Consumer Response to Promotions: Some New Perspectives

ABSTRACT - The field of sales promotions has grown in importance as increasingly large budgets are allocated to its use. An understanding of how consumers respond to promotions is important in developing effective strategies for sales promotions and other associated elements of the communications mix. This paper presents a model of consumer response to promotions which draws upon current work in the study of scripts a<- information processing to extend our understanding. Hypotheses are derived from the model and empirical Support for them is noted

Citation:

Meryl P. Gardner and Roger A. Strang (1984) ,"Consumer Response to Promotions: Some New Perspectives", in NA - Advances in Consumer Research Volume 11, eds. Thomas C. Kinnear, Provo, UT : Association for Consumer Research, Pages: 420-425.

Advances in Consumer Research Volume 11, 1984      Pages 420-425

CONSUMER RESPONSE TO PROMOTIONS: SOME NEW PERSPECTIVES

Meryl P. Gardner, New York University

Roger A. Strang, New York University

ABSTRACT -

The field of sales promotions has grown in importance as increasingly large budgets are allocated to its use. An understanding of how consumers respond to promotions is important in developing effective strategies for sales promotions and other associated elements of the communications mix. This paper presents a model of consumer response to promotions which draws upon current work in the study of scripts a<- information processing to extend our understanding. Hypotheses are derived from the model and empirical Support for them is noted

INTRODUCTION

In recent years the field of sales promotion has attracted increasing attention from both executives and researchers. This growing interest is the result of a recognition of the increasing importance of sales promotion activities in marketing strategy. In 1982 it was estimated that $60 billion was spent on promotions to the consumer, either directly through coupons, rebates, contests and the like, or indirectly via allowances to dealers or retailers to display or promote a product at a reduced price. An understanding of how consumers respond to promotions is important in developing effective strategies, not only for sales promotion but for other elements of the communications mix which are closely associated (Strang 1976). An increasing number of researchers are addressing questions about consumer response to promotions, but results have been limited and mixed due to the use of different methodologies, focuses, and scientific paradigms, The purpose of this paper is to present a model which integrates existing research and extends our understanding of consumer response to promotions by drawing on recent work in the study of consumer scripts and consumer information processing. Our discussion of the model will be preceded by a review of some of the theoretical paradigms that have been used to investigate the area.

PERSPECTIVES SUGGESTED IN THE LITERATURE

The process by which promotional teals influence individual consumer behavior has been addressed from two major perspectives. Rothschild and Gaidis (1981) draw on behavioral learning theory to explain consumer response to promotions. The concept of "shaping" suggests that a substantial incentive, such as a free sample, can encourage initial trial with successively smaller incentives fostering repeat purchases until the behavior is learned and the incentives can be withdrawn. If the incentive reward is greater than the regard associated with the product, then the repeat purchases are unlikely when the incentive is withdrawn. Similarly if the incentive is withdrawn before the behavior is learned, then the consumer may switch to another brand. This theory further suggests that intermittent schedules may be more effective than continuous, that an immediate reward, e.g., a coupon, is likely to be more effective than a delayed reward, e.g., trading stamps, and that primary reinforcers (those directly associated with the product such as a free sample) are likely to be more effective than secondary reinforcers (coupons).

In contrast to this perspective, Raju and Hastak (1980) proposed a "cognitive approach."

"The essential feature of the cognitive approach is that a deal is considered to be a cue at the point of purchase which triggers certain psychological processes within the consumer. These psychological processes include encoding the deal and using it in the formation of beliefs necessary for the evaluation of the brand as well as post-trial experience.

In the pre-trial stage Raju and Hastak draw on social judgement theory to suggest that a deal will not be considered unless the brand is already priced within the consumer's acceptable range or the deal is large enough to move the price within that range. The positive effects of this may be offset by concerns about brand quality due to the fact that a teal is offered. This hypothesis is suggested by the price-quality literature and the process of inferential belief formation (Olson 1978). Studies of the impact of promotions on consumer brand attitudes have generally not found the hypothesized negative effects. Seipel (1971) found that a promotion offer had a positive effect on consumers' general attitudes toward a food company and its products. In pilot studies which more directly associated promotions with specific brands, neither Tuck and Harvey (1972) nor Strang and Gardner (1983) found significant effects on consumer brand attitudes.

