Does Price Elasticity Vary with Economic Growth? A Cross-Category Analysis

Gordon, Brett R.; Goldfarb, Avi; Li, Yang

doi:10.2139/ssrn.2136658

Cited by 30 publications

(60 citation statements)

References 63 publications

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“…Future research While previous results hold for the majority of firms and brands, several studies have pointed out that there can be considerable heterogeneity depending on the industry type Steenkamp and Fang 2011), product category (Gordon et al 2013;van Heerde et al 2013), and even across different brands or firms within the category (Mukherjee and Bonfrer 2015;van Heerde et al 2013). More research is needed to develop adequate contingency frameworks to better understand this heterogeneity in the cyclical sensitivity of marketing's effectiveness.…”

Section: Focus On Differential Marketing Effectivenessmentioning

confidence: 85%

“…Tuli et al (2012) Advertising; Same-store sales The stock-market reaction to unexpected changes in advertising and same-store sales does not differ between contractions and expansions. Gordon et al (2013) Price Price sensitivity is predominantly counter-cyclical; it rises when the economy weakens. In some categories, the opposite holds.…”

Section: Lamey (2014)mentioning

confidence: 99%

“…These conclusions are based on studies by, among others, Srinivasan et al (2011) and Steenkamp and Fang (2011) for R&D spending, and Estelami et al (2001), Gordon et al (2013) and van Heerde et al (2013) for prices. In addition, Schöler et al (2014) find that the riskiness and radicalness of financial innovations tends to increase the introducing banks' abnormal returns, even though radicalness has lower cumulative abnormal stock returns in recessions than in expansions.…”

Section: Focus On Differential Marketing Effectivenessmentioning

confidence: 99%

“…GDP represents the total output produced in a country or region during a certain period, and fluctuations in GDP have been found to be at the core of the BC, making it a good proxy for a country's or region's overall economic health (Stock and Watson 1999). Ma et al (2011), Kamakura and Du (2012), and Gordon et al (2013) directly include absolute (levels) or relative (growth rates) GDP values in their analysis to account for the general state of the U.S. economy. 8 Other studies have relied on (or supplemented GDP data with) other economic indicators, such as household (disposable) income (Dubé et al 2017;Gordon et al 2013;Yeung et al 2013), unemployment (Cha et al 2015;Estelami et al 2001), or inflation and interest rates (Estelami et al 2001).…”

Section: Continuous Approximation By Official Economic Indicatorsmentioning

confidence: 99%

“…Ma et al (2011), Kamakura and Du (2012), and Gordon et al (2013) directly include absolute (levels) or relative (growth rates) GDP values in their analysis to account for the general state of the U.S. economy. 8 Other studies have relied on (or supplemented GDP data with) other economic indicators, such as household (disposable) income (Dubé et al 2017;Gordon et al 2013;Yeung et al 2013), unemployment (Cha et al 2015;Estelami et al 2001), or inflation and interest rates (Estelami et al 2001). Gordon et al (2013) show that changes in (regional) household income correlate highly (ρ = .932) with changes in national GDP (Gordon et al 2013, Fig.…”

Section: Continuous Approximation By Official Economic Indicatorsmentioning

confidence: 99%

See 4 more Smart Citations

Business cycle research in marketing: a review and research agenda

Dekimpe

Deleersnyder

2017

J. of the Acad. Mark. Sci.

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Business cycles (BCs) may affect entire markets, and significantly alter many firms' marketing activities and performance. Even though managers cannot prevent BCs from occurring, marketing research over the last 15 years has provided growing evidence that their impact on consumers, and hence on firm and brand performance, depends to a large extent on how firms adjust their marketing mix in response to these macroeconomic swings. In this study, we review the growing marketing literature on how to attenuate or amplify the impact of BC fluctuations. Our discussion focuses on three key aspects: (1) the scope of, and insights from, existing BC research in marketing, (2) advancements in the methods to study various BC phenomena in marketing, and (3) some emerging trends that offer new challenges and opportunities for future BC research in marketing.

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Section: Focus On Differential Marketing Effectivenessmentioning

confidence: 85%

Section: Lamey (2014)mentioning

confidence: 99%

Section: Focus On Differential Marketing Effectivenessmentioning

confidence: 99%

Section: Continuous Approximation By Official Economic Indicatorsmentioning

confidence: 99%

Section: Continuous Approximation By Official Economic Indicatorsmentioning

confidence: 99%

See 3 more Smart Citations

Business cycle research in marketing: a review and research agenda

Dekimpe

Deleersnyder

2017

J. of the Acad. Mark. Sci.

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The battle for health and beauty: What drives supermarket and drugstore category-promotion lifts?

Lin

Gijsbrechts

2016

International Journal of Research in Marketing

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Effective forms of market orientation across the business cycle: A longitudinal analysis of business-to-business firms

Frösén

Jaakkola

Churakova

et al. 2016

Industrial Marketing Management

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Macroeconomic developments, such as the business cycle, have a remarkable influence on firms and their performance. In business-to-business (B-to-B) markets characterized by a strong emphasis on long-term customer relationships, market orientation (MO) provides a particularly important safeguard for firms against fluctuating market forces. Using panel data from an economic upturn and downturn, we examine the effectiveness of different forms of MO (i.e., customer orientation, competitor orientation, interfunctional coordination, and their combinations) on firm performance in B-to-B firms. Our findings suggest that the impact of MO increases especially during a downturn, with interfunctional coordination clearly boosting firm performance and, conversely, competitor orientation becoming even detrimental. The findings further indicate that both the role of MO and its most effective forms vary across industry sectors, MO having a particularly strong impact on performance among B-to-B service firms. The findings of our study provide guidelines for executives to better manage performance across the business cycle and tailor their investments in MO more effectively, according to the firm's specific industry sector.

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Does Price Elasticity Vary with Economic Growth? A Cross-Category Analysis

Cited by 30 publications

References 63 publications

Business cycle research in marketing: a review and research agenda

Business cycle research in marketing: a review and research agenda

The battle for health and beauty: What drives supermarket and drugstore category-promotion lifts?

Effective forms of market orientation across the business cycle: A longitudinal analysis of business-to-business firms

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