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Impact Of Advertising Vs Sales Promotion Marketing Essay

EXECUTIVE SUMMERY

The report is based on the primary data collection research, which is based upon the impact of advertising as well as sales promotion in the consumer buying behavior. The main objective of this research was to determine what attracts more to a consumer Advertising of the product or Sales promotion when the purchase decision is made.

A questionnaire is made to gather the information which is a primary method for collection of data. Collecting data through questionnaire is the most appropriate method. This questionnaire includes:

a. Contact information about the respondent and

b. 10 questions.

This is a sufficient number which enabled me to analyze and derive the answers pertaining to my objective.

In accomplishing the objectivity, market visits and interactions were made with the consumer that included variety of consumers and accordingly tried to analyze the consumer buying behavior when he goes to buy certain product. What made customer to buy certain products which he never thought to buy. Various conclusions which we came up with such as Advertising and Sales Promotion play an important role. The Age factor plays a significant role for the selection of products from advertising and sales promotion. But the impact of sales promotion is more because they interact with the product more in this. Hence the touch and feel of product is very important in Indian market. Otherwise people do not buy the products. All these factors led me to conclude that the Sales promotion and advertising are not affective at some purchase stages. The study should be extended to different product categories in fast moving consumer durables. The study will be conclusive if Fast Moving Consumer Goods (FMCG) consumers are also considered for study. The profiles of the respondents, the geographic, demographic or psychographic are to be considered for further studies.

Introduction

INTRODUCTION

Companies always try to establish the contact with target market. This is a prestigious status for company to address the customers. Company wanted to enhance its image in the minds of common man so that in future, whenever it would be visited to customer court; it would be having enough matter to communicate the customers. The company presents it's history products history and even national history. Companies have these processes in all continuance and consistency. Promotion is a term, which means the moving from one end to another. In marketing, promotion means all those took that a marketer uses to take his product from the factory to the customers and it involves the advertising sales promotion, personal selling, public relations, publicity and merchandising. Promotions are result oriented. Promotion system works with proper communication system. This has sender, receivers and feedback system. Feedback is form of action which customer gives bark to the company about product, advertisement or strategy.

Promotion involves the following steps:

Common Understanding

Demographic and psychographics profile.

Media habits

Level of Awareness.

The ultimate expectation of the company is to make the people for purchase of product. The sales promotion and advertising functions and stimulate the customer purchase decision in accordance with this model. Present research paper will examine the comparative effectiveness issue of Sales promotion and advertising measures.

Advertising or "Mainline" as it is also called, helps an enterprise to launch a product or service, increase market share and to compete in the market place by influencing consumer and their decision making process. Sale promotion or "Below-the-line" activities as it popularly know as also helps an enterprise inducing trials, increasing off take and thereby enhance the top-line. Both the promotional activities aims at achieving the firms marketing and business objective, however the duration of results and magnitude of impact varies.

Marketing-Mix and Promotion-Mix

Marketing mix

Product

Price

Promotion

Place

Advertising

Personal selling

Sales promotion

Publicity

Direct

Marketing

Definition:

Your marketing mix is the combination of the elements of marketing and what roles each element plays in promoting your products and services and delivering those products and services to your customers.

Elements of the Marketing Mix

The elements of the marketing mix are also referred to as the 5 P's of marketing. For years marketers referred to the 4 P's of marketing. Only recently has a 5th P been added. Whether you subscribe to the theory that there are four p's or five p's of marketing, this is essentially referred to as your "marketing mix".

The 4 P's of the Marketing Mix

The original 4 P's of marketing (although they have been renamed a bit over the years) that were the elements of marketing mix is:

Product – The products or services offered to your customer: Their physical attributes what they do, how they differ from your competitors and what benefits they provide.

Price – How you price your product or service so that your price remains competitive but allows you to make a good profit. How price plays a role in your marketing strategy with respect to differentiating your products or services from your competitors'.

Place (Also referred to as Distribution) – Where your business sells its products or services and how it gets those products or services to your customers. May also be used in your marketing strategy to differentiate you from your competition.

Promotion – The methods used to communicate the features and benefits of your products or services to your target customers. Promotion consists of following elements.

Advertising

Personal selling

Sales promotion.

