Promotional Persuasion
Targeting consumer sales promotions efficiently
Master Thesis University of Groningen Faculty of Economics and Business
Msc Business Administration Marketing Management Amsterdam, October 2009
Promotional Persuasion
Targeting consumer sales promotions efficiently
Author:
E.L. Dehue (s1334042) Van Woustraat 42a
1073 LM Amsterdam, The Netherlands esmeedehue@hotmail.com
06-24107707 University of Groningen Faculty of Economics and Business
Msc Business Administration Specialization Marketing Management
Supervisors:
Faculty Supervisor: Dr. L.M. Sloot Co-assessor: Dr. J.A. Voerman
Amsterdam, October 2009
MANAGEMENT SUMMARY
Until now, most researches that investigate promotional proneness are mainly focussed on a single consumer sales promotion or promotional proneness in general. There is rarely any research that investigates the similarities between several consumer sales promotions, based on the promotional proneness of consumers. These days, packaged good manufacturers invest a lot of money in consumer sales promotions, but are not truly aware of the effectiveness. Therefore, this research investigates the similarities between six pre-selected consumer sales promotions, which are common in Dutch supermarkets. The concerning consumer sales promotions are: coupon, prize (sweepstake/contest), premium, bonus packs, price and refund promotions. There is a possibility that consumers respond the same toward several consumer sales promotions. In this case, it would be more efficient for the manufacturers to target their promotion expenses and reach the same amount of consumers with a lower budget.
In this research an online survey is conducted in order to determine the similarities in promotional proneness of the respondents throughout the selected consumer sales promotions. To be able to describe the consumers’ several characteristics, like demographic, psychographic and shopping related characteristics are taken into account. The factor analysis shows that it is indeed the case for several consumer sales promotions to show similar results in promotion proneness. Hence, price promotion and bonus pack promotion show similar results (combined into direct promotion). Premium promotion and prize promotion show similar results (combined into hedonic promotion), and coupon promotion and refund promotion show similar results (combined into money-back promotion). These results of the factor analysis are used as input for the cluster analysis.
the last and smallest segment, is prone towards every consumer sales promotion. Besides the functional reason for doing groceries they think a shopping trip to the supermarket is fun and they also take time to do so. They find it important to pay the best price for the products they purchase.
PREFACE
During my internship at Reckitt Benckiser, I got to see how sales promotions work in reality. I found that this manufacturer invested a lot of money in different consumer sales promotions, even though they did not measure the actual effects of this kind of promotions. Clearly, the consumer sales promotions had a positive effect on sales, yet, the company did not research effectiveness of the different promotional tools.
Therefore, I thought it would be useful to investigate which method exactly would generate the largest sales through spending the least money. This way the manufacturer would not have to spread out their promotional spending over all possible consumer sales promotions but only invest in the most profitable ones. Concluding my internship at Reckitt Benckiser I kept thinking about the abovementioned inadequate use of promotional budgets which fail to achieve maximal results. I am convinced higher profits can be made through a more efficient use of the consumer sales promotions.
I would like to thank my supervisor at the University Dr. Laurens Sloot for his guidance, constructive feedback and useful insights during the realization of this thesis. In addition, I would like to thank Dr. Liane Voerman for performing the function of co-assessor. Moreover, I would like to thank everyone who took time and effort in filling in my online questionnaire; enabling me to complete my analyses. Last, but certainly not least, I would like to thank all my friends and family for their advise and support during the last phase of my study. My special thanks go out to my parents, who for all time kept supporting me throughout my study and especially in completing this thesis.
Esmée Dehue
TABLE OF CONTENTS MANAGEMENT SUMMARY...3 PREFACE ...5 1. INTRODUCTION...9 1.1 Background... 9 1.2 Problem identification... 10 1.2.1 Research Objective ... 11 1.2.2 Research Question... 11 1.2.3 Sub Questions... 11
1.3 Relevancy of the study ... 12
1.4 Structure of the thesis ... 12
1.5 Scope of the thesis ... 12
2. THEORETICAL FRAMEWORK...13
2.1 Introduction sales promotions ... 13
2.2 Consumer Sales Promotion ... 15
2.2.1 Influence consumer behaviour... 16
2.3 Types of consumer sales promotion ... 17
2.3.1 Price promotion... 18 2.3.2 Bonus-pack promotion ... 18 2.3.3 Coupon promotion ... 19 2.3.4 Premium promotion ... 20 2.3.5 Prizes promotion ... 21 2.3.6 Refund promotion... 21 2.3.7 Promotion objectives... 22 2.4 Consumer behaviour... 23
2.4.1 Promotional proneness classification... 23
2.4.2 Consumer classification ... 24
2.4.3 Consumer decision making process ... 25
2.5 Identify relevant consumer characteristics ... 26
2.5.1 Marketing segmentation ... 27
2.5.2 Demographic characteristics... 29
2.5.3 Psychographic characteristics ... 30
2.5.4 Shopping-related characteristics ... 30
2.6 Profile consumer segments ... 31
2.7 Promotional proneness per consumer sales promotion ... 32
2.7.1 Bonus-pack proneness ... 32
2.7.2 Coupon proneness ... 33
2.7.3 Premium proneness ... 33
2.7.4 Overview consumer proneness ... 34
3. RESEARCH DESIGN ...35
3.1 Research Design ... 35
3.2 Research Methods ... 35
3.3 Data collection... 36
3.3.1 Online survey... 36
3.3.2 Target population and sampling technique... 37
3.3.3 Design of the questionnaire... 38
3.4 Methods of data-analysis ... 38
3.4.1 Descriptive statistics ... 39
3.4.2 Looking for (significant) correlations... 39
3.4.3 Factor Analysis... 40
4. RESULTS...43
4.1 Characteristics of the respondents ... 44
4.2 Descriptive statistics ... 44
4.2.1 Media influence and involvement ... 45
4.2.2 Behaviour towards supermarkets ... 46
4.2.3 Influence of consumer sales promotion per product group ... 47
4.3 Looking for correlations ... 48
4.3.1 Demographic comparisons ... 49
4.3.2 Overall promotional proneness ... 50
4.3.3 Coupon Proneness ... 51 4.3.4 Premium Proneness ... 52 4.3.5 Refund proneness... 52 4.3.6 Bonus proneness ... 53 4.3.7 Prizes proneness ... 53 4.3.8 Price proneness... 53 4.4 Factor Analysis... 53
4.5 Internal consistency reliability ... 54
4.6 Cluster analysis... 55
4.6.1 Segment 1 – Peter Plan ... 56
4.6.2 Segment 2 – Dora Direct ... 58
4.6.3 Segment 3 – Tyra Trends ... 58
4.6.4 Segment 4 – Betty Bargain ... 60
4.6.5 Summary ... 61
5. CONCLUSIONS AND RECOMMENDATIONS ...62
6. LIMITATIONS AND FUTURE RESEARCH ...66
REFERENCES ...67
APPENDIX I - OUTLINE QUESTIONNAIRE ...72
APPENDIX II - QUESTIONNAIRE...75
APPENDIX III - OVERVIEW SUPERMARKETS IN THE NETHERLANDS ...83
APPENDIX IV - OUTPUT DESCRIPTIVE STATISTICS ...84
APPENDIX V - OUTPUT CORRELATION ANALYSIS ...91
APPENDIX VI - OUTPUT CRONBACH’S ALPHA...104
APPENDIX VII - OUTPUT FACTOR ANALYSIS...106
LIST OF TABLES AND FIGURES List of Figures
