identifying the preference of consumers for different sales promotion techniques in the

8/14/2019 IDENTIFYING THE PREFERENCE OF CONSUMERS FOR DIFFERENT SALES PROMOTION TECHNIQUES IN THE

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IDENTIFYING THE PREFERENCE OF

CONSUMERS FOR DIFFERENT SALES

PROMOTION TECHNIQUES IN THE

CITY OF JAIPUR.

(In the partial fulfilment of first

semester

of PGDM)

Under the supervision of-

Submitted By-

Dr. Raghuvir Singh VikashKumar Swami

(Director,CIPS)

(PGDM, I Semester)

SUBMITTED TO

Centurion Institute of Professional Studies,

Sector- 18,Kumbha marg, Pratap

Nagar Jaipur.


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March,2008(Session:2007-09)

Acknowledge

mentThis is very special project brought to

fruition through the efforts of some veryspecial people. I am deeply grateful to all

those people whose enthusiasm and

energy transformed my vision of this

project into reality. Especially to

Dr.Raghuvir Singh (Director,CIPS)

because his commitment and sense of

vision moves me and I am in debted to

him for the help and encouragement.

My writing in this project has also been

influenced by no. of standard and populartext book in this field. As far as possible ,

they have been fully acknowledged at the


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appropriate places. I express my gratitude

to all of them.

I am also deeply grateful to Dr. B.L.Gupta& Dr. J.P.Sharma for their help

wherever it required in preparation of this

project.

I will be failing in our duty, if I does not

express my indebtedness to my Parents

and family member for generating

Confidence in me right from the

commencement of this task to its

accomplishment.

I am also very thankful to all the

faculty members, the whole college staff

for providing me with necessary facilities


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and support, essential for bringing out this

work in a short time.

I want to thank my friends who

extended their cooperation and were

patient at all stages of our work.

Especially to Pradeep, Anand

Kumawat, Niti Gupta, Vaibhav

Mathur, Sandeep Mishra,

&ChetanGangawat.

CHAPTER-1

EXECUTIVE

SUMMARY


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This project has been made on the

research problem IDENTIFYING THE

PREFERENCE OF CONSUMERS FOR

DIFFERENT SALES PROMOTION

TECHNIQUES IN THE CITY OF JAIPUR.

This project is totally

focusing on the consumer

preferences towards different sales

promotion techniques means which

sales promotion technique ismostly preferred by the customer

in the city of Jaipur. As the sales

promotion techniques are used for

the marketing of the product so the

research has done in the area ofmarketing. Today every firm is

facing the situation of cut throat


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competition. So it becomes very

important for every firm to

promote its product otherwise itcannot survive in the market. In

this research I need to find out the

different sales promotion

techniques and preference of

consumers for these techniques sothis is descriptive research. For

selecting sample I used non-

probability sampling technique in

which I used convenience sampling

method because I didnt have

sufficient time, money and could

not have put lot of efforts. Sample

consists of all those people who

often visit retail outlets in Jaipur.Sample is of size 100 Interrogation

through personal interview has

been used as a data collection


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technique and questionnaire is

data collection instrument which is

close-ended. After getting thesequestionnaire filled from

respondents I did tabulation. Then I

analyzed the tables and reached to

conclusion.


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CHAPTER-2

INTRODUCTION

This project has been made on the

research problem IDENTIFYING THEPREFERENCE OF CONSUMERS FOR



Purpose of this project is tounderstand the consumer behavior towards

different types of sales promotiontechniques and to know their preferenceabout these sales promotion techniques inJaipur.

These techniques are used in themarketing of product in the last stage which

is called retailing. It is the stage from whichthe product directly go in the hand ofcustomer and today India is standing on thethreshold of retail revolution and witnessing


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a great change in its retail landscape i.e.from unorganized retailing to organized

retailing. Retail is growing with an annualrate of 40%. Its contribution towards GDP is11% and towards employment is 8%. Soafter agriculture retailing is one of thebiggest sources of employment in thecountry and is one of the largest industries

in India. Although retail industry has existedin our country for centuries but it is only therecent past that it is witnessing such atremendous growth.

This has becomepossible due to large number of global

players flocking to Indian shores forbusiness expansion as India is the secondfastest growing economy in the world andthird largest economy in terms of GDP.Western markets are suffering fromsaturation point. So they are recognizing

potential Indian market to serve.Combination of

many factors has made India the topdestination for many global retail players.


