Promoting Products Through Volume Discount: Evidence from Malaysia
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DOI: 10.1080/10496491.2015.1107009
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Promoting Products Through Volume Discount:
Evidence from Malaysia
Mohammad Iranmanesh, K. Jayaraman, Brian Charles Imrie & Suhaiza Zailani
To cite this article: Mohammad Iranmanesh, K. Jayaraman, Brian Charles Imrie & Suhaiza Zailani (2016) Promoting Products Through Volume Discount: Evidence from Malaysia, Journal of Promotion Management, 22:1, 71-88
To link to this article: http://dx.doi.org/10.1080/10496491.2015.1107009
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Promoting Products Through Volume Discount: Evidence from Malaysia
Mohammad Iranmanesha, K. Jayaramana, Brian Charles Imrieb, and Suhaiza Zailanic
aUniversity Sains Malaysia, Penang, Malaysia;bSunway University, Kuala Lumpur, Malaysia;cUniversity of Malaya, Kuala Lumpur, Malaysia
ABSTRACT
This study examines the effectiveness of the determinants that influence consumers’ intention to purchase products under volume discount scheme (VDS). In addition, the moderating role of age is tested. A pilot study of 259 consumers was performed to conceptualize the underlying constructs and identify questionnaire items through employing exploratory data analysis. This was followed by a comprehensive survey of 583 Malaysian consumers. Data were analysed using partial least squares technique. The results indicate that brand image, store image, message framing, product characteristics, scheme characteristics, and subjective norms are crucial factors for the successful implementation of VDS. There is a wide gap noted between young and mature consumers in terms of the factors that influence on their purchasing behavior under VDS. The results help retailers to promote products under VDS in an effective way.
KEYWORDS
purchase intention, retailer, sales promotion, volume discount
Introduction
In marketing, sales promotion (SP) plays a vital role not only in terms of commu- nicating value for the benefit of consumers, but also as a means for manufacturers to increase their volume of business through luring new consumers to their prod- ucts. Belch and Belch (2007) have estimated that marketers allow between 60% to 75% of their promotional budgets to SPs. Despite the increase in the allocation of budget and varieties of SPs, most of the research on consumer response to sales promotions is limited to a narrow range of sales promotions such as price promo- tions (Beasley & Shank, 1997; Martın-Herran, Sigue, & Zaccour, 2010; Choi &
Mattila,2014) and freebies (Te’eni-Harari,2008; Banerjee,2009). In addition, there has been extensive research on the impact of SPs on overall store performance (Ramaswami & Srinivasan, 1998; Bezawada & Pauwels, 2013), comparisons of price promotions, discounts, the use of storeflyers as complimentary-promotional
CONTACT Mohammad Iranmanesh iranmanesh.mohammad@gmail.com PhD Candidate, School of Man- agement, University Sains Malaysia, USM 11800, Penang, Malaysia.
© 2016 Taylor & Francis Group, LLC 2016, VOL. 22, NO. 1, 71–88
http://dx.doi.org/10.1080/10496491.2015.1107009
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techniques (Kumar, Madan, & Srinivasan,2004), and the effects of sales promotion on brands (Gedenk & Neslin,1999; Yi & Yoo, 2011). There is however an identifi- able need for research to examine the factors which retailers need to be considered to promote effectively special products through appropriate sales promotion. In particular, there is a lack of research on the effectivess of volume discount schemes (VDS).
In VDS sales promotions, the retailer or manufacturer rewards those purchasing in bulk by providing a reduced price for each product or group of products (Bane- rjee, 2009). VDS may be considered both at Business-to-Business (B-to-B) and Business-to-Consumer (B-to-C) levels and is an ubiquitous marketing phenome- non. The majority of the literature on VDS has been focused on B-to-B level (Dahel,2003; Saen,2008), whereas Jayaraman, Iranmanesh, Kaur, & Haron (2013) showed that VDS is one of the most common sales promotion tactics at B-to-C level in Malaysia and Lichtenstein, Burton and Netemeyer (1997) have opined that consumers were more attracted toward VDS compared to other types of sales pro- motions. In addition, Mullin (2010) states that VDS beat all of the other types of sales promotions. Therefore, the focus of the current study is to explore the deter- minants of VDS at B-to-C level.
