International Journal of Retail & Distribution Management Essay

Introduction Sales promotion is the offer of an incentive to induce a desired sales result (Gilbert, 1999). For our purposes promotional techniques, within UK supermarkets, have been taken to be â€Å"value increasing† promotions (i. e. coupons and price deals) and â€Å"value adding† (i. e. premiums, prizes/contests/sweepstakes, samples, point of purchase display, demonstration and loyalty cards). Sales promotion consists of a wide variety of short-term tactical promotional tools aimed at generating a desired response from customers. Although there is a shift in marketing communications, away from advertising towards sales promotions, there is no consensus among researchers that sales promotions lead to repeat purchase. It is agreed, however, that price promotions can result in a short-term increase in sales (Smith and Sinha, 2000; Banks and Moorthy, 1999; Kopalle and Mela, 1999; Diamond, 1992; Gupta and Cooper, 1992; Bawa and Shoemaker, 1987). It is also important to note that studies of price promotions also show that customers who take advantage of a price promotion often return to their favourite brands (Ehrenberg et al. 1994; Brandweek, 1994). There is a large body of literature, which has examined consumer response to sales promotions, especially coupons (Krishna and Zhang, 1999; Huff and Alden, 1998; Leone and Srinivasan, 1996; Bawa and Shoemaker, 1987, 1989; Gupta, 1988, 1993; Blattberg and Neslin, 1990). Coupons and discounts are the most widely used promotional tools. However, relatively little research has focussed on value adding promotions. In coupon promotions retailers maintain the original price of the product and it is only coupon holders who are entitled to a discount. As buyers are not subject to a reduction in sales price there is no need for them to adjust their internal reference prices downwards, as is the case with discount promotions. Therefore, coupon promotions should be more attractive than discount promotions in improving the transaction value of the product. However, consumers must keep track of the coupons and produce them at the place of purchase. If consumers are used to utilising coupons then they are likely to have a more positive attitude towards them (Huff and Alden, 1998). Also, if a The authors D. C. Gilbert is Professor of Marketing and N. Jackaria is a Researcher, both at Surrey European Management School, University of Surrey, Guildford, UK. Keywords Sales promotion, Retail trade, Food industry, Marketing Abstract UK supermarkets need to be able to assess the current efficacy of the budget they allocate to promotional activities aimed at boosting sales. Therefore, the main objective of this article is to investigate consumer response to the four different promotional deals most commonly used in UK supermarkets: coupons, price discounts, samples and â€Å"buy-one-get-one-free†. Multi discriminant analysis was used on a study of 160 respondents to analyse whether there was an association between the four consumer promotional approaches and respondents’ reported buying behaviour. The findings indicate that only price discount promotions proved to be statistically significant on consumer’s reported buying behaviour. Purchase acceleration and product trial are found to be the two most influential variables related to a discount. For â€Å"buy-one-get-one-free†, while the result is not significant, the two variables, brand switching and purchase acceleration are statistically significant.