Description
Effectiveness is the capability of producing a desired result. When something is deemed effective, it means it has an intended or expected outcome, or produces a deep, vivid impression
Allied Academies International Conference
page 41
EFFECTIVENESS OF SALES PROMOTIONAL TOOLS IN MALAYSIA: THE CASE OF LOW INVOLVEMENT PRODUCTS
Nelson Oly Ndubisi, Monash University Malaysia
[email protected] ABSTRACT The thrust of this paper is to evaluate the effectiveness of sales promotional strategies namely, coupon, price discount, free sample, bonus pack, and in-store display in the purchase of low involvement products by Malaysian consumers. The paper also recognises that certain demographic factors such as education and income of consumers could potentially confound the observed relationships hence, these factors were controlled. A total of 312 consumers in Kota Kinabalu, Malaysia were surveyed using structured questionnaire. The results show that price discounts, free samples, bonus packs, and in-store display are associated with product trial. Coupon does not have any significant effect on product trial. Details of the findings and their implications are discussed. INTRODUCTION Research on the use of marketing tools in Malaysia is very scanty at best. Very little is understood about the Malaysian customers and their purchase behaviours, especially with regards to how they respond to the various promotional strategies used by marketers. Since the bulk of the extant literature on these relationships till date remains the Western perspective; there is need for research focusing on the Malaysian consumers and the Malaysian environment, which is unfamiliar to most readers. Since understanding the behavioural responses of Malaysian customers to sales promotion strategies is salient in customer management and in designing effective sales promotion strategies, important impetuses for this research are established. To embark on this task, the research focuses on low involvement products (LIP), which are generally believed to be more responsive to promotional tools than high involvement products. Low involvement products are those that are bought frequently and with a minimum of thought and effort because they are not of vital concern nor have any great impact on the consumer's lifestyle (www.marketingprofs.com). LITERATURE REVIEW According to Shimp (2003), sales promotion refers to any incentive used by a manufacturer to induce the trade (wholesalers, retailers, or other channel members) and/or consumers to buy a brand and to encourage the sales force to aggressively sell it. Retailers also use promotional incentives to encourage desired behaviours from consumers. Sales promotion is more short-term oriented and capable of influencing behaviour. Totten & Block (1994) stated that the term sales promotion refers to many kinds of selling incentives and techniques intended to produce immediate or short-term sales effects. Typical sales promotion includes coupons, samples, in-pack premiums, price-offs, displays, and so on. Coupons have been used to produce trial (Robinson & Carmack 1997). According to Cook (2003), coupons are easily understood by the consumer and can be highly useful for trial purchase. Gilbert and Jackaria (2002) concurring to the popularity of coupon reported that coupon is ranked last as the promotional least widely used by consumers and least influence on product trial. Other
Proceedings of the Academy of Marketing Studies, Volume 10, Number 2 Las Vegas, 2005
page 42
Allied Academies International Conference
studies (e.g. Peter & Olson 1996; Gardener & Trivedi 1998; Darks 2000; Fill 2002) have reported the importance of coupons as a sales tool. Price promotion does influence new product trial (Brandweek, 1994). According to Ehrenberg et al. (1994) short-term peaks in sales were due primarily to purchases made by occasional users of a brand rather than by new customers. Furthermore, the study concluded that these occasional users, after taking advantage of the price reduction, would most likely return to their favourite brands in their portfolio rather than buy the promoted brand at full price. However, Shimp (2003) and Fill (2002) among other extant studies have documented a link between price promotion and product trial. With regard to free sample, another important promotional tool often used by firms, marketing managers recognize the importance of product trial and direct behavioural experience with a product, hence they often mail free samples of products to consumers so that consumers can try the products for themselves, rather than just hear about the products (Kardes, 1999). However, Gilbert and Jackaria (2002) found that a free sample as a promotional offer had no significance on consumers' reported buying behaviour, whereas Pramataris et al. (2001), Fill (2002), and Shimp (2003), have shown otherwise. Factory