Analysis of Sales Promotion Effects on Household Purchase Behavior

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dummies add up to one. This implies that not all <strong>of</strong> them can be incorporated in the analysis. It was chosen to exclude feature promotions from the analysis, because prior research has shown that this type <strong>of</strong> promotions is <strong>of</strong>ten the least effective. Each promotion type parameter estimate has to be interpreted as the extra effect <strong>of</strong> that specific promotion type compared to feature promotions. Display promotions are more effective than feature promotions. DF promotions have the same impact as DP promotions, even though no economic price gain is attached to them (the differences between the estimated coefficients are not significant, which is tested by using DP promotions as the reference category, these results are not shown). Apparently, Dutch consumers react to strong promotional signals (promotions without an economic benefit attached to them, see Inman et al. (1990)) when it concerns a display. <strong>Promotion</strong>al feature signals have less impact. A possible explanation for the different effects for display and feature promotional signals could be that households that take the trouble to look at features, also look whether there are price reductions (price gains) attached to them. For US consumers, Inman et al. (1990) concluded that some consumers react to promotion signals without considering relative price information. Anderson and Simester concluded that sale signs increase demand. The households from our analysis set do react to display and to combined display/feature signals. With respect to the combined display/feature signal, the effect is even as much as for price cuts combined with a display. As mentioned before, displays especially tend to work as promotional signals. To our knowledge, the influence <strong>of</strong> promotion signals on sales has not been studied on a large scale in the Netherlands before. FP promotions have more influence than DP promotions (the difference in estimates being significantly different from zero, results are not shown). Many prior studies found that displays are more effective than feature activities, but for example Rossi and Allenby (1993) found the opposite effect. The best communicated promotions (DFP) have the strongest positive effect on the probability that a household makes use <strong>of</strong> a promotion. <strong>Promotion</strong>s for the favorite brand have a large estimated regression coefficient and therefore a strong impact on households when deciding whether to use the available promotion or not. This effect is even on top <strong>of</strong> the effect <strong>of</strong> the specific promotion type 149
present for the favorite brand. The number 22.8 (being B e ) is therefore the minimum value <strong>of</strong> the factor by which the odds change when a favorite brand is on promotion. The odds ratio in this research is the quotient <strong>of</strong> the probability that a household uses a promotion and the probability that the household does not use the promotion. The probability <strong>of</strong> response therefore increases to a very large amount when the brand on promotion is the favorite one. This supports the criticism from many practitioners and scientists that sales promotions have strong effects, leading to peak sales, but that a big share <strong>of</strong> these extra sales comes from customers who would have bought the product anyway. The effects <strong>of</strong> the different promotion types have face validity. <strong>Promotion</strong>s with an economic benefit attached to them have a bigger impact than promotions without an economic benefit. The display and feature combined price-promotions have the biggest positive influence <strong>of</strong> all promotion types. <strong>Promotion</strong>s for the favorite brand have a strong positive influence, and the presence <strong>of</strong> other types <strong>of</strong> promotions decreases the influence <strong>of</strong> a promotion. When the other promotion is for a favorite brand, the negative effect even becomes larger. 7.5.3 Contributions <strong>of</strong> the Study Regarding the Relationship between 150 Household (Purchase) Characteristics and <strong>Promotion</strong> Response In the preceding sections, the drivers <strong>of</strong> promotion response have been investigated. Different household characteristics (demographics, psychographics, and purchase characteristics), identified to be possible drivers based on prior research, have been incorporated in a binary logistic regression model to estimate the influence <strong>of</strong> these variables. Table 7.22 contains all hypotheses empirically tested and the empirical findings. The most interesting findings will be summarized in this subsection. Most hypotheses have been empirically tested at two levels, at the general level (across all sales promotions) and distinguishing between in-store and out-<strong>of</strong>-store promotions. Some hypotheses are rejected when all promotions are taken into account, but are accepted at the specific level <strong>of</strong> in-store versus out-<strong>of</strong>-store promotions.
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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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more often (probab
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Table 3.12 continued Hypothesis H9a
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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
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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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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 128 and 129: 7 EMPIRICAL ANALYSIS ONE: DRIVERS O
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 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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Page 175 and 176: 164 In general, the average quantit
Page 177 and 178: Purchase frequency is defined as th
Page 179 and 180: Table 8.3: Product category rating
Page 181 and 182: Table 8.4: Pearson correlation betw
Page 183 and 184: We hypothesized that within impulse
Page 185 and 186: measure (PU). Referring to Figure A
Page 187 and 188: Table 8.6: Significant within categ
Page 189 and 190: looked at this promotional bump dec
Page 191 and 192: Table 8.8: Differences in promotion
Page 193 and 194: approach (about one third) are much
Page 195 and 196: promotions lead to large purchase t
Page 197 and 198: studies. Promotion
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Page 201 and 202: categories revealed that the strong
Page 203 and 204: degree. When households switch bran
Page 205 and 206: specific sales promotion reaction m
Page 207 and 208: increasing (Inman and Winer 1998),
Page 209 and 210: 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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