The use of weekly scanner data is often used to monitor the impact of sales promotions, and has frequently proven that this marketing tool is able to boost sales, and as a result has continued to be heavily invested in by marketers (East, Wright and Vanhuele, 2013, p. 206). The purpose of this article is to provide a critical overview of academic research on sales promotions, and its impact on buyer behaviour. Firstly, the article will state an overview of sales promotions and continue to discuss the various behavioural impacts it could cause, including impulse and habitual purchasing.
Overview of sales promotions
The primary purpose of sales promotions is to change the behaviour of consumers, towards purchasing a brand’s products or services (Fill, 2009, p. 538). Academic researcher’s state that positive reinforcement (stimulus), such as a price reduction and promotional variables could be used in order to change a consumer’s behaviour (Rothschild and Gaidis, 1981, p. 71). Research published by the Chartered Institute of Marketing (CIM) indicates that sales promotions counted for at least 13% of UK marketing budgets, which was the second highest marketing activity invested in by marketers in 2009 (See appendix A) (Unmissable , 2009). Furthermore, according to research from the Institute of Promotional Marketing (IPM), in 2013 UK marketers spent £55 billion on promotional marketing with the majority spent on price promotions (Institute of Promotional Marketing, 2014). These figures show how popular sales promotions have become, although with this, companies have created a clutter of promotions, therefore brands need to design their offers to be unique (Kindel, 1993, p. 36).
Sales promotions could be utilised in order to provide value to consumers and could be distinguished by price and non-price promotions (Fill, 2009, p. 538). In particular, it has been found that price promotions such as coupons and discounts are value increasing, whereas non-price promotions are value adding (Krishna and Zhang, 1999, p. 1045).
Overall, sales promotions are often used as a short term strategy in order to increase sales, but could also lead to retaining and attracting new customers (Fill, 2009, p. 538). This marketing tool could also have various impacts on buyer behaviour, which will be discussed further.
Impact of sales promotions on buyer behaviour
Impulse and habitual purchasing
Sales promotions could have several impacts on buyer behaviour, one of these includes impulse purchasing which is a sense of urgency to purchase a brand, and ignore alternatives (Pandey, Pandey and Henry, 2013, p. 3). Furthermore, Rook and Hoch (1985, p. 23) distinguishes a planned purchase being asscociated with the evaluation of brands, whereas impulse purchasing simply involve urges. This behaviour could occur when a sales promotion is conducted sporadically, when a consumer does not expect it (Alvarez and Casielles, 2005, p. 57). Conversely, if consumers are aware a brand conducts sales promotions frequently, this could decrease the sales a brand anticipates (Alvarez and Casielles, 2005, p. 57). Furthemore, impulse purchasing could occur when a consumers reference price is higher than an observed price, which allows the consumer to believe that have gained more value for their money (East, Wright and Vanhuele, 2013, p. 196). Additonally, this behaviour could lead to stockpilling, which tends to occur during promotional periods, and could lead to a decrease in sales in the the long term. Although this behaviour has been found to increase sales in the short term, and narrow down a consumer’s brand choice (East, Wright and Vanhuele, 2013, p. 210).
However, it has been critiqued by Aydinli, Bertini, and Lambrecht (2014, p. 1) that sales promotions dicentivises the decision making process. Their research has found that price promotions could cause habitutal purchasing, where there is minimal mental effort in the decision making process, especially for low involvement products (Aydinli, Bertini and Lambrecht, 2014, p. 1). Habitual purchasing is prevalent for mature brands, therefore for new brands entering the market, this behaviour could initially be obstructed through the aspect of affect, also known as evoked feelings which could be used as a signifiicant factor in the design of sales promotions (Cohen, Pham and Andrade, 2006, p. 3). Affect within the decision making process allows more thought into the brand a consumer has purchased, which prevents minimal mental effort and makes a purchase become more consequential (Eagly, et al., 1999, p. 68).
Nonetheless, habitual puchasing could also be used effectivley as a marketing objective, for example, a case study on The Sun newspaper stated how the brand aimed to influence consumer behaviour, through creating a new habit of purchasing their newspaper (WARC, 2012). This was successfully accomplished through a personalised cereal box, including coupons sent to existing consumers (see appendix B) (WARC, 2012). This resulted in 68,822 of 210,000 vouchers being redeemed and influenced 58% of 250 consumers surveyed, to purchase the newspaper two or three times more a week (WARC, 2012). This is an example of how sales promotions could initially influence purchases, and as a result create habitual purchasing.
Figure 1 – The Sun promotional cereal box (WARC, 2012)
Sales promotions have become an evidently popular marketing tool to be used by many organisations within different industries, although particularly within retail. The use of sales promotions can be utilised in order to affect buyer behaviour, and to positively achieve marketing objectives such as creating impulse or habitual purchasing.
Although, whilst these behaviours can be encouraged through sales promotions, this tool can also induce other behaviours such as brand loyalty and brand switching which will be analysed in future articles on this site.
Alvarez, B. and Casielles, R. (2005) ‘Consumer evaluations of sales promotion: The effect on brand choice’, European Journal of Marketing, 39(1), pp. 54-70.
Aydinli, A., Bertini, M. and Lambrecht, A. (2014) ‘Price promotion for emotional impact’, Journal of Marketing, 78(4), pp. 1-18.
Cohen, J., Pham, M. and Andrade, E. (2006) ‘The nature and role of affect in consumer behaviour’, Handbook of Consumer Psychology, 1(1), pp. 1-98.
Eagly, A., Chaiken, S., Chen, S. and Shaw-Barnes, K. (1999) ‘Th e impact of attitudes on memory: An affair to remember’, Psychological Bulletin, 125(1), pp. 64-89.
East, R., Wright, M. and Vanhuele, M. (2013) Consumer behaviour: Applications in marketing, London: SAGE Publications Ltd.
Fill, C. (2009) Marketing communications: Interactivity, communities and content, 5th edn, Harlow: Pearson Education Ltd.
Institute of Promotional Marketing (2014) UK marketers spend £55 billion on promotional marketing. Available at: http://www.theipm.org.uk/information/uk-marketers-spent-55bn-on-promotions-in-2013.aspx (Accessed: 31 December 2014).
Kindel, S. (1993) ‘Cutting through the clutter’, Financial World, 162(8), pp. 36-37.
Krishna, A. and Zhang, Z. (1999) ‘Short or long term duration coupons: The effect of the expiration date on the profitability of coupon promotions’, Management Science, 45(8), pp. 1041-1057.
Pandey, B., Pandey, S. and Henry, A. (2013) ‘Sales promotion and its effectiveness: A study on selected small car companies and dealers in Bilaspur, Chhattisgarh’, International Journal of Marketing and Technology, 3(4), pp. 1-7.
Rook, D. and Hoch, S. (1985) ‘Consuming impulses’, Advances in Consumer Research, 12(1), pp. 23-27.
Rothschild, M. and Gaidis, W. (1981) ‘Behavioural learning theory: Its relevance to marketing and promotions’, Journal of Marketing, 45(2), pp. 70-78.
Unmissable (2009) Sales promotion soars in latest marketing spend research. Available at: http://www.unmissable.com/sales-promotion-soars-in-marketing-spend-research/
(Accessed: 31 December 2014).
WARC (2012) News International: The Sun cereal pack. Available at: http://www.warc.com.ezproxy.kingston.ac.uk/Content/ContentViewer.aspx?MasterContentRef=782e3911-c718-4143-8b14-3a7213b28cb1&q= (Accessed: 30 December 2014).