Sales Promotion Effectiveness The Impact of Consum

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Sales promotion effectiveness: The impact of consumer differences at an

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Article in Journal of Product & Brand Management · May 2005

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Sales Promotion Effectiveness:
The Impact of Culture at an Ethnic-Group Level
Simon Kwok & Mark Uncles
School of Marketing
University of New South Wales
Sydney NSW 2052
Australia
School of Marketing Working Paper 02/4

2002
Address for correspondence:
Professor Mark Uncles, School of Marketing, University of New South Wales, Sydney 2052,
New South Wales, Australia; Telephone: +61-2-9385-3510; Fax: +61-2-9663-1985; Email:
m.uncles@unsw.edu.au
Sales Promotion Effectiveness: The Impact of Culture at an Ethnic-Group Level
Abstract
There is considerable interest and debate over the effectiveness of sales promotion. Previous
studies have shown that sales promotions are more effective when they provide benefits that
are congruent with those of the promoted product. This study explores and extends the
congruency framework by analysing the impact of culture at an ethnic group level. The
purpose is to investigate the popular assumption that cultural differences exist at this level
and to see whether these differences have an impact on sales promotion effectiveness. A
quasi-experimental design is used to test a series of hypotheses based on a sample of Anglo-
Australians and Chinese-Australians. It is found that despite the existence of cultural
differences at an ethnic level, culture does not appear to have a significant impact on
consumer responses to sales promotion. It is also found that the congruency effects between
product and promotion type are weak and may be non-existent in some cases. Finally, the
study also provides evidence that further validates a scale used for the measurement of
culture.
Keywords: Culture, Ethnicity, Sales Promotions, Congruency Theory
1. Introduction
The widespread use of consumer sales promotions has sparked considerable interest and
debate over their effectiveness. Critics argue that sales promotions are ineffective as they
make consumers more promotion prone, resulting in market share losses in the long run
(Ehrenberg, Hammond and Goodhardt, 1994; Totten and Block, 1987). However, other
researchers have shown that sales promotions lead to real increases in sales and profits (Dhar
and Hoch, 1996; Hoch, Dreze and Purk, 1994). This discrepancy suggests that there are
conditions and factors that can influence the effectiveness of sales promotions. For instance,
it has been shown that sales promotions are more effective when they provide benefits that
are congruent with those of the promoted product (Chandon, Wansink and Laurent, 2000).
This paper explores and extends the congruency framework by incorporating the impact of
culture.
Culture has an impact on many aspects of consumer behavior, from service expectations to
consumer innovativeness. It also has been suggested that an understanding of culture can
assist in making marketing decisions, such as whether to pursue standardised or localised
strategies – something that has been discussed recently in the context of retailing strategies
(Mooij and Hofstede, 2002). However, many cross-cultural studies in consumer marketing
have only examined the impact of culture across nations. It has been argued that cultural
differences may also exist at an ethnic level, for instance among Caucasian-Americans,
Hispanic-Americans, African-Americans, North African-French, Italian-Australians, etc.
(Tan and McCullough, 1985; Donthu and Yoo 1998). This is reflected in the growth of
interest in ethnic marketing by both researchers (Lee, Fairhurst and Dillard, 2002) and
practitioners (Jarvis, 2002). However, there is limited empirical research focusing on culture
at an ethnic-group level and its impact on consumer behaviour.
The purpose of this study is to investigate cultural differences at this level and to gauge the
impact on the congruency framework of sales promotion effectiveness. The study was
undertaken in Australia. As in many nations, increasing use is being made of consumer sales
promotions by a diverse ethnic mix of consumers (Lyons, 2002; Millett, 2002).
1
This study makes several important contributions to both marketing theory and practice.
Firstly, although Chandon, Wansink and Laurent (2000) attempted a cross-national
replication, their analysis did not specifically explore the impact of culture. Thus, by
incorporating culture, this study redresses one of the limitations of the earlier study and helps
extend the congruency framework of sales promotion effectiveness. Secondly, this study is
one of the few pieces of research in marketing that empirically measures culture at an ethnic-
group level. It provides evidence to examine the popular assumption that cultural differences
exist at this level. Thirdly, the study also contributes to theory development by providing
further validation of a new scale for measuring culture in a consumer context, namely the
CVSCALE (Yoo, Donthu and Lenartowicz, 2001). Finally, the study provides insights to
marketing practitioners in the design of sales promotion strategies. It addresses the issue of
whether to standardise or localise sales promotions between targeted ethnic markets. It should
be noted that the focus of this study is on consumer sales promotions for packaged goods
The paper is organised as follows. The next section provides a review of the sales promotions
literature and considers the potential impact of culture. Hypotheses are presented in section
three. Key measures and stimuli are discussed next. In sections five and six, the methodology
and results of the study are described. A discussion of the findings is presented in section
seven. The paper concludes by highlighting the limitations and opportunities for future
research..
2. Sales Promotion and the Potential Impact of Culture

2.1 Types of Sales Promotion
The majority of past studies on the effectiveness of consumer sales promotion have focused
on monetary sales promotions (Dickson and Sawyer, 1990; Dhar and Hoch, 1996; Hoch,
Dreze and Purk, 1994). However, in practice, a range of both monetary and non-monetary
sales promotions are used (Campbell and Diamond, 1990; Tellis 1998), and there are
important differences between them. Monetary promotions (e.g., shelf-price discounts,
coupons, rebates and price packs) tend to provide fairly immediate rewards to the consumer
and they are transactional in character; non-monetary promotions (e.g., sweepstakes, free
gifts and loyalty programs) tend to involve delayed rewards and are more relationship-based.
In assessing the effectiveness of sales promotions, it is necessary to examine both types.
2.2 Benefits of Sales Promotion

Sales promotions can offer many consumer benefits. Past studies have concentrated on
monetary saving as the primary consumer benefit (Blattberg and Neslin, 1993). However,
there is evidence to suggest consumers are motivated by several other benefits, including the
desire for: savings, quality, convenience, value expression, exploration and entertainment.
These benefits are further classified as either utilitarian or hedonic (Babin, Darden and
Griffin, 1994; Hirschman and Holbrook, 1982). Utilitarian benefits are primarily functional
and relatively tangible. They enable consumers to maximise their shopping utility, efficiency
and economy. In general, the benefits of savings, quality and convenience can be classified as
utilitarian benefits. By contrast, hedonic benefits are more experiential and relatively
intangible. They can provide consumers with intrinsic stimulation, fun and pleasure.
Consistent with this definition, the benefits of value expression, exploration and
entertainment can be classified as hedonic benefits.
2.3 Promotion Types and Promotion Benefits
2
Based on the distinction between the types of sales promotions and promotion benefits,
Chandon Wansink and Laurent (2000) showed that monetary promotions provide more
utilitarian benefits whilst non-monetary promotions provide more hedonic benefits. These
relationships are a matter of degree rather than absolutes; for example, coupon promotions
(i.e., a monetary promotion) may still provide some hedonic benefits such as the enjoyment
in redemption, although its main benefit of saving is utilitarian (Mittal, 1994).
2.4 Congruency Theory and Sales Promotion

The basic principle of congruity states that changes in evaluation are always in the direction
that increases congruity with the existing frame of reference (Osgood and Tannenbaum,
1955). In other words, people have a natural preference for consistent information. The
principle has been examined in many marketing contexts, including studies of brand
extensions and advertising appeals. Applying the congruity principle to sales promotions, it is
expected that sales promotions will be more effective when they provide benefits that are
compatible with the benefits sought from the promoted product. The relevance of this
principle is evident from some past studies of sales promotions. For example, Roehm, Pullins
and Roehm Jr (2002) showed that loyalty programs are more successful if they provide
incentives that are compatible, rather than incompatible, with the brand. Likewise, Dowling
and Uncles (1997) suggest the effectiveness of loyalty programs is enhanced if program
benefits directly support the target product’s value proposition.
Congruency effects for sales promotions were directly tested and confirmed by Chandon,
Wansink and Laurent (2000), who showed that: (a) monetary promotions are more effective
for utilitarian products as they provide more utilitarian benefits, which are compatible to
those sought from utilitarian products; and (b) non-monetary promotions are more effective
for hedonic products as they provide more hedonic benefits, which are compatible to those
sought from hedonic products. For example, price cuts are more effective than free gifts for
influencing brand choice of laundry detergent (i.e., a utilitarian product), whereas
sweepstakes are more effective than price cuts for influencing brand choice of chocolates
(i.e., a hedonic product). However, it is noted that there are other factors that may impact on
the congruency effects, including the product life cycle, purchases situations and consumer
demographics. Another possible factor is culture, which is the focus of this study.
2.5 Culture and Ethnic Groups

Culture is difficult to define, but typically it is seen as a set of norms and beliefs that are
shared amongst a group of people and that provide the guiding principles of one’s life
(Goodenough, 1971; Kroeber and Kluckholn, 1952; Schwartz and Bilsky, 1987 and 1990).
Here, culture is defined as the way of life of people grouped by ethnicity, including shared
norms and beliefs that can impact on behavior. This definition is appropriate for several
reasons. Firstly, it implies that culture encompasses all the norms and beliefs of a society – it
is the total way of life in a society. As Triandis (1989) suggests, these societal norms and
beliefs will ultimately have an impact upon the dispositions and behaviours of society
members. Thus, the definition allows for the possibility of culture to have an impact on
consumer behaviour.
Secondly, the definition is flexible in allowing for different levels of culture. This is evident
by the notion of “society” within the definition, which means culture is not necessarily
restricted to a country basis. This is important given the focus of this study is not on national
culture. Furthermore, it has been suggested that equating culture with nations can be
inappropriate (Lenartowicz and Roth 1999; Usunier, 2000). Instead, culture can be
3
conceptualised at different levels and in a variety of contexts (Dawar and Parker 1994;
Hofstede, 1991) For instance, culture defined by age or music, as in youth or jazz culture.
In this study, culture is examined at the ethnic-group level within the domestic Australian
context. Ethnic groups can be considered as subcultures within a country. They preserve the
main characteristics of the national culture from which they originate but also develop their
own unique norms and beliefs (Steenkamp, Hofstede and Wedel, 1999; Usunier 2000).
Indeed, “central to any ethnic group is a set of cultural values, attitudes and norms” (Tan and
McCullough, 1985). Each ethnic group constitutes a unique “community because of common
culture” (Lee, Fairhurst and Dillard 2002). Thus, the study of culture by ethnicity within a
domestic context is feasible and appropriate since each ethnic group will have its own unique
set of cultural values. In fact, it has been suggested that intra-country variations of culture can
be as large as the variation across countries (Au, 1999). This is particularly the case in the
Australian context given its increasingly diverse ethnic mix (Millett, 2002). In effect, a single
national culture to represent Australia is likely to be inappropriate (Bochner and Hesketh,
1994).
2.6 Culture, Ethnic Groups and Sales Promotion

