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IntroductionSales promotionTypes of Sales PromotionMonetary promotions: Price Discounts, Coupons (Utilitarian product like light bulb)Non Monetary Promotions: free gifts, free samples, sweepstakes, contests (Hedonic product like Ice Cream)Less tangible benefit of Sales promo. Entertainment, Emotional benefit for Bargain Hunters like Self perception of being Smart Shopper.
Non-Monetary Promotions• Reinforce brand equity• Difficult to influence consumer internal reference
prices.• Less likely to influence negatively brand association.
Tools of non-monetary promo• Gift: Product or Service offered free.• Premium: Relatively low price on purchase.
Objective of the Paper• Understand factors impacting consumer response
towards gift promotions.• Specifically, analysis of Four variables:• Nature of promoted product• Fit between product and the gift• Type of brand used• Consumer deal proneness
Conceptual framework and hypothesis• Use of gifts to influence purchase intention• Free gift offer effects may be limited, if consumers
perceive it as providing little or no value.• Stronger relationship with business positively affect
consumer responses to gift. • No significant effect of gift value and recipient gender.• Role of other variables like: promotional benefit levels,
affective state of consumers, price consciousness.
Nature of promoted product• Categories of products studied in sales promotion
studies:• Utilitarian • Hedonic • Benefit congruence framework
Benefit congruence framework
• Effectiveness of sales promotion depends on the similarity b/w benefits product provide and benefits promotion generate.
• Monetary promotions→ Utilitarian benefits• Non-monetary promotions →Hedonic benefits
• Monetary promotions do not → Hedonic products• Non-monetary promotions also → Utilitarian products• Gift is a gift regardless of nature of product (perception
about gift promotion with reference to product)• Purchase intentions generated by gift promotion remains
same regardless of the nature of product. (hedonic benefits while purchasing utilitarian product)
Fit between the product and the gift• High fit → Consumers respond favorably • Low fit → consumers report negative reactions
Hypothesis• Overall evaluation of gift promotions will not be
influenced by the nature of the promoted product • Consumer purchase intentions of gift promotions will
not be influenced by the nature of the promoted product
Cognitive bases for perceived fit• In brand extension:• Feature similarities• Image consistency • In cause related marketing:• Similarity of values• Consumer base
Hypothesis• Overall evaluation of gift promotions will be more
favorable when the fit b/w promoted product and gift is high
• Consumer purchase intentions of gift promotions will be more likely when the fit b/w promoted product and gift is high
Brand type• Asymmetric effect of promotion • Gift promotions for high equity brand → more favorable
respond • Gift promotions for low equity brand → less favorable
respond
Hypothesis• Overall evaluation of gift promotions will be more
favorable when the promoted brand has high brand equity
• Consumer purchase intentions of gift promotions will be more likely when the promoted brand has high brand equity.
Deal proneness• Psychological propensity to buy• Consumers responses depend on characteristics of
consumers
Categories of research in deal proneness
• 1)-Characteristics of deal prone consumer• Demographic• Psychographic• Purchasing habit variables• 2) Deal proneness is a consumer trait
Hypothesis• Overall evaluation of gift promotions will be more
favorable when deal proneness is higher. • Consumer purchase intentions of gift promotions will
be more likely when deal proneness is higher.
Methodology• 2*2*2 between subjects factorial design• (Product type: Utilitarian vs Hedonic) * (Gift type:
Utilitarian vs Hedonic)* (Brand type: High Equity vs Medium Equity)
First Pretest• First pretest include 46 undergraduate students.• List 8 frequently used products• Degree of Utilitarianism or Hedonism:• 1- (Practical Purpose/Just for fun)• 2- (Purely functional/Pure enjoyment)• 3- (For a routine need/Pure enjoyment)• Level of familiarity
• Selected Products: • Sports Shoes: Utilitarian product• Mp3 Player: Hedonic Product
Second pretest• Congruent gifts with products:• Backpack → Utilitarian gift (Shoes)• Card → Hedonic gift (Mp3)• 2 Sports shoes brand selected:• Adidas (High equity), High familiarity level, high quality• Fila (Medium equity), Med familiarity level, Med quality
• 2 Mp3 brand selected:• Sony (High equity), higher familiarity, higher quality• Hitachi (Medium equity), med familiarity, med quality
Data collection, sample and procedure• 247 undergraduate students participated• 8 questionnaires • Assess hedonic v/s utilitarian nature of product• Awareness and perceived quality of brand • Respondent's deal proneness
Discussion and Implication• Hedonist or Utilitarian character is not an important
issue in gift promotions
For overall evaluation of gift promotion:
High equity brands Gifts that fit well with product
Medium equity brand Hedonic gifts
For purchase intention:
High equity brand Strong fit b/w product and gift
Deal proneness:
Deal proneness Positively influence purchase intentions
Deal proneness Similar evaluation of gift products regardless of deal proneness
• Non-Monetary promotions more effective for building brand equity.
• Promoted products and gifts should be of same nature for more effective results.
• High degree of similarity b/w products and gifts →higher purchase intention
Limitations of research• Constrained number of products, gifts and brands• Absence of factors such as gift interest, value of the
gift and perceived benefits• Less represented sample