American Journal of Business

The influence of price and promotion on package size propensity

Amit K. Ghosh,
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Amit K. Ghosh, (2017) "The influence of price and promotion on package size propensity", American
Journal of Business, Vol. 32 Issue: 2, pp.93-103, https://doi.org/10.1108/AJB-10-2016-0032
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The influence
The influence of price and of price and
promotion on package size promotion

propensity
Amit K. Ghosh 93
Marketing Department, College of Business,
Received 17 October 2016
Cleveland State University, Cleveland, Ohio, USA Revised 13 April 2017
Accepted 3 June 2017

Abstract
Purpose – The constantly changing prices, promotions, and packaging options have made decision making
more complex for consumers of packaged goods. The purpose of this paper is to explore how price and
promotions influence consumer propensity to buy a certain package size.
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Design/methodology/approach – Scanner panel data for shelf-stable salad dressing obtained from
Information Resources Inc. were used to compute the proportion of large packages bought, the relative price paid
for large packages, propensity to use various types of promotions, and a behavioral covariate for each household.
Data of over 5,600 households were analyzed using a multiple regression analysis for hypothesis testing.
Findings – The positive nature of relationship between the relative price of large packages and the
proportion of large packages bought demonstrates the suboptimal nature of consumer decision making. The
inefficiency is partially attributable to the abundance of promotions, to consumers’ lack of price awareness,
and to the use of heuristics by consumers. Also, consumers who are prone to use promotions such as displays
and temporary price reductions tend to purchase larger packages. They are more likely to buy impulsively
and base their decisions on heuristics. In contrast, consumers who are influenced by featured price cuts and
who utilize coupons tend to purchase smaller packages.
Research limitations/implications – Data were obtained from grocery stores; only a single product
category was studied.
Practical implications – Offer coupons and advertise featured price cuts on small packages to increase the
sales of smaller packages. To move large packages successfully, retailers should rely more on in-store
displays and temporary price reductions.
Originality/value – The impact of price and promotions on package size propensity has never been
investigated. This study is also one of the few that uses a household-level analysis based on observable
purchase data for consumer packaged goods.
Keywords Promotions, Decision making, Price, Consumer packaged goods, Household-level analysis,
Package size, Scanner panel data
Paper type Research paper

1. Introduction
Addition and/or modification of product package characteristics, especially those related to
downsizing the package size, has been frequently observed in the USA consumer packaged
goods (CPG) marketplace over the last two decades (Cakir and Balagtas, 2014;
Wansink, 1996). The CPG product category has also evidenced increased spending on
store and non-store promotions, such as temporary price reductions and couponing
(Pan et al., 2004; Pauwels, 2007), as well as frequent changes in brand prices at stores. Recent
estimates suggest that price promotions account for more than 50 percent of the marketing
budget (Bogomolova et al., 2015). It is believed that these strategies are essential to maintain
store traffic and brand domination in an increasingly competitive marketplace (Gauri et al.,
2008). Thus, increased product packaging options along with constantly changing prices
and promotions are now realities for consumers when they visit grocery stores (Binkley and
Bejnarowicz, 2003; Yang and Raghubir, 2005). American Journal of Business
Vol. 32 No. 2, 2017
pp. 93-103
The author thank the Information Resources Inc. for providing the scanner panel data, and the two © Emerald Publishing Limited
1935-5181
anonymous reviewers for their comments and suggestions for revising the manuscript. DOI 10.1108/AJB-10-2016-0032
 AJB The manner in which consumers are likely to react to changes in price, promotion, and
32,2 package size has been researched extensively and from several perspectives in the
marketing literature. For instance, there is a large body of research that has investigated the
impact of price and promotions on brand choice and store choice (e.g. Gaudagini and
Little, 1983; Pan and Zinkhan, 2006). Another stream of research has focused on how
consumers are likely to process information about prices and promotions and how such
94 evaluations could impact consumer behavior (Danziger and Segev, 2006; Moon et al., 2006;
Ofir et al., 2008; Swaminathan and Bawa, 2005). Similarly, research on package size has
studied its influence on various aspects that include consumer inefficiency (Binkley and
Bejnarowicz, 2003; Gupta and Rominger, 1996) and usage volume (Wansink, 1996; Yang and
Raghubir, 2005).
Unfortunately, consumer responses to package size and price under different conditions
of promotions have not been studied to the best of our knowledge.
This paper explores how price and promotions influence the consumer propensity
(or consumer inclination) to purchase a certain package size (e.g. large or small). Past studies
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suggest that, for the CPG marketplace, using observable purchase data is more appropriate
than using an experimental or survey-based methodology for several reasons. Compared to
other product categories, CPG purchases tend to be more habitual, to involve a higher
frequency of store visits of smaller denominations, and to have a greater proportion of
unplanned and impulsive purchases compared to other product categories (Ngobo, 2011;
Reutterer et al., 2006; Wedel and Kamakura, 2000). Therefore, the scanner panel data
obtained from Information Resources Inc. (IRI) are used to test the various hypotheses that
are formulated based on a review of literature. The use of scanner panel data allows us to
conduct a household-level analysis, that is, based on observable purchase data collected at
grocery stores all across the USA.
Understanding the influence of price, promotion, and package size simultaneously on
consumer behavior is important for several reasons. Past research suggests that both price
perception and exposure to promotions influence package size selection (Yang and
Raghubir, 2005). Thus, understanding the impact of these three factors jointly on consumer
behavior would result in a more complete understanding of consumers and allow us to avoid
model specification error. By comparing the unit price across different package sizes and the
package size that consumers actually selected, our research also allows us to speculate
about the optimality of consumer decisions under different conditions of promotions.
From a practitioner’s perspective, our paper helps retailers to design appropriate
promotional strategies that selectively increase the sales of certain package sizes in
accordance with retailer or manufacturer objectives. In summary, our paper is likely to
benefit both marketing academics and practitioners.

