Impact of Deals and Deal Retraction on Brand Switching

Abstract

Analysis of panel data for two consumer packaged goods indicates that media-distributed coupons and cents-off deals induce brand switching and result in less loyalty when retracted than if no deal is offered. In contrast, package coupons stimulate brand loyalty which is maintained when they are retracted. The extent to which economic utility theory and self-perception theory order these findings is evaluated and the implications of the results for managing demand are discussed.