Comparison and analysis of price and announcement changes on convenience products and their impact on consumer perception and response

Abstract

Scope and Method of Study: The purpose of this research was to study the perception of special price offers and announcements; to link the related evaluation of all brands of these products on the basis of performance, price, and decision difficulty to these perceptions; and to analyze the effect of these price reductions and announcements on buying behavior. To accomplish this purpose, a questionnaire designed to determine buyer intentions, respondent perceptions, purchase actions, and consumer evaluations was administered to all purchases of one of five low-priced branded convenience products in a store in Stillwater, Oklahoma. The products observed and analyzed were deodorant, hair spray, toothpaste, mouthwash, and shampoo. A more complete analysis was performed on the hair spray data since 129 of the 187 respondents bought or intended to buy hair spray.

Findings and Conclusions: Brand switching to the manipulated brand did occur. The relationships between sales, buyer intentions, and buyer evaluations was particularly meaningful in that the evaluations were less favorable among brand switchers. The increased sales of the manipulated brand in a descending order of significance were as follows: announced price reduction, unannounced price reduction, announced normal price, and unannounced normal price. This order of sales volumes may be partially attributed to consumer awareness. While most respondents noticed the announcements on the manipulated brand, approximately one-third of these observations were incorrect. Consumers tended to impute quality on the basis of price.