Introduction and background
Market dominance,
promotions, and
shopping mall group
performance
Andrew G. Parsons and
Paul W. Ballantine
The authors
Andrew G. Parsons and Paul W. Ballantine are based in the
Department of Marketing, The University of Auckland, Auckland,
New Zealand.
Keywords
Shopping centres, Promotional methods, Performance criteria,
Market position
Abstract
A common complaint about shopping malls is the “sameness” of
them. Despite this, shopping mall groups are increasingly using
group branding as the basis for promotional activities,
emphasising the security for the customer of knowing that they
will receive the same level of mix, no matter which “branch” is
shopped at. This research examines the effectiveness of group
versus local promotional activities, with the premise that level of
local market dominance will impact on the effectiveness of both
promotional types. The two key performance indicators of sales
and foot traffic were used to measure effectiveness. Findings
suggest that promotional type and level of market dominance
have significant effects on sales and traffic. Managerial
implications are offered, along with suggestions for future
research extending this study to other retail groups.
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International Journal of Retail & Distribution Management
Volume 32 · Number 10 · 2004 · pp. 458–463
q Emerald Group Publishing Limited · ISSN 0959-0552
DOI 10.1108/09590550410558590
458
Shopping malls are increasingly using promotional
activities to differentiate themselves from their
competitors through image and/or brand
communications in order to boost foot traffic
(visits), and to stimulate merchandise purchases
(LeHew and Fairhurst, 2000). This is occurring in
a progressively more competitive environment
characterised by over capacity and declining
customer visits (LeHew and Fairhurst, 2000; Shim
and Eastlick, 1998). Owner (or management)
groups that have a portfolio of malls have long
recognised a need to market themselves effectively
(Kirkup and Rafiq, 1999) given that the store mix
and product offerings of many regional shopping
malls are very similar (Burns and Warren, 1995;
Wakefield and Baker, 1998). However, the
changing consumer base is creating a need to
better understand the requirements of a
heterogeneous market composed of many diverse
segments (Dunne et al., 2002; Levy and Weitz,
2001; Solomon, 2002), thus making the use of
mass market promotions more difficult.
Mall groups (defined as multiple malls managed
by a single organisation) make use of two types of
promotional activities: group promotional
activities and local promotional activities. The first
of these, group-wide promotional activities, have
become increasingly used, and refer to a generic
promotional base that is replicated across the
group, with tailoring normally restricted to
institutional variations (e.g. location, opening
hours, etc.). As such, they take a mass-marketing
approach, usually attempting to appeal to either
a broad market (usually demographic or
lifestyle-based), or a common (in each mall’s
catchment area) specific target market for a limited
period, such as parents and children during school
holidays. These promotional activities tend to be
either institutional advertising, or two of
Alexander and Muhlebach’s (1992) four mall
promotional types – price-based and
entertainment-based activities.
Price-based activities commonly include
group-wide sales, gift-with-purchase, or discounts
once a minimum purchase level is reached
(Parsons, 2003). The levels of price reductions or
rewards are consistent across the mall group.
There is a dearth of research on the effectiveness of
price-based promotions in malls, but the general
retail literature implies that such activities are
effective in encouraging visits (Folkes and Wheat,
1995; Smith and Sinha, 2000), and in increasing
sales (Kendrick, 1998). Entertainment-based
activities commonly occur during school holidays,
and may involve a ‘touring package’ that each mall
in the group will have access to. Thus, while the
Market dominance, promotions, and shopping mall group performance
Andrew G. Parsons and Paul W. Ballantine
same entertainment may not be available in each
mall on a given day, over the holiday period, each
mall will have offered the same entertainment
variations, and an element of excitement above the
usual quality of the shopping experience would
have been provided (Wakefield and Baker, 1998).
With these promotional activities, marketing
managers thus have an annual calendar of events in
which malls belonging to the group will
participate. Individual mall managers will then
have gaps that can be filled with the second type of
promotional activity examined in this study – local
promotional activities. Whilst such activities can
include price and entertainment-based
promotions, budget constraints often mean that
the other two types identified by Alexander and
Muhlebach (1992) are used – educational
activities and school/community activities. Kirkup
and Rafiq (1999) see these as public relations
oriented, long-term tools, positioning malls as
integral parts of the community, rather than
short-term sales or traffic drivers, though the
potential is there for them to contribute to the
performance of the mall.