2. Review of literature and hypothesis development

In this section, we present a theoretical framework and a conceptual model based on a
review of the literature. This model is used to hypothesize about the possible influence of
price and promotion on package size selection. We also discuss the manner in which the
constructs are operationalized in this study.

2.1 Dependent variable

The dependent variable in this study is package size propensity, or the propensity
of a household to purchase a certain package size (e.g. large or small). Since the
research objective is to utilize observable household data, the dependent variable is
conceptualized as a household’s behavioral propensity to purchase large packages.
We operationalize this construct by measuring the proportion of large packages
(in unit measure) that each household bought in a certain product category over a certain
 time period. In order to ensure that package size propensity is not influenced by The influence
short-term impulsive behavior, we use a three-year time period to operationalize of price and
behavioral propensity. promotion
2.2 Independent variables
In this section, we introduce the independent variables and discuss how these constructs are
operationalized. Based on a review of literature, we also hypothesize a relationship between 95
each independent variable and dependent variable, which is the proportion of large
packages bought by each household.
2.2.1 The relative price of large packages. Similar to past studies on package size
(Binkley and Bejnarowicz, 2003), this study uses the relative price of large packages as an
independent variable. In this study, the relative price of large packages is defined as the price
each household paid for large packages relative to the price paid for all packages over a three-
year time period. However, the price of a package is unlikely to remain constant across such a
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long time period. Therefore, the relative price of large packages is operationalized by
calculating the ratio of the average price (per unit measure) paid for large packages compared
to the average price paid for all purchases in the product category across all the purchase
occasions. Assuming that a consumer has bought an assortment of large and small packages,
a small relative price for large packages (below 1) would indicate that the consumer has paid
less per unit measure for large packages across the purchase occasions. Since the unit price of
large package sizes is generally lower than that of smaller packages, we would expect most
households to have a relative price measure, that is, lower than 1.
Past research into the CPG markets provides evidence that consumers often lack price
awareness (Capon and Kuhn, 1982; Dickson and Sawyer, 1990). Constant promotions
increase the complexity of markets and do not help consumers make optimal decisions.
The frequent occurrence of temporary price reductions and other sales promotions makes
accurate evaluation of price even more challenging for the consumers (Binkley and
Bejnarowicz, 2003; Gupta and Rominger, 1996). Additionally, consumers are likely to use
heuristics on routine purchase occasions such as grocery shopping (Narasimhan et al., 1996;
Yao and Oppewal, 2016). For instance, consumers who use volume discount heuristics tend
to believe that unit costs are lower for larger sizes ( Sprott et al., 2003; Wansink, 1996).
These consumers are likely to choose larger package sizes without evaluating the actual
unit price (Hardesty et al., 2007; Mägi and Julander, 2005). All of these factors make it
difficult for consumers to evaluate the price on every purchase occasion and to make
economically optimal decisions on a continual basis.
A negative relationship between the relative price and relative quantity bought is predicted
by an economic theory which assumes that, on each purchase occasion, consumers are aware
of the price ( Jenson and Grunert, 2014) and are motivated primarily by value considerations,
thus ensuring efficiency in consumer decision making. Such assumptions do not always hold
good in the CPG marketplace. Though CPG customers are motivated by value considerations,
purchase decisions in the CPG marketplace are likely to be based not on a thorough
assessment of unit prices on every purchase occasion, but on purchaser habits and on their
use of heuristics. In these types of markets, the relationship between the relative price of large
packages and the propensity to buy large packages is likely to be determined by prevalent
pricing and promotional practices in the marketplace. A negative relationship between the
relative price of large packages and the proportion of large packages bought would indicate
that, despite the lack of accurate consumer assessment of price, the marketplace is
economically efficient in terms of the price-quantity relationship. The use of heuristics does
not result in suboptimal decisions if larger packages are priced more favorably than smaller
packages and if, in these situations, consumers value larger packages more.
 AJB However, what could contribute to a positive relationship between the relative price of
32,2 large packages and the proportion of large packages purchased? The marketing literature
suggests that in many instances, promotions lead to quantity surcharge situations where
smaller packages are more favorably priced compared to larger packages. Such occurrences
are not uncommon and the reasons underlying such promotional decisions and their
consequences have been thoroughly discussed by Sprott et al. (2003). Even in the presence of
96 quantity surcharge, many consumers are likely to keep on purchasing larger packages due
to their reliance on heuristics and due to their lack of price awareness, resulting in
suboptimal consumer decision making. Thus, we hypothesize the following:
H1. There is a positive relationship between the relative price paid for large packages
(within a product category) and the proportion of large packages bought.
2.2.2 Proportion bought during sales promotions. This study also investigates the
relationship between consumers’ proneness to respond to various forms of sales promotion
and their proneness to buy a particular package size.
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Behavioral proneness to respond to a certain type of promotion (e.g. temporary price

