The Impact of Promotional Activity on Market Share: A Robust Approach

Abstract

In this paper we propose a simple method to measure the impact of promotional activities on market share. The main idea is to assume that if promotion has an effect, it generate an additive outlier or a temporary level shift in the market share data. We propose an outlier robust estimation technique that can give estimates of the size of such an additive outlier or temporary level shift relative to an outlier-free time series. These estimated sizes than measure the impact of promotion. We illustrate our method for two examples concerning market shares of fast-moving consumer goods.