Buying association and its impact on promotional utility

Abstract

Purpose

Even if a sales promotion attracts consumers to the store, the hi‐lo performance will be uncertain if these consumers buy only promoted categories. Retailers need to pay attention to avoid promoting categories that are frequently bought together in the same promotional action, or be faced with a strong redundancy effect. This paper proposes a method to decrease redundancy effect without reducing overall promotion utility (and store traffic).

Design/methodology/approach

Three conjoint analyses were carried out, two based on promotional assortments composed by real product categories, and one based on attribute description.

Findings

The results suggest that grocery stores can avoid redundancy effects by introducing categories with weak conjoint probabilities, resulting in a higher share of full priced products on the consumer baskets without reducing the global utility of the promotion.

Research limitations/implications

Real promotion contains large number of category/brands, and we strongly recommend further research on this.

Practical implications

Retailers can propose promotional actions that increase store traffic and develop the price image of the store. By managing buying association, retailers can create more profitable promotions.

Originality/value

The idea of building promotions that take into account the redundancy effect as well as measuring its impact on consumer promotional value and store image are the main value of this research.

Citation

Borges, A., Cliquet, G. and Fady, A. (2005), "Buying association and its impact on promotional utility", International Journal of Retail & Distribution Management, Vol. 33 No. 5, pp. 343-352. https://doi.org/10.1108/09590550510596722