bonus pack according to Lee (1963) is used to increase consumer trial of the brand. Larger package size and accompanying advertising of the offer tended to make the promotion noticeable (Gardener &Trivedi 1998). Since more of the product is included at no extra cost, consumers can be persuaded to buy the product if they feel it represents a deal that produces the greatest value for their money. According to Gilbert and Jackaria (2002), packs with "buy-one-get-one-free" may not increase brand awareness before trial purchase because the customer will only come across the product once in the store (unlike samples or coupons), however, if the promotion is noticeable it will facilitate brand recognition and brand recall for future purchases. Since an additional amount is given for free, consumers may be persuaded to buy the product if they feel it represents a fair deal that provides value for money. Ong et al. (1997) found that consumers appeared to be slightly sceptical of the bonus pack offer, but somewhat more trusting of the price and quantity claimed. In other words, believability of the bonus pack offer was weak, however, they would likely buy one bottle and not buy more than one bottle they concluded. The report speculated that this happens because consumers suspect that manufacturers do raise prices slightly in conjunction with bonus pack offerings. Product trial involves actually trying or using a product (Kardes, 1999). According to Peter and Olson (1996), trialability refers to the degree to which a product can be tried on a limited basis or divided into small quantities for an inexpensive trial. Banks (2003) wrote that with sales promotion, brands have a chance to quickly affect consumer choice and behaviour by adding value through an on-pack offer, by achieving incremental display or by encouraging trial via sampling and/ or couponing. According to Schindler (1998), a price promotion that is designed to evoke attributions of responsibility could be expected to appeal to consumers more than one that does not evoke such attributions, and thus have a greater ability to create product trial among consumers. Wayne (2002) found a link between sales promotion and product trial. Chandon, et al. (2000) indicated that sales promotion may be attractive to highly promotion prone consumers for reasons beyond price savings. These highly promotion prone consumers may switch brands to receive "special" deals that reflect and reinforce their smart shopper self-perception. They concluded that highly promotion prone consumers might try a new product that has promotion. Thomas (1993) argued that the magnitude of planned distribution and promotion expenditures (advertising, sales promotions, sales force, and so on) could affect initial trial of the brand.
Las Vegas, 2005
Proceedings of the Academy of Marketing Studies, Volume 10, Number 2
Allied Academies International Conference
page 43
METHODOLOGY In this study, five consumer promotion tools- coupons, discount, samples, bonus packs, and in-store display were investigated for their impact on consumer purchase behaviour. Items from Garretson and Burton's (2003) study of consumer proneness towards sales promotion were adapted in the measurement of proneness to coupon, price discount, free sample, bonus pack, and in-store display. Trial behaviour of consumers were measured with items adapted from Gilbert and Jackaria (2002). Example of the items measuring free sample, bonus pack, price discount, in-store display, and coupon include: (1) If a brand offers ___ (free sample/bonus pack/price discount/in-store display/coupon); that could be a reason for me to buy it, (2) When I buy a brand that offers ___ (free sample/bonus pack/price discount/coupon), I feel I am getting a good buy; (3) I have favourite brands, but most of the time I buy a brand that offers ___ (free sample/bonus pack/price discount/in-store display/coupon); (4) One should try to buy a brand that offers ___ (free sample/bonus pack/price discount/in-store display/coupon); and (5) compared to most people, I am more likely to buy brands that offer free ___ (free sample/bonus pack/price discount/in-store display/coupon). In store display has four items only, because of the omission of item 2, which is considered irrelevant with respect to in-store display. There are five items measuring trial, for example, coupon enables me to buy a product, which I have not tried before, price discount makes me to buy a product, which I have not tried before, etc. The population of the study consists of consumers in Kota Kinabalu, Malaysia. The sample points were supermarkets in Kota Kinabalu area. The survey instrument was self-administered to customers using a mall intercept technique. Some respondents who could not answer on the spot were given a copy of the questionnaire (to be answered at home) with a postage paid return envelope. A five