Figure 2.1 Systematic framework of three mayor sales promotion types... 14
Figure 2.2 Approaches to influence consumer behaviour... 15
Figure 2.3 Example of price promotion... 18
Figure 2.4 Example of bonus-pack promotion ... 18
Figure 2.5 Example of coupon promotion ... 20
Figure 2.6 Example of premium promotion ... 20
Figure 2.7 Example of rebate promotion ... 21
Figure 2.8 Example of refund promotion ... 21
Figure 2.9 Consumer decision making process towards consumer sales promotion .. 26
Figure 2.10 Research model... 31
Figure 3.1 Classification of Marketing Research Designs ... 35
Figure 3.2 Classification of Marketing Research Data used in this thesis... 36
Figure 3.3 5-point Likert scale based on Malhotra (2004) ... 37
Figure 3.4 Overview variables per sales promotion strategy... 40
Figure 3.5 Action steps to conduct a cluster analysis... 41
Figure 4.1 Household situation according to occupation of the consumers ... 44
Figure 4.2 Media influence on purchasing behaviour ... 45
Figure 4.3 Average number of grocery shopping trips ... 46
Figure 4.4 Most often visited supermarkets by the respondents... 47
Figure 4.5 Store loyalty of the respondents ... 47
Figure 4.6 Number of respondent who purchase a product group in promotion ... 47
Figure 4.7 Means ANOVA test on education ... 49
Figure 4.8 Means ANOVA test on income... 50
Figure 5.1 Segment overview based on most important (significant) variables that differentiate them... 64
List of Tables Table 2.1 Consumer sales promotions combined with their obtainable objectives ... 22
Table 4.1 Background information about demographics before and after re-weight. 43 Table 4.2 Overview of positive or negative significant correlation... 51
Table 4.3 Factors according to the rotated component matrix ... 54
1. INTRODUCTION 1.1 Background
The moment the consumer walks into a supermarket he or she gets bombarded with promotional activities. At the end of almost every aisle displays are located, which offer up a variety of sales promotions. Eye-catching product packages can be found on almost every shelf. They either carry large text frames with appealing discounts, or a free gift that comes with the product. It is all intended to catch the consumers´ attention and encourage them to purchase the product. These are only a few examples of the different sales promotions consumers encounter on their daily trip to the grocery store.
Theory illustrates the complexity involved in a consumer’s purchase. According to Teunter (2002), there are four key decisions a consumer has to make for each product category. She argues that the consumer first has to decide what to purchase in a certain category, then, where to purchase it, and consequently the brand and the quantity. All these decisions may be influenced by the characteristics of the consumer (e.g. demographic characteristics) and by the marketing environment (e.g. sales promotions). The interest in how sales promotions and consumer characteristics influence consumers´ purchasing behaviour is increasing; expenditures on the sales promotions increase and so does the variety of the promotional methods.
In today’s world, sales promotions are of basic importance in our system of mass selling and mass production. According to Kotler (1994), ‘sales promotions consist of a diverse collection of incentive tools, mostly short-term, designed to stimulate quicker and/or greater purchase of a particular product by consumers or the trade’. Packaged good manufacturers have to make sure that they catch the eye of the consumer. Sales promotions have to win over the consumer to purchase the product and eventually create repeat purchase. They give consumers an incentive to purchase a product, for example by increasing the product value through a discount or additional premium.
A variety of sales promotions are used by manufacturers and retailers encourage consumers to try out a product, create a repeat purchase, and/or induce brand switching (Raghubir et al., 2004). Therefore, sales promotions can be used in all stages of the product life cycle. Furthermore, sales promotions can offer a rush in sales. This is an important given for marketing managers whose performance may be judged on whether or not they have achieved their sales target within a short period of time (Prendergast et al., 2008).
Improved technology allows promotions to become more efficient as targeted promotions become possible (Feinberg et al., 2002). In addition, companies are becoming increasingly creative in developing various types of promotions (Raghubir et al., 2004). Through a combination of a sound marketing budget and a creative marketer, a sales promotion can be very original, which is all conducive to the seduction of the consumer. Yet, despite all the expenditures on sales promotions, the effectiveness of many promotions in building sales is not clear (Winterich et al., 2008). Marketers need to know whether their targeted sales promotion actions produce good results or not. Then they can develop new methods to target different consumer groups. This will maximize the efficient use of budget, and so, in the end, ensure the highest possible profits.
According to Henderson (1987), an undifferentiated view of consumers with respect to promotional attitudes and responses seems naïve and inconsistent with empirical evidence suggesting that sensitivities to promotions differ across consumers and promotion types. This implies that there is a difference between consumers’ response to consumer sales promotions, depending on the consumer, the type of promotion and the situation.
1.2 Problem identification
compared to other consumers respond more strongly to a certain type of promotion, are identified as “prone” toward that specific promotion type.
The problem with today’s academic groundwork is that they generalize their findings into overall promotional proneness of the consumer or only focus on one specific kind of consumer sales promotion. This thesis will be dedicated to establishing a genuine, non-generalizing comparison of the various consumer sales promotions on the basis of promotional proneness of consumers.
1.2.1 Research Objective
A manufacturer needs to be aware of how to reach their target group. Only, through using the consumer sales promotion(s) suited for that specific group can the manufacturer influence the target group’s purchase behaviour. Thus, the objective of this thesis is to distinguish between the different consumer groups on the basis of the measure of attraction to a specific consumer sales promotion or across a combination of consumer sales promotions. On the other hand, there is a possibility that consumers do not make a distinction between different kind of promotions, so consumers are either promotional prone or not.
1.2.2 Research Question
The research question of this research is formulated as follows:
“How should packaged good manufacturers target their promotional activities more efficiently through a segmentation of Dutch grocery shoppers based on their promotional proneness towards the preselected consumer sales promotions?”
1.2.3 Sub Questions
In this respect, several sub questions should be addressed in order to fulfil the main research question. The following sub questions are formulated:
¾ Which consumer sales promotions can be distinguished?
¾ Can consumer sales promotions be used to influence consumer behaviour? ¾ How to classify consumers based on promotional proneness?
¾ Which shopping motivations can be distinguished?
