Retail Promotion Objectives: Evidence from New Zealand, Portugal and Hungary.

Abstract

Very little is known about the promotion objectives of small firms. In particular, do differences in promotional campaigns warrant a different set of promotion objectives, and how effective were these objectives? Are there differences in the use of promotion objectives amongst retailers with different national background, but within the same retail category? To address these questions, we questioned 287 clothing and shoe retailers in New Zealand, 161 in Portugal and 328 in Hungary. Retailers were asked questions about the following: (a) what was their most recent promotion campaign; (b) what were the objectives of their recent promotion campaign; (c) how successful was their recent promotion campaign; (d) how has their particular market share changed in the past 12 months; and (e) what fraction of their stock was markdown and what was the average percentage markdown. We then extended the analysis by contrasting the promotion objectives, market share and stock markdown of successful with unsuccessful campaigns. Again the results indicated some significant variations. These results have ramifications for the small firms' advertising strategies across countries, with an emphasis on the objectives of stock clearance and attracting new customers. A major finding was the cross-cultural differences across the three countries studied, mainly reflecting the different stages of economic development.