Monetary Promotions Research Articles

How shopping orientation influences the effectiveness of monetary and nonmonetary promotions

Purpose– This research aims to examine whether shopping orientation (experiential vs task-focused) influences how consumers react toward nonmonetary and monetary promotions. It was predicted that promotions are more effective if the promotional benefits are congruent with consumers’ shopping orientation. Moreover, consumers’ financial budget was assumed to moderate the influence of shopping orientation on promotion effectiveness.Design/methodology/approach– The hypotheses were tested in three experiments. Study 1 used a measure of shopping orientation as a consumer disposition and examined its influence on promotion attractiveness. Two further studies used an experimental manipulation of shopping orientation and examined its influence on promotions attractiveness and retailer choice.Findings– The results supported the hypotheses. Task-focused shoppers evaluated monetary promotions as more attractive than nonmonetary promotions. Experiential shoppers evaluated both types of promotions as comparably attractive. Furthermore, experiential shoppers were more likely than task-focused shoppers to choose a retailer offering a nonmonetary promotion over a retailer offering a monetary promotion. Low financial budget, however, reduced the influence of shopping orientation on retailer choice.Originality/value– To effectively use promotions as a tool, marketers and retailers need to know when and how to use them, as well as understand which type of promotion is the most effective. This research implies that retailers will benefit from customizing promotions to fit consumers’ shopping orientations. Furthermore, the findings show that the advantage of such a tailored approach is reduced if consumers’ financial budget is limited.

Role of Advertising and Promotion in Brand Equity Creation

This article surveys the effects of the individual's attitude toward advertising and nonmonetary promotions besides other subjects, namely advertising cost and monetary promotions on brand equity. It has been surveyed on 392 consumers in Iran. Its results prove the effective role of the individual's attitude toward advertising in promoting the brand equity. The deficiency of advertising in affecting the perceived quality and brand association, and the inefficacy of nonmonetary promotions on brand equity are the fascinating ramifications. In addition, the findings show that businesses can improve the process of the brand equity management by contemplating the relations between the dimensions of the brand equity.

Investigating the Role of Selected Marketing-Mix Variables in Formatting Corporate Image in Egyptian Market

The current study aims at investigating the relationship between selected marketing-mix variables (i.e., price, advertising, monetary promotion, distribution intensity) and corporate image, in the consumer markets, unlike research that concerned business market, or/and different group of marketing-mix variables, in terms of addressing their expected relationships with corporate image. The questionnaire response rate is approximately 83%. Structural equation modeling was used to investigate the proposed relationships, and the model`s fit as well. Significance of all relationships were verified, and the proposed model fits the data. Implications, limitations, and further research are provided.

The effects of the antecedents of service purchase intention in the context of monetary sales promotion

This study investigated the correlations among variables for credence service in the context of monetary sales promotion. The findings suggested that perceived price directly affected perceived quality, with a negative effect. Perceived price had a positive effect directly on perceived value. Perceived quality directly affected perceived value. Perceived value was found as a key predictor of purchase intention. In addition, perceived quality had indirect and positive impact on purchase intention via value. The results of this study also suggested that there was a negative effect of perceived price on perceived risk. Moreover, it was also noted that perceived risk had negative effects on perceived value and purchase intention.

Economic and utilitarian benefits of monetary versus non-monetary in-store sales promotions

While prior research has examined the issue of sales promotion proneness, very little has examined proneness to non-monetary promotions, such as contests and premiums discovered in store. This study draws on a promotions benefits framework to examine the influence of shoppers’ desired benefits on their relative proneness to in-store monetary and non-monetary promotions. Computer-aided telephone interviewing (CATI) data gathered from 500 grocery shoppers are used. The findings show that shoppers who are prone to using non-monetary in-store promotions seek exploration, entertainment and value expression benefits, in common with shoppers who are prone to monetary promotions. Both monetary and non-monetary promotion-prone shoppers feel financially constrained. In addition, non-monetary promotion-prone shoppers enjoy gambling and other hedonic outcomes. The managerial implications of our research findings are that many monetary sales promotion-prone shoppers may be attracted by the benefits provided by non-monetary promotions. The increased use by managers of non-monetary promotions instead of monetary promotions may result in improved category value and brand equity benefits.

Distribution Intensity, Advertising, Monetary Promotion, and Customer-Based Brand Equity: An Applied study in Egypt

Brand equity is so essential issue to be considered by manufacturers and retailers as well, that is to manage thebrand rationally. The aim of the current research is to support managers in terms of determining the expectedinfluence of marketing activities on the brand equity, which implies for the relative fund each activity deserves.The study investigated the potential effects of brand equity drivers (i.e., distribution intensity, advertising,monetary promotion) on the dimensions of customer-based brand equity. In addition, the research investigatesthe inter-relationships among the dimensions of brand equity. The study was built on data derived from 497respondents. The results indicate that the proposed model reflects perfect fit to the data. The most of thehypothesized influences were significant and took the expected directions. The results would lead to suggest thatbrand awareness is the starting point to constitute the customer-based brand equity. Discussion and implicationsare provided.

