INTRODUCTION

A common observation about self-service retail stores is the similitude between in-store ambience and retailing operations. Hence, self-service retail stores are increasingly using point-of-sales promotional activities to drive buying stimulation among consumers through redeemable coupons corresponding to the value of purchase. Such promotional strategy and market dominance have significant implications on the volume of sales and inflow of consumers in retail stores.1 The prospective customers have the objective to buy at the right time so as to minimize the expected price of the acquired item. Point-of-sales promotions, however, stimulate compulsive buying behaviour among the customer, which dominates the buying decision despite comparative differences in the prices of alternate channels.2 By making the attractive products accessible to customers at a point-of-sales promotion, customers would be driven by the ‘me too’ feeling and preferential prices. The concept of the point-of-sales promotion to create compulsive buying behaviour is based on a brilliant understanding of the human mind and a smart way of increasing the volume of store sales. Self-service retail stores introduce electronic cash cards (ECCs), shopping advantage cards (SACs) and bulk purchase price (BPP) offers as point-of-sales promotions in order to acquire new customers and retain existing customers.3, 4

Retailing firms build most profitable strategies through services differentiation and competitive advantages, offering customers something new that they value and that other retail outlets do not have. Self-service retail stores differentiate at every point of customer service and customer relationship from the moment that customers express store loyalty. Large self-service retail stores open up their promotional strategies in order to stimulate the shopping behaviour of customers and uncover new opportunities for them to gain long-term benefits with the retail stores and stay loyal.5 Some firms, however, have experienced that point-of-sales promotional activities can also backfire loudly and put reputations at risk if the tools of promotion such as electronic cash card (ECC), SAC and BPP are not effectively managed. Because point-of-sales promotion has emerged as a competitive strategy for retail firms, despite the apparent risks, managers are exploring the scope of acquiring and retaining customers. This strategy of point-of-sales promotions has helped large self-service retail stores to slash costs on advertising and publicity, increase volume of sales and sharpen their focus on core competencies.6

This paper attempts to analyse the drivers of compulsive buying behaviour induced by store-based promotion through an empirical investigation in Mexico. The role of point-of-sales promotions in stimulating arousal and the effectiveness of customer relations for building store loyalty have been analyzed in the paper. Also, acquiring new customers through innovative in-store promotions towards driving the compulsive shopping tendency and swaying store-brand loyalty through point-of-sales promotions in chain self-service stores are discussed in the paper. This study builds arguments towards the convergence of attractiveness of point-of-sales promotions and the effectiveness of customer service as a tool for gaining a competitive advantage in the retail business environment.

REVIEW OF LITERATURE

Point-of-sales promotions

Large self-service retail stores or supermarkets are potential outlets where customers experience innovative promotions on a variety of products and services, which drive the buying decisions. Among the various promotional offers, price discounts, free samples, bonus packs and in-store display are associated with product trial. Trial determines repurchase behaviour and also mediates in the relationship between sales promotions and repeat-buying behaviour.7 Repeat-buying behaviour of customers is largely determined by the values acquired on the product. The attributes, awareness, trial, availability and repeat (AATAR) factors influence the customers towards making re-buying decisions in reference to the marketing strategies of the firm. The decision of customers on repeat buying is also affected by the level of satisfaction derived from the products and the number of customers attracted towards buying the same product, as a behavioural determinant.8 Among growing competition in retailing consumer products, innovative point-of-sales promotions offered by super markets are aimed at boosting sales and augmenting the store-brand value. Purchase acceleration and product trial are found to be the two most influential variables of retail point-of-sales promotions. It has been found that there exists a significant association between the four consumer promotional approaches, coupons, price discounts, samples and buy-one-get-one-free, and compulsive buying behaviour.9 The occurrence and the choice of appropriate retail sales promotion techniques are important decisions for retailers. It is crucial for the retailing firms to apprehend the mechanisms involved at the consumer level regarding these sales promotions. Variables such as variety seeking, perceived financial benefit, brand loyalty and store loyalty towards point-of-sales promotions have specific influences on the buying behaviour and volume of retail sales.10