Direct marketing.

Publicity.

The 5th P of Marketing

Some marketing theorists have added a 5th P of marketing to the elements of the marketing mix: People

When referred to as an element in the marketing mix, this 5th P refers to how your level of service and the expertise and skills of the people who work for you can be used to set you apart from your competitors.

Advertising v/s Sales Promotion

Advertising

Sales Promotion

A type of marketing tool.

Advertising is a one-way communication whose purpose is to inform potential customers about products and services and how to obtain them.

Increase sales, brand building.

Long term.

Expensive in most cases.

Medium to large companies.

Assumption that it will lead to sales.

Giving an advertisement in the newspaper about the major products of a company

A type of marketing tool.

A Promotion usually involves an immediate incentive for a buyer (intermediate distributor or end consumer). It can also involve disseminating information about a product, product line, brand, or company.

Increase sales.

Short term.

Not very expensive in most cases.

Small to medium companies.

Directly related to sales.

Giving free products, coupons etc.

THE COMMUNICATION PROCESS

Modern marketing calls for more than developing a good product, pricing it attractively and making it accessible to target customers. Companies must also communicate with their present and potential customers. Every company is inevitably cast into the role of communicator and promoter. What is communicated, however, should not be left to change. To communicate effectively, companies hire advertising agen­cies to develop effective ads; sales promotion specialists to design sales incentive programs and public relations firms to develop the corporate image. They train their sales people to be friendly and knowledgeable. For most companies, the questions are not whether to communicate but rather what to say, to whom, and how often. A modern company manages a complex marketing communications system. The company communicates with its middlemen, consumers and various publics. Its middlemen communicate   with   their   consumers   and   various   publics.     

Consumers engage in word-of-mouth communication with other consumers and publics. Meanwhile each group provides communication feedback to every other group.

The marketing communication mix (also called the promotion mix) consists of four major tools:

Advertising. Any paid form of non personal presentation and promotion of ideals, goods or services by an identified sponsor.

Sales Promotion. Short-term incentives to encourage purc­hase or sale of a product or service.

Publicity. Non personal stimulation of demand for a product, service or business unit by planting commercially significant news about it in a published medium or obtaining favorable presentation of it upon radio, television or stage that is not paid for by the sponsor.

Personal Selling. Oral presentation in a conversation with one or more prospective purchasers or the purpose of making sales.

Over the years, a communication model with nine elements has evolved, that shown in figure 8. Two elements represent the major parties in a communication sender and receiver. Another two represent the major communication tools message and media. Four represent major communication functions en­coding, decoding, response and feedback .The last element represents noise in the system.

These elements are defined as follows:

Sender. The party sending the message to another party (also called the source of communicator).

 Encoding. The process of putting thought into symbolic form.

 Message. The set of symbols that the sender transmits.

 Media. The communication channels thought which the Message moves from sender to receiver.

Receiver. The party receiving the message sent by another party (also called the audience or destination).

 Response. The set of reactions that the receiver has after being exposed to the message.

Feedback. The part of the receiver's response that the receiver communicates back to the sender.

Noise. Unplanned static or distortion during the communi­cation process, resulting in the receiver's receiving a diffe­rent message than the sender sent.

SALES PROMOTION

INTRODUCTION

Sales promotion is one of the most loosely used terms in the marketing vocabulary. We define sales promotion as demand. Stimulating devices designed to supplement advertising and facilitate personal selling. In other words, sales promotion signifies all those activities that supplement, co-ordinate and make the efforts of personal selling and advertising more effective. It is non recurrent in nature which means it can’t be used continuously.

Concept of Sales Promotion

Sales promotion consists of diverse collection of incentive tools, mostly short-term designed to stimulate quicker and or greater purchase of a particular product by consumers or the trade. Where as advertising offers a reason to buy, sales promotion offers an incentive to buy. Sales promotion includes tools for consumer promotion (for example samples, coupons, prizes, cash refund, warranties, demonstrations, contest); trade promotion (for example buying allowances, free goods, merchandise allowances, co-operative advertising, advertising and display allowances, dealer sales contests); and sales-force promotion (for example bonuses, contests, sales rallies). Sales promotion efforts are directed at final consumers and designed to motivate, persuade and remind them of the goods and receives that are offered. Sales persons adopt several techniques for sales promotion. Creative sales promotion can be very effective. It is the marketing manager’s responsibility to specify promotion objectives and policies.

