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Article

Jason M. Carpenter and Marguerite Moore

To explore US consumers' perceptions of the level of fun associated with non‐price retail promotions and to predict likelihood of participation among demographic groups.

Abstract

Purpose

To explore US consumers' perceptions of the level of fun associated with non‐price retail promotions and to predict likelihood of participation among demographic groups.

Design/methodology/approach

The study employs a sample generated from retail forward panel data (n=500) to assess the impact of demographic variables including gender, age, educational attainment, income and household size on consumer perceptions and likelihood of participation in five types of non‐price retail promotions. Descriptive and inferential statistical techniques (t‐tests, regression) are used to evaluate the data.

Findings

Identifies demographic groups who perceive high levels of fun associated with non‐price retail promotions and examines relationships between demographics and likelihood of participation in these types of promotions.

Research limitations/implications

Generalizations of the findings of this study to markets outside the USA are limited due to the differences in consumers and forms of retail promotion within various markets. Future studies could examine perceptions of non‐price retail promotions across international markets as well as identify additional predictors of response to non‐price retail promotions.

Practical implications

This research provides retailers that operate within the USA specific knowledge of consumers' perceptions of non‐price retail promotions and identifies demographic characteristics of consumers who are likely to participate in such activities. As price competition in the sector continues to evolve, understanding non‐price forms of competition is critical to superior performance and survival in the industry.

Originality/value

This exploratory study uses demographics as a framework for examining consumers' perceptions of and likelihood of participation in non‐price retail promotions. The paper is unique because there are few similar empirical studies focused specifically on non‐price retail promotions.

Details

International Journal of Retail & Distribution Management, vol. 36 no. 2
Type: Research Article
ISSN: 0959-0552

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Book part

J. García Castillo, A. M. Castañeda Velásquez, A. Cárdenas Hurtado, J. D. Suárez Moreno and D. F. Prato

Since 2016, organized retailers in Colombia have struggled against a new retail format: Hard-discount stores. This sales channel fulfills essential shopping basket…

Abstract

Since 2016, organized retailers in Colombia have struggled against a new retail format: Hard-discount stores. This sales channel fulfills essential shopping basket products with consistent low prices. To be competitive and preserve their market position, organized retailers must improve their processes and their pricing decisions. Promotions and discounts have been considered as an effective alternative to compete. This study analyzes the impact of joint prices decisions over the individual and global financial key performance indicators when a collaborative strategy is adopted. Our case study comprises a supermarket chain Colombian retailer and a consumer packaged-goods manufacturer to analyze its supply chain performance. The analysis considers different product categories (food, personal care, and cosmetics) and country regions. The results highlight that benefits are unequally distributed along different echelons and supply chain performance is affected when pricing decisions are made independently.

Details

Supply Chain Management and Logistics in Emerging Markets
Type: Book
ISBN: 978-1-83909-333-3

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Article

Yunjeong Kim and Yuri Lee

The purpose of this study was to investigate whether consumers differ in their online or offline purchase intention, depending on which channel with price promotion

Abstract

Purpose

The purpose of this study was to investigate whether consumers differ in their online or offline purchase intention, depending on which channel with price promotion information they are first exposed to, and to analyse the moderating role of brand trust.

Design/methodology/approach

Overall, 174 responses were obtained via an online survey using two contact channels (online/offline) by two levels of brand trust (high/low) between-subject designs.

Findings

Spillover effects were found across channels when a consistent price promotion is executed in both online and offline channels, purchase intentions for cross-channel and contact channel increase simultaneously. Although there was a similar effect in the discrepancy of purchase intentions towards the cross-channel according to contact channels, it varied depending on brand trust. When brand trust is high, having contact with offline price-discount information has a large online spillover effect. When brand trust is low, the spillover effect from online to offline is large.

Research limitations/implications

This study expands the multi-channel research by proving the spillover effects between channels and confirming the difference according to brand trust.

