Coupons and buying behavior responses

 

Coupons are certificates given to the customer after purchasing a product which entitles the customer to save when they buy a product. The coupon is found in magazines, newspapers, and on packaging (Akaka and Alden, 2015). Coupons are papers are given to customers after purchasing a product as an exchange of financial discount or rebate for future purchasing (Akaka and Alden, 2015). Coupons are distributed through mediums such as magazines, newspaper, and social media directly to the customer from the manufactures or through middlemen such as wholesalers, retailers etc.

 

There are various forms of coupons such as discounts, free shipping, and buy-one-get-one, trade-in for redemption, first-time customer coupons, free trial offer, launch offers, festival offers, and free giveaways (Harms et al., 2017).

 

Kotler et al. (2017) explained that coupons stimulate the trail of new products by new customers since it reduces the cost of attaining such products. It has been argued that discounted products lose their value in the eyes of the customer. Besides the majority of the customers who will be given the coupons are already loyal customers and would have bought the product without the coupon. This makes coupon a waste of resources (Akaka and Alden, 2015).

 

It does not directly affect customer buying behaviour since the savings of price is not immediate; coupons are generally only effective in stimulating consumers on stockpiling and purchase acceleration. However, the coupon does not affect buying response since the most inefficient method of sales promotion (Maulani, 2017). This led to the following hypothesis H1b: Coupons have a relationship with buying behavior responses.

 

Price discounts (PD) and buying behavior responses

 

This is an offer to give a product to a customer at a reduced price. Price discount induces short term sales Mohsenzadeh and Ahmadian, 2016). According to only price discounts have a significant effect on customer buying behaviour through encouraging purchase acceleration and product trial, especially on a new product. Price discount indirectly attracts new customers who in a way has never tried that product before. This is through changing the mood of the customer in favour of the company’s product amid many other alternatives. According to Obeid (2014), price discount encourages the customer to spend more, stockpile, and attract competitor’s customers. However, competitors can easily respond to and even go lower than expected and can also lower the brand value of the product (Loda, 2014). This resulted in the following hypothesis: H1c: Price discounts have a relationship with buying behavior responses.

 

Free product samples (SM) and buying behavior responses

 

Free Samples are also amongst the most important tools of sales promotion. This is the number of new products given out to customers in many forms such as adding it up to different products, by mail, or displayed at accessible areas during the introductory stage. Maulani (2017) it stimulates the trial of new products.

 

Free samples are used by companies to encourage product trial to keep the customer in the long term. Samples are given to a customer for free at their doorsteps, by mail, or face to face in a shop. In other words, samples are useful as it motivates purchase acceleration (Obeid, 2014).

 

Free samples assist to attract competitors, customers. However, in a way it do not keeps customers as they will go back to their favorite product when the sales promotion ends and it is the most expensive sales promotion tool (Loda, 2014). This resulted in the following hypothesis: H1d: Free product samples have a direct association with buying behavior responses.

 

Rebates (RB) and buying behavior responses

 

Akaka and Alden (2015) stated that customers are given a refund of the price at which they bought the product after sending proof of purchase. The proof of purchase in most cases is the receipt for the company to send back a discount to the customer. Rebate is similar to coupons but the difference is that discounts are redeemed after purchase. Akaka and Alden (2015) continued to explain that there is always a misconception of whether redeeming the discount is certain.

 

Rebate may not encourage product trials but rather brand switching. It will in a way accelerate purchasing but not brand loyalty (Obeid, 2014). Rebate has an indirect link with customer buying behaviour. A lot of things going on in the minds of the customer before buying a product (Akaka and Alden, 2015).This resulted in the following hypothesis H1e: Rebates has a positive association with buying behavior responses.

 

Sales promotion tools and customer emotions

 

Sales promotions that are appealing to the sense of the customer, make them curious, and buy the product attached to the promotion. Besides some sales promotion messages has a sense of humor and end up attracting the customer to the response. Sales promotion tools appeal to people’s primal emotions to increase conversions and sales (Yang and He, 2011). Customer emotions then trigger the customer to either buy the product or postpone buying.   It means that there is a situation where customer emotions determine sales and not an only sales promotion.