Definitions of Sales Promotion

According to American Marketing Association “Those marketing activities other than personal selling advertising and publicity that stimulate consumer purchasing and dealer effectiveness such as display shows and exhibitions, demonstrations and various non-recurrent selling efforts not in the ordinary routine.”

Objectives of Sales Promotion

The basic objectives of sales promotion are:

i) To introduce new products To induce buyers to purchase a new product, free samples may be distributed or money and merchandise allowance may be offered to business to stock and sell the product.

ii) To attract new customers New customers may be attracted through issue of free samples, premiums, contests and similar devices.

iii) To induce present customers to buy more Present customers may be induced to buy more by knowing more about a product, its ingredients and uses.

iv) To help firm remain competitive Sales promotions may be undertaken to meet competition from a firm.

v) To increase sales in off season Buyers may be encouraged to use the product in off seasons by showing them the variety of uses of the product.

vi) To increase the inventories of business buyers Retailers may be induced to keep in stock more units of a product so that more sales can be affected.

Rationale of sales promotion

Rationale of sales promotion may be analyzed under the following points.

Short-term results:- Sales promotion such as coupons and trade allowances produce quicker, more measurable sales results. However critics of this strategy argue that these immediate benefits come at the expense of building brand equity.

Competitive Pressure: - If competitors offer buyers price reductions, contest or other incentives, a firm may feel forced to retaliate with its own sales promotions.

Buyers’ expectations: - Once they are offered purchase incentives, consumers and channel members get used to them and soon begin expecting them.

Low quality of retail selling: - Many retailers use inadequately trained sales clerks or has switched to self service. For these outlets, sales promotion devices such as product displays and samples often are the only effective promotional tools available at the point of purchase.

ADVERTISING

INTRODUCTION

Adverting is only one element of the promotion mix, but it often considered prominent in the overall marketing mix design. Its high visibility and pervasiveness made it as an important social and encomia topic in Indian society.

Concept of Advertising

Advertising is a form of communication that typically attempts to persuade potential customers to purchase or to consume more of a particular brand of product or service. “While now central to the contemporary global economy and the reproduction of global production networks, it is only quite recently that advertising has been more than a marginal influence on patterns of sales and production. The formation of modern advertising was intimately bound up with the emergence of new forms of monopoly capitalism around the end of the 19th and beginning of the 20th century as one element in corporate strategies to create, organize and where possible control markets, especially for mass produced consumer goods. Mass production necessitated mass consumption, and this in turn required a certain homogenization of consumer tastes for final products. At its limit, this involved seeking to create ‘world cultural convergence’, to homogenize consumer tastes and engineer a ‘convergence of lifestyle, culture and behaviors among consumer segments across the world’.

Definition of Advertising

The word advertising originates from a Latin word advertise, which means to turn to. The dictionary meaning of the term is “to give public notice or to announce publicly”. Advertising may be defined as the process of buying sponsor-identified

Media space or time in order to promote a product or an idea. The American Marketing Association, Chicago, has defined advertising as “any form of non-personal presentation or promotion of ideas, goods or services, by an identified sponsor.”

The basic objectives of advertising programme:

(i) To stimulate sales amongst present, former and future consumers. It involves a decision regarding the media, e.g., TV rather than print.

(ii) To communicate with consumers. This involves decision regarding copy

(iii) To retain the loyalty of present and former consumers. Advertising may be used to reassure buyers that they have made the best purchase, thus building loyalty to the brand name or the firm.

(iv) To increase support. Advertising impliedly bolsters the morale of the sales force and of distributors, wholesalers, and retailers;it thus contributes to enthusiasts and confidence attitude in the organizational. :

(v) To project an image. Advertising is used to promote an overall image of respect and trust for an organization. This message is aimed not only at consumers, but also at the government, shareholders, and the general public.

AIDA MODEL

There are three goals of advertising. These goals are to: Inform, Persuade, and Remind.