Practical implications

Increasing promotion information for online contact is effective in driving offline visits for new brands, and the effective use of promotion information at offline stores can have a positive impact on online channels for well-known brands.

Originality/value

This study explores the cross-channel spillover effect of price promotion and proves that these effects depend on brand trust.

Details

International Journal of Retail & Distribution Management, vol. 48 no. 10
Type: Research Article
ISSN: 0959-0552

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Article

Hongying Tan, Umair Akram and Yujia Sui

Uncertain level discount (ULD) is a type of promotion combining regular discount (RD) with uncertainty. The purpose of this paper is to explore the impact of ULD on…

Abstract

Purpose

Uncertain level discount (ULD) is a type of promotion combining regular discount (RD) with uncertainty. The purpose of this paper is to explore the impact of ULD on consumers’ perceived quality compared with RD and to identify the relevant influencing mechanism and boundary for the effectiveness of ULD.

Design/methodology/approach

Three online experiments were conducted with 445 participants from China. First, experiment 1 compares the attractiveness of ULD and RD. Second, experiment 2 evaluates the impacts of ULD and RD on consumers’ perceived quality and clarifies the mechanism in this process. Finally, experiment 3 examines the moderating effect of product knowledge.

Findings

ULD has the same level of attractiveness as RD with equivalent expected discount value for consumers. Besides, consumers in ULD give higher ratings to product quality compared with those in RD, and the lower diagnosticity of price cues in ULD underlies the differential effects of ULD vs RD. Furthermore, product knowledge moderates the relationship between the two promotions and perceived quality.

Practical implications

The findings provide valuable guidance for managers to conduct promotional campaigns. ULD is an effective promotion to attract consumers to purchase with keeping consumers’ perceived quality high, and such effectiveness will rise for products that consumers are unfamiliar with. Managers can make rational use of ULD to achieve positive promotion results in both the short and long term.

Originality/value

Few studies pay attention to the long-term effects of the uncertain promotion. This research profoundly investigates the impact of ULD on perceived quality, which complements existing studies from a more integrated perspective that combines short- and long-term effects. Also, this research identifies the mechanism based on the cue diagnosticity theory and puts forward a new explanation for positive uncertainty in uncertain promotions. Finally, this research applies the impact of product knowledge on information process strategies into the uncertain promotion, which clarifies the utility boundary of ULD from a new perspective and offers a more comprehensive understanding for this promotion.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 31 no. 4
Type: Research Article
ISSN: 1355-5855

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Article

Arpita Khare, Subhro Sarkar and Shivan Sanjay Patel

The exponential growth of organised retail has led to competition among mall retailers with the use of promotions to increase traffic to the stores. The footfall in the…

Abstract

Purpose

The exponential growth of organised retail has led to competition among mall retailers with the use of promotions to increase traffic to the stores. The footfall in the malls is dependent on the sales generated by various retail stores located in the malls. The current research analyses the role of promotions used by the retailers located in Indian malls in improving consumers’ commitment towards the mall. The purpose of this paper is to examine the influence of culture, personality traits like value consciousness, price consciousness and coupon proneness, and promotions used by retailers in malls on consumers’ commitment towards the malls.

Design/methodology/approach

Eight malls from six cities were selected by popularity and footfall. Mall-intercept technique along with systematic sampling was used to collect data from 453 mall shoppers using a self-administered questionnaire. Structural equation modelling was used to analyse the data.

Findings

Retailer promotions were categorised under discounts, promotional offers and loyalty cards. The findings suggest that cultural values of long-term orientation and masculinity have an impact on consumers’ perceptions towards discounts, promotional offers and loyalty programmes. Different promotional strategies had varied responses from consumers.

