Strategic Groups and Choice of Promotional Tools

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Strategic Groups and Choice of Promotional Tools
Empirical Evidence from Portugal and New
Zealand Zhilin Yang, City University of Hong
KongKim Shyan Fam, City University of Hong Kong

• 9th Multi-cultural Marketing Conference
• Montego Bay, Jamaica, December 11-14 2003

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Research Questions

• 1.Do differences in strategic approach warrant a
  different set of promotional tools?
• 2.Does environmental uncertainty influence a
  retailers choice of promotional tool?

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Research Hypotheses
H1 That Discounters will prefer price
markdowns/in-store displays more than
other promotion tools H2 That High
Profile/Price retailers will dislike price
markdowns/in-store displays as it will
damage their image. H3 That retailers who
perceived environmental uncertainty will prefer
price markdowns due to its less risky
nature. H4 That Discounters will allocate a
larger proportion of their promotional
budget to price markdowns than High Profile/Price
retailers. H5 That High Profile/Price retailers
will allocate a larger proportion of
their promotional budget to mass media than
Discounters.
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Research Methodology
Portugal New Zealand
Sampling Frame Yellow Pages list of clothing and shoes retail stores in 5 cities Yellow Pages list of clothing and shoes retail stores in 5 cities
Questionnaire Distribution Methods Delivered by post to Managers 2 waves of mailing 3 weeks apart Delivered by post to Managers 2 waves of mailing 3 weeks apart
Definition of size of retailers Large retailers with 6 or more outlets in the chain (franchise retailers inclusive) Small retailers between 1-5 outlets, majority of sample has 1 outlet Large retailers with 6 or more outlets in the chain (franchise retailers inclusive) Small retailers between 1-5 outlets, majority of sample has 1 outlet
Research Instruments 7 promotion tools 10 items relating to strategic orientation of the firm 7 promotion tools 10 items relating to strategic orientation of the firm
Scale 1 strongly disagree/ very unimportant, 7 strongly agree/ very important 1 strongly disagree/ very unimportant, 7 strongly agree/ very important
Response Rate 161 responses (94) 287 responses (39)
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Results
Characteristics of Respondents
Characteristics Portugal n 161 Portugal n 161 New Zealand n 287 New Zealand n 287
Characteristics N Per cent n Per cent
Clothing Stores 146 90.6 213 74.2
Shoe Stores 15 9.4 74 25.8
Independent Retailers 110 68.3 256 89.2
Chain Stores 51 31.7 31 10.8
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Results

• H1- Discount strategic group prefers PMIS
  supported
• H2- High Profile group dislikes PMIS supported
• H3- Environmentally uncertain retailers prefer
  PMIS supported
• H4 H5 partially supported
• Portuguese Discounters apportion a larger
  promotion
• budget to PMIS than High Profile retailers, but
  not reflected
• in the NZ sample (H4)
• Portuguese High Profile retailers apportion more
  budget
• to MM, but not reflected in the NZ sample (H5)

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Conclusions

• Findings supported earlier studies that
  retailers strategy affects choice of promotional
  tools
• High Profile retailers do not like PMIS as it
  would cheapen their store image
• Perceived environmental uncertainty will lead to
  the use of short-term promotional tools like PMIS
• Location could play a role in choice of
  promotional tools like sparsely populated NZ
  where Discounters spend more on MM instead of
  PMIS Portuguese retailers choice