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Benefit
Sales
Frameworkof
Congruency
Promotion Effectiveness
Are monetarysavings the only explanationfor consumer response to a sales promotion?If not, how do the different consumer benefits of a sales promotioninfluenceits effectiveness? To address the firstquestion, this research
buildsa frameworkof the multipleconsumer benefits of a sales promotion.Througha series of measurement studies, the authors find that monetaryand nonmonetarypromotionsprovideconsumers with differentlevels of three
hedonic benefits (opportunitiesfor value expression, entertainment,and exploration)and three utilitarianbenefits
(savings, higherproductquality,and improvedshopping convenience).Toaddress the second question, the authors
develop a benefitcongruencyframework,whichargues that a sales promotion'seffectiveness is determinedby the
utilitarianor hedonic natureof the benefits it delivers and the congruence these benefits have withthe promoted
product.Among other results, two choice experiments show that, as predictedfor high-equitybrands, monetary
promotionsare more effectivefor utilitarianproductsthan for hedonic products.The authorsthen discuss the implications of the multibenefitand the benefitcongruencyframeworksfor understandingconsumer responses to sales
promotions,reexaminingthe value of everyday-low-pricepolicies, and designing more effective sales promotions.
arketersand academics often view the reliance on
sales promotions,especially monetarypromotions,
as a suboptimalconsequence of price competition
caused by myopic management (Buzzell, Quelch, and
Salmon 1990). These critics argue that, in the short run, the
proliferationof monetarypromotionserodes their capacity
to rent market share, which explains why so many are
unprofitable(Abrahamand Lodish 1990; Kahnand McAlister 1997). In the long run, it is feared that sales promotions
increase price sensitivity and destroy brand equity-both
with retailers and consumers (Mela, Gupta, and Lehmann
1997). As a result, many industry experts are calling for
more effective and cost-efficient promotions that rely less
on price (PromotionMarketingAssociation of America Inc.
1994), and some go so far as to recommend eliminating
most promotions by switching to an everyday-low-price
policy (Kahn and McAlister 1997; Lal and Rao 1997).
The centralpremiseof this researchis thatthe value that
sales promotionshave for brands is relatedto the value, or
benefits, that sales promotionshave for consumers.Adopting this consumer perspective leads to the fundamental
question of why consumers respond to sales promotions.
Most econometric or game-theoretic studies assume that
monetarysavings are the only benefit that sales promotions
have for the consumer.If this is true, an everyday low price
may indeed represent an efficient solution for providing
consumerswith these savings while minimizingsearchcosts
for the consumer and logistical costs for the firm. Conversely, if, as this researchargues,sales promotionsprovide
consumers with an arrayof hedonic and utilitarianbenefits
beyond monetarysavings, everyday low prices cannot fully
replace sales promotionswithout the risk of alienatingconsumers who value the nonmonetarybenefits of sales promotions. From a researchperspective,the existence of multiple
consumer benefits may also help explain some puzzling
consumer responses to sales promotionsthat cannot be fully
explained by the search for savings (e.g., Dhar and Hoch
1996; Hoch, Dreze, and Purk 1994; Inman, McAlister, and
Hoyer 1990; Schindler 1992; Soman 1998).
Beyond its intended contributionto the general debate
on the value of sales promotions or on the antecedents of
consumer response to them, studying the consumer benefits
of sales promotionshas practicalimplicationsfor improving
their effectiveness. The existence of multiple types of consumer benefits provides a stepping stone for a benefit congruency framework,which argues that a sales promotion's
effectiveness is determinedby the congruency between its
benefits and those of the promotedproduct.In particular,the
benefit congruency frameworkargues that because monetary and nonmonetarysales promotionsoffer different benefits, they should be more effective for different types of
products.
