Analysis of Sales Promotion Effects on Household Purchase Behavior

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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 117
promotional shopping trips during which households purchased from a specific product category are included in this research. Summarizing, the types <strong>of</strong> variables included in the analysis will be the following: (1) household demographics: size and composition <strong>of</strong> the household, age, education, pr<strong>of</strong>ession <strong>of</strong> the shopping responsible person, and job sector <strong>of</strong> the breadwinner; (2) household socio-economic variables: social class, type <strong>of</strong> housing, and home ownership; (3) household pychographics: variety seeking; (4) characteristics <strong>of</strong> the purchasing process: shopping frequency, average size shopping basket, number <strong>of</strong> favorite brands, and number <strong>of</strong> stores visited; and (5) promotion types present in the store. Table 7.1 contains the operationalization <strong>of</strong> the variables, which are used in analyzing promotion response. Table A7.1 contains a more detailed overview <strong>of</strong> the variables used in the analysis. A (+) or (-) sign in Table 7.1 indicates whether the operationalization is expected to be positively or negatively related to a variable. For example, the number <strong>of</strong> different favorite brands is used as a positive indicator <strong>of</strong> variety seeking. Both variety seeking indicators are measured at the product category level. Steenkamp et al. (1996) demonstrated that variety seeking behavior does not occur to the same extent for all products. The different promotion types that are distinguished in this study are grouped into in-store versus out-<strong>of</strong>-store promotions. In-store promotions are defined to occur when display activity is included in the promotion. Out-<strong>of</strong>-store promotions are defined to occur when feature activity is included in the promotion. Although not all feature promotions are out-<strong>of</strong>-store, the majority is. As most prior research has shown that display promotions are more effective than feature promotions, promotions with both display and feature activity are defined as belonging to the in-store promotions. In addition, three promotion characteristics are added to Table 7.1 (X * , X other , and X *other ). These variables are described in more detail in Section 7.3. 118
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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
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has its deficiencies. Any purchase
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Chandon et al. 2000). But deal pron
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2.4 Concluding Remarks Regarding th
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stimulus-organism-response model) c
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Shoemaker 1987). Several factors ha
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such as display promotions. Althoug
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3.2.3 Type of resi
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3.2.5 Education Education links to
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these advantages therefore could be
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less likely to seek variety. More e
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3.3.1 Store Loyalty Store loyalty s
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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 and 104: 5.4.2 Sales <stron
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Page 107 and 108: 96 We measure possible time acceler
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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 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
Page 154 and 155: 7.5.2.8 Variety Seeking Two intrins
Page 156 and 157: anymore. Therefore it is concluded
Page 158 and 159: Thus, store loyalty and promotion r
Page 160 and 161: dummies add up to one. This implies
Page 162 and 163: Table 7.22: Overview empirical test
Page 164 and 165: enacting-on-impulse hypothesis and
Page 166 and 167: Table 7.23: Summary of</str
Page 168: Table 7.24: Correlation error coeff
Page 171 and 172: another category? Or do households
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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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