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Many malls are opening up in the city. It is adire need of an hour to understand the

consumer behavior and knowing itspreference about sales promotion techniqueswhich can lead to their success. So thisproject has its worth this time.

The mostimportant thing which I have learned from

this project is how to conduct a research ona particular problem. I came to know thathow to decide research methodology toconduct a research. The second thing whichI have learned is how to interact with thepeople in the market.


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depend on insights from marketing research,both formal and informal, to determine whatconsumers want and what they are willing to pay

for. Marketers hope that this process will give thema sustainable competitive advantage.Marketing management is the practicalapplication of this process. The offer is also animportant addition to the 4P's theory.

Within most organizations, the activities

encompassed by the marketing function are led bya Vice President or Director of Marketing. Agrowing number of organizations, especially largeUS companies, have a Chief Marketing Officerposition, reporting to the Chief Executive Officer.

The American Marketing Association (AMA)states, "Marketing is an organizational functionand a set of processes for creating,communicating and delivering value to customersand for managing customer relationships in waysthat benefit the organization and itsstakeholders.".[1]

Marketing methods are informed by many of the

social sciences, particularly psychology,sociology, and economics. Anthropology isalso a small, but growing influence. Marketresearch underpins these activities. Throughadvertising, it is also related to many of thecreative arts. Marketing is a wide and heavilyinterconnected subject with extensive publications.It is also an area of activity infamous for re-
http://en.wikipedia.org/wiki/Marketing_researchhttp://en.wikipedia.org/wiki/Sustainable_competitive_advantagehttp://en.wikipedia.org/wiki/Marketing_managementhttp://en.wikipedia.org/wiki/Chief_Marketing_Officerhttp://en.wikipedia.org/wiki/Chief_Executive_Officerhttp://en.wikipedia.org/wiki/American_Marketing_Associationhttp://www.marketingpower.com/content21257.phphttp://en.wikipedia.org/wiki/Social_sciencehttp://en.wikipedia.org/wiki/Psychologyhttp://en.wikipedia.org/wiki/Sociologyhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Anthropologyhttp://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Creativityhttp://en.wikipedia.org/wiki/Marketing_researchhttp://en.wikipedia.org/wiki/Marketing_researchhttp://en.wikipedia.org/wiki/Marketing_researchhttp://en.wikipedia.org/wiki/Sustainable_competitive_advantagehttp://en.wikipedia.org/wiki/Sustainable_competitive_advantagehttp://en.wikipedia.org/wiki/Sustainable_competitive_advantagehttp://en.wikipedia.org/wiki/Marketing_managementhttp://en.wikipedia.org/wiki/Marketing_managementhttp://en.wikipedia.org/wiki/Marketing_managementhttp://en.wikipedia.org/wiki/Chief_Marketing_Officerhttp://en.wikipedia.org/wiki/Chief_Marketing_Officerhttp://en.wikipedia.org/wiki/Chief_Marketing_Officerhttp://en.wikipedia.org/wiki/Chief_Executive_Officerhttp://en.wikipedia.org/wiki/Chief_Executive_Officerhttp://en.wikipedia.org/wiki/Chief_Executive_Officerhttp://en.wikipedia.org/wiki/American_Marketing_Associationhttp://en.wikipedia.org/wiki/American_Marketing_Associationhttp://en.wikipedia.org/wiki/American_Marketing_Associationhttp://www.marketingpower.com/content21257.phphttp://www.marketingpower.com/content21257.phphttp://www.marketingpower.com/content21257.phphttp://en.wikipedia.org/wiki/Social_sciencehttp://en.wikipedia.org/wiki/Social_sciencehttp://en.wikipedia.org/wiki/Social_sciencehttp://en.wikipedia.org/wiki/Psychologyhttp://en.wikipedia.org/wiki/Psychologyhttp://en.wikipedia.org/wiki/Psychologyhttp://en.wikipedia.org/wiki/Sociologyhttp://en.wikipedia.org/wiki/Sociologyhttp://en.wikipedia.org/wiki/Sociologyhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Anthropologyhttp://en.wikipedia.org/wiki/Anthropologyhttp://en.wikipedia.org/wiki/Anthropologyhttp://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Creativityhttp://en.wikipedia.org/wiki/Creativityhttp://en.wikipedia.org/wiki/Creativity


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inventing itself and its vocabulary according to thetimes and the culture.

