Jelena Franjković, Davor Dujak, Dario Šebalj – PRICE PROMOTIONS – IMPLICATIONS FOR LOGISTICS AND CONSUMER BEHAVIOUR

Jelena Franjković, Davor Dujak, Dario Šebalj – PRICE PROMOTIONS – IMPLICATIONS FOR LOGISTICS AND CONSUMER BEHAVIOUR

Jelena Franjković
Josip Juraj Strossmayer University of Osijek, Faculty of Economics in Osijek
E-mail:
jelenaf@efos.hr


Davor Dujak
Josip Juraj Strossmayer University of Osijek, Faculty of Economics in Osijek
E-mail:
ddujak@efos.hr


Dario Šebalj
Josip Juraj Strossmayer University of Osijek, Faculty of Economics in Osijek
E-mail:
dsebalj@efos.hr


Abstract


Forward buying is common business practice among retailers who purchase
large quantities from their suppliers when product price is low. They keep those large
quantities at their stock after the price promotion ends and continue to sell them at the
regular price. But what about consumers? They use different ways for informing about
products and their prices and although they are well informed about prices, for some
of them contemporary lifestyle leaves little time available for consumer goods
shopping. One would expect that smart consumers would wait for the lower prices
and then purchase extra inventory, more than they need at the moment, in order to
seize the opportunity of lower prices and avoid frequent shopping trips. This kind of
consumer behaviour is also well known as the starting whip in the bullwhip effect in
the supply chain. This paper aims to fill the gap in the literature of products stockpiling
in households (at the consumer level). Indicative research was conducted among 305
households in order to find out to what extent and to which product categories
consumers are prone to stockpiling. Certain attention was given to household’s space
constraints and the perception of extra inventory in the household as a good
investment. Research has shown that most consumers are prone to buy products for
future consumption, mostly due to rational behaviour and awareness of price
promotion. Commonly stockpiled are non-perishable product categories and products
that do not lead to higher consumption. Respondents who stockpile food categories
mostly believe that higher household inventory of products lead to increased
consumption. Unlike the household’s space constraints, perception of extra inventory
in the household as a good investment proves to be statistically significant for
consumers in deciding on purchasing amount of products.


Key words: stockpiling, households, price promotions, stockpiling constraints

Last Update: October 26, 2017  

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October 26, 2017   230    BLMM 2017  
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