PRICE PROMOTIONS AND TRADE DEALS WITH MULTI-PRODUCT RETAILERS	  
							Rajiv Lal	  
					Stanford University	  
								and	  
				J. Miguel Villas-Boas	  
			University of California at Berkeley	  
						August 1995	  
							ABSTRACT	  
	In this paper we study retail price promotions  and  manufacturer  
trade deals in markets with multi-product retailers.  We  find  that  in  
situations where retailers carry more than one competing brands,  the  
promotions  across brands can be positively or negatively correlated 
depending on  the  structure of the market: the relative sizes of the various 
market segments (in terms  of loyalty to manufacturer, retailer, or the pair 
manufacturer-retailer). We show that sometimes retailers offer the same 
discount on different products but  at other times, they offer a smaller 
discount on a brand supported  by  a  bigger trade deal. We also present 
results on the effects of changes in the sizes  of the different market 
segments on the depth of price promotions and trade deals and on passthrough.
 This work was supported by a grant from the  Regents  of  the  University  
of California to J. Miguel Villas-Boas. We gratefully appreciate comments  on  
an earlier version of this paper by Marshall  Freimer,  Sridhar  Moorthy,  
Duncan Simester, Birger  Wernerfelt,  and  seminar  participants  at  the  
University of Chicago and the University of Rochester.