1.3 Relevancy of the study
These days’ manufacturers use a lot of different sales promotions to attract customers. However, they are mostly not aware of the effectiveness of the consumer sales promotions that are used. Therefore, it is interesting to look for similarities between consumer response towards consumer sales promotions. Manufacturers will be able to target their consumer sales promotions more precisely at their consumers.
Until today many studies focussed on the response of consumers to a single type of promotion deal, and mostly concerning only a few products. Additionally, many studies on sales promotions investigated purchases made on the basis of promotional deals, without indicating the type of deal. In this thesis is tried to add to the existing literature and deepen the understanding of consumer sales promotions. Amongst other things an effort is made to give insight into the effectiveness of multiple promotional proneness types without making a distinction between product classes. Eventually, it will increase the efficiency of the application of consumer sales promotion, which will be quite relevant to marketing managers.
1.4 Structure of the thesis
This study contains an exploratory research consisting of two parts; a theoretical framework and an empirical data analysis. Section one will contain a literature review focusing on the relevant literature about consumer sales promotions, promotional proneness, shopping motivations and marketing segmentation. Section two is dedicated identifying consumer profiles based on their promotional interests. The data required to do so will be collected through an online survey. Consumers will be evaluated according to their behaviour in the supermarkets in relation to consumer sales promotions. Thereafter, the promotional proneness will be used to create segments of consumers. Finally, the similarities between the selected consumer sales promotions will be investigated.
1.5 Scope of the thesis
2. THEORETICAL FRAMEWORK
This chapter shows an overview of conducted research in academic literature about sales promotions in general, with a specification to consumer sales promotions, and the promotional proneness of consumers. The six most important types of consumer sales promotions for this research will get individual attention. Also consumer behaviour towards consumer sales promotions will be investigated. Hereby, several shopping motivation will be identified. Also the relevant consumer characteristics will be identified in order to profile segments. Furthermore, numerous studies have been conducted on promotional prone consumers in general, as well as per promotion type. An overview at the end of this chapter shows the relevant findings in literature about promotional proneness.
2.1 Introduction sales promotions
Since there are many similar products on the market, it is important for the packaged goods manufacturers to obtain attractiveness towards the consumer. Even products that consumers purchase on regular base should have an attractiveness that stands out from the competition, so the consumer prefers this product over the competitive products. A good way to stimulate the consumer to purchase their product is through sales promotion (Strang, 1976).
Three mayor types of sales promotion can be distinguished: retail promotion, trade promotion and consumer promotion. The aim of all sales promotion activities is to reach the end user, which is the consumer (Blattberg & Neslin, 1990). When the manufacturer is focussing its promotions directly on the consumer it is known as consumer sales promotions (Raghubir, et al., 2004). On the other hand, retailers can also focus their promotions on consumers, like the “Hamsterweken” or “Jokers plakken” of Albert Heijn . These sales promotions are called retail promotions (Schultz et al., 1994). The third type of sales promotion is trade promotion. This is a sales promotion that the manufacturer can offer to retailers or other trade entities, to create stronger and quicker response which eventually boosts sales (Blattberg & Neslin, 1990). Moreover, effects of sales promotions are usually on short term, thus not effective in building long term brand preference (Kotler, 1994).
Although the sales promotion tools can be very diverse, they have three distinctive characteristics according to Kotler (1994):
Manufacturer Trade
Consumer
Trade promotion
Consumer
promotion promotion Retailer
¾ Incentive: providing value to the consumer through concession, inducement or contribution.
¾ Invitation: including a distinct invitation to engage in the transaction at that moment.
According to Blattberg & Neslin (1990), trade promotion and retailer promotion are elements of the “push” component of a manufacturer’s marketing effort, while consumer sales promotion is part of the “pull” effort. This means that consumer sales promotion serves as a tool to bring certain products under extra attention towards the consumer, and seduce them to purchase these products. Moreover, it is important for these sales promotion elements to be coordinated with the rest of the company’s marketing strategy. For instance, trade promotion needs to go hand-in-hand with sales activities (Baker, 2003), and consumer promotion often needs to be coordinated with advertisement (Bemmaor and Mouchoux, 1991). Figure 2.1 gives an overview of the three mayor types of sales promotion and the relationships between them.
Figure 2.1 Systematic framework of three mayor sales promotion types (Blattberg & Neslin, 1990)
The focus in this research will be on consumer sales promotion. In general, consumer sales promotion tries to influence the consumer to purchase products and visit retail stores by offering extra value and incentives (Blattberg & Neslin, 1990). Research into consumer sales promotion demonstrates that they:
¾ can boost a brand’s sales, awareness level and image (Aaker, 1991)
¾ are effective in encouraging switches between brands, product categories and retailers (Walters, 1991)
¾ are most effective when backed up by advertising (Bemmaor and Mouchoux, 1991)
requires the manufacturer to develop the right message, select an appropriate medium and accurately target the promotion campaign (Baker, 2003). Manufacturers can communicate with different consumer groups by offering a choice in different promotion types. Sales promotion communicates with the aim of encouraging interaction between the manufacturer and the consumer (e.g. through a discount and collecting coupons). The main aim of sales promotion is seeking a direct response from consumers (Ailawadi & Neslin, 1998). To obtain this, the marketer tries to influence the purchase time or change the consumer’s attitude towards the product. For the majority of sales promotions the action the manufacturer is waiting for is a purchase (in stead of for instance brand awareness). Sales promotions have been demonstrated as effective in substantially increasing the consumer’s sales volume and rate of consumption on short-term (Van Heerde et al., 2004).
2.2 Consumer Sales Promotion
“Move the product today, not tomorrow. A consumer sales promotion gets people to pick the product up at retail and try it by offering something concrete – a premium, cents off, or whatever.” – Parker Lindberg1
Consumer sales promotion is designed by marketers to influence consumer behaviour, especially at the point of purchase. The way marketers can influence consumer behaviour is presented in figure 2.2.
Figure 2.2 Approaches to influence consumer behaviour
The consumer sales promotion is designed to influence consumer behaviour through positive reinforcement, by means of increase in chances of purchase behaviour of the promoted brand (Peters & Olsen, 2005). Consumer research data, Sales and Market share data measure changes in consumer behaviour. These measures can help marketers to evaluate the success of their consumer sales promotion strategy and provide new input into the development of consumer sales promotion strategies (Peter & Olsen,
1 president of the Promotion Marketing Association of America Information about consumer behaviour Consumer sales promotion placed in the environment Influence on consumer behaviour Consumer research data, Sales, Market
2005). Therefore, it is a continuous process, which demonstrates the dynamic nature of consumer behaviour and marketing strategy.
