Firms engage in marketing communication mix such as sales promotions and advertisements primarily to boost sales, attract potential customers while retaining their existing customer base. Marketing communications are therefore critical marketing strategies that are intended to increase the visibility of the firm’s offerings. Despite the rich body of research on sales promotions in the marketing literature, there still remains limited insight into the differential impacts of various marketing efforts as well as the conditions under which they are most effective. My first essay seeks to address these gaps by demonstrating the effects of two types of sales promotions (cash rebates and financing offers) on consumer perceptions of quality and unit sales across both luxury and mass goods. The results reveal that offering financing incentives can effectively drive sales irrespective of product class, but rebates only impact sales in the mass market. Interestingly, rebates negatively affect perceptions of quality across both product classes, demonstrating a more complex path to sales than traditional promotion models may suggest. My second dissertation essay examines the downside of marketing communication mix by U.S. pharmaceutical firms in the post-patent period. Findings suggest that incumbent’s marketing activities in the post patent period is a signal that is interpreted differentially by the waves of generic manufacturers who are planning to enter the market. Specifically, the first wave of generic entry may consider incumbent’s marketing effort as a threat and hence it may act as an entry deterrent strategy. Interestingly, continuance of incumbent’s marketing communication even after the first wave of generics have entered the market may be interpreted by the second wave of generics as signals of unexplored market potential, thereby attracting competition. My third essay analyzes the impact of firm’s adoption of loyalty program on risk and valuation. Results indicate that firm’s adoption of LP alleviates firm-specific risk. Next, we demonstrate that market share moderates the relation between firm’s adoption of loyalty program and sales. In particular, adoption of loyalty program by firms with high market share depletes sales. On the other hand, adoption of loyalty programs by small firms boost sales, thereby improving firms’ market share.
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