Part of the explanation may be found in the work of Scott and her associates in applying self-perception theory to predict consumer response to promotions. Although an earlier study (Scott 1976) had produced inconclusive results, a more recent paper (Scott and Yalch 1980) suggests that a promotion may have a mildly negative effect on brand attitudes only under certain circumstances; namely where the respondents were specifically encouraged to attribute their choice to an external cue, the offer of a coupon.

CONCEPTUAL MODEL

Overview

The proposed model, Figure 1, introduces additional perspectives in order to provide a broader understanding of consumer response to promotion and a framework to guide further research in this area.

The model indicates that one way consumers may respond to promotions is primarily through the use of stored scripts According to Shank and Abelson (1977, p. 41) a script is "a structure that describes an appropriate sequence of events in a particular context. A script is made up of slots ar.d requirements about what can fill those slots. The structure is an interconnected whole, and what is in one slot affects what can be in another." A script is one kind of cognitive schema (Rumelhart and Ortony 1976), i.e., organized knowledge structure in long term memory governing perceptual and cognitive processes (Abelson 1981). Because scripts deal with stereotyped event sequences, they affect behavior as well as perception and cognitive processes. Scripts are not just habits, i.e., response patterns; they deal with stereotyped understanding as well as stereotyped behavior (Abelson (1978). Attitude formation may or may not be involved.

Scripts therefore provide useful insights for understanding consumer response to promotions since they embody elements analogous to both the behavioral responses associated with operant conditioning and the conscious processes associate with the cognitive approach. The model suggests that the two processes may be integrated via their impact on consumer attitudes and behaviors. Script modification and attitude change may therefore involve different processes hut lead to the same outcome.

FIGURE 1

CONCEPTUAL MODEL

A second way that consumers may respond to promotions is primarily through an attitude formation process. This sequence is more likely to occur when the consumer's response is not routinize 1.

The model also addresses the interplay between information in the promotion and that conveyed by other parts of the communication or other marketing mix variables. Promotions do not work in a vacuum. A large part of their impact may be due to their role as mediators of other messages advertisers attempt to communicate.

The model does not delineate all plausible scenarios so-may not be applicable to all segments and all products. At this stage, we can only sketch in a role for such construct as interest in brand, evaluation, time pressures, and demographic characteristics. These variables are expected to mediate the hypothesized responses, but are omitted from the representation of the framework in Figure 1, because their role is so pervasive.

SCRIPTS

Many consumers see a coupon and go through a stereotyped sequence of steps which may or may not lead to purchase. This sequence may be stored as a script. Obviously, one scripted response to a promotion may be to ignore it. We are particularly interested in the response which leads to purchase and will use the term "Scripted response to promotions" throughout the rest of this paper to refer to those scripted responses that include purchase.

The notion of scripts facilitates integration of several important research findings and enables us to address new questions about the effects of promotions. These may be classified as related to the use and interruption of script ed response to promotions.

Use of Scripted Response to Promotions: One way consumers may develop scripts is through over-learning response patterns. Consumers in all segments are not equally likely to have a script stored in memory for responding to promotions. We might effectively investigate response to promotions by understanding who has relevant scripts and why they are used. This would include identifying the between individual factors which might help to determine the likelihood that an individual will have a scripted response. Script development may be facilitated by interaction with relevant others who also use coupons, such as family member or friends. Consumers do exchange coupons, refund offers and other PrOmOtiOns informally among themselves. There are also a number of individuals and organizations which encourage promotion exchange and use including newspaper columnists and 'coupon clubs' with newsletters.

Consumers may develop scripts for coupon use where the cost of such scripts is less than the perceived benefits. Relevant costs include the cost of script development and that of script use. Given the costs of time and energy involved in taking advantage of promotions, over-learning the behavior and forming relevant scripts may be more likely among those who have more discretionary time or who place a lower value on their time.

