Marketing Letters

, Volume 2, Issue 1, pp 35–45 | Cite as

Brand experience as a moderator of the negative impact of promotions

  • Gwen Ortmeyer
  • Joel Huber
Article

Abstract

While price promotions are generally believed to have a positive impact on immediate sales, their effects on attitude towards repurchase, quality perceptions, and repurchase are far less clear. We present a study that tests the effect of brand experience in moderating the negative impact of promotions. The results of the laboratory study indicate that the negative impact of a discount on perceptions of quality and subsequent intent to purchase at full price is eliminated among those who had tried the brand. The moderation of the negative impact of promotions has not been previously shown to occur despite its prediction by a variety of behavioral theories.

Key words

Brand Experience Price Promotions 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Bem, D. (1972). “Self-Perception Theory.” In L. Berkowitz (ed.), Advances in Experimental Social Psychology. New York: Academic Press, 1–62.Google Scholar
  2. Blattberg, Robert C., and Scott A. Neslin. (1989). “Sales Promotion: The Long and the Short of It,” Marketing Letters 1, 81–97.Google Scholar
  3. Bowman, Russ. (1988). “Sales Promotion,” Marketing and Media Decisions 23 (July), 150–154.Google Scholar
  4. Campbell, D. T., and D. W. Fiske. (1959). “Convergent and Discriminant Validation by the Multitrait-Multimethod Matrix,” Psychological Bulletin 56, 81–105.Google Scholar
  5. Dodson, Joe A., Alice Tybout, and Brian Sternthal. (1978). “Impact of Deals and Deal Retraction on Brand Switching,” Journal of Marketing Research 15 (February), 72–81.Google Scholar
  6. Gobor, Andre, and C. W. J. Granger. (1966). “Price as an Indicator of Quality: Report of an Enquiry,” Economica 33 (February), 43–70.Google Scholar
  7. Gerstner, Eitan. (1985). “Do Higher Prices Signal Higher Quality?” Journal of Marketing Research 21 (May), 109–115.Google Scholar
  8. Guadagni, P., and John D. C. Little. (1983). “A Logit Model of Brand Choice Calibrated on Scanner Data,” Marketing Science 2 (Summer), 203–238.Google Scholar
  9. Huber, Joel, and John McCann. (1982). “The Impact of Inferential Beliefs on Product Evaluations,” Journal of Marketing Research 19 (August), 324–333.Google Scholar
  10. Monroe, Kent B. (1973). “‘Buyers’ Subjective Perceptions of Price,” Journal of Marketing Research 10 (February), 70–80.Google Scholar
  11. Monroe, Kent B. (1979). Pricing: Making Profitable Decisions. New York: McGraw Hill.Google Scholar
  12. Neslin, Scott A., and Robert W. Shoemaker. (1989). “An Alternative Explanation for Lower Repeat Rates after Promotion Purchases,” Journal of Marketing Research 26 (May), 205–213.Google Scholar
  13. Ortmeyer, Gwen, James M. Lattin, and David B. Montgomery. (1991). “Individual Differences in Response to Consumer Promotions,” forthcoming. International Journal of Research in Marketing.Google Scholar
  14. Rothschild, Michael L., and William C. Gaidis. (1981). “Behavioral Learning Theory: It's Relevance to Marketing and Promotions,” forthcoming Journal of Marketing 45 (Spring), 70–78.Google Scholar
  15. Rothschild, Michael L. (1987). “A Behavioral View of Promotions' Effects on Brand Loyalty.” In M. Wallendorf and P. Anderson (eds.), Advances in Consumer Research. Association of Consumer Research, 14, 119–120.Google Scholar
  16. SAS Institute. (1988). SAS User's Guide: Statistics. Cary, North Carolina.Google Scholar
  17. Sawtooth Software. (1986). Ci2 System for Computer Interviewing. Ketchum, ID.Google Scholar
  18. Scott, Carol A. (1976). “The Effects of Trial and Incentives on Repeat Purchase Behavior,” Journal of Marketing Research 13 (August), 263–269.Google Scholar
  19. Sawyer, Alan G., and Peter Dickson. (1984). “Psychological Perspectives on Consumer Response to Sales Promotion,” In Katherine Jocz (ed.), Research on Sales Promotion: Collected Papers. Cambridge, MA: Marketing Science Institute.Google Scholar
  20. Spence, M. (1974). Marketing Signalling. Cambridge MA: Harvard University Press.Google Scholar
  21. Tenowitz, Ira. (1988). “Coupons Gain Favor with U.S. Shoppers,” Advertising Age 64 (November 14).Google Scholar
  22. Tybout, Alice M., and Carol A. Scott. (1983). “Availability of Well-Defined Internal Knowledge and the Attitude Formation Process: Information Aggregation versus Self Perception,” Journal of Personality and Social Psychology 44, 474–479.Google Scholar
  23. Urbany, Joel E., William O. Bearden, and Dan C. Weilbaker. (1988). “The Effect of Plausible and Exaggerated Reference Prices on Consumer Perceptions and Price Search,” Journal of Consumer Research 15 (June), 95–110.Google Scholar
  24. Winer, Russell S. (1986). “A Reference Price Model of Brand Choice for Frequently Purchased Products,” Journal of Consumer Research 13 (September), 250–256.Google Scholar

Copyright information

© Kluwer Academic Publishers 1990

Authors and Affiliations

  • Gwen Ortmeyer
    • 1
  • Joel Huber
    • 2
  1. 1.Harvard UniversityCambridgeUSA
  2. 2.Duke UniversityDurhamUSA

Personalised recommendations