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An assortmentwide decision-support system for dynamic pricing and promotion planning in DIY retailing

Natter, M, Reutterer, T, Mild, A and Taudes, A (2007) An assortmentwide decision-support system for dynamic pricing and promotion planning in DIY retailing Marketing Science, 26 (4). pp. 576-583.

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Abstract

The main objective of this report is to describe a decision-support system for dynamic retail pricing and promotion planning. Our weekly demand model incorporates price, reference price effects, seasonality, article availability information, features, and discounts. Building on previous research, we quantify demand interde-pendencies and integrate the resulting profit-lifting effects into the optimal pricing model. The methodology was developed and implemented at bauMax, an Austrian do-it-yourself retailer. Along with the practical requirements, an objective function was employed that can be used as a vehicle for implementing a retailer's strategy. Eight pricing rounds with thousands of different stock-keeping units have each served as a testing ground for our approach. Based on various benchmarking methods, a positive impact on profit was reported. The currently implemented marketing decision-support system increased gross profit on average by 8.1 and sales by 2.1%. © 2007 INFORMS.

Item Type: Article
Authors :
NameEmailORCID
Natter, MUNSPECIFIEDUNSPECIFIED
Reutterer, Tt.reutterer@surrey.ac.ukUNSPECIFIED
Mild, AUNSPECIFIEDUNSPECIFIED
Taudes, AUNSPECIFIEDUNSPECIFIED
Date : 1 July 2007
Identification Number : 10.1287/mksc.1060.0217
Depositing User : Symplectic Elements
Date Deposited : 16 May 2017 15:15
Last Modified : 16 May 2017 15:15
URI: http://epubs.surrey.ac.uk/id/eprint/818325

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