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The Effect of Consumer’s Psychographic Variables upon Deal-proneness

The Effect of Consumer’s Psychographic Variables upon Deal-proneness

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Journal of Retailing and Consumer Services 13 (2006) 157–168
The effect of consumer’s psychographic variablesupon deal-proneness
Eva Martı ´nez, Teresa Montaner
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Universidad de Zaragoza, Facultad de Ciencias Econo´ micas y Empresariales, Gran Vı´ a, 2, 50005 Zaragoza, Spain
Abstract
Companies are increasingly attaching more importance to sales promotion within their communication programs. The mainreason for the increase in the use of promotions is their immediate effect on the consumers. However, there are some consumers thatdo not respond to promotions. This study analyses the psychographic traits associated with deal-proneness. A personal survey hasbeen conducted with a sample of 425 individuals who regularly buy package food and cleaning products. In the study, three kinds of deal-proneness are differentiated: proneness towards store flyers, proneness towards coupons and proneness towards in-storepromotions. The results prove that there are relationships between some psychographic characteristics of consumers and deal-proneness. In general, price-conscious consumers are deal-prone. However, savings are not the only reason to buy a product onpromotion. Deal-proneness is influenced by other aspects as impulsiveness, innovativeness or shopping enjoyment.
r
2005 Elsevier Ltd. All rights reserved.
Keywords:
Sales promotion; Market segmentation; Consumer behaviour
1. Introduction
Promotional marketing is increasingly gaining im-portance in communication budgets of companies.Marketing managers attribute this high investment insales promotion to the immediate effects of these actionson sales (Schultz et al., 1998). Because of the littleempirical evidence for the response and effectiveness of different promotional instruments, over the last decadesnumerous studies have tried to provide organisationswith some decision-making guidelines for the design of promotional campaigns.Some studies have focused on analysing whether allconsumers show the same response to sales promotion,defining the profiles of more sensitive consumers to thistype of action (Webster, 1965;Ailawadi et al., 2001). Several types of variables have been used to define theseprofiles. Initial research paid more attention to socio-demographic aspects of consumers, but the results werenot fully conclusive and some other variables weresuggested (Schneider and Currim, 1991;Grover and Srinivasan, 1992). Some studies have emphasised thepsychographic profile of the deal-prone consumerobtaining remarkable results (Montgomery, 1971;Lich- tenstein et al., 1990;Ailawadi et al., 2001). Conse- quently, this research will focus on analysing theimportance of the consumer’s psychographic profile intheir behaviour towards sales promotions. More speci-fically, we will attempt to identify different types of response to promotional actions. In addition, therelationship between these responses will be related withdifferent psychographic traits.This paper proceeds as follows: First, we revise theliterature which analyses the consumer response topromotional actions and relates proneness to promo-tions with different psychographic traits of consumers.In the next section we define the hypotheses to becontrasted in the study and explain the methodologyused in the empirical part of our study. We proceed then
ARTICLE IN PRESS
www.elsevier.com/locate/jretconser0969-6989/$-see front matter
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2005 Elsevier Ltd. All rights reserved.doi:10.1016/j.jretconser.2005.08.001
Ã
Corresponding author. Tel.: +34976761000;fax: +34976761767.
E-mail addresses:
emartine@unizar.es (E. Martı ´nez),montagut@unizar.es (T. Montaner).
 
to analyse the major psychographic features of the deal-prone consumer. Finally, we present the main conclu-sions of our research.