In the next section, we show how fragmentedexplanations for consumer"dealproneness"can be integratedinto a
frameworkof the hedonic and utilitarianconsumer benefits
of consumer sales promotions (defined as temporary and
Brian
PierreChandon
is Assistant
Professor
of Marketing,
INSEAD.
of Nutritional tangible monetary or nonmonetary incentives intended to
Wansink
is AssociateProfessor
of BusinessAdministration,
andof Agricultural
andConsumer
Science,of Advertising,
Economics, have a direct impact on consumer behavior). In the second
of
section, we reportthe results of three measurementstudies
GillesLaurent
is Professor
of Illinois,
Urbana-Champaign.
University
HEC.
The
thank
Adam
Jer-Yuan
authors
validatethe consumerbenefit frameworkthroughmultithat
Brasel,
Chao,
Marketing,
Groupe
forhelp
Seabum
Volle,andAnneMacquin
Delamotte,
Park,Pierre
Maryse
order confirmatoryfactor analyses and structuralequation
withthedatacollection.
Thearticleis basedon PierreChandon's
dissermodels. In the third section, we develop a benefit congruof DonnieLichtenstein,
Lautationandhasbenefited
fromthecomments
ency frameworkand examine its implicationsfor the effecScottNeslin,
renceCapron,
JamesHess,StephenHoch,KentMonroe,
tiveness of monetary and nonmonetarypromotions for difandTerence
Shimp.
ferent types of productsand for brandswith various levels
Journal of Marketing
Vol. 64 (October 2000), 65-81
/ 65
Effectiveness
Sales Promotion
port for the six hypothesized benefits (for more details, see
Table I and Chandon,Wansink,and Laurent1999).
Validatingthe benefits of sales promotions. Validating
the dimensionality and the higher-order structure of the
multibenefit frameworkrequiredcollecting additionaldata
and analyzing them with confirmatory factor analyses
(Gerbing and Anderson 1988). Following the same procedure as in Study 1, in Study 2 we asked 118 graduatestudents and staff at another French university to evaluate 4
promotionseach (of a sample of 24 new promotions)using
the 18-item scale presented in Table 1. Using AMOS 3.6
(Arbuckle 1997), we first validatedthe internalconsistency
and reliability each of the six congeneric models. We then
tested the convergentand discriminantvalidity of each benefit throughfirst-orderconfirmatoryfactor analyses. These
analyses show that the proposedmodel with six distinct but
correlated benefits significantly outperforms any models
that force two benefits to be perfectly correlatedand, a fortiori, outperformsthe prevailing unidimensionalmodel (for
more details, see Chandon,Wansink,and Laurent1999).
Second-orderfactor analyses. As predicted,the six benefits are not orthogonal.To test the utilitarianand hedonic
higher-orderstructureof the six benefits, we estimated the
model with the two second-orderfactors shown in Figure I
and comparedit with a single second-orderfactormodel (see
Bollen 1989;Lichtenstein,Netemeyer,and Burton 1995).All
fit indices supportthe two higher-orderfactormodel over the
unidimensionalsolution (X2127 = 565; p < .01, goodness-offit index [GFI] = .881, adjusted goodness-of-fit index
[AGFI] = .840, incrementalfit index [IFI]= .882, root mean
squareerrorof approximation[RMSEA] = .087 for the twoconstruct model, and X2128 = 830; p < .01, GFI = .851,
AGFI = .801, IFI = .810, RMSEA = .109 for the one-con-
Promotions?
o
a0,
TABLE1
Utilitarianand Hedonic Consumer Benefits of Sales Promotions
C
0
0)
0
CD
<P~
U2
Benefit
Savings
(Monetary
savings)
C.)
h=
CD3
Existing Support
Sales promotionscan provideperceptionsof monetarysavings by loweringthe
unitprice of the promotedproduct,offeringmore of the same productforfree, or
providingrefundsor rebates on subsequent purchases of the same or other
products.Both the size of the price reductionand the deviationfroma reference
price can create perceptionsof monetarysavings and can reduce the pain of
paying (Blattbergand Neslin 1990).
Quality
(Increase in the
qualityof the
productbought)
"Inormallydon'tbuy pack
salads because they are
expensive. But I buy the
when they cut the pric
Convenience
(Reductionin
search and
decision costs)
"SometimesI remembert
need a productwhen I se
on sale."