Practical implications

Mall retailers can use the findings to design promotions according to the cultural values of masculinity and long-term orientation. Loyalty programmes can symbolise status and long-term relationship with retailer. Commitment towards retailers and consequently malls could be enhanced through discounts and promotional offers. Different promotional strategies can be used to target price-conscious consumers and increase footfall in the stores. The linkages between cultural dimensions and promotional techniques would be helpful in targeting different consumer groups by designing promotions which are in line with cultural values.

Originality/value

The research extends the existing literature on mall retailing by analysing the importance of cultural dimensions on sales promotions strategies used by retailers in malls. The study establishes that perceptions towards retailer promotions differ across cultures. Different promotions offered by retailers generate varied response from consumers across different cultures which would influence their commitment towards malls.

Details

International Journal of Retail & Distribution Management, vol. 47 no. 10
Type: Research Article
ISSN: 0959-0552

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Article

John Dawes

Many studies have examined the short‐term and long‐term effects of price promotions. This study adds to previous research by examining, in some depth, the effects of a…

Abstract

Many studies have examined the short‐term and long‐term effects of price promotions. This study adds to previous research by examining, in some depth, the effects of a massively successful price promotion in a consumer goods category. This study sought to determine if this large price promotion had any: longer‐term effect on brand volume; short‐term effect on total category volume for the retailer; short‐term effect on competing retailers; and longer‐term effect on category sales for the retailer that ran the promotion. The results showed that this promotion did not have any longer‐term (positive or negative) effect on the brand, but it did expand the total category for the retailer, albeit temporarily. Sales dropped slightly for one competing retailer at the time of the promotion, but not for the other two retailers in the market. Finally, the study found that the promotion was followed by a decline in total category volume for the retailer, suggesting some degree of purchase acceleration or stockpiling by consumers. The results suggest that the longer‐term negative effect on category volume cancelled out approximately two thirds of the gains of the price promotion to the retailer.

Details

Journal of Product & Brand Management, vol. 13 no. 5
Type: Research Article
ISSN: 1061-0421

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Article

Michael F. Smith and Indrajit Sinha

Focuses on consumer evaluations of store preference when presented with promotional deals that are equivalent on a unit‐cost basis and/or are equivalent on a total cost…

Abstract

Focuses on consumer evaluations of store preference when presented with promotional deals that are equivalent on a unit‐cost basis and/or are equivalent on a total cost basis but are worded differently. An experimental design setting is used to examine the effect of three deal frames: one, stated in terms of a straight price promotion (“50 percent off”), the second, as an extra‐product or volume promotion (“buy one, get one free”), and a third as a “mixed” promotion (“buy two, get 50 percent off”). Four typical supermarket product categories are considered in a shopping scenario to investigate the effect of two category‐based moderating factors: product stock‐up characteristic and price level. Results show that the nature of framing significantly affects consumer deal preference and store preference even though the deals are equivalent on a unit cost basis and two of the deals are also equivalent on a total cost basis.

Details

International Journal of Retail & Distribution Management, vol. 28 no. 2
Type: Research Article
ISSN: 0959-0552

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Article

John G. Dawes

This paper aims to investigate the extent to which temporary price promotions attract people who do not normally buy a brand, and whether buyers change their propensity to…

Abstract

Purpose

This paper aims to investigate the extent to which temporary price promotions attract people who do not normally buy a brand, and whether buyers change their propensity to buy the promoted brand afterwards.

Design/methodology/approach

The study analyses promotions in 18 consumer goods categories in the UK and USA. It calculates the proportion of promotion purchasers that have bought a brand at least once in their last five purchases and the Share of Category Requirements of those purchasers. These figures are then compared to normal-price purchasers.

Findings

The study finds the majority of price-promotion buyers already bought the brand at least once in their last five category purchases (average = 77 per cent). This figure is similar to that for normal-price purchases (average = 81 per cent). Average Household SCR to the brand is also very similar for price-promotion purchases compared to normal price purchases. Therefore, promotions do not attract a markedly different mix of buyers. Furthermore, buyer propensity to buy the brand is the same after a promotion purchase as it was before.

