The Marketing Book 5th Edition

MARKETING MIX DECISIONS

TOTAL

AVAILABLE

MARKET

100%

Competitors'

Share

Marginal

Consumers

Core

Consumers

P R O D U C T

P

R

I

C

E

P

L

A

C

E

ADV

PR

and

SALES

SALES

PROMOTION

0

470 The Marketing Book

are a very effective persuader. In their research
into coffee purchasing (a process one might
expect to involve a high degree of personal
taste and brand loyalty), Fraser and Hite (1990)
concluded that: ‘The vast majority of con-
sumers are promotion responsive... Promo-
tional incentives are effective in capturing
brand choices, encouraging purchase accelera-
tion and stimulating category demand. Many
customers use and expect deals, and many
more are induced to alter purchase behaviours
by deal offers.’
There are four dimensions of consumer
behaviour which determine peoples’ response
to promotions:

1 Value consciousness. Promotions enhance the
value of the product offering. Price- and
product-based promotions are most directly
targeted at consumers’ desire for value.
2 Susceptibility to promotions. Beyond simple
economic rationality, people vary in their
responsiveness to promotions (Lichtenstein et
al., 1990, 1997). The benefits sought may not
reflect only economic rationality, but can also
include hedonic benefits such as entertainment,

exploration and self-expression (Chandon et

al., 2000). Many people enjoy the sense of

being a ‘smart shopper’, which judicious use of

promotions can provide. Susceptibility can vary

in relation to the nature of the purchase (Bawa

and Shoemaker, 1987), and also to the nature

of the shopping trip and retail environment

(Chandon, 1995).

3 Brand loyalty. Promotions can overcome

consumer loyalty to a competitor’s brand to

encourage brand switching, or they can

capitalize on core customer loyalty and

encourage increased usage (Ailawadi and

Neslin, 1998).

4 Attitude to risk. By reducing price, allowing

product trial, providing information or

improving warranty or payment terms,

promotions can overcome consumers’ innate

conservatism and reduce the perceived risk

they associate with purchase.

A promotion does more than provide an

opportunity to stimulate a simple response

from a consumer. It provides opportunities to

change the consumer’s whole relationship with

a given brand (see Figure 18.5) in three ways:

Figure 18.4 Promotions and the marketing mix: a sequential model