As Nakata and Sivakumar (2001) noted, the impact of culture has been well documented in
many areas of marketing, including consumer responses to sales promotion. For example,
Bridges, Florsheim and Claudette (1996) argued that “there is a need for research directed at
understanding culturally-driven responses of consumers to promotional activities”. They
showed that in the service context, cultural values affect the effectiveness of promotion
strategies. This is supported by McCort and Malhotra (1993) who claim that “as cultures
differ in their value systems, evaluations of marketing communications will differ”. However,
most of these assessments have been conducted at a national level, whereas there is also a
need for research to examine the effects of promotional activities on cultural groups within
countries (Albaum and Peterson, 1984). There has been some consideration of this in
previous studies. For example, it has been argued that “various cultural sub-groups should
react differently to different promotion strategies” (Laroche, Pons and Turnel, 2002) and
Green (1995) found that coupons are relatively less effective for African-Americans than
Anglo-Americans. Nevertheless, evidence at an ethnic-group level remains limited.
2.8 Cultural Dimensions

Given the potential relevance of culture, a basis is required for assessing its impact. Here use
is made of the five cultural dimensions popularised by Hofstede (1991): power distance,
uncertainty avoidance, individualism-collectivism, masculinity-femininity and the Confucian
dynamism. Alternative dimensions have been suggested by other researchers (Clark, 1990),
but Hofstede’s dimensions are by far the most widely accepted (Sondergaard, 1994) and have
been applied in many cross-cultural studies (Steenkamp, Hofstede and Wedel, 1999; Lynn,
Zinkhan and Harris, 1993; Roth, 1995). Admittedly, there are several poignant criticisms of
Hofstede’s dimensions. Firstly, his original study is relatively old and may be outdated.
Secondly, the dimensions were developed from work-related values and thus, they may not
fully apply to a consumer context. However, despite these limitations, Hofstede’s dimensions
remain conceptually valid for explaining cultural differences.
The appropriateness of these dimensions for this study is supported by the suggestion that
“there are specific relationships between (Hofstede’s) cultural dimensions and the appropriate
promotional policy” (Kale and McIntyre, 1991). Indeed, one of the aims of this study is to
verify whether there are any relationships between the cultural dimensions and consumer
4
responses to sales promotion. Furthermore, although developed for cross-country
comparisons, Hosfstede’s dimensions are believed to be capable of explaining intra-country
variations (Au, 1999), including at an ethnic-group level.
3. Hypotheses
In general, it is hypothesised that differences based on Hofstede’s (1991) five cultural
dimensions can lead to relative differences between ethnic groups in their preference for
promotion types. In effect, within the congruency relationships established between product
and promotion types, ethnic groups may differ in their relative choices of monetary and non-
monetary promotions. For example, whilst monetary promotions might be more effective for
utilitarian products, the choice share of monetary promotions may be higher for one ethnic
group than another due to cultural differences.
In the following, the hypotheses are detailed based around the five cultural dimensions. It is
should be kept in mind that the theoretical strength of the hypotheses is not equal across the
five dimensions. For example, hypotheses regarding collectivism have a stronger theoretical
basis than hypotheses regarding power distance. Also, as is in the nature of any testing of this
kind, it is possible to conceive of alternative arguments. However, all five dimensions have
been included to ensure the study is comprehensive.
3.1 Power Distance

Power distance deals with the acceptability of social inequalities, such as in power, wealth
and status (Nakata and Sivakumar 2001). In high power distance cultures, inequality is
prevalent and accepted. Indeed, “privileges and status symbols are both expected and
desired” (Hofstede, 1991). Consumers in such cultures are thus likely to be more responsive
to sales promotions that contain differential treatment. These mainly involve non-monetary
promotions, in which differential treatment may occur by purchase value (e.g., free gifts and
reward programs) or by chance (e.g., sweepstakes). In contrast, cultures with lower power
distance are less tolerant of inequalities and special privileges (Hofstede, 1991). Consumers
in such a culture would have a relatively higher preference for sales promotions that offer
equal rewards for everyone. These mainly involve monetary promotions, such as price
discounts and coupons, as they are generally available with the same level of benefit offered
to everyone.
Hypotheses 1A : Monetary promotions are more effective for low power distance cultures
relative to high distance power cultures.
Hypotheses 1B : Non-monetary promotions are more effective for high power distance cultures
relative to low distance power cultures.
3.2 Uncertainty Avoidance

Uncertainty avoidance deals with the level of discomfort regarding future uncertainties
(Nakata and Sivakumar 2001). Although not equivalent, it is closely related to risk aversion.
In high uncertainty avoidance cultures, there is a tendency to “prefer stable situations and
avoid risk” (Usunier, 2000). Thus, to the extent that uncertainty avoidance is related to risk
aversion, such cultures would prefer promotions that offer more tangible and immediate
rewards (e.g., price discounts). This is expected since such rewards are more certain and
involve minimal amounts of risk. On the other hand, cultures with low uncertainty avoidance
are more risk tolerant and see opportunities within future uncertainties (Nakata and
Sivakumar 2001). In fact, they may even be considered as risk seeking given that cultures
5
with low uncertainty avoidance have been shown to exhibit higher levels of innovativeness
(Steenkamp, Hofstede and Wedel, 1999). Thus, consumers of such a culture will be more
accepting of promotions that offer relatively less tangible and long-term rewards (e.g.,
sweepstakes and loyalty programs).
Hypotheses 2A : Monetary promotions are more effective for high uncertainty avoidance
cultures relative to low uncertainty avoidance cultures.
Hypotheses 2B : Non-monetary promotions are more effective for low uncertainty avoidance
cultures relative to high uncertainty avoidance cultures.
3.3 Individualism/Collectivism
Individualism refers to the degree of distance in social relationships (Nakata and Sivakumar
2001). It has been suggested that relationships “play an important role in the search and
choice processes” of consumers (Doran, 1994). Thus, the extent of individualism may affect
consumer choices between different types of promotions. Individualistic cultures have distant
social relationships, in which personal goals are favoured over group needs (Watkins and Liu,
1996). Value is placed on self-interest and independence (Gurhan-Canli and Maheswaran,
2000), as well as pleasure (Triandis and Hui, 1990). In addition, individualistic cultures
emphasise differentiation (Aaker and Maheswaran, 1997) and the ability to express one’s
uniqueness (Watkins and Liu, 1996). Given these characteristics, individualistic cultures
might be more receptive to non-monetary promotions since the associated hedonic benefits
are entertaining and more experiential. Furthermore, hedonic benefits can provide intrinsic
value to individuals and provide an opportunity for self-expression.
In contrast, less individualistic (or more collectivistic) cultures are characterised by close
relationships and interdependence (Fletcher and Brown, 1999). There is strong emphasis on
conforming to in-groups, which are typically close social groups such as family and friends
(Hofstede, 1991). At the same time, entry and exit to other groups is difficult and rare
(Watkins and Liu, 1996). Thus, collectivistic cultures can be expected to be less responsive to
relationship building promotions (e.g., free gifts and reward programs) since they will be
reluctant to forge a relationship with an out-group. Instead, collectivistic cultures may be
more likely to respond to monetary promotions since the benefits provided are more common
(e.g., conform to group norms) and are more readily shared amongst the in-group (e.g.,
savings and quality).
Hypotheses 3A : Monetary promotions are more effective for collectivistic cultures relative to
individualistic cultures.
Hypotheses 3B : Non-monetary promotions are more effective for individualistic cultures

relative to collectivistic cultures.
3.4 Masculinity/Femininity
Masculinity refers to the tendency to strive for personal achievement and performance
(Cutler, Erdem and Javalgi, 1997; Nakata and Sivakumar, 2001). In more masculine cultures,
strong values are placed on “materialistic success and assertiveness” (Fletcher and Brown,
1999). It can be argued that consumers in masculine cultures are more likely to respond to
monetary promotions, since the more tangible and transactional-based benefits can satisfy
their need for personal and materialistic success. At the other end of the spectrum, less
masculine (or more feminine) cultures emphasise the values of nurturing, caring for others
6
and the quality of life (Nakata and Sivakumar 2001). There is relatively less emphasis on
personal and materialistic gains. Instead, “people and relationships are important” (Hosfstede,
1991) and “group oriented harmony” is preferred (Cutler, Erdem and Javalgi, 1997). Thus,
feminine cultures are expected to be more responsive to non-monetary promotions since the
benefits offered are more relationship focused.
Hypotheses 4A : Monetary promotions are more effective for masculine cultures relative to
feminine cultures.
Hypotheses 4B : Non-monetary promotions are more effective for feminine cultures than
masculine cultures.
3.5 Confucian Dynamism