Leisure shopping is influenced by time and attractiveness of sales offers, which include variables viz. hours of work, public holidays, paid leave entitlements, point-of-sales promotions and effectiveness of customer relations. These factors vary widely in reference to consumer segments and markets attractiveness and induce compulsive buying behaviour among customers, which is judged by the satisfaction in spending and perceiving pleasure of buying, occasionally exercising choice and passing time in knowing new products, services and technologies and understanding fellow customers.11, 12 Retailers using a ‘store as the brand’ strategy invest in creating a specific, unique shopping experience for their target customer and encourage leisure and group buying behaviour, where delivery of customer satisfaction seems to be an effective source of differentiation.13 Change-of-season sales are most frequently introduced with attractive sales promotions in reference to price discounts or a two-for-one price basis and are linked with the objective of moving a volume of stock. Retail promotional sales also include general sales, and these are linked with other promotional objectives and activities such as increasing profit and inventory management.14

Compulsive buying

Compulsive buying is closely associated with the obsessive behaviour of customers who orient to their minds to acquire certain products or services. There exists a close relationship between compulsive buyers and specific types of external stimuli such as sales promotions and bargains offered in the large self-service retail stores. Customers who have a higher tendency to buy compulsively are more prone to promotions and are more likely to yield to innovative sales promotions in retail stores. Such customers have a greater likelihood to use promotional tools such as ECC, SAC and BPP offered by retail stores, and subsequently have a greater incidence of compulsive shopping.15 Clinically, compulsive buying is closely related to major depression, obsessive–compulsive disorder and, in particular, compulsive hoarding. Like compulsive hoarding, compulsive buying is thought to be influenced by a range of cognitive domains including deficits in decision-making, emotional attachments to objects and erroneous beliefs about possessions, and other maladaptive beliefs.16

Five essential qualities of aesthetic judgment, which include interest, subjectivity, exclusivity, thoughtfulness and internality, need to be nurtured among consumers to develop conviction in buying. The quality of aesthetic judgment, driven by in-store aura and arousal on new products, exercised by the customers in association with the sales promoters, determines the extent to which the promoted new products and brands enhance quality of life.17 Convergence of sales promotion, customer's perceptions, value for money and product features drive arousal among customers. The nature of the customer–retailer relationship functions as the key in the selling and buying process in reference to in-store promotions. In this process, however, the perceptional problems with customers can greatly devalue the customer–promoter relationship and brand as a whole.18, 19 Consumer appreciation of premium-based promotional offers is more positive when the premium is offered through an easy process and in combination with a relatively lower quantity of products to purchase. It has also been found that when the value of the premium is mentioned and the brand perception is positive, then compulsive buying tendencies are higher among customers.20

The in-store environment variables driving impulsive buying behaviour include the display of point-of-sales posters, exhibiting promotional discounts and cheaper prices, while the atmosphere engagement, referring to enjoyment, elegance and attractiveness, is conveyed by in-store point-of-sales posters. Such behavioural drivers may also be referred to as the in-store promotional effect and the atmospheric effect.21 It has been observed in some studies that consumers who intend to shop on short notice, generally lean towards impulsive or compulsive buying behaviour, driven by the arousal effect in the retail stores. Gender, age, leaning towards unplanned purchases and the tendency to buy products not on shopping lists serve to predict compulsive tendencies.22 There are some common strategies adopted by retailers to overcome the problems of fickle consumers, price-slashing competitors and mood swings in the economy. Such wishful thinking holds that sales promoters can thrive only if they communicate better with consumers during pre-purchase situations and assist in product demonstrations that involve consumers in order to help their purchase decisions.23

Hispanic consumers’ shopping behaviour

Human personality traits are determined by multidimensional factors such as the individual's behavior, appearance, attitude and beliefs and demographic characteristics. On the basis of the trait theory, researchers have concluded that there are five stable personality dimensions, also called the ‘Big Five’ human personality dimensions.24 The Big Five factors include extraversion, agreeableness, conscientiousness, neuroticism and openness to experience. The relationship between the point-of-sales promotions and retail buying decisions is largely governed by the psychographic variables that can be measured broadly by the closeness and farness of the personalities of brand and customer. The type of relationship that customers possess with the point-of-sales promotions offered by retail stores is largely based on loyalty levels.12 The new generation marketing approaches include customer-focused, market-driven, outside-in, one-to-one marketing, data-driven marketing, relationship marketing, integrated marketing and integrated marketing communications that emphasize two-way communication through better listening to customers and the idea that communication before, during and after transactions can build or destroy important brand relationships.25 It has been observed that Hispanic consumers are sensitive to the price while making buying decisions and have a higher tendency to buy compulsively, are more prone to promotions and are more likely to use online sales promotions.15

