Special Session Summary Psychological Processes Underlying Heterogeneity in Consumer Response to Promotions

[ to cite ]:
(1998) ,"Special Session Summary Psychological Processes Underlying Heterogeneity in Consumer Response to Promotions", in NA - Advances in Consumer Research Volume 25, eds. Joseph W. Alba & J. Wesley Hutchinson, Provo, UT : Association for Consumer Research, Pages: 66-67.

Advances in Consumer Research Volume 25, 1998      Pages 66-67

SPECIAL SESSION SUMMARY

PSYCHOLOGICAL PROCESSES UNDERLYING HETEROGENEITY IN CONSUMER RESPONSE TO PROMOTIONS

J. Jeffrey Inman, University of Wisconsin-Madison

Most empirical research regarding the effect of promotions relies exclusively on behavior-based scanner data. This literature is invaluable in estimation of response elasticities to promotional vehicles, but has several shortcomings in addressing the underlying psychological motivations and individual differences affecting consumer decision-making (Winer et al. 1993). This session brought together several scholars who have been very active in the growing area of research exploring the psychological processes associated with consumers’ behavioral response to various promotion types. Specifically, the overarching objective of this special session was to present current research findings regarding why consumers respond to promotions. This research provides insight into scanner-based research findings by examining some of the underlying sources/causes of heterogeneity in consumer response to promotions. The audience of approximately 50 scholars and practitioners was very interactive with the presenters.

In the first paper, Priya Raghubir argued that the coupon value effect (where higher coupon values are associated with higher prices, cf. Raghubir 1996) is contingent on the availability of price-based (direct) and non-price based (indirect) alternate price cues and the relative diagnosticity of these cues versus the coupon value cue (Feldman and Lynch 1988). She argued that direct cues are more diagnostic than indirect ones, as they are price-based. Three studies examined how the presence of alternate contextual price cues moderate the coupon value effect. Specifically, price-based cues inhibit the coupon value effect, while non-priced based cues appear to inhibit or amplify it.

Previous research has shown that FSI coupons contribute to incremental brand sales beyond what can be attributed to coupon redemptions. In other words, there is some advertising exposure effect that influences the brand purchases of shoppers regardless of whether or not they actually redeem the coupon. In the second paper, France Leclerc and Sanjay Dhar are seeking to understand the process by which this effect occurs and examine the factors that moderate it. Leclerc and Dhar are exploring the possibility that this effect is the result of shoppers who clip the coupon but forget to use it at the time of purchase. France reported results of a study wherein they organized a panel of consumers and tracked their coupon clipping, redemption and purchase behavior. Peripheral cues appear to influence clipping but ot redemption while cues that can be centrally processed affect both clipping and redemption.

In the third paper, Jeff Inman adapted the Persuasion Knowledge Model (Friestad and Wright 1994) to explore the perceptions which consumers hold toward promotional displays and the effects of these perceptions on choice. He reported results from a survey integrated with an existing database of consumer shopping behavior that assesses the effect of each perception dimension on choice. The results suggest that consumers vary in terms of how they feel and what they think about displays. On average, consumers feel that displays are a marketing tool that can be a helpful shopping aid in providing information and in pointing out promoted items. Importantly, his preliminary analysis reveals that the perception of displays as a shopping aid interacts with each of the other dimensions.

A particularly exciting aspect of the special session was the discussant, Lawrence Fisher, from Information Resources, Inc. Larry gave an excellent presentation about the interface between academic research and research by consumer packaged goods (CPG) firms. He contrasted academic research as more etic in nature, while CPG research is more emic in its focus. He also noted that academics tend to examine forces internal to consumers (e.g., psychological processes) and examine why consumers act as they do, while marketers tend to focus on consumers’ behavior and "what works". Ultimately, he argued, there is one underlying system to be explained and consumer researchers should partner with marketers to integrate attitudinal and behavioral research.

 

ABSTRACT - S

THE DIAGNOSTICITY OF COUPON VALUE AS A PRICE SIGNAL: MODERATORS OF THE COUPON VALUE EFFECT

Priya Raghubir, University of California-Berkeley

This paper argues that the coupon value effect (where higher coupon values are associated with higher prices, cf. Raghubir 1996) is contingent on the availability of price-based (direct) and non-price based (indirect) alternate price cues and the relative diagnosticity of these cues versus the coupon value cue (Feldman and Lynch 1988). A direct cue is defined as a price based cue (e.g., own past prices, prices of non-promoted lines, competitors’ prices), whereas an indirect cue is one from which price needs to be inferred (e.g., coupon value, brand name). It is argued that direct cues are more diagnostic than indirect ones, as they are price-based. Three studies examine how the presence of alternate contextual price cues moderate the coupon value effect, with price-based cues inhibiting it, but non-priced based cues inhibiting or amplifying it. Results are discussed in terms of the informational vs. economic effects of price promotions (cf. Inman, Peter, and Raghubir 1997). Managerial implications for the communication of coupon related promotions for new product introductions are discussed.

 

THE EFFECT OF ADVERTISING COPY ON COUPON CLIPPING AND COUPON REDEMPTION

France Leclerc, University of Chicago

Sanjay Dhar, University of Chicago

Previous research have shown that FSI coupons contribute to incremental brand sales beyond what can be attributed to coupon redemptions; in other words there is some advertising exposure effect that influences the brand purchases of shoppers without them using the coupon. We seek to understand the process by which this effect occurs and examine the factors that moderate it. One possible explanation for this effect is that it may be the result of shoppers who clip the coupon but forget to use it at the time of purchase. If this is the case, then a manager would want to design FSI ads that are likely to generate clipping but lss likely to induce redemption. Results of a study in which coupon clipping, redemption and purchase behavior were recorded suggest that peripheral cues influence clipping but not redemption while cues that can be processed centrally affect both clipping and redemption.

 

SCHEMER SCHEMA GOES SHOPPING: PERCEIVED MOTIVES ABOUT DISPLAYS AND THEIR EFFECT ON BEHAVIOR

J. Jeffrey Inman, University of Wisconsin

We explore the perceptions which consumers hold toward promotional displays and the effects that these perceptions have on choice. The effect on displays on choice are well-documented in the scanner-data modeling literature. Conversely, recent research has suggested that consumer’s perceptions toward marketing persuasion devices affects their reaction thereto (Friestad and Wright 1994). We generate five dimensions of perceptions toward displays: shopping aid, information source, sale items, slow selling merchandise, and price promotions, then develop summated scales to measure these dimensions. Results from this survey are then integrated with an existing database of consumer shopping behavior to assess the effect of each perception dimension on choice. The results suggest that consumers vary in terms of how they feel and what they think about displays. On average, consumers feel that displays are a marketing tool that can be a helpful shopping aid in providing information and in pointing out promoted items. Importantly, a multivariate analysis reveals that the perception of displays as a shopping aid interacts with each of the other dimensions. Implications for researchers and practitioners are discussed.

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