Marketing Research : Discount & Coupon

Management Science9631001 林鼎強9631014 古宛臻9631015 吳育庭9631046 洪毓茹9631047 許弘道

Introduction In recent years, Taiwan is suffering from

the period of economic recession, intense with the market competition, urged the general merchandise industry to use each kind of promotion to attract consumers’ purchasing will. We decide to investigate the relationship with promotion and consumers’ buying behavior instead of sales volume. We are trying to figure out which type of sales promotion can attract most customers. And the main purpose of this study is to investigate the customer satisfaction on sales promotion of department stores

Literature review (1/5)

2.1 The definition of price discount promotion

Priya Raghubir and Kim Corfman (1999) thought the discount promotion significance is typically, in decides in quantity to reduce the price or quantity which increases in the same price may obtain.

Literature review (2/5)

2.2 The influence on price discount promotion regarding to purchasing will

(1) promotion positive argument: Fry in and McDougall(1974) research pointed out,

when the discount depth is higher, the consumer more can think he buys price for lowest price. Priya Raghubir and Kim Corfman(1999) believed that, the discount promotion may increase the value and the creation purchase economical cause, promotes the consumer to purchase the wish and to attract the consumer to purchase.

Literature review (3/5)

(2) promotion negative argument: Jedidi, Mela, and Gupta(1999) research

discovered that, the great scope discount and the many discount number of times can affect the brand choice and purchase quantity, even product appraisal.

Winer(1986) piece believed that, the regular promotion can endanger the brand, because this can create the consumer to confuse, and is different with the anticipated price, this all possibly causes the brand image not to be unstable.

Literature review (4/5)

2.3 some promotion tools that are commonly used:

1st, gives a discount ticket (coupons): The manufacturer often can use provides gives a discount the ticket, strengthens the product itself value.

Literature review (5/5) 2nd, direct reduction discount (price-off): The

manufacturer often can provide compared to a product originally selling price lower price, this kind of integrity price falls the discount to be possible to encourage the consumer to the promotional material increase purchase quantity, then wish of the raise again purchase.

3rd, complimentary gift (premium): The manufacturer often can provide some low cost or the free goods gives the consumer, stimulates buys the gas to increase the sales volume.

Hypotheses Development

1. The consumer’s purchasing will does have positive relationship with promotion.

2. Discount is more attractive than coupon for consumers

Methodologies

3.1 Sample and data collection

Our target sample for this search is students aged from 16~25. We receive 108 questionnaires, 100 of which are available.

Methodologies

3.2 Research Process

Methodologies 3.3 questionnaire

3.3 questionnaire -2

(English version) : 1. Your gender □male □female2. Your age. 10~15 □16~20 □21~25 □26~30 □above303. How many average times do you consume in the department

store every half a year? □1~2 □3~4 □5~6 □above 6 times4. Your average consuming volume each time? □below 2000 □2000~5000 □5000~10000 □above 100005. Consider following condition: if you can get free $100 gift

certificate for every $1000 you spend, would you purchase more in order to get the coupon? □Strongly Disagree □Disagree □Neutral □Agree □Strongly

Agree6. Would you increase your purchasing will when the department

store is on sale?□Strongly Disagree □Disagree □Neutral □Agree □Strongly

Agree7. Consider following condition : You want to buy a product costs 5000, and there are two kinds

of promotion, “get free $600 gift certificate ” or “10 percent off ” , which promotion will attract you more? □discount □coupon

8. What is your reason for choosing question7?

Research Analysis and results We choose Z test to test whether discount

is more attractive than coupons. 1. Null hypothesis:μ1≧μ2 Alternatives hypothesis:μ1 ＜ μ2 (which thatμ1 is the mean of question5, and

μ2 is the mean of question6) 2. Level of significant α=0.05 3. Criterion: Reject the null hypothesis if Z>1.645 or Z<-1.645 4. Decision: Since Z=–6.762087< -1.645, therefore we can reject the null atα=0.05. 5 Conclusion: Discount is more attractive than coupons.

Research Analysis and results

Research Analysis and results

Research Analysis and results

Conclusion

From all the research and the questionnaire above, it is true that the consumer’s purchasing will does have positive relationship with promotion. From this questionnaire, we could find that 66 percent of survey responsers agree that when there are promotions in the department stores, they would increase their purchasing will.

Conclusion

According to question 7, there are 85 percent of survey responsers prefer discount to coupons. Therefore, we conclude that discount is more attractive than coupon for consumers.

Reference (1/2) 1. Barwise, P. （ 1993 ） , “Brand Equity: Snark or

Boojum” ,International Journal of Research in Marketing, Vol. 10, No. 1, pp. 93-104.

2. Berkowitz, Eric N. and John R. Walton （ 1980 ） , ” Contextual Inference on Consumer Price Response ： An experimental Analysis ” , Journal of Consumer Research, Vol. 17, December, pp. 349-358.

3. Chen, S., Shih, C., Monroe, B., and Lou, Y. C. （ 1998 ） , “ The effects of framing price promotion messages on consumers’ perceptions and purchase intentions”, Journal of Retailing, Vol. 74, No. 3, pp. 353-372.

4. Davis, S. J., J. Inman, and L. McAlister （ 1992 ） , ” Promotion Has a Negative Effect on Brand Evaluation Or Does It Additional Disconfirming Evidence”, Journal of Marketing Research, Vol. 29, pp. 143-148.

5. Dickson R. P. and A. G. Sawyer （ 1990 ） ,” The Price Knowledge and Search of Supermarket Shoppers”, Journal of Marketing, Vol. 54, pp. 42-53.

Reference (2/2)

6. Evans, F. B., （ 1963 ） , ” Selling as a Dyadic Relationship: a New Approach” , American Behavioral Scientist, vol. 6, May, pp. 76-79.

7. Fry, Joseph N. and Gordon H. McDougall （ 1974 ） , “ Consumer Appraisal of Retail Price Advertisement”, Journal of Marketing, Vol. 38, July, pp. 64-74.

8. Grewal, D., R. Krishnan, J. Baker and N. Borin （ 1988 ） , ” The Effect of Store Name, Brand Name and Price Discounts on Consumers’ Evaluations and Purchase Intentions” , Journal of retailing, Vol. 74, No. 3, Fall, pp.331-352.

9. Jedidi, Kamel, Carl F. Mela and Sunil Gupta （ 1999 ） , “ Managing Advertising and Promotion for Long-Run Profitability” , Marketing Science, Vol. 18, Winter, pp. 1-22.

10. Raguhubir, P. and K. Corfman （ 1999 ） , “ When do Price Promotions Affect Pretrial Brand Evaluations?”, Journal of Marketing Research, Vol. 36, No. 2, pp. 211-222.

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