Hispanic consumers are found to be attached firmly to the ethnic culture and tend to shop at the same store, especially those stores owned by members of the subculture and stores with Spanish-speaking salespeople.26 Marketers reinforce the relationship between consumers and their stores by introducing periodical sales promotions. In general, Hispanic consumers show the tendency of buying products offered in sales promotions.27 In Latin America, consumers’ diversity is apparent and so is their attitude towards promotions. Consumers considered the relative advantages in perceived price and product promotions, and preferred the big bargains offered by the retail stores when buying. Retailers accrued a higher benefit from such buying behaviour of consumers when defining their promotional strategies, especially when emphasizing on an every day low prices strategy such as Wal-Mart.28 Practically, consumers react favourably to leisure sales campaigns of goods and services. Customer value, however, plays a decisive role in the shopping process. Sales promoters instill emotions among customers in terms of merchandise choice, visual merchandising, store environment, sales personnel attitude, pricing policies and promotional activities during the pre-purchase stage. These factors are the very foundations of consumer satisfaction and are the decision drivers towards buying products.29

CONCEPTUAL MOTIVATION

The point-of-sales promotional strategy for prospecting new customers and generating shopping arousal among existing customers through in-store ECC, SAC and BPP involves the impulsive and compulsive buying process. The effects of location convenience, one-stop shopping convenience, the reputation of retail stores, in-store ambience and direct mailings generate shopping arousal among leisure shoppers. Satisfaction and trust developed by the retail stores during the pre-purchase phase help in persuading customers during sales promotions.30 Consumers respond encouragingly to point-of-sales campaigns run by the self-service retail stores in Mexico; however, customer services associated with point-of-sales promotions and perceived promotional advantage play a decisive role in the buying process.31, 32 Information on the current point-of-sale promotion and the previous experience of the customer with promotional offers of the retail store stimulate consumer feelings and prompt one's decision towards experimenting with new products on promotional offers.33 The strategy of point-of-sales promotion in acquiring new customers, retaining existing customers and increasing the volume of sales by shopping arousal has been derived from the previous research studies reviewed in the pretext and exhibited in Figure 1.

Figure 1
figure 1

Interactive sales strategies in customer prospecting and developing shopping arousal.

Figure 1 illustrates that shopping arousal and compulsive buying behaviour are developed by the retailing firms through point-of-sales promotions engaging innovative promotional offers. Such promotional attractions for overselling products drive business-to-consumer (B-to-C) marketing approaches. Retailing firms develop the point-of-sales satisfaction and post-sales satisfaction, which prompts consumer-to-consumer (C-to-C) interactions and helps in building store loyalty. The hypotheses H1 and H2 (a) and H2(b) have been framed considering point-of-sales shopping dynamics, and the construct of hypotheses H3(a) and H3(b) are based on post-sales satisfaction leading to store loyalty as an impact of promotional offers.

RESEARCH DESIGN

Framework of hypotheses

The tendency of compulsive buying in retail stores in response to point-of-sales promotions among consumers has often been dichotomized in terms of its arousal-led compulsive nature and its close association with the post-buying level of satisfaction, which determines customer value and justification in the buying decisions. Such impulsive buying attitudes, emerging from self-reference criterion, may lean towards derived cognitions, possibly including compulsive buying, hoarding and materialism.34

As new and exciting products are introduced, firms prospect the consumers through inter-personal negotiations managed by the sales promoters and inculcate a high arousal among customers towards buying these products. The visual merchandising and computer-aided simulations act as stimuli to consumers, who intend to elicit a positive response. This creates shopping arousal among customers in reference to merchandise choice, store ambience, attributes of promotional products, perceived use value, pricing policies and promotional activities. These factors may be considered as the foundations of consumer behaviour towards the point-of-sales promotions offered in retail stores.29 Further, it is predicted that the magnitude of such positive response will be proportional to the value of an option to make the buying decision at the available price.31 Accordingly, a hypothesis may be framed as:

H1::

Consumers are influenced in making buying decisions by the product attractiveness and by in-store shopping arousal generated by the point-of-sales promotions introduced by the retail stores.

