Effects of sales promotion type and promotion depth on consumer perceptions: the moderating role of retailer reputation

Abstract

This study uses a between-subjects experimental design to test the effect of two sales promotion formats (coupon versus markdown) with either high and low face values on consumer attitudes toward the deal, perceived product quality, and purchase intentions. The reputation of the retailer offering the deal is predicted to moderate the relationship between the promotional offer and consumer responses. Consumers perceive product quality to be higher when offered a high value coupon vs. markdown but there is no significant difference in perceived quality across promotion types when the promotion face value is low. When a deep price discount is offered by a retailer with a negative reputation, however, consumers have more favorable attitudes toward the deal and higher purchase intentions when provided with a markdown vs. coupon. Conversely, a high value coupon elicits more favorable evaluations than a markdown when the retailer has a positive reputation. When the value of the promotion is low and the retailer has a positive reputation, consumers have more positive deal attitudes and purchase intentions when offered a markdown vs. coupon. There is no significant difference in the effects of promotion type when the retailer has a negative reputation. The findings therefore establish retailer reputation as an important moderator of sales promotions effectiveness. This research is limited by the use of a single product category and a student sample. Process measures are also needed to validate the proposed theoretical conceptualization. The results provide managers insight into the type and value of the sales promotion to offer based on consumer perceptions of the retailer's reputation in the market.

Usage pattern of sales promotion in the Korean market

“…These advantages can be attributed mainly to the nature of sales promotions, which act as a strong purchase incentive for customers (Blattberg and Neslin 1990;Blattberg et al 1981;Blattberg and Wisniewski 1989;Doob et al 1969;Guadagni and Little 1983;Kuehn and Rohloff 1967;Moriarty 1985;Neslin and Shoemaker 1983;Neslin et al 1985;Woodside and Waddle 1975). For this reason, an increasing number of retailers and manufacturers are relying on sales promotions, and even supposedly recession-proof retailers are starting to offer customers sales promotions, such as deep discount coupons to drive traffic to stores (Pacheco and Rahman 2015).…”

Enhancing green loyalty towards apparel retail stores: A cross-generational analysis on an emerging market

“…Customer preference and loyalty to a particular retail store, chain or brand (Khare 2012) is built up with the aid of the tools available to company management, consisting of assortment, price, communication, service, ambiance, or location (Lassar et al 1995;Swoboda et al 2014). Also of significance are the retailer's reputation among the target groups (Walsh et al 2009;Luo and Chung 2015;Pacheco and Rahman 2015;Ziaullah et al 2016), consumer culture and traditions (Rajamma et al 2010;Khare 2012) and the image created over time on the basis of trust, awareness, uniqueness and appeal (Lassar et al 1995;Aaker 1996;del Rio et al 2001;Verhoef et al 2007;Dabija and Băbuţ 2012;Dabija and Băbuţ 2014).…”

Moderating Effects of Sales Promotion Types

“…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).…”