An Empirical Study on Financial Products Offered by Indian Retail Banks to Assess the Relationship Between Sale Promotions, Time to Reward Receipt, and Customer Preference

The present study attempts to investigate the impact of sales promotions and the time to reward receipt on customer preference. Moreover, the study also seeks to examine the contingent effect of different types of financial products. Many banks are competing on sales promotion segregation for their customer acquisition because of the highly competitive environment in the banking industry and almost similar financial product portfolios. The types of sale promotions studied are monetary and nonmonetary promotions, and instantaneous and delayed receipt of rewards is examined. Four financial products are studied: credit cards, mutual funds, fixed deposits, and bancassurances. Three-way analysis of variance showed that sales promotions in monetary terms are more preferable than those in nonmonetary terms in the case of all four financial products. Furthermore, instantaneous receipt of rewards is preferred over delayed receipt. Also, the study finds that a monetary promotion on a financial product (credit card) is more effective than offering a monetary promotion on other financial products (mutual funds, fixed deposits, bancassurances). However, the contingent role of the financial product category has no significant impact on the relationship between the time to reward receipt and customer preference.

Consumer perceptions of monetary and non-monetary introductory promotions for new products

Little research has examined how consumers respond to sales promotions in new product categories. This article fills this gap by integrating research on reference prices with literature on sales promotions for new product categories. Existing research suggests that consumers respond more favourably to non-monetary promotions (e.g. extra free promotions) than monetary promotions (e.g. price discounts) because non-monetary promotions are framed as segregated gains rather than reduced losses. However, both kinds of promotions are widely used in practice, suggesting the importance of other contributory factors. With a consumer experiment on a national panel of consumers, this research demonstrates that extra free product promotions are most preferred for existing products, and introductory low-price promotions are preferred for innovative products. The moderating effect of a product's innovativeness is explained via a new relationship in the marketing literature, whereby perceived risk mediates the relationship between perceived innovativeness and a consumer's tendency to stockpile.

The role of advertising and promotions in enhancing brand credibility and customers’ using intention

The antecedents of brand credibility have not been investigated in detail to find out what are the factors that influence brand credibility especially in service industry. Marketing mix elements is one of the factors that have been argued to be potential drivers of brand credibility. This study by targeting this issue tried to find out the significant relationship of advertising, monetary, and non-monetary promotions with brand credibility, which would result in higher expected utility among consumers by increasing quality perception, and decreasing perceived risk and information costs. SEM using AMOS developed to analyze the 177 data collected from consumers who were the users of telecommunication services. The results showed that both advertising and non-monetary promotions were in positive significant relationship with brand credibility, while the relationship between monetary promotions and brand credibility could not be supported. On the other hand, brand credibility was found to be positively related to perceived quality and information costs saved, and negatively to perceived risk; which would result in higher using intention.

The long‐term effects of sales promotions on brand attitude across monetary and non‐monetary promotions

AbstractThis study compares the influence of sales promotions on brand attitude across promotion types over time. An experiment is conducted with 154 subjects, who are exposed to test materials for 12 weeks. Evidence shows that the long‐term effects of sales promotions on brand attitude vary across deal types. Non‐monetary promotions seem to work better in eliciting consumers' favorable brand attitude than monetary promotions over time. However, such effects are moderated by consumers' deal proneness. Although monetary promotions may induce more negative effects than non‐monetary promotions, these effects are weaker for high deal‐prone consumers than for low deal‐prone consumers. © 2011 Wiley Periodicals, Inc.

The Effect Of Promotion Type And Benefit Congruency On Brand Image

Sales promotion is a communication device increasingly used by companies due to its capacity to produce an immediate sales increase. However, although these activities generate good short- term results, they may also have side effects on the customers’ assessment of the promoted brands. The purpose of this paper is to delve into the effects of promotions on the expected product price and brand image. The results of the study reveal that the frequent use of promotions affect consumers’ evaluations of brand image, but the effect depends on the type of promotional tool and the product category. The frequent use of price promotions will lower brand image assessments whereas non-monetary promotions lead to higher brand evaluations. These results are moderated by the product category. Moreover, the expected price of a product is lower after frequent monetary promotions.