 

According to Damasio (1999), at any time customers are exposed to price discounts, bonus packs, coupons, free sales, and rebates it makes the potential customer think twice and make a logical choice. Customers are rational and want to make good use of their available resources.

 

However, According to Kotler and Armstrong (2017) monetary sales promotion tools are less effective in building brand interest since the emphasis is on price and not the brand. In the submission of Damasio (1999) customers will not necessarily buy brands because of price discount especially when they are not aware of the brand. But a brand that has built its image over a long period will record higher sales during a sale promotion. The likeability of the brand predicts the increase in sales during sales promotion time. It resonates emotionally with a consumer; this led to the formation of the hypothesis. H2 there is a significant relationship between Sales promotion tools and customer emotions.

 

Customer emotions and customer buying response

 

At any time where a customer must respond to stimuli to make a decision, the emotions from previous related experience affect the final decision. Customer’s emotions at the time of purchase create brand preference which then translates into customer response. Customer process information in their minds to choose a brand to buy but in most cases is not able to decide due to lack of sense of what they feel about the alternative (Damasio, 1999).

 

When customers are evaluating among available brands, they examine the other brands based on their emotions (personal feelings and experiences), rather than information (brand attributes, features, and facts) (Kim, 2002). The result from various studies indicates that positive customer emotion towards a brand affects the customers buying response than judgments, which are based on a brand’s attributes (Damasio, 1999: Bosse et al., 2006).

 

Customer preference is determined by the emotions of customers. There are various alternatives to brands on the market at different prices. What the customer settles on is emotionally motivated. In other words the higher the emotions of a customer on a particular brand, the higher the possibility of brand loyalty (Damasio, 1999).These demonstrate that the Customer’s buying response is influenced by customers' emotions. There is a link directly between the customer’s emotions and customer buying response. This led to the formation of the hypothesis. H3 there is a significant relationship between Sales promotion tools and customer emotions.

 

Conceptual framework review

 

Powers et al. (2017) explained the influence of sales promotion tools: coupons, price discounts, and sample and rebate customers buying response: behaviors like brand switching, purchase acceleration, product trial, and brand loyalty.

 

There are instances where the link between sales promotion tools and customer consumer buying responses is moderated by customer emotion. Therefore, there is no direct link between sales promotion and buying response (Rizwan et al., 2018).

The study adopted a descriptive research design. The population of the study was customers who are between the ages of 18 to 60 years and a residence of Tema in the Greater Accra region of Ghana. The convenience sampling technique was used to collect the data for its easiness of contact. The final sample size was 664. The data were collected using a questionnaire. The 5-point Likert Scale was used to collect the responses (1-Strongly agree to 5-Strongly Disagree).

 

Convenient sampling was employed to select the sample. Pilot research was conducted on 40 respondents to check the understanding and measure the reliability of the questionnaire items that were used for the study. Five items were used to measure sales promotion tools and one item was used to measure consumer buying behaviour.

 

Questionnaires were issued on weekdays and weekends with the time of day kept consistent between 10 a.m. and 2 p.m. The researcher explained the questionnaires to respondents and built rapport and encouraged the final response rate. The respondents used an average of 10 min to complete the questionnaire. There was a response rate of 82%.

 

The study adopted a Structural equation model to measure the conceptual model and hypotheses. The result answers the research questions.

Regarding gender, 302 (45.48%) respondents were male and 362 (54.52%) were Females.  Regarding occupation, 276 (41.56%) respondents described themselves as housewives, 345 (51.96%) as professionals, 43 (6.48%) as business.

 

Regarding the educational qualification, graduates were the largest in number, 390 (58.74%); the postgraduates were 45 (6.77%), and 107 (16.11%) respondents were diploma holders, and 122 (18.38%) were certificate holders (Table 1).

