Sales promotion can be defined as “special offers” and excludes all paid media advertising, but also includes techniques like coupons, self-liquidating offers, bargain packages, gifts, sampling, and point of purchase promotions and displays (Alai, 2006; Apatite, 1998). Sales promotion is value offered to the customer in a short-term orientation. It essentially aims to stimulate demand during the period in which it is set (Apatite & Apatite, 1995; Lehman & Winner 2002).
The potential benefits of using sales promotions could range from attracting new customers from competitors to resurging customers to switch to brands with higher profit margins or simply inducing existing customers to buy more. According to Apatite and Apatite (1995), promotions can be divided into two groups: and “value-adding” promotions. Valetudinarians promotions such as price deals, coupons, and refund offers are the most popular promotional techniques used by retailers.
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Value-adding promotions including free gifts, samples, loyalty schemes, or competition are often overlooked. These types of sales promotions may play a more positive role of adding entertainment value for what is paid (Wakefield & Barnes, 1996). Liechtenstein, Nanometer, and Burton (1995), on the other hand, classified sales promotions into price or non-price promotions. Notwithstanding, price-based value increasing promotions have the potential to erode the image of the company as consumers often use price as a surrogate measure of quality (Tells & Agate, 1990).
In contrast, value added promotions tend to offer the customer “something extra,” which might provide the customer with extra incentives to purchase the product (Apatite & Apatite, 1995). Along that line, the central An Examination of Sales Promotion Programs in Hong Kong remises of the research by Chanson, Wanting, and Laurent (2000) is that the value that sales promotions have for brands or for customers is related to the value. Several researchers (Henderson, 1987; Schneider & Currie, 1991) claim that sensitivity to different types of sales promotion might explain different promotional responses.
Following this rationale, the primary objective of this study is to focus on the sales promotion techniques offered by Hong Kong cosmetic and toiletry retailers and to determine to what extent these techniques are preferred by their consumers. LITERATURE REVIEW Although sales promotions take up a very large share of total marketing expenditure, they remain an area of less strategic consideration or attention than any other aspect of the promotion mix (Cravings & Anderson, 1998).
The consumer goods manufacturer sees sales promotions as a necessary evil. The advocate of brand advertising proclaims that sales promotions are a bad thing since they do not contribute to the brand building needed for future success and profitability (Dates, 2004). At the same time, those involved in running the sales promotions focus on the actual issue of getting the greatest amount of short-term sales for the least promotional investment (Davies, 1992).
Over the years, sales promotion has become a ubiquitous element of consumer marketing. However, not all promotional activities are effective. For instance, Alai (2006) claimed that instant-reward sales promotion was preferred over delayed- reward sales promotion and the preference for semiconductor sales promotion was stronger than for other-product sales promotion. Gilbert and Jakarta (2002) analyzed the promotional deals used in U. K. Supermarkets and found that price discount had significant influence on consumers’ buying behavior.
In contrast, sampling and “buy one get one free” techniques had no significance on a consumer’s reported buying behavior. In food retailing, Apatite (1998) found non-price sales promotion techniques like competition were an effective method for moving stock. However, in the case of financial services, Apatite and Apatite (1995) suggested glittering prizes. A large number of reviewed literature essentially focused on the functions of sales promotion activities (e. G. , Gilbert & Jakarta, 2002; Alai, 2006; Apatite, 1998; Apatite & Apatite, 1995).
However, a relatively small number of the studies explicitly examined the retailers’ capability of managing “sales. ” There are two articles that relate to this perspective. Beets and McCormick (1995) examined a wide range of factors that might influence “sales. ” These include the external environment (e. G. , legal, economics, competitive, culture), retailers (e. G. , strategic, merchandise), consumers (e. G. , individual perception, motivation), and behavior (e. G. , buying, complaints). The second 470 L. Yang teal. Vigorous (cost-effective and cost-ineffective managers of “sales”) of New Zealand tillers, Merciless and Foam (1999) found the cost-effective managers used more accurate demand forecasting, good coordination of media, careful planning of the promotion, and timely availability of stock rather than cost-ineffective managers of “sales. ” The literature has thus far indicated that not all sales promotion techniques are effective in influencing consumers’ buying behavior. To be successful, effective management of sales promotion programs is essential.