Two levels of marketing-

Strategic marketing attempts to determine howan organization competes against its competitorsin a market place. In particular, it aims at

generating a competitive advantage relative to itscompetitors.

Operational marketing executes marketingfunctions to attract and keep customers and tomaximize the value derived for them, as well as tosatisfy the customer with prompt services and

meeting the customer expectations. OperationalMarketing includes the determination of themarketing mix (4 Ps).

Four Ps-In the early 1960's, Professor NeilBorden at Harvard Business School identified a

number of company performance actions that caninfluence the consumer decision to purchasegoods or services. Borden suggested that all thoseactions of the company represented a MarketingMix. Professor E. Jerome McCarthy, also at theHarvard Business School in the early 1960s,suggested that the Marketing Mix contained 4

elements: product, price, place and promotion.


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In popular usage, "marketing" is the promotion ofproducts, especially advertising and branding.However, in professional usage the term has a

wider meaning which recognizes that marketing iscustomer-centered. Products are often developedto meet the desires of groups of customers oreven, in some cases, for specific customers. E.Jerome McCarthy divided marketing into fourgeneral sets of activities. His typology has becomeso universally recognized that his four activity sets,the Four Ps, have passed into the language.

The four Ps are:

1. Product: The product aspects of marketingdeal with the specifications of the actual goodsor services, and how it relates to the end-user's needs and wants. The scope of aproduct generally includes supportingelements such as warranties, guarantees, andsupport.

2.

3. Pricing: This refers to the process of setting aprice for a product, including discounts. The

price need not be monetary - it can simply bewhat is exchanged for the product or services,e.g. time, energy, psychology or attention.

4.

5. Promotion: This includes advertising, salespromotion, publicity, and personal selling,
http://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/E._Jerome_McCarthyhttp://en.wikipedia.org/wiki/E._Jerome_McCarthyhttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/End-userhttp://en.wikipedia.org/wiki/End-userhttp://en.wikipedia.org/wiki/Pricinghttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Promotion_(marketing)http://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Publicityhttp://en.wikipedia.org/wiki/Saleshttp://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/E._Jerome_McCarthyhttp://en.wikipedia.org/wiki/E._Jerome_McCarthyhttp://en.wikipedia.org/wiki/E._Jerome_McCarthyhttp://en.wikipedia.org/wiki/E._Jerome_McCarthyhttp://en.wikipedia.org/wiki/E._Jerome_McCarthyhttp://en.wikipedia.org/wiki/E._Jerome_McCarthyhttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/End-userhttp://en.wikipedia.org/wiki/End-userhttp://en.wikipedia.org/wiki/End-userhttp://en.wikipedia.org/wiki/End-userhttp://en.wikipedia.org/wiki/End-userhttp://en.wikipedia.org/wiki/End-userhttp://en.wikipedia.org/wiki/Pricinghttp://en.wikipedia.org/wiki/Pricinghttp://en.wikipedia.org/wiki/Pricinghttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Promotion_(marketing)http://en.wikipedia.org/wiki/Promotion_(marketing)http://en.wikipedia.org/wiki/Promotion_(marketing)http://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Publicityhttp://en.wikipedia.org/wiki/Publicityhttp://en.wikipedia.org/wiki/Publicityhttp://en.wikipedia.org/wiki/Saleshttp://en.wikipedia.org/wiki/Saleshttp://en.wikipedia.org/wiki/Sales


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branding and refers to the various methods ofpromoting the product, brand, or company.

6. Placement(ordistribution): refers to how theproduct gets to the customer; for example,point of sale placement orretailing. This fourthP has also sometimes been called Place,referring to the channel by which a product orservices is sold (e.g. online vs. retail), whichgeographic region or industry, to which

segment (young adults, families, businesspeople), etc.

These four elements are often referred to as themarketing mix,[1] which a marketer can use to crafta marketing plan. The four Ps model is most usefulwhen marketing low value consumer products.Industrial products, services, high value consumer

products require adjustments to this model.Services marketing must account for the uniquenature of services. Industrial orB2B marketingmust account for the long term contractualagreements that are typical in supply chaintransactions. Relationship marketing attempts to

do this by looking at marketing from a long termrelationship perspective rather than individualtransactions.