 

Reliability, convergent validity and discriminant validity

 

The items for the study were assessed in terms of reliability, convergent validity, and discriminant validity. All the loading satisfied the statistically significant level of 1%. All the loading was qualified for the study since it higher loading than the minimum acceptable value of 0.7 (Götz et al., 2010). The average variance extracted (AVE), the composite reliability (CR), and the correlations of the variables of the study in Table 2. The AVE of each of the elements of the study is greater than the minimum accepted value 0.5 (Götz et al., 2010) which makes convergent validity. The discriminant validity of each of the variable which is a square root of AVE is greater than the absolute value of all the correlation with other variables.

 

The structural model in Figure 3 as explained by (Götz et al., 2010) was examined with the statistical significance parameter of structural relationship, the variance (R2) of the endogenous latent variable, and the size effect (F2) on each endogenous latent variable. From Figure 2, all the structural relationship is positive with the assumption of the research model, which falls within 0.62 to 0.82.  This means that all the relationships were significant at a 0.1% level which confirms the entire stated hypothesis.

 

The study examined the change in R2 through the effect size (f2) to ascertain the impact of an independent latent variable on the dependent variable (Götz et al., 2010). There are three categories of values, small, medium, and large which are 0.02, 0.15, and 0.35 respectively of the predictor latent variables on endogenous latent variables (Chin, 2010; Götz et al., 2010). The results presented in Table 3 indicate that there is a strong effect of sales promotion tools on customer buying response whiles customer emotions have a medium effect on customer buying response.

 

Table 4 indicates the direct, indirect and the total effect analyses. All three categories are statistically significant at the 0.01% level. The strength of sales promotion construct is displayed in their direct effects on customer buying behaviour.

 

The total effect of a sample on customer buying response is (b=0.034* regarding on total effect, bonus on customer buying response recorded the highest (b= 0.441*) whiles the total effect is the contribution of sales promotion on customer emotion (b=0.421*). Figure 4 shows the summary of the path coefficient.

 

 

 

 

With the rise in the importance assigned to sales promotion on customer behaviour, is still not well researched. This study provides support for the conclusion that sales promotion induces a customer’s mood as well as customer buying response. The study result confirms most of the hypotheses deduced from the conceptual model.

 

If new or existing product wants to be accepted in a new market, the vehicle to facilitate the acceptance of such a product is a bonus. Kotler et al. (2017) that monetary sales promotion tools are less effective in building brand interest since the emphasis are on price and not the brand. The buyer’s response is no commitment but rather promotion driven by the incentives given by the company. Therefore H1a is accepted.

 

The results confirm that there is an indirect relationship between Coupons and customer buying response. Significant (b  =  0.097 *p-value  <  0.001),  which means that, coupons to customers attracts customers to a product. These findings are consistent with studies by Bakator et al., (2017) who argued that coupons stimulate customer’s interest to switch to a new brand. Customers' emotion is activated by coupons which intent stimulates to switch to a new brand. This is also confirmed by Alimpic (2014) that coupon encourages nonusers of product to buy for the first because they want to enter into a draw. According to Chang (2017) explained that coupons do not create loyal customers. This means that customers commit to a product is temporary as the will stop buying a particular product when the promotion ends. Therefore H1b is accepted.

 

The results confirm that there is an indirect relationship between Price Discount and customer buying response (b = 0.016*-value < 0.001). The finding is consistent with Sethi (2018) that customers will always favour a brand that has a discount package. This is supported by Ubeja and  Kusuma (2014) who explained that customers make three different buying decisions: 1) what to buy; 2) how much to buy, and 3) what brand to buy? Sales promotion affects all these three buying decisions. Kotler et al. (2017) explained that price discount induces customers to buy a product that they have known plans to buy. Therefore H1c is accepted.

 

The association between sample and customer buying response (b = 0.034*p-value < 0.001) is indirect. This is confirmed by Kotler et al., (2017) that customers trail product when the product is free. Therefore H1d is accepted. The link between Rebate and customer buying response (b=.0.209 * p-value < 0.001). According to Harms et al. (2017) rebate encourages a free trial of a new product but does not lead to brand switching. Rebate appeals to the old customer and does not encourage new customers to buy (Truong et al., 2017). According to Harms et al. (2017), rebate encourages free trial of a new product but does not in a way leads to brand loyalty. Therefore H1e is accepted H2 there is a significant relationship between sales promotion tools and customer emotions.