Value expressionb
(Expressionand
enhancement of
self-concept
and personal
values)
"Ilike promotionalpack
because they make shop
fast and easy."
TABLE 1
Continued
Benefit
Exploration
(Stimulationand
variety)
Entertainment
(Amusement
and aesthetic
value)
C,
(0
ant
-o
S
3
m
CD
U)
u,
Ca
C.D
Existing Support
Because sales promotionsare constantlychanging, and because they attract
consumers' attention,they can fulfillintrinsicneeds for exploration,variety,and
information(Baumgartnerand Steenkamp 1996; Kahnand Louie 1990; Kahnand
Raju 1991). The explorationbenefit has been documentedin the context of
shopping (Babin,Darden,and Griffin1994), varietyseeking (Kahn1995), and
exploratorybehavior(Baumgartnerand Steenkamp 1996).
FIGURE1
the
Frameworkof Sales Promotions
Multibenefit
Validating
(Second-Order Confirmatory Factor Analysis)
.67
Hedonic
Utilitarian
.83
zs
Savings
.84
.45
zve
.6
.78
.61
.6
.53
.56
s1
s2
s3
qi
q2
q3
cl
c2
c3
zsl
zs2
zs3
zql
zq2
zq3
zcl
zc2
zc3
"I wish there were more promotions like this," and "With
this type of promotion,I feel like buying the product").We
selected these items on the basis of a pretest.The reliability
of the measureis conventionallyacceptable(Cronbach'sa =
.83). We used AMOS 3.6 to estimate a structuralequation
model in which the overall evaluation of the promotion
(modeled as a latent constructwith the three indicatorspresented previously) is regressed on the six latent constructs
(benefits) measuredwith the items describedin Table 1. To
examine the differences between monetaryand nonmonetary promotions, we estimated a multigroup model that
allowed for different regression coefficients, means, and
intercepts for each subsample of promotions (see Bollen
1989, p. 306). The subsampleof monetarypromotionsconsists of five temporaryprice reductions,four coupons, three
rebates,and two multiunitpacks, for a total of 269 observations. The subsample of nonmonetarypromotionsconsists
of two free gifts, two free samples, and three sweepstakes,
for a total of 192 observations. Because the questionnaire
asked respondentsto use each specific promotionas a category exemplar,we tentativelygeneralizethe results to monetary and nonmonetarypromotions.
Results of predictive analyses. A multigroup model in
70 / Journalof Marketing,
October2000
.69
.76
.76
ve2
vel
zvel
zve2
ze
45
Value
Expression
Convenience
Quality
.80
.75
.46
zq
.8
. 1
.78
.74
zx
Enter-Exploration
Exploration
tainment
.85
.65
.86
.72
.86
.80
ve3
el
e2
e3
xl
x2
zve3
zel
ze2
ze3
zX1
zx2
x3
zx3
TABLE2
3:
How
and
Utilitarian
Hedonic
Benefits Influence Promotion Evaluations
Study
NonmonetaryPromotions
n = 192
MonetaryPromotions
n = 269
Savings
Quality
Convenience
Value expression
Entertainment
Exploration
Meana
t-Value
Meana
t-Value
3.57b
2.90b
2.25
3.29
2.09
2.96
.55*
-.11
.27*
.26*
.11
-.07
5.25
-1.76
2.60
2.18
1.47
-.98
2.09
2.17
2.17
2.87b
2.94b
3.16C
.30
.36
-.84
.35*
.43*
.79*
1.63
1.16
-1.82
2.08
2.12
3.51
al = completelydisagree;5 = completelyagree.
bThemean scores of monetaryand nonmonetarypromotionsare differentat p < .01.
cThe mean scores of monetaryand nonmonetarypromotionsare differentat p < .05.
*The regressioncoefficientis differentfromzero foreach type of promotionat p < .01.
Note: Means of latentvariablesand regressioncoefficientsare estimatedin a multigroupstructuralequationmodel withmeans and intercepts
(Bollen1989, p. 306).
