LF1643774 (Unilever)

Bachelor of International Economics
Management and Finance
Final Paper – Giacomo Sainaghi
1643774
“Monetary vs. Non-Monetary Incentives for
Impulse Buying Products in Marketing
Promotions”
Milan, July 2015

Ad
Annibale,
condottiero
dall’animo
immortale.

A
Lorella,
che
è
stata
sempre
presente
e
sempre
lo
sarà.

A
Giuliana,
Franco
e
Fabiana,
che
rendono
la
mia
famiglia
ancor
più
splendida.

A
chi
mi
vuole
bene
ma,
ancor
di
più,
a
chi
non
me
ne
vuole:

Grazie.

1
“Monetary and Non-Monetary Incentives for Impulse Buying
Goods in Marketing Promotions”
Table of Contents
Chapter I: Introduction .................................................................................. 2
1.1 Brief Introduction ...................................................................................................2
Chapter II: Background and Literature Review........................................... 2
2.1 Impulse Buying Model ...........................................................................................2
2.1.1 Psychological Means of Impulse Buying ........................................................2
2.1.2 Significance of Impulse Buying Behaviour .....................................................3
2.1.3 Effect of Promotion Strategies on Impulse Buying Behaviour ........................5
2.2 Promotion strategies..............................................................................................7
2.2.1 Influence of Promotion Strategies on Brand Image, Brand Equity and Brand
Loyalty. ....................................................................................................................7
2.2.2 Consumer Perceptions of Trade Promotions ...............................................10
2.2.3 Free-Gifts effect on promotions ....................................................................11
2.3 Theory of Incentives ............................................................................................13
2.3.1 Consumer’s Preferences of Rewards and Monetary vs. Non-Monetary
Incentives...............................................................................................................13
2.3.2 The Role of Trust..........................................................................................14
2.4 Controlled Experiments on Promotion Strategies................................................15
2.4.1 Price Promotions vs. Quantity-Based Promotions........................................15
2Chapter III: Methodology........................................................................... 17
3.1 Definition of the Research Question....................................................................17
3.2 Hypothesis Testing Research Design Sampling .................................................18
3.3 Research Method Explanation ............................................................................20
3.4 Research Design Sampling .................................................................................21
Chapter IV: Case Study ............................................................................... 22
4.1 Case Study on Unilever’s Promotion Strategies..................................................22
Chapter V: Results....................................................................................... 29
5.1 Results from Previous Experiment ......................................................................29
Chapter VI: Conclusions ............................................................................. 33
6.1 Findings from Questionnaire and Case Study.....................................................33
6.2 Managerial Implications.......................................................................................34
Bibliography................................................................................................. 36
Appendix ...................................................................................................... 39

2
Chapter
I:
Introduction

1.1 Brief
Introduction

In recent years, the “Theory of Incentives” has increasingly been studied,
analysed and used by marketers in relation with promotion strategies for
various categories of products. First, a brief outline on the existent literature
will summarize and clarify variables to be analysed through previous studies
made on the topic. With the following experiment, different categories of
consumers will be sorted by demographics to understand their preferences
and their buying behaviour towards specific impulse products (such as Ice
Cream and Mayonnaise). In addition, the respondents will eventually express
their preference among monetary or non-monetary incentives used for a
determined set of products. Answers will be interpreted and analysed with
statistical tools, highlighting differences within different consumer groups.
Moreover, a case study will be run on a Unilever ‘s impulse product to give a
practical example enforcing key findings and results from the experiment.
Lastly, conclusions on this topic will outline tendencies of consumer groups
towards impulse buying products chacterized by presence of promotions.
Chapter
II:
Background
and
Literature
Review
2.1
Impulse
Buying
Model

2.1.1
Psychological
Means
of
Impulse
Buying

Impulse buying has been defined as a prevalent and common phenomenon in
consumers’ lifestyle, thus receiving a great deal of importance from
researchers and theorists (Youn, Faber, 2000, p.179). By definition, impulse
buying occurs when a consumer experiences a sudden, often powerful and
persistent urge to buy something immediately. The impulse to buy is
hedonically complex and may stimulate emotional conflict. Also, impulse
buying is prone to occur with diminished regard for its consequences (Rook,
1987, p. 191)

3
As this peculiar behaviour does not include a great deal of evaluation,
unreflective individuals are more likely to seek immediate gratification instead
of thinking and considering long term consequences.
Moreover, most recently, researchers seem to agree on a hedonic component
of impulse buying, laying the emphasis on some behavioural elements that
characterize impulse consumers. Actually, Rook (1987) reports experiences
of consumers “being called” by the products, as if they were subconsciously
induced to purchase them.
To tell the truth, even impulsive shoppers view and recognize their purchases
as negative but, throughout their decision making process, their affective state
overcomes their cognitive willpower inducing them to deliberate about
purchase (Karbasivar, Yarahmadi, 2011, p.175).
Previous findings on psychological means of impulsiveness brought to a
precise classification of impulse buying tendencies in five crucial elements.
Rook and Hock (1983) identified them as follows: a sudden and spontaneous
desire to act, a state of psychological disequilibrium, the onset of
psychological conflict and struggle, a reduction in cognitive evaluation and a
lack of regard for the consequences of impulse buying.
Thus, having to deal with impulsive shoppers, marketers are giving a greater
deal of attention to psychological traits that drive impulse buying and, in turn,
affect shopping experiences for different consumer categories. Eventually,
each of them will have a similar behaviour and mind-sets influencing their
reaction to a certain stimulus encoded in different types of impulse products.
2.1.2
Significance
of
Impulse
Buying
Behaviour

Due to the increasing number of consumers making purchases without
advance planning (Stern, 1962, p.59), impulse buying behaviour has shown a
great deal of importance to marketers while classifying consumers during their
shopping experiences. Stern (1962) already investigated the significance of
impulsiveness through surveys inside supermarkets almost fifty years ago.
The results of his studies were briefly summarized in the following table
(Table 1) where the tendency towards unplanned purchases is shown as a
percentage of total purchases.

