A BENEFIT-BASED APPROACH FOR INCREASING THE EFFECTIVENESS OF PROMOTIONS

Marusya IVANOVA

Abstract


The purpose of this paper is to reveal some insights for increasing the effectiveness of promotions. To achieve this purpose, first, the existence of multiple customer benefits of promotions is proved. It is empirically validated that promotions deliver three utilitarian (monetary savings, higher quality and shopping convenience) and two hedonic (variety and pleasure) benefits to the customers. Second, a structural equation model is estimated to measure the relative contribution of these benefits on the customers’ overall evaluation of promotions. The research suggests that in order to increase their effectiveness, promotions must be framed by focusing not only on their primary benefits but also on all other benefits with a significant contribution to customers’ attitudes towards promotions. Finally, a benefit-based segmentation is conducted. Four market clusters are identified (none-benefit, all-benefit, utilitarian-benefit and hedonic-benefit customer segments). Further, these clusters are profiled using demographic and psychographic variables.


Full text: PDF

Keyword(s)


promotions, customer benefits of promotions, promotional effectiveness, structural equation modeling

JEL Codes


M31, C38

References


Ahtola, O., 1985. Hedonic and Utilitarian Aspects of Consumer Behavior: An Attitudinal Perspective. Advances in Consumer Research, 12, [online]. Available at: [Accessed 12 October 2012].

Ailawadi, K., Neslin, S., Gedenk, K., 2001. Pursuing the Value-Conscious Consumer: Store Brands versus National Brand Promotions. Journal of Marketing, 65(1), pp.71-89.

Babin, B., Darden, W., Griffin, M., 1994. Work and/or Fun: Measuring Hedonic and Utilitarian Shopping Value. Journal of Consumer Research, 20(4), pp.644-656.

Bagozzi, R., Baumgartner, H., Yi, Y., 1992. State versus Action Orientation and the Theory of Reasoned Action: An Application to Coupon Usage. Journal of Consumer Research, Vol. 18(4), pp.505-518.

Berkowitz, E., Walton, J., 1980. Contextual Influences on Consumer Price Responses: An Experimental Analysis. Journal of Marketing Research, 17(3), pp.349-358.

Biswas, A., Blair, E., 1991. Contextual Effects of Reference Prices in Retail Advertisements. Journal of Marketing, 55(3), pp.1-12.

Burton, S., et al., 1994. The Role of Attributions in Consumer Perceptions of Retail Advertisements Promoting Price Discounts. Marketing Letters, 5(2), pp.131-140.

Chandon, P., Wansink, B., Laurent, G., 2000. A Benefit Congruency Framework of Sales Promotion Effectiveness. Journal of Marketing, 64(4), pp.65-81.

Chankova, Zh., 2007. Nakade bez Promotsii. Regal, 11 Apr., [online]. Available at: [Accessed 12 October 2012].

Churchill, G., Jr., 1979. A Paradigm for Developing Better Measures of Marketing Constructs. Journal of Marketing Research, 16(1), pp.64-73.

Della Bitta, A., Monroe, K., 1981. A Multivariate Analysis of the Perception of Value from Retail Price Advertisements. Advances in Consumer Research, 8, [online]. Available at: [Accessed 12 October 2012].

Della Bitta, A., Monroe, K., McGinnis, J., 1981. Consumer Perceptions of Comparative Price Advertisements. Journal of Marketing Research, 18(4), pp.416-427.

De Pechpeyrou, P., et al., 2006. Perceived value and trustworthiness of a multi- promotion offer. HAL Post-Print Series, halshs-00146652, pp.1-29, [online]. Available at: [Accessed 12 October 2012].

Dick, A., Jain, A., Richardson, P., 1995. Correlates of Store Brand Proneness: Some Empirical Observations. Journal of Product & Brand Management, 4(4), pp.15-22.

Dimitrova, E., 2012. Po-visoka Sredna Otstapka na Tsenite v Promotsia prez 2011 g. Regal, 4, pp.30-31.

Dimov, C., 2011. Gergana Marinova: Balgarskiyat Kupuvach Tarsi Nay-dobrata Sdelka. Regal, 10, pp.7-8.

Feick, L., Price, L., 1987. The Market Maven: A Diffuser of Marketplace Information. Journal of Marketing, 51(1), pp.83-97.

Gencheva, B., 2011. Proizvoditelite se Vrashtat kam Promotsiite. Regal, 5, pp.3-5.

Hirschman, E., Holbrook, M., 1982. Hedonic Consumption: Emerging Concepts, Methods and Propositions. Journal of Marketing, 46(3), pp.92-101.

Holbrook, M. Hirschman, E., 1982. The Experiential Aspects of Consumption: Consumer Fantasies, Feelings, and Fun. Journal of Consumer Research, 9(2), pp.132-140.

Inman, J., McAlister, L., Hoyer, W., 1990. Promotion Signal: Proxy for a Price Cut? Journal of Consumer Research, 17(1), pp.74-81.