FIGURE2
Sales Promotions Benefit Matrix
High
Freegifts
Free productoffers
Hedonic
Benefits
Coupons
?
Sweepstakes
*
Rebates
*
Price
reductions
Low
Low
High
UtilitarianBenefits
Effectiveness
/ 71
Sales Promotion
A Benefit CongruencyFramework
Accordingto most models of consumerchoice (e.g., combinatorialmodels of attitudeformationor utility theory),consumers evaluate products on the basis of the benefits they
provide weighted by the importanceof these benefits. The
weighting of the benefits varies across products,purchase
occasions, and individuals(Eagly and Chaiken 1993; Meyer
and Kahn 1991). For low-involvement, repeat-purchase
products,the weights of some of these benefitsmay go down
to zero, so thatonly a few benefits, the most importantones,
are considered in the purchaseevaluation (as in a lexicographic decision rule). For example, Hoyer's (1984) field
study of laundrydetergentbuyersin the United States shows
that a few product benefits, such as product performance,
price, emotional attachment,or social norms, account for
81% of the (self-reported) benefits sought. Many studies
have documented that the importanceof benefits sought
varies(see Kivetz 1999;Shavitt 1990;StrahilevitzandMyers
1998), but Leong's (1993) replicationof Hoyer's study provides some of the clearestevidence. Leong finds thatthough
the same list of benefits accounts for 86% of the benefits
sought by Singaporeanconsumers,the weights of these benefits are very differentfromthe figuresreportedfor U.S. buyers. Interestingly,Leong finds that these weights vary more
across product categories (e.g., laundry detergent versus
shampoo)thanacross nationalitiesfor the same category.
We expect, therefore, that the utilitarianbenefits of a
specific choice alternativeare given more weight when consumers make a utilitarianpurchasedecision and that hedonic benefits are given more weight when consumersmake a
72 / Journalof Marketing,
October2000
173
Effectiveness
SalesPromotion
within-subjectreplicationsconsisting of a different promotion condition for each of the five choices. The five promotion conditions were (1) no promotionon any brand,(2) a
monetary promotion on the high-equity brand only, (3) a
nonmonetarypromotionon the high-equitybrandonly, (4) a
monetarypromotionon the low-equity brandonly, and (5) a
nonmonetary promotion on the low-equity brand only.
Depending on the design treatment,the five pairs of products were either two pairs of utilitarianproductsand three
pairs of hedonic productsor vice versa. The orderin which
the promotions,products,and type of targetbrandappeared
was counterbalanced.
Questionnaireswere mailed to 350 consumers in five
states (California,Iowa, Illinois, New Hampshire,and Pennsylvania), and 171 usable questionnaires were returned
(48%). Each mailing consisted of the study survey,an unrelated questionnaire,and a $6 check for participation.In the
first part of the questionnaire,respondentschose between
pairs of brandsgrouped into five productcategories. They
then providedpast usage informationfor each brand,evaluated two of ten brandsand two of five promotions,and rated
their hedonic and utilitariannature.We rotatedacross subjects the two brandsandpromotionsfollowing a latin-square
design. For each brand,a one-sentence productdescription
(e.g., "PlantersMixed Nuts, 10 oz., less than 50% peanuts")
was provided along with its price, and when necessary, a
shelf tag with the textualdescriptionof the promotionspresented in Table 3 was added. Prices ranged from $2.39 to
$3.99, equally balanced between utilitarian and hedonic
brands, with an average price of $3.46. The low-quality,
lesser-knownbrandof the pairwas pricedat a 20% discount.