Parsons (2003) has shown that different
promotional activities for individual shopping malls
can have an impact on the sales levels for malls and
the number of shoppers who visit malls. However,
what is not clear is the influence of group activity,
and it is unclear whether mall-group price and
entertainment promotions are any more or less
effective than similar local (individual mall) price
and entertainment promotions that are targeted
more specifically at the local population.
Store choice literature suggests that in situations,
where there is saturation (Guy, 1996), or at least
alternatives within reasonable travelling distance
(Burns and Warren, 1995), that shoppers will travel
to their preferred centre rather than the nearest,
with differentiation often occurring through local
promotional activities. Conversely, the generic
approach of group promotional activities infers that
because each mall offers the same level of
promotional mix, it would be rational to shop at the
most convenient (or closest) mall. The impact of
this is, by inference, dependent upon the level of
market dominance enjoyed by a portfolio of malls in
a specific catchment area. Moreover, the literature
on mass marketing versus target marketing suggests
that combinations of group and local strategies may
adversely affect the mall group, making business
stronger, where activities were focused, but less
strong where they were not (Cahill, 1997; Freeman,
1992). In contrast to this however, some research
suggests that localised activities still need to make
use of mass-marketing media, possibly in order to
be seen as equal to the “big players” (Holstius and
Kaynak, 1995; Slater, 1990).
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Volume 32 · Number 10 · 2004 · 458–463
Aim of study
The aim of this study is to examine the
effectiveness of promotional activities when a
shopper is faced with malls promoting themselves
as part of both a generic group and a distinct local
entity. This study argues that level of market
dominance will impact upon the effectiveness of
promotional activities, such that the presence of
multiple malls in a group will strengthen the
perception of similarity (Burns and Warren, 1995),
and thereby enhance the effectiveness of the
groups’ promotional activities. Moreover, this
study also argues that the level of market
dominance will suppress individuality through the
available reinforcement of the “sameness” of the
member malls, thus reducing the effectiveness of
promotional activities intended to create a local
identity for a mall (Kirkup and Rafiq, 1999).
Accordingly, the following two hypotheses are
examined:
H1. Greater market dominance will increase the
effectiveness of group promotional
activities.
H2. Greater market dominance will decrease
the effectiveness of local promotional
activities.
Methodology
Weekly sales and foot traffic figures were obtained
for eight shopping malls owned and managed by a
single entity. Each of the malls was branded in a
manner consistent with the definition of group
promotional activities outlined in the introduction
section, and similar to that demonstrated by
Groupe Leçon (Anon., 2002). The key
performance indicators (KPI) of sales and foot
traffic were used because they determine the rents
for retail tenants that form the primary source of
income for mall owners or managers. Sales were
calculated from retailers’ audited figures provided
to mall management. Foot traffic was measured
through the use of electronic counters installed at
all mall entrances. The assumption was made that
shopper count reflected the number of people who
were actually shopping. Although there are likely
to have been other visitors (e.g. tradespeople,
delivery people) to the mall, this is likely to have
been a systematic error, and generally a small
actual number. Therefore, this factor was not
assumed to have impacted upon the associations
identified.
The catchment (primary and secondary trade
areas) area for each mall was established from
secondary information that was provided by mall
Market dominance, promotions, and shopping mall group performance International Journal of Retail & Distribution Management
Andrew G. Parsons and Paul W. Ballantine Volume 32 · Number 10 · 2004 · 458–463

management. The number and size of competitors Figure 1 Sales from group promotional activities against market dominance
was established using public records, and was
based upon gross leasable area (GLA), a standard
measure used for shopping malls. Each mall was
similar in format, with one or two supermarket
anchors, one or two department store anchors,
approximately 60-70 percent fashion oriented
specialty stores (dominated by chain-store
operations), and at least one food court. While
mall size did vary, the relative proportion of GLA
for the group mall(s) in each catchment area was
used as a measure, thus allowing comparisons.
