Effects of Price Specials on Volume of Sales of Frying Chickens

Every week, major food retailers have advertisements in local newspapers in which they feature commodities at special sale prices. Probes to measure the effects of advertising these price specials, however, are relatively recent in marketing economics research. What effect do retail price specials have on total sales in a market area, or in the whole Nation? A preliminary study that attempted an aggregate approach to this problem for frying chickens was published by the USDA in 1963.1 A substantial increase in sales volume would be expected when fryers are featured as a special. Such a change in volume should exceed the normal increase expected from just lowering the price without featuring the item. As a result, the demand function at a designated price level during a special sales promotion should shift to the right—larger sales at the same price. The interaction of price and special sales advertising might also be expected to change the slope of the demand function in a direction that would indicate an increase in price elasticity of demand. These changes would occur if consumers spent a greater percentage of their incomes on fryers in sale weeks than in nonsale weeks.

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Journal Article
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Agricultural Economics Research, Volume 16, Number 3
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 Record created 2017-04-01, last modified 2017-04-24

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