Analysis of Sales Promotion Effects on Household Purchase Behavior

7 EMPIRICAL ANALYSIS ONE: DRIVERS OF SALES
PROMOTION RESPONSE
7.1 Introduction
Understanding household promotion response means understanding the drivers that determine
whether or not to respond to a specific promotion. Based on the hypotheses formed in Chapter
4, we want to identify which household variables (demographics, psychographics, and
purchase characteristics) influence purchase decisions, and in what way. Moreover, we want
to check whether promotion response behavior <strong>of</strong> households is consistent across product
categories. For each shopping trip <strong>of</strong> each household in our database, we know whether there
were promotions and, if so, whether a promoted item was purchased. This information serves
as the basis for the analyses performed and the results described in this chapter.
The variables used in the hypotheses derived in Section 4.2 and 4.3 will be
operationalized in Section 7.2. This results in an overview <strong>of</strong> the variables used in the
analysis. The model used to derive the drivers <strong>of</strong> promotion response was already dealt
with in Section 5.4.1. Section 7.3 describes the format <strong>of</strong> the data used to test the
hypotheses. Before actually starting the analyses, variables have to be screened on their
usefulness or their potential disturbing influence. This is discussed in Section 7.4. The
results will be presented in Section 7.5.
7.2 Operationalization
<strong>Promotion</strong> response can be operationalized at various levels <strong>of</strong> detail. In this chapter, we
look at a rather general level. We ignore the specific type <strong>of</strong> promotion response (the socalled
sales promotion reaction mechanisms). Whether or not a household responds to the
available sales promotion is the key dependent variable <strong>of</strong> interest in this chapter. This
dependent variable, from here on called promotion response, is defined as a binary variable
for each individual shopping trip. It is 1 if a sales promotion is used and 0 otherwise. Only
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