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Towards Understanding Consumer Reactions in Out-of-Stock Situations: A comparison of price promoted versus regular-priced items in grocery retail

Timmerman, Susan LU and Hajszan, Christina LU (2016) BUSN39 20161
Department of Business Administration
Abstract
Temporarily unavailable products in the grocery retail environment cause problems for multiple parties, resulting in possible sales losses for retailers and high dissatisfaction among consumers. With price promoted products being twice as often out-of-stock (OOS) as regular-priced items, the need for a further understanding of reactions to price promoted products is evident. The purpose of this thesis is therefore to examine the differences between regular-priced and price promoted out-of-stock consumer responses based on the specific product category coffee. The development of a response model which tailored previously researched OOS responses towards price promoted products served as a foundation to approach the problem. Using an... (More)
Temporarily unavailable products in the grocery retail environment cause problems for multiple parties, resulting in possible sales losses for retailers and high dissatisfaction among consumers. With price promoted products being twice as often out-of-stock (OOS) as regular-priced items, the need for a further understanding of reactions to price promoted products is evident. The purpose of this thesis is therefore to examine the differences between regular-priced and price promoted out-of-stock consumer responses based on the specific product category coffee. The development of a response model which tailored previously researched OOS responses towards price promoted products served as a foundation to approach the problem. Using an experimental survey design, the results of the experimental group (price promoted OOS) were compared against the results of the control group (regular-priced OOS), finding that consumers react differently in some instances. In both situations, consumers were most likely to switch to another product of the same brand followed by postponing the purchase until the product is available again. A great difference in behaviour was detected in relation to switching to another store to buy the intended product, being far more popular in regular-priced stock-out situations than in case of a price promoted OOS. The overall response patterns indicate that consumers faced with a stock-out of a price promoted product only react slightly different to stock-outs of regular-priced products, in both instances, however, guided by a remarkably strong brand loyalty according to the studied responses. (Less)
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author
Timmerman, Susan LU and Hajszan, Christina LU
supervisor
organization
course
BUSN39 20161
year
type
H1 - Master's Degree (One Year)
subject
keywords
Out-of-Stock, Stock-out, Promotion, Price promotion, Consumer decisionmaking, Consumer behaviour, Grocery retail
language
English
id
8878303
date added to LUP
2016-06-22 13:16:18
date last changed
2016-06-22 13:16:18
@misc{8878303,
  abstract     = {Temporarily unavailable products in the grocery retail environment cause problems for multiple parties, resulting in possible sales losses for retailers and high dissatisfaction among consumers. With price promoted products being twice as often out-of-stock (OOS) as regular-priced items, the need for a further understanding of reactions to price promoted products is evident. The purpose of this thesis is therefore to examine the differences between regular-priced and price promoted out-of-stock consumer responses based on the specific product category coffee. The development of a response model which tailored previously researched OOS responses towards price promoted products served as a foundation to approach the problem. Using an experimental survey design, the results of the experimental group (price promoted OOS) were compared against the results of the control group (regular-priced OOS), finding that consumers react differently in some instances. In both situations, consumers were most likely to switch to another product of the same brand followed by postponing the purchase until the product is available again. A great difference in behaviour was detected in relation to switching to another store to buy the intended product, being far more popular in regular-priced stock-out situations than in case of a price promoted OOS. The overall response patterns indicate that consumers faced with a stock-out of a price promoted product only react slightly different to stock-outs of regular-priced products, in both instances, however, guided by a remarkably strong brand loyalty according to the studied responses.},
  author       = {Timmerman, Susan and Hajszan, Christina},
  keyword      = {Out-of-Stock,Stock-out,Promotion,Price promotion,Consumer decisionmaking,Consumer behaviour,Grocery retail},
  language     = {eng},
  note         = {Student Paper},
  title        = {Towards Understanding Consumer Reactions in Out-of-Stock Situations: A comparison of price promoted versus regular-priced items in grocery retail},
  year         = {2016},
}