reduction) is measured by calculating the proportion of purchases made by a household
within a certain product category, when that particular condition was applied (or when the
product was on sale). The types of sales promotions that are studied in this paper are: use of
manufacturer coupons, price cuts featured on flyers or newspaper inserts, in-store displays,
and temporary in-store price reductions.
The extensive literature on sales promotions in marketing is used to formulate
hypotheses relating promotions to package size selection. In general, research suggests that
promotions tend to increase consumer perceptions of deal value (Compeau and Grewal,
1998; Darke and Chung, 2005) and to increase the consumer sensitivity to price
(Bridges et al., 2006). Promotional activities are also likely to increase the perceived value of
a brand or package size and focus consumer attention on the economic benefits of purchase
(Raghubir, 2004). While the focus on value when a consumer encounters a promotion in the
CPG markets is indisputable, the research issue is how consumers determine the value in
that situation. Is the value assessed on the basis of a thorough assessment of unit prices
across all the package sizes after having considered various promotions? Or, alternatively, is
the value assessment situational in nature or based on some heuristic such as
“sale price must be a better value”? Based on the findings of past research on
promotions, we speculate that consumers are likely to process information differently in
response to different types of promotions.
Past studies indicate that coupon-prone households are likely to have a higher
involvement level, since an intention to utilize a coupon involve clipping a coupon and
following up with subsequent behavior at the store (Moon et al., 2006; Swaminathan and
Bawa, 2005). Users of coupons are more likely to be active searchers, motivated by an
economic incentive, and thus willing to expend greater cognitive effort (Raghubir, 2006).
Coupons often have the same face value irrespective of the package size over a minimum
package size that tends to exclude only the trial size in most cases. It follows then that in
certain cases, a coupon user may find a greater value by buying small packages.
For instance, using a 50¢ coupon on a 16oz package that normally costs $2.29 reduces the
unit price from 14.3¢ to 11.2¢ per oz. Using the same 50¢ coupon on a small 8oz package
costing $1.32 would reduce the unit price from 16.5¢ to 10.25¢ per oz. In this case, we have a
quantity surcharge situation; the smaller package has a higher value than the larger
package. Thus, we hypothesize the following:
H2. The greater the proportions of purchases (within a product category) that are based
on coupons, the less likely consumers are to purchase larger packages.
 Consumers who review featured price cuts at home and then visit a specific store to take The influence
advantage of price savings are also actively searching for deals. Like coupon users, of price and
consumers who shop based on featured price cuts are also likely to be motivated by the promotion
desire to save money. Moreover, since featured price cuts are used to increase store traffic
by increasing the sales of fast moving, smaller-sized packages (Kumar and Swaminathan,
2005; Narasimhan et al., 1996), retailers are more likely to offer reduced prices on small
packages when brands are featured. Thus, we hypothesize that consumers who take 97
advantage of featured price cuts are more likely to select smaller packages:
H3. The greater the proportions of purchases (within a product category) that are based
on featured price cuts, the less likely consumers are to purchase larger packages.
In contrast to information about coupons and featured price cuts, information about
temporary price reductions and displays is likely to be processed during the shopping visit