point Likert scale, ranging from 1 (strongly disagree) to 5 (strongly agree) was used for the construct's dimensions. A total of 420 questionnaires were distributed and only 312 were returned, which represents a response rate of 74%. The Multiple Regression Model was employed to predict the relationships in the construct. RESULTS AND DISCUSSION Demographic Profile Out of the 312 usable questionnaires returned by the respondents, 59.6% were female respondents, and 40.4% were male. Various income levels (in Malaysia Ringgit) were represented, for example below 24,000 was 60.9%, 24,000-47,999.99 (29%), 48,000-71,999.99 (9%), and so on. Chinese consumers made up 51%, Kadazan-Dosuns (22%), Malays (16%), Indians and others (11%). The ages of the respondents were as follows: below 20 (13%), 20-39 (62.8%), 40-59 (22%), and 60 and above (2.2%). The rate of married respondents was 46%, while singles represented the balance of 54%. With respect to education background, 50.6% had secondary school education and less, 26% had high school and diploma qualifications, and the rest (23.4%) were degree and post-graduate degree holders. Although the observed patterns of item loadings were similar for both Varimax (adopted in this study) and Oblique rotation (alternative technique), providing grounds to assume that the instruments are consistent, the internal consistency of the instruments were further tested via reliability analyses. Cronbach's alpha test was used to ensure the reliability of the variables. For sales promotional tools, the results indicate acceptable values: coupon (a=0.81), price discount (a= 0.86), free sample (a= 0.87), bonus pack (a=0.88), and in-store display (a= 0.87). The Cronbach's alpha value for product trial is 0.81. Mean score for all dimensions are as follows: coupon (2.99), price discount (3.67), free sample (3.08), bonus pack (3.28), in-store display (2.84), product trial (3.22).
Proceedings of the Academy of Marketing Studies, Volume 10, Number 2
Las Vegas, 2005
page 44
Allied Academies International Conference Table 2: Descriptive and Reliability Analysis Results Variables No. of Items Mean S/D Cronbach's Alpha Coefficient 0.81 0.86 0.87 0.88 0.87 0.81
Coupon Price Discount Free Sample Bonus Pack In-store Display Product Trial
5 5 5 5 4 5
2.99 3.67 3.08 3.28 2.84 3.22
0.77 0.75 0.81 0.77 0.84 0.73
Relationship among Constructs Table 3 shows the results of the regression analysis used to determine the relationship between the promotional strategies and product trial. Standardized beta coefficients are reported all through, as standardized regression coefficients allow for a direct comparison between coefficients as to their relative explanatory power of the dependent variable (Hair et al. 1998).
Table 3: Promotional Tools and Product Trial Independent variables Constant Coupon Price discount Free sample Bonus pack In-store display R2 = .294 F = 25.218 0.023 0.143 0.218 0.114 0.234 Sig. F = .000 Beta coefficients t-value 5.932 0.401 2.334 3.483 1.9 4.322 p-value 0 0.689 0.02 0.001 0.058 0
The above results show that coupon, price discount, free sample, bonus pack, and in-store display contribute significantly (F = 25.22; p = .000) and predict approximately 30% of the variations in product trial. The 30% explanation is considered good for a behavioural science research. Further examination of the results shows that price discount (t = 2.334; p = .020), free sample (t = 3.483; p = .001), and in-store display (t = 4.322; p = .000) are significantly associated
Las Vegas, 2005 Proceedings of the Academy of Marketing Studies, Volume 10, Number 2
Allied Academies International Conference
page 45
with product trial at 5% significance level. Bonus pack is moderately associated with product trial (t = 1.900; p = .058). Hence there is enough evidence to accept hypotheses 2, 3, 4 and 5. The results indicate that in-store display is the strongest predictor of product trial followed by free sample, price discount and bonus pack. There is no significant relationship between coupon and product trial (t = 0.401, p = 0.69) at 5% significance level, which leads to rejection of hypothesis 1. Therefore, it is conclusive that coupon is not a strong determinant of product trial among the respondents. This may be because of the sparse use of coupon as a promotional strategy by marketers in Malaysia. As a most rarely used promotional tool in Malaysia, many consumers may not be familiar with it compared to other promo-tools. The results of this study provide some useful information on the impact of the five promotional tools on consumer buying behaviour (product trial). With respect to consumer proneness to sales promotions, the results show that in-store display plays a significant role in shaping consumer product trial reaction. Moreover, the results of this study show that free sample and price discount play significant roles in influencing