This research addressed the question regarding the difference in the short-term influence on sales revenue and long-term influence on brand loyalty of price and non-price promotions.
According to economic utility hypothesis, price-promotions have stronger positive short-term influence than non-price promotions. Nevertheless, the impact of promotion on brand retention is ambiguous and hard to precisely estimated. Behavioral learning theory and self-perception theory suggest that purchasing promoted products may increase, detract, or have little impact on subsequent brand preference in comparison to purchasing non-promoted products. In the language of behavioral learning hypothesis, price promotions are less effective than non-price promotions because price promotions can be primarily considered as reinforcement or in the context of self-perception theory, they are the reason to buy the brand. Therefore, it is hypothesized that price promotions are more effective than non-price promotions in the short-term while being less promising the long-term1. Behavioral Learning Theory Studies about sales promotions are considered as one type of consumer behavioral research which emphasizes on the detection of the regular users of promotions2. The perceived risk theory, the economic theory, attribution theory, and psychographics are utilized in theory-based studies to identify the underlying cognitive interpretation behind the usage frequency of sales promotions. The behavioral learning hypothesis is used to clarify buying behavior, the association between various sorts of sales promotions and brand loyalty.
Behaviorism is a scientific term applied in multiple areas – psychology, biology, and philosophy. The behaviorists interpret learning is a relatively everlasting modification in behavior achieved through experience or practice; therefore, learning is the aftereffect of the applications of the results3. Behaviorism provides an understandable interpretation of learning process, and hence, a systematic approach to comprehend behavior. Behaviorism claims that human beings follow the principle of “stimulus-response” which means humans, like other animals, are biological organisms, naturally able of adapting to the changing environment in which they live4. Stimuli, responses, and reinforcements are three primary factors in behaviorism.
The stimulus is a thing/event that triggers the response. The reinforcement is the bridge between the stimuli and the conditional response; therefore, when reinforcement is removed, the connection between the stimuli and the conditioned response will be broken and disappear5.