Evaluating the Effect of Consumer Sales Promotions on Brand Loyal and Brand Switching Segments

Abstract

Sales promotions are generally looked at as tools that undermines the brand; yet a tool that is necessarily meant to speed up sales. Consumer sales promotion take up a large share of the total marketing expenditure despite which it remains an area that still attracts attention as an essential component of the promotion mix meant to increase short term sales. It is therefore not surprising that most of the marketers resort to sales promotions to attract the competitor's market share. The present paper reports the results of the effects of consumer sales promotions on 427 consumers. This study has attempted to explore the effect of consumer sales promotions on loyal and non-loyal consumers in two Fast Moving Consumer Goods- washing powders and shampoos. Consumers were classified into two categories by their degree of loyalty towards the brand: brand loyal consumers and non-loyal consumers (also known as brand switchers). The study found that consumer sales promotions have more influence on the brand switchers as compared to the loyal consumers. Also, among the various forms of consumer sales promotions, free gifts have more influence on the brand switching behaviour of consumers. Further, it was found that economic status was not a defining factor effecting consumer's brand loyalty.

Do Customer Dissatisfaction and Variety Seeking Really Affect the Product Brand Switching? A Lesson from the Biggest Southeast Asia Mobile Telecommunication Market

“…Prior studies have reported the important role played by promotion in influencing consumer behavior (Sood and Kathuria, 2005). Even though generally, the sales promotion is viewed as a destructive tool in promoting certain brands (Nagar, 2009), companies believe that it must be done and is intended to accelerate sales. In many cases, sales promotion takes a big part of total marketing expenditure, and it remains as an area that still attracts attention and plays an important component of the promotion mix that is intended to increase short-term sales.…”

“…In many cases, sales promotion takes a big part of total marketing expenditure, and it remains as an area that still attracts attention and plays an important component of the promotion mix that is intended to increase short-term sales. Therefore, it is not surprising that most marketers use sales promotions to attract market share of competitors (Nagar, 2009). The study of Kahn and Louie (1990) reports that the effect of sales promotion on consumers who frequently make the brandswitching decisions has encouraged consumers to be attracted to the product of a certain brand, which is in a sales promotion program.…”

“…Prior empirical findings also reveal that sales promotion variable is given less attention as the influencing factor (Sambandam and Lord, 1995;Van Trijp, Hoyer, and Inman, 1996;Junaedy and Dharmmesta, 2002;Setiyaningrum, 2006), even though Nagar (2009) reports that sales promotions have a significant effect on brand switching decision. It is important to include sales promotion into the model of brand switching influencing factors due to the empirical finding of Van Heerde, Gupta, and Wittink (2003), which report that 30% of sales promotion influences brand switching.…”

The impact of retail shoes sales promotional activities on ladies’ purchase intentions

“…Therefore, retailers are trying harder to cope with the changing competitive environment by using different promotional tools and understanding the preferences of customers. Customers' preferences and commitment for a brand or a product play a vital role in building customer loyalty as it has been proved earlier by Nagar (2009), that only repeat purchasers are profitable. Customer's commitment adds to the profitability of the businesses but it is not every purchase that leads towards customer loyalty and profitability.…”

The promotional tools and situational factors’ impact on consumer buying behaviour and sales promotion

“…According to (Nagar, 2009) it has been recognized in literature that only customers with repeat purchases are profitable. Is not this all repeat purchase online to engage consumers with the brand?…”