4
As it is shown above, unplanned buying represents a distinctive share of
purchases in supermarkets and it has become, in the majority of cases, an
efficient and sensible way to buy goods (Stern, 1962, p.59).
Furthermore, this increase in significance brought to the creation of an actual
“Impulse mix”, dividing and identifying four broad categories of unplanned
buying.
First, it is to say that impulse buying is strongly influenced by various factors,
such as economic, personality, time, location and cultural factors. Second, the
factors listed above eventually made possible the definition of the categories
of unplanned buying. Again, Stern (1962) divides the categories as follows:
1. Pure Impulse Buying. According to Stern’s classification, this kind of
impulse buying is the easiest to distinguish, as it is actually the pure
impulse purchase. This classification may account just for a small
number of purchases as frequent shoppers develop habits that
eliminate a big amount of impulsiveness from shopping experience.
2. Reminder Impulse Buying. This occurs when a shopper remembers
that his stock is exhausted or running low while shopping, or when he
links a product advertisment to a product he previously decided to buy.
Actually, remembrance of previous experience is the key point of this
category, sparking the impulse to buy.
3. Suggestion Impulse Buying. This kind of impulse behaviour affects the
shopper when he first sees the product, visualizing its need. Product
characteristics and qualities are valued at the Point Of Sale, as the
shopper does not have any previous knowledge of the item. The main
difference from pure impulse buying lays in the rational and functional
approach behind the purchase, giving less importance to the emotional
shopping driver.

5
4. Planned Impulse Buying. According to its mere wording, planned
impulse buying seems to be a counterintuitive definition at first, but it is
really the best description for this shoppers’ tendency. In fact, the
already planned shopping experience that consumers have in mind
coexists with the intention to make other purchases depending on price
specials, coupon offers and other promotion strategies.
Together with the above classification, researchers have developed different
scales measuring consumers’ impulse buying attitude. As a matter of facts,
their tendency can also be assessed as a product-specific variable (Jones,
Reynolds, Weun, and Beatty, 2003, p.510) driving, in turn, a product-specific
behaviour.
Moreover, researchers have also empirically assessed the role of involvement
in impulse buying, because of its significant impact on the product-specific
level. Actually, involvement may include different mechanisms such as
emotional responses to certain items, role of atmospherics and other
situational variables characterizing impulse and product-specific purchases
(Jones, 2003).
Finally, the incidence of impulse buying is growing (Stern, 1962, p.62), mainly
because of readily adopted methods of buying to certain merchandising
innovations by consumers. According to Stern, due to the previously
mentioned interrelationship between buying and merchandising, impulsive
shopping will continue to grow in significance.

2.1.3
Effect
of
Promotion
Strategies
on
Impulse
Buying
Behaviour

As mentioned in the previous section, there is a substantial difference in goals
of reminder impulse buying from the pure impulse buying behaviour, as the
first is more rationale in its decision making process (Liao, Shen, Chu, 2009,
p.274). The two processes have also different evaluation processes in which
motivation differs. Actually, in reminder impulse buying rational motivation is
present but it could not be interpreted as a bigger mean of motivation with the
respect to emotional drivers. The research ran by Liao (2009) eventually
confirms that the link between rational consumers and emotional motivations
is statistically evident.

6
As a matter of facts, consumer benefits are mainly based on the distinction
between utilitarian and hedonic benefits. Liao (2009) argues that utilitarian
attributes of products such as reliability, accessibility and reduced pricing are
mainly auxiliary, practical and cognitive, serving as a mean to the end value of
products themselves. On the other hand, hedonic features of products with
non-practical purpouses are mainly passionate and sensorial.
Marketing scholars argued that sales promotions might bring benefits to
consumers according to their shopping habits, their values and ultimately their
satisfaction. Thus, promotional items and activities attached to a certain
product can be alternatively be valued as tools aimed at increasing
consumers’ utility (Darke and Freedman, 1995). On the basis of previous
arguments, sales promotions and their benefits follow a utilitarian and hedonic
classification. On the one hand, if sales promotions provide utility
maximization and intrinsic efficiency they can be filed as utilitarian promotions.
On the other hand, if they aim at consumer engagement, fun and enjoyment
then they can clearly be classified as hedonic.
Based on the work of Chandon (2000), a benefit congruency framework has
been created, in order to highlight how monetary and non-monetary incentives
provide consumers with diverse benefits. Moreover, this tool also links
promotion’s effectiveness with the match between these benefits and product
value, personality traits and shopping occasions.
Congruently with previous findings, non-monetary incentives provide hedonic
benefits to consumers, while monetary incentives brought product users
utilitarian plus (Liao, 2009).
The reason why price-discount-based promotions refer to the utilitarian
reference group is to be found in the way consumers solve needs. Actually,
utilitarian consumers are mainly focused on resolution of external needs such
as saving money, search reduction and the cost of decision-making.
On the other hand, non-monetary promotions refer to hedonic products as
they address users’ need for diversity and innovation, self-perception and
enjoyment.
Moreover, researches made by Liao (2009) are statistically supported, thus
linking price discounts to utilitarian products and non-monetary promotions to
hedonic products. Thus, due to the interaction effect of promotion strategy

7
and product appeal on reminder impulse buying, utilitarian products will
benefit more from a price discount while hedonic products will promote
stronger impulse buying by using non-monetary incentives.
However, rational consumers are indifferent between monetary or non-
monetary promotions because prudent thinking and gift preference
characterize their decision-making process.
Finally, it seems possible that free gift and price discount incentives bring the
same effect on reminder impulse buying (Liao, 2009).
2.2
Promotion
strategies

In many industries, promotions counts for a significant share in the marketing
mix budget.
Before continuing, a definition of trade promotion is required. Trade
promotions are defined as “special incentive programs offered by the
manufacturer to their distribution channel members. They take many forms,
including direct price discounts and free case offers” (Blattberg, 1987, p.124).
Band managers spend a substantial amount of budget resources to trade
promotions and eventually, within some companies, trade promotion
expenditures are greater than advertising expenditures. For this reason,
models were developed to test if trade promotions were profitable and sales-
effective.
2.2.1
Influence
of
Promotion
Strategies
on
Brand
Image,
Brand

Equity
and
Brand
Loyalty.

Generally, price promotions create additional revenues influencing total profits
(margins), while factors such as brand, category and setting of the
marketplace affect promotional benefits and how they are allocated among
retailer and manufacturer revenues.
A first major finding is that a price promotion typically does not have
permanent monetary effects for either party. Second, price promotions have a
predominantly positive impact on manufacturer revenues, but their effects on
retailer revenues are mixed (Srinivasan, 2004, p.617).
Additionally, margins for the whole retailer category are eventually negatively
influenced by price promotions; Srinivasan (2004) outlines the existence, with

8
empirical evidence, that price promotions are typically not valuable to the
retailer.
Moreover, revenue elasticities for retailers are bigger for frequently promoted
brands, for impulse products and within categories with low intensity of brand-
proliferation.
For this reason, even if companies are giving increasing importance and
frequency to sale promotions, becoming increasingly relevant in
communication strategies, there is always a degree of risk in their use. One of
biggest is actually the decrease in sales following the promotion period, due to
consumers stocking promoted items. Other reasons could be related to habit
effects, as consumers purchase the product only if promoted, or to brand
image deterioration due to promotion effect. Actually, brand image can be
deteriorated through frequent promotional campaigns, obstructing all the
efforts in building up the brand itself.
As a matter of facts, brand equity is built up on the set of assets and liabilities
directly linked to the logo and brand name, increasing or decreasing product
or service value for the company or its consumers. Brand equity is actually
constructed on a multidimensional level, including five dimensions: loyalty,
perceived quality, association/differentiation, awareness and market
behaviour (Martìnez, 2006, p.33).
The third dimension mentioned above directly refers to a precise concept,
such as brand image. According to Keller (1993), brand image is defined as
the perceptions on a brand reflected as existing associations in the
consumer’s memory. These associations have their origin in direct
experience, communicated information and also in interference from existing
associations on the company, origin, etc. If those associations are positive,
they become clear and recognizable through the consumer’s preference for a
specific brand.
The associations generated by brands on consumers may actually be
regrouped into attributes, benefits and attitudes (Keller, 1993, p.11).
Associations will be impressed in the individual’s memory according to the
stimulus provided and to the mental impression related to the aforementioned
information. Thus, managing brand image is crucial in strategic marketing
programs.

