Analysis of Sales Promotion Effects on Household Purchase Behavior

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purchase behavior, taking intervening variables into account, the promotion trait conceptualization stands on shaky grounds. With this framework, we follow up on research by Seetharaman and Chintagunta (1998). They concluded that there is a need to simultaneously account for the effects <strong>of</strong> time-varying marketing variables, heterogeneity across households and higher-order effects (such as variety seeking) while modeling household purchase behavior in order to obtain valid estimates <strong>of</strong> model parameters. In addition, also possible differences across product categories are taken into account. This framework applies to each individual household. The dependent variable is the overt household promotion response behavior. This possibly differs across reaction mechanism, promotion-type, product category, and can depend on household variables. This way <strong>of</strong> conceptualization <strong>of</strong>fers the opportunity to answer the two research questions as stated in Chapter 1. First, can we relate the exhibited household promotion response behavior to household variables? If so, do we find a consistent pattern in individual household purchase behavior regarding promotion response, either across product categories, dealtypes, and/or reaction mechanisms? And if we find a pattern, is this pattern then caused by the socio-economic, demographic, and/or psychographic household characteristics such as social class, size, composition <strong>of</strong> the household, variety seeking and purchase process characteristics alone, or also by an individual deal proneness trait? Second, can we find a general decomposition <strong>of</strong> household promotion response into the sales promotion reaction mechanisms across different product categories? 5.3 Research Methodology The focus <strong>of</strong> this dissertation is to observe household purchase behavior at such a microscopic level that it allows us to draw conclusions about the effects <strong>of</strong> sales promotions on household purchase behavior. Are households influenced by sales promotions? And if so, in what way? Are all households influenced in the same way? Are there household characteristics that explain the difference in displayed household deal response behavior? Are there similarities within household promotion response across product categories? Are these similarities explained by household characteristics, or is 87
there another factor that is related to these similarities across product categories? Can we find a consistent household promotion response decomposition across different product categories? We have chosen a two-step approach to answer these questions. 1. Identify drivers <strong>of</strong> household promotion response; 2. Investigate the sales promotion reaction mechanisms that constitute household promotion response. In the first step, we try to empirically identify drivers <strong>of</strong> household promotion response. The hypotheses regarding the possible drivers <strong>of</strong> household promotion response, as derived in Chapter 3, based on theories from consumer behavior and prior research, are empirically tested. Household variables such as size, composition <strong>of</strong> the household, variety seeking, purchase frequency are included in this research as possible drivers <strong>of</strong> promotion response. In addition, the empirical findings are used to make a statement about the deal proneness trait concept. We investigate whether the household characteristics mentioned above explain the biggest part <strong>of</strong> consistencies in household sales promotion response behavior across product categories, or whether a substantial amount <strong>of</strong> unexplained variance remains, which could point towards the existence <strong>of</strong> deal proneness In the second step, the sales promotion reaction mechanisms are studied in detail. Did the household switch brands due to the promotion or not? Or did the household change its purchase quantity and purchase timing? Intuitively appealing, intertemporal measures (taking also the pre- and post-promotional changes in purchase behavior into account) are derived for each sales promotion reaction mechanism. Differences within and across households are studied, leading to additional insights in the deal proneness existence question. The different reaction mechanisms are studied from two different angles. The first angle is the intertemporal study <strong>of</strong> effects <strong>of</strong> sales promotions on household purchase behavior, meaning that not only the effects during the promotional shopping trip itself, but also pre-promotional and post-promotional effects on purchase behavior are incorporated. A household that buys more <strong>of</strong> a product when it is on promotion, may buy less before (anticipation effect) or after the promotion period. The intertemporal approach takes the time dynamic effects into account. The second angle is the decomposition <strong>of</strong> the promotional bump (e.g., Gupta 1990, Bucklin et al. 1998, Bell et al. 1999). This decomposition at the household level derives the frequency and strength <strong>of</strong> the different sales promotion reaction mechanisms. 88
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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 -
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
Page 77 and 78: more often (probab
Page 79 and 80: Table 3.12 continued Hypothesis H9a
Page 81 and 82: 4.2.1 Brand Switching Brand switchi
Page 83 and 84: involvement purchases for most cons
Page 85 and 86: Neslin (1998), there is a great nee
Page 87 and 88: are called “attributions.” Attr
Page 89 and 90: and less than 2 percent by stockpil
Page 91 and 92: into a unit sales decomposition and
Page 93 and 94: 4.3.4 Storability/Perishability Sto
Page 95 and 96: Economic theory ignores mental deci
Page 97: seeking (cf. Assael 1987, Desphande
Page 101 and 102: Pr(event) 90 = 1+ 1 z e − Here Z
Page 103 and 104: 5.4.2 Sales <stron
Page 105 and 106: It represents the fraction
Page 107 and 108: 96 We measure possible time acceler
Page 109 and 110: promotional post-promotional purcha
Page 111 and 112: ( 12) CategoryExpansion effect : 10
Page 114: PART II EMPIRICAL ANALYSIS 103
Page 117 and 118: more persons living together and di
Page 119 and 120: 6.4 Linking Household and Store Dat
Page 121 and 122: Table 6.1 contains the results <str
Page 123 and 124: 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
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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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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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