Analysis of Sales Promotion Effects on Household Purchase Behavior

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promotional quantity are positively related (BS and QP), also leading to extra consumption (BS and CE). In general, sales promotions do induce households to change their purchase behavior, especially to switch brands and buy more <strong>of</strong> the promoted product. But when a different brand is chosen, households do not seem to purchase more than they would normally do (except for promoted fruit juice products, no significant positive correlation is found between BS and QP). When households do not switch brands, buying sooner and/or more seems to occur across all categories, even resulting in additional consumption (either a negative correlation between TN and CE, or a positive correlation between QN and CE). <strong>Promotion</strong>s therefore seem to be pr<strong>of</strong>itable for retailers and product managers. But some caution has to be taken. Frequent promotions within a category may lead to cherry picking behavior, especially for high impulse product categories. Summarizing, sales promotions do affect sales. They influence households to purchase different brands, buy a product sooner or later, or purchase more <strong>of</strong> the product. But consistencies across categories within the same reaction mechanism only occur to a modest degree. We have found empirical evidence that consistencies are stronger within a category across mechanisms than across categories within mechanisms (based on the relative number <strong>of</strong> significant correlation coefficients). In accordance with the findings and conclusions in Chapter 7, promotion response is more consistent within a product category than across different product categories. No empirical pro<strong>of</strong> for the existence <strong>of</strong> deal proneness is found, neither at the promotional utilization level, nor at the level <strong>of</strong> the sales promotion reaction mechanisms. Thus far, the empirical argumentation has used the results from the intertemporal approach. Not only were the effects during the promotional shopping trip itself studied but also before and after effects were incorporated to gain understanding <strong>of</strong> the effects <strong>of</strong> sales promotions on household purchase behavior. Incorporating this intertemporal aspect is <strong>of</strong> great importance to capture the household dynamics to determine for example whether or not consumption increases as a result <strong>of</strong> promotions. Nevertheless, the next section deals with the empirical decomposition <strong>of</strong> just the promotional bump, not taking the possible intertemporal adjustments into account. Many other important contributions to sales promotion models have 177
looked at this promotional bump decomposition at and across product categories (e.g., Gupta 1988, Chiang 1991, Chintagunta 1993, Bucklin et al. 1998, and Bell et al. 1999). 8.5 <strong>Promotion</strong>al Bump Decomposition into Brand Switching, Purchase 178 Quantity, and Purchase Timing A promotion can affect the timing, brand choice, and quantity <strong>of</strong> a household’s purchase. A change in timing means that a purchase is moved forward (TA-) or backward (TA+) in time. In order to exclude small ‘natural’ variations when analyzing the timing effect, we only speak <strong>of</strong> a change if the interpurchase time before a promotional shopping trip is at least 10 percent smaller or larger than the overall average non-promotional interpurchase time. Similarly, we speak <strong>of</strong> a positive (QP+) or negative (QP-) change in purchase quantity due to a promotion if the purchase quantity during the promotional shopping trip is at least 10 percent more or less, respectively, than the overall average non-promotional purchase quantity. We speak <strong>of</strong> a brand switch (BS) if a non-favorite brand is purchased during the promotional shopping trip. The promotional effects are household and product category specific. The purchase timing effect has three possible outcomes (accelerated, decelerated, no change). Brand switching has two possible outcomes (it occurs or not). The purchase quantity effect has three possible outcomes (increased, decreased, no change). This leads in total to eighteen possible combinations <strong>of</strong> promotional reaction mechanisms that can occur during a utilized promotional shopping trip (one <strong>of</strong> them representing that none <strong>of</strong> the effects occurred). Table A8.3 shows how <strong>of</strong>ten these combinations <strong>of</strong> effects occur and the average quantity purchased with each <strong>of</strong> the effects. The results are given for each product category separately, since we expect differences between categories based on prior studies. The results for the pasta category are not shown due the limited number <strong>of</strong> observations (n=38). The bottom part <strong>of</strong> Table A8.3 gives some additional occurrences (without making the distinction between accelerated or decelerated purchase times and increased or decreased purchase quantities). Table 8.7 provides the total aggregated percentages <strong>of</strong> occurrence for each <strong>of</strong> the five possible response effects (BS, QP-, QP+, TA-, TA+).
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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
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Table 6.4: Frequency distribution <
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7 EMPIRICAL ANALYSIS ONE: DRIVERS O
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Table 7.1: Operationalization <stro
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during 435 shopping trips more than
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The variables size, age, and cycle
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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 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: Table 8.6: Significant within categ
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
Page 211 and 212: quantity downward for potato chips.
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), “
Page 227 and 228: Gupta, Sachin and P.K. Chintagunta
Page 229 and 230: Kahn, B.E., Morrison, D.G.and G.P.
Page 231 and 232: Lattin, J.M. and R.E. Bucklin (1989
Page 233 and 234: McAlister, L. and E. Pessemier (198
Page 235 and 236: Petty, R.E. and J.T. Cacioppo (1981
Page 237 and 238: 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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