The extant literature indicates that most SP activities fail and are unable to fulfill retailers’goals (Gedenk & Neslin,1999; Grewal, Krishnan, Baker, & Borin,1998) as the retailers have insufficient knowledge of the potential drivers of consumer inten- tion to purchase under each type of sales promotion (Mullin, 2010). Therefore, retailers are interested to know the factors which need to be considered in effec- tively promoting products utilising SP (Laroche,2002). Due to the high demand for products under Volume discount schemes (VDS) in the market, coupled with a lack of knowledge on the effectiveness of factors for promoting products, the pres- ent study attempts to answer, how to effectively promote products under VDS in a business-to-consumer context. This study provides guidance for both manufac- turers and retailers on implementation of VDS to satisfy consumer expectations.
Furthermore, age is considered as a moderator will add more value to identify the target group of VDS, which in turn benefit the retailers and manufacturers.
Literature Review
Cumnin and Mullin (2010) define sales promotion as sales offers and incentives that encourage consumers to behave in a particular way at a particular time and place. Sales promotions have been often classified by researchers as monetary or nonmonetary promotions (Chandon, Wansink, & Laurent, 2000; Diamond &
Johnson,1990). For example, a price discount offifty percent would be a monetary promotion and an extra free product (volume discount), would be a nonmonetary promotion. Nonmonetary promotions are becoming increasingly important in promotional strategies (Palazon & Delgado,2009; Reid, Thompson, Mavondo, &
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Brunsø, 2014), but surprisingly, academic research into nonmonetary SPs is limited.
The issue of discriminating between responses to VDS versus price discount has been examined in some prior studies (Diamond,1992; Diamond & Sanyal,1990;
Li, Sun, & Wang,2007). Given that price discount and volume discount are exten- sively used as sales promotions in practice, the consumers’ preference may tilt between price discount and VDS due to a variety of factors, such as, the depth of the discount, brand, and quality. For example, Diamond (1992), shows that con- sumers value VD for cheaper products, but the pattern is reversed for more expen- sive products. Das (1992), investigated how consumers perceive three economically equivalent deals (which were all held constant at a 25% discount level), for example, the buyer receives a 25% discount from the total when they purchase two; buy three items, get one free item of equal value or save $50 U.S. dol- lars when purchasing two of the same products valued at $200 U.S. dollars. The findings show that deal semantics indeed affect consumer internal evaluation of VDS benefits and the effect is greater for lower-priced products. Furthermore, the author reports that there is a significant interaction effect between certain types of semantic cues and item price, for example, the savings (“Save $”) label appears to be preferred for higher-priced items. In addition, VDS is very common with fast moving consumer products and this promotion tool stimulates demand through increasing consumption (Banerjee,2009). Therefore, VDS is different from other types of sales promotions and it can be useful for particular products in particular situations. In the present study, the factors that may effect consumer intention to purchase promoted products under VDS are investigated to generate more knowl- edge for the marketing theory. In the next section, the proposed model of the cur- rent study is presented and the recognized variables are explained by literary evidence. Further on, in the methodology section, the variables selection procedure is explained.
Model construction and development of hypotheses
Figure 1shows the theoretical model of present study, which is rooted in literature based on potential drivers of consumer intention to purchase products under sales promotions, pre-tests with consumers, and interviews with experts. The model proposes a direct relationship among brand image, store image, message framing, product characteristics, scheme characteristics and subjective norms. Additionally, it proposes consumer purchase intention under VDS with age as moderator. In the following sections, the relationship is established and hypothesis introduced.
Brand image
Dobni and Zinkhan (1990) defined brand image as the consumer’s mental picture of an offering and it includes symbolic meanings that consumers associate with the specific attributes of the product or service. A favorable brand image has a positive
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effect on consumers’purchase intentions (Eze, Tan, & Yeo,2012), as brand image serves as a signal of product quality (Khasawneh & Hasouneh, 2010). Ortmeyer and Huber (1991) stated that, negative impact of a sales promotion on perceptions of quality and subsequent intent to purchase is eliminated through consumers’
brand image. Furthermore, VDS may be effective for one brand but may not be for another. Some studies found that higher-quality brands gain more from SP than lower quality brands (Blattberg & Wisniewski,1989), others found the vice versa (Bronnenberg & Wathieu, 1997). Therefore, the effect of brand image on consumer intention to purchase products under VDS needs more empirical evidence. Thus we set the hypothesis:
H1: There is a positive relationship between brand image and consumers’intention to purchase products under VDS.
