Are costly introductory promotions really necessary?
John H. Holmes Ph.D., Frank H. Bennett M.B.A.
Journal of the Academy of Marketing Science · 1977 · Volume 5 · Issue 1
Abstract
The continuous growth of competition during the past twenty-five years has placed increased emphasis on the introduction of new products and services. Several alternative promotional tactics can be used in marketing innovations. More importantly, the selection of the appropriate promotion will have a direct effect on the item's rate of acceptance as well as affect the firm's profitability. The present article reports the results of a field experiment where subjects were exposed to a brochure announcing the introduction of a new magazine. Each brochure contained one of three types of promotional offers: viz., a regular price, a discounted price, or an extended subscription having equal value to the discount. Subjects were randomly divided into three groups and exposed to one of the three offers. After viewing the materials, the respondents from each group stated their purchase intentions. The unexpected results suggest that (a) researchers further investigate consumer responses and (b) practitioners carefully assess the effects introductory promotions may have on the innovation's acceptance and profitability. The evidence presented here suggests costly introductory promotions may not be necessary.
Keywords
Purchase Intention, Discount Price, Special Offer, Behavioral System Approach, Adoption Intention
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