The role of retail promotion in determining future brand loyalty: Its effect on purchase event feedback

We model and estimate the role of retail promotion in determining future brand loyalty through its effect on purchase event feedback. Purchase event feedback represents the effect of current purchases on future brand preference. Our model assesses the extent to which put-chases made under a retail promotion enhance or detract from the level of feedback, compared to nonpromotion purchases. We apply the model to two product categories and compare the effects of price versus nonprice retail promotions. We find that in-store price promotions are associated with negative purchase event feedback compared to nonpromotion purchases, whereas nonprice promotions such as features or sampling have no effect or in fact are associated with positive purchase event feedback, compared to purchases made of promotion.