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Changing consumers’ minds at the point of sale: price discounts vs. in-store advertising

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Abstract

Point-of-sale (POS) promotions are increasingly relevant for manufacturers, with substantial impacts on shoppers’ decision-making in competitive environments. To provide new guidelines for effectively using such promotions, this article distinguishes POS activities that provide an incentive to buy by altering perceptions of economic purchase value (e.g., price discount) from those that create a reason to buy by emphasizing product attributes (e.g., in-store advertising). Prior literature intensively analyzes the effectiveness of different POS promotion instruments, but no studies identify conditions in which manufacturers should choose either incentive or reason to buy instruments. Thus, this article aims to identify conditions in which each of the two promotions type is superior with regard to consumers’ choice behavior at the POS. With two incentive-aligned experiments, this article shows that incentive to buy activities is more effective for changing consumers’ minds at the POS when the brand relevance in the category and perceived decision difficulty are low. In contrast, reason to buy activities are more effective when brand relevance and decision difficulty are high.

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Notes

  1. 1.

    Dickson & Ginter (1987) would argue that the process of RTB instruments works through “demand modification”. We would like to thank an anonymous reviewer for bringing up this issue.

  2. 2.

    In contrast, for instance, to product quality, where ITB instruments are less appropriate for high levels due to the worsened quality signal of price discounts.

  3. 3.

    In addition, finding product information with higher quality and relevance may also serve to reduce post-purchase cognitive dissonance (Festinger 1957). We would like to thank an anonymous reviewer for bringing up this issue.

  4. 4.

    To account for potential multicollinearity, we conducted correlational analyses; however, all correlations were below 0.20.

  5. 5.

    We checked whether the effects differed for respondents receiving known brands and those receiving unknown brands by using three-way interactions. However, the three-way interactions between promotion type, brand stimuli type, and BRiC (or PDD) were not significant (BRiC: β = − 0.87, p = .34; PDD: β = − 0.08, p = .93). Hence, we conclude that our results were not affected by the type of stimuli (i.e., known or unknown brands). Furthermore, we tested for the three-way interaction involving promotion type, BRiC, and PDD to check whether the two-way interactions depend on the level of the other moderator. However, the three-way interaction was not significant (β = − 0.02, p = .92), indicating no such dependency.

  6. 6.

    A pre-test (N = 100) confirmed the intended manipulation of BRiC, revealing a significant difference in respondents’ perceived BRiC according to the four-item scale by Fischer et al. (2010) (Mhigh = 3.48, SE = 0.26, Mlow = 2.68, SE = 0.26, t(50) = 2.15, p = .03). Furthermore, we tested whether our manipulation affected respondents’ price consciousness to rule out any confounding effects on our promotion manipulation. Therefore, we used the two-item scale by Batra and Sinha (2000: “When buying a brand of toothpaste, I look for the cheapest brand available. / “Price is the most important factor when I am choosing a brand of toothpaste.”). However, we did not observe any significant differences across high and low brand relevance conditions with regard to price consciousness (Mhigh = 3.26, SE = 0.29, Mlow = 3.52, SE = 0.27, t(98) = 0.65, p = .519).

  7. 7.

    Respondents in the high BRiC conditions evaluated the brand as a more relevant factor for the purchase decision than respondents in the low BRiC conditions (Mhigh = 2.82, SE = 0.16, Mlow = 2.05, SE = 0.12, t(223) = 3.85, p < .001). Those in the high PDD conditions also perceived the purchase decision as more challenging than respondents in the low PDD conditions (Mhigh = 4.58 SE = 0.14, Mlow = 4.16, SE = 0.15, t(223) = 2.03, p = .04). To rule out cross-manipulations, we conducted an analysis of variance with all three manipulated factors and their interactions as independent variables for each manipulation check variable; however, none of the effects except the intended manipulations was significant (all p > .10).

  8. 8.

    Again, we tested for the three-way interaction involving promotion type, BRiC, and PDD to check whether the two-way interactions depend on the level of the other moderator. However, the three-way interaction was not significant (β = 0.01, p = .99), indicating no such dependency.

  9. 9.

    We would like to thank an anonymous reviewer for bringing up this issue.

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Acknowledgments

The authors would like to thank Rieke Fuhrmann and Vygaudas Juodelis for their support in data collection and Kusum Ailawadi and Karen Gedenk for their helpful comments and suggestions.

Author information

Correspondence to Marius Johnen.