consumer product trial behaviour. This finding is consistent with the views of Blackwell et al. (2001). Another sales promotional tool that has important effect is bonus pack. Bonus pack is instrumental in increasing consumer trial of a brand, thus, the more of the product included at no extra cost, the greater the likelihood of consumers buying the product for trial. Although, the effect of bonus pack on product trial is lower than other promotional tools such as in-store display, free sample, and price discount, bonus pack remains a useful marketing tool. Contrary to some earlier findings (e.g. Banks 2003; Blackwell et al. 2001), coupon in this study does not have significant effect on product trial. This could be as a result of the respondents' poor familiarity with the use of coupons. In fact in Malaysia, the use of coupons as a promotional strategy is not as common as the use of other promotional tools. Marketers in Malaysia very seldom use coupons, resulting in the tool's unpopularity among Malaysian consumers. Zajonc (1980) had earlier shown that exposure to a stimulus enhances a person's attitude toward it. Control The control procedures applied in this study include the following: (1) examination of the role of familiarity with each promotional tool on the impact (or lack of it) of the tool on product trial; and (2) examination of potential confounding effects of respondents' education and income levels. Firstly, to examine whether consumer familiarity with particular promotional tool is what explains its effectiveness, the study controlled for this factor. From the result in Table 4 below, it can be said that the weak impact of coupon on trial is attributable to the unfamiliarity of Malaysian customers with coupon. This may have resulted from the seldom use of this tool by marketers in Malaysia.
Table 4: The Role of Familiarity on the Effectiveness of Tools Variables Coupon*Familiarity Price Discount* Familiarity Sample* Familiarity Bonus Pack* Familiarity B 0.779 0.068 -0.28 -0.457 Sig. 0.017 0.874 476 0.236 Las Vegas, 2005
Proceedings of the Academy of Marketing Studies, Volume 10, Number 2
page 46 In-store Display* Familiarity R| 0.356
Allied Academies International Conference 0.237 0.289
Further analysis confirms that familiarity is a key issue in coupon-trial relationship. Taking coupon use at below median and above median (inclusive), the corresponding values were assigned 1 and 2 respectively. Similarly, taking familiarity with coupon at below median and above median (inclusive), 0 and 1 were assigned. By plotting the graph of these dimensions, the resulting levels of product trial for different levels of coupon usage and familiarity with the tool are as shown in Figure 2. Figure 2: Trial at Different Levels of Coupon Use and Familiarity with the Tool
3.4
3.3
3.2
M e a n T R I A L
3.1
3.0
high -low familiarit
.00
2.9 1.00 2.00
1.00
high -low coupon
Figure 2 shows that customers, who are familiar with coupon, increase product trial as more coupon are offered. In other words, the behavioural responses of highly coupon-familiar customers are greater than the responses of those who are not familiar with the tool. CONCLUSIONS AND IMPLICATIONS This research has important implications on theory. The framework provides new insights into the understanding of sales promotional strategies and their impacts on Malaysian customers' behavioural responses in low involvement product setting. In addition, it helps to explain the role of familiarity with sales promotion tools. Malaysian consumers respond more to free sample, price discount, in-store display, and bonus pack than coupon. A plausible explanation for the weak influence of coupon is poor familiarity with the tool. This research shows the linkages among various promotional tools and product trial, and thereby helps to better understand how Malaysian consumers respond to various promotional tools offered by marketers. This is an important
Las Vegas, 2005 Proceedings of the Academy of Marketing Studies, Volume 10, Number 2
Allied Academies International Conference
page 47
contribution to the body of knowledge in this field and in Malaysia in particular, being one of the pioneer studies in this area in Malaysia. The results also have important implications for practitioners. One of the major implications of this research is that firms can increase sales by offering the right promotional tools to attract trial customers. Therefore organisations should carefully plan their promotional strategies, and allocate promotional budget over the different promotion tools, giving preference to the more effective tools. Promotions that emphasize in-store display, free sample, price discount, and bonus pack are likely to be more effective than coupon. REFERENCES Available Upon Request
Proceedings of the Academy of Marketing Studies, Volume 10, Number 2
Las Vegas, 2005
doc_367364142.pdf