The major media types for advertising are:

Newspapers, Television, Direct mail, Radio, Magazines, Internet, Outdoor (billboards, blimps, etc.), Yellow pages, Newsletters, Brochures, and Telephone

The traditional conceptual model for creating any advertising or marketing communications message is the AIDA Model: get Attention, hold Interest, arouse Desire, and then obtain Action.

The AIDA Model

AIDA The selling process, originally conceived as a guide for the creator of good advertising copy, is called AIDA. Shoppers are at some point in this selling process when they enter the store. Salespeople who can recognize at which step of the process the customer is when they meet him can accurately classify the customer and use the information to help make the sale.

Consider the three basic types of customers and at what step they are in the selling process.

Customers who know what they want.

Customers who do not know exactly what they want but have a need.

Customers who do not know if they want or need anything.

Action -- Customers who know what they want are at the action step of the selling process. These customers have given some thought to what they want and can request a particular type of merchandise or service. The salesperson's chief task is to get the merchandise to the customer or to supply the service along with some information.

Desire -- Customers who know they have a need for merchandise show both an interest and a desire. This person is looking for something but is not sure what. It is up to the salesperson to help the customer toward the action step by turning the interest in merchandise to an actual desire to purchase the item. The salesperson should demonstrate the merchandise and explain the benefits and features. This person has many open options. The salesperson must discover them and fill the needs.

Attention -- Customers who do not know if they want or need any merchandise are at the attention state of the selling process. This group of "lookers" or "shoppers" presents a real challenge to the salesperson. They need to be introduced to the selling process. Talking with these customers may trigger a momentarily forgotten need for merchandise.

Attention, interest, desire and action. Find out where the customer is in the selling process, and then begin your job of selling from there.

CONSUMER BUYING BEHAVIOR

Buying Behavior is the decision processes and acts of people involved in buying and using products. Consumer Buying Behavior refers to the buying behavior of the ultimate consumer.

A firm needs to analyze buying behavior for:

Buyers’ reactions to a firms marketing strategy has a great impact on the firm’s success.

The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy.

Marketers can better predict how consumers will respond to marketing strategies.

Stages of the Consumer Buying Process

The process of consumer buying involves 6 stages. All consumer decisions do not always include all 6 stages

The 6 stages are:

Problem Recognition (awareness of need)—It is the difference between the desired state and the actual condition. It represents deficit in assortment of products.

Information search : this can be of two types external or internal as follows

Internal search on the basis of your memory.

External search if you need more information. Friends and relatives (word of mouth), public sources etc.

Evaluation of Alternatives--need to establish criteria for evaluation, features the buyer wants or does not want. Rank/weight alternatives or resume search. Marketers try to influence by "framing" alternatives.

Purchase decision--Choose buying alternative, includes product, package, store, method of purchase etc.

Purchase--May differ from decision, time lapse between 4 & 5, product availability.

Post-Purchase Evaluation: Outcome can be Satisfaction or Dissatisfaction. Cognitive Dissonance, have you made the right decision. This can be reduced by warranties, after sales communication

Categories that Effect the Consumer Buying Decision Process

A consumer, making a purchase decision will be affected by the following three factors:

Personal

Psychological

Social

Personal:- These are the reasons which are unique to a particular person. Some of them are

Demographic Factors

Sex

Race

Age

Psychological factors:-Psychological factors include

Motives--

A motive is an internal energizing force that orients a person's activities toward satisfying a need or achieving a goal. Motives often operate at a subconscious level therefore are difficult to measure.

Perception--

Perception is the process of selecting, organizing and interpreting information inputs to produce meaning. If we chose what info we pay attention to, organize it and interpret it. Information inputs are the sensations received through sight, taste, hearing, smell and touch.

Attitudes--

Individual learns attitudes through experience and interaction with other people. Consumer attitudes toward a firm and its products greatly influence the success or failure of the firm's marketing strategy. Attitudes and attitude change are influenced by consumer’s personality and lifestyle. Consumers screen information that conflicts with their attitudes. Distort information to make it consistent and selectively retain information that reinforces our attitudes. There is a difference between attitude and intention to buy (ability to buy).

Personality—

All the internal traits and behaviors that make a person unique, uniqueness arrives from a person's heredity and personal experience. Examples include:

Work holism

Compulsiveness

Self confidence

Friendliness

Adaptability

Ambitiousness

Dogmatism

Authoritarianism.

