Usage pattern of sales promotion in the Korean market

Abstract

Purpose -An increasing number of retailers and manufacturers are relying on sales promotions to boost sales, extend market share, and clear excess inventory. Previous research on sales promotions primarily focus on the effect of this approach on two main perspectives: firm level, which includes sales, market share, and firm performance; and customer level, which involves perceived quality of product/service, change in reference price, and purchase/repurchase intention. To help subsequent and new research on these issues, this research note focuses on finding patterns of sales promotions conducted in various sectors of industry in the Korean market. Methodology -A survey on the sales promotion usage pattern of a company was conducted with 74 decision makers in various companies followed by a small group interview. Findings-Results indicated that price off and bonus pack sales promotions were the main types of sales promotions conducted and considered in most sectors of industry in Korea. Decision makers were also found to have knowledge on the long-term disadvantage of sales promotions. Despite this advantage, two main reasons were pointed out for the continuing conduct of sales promotions: reaction to the sales promotions of competitors and expectation of other members of the organizations. Conclusion-This research on the usage pattern of sales promotions in Korea can contribute to the choice of the next sales promotion research topic in Korea and in other nations.

Patterns of buyer behavior and brand metrics in a “high loyalty” category: Liquor

“…Furthermore, the finding relating to lower income to high loyalty is not necessarily intuitive, since there is an argument that low‐income buyers have more of an economic incentive to search for bargains (Akbay & Jones, 2005; Griffith et al, 2009), which should reduce their brand loyalty. The finding provides a complementary viewpoint to findings from Orhun and Palazzolo (2019) and Kwon and Kwon (2007), among others, who that find higher‐income buyers avail themselves of temporary promotions more than low‐income buyers, because they have the financial resources to take advantage of temporary low‐prices as they arise. This heightened promotion buying (seen among higher‐income households) will reduce brand loyalty if those buyers switch across more brands to take advantage of promotions.…”

“…This behavior could arguably result in lower brand loyalty among high‐income households. There is mixed empirical evidence on this issue, for example, East, Harris, Willson, and Lomax (1995) found low‐income consumers were more loyal, and Kwon and Kwon (2007) found low‐income consumers were surprisingly less “deal prone” suggesting they could be more brand loyal. However, McGoldrick and Andre (1997) and Cowie et al (2014) found lower‐income buyers were less brand‐loyal; and Koll and Plank (2022) found no relationship between social class and loyalty.…”

“…This behavior could arguably result in lower brand loyalty among high-income households. There is mixed empirical evidence on this issue, for example, East, Harris, Willson, and Lomax (1995) found low-income consumers were more loyal, and Kwon and Kwon (2007) found low-income consumers were surprisingly less "deal prone" suggesting they could be more brand loyal.…”