Analysis of Sales Promotion Effects on Household Purchase Behavior

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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. 165
Purchase frequency is defined as the average number <strong>of</strong> purchase occasions per household per quarter <strong>of</strong> a year. Table 8.3 contains the results using purchase data from the last quarter <strong>of</strong> 1995. The indicator for promotional activity used in the research deals with promotional frequency, not with the magnitude <strong>of</strong> the promotions. We have used the causal data (promotional data) from different stores and different weeks to derive an average number <strong>of</strong> promotions within each <strong>of</strong> the six categories per week. As Table 8.3 shows, pasta and fruit juice are promoted the least whereas candy bars and potato chips are promoted most <strong>of</strong>ten. With respect to storability, different indicators have been used in prior research. Bulkiness (volume) and perishability (Raju 1992), shape <strong>of</strong> the product (regular or not), refrigerated or not (Bell et al. 1999). Regarding bulkiness, we use a refinement <strong>of</strong> the modal unit-size (as derived to obtain the average price level) as an indicator (modal unitsize and storability being negatively related). The dimension <strong>of</strong> modal unit-size differs across the product categories. Some sizes are measured in grams, other are measured in cubic centimeters (cc’s). Furthermore, some <strong>of</strong> the categories included in this research have packaging containing a lot <strong>of</strong> air (and therefore storage space) whereas others are packaged vacuum. The refinement <strong>of</strong> the modal unit-size takes these differences into account, it is based on the number <strong>of</strong> cc’s <strong>of</strong> each modal unit-size. Regarding storability, following Bell et al. (1999), we use a dichotomous classification scheme for the product categories. Three <strong>of</strong> our product categories were also used in their study. C<strong>of</strong>fee and s<strong>of</strong>t drinks were classified as being storable whereas potato chips category was classified as not being storable. The remaining three categories (fruit juice, pasta, and candy bars) are classified as being storable or not using subjective arguments, but trying to follow the classification <strong>of</strong> Bell et al. (1999), combining shape, perishability, and storage place (inside or outside the refrigerator). Fruit juice products are comparable to s<strong>of</strong>t drink products. They last long unopened, but once the product is open, the storage life is not very long. Therefore fruit juice is being classified as storable. We classify candy bars as not storable since they need to be refrigerated. Pasta products are not easily classified. Storage life is quite long, but the shape <strong>of</strong> the product is not very suited for stacking. We do classify it as storable, but less storable than c<strong>of</strong>fee products. Narasimhan et al. (1996) did the same. 166
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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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promotional post-promotional purcha
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( 12) CategoryExpansion effect : 10
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PART II EMPIRICAL ANALYSIS 103
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more persons living together and di
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6.4 Linking Household and Store Dat
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Table 6.1 contains the results <str
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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 160 and 161: dummies add up to one. This implies
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
Page 173 and 174: and unweighted. With respect to the
Page 175: 164 In general, the average quantit
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
Page 199 and 200: Promotional extra
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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Page 213 and 214: 9.2.2.3 Deal Proneness With respect
Page 215 and 216: 204 related to promotion response.
Page 217 and 218: influenced by out-of</stron
Page 219 and 220: Andrews, K.Z. (1997), “Do Marketi
Page 221 and 222: Blattberg, R.C., Eppen, G.D. and J.
Page 223 and 224: Chintagunta, P. (1993), “Investig
Page 225 and 226: 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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