Effectiveness is the capability of producing a desired result. When something is deemed effective, it means it has an intended or expected outcome, or produces a deep, vivid impression
Allied Academies International Conference
page 41
EFFECTIVENESS OF SALES PROMOTIONAL TOOLS IN MALAYSIA: THE CASE OF LOW INVOLVEMENT PRODUCTS
Nelson Oly Ndubisi, Monash University Malaysia
[email protected] ABSTRACT The thrust of this paper is to evaluate the effectiveness of sales promotional strategies namely, coupon, price discount, free sample, bonus pack, and in-store display in the purchase of low involvement products by Malaysian consumers. The paper also recognises that certain demographic factors such as education and income of consumers could potentially confound the observed relationships hence, these factors were controlled. A total of 312 consumers in Kota Kinabalu, Malaysia were surveyed using structured questionnaire. The results show that price discounts, free samples, bonus packs, and in-store display are associated with product trial. Coupon does not have any significant effect on product trial. Details of the findings and their implications are discussed. INTRODUCTION Research on the use of marketing tools in Malaysia is very scanty at best. Very little is understood about the Malaysian customers and their purchase behaviours, especially with regards to how they respond to the various promotional strategies used by marketers. Since the bulk of the extant literature on these relationships till date remains the Western perspective; there is need for research focusing on the Malaysian consumers and the Malaysian environment, which is unfamiliar to most readers. Since understanding the behavioural responses of Malaysian customers to sales promotion strategies is salient in customer management and in designing effective sales promotion strategies, important impetuses for this research are established. To embark on this task, the research focuses on low involvement products (LIP), which are generally believed to be more responsive to promotional tools than high involvement products. Low involvement products are those that are bought frequently and with a minimum of thought and effort because they are not of vital concern nor have any great impact on the consumer's lifestyle (www.marketingprofs.com). LITERATURE REVIEW According to Shimp (2003), sales promotion refers to any incentive used by a manufacturer to induce the trade (wholesalers, retailers, or other channel members) and/or consumers to buy a brand and to encourage the sales force to aggressively sell it. Retailers also use promotional incentives to encourage desired behaviours from consumers. Sales promotion is more short-term oriented and capable of influencing behaviour. Totten & Block (1994) stated that the term sales promotion refers to many kinds of selling incentives and techniques intended to produce immediate or short-term sales effects. Typical sales promotion includes coupons, samples, in-pack premiums, price-offs, displays, and so on. Coupons have been used to produce trial (Robinson & Carmack 1997). According to Cook (2003), coupons are easily understood by the consumer and can be highly useful for trial purchase. Gilbert and Jackaria (2002) concurring to the popularity of coupon reported that coupon is ranked last as the promotional least widely used by consumers and least influence on product trial. Other
Proceedings of the Academy of Marketing Studies, Volume 10, Number 2 Las Vegas, 2005
page 42
Allied Academies International Conference
studies (e.g. Peter & Olson 1996; Gardener & Trivedi 1998; Darks 2000; Fill 2002) have reported the importance of coupons as a sales tool. Price promotion does influence new product trial (Brandweek, 1994). According to Ehrenberg et al. (1994) short-term peaks in sales were due primarily to purchases made by occasional users of a brand rather than by new customers. Furthermore, the study concluded that these occasional users, after taking advantage of the price reduction, would most likely return to their favourite brands in their portfolio rather than buy the promoted brand at full price. However, Shimp (2003) and Fill (2002) among other extant studies have documented a link between price promotion and product trial. With regard to free sample, another important promotional tool often used by firms, marketing managers recognize the importance of product trial and direct behavioural experience with a product, hence they often mail free samples of products to consumers so that consumers can try the products for themselves, rather than just hear about the products (Kardes, 1999). However, Gilbert and Jackaria (2002) found that a free sample as a promotional offer had no significance on consumers' reported buying behaviour, whereas Pramataris et al. (2001), Fill (2002), and Shimp (2003), have shown otherwise. Factory bonus