Analysis of Sales Promotion Effects on Household Purchase Behavior

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generally generated from a smaller sample size. Furthermore, it is difficult to start up and maintain a representative household panel. Some <strong>of</strong> the pre-scanning research on consumer behavior focused on the micro (individual consumer or household) or segment-level (e.g., Webster 1965, Massy and Frank 1965, Blattberg and Sen 1974, Blattberg et al. 1978). In this study, we will make use <strong>of</strong> household-level scanner data for analyzing purchase behavior reactions to sales promotions at the individual household level. By doing so, we develop new insights into the ‘why’ and ‘what’ questions: ‘Why do consumers react to sales promotions in their purchase behavior’, and ‘What are the effects <strong>of</strong> sales promotions on household purchase behavior’. Numerous variables have been proposed to describe the relationship between sales promotions and consumer buying behavior. Household demographics (income, household size, children, etc.), household psychographics (household psychological characteristics such as deal proneness, variety seeking), and product category characteristics (volume, perishability, price) are just some examples. Findings <strong>of</strong> different studies are <strong>of</strong>ten conflicting with respect to the relationship between household variables and category variables with household promotional purchase behavior. For example, some researchers found that income has a positive influence on promotion response behavior (e.g., Urbany et al. 1996), whereas others found opposite results (e.g., Inman and Winer 1998). Based on an in-depth longitudinal analysis <strong>of</strong> household purchase behavior we try to identify drivers <strong>of</strong> household sales promotion response. Blattberg, Briesch, and Fox (1995) summarized the key findings in the literature up to 1995. They provide research issues with conflicting empirical results, and also identify issues, which are not yet studied empirically. Some authors found that the majority <strong>of</strong> promotional volume comes from brand switchers (e.g., Totten and Block 1987, Gupta 1988, Bell et al. 1999). However, Chintagunta (1993) and Vilcassim and Chintagunta (1995) found that more promotional volume comes from category expansion, rather than from brand switching. By studying sales promotions at the individual household level, we can track these sources down. Opposite to most prior research, we apply an intertemporal analysis to uncover the sources <strong>of</strong> promotional household purchase behavior. Besides 3
investigating how households respond to promotions when they are present, also pre- and post-promotional household purchase behavior is taken into account. Several researchers have spent considerable effort trying to identify and understand the ‘deal prone’ consumer. Unfortunately, different conceptualizations, definitions, and operationalizations <strong>of</strong> deal proneness led to conflicting insights. Furthermore, most researchers (e.g., Webster 1965, Montgomery 1971, Lichtenstein et al. 1995, 1997, Burton et al. 1999) used a behavioral or attitudinal outcome measure to operationalize deal proneness. But, deal proneness actually represents a psychological trait and can therefore not be directly measured as promotion response, neither within nor across different product categories. Ainslie and Rossi (1998) were among the first researchers who investigated similarities in brand choice behavior across product categories to get possible evidence for the notion that sensitivity to marketing mix variables is a consumer trait and not unique to specific product categories. The existence <strong>of</strong> deal proneness was not inferred directly from promotional behavior, but indirectly. Other possible causes were taken into account and the remaining, unexplained part <strong>of</strong> household purchase behavior was used to draw conclusions regarding deal proneness. Sensitivity was interpreted as brand choice marketing mix sensitivity. According to Ainslie and Rossi (1998), sensitivity to marketing mix variables is a consumer trait and is not unique to specific product categories. We will expand their work by incorporating not only brand choice, but also purchase quantity and purchase timing. We will investigate whether there are similarities across product categories in household promotion response behavior. We will further investigate whether these similarities result from household characteristics such as income, available time, children, etc., or if there really is something like an individual deal proneness trait. In this study, the different types <strong>of</strong> sales promotion incorporated are not all associated with a short-term price-cut. The term deal proneness therefore does not relate only to price-cuts, but also to the so-called promotional signals (e.g., Inman and McAlister 1993). The key feature <strong>of</strong> our approach is the “microscopic” level <strong>of</strong> analysis. We will perform an analysis <strong>of</strong> individual household response behavior with respect to sales promotions. Our goal is to develop an approach that provides a decomposition <strong>of</strong> sales promotion response by sales promotion reaction mechanisms (store switching, brand 4
Page 1 and 2: LINDA H. TEUNTER Analysis</
Page 4 and 5: Analysis o
Page 6 and 7: Voorwoord Soms valt de appel echt n
Page 8 and 9: Contents 1 INTRODUCTION AND OVERVIE
Page 10 and 11: 5.4.2.3.1 Inter Purchase Time .....
Page 12 and 13: 1 INTRODUCTION AND OVERVIEW 1.1 Int
Page 16 and 17: switching, purchase acceleration, c
Page 18 and 19: strategy change (decrease in promot
Page 20 and 21: of promotions, or
Page 22 and 23: characteristics are important in ex
Page 24: Chapter 5 are applied to study the
Page 28 and 29: 2 THEORIES OF CONSUMER BUYING BEHAV
Page 30 and 31: systematically explored the decisio
Page 32 and 33: the part of the co
Page 34 and 35: As mentioned before, Figure 2.3 is
Page 36 and 37: product use coupled with the import
Page 38 and 39: 2.3.2 Stimulus-Response Model Appli
Page 40 and 41: 2.3.2.2 Operant Conditioning In ope
Page 42 and 43: X is very popular that it will brin
Page 44 and 45: But, in contrast, economic theory c
Page 46 and 47: compared to a perceived benchmark -
Page 48 and 49: High need-for-cognition (NFC) indiv
Page 50 and 51: 2.3.4.2 Literature Overview Our rev
Page 52 and 53: 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
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less likely to seek variety. More e
Page 75 and 76:
3.3.1 Store Loyalty Store loyalty s
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more often (probab
Page 79 and 80:
Table 3.12 continued Hypothesis H9a
Page 81 and 82:
4.2.1 Brand Switching Brand switchi
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involvement purchases for most cons
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Neslin (1998), there is a great nee
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are called “attributions.” Attr
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and less than 2 percent by stockpil
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into a unit sales decomposition and
Page 93 and 94:
4.3.4 Storability/Perishability Sto
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Economic theory ignores mental deci
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seeking (cf. Assael 1987, Desphande
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there another factor that is relate
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Pr(event) 90 = 1+ 1 z e − Here Z
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5.4.2 Sales <stron
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It represents the fraction
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96 We measure possible time acceler
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promotional post-promotional purcha
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( 12) CategoryExpansion effect : 10
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PART II EMPIRICAL ANALYSIS 103
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more persons living together and di
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6.4 Linking Household and Store Dat
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Table 6.1 contains the results <str
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The age of the sho
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Table 6.4: Frequency distribution <
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7 EMPIRICAL ANALYSIS ONE: DRIVERS O
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Table 7.1: Operationalization <stro
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during 435 shopping trips more than
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The variables size, age, and cycle
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7.5 Results Drivers of</str
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esponsive the households within tha
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Table 7.3: Relationship promotion r
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indication that decreasing marginal
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Page 146 and 147:
Page 148 and 149:
Table 7.10: Relationship promotion
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Page 152 and 153:
Page 154 and 155:
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
Page 278 and 279:
Title: Beyond Generics;A closer loo
Page 280 and 281:
Title: Planning and Control Concept
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