9
For this reason, Chandon (2000) argues that sales promotions will be actually
more effective if congruence between benefits provided by the good and
benefits generated by the promotion exists. This congruence may also have
long-term effects on brand image due to promotional strategies related to the
brand.
Taking into account brand equity, researchers have traditionally argued that
sales promotions may not have beneficial effects, eroding brand equity. On
the other hand, according to modern marketing habits, companies utilize
promotional campaigns to differentiate and refresh their brand image, trying to
build awareness for the promoted brand.
As a matter of facts, adopting a consumer-based brand knowledge
perspective of brand equity, this study shows that monetary and non-
monetary promotions are useful to create brand equity because of their
positive effect on brand knowledge structures (Palazón-Vidal, 2005, p.180).
Thus, organizations are striving to create and define a durable brand in the
marketplace as their ultimate goal. This is due to the higher retail price for
strong brands, increasing market presence, reactive promotional campaings
and advertising, broader product lines and time-responsive market
penetration. Apparently, sales promotions are no longer used for traditional
marketing goals only, but also to build stronger brands in the industry.
Keller (1993) stresses the importance of the “differential effect that brand
knowledge has on a consumer response to the marketing of that brand”.
According to Keller’s statement, brand equity and brand knowledge seem to
be two strictly linked concepts that are built, from a psychological perspective,
on a variety of brand associations impressed in memory.
Hence, higher-equity brands are marked by a greater number of associations,
and more net positive and unique associations (Martìnez, 2006, p.35).
In recent literature, the effect of brand equity on advertising and trade
promotions has been empirically tested, finding different arguments
supporting the aforementioned concepts.
In his analysis, Agrawal (1996) indicates that “if a brand is sufficiently stronger
than the other and if advertising is cost effective, then the stronger brand
loyalty requires less advertising than weaker brand loyalty, but a larger loyal

10
segment requires more advertising than a smaller loyal segment”. Moreover,
under the outlined conditions, a greater deal of trade promotion budget is
required for brands with stronger loyalty.
Apparently, the stronger loyalty brand is less threatened by the weaker brand,
as its loyalty is eventually stronger, thus finding advertising practices
unattractive.
On the other hand, promotions play a great role in stronger loyalty brand’s
spending, trying to tear apart the weaker brand’s pool of trusty consumers.
Ultimately, Agrawal (1996) clearly defines the strategies followed by the two
categories of brands. “Stronger brand plays ‘offensive’ actually using more
trade promotions, while the weaker brand plays ‘defensive’ by increasing the
amount of advertising”.
2.2.2
Consumer
Perceptions
of
Trade
Promotions

Consumers build various perceptions towards different promotional frames,
each one increasing consciousness about deal value. In those frames, price
discounts are dominating the scene, having the greater beneficial effect on
consumer impression.
Moreover, in low-price offerings the role of inferences has become
increasingly important, as some products suffer negative quality inferences.
Alternatively, free-gifts are able to maintain good quality image and deal
value.
To tell the truth, in the trade promotions environment the most common
promotion strategy is eventually represented by monetary incentives in buying
products, that is reduction in pricing.
However, taking into account consumer inferences and perceptions, price
discounts have been widely criticized, as they lower the perceived selling
price and quality; often, the discounted price is wrongly interpreted as the
“true price” of the item, lowering the possibility of continuous purchase after
the end of the reduced pricing policy.
Rather than thinking they are getting the same quality item at a lower price,
consumers may use the lower discount price to infer they are actually getting
a lower quality item at a lower price (Darke, 2005, p.37)

11
Together with the actual price discount related to the promoted item,
promotions have also different non-price benefits. Actually, one of those
benefits is represented by the time frame during which the promotion is valid
(also known as ‘redemption window’). Specifically, redemption windows can
be framed as ‘expansive’ or ‘restrictive’, thus interacting with consumers’
perception in valuing and using the promotion itself (Cheema, 2007, p.4).
Consumers’ judgment of promotion utility is directly linked to their knowledge
of redemption window’s time frame. As a matter of facts, the more expansive
the time frame is, the longer and more feasible is perceived to be. Thus,
consumers express their preference regarding flexibility, usually preferring
expansive frames to restrictive ones.
On the other hand, restrictive frames could sometimes be preferred, as they
are perceived as more definite and less vague.
2.2.3
Free-‐Gifts
effect
on
promotions

Nowadays, marketers are struggling while designing adequate and rewarding
promotional campaigns. Eventually, promotions may vary on different levels,
trying to catch consumer’s eyes and inducing him to make a purchase. For
this reason, marketers are giving a great deal of importance to creativity,
especially in designing promotional campaigns for consumers.
Common types of promotions are free-gift offers with the purchase of a
product (Laran, 2013, p.112). Actually, the offer effectiveness is still being
studied as some companies make the biggest share of sales through free-
gifts while other companies are not using this promotional strategy at all.
Conversely, marketers are offering an alternative promotion strategy such as
pool of free-gifts with a certain product; consumers are eventually unsure of
what they are getting as each gift has a certain degree of winning probability.
Actually, psychologists have studied the effects of uncertainty on consumers
and findings showed a negative impact as uncertain situations create a sense
of anxiety. Consumers solve this state of mind only with information gathering,
the only mean to solve and cope with uncertainty. Eventually, Laran (2013)
states that consumers suffer greater uncertainty when they make cognitive
decisions, thus gathering information becomes a crucial step in the
purchasing process. On the other hand, if consumers make affective

