An Investigation of Consumer Response to Sales Promotions in Developing Markets:&Nbsp; a Three-Country Analysis

Lenard C. Huff, University of Hawaii at Manoa
Dana L. Alden, University of Hawaii at Manoa
[ to cite ]:
Lenard C. Huff and Dana L. Alden (1999) ,"An Investigation of Consumer Response to Sales Promotions in Developing Markets:&Nbsp; a Three-Country Analysis", in NA - Advances in Consumer Research Volume 26, eds. Eric J. Arnould and Linda M. Scott, Provo, UT : Association for Consumer Research, Pages: 41-42.

Advances in Consumer Research Volume 26, 1999      Pages 41-42

AN INVESTIGATION OF CONSUMER RESPONSE TO SALES PROMOTIONS IN DEVELOPING MARKETS:  A THREE-COUNTRY ANALYSIS

Lenard C. Huff, University of Hawaii at Manoa

Dana L. Alden, University of Hawaii at Manoa

INTRODUCTION

Considering the importance of consumer sales promotions in the marketing mix of many products throughout the world, a notable lack of research examines consumer response to sales promotions outside North America and Europe. In addition, relatively little research focuses on non-price promotions, such as sweepstakes. This study develops and tests models explaining consumers’ attitudes toward and use of coupons (a price-oriented promotion) and sweepstakes (a non-price promotion). The models are designed specifically for developing or newly industrialized countries with collectivist cultures and are tested with consumer samples from Taiwan, Thailand and Malaysia.

CONSUMER RESPONSE TO SALES PROMOTIONS

Explaining Consumer Attitudes Toward Coupons

We propose that the following factors influence attitudes toward coupons in developing, collectivist societies:

Familiarty. Literature on familiarity and mere exposure (Zajonc, 1968), would argue that the more familiar a consumer is with coupons, the more positive his or her attitude.

Social Norms. The extended theory of reasoned action (Fishbein and Ajzen, 1975) models behavior as a function of intentions, which are a function of attitudes and subjective or social norms. Lee and Green (1991) argue that societies with strong group conformity pressures would foster strong interactions between individual and societal attitudes. In collectivist societies, social normative factors should therefore directly influence attitudes toward sales promotions. We include two social norms: (1) the perceived attitudes of family and friends toward coupons (positive influence), and (2) consumer’s fear of embarrassment or losing face (negative influence).

Price-Consciousness. Based on previous findings (e.g., Narasimhan, 1984; Tat and Bejou, 1994) we expect that the more price-conscious the consumer, the more positive his or her attitude toward coupons.

Explaining Consumer Use of Coupons

Attitude. Drawing on Mittal (1994), we posit that the level of coupon use is largely driven (positively) by consumer attitudes toward coupons.

Availability. Cross-cultural studies (Green, 1995 and 1996; Kaufman and Hernandez, 1990; Hernandez, 1988) have shown that the more available the consumer perceives coupons to be, the greater the consumer’s use of coupons.

Explaining Consumer Attitudes Toward Sweepstakes

As with coupons, (1) familiarity and the (2) attitude of family and friends should positively influence consumer attitudes toward sweepstakes. In addition, as Chandon, Laurent and Wansink (1997) note, sales promotions such as sweepstakes are intrinsically fun. We therefore propose that (3) the degree to which the consumer believes sweepstakes are fun or enjoyable will positively influence the consumer’s attitude.

Because participation in sweepstakes is more private than for coupons, we don’t expect consumers in developing, collectivist societies will have a strong fear of embarrassment if they enter sweepstakes. As sweepstakes have no direct influence on price, price consciousness is also not included in our attitude model for sweepstakes.

Explaining Consumer Use of Sweepstakes

As with coupons, we model consumer use of sweepstakes as a function of the consumer’s (1) attitude toward and the (2) availability of sweepstakes.

EXAMINING BETWEEN-COUNTRY DIFFERENCES

In the second step of our study, we examine differences in attitude and use of coupons and sweepstakes between consumers from Taiwan, Thailand and Malaysia. First, we estimate the above models explaining attitude and use for each country and then compare the results. Second, we compare mean similarities and differences in attitude and use, and also compare ratios of coupon to sweepstakes attitude and use.