Traits affect the way people behave. Marketers try to match the store image to the perceived image of their customers. There is a weak association between personality and Buying Behavior; this may be due to unreliable measures. Consumers buy products that are consistent with their self concept.

Social Factors: - Consumer wants, learning, motives etc. are influenced by opinion leaders, person's family, reference groups, social class and culture.

Opinion leaders--

Marketers try to attract opinion leaders...they actually use (pay) spokespeople to market their products. Michael Jordon (Nike, McDonalds, Gatorade etc.)

Roles and Family Influences--

Individuals role are continuing to change therefore marketers must continue to update information.

Family is the most basic group a person belongs to. Marketers must understand:

that many family decisions are made by the family unit

consumer behavior starts in the family unit

family roles and preferences are the model for children's future family (can reject/alter/etc)

family buying decisions are a mixture of family interactions and individual decision making

Family acts an interpreter of social and cultural values for the individual.

Culture and Sub-culture--

Culture refers to the set of values, ideas, and attitudes that are accepted by a homogenous group of people and transmitted to the next generation. Culture also determines what is acceptable with product advertising. Culture determines what people wear, eat, reside and travel. Cultural values in the US are good health, education, individualism and freedom

Culture can be divided into subcultures:

Geographic regions

Human characteristics such as age and ethnic background.

STATEMENT

OF

RESEARCH DESIGN

OBJECTIVES

The Dissertation Report will highlight the effectiveness and applicability factors of sales promotion and advertisement techniques. The research study is of empirical in nature. It has the following objectives:

To investigate the effectiveness of sales promotion technique on purchase decision.

To study the effectiveness of Advertising on the purchase decision.

To compare the effects of the both techniques.

HYPOTHESIS

Hypothesis testing for this report has evolved around formulating a null hypothesis and an alternative hypothesis as regards to the difference in the customer acquisition by both Advertising and Sales promotion.

Assuming a null hypothesis to be H(O) and the alternative hypothesis as H(T) we formulate the hypothesis as following:

H(o) Null Hypothesis:- Effectiveness of sales promotion plays an important role on consumer’s buying behavior.

H(T) Alternative Hypothesis: - Effectiveness of sales promotion does not play an important role on consumer’s buying behavior

At 5% level of significance we test the above mentioned hypothesis as per the results obtained.

The Chi-Square test has been taken up as the selection criteria for the above mentioned data. The Chi-Square test which shows the magnitude of discrepancy between observed and expected frequency can be expressed symbolically as,

Where,

O= Observed set of frequencies

E= Expected set of frequencies

RESEARCH DESIGN

RESEARCH DESIGN

The research design will help in the arrangement of conditions for collection and analysis of datas as it is a conceptual structure which depicts the advance planning of the methods to be adopted for collecting datas and the techniques used in the analysis, keeping in view the objective of the dissertation.

Research type: Quantitative marketing Research

Research Duration: 26th Jan‟09 to 8th Apr‟09

Tape of Data: Primary

Data Analysis: Descriptive analysis through Chi-square Test.

Sources of Data: Personal Interview, Mailing Questionnaire

Research Design focuses primarily on providing help with the tool and techniques used in research process. These tools and techniques differ from discipline to discipline. The Research design was a blend of descriptive and exploratory research design. The respondents have been selected through random sampling method. The customers have been presented with an advertising campaign and sales promotion schemes.

Methodology

RESEARCH METHODOLOGY

The Research exercise has been accomplished with the sample size of 50 customers and few retailers. The questionnaire method was applied for this exercise. The Research design was a blend of descriptive and exploratory research design. The respondents have been selected through Random sampling method. The research study has investigated the effect of advertising Vs Sales Promotion in both test marketing stage and post launch stage. The study involved a field survey conducted across different malls in the NCR regions. The respondents were approached at the web sight of www.survey.com. And also by interviewing the customer. The statistical tools were run using Statistical Package for Social Sciences (SPSS) and MS Excel to get inferences.