Visual effects and economic advantage associated with promotional products in the retail stores often stimulate the compulsive buying behaviour. Point-of-sales brochures, catalogues and posters build the assumption on perceived use value and motivational relevance of buying decisions of the product. Emotional visuals exhibited by the retailers also drive the perception of customers and determine the anticipated satisfaction on products.35 Retailers demonstrate higher visual attention and increasing visual stimuli during the point-of-sales promotions. It reveals that consumers exhibit a muddled search strategy where economic and perceived use-value throughout document benefits influence the buying decision process among customers.36 In addition, a pleasant store ambience where attractive displays, music, hands-on experience facilities and recreation are integrated helps in maximizing the consumer arousal towards buying. It has been observed that consumers perceive a positive effect during interaction with sales promoters if arousal is high.37 Hence, it may be hypothesized as:

H2(a)::

Consumers develop compulsive buying behaviour and higher store loyalty while responding to the point-of-sales promotions.

H2(b)::

During the point-of-sales promotions, retailers boost higher shopping arousal, leading to conformity towards the buying decision.

The impact of initial interactions among fellow customers about the point-of-sales promotions can be measured in reference to the degree of stimulation gained by customers. Interactive tools on product learning provided by the retailers significantly affect the levels of arousal and pleasure, which contribute towards the experience and thereby influence the buying behaviour. As higher stimulation or interactive learning provided by the sales promoters focuses on gaining an initial experience of the product, consumers tend to engage in higher arousing activities and adhere to the sale promotions offered by the retail stores.3, 38

It has been demonstrated in some researches using store-level data that shoppers in predominantly Hispanic communities actually buy fewer name brands and more store brands.39 Marketers reinforce this perception between consumers and their stores by consistently offering them loyalty offers, as Hispanic consumers are more loyal than non-Hispanic consumers. Hence retailers use point-of-sales promotions to build shopping arousal, gain satisfaction with the customers and get the customers to stay loyal to the stores.40 In view of such consumer arousal-led compulsive behaviour in retail buying, the hypothesis may be delineatedas the following:

H3(a)::

Shopping arousal, generated through interpersonal communication and product experience offered to the customers during point-of-sales promotions, increases the randomness of variety-seeking behaviour and impulsive buying.

H3(b)::

In response to the sales promotion offers, loyal customers purchase more store brands than non-store brands.

The magnitude of the consumer response to clearance sales is weighed in two ways, evaluative and behavioural. First, consumer satisfaction with the decision process, leading to the expected level of satisfaction, is measured, which may be expressed as one of a number of cognitive and affective responses. Satisfaction is the customer's perception of the value received in a transaction or relationship, and it helps in making re-patronage decisions on the basis of their predictions concerning the value of a future product. Hence, many retailers develop innovative approaches to prospect new customers for new products by strengthening their customer relationship and value management strategies.41

Sampling

This study has been conducted in 16 branches of the 4 chain self-service retail stores of Mexico-Commercial Mexicana, Chedraui, Gigante-Soriana and Wal-Mart de Mexico located in Mexico City (Federal District of Mexico). The samples’ respondents selected were those who regularly shop in the above self-service stores in Mexico City and its suburbs. These respondents showed homogeneity in shopping behaviour in reference to store loyalty, point-of-sales promotions, promotional brands, product categories, point-of-sales arousal on store promotions and post-promotion satisfaction on buying. Data were collected by administering pre-coded, structured questionnaires to 270 customers, who were selected following a purposive sampling and snowballing technique. Information collected through the questionnaires were reviewed for each respondent in order to ascertain quality and fit for analysis.