12
decisions they would be more willing to be surprised with a gift. Thus,
consumers are much more likely to make a purchase in presence of
uncertainty when a certain degree of affect is involved. Managers should
actually know how to increase or decrease the degree of uncertainty in their
promotional campaings involving free-gifts, as this state of mind is crucial for
promotional effectiveness.
Precisely, when the decision-making process is characterized by the
presence of profound feelings affective decisions are made; they are
influenced by internal and circumstantial factors such as emotive feelings or
affective product positioning. Whereas cognitive decisions are more practice
and related to the amount of information gathered before making a decision.
Internal factors play an important role, especially in focusing on objective
product features, while circumstantial factors relate more to objective product
offerings by marketers or utilitarian product valuations.
Having considered how much internal decision-making process influence
marketers’ promotion strategies, free-gift strategies seem to be inundating the
marketplace (Raghubir, 2004, p.181). Marketers use free-gift with purchase
as a mean of enticing consumers to buy their product.
Moreover, it is crucial to understand what is the degree of influence that free-
gifts have on current and future sales of the brand being promoted with non-
monetary incentives, as for the other promotional strategies mentioned in
previous chapters. Eventually, free-gifts boost the purchase value for the item
but they also bring some other inferences that consumers link to this type of
promotion strategy. Inferences could be both about the free-gift itself and
about the brand giving away the free-gift incentive.
Raghubir (2004) analyses free offers as a mean to enhance sales of the
promoted product by increasing the value of the transaction, taking into
account how this promotion strategy may affect stand-alone sales of the
product offered as a free gift.
Ultimately, brand managers should be able to identify the situations where
using free-gifts actually helps sales volume, trying to keep the same level of
brand equity of the product offered for free.

13
2.3
Theory
of
Incentives

2.3.1
Consumer’s
Preferences
of
Rewards
and
Monetary
vs.
Non-‐
Monetary
Incentives

In recent years, marketers, focusing not only on promotional strategies
involving free-gifts but also on the role of consumer’s preferences with the
respect to rewards, have increasingly studied the “Theory of Incentives”.
Apparently, on-line privacy is one area of study where incentives given to
customers play a crucial role.
First, according to psychological wording, incentives are defined as “those
stimuli in the environment, both positive or negative, that motivate our
behaviour”. As a matter of fact, in the on-line privacy field, the given incentives
seemed to be effective means of behaviour, thus materialistic consumers
were identified as more willing to share personal information.
Offering incentives in return for personal details seem to be one viable
strategy to deal with privacy concerns. Actually, consumers are willing to
share their personal information in exchange for certain subsequent benefits
such as reduced pricing, premiums or other forms of promotions.
Phelps et al. (2000) suggested that privacy concerns could be alleviated if
marketers offer benefits in exchange for personal details. He also found that
“in most cases, the individual-level information was willingly supplied in
expectation of such future benefits as reduced prices, premiums, or other
incentives”.
Furthermore, the “Theory of Incentives” may also apply to customer loyalty,
using as example loyalty programs offered by different companies.
Moreover, Jang (2015) categorizes the objectives of loyalty or frequency
reward programs into three basic groups. First, most of these schedules are
modelled to retain the actual customer base and therefore maintain sales
volumes, margins, and profits. The second objective is to ultimately boost
sales to existing customers. The third objective is to make possible cross-
selling practices for the company’s products or services.
Specifically, another crucial element in the incentives’ framework is
represented by the timing of the reward, which is eventually an indicator used
to determine the value that costumers give to incentive programs. As a matter

14
of facts, consumers have always preferred immediate gratification with the
respect to accumulated and delayed rewards (Jang, 2015, p.403).
Furthermore, marketers should examine the degree of effort and involvement
to accomplish monetary or non-monetary rewards in assessing customer
preferences. Actually, apart from reward preferences, the role of motivation
while applying to loyalty reward programs is becoming crucial. Prior research
in sales promotions strategies has outlined that monetary incentives (savings)
are not the only reason why consumers look for special deals (Chandon et al.,
2000). Attributes such as quality, accessibility, value definition and hedonic
benefits serve as further motivators among consumers.
Perhaps, in the end, the most distinguishing feature of monetary incentives
(price promotions) is their emphasis on getting consumers to take action, thus
managers preserve their use as the quickest and most solid means to boost
sales. Yet just as price promotion is an incentive to shop, it can also be a
disincentive to think carefully and evaluate alternatives (Aydinli, Bertini, 2014,
p.1).
The starting point of this theory is the psychological and managerial
assumption that people take their decisions by combining two different types
of decision-making processes: one, unintentional and affective; the other,
cautious and premeditated. As a matter of facts, deliberate thinking can take
part on these reactions, but it is costly and time-consuming.
In this context, price promotion can discourage deliberation (Aydinli, Bertini,
2014, p.4) because it makes a potential purchase less consequential: the
prospect of paying less for an item of given quality necessarily lowers the
degree of involvement, inviting the consumer to rationalize and diminish
mental and time effort. If this is the case, price promotions should leverage
the relative impact of affective responses in shopping habits, thereby shifting
propensity toward affect-rich products such as impulse buying products.

2.3.2
The
Role
of
Trust

As previously mentioned in the paragraph, the potential threat of loosing
privacy has actually been examined as a disincentive to consumer disclosure,
and this potential loss stands out as a socially shared risk linked to disclosure
consequences. The main arguments regard the possibility by external party to

15
access or even buy private information. Eventually, as soon as consumers do
not have complete control over their personal information exposure they
immediately feel vulnerable and thus reluctant to disclose (Castaldo,
Premazzi, 2010, p.66).
Specifically, according to self-disclosure theories, consumers’ willingness to
share their personal data regards fundamentally their judgment of intrinsic
costs, exposure, and profits. Thus, first of all, companies should try to develop
a trust relationship with consumers, actually reducing their self-disclosure
costs. During the process of building trust, the two parties are involved in a
dynamic and on-going relationship made of successive interactions between
them. On the other hand, initial trust opinions could also be modelled without
previous experiences or direct relationships between the two parties.
Moreover, companies may boost benefits regarding self-disclosure using
incentives in exchange for consumers’ details, increasing consumer
perception that an exchange of benefits from the information-providing act is
taking place, thus reducing concern with privacy because they feel an equal
exchange has been established (Castaldo, Premazzi, 2010, p.67).
Ultimately, as monetary incentives can be widely used by consumers for any
of their wishes, price promotions may be framed as bigger gains than a
promotional gift of the same value but disposed not by the consumer himself
but by the companies.
2.4
Controlled
Experiments
on
Promotion
Strategies

2.4.1
Price
Promotions
vs.
Quantity-‐Based
Promotions

Nowadays marketers explored consumer preferences towards different
promotional strategies by carrying out an increasing number of researches.
Normally, it turns out that promotions are preferred to regular offerings
(Mishra, 2011, p.197), but their behaviour changes while dealing with bonus
packs. As a matter of facts, even if both offer means of saving, consumers
seem to demonstrate a preference to promotions framed as beneficial rather
than those aimed at reducing losses.
Mishra (2011) demonstrates consumers’ inclination in getting more or a
surplus of a product. Specifically, the rationale lies in the monetary value

16
associated with bonus packs. Consumer valuation follows an independent
process, evaluating only the bonus without taking into account the price of the
item. Consequently, it leads to a more positive evaluation when the focus is
on the bonus part and not on its monetary value (Mishra, 2011, p.199).

