Revenue Management Solutions, Inc.

Nicholas M Kiefer

Thomas Kelly

Michael Lukianoff

Iassena Stratieva

Alex Wohlhueter

Sebastián Fernández

A method of allocating advertising resources uses a database that includes a number of business unit characteristics, one being an average allocation of advertising costs over time. A regression coefficient is produced based on the characteristics, wherein a non-linear specification is used for the average allocation of advertising cost characteristic. An impact indicator is assigned based on the how positive the regression coefficient is so that the effect of each characteristic on sales/profits and quantity sold can be determined.

Method for allocating advertising resources

A method of selecting a site for one or more retail units uses a database of information on existing units in a chain, including store sales or profits, site characteristics available from various databases, and information on marketing expenditure in the relevant market. Sales of potential new units are forecast abstracting from advertising efforts. Thus, potential profit characteristics of a site can be evaluated without regard to existing advertising programs. This corrects a major problem with existing approaches; site decisions can be made simultaneously with marketing allocation decisions.

Method for site selection for retail and restaurant chains

A method of grouping retail units of a set of units in a chain uses store and market-specific characteristics, including store profitability, to group stores into like economic markets. The relation between profits and prices defines markets; stores facing the same relation, that is the same profit function, are in the same economic market. These stores can follow similar pricing and promotion strategies. Multiple regression analysis is used to identify those characteristics that affect the relation between prices and profits (not simply variables correlated with profits). Upon suitable standardization and weighting, these variables are subsequently used with a statistical cluster analysis to classify units in two markets. Based on the estimated relationship and homegenity valuations from discriminant analysis, new stores can be more accurately added to the appropriate group.

Method for assigning retail units to economic markets

A method of grouping retail units of a set of units in a chain uses, store and market-specific characteristics, including store profitability, to group stores into like economic markets. The relation between profits and prices defines markets; stores facing the same relation, that is the same profit function, are in the same economic market. These stores can follow similar pricing and promotion strategies. Multiple regression analysis is used to identify those characteristics that affect the relation between prices and profits (not simply variables correlated with profits). Upon suitable standardization and weighting, these variables are subsequently used with a statistical cluster analysis to classify units in two markets. Based on the estimated relationship and homegenity valuations from discriminant analysis, new stores can be more accurately added to the appropriate group.

A method of determining a price sensitivity index for one or more retail units is based on the relation between profits, sales or traffic and a fixed weight price index based on information from individual retail units. Statistical regression and the theory of the single-product firm is used to analyze the relation between changes in performance variables and changes in the price index, leading to a unit-specific index of sensitivity. This information allows stores to be sorted into those which can see price aggression, those which cannot, and those which are likely to respond to promotions.

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Ithaca, NY, United States of America

Nicholas M Kiefer