Increasing repurchase rates: A reappraisal of coupon effects

One criticism of the use of sales promotions, particularly couponing efforts, is that they may contribute to the deterioration of a brand's consumer franchise. A consumer may be less inclined to repurchase a couponed brand than a brand bought without a coupon. Cognitive evaluation theory is used as a means of further understanding this phenomenon, and a study is conducted to testspecific hypotheses derived from the application of this theory. As hypothesized, this study presents evidence that allowing coupon users to choose between two defferent deals on the same brand may increased the repurchase rates of the couponed brand. © 1994 John Wiley & Sons, Inc.     

A method to infer coupon availability from coupon redemption in the supermarket scanner panel data

Measuring the impact of coupon availability on consumers’ purchase decisions often poses a problem in forecasting market shares of brands in a retail environment. Because, data on actual coupon availability do not exist or can only be obtained by costly field experiments. The widely used supermarket scanner panel data sets offer information on coupons redeemed by the household for only the specific brand that is bought. However, using the redemption variable introduces bias in brand choice or purchase incidence models because redeeming a coupon implies buying the brand or making the purchase. This study presents a way to infer availability from coupon redemption data and to predict market shares for each brand in a supermarket product category.     

When consumers switch brands

A proposed integrative approach measured consumer response to various incentives to switch brands. The response measure consisted of both actual behavior (i.e., switching behavior) and an evaluative measure, which underlies the behavior. Self-perception theory was utilized to assess consumer switching behavior in response to intrinsic versus extrinsic motives. The integrative approach was tested in the context of a multistage longitudinal field study concerning five product classes. Findings show that there is a difference depending upon whether switching behavior was induced by extrinsic (e.g., price, coupon) or intrinsic (e.g., a desire to try a new brand) incentives. Unlike intrinsically induced switching, extrinsic incentives motivated consumers to switch despite a high level of satisfaction with the last purchased brand. However, this switching behavior resulted in weaker intentions to repurchase the new brand.     

The Effect of Price Promotions on Repeat Purchase Behavior

Abstract

While there is general agreement that price promotions generally have an immediate positive impact on the sales of consumer nondurables, there is little agreement about their repeat-purchasing effects. Promotion usage effects may exist in which brand repurchase rates are negatively affected by the fact that a promotion was used to make a purchase.

Using scanner data, this study examines the effect of price promotions on brand repurchase rates in four product categories. Findings indicate that repurchase rates are generally higher after non-deal purchases, however, this seems largely attributable to differences in household pre-purchase probabilities.     

Consumers’ forgiveness after brand transgression: the effect of the firm’s corporate social responsibility and response

Abstract

In this article we examine the interplay between the severity of a brand transgression, consumers’ prior awareness of the firm’s corporate social responsibility (CSR) initiatives, and the firm’s response (apology vs. apologia) on the rates of forgiveness among consumers. Results of two experiments show that consumers’ prior awareness of the firm’s CSR initiatives significantly differentiates apologia from apology, with the effect of apology on consumer forgiveness being more apparent when brand transgression severity is mild. Results also show that consumer forgiveness mediates the effect of brand transgression severity, firm response, and consumer awareness on repurchase intentions. In this way, the study enables managers to determine whether or not an apology or apologia will be sufficient to solicit consumer forgiveness, using information about the levels of awareness of CSR among consumers.     

“Regretting your brand-self?” The moderating role of consumer-brand identification on consumer responses to purchase regret

Extending the study of consumer-brand relationships in the post-purchase stages of consumer decision making and in situations involving unfavorable comparisons with foregone brands, this research investigates the role of consumer-brand identification on consumer responses to purchase regret. Drawing on regret theory and consumer-brand relationship literature, the authors argue that consumer-brand identification immunizes the brand from the negative consequences of purchase regret through the amplification of consumers' cognitive regret regulation and the attenuation of consumers' behavioral regret coping. An empirical study using scenario manipulation of regret for participants' favorite brands provides support to the protective role of consumer-brand identification. The results indicate that consumer-brand identification attenuates the negative effects of regret on satisfaction and behavioral intentions and strengthens the positive impact of satisfaction on brand repurchase/recommendation intent. The findings enrich regret and consumer-brand relationship theories and provide managerial insights for effective branding strategy development under conditions of intense competitive pressure.     