The final dimension of Confucian dynamism concerns time orientation and is bipolar.
It has been suggested that the way consumers “understand and allocate time may help explain
differences in consumer behaviour across cultures” (Brodowsky and Anderson, 2000). The
higher or positive end is related to a future oriented perspective with values placed on
persistence and loyalty (Fletcher and Brown, 1999). Consumers in such cultures are more
willing to make short-term sacrifices or investments for long term gains (Nakata and
Sivakumar 2001). This is supported by research studies which have shown that people with a
future orientation have a preference for delayed rewards (Klineberg, 1968). In effect,
consumers in cultures high on Confucian dynamism are expected to be more responsive to
non-monetary promotions such as sweepstakes and loyalty programs, since many of the
rewards are long term and loyalty-based (Foxman, Tansuhaj and Wong, 1988).
In contrast, the lower or negative end is characterised by a past oriented perspective, with an
emphasis on traditions (Fletcher and Brown, 1999). People in such cultures favour “short-
term planning and more immediate financial gains” (Nakata and Sivakumar, 2001). This is
supported by the fact that people with a past orientation are less likely to save money for the
future (Spears, Lin and Mowen, 2001). Thus, consumers of cultures low on Confucian
dynamism are expected to react relatively poorly towards non-monetary promotions due to
the delayed gratification involved (Foxman, Tansuhaj and Wong, 1988). Instead, they are
expected to favour monetary promotions given the benefits are more immediate and
transactional.
Hypotheses 5A : Monetary promotions are more effective for cultures low on the Confucian
dynamism relative to cultures high on the Confucian dynamism.
Hypotheses 5B : Non-monetary promotions are more effective for cultures high on the
Confucian dynamism relative to cultures low on the Confucian dynamism.
The ten hypotheses associated with the five cultural dimensions are summarised in Figure 1.
Each cultural dimension is considered one-by-one.
7
Figure 1: Summary of Hypotheses
• Low power distance • High power distance
Cultural • High uncertainty avoidance • Low uncertainty avoidance

Dimensions • Collectivistic • Individualistic
(considered
individually) • Masculine • Feminine
• Low Confucian • High Confucian
Sales
Promotions Monetary Promotions Non-monetary Promotions
and (with utilitarian benefits) (with hedonic benefits)
Benefits
Congruency
Effects Utilitarian Products Hedonic Products
4. Measurement
To test the hypotheses, there are two pretests and one main experiment. However, it is first
necessary to discuss the stimuli and measurement scales. This is summarized in Table 1 and
detailed below.
Table 1: Summary of Measures
Item Measures/Source Area of Application

Sales promotion benefits • 18-item benefit scale • pretest one
• 3-item overall evaluation scale
(Chandon, Wansink and Laurent, 2000)
Product category stimuli • 4-item utilitarian index score • pretest two
(Batra and Ahtola, 1990) • main experiment
Brand stimuli • Secondary research • pretest two
(Burton, 2001) • main experiment
Promotion stimuli • Secondary research • pretest one
• main experiment
Culture • 26-item CVSCALE • main experiment
(Yoo, Donthu and Lenartowicz, 2001)
Sales promotion • Brand choice • main experiment
effectiveness (market shares)
8
4.1 Sales Promotion Benefits
Sales promotion benefits are defined and classified in this study according to the scale
developed by Chandon, Wansink and Laurent (2000). The scale indicates six main benefits,
which can be classified as either utilitarian or hedonic. Specifically, the benefits of savings,
quality and convenience are classified as utilitarian, whilst the benefits of value expression,
exploration and entertainment are hedonic. A direct replication of these classifications is
appropriate as the scale has been shown to be valid and maintaining scale consistency can
enhance the comparability of final results with the original research (Churchill, 1979). A
pretest is conducted to confirm the classification of benefits in the Australian context. The
measures for the pretest are the same 18-item agree/disagree scales used in the original study.
4.2 Product Category and Brand Stimuli

Utilitarian and hedonic products are used as stimuli in the main experiment. In the past,
researchers have used a variety of products to represent these two categories. For example,
Hirschman and Holbrook (1982) suggested that washing machines and other durables are
utilitarian products, whereas movies and fashion items are hedonic.
The product categories used in this study are mostly derived from those used by Chandon,
Wansink and Laurent (2000). Specifically, laundry detergent, AA batteries and film are
selected as utilitarian products, whilst chocolates, ice-cream and biscuits 1 are selected as
hedonic products. This degree of replication helps to ensure consistency. A pretest described
later is used to verify the utilitarian and hedonic nature of the pre-selected product categories.
In measuring the degree of utilitarianism and hedonism of a product, an adaptation of the
scale by Batra and Ahtola (1990) is used. Specifically, products are classified as either
utilitarian or hedonic based on a utilitarian index score. The index consists of 9-point
semantic differential scales on two hedonic items of “fun/not fun” and “pleasant/unpleasant”,
and two utilitarian items of “useful/useless” and “wise/foolish”.
Within each of these product categories, brands of relevance to Australian consumers are
selected. Furthermore, only brands with a high level of customer-based brand equity are used
as the congruency effects are expected to be strongest for high equity brands 2 . High equity
brands tend to be well-known national brands with high market shares. These were identified
from pretests based on the brands with the highest market shares in Australia for each product
category, as reported by Retail World (Burton, 2001).
4.3 Promotion Stimuli

Examples of monetary and non-monetary promotions are used as stimuli for both the pretests
and the main experiment. The stimuli for monetary promotions are shelf-price discounts and
price packs 3 , and for non-monetary promotions they are sweepstakes and free gifts. These
promotion techniques are appropriate for several reasons. Firstly, they correspond to those
used in earlier research and thus, consistency can again be maintained (e.g., Dickson and
Sawyer, 1990; Dhar and Hoch, 1996; Huff and Alden, 1998). The techniques are also
appropriate as they are commonly used in Australia and are also common for the pre-selected
product categories. In contrast, alternatives such as coupons are inappropriate since coupon
1
Biscuits did not form part of the earlier study but are included as an appropriate example of a hedonic product
in Australia.
2
This decision was made because the focus of this study is the impact of culture and not the effect of brand
equity per se.
3
Price packs, as defined by Tellis (1998), are monetary promotions that offers savings through multiple packs
(e.g., two for the price of one) or enlarged packs (e.g., contains 50% more).
9
usage is relatively low in Australia. Loyalty programs are also unsuitable given that there are
few loyalty programs for the product categories selected for this study. The nature of the pre-
selected promotion techniques (i.e., monetary or non-monetary) is verified in a pretest.
Specific examples of the four promotion techniques are used in the main experiment. They
are drawn from currently offered promotions in the product categories to ensure realism. This
involved the use of a combination of secondary data and judgement. Specifically, the
examples are derived from reviews of weekly supermarket catalogues and from direct
observations in supermarkets. Judgment is then applied to determine the most typical
examples representing each promotion technique. Consideration is also given to the fact that
monetary promotions will be preferred over non-monetary promotions of the same nominal
value (Campbell and Diamond, 1990). This is due to the time value of money and the
relatively higher effort required for non-monetary promotions (Soman, 1998). Thus, another
criterion for identifying the examples of each promotion technique is that in general, the
nominal value of non-monetary promotions will need to be greater than monetary
promotions.
4.4 Culture
Culture is measured using a personality-centered approach based on direct value inference
(Lenartowicz and Roth, 1999). In particular, use is made of the CVSCALE proposed by Yoo,
Donthu and Lenartowicz (2001). This is an adaptation of Hofstede’s scale; it consists of 26-
items, measured by 5-point Likert scales, relating to Hofstede’s five cultural dimensions (see
Appendix A). It allows culture to be measured at the individual level and then aggregated to
form groups at a chosen level for comparison. This is appropriate as it recognises that
members of a society may not share the same cultural values (Au, 1999) and it also allows
different ethnic groups within one country to be analysed. As suggested by Yoo, Donthu and
Lenartowicz (2001), the CVSCALE is useful for analysing cultural values in a heterogeneous
country and thus, the scale is particularly relevant for this study. Furthermore, the items of the
scale have been adapted to suit the consumer context. This reduces the negative impact of
using Hofstede’s measures, which were based on work-related values. Finally, the reliability
and validity of the CVSCALE have been shown to be robust in multiple studies across
different samples, including validation studies involving both student and non-student
respondents from across America, Korea, Brazil and Poland (Yoo, Donthu and Lenartowicz,
2001). The CVSCALE has also been applied in cross-cultural research (Yoo and Donthu,
2002). Thus, there is strong evidence to support the use of this scale. Its reliability and
validity is further tested in this study.
4.5 Sales Promotion Effectiveness