Data collection tools

The study was conducted during 2005–2007 in three seasons, March–April (spring sales), July–August (summer sales) and November–January (winter sales), per annum, when point-of-sales promotions were offered frequently by the selected retail stores as cited above. The data collection process was initiated in November 2005 and terminated in August 2007, covering six periods of sales during the study. A focus group session was organized with potential respondents to identify the most appropriate variables for the data collection. Accordingly, 36 variables that were closely related towards influencing the shopping arousal and customer satisfaction on point-of-sales promotions were selected and incorporated into the questionnaires. The questionnaires were pilot-tested to 32 (11.85 per cent of the total sample size) randomly selected respondents and finalized after refining them based on the responses of the pilot study. The variables selected for the study have been broadly classified into economic and behavioural variables, as exhibited in Table 1.

Table 1 Variables chosen for the study

A questionnaire was developed to investigate the extent to which point-of-sales promotions have influenced buying behaviour, derived post-buying satisfaction and augmented the volume of sales of the retail stores. The pre-test of the preliminary questionnaire upon measuring the influence of point-of-sales promotions on stimulated buying behaviour indicated that promotional offers introduced by the retailers indicated a strong stimuli for both regular and new shoppers. On the basis of responses from the pre-test, the final questionnaire necessitated no significant changes. The questionnaires were translated into Spanish. All care was given to the terminology and language being used in each version of the questionnaire. The variables used in the questionnaire for data collection include various perspectives of customer satisfaction and promotional practices offered by the retailers in order to gain a competitive advantage, optimal market share and higher aggregate sales. The descriptive statistics of the data sets for the variable segments used in the analysis of the study are exhibited in Table 2.

Table 2 Descriptive statistics for the selected variable groups for the study

Data were collected by means of personal interviews by undergraduate students of international commerce and marketing, who hand-delivered the questionnaires to the key respondents in the self-service retail stores that had agreed to be the subject of the research investigation. In most cases, the respondents completed and returned the questionnaires on the predetermined date.

Response trend

Questionnaires were administered to 270 respondents. During the process of data analysis, the questionnaires of 36 respondents were omitted due to paucity of information. In all, 234 respondents were covered under the study, and the usable response rate was 86.66 per cent. The non-response bias has been measured, applying two statistical techniques. First, telephonic conversations were made with 20 randomly selected non-respondents responding to some general questions about the sales and services policies of the dealers.42 T-tests were used to ascertain emerging differences between respondents and non-respondents concerning the issues pertaining to market orientation and customer services strategies. No statistically significant differences in pre-coded responses (a=0.05) were found. A second test for non-response bias examined the differences between early and late respondents on the same set of factors,43 and this assessment also yielded no significant differences between early and late respondents.

Construct of measures

The effectiveness of point-of-sales promotion was measured with a 12-variable self-appraisal perceptual scale derived originally from the basis of focus group analysis, as referred in the pretext. The motivation of this construct, however, has been derived from an original scale developed by Narver and Slater44 on market orientation, who conceptualized it as a multivariate construct composed of customer orientation, competitor orientation and inter-functional coordination as the principal behavioural components. This scale also comprised a dyadic decision criterion including long-term horizon and profit emphasis.45, 46 The impact of the post-promotional buying decision in terms of enhancing customer satisfaction and store loyalty has been measured using an 11-variable ‘self-appraisal perceptual scale’, which included major services quality determinants of tangibility, responsiveness, trust, precision and empathy.47

In this study, a five-point Likert scale has been used to measure the efficiency of customer services delivered by the automobile dealers in the study region. Respondents were asked, on a five-point Likert scale (anchored by strongly agree=1/strongly disagree=5), the extent to which quality management practices were implemented. The chi-square and comparative-fit index for the factor loadings have been analyzed for the model. Measures had been validated and a performance construct for the point-of-sales promotion was developed for the scores that emerged from the data analysis. Regression analysis was performed in order to ensure that the results of these constructs become non-correlated with the mutual interaction terms.48

RESULTS AND DISCUSSIONS

Self-service retail stores use a variety of point-of-sales promotional tools as exhibited in Table 3 in order to attract customers and augment sales. Of these promotional tools, easy installment payment (EIP) and BPP appeared to be the most popular promotion tools among the customers. EIP is used by the retailers throughout the year, while BPP is limited to the summer sales season (July–August) and is restricted to notified products only.