2.4.2
Coupon
Campaigns
and
Scan-‐Back
Deals

Recalling what has been outlined in previous chapters, for most
manufacturers trade promotions are primary source of short-term sales
increase.
According to Venkatesan (2012), retailers are eventually seen as the crucial
source of those campaigns, taking into account coupon promotional
strategies. As a matter of facts, retailers customize their customer database
according to revenue contributions. Thus, consumers can be classified as
‘best customers’ only if above a certain threshold.
Specifically, unlike typical loyalty points programs, customers are not aware of
customized coupon campaigns until they receive them, and retailers do not
explicitly communicate the type of customer behaviours that are rewarded
(Venkatesan, 2012, p.77).
Moreover, coupons are tools providing, at the same time, savings value and
information related to certain products, producing exposure and redemption
effect for customers.
Conversely, the widespread use of scanners means manufacturers can create
a different type of trade deal - named “scan-back” - in which they offer to
reimburse retailers a certain amount of money for each unit sold during a
promotion week (Drèze, 2015, p.19). The retailer may eventually begin the
promotional activity at any time within the deal window, using the scan-back
incentive only referring to the units sold rather than the off-invoice deal.
Consequently, according to Drèze (2015), retailers will have to give a greater
deal of importance on marketing to consumers, rather than making purchases
from manufacturers.

17

2.4.3
Ethnic-‐group
Level
Effect

The widespread use of consumer sales promotions in product management
has sparked considerable debate over their effectiveness (Kwok, Uncles,
2005, p.170). Thus, existing discrepancies suggest there are multiple factors
at work; for instance, that sales promotions are more effective when they
provide benefits that are congruent with those of the promoted product
(Chandon et al., 2000).
In principle, cultural differences at national and ethnic-group levels may
influence different levels of consumer behaviour, including responses to
marketing stimuli such as sales promotions. Eventually, a deep understanding
of where these characteristics have an impact can help in taking strategic
marketing decisions.
Kwok and Uncles (2005) focus their study on one particular aspect of culture:
the way of life of people grouped by ethnicity, including shared norms and
beliefs. As a matter of facts, being part of an ethnic group will have, in turn, an
impact on consumer dispositions and behaviours.
Lastly, cultural values’ strength may affect the effectiveness of promotion
strategies, thus there is an actual need to assess and understand culturally-
driven responses of consumers to promotional strategies.

Chapter
III:
Methodology

3.1
Definition
of
the
Research
Question

Although incentives, either monetary or non-monetary, have largely been
used as a promotional means for different product categories, yet few studies
have been focused on understanding their importance in non-planned
shopping experiences. The existing literature emphasizes various consumer
reactions to marketing stimuli and outlines several shopper behaviours
accordingly. Eventually, as impulse buying is prone to occur with diminished
regard for its consequences (Rook, 1987, p.191), empirical testing on the
appeal and effectiveness of incentives represents an engaging research field

18
to better understand the hedonically complex consumer shopping
experiences.
Thus, the following study is aimed at defining, through various hypothesis
testing, what is the relationship among monetary and non-monetary incentives
in non-programmed buying, stressing the importance of impulsiveness in
consumer preferences.
3.2
Hypothesis
Testing
Research
Design
Sampling

In general, consumers appreciate the presence of promotional incentives
when they are making a purchase (because incentives provide immediate and
tangible benefits). In contrast, due to the impulsiveness of their decision, the
presence of incentives does not represent a crucial attribute in shopping
experiences (because, by definition, impulse buying occurs when a consumer
feels the urge to buy something immediately).
Thus, based on previous literature researches and recent consumer
tendencies, the two main hypotheses were defined.
In this specific case, the following linear regression will be run to test H1(1) and
H2(2):
o Y = Tendency to impulse buying (Q8 of the questionnaire: “Ti capita
mai di fare acquisti non programmati quando ti rechi al supermercato?”
!1-7)
o X1 = Influence of monetary incentives (Q9 of the questionnaire: “In un
acquisto non programmato quanto influisce la presenza di uno sconto
di prezzo? ! 1-7)
o X2 = Influence of non-monetary incentives (Q10 of the questionnaire:
“In un acquisto non programmato quanto influisce la presenza di un
articolo promozionale in omaggio? ! 1-7)
o X3 = Being Young/Senior (Dummy variable based on Q20 of the
questionnaire, regrouping the variable “Age” into two different
categories: Young and Senior)
Thus the regression to be run on the first hypothesis will be as follows:
Y = β0+ β1X1 +β2X2 + β3X1X3 + β4X2X3 + ε

19
" H1 (1): In impulse buying shopping experiences, promotions
involving monetary incentives result in increased purchase
likelihood compared with promotions involving non-monetary
incentives between the “young” and the “senior” customer groups.
The statistical analysis to be run on the second hypothesis regards a
comparison between averages. It is to be done with the same variables as
above, including one new variable:
o X3 = Being Salaried/Unsalaried (Dummy variable based on Q21 of the
questionnaire, regrouping the variable “Profession” into two different
categories: Salaried and Unsalaried)
" H1 (2): In impulse buying shopping experiences, promotions
involving monetary incentives result in equal purchase likelihood
compared with promotions involving non-monetary incentives
between the “Salaried” and the “Unsalaried” customer groups.
Moreover, the questionnaire submitted to respondents was characterized by
some “YES/NO” questions, thus the second hypothesis (H2) will be tested with
a logistic regression analysis. This peculiar type of analysis is a particular
case of the generalized linear regression model. The logistic model is applied
when the dependent variable (Y) is represented by a dummy variable taking
values 0 to 1, assuming only two possible outcomes.
The variables taken into account will be the following:
o Y = Being Young/Senior (Dummy variable based on Q20 of the
questionnaire, regrouped as above)
o X1 = Brand-switching with monetary incentives (Q6 of the
questionnaire: “Quanto saresti disposto a cambiare il tuo brand di
fiducia con uno nuovo in seguito ad un incentivo monetario”! 1-7)
o X2 = Brand-switching with non-monetary incentives (Q7 of the
questionnaire: “Quanto sei disposto a cambiare il tuo brand di fiducia
con uno nuovo in seguito ad un incentivo non monetario?” ! 1-7)