There are various ways to define and measure the effectiveness of sales promotions. The
measures typically used are short-term measures, as sales promotions are mostly used to
produce short-term effects. This includes measuring the effectiveness of sales promotions by
sales volume (Dhar and Hoch, 1996), profits (Hoch, Dreze and Purk, 1994) and consumer
usage of the promotion (Babaku, Tat and Cunningham, 1988). However, it has been noted
that a “brand’s sales volume is by far the best measure of the performance of a sales
promotion” (Totten and Block, 1987). For the purposes of this study, the effectiveness of
sales promotions is measured by market share, which is a proxy for sales volume. Market
shares are calculated based on choices for promotion types, made under the conditions of the
quasi-experiment. The effectiveness of sales promotions is then determined by a comparison
between the choice shares of promotion types across different products. This is consistent
with Chandon, Wansink and Laurent (2000).
10
5. Methodology and Pretests
The sample is described, followed by a summary of the pretests. Then the main experiment is
introduced.
5.1 Samples
The two ethnic groups of Anglo-Australians and Chinese-Australians are selected for
investigation. The source countries of these groups differ markedly in terms of Hofstede’s
(1991) cultural dimensions. Relatively, China is seen as: high power distance, low on
uncertainty avoidance, collectivistic, feminine and high on the Confucian dynamism, whereas
Australia is: low power distance, high on uncertainty avoidance, individualistic, masculine
and low on the Confucian dynamism.
Whilst these differences are found at a very broad national level, it is expected that the main
differences will also be evident at an ethnic level and hence facilitate the testing of the
hypotheses. Previous studies of Anglo-Australians and Chinese-Australians, and North-
Americans and Canadian-Chinese, support this belief (Bochner and Hesketh, 1994; Doran,
1994). However, rather than merely rely on previous studies, the differences between the two
ethnic groups are derived empirically in the present study (see section 6.2).
The ethnic samples used for both pretests and the main experiment are drawn from
undergraduate students. Although there are criticisms over the validity and generalisability of
student samples (Peterson, 2001), the main purpose of this study is theory testing and not
effects application. Thus, the use of a homogeneous sample such as students is acceptable and
indeed appropriate, as it reduces variability and the impact of irrelevant factors (Calder,
Phillips and Tybout, 1981). Furthermore, the use of students is only inappropriate if there are
theoretical reasons to suggest that they will systematically respond differently than others to
sales promotions. However, there does not appear to be any major theoretical evidence for
this, and students are consumers of all the products studied here.
The samples are controlled for non-cultural confounding factors. As Foxman, Tansuhaj and
Wong (1988) pointed out, both macroeconomic and sociodemographic factors can affect
consumers of different cultures in their responses to sales promotions. Macroeconomic
factors, such as the level of national economic activity, are effectively controlled by
examining only one country and thus, these factors can be treated as constants. In regard to
sociodemographic factors, common characteristics considered in cross-cultural studies on
sales promotion include age, gender, income and the level of education. These have either
been treated as covariates (Steenkamp, Hofstede and Wedel, 1999) or controlled via matched
sampling (Bond, 1988; Green, 1995). However, it has also been argued that consumer
demographics “do not explain any differential effectiveness of a promotion” (Totten and
Block, 1987).
Given these varied findings, in this study a mixed approach to the treatment of confounding
sociodemographic factors is adopted. Firstly, the level of education is matched. The samples
are restricted to undergraduate students, but of any discipline. This is designed to ensure a
common level of education and, at the same time, reduce any bias from knowledge of a
particular field. Secondly, the factors of gender, age and income are treated as covariates.
Although gender and age were not found to be a significant factor by Chandon, Wansink and
Laurent (2000), they remain important to examine as gender and age differences in consumer
behaviour are possible, particularly across different cultures (Usunier, 2000). Income is also
11
considered a covariate although students tend to be relatively homogeneous in this respect,
and any potential impact is expected to be minimal (Durvalsula et al, 1993).
In terms of recruitment, a self-identification process is used to determine the ethnicity of

respondents. This involves asking respondents to self-identify their ethnicity based on
prompts such as “Anglo-Australians, including Anglo-Saxons and Anglo-Celtics”4 .
Respondents that identify themselves as neither Anglo-Australian nor Chinese-Australian are
excluded from analysis. Self-identification is believed to be more relevant for selecting
subcultures within a country than other popular measures, such as the country of citizenship
(Bochner and Hesketh, 1994). Self-identification represents a person’s internal beliefs and
hence is said to reflect a person’s cultural reality (Hirschman,1981).
However, despite the validity of self-identification, it may be confounded with the effect of
acculturation (i.e., the extent of assimilation of a new culture by an ethnic minority). It has
been suggested that the level of acculturation can largely determine an individual’s
commitment to the cultural norms of his or her ethnic group (Hirschman, 1981). Thus,
acculturation is another confounding factor that is controlled. Based on an adaptation of the
acculturation scale suggested by Quester, Karunaratna and Chong (2001), acculturation in
this study is analysed using a person’s country of birth and the time they have spent living in
Australia.
5.2 Pretests
Two pretests were completed (see Appendix B for details). The first pretest was designed to
confirm the nature of the promotion techniques, and verify the relationships between
monetary and non-monetary promotions with utilitarian and hedonic benefits respectively.
Short self-administered questionnaires were completed by a random sample of 15 Anglo-
Australian and 15 Chinese-Australian students. Results confirmed that shelf-price discounts
and price packs can be classified as monetary promotions, with sweepstakes and free gifts as
non-monetary promotions. They also showed that positive relationships exist between
These results largely replicated the findings of Chandon, Wansink and Laurent (2000).
The second pretest was designed to verify the utilitarian and hedonic nature of the pre-
selected product categories that are used for the main experiment. It also sought to identify
specific brands that are representative of high equity brands in each of the product categories.
Using a new random sample of 15 Anglo-Australians and 15 Chinese-Australian, batteries
and film were shown to be utilitarian products and chocolates and ice-cream as hedonic
products. Brands with which respondents had most experience, in terms of frequency of
purchase, were Energiser (batteries), Kodak (film), M&Ms (chocolates) and Peters (ice-
cream).
5.3 Main Experiment

The main experiment consists of a self-administered questionnaire, which is designed to test
the validity of the CVSCALE and test the five pairs of hypotheses listed in section 3. The
questionnaire was pilot tested. In the main experiment, two versions were used to test for
ordering effects. Questionnaires were only distributed in undergraduate classes, thereby
eliminating the need to screen for education level. After a brief introduction, without
disclosing the purpose of the questionnaire, participation was sought on a voluntary basis.
4
However, this is merely a screening exercise. Respondents do not self-select into treatment conditions.
12
Screening for ethnicity did not occur at this stage. Instead all students were invited to
participate. The questionnaire took about 10-15 minutes to complete and almost all students
choose to participate across all classes. No incentives were offered – it was felt that in a study
about sales promotion the offer of incentives might bias results.
Respondents were randomly assigned one of the two versions of the questionnaire. For both
versions, respondents were asked to: i) choose between options A and B for two utilitarian
and two hedonic products (Option A was a brand associated with a monetary promotion
whilst option B was the same brand but associated with a non-monetary promotion); ii)
provide past purchase information for the products and brands involved; iii) complete the
CVSCALE items; and iv) complete demographic questions including gender, age, income,
ethnicity and acculturation.
It should be noted that Chandon, Wansink and Laurent (2000) differed slightly in their
research design as they asked respondents to evaluate two different brands within each
product category. However, only one brand is used for this study so as to strengthen the
promotion manipulations; by asking respondents to choose between two types of promotions
for the same brand, any branding effects are eliminated and the focus is on pure-promotional
effects. Price was omitted from the earlier study, whereas here it is included to give added
realism to the scenarios, but it was held constant and therefore not manipulated.
6. Analysis
In this section, a descriptive analysis is first presented. This is followed by an analysis of the
CVSCALE and then the presentation of the main results.
6.2 Descriptive Analysis

A total of 815 questionnaires were completed, 250 of which were for either Anglo-
Australians or Chinese-Australians (with an equal split between the two groups). Almost half
of the sample was born overseas with Hong Kong (16%), China (8%) and Indonesia (5%)
being the most common countries of birth. However, on average respondents have lived in
Australia for 15 years (an average of 19 years among Anglo-Australians and 11 years among
Chinese-Australians). Demographically the two groups are matched, although Anglo-
Australians are somewhat older on average and have a slightly higher level of income.
With regard to past purchasing behaviour, most respondents have bought the four product
categories examined in the past 12 months (batteries-80%, film-81%, chocolate-98% and ice-
cream 95%). Past purchases were also relatively high at the brand level (Energiser-64%,
Kodak-77%, M&Ms-78% and Peters’-58%). Whilst there are some differences between the
two ethnic groups (ice-cream, M&Ms and Peters’; p< 0.05), the percentages of past purchases
remain relatively high across all products and brands for each ethnic group. This suggests that
respondents have sufficient knowledge and purchase experience of the products and brands
involved, and it is reasonable to assume they are able to make informed evaluations of the
different promotional options presented.
6.2 CVSCALE Analysis

Responses to the CVSCALE are used to determine the relative cultural values of both ethnic
groups on the five cultural dimensions. However, first the reliability and validity of the
CVSCALE is tested. For the whole sample, the reliability alpha of the cultural dimensions
ranged from 0.60 to 0.69 (Table 2). Although these results are modest, they are comparable to
those reported by Yoo, Donthu and Lenartowicz (2001) and they all satisfy the reliability
13
threshold of 0.6 that is commonly accepted for new scales (Hair et al, 1998). Furthermore, no
significant differences were found in the responses between the two versions of the
questionnaire. Thus, there appear to be no ordering effects.
It should be that reliability levels varied slightly between the ethnic groups. However, the
variations are similar to those reported by Yoo, Donthu and Lenartowicz (2001) and in only
one case did the reliability alpha fall below 0.6 (0.54 for masculinity among Anglo-
Australians) (Table 2).
Table 2: Reliability Analysis Results
Dimension Whole Anglo- Chinese- Yoo, Donthu and

Sample Australians Australians Lenartowicz
Power Distance 0.65 0.69 0.62 0.61
Uncertainty Avoidance 0.64 0.67 0.61 0.71
Collectivism 0.67 0.61 0.70 0.76
Masculinity 0.60 0.54 0.67 0.67
Confucian Dynamism 0.69 0.68 0.69 0.69
After reliability testing, factor analysis was used to ascertain the validity of the items (Table
3). Under the specification of 5 factors, the results of exploratory factor analysis provide
preliminary support for the CVSCALE’s validity. With one exception (D3-personal
steadiness and stability), all the items loaded highly on the appropriate factors and no item
loaded on more than one factor. Overall, therefore, the results support the independence of
the constructs. Furthermore, the five factors explained 45% of the total variance, which
exactly matches the figure reported by Yoo, Donthu and Lenartowicz (2001).
Table 3: Exploratory Factor Analysis Results
CVSCALE Power Uncertainty Collectivism Masculinity Confucian