Store image
Retail stores present different images in the market and VDS may be effective for one store but may not be for another. Martineau (1958) has defined store image as the manner in which the store is defined in the consumer’s mind. Store image has Figure 1.Proposed theoretical model.
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been established as an important input in the consumer decision-making process (Bao, Bao, & Shen,2011; Wu at al.,2011). Wu et al. (2011) found that store image effects purchase intention directly. Hence, the effect of store image on consumer intention to purchase products under VDS needs to be investigated. Thus, we set the hypothesis:
H2: There is a positive relationship between store image and consumers’intention to pur- chase products under VDS.
Message framing
Message framing refers to communication in words, images, and phrases for the purpose of providing information on an issue or event (Chong & Druckman, 2007). The use of message framing can substantially enhance the success of social marketing campaigns (Cheng, Woon, & Lynes,2011). As Sinha and Smith (2000) pointed out, consumers often exhibit economically non-rational behavior as a result of contextual cues, including semantic cues, they derive from price offers. In other words, the way in which the price offer is “framed” affects consumers’
response (Kim & Kramer,2006). Different stores provide different information on price label and the displaying factors can have different effects on consumer inten- tion to purchase products under VDS. Gendall, Hoek, Pope, and Young (2006) found that in VDS“buy £get one free” is likely to be more effective than“y for the price of x.”Chen, Monroe, and Lou (1998) stated that message framing has an effect on consumer intention to purchase products under SPs. Therefore, the cur- rent study hypothesizes that:
H3: There is a positive relationship between message framing and consumers’intention to purchase products under VDS.
Product characteristics
Product characteristics differentiate products based on the nature of the product, namely necessary/nonnecessary and fast/slow consuming characteristics. In the area of advertising, research suggests that the positioning of an advertisement should be adapted to the type of goods that is promoted (Vakratsas & Ambler, 1999). Similarly in sales promotion, it has been established that there should be an accurate match between the type of sales promotion and the type of goods (Moon et al., 2008). When the product-promotion congruity is weak, the promotional offer is likely to be perceived as inconsistent and perhaps opportunistic. In support of this rationale, Chandon et al. (2000) concluded that the most effective sales pro- motions are those that offer benefits congruent with the promoted products. For example, in the case of fast consuming products like mineral water, the VDS can be more effective than a cash discount option (Sinha & Smith,2000; Gendall et al., 2006). By purchasing necessary and fast consuming products under VDS, the
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consumers benefit from reducing the number of trips to the shop, in addition to saving money. Therefore, the current study hypothesizes that:
H4: There is a positive relationship between product characteristics of promoted products under the VDS and consumers’intention to purchase products.
Scheme characteristics
Scheme characteristics refer to the time constraint, namely 10 days of promotion versus one month of promotion, number of item restrictions (up tofive items), and the frequency of promotions (e.g., one time in the year versus three times in the year) and the expiry date of products that are promoted under VDS. Inman, Peter, and Raghubir (1997) found that SP deals with restrictions such as “Limit to two per consumer”or“Offer goods till a certain date”elicit higher evaluations from consumers than the same deals without such restrictions. The consumers believe that if the manufacturer/retailer is restricting the number of products they purchase on SP deal then deal is popular and they lose money indirectly if many consumers purchase too much on deal in advance. Scheme characteristics may be the signal value of the deal to the consumers (Raghubir, Inman, &
Grande, 2004), which lead to purchase intention. Therefore, the current study hypothesizes that:
H5: There is a positive relationship between scheme characteristics and consumers’
intention to purchase products under VDS.
Subjective norms
Subjective norms have a significant effect on consumers’ behavioral intention.
