A Benefit Congruency Framework of Sales Promotion Effectiveness

Abstract

International audienceAre monetary savings the only explanation for consumer response to a sales promotion? If not, how do the different consumer benefits of a sales promotion influence its effectiveness? To address the first question, this research builds a framework of the multiple consumer benefits of a sales promotion. Through a series of measurement studies, the authors find that monetary and nonmonetary promotions provide consumers with different levels of three hedonic benefits (opportunities for value expression, entertainment, and exploration) and three utilitarian benefits (savings, higher product quality, and improved shopping convenience). To address the second question, the authors develop a benefit congruency framework, which argues that a sales promotion's effectiveness is determined by the utilitarian or hedonic nature of the benefits it delivers and the congruence these benefits have with the promoted product. Among other results, two choice experiments show that, as predicted for high-equity brands, monetary promotions are more effective for utilitarian products than for hedonic products. The authors then discuss the implications of the multibenefit and the benefit congruency frameworks for understanding consumer responses to sales promotions, reexamining the value of everyday-low-price policies, and designing more effective sales promotions

Intention to Purchase Products under Volume Discount Scheme: A Conceptual Model and Research Propositions

“…Nevertheless, previous studies have found that the everyday low price tactic cannot fully replace SP strategies (Hoch et al 1994;Lal, Rao 1997). If not, what other con sumer perceptions of the benefits of SPs affect consumer evaluation? Towards this, Chandon et al (2000) proposed a research framework of the multiple consumer benefits of sale promotions. They categorized the benefits of SPs to the consumers as utilitarian benefits (savings, higher product quality, and improved shopping convenience) and hedonic benefits (value expression, entertainment, and exploration).…”

“…Palazon and Delgado (2005) demonstrated that non monetary promotion is also appropriate for utilitarian products as it generates empirical benefits. Raghubir et al (2004) extended the ideas of Chandon et al (2000) and constructed an integrated SP model to as sist marketers to design SP more efficiently as well as more effectively. The researchers considered additional utilitarian and hedonic benefits and explicitly address the informative effects of SP.…”

“…The initial studies on sales promotions proposed by Chandon et al (2000) and Raghubir et al (2004) concep tualized the management models in general. Both models are related to sales promotions and do not focus on volume discount.…”

“…In fact, the definitions and measurement of va riables differ for different types of promotion as the nature of the promotions are different. Chandon et al (2000) con sidered a reduction in search and purchase decision cost as relative factors of perceived convenience. In fact, these factors are more appropriate for price discount than VDS.…”

Risky discounts: Do people prefer them on a per-item or per-purchase basis and why?

“…Literature looking at promotions from a consumer perspective has identified different reasons why consumers like and redeem discounts (e.g., Chandon et al, 2000). We organize the putative reasons for per-item versus per-purchase discount format in terms of Raghubir, Inman, and Grande's (2004) framework, which posits that promotions can influence consumers via three routes.…”