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A Benefit-Based Approach for Increasing the Effectiveness of Promotions

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  • Ivanova Marusya

    (D.A. Tsenov Academy of Economics Svishtov, Bulgaria)

Abstract

The purpose of this paper is to reveal some insights for increasing the effectiveness of promotions. To achieve this purpose, first, the existence of multiple customer benefits of promotions is proved. It is empirically validated that promotions deliver three utilitarian (monetary savings, higher quality and shopping convenience) and two hedonic (variety and pleasure) benefits to the customers. Second, a structural equation model is estimated to measure the relative contribution of these benefits on the customers’ overall evaluation of promotions. The research suggests that in order to increase their effectiveness, promotions must be framed by focusing not only on their primary benefits but also on all other benefits with a significant contribution to customers’ attitudes towards promotions. Finally, a benefit-based segmentation is conducted. Four market clusters are identified (none-benefit, allbenefit, utilitarian-benefit and hedonic-benefit customer segments). Further, these clusters are profiled using demographic and psychographic variables.

Suggested Citation

  • Ivanova Marusya, 2012. "A Benefit-Based Approach for Increasing the Effectiveness of Promotions," Scientific Annals of Economics and Business, Sciendo, vol. 59(2), pages 67-82, December.
    • Handle: RePEc:vrs:aicuec:v:59:y:2012:i:2:p:67-82:n:5
    DOI: 10.2478/v10316-012-0032-7
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    References listed on IDEAS

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    Cited by:

    1. Somesh Kumar Sinha & Priyanka Verma, 2018. "Impact of Sales Promotion’s Benefits on Brand Equity: An Empirical Investigation," Global Business Review, International Management Institute, vol. 19(6), pages 1663-1680, December.

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