Subjective norms refers to the propensity foran individual’s perception being influenced by friends, relatives, and colleagues (Ajzen & Fishbein, 1977). Hsu and Lu (2004) and Chiou (2000) proposed that subjective norms are a significant factor that affects individuals’ intentions to purchase product. If consumers believe that a significant amount of others think purchasing products under VDS is valuable, consumers will have more intention to purchase products under this type of sales promotion. In addition, according to the four dimensions of culture by Hofstede (2009), Malaysia is a collectivist culture compared to West- ern society. In collectivist cultures, social norms are highly valued and are expected to play an important role. Therefore, the current study hypothesizes that:
H6: There is a positive relationship between subjective norms and consumers’intention to purchase products under VDS.
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Age
Lambert-Pandraud, Laurent, and Lapersonne (2005) stated that the elderly are consistently more brand-loyal than younger consumers. In view of this, the pro- motion of new branded products under VDS may attract young consumers.
Indeed, young consumers are more influenced by purchase characteristics of VDS such as displaying of products in the appropriate place and therefore they are easily induced through SP compared to more elderly consumers. In regard to price con- sideration in the value equation, Ainslie and Rossi (1998) state that younger con- sumers are more price sensitive than older consumers and consequently they are more deal proneness. On the other hand, the number and the purchasing power of matured people has increased over time. However, matured consumers have both the time and money to spend, they often believe marketers, including retailers, by and large do not have enough understanding to connect with them (Leinweber, 2001). Hence the following hypothesis is developed:
H7: Age moderates the relationship between purchase characteristics and consumers’
intention to purchase products under VDS.
Research methodology
Variables selection
Several steps were taken in the present study to develop and refine the theoretical framework. The first step involves the determination of several variables and dimensions from the review of the literature on sales promotions and consumer behaviours. These represent the potential constructs of the study (e.g. Gendall et al.,2006; Li et al., 2007; Cheng et al.,2011). Second, a pre-test with consumers was conducted to determine the appropriate variables related to volume discount from the Malaysian consumers’point of view. Third, the initial framework under- went an evaluation process including interviews with the selected experts (supervi- sors and managers of hypermarkets); therefore, the final framework could be developed and enhanced from the successfully identified the variables and the rela- tionships among them, upon completion of the interviews. By matching amongst the literature, pre-tests and interviews, the variables and the relationships among them were refined. Thefinal framework is illustrated inFigure 1.
Procedure
The present study employed a quantitative structured questionnaire to test the hypotheses within Figure 1. Individual Malaysian consumers who have experi- enced sales promotions under VDS during the last year constitute the population of this study. The data was collected through random sampling. As there are some self-constructed question items in the questionnaire, a pilot study was conducted and exploratory factor analysis (EFA) employed to explore the underlying factor
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structure (Child,1990). The pilot study was carried out by administering hard copy questionnaires to potential respondents. Out of a total of 350 distributed question- naires, a total of 259 usable responses were received. These respondents were also asked to assess the clarity of the items. Based on the EFA and respondents sugges- tions, the questionnaire was cleaned with 5 items being removed, and message framing and scheme characteristics variables were divided into two sub-variables.
Based on Hair, Hult, Ringle, and Sarstedt (2013) suggestions, we considered these sub-variables as second-order constructs.
Kaden (2007) state that a robust sample for most marketing research studies is approximately 300. Although a 300 sample size is sufficient, the present study aimed at 600 responses in order to: a) increase the accuracy (95% confidence inter- val) and b) to attain a sufficient sample for subgroups in multigroup analysis (Hair et al.,2013). As a consequence, a total of 1,000 questionnaires were distributed for the main study, with a total 723 responses received. Out of the 723 responses, 3 were only partially completed, 120 respondents mentioned that they have no expe- rience in purchasing with VDS and 17 respondents were discarded in data clean- ing. This left a total 600 valid responses, or a 60% response rate.
Measures of constructs
The questionnaire is divided into three sections with a total of 38 items: purchase characteristics of VD (brand image, store image, message framing, product cate- gory, scheme characteristics, and subjective norms), intention to purchase prod- ucts under VDS, and respondents’ personal information. In addition to the respondents’personal information, the other items were measured using a 5-point Likert scale anchored by “strongly disagree” and “strongly agree.” The detailed measurements and their sources for the principal constructs are shown in Appendix I.
