Academic journal article South Asian Journal of Management

A Theoretical Analysis of the Critical Factors Governing Consumers' Deal Responsive Behavior

Academic journal article South Asian Journal of Management

A Theoretical Analysis of the Critical Factors Governing Consumers' Deal Responsive Behavior

Article excerpt

Consumer promotion is a conspicuously powerful component of the marketing mix, with the overarching objective of framing customers' perceptions and stimulates buying. However, it is powerful tool only when applied correctly, specifically conforming to the responsive behavior of the target consumer to the applied promotional vehicle. It is, therefore, imperative for the marketer to have a comprehensive understanding of the deal (promotion) responsive behavior of the consumer to various promotional tools. This shall ensure effectiveness of the promotional campaigns by appropriate appealing to the target consumer and leading to the perception of value addition. This paper presents a comprehensive theoretical analysis of various factors that influence the deal responsive behavior of the consumer. The response patterns to various types of promotional deals, the influence of consumers' and deal characteristics on deal redemption intentions, and the underlying psychological or behavioral mechanisms involved in deal redemptions, are discussed in this paper. The findings depict that promotional strategies should be deal specific, and psychological variables need to be emphasized.

INTRODUCTION

Consumer promotions constitute an important part of the promotional mix for majority of companies. In the consumer context, promotions are primarily used to encourage trial of a new brand or switching to an established brand, with the expectation that such trial or switching would also lead to higher repeat purchase rates.

Sales promotion is a powerful tool when employed creatively and appropriately. The offers made must appeal directly to the target audience and be perceived by them to add value. A 'money off' offer will have limited appeal to a price-insensitive segment.

For these reasons, the investigation of consumer response to promotions promises to be a fruitful area with several practical implications. Consequently several marketing researchers have addressed issues in this area (Raju and Hastak, 1980; and Hatton, 1998).

From the marketing management perspective, knowing the profile of promotion-prone consumers will enable marketers to design better promotional campaigns (Bawa and Shoemaker, 1987; and Blattberg and Neslin, 1990).

Numerous studies have tried to provide organizations with some decision-making guidelines for the design of promotional campaigns. These studies have focused on analyzing whether all consumers show the same response to sales promotion, defining the profiles of more sensitive consumers to this type of action. Several types of variables have been used to define these profiles. This paper presents a comprehensive review of these studies and analyzes the critical factors that should govern marketing strategies and future research in the domain of consumers' deal responsive behavior.

AN ASSESSMENT OF CONSUMERS' PRONENESS TO DEALS

Proneness to deals may be defined, overall, as the tendency to use promotional information as a reference to make purchase decisions. As the response to deals varies across individuals (Webster, 1965; Montgomery, 1971; and Blattberg et al, 1978), deal-prone consumers will be those who modify their purchase behavior so as to benefit from the temporary incentive offered by a promotion (Wakefield and Barnes, 1996). This implies that deal proneness is a result of the development of deal redemption intention at the consumer's cognitive level.

DEAL PRONENESS IS DIFFERENTIATED

Schneider and Currim (1991) have differentiated consumer's deal proneness as active proneness and passive proneness, based on their involvement and intensity of search for deals. Active proneness refers to the consumers' sensitivity to store flyers and coupons. This proneness requires an intense search from the consumer to find interesting promotions. On the other hand, passive proneness demands a limited search developed at the point of sales. Such proneness is reflected in the consumers' sensitivity to in-store displays. …

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