brand loyalty is clearly an important determinant of retail promotion strategies. Consistent with Agrawal (1996), our estimates indicate that the average price discount at the retail level is negatively related to the strength of brand loy- alty (φpref < 0). In other words, retailers will promote a brand with weak loyalty more aggressively than a strong one, which is contrary to the theoretical predictions of Raju, Srinivasan, and Lal (1990).