Geo-conquesting: Competitive locational targeting of mobile promotions

Nathan M. Fong, Zheng Fang, Xueming Luo

Research output: Contribution to journalArticlepeer-review

149 Scopus citations

Abstract

As consumers spend more time on their mobile devices, a focal retailer's natural approach is to target potential customers in close proximity to its own location. Yet focal (own) location targeting may cannibalize profits on inframarginal sales. This study demonstrates the effectiveness of competitive locational targeting, the practice of promoting to consumers near a competitor's location. The analysis is based on a randomized field experiment in which mobile promotions were sent to customers at three similar shopping areas (competitive, focal, and benchmark locations). The results show that competitive locational targeting can take advantage of heightened demand that a focal retailer would not otherwise capture. Competitive locational targeting produced increasing returns to promotional discount depth, whereas targeting the focal location produced decreasing returns to deep discounts, indicating saturation effects and profit cannibalization. These findings are important for marketers, who can use competitive locational targeting to generate incremental sales without cannibalizing profits. Although the experiment focuses on the effects of unilateral promotions, it represents an initial step in understanding the competitive implications of mobile marketing technologies.

Original languageEnglish (US)
Pages (from-to)726-735
Number of pages10
JournalJournal of Marketing Research
Volume52
Issue number5
DOIs
StatePublished - Oct 2015
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Economics and Econometrics
  • Marketing

Keywords

  • Competitive targeting
  • Locational targeting
  • Mobile commerce
  • Mobile targeting
  • Randomized field experiment

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