Influences on consumer response to direct mail coupons: An integrative review

A substantial and growing body of research on coupons and coupon effectiveness has emerged in the marketing literature. The objective of this paper is to review and consolidate the findings of previous studies to provide a better understanding of the factors that influence consumer response to direct mail coupons. The effects of coupon, brand, product category, and consumer characteristics on redemption behavior and incremental sales are examined, and their implications for the effectiveness of direct mail coupon promotions are discussed. Based on the findings of prior studies, a theoretical model of coupon effects on purchase behavior is proposed. Several key issues that need to be addressed in future research are identified. © 1996 John Wiley & Sons, Inc.     

Coupons in context: discounting prices or decreasing profits?

A coupon is a commonly used sales promotion device offering the user a discount on the purchase of a product. Consumer coupon offerings are also becoming increasingly diverse: from “% off” and “$ off” to “Buy one, Get one free” (BOGO) offers and co-promotions (Buy X, Deal on Y). This paper reports the results of three experiments that examine whether the economic value of a coupon is a source of information to infer the price of the product/service, and the quality of the product/service, which inference can undercut the economic value, with resulting consequences for deal evaluations and purchase intentions. The framework predicts, and empirical results show, that increasing the value of the coupon does not always improve deal evaluations or purchase intentions. This could imply lower profits for the company. The presence of past price information about the brand, information about prices of other brands offered by the company, and information about competitors’ prices moderate the impact of coupon value on brand-related inferences. When such alternate sources of information are present and are diagnostic of the price of the promoted product, consumers are less likely to infer price and quality from the value of the coupon and higher coupon values are more likely to increase deal evaluations and purchase intentions. Implications for managers designing and communicating promotions are offered.     

Estimating the effects of higher coupon face values on the timing of redemptions,the mix of coupon redeemers,and purchase quantity

One of the key decisions a manager must make in designing a coupon promotion is to decide on the face value. In this study we examine the effects of higher face values on coupon redemption timing, category purchase timing, the mix of buyers who redeem the coupon, and purchase quantity. Data from a field experiment on coupon face values are used to test the hypotheses. A new method of measuring the effects of a coupon on category purchase timing is proposed. We find that coupons per se tend to advance category purchase timing, but higher face values do not increase the magnitude of this effect. Surprisingly, higher face values appear to increase redemption rates for both the prior nonbuyers and prior buyers of the brand in a similar way. However, higher face values have little effect on the package size purchased, the number of units purchased, or the total quantity (package size times units) purchased.     

Effects of sales promotion type and promotion depth on consumer perceptions: the moderating role of retailer reputation

This study uses a between-subjects experimental design to test the effect of two sales promotion formats (coupon versus markdown) with either high and low face values on consumer attitudes toward the deal, perceived product quality, and purchase intentions. The reputation of the retailer offering the deal is predicted to moderate the relationship between the promotional offer and consumer responses. Consumers perceive product quality to be higher when offered a high value coupon vs. markdown but there is no significant difference in perceived quality across promotion types when the promotion face value is low. When a deep price discount is offered by a retailer with a negative reputation, however, consumers have more favorable attitudes toward the deal and higher purchase intentions when provided with a markdown vs. coupon. Conversely, a high value coupon elicits more favorable evaluations than a markdown when the retailer has a positive reputation. When the value of the promotion is low and the retailer has a positive reputation, consumers have more positive deal attitudes and purchase intentions when offered a markdown vs. coupon. There is no significant difference in the effects of promotion type when the retailer has a negative reputation. The findings therefore establish retailer reputation as an important moderator of sales promotions effectiveness. This research is limited by the use of a single product category and a student sample. Process measures are also needed to validate the proposed theoretical conceptualization. The results provide managers insight into the type and value of the sales promotion to offer based on consumer perceptions of the retailer's reputation in the market.     

Effects of prior brand usage and promotion on consumer promotional response

We examine how prior purchases influence consumer response to promotional activity in brand choice decisions. To improve understanding of the nature of this influence, we separate previous purchases into those on promotion and those not on promotion, and consider their differential impact on subsequent brand choices. Impact may be observed at the brand level, category level, or both and we suggest circumstances in which each might occur. Across four product categories, consumer sensitivity to price, price promotions, and feature advertisements increases for all brands in the product category following a promotional purchase but also decreases for the most recently purchased brand. The magnitudes of the results indicate that prior promotional purchases influence choice more than prior brand usage does. We offer managerial recommendations regarding promotional activities, for both retailers and manufacturers.     

