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Sales promotions and point of sales materials, does it work of not? : To what extent does advertising on the shopping floor influence the (negative) effects of sales promotions on customer brand equity?

Smedema, I. (2016) Sales promotions and point of sales materials, does it work of not? : To what extent does advertising on the shopping floor influence the (negative) effects of sales promotions on customer brand equity?

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Abstract:Customers who are shopping in a grocery store are confronted with lots of stimuli. Most of these stimuli are sales promotions. These sales promotions directly result in a financial saving for a customer and an immediate financial gain for the retailer and manufacturer. However, these sales promotions could also have a downside, namely the erosion of brand equity over time. The aim of this study is to find a solution to overcome the presumable negative effects of sales promotions. This solution might be found in a relatively new and fast growing marketing strategy, called shopper marketing. Effective shopper marketing helps companies to stimulate consumption and to build brand equity. Part of this marketing strategy is in-store communication, i.e. all marketing related instruments that are present on the point of purchase: in this case the grocery store. The goal of this research is to combine sales promotions with in-store communication, in particular Point of Sales (POS) materials, to investigate the effects of advertising on the shopping floor and its potential to diminish or resolve the presumable negative effects of sales promotions. A ‘3x2 between-subject’ design was used to examine the influence of sales promotions and POS materials on the different dimensions of brand equity (‘perceived quality’, ‘brand image’, ‘brand attitude’ and ‘brand awareness’). In this experiment, the level of discount, 50% off, 20% off, original price (3), and the presence or absence of POS materials (2) were manipulated, which resulted in six different conditions. Participants were randomly assigned to one of these six conditions in an online questionnaire. Ultimately, 286 participants were included for further analysis. Based on the results of this study, it may be concluded that advertising on the shopping floor did not significantly influence the (negative) effects of sales promotions on customer brand equity. Furthermore, no negative effects of sales promotions on brand equity were found in this study: the scores on all three discount levels (50% off, 20% off and the original price) were almost the same. Additionally, no significant positive effects were found for the addition of POS materials, compared to the conditions without POS materials. This might be explained by the fact that a big part of the participants did not notice the POS materials and were not aware of the high promo pressure of the product. The awareness of the high promo pressure is important, as the biggest negative impact of sales promotions will occur on a longer-term basis. The findings of this study suggest that the presence of POS materials do not necessarily help with building a brand or resolving the (negative) effects of sales promotions. No significant results were found for the effects of sales promotions and POS materials on all the four brand equity dimensions (‘perceived quality’, ‘brand image’, ‘brand attitude’ and ‘brand awareness’). However, there was a small trend that the presence of POS materials might attract the attention of customers, create brand awareness and stimulate them to purchase the product. However, since the differences in valuations are not significant, these findings could only be interpreted as an indication. Future research on larger samples is needed to be able to draw conclusions on significant results. Furthermore, more research is needed to gather additional information about the effects of sales promotions nowadays and the consciousness of customers and effects of in-store communication (POS materials). This additional information is needed to draw the presumable conclusion that there is no link between sales promotions and in-store communication (POS materials).
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:05 communication studies
Programme:Communication Studies MSc (60713)
Link to this item:http://purl.utwente.nl/essays/71018
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