Marketing Truths.Where science meets impact.

A price cut moves volume far harder than advertising, on the order of 20 times harder. For shifting short-term volume, price is the stronger lever by a wide margin. Across 262 elasticity estimates from 16 studies that measured both in the same model, the median price elasticity is about 20 times the advertising elasticity; the mean price elasticity is -1.61 against a mean short-term advertising elasticity of 0.11.

That does not make discounting the smarter move: a price cut applies to nearly every unit sold and comes straight out of margin, and the authors caution that advertising's brand-building and loyalty effects show up later. The gap is widest for mature, nondurable goods, where the ratio runs about 25 to 1. The estimates span published studies from 1960 to 1988.