Item No. Distance Avoidance Dynamism
P2 0.69 0.12 0.15 -0.08 -0.08
P1 0.66 0.09 -0.04 0.11 -0.16
P4 0.60 -0.10 0.13 0.13 0.07
P5 0.58 0.18 0.06 0.02 -0.02
P3 0.49 -0.26 -0.02 0.05 0.11
U3 0.04 0.78 0.05 0.09 0.03
U5 -0.05 0.64 0.06 0.17 0.17
U2 0.12 0.53 0.11 -0.19 0.26
D3 -0.08 0.45 -0.04 -0.09 0.44
U4 -0.01 0.45 0.12 0.23 0.09
U1 0.12 0.44 -0.01 0.17 0.28
C3 0.01 0.03 0.67 0.16 0.19
C4 0.21 0.03 0.67 -0.05 0.21
C6 0.11 0.00 0.67 0.27 -0.07
C2 -0.20 0.19 0.54 -0.09 -0.14
C5 0.18 0.20 0.51 0.25 -0.17
C1 0.07 -0.02 0.50 0.02 0.16
M2 -0.06 0.09 0.01 0.76 0.15
M1 0.37 -0.14 0.17 0.66 0.15
14
M3 0.10 0.15 0.11 0.64 -0.01
D4 -0.05 0.29 0.07 0.07 0.70
D5 0.09 0.00 0.08 0.03 0.68
D6 -0.08 0.27 0.15 -0.10 0.67
D1 0.02 0.28 -0.05 0.09 0.58
D2 -0.20 -0.23 0.22 -0.03 0.35
Extraction Method Principal Components
Rotation Method Varimax
Kaiser-Meyer-Olkin Measure of Sampling Adequacy 0.731
Bartlett's Test of Sphericity 0.000
Confirmatory factor analysis was then employed to validate the scale in regard to specific
constructs. The measurement model is based on the same specifications as Yoo, Donthu and
Lenartowicz (2001), with 5 factors and 26 items, where each item loaded on only one factor
and the factors are uncorrelated.
Using AMOS 4.0, the key results of the standardised solution are shown in Table 4.
The overall fit of the measurement model was excellent: χ2 (d.f. = 299) = 543.32; root mean
square error of approximation (RMSEA) = 0.06; normed fit index (NFI) = 0.97; comparative
fit index (CFI) = 0.99; and incremental fit index (IFI) = 0.99. These results provide strong
confirmatory support for the CVSCALE and its use in studying the hypothesised constructs.
With regard to composite reliability, all the estimates were above the recommended level of
0.70 (Hair et al, 1998), ranging from 0.79 to 0.85 (Table 4). These results are evidence of the
scale’s convergent validity. In addition, whilst the average variance extracted for each
dimension was only moderate at 0.50, they do satisfy the minimum acceptable level (Hair et
al, 1998). Thus, the results provide support for the independence of the dimensions (Fornell
and Larker 1981).
Table 4: Confirmatory Factor Analysis Results
Standardised Factor Loadings

CVSCALE Power Uncertainty Collectivism Masculinity Confucian
Item No. Distance Avoidance Dynamism
P1 0.61
P2 0.53
P3 0.41
P4 0.52
P5 0.47
U1 0.46
U2 0.46
U3 0.75
U4 0.37
U5 0.62
C1 0.39
C2 0.29
C3 0.66
C4 0.61
C5 0.48
C6 0.59
15
M1 0.61
M2 0.57
M3 0.60
M4 0.36
D1 0.58
D2 0.23
D3 0.49
D4 0.73
D5 0.48
D6 0.69
Composite 0.83 0.82 0.85 0.79 0.85
Reliability
Variance 0.50 0.50 0.50 0.50 0.50
Extracted
χ2 d.f. RMSEA NFI CFI IFI

Model 543.32 299 0.06 0.97 0.99 0.99
Having confirmed the reliability and validity of the CVSCALE, responses to the scale are
then aggregated for analysis. For the whole sample, an average score for each cultural
dimension is computed for both ethnic groups. The score is calculated as the average of the
individual items of each cultural dimension answered by the respondents of each ethnic
group 5 . This approach reflects the flexibility of the CVSCALE in that it allows culture to be
measured at the individual level but analysed at an appropriate aggregate level. Thus,
individual respondents may differ from the average of their group but will remain appropriate
for analysis. The average scores are then compared to classify the relative cultural values of
the two ethnic groups on each dimension (Table 5).
Table 5: Average Cultural Scores
Power Uncertainty Collectivism Masculinity Confucian

Distance Avoidance Dynamism
Anglo- 4.05 2.16 2.99 3.28 2.11
Australians Low Low Individualistic Feminine Low
Chinese- 3.88 2.07 2.78 3.03 1.91
Australians High High Collectivistic Masculine High
T-value 2.49 1.40 2.96 3.16 3.22
Sig. P- 0.01 0.16 0.00 0.00 0.00
value
Although the absolute difference appears small, based on conventional statistical standards
there are significant differences between the two ethnic groups on all of the cultural
dimensions (p < 0.05), except for uncertainty avoidance. Using the relative averages, Anglo-
Australians can be classified as relatively low power distance, low on uncertainty avoidance,
individualistic, feminine and low on Confucian dynamism, and vice-versa for Chinese-
Australians. The classifications largely conform to Hofstede’s (1991) results. The exceptions
are the contrary results on uncertainty avoidance and masculinity. However, some
5
For example, if there are 5 items for the power distance dimension and 25 respondents for each ethnic group.
The average for each ethnic group is equal to: Σ (25 x 5 items scores) / 25
16
inconsistency is acceptable given the distinctiveness of the CVSCALE and the limitations of
Hofstede’s empirical data. Indeed, as explained in section 4, the purpose of using the
CVSCALE is to provide a direct measure of culture and to avoid the limitations of inferring
this from past studies such as Hofstede’s.
It should also be noted that despite the slight inconsistency, the hypotheses can still be tested.
This is because the hypotheses involve a comparison of cultures defined only by cultural
dimensions. There are no restrictions regarding how Anglo-Australians or Chinese-
Australians should score on each dimension. For example, the hypotheses involving
masculinity can still be tested by using Anglo-Australians as the feminine culture and
Chinese-Australians as the masculine culture.
6.3 Analysis Procedures

In order to examine each hypothesis, the results of the experiment are analyzed using two
main procedures. Firstly, logistic regression is used to test for the congruency relationships
between product and promotion types. The dependent variable is the choice between
promotion type (monetary or non-monetary) and the independent variables are product type
(i.e., utilitarian or hedonic) and the covariates of gender, age and income. Secondly, choice
shares of promotion types are analysed to identify any differences in the choices between
ethnic groups. Analysis is undertaken at an ethnic-group level and an individual level, and
across different acculturation groupings
6.4 Main Results at an Ethnic Level

In testing the hypotheses, the data were analysed at an ethnic level. The ethnic groups are
already classified on each cultural dimension as shown in Table 5. For the purposes of
analysis, the upper median splits within each ethnic group on each cultural dimension are
used. This results in greater variance between the two groups on the dimensions of interest.
Logistic regression analysis is performed on each ethnic group for each dimension. Thus, a
total of 10 regressions were conducted (Table 6). Results show that the regression models
generally have a poor fit since the reduction in the –2 log likelihood values and the R2 values
are relatively low. However, the omnibus test of model coefficients indicates that coefficients
were significant for 5 of the models (p < 0.05). Within the significant models, product type
was consistently shown to have a significant and negative relationship with promotion type:
high power distance (B = -1.60, p = 0.00), high uncertainty avoidance (B = -1.33, p = 0.00),
collectivist (B = -0.96, p = 0.00), masculine (B = -1.38, p = 0.00) and high Confucian
Dynamism (B = -1.06, p = 0.00). These results indicate that for each significant dimension,
hedonic products are associated with the choice of monetary promotions and utilitarian
products are associated with the choice of non-monetary promotions. The covariates of
gender, age and income were generally found to be insignificant. The only exception is that
higher income was found to be associated with the choice of non-monetary promotions under
the collectivist dimension (B = 1.29, p = 0.04).
Table 6: Logistic Regression Results at an Ethnic Level
Model Summary Independent Variables

-2 Log R2 Omnibus Test Product Gender Age Income
Likelihood Value of Model Type
Coefficients
17
Low PD- 223a 0.03c 0.43 -0.23 0.64 0.15 -0.31
Anglo (226)b (0.50)d (0.08) (0.69) (0.46)
High PD- 218 0.15 0.00 -1.60 0.39 -0.17 0.58
Chinese (242) (0.00) (0.27) (0.66) (0.18)
Low UA- 238 0.03 0.42 -0.48 0.55 0.09 0.47
Anglo (242) (0.15) (0.88) (0.79) (0.18)
High UA- 241 0.12 0.00 -1.33 -0.15 -0.16 0.64
Chinese (261) (0.00) (0.65) (0.64) (0.10)
Individualist- 261 0.03 0.28 -0.28 0.30 -0.22 0.61
Anglo (266) (0.36) (0.36) (0.50) (0.07)
Collectivist- 244 0.09 0.00 -0.96 0.30 -0.07 1.29
Chinese (258) (0.00) (0.35) (0.85) (0.04)
Feminine- 241 0.01 0.95 -0.16 0.16 -0.05 0.14
Anglo (242) (0.63) (0.67) (0.88) (0.71)
Masculine- 216 0.12 0.00 -1.38 0.41 -0.15 0.78
Chinese (236) (0.00) (0.25) (0.70) (0.09)
Low CD- 255 0.03 0.25 -0.39 0.59 -0.07 0.23
Anglo (261) (0.22) (0.07) (0.85) (0.50)
High CD- 236 0.09 0.00 -1.06 0.35 -0.26 0.61
Chinese (250) (0.00) (0.30) (0.46) (0.10)
a b
Model –2 Log Likelihood Initial –2 Log Likelihood
c
Nagelkerke R2 d
Significant value
The choice share results for each ethnic group on each dimension are shown in Table 7. The
results are reflective of the regression findings, in that hedonic products have a relatively
higher choice share of monetary promotions than utilitarian products. Another key result is
that for each ethnic split, monetary promotions are preferred over non-monetary promotions
across all products and for each product type.
18
Table 7: Choice Shares for Monetary Promotions at an Ethnic Level
All Utilitarian Hedonic

