Analysis of Sales Promotion Effects on Household Purchase Behavior

Table 7.23: Summary <strong>of</strong> studies relating promotion response across categories
Sign Relationship Study
+ Bawa and Shoemaker (1987)
Wierenga (1974)
Seetharaman et al. (1999)
Blattberg et al. (1976, 1978)
Ainslie and Rossi (1998)
0 Bell et al. (1999)
Cunningham (1956)
Massy et al. (1968)
Wind and Frank (1969)
Manchanda et al. (1999)
Narasimhan et al. (1996)
Hypothesis: Deal proneness does not exist.
Several studies mention category characteristics that are related to promotion response.
These are: (1) the number <strong>of</strong> brands within a category, (2) the average price level within a
category, (3) the average interpurchase time <strong>of</strong> a category, (4) storability, (5) perishability,
(6) impulse sensitivity, and (7) category promotion frequency. Bolton (1989) found that
the effects <strong>of</strong> category-display and feature activity on promotional elasticities are much
larger than the effects <strong>of</strong> brand-prices, display, and feature activity. Raju (1992) concluded
that there is more promotional response for categories with deeper, infrequent dealings and
good storability. Narasimhan et al. (1996) studied the relationship between product
category characteristics and promotional elasticity for 108 product categories. They
reported that promotions get the highest response in easily stockpiled, high penetration
categories with short purchase cycles. Bell et al. (1999) concluded that storability and share
<strong>of</strong> budget are two category characteristics that play a large role.
Based on the fact that category characteristics such as storability, perishability,
promotion frequency, number <strong>of</strong> different brands, etc. differ across categories and
influence promotion response, we expect that promotion response differs across product
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