Analysis of Sales Promotion Effects on Household Purchase Behavior

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more than one product category. In this research, the measures are estimated for each combination <strong>of</strong> household and product category, and for each household across the different product categories. Before operationalizing the measures, let us first introduce some new concepts. For clarity, these concepts are graphically depicted in Figure 5.2. A shopping trip for a product class occurs if a household purchased from that specific product category during a day. <strong>Promotion</strong>al activity is also defined per product class. We speak <strong>of</strong> promotional activity in a store when some brand within that product class is on promotion. A shopping trip is called a promotional shopping trip when there is promotional activity. A utilized promotional shopping trip is defined as a promotional shopping trip during which a household purchased one or more brands on promotion. A non-promotional shopping trip is a shopping trip that is not a promotional shopping trip. It has to be noted that the measures and calculations are conditional on a purchase having taken place and that the concepts are defined for each product category separately. Shopping trip <strong>Promotion</strong>al activity No promotional activity <strong>Promotion</strong>al shopping trip Non-promotional shopping trip Figure 5.2: Graphical presentation <strong>of</strong> concepts defined 5.4.2.1 <strong>Promotion</strong>al Utilization Household purchased promoted product(s) Household did not purchase promoted product(s) A general indicator for promotion response is the following: number <strong>of</strong> utilized promotional shopping trips ( 1) <strong>Promotion</strong>al Utilization : PU = . number <strong>of</strong> promotional shopping trips Utilized promotional shopping trip Non-utilized promotional shopping trip 93
It represents the fraction <strong>of</strong> shopping trips with brands on promotion, during which these promoted brands are purchased. This measure provides insights in the overall household sensitivity towards promotions. Compared to promotion response dealt with in the prior section, this promotional utilization measure aggregates the 0/1 record outcomes across the different shopping trips (or records). However, our main interest goes beyond this overall level. Especially the specific mechanisms for buying on promotion are <strong>of</strong> interest to us. For these different sales promotion reaction mechanisms, indicators are defined and operationalized in the following subsections. 5.4.2.2 Brand Switching We want to measure the extent to which households switch brands due to promotions. Brand switching itself can be conceived in several ways. There is no general agreement about what constitutes an appropriate conceptual or operational definition <strong>of</strong> brand loyalty (Jacoby and Chestnut 1978). We operationalize brand switching as switching from the favorite brand to another brand. The favorite brand is determined according to Guadagni and Little (1983) and Gupta (1988), as the brand with the largest exponentially weighted average <strong>of</strong> past purchases. The weight parameter must be in the [0,1] interval. As the parameter is smaller, historic purchases are more important in determining the favorite brand. A high value for the parameter means that only a few historic purchases determine the favorite brand. This operationalization <strong>of</strong> brand loyalty enables us to vary the time range <strong>of</strong> historic purchase behavior that determines the favorite brand. Several sensitivity analyses concluded that the results are insensitive to small changes in the weight parameter (Ortmeyer 1985, Gupta 1988, and Lattin 1987). We use non-promotional purchase data (purchases on shopping trips during which there were no promotions in the store or the available promotions were not utilized) to determine the favorite brand. Note that with this operationalization, the favorite brand can change over time. We compare brand switch behavior in promotional situations (switch behavior from the favorite brand to another brand during promotional shopping trips) with base line brand switch behavior (switch 94
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LINDA H. TEUNTER Analysis</
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Analysis o
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Voorwoord Soms valt de appel echt n
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Contents 1 INTRODUCTION AND OVERVIE
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5.4.2.3.1 Inter Purchase Time .....