2.2.1 Influence consumer behaviour
Consumer sales promotion can be used to influence consumer behaviour in several ways. The most valuable influences on consumer behaviour are:
¾ Purchase probability ¾ Continue purchase ¾ Obtain brand switch ¾ Develop brand loyalty
¾ Intensify spending (purchase quantity) ¾ Purchase time
¾ Purchase location
Most consumer sales promotions are designed to increase the probability that consumers will purchase a particular brand or combination of products. The objective of most consumer sales promotions is changing the consumers’ immediate purchase behaviour. In case of new products, the primary goal is to get consumers to try it. In addition, manufacturers try to position a brand or company in the mind of consumers by means of consumer sales promotions. They also try to encourage the consumer to purchase and continue to purchase the company’s brand. So the effect of a consumer sales promotion will become long term, instead of a single purchase.
Most consumer sales promotions are designed to not only influence purchase of a brand, but also to influence the amount of products purchased (Bhattacharya, 1997). Once a consumer is persuade to purchase the brand in sales promotion, the manufacturer should try to intensify the spending of the consumer, in order to create more profit. In case consumers are already loyal to a brand, sales promotions may influence their buying behaviour. There is a possibility that these consumers only purchase the brand during a promotion (Davis et al. 1992). This can be controlled by the manufacturer, because he can influence the time at which consumers purchase. Furthermore, consumer sales promotions can influence the location where the consumer purchases its products. These kind of dynamic effects of promotions are substantial, e.g. up to 25 percent of the current sales effect depends on shifts in timing of the purchases of the promoted brand (Van Heerde et al., 2000). However, about two-third of the retailer’s brand sales increase due to sales promotion is either the result of cross-brand effects, by decreasing sales from other brands in the category, or stockpiling effects by purchasing in other time periods. Only one-third of the retailer’s brand sales represent category expansion effects (Van Heerde et al., 2002).
2.3 Types of consumer sales promotion
In this paragraph the different types of consumer sales promotion will be discussed. A selection has been made of the most prominent promotions in supermarkets. There are many types of consumer sales promotion, which are often used in combination. This to increase probability of desired behaviours. Considering the scope of this research it is unrealistic to examine them all. This is why a selection has been made of the most commonly employed consumer sales promotions (Blattberg & Neslin, 1990). The types of consumer sales promotion that will be discussed are:
¾ Price promotion ¾ Bonus-pack promotion ¾ Prizes promotion ¾ Coupon promotion ¾ Refund promotion ¾ Premium promotion
Figure 2.3 Example of price promotion 2.3.1 Price promotion
The purpose of price promotion is to encourage trial of new products, to convince existing users to purchase more or at a different time or to convince new users to try an established product (Floor & Van Raaij, 2002). Only if the price is an important factor in the purchasing process of a brand or when there is no brand loyalty at all, price promotions will be effective.
In this thesis price promotion can be seen as temporary price reduction, such as cents-off (e.g. €5,- in stead of €6,50, or second product half price) and percentage-off (e.g. 20% free). According to Floor & Van Raaij (2002), one-third of all promotions are price promotions. The manufacturers have to give at least 10 to 15% discount when doing a price promotion, otherwise a consumer would not even notice the difference.
There are several disadvantages concerning price promotion. When a price promotion attracts new consumers, some of these consumers might be “price-hoppers” and will just purchase products that are in promotion (Blattberg & Neslin, 1990). Those consumers will not become loyal to the product. Also, consumers can get used to price promotion, then they expect the manufacturer to come up with a new price promotion, and are not willing to pay the normal price anymore (Chandon et al., 2000). Consumers might purchase more products of their favourite brand when this product is in price promotion. Then store it and wait for the next price promotion to come. In this case the price promotion becomes the normal price in the eyes of the consumer. So, a price promotion should not be used too frequently by manufacturers to promote their products. Too many and too large price promotions might also harm the quality image of the brand.
2.3.2 Bonus-pack promotion
A bonus-pack is a special factory pack that offers the consumer extra product at no additional cost (Urseth, 1994). For example, washing detergents are regularly available with extra content for the usual price. On average, the amount of bonus varies between 20 and 40%, an additional content of one-third is most common (Urseth, 1994). Consumers
which is why bonus-packs are becoming a more common tool to promote a product. In almost every retail-store products can be found with “25% more free” (percentage of more free product) or “100 grams extra free” (amount of more free product) on the package. These packages are designed to attract the consumer’s attention to eventually get the consumer to purchase the product and thereby boost sales. This type of promotion is clearly visible for the consumer, and the additional costs are known in advance. A particular type of bonus-pack is the BOGO, this means “buy one, get one free” (Ong, 1997). Because of the financial advantage of bonus-packaging, this type of promotion can also be seen as a form of price promotion.
Usually, most bonus-pack promotions are limited time offers, to stimulate short-term sales and to boost product awareness (Reiter, 1994). In some cases, consumers might not be aware of the temporary character of this type of promotion. Consumers may think that they paid a too high price in the past, and suspect that manufacturers increase the prices when offering bonus-packs. Otherwise, consumers who are aware of the temporary offer, will purchase this brand instead of their usual brand than or purchase more than planned (Ong, 1999). In addition, one of the objectives of bonus-packs is that the consumers, who are loyal to the brand, get rewarded when their product is in promotion. Ong (1999) pointed out that the variation in extra quantity of product may not have been sufficient to affect consumer purchase intentions.
Another objective is to push the product into the market in order to off-load inventory at the factory and distribution level. Furthermore, bonus-packs are used to load consumers so that they would not purchase competitive brands, at least for a short period. This is why a bonus-pack is an excellent tool for a manufacturer when he expects new entrants of competitors (Ong, 1997).
A disadvantage of bonus-packs is that the interest of new consumers will not increase, because they mostly prefer to try smaller packages. Furthermore, the product-package has to be adjusted, which can lead to problems in the shelves, production and distribution.
2.3.3 Coupon promotion
Figure 2.5 Example of coupon promotion
addresses filled in on the coupon can be used for future marketing communication or research.
Coupons are distributed through direct mail, door-to-door advertisement, media channels (e.g. newspaper and magazine ads), on the package itself, or through the retailer by co-op advertising. The coupon is still an important promotional tool in many consumer product categories, especially in the United States. According to CMS Inc. (2007), 286 billion coupons were distributed in the United States in 2006 with an average value of €0,78 and an average redemption rate of less than 1%. Coupon distribution has increased rapidly in the past decades. Compared to 1986, a total of 190 billion coupons was distributed in the United States, which means that the distribution has grown by more than 150%. However, coupons are not that popular in Europe.
The effect of the use of coupons by manufacturers seems to be different from other consumer sales promotions. Coupons do not have a short expiration date and are good for only one purchase, this is why the major incentive is to switch brand rather than accelerate purchases. As with other promotions the intention is to increase sales in a limited time period.
2.3.4 Premium promotion
Premium promotion is a promotional tool in the shape of a free gift or a product at a relatively low price offered to consumers in return for the purchase of one or many products (d’Astous & Jacob, 2002). The premium does not have to be of the same category as the product purchased (e.g. Flippo’s
from Lay’s chips) and can therefore be seen as a hedonic promotion. Inherently, most of the time premiums tend to be offered in competitive product categories, in order to encourage brand switching (Prendergast et al, 2008). Furthermore, a premium serves to reward and retain existing loyal customers and to enhance brand image
Figure 2.8 Examples of refund promotion
Figure 2.7 Example of rebate promotion through interaction and association.
