Magazine Sales Promotion: A Dynamic Response Analysis

This paper studies the effectiveness of a type of nonprice promotion often used in the European magazines industry to diminish the decline rate of periodical sales, in which a value pack is sold containing the magazine issue plus another product. Magazines are sold simultaneously with and without promotion at different prices, and promotions are serialized by fractioning the additional product across different issues of the magazine. Although promoting magazines contemporarily may cannibalize nonpromoted sales, this loss is compensated by a long-term increase in nonpromoted sales caused by product awareness and loyalty improvements. This strategy is increasingly used as an innovative form of product advertising.