As a counter to this, Morgan, in Riding the Wavesof Change (Jossey-Bass, 1988), suggests that oneof the greatest limitations of the 4 Ps approach "isthat it unconsciously emphasizes the insideout

view (looking from the company outwards),
http://en.wikipedia.org/wiki/Brandinghttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Retailerhttp://en.wikipedia.org/wiki/Marketing_mixhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Marketing_planhttp://en.wikipedia.org/wiki/Services_marketinghttp://en.wikipedia.org/wiki/B2Bhttp://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Relationship_marketinghttp://en.wikipedia.org/wiki/Brandinghttp://en.wikipedia.org/wiki/Brandinghttp://en.wikipedia.org/wiki/Brandinghttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Retailerhttp://en.wikipedia.org/wiki/Retailerhttp://en.wikipedia.org/wiki/Retailerhttp://en.wikipedia.org/wiki/Marketing_mixhttp://en.wikipedia.org/wiki/Marketing_mixhttp://en.wikipedia.org/wiki/Marketing_mixhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Marketing_planhttp://en.wikipedia.org/wiki/Marketing_planhttp://en.wikipedia.org/wiki/Marketing_planhttp://en.wikipedia.org/wiki/Services_marketinghttp://en.wikipedia.org/wiki/Services_marketinghttp://en.wikipedia.org/wiki/Services_marketinghttp://en.wikipedia.org/wiki/B2Bhttp://en.wikipedia.org/wiki/B2Bhttp://en.wikipedia.org/wiki/B2Bhttp://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Relationship_marketinghttp://en.wikipedia.org/wiki/Relationship_marketinghttp://en.wikipedia.org/wiki/Relationship_marketing


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3. Physical evidence: Unlike a product, aservice cannot be experienced before it isdelivered, which makes it intangible. This,

therefore, means that potential customerscould perceive greater risk when decidingwhether to use a service. To reduce the feelingof risk, thus improving the chance for success,it is often vital to offerpotential customers thechance to see what a service would be like.This is done by providing physical evidence,such as case studies, testimonials ordemonstrations.

4.

Four New P's-

1. Personalization: It is here referred

customization of products and servicesthrough the use of the Internet. Earlyexamples include Dell on-line andAmazon.com, but this concept is furtherextended with emerging social media andadvanced algorithms. Emerging technologieswill continue to push this idea forward.

1. Participation: This is to allow customer toparticipate in what the brand should stand for;what should be the product directions andeven which ads to run. This concept is layingthe foundation for disruptive change throughdemocratization of information.
http://en.wikipedia.org/wiki/Physical_evidencehttp://en.wikipedia.org/wiki/Intangiblehttp://en.wikipedia.org/wiki/Potentialhttp://en.wikipedia.org/wiki/Case_studieshttp://en.wikipedia.org/wiki/Testimonialshttp://en.wikipedia.org/wiki/Demonstrationshttp://en.wikipedia.org/wiki/Physical_evidencehttp://en.wikipedia.org/wiki/Physical_evidencehttp://en.wikipedia.org/wiki/Physical_evidencehttp://en.wikipedia.org/wiki/Intangiblehttp://en.wikipedia.org/wiki/Intangiblehttp://en.wikipedia.org/wiki/Intangiblehttp://en.wikipedia.org/wiki/Potentialhttp://en.wikipedia.org/wiki/Potentialhttp://en.wikipedia.org/wiki/Potentialhttp://en.wikipedia.org/wiki/Case_studieshttp://en.wikipedia.org/wiki/Case_studieshttp://en.wikipedia.org/wiki/Case_studieshttp://en.wikipedia.org/wiki/Testimonialshttp://en.wikipedia.org/wiki/Testimonialshttp://en.wikipedia.org/wiki/Testimonialshttp://en.wikipedia.org/wiki/Demonstrationshttp://en.wikipedia.org/wiki/Demonstrationshttp://en.wikipedia.org/wiki/Demonstrations


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1. Peer-to-Peer: This refers to customernetworks and communities where advocacyhappens. The historical problem with

marketing is that it is interruptive in nature,trying to impose a brand on the customer. Thisis most apparent in TV advertising. Thesepassive customer bases will ultimately bereplaced by the active customercommunities. Brand engagement happenswithin those conversations. P2P is now beingreferred as Social Computing and will likely tobe the most disruptive force in the future ofmarketing.