Products Products Products
Power Distance
Low-Anglo 83%a 81% 85%
High-Chinese 81% 70% 92%
(sig. p-value) (0.56) (0.03) (0.07)
Uncertainty Avoidance
Low-Anglo 79% 76% 82%
(sig. p-value) (0.44) (0.10) (0.33)
Collectivism
Individualist-Anglo 78% 75% 80%
Collectivist-Chinese 79% 71% 86%
(sig. p-value) (0.75) (0.52) (0.16)
Masculinity
Feminine-Anglo 81% 80% 82%
Masculine-Chinese 82% 73% 91%
(sig. p-value) (0.82) (0.16) (0.04)
Confucian Dynamism
Low-Anglo 78% 75% 82%
(sig. p-value) (0.67) (0.52) (0.15)
a
Choice share for non-monetary promotions is the complement to 100%
The choice share results also provide a basis to evaluate the hypotheses. As is evident in
Table 7, there was no significant difference in the choice shares between ethnic groups across
all products. Within product types, differences were found in only 2 out of the possible 10
cases. Firstly, in the case of utilitarian products, low power distance Anglo-Australians were
found to have a higher preference for monetary promotions than high power distance
Chinese-Australians (81% vs 70%; p < 0.05). This is in line with the prediction of hypotheses
H1A and H1B. Secondly, in the case of hedonic products, feminine Anglo-Australians were
found to have a lower preference for monetary promotions than masculine Chinese-
Australians (82% vs 91%; p < 0.05). This is consistent with hypotheses H4A and H4B.
However, these were the only two instances where differences were found. It is evident that,
in general, there was no difference in the choice shares between the two ethnic groups across
all products and product types, despite differences in cultural values. Thus, there is
insufficient evidence to support the hypotheses of this study. The results were confirmed
when the same analyses were performed with a quartile-split sample. Although there was
greater variance in the cultural values between ethnic groups, no significant difference in
choice shares was observed for any of the cases.
6.5 Main Results at an Individual Level

In order to provide further understanding, the data was also analysed at an individual level.
Specifically, median splits were conducted on each dimension based on the scores of all
individuals, regardless of their ethnic background.
19
The two groups on each dimension were analysed using the same logistic regression model as
specified earlier. From Table 8 it is evident that the results generally reflect those found at the
ethnic level. Firstly, the reduction in the –2 log likelihood values and the R2 values for each
regression are again relatively low, suggesting a poor fit for all the models. However, with
the exception of the collectivist dimension, model coefficients were found to be significant
for the same dimensions identified at the ethnic level (p< 0.05). Similarly, product type was
consistently shown to have a significant and negative relationship with promotion type: high
power distance (B= -0.85, p= 0.00), high uncertainty avoidance (B= -0.81, p= 0.00),
masculine (B= -0.89, p= 0.00) and high Confucian Dynamism (B= -0.68, p= 0.00). These
results confirm the findings at the ethnic level that hedonic products are associated with the
choice for monetary promotions. In regard to the covariates, they were generally again found
to be insignificant. However, there are some results that differed from the ethnic level.
Firstly, the model coefficients for low uncertainty avoidance, individualist and low Confucian
Dynamism were also found to be significant (p< 0.05). Product type was again negatively
related to promotion type. In addition, under the low Confucian Dynamism dimension female
responses were positively related with the choice of non-monetary promotions (B= 0.47, p=
0.05).
20
Table 8: Logistic Regression Results at an Individual Level

Coefficients
Low 474a 0.03c 0.06 -0.54 0.48 0.17 -0.02
Power (483)b (0.02)d (0.06) (0.50) (0.93)
distance
High 509 0.05 0.01 -0.85 0.03 -0.15 0.03
Power (524) (0.00) (0.91) (0.53) (0.89)
distance
Low 479 0.03 0.05 -0.58 0.40 0.24 -0.09
Uncertainty (489) (0.01) (0.10) (0.33) (0.71)
Avoidance
High 505 0.04 0.01 -0.81 0.09 -0.23 0.15
Uncertainty (519) (0.00) (0.69) (0.32) (0.52)
Avoidance
491 0.04 0.01 -0.74 0.33 0.02 0.11
Individualist (503) (0.00) (0.18) (0.93) (0.65)
497 0.03 0.06 -0.65 0.18 -0.03 -0.04

Collectivist (506) (0.00) (0.43) (0.88) (0.88)
484 0.03 0.10 -0.50 0.41 0.16 0.15

Feminine (492) (0.03) (0.14) (0.49) (0.54)
500 0.05 0.00 -0.89 0.10 -0.19 -0.09

Masculine (517) (0.00) (0.67) (0.45) (0.72)
Low 497 0.04 0.01 -0.71 0.47 0.12 0.08

Confucian (506) (0.00) (0.05) (0.63) (0.74)
Dynamism
High 494 0.03 0.05 -0.68 0.07 -0.11 0.10
Confucian (503) (0.00) (0.75) (0.65) (0.66)
Dynamism
a b
c
Nagelkerke R2 d
Significant value
Choice share results for each dimension at an individual level are shown in Table 9. It is
again evident that hedonic products are associated with a higher choice share of monetary
promotions. The preference for monetary promotions also dominates across all products and
for each product type. In addition, across all products and for each product type, no
significant difference was found in the choice shares between the groups on each dimension.
In fact, there are many cases with virtually no difference in the choice shares between the
groups.
21
Table 9: Choice Shares for Monetary Promotions at an Individual Level

Power Distance
Low 81%a 77% 85%
High 78% 71% 85%
(sig. p-value) (0.24) (0.13) (1.00)
Uncertainty Avoidance
Low 81% 76% 85%
High 79% 72% 85%
(sig. p-value) (0.39) (0.26) (1.00)
Collectivism
Individualist 80% 74% 86%
Collectivist 80% 74% 85%
(sig. p-value) (0.94) (0.92) (0.80)
Masculinity
Feminine 81% 77% 84%
Masculine 79% 72% 86%
(sig. p-value) (0.48) (0.19) (0.62)
Confucian Dynamism
Low 80% 74% 85%
High 80% 74% 85%
(sig. p-value) (0.94) (0.92) (1.00)
a
6.6 Acculturation Analysis

The effects of acculturation are explored by dividing the sample of Chinese-Australian
respondents using a median split based on the number of years that respondents have lived in
Australia and, in a separate analysis, based on whether the respondent was born in Australia
or overseas. These two splits are seen as different ways to examine the same underlying
dimension of acculturation (Quester, Karunaratna and Chong, 2001).
The four groups were analysed using logistic regression (Table 10). The results are fairly
consistent across all groups. Firstly, all the models had relatively poor fit, as shown by the
low reductions in the –2 log likelihood value and the low R2 values. Secondly, with the
exception of the Australia born group, the model coefficients were found to be significant for
all groups (p< 0.05) and the only significant variable was product type, which had a negative
relationship with promotion type.
22
Table 10: Logistic Regression Results using Acculturation Splits

Coefficients
Years In 219a 0.07c 0.03 -1.01 0.44 -0.02 0.44
Australia- (230)b (0.01)d (0.21) (0.92) (0.32)
Low
Years In 236 0.13 0.00 -1.53 0.05 0.10 0.35
Australia- (258) (0.00) (0.89) (0.79) (0.33)
High
Overseas 342 0.10 0.00 -1.31 0.39 0.03 0.35
Born (368) (0.00) (0.17) (0.92) (0.28)
Australia 113 0.10 0.10 -1.20 -0.44 -0.47 0.47

Born (121) (0.01) (0.45) (0.43) (0.36)
a b
c
Nagelkerke R2 d
Significant value
The choice share results for the four groups are shown in Table 11. The results are consistent
with those reported for Chinese-Australians in the earlier analyses (Tables 7 and 9). Firstly,
the choice for monetary promotions was found to dominate non-monetary promotions.
Secondly, hedonic products were found to be associated with monetary promotions. The
results were consistent across all groups, and no significant difference in choice shares was
observed. Thus, the results suggest that acculturation does not have an impact on the findings
of this study.
Table 13: Choice Shares for Monetary Promotions using Acculturation Splits

Years Lived in Australia
Low 83%a 76% 90%
High 79% 67% 90%
(sig. p-value) (0.26) (0.12) (0.83)
Country of Birth
Overseas 82% 72% 90%
Australia 78% 69% 88%
(sig. p-value) (0.46) (0.61) (0.55)
a
23
7. Summary and Discussion
The key findings and contributions of the study can be summarized in three main areas: i)
culture and ethnicity, ii) culture and sales promotion, iii) culture and the congruency
framework.
7.1 Culture and Ethnicity

Clear cultural differences are found at an ethnic group level. With the exception of
uncertainty avoidance, the mean scores between Anglo-Australians and Chinese-Australians
are significantly different from each other across all cultural dimensions. This is an important
finding as most cross-cultural studies only assume or suggest that cultural differences exist at
an ethnic level, rather than measure and demonstrate these differences (Doran, 1996;
Laroche, Pons and Turnel, 2002). By contrast, the current study provides empirical evidence
that confirms the popular assumption. It also further validates the CVSCALE established by
Yoo, Donthu and Lenartowicz (2001). The flexibility of the CVSCALE is demonstrated, in
that culture can be analyzed at both the ethnic and individual level. Thus, the study provides
further evidence for the validity and usefulness of this scale.
7.2 Culture and Sales Promotion

Another key contribution of the study is that despite cultural differences between ethnic
groups, there is no significant difference in their preferences for sales promotion types. With
only 2 exceptions, this result is found to be consistent at an ethnic-group level across all
products and for each product type. The absence of cultural effects is also evident at an
individual level.
The implication of this finding is twofold. Firstly, although cultural differences may exist,
these do not appear to affect consumer responses to sales promotion at an ethnic level. This
suggests that managers can use standardized sales promotions when targeting different ethnic
groups and avoid the use of more costly differentiated strategies. Secondly, the finding
highlights the fact that cultural distinctions may be more relevant in some areas of marketing
than in others. For example, the distinction between collectivism and individualism was
found to account for differences in consumer complaining behavior (Watkins and Liu, 1996)
but not in advertising appeals (Cutler, Erdem and Javalgi, 1997). Thus, it would be a mistake
to assume that cultural differences will affect all areas of marketing. Hence, the relevance of
ethnic marketing as suggested by researchers and practitioners (Jarvis, 2002; Lee, Fairhurst
and Dillard, 2002; Quester, Karunaratna and Chong, 2001) needs to be considered within the
specific context in which it is applied.
7.3 Culture and the Congruency Framework

