The manufacturer-retailer-consumer triad: differing perceptions regarding price promotions

Abstract

The effectiveness of any promotional strategy depends, in part, on how accurately channel members predict consumers’ perceptions of their promotional activity. However, empirical research on channel member predictions and their accuracy is virtually nonexistent. In this article we examine manufacturer and retailer beliefs about consumers’ (and each others’) perceptions of sales promotions and assess the accuracy of these predictions. Our findings indicate that manufacturers and retailers hold similar, but equally inaccurate views of consumers’ industry knowledge. When assessing consumers’ specific beliefs about different types of promotions, these channel members underestimate consumer knowledge. Their motivational knowledge, however, appears quite accurate -whether predicting consumer or other channel member perceptions of motivations. The similarity of supplier and retailer knowledge bodes well for channel efficiency, yet limitations in their understanding of consumer knowledge about promotions may lead to weakness in channel marketing strategies.