Outdoor temperature and marketing mix in retailing

The demand for weather-sensitive products, such as refreshing drinks, varies with outdoor temperature. However, when temperatures change, retailers lack a clear framework to adapt key marketing mix variables, notably pricing and advertising. This article analyses how price and advertising respond to temperature variations and how these adjustments mediate the impact of temperature on demand. Using original three-year weekly scanner panel data for the leading brand Yop in the French drinking yoghurt market, we estimate a structural equation model that jointly captures the relationships among temperature, price, advertising, and demand. The results reveal that temperature has a direct positive effect on demand and indirect effects operating through both price and advertising. In warmer periods, retailers adjust prices and advertising expenditures upward for this positive weather-sensitive product category, conditional on regional and seasonal controls. These findings highlight the mediating role of marketing mix decisions in translating temperature shocks into market outcomes and provide actionable insights for profit-enhancing adaptation of pricing and advertising strategies to weather conditions.