There are mixed findings in regard to the congruency framework of sales promotion
effectiveness. Firstly, the preference for monetary promotions was found to dominate over
the preference for non-monetary promotions across all product types. Furthermore, with only
a few exceptions, the covariates of gender, age and income were all insignificant in
accounting for the choice of promotions. All of these results are consistent with those
reported by Chandon Wansink and Laurent (2000). They were also evident across all cultural
groups at all levels of analysis and thus, the impact of culture on these results appears to be
minimal.
However, the interesting finding is that the direction of congruency effects between product
and promotion types was opposite to that described by Chandon Wansink and Laurent
24
(2000). In the current study, it was generally found that hedonic products were associated
with the choice of monetary promotions whilst utilitarian products were associated with non-
monetary promotions. The contrasting relationships may be explained by the fact that the
congruency effects observed by the earlier researchers were only marginal (B = 0.32 for the
US sample and B = 0.022 for the French sample). Thus, other factors could have affected the
direction of the relationships. For example, the use of monetary incentives for recruiting
respondents may have biased their results (whereas incentives were not used in the present
study). Another possible explanation is that non-monetary promotions are preferred for
utilitarian products because they provide consumers with the experiential benefits that are not
provided by the product itself. This is supported by the successful use of non-monetary
promotions for many utilitarian products, such as the loyalty program for Unilever’s Omo
laundry detergent and online competitions for Kellogg’s Coco Pops. On the other hand,
monetary promotions may be preferred for hedonic products because they can reduce the
guilt associated with hedonic consumption. This is hinted at by the fact that promised
donations to charity are more effective for promoting luxuries (i.e., hedonic products) than
for necessities (Strahilevitz and Myers, 1998).
8. Limitations and Further Research

There are several limitations, relating to the focus of the study and the methodology used.
Some of these highlight useful directions for future research.
One issue is that the cultural dimensions are examined separately. There is no examination of
any correlation effects between the dimensions and no assessment of the relative importance
of each dimension. Yet, ethnic groups are not expected to conform to any single cultural
dimension as they involve a whole “set of cultural values” (Tan and McCullough, 1985).
However, the focus on single cultural dimensions provides a clear conceptual distinction that
can facilitate analysis and assist in the interpretation of results. Furthermore, the separate
analysis of dimensions is consistent with past studies (Brodowsky and Anderson, 2000;
Steenkamp, Hofstede and Wedel, 1999; Watkins and Liu, 1996).
It is also noted that due to the many complexities involved in consumer responses to sales
promotion, this study has necessarily been limited to a fairly narrow focus in order to isolate
the impact of culture. For example, the effects of branding and prices have been kept
constant. However, it has been suggested that consumer responses to brands (McCort and
Malhotra, 1993) and prices (Laroche, Pons and Turnel, 2002) can differ across cultures. Thus,
it would be worthwhile for future research to explore branding and pricing effects along with
the impact of culture on consumer sales promotions. The study is also limited by its
consideration of culture. This study ignores the fact that people may perceive themselves to
belong to more than one ethnic culture and that the strength of identification with a particular
ethnic group may differ between its members (Tan and McCullough, 1985). These themes
deserve further consideration.
Apart from culture, there are also likely to be other factors that will impact on the congruency
framework and the effectiveness of sales promotions. For example, it has been shown that the
role of guilt can affect the type of promotional benefits preferred (Kivetz and Simonson,
2002) and the nature of the decision can influence the choice between utilitarian and hedonic
products (Dhar and Wertenbroch, 2000). Furthermore, the current study only focused on
consumer promotions and consumer packaged goods. The congruency effects and the impact
of culture may apply differently to business-to-business trade promotions and other types of
products (e.g., services and industrial products). Analysis of these conditions would mean
25
going beyond student respondents; something that would increase variance in the data
(particularly in the covariates). All of these areas represent opportunities for future research
that can help extend our knowledge of sales promotion effectiveness.
In terms of the methodology for this study, a quasi-experimental design is adopted and data
are analyzed using inferential statistics. It is acknowledged, this is only one of the many
possible methodologies that might be used. An alternative would be to observe the choice
behavior of consumers at the point of purchase. This would accurately capture choice
behavior, although it might be difficult to assign ethnicity. Another alternative is to use
scanner data to measure brand choice, as has been adopted in previous studies of consumer
promotion (Ehrenberg, Hammond and Goodhardt, 1994; Lemon and Nowlis, 2002; Mela,
Gupta and Lehmann, 1997). Typically, this would be accompanied by a usage and attitude
questionnaire, which could provide demographic, ethnographic and acculturation
information.
The study could be further extended by considering the use of alternative measures and
stimuli. For example, culture may also be measured using Hofstede’s (1990) original scale, or
one of the alternatives that has been proposed (e.g., Furrer, Liu and Sudharshan, 2000). The
results may then be compared with the CVSCALE to provide a form of triangulation.
Another possible extension is to present the promotion scenarios with pictorial aids. The
pictorial presentation of both the product and promotional offer may have an impact on
consumer responses to the sales promotion scenarios.
Finally, the generalizability of the results could be extended by considering other monetary
and non-monetary promotions (e.g., coupons, loyalty schemes), and by broadening the list of
utilitarian and hedonic products (e.g., other packaged goods or services). This is particularly
important given the variety of promotional types found in most supermarkets, across a
diverse range of products categories. It would also be worthwhile to explore the responses of
other cultural groups within and across a variety of countries (e.g., Italian-Australians,
Korean-Australians, North African-French, Hispanic-Americans, etc).
26
Appendix A: The CVSCALE
Cultural Measurement Items 5-Point Scale

Dimension
Power P1. People in higher positions should make most 1 = Strongly agree
Distance decisions without consulting people in lower 2 = Agree
Values positions. 3 = Neither
P2. People in higher positions should not ask the agree/disagree
opinions of people in lower positions too frequently. 4 = Disagree
P3. People in higher positions should avoid social 5 = Strongly disagree
interaction with people in lower positions.
P4. People in lower positions should not disagree
with decisions by people in higher positions.
P5. People in higher positions should not delegate
important tasks to people in lower positions.
Uncertainty U1. It is important to have instructions spelled out in 1 = Strongly agree
Avoidance detail so that I always know what I'm expected to do. 2 = Agree
Values U2. It is important to closely follow instructions and 3 = Neither
procedures. agree/disagree
U3. Rules and regulations are important because they 4 = Disagree
inform me of what is expected of me. 5 = Strongly disagree
U4. Standardised work procedures are helpful.
U5. Instructions for operations are important.
Collectivism Cl. Individuals should sacrifice self-interest for the 1 = Strongly agree
Values group (either at school or the work place). 2 = Agree
C2. Individuals should stick with the group even 3 = Neither
through difficulties. agree/disagree
C3. Group welfare is more important than individual 4 = Disagree
rewards. 5 = Strongly disagree
C4.Group success is more important than individual
success.
C5.Individuals should only pursue their goals after
considering the welfare of the group.
C6.Group loyalty should be encouraged even if
individual goals suffer.
Masculinity Ml. It is more important for men to have a 1 = Strongly agree
Values professional career than it is for women. 2 = Agree
M2. Men usually solve problems with logical 3 = Neither
analysis; women usually solve problems with agree/disagree
intuition. 4 = Disagree
M3. Solving difficult problems usually requires an 5 = Strongly disagree
active, forceful approach, which is typical of men.
M4. There are some jobs that a man can always do
better than a woman.
Confucian Dl. Careful management of money (thrift) 1 = Very unimportant
Dynamism D2. Going on resolutely in spite of opposition 2 = Unimportant
Values D3. Personal steadiness and stability 3 = Neither
D4. Long term planning important/unimportant
D5. Giving up today's fun for success in the future 4 = Important
D6. Working hard for success in the future 5 = Very important
27
Appendix B: Pretests
(To be deleted or printed in smaller type if there are constraints on journal space)
B.1 Pretest One: Design and Procedure

The first pretest tests and confirms the nature of the promotion techniques. It also verifies the
relationships between monetary and non-monetary promotions with utilitarian and hedonic
benefits respectively.
Short self-administered questionnaires were completed by a random sample of 15 Anglo-

Australian and 15 Chinese-Australian students. Recruitment was by random interception and
participation was voluntary6 . Respondents were first screened for their education level and
ethnicity, and only those who passed both screening criteria were retained.
Respondents were randomly assigned a questionnaire consisting of either promotion stimuli

set A or B. As shown in Table B1, each set includes an example of the four promotion
techniques described in section 4. However, the stimuli examples are not specific to any
product, as the purpose of the pretest is only to examine the nature of promotion techniques
and their relationships with promotional benefits.
Table B1: Promotion Stimuli used for Pretest One
Promotion Type Stimuli Set A Stimuli Set B

1. Shelf-price discounts Special! Save 50 cents. Take 10% off the marked price.
2. Price packs Get two for the price of one. Get 20% extra for free.
3. Sweepstakes Scratch the panels inside and Win a trip to Hawaii! See details
win instantly! inside pack
4. Free gifts Free bag! Redeem by mail Buy this product and receive a
with receipt. free toy.
Each respondent was asked to: i) classify each promotion stimuli as either a monetary or non-
monetary promotion, and ii) evaluate each promotion stimuli based on the 18-item scale for
measuring promotion benefits.
B.2 Pretest One: Results

Firstly, the results confirmed the nature of the four promotion techniques. Shelf-price
discounts and price packs were correctly identified by the majority of respondents as
monetary promotions, and sweepstakes and free gifts were identified as non-monetary
promotions. Similar results were obtained between the two sets of stimuli and between the
two ethnic groups (see Table B2).
Table B2: Nature of Promotion Techniques (% of correct identification)
Promotion Technique Overall Sample Anglo-Australians Chinese-Australians

