Choosing high-equity cosmetic brands in bad macroeconomic conditions: evidence from panel data. Issue 4 (3rd April 2020)

• Record Type: Journal Article
• Authors: Kaswengi, Joseph; Diallo, Mbaye Fall; Akrout, Houcine; Valette-Florence, Pierre
• Is Part Of: International journal of retail & distribution management. Volume 48:Issue 4(2020)
• Page Start: 305
• Page End: 325
• Publication Date: 2020-04-03
• Subjects: Cosmetic brand -- Brand equity -- Price -- Promotion/feature/display -- Consumer characteristics -- Macroeconomic conditions; Retail trade -- Management -- Periodicals; Physical distribution of goods -- Management -- Periodicals; 658.87
• DOI: 10.1108/IJRDM-01-2019-0003
• Languages: English
• ISSNs: 0959-0552

Abstract

Abstract : Purpose: This study investigates how price, promotion and consumer characteristics affect consumer choice of high over medium- and low-equity cosmetic brand under different macroeconomic conditions. Design/methodology/approach: The study uses purchase records from MarketingScan's Behaviour Scan panels (a GFK – Mediametrie Company) covering the period from 2008 to 2009. The panel analysed represents a sample of 2, 149 households representative of the national population. Findings: Results indicate that regular price and relative brand price increase high-equity cosmetic brand choice over both low- and medium-equity brands, while reference price decreases it. Brand feature promotion activity and joint promotion positively affect high-equity cosmetic brand choice, whereas display promotion decreases it. In comparison to medium-equity cosmetic brands, gender and education slightly increase high-equity cosmetic brand choice, while age decreases it. Surprisingly, household income does not affect high-equity cosmetic brand choice. The effect of regular price decreases over worsening macroeconomic conditions. However, the effect of relative brand price decreases between low and moderate contraction periods, but increases between moderate and high contraction times. Feature promotion is effective only when the contraction is moderate, while the negative effect of display promotion is stable over time. Originality/value: The paper underlines the moderating role of macroeconomic conditions on the relationship between pricing decisions as well as promotion activity and consumer choice of high-equity cosmetic brands.