How can Targeted Price Promotion Create Value for Firms in B2C Relationships? A Systematic Review and Research Agenda: An Abstract

Abstract

Advances in technology have facilitated an increased emphasis on targeted price promotion to consumers. Given the increased use of targeted price promotion by firms and the significant emphasis on marketing’s ability to generate substantial value for firms, it is imperative that researchers give increased attention to the value-creating potential of targeted price promotions. The significant push by manufacturers and retailers to embrace targeted price promotion as a strategy to offer special prices only to select customers is fueled by the continuous developments in marketing technologies, which enhance firms’ ability to target customers. In fact, projections also suggest that firms will continue to engage in the use of targeted pricing strategies and individualized offers to customers expected to remain on an upward trajectory. Overall, firms’ targeted price promotion strategies involve the collection and interpretation of vast amounts of data on consumers to generate insights into consumers’ likely response to promoted products, brands, and services. However, the effectiveness of a targeted price promotion as a strategy to help generate firm value is dependent on consumers’ response to the promotion. Unfortunately, although marketing researchers have examined the impact of targeted price promotion on firm outcomes, targeted price promotion research remains highly fragmented. In addition, mixed results from existing research and the growing use of the targeted price promotion by firms demand a systematic approach to bring clarity, specificity, and comprehensiveness to targeted price promotion strategy. To address this research gap, we first frame our research question as the impact of targeted price promotion on the creation of value for firms. Next, we systematically review and summarize research findings on how targeted price promotion impacts key firm value indicators such as increased marketing effectiveness, customer loyalty, and revenue, while also discussing challenges such as sub-optimal returns and customer switching. Finally, we offer a research agenda and implications of our research for theory and practice.