There are different types of premium promotions. A premium may be inside, on the product package or it may be the package itself (container premiums). The premium can also be exhibited nearby the product or received at the pay desk (d’Astous & Jacob, 2002). In case a consumer gets a premium at a reduced price it is called ‘self-liquidating premium’, because the extra pay normally is cost-covering for the purchase and distribution of the gift. However, this kind of premium will not be taken into account in
this thesis.
According to Simonson et al. (1994), it is essential that the offered premium is attractive to the consumer in order to create promotional proneness. They state that offering an unattractive premium may have a negative effect on the image and sales of the product.
2.3.5 Prizes promotion
Prizes consist of contests, sweepstakes and games (Floor & Van Raaij). These promotions create excitement by promising impressive prizes free of charge. Contests require consumers/participants to compete for one or more prizes based on some sort of ability or talent. Consumers need to submit an entry, like a jingle, suggestion, estimation or completion of a rhyme, which will be examined by a panel of judges who will select the best entries (Kotler, 1994). To be included in sweepstakes, consumers/participants only need to submit their names. According to Floor & Van Raaij (2002), only 20% of sweepstakes are being returned, in that case only 20% of the prizes have to be remitted. Prize promotion is financially well predictable, since the costs are known in advance. Furthermore, prize promotion is an accurate tool to fit the brand image. The way prizes are being promoted is through displays and other in-store communication, through the product packages and through external media like television, radio and magazines.
2.3.6 Refund promotion
promotion, just like coupons. On the other hand, a refund promotion does not need the support of the supermarkets, like coupons do. To receive the discount, the consumer needs to send one or more certificates of purchase, mostly to one of the specialised clearing houses. The consumer then receives an amount of purchase money back on his or her bank account. This promotion tool gives the consumer the opportunity to try the product for free and might reduce the purchase threshold.
According to Floor & Van Raaij (2002), the redemption rate of refund promotion is low. Redemption is the percentage of rebates that are send by the consumer. Most of the time consumers forget to send in their certificates of purchase. On average, less than 10% of the rebates and refunds are sent in by the consumers. Therefore the cost of this promotion tool is low, which makes it attractive for manufacturers to use.
2.3.7 Promotion objectives
Floor & Van Raaij (2002) investigated most of the consumer sales promotion objectives in order to stimulate consumer behaviour (mentioned in paragraph 2.2.1) in combination with several sales promotion types. Table 2.1 shows an overview of the selected consumer sales promotion types in combination with the sales promotion objectives. The “+” indicates the relationship between the consumer sales promotion type and the objectives. The amount of plusses indicates the strength of this relationship.
Promotion type Promotion objective Price deals Bonus packs
Coupons Premiums Prizes Rebates
and refunds
Attract new consumers + + + + +
(re)Introducing a new brand
+ + + Intensify spending per
consumer
++ + + + +
Stimulate product usage + +
Retain current consumers + ++ ++ + ++
+ qualified ++ very qualified
Table 2.1 Consumer sales promotions combined with their obtainable objectives
80% of the profit. So retaining current consumers is just as important as attracting new consumers.
2.4 Consumer behaviour
This chapter will take a closer look at the behaviour of consumers towards the preselected types of consumer sales promotion, also known as promotional proneness. Firstly, consumers will be classified based on their promotional proneness. Secondly, several consumer types will be described based on their shopping motivations. Thirdly, the consumer decision making process will be discussed.
2.4.1 Promotional proneness classification
Webster (1965) was the first to use the word deal-proneness, which is currently known as promotional proneness. Promotional proneness refers to the consumer tendency to respond to sales promotion. According to Lichtenstein, Netemeyer & Burton (1990), promotional proneness is ‘an increased propensity to respond to a purchase offer because the form of the purchase offer positively affects purchase evaluations’. Essential in this definition is that promotional proneness is the psychological tendency to purchase and not the actual purchase of products in promotion (DelVecchio, 2005). Therefore, promotional proneness is typically measured by behaviour.
Consumer sales promotion can provide the consumer monetary (discounts) (Teunter, 2002) and psychological (smart shopper feeling) benefits (Babakus et al., 1998). At the same time these promotions necessitate different levels of consumer involvement, like their efforts and costs in using and finding the promotion (Schneider & Currim, 1991). A distinction in the way consumers behave toward different consumer sales promotions can be found in several academic researches (Schneider & Currim, 1991; Lee & Ariely, 2006). Researchers have suggested different perspectives to classify consumers based on promotional proneness.
¾ Active and passive promotional proneness (Schneider and Currim, 1991) ¾ Price and non-price promotional proneness (Shimp, 1990)
¾ Hedonic and utilitarian promotional proneness (Chandon et al. 2000)
active or purely passive towards promotions. Relatively few consumers are equally prone to both promotional types. There might be some overlap in the way consumers act towards promotions.
According to Shimp (1990), consumer sales promotion can be classified in price and non-price-oriented sales promotion. Some promotions offer a discount which results in lower purchase prices (like cents-off, coupons and refunds), other promotions do not offer a financial advantage (like premiums and prizes).
Chandon et al. (2000) classify consumer sales promotion into utilitarian and hedonic benefits. Utilitarian benefits are savings, quality and convenience; and can be compared with price promotion. These utilitarian benefits are evolved out of the utilitarian aspects of shopping, which are the conventional shopping reasons like task-related and rational shopping reasons (Batra & Athola, 1991), which can be seen as a more functional way of shopping. Consumers who show utilitarian aspects know what to purchase in advance and are well-prepared concerning the products they are looking for in the grocery store (Babin et al., 1994). They have a laid out plan when they go to the grocery store, and walk straight to their target.
On the other hand, hedonic benefits are value expression, exploration and entertainment; and can be compared to non-price promotion (Chandon et al., 2000). Nowadays, most purchase decisions are made inside the retail store (more than 70 percent, Urbany et al., 1996), this suggests that the consumer becomes more sensitive to the environmental influences in the supermarket. Therefore, the importance of hedonic shopping motivations is growing. The hedonic aspects of shopping can be defined as behaviour that relates to multisensory, fantasy, and emotive aspects of consumption (Hirschman & Holbrook, 1982). This view is complementary to the utilitarian view, since consumers go shopping when there is a need for a particular good. However, their exact purchase decisions can be influenced by in-store environment, like consumer sales promotion (Blackwell et al., 2006).
2.4.2 Consumer classification
Five broad categories can be distinguished, based on shopping motivations (according to various promotional prone research, e.g. Arnold & Reynolds, 2003). Each of these motivations will be briefly defined.
