Executive summary of “Sales promotion influencing consumer brand preference/purchases”

Citation

(2014), "Executive summary of “Sales promotion influencing consumer brand preference/purchases”", Journal of Consumer Marketing, Vol. 31 No. 3. https://doi.org/10.1108/JCM-04-2014-0937

Executive summary of “Sales promotion influencing consumer brand preference/purchases”

Article Type: Executive summary and implications for managers and executives From: Journal of Consumer Marketing, Volume 31, Issue 3

This summary has been provided to allow managers and executives a rapid appreciation of the content of the article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present.

Recent work has indicated that over the decade ending 2012, consumer preference for manufacturer brands for fast moving consumer goods (FMCG) has weakened considerably. A greater number of shoppers have instead demonstrated a growing tendency to choose retail store brands. Over this period, such brands experienced stronger growth rates than their national brand counterparts.

It was inferred from these results that people were choosing stores that offered a selection of retailer brand products rather than places which stocked certain manufacturer brands. This assumption gains added credibility by the fact that many participants in the study indicated that they had no brand preference (NBP) in most product categories.

Changing habits regarding media consumption was suggested as being a primary cause for the apparent decline in propensity towards national brands. Specifically, consumers reported spending more time with social media platforms and that their consumption of television and other mass media had decreased accordingly. It was thus argued that brand messages conveyed through social media become more fragmented and individualized. This signifies a shift away from the images and icons traditionally at the core when mass media channels relay these messages.

Additional reviews of the work have led to other suggestions as to why preference for manufacturer brands has declined. Among these is the belief that challenging economic times has prompted greater emphasis on cost-cutting. Other commentators point to the explosion of national brands and brand extensions making overkill a possible factor.

Evidence relating to the rise in NBP hints that decreasing trust in the brand owner and erosion of product differentiation bear some responsibility. Belief in growing homogeneity between different products was indicated in research investigating breakfast cereals, women’s cosmetics and allergy medications. In each of these product categories, consumer preference for manufacture brands was found to be diminishing.

Schultz & Block were heavily involved in this earlier work, which provides the foundation for the present study. The aim here is to investigate how sales promotions and other similar initiatives impact on consumer preference of national brands and NBP. This area had been largely ignored previously.

It is widely proposed that consumer perception of value is influenced by sales promotions. The premise is that constant price fluctuations help shape how a brand is viewed. Data sets used for the study were collected between 2002 and 2013 and represent three frequently conducted studies. In addition to measuring consumer brand preference and use of various media, these studies made some investigation into how consumer purchase behavior is affected by promotional methods. The authors further explore such methods through additional data captured from a different one-off consumer survey.

The data used relate to > 1,500 consumer packaged goods brands in 73 product categories. There is also reference to 23 internal and external sales promotion initiatives deployed by retail store managers and brand owners to influence consumer decision making. Participants in these surveys indicated the four most influential promotional methods in descending order to be:

• coupons offered in newspapers or supplements;

• product samples delivered to the customer’s home;

• product samples available in the retail store; and

• store loyalty cards.

Sending sample to consumers at home is an activity conducted by the national brand, whereas those included in newspapers might be either down to these brands or the retail store involved. The others typically involve some degree of collaboration between brand manufacturer and store. Although loyalty cards directly relate to the store, offers are often valid for various manufacturer brands.

Further analysis focused on the growth in use of these methods between 2006 and 2012. It revealed consistently high popularity of coupons offered through printed media and slow but stable growth of in-store product samples. Retails stores use the latter to increase customer interest, while manufacturers are able to secure greater attention for their brands.

By far the strongest expansion was evident for store loyalty cards. The number of shoppers reporting that this mechanism influences their purchase behavior grew by roughly 70 per cent during the period covered. Evidence suggests that consumers use multiple store cards for the purchase of groceries, medicines and specialty products. Such cards enjoy widespread use and are responsible for almost half of all purchases made.

The authors then examined the relationships between “reported brand preference” and “reported promotional influence”. Brands considered were those scoring highly on NBP, each category’s leading brand and those brands labeled as “secondary brands”. The latter were all the other brands referred to by consumer participants. Promotional influences analyzed included the four sales promotion categories and reported media consumption in terms of the respective average time spent viewing television and on the Internet each day.

Schultz & Block interpreted the correlations to signify that:

• media support, especially television, wields considerably greater influence on primary brands than secondary brands;

• secondary brands are more positively influenced by the different promotional techniques than are leading brands; and

• retail store loyalty cards impact on all forms of manufacturer brands in each brand and category analyzed.

Overall, it was concluded that the impact of sales promotions was positive for secondary brands. But for consumers reporting preference for the category leading brand or NBP, the effect seemed negative.

This research provides further evidence that consumer preference for national brands is decreasing. That such brands rely heavily on mass media channels like television is added cause for concern, given that the number of consumers engaging with TV advertising continues to dwindle.

The negative impact on consumer preference for leading brands suggests that owners of such brands must also re-examine strategies in this area. On the contrary, brands identified as secondary might increase sales and volumes by collaborating with retailers to develop promotional activities that involve store loyalty cards. Schultz & Block do warn though that any effects might be short-term and suggest additional research to ascertain whether lasting preference for secondary brands might be created.

Future work could focus on deepening the understanding of how store cards influence consumer purchase behavior and brand preference. Added investigation into the link between media advertising and sales promotion is likewise recommended. The authors also advocate similar longitudinal research to increase knowledge of how consumers are persuaded by marketing activities.

To read the full article enter 10.1108/JCM-01-2014-0822 into your search engine.

(A précis of the article “Sales promotion influencing consumer brand preference/purchases”. Supplied by Marketing Consultants for Emerald.)