. PRIMARY DATA COLLECTION METHOD

In primary data collection, you collect the data yourself using methods such as interviews and questionnaires. The key point here is that the data you collect is unique to you and your research and, until you publish, no one else has access to it. There are many methods of collecting primary data and the main methods include:

questionnaires

interviews

focus group interviews

observation

case-studies

diaries

critical incidents

portfolios.

SOURCES OF DATA

There are two main sources of data collection i.e. through Primary data collection or Secondary data collection method. I have adopted Primary data collection method for the survey. Under this method the method of survey was best suited with my sample size and the requirement of data.

The respondents included retailers from different malls and Surveys included:

Personal interviews: The investigator follows a rigid procedure and seeks answers to a set of pre-conceived questions through personal interviews. This method of collecting data is usually carried out in a structured way where output depends upon the ability of the interviewer to a large extent.

Mailing of Questionnaires: The researcher and respondents do not come in contact with each other if this method of survey is adopted. Questionnaires are mailed to the respondents with a request to return after completing the same.

Through these methods survey was done and the required data was collected from the respondents. Respondents were not easy to tackle as many of them sounded uninterested in even listening to me. I collected the required information from the respondents depending upon their reaction only.

SAMPLING OF RESPONDENT

Survey sampling

In statistics, survey sampling is random selection of a sample from a finite population. It is an important part of planning statistical research and design of experiments. Sophisticated sampling techniques that are both economical and scientifically reliable have been developed.

Random Sampling

Sampling can be defined as a part of population. Thus random sampling may be defined as the selection of a portion from the whole population in which each elements of the population has an equal chance of being selected. A more please definition is that each element in the population has a non-zero and known probability of selection a randomly drawn sample is an unbiased sample. In this research survey 50 people were surveyed at random to get the relevant information

The most elementary methodology is called simple random sampling. Most of the theory of statistics assumes this kind of sampling unless otherwise noted. In theory it ensures that all subsets of the population are given a balanced probability of selection.

The possibility of very expensive or very a typical sample has led to a variety of modifications such as stratified sampling, cluster sampling, and multistage sampling.

In public opinion polling by private companies or organizations unable to require response, the resulting sample is self-selected rather than random. Volunteering for the sample may be determined by characteristics such as submissiveness or availability. The samples in such surveys are therefore non-probability samples of the population, and the validity of estimates of parameters based on them is unknown. Generally, the survey is designed to minimize such bias, such that it can reasonably be assumed that the sample is close enough to random, to be treated as such.

INSTRUMENT USED

A questionnaire is a research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents. Although they are often designed for statistical analysis of the responses, this is not always the case. The questionnaire was invented by Sir Francis Galton.

Questionnaires have advantages over some other types of surveys in that they are cheap, do not require as much effort from the questioner as verbal or telephone surveys, and often have standardized answers that make it simple to compile data. However, such standardized answers may frustrate users. Questionnaires are also sharply limited by the fact that respondents must be able to read the questions and respond to them. Thus, for some demographic groups conducting a survey by questionnaire may not be practical.

As a type of survey, questionnaires also have many of the same problems relating to question construction and wording that exist in other types of opinion polls.

Pre-testing the Questionnaire

Estimate the length of the questionnaire.

Ensure that words, phrases, and subjects are easily understood by the respondents.

Ensure that answer categories match with what the respondents have to say.

Ensure that the questionnaire achieves the research objectives.

PROCEDURE

The dissertation project is carried out in various phases since the project is exploratory in nature and the data collected for the analysis is collected from primary research. The research work is carried out in two phases:

FIRST PHASE

In the first phase, I collected the primary data from the customers with the help of a questionnaire. The questionnaire was filled by a sample size of 50 respondents. After the questionnaire being filled, the null hypothesis made was tested using the Chi-Square test. As per the Chi-Square test the null hypothesis was accepted and it was found that the effectiveness of sales promotion plays an important role in the consumers buying behavior.

SECOND PHASE

In the second phase, I have given the briefings about the hypothesis testing from both the primary sources i.e. through questionnaires and through the secondary sources like Internet. In this phase I have done the research and analysis of the responses. At the end I have drawn a conclusion on the basis of my analysis of the data collected from primary as well as secondary sources.

RESULT AND ANALYSIS

HYPOTHESIS TESTING

Procedure in hypothesis testing:-

Formulate a hypothesis.

