Analysis of Sales Promotion Effects on Household Purchase Behavior

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to buy less than what it normally purchases, or the household can decide to postpone its subsequent shopping trip to compensate for these extra promotional purchases. The sales promotion therefore can also influence the household behavior during the next shopping trip (the so-called post-promotional effects). Some households anticipate a sales promotion coming up and therefore wait for it, or buy less right now (the so-called pre-promotional effects). The effects <strong>of</strong> sales promotions on household purchase behavior have to be studied in an intertemporal setting, not taking only the current promotional shopping trip into account but also the pre- and post-promotional shopping trips. First <strong>of</strong> all, households have to buy the promoted products before any <strong>of</strong> these effects can occur. Households use c<strong>of</strong>fee promotions the most. On average, households made use <strong>of</strong> the available promotions during 44 percent <strong>of</strong> the promotional shopping trips for c<strong>of</strong>fee (a promotional shopping trip is called promotional if both a household purchases from the specific category and there was a promotion within that specific category). Pasta promotions are used the least (8 percent). <strong>Promotion</strong> response differs across the product categories. Measures that take this intertemporal aspect into account are developed for brand switching, changes in purchase time, changes in purchase quantity, and category expansion (the net effect <strong>of</strong> timing and quantity). The measures are based on comparing the promotional, pre-, and post-promotional shopping trip with the average non-promotional purchase behavior. The measures are estimated for each individual household for the six product categories, the interested reader is referred to Section 5.4.2 for the details. When we look at the specific sales promotion reaction mechanisms, again differences between categories are found. For all six categories included in this research significant brand switch effects are found, but ranging from 7 percent for s<strong>of</strong>t drink promotions up to 47 percent for c<strong>of</strong>fee promotions. Purchase timing and purchase quantity effects are found to be significant for some categories, but not for all. <strong>Promotion</strong>s are found to accelerate purchase timing for two categories, pasta and candy bars. In addition, households postpone their post-promotional shopping trip for two other categories, c<strong>of</strong>fee and s<strong>of</strong>t drinks. The quantity bought on promotion is increased for four product categories, s<strong>of</strong>t drinks, fruit juice, potato chips, and c<strong>of</strong>fee. The increase ranges from 26 percent for s<strong>of</strong>t drinks up to 96 percent for c<strong>of</strong>fee. Households do seem to adjust their pre- and post-promotional purchase 199
quantity downward for potato chips. Category expansion effects are found to be positive for all categories, but only significant for fruit juice (increase <strong>of</strong> 24 percent). In general, households seem to behave in a systematic way. Purchase timing and purchase quantity are used as two interdependent mechanisms. Shoppers either accelerate their purchase timing due to a promotion but do not buy more, or they buy more <strong>of</strong> a promoted product during a non-accelerated promotional shopping trip. When a promotion results in a large quantity increase, the next shopping trip is postponed. Purchase quantity and purchase timing are therefore two interdependent mechanisms and are used by shoppers to correct for their promotional purchase behavior, during the promotional and/or the postpromotional shopping trip. For example, c<strong>of</strong>fee promotions lead to an increase in purchased quantity, which is almost doubled. But, the next shopping trip is postponed, waiting extra long to repurchase again within the same product category. But not all promotional effects are compensated for. The extra promotional fruit juice purchases lead to category expansion. This indicates that sales promotions do not lead only to cannibalization <strong>of</strong> future category expenditures. <strong>Sales</strong> promotions also result in incremental category expenditures. 9.2.2.2 Product Category Characteristics The sales promotion reaction mechanisms occur in different patterns across the six product categories. For some categories brand switching is relatively <strong>of</strong>ten combined with accelerated purchase timings (candy bars and pasta), whereas for other categories brand switching is combined with changes in purchase quantity (s<strong>of</strong>t drinks, fruit juice, potato chips, and c<strong>of</strong>fee) is more common. In turn, the extra promotional potato chips purchases are compensated for by buying less before and after the promotional shopping trip. For this product category, promotions seem to lead to cherry picking purchase behavior. Households compensate for the extra promotional c<strong>of</strong>fee and s<strong>of</strong>t drinks purchases by postponing their next purchase. Buying a different quantity due to a promotion occurs the most <strong>of</strong>ten, followed by brand switching and a change in interpurchase time. But, the extra quantity purchased is smaller if the promoted brand is not a favorite brand, i.e. in case <strong>of</strong> a brand switch. This is found to be the strongest for fruit juice products. The purchase quantity <strong>of</strong> promotional non- 200
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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
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esponsive the households within tha
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Table 7.3: Relationship promotion r
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indication that decreasing marginal
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Table 7.10: Relationship promotion
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7.5.2.8 Variety Seeking Two intrins
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anymore. Therefore it is concluded
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Thus, store loyalty and promotion r
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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
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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 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: indirectly from promotional purchas
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
Page 239 and 240: Van Trijp, H.C.M. and J.B.E.M. Stee
Page 241 and 242: Winer, R.S., Bucklin, R.E., Deighto
Page 244 and 245: APPENDIX A4: Research Overview Tabl
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Page 251 and 252: Table A7.1 continued Symbol Descrip
Page 253 and 254: Table A7.2: Data legitimacy check (
Page 255 and 256: Table A7.3: Results binary logistic
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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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