itself. The in-store nature of such decision making is likely to result in more impulse buying
and less information processing (Blattberg and Neslin, 1990; Narasimhan et al., 1996; Yao and
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Oppewal, 2016). In-store decision making is also likely to be associated with simpler heuristic-
based behavior (Mägi and Julander, 2005; Narasimhan et al., 1996). For instance, research
suggests that consumers tend to infer low prices or to infer price cuts after seeing end-of-aisle
displays (Raghubir, 2004). Past studies also report that placing sales signs can increase sales
even when the price does not decrease (Ahmetoglu et al., 2014). For buyers who are influenced
by in-store promotions, the assessment of value is likely to be influenced by situational
triggers or by the invocation of heuristics. Since volume discount heuristic (i.e. a perception
that “bigger is cheaper”) is prevalent in the CPG marketplace, we speculate the following:
H4. The greater the proportion of purchases (within a product category) based on
in-store displays, the more likely consumers are to purchase larger packages.
H5. The greater the proportion of purchases (within a product category) based on
in-store temporary price reductions, the more likely consumers are to purchase
larger packages.
2.2.3 Behavioral covariate. All of the hypotheses introduced thus far have been formulated
based on a consumer’s motivation to get the greatest value from purchases. However, non-
economic motivations such as convenience and planning horizon could also impact package
size selection. For instance, buying a bigger package could necessitate fewer trips to the
store. Concerns about running out of the product can also be alleviated by purchasing a
larger size (Wansink, 1996). On the other hand, larger packages tend to be bulkier and
heavier. They are more difficult to carry from the store and more challenging to store at
home. Another factor that affects size selection is the consumer planning horizon. Buyers
who do not plan their shopping carefully tend to “convenience shop,” to seek variety in
products, and to buy impulsively (Urbany et al., 1996). Determining which package size to
buy could be influenced by these non-economic motivations.
Several measures were considered as a behavioral covariate to address non-economic
motivations. In the purchase of salad dressing, product usage per person varied considerably
across households and household size was only moderately correlated (less than 10 percent)
with behavioral measures for such as number of store visits and annual consumption.
Therefore, household size was not used as a control factor in this research. However, behavioral
measures such as annual household consumption of the product category and the number of
store visits were strongly correlated (above 90 percent) and could be used as control factors.
We chose annual household consumption as a covariate since it directly measures
volume purchased – and purchase volume has been directly related to package size
selection. Annual household consumption was measured by calculating the total dollars
 AJB spent per year by each household. Heavier users of a product are likely to favor larger
32,2 packages for several reasons.
Purchasing large packages reduces the chance that a product will run out when it is needed.
Thus, buying large packages allows consumers to avoid inconvenient trips to the store
(Wansink, 1996). Large category users are also more likely to plan their purchases carefully.
They are also less likely to engage in convenience shopping or variety seeking. We therefore
98 hypothesize the following:
H6. Large category users are more likely to purchase larger packages.
The proposed model and the hypotheses are summarized in Figure 1.