Set up a suitable significance level.

Choose a test criterion.

Compute.

Make decisions.

FORMULATE A HYPOTHESIS

The conventional approach to hypothesis testing is not to construct a single hypothesis about the population, but rather to set up two different hypotheses. These hypotheses must be so constructed that if one hypothesis is accepted, the other is rejected and vice-versa these two hypotheses are:

H(O) Null Hypothesis:- Effectiveness of sales promotion plays an important role on consumers buying behavior.

H(T) Alternative Hypothesis: - Effectiveness of sales promotion does not play an important role on consumers buying behavior.

So considering the hypothesis:

“Effectiveness of sales promotion plays an important role on consumers buying behavior”.

Set up a suitable significance level

The confidence with which a null hypothesis is rejected or accepted depends upon the significance level used for the purpose. A significance level of, say 5 per cent, means that in the long run, the risk of making the wrong decision is about 5 out of every 100 occasions. A significance level of, say 1 per cent, implies that researcher is running the risk of being wrong in accepting or rejecting the hypothesis is 1 out of every 100 occasions. Thus, a 1 per cent, significance level provides greater confidence to the decision than a 5 per cent significance level.

For our calculations, we take the significance level of: 5 per cent.

Select Test Criterion

Chi Square

Observed Table:

Yes

No

Can’t Say

Male

36

30

14

80

Female

13

5

02

20

49

35

16

100(Total)

Expected Table:-

39.2

28

12.8

9.8

7

3.2

Calculation:

O

E

(O-E)

(O-E)^2

(O-E)^2/E

36

39.2

-3.2

10.24

.2612

30

28

2

4

.142

14

12.8

1.2

1.44

.1125

13

9.8

3.2

10.24

1.0489

5

7

-2

4

.5714

2

3.2

-1.2

1.44

.45

2.58

Degree of freedom (υ) = (r-1) (c-1) = (3-1) (2-1) = 2

Referring to the table:

For υ = 2, for 5% (0.05) = +5.9

DECISIONS AND CONCLUSIONS

The last step in hypothesis testing is to draw a statistical decision, involving the acceptance or rejection of hypothesis. This will depend upon whether the computed value of the test criterion falls in the region of acceptance or in the region of rejection at a given level of significance. It may be noted that the statement rejecting the hypothesis is much stronger than the statement accepting the hypothesis.

In our calculations: The calculated value of is LESSER than the table value. So, the hypothesis is ACCEPTED i.e. effectiveness of sales promotion plays an important role on consumers buying behavior.

RESULT ANALYSIS

The age factor was an important issue. The age wise variations have been highlighted in the research process. The age factor has become a factor for the comparative analysis of advertising and sales promotions.

Age wise Opinion of Customers about Sales Promotion and Advertising

Age in years

Sales Promotion

Advertising

Like

Dislike

Like

Dislike

Below 25

35%

65%

55%

45%

25-35

38%

62%

65%

35%

35-45

42%

58%

52%

48%

45-55

51%

49%

53%

47%

SALES PROMOTION

ADVERTISING

CONSUMERS PERCEIVED SALES PROMOTION AS A PURCHASE DECISION FACTOR

The perception is in effective stage. Female have 77% as a heavy perceived mind with the selection of consumer durable. The Non-affected stage is also very high in this regard.

Perceived Status

Sex

Male

Female

Heavy

23%

77%

Moderate

55%

45%

Non affected

35%

65%

PERCEIVED STATUS OF ADVERTISING WITH CONSUMER

Perceived Status

Sex

Male

Female

Heavy

44%

56%

Moderate

36%

64%

Non affected

40%

60%

Advertising presents the perceived state of mind of the consumers. It affects the Male and Female in the different propositions.

INTERPRETATION: the data interpretation is that after the survey it was observed that most of the people get exited by the following sales promotional tools. And they take advantage of this activity in following proportion.

Coupons 10%

Discounts and sales 30%

contests 15%

Point of purchase displays. 20%

Rebates. 25%

.

LIMITATION

The research is confined to a certain parts of Delhi due to time constraints and does not necessarily shows a pattern applicable to all the places.

