Abstract: In the mounting competition of the retailing business, price promotion is one of the frequently used strategies and becomes the major part of retailers' marketing budget. Previous researches on price promotion often focus on particular brands or products from manufacturers' perspect. Few are conducted for retailers. To fill the gap in price promotion literature, the present study developed this multi-products promotion model to evaluate the the effects of price promotion on the profit of retailers by simultaneously taking multiple products and their promotion time into consideration. The multi-products promotion model is as followed:

where Y_i is the retailer's profit in day i, X_i=(X_i1,X_i,…,X_ip) and X_ij is the promotion degree of j th product in day i, p is the total number of products. T_ij is the total promotion days of j th product from the beginning to day i, P_1j,P_2j,P_3j are catagory characteristics varibles, D_1j,D_2j are product specific varibles,W_i is a dummy variable to denote whether day i is weekend. ω₀, ω, γ₀, γ₁, γ₂, γ₃, γ₄, γ₅, γ₆, γ₇ are the parameters to be estimated. This paper used the daily sales records in 159 days from a large chain supermarket for emprical analysis. The data included the name, id number, price, daily sales volume and promotion price of products which are sold by the surpermarket. Preliminary calculation were conducted to quantify the products characteristics, category characteristics and promation time. By introducing these characteristics variables, we could examine the effects that price promotion of individual product has on the retailer's profit.Results shows that price promotion of individual product can significantly affect the total profit of the retailer. Moreover, the effect of price promotion is segnificantly related to promotion time and whether in weekend or not. As time goes on, the promotion effect decreases and even becomes negtive on retailer's profit. The promotion effect is better in weekend than in weekdays. So determing the proper promotion time for promoting products is critical for retailers. This study extended the previous promotion research by emphasizing on retailers and developing an empirical model to examine the role of individual product's promotion on retailers profit. By employing this model, retailers can develop more scientific and feasible price promotion strategies for individual product. In particular, retailers can dynamically monitor the impact of every product in promotion on the profit of the entire store and accordingly adjust promotion time to maximize their profit.

Key words: price promotion, retailer, profit, promotion time