On the other side, the benefits associated with taking advantage of promotions may encourage over-learning and script formation. These include the ease of calculation of the price saving provided by promotional offers. Consumers generally demonstrate a low level of price awareness, so an offer represents a specific saving which might not be recognized if it were presented as a reduction of the shelf price. Cotton and Babb (1978) and others have reported that promotional offers appear to generate a higher sales response than a comparable reduction in price. Other benefits may include the social gains from exchanging promotion offers with friends or from belonging to clubs. Coupons may also make it easier to plan shopping trips by acting as a de facto shopping list. A study by one company found that 40% of the respondents reported making lists of coupons before visiting a store (Sims 1977). Of course, the major benefit remains the reduction in price, and coupon usage is generally highest among those who recognize this saving as important, i.e., consumers from middle-income households (Aycrigg 1980).

A related issue is whether or not promotion scripts are entered whenever a coupon or other offer is seen. There is some evidence that the format of the communication may play a critical role. Langer, Blank, and Chanowitz (1978), have shown that "normal" format is needed to facilitate scripted behavior. Consumers may respond to structure without stopping to think about its content. Thus, a coupon that looks like a coupon may lead to scripted behavior, but one that looks like a work of art may not be as effective a trigger. It may interrupt the performance of the script, and so, not work as well. Some evidence of this is provided in a recent analysis of response to two coupon offers which concluded that the advertisement which highlighted the coupon was substantially more effective in generating consumer response (Nielsen 1982).

Interruption of Scripted Response to Promotions

Entry to a script implies a commitment to its performance (Abelson 1981), but the link between script processing and actual behavior may not always be made. One set of reasons involves logistical factors, such as not having the couponed brand in the store or the shopper not having the coupon at the time of the purchase.

A second set of reasons involves unmet script conditions. These are analogous to check-points whose conditions are not met. For example, consumer scripts may include sets of action rules for promotion use, and consumers may refuse to respond if their criteria are not met. It may be that the consumer establishes a threshold for the minimum absolute value required to initiate a behavioral response. Similarly, we might hypothesize that the format of the coupon would have relatively little effect at this point, but that restrictions, e.g. the offer requires multiple purchases may have a big impact.

These hypothesized effects of interrupts may be mediated by why and how coupons are used. The benefits which induced promotion response may lead to scripts which differ in content so much that some to not have interrupts. For example, if working parents use coupons to insure that their teenage child will bring home the right products, the child may not be instructed to use any additional criteria. In such cases, interrupts will not be activated. A similar argument can be made for shoppers who use coupons to avoid complicated price calculations.

ATTENTION

The model recognizes that consumer response to promotions may follow a path which includes attitude formation. In Figure 1, the major stages in this response include attention and processing. ^ promotion may be presented embedded in other marketing communications, such as advertisements or packages. The level of attention directed to a communication may be affected by the consumer's goals while processing the message or directed by external stimuli. Consumers who are interested in evaluating the advertised brand and have the opportunity and resources to do so, may direct attention to brand evaluation. In such cases, the level of attention directed to the communication will be high. We may expect this to hold whether or not there is a promotion in the communication. Consumers who are not interested in evaluating the advertised brand or for whom circumstances or external distraction make it difficult to do so, may direct less attention to brand evaluation. The level of attention to the communication may be quite low. In such cases, a promotion may increase the amount of attention given to the communication as a whole.

We may therefore hypothesize an interactive effect on attention between interest in brand evaluation and the presence or absence of a promotion. Under low levels of interest in brand evaluation or in the presence of an external (environmental) distraction, it might be expected that a promotion will increase the amount of attention paid to a communication. Under high levels of interest in brand evaluation and no external distractions, a promotion is not expected to affect the level of attention. Some indirect evidence for the impact of a promotion on attention comes from Strach scores. They indicate that the presence of a promotion in an ad is associated with nigher readership. (Bowman). These data do not allow us to test the hypotheses since there are no measure of the two proposed scenarios.