1. Predictive modeling: This refers toalgorithms that are being successfully appliedin marketing problems (both a regression as

well as a classification problem).

(1)Product-

Scope

1.Breadth -- number of product lines in a range.

2.Depth -- number of product items in a product

line.3.

Steps in product design-

1.Design and development of product ideas.

2.Selection of and sifting through product ideas.

3.Design and testing of product concept.

4.Analysis of instead of product concept.


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5.Design and testing of emotional product.

6.

Packaging-

Requirements of good packaging

1.Functional - effectively contain and protect thecontents

2.Provide convenience during distribution, sale,opening, use, reuse, etc.

3.Be environmentally responsible4.Be cost effective

5.Appropriately designed for target market

6.Eye-catching (particularly for retail/consumersales)

7.Communicate attributes and recommended

use of the product and package8.Compliant with retailers' requirements

9.Promotes image of enterprise

10.Distinguishable from competitors' products

11.Meet legal requirements for product andpackaging

12.Point of difference in service and supply ofproduct.

13.For a perfect product, perfect colour.

14.Forms of packaging


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1. Specialty packaging emphasizes theelegant character of the product

2. Packaging for double-use

3. Combination packaging two or moreproducts packaged in the same container

4. Kaleidoscopic packaging packagingchanges continually to reflect a series orparticular theme

5. Packaging for immediate consumption to be thrown away after use

6. Packaging for resale packed, intoappropriate quantities, for the retailer orwholesaler.

7.

Trademarks

Significance of a trademark

1.Distinguishes one company's goods fromthose of another

2.Serves as advertisement for quality

3.Protects both consumers and manufacturers

4.Used in displays and advertising campaigns5.Used to market new products

Brands

A brand is a name, term, design, symbol,or other feature that distinguishes products

and services from competitive offerings. A


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Reasons for direct selling methods-

1.Manufacturer wants to demonstrate goods.

2.Wholesalers, retailers and agents not activelyselling.

3.Manufacturer unable to convince wholesalersor retailers to stock product.

4.High profit margin added to goods bywholesalers and retailers.

5.Middlemen unable to transport.6.

Reasons for indirect selling methods-

1.Manufacturer does not have the financialresources to distribute goods.

2.Distribution channels already established.

3.Manufacturer has no knowledge of efficientdistribution.

4.Manufacturer wishes to use capital for furtherproduction.

5.Too many consumers in a large area; difficultto reach.

6.Manufacturer does not have a wideassortment of goods to enable efficientmarketing.

7.Wholesalers-

Reasons for using wholesalers-


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1.Bear risk of selling goods to retailer orconsumer

2.Storage space

3.Decrease transport costs

4.Grant credit to retailers

5.Able to sell for the manufacturers

6.Give advice to manufacturers

7. Break down products into smaller quantities.

8.Reasons for bypassing wholesalers-

1.Limited storage facilities

2.Retailers' preferences

3.Wholesaler cannot promote productssuccessfully

4.Development of wholesalers' own brands

5.Desire for closer market contact

6.Position of power

7.Cost of wholesalers' services

8.Price stabilisation

9.Need for rapid distribution10.Make more money.

11.Ways of bypassing wholesalers-

1.Sales offices or branches

2.Mail orders

3.Direct sales to retailers


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4.Travelling agents

5.Direct Orders

6.Agents-

1. Commission agents work for anyone whoneeds their services. They do not acquireownership of goods but receive delcrederecommission.

2. Selling agents act on an extended contractualbasis, selling all of the products of themanufacturer. They have full authorityregarding price and terms of sale.

3. Buying agents buy goods on behalf ofproducers and retailers. They have an expertknowledge of the purchasing function.

4. Brokers specialize in the sale of one specificproduct. They receive a brokerage.

5. Factory representatives represent more thanone manufacturer. They operate within aspecific area and sell related lines of goodsbut have limited authority regarding price and

sales terms6..

Marketing communications-
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Reaches large, geographically dispersedaudiences, often with high frequency; Low cost perexposure, though overall costs are high; Consumers

perceive advertised goods as more legitimate;Dramatizes company/brand; Builds brand image; maystimulate short-term sales; Impersonal, one-way

communication; Expensive .