METHODOLOGY AND RESULTS

Samples of consumers were taken in Thailand (n=250), Taiwan (n=200), and Malaysia (n=250). To test our hypotheses, we developed multiple regression models for both attitude and use for each type of promotion.

Testing the Models.

Attitude Toward Coupons. Familiarity, perceived attitudes of fiends and family and price consciousness all have significant positive effects, while fear of embarrassment has a negative effect on consumer attitudes using aggregated data. Within-country tests show that only "attitudes of friends and family" is significant in all three. Price consciousness is not a significant indicator of attitudes toward coupons in Thailand and Malaysia, while familiarity and fear of embarrassment have no significant impact in Taiwan.

Coupon Use. With one exception ("know where to find coupons", a measure of availability, for Taiwan), both consumer attitude and availability positively influence coupon use in all three countries.

Attitude Toward Sweepstakes. Familiarity, attitudes of friends and family and the degree to which sweepstakes are perceived as fun, all positively affect attitudes toward sweepstakes using aggregated data. In country-specific models, "attitude of friends and family" is significant for all three, but "familiarity" is not significant in Taiwan and "fun" is not significant in Thailand.

Sweepstakes Use. Consumer attitudes and availability both positively influence sweepstakes use in all three countries.

Comparing Means and Relative Response Toward Coupons and Sweepstakes

Familiarity, attitude, and use of both coupons and sweepstakes are substantially lower in Taiwan than Thailand or Malaysia. Thais generally display the most positive response toward sales promotions, particularly coupons. Malaysians appear to have the greatest fear of embarrassment or losing face when using coupons. Finally, Thais appear to be the most, and Taiwanese the least, price conscious consumers.

DISCUSSION AND IMPLICATIONS

Our models tested well with aggregated data. Perhaps the most important finding is that in collectivist cultures, social factors appear to have a strong direct influence on consumer attitudes. Our results also show that availability directly influences use. Managers marketing in less developed countries should be aware that the more available the promotion, the more consumers will use them, despite cultural differences.

In general, our models fit better in Thailand and Malaysia than in Taiwan. This may indicate that the models are more appropriate for developing, rather than newly industrialized collectivist societies. Perhaps the most important finding from our country comparisons is that despite the geographic and, in some respects, cultural proximity between Taiwan, Thailand and Malaysia, there are significant differences in their response to sales promotions. Firms may find it difficult to standardize consumer sales promotion strategies across the developing and newly industrialized countries of Asia.

REFERENCES

Chandon, Pierre, Gilles Laurent and Brian Wansink (1997), "Beyond Savings: The Multiple Utilitarian and Hedonic Benefits of Sales Promotions" Working paper, University of North Carolina.

Fishbein, M. and I. Ajzen (1975), Beliefs, Attitude, Intention and Behavior: An Introduction to Theory and Research, Reading, MA: Addison-Wesley.

Green, Corliss L. (1995), "Differential Responses to Retail Sales Promotions Among African-American and Anglo-American Consumers," Journal of Retailing, 71(1), 83-92.

Green, Corliss L. (1996), "Ethnic Response to Couponing: A Motivational Perspective," Journal of Consumer Marketing, 13(2), 14-25.

Hernandez, Sigfredo A. (1988), "An Exploratory Study of Coupon Use in Puerto Rico: Cultural vs. Institutional Barriers to Coupon Use," Journal of Advertising Research, October/November, 40-46.

Kaufman, Carol J. and Sigfredo A. Hernandez (1990), "Barriers to Coupon Use: A View from the Bodega," Journal of Advertising Research, October/November, 18-25.

Lee, Chol and Robert T. Green (1991), "Cross-Cultural Examination of the Fishbein Behavioral Intentions Model," Journal of International Business Studies, 22(2), 289-305.

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

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

Tat, Peter K. and David Bejou (1994), "Examining Black Consumer Motives for Coupon Usage," Journal of Advertising Research, March/April, 29-35.

Zajonc, R. B. (1968), "Attitudinal Effects of Mere Exposure," Journal of Personality and Social Psychology, 9(2), (Pt. 2).

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