¾ Bargain hunters – these consumers go to the supermarket especially for the bargains. They already sorted out for themselves what consumer sales promotion is interesting to them. Hereby, they primarily use supermarket flyers to prepare their grocery trip, but also look on the internet for bargains, or check commercials and advertisements. These consumers are willing to go to several supermarkets to look for the best bargains, they will not pay attention to other products.
¾ Flyer shoppers – these consumers are loyal to their grocery store, but are doing their groceries by way of using the grocery flyer to look for store specials. So they do their day to day groceries as usual, additionally pay attention to the bargains and are willing to respond to consumer sales promotions.
¾ Collectors – these consumers mostly have several loyalty cards in their wallet. They enjoy saving stamps in all kinds of ways. They cut coupons out of newspapers and magazines, and exchange them as much as possible to eventually obtain the highest discount.
¾ Impulsive buyers – these consumers accidentally walk into a certain supermarket and are very impulsive. They usually have a product in mind to purchase the moment they walk into the store, but get distracted by the sales promotions in the supermarket. As a result, they come home with much more than they intended to purchase.
¾ Planners – these consumers mostly make a shopping list in advance of doing groceries. They know what they want to purchase and do not get distracted by any consumer sales promotion. Mostly they have favourite brands for most of the products they purchase, and therefore go straight to their target while shopping. 2.4.3 Consumer decision making process
consumer sales promotion. This overview is based on the consumer decision making model from Peter & Olsen (2005, p167).
Figure 2.9 consumer decision making process towards consumer sales promotion
As can be seen in figure 2.9 there are many aspects that may influence the consumer behaviour before responding to a consumer sales promotion. Every consumer will get confronted with this decision making process, although they might have different shopping motives. Besides the shopping motives, consumer characteristics also play an important role in the purchase process (Peter & Olsen, 2005). Therefore, the following paragraphs will further discuss the consumer characteristics.
2.5 Identify relevant consumer characteristics
For manufacturers it is very important to identify their current and potential consumers. Therefore, a manufacturer needs to have a consumer profile in mind for every product they sell in retail stores, which reflects the corresponding characteristics of their target group. According to Cummins and Mullin (2002, p10): “you need to find out all about them to serve them better, retain their custom and persuade them to buy more.” According to this research, it is a bilateral communication process. A manufacturer has to know all about the consumer and has to try to understand them. Subsequently the
Attention & Comprehension Attitude & Intentions Decision making Behaviour (purchase) Evaluate alternatives Physical and social
consumer will be finding out about the manufacturer. The moment consumers are getting interested in the manufacturer they should try to influence them with promotional actions at the supermarket (Casielles & Alvarez, 2007). It is important for the manufacturer to formulate a consumer profile, before choosing a sales promotion strategy. This profile has to give complete understanding in the way consumers think and what influences them in their purchasing behaviour (Cummins & Mullin, 2002). The next paragraph gives an overview of the way manufacturers can profile their target consumer group in order to choose the right consumer sales promotion strategy.
2.5.1 Marketing segmentation
Consumers can be subdivided into different consumer types, each with a different approach to purchase and consumer sales promotion. Every consumer has its own background, attitude and behaviour, which is influenced by the way they were raised in their social environment (Huff & Alden, 1999). Therefore, it is nearly impossible and undesirable to reach all the consumers in the supermarket. A manufacturer should design a promotion strategy for every product to obtain more targeted excellence. For that reason, the manufacturer has to split up the market into groups of consumers with more or less the same needs and desires (Cummins & Mullin, 2002). Every different, yet identifiable, separate consumer group is known as a segment (Malhotra, 2004). Sorting the consumers into segments is termed as marketing segmentation. Subsequently, each identifiable consumer group will have another marketing approach, in this case by using different promotion strategies. According to Den Boon & Neijens (2003), marketing segmentation is an important instrument in modern marketing. Ted Levitt, emeritus professor at Harvard Business School, once said:
“if you’re not thinking segments, you’re not thinking marketing.”
Marketing segmentation is based on variables. In the application of marketing segmentation, two types of variables are relevant: variables on which the segmentation is based on (called the dependent or active variables), and variables to describe a segment (called the independent or passive variables) (Field, 2005). In this research segments will be defined based on cluster analysis. The number of segments and the segment types are not known in advance.
¾ Measurable: it has to be possible to gain information that is measurable, for example about the size and household composition of the segment.
¾ Substantial: the segments have to be large enough in order to be profitable enough to serve them.
¾ Accessible: the segments have to be accessible in a communicative and distributive way.
¾ Differentiable: the segments have to be distinguishable and have to respond differently to different promotional strategies.
¾ Actionable: it should be feasible to develop marketing strategies that influence the target groups within the segments in different ways.
In the promotional prone research four types of consumer characteristics are used to describe promotional prone consumers. These are demographic characteristics, psychographic characteristics, behavioural characteristics and personality characteristics (Blattberg & Neslin, 1990, p29). Most prior research on promotional prone consumers describes consumer characteristics exclusively by investigating demographic characteristics. Although, since the society is becoming more independent, demographic characteristics are not sufficient anymore. Moreover, according to Pechtl (2004), the demographic differences between promotional prone segments seem too small to design a marketing strategy based on these demographics. The psychographic and purchasing habits of consumers are becoming more important to identify promotional prone consumers (Schneider and Currim, 1991). Based on the segmentation criteria in combination with prior research, a composite segmentation is employed in this research. This segmentation uses multiple variables to identify consumers in the target group according to their demographic characteristics, shopping-related characteristics and psychographic characteristics. According to Blattberg & Nesling (1990, p72), “demographics, behavioural and psychographic characteristics can yield a well-defined profile of deal-prone consumers that can be translated into targeting goals”.
promotional prone literature. A selection has been made of the most important variables to investigate in the scope of this research.
2.5.2 Demographic characteristics
There are many different demographic characteristics to be investigated in order to create consumer profiles in combination with psychographic characteristics and shopping-related characteristics. In this paragraph the demographic characteristics according to Kotler (1994) are discussed and a choice has been made which to examine and which not.
Demographic characteristics are easy to measure, are objective and are often highly related to the preferences and usage rate of consumers (Kotler, 1994). Moreover, these consumer groups based on demographic characteristics are often well accessible and of sufficient size. According to Kotler (1994), the following demographics can be divided:
¾ Age ¾ Gender ¾ Family structure ¾ Income ¾ Occupation ¾ Education ¾ Religion ¾ Race ¾ Nationality
groups or with different religions. Since this research is limited to the Netherlands, nationality is also not included.