Some respondents were reluctant to divulge personal information which can affect the validity of all responses.

In a rapidly changing industry, analysis on one day or in one segment can change very quickly. The environmental changes are vital to be considered in order to assimilate the findings.

CONCLUSION

After the survey, the following were the conclusions:

The hypothesis is accepted i.e. effectiveness of sales promotion plays an important role on consumers buying behavior (Proved on page no.39).

Sales promotion is a most important aspect for any company, and the impact of sales promotion is more because in this the people interact with the product more.

The touch and feel of product is very important in Indian market, otherwise people do not buy the products that is also the reason why the effectiveness of sales promotion is more than advertising. The Sales promotions and advertising are not effective at some purchase stages.

The Age and gender factor plays an important role for the selection of products with the help of advertising and sales promotion.

Reputation is incredibly important. Without this a brand is nothing but a product Reputation is best enhanced through experience. What you feel, touch and smell. If consumers try it, buy it and interact with it, they will engage more with a brand than seeing an advertisement about it.

It shows that Liking an advertisement does not the guarantee of sell. Only few of them actually buy after seeing an ad.

RECOMMENDATION

Based on hypothesis an intense AIDA model needs to be adopted the AIDA model (Awareness, Internet, Desire, and Action). Customers are aware of majority of products brand to create the awareness regarding Product.

In the findings of my survey it shows that people are keener towards the sales promotion activity which help customers at some point, hence more and more sales promotion can be done.

Giving free gifts for the customer.

Sales promotion will do more for a brand’s reputation by encouraging relationships with consumers. Hence forth promotional activity is important for making brand reach to every individual.

Since majority of the customers is in favor of live demonstration of Product. They should prioritize more in rest of the sales promotional tools to attract more customers work on it.

Sales promotional strategies should be evaluated twice. First at the stages of implementation and secondly after the final performance because implementation control’ will suggest improvements during the application of the promotional strategy, while ‘performance control’ will be a guide for the future. The push and pull promotional strategies may be used to enhance sales.

IMPLICATIONS

Sales Promotion, a short-term inducement, offered to a consumer or trade has gained momentum as a promotional tool world over. It represents nearly three fourth of the marketing budget at most consumer product companies.

Sales promotion is used to reduce dissonance and in turn the risk involved in the purchase process of a consumer. The risk could be financial, functional, social or psychological.

Sales promotion can be used both for shaping of new behavior as well as reinforcing existing behavior.

Monetary promotions like price-off are primarily evaluated by a consumer on utilitarian benefits like savings in time and money, convenience and quality.

The study should be extended to different product categories in fast moving consumer durables. The study will be conclusive if Fast Moving Consumer Goods (FMCG) consumers are also considered for study. The profiles of the respondents, the geographic, demographic or psychographic are to be considered for further studies.

Now the marketers know the psychology of the customers that customers need interaction with the product and also very much particular about the pricing decision.

This is applicable for consumer durable products. Where promotion plays important role in the consumers mind.

ABSTRACT

If consumers try it, buy it and interact with it, they will engage more with a brand than seeing an advertisement about it. Experience of a brand equals interaction, and promotions force this interaction between the consumer and a brand, and hence sit at the heart of the interaction that forges reputation. Sales promotion can be used both for shaping of new behavior as well as reinforcing existing behavior. Monetary promotions like price-off are primarily evaluated by a consumer on utilitarian benefits like savings in time and money, convenience and quality. While value added promotions like contests, premiums provide both utilitarian as well as hedonic benefits like value expression, entertainment and exploration. An intense AIDA model needs to be adopted the AIDA model (Awareness, Internet, Desire, and Action). Customers are aware of majority of products brand.

Research Question

This research was done among 50 respondents. And it has been observed that all the respondent where buying the product with the influence of sales promotion. Advertising helps in giving information about the product but sales promotion makes the buyer to purchase the product.

Methodology

To prove the hypotheses, exploratory research was used and data was collected from Primary sources with the help of Questionnaires and Secondary sources like white papers/case studies/journals of various industries.

Conclusion

Now a days sales promotion’s impact is more than the others because customers are very smart and they value money. Sales promotion is a most important aspect for any company, and the impact of sales promotion is more because in this the people interact with the product more.

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