Analysis
The structural Equation Modeling technique of Partial Least Squares (PLS) was applied to estimate the theoretical model using the software application of SmartPLS 2.0 (Beta) M3 (Ringle et al.,2005). PLS is suitable for identifying the key driver constructs, meanwhile the latent variable scores are needed for second-order analyses (Hair et al.,2013). A two-step approach was utilized in data analysis. The first step involved the analysis of the measurement model, while the second step tested the structural relationships among the latent constructs.
Results
Sample characteristics
There was gender bias noted in the sample with male respondents accounting for only 42.4% of the sample. There were 228 (39.1%) respondents between the ages of
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15 and 24 years, followed by 175 (30.0%) respondents between 25 and 34, and 131 (22.5%) respondents between 35 and 44 years old. Only 49 (8.4%) respondents fell in the age group above 45 years. In terms of ethnicity, the 270 (49.7%) Malay respondents dominated the survey, followed by Chinese with 213 (39.2%) respond- ents and 60 (11.1%) Indian respondents. Finally, the majority of the respondents earned a salary between USD 700 and USD 2,000 (50.6%).
Measurement model results
The PLS test of the measurement model determines three primary aspects: (a) indi- vidual item reliability, (b) internal consistency of the entire scale, and (c) discrimi- nant validity. Since the loadings associated with each of the scales were all greater than 0.6 (Table 1), individual item reliability was acceptable (Hair, Babin, &
Anderson,2010). The construct’s internal consistency was assessed using compos- ite internal scale reliability. All eight latent variables satisfied the Hair et al. (2010) guidelines of at least 0.7 for internal consistency. Internal consistency can also be evaluated using the Average Variance Extracted (AVE). The present study has an AVE of above 0.5 for all variables. This satisfies the requirements established by Fornell and Larcker (1981).
We used two approaches to assess the discriminant validity of the constructs.
First, we examined the cross-loading of the indicators, which revealed that no indi- cator loads were higher on an opposing construct (Hair et al.,2013). Second, we applied the criterion of Fornell and Larcker (1981) and tested whether the square root of each latent construct’s AVE is greater than its correlation with the remain- ing constructs (Table 2). Each construct meets this requirement, in support of dis- criminant validity.
We applied the repeated indicators approach for second-order constructs on message framing and scheme characteristics. As suggested by Hair et al. (2013) the same measurement model evaluation criteria (except discriminant validity) were applied to the high-order components and internal consistency reliability and con- vergent validity as established inTable 3. All the outer loadings are well above the critical value of 0.6. The composite reliability of both secod-order constructs are
Table 1.Measurement model evaluation.
Constructs Number of Items Factor Loadings CR AVE
Brand Image (BI) 4 0.757–0.850 0.890 0.669
Store Image (SI) 5 0.759–0.788 0.833 0.600
Message Framing 1 (MF1) 5 0.694–0.944 0.876 0.620
Message Framing 2 (MF2) 2 0.866–0.884 0.867 0.765
Product Characterisitcs (PC) 2 0.817–0.856 0.824 0.700
Scheme Characteristic 1 (SC1) 2 0.916–0.918 0.914 0.841
Scheme Characteristic 1 (SC2) 2 0.887–0.894 0.885 0.793
Subjective Norms (SN) 6 0.689–0.826 0.897 0.593
Intention to Purchase under VDS (INT) 5 0.777–0.850 0.912 0.675
Notes. CRDComposite Reliability; AVEDAverage Variance Extracted.
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above 0.7, which ensures internal consistency. In addition, the AVE values were above the thereshold of 0.5, signifying a satisfactory degree of convergent validity.
Assessment of the structural model
The explanatory power of the research model was examined in terms of the total explainable variation of the model. The results suggested that the model is capable of explaining 46.9% of the explainable variation of consumers’intention to pur- chase products under VDS. In addition to estimating the magnitude of R2, researchers have recently included predictive relevance (Q2) as additional modelfit assessments (Hair et al.,2013). Following the guidelines suggested by Chin (2010), aQ2value of greater than zero implies the model has predictive relevance and in the present study, a value of 0.310 was obtained which is greater than zero.