Information, Promotion, and the Adoption of Innovative Consumer Durables*

The diffusion of innovative new products is critically dependent on the transmission of relevant information to potential adopters. Existing research indicates that the relative effectiveness of different communication tools depends on the type of information being communicated. Written and verbal communication tools can be effective when consumers make adoption decisions based on search attributes. However, when adoption depends on experience attributes, marketers must find ways to effectively expose consumers to these attributes. In this paper the authors explore the effectiveness of promotional incentives in motivating consumers to engage in behaviors that should increase their understanding of an innovation's experience attributes. To the authors' knowledge, the research described here is the first published study of the relative effectiveness of different promotional vehicles in stimulating adoption of a consumer durable. The empirical analysis is based on data collected in a real‐world experiment involving 614 households. Just over half of these households received a free DVD movie disc as an incentive to participate in the study. The authors assigned the participating households to four treatment groups of 100 households each and a control group of 214 households. The households in the treatment groups received one of four promotional offers that featured some form of a $50 monetary incentive. These promotional offers differed in the degree to which they encouraged behavior that exposed consumers to the experience attributes of a DVD player. After one month the authors surveyed these households again to determine how many purchased a DVD player in the preceding month. An analysis of this experimental data reveals that all four monetary promotions significantly enhanced the probability of adoption. In particular, the average adoption rate among the households receiving one of the monetary incentives was 41%. In contrast, none of the households in the control group reported purchasing a DVD player. Promotions that paid consumers for specific behaviors that precede purchase were no less effective than a coupon that reduces the purchase price by an equivalent amount. In addition, promotions that directly exposed consumers to experience attributes were more effective than promotions that simply provided consumers with the opportunity to learn about experience attributes. Finally, the gift of a free complementary product (a DVD movie) enhanced the effectiveness of three of the four monetary promotions. The authors close with a discussion of managerial implications and directions for future search.

Characterising the deal-proneness of consumers by analysis of price sensitivity and brand loyalty: an analysis in the retail environment

This study characterises the ‘deal-proneness’ of consumers by analysis of the consumer-level characteristics of price sensitivity and brand loyalty. The study first develops a multinomial logistic (MNL) latent class model suitable for use with universal product code (UPC) point-of-sale (hypermarket) scanner data. The model is then used to assess the deal-proneness of consumers with respect to monetary promotions (price reductions) and non-monetary promotions (store flyers). The results show that almost 47% of consumers can be considered deal-prone, in that both kinds of sales promotions have a significant effect on their choice behaviour. The findings provide important insights for retail management in seeking to optimise the results obtained from promotional budgets.

The Price of “Free”-dom: Consumer Sensitivity to Promotions with Negative Contextual Influences

Past research has shown that monetary promotions (e.g., discounts) are more likely to be processed relative to and integrated with the original product price than are free promotions. We posit that because of this difference, free promotions are more focal and salient than monetary promotions. In a set of three experiments, we demonstrate that this salience results in free promotions being less susceptible than equivalent monetary discounts to negative contextual information on quality that can potentially lower purchase intentions. We show that this effect can be reversed when respondents focus on other pieces of information that diminish the salience of the free promotion.

Sales Promotion Effectiveness: The Impact of Culture at an Ethnic-Group Level

Summary 163 113 0.46 Omnibus Tests Chi-Square Df Sig Model 50 2 0.00*Enter method after 4 iterationsFrom the regression results it is seen that both the utilitarian and hedonic factors weresignificant explanatory variables for the classification of promotion techniques. Specifically,the coefficient of the utilitarian factor is negative (e.g., B= -6.81, p = 0.00) whilst thecoefficient of hedonic factor is positive (e.g., B= 4.10, p= 0.00). These results indicate that asthe amount of utilitarian benefits decreases and the amount of hedonic benefits increases, themore likely that the sales promotion technique is a non-monetary promotion. Similarly, thehigher the amount of utilitarian benefits and the lower the amount of hedonic benefits, themore likely that the sales promotion technique is a monetary promotion. The samerelationships were observed between the two ethnic groups when analysed individually. Thekey regression results are summarised in Table B4. Table B4: Regression ResultsVariable B SE Wald Df Sig Exp (B)

A Benefit Congruency Framework of Sales Promotion Effectiveness

Are monetary savings the only explanation for consumer response to a sales promotion? If not, how do the different consumer benefits of a sales promotion influence its effectiveness? To address the first question, this research builds a framework of the multiple consumer benefits of a sales promotion. Through a series of measurement studies, the authors find that monetary and nonmonetary promotions provide consumers with different levels of three hedonic benefits (opportunities for value expression, entertainment, and exploration) and three utilitarian benefits (savings, higher product quality, and improved shopping convenience). To address the second question, the authors develop a benefit congruency framework, which argues that a sales promotion's effectiveness is determined by the utilitarian or hedonic nature of the benefits it delivers and the congruence these benefits have with the promoted product. Among other results, two choice experiments show that, as predicted for high-equity brands, monetary promotions are more effective for utilitarian products than for hedonic products. The authors then discuss the implications of the multibenefit and the benefit congruency frameworks for understanding consumer responses to sales promotions, reexamining the value of everyday-low-price policies, and designing more effective sales promotions.

Framing and Sales Promotions: The Characteristics of a ″Good Deal″

Considers the differences between consumer perceptions of nonmonetary promotions such as free extra product and monetary promotions such as discounts and rebates. Reports on an experiment which found that monetary promotions did not have to be as large as nonmonetary promotions to be noticed by the consumer, and that large incentives make consumers sceptical. Concludes that the decision about which type of promotion to use depends on whether a price‐conscious or a premium product market segment is being sought.