Type: Research Essays
Sample donated: Gail Morton
Last updated: May 14, 2019
Researches on sales promotions havebeen concentrated on the influence of sales promotions (mostly pricepromotions) on short-term sales revenue, profits; on purchasing behavior duringand post promotional period. However, few research pays attention to thelong-term effect of promotions on brand loyalty, especially the potentialeffect of non-price promotions on brand equity.
Therefore, this studydeliberates and contribute to the current literature in the field of promotionmarketing; particularly, it extends the knowledge on how various categories ofsales promotions affect the way consumers choose one brand over the others, andtake the product involvement level into account. It was suggested that sales promotionswill behave differently regarding their long-term influence on reference pricewhich is the internal price that consumers perceive based on how beneficial theproduct is to them. Consumers perceive a gain when what they have to pay islower than the internal price; and vice versa, a loss is perceived when the internalprice is lower than the observed price1.These beliefs were firmly reinforcedby the studies of behavioral shaping by Rothschild and Gaidis, Peter and Nord.Findings of this study also indicate that consumers respond to sales promotionswith different motives which help explain the underlying reasons why consumerssometimes are willing to spend more money using the promotion “premium offers”rather than save some money by using “discounts”; and why price promotions donot always lead to positive results as expected.
Marketing professionals could better activelyforecast the way consumers respond to sales promotions programs bydifferentiating the offered benefits of promoted products, and optimizing thebenefit congruency. Additionally, this study proposes that the proneness tosales promotions should be segmented based on hidden benefits that consumersseek for instead of their inclination to deal or their perception towardsvalues. The benefit approach in segmenting would help drive promotions totargeted consumers who are most responsive to them. Likewise, grouping salespromotions based on offered benefits (utilitarian or hedonic) rather than formsof promotions will be more effective.