pack according to Lee (1963) is used to increase consumer trial of the brand. Larger package size and accompanying advertising of the offer tended to make the promotion noticeable (Gardener &Trivedi 1998). Since more of the product is included at no extra cost, consumers can be persuaded to buy the product if they feel it represents a deal that produces the greatest value for their money. According to Gilbert and Jackaria (2002), packs with "buy-one-get-one-free" may not increase brand awareness before trial purchase because the customer will only come across the product once in the store (unlike samples or coupons), however, if the promotion is noticeable it will facilitate brand recognition and brand recall for future purchases. Since an additional amount is given for free, consumers may be persuaded to buy the product if they feel it represents a fair deal that provides value for money. Ong et al. (1997) found that consumers appeared to be slightly sceptical of the bonus pack offer, but somewhat more trusting of the price and quantity claimed. In other words, believability of the bonus pack offer was weak, however, they would likely buy one bottle and not buy more than one bottle they concluded. The report speculated that this happens because consumers suspect that manufacturers do raise prices slightly in conjunction with bonus pack offerings. Product trial involves actually trying or using a product (Kardes, 1999). According to Peter and Olson (1996), trialability refers to the degree to which a product can be tried on a limited basis or divided into small quantities for an inexpensive trial. Banks (2003) wrote that with sales promotion, brands have a chance to quickly affect consumer choice and behaviour by adding value through an on-pack offer, by achieving incremental display or by encouraging trial via sampling and/ or couponing. According to Schindler (1998), a price promotion that is designed to evoke attributions of responsibility could be expected to appeal to consumers more than one that does not evoke such attributions, and thus have a greater ability to create product trial among consumers. Wayne (2002) found a link between sales promotion and product trial. Chandon, et al. (2000) indicated that sales promotion may be attractive to highly promotion prone consumers for reasons beyond price savings. These highly promotion prone consumers may switch brands to receive "special" deals that reflect and reinforce their smart shopper self-perception. They concluded that highly promotion prone consumers might try a new product that has promotion. Thomas (1993) argued that the magnitude of planned distribution and promotion expenditures (advertising, sales promotions, sales force, and so on) could affect initial trial of the brand.
Las Vegas, 2005
Proceedings of the Academy of Marketing Studies, Volume 10, Number 2
Allied Academies International Conference
page 43
METHODOLOGY In this study, five consumer promotion tools- coupons, discount, samples, bonus packs, and in-store display were investigated for their impact on consumer purchase behaviour. Items from Garretson and Burton's (2003) study of consumer proneness towards sales promotion were adapted in the measurement of proneness to coupon, price discount, free sample, bonus pack, and in-store display. Trial behaviour of consumers were measured with items adapted from Gilbert and Jackaria (2002). Example of the items measuring free sample, bonus pack, price discount, in-store display, and coupon include: (1) If a brand offers ___ (free sample/bonus pack/price discount/in-store display/coupon); that could be a reason for me to buy it, (2) When I buy a brand that offers ___ (free sample/bonus pack/price discount/coupon), I feel I am getting a good buy; (3) I have favourite brands, but most of the time I buy a brand that offers ___ (free sample/bonus pack/price discount/in-store display/coupon); (4) One should try to buy a brand that offers ___ (free sample/bonus pack/price discount/in-store display/coupon); and (5) compared to most people, I am more likely to buy brands that offer free ___ (free sample/bonus pack/price discount/in-store display/coupon). In store display has four items only, because of the omission of item 2, which is considered irrelevant with respect to in-store display. There are five items measuring trial, for example, coupon enables me to buy a product, which I have not tried before, price discount makes me to buy a product, which I have not tried before, etc. The population of the study consists of consumers in Kota Kinabalu, Malaysia. The sample points were supermarkets in Kota Kinabalu area. The survey instrument was self-administered to customers using a mall intercept technique. Some respondents who could not answer on the spot were given a copy of the questionnaire (to be answered at home) with a postage paid return envelope. A five point