Hedonic and Utilitarian Consumer Benefits of Sales Promotions

A growing number of marketers and academics argue that sales promotions have a detrimental impact on brand equity, increase consumer sensitivity to price, and are inefficient and frequently unprofitable in the short term. These critics usually assume that monetary savings are the only benefit of sales promotions; thus they recommend every-day-low-pricing (EDLP) as a more efficient way to pass savings to the consumer. Ignored in this debate is the question of whether sales promotions have consumer benefits beyond monetary savings. In this report, authors Chandon, Wansink, and Laurent suggest that sales promotions actually offer consumers multiple benefits, both utilitarian and hedonic. They develop and test a multibenefit framework and, in two experiments, demonstrate that a promotion's effectiveness is determined by the range of benefits it delivers and the congruency these benefits have with the promoted product.