20
Thus the regression to be run on the second hypothesis will be as follows:
" H2: In impulse buying decisions, the brand-switching likelihood
related to monetary incentives is higher than the brand-switching
likelihood related to non-monetary incentives between the “Young”
and “Senior” customer groups.
3.3
Research
Method
Explanation

The following questionnaire uses a descriptive method research in
determining the existing relationship between monetary or non-monetary
incentives in impulse-like shopping experiences on a determined sample of
respondents.
The following research uses both quantitative and qualitative methods of
study. On the one hand, in assessing the profile of respondents and their
preferences, quantitative method was used. On the other hand, a practical
case study will be included in the analysis to formulate both quantitative and
qualitative inferences on how companies deal with impulsiveness throughout
their promotional campaigns.
Specifically, the instrument used in this study was an online questionnaire
(see Appendix) for the respondents. It consisted of different parts:
Part I.
It dealt with the respondent’s attitude in non-programmed shopping
experiences and their tendency towards impulsiveness. Respondents were
given different anchored scales to choose from under various impulse buying
experiences. Eventually, this part has been used to test their tendency
towards impulsive choices while shopping.
Part II.
It dealt with the respondent’s personal and professional profile. This part was
only aimed at gathering demographics on the sample population (n = 266)
eliciting data on “Sex”, “Age”, “Employment Status” and “Region of
Provenience”.
Y = β0+ β1X1 +β2X2 + ε

21
Actually, personal data were asked at the very end of the experiment as they
sometimes represent a disincentive in filling the questionnaire itself.
Consumers are sometimes unwilling to share personal information if asked at
the beginning of the study.
Variables were reorganized to run hypothesis tests. Especially, the variable
“Age” was regrouped as follows:
• “Young” customer group; including respondents from the 15-25 yrs
old and 26-40 yrs old categories.
• “Senior” customer group; including respondents from the 41-60 yrs
old and >60 yrs old categories.
Moreover, the variable “Profession” was regrouped as well, taking into
account money disposability as follows:
• “Salaried” customer group; including respondents from the following
categories: “Employee”, “Manager”, “Freelance Professional” and
“Entrepreneur”.
• “Unsalaried” customer group; including respondents from the
following categories: “Student”, “Retired” and “Unemployed”.
The aforementioned division is aimed at differentiating streams of income. On
the one hand, the “Salaried” customer group is characterized by the presence
of a stable monthly salary. On the other hand, the “Unsalaried” customer
group is characterized by the presence of a random income stream,
depending on different factors such as money given by the family (for
“Students”), the actual amount of pensions (for “Retired”) and the different
monetary benefits given to the “Unemployed” category. For all these reasons,
the different categories were regrouped under the same label “Unsalaried”.
Finally, a case study will be used as a reinforcing tool to demonstrate previous
hypothesis by a corporate perspective. As a matter of facts the focus will be
given on Unilever PLC and on one of its impulse products such as its
mayonnaises (e.g. Calvé, Hellmann’s, etc.).
3.4
Research
Design
Sampling

The following study will be conducted on a sample of 266 (n=266) randomly
chosen Italian consumers. Respondents were targeted according to some

22
demographic variables such as “Sex”, “Age Group”, “Employment status” and
“Region of provenience”. Eventually, some of those variables will be
combined and used to test different hypothesis on promotional preferences for
a given set of customers.
Data were collected through an on-line questionnaire but additional thirty-five
answers were gathered through face-to-face interviews in stores, trying to
address the address the “Over 60” category. The online questionnaire was not
actually completed by the entire sample, thus some answers may be
characterized by missing values.
Moreover, gathered results have been balanced among the different levels of
each attribute. The crucial customers segments are based on “Age Group”
(Table 2) and “Region of Provenience” (Table 3), thus information were
collected trying to keep a uniform distribution of answers among the Italian
market.
Table 2 – Age Groups
The table above shows the distribution of respondents among age groups. The greater share of answers is
represented by the 15-25 category.
Table 3 – Region of Provenience
The table above shows the distribution of respondents among different regions of provenience. The greater share of
answers is represented by the “Centre” category (45% of the sample).

Chapter
IV:
Case
Study

4.1 Case
Study
on
Unilever’s
Promotion
Strategies

The following case study is aimed at briefly outlining corporate strategies
towards trade promotions on impulse buying products. Thus, its significance
also relates to the previous questionnaire, where impulse buying tendencies
and promotion preferences were studied from a consumer’s standpoint.

23
Moreover, the representativeness of this case study is eventually confirmed
by the relative market presence of the subject company, Unilever Italy.
Unilever is a BritishDutch multinational FMCG company, founded in 1929 by
the merger of a Dutch margarine company (“Margarine Unie”) and a British
soap-making firm named “Lever Brothers”. From the very beginning the
company has been playing in the international market and, between the
1930s and recent days, it has been a protagonist of a sharp rise and large
expansion, making it one of the biggest and most powerful FMCG
multinationals worldwide.
Nowadays, Unilever is characterized by four product categories: food, ice
cream, home care and personal care, with a lot of brands including Knorr,
Calvé, Dove, Lipton, Algida and many others.
One of the pillars on which Unilever built its success is its culture
comprehension and market adaptation strategy, enabling a sound customer
relationship.
Furthermore, UL serves its customers with international experience and
knowledge, shaping itself as a real multi-local multinational (Cherubini, 2007).
Due to the importance of Food within the Italian market, the following case
study will be focused on one product from the aforementioned category,
satisfying attributes related to impulse buying behaviour of consumers. Thus,
using mayonnaise as an explanatory product perfectly outlines the importance
of impulse buying by the corporate perspective, especially in revenue-
generating strategies.
As a matter of facts, Dressing, after the Ice Cream, is the category with the
highest number of impulse buying shoppers. It leverages the so-called
continuous “double exposition” and, being placed close to dressings’ product
complements (see Appendix A), it boosts the impulsiveness and generates
value for the whole category. Additionally, Table 4 outlines the relative
importance of Dressing (“Salse”) within the Unilever’s product offering.
Possibly, the questionnaire on impulse buying consumer behaviour outlined,
through hypothesis testing, the following three main findings on shopping
habits:
" Impulse buying tendency
" Sensitiveness to monetary incentives by consumers

24
" Brand-switching practices within the same product category
Table 4: Relative importance of Dressing compared to other UL’s categories
Superstores Supermarkets
As a matter of facts, both UL and other FMCG companies are increasingly
becoming aware of those three shopping habits, eventually representing the
core essence of challenges for branded companies.
1. First, consumers’ tendency towards impulse buying represents a
challenge both for retailers (from now on named “Trade”, as UL uses
this term in its corporate dictionary) and for branded companies,
working to satisfy consumer trends such as the necessity to boost
product impulsiveness. Thus, impulse buying implies category projects
to physically fill stores and not only shelves, having invested resources
of the branded company towards the Trade. Actually this execution
enables both parties to work positively on margins by using different
promo strategies such as double exposition for impulse shopping
experiences.
2. Second, the increasing and crucial importance of monetary incentives
to consumers represents a further threat to leader companies. It
eventually encompasses the risk of greater investments in monetary
promotions with evident financial impact for major corporations. Failing

