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Strategic Groups and Choice of Promotional Tools – Empirical Evidence from Portugal and New Zealand Zhilin Yang , City University of Hong Kong Kim Shyan Fam, City University of Hong Kong. 9 th Multi-cultural Marketing Conference Montego Bay, Jamaica, December 11-14 2003. Research Questions.
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Strategic Groups and Choice of Promotional Tools – Empirical Evidence from Portugal and New Zealand Zhilin Yang, City University of Hong KongKim Shyan Fam, City University of Hong Kong 9th Multi-cultural Marketing Conference Montego Bay, Jamaica, December 11-14 2003
Research Questions 1.Do differences in strategic approach warrant a different set of promotional tools? 2.Does environmental uncertainty influence a retailer’s choice of promotional tool?
Research Hypotheses H1: That Discounters will prefer price markdowns/in-store displays more than other promotion tools H2: That High Profile/Price retailers will dislike price markdowns/in-store displays as it will ‘damage’ their image. H3: That retailers who perceived environmental uncertainty will prefer price markdowns due to its less ‘risky’ nature. H4: That Discounters will allocate a larger proportion of their promotional budget to price markdowns than High Profile/Price retailers. H5: That High Profile/Price retailers will allocate a larger proportion of their promotional budget to mass media than Discounters.
Results Characteristics of Respondents
Results • H1- Discount strategic group prefers PMIS – supported • H2- High Profile group dislikes PMIS – supported • H3- Environmentally uncertain retailers prefer PMIS – supported • H4 & H5 – partially supported • Portuguese Discounters apportion a larger promotion • budget to PMIS than High Profile retailers, but not reflected • in the NZ sample (H4) • Portuguese High Profile retailers apportion more budget • to MM, but not reflected in the NZ sample (H5)
Conclusions • Findings supported earlier studies that retailers’ strategy affects choice of promotional tools • High Profile retailers do not like PMIS as it would cheapen their store image • Perceived environmental uncertainty will lead to the use of short-term promotional tools like PMIS • Location could play a role in choice of promotional tools like sparsely populated NZ where Discounters spend more on MM instead of PMIS – Portuguese retailers’ choice