Table 3 Attributes of point of sales promotions offered in self-service retail stores (n=234)

The results reveal that 78.80 per cent of customers use EIP promotional services, while 64.77 per cent of customers are attracted by the BPP promotions offered by the retail stores. Wal-Mart does not offer BPP promotion, as it has the policy of offering every day low prices. Unlike other self-service retail stores covered under this study, Wal-Mart has two major point-of-sales promotions, which include ECC and store credit card (SCC). ECC has been introduced as a gift card for use after recharging the card with cash, and also the value of returned goods can be charged to this card by Wal-Mart customer services modules. ECC can be used by the customers in all the stores of Wal-Mart Group including all Wal-Mart super stores, Superama (convenience store), Bodega Aurera (super store with bulk retailing), VIPS (restaurant) and Suburbia (retail apparel stores). Hence, 78.56 per cent of customers use ECC within the Wal-Mart group of stores, while 81.49 per cent of customers use SCC for continuous purchases at the store.

During point-of-sales promotions, the impact of EIP promotion on the volume of sales has been significant with 77.85 per cent ( 2=0.7785, p>0.01) in the four retail stores, while the SAC loyalty programme in two retail stores made a 73.70 per cent ( 2=0.7370, p>0.001) impact on the volume of sales. The categorical analysis on point-of-sales promotions in the retail stores is exhibited in Table 4.

Table 4 Regression analysis of the point-of-sales promotional effect and volume of buying n=234

It has been observed that the longer the consumers are attracted by the point-of-sales promotions, product promotions, innovation and technology, and ‘do it yourself’ (DIY) and eye-track experience (ETE), the more spendthrift they become. Many customers derived satisfaction by perceived use value and post-promotion customer relation services rendered by the retail stores. Accordingly, the results discussed in Table 4 are consistent with the hypothesis H1.

Sales in response to point-of-sales promotions during the leisure season are stimulated also by the personal interactions with the employees of retail stores, in-store demonstrations and hands-on experiences of the customers. The post-promotion satisfaction is perceived by the customers as economic, and relates advantages on the products, brands and services of the retail stores. Sensitivity analysis has been performed to study those factors that affect change in the buying decision of customers in reference to point-of-sales promotions offered by the retail stores. Variables sensitivity has been computed as a series of tests in which the different variable values were set to show how a change in the variable causes a change in the dynamic buying behaviour of the customers. The sensitivity coefficient β has been computed using the following linear model:

Wherein, Z p represents maximizing promotional sales, Z r indicates regular retail sales (without promotion), p a indicates price advantage, v a shows volume advantage in buying and ΔB it represents change in the buying intensity of customers in a given time. The buying sensitivity analysis presented in Table 5 reveals that perceived advantages in reference to economic gains over price and brand have shown a higher degree of response to the point-of-sales promotions. A small change in the variables value of price and volume of products have resulted in relatively large changes in the volume of buying, responding to the point-of-sales promotion, which may be said to be sensitive to the variables of price and volume of the products offered in the promotion.

Table 5 Sensitivity analysis for the variables responding to point-of-sales promotions n=234

The level of satisfaction derived by the customers, point-of-sales promotion in reference to comparative advantages, volume gains in buying, higher perceived use value and fear of not having such a bargain significantly affect the buying sensitivity, leading to compulsive buying (BS1, (β=0.853, p>0.01)). The buying sensitivity is also affected by the brand value of products in reference to product attractiveness, product line, value for money, quality and uniqueness of the products offered in the point-of-sales promotions in the retail stores (BS2, (β=0.527, p>0.001)). It may also be seen from the result exhibited in Table 5 that price advantage also plays a significant role in stimulating the customer response on point-of-sales promotions (BS3, (β=0.739, p>0.01)). Accordingly, the results presented in Table 4 are consistent with hypothesis H2(a) and H2(b).