25
to do so may enable customers to lower their loyalty to the brand,
broadening even more the financial loss.
3. Last, the brand-switching phenomenon is closely linked with the two
previously outlined risks. As a matter of facts, switching practices are
specifically related to impulse buying tendencies in shopping and to the
sensitiveness to price cuts.
The main explanation that trade managers give in supporting trade promotion
strategy refers to the category’s growth. Specifically, as market leaders grow,
so does the category by doing marketing promo activations to reduce cut
price and increase the quantity of portfolio in promo. Those activities are
aimed at increasing total value sales for the category and to boost gross
margins linked to promo mechanics.
Therefore, having to deal to trade promotions’ challenges, the leading
company reacts with a “category action” to overcome problem in margins and
channel exposure with the Trade.
The Marketing Mix Modelling (from now on named “MMM”) represents a
powerful tool that UL uses while mitigating the previous risks, taking concrete
actions to overcome promotions’ threats.
Consequently, the MMM acts as a statistical model answering a broad set of
questions such as:
• What is the optimal price to improve brand profitability?
• When a competitor increases price, what impact might this have and
how should the company respond?
• What is the substitution effect of a price reduction?
• Which is the most effective promotion to deliver increased volume and
profit?
• Which activities and channels delivered the highest ROI?
This econometric model can isolate and quantify individual volume drivers by
taking into consideration the historical data each week, in each point of sale. It
also uses the largest number of “observations” as possible to analyse the
sales changes due to the different drivers, being able to get the net impact of
each simultaneously.

26
Hence, the MMM works by relating changes in a marketing mix factor (such
as “price” to a determined change in sales) while accounting for any other
changes that might be happening at the same time. The resulting analytics, in
turn, provide the business with fact-driven and evidence-based input to
decision-making.
As a matter of facts, MMM’s output ranges from different elements of the
Marketing Mix (such as “Price” and “Promotion”) to other crucial factors in
setting marketing strategies as follows:
" Base Price. It measures the responsiveness of the brand to its price;
practically, what will happen after a raise/reduction in price by X%.
" Promotions. It studies which promotions make the biggest different to
the business.
" Media. It analyses the ideal media mix or weight.
" Competition. It identifies which competitor activities have really
affected the company’s brand.
" Seasonality/Climate. It values the impact of the time of the year on
sales volume. Seasonality may affect dynamics for impulse buying
seasonal products such as the refreshment category for Unilever (Ice
Cream and Ice Tea).
Actually, the MMM satisfies various needs in setting marketing strategies and,
for this reason, big companies are leveraging its usefulness.
First, the model enables trade managers to get from the money spent by the
company, eliminating waste and regulating investments.
Second, it is particularly helpful in the key decision areas of Pricing,
Promotions and Communications Planning, actually core factor within the
Marketing Mix.
Third, whereas MMM does require an investment of time and money, it more
than pays back enabling managers to follow the right path in defining
strategies and setting marketing budgets.
Last, also the competition invests significantly in this area and in this
marketing tool (e.g. competitors such as P&G and Kraft).
Furthermore, the MMM can be easily decomposed in different value drivers to
value each strategy within the Marketing Mix as it is shown in the following
table (Table 5):

27
Table 5: MMM Decomposition in Mix Drivers
The main MMM Mix drivers are actually three, including:
1. Price Repositioning = It compares the sales elasticity to base price
variations and it is based on two components; the absolute component
concerns the % of volume lost by category in case of 1% price increase
of item A. On the other hand, the relative component entails the % of
volume lost by the item A (in case of 1% price increase) in favour of
other competitors.
Clearly, there exist several factors that impact price sensitivity such as:
income/disposable income, product necessity, availability of substitutes,
emotional/functional appeal of the brand and the image importance of the
category/brand.
2. Promotions = It values the sales reaction to promotions and it deals
with two effects; the direct effect relates the company’s product volume
increase due to the X% discount on shelf price. Alternatively, the
competitive effect studies how the company’s product volume
decreases due to the X% discount of a competitor.
Alternatively, the main concern on promotions regards different variables
as: the promotional vehicles generating the greatest incremental volume
and value, the difference in product cost between extra uplift from display
vs. shelf only, the combined effect of a leaflet and the cannibalization
effect of promotions.
3. Advertising = It simply evaluates sales reaction to ADV campaigns,
reporting two effects as well; the direct effect studies the incremental
volume of the company’s product due to its own adv campaign.

28
Conversely, the cross effect (umbrella/competition) reports company’s
product volume loss due to the competitor’s adv campaings.
While dealing with the aforementioned drivers it is always important to bear in
mind some methodological notes. First, results of variations should always be
evaluated both in volume and value together with internal information around
margins to understand the profit effect. Second, competitive effect of
company’s can also be cannibalization from another UL product.
Moreover, the MMM eventually acts as a recovering tool from the shift in
promotion strategies that occurred after the 2007-2009 global crisis. Unilever,
as all other FMCG leading companies, suffered from this recession and
consumers became even more price sensitive to products that were usually
sold quickly and at a relatively low cost. Thus, promotion strategies followed
the after crisis consumer trends and UL had to change its approaches to “win”
on the marketplace.
As a matter of facts, before the crisis, promotion strategies entailed the use of
folders/leaflets (see Appendix B) over different times of the year (Easter,
“Back-to-school” and Christmas were the occasions) while the rest of product
offering was referred as “base-line” undiscounted items. Hence, being on
leaflets was eventually the synonym of a “winning strategy”. Nowadays,
everyone in the market follows the “leaflet strategy” due to the price
sensitiveness of consumers, thus it becomes even more important to execute
promotions in the right way to create real value added results. Additionally, as
a matter of frequency, the increase in promotion folders throughout the year
seems to be a viable opportunity to companies to deal with trade suffering and
its unstoppable decrease in sales.
Actually, post-crisis formats such as “3x2”, “1+1” and “50% off” promotions
increasingly became important, but only the “perfect execution”(starting from
defining a folder/leaflet present and finishing on the double exposition within
impulse buying areas in stores) may enable mitigation for the three previously
outlined risks.
Nowadays, the main challenge for big corporations such as Unilever is
dealing with the strong pushing on promo execution. The company should
eventually invent promotional models enabling the category to grow without
depressing prices.