Kahn, B., Louie, T., 1990. Effects of Retraction of Price Promotions on Brand Choice Behavior for Variety-Seeking and Last-Purchase-Loyal Consumers. Journal of Marketing Research, 27(30, pp.279-289.

Kahn, B., Raju, J., 1991. Effects of Price Promotions on Variety-Seeking and Reinforcement Behavior. Marketing Science, 10(4), pp.316-337.

Mano, H., Elliott, M., 1997. Smart Shopping: the Origins and Consequences of Price Savings. Advances in Consumer Research, 24, [online]. Available at: [Accessed 12 October 2012].

Markova, Z., 2007. Okolo 5% ot Potrebitelite Pazaruvat Zaradi Promotsiite vav Verigite. Regal, 3 Dec., [online]. Available at: [Accessed 12 October 2012].

Martinez, E., Montaner, T., 2006. The Effect of Consumer’s Psychographic Variables upon Deal-proneness. Journal of Retailing and Consumer Services, 13, pp.157-168.

Menon, S., Kahn, B., 1995. The Impact of Context on Variety Seeking in Product Choices. Journal of Consumer Research, 22(3), pp.285-295.

Micheva, V., 2009. Promo-marketingat – ne Samo Taktika, no i Strategia za Uspeshen Biznes. Investor.BG, 3 Feb., [online]. Available at: [Accessed 12 October 2012].

Mittal, B., 1994. An Integrated Framework for Relating Diverse Consumer Characteristics to Supermarket Coupon Redemption. Journal of Marketing Research, 31(4), pp.533-544.

Montgomery, D., 1971. Consumer Characteristics Associated with Dealing: An Empirical Example. Journal of Marketing Research, 8(1), pp.118-120.

Narasimhan, C., 1984. A Price Discrimination Theory of Coupons. Marketing Science, 3(2), pp.128-147.

Price, L., Feick, L., Guskey, A., 1995. Everyday Market Helping Behavior. Journal of Public Policy & Marketing, 14(2), pp.255-266.

Price, L., Feick, L., Guskey-Federouch, A., 1988. Couponing Behaviors of the Market Maven: Profile of a Super Couponer. Advances in Consumer Research, 15, [online]. Available at: [Accessed 12 October 2012].

Progressive, 2011. Konferentsia Progressive – Retail Network. Progressive, 6, pp.2-7.

Schindler, R., 1989. The Excitement of Getting a Bargain: Some Hypotheses Concerning the Origins and Effects of Smart-Shopper Feelings. Advances in Consumer Research, 16, [online]. Available at: [Accessed 12 October 2012].

Shimp, T., Kavas, A., 1984. The Theory of Reasoned Action Applied to Coupon Usage. Journal of Consumer Research, 11(3), pp.795-809.

Raghubir, P., 2004. Coupons in Context: Discounting Prices or Decreasing Profits? Journal of Retailing, 80, pp.1-12.

Strahilevitz, M., Myers, J., 1998. Donation to Charity as Purchase Incentives: How Well They Work May Depend on What You Are Trying to Sell. Journal of Consumer Research, 24, pp.434-446.

Raju, P., Hastak, M., 1980. Consumer Response to Deals: A Discussion of Theoretical Perspectives. Advances in Consumer Research, 7, [online]. Available at: [Accessed 12 October 2012].

Richardson, P., Dick, A., Jain, A., 1994. Extrinsic and Intrinsic Cue Effects on Perceptions of Store Brand Quality. Journal of Marketing, 58(4), pp.28-36.

Simonson, I., Carmon, Z., O'Curry, S., 1994. Experimental Evidence on the Negative Effect of Product Features and Sales Promotions on Brand Choice. Marketing Science, 13(1), pp.23-40.

Teel, J., Williams, R., Bearden, W., 1980. Correlates of Consumer Susceptibility to Coupons in New Grocery Product Introductions. Journal of Advertising, 9(3), pp.31-35+46.

Van Trijp, H., Hoyer, W., Inman, J., 1996. Why Switch? Product Category: Level Explanations for True Variety-Seeking Behavior. Journal of Marketing Research, 33(3), pp.281-292.

Ward, J., Hill, R., 1991. Designing Effective Promotional Games: Opportunities and Problems. Journal of Advertising, 20(3), pp.69-81.

Wansink, B., Kent, R., Hoch, S., 1998. An Anchoring and Adjustment Model of Purchase Quantity Decisions. Journal of Marketing Research, 35(1), pp.71-81.

Wetzels, M., Odekerken-Schröder, G., Van Oppen, C., 2009. Using PLS Path Modeling for Assessing Hierrarchical Construct Models: Guidelines and Empirical Illustration. MIS Quarterly, 33(1), pp.177-195.

Yankova, I., 2012. Tendentsii v Targoviyata s Barzooborotni Stoki. Progressive, 3, pp.8-9.

Yankova, I., 2010. Po-masovi Promotsii pri Shodni Niva na Otstapka. Regal, 2, p.11.