3. Methodology
3.1 Product category selection and data
This paper uses household-level scanner panel data collected at grocery stores to calibrate the
model. Data about details of consumer responses (e.g. package size selected and quantity
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purchased) and of marketing stimuli (e.g. price paid and type of promotions used) are available
at the household level. The scanner data used here were obtained from IRI, one of the USA’s two

O
f
Relative price of H1(+)
large package size P
r l
o a
p r
o g
Proportion bought using H2 (–) r e
coupons t
i
o
n p
Proportion bought using H3 (–) a
features c
k
a
i g
n e
Proportion bought using H4 (+)
displays

u
n s
i i
Proportion bought using t z
H5 (+) e
temporary price
reduction

Figure 1.
The influence of price
and promotion on the
proportion of large Non-economic motivations
packages purchased annual consumption H6 (+)
 major providers of scanner panel data. The product category studied was shelf-stable salad The influence
dressing. The IRI data included data collected over three years from a representative sample of of price and
more than 10,000 panel members across the USA. In order to reduce the complexity of the promotion
analysis, only purchases of salad dressings bottled in plastic, rather than in glass containers
were considered. Purchases of plastic bottles constituted 44 percent of all shelf-stable salad
dressing purchases during this time frame. Infrequent purchasers, or those who bought fewer
than six bottles over the three-year period, were excluded from consideration, as were those who 99
bought only small containers or only large containers. Small containers, which accounted for
40 percent of purchases, were defined as those that held eight ounces of dressing. The other
60 percent of the purchases were 16oz bottles of dressing.
The final sample consisted of over 5,600 households. Each purchase occasion for every
consumer at each retail establishment was treated, initially, as an individual record.
The purchase data were then aggregated at the household level, and all the relevant
statistics (as discussed in the last section) were computed.
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3.2 Data analysis techniques

The dependent variable in the analysis was the proportion of large packages (in terms of
ounces of salad dressing) a household bought. The independent variables were the relative
price of large packages, the proportion of purchases made under various promotional
conditions: coupons, features, in-store displays, and temporary price reductions. Annual
household consumption of salad dressing was used as a covariate. A multiple regression
analysis was used to test the various hypotheses in this paper.

4. Results
4.1 Multiple regression analysis
The results of the analysis are reported in Table I. The prediction model was statistically
significant (F-value ¼ 349.91; p-value o0.0001) and accounted for over 27 percent of the
variance in the proportion of large packages bought by consumers. Thus, relative price of
large packages along with consumer proneness to use the four different types of promotions
are good predictors of package size propensity.

4.2 Multicollinearity
The presence of four different types of promotion proneness as independent variables raises
the issue to multicollinearity. Arguably, household proneness to using a certain type of

Variables Hypothesized Parameter t-values p-values VIF

relationship estimates
Relative price of large package H1 + 0.6189 18.05 o0.0001 1.0231
Proportion bought using coupon H2 − −0.1511 −10.50 o0.0001 1.0716
Proportion bought using features H3 − −0.3436 −22.60 o0.0001 1.2072
Proportion bought using display H4 + 0.1770 6.73 o0.0001 1.2161
Proportion bought using temporary price
reduction H5 + 0.4400 27.97 o0.0001 1.0734
Annual consumption H6 + 0.0007 12.91 o0.0001 1.0159
Criteria for accessing goodness of fit
1. F-value (6,5610) 349.91
2. p-value o0.0001
2
3. Adjusted R 0.2715 Table I.
Sample size 5,617 Results of multiple
Notes: Dependent variable: proportion of large-packages (in ounces) bought by households regression analysis
 AJB promotion (e.g. temporary price reduction) could also be associated with the usage of some
32,2 other form of promotion (e.g. using coupons), since the common motivation is to save money.
If such a trend was prevalent in this product category, some of the independent variables
would be highly correlated. The resultant intercorrelation of independent variables would
then compromise the results of hypothesis testing (Bhukya and Singh, 2015).
Table II reports the correlation matrix of the four variables related to promotion proneness.
100 The correlation coefficients range from 0.01 to 0.35 suggesting that intercorrelations among
promotion proneness constructs are unlikely to impact the results of the regression analysis.
Moreover, the variance inflation factor , which is an indicator of collinearity, ranges from
1.01 to 1.07 (please see Table I). All of these statistics strongly suggest the absence of
multicollinearity. The low correlations across the proneness of promotional tools are also
consistent with the body of literature that suggests that, in the CPG marketplace, pre-planners
tend to use different promotion tools than impulsive shoppers.

4.3 Hypothesis testing

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H1 is supported (t-value ¼ 18.05; p-value o0.0001), confirming that the relative price of
large packages is positively related to proportion of large packages bought. H2
(t-value ¼ −10.50; p-value o0.0001) and H3 (t-value ¼ −22.60; p-value o0.0001) are also
supported, indicating that households that use a larger proportion of coupons and features
are more likely to purchase smaller package sizes. Support is also established for H4
(t-value ¼ 6.73; p-value o0.0001) and H5 (t-value ¼ 27.97; p-value o0.0001), indicating that
households in which a larger proportion of the product is purchased in response to store
displays and temporary price reductions are more likely to purchase larger packages.
Finally, households with greater annual consumption are more likely to purchase larger
package sizes: H6 (t-value ¼ 12.91; p-valueo0.0001).