29
One of the category examples is the previously mentioned “double-exposition”
combining different products in different locations of the store, creating the so-
called “consumer experience”. Specifically, in the Food category, Unilever
uses mayonnaise to be placed in the meat aisle to facilitate the “host food”
experience, combining both an impulse-buying practice and a brand-switching
driver (Appendix C). Specifically, in 2015 Calvé becomes synonym of
Hamburger, inviting consumers to find the pleasure of hosting burger parties
with friends or the family. The “burger party” experience is actually matched
with a new and massive in-store activation. Unilever is actually trying to
leverage this retail trend: the hamburger is the top dish and the 12% of Italian
families eats hamburgers almost once a week.
Finally the MMM, a tool of promotional efficiency and efficacy, helps giving
post crisis answers, bearing in mind that the “real boss” throughout shopping
experiences is actually the shopper.
Chapter
V:
Results

5.1
Results
from
Previous
Experiment

The online questionnaire and face-to-face interviews outlined a crucial finding,
such as people’s tendency towards impulse buying shopping experiences. As
a matter of facts, the validity of the statement could be enforced by analysing
answers to two different questions that entail impulsiveness:
" Q1: “Ti capita mai di fare acquisti non programmati quando ti rechi al
supermercato?”
The previous question is aimed at exploring impulse buying trends between
shoppers by asking if unplanned buying ever occurs while shopping at the
supermarket.
The results from this single question were eventually straightforward as it is
shown in Table 6.
Table 6: Answers to Q1

30
Actually, 96% of respondents positively admitted their tendencies towards
impulse-like shopping experiences. Thus, unplanned buying seems a diffuse
behaviour among shoppers.
Furthermore, respondents were also asked about the frequency of their
unplanned transactions, ranging from less than once a month/never to daily
impulse shopping.
" Q8: “Indica la tua tendenza a fare acquisti non programmati” (1-7)
Hence, the results show the distribution of answers and further descriptive
statistics grouped in Table 7.
Table 7: Answers to Q8
Eventually, the previous table outlines an almost normal distribution of
answers to Q8 where the mean (4.39) shows a weekly tendency of
consumers in carrying on impulse-like shopping. As a matter of cumulative
frequency, shoppers who buy impulsively at least more than once a month
represent the 75% of the sample.
Hence, the results from Q1 and Q8 give some degree of evidence in
supporting the impulse buying argument among shoppers.
Moreover, once the tendency to impulsiveness was positively experimented,
three logit regressions were run to test the hypotheses on different consumer
behaviours related to incentives. The results were as follow:
" Hypothesis H1(1)

31
Table 8 shows the model summary for
H1(1), showing how the R2
for the model
is close to zero (2.2%), hence explaining the missing linear relationship
between the variables Q9 (“Monetary Incentive”) and Q10 (“Non-Monetary
Incentive”).
Table 8: Model Summary for H1(1)
Regarding coefficients, it seems that only Q10 (“Non-Monetary
Incentives”) results statistically significant with a 6.5% level.
Table 9: ANOVA and Analysis of Coefficients for H1(1)
From the analysis of coefficients shown in Table 9, it follows that given the
increase in non-monetary incentives (Q10, significant at the 14.5%) the
propensity to impulse purchases for the “Senior” category increases by
.138, the β coefficient for the variable Q10.

32
The previous statement does not have a high significance due to its low p-
value, thus reflecting a low probability event that actually takes place
during shopping experiences.
Generally, following the usual statistical approach, the hypothesis H1(1)
should be rejected.
" Hypothesis H1(2)
Conversely, the following model tests the difference between the means for
“Salaried” and “Unsalaried” consumer groups. The variable to be taken into
account in this model is eventually Q9 (“Monetary Incentives”), as it is shown
in Table 10.
Table 10: Mean comparison testing H1(2)
The previous results outline a bigger propensity to buy for the “Unsalaried”
consumer group that is, in turn, more sensitive to monetary incentives given in
impulse buying shopping experiences.
" Hypothesis H2
The logit regression outlines, as a result of hypothesis testing, the following
findings included in Table 11:

33
Table 11: Logit regression run on H2
The only variable that is statistically significant at a 1.5% level is Q6 (Brand-
switching with monetary incentives). Thus, H0 is rejected and H1 results
eventually true.
Hence, for the “Senior” consumer group, the brand-switching likelihood
decreases by 13.76% as it is shown by the coefficient β1. Thus, the “Young”
consumer group is more sensitive to monetary incentives in brand-switching
practices.
Chapter
VI:
Conclusions

6.1
Findings
from
Questionnaire
and
Case
Study

Combining quantitative and qualitative results from both the experiment and
the corporate case study analysed in previous chapters, some common key
findings were outlined.
" Consumers are likely to be involved in impulse-like shopping practices,
due to their propensity for unplanned buying during their usual
purchase experiences.
" Monetary incentives represent one mean of brand switching practices
among consumers.
" Promotion effectiveness is not directly linked with the exclusive use of
either monetary or non-monetary incentives only. It is actually linked
with the right mix of both, together with other marketing strategies in
product placement and exposition.

34
6.2
Managerial
Implications

From a managerial perspective, trade promotions represent one of the most
effective tools in boosting value sales and increasing the overall category’s
growth.
Moreover, for impulse buying products, promotions are eventually linked with
several challenges for managers. As a matter of facts, the brand-switching
attitude of consumers related to monetary incentives given by different brands
(H2(1)) eventually represents one of the biggest threats to be fought to “win” on
the marketplace.
Generally speaking, consumers look for deals whenever possible, whether
there are monetary or non-monetary promotions attached to products. Thus,
consumers’ active seeking of promotions results in the following findings, as it
is shown in Table 12:
Table 12: Consumer attitudes toward promotions in four different European markets
As it is shown in the Table above, the Italian market is strongly characterized
by the presence of consumers sensitive to promotion activities. Specifically,
the 41% of them is even willing to change the store based on which one has
the best promotions experiences, the 26% seldom changes store but it is
always actively searching for promotions and the 17% of respondents admits
that they regularly buy different brands because of promotions.

35
Moreover, taking into account consumer sensitiveness to promotion deals,
there exist some evidence on the increasing trend of sales made on deal
within the total FMCG category. The Table 2 reports as follows:
Table 2: % Units Sold on Deal Within the Entire FMCG Category

Actually, the Italian market showed a percentage increase by 1.8% (YTD)
from 2012 to 2014.
Finally, the previous findings showed how importance is to trade managers to
build the right promotion campaign, leveraging new forms of promotions (e.g.
“double exposition”), to compete with the higher sensitiveness of consumers
towards promotions and their different types of incentives attached.

36
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39
Appendix

Appendix
A:
Double
Exposition
in-‐store

40
Appendix B: Leaflet Strategy for an Impulse Buying Product (Mayonnaise)

Appendix C: “Host Food” Experience

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