There are a number of studies on sales promotion at product category and service level, such as on service Wakefield & Barnes, 1996), FMC (Blather & Inclines, 1990; Raja, 1992), supermarket industries (Shih, Chemung, & Preponderates, 2005), and even on specific goods like tobacco (Gulping, Pierce, & Rooks, 1997). Nevertheless, there is a lack of studies relating to evaluating the sales promotion techniques employed by cosmetic and toiletry retailers and the consumer’s preference of these promotions, especially in the Asian context.
This study will fill in this gap by revealing the sales promotion practices and customers’ responses to them in Hong Kong. METHODOLOGY Hong Kong is a free enterprise society. It has been touted by advertisers as the capital of sales promotion, given the myriad of promotional activities that appears in the newspapers, outside the undergrounds, inside commercial enterprises, and in letter boxes. Hong Kong is a large import market for cosmetics and toiletries in Asia as it has a very small manufacturing sector.
Cosmetic and toiletry products are mainly distributed through department stores, supermarket chain stores, cosmetics specialty shops, and, more recently, through concept stores and beauty salons. Hong Kong consumers spend an average of HAS $900 per month on these products (Line, 007). Popular product ranges include skin whitening products, hair coloring products, color cosmetics, nail care products, and skin and slimming treatments (Echoing, 2005).
Three research assistants were recruited to identify all the sales promotion techniques that appeared in DON between April and October 2004. The three Judges were initially given briefing and training by the authors before setting out to identify the techniques based on the 12 definitions. All three Judges examined one newspaper at a time. Any disputes with regards to promotion techniques were referred to the authors and resolved immediately. At the end of the exercise, the inter-Judge reliability averaged 86. 3% which slightly exceeded the 85% recommended by Sardinian (1977, p. 14). 472 Questionnaire for the Consumers The questionnaire was translated into Chinese by employing back-translation technique, which ensures meaning was as close to identical as possible.
Using the 12 techniques we have identified, we asked the respondents to nominate one sales rumination technique they received in the most recent purchase, and to tick the level of satisfaction with the technique received and overall purchase experience. Four These include: unfavorable or favorable; did not please me or pleased me a lot; worthless or valuable; and did not like it or liked it a lot. To gauge the consumers’ overall purchase experience, we used four items: 1) experience not unique or experience is unique; 2) has no special meaning or has special meaning; 3) not as good as expected or as good as expected; and 4) not worth my efforts or worth my efforts.
The in-person surveys were carried out simultaneously in 15 locations in Hong Kong between 3 and 6 pm on one Saturday in June. The respondents were randomly selected. For instance, every third person was asked to participate in the interview provided that the candidate has made a recent cosmetic or toiletry product purchase. Otherwise, the fourth person was selected and so on. Each participant was shown a card that listed the 12 sales promotion techniques translated into Chinese as the majority of Hong Kong people read and write in Chinese. RESULTS Profile of Sales Promotion Techniques and Respondents Our analysis revealed there were 99 cosmetic and toiletry sales promotion advertisements in the past six months: 63% of them appeared on Monday, Tuesday, and Thursday.
A large number (56%) of these advertisements were placed in News and Entertainment sections of the newspapers. For consumers, there were 121 respondents participating in our survey. Of this, 90% of them were females, and 61% claimed they were married. In terms of age, 46% were aged 25-34; 32% were aged 35-44; and 21% were aged 45-55. Most of the respondents (91%) had at least a secondary education; 83% of the respondents said they bought the cosmetic and littler products for their own use; and, only 17% said the purchase was for family use. Popularity of Sales Promotion Techniques Table 1 shows the importance of various sales promotion techniques between cosmetic/toiletry advertisers and consumers.