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Appendices

Appendix 1. Stimulus material in study 1

First brand choice

figurea

Second brand choice, incentive to buy condition (price promotion)

figureb

Second brand choice, reason to buy condition (display promotion)

figurec

Appendix 2. BRiC manipulation, study 2

Example screenshot (high BRiC condition):

figured

Translation, high [low] BRiC condition

Germans love their teeth

Brands as a key purchase criterion of toothpaste

[Brands are not a key purchase criterion for toothpaste]

Dental hygiene is becoming increasingly important to Germans. According to a study by Techniker Krankenkasse, per-capita consumption of toothpaste, toothbrushes, and dental floss recently reached an all-time high. In the past year, per-capita consumption was 5.9 tubes of toothpaste and 3.8 toothbrushes, corresponding to increases of 6.7% and 4.5%, respectively, compared with the previous year. Private households’ total expenditures for dental and oral hygiene products were 1.81 billion Euro.

According to the study, German citizens are paying more and more [less and less] attention to the brand when it comes to dental and oral care products on the shelves. Thus, 4 out of 5 respondents stated that the brand is [not] the central selection criterion when buying toothpaste. In contrast, the price, personal recommendations, or test judgments were of secondary importance [are more important]. According to the representative study, satisfaction with dental and oral hygiene products therefore primarily depends [is not dependent] on whether they come from a brand manufacturer.

It also looks good in terms of care and provision. That is, 84% of the respondents stated that they brush their teeth at least twice a day. In addition, around three-quarters of the Germans go to the dentist for a checkup even when they do not have any problems.

Appendix 3. Manipulation of decision difficulty, study 2

In all conditions and for each respondent, product information was randomly assigned to a brand. This study was conducted in German, so the summary here provides English translations, creating some minor differences in the number of words and comparability across descriptions.

Product information in low decision difficulty condition:

Description 1

- [brand] remineralizes the enamel and thus protects against cavities.

- [brand] ensures healthy and strong gums.

Description 2

- [brand] fights the bacterial cause of gingivitis.

- The protective shield of [brand] prevents the development of cavities.

Description 3

- [brand] reliably and effectively helps protect against cavities.

- [brand] effectively prevents gingivitis.

Description 4

- [brand] provides effective and long-term cavity protection.

- [brand] supports fight against the cause of gum problems.

Description 5

- The fluoride technology of [brand] effectively combats the cause of cavities.

- [brand] works reliably and keeps the gums healthy.

Product information in high decision difficulty condition:

Description 1

The formula of [brand] is gentle on dental enamel, as it contains enzymes and proteins that your mouth uses to fight bacteria. [Brand] reliably and effectively helps prevent the loss of dental enamel minerals and protect against cavities. The protective shield of zinc and minerals prevents plaque and thus protects against gum problems. By using [brand], you get daily protection against plaque and periodontal disease. Additionally, [brand] leaves a fresh feeling with intense flavor.

Description 2

The fluoride technology of [brand] remineralizes the enamel and thus protects against cavities. In addition, the formation of bacterial plaque is inhibited in the long term. The causes of gingivitis are combated by [brand]. Thus, [brand] helps fight against the cause of gum problems.

[Brand] contains sodium fluoride to strengthen the dental enamel and is a proven preventive against periodontal diseases. In addition, [brand] offers a long-lasting feeling of freshness.

Description 3

The special formula of [brand] provides long-term protection against plaque formation and combats bacteria in the tooth pockets, which often cause gingivitis and bleeding gums. Thus, [brand] is preventative dental care for strong gums. [Brand] provides daily protection against periodontal disease and helps your mouth fight the causes of cavities. With [brand], you have an overwhelming taste experience every day with a strong feeling of freshness.

Description 4.

[Brand] provides effective protection against cavities, while the formula has an effective and gentle effect like balm. The protective shield of [brand], consisting of zinc and minerals permanently inhibits the formation of plaque and keeps the gums healthy. In addition, [brand] provides complete antibacterial protection and remineralizes the enamel, whereby the new formation of plaque and tartar are reduced. Discover the cooling taste of [brand] with particularly long-lasting freshness for a self-assured appearance.

Description 5

[Brand] offers an intense and irresistible taste experience. It has been clinically proven that [brand] reduces halitosis-causing bacteria and protects against cavities. The unique shield of protection of [brand], consisting of zinc and minerals, prevents the formation of calculus, helps harden the dental enamel, and thus effectively protects against pain sensitivity. [Brand] effectively combats the bacterial cause of gingivitis and protects against plaque when used regularly.

Appendix 4. POS promotion manipulation, study 2

Incentive to buy condition

figuree

Reason to buy condition

Storyboard of Ad

figuref

Banner in product selection

figureg

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Johnen, M., Schnittka, O. Changing consumers’ minds at the point of sale: price discounts vs. in-store advertising. Mark Lett (2020). https://doi.org/10.1007/s11002-020-09512-0

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Keywords

  • Point-of-sale promotions
  • Brand change
  • Brand relevance in category
  • Decision difficulty