We applied nonparametric bootstrapping (Efron & Tibshirani,1993) with 5000 resamples to test the structural model. The significance and relative strength of direct effects specified by the research model were evaluated (Table 4). The results reveal that all paths are positively significant and therefore H1–H6 are supported.
To further examine whether H1–H6 are supported for the young and mature groups, we split our data into two groups and conducted PLS analyses for both groups (Table 4). The results show that store image, message framing, and product category are significant predictors of young (less than 35 years old) consumers’
intention to purchase products under VDS whereas brand image, message framing, Table 2.Discriminant validity coefficients.
BI INT MF1 MF2 PC SC1 SC2 SI SN
BI 0.818
INT 0.395 0.821
MF1 0.380 0.534 0.788
MF2 0.349 0.432 0.531 0.875
PC 0.281 0.347 0.406 0.276 0.837
SC1 0.201 0.252 0.290 0.283 0.113 0.917
SC2 0.266 0.361 0.449 0.289 0.292 0.257 0.891
SI 0.608 0.453 0.472 0.425 0.365 0.229 0.347 0.775
SN 0.391 0.395 0.408 0.303 0.320 0.159 0.348 0.412 0.770
Table 3.Assessing the second-order constructs.
Scheme Characteristics Message Framing
Scheme characteristic 1 0.780
Scheme characteristic 2 0.779
Message Framing 1 0.944
Message Framing 2 0.806
CR 0.756 0.870
AVE 0.608 0.770
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and subjective norms are the significant factors influencing the intention of matured (above 35 years old) to purchase products under VDS.
In addition, all hypotheses were tested with a statistical comparison of the path coefficients for young and matured, using Keil et al. (2000) procedure. Table 4 shows that, there is a significant difference exists between the effects of product category between two age groups. It may be noted that the product category is an important driver of intention to purchase products under VDS for young consum- ers, whereas not significant for mature consumers. There is no significant differ- ence between young and matured group on the effects of other determinants of intention to purchase products under VDS.
Discussions and implications
The results of the current study suggest that brand image, store image, message framing, product category, scheme characteristics, and subjective norms play a sig- nificant role in consumers’intention to purchase products under VDS. In addition, the effect of product characteristics is significantly different between young and matured consumers. Furthermore, the factors that retailers need to consider for promoting products effectively under VDS for young consumers are mostly differ from matured consumers. Store image, message framing, and products characteri- sitcs are the factors which effect on young consumers’intention to purchase under VDS, whereas brand image, message framing, and subjective norms are significant factors among matured consumers.
The significant effects of brand image and store image on consumers’intention to purchase under VDS are in line with the study conducted by Eze et al. (2012), Bao et al. (2011), and Wu at al. (2011). This result has important implications for retail managers and manufacturers alike: Consumers’ intention to purchase a product under VDS can be influenced by the consumers’image regarding to the Table 4.Path coefficient and hypothesis testing.
Hypothesis Relationship Path Coefficient Std. Error t-value Decision
H1 BI!INT 0.088 0.049 1.787 Supported
H2 SI!INT 0.112 0.056 2.021 Supported
H3 MF!INT 0.340 0.050 6.842 Supported
H4 PC!INT 0.081 0.041 1.969 Supported
H5 SC!INT 0.098 0.047 2.084 Supported
H6 SN!INT 0.115 0.043 2.688 Supported
Hypothesis Relationships
Path Coefficient (Young, nD403)
Path Coefficient
(Matured, nD180) Difference
Moderating effect testing
H7a BI!INT 0.054 0.198 ¡0.144 Not Supported
H7b SI!INT 0.131 0.080 0.051 Not Supported
H7c MF!INT 0.317 0.364 ¡0.047 Not Supported
H7d PC!INT 0.128 ¡0.020 0.148 Supported
H7e SC!INT 0.087 0.110 ¡0.023 Not Supported
H7f SN!INT 0.079 0.200 ¡0.121 Not Supported
Note.p<0.05.p<0.01.p<0.001 (one tailed).
