Type: Research Essays
Sample donated: Randy Gonzalez
Last updated: December 26, 2019
As mentioned in the previous sections, studies about promotions mostly focus on the influence of price promotions on generating short-term sales revenue and/or as a means to viral new products/services; while non-price promotions have been investigated with less interest regarding their potential of generating preference for the brand. The consumer-based approach was employed to assess how sales promotions cognitively or emotionally impact on consumer attitude that may then impact the brand retention. Therefore, hypotheses H1a and H1b theorizes that impact of price and non-price promotions vary according to level of hedonic and utilitarian benefits for different levels of involvement. Whereas hypotheses H2a and H2b investigated the impact of preference for various types of promotions on brand loyalty for different levels of involvement.
Multiple regressions were conducted to examine the relationship between the independent variables, controlled variables and the brand loyalty. Results show that hypotheses H1a and H2a were supported, while H1b and H2b were rejected at 5% significance level. These findings imply that for high-involvement product category, preferences and the extent of perceived hedonic benefits for non-price promotion enhance the brand loyalty. Moreover, the results also show that price-promotions are perceived to carry more utilitarian benefits than hedonic benefits which is consistent with findings of Chandon et al and Palazo?n-Vidal and Delgado-Ballester. See table 4, PNPW has the negative relationship with HNP while having positive relationship with HP.
This finding supports Liao’s findings that it is sometimes impossible to figure out pure hedonic or utilitarian benefits offered by products when it comes to real consumer purchase decisions. Related to hypotheses H2a and H2b, the relationship between preference for specific types of promotion and brand loyalty, results showed that “premium offers” for perfume, a high involvement product, enhances brand loyalty. This finding is critically important for this study because the assumption was that for high involvement products, the non-price promotions would be more impactful on brand loyalty. Moreover, it can be seen that “involvement” always has the positive relationship with brand loyalty on both product categories.
The findings of this study strengthen previous research’s findings and contribute more proofs proposing that involvement is a crucial antecedent of the loyalty level to a specific brand. Another unanticipated result was that the preference for “discount” eroded brand loyalty in the model for washing powder. This finding does not support findings from Chandon et al.
, Liao, Palazo?n-Vidal & Delgado-Ballester suggesting that sales promotions do positively affect brand loyalty. This unexpected result can be explained by the disagreement in the application of sales promotions in marketing activities. Sales promotions were proven to have either positive or negative impact on brand loyalty1. On the other side, they can even have neutral or negative effect2.
For instance, promotions make consumers more sensitive to price for all brands in the same product category; they consequently decrease the probability to buy the purchased brand if there is no promotion3. In other words, promotions may heavily impact the subsequent brand choice. If consumers buy the brand because it is promoted but because they favor the brand, then promotions have generated negative association to the brand. This can explain why “discount” negatively impact the brand loyalty, as it can be explained that consumers no longer have incentive to switch the brand, they may come back to the favorite brand with the same function of the product