The malls were classified on whether they were
sole representatives of the group in the catchment
area, and the proportion of GLA the group held in between market dominance and foot traffic
the catchment area. This combined position is (Figure 2). The second research hypothesis argued
referred to as market dominance in the results that greater market dominance would decrease the
section. For the purpose of this research, GLA was effectiveness of local promotional activities. Level
restricted to malls, and thus excluded town of market dominance had a significant effect on
centres, power centres, etc., so that it was sales (F ¼ 5:76; p ¼ 0:01) as well as traffic
computationally simpler to account for (F ¼ 3:25; p ¼ 0:05). However, while a negative
competitive activity during the research period, linear relationship was found between market
while also ensuring the data collection process was dominance and traffic (F ¼ 6:41; p ¼ 0:02;
manageable. Dominance level was classified into Figure 3), a quadratic (i.e. U-shaped) relationship
three categories (less than 25 percent; 25 to was instead found between level of market
50 percent; or over 50 percent of GLA), with the dominance and sales (F ¼ 4:45; p ¼ 0:01;
levels based on observed natural groupings. Figure 4), where higher sales occurred at both
The KPI data were then classified on whether under 25 percent GLA and over 50 percent
the corresponding activity was group promotional GLA levels.
activity or local promotional activity. Ten weeks of
group promotional activity and ten weeks of local Figure 2 Traffic from group promotional activities against market dominance
promotional activity were then drawn from the
data for comparison. All advertising used by
the malls was promotion-oriented during each of
the ten week time periods, and retailers undertook
no other promotional activity. An a of 0.05 was
used in all statistical tests discussed in the
following section.

Findings
To address each of the two research hypotheses, a
series of one-way Analysis of Variance (ANOVA)
were conducted. Trend analysis was also conducted Figure 3 Traffic from local promotional activities against market dominance
to determine the nature of the relationship between
market dominance and each of the two KPI
measures. H1 argued that greater market
dominance would increase the overall effectiveness
of group promotional activities. The results suggest
that market dominance had a significant effect on
sales (F ¼ 19:93; p ¼ 0:00) when using group
promotional activities, but that it had no effect on
traffic (F ¼ 4:45; p ¼ 0:40). Subsequent trend
analysis also confirmed that a positive linear
relationship existed between level of market
dominance and mall sales (F ¼ 26:52; p ¼ 0:00;
Figure 1), as well as the absence of a relationship
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 Market dominance, promotions, and shopping mall group performance
Andrew G. Parsons and Paul W. Ballantine
Figure 4 Sales from local promotional activities against market dominance
Further analysis was also conducted to examine
the main and interactive effects of both
promotional type and market position on mall
sales and traffic using the general linear model
procedure (for ANOVA). Sales and foot traffic
were the two dependent variables, while
promotional type and level of market dominance
were the two treatments (or factors). As outlined in
the introduction section, promotional type was
either group or local. Combinations were also
compared using t-tests (Table I). Mean sales and
mean foot traffic counts were calculated for each
combination (interaction), and examined for
direction. To enhance the precision of the analysis,
level of market dominance was further broken into
four groups, with categories being formed around
whether there were one or more group malls
operating in a catchment area (i.e. sole or
multiple), and the proportion of GLA held by the
mall group in each area. The number of malls from
the group operating in each of the four market
dominance categories were: sole, under 25 percent
GLA ðn ¼ 1Þ; sole, 25-50 percent GLA ðn ¼ 2Þ;
multiple, 25-50 percent GLA ðn ¼ 3Þ; and
multiple, over 50 percent GLA ðn ¼ 2Þ:
The analysis of variance showed that the main
effects of promotional type and market position
were significant for sales (F ¼ 96:49; p ¼ 0:00;
and F ¼ 7:87; p ¼ 0:00; respectively), but
only market position was significant for traffic
(F ¼ 4:45; p ¼ 0:01). For both sales and
traffic, the interactions were significant
Table I : t-tests of combinations for promotional type
Mall position
Sole, under 25 percent GLA
Sole, under 25 percent GLA
Sole, 25-50 percent GLA
Sole, 25-50 percent GLA
Multiple, 25-50 percent GLA
Multiple, 25-50 percent GLA
Multiple, over 50 percent GLA
Multiple, over 50 percent GLA
International Journal of Retail & Distribution Management
Volume 32 · Number 10 · 2004 · 458–463
(F ¼ 10:47; p ¼ 0:00; and F ¼ 8:21; p ¼ 0:00;
respectively).