2.5.3 Psychographic characteristics
When going beyond demographic characteristics, some promotional prone studies include psychographic and shopping-related characteristics as predicting variables (e.g. Lichtenstein, Burton & Netemeyer, 1997). Psychographic characteristics are subjective characteristics of the consumers. According to Kotler (1994), these subjective characteristics are lifestyle, self-perception and personality characteristics. These refer to the way people live, how they spend their time and money, what activities they pursue, and their attitude and opinions about their environment (Levy & Weitz, 2009, p120). Prior studies examined psychographic characteristics like:
¾ busyness (time pressure)
¾ variety seeking (innovativeness) ¾ storage space
¾ media involvement (orientation)
Even if consumers share the same demographic characteristics, their lifestyle might be different. According to M.R. Solomon (2004), each consumer chooses products, services, and activities that tell who a consumer is and which type of consumer he or she desires to be identified with. People tend to sort themselves into groups on the basis of interests, how they like to spend their free time, and how they like to spend their income. All different characteristics help to determine which promotion strategy or product is attractive to a customer group.
2.5.4 Shopping-related characteristics
Whereas psychographic characteristics are subjective and general traits, shopping related characteristics are more objective and are specific traits related to shopping (Kotler, 1994). These characteristics will reflect measurable variables like:
In case of store loyalty, research will be conducted on how often consumers go to the same supermarket, or to what extend they have a favourite supermarket chain (Ailawadi et al., 2001). When consumers are not loyal to a certain supermarket chain, they are called “store-switchers”. Consumers with high store loyalty and low brand loyalty are called “brand-switchers”. To influence store loyalty, many supermarket chains have their own loyalty programs (e.g. Albert Heijn bonus card). This will not be investigated in the scope of this research.
2.6 Profile consumer segments
The independent variables in the segmentation process of the consumer will be based on the promotional proneness of these consumers. To measure the promotional proneness of the consumers, several questions have been designed for every preselected consumer sales promotion tool. This will determine their proneness towards a certain promotion. After the consumers have been segmented, different profile outlines need to be developed. Hereby, the dependent variables are used that are mentioned in the previous paragraph. All questions included in the questionnaire that are linked to the dependent and independent variables are placed in an overview in appendix I. Several relevant articles have been mentioned on which the questions have been based. Figure 2.10 will give an overview of the different variables of which the segmentation is based.
Figure 2.10 Research model
2.7 Promotional proneness per consumer sales promotion
Prior research on promotional proneness toward the selected consumer sales promotions will be evaluated before starting the research process. Hereby, the consumer characteristics mentioned in paragraph 2.5 (demographic characteristics, psychographic characteristics and shopping-related characteristics) are taken into account. An overview of the findings in prior research on promotional proneness can be found at the end of this paragraph.
First of all, there are some findings in studies that are related to promotional proneness in general. According to Trivedi and Morgan (2003), variety seekers are more sensitive to promotional effort. This because these consumers are more open to new happenings during grocery shopping and because they are willing to respond to consumer sales promotion. Furthermore, according to d’Astous and Jacob (2002), consumers who are compulsive buyers have more appreciation for promotional offers. According to Teunter (2002), household size and promotion response are positively correlated.
On the other hand, Trividi and Morgan (2003) provide an analysis of the value of studying promotions as separated types of stimuli. According to them different type of consumer sales promotions should provoke different types of behaviour. Moreover, Schneider and Currim (1991) conclude that “there is evidence that sensitivity to different types of promotions, or types of promotional proneness, may explain differing promotional response.” This is why the following paragraphs will give an overview of previous research on the promotional proneness per consumer sales promotion type. Since not every selected consumer sales promotion for this thesis is evaluated in literature in terms of proneness, only the ones with related findings to promotional proneness will be mentioned.
2.7.1 Bonus-pack proneness
greater their purchase intentions are. This might give the consumer the impression of scarcity, which may boost the value perception of the offer.
According to Seibert (1997), older consumers are more willing to switch brand, when there is a smaller amount of product for free in the bonus pack. Consumers with formal education are willing to switch for less as well. Furthermore, older consumers are more likely to stock-pile, probably because they have more money to spend at once, more space to store the products, and probably because they are more value conscious. According to Ong (1999), the consumers who only purchase when they are about to run out of the product are not the ideal target group for bonus pack promotion. This is because the purchase cycle will be stretched to the extend of the extra product.
2.7.2 Coupon proneness
Several studies have been conducted over the years on the coupon proneness of consumers (e.g. Bawa & Shoemaker, 1986; Mittal, 1994). These studies researched if there is any consistent shopping behaviour within a certain consumer segment regarding coupons. Hereby, it is possible that when consumers are heavy users of coupons they use a store switching technique to get the best coupon deals, because they are also responsive to coupons for products that are not available in their favourite store. A consumer has to invest in collecting and redeeming coupons. This is why Bawa and Shoemaker (1986) assume that an individual household’s coupon usage is a function of the saving obtained relative to the costs associated with coupon usage.
Coupons are the most examined promotion tool in promotional prone research of all consumer sales promotion types. Hereby, the most commonly investigated consumer characteristics are demographic characteristics. However, the findings with regard to the demographic characteristics are inconsistent across studies (Mittal, 1994). Moreover, non-demographic characteristics are under-investigated in research on coupon proneness (Mittal, 1994). The results of the studies on coupon promotion can be found in table 2.2.
2.7.3 Premium proneness
Compulsive buying refers to consumers who experience and routinely act on powerful, uncontrollable urges to purchase (Yurchisin & Johnson, 2004). Furthermore, research of Prendergast et al (2008) shows that consumers with a strong tendency to seek variety are likely to show higher premium proneness.
2.7.4 Overview consumer proneness
Table 2.2 gives an overview of the results that are found in relevant research about promotional proneness. The table shows that there are conflicting results in different researches.
Bonus Pack Premium
Characteristics We bst e r ( 1 9 65) M o nt gom er y ( 1971 ) C o tt on a nd B a b b ( 1 9 78) B lat tber g et al . ( 1 978) T ri v ed i and M o rgan ( 200 3) d' A s tous and Jac ob ( 2 002) T e el et al . (1980 ) N a ra s im han ( 1984 ) B a w a and S hoem ake r (19 87 ) O ng ( 1 999) P e n der g a s t e t a l. (2 008 ) Demographic Income NS + + + Age + - NS Education NS - NS + + Household size NS - + + Gender NS Psychographic Time pressure Variety seeking + + Lifestyle Media involvement Shopping-related Brand loyalty - - - -Store loyalty NS -Price sensitivity Compulsive buying + + + Frequency of purchase -"+" = possitive correlation "-"= negative correlation NS = Not Significant Coupon General
Research Design
Exploratoy
Research Design Research Design Conclusive
Descriptive
Research Research Causal 3. RESEARCH DESIGN
This chapter describes the way this research is conducted. Therefore the different research designs will be explained as well as the research methods used to analyse the obtained data. According to Malhotra (2004), a research design is an overview of the marketing research project processed in a framework of blueprint. It shows the way the research is conducted and the procedures necessary to obtain the information needed in order to answer the marketing research question.