Research limitations/implications

A contribution of the paper is that it supports a theory of consumers as cognitive misers, who screen out promotion information about unfamiliar brands. The paper also highlights that in packaged-goods markets, consumers can be generally seen as experienced buyers, who do not learn new information from buying brands they have previously purchased.

Practical implications

The managerial implication is that price promotions must be judged on their immediate profitability. There seems little recourse to the idea they can result in “try it, like it, buy it again later” effects.

Originality/value

While many studies have examined the effects of price promotions, this is the first to explicitly compare the mix of buyers attracted from a price promotion to that which occurs when a brand is sold at normal price.

Details

Journal of Consumer Marketing, vol. 35 no. 4
Type: Research Article
ISSN: 0736-3761

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Article

Enrique Manzur, Sergio Olavarrieta, Pedro Hidalgo‐Campos and Pablo Farías

The purpose of this paper is to examine two popular price promotion strategies – price matching guarantees (PMGs) and everyday low prices (EDLP) – and their effects on…

Abstract

Purpose

The purpose of this paper is to examine two popular price promotion strategies – price matching guarantees (PMGs) and everyday low prices (EDLP) – and their effects on Chilean consumer behavior in terms of consumer perceptions of low prices, search behavior and purchase intention.

Design/methodology/approach

A quasi experiment with three scenarios was conducted to test price promotion effects. Subjects were instructed to respond a questionnaire that included the dependent variables.

Findings

Results show that EDLP and PMG strategies increase perceptions of low prices and affect purchase intentions. These effects are significantly higher for stores offering EDLP than PMG. However, when consumers are exposed to two or more price promotion strategies (rather than one) they reduce their purchase intentions for a specific store and increase their search intentions.

Research limitations/implications

This is an initial study exploring the effects of price promotion strategies on consumers. Future research could test the hypotheses advanced in the study across different samples and contexts (supermarkets, department stores, convenience stores, and other retailers) and might privilege external validity, using experiments mimicking decisions with real consequences.

Practical implications

Retailers and marketers in Latin America – particularly those companies stressing price or value as their differential advantage – should consider the use of price promotions when designing marketing strategies. On the other hand, retailers should be aware that an intensive use of these of promotions could lead to increases in consumer search behavior.

Originality/value

While findings from the USA suggest that price promotion strategies can be effective in several contexts, there has been a limited number of studies addressing whether such strategies are effective in other countries, particularly in Latin America and emerging nations.

Details

Academia Revista Latinoamericana de Administración, vol. 26 no. 3
Type: Research Article
ISSN: 1012-8255

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Article

Lan Xia and Kent B. Monroe

This paper aims to examine the effect of targeted promotions on perceptions of fairness from the perspective of consumers who are not targeted.

Abstract

Purpose

This paper aims to examine the effect of targeted promotions on perceptions of fairness from the perspective of consumers who are not targeted.

Design/methodology/approach

A scenario-based approach is used. Three studies manipulating promotion selectivity and various bases for promotion selection were conducted. A total of 403 people participated in the studies.

Findings

Results showed that these consumers consider targeted promotions unfair, and the primary reason is centered more on damage to relational identity than the economics of reduced perceived value. The effect is moderated by how the targeted promotion is delivered (buyer-discovered vs seller-delivered) and different basis for selection.

Practical implications

As companies adopting the practice of dynamic pricing such as targeted promotion, it is important to manage relationship with their consumers. Framing targeted promotions that reduce the salience of seller’s role and provide explanations that not attributed to buyer-seller relationship are important in reducing the potential damage of targeted promotion on relational identity.

Originality/value

Existing research on perceptions of price fairness has focused on the role of perceived value. This research tested the relative effect of perceived value, relational identity and personal identity in the context of targeted promotion and identified relational identity as the major mechanism.

Details

Journal of Product & Brand Management, vol. 26 no. 3
Type: Research Article
ISSN: 1061-0421

Keywords

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