The use of sales promotion has grown steadily over the past twenty years. The reason for the growth is simple:  promotions increase sales[BC1] . As the use of promotions has increased, so, too, has interest in understanding the implications of the use of promotions on preference for a brand once the promotion is rescinded. Research on post-promotion brand preference offers mixed results. On one hand, there is concern that promotions harm brands in the longer run. Such concerns are usually based on the fear that consumers will make negative attributions about a brand’s use of promotion (i.e., “if the brand needs to promote maybe it isn’t that good”). On the other hand, researchers have forwarded[BC2]  that promotions may help a brand in the longer run by rewarding consumers and reinforcing their positive beliefs about the brand (purchase reinforcement). Consistent with the conflicting views of promotions, empirical results run the gamut from finding a positive effect of promotions on brand preference, to providing evidence that promotions undermine brand preference.

Given conflicting theory and results, we undertook a meta-analysis of the existing research. The analysis was based on our coding of the pertinent details of forty-one articles that empirically test the effect of promotions on post-promotion brand choice or brand evaluation. The articles allowed us to code 132 observations of the promotion-brand preference relationship. In analyzing the existing research, we:  (a) summarize the overall relationship between sales promotion and post-promotion brand preference; and, (b) test the contextual factors that may moderate the relationship. The contextual factors we consider relate to the consumer, product, and promotion characteristics that define the choice environment as well as characteristics of the method by which the original research studied the promotion-brand preference relationship. 

Across 132 observations, the overall relationship between sales promotion and brand preference after exposure to the promotion was not significant. Thus, on average, promotions do not affect brand preference. However, it appears that promotions build brand preference by reinforcing purchase in some instances, while undermining preference in other circumstances. Specifically, preference for a brand after a promotion is lower when the[BC3]  promotion is 20% or more of the product value. Thus, managers must balance the tradeoff between attempting to obtain the large sales boosts that come from offering deep promotions and protecting their brand by offering smaller promotions. Brand preference is also weakened by promotions that are in the form of an unannounced price reduction, as when a temporary decrease in the everyday retail price is offered. On the other hand, relative to other promotions, post-promotion preference is relatively higher when the discount is in the form of a coupon or a premium. This suggests that managers avoid promotions that may be construed as permanent price reductions and instead offer promotions that are either effortful for the consumer to redeem (e.g., coupons) or are not price-based (e.g., premiums).   [BC4] 

Characteristics of the product also play a significant role in determining the degree to which a promotion affects brand preference. Sales promotions were particularly damaging to brands with which consumers are unfamiliar. In the meta-analysis, lack of familiarity with a brand was due to the use of hypothetical brands in some of the extant research. However, the general result is likely to apply to brands that are new or relatively unknown.

Promotions also have a more negative effect on brand preference when offered on a product that competes with a small set of products. Thus, promotions are more likely to lead to lower brand evaluations in product categories such as in which there are relatively few national competitors[BC5] . Finally, promotions of durables and services were associated with more negative effects on post-promotion brand preference than were promotions by packaged goods products[BC6] .  This finding suggests that promotions may be particularly damaging to brand preference when promotions are not a category norm and/or consumers are rarely exposed to promotions due to infrequent shopping.  Managers of service and durable brands are therefore advised to avoid the temptation to draw consumers by differentiating their offering via promotions.