Impact of sales promotions on brand preference after promoting period has been the debatable topic for years1. Advertising was believed to be the primary tool in the marketing mix, if not the only one, for branding. While promotions were believed to be the temporary tool used to stimulate sales volume or to help accomplish short-term objectives. “It is generally assumed that enhancing a product with features that do not negatively affect other attributes, such as offering a free premium or sweepstakes, can only help short term sales”2. Gedenk and Neslin claimed that experimental proof collected supports that promotions can be strengthening if consumers already develop positive attitudes towards the brand, and this will be particularly true when using non-price promotions. “Non-price promotions are even more effective because they enhance rather than hurt repeat purchasing. So even though they are not quite as effective in the short-term, their stronger long-term effects enable them to generate more sales” 3.
To support Gedenk and Neslin, the PMA/Northwestern University 2002 study, Promotion, Brand Building and Corporate Performance Research also illustrated that brand experience, and relationship between brand and its consumers may be enhanced using promotions. Van Heerde and Neslin discovered the same results proving that long-term consumer behavior may be affected by promotions4. Whereas Palazo?n-Vidal and Delgado-Ballester believed that price-promotions are less effective in branding due to their focus on the monetary association (the price)5. Simply put, they drive people to become more price-sensitive and habituate them to look for bargains whenever they intend to buy something.
Price discounts have conventionally been the robust form of sales promotions, consumers expectations move from quality improvement to price reduction, and hence simply decreasing prices is indeed problematic6. Darke and Chung conducted a research to investigate the pros and cons of price cuts in comparison to other promotional programs such as everyday-low-prices (EDLP) and free gift. The research demonstrated that free gifts were more effective in improving quality perceptions towards the brand and delivering value to consumers than EDLP promotional strategy1.
Bawa and Shoemaker developed a model to examine the impact of free samples on incremental sales and brand preference. They found that free samples plays an crucial role in producing brand loyalty, and generate sales after the trials due to a high level of customer’s retention, increase in purchase probability among those who have tried the brand with a sample2. A meta-analysis integrating 51 studies was conducted by DelVecchio, Henard, and Freling to assess the findings of earlier published studies that relates the application of sales promotion to implication of post-promotion brand choice.
They found out that in general, sales promotions statistically have little effect on brand preference beyond the time promotion are in effect. Nevertheless, based on the degree of congruency between types of promotions and the promoted products, promotions can either improve or erode the brand loyalty3.