Likert scale, ranging from 1 (strongly disagree) to 5 (strongly agree) was used for the construct's dimensions. A total of 420 questionnaires were distributed and only 312 were returned, which represents a response rate of 74%. The Multiple Regression Model was employed to predict the relationships in the construct. RESULTS AND DISCUSSION Demographic Profile Out of the 312 usable questionnaires returned by the respondents, 59.6% were female respondents, and 40.4% were male. Various income levels (in Malaysia Ringgit) were represented, for example below 24,000 was 60.9%, 24,000-47,999.99 (29%), 48,000-71,999.99 (9%), and so on. Chinese consumers made up 51%, Kadazan-Dosuns (22%), Malays (16%), Indians and others (11%). The ages of the respondents were as follows: below 20 (13%), 20-39 (62.8%), 40-59 (22%), and 60 and above (2.2%). The rate of married respondents was 46%, while singles represented the balance of 54%. With respect to education background, 50.6% had secondary school education and less, 26% had high school and diploma qualifications, and the rest (23.4%) were degree and post-graduate degree holders. Although the observed patterns of item loadings were similar for both Varimax (adopted in this study) and Oblique rotation (alternative technique), providing grounds to assume that the instruments are consistent, the internal consistency of the instruments were further tested via reliability analyses. Cronbach's alpha test was used to ensure the reliability of the variables. For sales promotional tools, the results indicate acceptable values: coupon (a=0.81), price discount (a= 0.86), free sample (a= 0.87), bonus pack (a=0.88), and in-store display (a= 0.87). The Cronbach's alpha value for product trial is 0.81. Mean score for all dimensions are as follows: coupon (2.99), price discount (3.67), free sample (3.08), bonus pack (3.28), in-store display (2.84), product trial (3.22).
Proceedings of the Academy of Marketing Studies, Volume 10, Number 2
Las Vegas, 2005
page 44
Allied Academies International Conference Table 2: Descriptive and Reliability Analysis Results Variables No. of Items Mean S/D Cronbach's Alpha Coefficient 0.81 0.86 0.87 0.88 0.87 0.81
Coupon Price Discount Free Sample Bonus Pack In-store Display Product Trial
5 5 5 5 4 5
2.99 3.67 3.08 3.28 2.84 3.22
0.77 0.75 0.81 0.77 0.84 0.73
Relationship among Constructs Table 3 shows the results of the regression analysis used to determine the relationship between the promotional strategies and product trial. Standardized beta coefficients are reported all through, as standardized regression coefficients allow for a direct comparison between coefficients as to their relative explanatory power of the dependent variable (Hair et al. 1998).
Table 3: Promotional Tools and Product Trial Independent variables Constant Coupon Price discount Free sample Bonus pack In-store display R2 = .294 F = 25.218 0.023 0.143 0.218 0.114 0.234 Sig. F = .000 Beta coefficients t-value 5.932 0.401 2.334 3.483 1.9 4.322 p-value 0 0.689 0.02 0.001 0.058 0
The above results show that coupon, price discount, free sample, bonus pack, and in-store display contribute significantly (F = 25.22; p = .000) and predict approximately 30% of the variations in product trial. The 30% explanation is considered good for a behavioural science research. Further examination of the results shows that price discount (t = 2.334; p = .020), free sample (t = 3.483; p = .001), and in-store display (t = 4.322; p = .000) are significantly associated
Las Vegas, 2005 Proceedings of the Academy of Marketing Studies, Volume 10, Number 2
Allied Academies International Conference
page 45
with product trial at 5% significance level. Bonus pack is moderately associated with product trial (t = 1.900; p = .058). Hence there is enough evidence to accept hypotheses 2, 3, 4 and 5. The results indicate that in-store display is the strongest predictor of product trial followed by free sample, price discount and bonus pack. There is no significant relationship between coupon and product trial (t = 0.401, p = 0.69) at 5% significance level, which leads to rejection of hypothesis 1. Therefore, it is conclusive that coupon is not a strong determinant of product trial among the respondents. This may be because of the sparse use of coupon as a promotional strategy by marketers in Malaysia. As a most rarely used promotional tool in Malaysia, many consumers may not be familiar with it compared to other promo-tools. The results of this study provide some useful information on the impact of the five promotional tools on consumer buying behaviour (product trial). With respect to consumer proneness to sales promotions, the results show that in-store display plays a significant role in shaping consumer product trial reaction. Moreover, the results of this study show that free sample and price discount play significant roles in influencing