions (BPPs) that promote multiple brands to targeted consumers at discrete times. Such programs possess unique properties that require a novel model to assess their effectiveness. The authors propose a model that captures the magnitude and shape of the BPP effect for each brand in the portfolio, accounts for diminishing returns of brand exposure, and incorporates the intertemporal effect of BPPs. The model is shown to be general enough to apply to any discrete promotion in which the carryover effect duration is unknown. The authors present several model-based metrics that allow for an objective comparison of a BPP's return on investment with that of other forms of promotion. The results suggest that a BPP, when contrasted with feature, leads to higher sales lift per household for some of the brands. The authors develop an optimal exposure allocation procedure based on the proposed model that informs (1) which assortments of brands to promote across multiple BPPs and (2) the exposure level for each brand.