Analysis of Sales Promotion Effects on Household Purchase Behavior

7.5.2.2 Household Size
As mentioned in Section 7.4, size and cycle are intertwined. At first, size is therefore
linearly incorporated (leading to the first parameter estimate for size in Table 7.4). The
remaining rows show the results <strong>of</strong> treating size as a categorical variable (excluding cycle
and including household size and age as categorical variables, all estimated regression
coefficients can be found in Table A7.3). As mentioned before, no real differences are
encountered when comparing the regression results with cycle and without cycle (age and
size incorporated instead). This implies that the estimates are quite robust to incorporating
different variables, which underlines the validity <strong>of</strong> the findings regarding the drivers <strong>of</strong>
sales promotion response. Table 7.4 shows that bigger households make more use <strong>of</strong> the
available promotions, but the positive effect diminishes for relatively large households
(decreasing marginal returns after a household size <strong>of</strong> four).
Table 7.4: Relationship promotion response and household size
HOUSEHOLD SIZE
H3: Household size and promotion response are positively related.
B S.E. Sign. Exp(B)
Coefficient
model
in linear 0.2544 0.0474 0.0000 1.2897
- 1 -0.1412 0.0820 0.0851 0.8683
- 2 -0.2244 0.0605 0.0002 0.7990
- 3 0.0450 0.0635 0.4785 1.0460
- 4 0.2265 0.0596 0.0001 1.2543
- >=5 0.0941 0.1113 0.3978 1.0986
Test results: Household size and promotion response are positively related.
These findings also direct towards Narasimhan (1984), who argued that the relationship
between size <strong>of</strong> a household and using coupons is log-linear. Our findings provide an
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