3.1 Research Design
According to Malhotra (2004), three basic research designs can be distinguished. The first way to conduct a research is exploratory. Exploratory research is often used as the initial step in the overall marketing research framework. It is used to gain information in order to provide insight and understanding of the research problem. Exploratory research is mostly followed by descriptive or causal research (Malhotra, 2004). Descriptive research is often used to describe market characteristics and functions. Causal research is used to establish causal relationships between variables. The outcomes of both descriptive and causal research are used as input into managerial decision making. This research can be characterized as an exploratory research in combination with descriptive research, since there are no segments known a priori based on promotional proneness. Subsequently, an online survey will be conducted to describe the characteristics of relevant consumer groups.
Figure 3.1: Classification of Marketing Research Designs (Malhotra, 2004)
3.2 Research Methods
Marketing Research Data
Secondary Data Primary Data
Qualitative
Data Quantitative Data
Descriptive Survey Data Direct (nondisguised) Depth Interviews Published
secondary data Computerized databases
Literature Internet
been conducted with several supermarket managers, to be sure that the chosen promotion strategies cover most of them and to give insight in the behaviour of consumer towards consumer sales promotions in the supermarket. Based on the result of the interviews and secondary data analysis, the questionnaire (survey) is created.
3.3 Data collection
The data collection process of this thesis is twofold. In the first stage, data is gathered to determine the different promotion strategies and ways to analyze the consumer. Therefore, internet websites, academic literature and interviews are used. In the second stage, concrete data of the consumers are gathered through an online questionnaire. The results of the questionnaire have been analysed in SPSS 17.0. Both interviews and online questionnaire will be explained in this section.
Figure 3.2 Classification of Marketing Research Data used in this thesis (based on Malhotra, 2004) 3.3.1 Online survey
In order to be able to create a framework for manufacturers who are willing to start up a consumer sales promotion, an online survey (Thesistools) is been used. The reason for choosing this method is because it enables to gather a large amount of information in a relatively short time span (De Leeuw, 1996). Furthermore, promotional proneness is the psychological propensity to purchase, not the actual purchase of products on promotion (DelVecchio, 2005). This is why it is useful to conduct a survey, to find out the consumers thoughts about consumer sales promotions. An online survey for a descriptive research enables to identify and describe the variability in different phenomena (Saunders et al., 2000).
strategies in the supermarket. The respondents are asked a variety of questions about their lifestyle, demographic characteristics, brand loyalty, price consciousness, time pressure, media involvement and some other factors that are included into the conceptual framework. Filling in the questionnaire will take 10 to 15 minutes. Since consumers from all layers of the Dutch society have to be able to fill in the questionnaire, the questions have been kept short and simple.
According to Saunders et al. (2000), scale questions are often used to collect data on attitudes and beliefs of the respondents. The most common method is the Likert-style rating scale, in which the respondent is asked to give their opinion about a statement. This research uses a 5-point Likert-scale, which creates enough possibilities for the respondents to express their opinion and it is measurable (figure 3.3). Furthermore, it is an odd number of scales in order to give the respondent the opportunity a neutral answer. In general respondents find it difficult to distinguish between values of scales of more than a five points plus the ‘neutral’ option.
Statement
Strongly disagree
1 Disagree 2 Neutral 3 Agree 4 Strongly Agree 5
Figure 3.3 5-point Likert scale based on Malhotra (2004) 3.3.2 Target population and sampling technique
The target group of this research is Dutch male and female grocery shoppers over 18 years of age and head of the household, responsible for most of the shopping at the supermarket. Therefore, these respondents decide for themselves if he or she wants to react on a promotion during grocery shopping. To collect data and reach the target group, the online survey is sent to many consumers through e-mail. Hereby, the “snow-ball” effect is created by asking the respondents to send the e-mail forward to other grocery shoppers over 18 years old. Furthermore, the internet-link that leads to the online questionnaire is placed on several online forums about supermarkets. Also flyers with the internet-link are distributed in several supermarkets in Amsterdam. Hereby, grocery shoppers are approached during packing their groceries. This way there is tried to reach a great variety of respondents.
elements based on own judgements. Since the research is about consumer sales promotion in the supermarket, respondents were approached in the supermarket, right after they paid their groceries. Furthermore, through supermarket forums respondents can be reached who are mostly involved with grocery shopping.
3.3.3 Design of the questionnaire
To research the promotional proneness of the consumers per promotion strategy, a series of statements are used per promotion strategy. To avoid confusion with the respondents the order of questioning is kept the same for each response category. Furthermore, demographic, psychographic and shopping-related characteristics are tested as well. Therefore, all the variables mentioned in the conceptual framework are processed in the questionnaire through several specific questions, mainly based on academic literature. These questions per segmentation variable can be found in appendix I. The complete questionnaire can be found in appendix II.
Preliminary to the questionnaire there is a short introduction which explains clearly and concisely what the research is about and trigger the respondents to complete the questionnaire. In general, questions in the beginning of the questionnaire are obviously relevant to the stated purpose of the research. This makes it interesting and more fun to the respondents to answer the questions and motivate them to continue and finish the questionnaire. Furthermore, the questions that are more complex are placed in the middle of the questionnaire, because at the moment respondents have reached this stage most of them will complete the questionnaire with confidence, and are not yet bored or tired (Saunders et al., 2000). In addition, questions are grouped into obvious sections which make sense to the respondent. Demographic questions are placed at the end of the questionnaire, because they are easy to answer since the concentration level of the respondent will be lowered.
In advance of the actual questionnaire to collect data it is pilot tested, with a group of friends and family as similar as possible to the final population of the sample. Hereby, the questionnaire is refined, so that no further problems in answering the questions will occur once the questionnaire is online. Furthermore, it gives insight into the validity of the questions and the reliability of the data that will be collected.
3.4 Methods of data-analysis
3.4.1 Descriptive statistics
As a start the basic features of data for the respondents will be deducted from the data. The descriptive analyses are used to describe the representativeness of the sample. The main focus in these analyses will be on the demographic characteristics of the respondents. Hereby, the shopping behaviour of the consumer will be evaluated, based on their supermarket visits and their preference and behaviour towards consumer sales promotions and media. In case of media, the respondent is asked to mention their most favourable television channels, radio stations and newspapers. Furthermore, the respondents defined the media type that influences their behaviour the most. Also, the influence of consumer sales promotions per product type will be checked.
3.4.2 Looking for (significant) correlations
After describing the descriptive statistics several regression analyses and ANOVA analyses have been performed in order to find significant correlations. The ANOVA analysis have been performed per promotion strategy as well as with the overall promotional proneness. Per promotion strategy five components are used (question 20, 23, 25, 26, 27 and 28 of the survey, see appendix II), since these show the most significant results and cover the variables that are investigated in prior research (see table 2.2). The correlations (Spearman) have also been performed per consumer sales promotion strategy to check the correlation for the ordinal variables. Furthermore, several MANOVA analysis tests have been performed in order to find more significant variables. These MANOVA analysis tests are followed by multiple comparisons to check the exact significance. This way all the possible connections between the different variables have been checked and only the most significant and important connections are discussed.