1. Shelf-price discounts 83% 93% 73%
2. Price packs 63% 60% 67%
3. Sweepstakes 93% 100% 87%
4. Free gifts 87% 87% 87%
6
The total sample size of 30 is deemed sufficient for most statistical analysis (Hair et al, 1998).
28
Secondly, congruency relationships between the promotional types and promotion benefits
were examined. Whilst Chandon, Wansink and Laurent (2000) analyzed their results with
second-order confirmatory factor analysis, their purpose was scale and theory development.
Here the only objective is to verify past findings. Thus, although confirmatory factor analysis
may be employed, an alternative and a relatively more efficient set of analyses is used.
The utilitarian and hedonic nature of the six types of benefits was first confirmed via
reliability analysis. The items for the benefits of savings, quality and convenience produced a
relatively high reliability alpha of 0.79. This supports the theory that these are three related
utilitarian benefits. Similarly, the items for the benefits of value expressive, exploratory and
entertainment had a high reliability alpha of 0.71. This confirms the hedonic nature of these
three benefits.
A utilitarian and hedonic factor score was then computed for each evaluation of a promotion
technique. The scores represent the summated average of all the utilitarian and hedonic items
respectively, as classified by Chandon, Wansink and Laurent (2000) from the 18-item scale
for promotion benefits. Logistic regression was then applied in which the two factor scores
acted as the independent variables. The dependent variable is the classification of a
promotion technique as either a monetary or non-monetary promotion. Results are
summarized in Table B3. The R2 value of 0.46 was relatively modest; however, the reduction
in the -2LL value from an initial 163 to a final 113 suggests a good overall fit of the model.
This is confirmed by the low significance values in the omnibus tests of model coefficients
(0.00), which is another test of model fit.
Table B3: Model Summary Results
-2 Log likelihood -2 Log likelihood Nagelkerke

(initial) (model)* R2
Summary 163 113 0.46
Omnibus Tests Chi-Square Df Sig
Model 50 2 0.00
*Enter method after 4 iterations
From the regression results it is seen that both the utilitarian and hedonic factors were
significant explanatory variables for the classification of promotion techniques. Specifically,
the coefficient of the utilitarian factor is negative (e.g., B= -6.81, p = 0.00) whilst the
coefficient of hedonic factor is positive (e.g., B= 4.10, p= 0.00). These results indicate that as
the amount of utilitarian benefits decreases and the amount of hedonic benefits increases, the
more likely that the sales promotion technique is a non-monetary promotion. Similarly, the
higher the amount of utilitarian benefits and the lower the amount of hedonic benefits, the
more likely that the sales promotion technique is a monetary promotion. The same
relationships were observed between the two ethnic groups when analysed individually. The
key regression results are summarised in Table B4.
Table B4: Regression Results
Variable B SE Wald Df Sig Exp (B)

Utilitarian -6.81 1.24 30.04 1 0.00 0.00
Hedonic 4.10 1.17 12.22 1 0.00 60.38
Constant 0.76 0.44 2.92 1 0.09 2.13
29
In summary, the results of pretest one largely replicated the findings of Chandon, Wansink
and Laurent (2000). In particular, the results confirmed that shelf-price discounts and price
packs can be classified as monetary promotions, with sweepstakes and free gifts as non-
monetary promotions. Furthermore, the results show that positive relationships exist between
B.3 Pretest Two: Design and Procedure

The second pretest verifies the utilitarian and hedonic nature of the pre-selected product
categories that are used for the main experiment. The pretest also seeks to identify specific
brands that are representative of high equity brands in each of the product categories.
Following the same recruitment procedure as pretest one, self-administered questionnaires

were completed by a new sample of 15 Anglo-Australian and 15 Chinese-Australian students
on a voluntary basis. Respondents that passed the same screening criteria as pretest one were
retained. Respondents were given short descriptions of the 6 pre-selected product categories
and a list of high equity brands from each category. They were then asked to: i) evaluate each
product category based on the utilitarian index adapted from Batra and Ahtola (1990), and ii)
for each product category, select the brands that they have purchased in the past 12 months.
B.4 Pretest Two: Results

Firstly, the utilitarian index is calculated as the difference between two average 9-point
semantic differential scores. Specifically, it is the difference between the average score of the
two hedonic items of “fun/not fun” and “pleasant/unpleasant”, and the average score of the
two utilitarian items of “wise/foolish” and useful/useless”. The index scores based on
individual responses are summated for each product category and then averaged to give a
summary measure for the nature of each product. The utilitarian index ranges from –8 to 8,
with a more positive number indicating a more utilitarian product.
The results confirmed the utilitarian and hedonic nature of each product category (Table B5).
Specifically, relatively higher index scores were recorded for laundry detergent (2.70), AA
batteries (2.30) and film (1.38). This provides support for their utilitarian nature. On the other
hand, relatively lower index scores were evident for chocolates (-1.40), ice-cream (-1.52) and
biscuits (-0.77), which confirms their hedonic nature. The distinctions for each product
category were also consistent across both ethnic groups.
Table B5: Utilitarian Index Scores
Product Utilitarian Index Anglo-Australians Chinese-Australians

1. Laundry Detergent 2.70 3.37 2.03
2. AA Batteries 2.30 2.40 2.20
3. Film 1.38 1.47 1.30
4. Chocolates -1.40 -2.03 -0.77
5. Ice-Cream -1.52 -1.97 -1.07
6. Biscuits -0.77 -0.83 -0.70
With regard to identifying the specific brands to represent each product category, frequency
tests were performed on the brands purchased by respondents in the last 12 months. The
brands with the highest frequency were then selected to be representative of each category
30
and they include: Omo (laundry detergent), Energiser (AA batteries), Kodak (film), M&Ms
(chocolates), Peters (ice-cream), and Arnotts (biscuits). These
findings were consistent across both ethnic groups (Table B6).
Table B6: Frequency Results
Product Highest 2nd Highest

1. Laundry Detergent Omo (20)* Cold Power (13)
2. AA Batteries Energiser (23) Everready (14)
3. Film Kodak (29) Fuji (14)
4. Chocolates M&Ms (20) Cadbury (19)
5. Ice-Cream Peters (18) Cadbury (15)
6. Biscuits Arnotts (29) Westons (11)
* All frequencies are out of a total of 30 respondents
In summary, the results confirmed the utilitarian and hedonic nature of each product
category. However, for the purposes of the main experiment, laundry detergent is excluded as
analysis of the results indicated that a relatively small number of respondents had purchased
brands from this product category. This suggests that laundry detergent is an inappropriate
stimulus since the sample appears to lack the purchase experience to form evaluations.
Biscuits are also excluded to ensure an even distribution of product types, with 2 utilitarian
and 2 hedonic product stimuli 7 . This is consistent with the research design of Chandon,
Wansink and Laurent (2000). The final configuration is shown in Table B7.
Table B7: Product Stimuli
Product Nature Brand

1. AA Batteries Utilitarian Energiser
2. Film Utilitarian Kodak
3. Chocolates Hedonic M&Ms
4. Ice-Cream Hedonic Peters
7
Biscuits are selected for exclusion over the other two hedonic products, as it was the least hedonic of all the
hedonic products.
31
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Sales promotion effectiveness: The impact of consumer differences at an

Article in Journal of Product & Brand Management · May 2005

Simon Kwok Mark D. Uncles

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Simon Kwok & Mark Uncles

School of Marketing Working Paper 02/4

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Keywords: Culture, Ethnicity, Sales Promotions, Congruency Theory

2. Sales Promotion and the Potential Impact of Culture

2.2 Benefits of Sales Promotion

2.3 Promotion Types and Promotion Benefits

2.4 Congruency Theory and Sales Promotion

2.5 Culture and Ethnic Groups

2.6 Culture, Ethnic Groups and Sales Promotion

2.8 Cultural Dimensions

3.1 Power Distance

3.2 Uncertainty Avoidance

Hypotheses 3B : Non-monetary promotions are more effective for individualistic cultures

3.5 Confucian Dynamism

• Low power distance • High power distance

Cultural • High uncertainty avoidance • Low uncertainty avoidance

Table 1: Summary of Measures

Item Measures/Source Area of Application

4.2 Product Category and Brand Stimuli

4.3 Promotion Stimuli

4.5 Sales Promotion Effectiveness

In terms of recruitment, a self-identification process is used to determine the ethnicity of

5.3 Main Experiment

6.2 Descriptive Analysis

6.2 CVSCALE Analysis

Table 2: Reliability Analysis Results

Dimension Whole Anglo- Chinese- Yoo, Donthu and

Table 3: Exploratory Factor Analysis Results

CVSCALE Power Uncertainty Collectivism Masculinity Confucian

Table 4: Confirmatory Factor Analysis Results

Standardised Factor Loadings

χ2 d.f. RMSEA NFI CFI IFI

Table 5: Average Cultural Scores

Power Uncertainty Collectivism Masculinity Confucian

6.3 Analysis Procedures

6.4 Main Results at an Ethnic Level

Table 6: Logistic Regression Results at an Ethnic Level

Model Summary Independent Variables

All Utilitarian Hedonic

6.5 Main Results at an Individual Level

Model Summary Independent Variables

497 0.03 0.06 -0.65 0.18 -0.03 -0.04

484 0.03 0.10 -0.50 0.41 0.16 0.15

500 0.05 0.00 -0.89 0.10 -0.19 -0.09

Low 497 0.04 0.01 -0.71 0.47 0.12 0.08

All Utilitarian Hedonic

6.6 Acculturation Analysis

Model Summary Independent Variables

Australia 113 0.10 0.10 -1.20 -0.44 -0.47 0.47

All Utilitarian Hedonic

7.1 Culture and Ethnicity

7.2 Culture and Sales Promotion

7.3 Culture and the Congruency Framework

8. Limitations and Further Research