Utilitarian, hedonic, collecting, epistemic, and high values as determinants of the attractiveness of premium promotions

Abstract

Modern retail is fiercely competitive, forcing grocery retailers to enhance promotions including premium redemption to attract customers. Taiwan’s leading convenience store chains have even established an integrated marketing department to develop unique premium rewards and campaigns that seek to induce customers to spend more or switch from other retailers. However, research on premium attractiveness is relatively scarce despite its importance in determining the success of a premium promotion. This empirical study identifies the premium value hierarchy that drives attractiveness from the consumer’s perspective. It finds that epistemic value is the most important driver behind making a premium reward attractive, which in turn, raises customers’ brand attitude toward the retailer and purchase intention in the retailer’s stores. High premium value can also make a customer develop a positive brand attitude. By contrast, utilitarian, hedonic, and collecting values only indirectly affect a customer’s brand attitude via the epistemic value. In addition, the trading stamps promotion only works with frequent customers; it is not effective in enticing VIP customers. This study provides suggestions on how to develop an attractive premium product and successful trading stamps promotion.

Keywords:

• Consumption value
• trading stamps
• epistemic value
• collectible premium
• high value
• premium rewards