Results of correlation metrics indicate a higher degree correlation between interpersonal communication and the in-store product experience (V1, V2), and the variety of products and randomness and the in-store product experience (V4, V2). Uniqueness and perceived use value and store-brand preferences (V4, V5) are also highly correlated. Similarly, variables related to shopping arousal and impulse, and store-brand preference (V5, V6) also have shown a high correlation. Comparative advantage as a variable that influenced the point-of-sales promotion buying decision among the customers has shown a high correlation with all major variables of the study. The correlations among these variables are exhibited in Table 6.

Table 6 Inter-group correlation matrices (n=234)

It may be observed from the results of Table 6 that the correlation coefficient has a maximum value of 0.927, which showed a significant concern on the multi-colinearity between the variables — comparative advantage and the variety of products and randomness in promotion (V7, V4). It has been observed during the study that attractive in-store ambience further escalates the shopping arousal of the customer and that one's level of satisfaction remains high, although long-term customer value is influenced by both the price and the non-price factors associated with the product. Performances of point-of-sales promotions in retail stores also, however, depend on just-in-time supplies, impulsive displays and efficient customer services. Hence, the results exhibited in Table 6 are consistent with hypothesis H3(a).

Redundancy in the results, which exhibited some degree of biasness in inter-correlations among variables, has been minimized using the Monte Carlo (MC) method. Bias is largely affected by sample size, and biasness was found to decrease by increasing the volume of data. It has been observed that inter-correlation bias tends to decrease as the inter-correlations between the two sets of variables increase. The numbers of predictors and criterion variables, as well as the size of the correlations between variables in each set, has a relatively minimal effect on bias.49 The MC method is a useful technique for computing numerical integration and sorting out the redundancy in the statistical results. A procedure for averaging correlation coefficients using the Eigen value of an inter-correlation matrix was adopted in the study using the Monte Carlo method,50 which is known as the Kaiser average. This process has substantially reduced the bias for correlations near zero and showed slightly smaller standard errors (greater efficiency) than the other averages for small correlations.

As the data have been organized following normative distribution, in many observations the biasness of inter-correlations in the results was minimized. Because of the computational limitations of the data, the statistical prejudice, however, could not be fully eliminated. The results are more likely to project a relationship from the perspectives of judgments and efficacy. The biasness of an illusory correlation effect on the judgment similarity of the variables relationship, or of whether the relationship of one variable induces another, has also been statistically minimized using the MC method.

It has been observed during the study that customers had experienced a higher attraction towards the store brands as compared with the non-store brands due to low price and acceptable quality at par with the non-store brands. Results exhibited in Table 7 show that sale of store brands during the promotional programme in a retail store is 56.73 per cent, on average. This fact establishes that the customers who are loyal to a particular retail store would take maximum advantage of point-of-sales promotional programmes. The loyalty programmes are largely governed through ECC, SAC and EIP promotional programmes administered by the retail stores. The post-promotion satisfaction has been experienced by the customers when the promotional programme benefits are combined with future events of the stores. The point-of-sales promotion programmes in retails stores largely influence shopping arousal and contribute towards augmenting the sales of store brands among loyal customers. Hence, the results presented in Table 7 are consistent with hypothesis H3(b).

Table 7 Sales of store brands during point-of-sales promotions (n=234)

MANAGERIAL IMPLICATIONS

The promotional effects generated from various promotional tools may be monitored for longer periods of time and measured in reference to achieving the long-term goals of retail firms. Also, the variability of promotional response in different retail markets, channels and outlets should be analysed for making the required modifications in the process of delivery of promotional programmes to the customers. Such management strategy would allow for better promotional planning and marketing effectiveness, with consequences that extend beyond economic benefits for the retail company itself and that reverberate on relationships with suppliers and on cooperative promotional decisions. Retailers must be strategic about pulling unprofitable products from the shelves and avoiding high-volume but low-profit customer segments. Retailing firms must expand aggressively into new markets, and once the retailing firms saturate the markets with outlets, they can sustain their earnings growth by improving the mix of products sold, offering attractive sales promotions. At times, retailers also need to alter their promotional, advertising and merchandising strategies to better respond to the preferences of potential customers. Thus, sales promotion programmes should be strategically conceived, considering the long-term effects on volume of sales and building loyalty among customers.