consumer product trial behaviour. This finding is consistent with the views of Blackwell et al. (2001). Another sales promotional tool that has important effect is bonus pack. Bonus pack is instrumental in increasing consumer trial of a brand, thus, the more of the product included at no extra cost, the greater the likelihood of consumers buying the product for trial. Although, the effect of bonus pack on product trial is lower than other promotional tools such as in-store display, free sample, and price discount, bonus pack remains a useful marketing tool. Contrary to some earlier findings (e.g. Banks 2003; Blackwell et al. 2001), coupon in this study does not have significant effect on product trial. This could be as a result of the respondents' poor familiarity with the use of coupons. In fact in Malaysia, the use of coupons as a promotional strategy is not as common as the use of other promotional tools. Marketers in Malaysia very seldom use coupons, resulting in the tool's unpopularity among Malaysian consumers. Zajonc (1980) had earlier shown that exposure to a stimulus enhances a person's attitude toward it. Control The control procedures applied in this study include the following: (1) examination of the role of familiarity with each promotional tool on the impact (or lack of it) of the tool on product trial; and (2) examination of potential confounding effects of respondents' education and income levels. Firstly, to examine whether consumer familiarity with particular promotional tool is what explains its effectiveness, the study controlled for this factor. From the result in Table 4 below, it can be said that the weak impact of coupon on trial is attributable to the unfamiliarity of Malaysian customers with coupon. This may have resulted from the seldom use of this tool by marketers in Malaysia.
Table 4: The Role of Familiarity on the Effectiveness of Tools Variables Coupon*Familiarity Price Discount* Familiarity Sample* Familiarity Bonus Pack* Familiarity B 0.779 0.068 -0.28 -0.457 Sig. 0.017 0.874 476 0.236 Las Vegas, 2005
Proceedings of the Academy of Marketing Studies, Volume 10, Number 2
page 46 In-store Display* Familiarity R| 0.356
Allied Academies International Conference 0.237 0.289
Further analysis confirms that familiarity is a key issue in coupon-trial relationship. Taking coupon use at below median and above median (inclusive), the corresponding values were assigned 1 and 2 respectively. Similarly, taking familiarity with coupon at below median and above median (inclusive), 0 and 1 were assigned. By plotting the graph of these dimensions, the resulting levels of product trial for different levels of coupon usage and familiarity with the tool are as shown in Figure 2. Figure 2: Trial at Different Levels of Coupon Use and Familiarity with the Tool
3.4
3.3
3.2
M e a n T R I A L
3.1
3.0
high -low familiarit
.00
2.9 1.00 2.00
1.00
high -low coupon
Figure 2 shows that customers, who are familiar with coupon, increase product trial as more coupon are offered. In other words, the behavioural responses of highly coupon-familiar customers are greater than the responses of those who are not familiar with the tool. CONCLUSIONS AND IMPLICATIONS This research has important implications on theory. The framework provides new insights into the understanding of sales promotional strategies and their impacts on Malaysian customers' behavioural responses in low involvement product setting. In addition, it helps to explain the role of familiarity with sales promotion tools. Malaysian consumers respond more to free sample, price discount, in-store display, and bonus pack than coupon. A plausible explanation for the weak influence of coupon is poor familiarity with the tool. This research shows the linkages among various promotional tools and product trial, and thereby helps to better understand how Malaysian consumers respond to various promotional tools offered by marketers. This is an important
Las Vegas, 2005 Proceedings of the Academy of Marketing Studies, Volume 10, Number 2
Allied Academies International Conference
page 47
contribution to the body of knowledge in this field and in Malaysia in particular, being one of the pioneer studies in this area in Malaysia. The results also have important implications for practitioners. One of the major implications of this research is that firms can increase sales by offering the right promotional tools to attract trial customers. Therefore organisations should carefully plan their promotional strategies, and allocate promotional budget over the different promotion tools, giving preference to the more effective tools. Promotions that emphasize in-store display, free sample, price discount, and bonus pack are likely to be more effective than coupon. REFERENCES Available Upon Request
Proceedings of the Academy of Marketing Studies, Volume 10, Number 2
Las Vegas, 2005
doc_367364142.pdf