Analysis of Sales Promotion Effects on Household Purchase Behavior

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2 THEORIES OF CONSUMER BUYING BEHAVIOR 2.1 Introduction Why do people buy what they buy? How do people go about making decisions and choices in the market place and how can sales promotions influence these decisions and choices? Marketing starts with the analysis <strong>of</strong> consumer behavior, which is defined by Blackwell et al. (2001) as those acts <strong>of</strong> individuals directly involved in obtaining, using, and disposing <strong>of</strong> economic goods and services, including the decision processes that precede and determine these acts. Knowledge <strong>of</strong> consumer behavior is an indispensable input to promotional mix decisions. This, in turn, is not confined to manufacturers but extends into the realms <strong>of</strong> the retailer and the nonpr<strong>of</strong>it marketers. Different fields <strong>of</strong> science are important when studying consumer behavior (Economics, Psychology, Sociology, Methodology, Statistics, etc.). Until 1950, the field <strong>of</strong> economics was the main contributor in explaining consumer behavior (Wierenga and van Raaij 1987). Theories regarding utility functions were developed that describe a consumer’s allocation process <strong>of</strong> income across products to maximize utility. Especially effects <strong>of</strong> price and income changes could be studied using utility functions. Later on, marketers borrowed rather indiscriminately from social psychology, sociology, anthropology, or any other field <strong>of</strong> inquiry that might relate to consumer behavior in some way. During the 1960s the behavioral approach <strong>of</strong> consumer behavior emerged as a field <strong>of</strong> academic study. Section 2.2 contains some <strong>of</strong> the most frequently applied models in consumer behavior research. These theories are applied to the field <strong>of</strong> sales promotions in Section 2.3. This chapter ends with some concluding remarks about the relevance <strong>of</strong> these theories to the field <strong>of</strong> sales promotions. 2.2 Basic Models <strong>of</strong> Consumer Behavior It is very difficult to identify the causes <strong>of</strong> consumer behavior. People buy things for many reasons. They seldom are aware <strong>of</strong> all their feelings and thought processes concerning 17
purchases, and many external forces, such as economic and social conditions, constrain their behavior. Scholars in marketing and the behavioral sciences have attempted to search for simplified, yet fundamental, aspects <strong>of</strong> consumption in order to better understand and predict at least a portion <strong>of</strong> behavior in the marketplace. Three outstanding models underlie most <strong>of</strong> the theories that scholars have advanced: the economic model, the stimulusresponse model, and the stimulus-organism-response model (Bagozzi 1986). 2.2.1 Economic Model Economists were the first to propose a formal theory <strong>of</strong> consumer behavior (Bagozzi 1986). Their model has led to the so-called vision <strong>of</strong> economic man, which basically builds on the following premises: 1 Consumers are rational in their behavior. 2 They attempt to maximize their satisfaction in exchanges using their limited resources. 3 They have complete information on alternatives to them in exchanges. 4 These exchanges are relatively free from external influences. Actually, not every approach in economics is based on all four premises. Especially the second premise is the basis for the neoclassical economic theory <strong>of</strong> consumer behavior today. That theory assumes that the consumption <strong>of</strong> goods and services is motivated by the utility that these goods and services provide. Moreover, it assumes that the choices <strong>of</strong> the consumer will be constrained by his or her resources. The economic model hypothesizes that quantity bought (an observable phenomenon) will be a function <strong>of</strong> income, prices, and tastes (which, with the possible exception <strong>of</strong> tastes, are also observable). The mechanism or theory behind the prediction lies in the implied decision process. It is assumed that the consumer attempts to maximize his or her utility, subject to budget constraints. Utility is believed to be unobservable. As a consequence, economists have concentrated primarily on the relationship <strong>of</strong> easily measured variables, such as income and prices, on quantity bought and have not 18
Page 1 and 2: LINDA H. TEUNTER Analysis</
Page 4 and 5: Analysis o
Page 6 and 7: Voorwoord Soms valt de appel echt n
Page 8 and 9: Contents 1 INTRODUCTION AND OVERVIE
Page 10 and 11: 5.4.2.3.1 Inter Purchase Time .....
Page 12 and 13: 1 INTRODUCTION AND OVERVIEW 1.1 Int
Page 14 and 15: generally generated from a smaller
Page 16 and 17: switching, purchase acceleration, c
Page 18 and 19: strategy change (decrease in promot
Page 20 and 21: of promotions, or
Page 22 and 23: characteristics are important in ex
Page 24: Chapter 5 are applied to study the
Page 30 and 31: systematically explored the decisio
Page 32 and 33: the part of the co
Page 34 and 35: As mentioned before, Figure 2.3 is
Page 36 and 37: product use coupled with the import
Page 38 and 39: 2.3.2 Stimulus-Response Model Appli
Page 40 and 41: 2.3.2.2 Operant Conditioning In ope
Page 42 and 43: X is very popular that it will brin
Page 44 and 45: But, in contrast, economic theory c
Page 46 and 47: compared to a perceived benchmark -
Page 48 and 49: High need-for-cognition (NFC) indiv
Page 50 and 51: 2.3.4.2 Literature Overview Our rev
Page 52 and 53: The previously described research h
Page 54 and 55: has its deficiencies. Any purchase
Page 56 and 57: Chandon et al. 2000). But deal pron
Page 58 and 59: 2.4 Concluding Remarks Regarding th
Page 60: stimulus-organism-response model) c
Page 63 and 64: Shoemaker 1987). Several factors ha
Page 65 and 66: such as display promotions. Althoug
Page 67 and 68: 3.2.3 Type of resi
Page 69 and 70: 3.2.5 Education Education links to
Page 71 and 72: these advantages therefore could be
Page 73 and 74: less likely to seek variety. More e
Page 75 and 76: 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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Page 146 and 147:
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Table 7.10: Relationship promotion
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Page 152 and 153:
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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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dummies add up to one. This implies
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Table 7.22: Overview empirical test
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enacting-on-impulse hypothesis and
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Table 7.23: Summary of</str
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Table 7.24: Correlation error coeff
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another category? Or do households
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and unweighted. With respect to the
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164 In general, the average quantit
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Purchase frequency is defined as th
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Table 8.3: Product category rating
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Table 8.4: Pearson correlation betw
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We hypothesized that within impulse
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measure (PU). Referring to Figure A
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Table 8.6: Significant within categ
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looked at this promotional bump dec
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Table 8.8: Differences in promotion
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approach (about one third) are much
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promotions lead to large purchase t
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studies. Promotion
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Promotional extra
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categories revealed that the strong
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degree. When households switch bran
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specific sales promotion reaction m
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increasing (Inman and Winer 1998),
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indirectly from promotional purchas
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quantity downward for potato chips.
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9.2.2.3 Deal Proneness With respect
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204 related to promotion response.
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influenced by out-of</stron
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Andrews, K.Z. (1997), “Do Marketi
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Blattberg, R.C., Eppen, G.D. and J.
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Chintagunta, P. (1993), “Investig
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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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