Analysis of Sales Promotion Effects on Household Purchase Behavior

elationship between product category characteristics and the sales promotion reaction
mechanisms. But, again, these correlation coefficients are based on only 6 observations.
Brand switching (BS) occurs most <strong>of</strong>ten for the higher priced categories c<strong>of</strong>fee
and candy bars. Furthermore, brand switching (BS) occurs less <strong>of</strong>ten within more bulky
categories. Purchases are not accelerated (TA) for higher priced categories. Quantity net
(QN) effects are negatively related with promotional frequency. Households buy more <strong>of</strong> a
promoted product that is better storable (QN).
As mentioned before, the numbers in Table A8.2 regarding the promotion reaction
mechanisms are based on across household averages, meaning loss <strong>of</strong> information. Therefore,
instead <strong>of</strong> computing the Spearman correlation coefficient between the product category
characteristics and the estimated averages <strong>of</strong> the sales promotion reaction mechanisms, we use
data at the individual household level and compute the Pearson correlation coefficient.
For each household we have estimates for each <strong>of</strong> the reaction mechanisms. Figure
A8.1 in Appendix A8 depicts the general format <strong>of</strong> the dataset used in this chapter. The data
matrix contains 200 rows (number <strong>of</strong> households) and 114 columns (6 x 19, 6 product
categories, for each category 11 sales promotion reaction mechanism measures and 8 product
characteristic ratings are estimated). As not all households purchased from all categories,
some matrix elements for the sales promotion reaction mechanism measures contain no
information. The product category characteristic ratings are the ratings as introduced in Table
8.3. These ratings differ across the product categories, but are constant within the product
category across the different households. We will refer to this data format for clarification
purposes throughout the remainder <strong>of</strong> this chapter.
So for each sales promotion reaction mechanism, we can compute the correlation
coefficient using data from each individual household, where the category characteristics are
<strong>of</strong> course constant across the households but differ across the product categories. The
resulting Pearson correlation coefficients can be found in Table 8.4. These coefficients are
used to test the hypotheses derived in Section 4.3. Note, however, that only 6 product
categories are included in this research and therefore the hypotheses can only be tested in a
tentative way.
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