A brand preference and repurchase intention model: the role of consumer experience

Consumer brand preference is an essential step towards understanding consumer choice behaviour, and has therefore always received great attention from marketers. However, the study of brand preference has been limited to traditional marketing focusing on functional attributes to maximise utility. But now the shift to experiential marketing broadens the role of the brand from a bundle of attributes to experiences. Technological advancements have helped to increase the similarities between brand attributes and product commoditisation. Consequently, consumers cannot shape their preferences among brands using rational attributes only. They seek out brands that create experiences; that intrigue them in a sensorial, emotional and creative way. This study seeks to develop a model that provides an understanding of how brand knowledge and brand experience determine brand preference and to investigate its impact on brand repurchase intention. Accordingly, exploratory focus group discussions are employed followed by a survey of mobile phone users in Egypt. The findings provide insights into the relative importance of consumer perceptions on different brand knowledge factors in shaping brand preferences. It also demonstrates the significance of consumers’ experiential responses towards brands in developing their brand preferences that in turn influence brand repurchase intention. The model therefore offers managers a new perspective for building strong brands able to gain consumer preferences.     

Are Low Price and Price Matching Guarantees Equivalent? The Effects of Different Price Guarantees on Consumers’ Evaluations

Some retailers offer price match guarantees, whereas others offer guarantees making the same promise but labeling these low-price guarantees. Do consumers respond differently to these different price guarantee labels? To address this research question, this paper leverages insights from pricing, signaling, and regulatory focus theories to demonstrate – across multiple studies – that consumers perceive price match versus low price guarantees differently. In turn, contingent on consumers’ regulatory focus, this difference in perceptions feeds forward and influences consumers’ purchase intentions and post purchase (e.g., repurchase) intentions. This paper contributes to theory, not only by showing differences across price match versus low price guarantees, but also by being the first to jointly examine purchase and post purchase intentions relating to price guarantees. This paper also speaks to practice, noting contingencies that determine whether the price match or the low-price guarantee label should be used.     

Consumer heterogeneity in the longer-term effects of price promotions

While a significant literature has emerged recently on the longer-term effects of price promotions, as inferred from persistence models, there is very little if any attention paid to whether such longer-term effects vary across different types of consumers. This paper takes a first step in that direction by exploring whether the adjustment, permanent, and total effects of price promotions, and the duration of the adjustment period, differ between consumers segmented based on their usage rates in a product category and their loyalty to a brand. We also investigate whether such consumer segmentation will improve the forecasting performance of persistence models at both product category and brand levels. Expectations are developed based on consumer behavior theory on various effects of price promotions, such as the post-deal trough, the mere purchase effect, the promotion usage effect, and responsiveness to competitor's reactions. Evidence from household-level supermarket scanner data on four product categories is provided. We find substantial differences between consumer segments and provide insights on how managers can increase the longer-term effectiveness of price promotions by targeting each consumer segment with a different promotion program. In addition, consumer segmentation is found to significantly improve the forecasting performance of the persistence model for two of the four product categories. For the other two product categories, consumer segmentation provides forecasting performance similar to that obtained from aggregate-level persistence models.     

Consumer–Brand Relationships: A Contrast of Nostalgic and Non‐Nostalgic Brands

This research examined how consumer–brand relationships change when one contrasts brands perceived as nostalgic with brands perceived as non‐nostalgic. Paired comparisons of brands in six product categories revealed that brand attachment, self‐brand connections, and storytelling, as well as, the propensity to offer the brand as a gift and collect brand‐derived products, depend on the nostalgic status of the brand. On a sample of 606 consumers, the results showed that a brand's nostalgic status has a positive effect on attachment, self‐brand connections, and storytelling. These effects had not previously been considered in nostalgia research. Furthermore, the nostalgic status of a brand has positive effects in terms of intention to purchase the brand as a gift and collect brand‐derived products. Moreover, ANOVA results illustrate that consumer relationships with nostalgic brands are systematically stronger than with non‐nostalgic brands. Finally, results indicated that product category moderates all of the dimensions of brand relationships while gender does not.     

Inclusive advertising featuring disability on instagram: Effect on consumer well-being,brand engagement,and purchase intention