The four monetarypromotionsconsistedof two coupons and
two free product offers, and the four nonmonetarypromotions consisted of two free gifts and two sweepstakes.These
promotions were selected on the basis of currentlyoffered
Study 4: Results
Manipulation checks. With two exceptions, all highequity brandswere more frequentlypurchasedthan any of
the low-equity brands(t = 18.3, p < .01) and were preferred
to their low-equity counterparts(FI,293 = 7.5, p < .01, 1r =
.16). The two exceptions were the two brands of bubble
bath, which had similarlylow usage rates and brandevaluation, and the two brandsof batteries, which had similarly
high usage rates and brandevaluations.Because this study
examines the effects of sales promotions for consumer
choices between a high-equity and a low-equity brand,we
eliminatedthese two productsfromthe subsequentanalyses.
Following the same rationale,we also eliminated subjects
who were unawareof the high-equity brandsand subjects
who were completely acquainted with the low-equity
brands, as measured by their self-reportedprior purchases
(respectively, n = 43 and n = 11). Each utilitarianproduct
scored higher on a utilitarianindex that was inspired by
Batra and Ahtola (1990) and computed by subtractingthe
semantic differentialscore on "fun/notfun" from the average semantic differentialscore on "wise/foolish"and "useful/useless."The utilitarianscore was -.04 for chocolate, .36
for nuts, 1.39 for flour,and 1.96 for detergent(FI,232= 31.3,
TABLE3
Sales Promotion Stimuli Used in Study 4
Type
Monetary
Technique
Price cut
Free product
Description
SmartSaver! Save 350 withthis coupon. Redeem at checkout.
Free gift
Sweepstakes
.69
1.93
1.31
UtilitarianScorea
.31
Buy this productand get one red rose free! Simplyselect a rose
fromthe flowerdepartmentand show this pack withthe offerto
the cashier.
-1.58
-1.10
-2.58
-1.68
score ranges from-8 to 8 and is computedby subtractingthe nine-pointsemantic differentialscore on "fun/notfun"fromthe aver
aUtilitarian
and "useful/useless."
age semantic differentialscore on "wise/foolish"
74 / Journalof Marketing,
October2000
two-way interaction is significant. As expected, the threeway interaction among product type, promotion type, and
brand equity is significant (Wald = 4.8, p < .03), which
shows that the importance of benefit congruency varies
depending on the equity of the target brand. Subsequent
analyses therefore examine high-equity and low-equity
brands separately.
The effects of benefit congruencyfor high- and lowequity brands. As predicted in HI and shown in Figure 3,
sales promotions, on average, increased market share for
high-equity brands (Wald = 5.56, d.f. = 2, p < .01) but not
for low-equity brands(Wald= .60, d.f. = 2, p = .74). As predicted in H2, for low-equity brands,monetaryand nonmon-
FIGURE3
4:
How
Benefit
Study
Congruency Influences Sales Promotion Effectiveness
Low-Equity Brands
High-Equity Brands
30
MarketShare
PointsIncrease
overtheControl 25
(No-Promotion)
Condition
20
24
-
, 19
15
With a monetary
promotion
10
666
-2
-2 *
-5
Utilitarian
Products
Hedonic
Products
Utilitarian
Products
Hedonic
Products
Effectiveness
/ 75
Sales Promotion
FIGURE4
Study 5: Effects of Benefit Congruency for U.S. and French Respondents
U.S. Respondents
French Respondents
100%
Choice Share
75%
75%
63%
64%
52%
50%
."
25%
37%
48%
36%
"
25%
0%
Utilitarian
Hedonic
Utilitarian
Hedonic
Products
Products
Products
Products
With a monetary
promotion
- - - - With a nonmonetary
promotion
products
etarypromotionsaremoreeffectivefor utilitarian
thanfor hedonicproducts.Conversely,nonmonetary
promotionsarerelativelymoreeffectivefor hedonicproducts
thanforutilitarian
products.
Implicationsfor Researchers
Understandingconsumer response to sales promotions.
The multibenefitframeworkprovides new insights into the
questions raised previously. Why do consumers respond
more to an on-shelf coupon than to a similarly advertised
temporary price reduction that offers the same monetary
incentive(DharandHoch 1996; Schindler1992)?One explanation may be that coupons offer strongervalue expression
benefits because collecting and redeemingcoupons requires
more skill and effort than buying productson sale. Coupon
usage therefore more clearly signals the smart-shopping
skills and values of the users and may superiorlyenhance
their social prestige and help them fulfill their personalvalues and moral obligations.The benefit congruencyprinciple
moderatesthis predictionby emphasizingthatit would occur
only to the extent that the value expression benefits are
important-forthe consumeror the purchaseconsidered.
