University of Southern California

USC Marshall Professor Wins Award for Marketing Study
Journal of Marketing Research recognizes S. Siddarth's examination of price promotions
February 26, 2007 • by Evy Jacobson

A groundbreaking paper on the effects of price promotions on marketing strategies won the prestigious 2007 William F. O'Dell Award for USC Marshall's Associate Professor of Marketing Sivaramakrishnan Siddarth.

The O'Dell Award is given for the most influential paper written in a given year for the Journal of Marketing Research.

Siddarth's paper, co-authored by UCLA and Dartmouth professors, showed that, in the long term, price promotions have their greatest impact on the likelihood that consumers will make another purchase within the same category. This finding contradicted previous conventional wisdom that in the short term price promotions mostly just encourage consumers to switch brands. The article appeared in the journal's November 2002 issue.

"We integrated existing research on the impact of promotions, and used a different modeling approach to provide insights into a question that hadn't been studied before," said Siddarth, whose studies econometric models of the impact of marketing on consumer purchase decisions. "We were able to replicate the previous results on the immediate effects of a promotion and show that the intermediate effects, which had not previously been considered, were large enough to overwhelm the short-term effects."

Siddarth says that the results of this study give retailers and manufacturers a better sense of how price promotions perform. It also suggests that promotion may be more attractive to retailers than traditionally thought.

"While permanent effects of promotions were virtually absent, it appears that promotions do not cause any long-term damage, so playing the promotion game is better than staying out of it," Siddarth said. "It benefits the retailer by bringing more people in to the store to buy in a particular category, which expands the market for that category. That's important for retailers."

The O'Dell Award is given annually to honor the Journal of Marketing Research article with the most significant long-term contribution to marketing theory, methodology and/or practice. The title of the study is "The Long-Term Effects of Price Promotions on Category Incidence, Brand Choice, and Purchase Quantity." Professor Siddarth accepted the award at a Feb. 16 conference of the American Marketing Association in San Diego.

The article's co-authors are Koen Pauwels of Dartmouth's Tuck School of Management, Dominique M. Hanssens of UCLA's Anderson Graduate School of Management. Siddarth has won multiple awards for his teaching and research, including an American Marketing Association special interest group award for his research. He has written 16 articles in this area, from the effects of pricing and promotions on consumer categories, brand choice and purchase quantity to promotional programs in the automotive industry.

He has also studied the dynamics of attention to TV commercials, and contributed a chapter to "Handbook of Advertising," edited by Gerard J. Tellis and Tim Ambler. His most recent study, "Lease or Buy? A Structural Model of a Consumer's Vehicle and Contract Choice Decisions," which is forthcoming in the Journal of Marketing Research, looks at how consumer demand for cars depends upon the financial incentives offered by automobile manufacturers.

"For me, teaching and research are closely intertwined," he said. "One of the great benefits of the research I do is that I can communicate it to my students and provide them with a richer and more useful learning experience."

About the USC Marshall School of Business
Consistently ranked among the nation's premier schools, USC Marshall is internationally recognized for its emphasis on entrepreneurship and innovation, social responsibility and path-breaking research. Located in the heart of Los Angeles, one of the world's leading business centers and the U.S. gateway to the Pacific Rim, Marshall offers its 5,700-plus undergraduate and graduate students a unique world view and impressive global experiential opportunities. With an alumni community spanning 123 countries, USC Marshall students join a worldwide community of thought leaders who are redefining the way business works.