Behavioral Learning Theory: Its Relevance to Marketing and Promotions

Abstract

Behavioral learning theory has been generally overlooked in the development of marketing thought. The central concept states that behavior that is positively reinforced is more likely to recur than nonreinforced behavior. This runs parallel to the marketing concept and may be a sufficient model for dealing with most low involvement purchase situations. Its greatest value may be in the development of promotional strategies. This paper extends some of the ideas presented in an earlier paper in this journal.

Receipt and redemption of cigarette coupons, perceptions of cigarette companies and smoking cessation

“…Provision of cigarette coupons may entice female and younger smokers to continue smoking. This is consistent with an application of behavioural learning theory to marketing by Rothschild and Gaidis,17 which posited that provision of coupons can shape repeated purchase behaviour among consumers.…”

The associations between exposure to tobacco coupons and predictors of smoking behaviours among US youth: Table 1

“…First, marketing theories suggest that through lowering the cost of products to consumers, coupons can induce initial trial of a product among non-users, and can shape repeated purchasing behaviours among current users 13. This hypothesis is supported by the current findings that exposure to tobacco coupons was positively associated with susceptibility to cigarette smoking among youth never smokers and with intention to purchase cigarettes in the future among youth experimenters and current smokers.…”

Manufacturer and retailer perceptions of in‐store promotions in South Africa

“…Price and non-price attitude orientations are shown in Table 6 Manufacturers and retailers do not agree on price and non-price attitudes Retailers agreed very strongly that price promotions were a necessary activity to stimulate short-term sales Manufacturers only partially agreed Neither sample Perceptions ofln-store Promotions 453 agreed strongly that non-price promotions created greater brand loyalty Manufacturers in general indicated that they did not generally prefer price discounted promotions to other non-price promotions Retailers, on the other hand, agreed to a certain extent Manufacturers strongly agreed that non-price promotions that tied in with the brand's media advertising campaign were effective Retailers were less certain, tending to be neutral on this statement Retailers agreed strongly that price promotions increased sales and therefore profit Manufacturers, on the other hand, were less certain Manufacturers indicated that these profits often did not increase with price-related promotions, despite sales increases The manufacturer, and not the retailer, had to bear the price reduction The difference between the two means may reinforce these comments in that if the retailers profit position is not affected by price discounted promotions, they are more likely to view them as a way of Increasing profits Retailers agreed strongly that price promotions created brand switches Surprisingly, manufacturers showed a weak agreement with this statement This could possibly be explained by the fact that, although manufacturers do not generally prefer price promotions, they do conduct them Agreement that they •were creating brand switches through the use of price promotions would be tantamount to admitting bad management of the brand The short-term orientation of many brand managers for immediate sales to reach target may be another factor causing their ambivalence in respect of this statement The brands are however not the property and responsibility of the retailer, possibly resulting in a more objective, 3ugher level of agreement with this statement Manufacturers disagreed to a certain extent that non-price promotions had very little effect on sales Retailers expressed 3io conclusive opinion in this regard The manufacturer sample placed a significantly greater amount of emphasis on the fact that frequent price promotions were destructive to the long-term health of the brand Retailers, on the other hand, were fairly indifferent to this statement Most researchers agree that price promotions increase sales in the short term, but there is disagreement as to how these short-term gains affect long-term sales (Rothschild and Gaidis 1981;Guadagni and Little 1983;Winer 1986;Bawa and Schoemaker 1987;Kumar and Leone 1988) Studies have found that goods are either being stockpiled by the consumer, or that the deal itself has an effect on the perceived value of the brand (Dodson et al 1978;Jones and Zufryden 1980;Guadagni and Little 1983;Schoemaker and Shoaf 1987;Lattin and Bucklin 1989;Neslin and Schoemaker 1989;Kahn and Louie 1990) …”

“…Sales promotion expenditure has grown in recent years, with estimated expenditures on all types totalling $124 5 billion in the USA (Engel et al 1991) Thus saleŝ promotion expenditure was larger than advertising expenditure Comparable South African figures are unavailable but trends are similar to that of the USA In the past, manufacturers of packaged goods were the sole decision makers of the marketing strategies behind their products The power of their brands was used to stimulate consumers to purchase products through the trade distribution system Advertising, point-of-sale material and packaging helped manufacturers build and maintain market share by positively influencing the consumers choice in favour of their brand The price premiums these consumers "votes of confidence" allowed, yielded the funds necessary to maintain large advertising, promotional and product development budgets Two other factors that aided the development of "pull" marketing were increasing self-service in distribution, and increasingly sophisticated media such as television (Achenbaum and Mitchel 1987) This formula of brand differentiation, in-store communication and mass advertising which has been prevalent since the end of 1945, has drastically lost ground in America (Achenbaum and Mitchell 1987;Shapiro 1990) Price-off promotions, consumer coupons or trade allowances have come to dominate manufacturers' promotion and advertising budgets This has resulted in intensive price competition, a weakening of the franchise that brands enjoyed, and reduced margins for the manufacturers of packaged goods This shift in emphasis by manufacturers has led to an era of "push" marketing (Achenbaum and Mitchel 1987;Flanagan 1988;Jones 1990;Shapiro 1990) This article addresses these issues from the point of view of both the manufacturers and retailers in South Africa No research has been conducted Source: Adinex 1994 advances in information technology and processing (Bhasin et al 1989) Analysis of price discounting or price-related promotions dominate the literature in which theories that explain the detrimental effect of such promotions on building or maintaining brand loyalty are introduced (Dodson et al 1978;Jones and Zufryden 1980;Rothschild and Gaidis 1981;Guadagni and Little 1983;Winer 1986;Bawa and Schoemaker 1987; Kumar and Leone 1988;Lattin and Bucklin 1989;Neslin and Schoemaker 1989;Kahn and Louie 1990;Kalwani et al 1990) …”