Consumer evaluations of sales promotion: the effect on brand choice

Abstract

If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -This study evidences the influence that sales promotion has on brand choice behaviour. Establishments wish to influence consumers' buying behaviour, and thus they launch strong promotional campaigns or introduce changes in their price policies, among other actions. However, they are not always capable of achieving their goal, since, although they may reach their objective in the short term, when the longer term is considered there are undesirable consumer actions. Design/methodology/approach -The problem of consumer brand choice can be adequately described with logit models that allow the use of discrete dependent variables. The probability that the consumer chooses a brand depends directly on the capacity of satisfaction that the brand holds for him/her. In this case, the dependent variable is the brand, and the independent variables are price, reference price, losses and gains, and the different types or techniques of sales promotion. With the aim of obtaining the necessary information for the present study, a regional consumer panel was used.Findings -The results show that it is necessary to consider the product's promotional state at the moment of purchase as an explanatory element of the process. Promotion is a tool that can help manufacturers and/or retailers in the achievement of their objectives (try the brand, help to decide what brand to buy, etc.). Immediate price reduction is the technique that exerts greatest influence on the brand choice process. It is possible that the consumer perceives a promotion, for example, coupons or rebates, but does not modify his or her behaviour. In this case, manufacturers and/or retailers will be investing their resources in promotional actions that do not have any effect on the consumer. Originality/value -Presents a regional consumer panel that has been elaborated and planned by the authors. Because of this, the information collected is just what was necessary for this study. On the other hand, the paper shows that is very important to know the consumer's preferences and the actions that influence his or her behaviour. Considering the results, it seems that promotions based on price have the greatest effectiveness.

Moderating Effects of Sales Promotion Types

“…Monetary promotions are considered the best alternative for short-term increased sales, and these promotions play a key role in consumer choices (Alvarez & Casielles, 2005). This assumption is reinforced by Blattberg and Neslin (1990), who argued that this promotion type satisfies consumers' desire for savings.…”

“…Lee (2002), for instance, found that sales promotions are more effective than advertising in reaching company sales objectives. Nevertheless, studies conducted in the 1970s, such as Cotton and Babb (1978), and more recent studies such as Alvarez and Casielles (2005) have demonstrated the effectiveness of both monetary and nonmonetary sales promotions in consumers' responses and attitudes. For this reason, the following hypothesis is proposed: H1: Sales promotions positively influence consumers' purchase intentions.…”

“…This projection exceeds the forecast that advertisement will have investments of $14 billion. In the academic sphere, some gaps can be observed in the literature, especially regarding the analysis of moderators that may either enhance or minimize the impact of sales promotion on consumer behavior (Alvarez & Casielles, 2005;Freo, 2005;Low & Mohr, 2000). Therefore, inquiry into how sales promotion type results in different consumer responses becomes essential (Chandon, Wansink, & Laurent, 2000;Kwok & Uncles, 2005;Taylor & Neslin, 2005).…”

“…This study is expected to contribute to the literature in the following ways: (a) to stimulate discussion of the topic with a view of the scarce literature on the subject (Alvarez & Casielles, 2005;D'Astous & Landreville, 2003); (b) to deepen understanding of non-monetary sales promotion techniques, as they have been unsuccessful in relation to monetary promotions (Ailawadi, Beauchamp, Donthu, Gauri, & Shankar, 2009;Pacheco & Rahman, 2015;Reid, Thompson, Mavondo, & Brunsø, 2015); (c) to provide knowledge about consumer responses to two different sales promotion techniques (Ailawadi et al, 2009;Chandon et al, 2000;Kwok & Uncles, 2005;Taylor & Neslin, 2005); (d) to provide a better understanding of the relationship between sales promotion and purchase intention based on the inclusion of moderators (Chandon et al, 2000;Kwok & Uncles, 2005;Taylor & Neslin, 2005); and (e) to expand on the research of Chandon, Wansink and Laurent (2000) by including an independent variable (risk perception).…”

“…Despite being widely used in the management sphere (Bertrand, 1998;Wierenga & Soethoudt, 2010), sales promotion has scarcely been explored in the academic field (Alvarez & Casielles, 2005;D'Astous & Landreville, 2003). In the business context, Silva (n.d.) indicated that $176 billion would be invested in such initiatives by the end of 2013, representing an increase of 33% in relation to 2011.…”