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product brand and the store in which that product is promoted above and beyond the value they perceive the product itself offers. Thus, consumers may derive some amount of“added value”from the image of the brand and the store (e.g.,“I bought this t-shirt under VDS from a high-equity brand, therefore it is a good value for money”). This means that manufacturers should be careful to promote their prod- ucts under VDS in retailers whose image is consistent with their brands’position- ing. Retailers, on the other hand, should promote high-equity brand products under VDS to attract more consumers.
The message framing also has a direct effect on consumers’ intention to purchase products under VDS. Many researchers have similarly confirmed that the promotional communication method (framing of messages) affects consumers’ purchase intentions (e.g. Chen et al., 1998; Li et al., 2007) as con- sumers differently perceive the equivalent deals that frame differently. This indicates that, the retailers can make promotion under VDS more effective through attractive price labeling, product labels, and display products in front of the store. The actual relevance of message framing to volume discount is that there are different ways in which the same message of sales promotion may be expressed. Gendall et al. (2006) found that in VDS, “buy x get one free” is likely to be more effective than “y for the price of x.” The retailers offering VDS have their own choice on message framing and price labelling, but effective message framing is an important factor that has a direct influence on the purchase of the products under VDS.
In addition, this study highlighted the role that product characteristics perform in influencing consumers’intention to purchase product under VDS. This result is consistent with many other previous studies like Sinha and Smith (2000) and Gen- dall et al. (2006) as they claimed that fast consuming products are more suitable to promote under VDS. Consumers are increasingly busy and don’t have enough time to travel to a store frequently. Therefore, consumers are more interested in purchasing fast consuming and necessary products under VDS to ensure there is sufficient inventories of these product categories maintained within the house. By purchasing both necessary and fast consuming products in more volume at one time purchase, not only consumers’number of trips to the shop educed but they also save money. Retailers should promote both necessary and fast consuming products under VDS as an effective price promotion strategy as the benefits are congruent with consumer needs for these product categories (Chandon et al., 2000).
Moreover, the result also showed that scheme characteristics have a significant impact on consumer intention to purchase products under VDS. This result is con- sistent with other previous studies such as Inman et al. (1997) and Raghubir et al.
(2004). Frequent and periodic sales promotion may lead to a negative impact on consumers’ intention to purchase products under VDS as consumers might feel artificial on the sales promotion deal. In addition, consumers prefer to purchase products which are not close to a expiry date and are not defective. If the promoted
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products are close to expiry date, it means that the retailers want to decrease their losses and it impacts negatively on consumers’intention.
The subjective norms also play an important role in determining consumers’
intention to purchase under VDS. This result consistant with Hsu and Lu (2004) and Chiou (2000) result. In Malaysia, subjective norms play an important role on purchase decisions (Hofstede,2009). This means that, consumers’opinion of the other people thinking of purchasing under VDS effects purchase intention.
Finally, the moderating effect of age was tested. The results show that, the brand image is a significant driver of mature consumers whereas store image is a signifi- cant driver of young consumers. Matured consumers have higher income (Lee, 1997) and have greater focus on the quality of the products (Littrell, Yoon, & Jaya, 2005; Goodwin & McElwee,1999). Therefore, they are more particular to purchase branded products which signal high equity for the promoted products under VDS.
The younger consumers are less particular on the quality of the promoted products and are not likely to spend money on high equity brands; hence, their image regarding the saving in purchasing products under VDS in favor of stores affects the intention to purchase. However, young and matured consumers have the same opinion on the importance of the message framing. It is worthwhile to highlight that product category had a significant role in influencing young consumers’pur- chase intention under VDS, but not so for the mature consumers. The mature con- sumers have frequent trips to the shop (Hu & Jasper,2007), they enjoy shopping, and shop twice a week or more (Walker & Mesnard,2011). Therefore, purchasing necessary and fast consuming products in volume is not as important for them as they are going to shop frequently and it is not convenient for them to carry more products and store in the house. Similarly, mature consumers’intention to pur- chase products under VDS is influenced by the close associates, people around him, and store employees, whereas young consumers have a different attitude.