2. Literature review
 2.1. Deal-proneness
The literature which analyses the consumer’s responseto sales promotion frequently refers to the term ‘‘deal-prone consumer’’. Proneness to promotions may bedefined, overall, as the tendency to use promotionalinformation as a reference to make purchase decisions.As the response to promotions varies across individuals(Webster, 1965;Montgomery, 1971;Blattberg et al., 1978;Vazquez and Ballina, 1996), deal-prone consumers will be those who modify their purchase behaviour so asto benefit from the temporary incentive offered by apromotion (Wakefield and Barnes, 1996).Several authors, when studying the consumer’sresponse to promotional actions, have analysed whethera consumer who is prone to purchase a certainpromoted product will also respond to any otherpromotional action. The results of that research arenot fully conclusive. Some studies reveal that deal-proneness is a generalised construct, that is, anindividual who modifies his or her purchase behaviourin certain promotions is likely to modify his or herbehaviour in any other promotion (Shimp and Kavas,1984;Price et al., 1988). Other authors maintain that deal-proneness is domain specific and that consumersmay respond to a certain type of promotional mechan-ism but not to others (Schneider and Currim, 1991;Ailawadi et al., 2001).In this respect,Schneider and Currim (1991)differ-entiate between active and passive proneness. Activeproneness refers to the consumers’ sensitivity to storeflyers and coupons. This proneness requires an intensesearch from the consumer to find interesting promo-tions. Nevertheless, passive proneness demands a limitedsearch developed at the point of sales. Such a pronenessis reflected in the consumerssensitivity to in-storedisplays.Ailawadi et al. (2001)establish a similardifferentiation between proneness to out-of-store pro-motions and proneness to in-store promotions. Forthese authors, out-of-store promotions are those whichtake place out of the shops and demand some effortfrom the consumer; they would be related to the activeproneness proposed bySchneider and Currim (1991).On the other hand, in-store promotions are those whichare developed inside the point of sales and discovered bythe consumer when shopping. These types of promo-tions require a reduced effort from the buyer and theyare associated to passive proneness. In the presentresearch we differentiate, as doAilawadi et al. (2001),between in-store and out-of-store promotions.
 2.2. Characterisation of the deal-prone consumer
From the marketing management perspective, know-ing the profile of deal-prone consumers will enable us todesign better promotional campaigns (Bawa and Shoe-maker, 1987;Blattberg and Neslin, 1990;Laroche et al., 2003). The first studies which attempted to characterisethe deal-prone consumer fundamentally based thischaracterisation on socio-demographic variables. Hav-ing obtained inconclusive results, psychographic andpurchasing habit variables have been recommended toidentify the deal-prone consumer (Schneider and Cur-rim, 1991;Grover and Srinivasan, 1992;Sa ´nchez and Del Barrio, 1998).Because sales promotions affect the purchase process(A ´lvarez, 2002), we may explain the different responsesto promotions by analysing the variables which influ-ence the purchase process. Some researchers have usedeconomic benefits or purchase costs as a reference tocharacterise deal-prone consumers (Blattberg et al.,1978;Bawa and Shoemaker, 1987). Other authors have emphasised the hedonic benefits generated by thepurchase of a promoted product (Shimp and Kavas,1984;Schindler, 1989). However,Chandon et al. (2000) integrate both perspectives and consider that consumersrespond to sales promotions due to the positiveexperience provided and thus they attempt to explainhow both economic and hedonic benefits and costsinfluence deal-proneness. This paper is based on thisperspective and therefore we will briefly describe thesebenefits or costs in order to relate them to the buyers’characteristics.Economic or functional benefits are tied to theproduct’s attributes, they provide the customer withfunctional information and they refer to tangible orobjective aspects product-related. Among those func-tional benefits we should highlight savings and quality(Chandon et al., 2000;Ailawadi et al., 2001). Promo- tions provide a saving feeling and reduce the pain of paying. They may also grant the access to higher qualitybrands which could not be bought at their normal price.Hedonic benefits are tied to intangible attributes andthey are experiential and affective. Some outstandinghedonic benefits of promotional actions are entertain-ment, exploration and expression. For example, forthose consumers who enjoy shopping, some promotionsmay be amusing and increase this entertainment benefitprovided by the product purchase.Along the purchase decision process, the consumerweighs up both the benets and the costs of apromotion. Some costs related to the purchase of promoted products, as it will be explained below, maybe switching, search and inventory costs.