Promotions may not only affect the level of attention, they may also influence the direction of attention to components of the communication. If the promotion is prominent in a communication, it may receive a lot of attention during exposure, and so, be easily recalled. Empirical evidence for the enhanced recall of a unique element is provided by a series of studies by von Restorff (1933). We may therefore expect that a promotion will be more likely to be recalled than the remainder of the communication. On the whole, the material in the communication which is not in the promotion may be less well recalled than if no material at all was promoted (for an analogous example, see Gardner 1981). Calkins (1894) reported analogous findings using color to manipulate the prominence of numerals in a list. (For discussions of the underlying process, see Simon and Feigenbaum 1962 and Wallace 1965). It might be hypothesized that a promotion will decrease recall of the communication when the content of the communication is unrelated to the promotion.

wan the attention-directing role of a coupon help design copy formats? Advertisers often include material in their ads that they want people to pay attention to and material that they want people to ignore, e.g., required warning notices. If the at has a coupon, which of the two types of material should be placed closest to the coupon? Psychologists report mixed results for the recall of non-prominent stimuli adjacent to prominent stimuli. The nature of the prominence manipulation appears to affect the findings. According to Wallace (1965), recall of immediately adjacent terms does not seem to be enhanced when prominence is produced by substituting a different kind of material in a list, but recall of immediately adjacent terms appears to be facilitated when prominence is produced by printing one term in a different color. A coupon is prominent, at least in part, because it is a different kind of material. This might suggest that it will not enhance recall of adjacent material. However, findings in this area are unclear and further research is required before firm conclusions can be drawn.

PROCESSING

One way in which attention affects have been investigated involves the distraction paradigm. A decrease in attention may disrupt thought processes. The effects of a distraction depend on the valence of the responses that are inhibited. If, in the absence of a distraction, the consumer would generate positive own thoughts, then cutting town on these thoughts with a distraction will decrease persuasion (positive attitude shift). If the consumer would have generated negative own thoughts, then disrupting them will increase positive attitude shift (Petty, Wells and Brock 1976).

The generation of own thoughts may be important under circumstances in which cognitive responses are known to mediate attitude. Such processing is expected to occur where motivation and opportunity make it easy and useful for the consumer to carefully consider the brand's expected performance on a host of attributes. This is analogous to the analytical mode of attitude formation discussed by Park and Young (1981). It may occur more readily where consumers are presented with informational, verbal print ads and have the knowledge, motivation, time and attentional resources to generate cognitive responses (Wright 1980, Edell 1981, Gardner 1982).

In such cases, responses are often negative. Consumers have learned to be skeptical and cynical about advertisements. Using print advertisements, Wright (1973) has shown that counterarguments and source derogations, both negative elaborations, are more frequent than support arguments. He also found that each counterargument contributes twice as much to overall attitude formation as the other elaborative responses assessed.

Ads which encourage cognitive response, i.e., print, verba; informational, might benefit from the decrease in cognitive response due to the distraction of a promotion offer. Such a decrease might consist primarily of a decrease in counterarguments, and so may increase yielding to the advertisers' message. The valence of cognitive responses generated often depends on the consumer's prior attitude toward the brand. Those who have positive attitudes before exposure to the message are more likely to generate support arguments upon exposure than those who are initially negative about the brand.

Those who have favorable attitudes toward the brand are likely to be current users and so are likely to see and respond to a promotional offer. If the communication also contains information, the offer may distract these consumers from generating support arguments to the message and so attenuate the communication's persuasive effect. On the other hand, consumers who are initially negative about the brand, e.g., users of the competitors' brands, might notice the coupon and be distracted from counterarguing the rest of the manufacturer's message. This suggests that in communications directed to non-users the promotion itself should be most important. For current users however, the promotion should be used to encourage readership of the rest of the communication.

The effects of a promotion on attitude due to distraction need not be limited to rational appeals or analytic processing. Ads which are not attribute-based may also generate own thoughts. One important class of such responses are those which associate ads and advertised brands with schemata. Affect associated-with such schemata may be associated with the advertised brands. (For a discussion of schema-triggered affect see Fiske 1982, Cohen 1982) This is similar to the analogical mote of attitude formation suggested by Park and Young (1983). If distraction occurs, this process may be inhibited. Whether this results in more or less favorable attitudes depends on the valence (favorable or unfavorable) of the schema-associated affect. It is possible that judicious use of promotions may enhance the impact of ads of somewhat narrow appeal. People to whom the non-promotional part of the ad appeals will attend to that part of the ad (if it has information or images especially interesting to them), while those who are not interested in this material may attend to the promotion instead of generating negative own thoughts.