The findings of this research provide practical implications for manufactures and retailers. These results may help retailers better understand the relative and combined influences of product characteristics, product brand image, store image, scheme characteristics, message framing, and subjective norms on consumers’
intention to purchase products under VDS, thereby, allowing them to promote products under VDS more effectively. Not every generation is alike, nor should they be treated by marketers in the same way. The factors that retailers need to consider to promote products under VDS more effectively are varied based on the potential consumer of a particular product. Based on the findings of the present study, store image, message framing, and product characteristics have an effect on young consumers’ intention to purchase product under VDS, whereas brand image, message framing, and subjective norms have effect on matured consumers.
Hence, the retailers need to consider potential consumers of a particular product (young or mature) and promote the product under VDS based on the intention to purchase drivers of potential consumers. For example, the potential consumers of Calcium supplements are mostly mature consumers. As the brand image is an
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important factor for mature consumers, the high equity branded products are more suitable to promote under VDS.
Limitations and future studies
Our sample consisted solely of consumers whose have experienced sales promo- tions under VDS during the last one year. Individuals who had already experienced with VDS might have different stimulus to purchase under VDS compare to con- sumers with no experience during the last one year. Therefore, the results need to be interpreted as explaining only the stimulus of consumers with a recent experi- ence. Whether the results can be generalized to consumers with no experience dur- ing the last year will require additional research. Furthermore, retailers’knowledge on consumers’internal evaluations of different stimulus can help them to promote on the appropriate situations. Future research is encouraged in order to investigate the potential mediators to explain the reason that the proposed stimuli of the cur- rent study have a significant effect on consumer intention to purchase under VDS.
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Appendix I Questionnaire Items.
Constructs Source
Brand Image
My favorite brands promote high quality products under VDS Grewal et al. (1998) My favorite brands promote reliable products under VDS Grewal et al. (1998) My favorite brands promote superior products under VDS Grewal et al. (1998) The products under VDS in my favorite brands are good value for money Collins-Dodd and Lindley (2003)
Store Image
My favorite stores promote high quality products under VDS Grewal et al. (1998) My favorite stores promote reliable products under VDS Grewal et al. (1998) My favorite stores promote superior products under VDS Grewal et al. (1998) The products under VDS in my favorite stores are good value for money Collins-Dodd and Lindley (2003)
In my favorite stores the price of products under VDS are reasonable Collins-Dodd and Lindley (2003) Message Framing 1
I am attracted toward the depth of volume discount Gendall et al. (2006) I am attracted toward the display of amount of savings through volume
discount on price label
Gendall et al. (2006) I am attracted toward the display of percent of savings through volume
discount on price label
Gendall et al. (2006) I am attracted toward the display of old and new price after volume discount on
price label
Gendall et al. (2006) Message Framing 2
I am attracted toward attractive label of products sold under VDS Self Constructed I am attracted toward VDS products display on“front-of-the-store” Self Constructed
Product Characteristics
Necessary items are suitable to have volume discounts Self Constructed Fast consumable items are suitable to have volume discounts Li et al. (2007)
Scheme Characteristic 1
VDS attracts me in stores when there is less frequent promotion Raghubir et al. (2004) VDS attracts me in brands when there is less frequent promotion Raghubir et al. (2004)
Scheme Characteristic 2
The products sold under VDS not closed to expiry date attract me Self Constructed The products sold under VDS which are not defective attract me Self Constructed
Subjective Norms
While purchasing with close associates, they do not interfere me to purchase products under VDS
Ajzen and Fishbein (1980) The people around me do not interfere me to purchase products under VDS Ajzen and Fishbein (1980) My favorite store employees do not interfere me to purchase products under
VDS
Ajzen and Fishbein (1980) I believe that, close associated will not object if I purchase products under VDS Ajzen and Fishbein (1980)
I believe that, people around me will not object if I purchase products under VDS
Ajzen and Fishbein (1980) I believe that, my favorite store employees will not object if I purchase products
under VDS
Ajzen and Fishbein (1980) Intention to Purchase under VDS
My willingness to purchase under VDS is very high Grewal et al. (1998) The probability that I would purchase under VDS is very high Grewal et al. (1998)
I intend to purchase products under VDS when it is offered Poddar, Donthu, and Wei (2009) I expect to purchase products under VDS when it is offered Poddar et al. (2009) I will recommend others to purchase special products under VDS Ramayah, Lee, and Mohamad (2010)
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