ARTICLE IN PRESS
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The importance of these benefits and costs for eachconsumer would differentiate deal-prone from non-deal-prone consumers. Some authors have identified socio-demographic and psychographic traits of the consumerassociated to each of these benefits and costs and theyhave related them to deal-proneness. In the followingsection we will emphasise the psychographic traits whichmight be related to deal-proneness.
3. Hypotheses
In the characterisation of the deal-prone consumer wewill consider the traits thatAilawadi et al. (2001)associated with the aforementioned benefits and costs.First, we will set the hypotheses related to theconsumer’s characteristics associated with the utilitarianbenefits of promotion purchase. We will then establishthe hypotheses related to hedonic benefits. Finally, wewill present the hypotheses related to the costs of promotion purchase.Furthermore, when setting the hypotheses, we willdistinguish between both types of proneness mentionedbefore: proneness to in-store promotions and pronenessto out-of-store promotions. We consider that thedifferences between both types of promotion will makesome consumers respond to certain promotions but notto others.
3.1. Consumer characteristics associated to the economicbenefits of promotions
Some promotions may provide savings for theconsumer reducing the pain of paying. Consequently,some consumers will purchase promoted products toobtain these economic benefits. Savings will be remark-able for those price-conscious consumers and for thosewith financial constraints.People with a higher economic level are usually lessprice conscious (Ailawadi et al., 2001), they are lesssensitive to price changes (Kim et al., 1999), they makelittle effort to find a product’s best price (Putrevu andLord, 2001) and they use promotions less (Ballina andVazquez, 1996). Nevertheless, consumers with a lowereconomic level tend to be more price-sensitive, theythoroughly search for price information (Kim et al.,1999) and they are willing to make an additional effortto benefit from a promotion (Chen et al., 1998). Mostresearch has concluded that price-conscious consumerswith financial constraints respond well to promotionalactions.
H1.
Price-conscious consumers: (a) are prone to in-store promotions and (b) are prone to out-of-storepromotions.
H2.
Consumers with financial constraints: (a) are proneto in-store promotions and (b) are prone to out-of-storepromotions.Quality is another utilitarian benefit associated withthe purchase of a product. Promotional actions mayproduce a negative effect on the perceived quality of products (Grewal et al., 1998) and considering thatquality-conscious consumers attach little importance toprice, quality-conscious people are expected to show lowproneness to promotions.
H3.
Quality-conscious consumers: (a) are not prone toin-store promotions and (b) are not prone to out-of-store promotions.
3.2. Consumer characteristics associated to the hedonicbenefits of promotions
Hedonic benefits refer to experiential and affectiveaspects and they are not based on the objective aspectsof the product or the promotion. When buying apromoted good, the consumer may obtain hedonicbenefits such as entertainment, exploration and self-expression.The entertainment benefit is important for people whoenjoy shopping. People who enjoy shopping equallyenjoy searching for information on available promo-tions (Beatty and Smith, 1997), obtain an additionalutility tied to low-price buying (Urbany et al., 1996) andtherefore they use discount coupons and glance throughstore flyers (Kolodinsky, 1990). Overall they present ahigher proneness to use both in-store and out-of-storepromotions (Ailawadi et al., 2001) since these activitiesincrease the benefit they obtain with the purchase.
H4.
Consumers who enjoy shopping: (a) are prone toin-store promotions and (b) are prone to out-of-storepromotions.On the other hand, the exploration benefit, as notedbyAilawadi et al. (2001), evokes characteristics such asinnovation, variety seeking and impulsiveness which arecommented on below.Innovative people may show a favourable attitude topromotions since these actions encourage them to trynew products (Massy and Frank, 1965;Montgomery, 1971orTeel et al., 1980) and therefore
H5.
Innovative consumers: (a) are prone to in-storepromotions and (b) are prone to out-of-store promo-tions.The market also presents a segment of consumers whoenjoy constantly trying out different brands, the so-called variety seekers. Brand switching providesthem with more satisfaction than always buying thesame product. These consumers are more sensitive to
ARTICLE IN PRESS
E. Martı´ nez, T. Montaner / Journal of Retailing and Consumer Services 13 (2006) 157–168
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