The sales promotion programmes need to be a part of the agenda of marketing managers and stretched for a long period with regular intervals. Appropriate promotional strategies that consider the economic and behavioural variables discussed in the study may be developed by the managers on measuring the intensity of buying in response to sales promotions and by maximizing consumer satisfaction to increase the volume of sales. As customer satisfaction is one of the principal measures of retailing performance and buying behaviour in response to sales promotions offered by the retailing firms, the focus of sales promotions needs to be oriented towards augmenting loyalty attitude and customer values. The strategy paradigm for augmenting such an effect is exhibited in Figure 2.

Figure 2
figure 2

Point-of-sales promotions, consumer behaviour and loyalty attitude.

At the retail point of purchase convergence of customer loyalty, value for money and competitive product advantages drive the loyalty of retail stores. Also, the manager needs to measure periodically the buying potential of customers and the propensity of spending towards merchandise in the retail store in order to plan the sales promotion programmes effectively. The success of retail firms grows with customer satisfaction, brand value, repeat-buying behaviour and an increase in the sales of products. A strategic focus that considers how customers and competitors will react to any promotional effort, as well as the message delivered and the stature in the marketplace of the brand delivering that message, should be developed by the firms in order to strengthen and streamline the pre-purchase promotions in the marketplace. Hence, managers should not only tailor promotional programmes successfully in order to target customers, but also skillfully monitor their promotional programmes’ implementation through customer culture and competition challenges.

CONCLUSION

Sales promotions are considered to be short-term instruments, usually designed to yield an immediate sales effect. Point-of-sales promotion programmes have become the principal tool of retailers in Mexico to acquire new customers and retain loyal customers. There are a variety of promotional strategies used by the retailing firms during the leisure seasons observed three times per annum. It is found that loyal customers are attracted to the store brands during the promotional offers, while new shoppers are price sensitive and are attracted by the in-store ambience of sales promotions and volume discounts. Retail sales promotions are largely built around price or volume discount offers. Retailing firms attempt to influence the buying behaviour of customers by launching attractive promotional campaigns and introducing changes in their price policies, among other actions. Periodical price discounts offered by the retailers exert a greater influence on the store-brand choice over the non-store-brand preferences. The type of promotion and the level of retailer dominance, however, have significant effects on the volume of sales, acquiring new customers and sustaining customer loyalty. The discussions in the study reveal that point-of-sales promotions significantly stimulate the buying behaviour among customers towards compulsive buying that is driven by the factors of the hidden fear of not getting such bargain in the future, product attractiveness and in-store shopping arousal. It has also been observed in the study that customers develop a higher preference for store brands, enhanced use value and repeat-buying behaviour through a hands-on experience of the product.

LIMITATIONS OF THE STUDY

Like many other empirical studies, this research might also have some limitations in reference to sampling, data collection and generalization of the findings. Samples drawn for the study might have been insufficient to generalize the study results. Questionnaires were translated in Spanish for the respondents in Mexico, which might have conveyed a varied conceptual sense to some extent. The open-ended questions were answered by the Mexican respondents in Spanish, and occasionally some issues might have been overlooked during the translation of questionnaires. The study does not indicate as to how behaviour control, quality differentiation, and promotional design efficiency overrule the price and volume discount stimuli among the customers. Besides, the study might also have limitations concerning some of the biases driving shopping arousal among the customers during point-of-sales promotions such as, at times, virtual shopping overweighing the price promotions. To ensure that the data cover wider spatial and temporal dimensions in the study region, data should be cleansed and filtered with many variability factors that affect consumer behaviour and retailer performance.

FUTURE RESEARCH PROSPECTS

Future research could examine issues related to customer perceptions of quality and the design of sales promotional programmes for a sustained response. The impact of economic variables on shopping arousal and compulsive buying behaviour in response to competitive sales promotions may also be considered in reference to the market orientation of a retailing firm. The role of retail competition, account retail strategy and demographics in determining promotional response are also potential issues to be pondered over in future research. Issues related to the effectiveness retail promotional programmes, with the premise that the level of local market dominance will have an impact on increasing the volume of sales and enhancing the gamut of customers may also be considered for further research.