Analysis of Sales Promotion Effects on Household Purchase Behavior

switching, purchase acceleration, category expansion, and repeat purchasing) within and
across product categories and promotion types. Possible drivers <strong>of</strong> promotion response will
be identified.
Our objective is to help researchers and practitioners reveal more <strong>of</strong> the effects <strong>of</strong>
sales promotions on individual household purchase behavior. In contrast to most
promotional research, we do not take the promotion as the point <strong>of</strong> departure. Instead, the
central research object in this study is the purchase behavior <strong>of</strong> the individual household. In
our approach, we are observing individual household purchase behavior over time, using a
magnifying glass.
A side effect <strong>of</strong> gaining insights in individual household deal response is that it
provides us with the opportunity to partly examine whether retailers’ expenditures on sales
promotions are rewarding. Are they affecting household purchase behavior in the alleged
way? Or are the increasing concerns justified: do sales promotions only increase short-term
sales through ‘borrowed’ expenditures?
1.2 <strong>Sales</strong> <strong>Promotion</strong>s
<strong>Sales</strong> promotions are action-focused marketing events whose purpose is to have a direct
impact on the behavior <strong>of</strong> the firm’s customers. There are three major types <strong>of</strong> sales
promotions: consumer promotions, retailer promotions, and trade promotions. Consumer
promotions are promotions <strong>of</strong>fered by manufacturers directly to consumers. Retailer
promotions are promotions <strong>of</strong>fered by retailers to consumers. Trade promotions are
promotions <strong>of</strong>fered by manufacturers to retailers or other trade entities (Blattberg and
Neslin 1990). This thesis is focused on promotions <strong>of</strong>fered to the consumer, therefore a
combination <strong>of</strong> consumer and retailer promotions. Throughout the world, sales promotions
<strong>of</strong>fered to consumers are an integral part <strong>of</strong> the marketing mix for many consumer
products. Marketing managers use price-oriented promotions, such as coupons, rebates,
and price discounts to increase sales and market share, entice consumers to trial, and
encourage them to switch brands or stores. Non-price promotions such as sweepstakes,
7frequent user clubs, and premiums add excitement and value to brands and may increase
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