Should advertisers continue to promote their brands through brand endorsers without considering their diverse characteristics, or should they embrace diversity in advertising? Gender, age, ethnicity, and sexual orientation are some of the aspects of diversity that have been investigated in advertising research, primarily in the context of Western and developed countries. However, it remains underexplored how physical disabilities in influencer advertising on Instagram affect consumer well-being and consumers’ responses toward brands in a non-Western market. Through an experimental design (including both inclusive and non-inclusive samples), this study examined the effects of inclusive advertising (including disabled persons) on consumer well-being (both hedonic and eudaimonic), brand engagement, and purchase intention. Two studies were conducted to test the hypotheses. In Study 1 (shampoo brand case), a data analysis of 260 young Pakistani consumers revealed that inclusive (vs non-inclusive) advertisements enhance both hedonic well-being (HWB) and eudaimonic well-being (EWB), with a stronger effect for EWB. The spillover effects of EWB and HWB indicated a significant influence on brand engagement and purchase intention, whereas the effect of HWB is significant only on brand engagement. The effects of HWB on brand engagement and of EWB on purchase intention showed a greater influence in the case of inclusive advertisements than in traditional non-inclusive advertisements. In Study 2 (clothing brand case), an analysis of 235 respondents revealed that inclusive advertising drives both HWB and EWB, which have a greater influence on brand engagement and purchase intention when individuals are exposed to an inclusive advertisement featuring disabled persons than a non-inclusive one. These studies confirm that inclusive advertisements attract a more diverse customer base in addition to existing customers. These findings offer theoretical and practical insights for advertising and consumer research.     

The Effect of Parent Brand Experience on Line Extension Trial and Repeat Purchase

This research analyzes how consumer experience with a parent brand affects trial and repurchase probabilities for a line extension. We develop and test the uncertainty hypothesis which is based on the premise that consumers use experience with the parent brand to infer the quality of the extension. Experience with the parent-brand increases consumers' expectation that the extension quality is high. Therefore, consumers with more parent-brand experience will be more likely to try the extension. However, they will be less likely to repurchase the extension because of the selection bias.We test the hypothesis with scanner panel data from three product categories. The results are consistent with our hypothesis. We also discuss the implications of our results on how to design market programs for new line extensions.     

对已购品牌的危机反应：不同品牌危机类型对消费者购后行为的差异化影响研究

基于自我分类理论,文章研究品牌危机类型(能力相关型与道德相关型品牌危机)对消费者购后行为(重复购买与口碑传播)的影响。通过分析实验数据以及消费者实际购后行为数据发现,道德相关型品牌危机会导致更高的矛盾态度,从而产生更低的重复购买和口碑传播。在能力相关型品牌危机下,强自我品牌联结消费者的重复购买和口碑传播都显著大于弱联结的消费者,而且强联结的消费者面对本土品牌的重复购买和口碑传播要显著高于外国品牌;在道德相关型品牌危机下,强联结消费者的重复购买显著大于弱联结的消费者,而口碑传播没有显著差异。文章拓宽了品牌危机与消费者行为研究视角,并为品牌商正确认识品牌危机与消费者群体关系提供理论指导。     

A comparison of two types of price discounts in shifting consumers' attitudes and purchase intentions

This study focuses on consumer responses to two different types of price discounts: 1) a price discount with and 2) a price discount without a minimum purchase requirement. The effects of the discounts are examined to the extent that they may change consumers' attitudes and purchase intentions regarding a particular brand, by moving it from consumers' hold set to consideration set. A three-phase study on fast-food services in China was conducted. The results of the study provide new empirical insights regarding how to use a brand categorization model to predict the effects of different types of price discounts on consumer purchase behavior. More specifically, this study demonstrates that when a price discount with and without a minimum purchase requirement is applied to a brand in a hold set, the brand moves from the consumers' hold set to the consideration set. However, the effects of the two types of price discounts on consumers' attitudes and purchase intentions are not significantly different. The results are discussed in relation to brand management and marketing strategies in consumer goods industries.     

The dark side of up-selling promotions: Evidence from an analysis of cross-brand purchase behavior☆

This research investigates how up- and down-selling promotions affect customers’ cross-brand purchasing and churn behavior at a multi-brand retailer. We employ a hidden Markov model that accounts for the dynamics of customers’ latent brand preferences and attrition and captures the resulting purchase behavior in response to promotional offers. Using data on coupon promotions and purchase transactions from an online retailer, we find that coupons for a higher-end brand increase customers’ likelihood of purchasing the brand. While this suggests that the retailer can increase its short-term revenues by sending coupons for the higher-end brand to customers of the lower-end brand, we find that customers up-sold via coupons are more likely to switch back to the lower-end brand, in comparison to other customers of the higher-end brand, limiting the positive effect of up-selling promotions in the long term. Moreover, lower-end brand customers’ promotion-induced brand switching leads to their increased attrition from the retailer, which negatively affects long-term purchase behavior and revenues. In contrast, when triggered by down-selling coupons, customers’ brand switching does not impact their attrition. Based on these findings, we demonstrate how our model-based approach can assist marketers’ multi-brand couponing decisions.