Introduction

Sales promotion Types of Sales Promotion Monetary promotions: Price Discounts, Coupons (Utilitarian product like light bulb) Non Monetary Promotions: free gifts, free samples, sweepstakes, contests (Hedonic product like Ice Cream) Less tangible benefit of Sales promo. Entertainment, Emotional benefit for Bargain Hunters like Self perception of being Smart Shopper.

Non-Monetary Promotions
Reinforce brand equity Difficult to influence consumer internal reference prices. Less likely to influence negatively brand association.

Tools of non-monetary promo

Gift: Product or Service offered free. Premium: Relatively low price on purchase.

Objective of the Paper

Understand factors impacting consumer response towards gift promotions. Specifically, analysis of Four variables: Nature of promoted product Fit between product and the gift Type of brand used Consumer deal proneness

Conceptual framework and hypothesis

Use of gifts to influence purchase intention Free gift offer effects may be limited, if consumers perceive it as providing little or no value. Stronger relationship with business positively affect consumer responses to gift. No significant effect of gift value and recipient gender. Role of other variables like: promotional benefit levels, affective state of consumers, price consciousness.

Nature of promoted product

Categories of products studied in sales promotion studies: Utilitarian Hedonic Benefit congruence framework

Benefit congruence framework

Effectiveness of sales promotion depends on the similarity b/w benefits product provide and benefits promotion generate. Monetary promotions Utilitarian benefits Non-monetary promotions Hedonic benefits

 Monetary promotions do not Hedonic products Non-monetary promotions also Utilitarian products Gift is a gift regardless of nature of product (perception about gift promotion with reference to product) Purchase intentions generated by gift promotion remains same regardless of the nature of product. (hedonic benefits while purchasing utilitarian product)

Fit between the product and the gift

High fit Low fit Consumers respond favorably consumers report negative reactions

Hypothesis
Overall evaluation of gift promotions will not be influenced by the nature of the promoted product Consumer purchase intentions of gift promotions will not be influenced by the nature of the promoted product

Cognitive bases for perceived fit

In brand extension: Feature similarities Image consistency In cause related marketing: Similarity of values Consumer base

Hypothesis
Overall evaluation of gift promotions will be more favorable when the fit b/w promoted product and gift is high Consumer purchase intentions of gift promotions will be more likely when the fit b/w promoted product and gift is high

Brand type
Asymmetric effect of promotion Gift promotions for high equity brand respond Gift promotions for low equity brand respond more favorable less favorable

Hypothesis
Overall evaluation of gift promotions will be more favorable when the promoted brand has high brand equity Consumer purchase intentions of gift promotions will be more likely when the promoted brand has high brand equity.

Deal proneness
Psychological propensity to buy Consumers responses depend on characteristics of consumers

Categories of research in deal proneness

1)-Characteristics of deal prone consumer Demographic Psychographic Purchasing habit variables 2) Deal proneness is a consumer trait

Hypothesis
Overall evaluation of gift promotions will be more favorable when deal proneness is higher. Consumer purchase intentions of gift promotions will be more likely when deal proneness is higher.

Methodology
2*2*2 between subjects factorial design (Product type: Utilitarian vs Hedonic) * (Gift type: Utilitarian vs Hedonic)* (Brand type: High Equity vs Medium Equity)

First Pretest
First pretest include 46 undergraduate students. List 8 frequently used products Degree of Utilitarianism or Hedonism: 1- (Practical Purpose/Just for fun) 2- (Purely functional/Pure enjoyment) 3- (For a routine need/Pure enjoyment) Level of familiarity

 Selected Products: Sports Shoes: Utilitarian product Mp3 Player: Hedonic Product

Second pretest
Congruent gifts with products: Backpack Utilitarian gift (Shoes) Card Hedonic gift (Mp3) 2 Sports shoes brand selected: Adidas (High equity), High familiarity level, high quality Fila (Medium equity), Med familiarity level, Med quality

 2 Mp3 brand selected: Sony (High equity), higher familiarity, higher quality Hitachi (Medium equity), med familiarity, med quality

Data collection, sample and procedure

247 undergraduate students participated 8 questionnaires Assess hedonic v/s utilitarian nature of product Awareness and perceived quality of brand Respondent's deal proneness

Discussion and Implication

Hedonist or Utilitarian character is not an important issue in gift promotions

For overall evaluation of gift promotion: High equity brands Medium equity brand For purchase intention: High equity brand Deal proneness: Deal proneness Deal proneness Positively influence purchase intentions Similar evaluation of gift products regardless of deal proneness Strong fit b/w product and gift Gifts that fit well with product Hedonic gifts

 Non-Monetary promotions more effective for building brand equity. Promoted products and gifts should be of same nature for more effective results. High degree of similarity b/w products and gifts higher purchase intention

Limitations of research
Constrained number of products, gifts and brands Absence of factors such as gift interest, value of the gift and perceived benefits Less represented sample