Analysis of Sales Promotion Effects on Household Purchase Behavior

8.3 Testing the Hypotheses Relating Product Category Characteristics
with <strong>Sales</strong> <strong>Promotion</strong> Reaction Mechanisms
Prior research has shown that not all sales promotion reaction mechanisms occur to the same
degree across all categories. The findings from the previous section support this across
category difference in promotional response. Linking these differences with some important
product category characteristics might lead to meaningful insights. We therefore try to explain
the differences found in the previous section using the category characteristics discussed in
Section 4.3. Testing the derived hypotheses will be impossible because <strong>of</strong> the limited
number <strong>of</strong> categories included in this research. Therefore only tentative conclusions will be
drawn.
First, we need to determine the value <strong>of</strong> the category characteristics for each <strong>of</strong> the
indicators mentioned in Section 4.3. Table 8.3 contains the results <strong>of</strong> this process. Besides
the estimated size <strong>of</strong> the indicators, also the ranking <strong>of</strong> each <strong>of</strong> the categories is included in
Table 8.3. The categories are ordered according to their overall promotional utilization
(last column). Most <strong>of</strong> the product category characteristics can be derived objectively,
using either data from the households themselves or causal data. Some ratings are copied
from other studies incorporating the same category characteristics. Impulse rating and
storability are partly derived based on subjective arguments. The last row contains the
Spearman rank correlation coefficients between the category characteristics and
promotional utilization. Next, the derivations <strong>of</strong> (rankings <strong>of</strong>) category characteristics will
be discussed in detail.
The average price level per modal unit size is derived using purchase data from
the households (e.g., Bell et al. (1999)). The modal unit-size is defined as the unit-size that
is purchased most <strong>of</strong>ten. A second indicator for the product category price level is the
average dollar spent per purchase occasion (Fader and Lodish (1990)). This price level can
also be easily determined using purchase data. Note from Table 8.3 that the two price
indicators lead to different, though similar rankings <strong>of</strong> the product categories.
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