Customer satisfaction of priced-based sales promotion techniques: a Central Asian perspective
Table of contents: The Kazakh-American Free University Academic Journal №6 - 2014
Author: Kim-Choy Chung, KIMEP University, Kazakhstan
1.
Introduction
Customer satisfaction is seen as a key
differentiator of product/service quality, or value
offerings (Thaler 1985) and is known to the key driver of good
customer-brand relationship. Despite the volume of literatures on customer
satisfaction and sales promotion techniques, few studies have been initiated
within the central Asian perspective. This study addresses this void by
investigating customer satisfaction of price-based sales promotion techniques
in Kazakhstan. Three hypotheses are proposed and tested in this study. Results
from 187 surveys (questionnaire) in this study revealed that there were higher
levels of customer satisfaction with percentage discount and membership discount
than rebates and coupons discount for specific product in Kazakhstan. Women are more satisfied with membership discount than men while the later are more
satisfied with percentage discount for specific product. Implications for businesses
are presented.
2.
Literature review
Sales promotions can be considered as ‘special offers’ to
stimulate demand during the period in which they are set (Lehman & Winer
2002). Sales promotions can be priced-based (dollar discount, percentage
discount, refund/rebate, coupon) or non-priced based (buy
two get one free, special orders, free gifts).
The potential benefits of using sales promotion can range from attracting new
customers from competitors, to persuading customers to switch to brands with
higher profit margins or simply inducing existing customers to purchase more. Customer
satisfaction refers to an individual’s perception of the performance of the
purchased product/service in relation to his/her expectation (Kotler &
Philips 2010). If a product or service performance met users’ expectation, then
there is customer satisfaction. Satisfaction with a promotion can not only be
linked to repurchase, but may in fact be able to be linked to a transfer of
satisfaction to the brand or company offering the promotion (Tat &
Schwepker 1998). When consumers are satisfied, this generates positive word of
mouth and purchase recommendations (Wirtz & Chew 2002) and thus the sales
promotion achieves its target by directly impacting consumer purchases
(Alavarez & Casielles 2004).
From a sales promotion
perspective, the transaction utility theory Thaler (1985) tells us that
consumers will make overall satisfaction or dissatisfaction judgments about a
price-based promotion after the purchase experience, driving their intention to
repeat/ discontinue the process in the future. Overall judgments about price
promotion are formed through consideration of the acquisition utility of the
deal (satisfaction or dissatisfaction with the intrinsic utility of the item
purchased less its price) and transaction utility. Customer
satisfaction with particular sales promotions may be moderated by factors such
as price sensitivity and perceived value (Rajagopal 2007), driven by the
purchasing power (income) of the consumer. This suggests that higher priced items are capable of achieving greater
levels of satisfaction with the promotional deal than lower value items
purchases (Tat & Schwepker 1998). Thus,
H1: Satisfaction
with price-based sales promotion techniques is likely to be greater when
related to a high-value purchase than a low value purchase.
In addition, there are gender differences with respect to shopping
habits. According to the Wharton Research (2007) conducted in the USA, women
are happy to meander through sprawling clothing and accessory collections or
detour through the shoe department while shopping is a mission for men and they
are more likely to respond to more utilitarian aspects of the experience –
availability of stocks and parking space (sale context). Similar research in
the UK (Jenno 2007) suggest that men are being much happier to go for the kill,
whereas women are still far more inclined to value shopping as a social and
therapeutic activity. It suggests that men are easier to satisfy on acquisition
utilities with specific products and that women are more prone to attraction
from storewide discounts. Thus,
H2: Satisfaction with percentage discount on specific products is
more likely to be greater when related to men than to women.
H3: Satisfaction with membership discount for storewide purchases is
more likely to be greater when related to women than to men.
3.
Methodology
3.1 Samples and measurement scales
Data are collected in two cites of Kazakhstan (Almaty and Asatana) using a multi-item questionnaire which required respondents
to answer rating scaled questions in relation to their attitudes towards sales
promotion techniques. Scale items were drawn from existing, pre-tested marketing
scales relating to consumption satisfaction and sales promotion (Bearden &
Netemeyer 1999). High value items are referred in this study as product costing
more than USD350 (half of the average monthly salary in Kazakhstan). Respondents were drawn from a wide range of occupations and lifestyles. Overall 220
questionnaires were randomly collected and only 187 (Almaty n= 98, Astana n=89)
were valid for further analysis because of incomplete fillings. Females constitute
57.7% of the valid data sample (n=108). About 20% of respondents identified
themselves as office workers, 12% as management professionals, 16% as
technical/engineering staff and 40% as university/college students.
3.2 Analysis
Analysis of data was completed using SPSS
17. Test of normality of data, homogeneity of variances and post-hoc test were
conducted.
4.
Findings
The descriptive
statistics revealed that that percentage discount (mean: 5.89 out max 7) and
membership discount (mean=5.54) are the top two highest scored variables (Table
1). Rebates (mean=1.75) and coupons discount (mean=1.27) for specific product
generated the lowest scores for satisfaction. Gender
has significant impact on customer satisfaction with priced-based sale promotion
techniques (Wilks’ lambda=0.977, F=3.100, p=0.047) in Kazakhstan. The Tests of between-subject effects revealed that the ‘membership discount’ recorded
significant value (F=6.223, p=0.013), with female scoring higher (mean=6.31)
than male (mean=5.22) while men scoring higher (mean= 6.24) than female
(mean=4.80) on ‘percentage discount on specific product’. Thus, the
following hypotheses were supported at the 5% significant level:
H2: Satisfaction with a percentage discount on specific products are
more likely to be greater when related to men than to women.
H3:
Satisfaction with a membership discount for storewide purchases are more likely
to be greater when related to women than to men.
However,
there was no evidence to support H1: Satisfaction with price-based sales
promotion techniques are likely to be greater
when related to a high-value purchase than a low value purchase (Wilks’ lambda=0.837, F=.081, p=0.965). This implies
that the values of purchases (high or low tickets items) have limited impact on
the level of satisfaction on priced-based sales promotion techniques.
Table 1: Satisfaction scores for
price-based sales promotion techniques
5.
Conclusion and limitations of research
This study revealed that customers are most
satisfied with percentage discount of specific product and membership discount
for future (storewide) purchases. Coupons for specific product discount
generated the less satisfaction. Women are more satisfied than men with
membership discount (for future purchases) while men are more satisfied than
women with percentage discount for specific product. There is no evidence to
suggest that low or high values purchases (>USD350) have on an impact on
customer satisfaction with price-based sales promotion techniques. The
limitations of this study are, first, the questionnaire survey is dependent on the
respondent’s own account of their behavior, attitude or perception. Second, the
low samples in this survey may be misrepresentative of the whole Kazakhstan population. Also, variation among the population at the level of interest in the
research topic can result in a biased, unrepresentative response.
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Table of contents: The Kazakh-American Free University Academic Journal №6 - 2014
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