The results from Table I, when examined with
the direction of the comparable means, show the
following: (note in each situation, Mall A is the
mall examined that belongs to the group)
(1) When Mall A has no other group members
present in the catchment area, and Mall A has
less than 25 percent of GLA, there is no
difference for sales or traffic given the
promotional types.
(2) When Mall A has no other group members
present in the catchment area, and Mall A has
between 25 and 50 percent of GLA, group
promotional activities are significantly more
effective for generating sales. There is no
difference for traffic.
(3) When Mall A has other group members
present in the catchment area, and the group
accounts for between 25 and 50 percent of
GLA, group promotional activities are
significantly more effective for generating
sales, and local promotional activities are
significantly more effective for generating
traffic.
(4) When Mall A has other group members
present in the catchment area, and the group
accounts for over 50 percent of GLA, group
promotional activities are significantly more
effective for generating sales. There is no
difference for traffic.
While the results of (1) are more fully discussed
later, it is possible that when operating as a small
player within a fragmented market, that both
promotional types have equal impact on the
performance of a shopping mall operating as part
of a group. Consequently, the decision to use
group or local promotional activities may not be
critical to the success of a group mall operating in
such an environment. The findings for (2) suggest
that with greater presence (or dominance) in a
market, a group mall may enjoy a higher level of
brand name recognition, so that local promotional
activities are not as important for generating sales
given the high level of visibility the mall group has
in the local marketplace. In the instance of (3),
Promotional type t (sig) sales t (sig) traffic
Group 0.52 (0.62) 21.79 (0.11)
Local
Group 9.74 (0.00) 2.09 (0.07)
Local
Group 4.47 (0.00) 23.22 (0.01)
Local
Group 5.63 (0.00) 1.54 (0.16)
Local
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Market dominance, promotions, and shopping mall group performance
Andrew G. Parsons and Paul W. Ballantine
while a mall still enjoys a high level of market
dominance, it is joined by other group member
malls in the local market. As with previous results,
group promotional activities are better
determinants of sales. However, the finding
that local promotional (e.g. educational and
school/community) activities are better predictors
of foot traffic is perhaps not surprising.
Specifically, adopting the argument that such
promotional activities may be viewed as being
more public relations oriented, the primary focus
(and outcome) of these activities may be to attract
visitors to a mall to foster a sense of community,
over and above a pure focus on short-term
increased sales. Finally, in terms of (4), where a
mall enjoys a high level of market dominance and
limited competition (and hence high brand
visibility and recognition), as with (2), it is little
surprise that group promotional activities have the
greatest effect on sales. Overall, the results visibly
show that market dominance as defined by this
study does have a relationship with the shopping
mall KPI’s.
Discussion and conclusions
This study hypothesised that greater market
dominance would increase the effectiveness of
group promotional activities, and decrease the
effectiveness of local promotional activities.
However, only partial support for these two
hypotheses was established. Specifically, while
level of market dominance had a positive effect on
sales when group promotional activities were used,
there was no relationship between market
dominance and traffic. Thus, the more prevalent a
mall group is within a marketplace, the more
successful its group promotional activities are in
increasing sales. Moreover, while market
dominance had a negative effect upon mall traffic
when using local promotional activities, a
quadratic relationship was instead found between
level of market dominance and sales. While the
relationship between market dominance and traffic
was hypothesised, the relationship between market
dominance and sales was not. The nature of this
relationship suggests that group malls with a high
level of market dominance may expect sales to
remain high due to their high marketplace
visibility, irrespective of the local promotional
activities they undertake.
