THE EFFECTIVENESS OF POINT OF SALES (POS) DISPLAYS IN THE BUYING BEHAVIOUR OF CONSUMER

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THE EFFECTIVENESS OF POINT OF SALES (POS) DISPLAYS IN THE BUYING BEHAVIOUR OF CONSUMER

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

Up to 70% of retail purchases are unplanned (e.g., POPAI Europe, 1998) and therefore likely to be influenced by factors within the retail environment itself. Researchers have been paying increased attention to a number of situational factors in in-store communications such as store image, organization, Gratitude goes to the executives and store managers of Hagar in Reykjavik for access to the retail outlets used as an experimental setting. Valdimar Sigurdsson acknowledges the support provided by a postdoctoral grant from Rannís, The Icelandic Centre for Research.

and atmosphere along with product placement and packaging (e.g., Irena, Claude, & Michelle, 2007; Mattila & Wirtz, 2001; POPAI Europe, 1998). Communications have a number of functions and objectives. The five most common point-of-purchase communication objectives are to (a) capture attention for the purpose of differentiation, (b) remind consumers of previous and ongoing marketing communications stimuli, (c) inform consumers about product attributes, (d) create image of positive associations, and lastly (e) persuade consumer toward impulse purchases (De Pelsmacker, Geuens, & Van den Bergh, 2004). In-store displays are one way to change the retail environment to increase sales. Behaviorally, in-store displays are antecedent manipulations of the retail setting and fall under a category of marketing communications channels, commonly referred to as point-of-purchase communications (e.g., De Pelsmacker et al., 2004).

Sales-measured retail promotion is most appropriate when the behaviorenvironment relationship is located in the same space and time. This is especially the case if extraneous variables in the retail environment can be controlled. Unlike with mass advertising, there are no intermediaries (e.g., changes in budget, advertisements from other manufacturers, or word of mouth) between consumers noticing the interventions in-store and their response. Consequently, in marketing communications, sales are relevant for measuring the impact of in-store promotions.

The effects of point-of-purchase stimuli have been broadly researched in applied marketing, but the findings are mixed. Although it is expected that various point-of-purchase displays increase sales it can be argued that it is more of a creed than an empirical fact. Some studies have shown that displays and shelf talkers can increase purchase (POPAI Europe, 1998). Evidence suggests that displays can increase sales of the featured brand (Grover & Srinivasan, 1992; McKinnon, Kelly, & Robinson, 1981), but the effects seem to vary (Areni, Duhan, & Kiecker, 1999; Bronnenberg & Wathieu, 1996; Wilkinson, Mason, & Paskoy, 1982) or even fail to emerge (Kumar & Leone, 1988). A problem in this literature is a confound of display manipulations in conjunction with retail price promotion. The increase in sales is assumed to result from consumers choosing the promoted brand because of its reduced price, but not necessarily from the communicative signal of the display itself. However, Inman, McAlister and Hoyer (1990) have found evidence that suggest that some consumers respond to promotional signals such as point-of-purchase displays without considering price. Woodside and Waddle (1975) have also found that point-of-purchase signing at regular prices can increase sales further compared to periods without advertised price reductions; but when price reductions were advertised, sales multiplied by up to a factor of six compared to sales during no promotion nor price reductions. In brief, the proprietary status of many findings, outdated research, unrealistic research situations (e.g., closed experimental settings and heavy reliance on students as participants), varying results, and lack of replications and testing of generalization yield few conclusions.

STATEMENT OF THE PROBLEM

Foxall (1998) questions the extent to which control of behavior be attributed to the environment when the setting is relatively open. The sufficient condition for identifying functional relationships (as for displays on sales) is the experimental manipulation of an independent variable (Johnston & Pennypacker, 1993). It is thus necessary to manipulate the retail environment and see how it affects consumer behavior (Curry, Foxall, & Sigurdsson, 2010).

OBJECTIVES OF THE STUDY

To understand the effectiveness of point of sales displays in the buying behavior of consumer
To understand the relationship between point of sales displays and the buying behavior of consumer

RESEARCH QUESTIONS

What is the effectiveness of point of sales displays in the buying behavior of consumer
What is the relationship between point of sales displays and the buying behavior of consumer

RESEARCH HYPOTHESIS

H0: There is no relationship between point of sales displays and the buying behavior of consumer

H1: There is a relationship between point of sales displays and the buying behavior of consumer

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