5. Discussion
This study demonstrates the utility of a model that simultaneously considers how price,
various forms of sales promotion, and behavioral covariates (such as annual consumption
level) influence package size selection. An examination of the results reveals several interesting
patterns. Heavy users of a product class are likely to purchase larger packages because they
fear having insufficient product on hand. Good value (Granger and Andrew, 1972), as well as
the convenience of buying a single larger package rather than several smaller ones, are also
purchase motivators. We speculate that the continual purchase of larger packages could also
contribute to the subsequent usage of a volume discount heuristic.
An interesting finding of this research is the positive relationship between the relative
price paid for large packages and the proportion of large packages bought. Such a pattern
demonstrates the suboptimal nature of consumer decision making in a marketplace with
everchanging prices, promotions, and package sizes. Our conceptual model and results
are consistent with past research that report that consumers lack price awareness

Proportion Proportion Proportion Proportion bought

Pearson correlation bought using bought using bought using using temporary price
coefficient N ¼ 5,617 coupon features display reduction

Proportion bought using coupon 1.0000 0.0153 0.2043 0.0760

Proportion bought using features 0.0153 1.0000 0.3490 0.2331
Table II. Proportion bought using display 0.2043 0.3490 1.0000 0.0274
Results of correlation Proportion bought using
analysis temporary price reduction 0.0760 0.2331 0.0274 1.0000
 (Capon and Kuhn, 1982; Dickson and Sawyer, 1990), and that such consumers frequently use The influence
heuristics such as a volume discount heuristic (Mägi and Julander, 2005). Such reliance on of price and
heuristics is likely to increase when consumers are exposed to an everchanging option promotion
(DelVecchio and Smith, 2005; Raghubir, 2006; Yao and Oppewal, 2016). However, the pricing
strategies of manufacturers and retailers also contribute to market inefficiency or the
positive relationship between price and volume. In order to promote store traffic, retailers
often promote and reduce prices of fast moving smaller packages. Such promotions could 101
create quantity surcharge situations. We have also shown how the use of a fixed value
coupon could also lead to a quantity surcharge situation. The results of this research are
therefore consistent with past research that suggests that the frequent use of promotional
tools increases the inefficiency in consumer decision making (Sprott et al., 2003).

6. Practical implications
The findings of this paper can help marketers in several ways. The results suggest that
marketers will benefit by offering coupons and by advertising featured price cuts to target
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consumers who actively seek out promotions and who search for deals. Retailers could
attract greater traffic to their stores and manufacturers could increase sales of smaller
packages if these packages were priced more favorably than larger packages. On the other
hand, to move large packages successfully, retailers should rely more on in-store displays
and on temporary price reductions. These tools are likely to influence more passive
consumers who make in-store stimulus-based judgments. Since point-of-purchase
information is likely to dominate value judgments for this category of consumers, they
will tend to perceive more “deal value” in these modes of sales promotion (Compeau and
Grewal, 1998; Darke and Chung, 2005).
On the other hand, marketers must also guard against the negative publicity that could
be generated due to the perception of inefficiency in the marketplace. As pointed out by
Sprott et al. (2003), inefficiency and quantity surcharges are often caused by promotions that
are designed to build store traffic and increase sales. There is no evidence that these
strategies are meant to exploit consumer’s lack of price awareness or use of heuristics.

7. Limitations
While the findings of this paper are intriguing and exciting, several avenues need to be
explored further. Our research uses behavioral data obtained from stores, which have some
limitations. For instance, it is not possible to conclude where the information about featured
price cuts is processed by consumers. Is it processed before coming to the store as suggested
in H3. However, past research (Kumar and Swaminathan, 2005; Narasimhan et al., 1996)
corroborates our belief that information about featured price cuts are more likely to be
processed prior to store visits. It must also be noted that the data used in this study were
collected in grocery stores only. Investigating the pattern of purchases across different types
of stores (e.g. drug stores, warehouse stores) could not be explored. However, since salad
dressing is bought mostly in grocery stores, our results are likely to be useful to marketers. It
is possible that purchase motivations may vary across product categories. Validating the
model across multiple product categories could provide useful insights. Finally, the weak
correlation between the average consumption and the household size is surprising. Since over
80 percent of the consumers do not consume salad dressing (Bigornia et al., 2016), it is possible
that certain family members within large households do not use salad dressing. If so, the
average consumption per household will not increase substantially with the increase in
household size. Future research could investigate whether this relationship is product-specific
or not. Although this paper is a modest attempt to investigate consumer responses to price,
sales promotions, and package size for CPG products, we hope that it will lead to more
discussion and research in this vital area of marketing.
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Corresponding author
Amit K. Ghosh can be contacted at: a.ghosh@csuohio.edu

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