The results of the additional analyses also
suggest a clear argument that for groups of malls
that are branded as being similar, group
promotional activities are much more important
for generating sales than the local promotional
activities of individual malls. Viewed from a
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Volume 32 · Number 10 · 2004 · 458–463
resource allocation perspective, this would suggest
that budgets should shift away from local control
and activities, to more group-oriented
undertakings. However, this assertion should be
tempered by the argument provided by Kirkup and
Rafiq (1999), that those malls engaging in local
community or school activities may have longer
term returns, where the long-term goal of a
promotion may be to enhance the relationship
a mall has with the surrounding population.
This perspective is reflected in the result that when
multiple alternatives from within the group were
available to a shopper, it was the local promotional
activities that were found to have a significant
effect on traffic. In effect, local promotional
activity helped differentiate the otherwise similar
malls, with support being garnered for the mall
using group plus local activities.
Another important inference from this study is
that when a mall is isolated from the mall group in
the marketplace, and under intense competitive
pressure (i.e. less than 25 percent of GLA), group
promotional activities are no better or worse than
local promotional activities in generating sales or
foot traffic. Thus, if it is more expensive or
logistically difficult to include a mall in the
activities of the group because of its isolation, it is
possible that its omission from group activities will
not have a detrimental effect upon its
performance. However, this study did not examine
this explicitly, and the findings of Freeman (1992)
and Cahill (1997), that those businesses not
included in the promotional activities of a group
may end up in a weakened competitive position,
could be applicable. Moreover, it may be more
cost-effective to simply use group advertising to
gain mass-marketing media advantages (Holstius
and Kaynak, 1995; Slater, 1990).
Building upon the results of this study, several
fruitful directions for future research are evident.
First, the issue of what specific types of promotion
are associated with increased sales and foot traffic
warrants further attention. Thus, rather than
examining the effects of two broad categories of
promotional activities (i.e. group or local), future
research could explore the effects of specific
promotional types, such as those discussed by
Parsons (2003). Second, there is also a need to
consider how long a mall has been trading in a
specific catchment area, consumers’ awareness of
each mall, and perhaps most importantly – the
type(s) of promotional activity normally associated
with each mall, as expectations may impact upon
the effectiveness of different promotional types. It
is possible that any change in promotional type
may revitalise consumer interest, beyond that
identified by this study. Moreover, while this study
focused on the promotional activities of shopping
Market dominance, promotions, and shopping mall group performance
Andrew G. Parsons and Paul W. Ballantine
malls, the issue of whether the results presented
are also applicable to shopping districts, and
whether any differences exist between malls and
districts provides another potential research
direction. Finally, building upon the research of
Finn and Louviere (1996), another area of future
research could be to investigate how the
promotional activities of individual (or anchor)
stores within a mall might impact on both sales and
foot traffic. Given that the mall anchors were the
same for all malls included in this study, there was
no expectation of an effect for anchor stores on
either of the two KPIs included in this paper.
In the more general retail sector, fast food
chains belong to a retail category that pursue a very
similar strategy of those of branded malls, as do
many franchise operations. As with malls, fast food
chains often use group-based promotions on a
national basis, and local individual franchise
operator promotions targeted at local
communities. Although this issue was not
explored, this study suggests that the management
of such operations may also be able to explore ways
of taking advantage of market position through the
use of group and local promotional activities. By
doing so, it is apparent that both sales and traffic
could be significantly enhanced. Certainly, in the
case of shopping malls, the careful management of
promotional activities can improve performance.
Some limitations were evident with this study,
which may also provide guidance for future
research. The exploratory nature of this study, and
the limitations of the available data, meant that
only certain combinations of market dominance
and promotional activity were examined.
Moreover, some possible combinations of market
dominance were not explored, while one included
category (sole, less than 25 percent GLA)
consisted of only a single mall. This study did also
not explicitly consider the effects of competitors’
promotional activities, and such information could
provide an additional level of understanding.
Nevertheless, this study highlights the need to
examine the findings presented in this paper by
taking a more general approach, particularly their
applicability to other retail sectors.
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