 

Data collected and analyzed show a direct link between sales promotion tools and customer emotions (b=0.473.209 * p-value < 0.001). This means that the various sales promotion tool (bonuses, coupons, samples, price discounts, and rebates arouse the emotions of customers. The finding is congruent with Yang and He (2011) who said that sales promotion is a stimulus and makes customers curious to buy. Customer’s emotions can either be positive or negative. Positive emotions lead to buying of products whereas negative emotions lead to brand switching or postponement of purchase. According to Damasio (1999) when customers are exposed to price discounts, bonus packs, coupons, free sales, and rebate it makes the potential customer think twice and make a logical choice. This in way means that customer emotions are triggered by sales promotion too and then the customer will decide whether to buy or not.

Customer emotion and customer buying response recorded (b = 0.621 *-value < 0.001). There is a direct connection between the two variables. This is supported by Yang and He (2011) explained that customer emotion affects customer buying response. Customer’s process information in their minds to choose a brand to buy but in most cases is not able to decide due to a lack of sense of what they feel about the alternative.  According to Damasio (1999) Customer process information of sales promotion tools in minds to choose a brand to buy but in most cases is not able to decide due to a lack of sense of what they feel about the alternative.  The emotion of customers triggers buying decisions. A customer may decide to switch from one brand to another, accelerate purchase, or trail a product due to their emotion at a given point. Favourable emotion leads to a favourable buying response. According to Damasio (1999) and Bosse et al. (2006), positive customer emotion towards a brand affects the customers buying response than judgments, which are based on a brand’s attributes. Therefore H3 is accepted.

The findings of the study are important to the academic and corporate world. Academically, the study contributed to knowledge by bridging the existing gap of almost no studies of sales promotion and customer response using the Mehrabian-Russell Model. The model demonstrated the link between sales promotion and customer emotion and customer buying response.

 

In business terms, the study proved that there is a link between sales promotion and customer emotions and customer buying response.

 

The study concluded that among the sales promotional tools (bonus, coupon, sample, price discount, and rebate only bonus pack that have a direct link with customer buying response. This means that customers are moved by a bonus pack than any other tool. A customer can make instant buying decisions upon the discovery of a bonus pack. Some may even buy without pressing need for the product just that they want to take advantage of the bonus pack as it exists.

 

The other four sales promotional tools only affects customer buying response indirectly, this means then, in its own way, they cannot affect customer buying response unless it triggers the customer’s emotions. Meaning it is moderate by customer’s emotions to result in buying.

 

The study again shows that sales promotion tools affect customer emotions. It was clear that the customer’s emotions are manipulated by what they see and hear about the various sales promotion packages. The sales promotional tools must hit on the sense, humor, and curiosity of the customer to make an impact on customer emotions. Customers are moved by such offers.

 

Finally, the study concluded that customer emotions affect customer buying response. This is an indirect link because customer emotions do not come on its own. There must be a sales promotion tool first before customer emotions then customer buying response. This means that customer’s emotions cannot stand on their own unless a company puts together sales promotion and the fact that is sales promotion too does not mean customers will respond to it.

 

The study concludes a thorough integration among the three components: sales promotion, customer emotions, and customer buying response are welcomed since one component leads to the other. Sales promotion works on the emotions of customers and reinforces customer to buy products.

A manager must understand how customers feel about their experience with their brands. The emotions of customers stimulate customer’s decisions and indicate customer purchases. Customers may not remember the price of a product but rather the experience from it.

 

Using sales promotion to influence customer buying response is good but companies must create new value for their product to build an emotional connection with the product. Investing in emotional motivators such as feel a sense of belonging, enjoy a sense of well-being, and protecting the environment is the best way to go.

 

The major limitation of the study has to do with convenience sample used to select the target population of the study in this case the results cannot be generalized to the entire population of consumers.

 

Finally, future lines of research could use qualitative data to probe a deeper understanding of the sales promotion on purchase behaviours.

The authors have not declared any conflicts of interests.