Behavioural and Psychographic Characteristics of Supermarket Catalogue Users
Supermarket catalogues (also known as store flyers or circulars) are a popular retail tool for influencing shoppers’ behaviour and increasing store sales. Past research has documented varying effects of catalogue promotions on consumer behaviour, but it has not focused specifically on the psychographic and behavioural characteristics of catalogue users. This research aims to fill this gap through an analysis of a representative sample of 506 South Australian consumers. The results show that consumers who use supermarket catalogues are more likely to have one or more of these characteristics: price-consciousness, deal-proneness, low-income, and rarely switches brands. The contribution of this research provides empirical evidence on the user profiles of supermarket catalogues. Retailers and suppliers equipped with this knowledge can create more relevant promotions to increase efficiency and incremental sales.
CitationTan, P.J., Bogomolova, S., Tanusondjaja, A., Lockshin, L., Maria Corsi, A., and Villani, C. (2021) "Behavioural and Psychographic Characteristics of Supermarket Catalogue Users". Forthcoming in the Journal of Retailing and Consumer Science
The Effects of Competitive Context on Consumer Response to Price Changes
This paper aims to understand how a brand’s price level, relative to its competitors, will affect consumers’ responses to price changes of the brand. The study uses experiments to examine brand choice responses to price increases and decreases across contexts differing in competitor brands and their respective prices. These experiments are conducted with six consumer goods categories. The research identifies three key factors that affect the size of responses to brand price changes - (1) passing a competitor brand’s price, (2) narrowing versus widening the price gaps with competitors, and (3) whether competitors are predominantly higher or lower priced brands.
CitationDunn, S., Dawes,J., Bogomolova,S. (2019). "The Effects of Competitive Context on Consumer Response to Price Changes”. Forthcoming in the Journal of Marketing Management.
How the layout of a unit price label affects eye-movements and product choice: an eye-tracking investigation
Unit pricing (i.e., displaying prices per unit of volume or weight) is deemed helpful for grocery shoppers. Many countries mandate that supermarkets provide unit prices. However, consumers only make limited use of unit pricing. Consumer advocates attribute this to the poor and inconsistent presentation of the unit price information. Using eye-tracking, the present research tests how unit price label design factors (position, font size, signposting and color highlighting on the price label) affect consumers’ eye-movements during the product decision process. Additionally, the study assesses how the effects of the design factors depend on the consumer’s price consciousness. The research also tests how the consistency of the label presentation affects eye-movements and choice. Findings from an experimentally designed shopping task using natural stimuli reveal that an enhanced label design leads to an increase in the number of eye fixations, in particular when the unit price is color highlighted and especially for consumers who are less price conscious. These increased fixations, however, do not result in changes in product choice.
CitationBogomolova, S, Oppewal, H, Cohen, J & Yao, J, "How the layout of a unit price label affects eye-movements and product choice: an eye-tracking investigation", Journal of Business Research, 2018
Price Promotions: examining the buyer mix and subsequent changes in purchase loyalty
Price-related promotions are rife in consumer goods categories. Reports say between 50% to 60% of the total marketing budget of CPG firms are spent on temporary price promotions. Price promotions are prevalent for many reasons. These include very large sales uplifts, to maintain brand sales and shelf space, to preserve the brand’s normal price, and to combat store brands. Retailers run price promotions to signal to shoppers they are price-competitive and drive store traffic.
However, price promotions are costly. Various sources say the majority of price promotions are loss-making for both manufacturers and retailers. Unfortunately, managers become reliant on price promotions. The reason is that running promotions can help achieve sales budget for a brand in one year, but it then becomes very difficult to reduce promotion incidence the next year while maintaining market share.
This study investigates the extent to which temporary price promotions attract people who do not normally buy a brand, and whether buyers change their propensity to buy the promoted brand afterwards.
CitationDawes, J. (2017) "Price Promotions: examining the buyer mix and subsequent changes in purchase loyalty". Forthcoming in the Journal of Consumer Marketing.
Buying Brands at both Regular Price and on Promotion Over Time
We analyse the purchasing of brands at both regular and promotional price over time. The goal is to better understand the extent of consumer deal-proneness. Our analysis shows most consumers buy brands on promotion at least some of the time, and the tendency to buy on promotion relates mostly to how much promotion is available in a category, suggesting little innate deal-proneness. The extent of promotion can be so high that as many as half of all brand buyers buy the brand solely when it is on promotion. However, this amount of on-deal buying is only very slightly higher than would be expected given the amount of promotion available. We find few buyers buy only on promotion. Promotion buyers of a particular brand also buy other brands on and off promotion more or less in line with the market share those other brands have at regular and promotional price. The three main implications are: (1) brand loyalty is still an important aspect of purchase, (2) a brand’s normal-price buyers are a major source of its volume from price promotions, (3) there is only a small effect of deal-proneness on promotion buying over and above that of promotion prevalence in a category.
CitationScriven, J., Clemente, M., Dawes, J., Trinh, G., Sharp, B. (2017). "Buying Brands at both Regular Price and on Promotion Over Time ". Australasian Marketing Journal, Accepted November 1, 2017.
Retailers’ and manufacturers’ price-promotion decisions: intuitive or evidence-based?
Consumer price promotions account for more than half of many manufacturers’ marketing budgets, and require a significant time investment to manage. Amidst the considerable research on price promotions, little academic attention has been paid to how manufacturers and retailers make price-promotion decisions. Based on in-depth interviews with a broad range of managers, this study investigates factors that influence price-promotion decisions in durable and consumer goods industries. Findings suggest that (1) intuition and untested assumptions are the main inputs into these decisions; (2) practitioners lack solid empirical evidence to guide their actions, and their beliefs are often in stark contrast with academic knowledge about the effectiveness of price promotions; and (3) price promotions are typically not evaluated against the objectives according to which they were justified, impeding appropriate feedback for future decisions. Research priorities are outlined to advance evidence-based decision-making in this area.
CitationSzabo, M, Kennedy, R, and Bogomolova, S (2016), 'Retailers’ and manufacturers’ price-promotion decisions: intuitive or evidence-based?', Journal of Business Research.
Exploring the effectiveness of endcap locations in a supermarket: early evidence from in- store video observations
Despite anecdotal evidence that manufacturers and retailers consider front of store endcaps as more enticing, our results show that back of the store endcaps have slightly more shopper traffic and are most often in the shoppers’ field of vision during the shopping trip.
Price changes and defection levels in a subscription‐type market: can an estimation model really predict defection levels?
This paper examines the relationship between price changes and customer defection levels in a “subscription”‐type market, namely car insurance. Two regression models are constructed to estimate this relationship, one model for younger customers and another for older customers. The regression models closely estimate the defection rates associated with different levels of price changes. The analysis also shows that the impact of price decreases on defection rates is less than the impact of price increases, extending previous research. The paper notes that models of this type should offer true predictive ability and therefore tests the ability of the model to predict defection rates for new data. The models performed comparatively poorly in this regard, particularly for price increases. The paper concludes that multiple sets of data are needed to develop and validate predictive models.
Managers must at all times remain skeptical of "predictive" analysis based on a single set of data. The difference between fitting a model, and subsequently using it for prediction, is well acknowledged in the forecasting literature, but less so in the marketing discipline.
Model fitting may be easy, but true prediction is very difficult.
CitationDawes, J. (2004). "Price changes and defection levels in a subscription‐type market: can an estimation model really predict defection levels?". Journal of Services Marketing, Vol. 18 Issue: 1, pp.35-44.