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1 INTRODUCTION AND OVERVIEW 1.1 Int
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generally generated from a smaller
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switching, purchase acceleration, c
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strategy change (decrease in promot
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of promotions, or
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characteristics are important in ex
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Chapter 5 are applied to study the
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2 THEORIES OF CONSUMER BUYING BEHAV
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systematically explored the decisio
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the part of the co
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As mentioned before, Figure 2.3 is
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product use coupled with the import
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2.3.2 Stimulus-Response Model Appli
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2.3.2.2 Operant Conditioning In ope
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X is very popular that it will brin
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But, in contrast, economic theory c
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compared to a perceived benchmark -
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High need-for-cognition (NFC) indiv
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2.3.4.2 Literature Overview Our rev
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The previously described research h
Page 54 and 55: has its deficiencies. Any purchase
Page 56 and 57: Chandon et al. 2000). But deal pron
Page 58 and 59: 2.4 Concluding Remarks Regarding th
Page 60: stimulus-organism-response model) c
Page 63 and 64: Shoemaker 1987). Several factors ha
Page 65 and 66: such as display promotions. Althoug
Page 67 and 68: 3.2.3 Type of resi
Page 69 and 70: 3.2.5 Education Education links to
Page 71 and 72: these advantages therefore could be
Page 73 and 74: less likely to seek variety. More e
Page 75 and 76: 3.3.1 Store Loyalty Store loyalty s
Page 77 and 78: more often (probab
Page 79 and 80: Table 3.12 continued Hypothesis H9a
Page 81 and 82: 4.2.1 Brand Switching Brand switchi
Page 83 and 84: involvement purchases for most cons
Page 85 and 86: Neslin (1998), there is a great nee
Page 87 and 88: are called “attributions.” Attr
Page 89 and 90: and less than 2 percent by stockpil
Page 91 and 92: into a unit sales decomposition and
Page 93 and 94: 4.3.4 Storability/Perishability Sto
Page 95 and 96: Economic theory ignores mental deci
Page 97 and 98: seeking (cf. Assael 1987, Desphande
Page 99 and 100: there another factor that is relate
Page 101 and 102: Pr(event) 90 = 1+ 1 z e − Here Z
Page 103: 5.4.2 Sales <stron
Page 107 and 108: 96 We measure possible time acceler
Page 109 and 110: promotional post-promotional purcha
Page 111 and 112: ( 12) CategoryExpansion effect : 10
Page 114: PART II EMPIRICAL ANALYSIS 103
Page 117 and 118: more persons living together and di
Page 119 and 120: 6.4 Linking Household and Store Dat
Page 121 and 122: Table 6.1 contains the results <str
Page 123 and 124: The age of the sho
Page 125 and 126: Table 6.4: Frequency distribution <
Page 128 and 129: 7 EMPIRICAL ANALYSIS ONE: DRIVERS O
Page 130 and 131: Table 7.1: Operationalization <stro
Page 132 and 133: during 435 shopping trips more than
Page 134 and 135: The variables size, age, and cycle
Page 136 and 137: 7.5 Results Drivers of</str
Page 138 and 139: esponsive the households within tha
Page 140 and 141: Table 7.3: Relationship promotion r
Page 142 and 143: indication that decreasing marginal
Page 148 and 149: Table 7.10: Relationship promotion
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7.5.2.8 Variety Seeking Two intrins
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anymore. Therefore it is concluded
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Thus, store loyalty and promotion r
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dummies add up to one. This implies
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Table 7.22: Overview empirical test
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enacting-on-impulse hypothesis and
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Table 7.23: Summary of</str
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Table 7.24: Correlation error coeff
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another category? Or do households
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and unweighted. With respect to the
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164 In general, the average quantit
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Purchase frequency is defined as th
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Table 8.3: Product category rating
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Table 8.4: Pearson correlation betw
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We hypothesized that within impulse
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measure (PU). Referring to Figure A
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Table 8.6: Significant within categ
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looked at this promotional bump dec
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Table 8.8: Differences in promotion
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approach (about one third) are much
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promotions lead to large purchase t
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studies. Promotion
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Promotional extra
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categories revealed that the strong
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degree. When households switch bran
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specific sales promotion reaction m
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increasing (Inman and Winer 1998),
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indirectly from promotional purchas
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quantity downward for potato chips.
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9.2.2.3 Deal Proneness With respect
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204 related to promotion response.
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influenced by out-of</stron
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Andrews, K.Z. (1997), “Do Marketi
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Blattberg, R.C., Eppen, G.D. and J.
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Chintagunta, P. (1993), “Investig
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East, R. and K. Hammond (1996), “
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Gupta, Sachin and P.K. Chintagunta
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Kahn, B.E., Morrison, D.G.and G.P.
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Lattin, J.M. and R.E. Bucklin (1989
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McAlister, L. and E. Pessemier (198
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Petty, R.E. and J.T. Cacioppo (1981
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Shimp, T.A. (1990). Promoti
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Van Trijp, H.C.M. and J.B.E.M. Stee
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Winer, R.S., Bucklin, R.E., Deighto
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APPENDIX A4: Research Overview Tabl
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Table A4.1 continued Article Promot
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� Size of munici
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Table A7.1 continued Symbol Descrip
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Table A7.2: Data legitimacy check (
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Table A7.3: Results binary logistic
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Table A7.4: Results interacting wit
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Table A7.5: Results age and size no
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Table A7.5 continued Variable B S.E
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Table A8.1 continued Impulse BS TA
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Table A8.2 continued Number <strong
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Table A8.3: Relative occurrence and
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Figure A8.2: Decomposing total prom
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interessante aanbieding is. Combina
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aantalmerken in een categorie en im
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ERASMUS RESEARCH INSTITUTE OF MANAG
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Title: Beyond Generics;A closer loo
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Title: Planning and Control Concept
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