Why do consumersrespondto insignificantprice reductions (Hoch, Dreze, and Purk 1994; Inman,McAlister, and
Hoyer 1990)? The surprisinglystrongresponse to sales promotion signals in the absence of significant price reductions
may be explained by the convenience benefit. Promotion
signals can increase shopping convenience by reducing
search costs (because the brandis more visible at the point
of purchase)and decision costs (because it provides a simple justification for the choice of the promoted product).
Again, the benefit congruency principleexplains why these
effects are especially strong for hurriedconsumersor those
with low need for cognition (Inman,McAlister, and Hoyer
1990; Inmanand Winer 1998).
Why do some consumers switch brands because of a
coupon but then do not redeem it (Bawa and Shoemaker
1989; Dhar and Hoch 1996; Soman 1998)? The failure to
redeem the coupons responsible for the purchase decision
may be due to these consumers valuing the convenience and
explorationbenefits coupons providein the aisles at the time
of the decision but not the monetarysavings they provide at
the time of payment. For example, if consumers buy
couponed brands because they reduce search and decision
costs or increase the variety of productsconsumers buy by
suggesting new alternatives,consumers may simply forget
to use the coupon at the checkout or believe that the embarrassmentof showing it to the cashier and the other shoppers
is not worth the monetarysavings provided.
Expandingthe relevance of benefit congruency. Further
research could study the effects of benefit congruency
beyond the utilitarianor hedonic nature of the product. It
would be interestingto study benefit importanceacross the
differentphases of the productlife cycle, differentpurchase
situations,and different general demographicand personality classifications. For example, we might expect that savings are more importantthan value expression for mature
products than for new products, for agents than for end
users, and for low self-monitoring consumers. Similarly,
Sales PromotionEffectiveness/ 77
tary promotions.One of the majorconclusions of the benefit congruency results in Studies 4 and 5 is that marketers
can increase sales promotioneffectiveness by matchingthe
type of promotion to the type of product being promoted.
When this cannot be done-say, when the promotion is
offered across differentbrandsor when the promotedbrand
is bought for a wide variety of benefits-the benefit congruency framework recommends using promotions that
combine multiple hedonic and utilitarian benefits. Such
multibenefitpromotionswould appealto the differentbenefits sought by the various segments of consumers that buy
each product.They would also match the differentbenefits
provided by the various brands promoted under a multibrandpromotion.As Study 3 suggests, this can be achieved
by designing promotionsthat combine monetaryand nonmonetary incentives (e.g., an in-pack coupon with an onpack contest or a multipackrefundwith an in-store display
that emphasizes new productuses).
The benefit congruencyprinciplecalls into question the
strong reliance of marketerson monetary promotions and
the relative neglect of nonmonetarypromotions(Cox Direct
1997). This research shows that monetary promotionscan
destroy marketshare when offered with incongruenthighequity hedonic brandscompetingagainstlow-pricedbrands.
In contrast,in the studies reportedhere, the effects of nonmonetary promotions were always positive and were relatively more stable across producttypes. Nonmonetarypromotions are also more likely than monetary promotionsto
create unique brand associations that can reinforce brand
image. We gatheredpreliminaryevidence on this issue by
Composition
TABLE 4
of the 1999 Reggie Award Finalists (number of finalists and typical examples)
UtilitarianProductsa
Monetary
promotions
Seven finalists
Hedonic Products
No finalist
Typicalexample:
BurgerKingFree FryDay:
Free orderof Frenchfries offeredon
Friday,January2, 1998.
Nonmonetary
promotions
Six finalists
Eightfinalists
Typicalexample:
Typicalexample:
Sales PromotionEffectiveness/ 79
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