A review of a research paper focusing on specificity of research traditions, their principal results and most promising areas for future research

1. Consumer Research on Sales
Promotions
A State-of-the-Art Literature Review
Harsh (IM 18 / 191)

2. Research Traditions
Consumer Consumer
Behavior Psychology
Consumer Consumer
Psychology Behavior Users Of
Cognitive
Promotions
Sales
Promotions Purchasing
Attitudinal
Strategies
Behavioral
Objective :
Economic
• Specificity of Research Traditions
• Principal Results
• Most promising areas for Future Research

3. A research tradition can be defined as "a framework
hinging on a privileged theory, methodology or
conception of the world"
Distinguishing factors between two research traditions :
X Concepts  Cognitive Aims
X Methodologies  Viewpoints

4. Definition and Typology
Decisions Mechanisms Effects
Firms Sales
—Promotional promotions
policy On sales and
Customers profitability
—Consumers
—Retailers
The Price —Sales force
authorities product
—Consumer advertising On behaviors
welfare and attitude
Different levels of analysis of sales promotion

5. Trade Promotions Retailers’ Promotions
Price Promotions
Discounts Displays
Features
Manufacturers Retailers and Consumers
Sales Force
Consumers’ Promotions
Coupons, Refunds, Premiums
More products, two at the price of one
Natural Typology of sales promotions

6. Mechanisms Operationalizations Empirical Evidences
Cost reduction (1) Transfer of storage costs to the (1) Non-perishable products
- Sales promotions cost less costumers who have cheaper have greater promotional
than everyday-low-price policy. storage costs than the retailer elasticity
Consumer price discrimination (2) People with high demand have (2) Coupons are offered on
- Price promotions permit to higher opportunity costs of time. expensive products . Consistent
charge prices adapted to the Companies can use the following with the discrimination
level of demand of each costs to discriminate : hypothesis, promotions are often
consumer segment, which is — Cost of collecting coupons random, of similar magnitude
more profitable. — Transaction costs of coupons and, above all, purchase
— Storing promoted products probabilities don‘t change after a
promotional purchase.
(3) Improving the efficiency of (3) Simulation in a university
price promotions through pseudo retail outlet. The recommended
price-cuts if there are enough promotional policy yields higher
light information processors returns
among consumers.
(4) If they don't know how to (4) Anecdotal evidence of markets
discriminate consumers, firms can where prices are set very high but
begin by charging a high price and promoted soon because
then reduce it in accordance with competition is weak, suggests
market size, competition and that consumers are numerous and
costs of the information search. information search is expensive.
Taking advantage of consumer heterogeneity with promotions

7. • - Not incorporated all working papers • Ample room for research on the
and professional works completed various sales promotions techniques
during past 10 years • Consumer-oriented research
• Substantial overlap of various tradition will no longer continue with
research traditions not accounted for the orthodox methods
• Theory-oriented research tradition is
very unbalanced
• Theoretical economic models have
made major contributions to
research on sales promotion
Limitations Takeaways

8. References
• Research Paper
– Consumer Research on Sales Promotions : A State-of-
the-Art Literature Review
– Journal of Marketing Management, 1995, 11, 419-441
– Pierre Chandon, HEC School of Management, Paris
– URL :
http://faculty.insead.edu/chandon/personal_page/Do
cuments/Article-
Consumer%20research%20on%20sales%20promotion
s.pdf

9. Disclaimer
• This document was prepared purely for
academic purpose.