Information Use

A second paradigm for understanding the effects of attention on processing which leads to attitude involves the impact of available information on attitude. Under some circumstances, attitudes may be affected more by information which is readily accessible than they are by information which the individual knows but does not have readily accessible (Kisielius and Sternthal 1982). Under some circumstances, prominent stimuli may affect evaluations by directing processing. Researchers in political science provide some evidence by examining the agenda-setting role of the media during elections. Numerous empirical studies demonstrate that readers' perceptions of issue importance, as measured by self-report rating scales and open-ended elicitations, reflect the emphasis these issues have received in the media to which they have been exposed. (See Krauss and Davis 1976 for a review). McLeod et al (1974) point out that this does not mean that the media have affected votors' priorities but that perhaps people seek out media that concentrate on issues they feel are important. In addition to uncertainty about the direction of causal influence, we must also ascertain the strength of the link between issues people say are important and those they actually use to evaluate and elect candidates. RePass (1971) provides evidence that this link may be rather strong. If this is so, the agenda-setting function of the media may provide an example of prominence affecting the degree to which some issues affect attitudes.

The accessibility phenomena and the availability heuristic lead to some suggestions about the impact of the additional attention received by the promotion. The promotion may serve to focus attention on price and financial considerations involved in the purchase situation. This may have beneficial, harmful or neutral consequences for the promoting company.

Beneficial consequences may predominate if the consumer needs the product and is merely making a brand selection, if the brand is viewed as a good value, or if price is low (discount is high). In such cases, the promotion focuses attention on a virtue of the brand and may get that factor to be considered in attitude formation. If many companies in the product class often use coupons, this may make that attribute important in general, particularly among new users of the product class (e.g., Wright and Rip 1980).

Negative consequences may occur if the promotion focusses attention on price. One possible consequence is that the consumer may feel psychologically unable to make any purchase in such an expensive product class and forego buying the product entirely (for an analogous example, see Redigner and Staelin 1979). A second consequence which would be undesirable from the perspective of the promoting company is that the consumer may associate the brand with low price and infer that it is low quality.

The increased attention to price due to a promotion may not affect brand attitudes if consumer do not use price for brand evaluation. Gardner (1983) found that an attribute which is readily recalled may not necessarily be used to form attitudes. In this study, advertisement-induced recall due to an attention-focusing tactic did not imply increased emphasis on that attribute during a subsequent brand evaluation. This suggests that availability and use in attitude formation are not equivalent. Therefore, although a promotion may-direct attention to price, price may not affect attitude.

BEHAVIOR

The classical view is that attitudes direct behavior (Fishbein and Azjen 1975). In Figure 1, this appears as a hypothesized relationship between attitudes and behavior and suggests that consumers may respond to a promotion to the extent that they are favorably disposed to purchasing that brand on that promotion.

However, under some conditions, behavior may precede attitude formation. Swinyard and Smith (1982) suggest that trial behavior may be used to gather information necessary for committed behavior. Promotions may thus lead to purchase without favorable attitudes because they induce trial. This may be particularly true for products involving little perceived risk or low product differentiation.

An alternative way to look at the relationship between attitude and behavior is given by Abelson (1981). Attitude formation may or may not occur with a scripted response. If it does occur, it may precede or follow purchase behavior.

DISCUSSION

Promotions clearly have a major impact on consumer purchase behavior. What is not clear is the process by which consumers respond to these offers. Understanding this process is important not only for designing effective promotions but also for insuring that potentially negative effects of other communication elements are minimized.

The model of consumer response presented here suggests two processes which should be considered in sales promotion research. Recent findings in the area of scripts appear to be highly relevant in understanding consumer responses with or without attitude formation. Future research which builds upon this framework may allow the identification of who is likely to respond to promotions as well as the nature of their response. Equally important, script research suggests ways in which communication strategies may be developed to maximize the impact of promotional incentives.

Communications issues were also considered in regard to the cognitive process. New perspectives were presented and a set of hypotheses developed to guide further research. Conditions under which each process might occur were hypothesized, but this is an area where further research is required.

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