Most effective tool for building buyerspreferences, convictions, and actions; Personalinteraction allows for feedback and adjustments;

Relationship-oriented; Buyers are more attentive; Salesforce represents a long-term commitment; Mostexpensive of the promotional tools

May be targeted at the trade or ultimateconsumer; Makes use of a variety of formats:

premiums, coupons, contests, etc.; Attracts attention,


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offers strong purchase incentives, dramatizes offers,boosts sagging sales; Stimulates quick response; Short-lived; Not effective at building long-term brand

preferences

Highly credible; Very believable; Manyforms: news stories, news features, events andsponsorships, etc.; Reaches many prospects missed via

other forms of promotion; Dramatizes company orproduct; Often the most under used element in thepromotional mix; Relatively inexpensive (certainly not'free' as many people think--there are costs involved)

Many forms: Telephone marketing,direct mail, online marketing, etc.; Four distinctivecharacteristics: Non-public, Immediate, Customized,Interactive; Well-suited to highly-targeted marketingefforts

Marketing communications breaks down thestrategies involved with marketing messages intocategories based on the goals of each message.There are distinct stages in converting strangers tocustomers that govern the communication mediumthat should be used.

Advertising-


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requires similar care in planning and strategydevelopment. Second, three audiences can be targeted

by sales promotion: consumers, resellers, and the sales

force. And third, sales promotion as a competitiveweapon provides an extra incentive for the targetaudience to purchase or support one brand over another.This last factor distinguishes sales promotion fromother promotional mix tactics. For example, unplanned

purchases may be directly related to one or more salespromotion offers.

In order to understand the basic role and function ofsales promotion, one must differentiate between sales

promotion and other components of the marketing mix.Sales promotion usually operates on a short timeline,uses a more rational appeal, returns a tangible or realvalue, fosters an immediate sale, and contributes highly

to profitability. The idea of contribution to profitabilitymay be confusing. It is simply the ratio between what isspent on a promotional mix compared to the direct

profitability generated by that expenditure. A fewexceptions to the above characteristics do exist. Forexample, a sweepstakes might use a very emotionalappeal, while a business-to-business ad may be very

rational.Promotion is generally sub-divided in the textbooksinto two parts:

Above the line promotion: Promotionin the media (e.g.TV, radio, newspapers,Internet) in which the advertiser pays an

advertising agency to place the ad
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Another increasingly perceived drawback occurs withdistributed manufacturers' coupons, such as thoseinserted in Sunday newspapers. While ideally these are

offered as an incentive for new or occasional customersto try the product in hopes of making them regular

buyers, research has suggested that most coupons areredeemed by individuals who would normally buy the

products anyway. In effect, the manufacturers aresubsidizing their existing sales, as only a relativelynarrow segment of the consumer market actively usesclipped coupons from the newspapers. To address this

problem, manufacturers have found that in-store coupondevices or displays reach a wider cross-section of

buyers and are more likely to entice targeted customers(in addition to the regular customers who will likelyalso use the coupons).

Also, consumers and resellers have learned how to milkthe sales promotion game. Notably, consumers maywait to buy certain items knowing that eventually priceswill be reduced. Resellers, having learned this strategylong ago, are experts at negotiating deals andmanipulating competitors against one another, so that,for example, one company's product may be on sale one

week and its competitor's the following week. Value-minded consumers then can regularly find an equivalent

product on sale, which may increase their loyalty to thestore at the cost of the manufacturers.

TECHNIQUES OF CONSUMERPROMOTIONS


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windows. Ads that notify consumers of upcomingdiscounts includes fliers, newspaper and television ads,and other media. Price discounts are especially common

in the food industry, where local supermarkets runweekly specials.

Price discounts may be initiated by the manufacturer,the retailer, or the distributor. For instance, amanufacturer may "pre-price" a product and thenconvince the retailer to participate in this short term

discount through extra incentives. Effectiveness ofnational price reduction strategies requires the supportof all distributors. When such support is lacking,consumers may find that the manufacturer's price iscovered by the retailer's price, bearing witness to the

power of retailers.

Existing customers perceive discounts as rewards and

often then buy in larger quantities. Price discountsalone, however, usually don't induce first time buyers.Other appeals must be available, such as mass media adexposure or product sampling.

PRICE PACK DEALS.

A price pack deal may be either a bonus pack or a

banded pack. When a bonus pack is offered, an extraamount of the product is free when the product is

bought at the regular price. This technique is routinelyused for cleaning products, food, and health and beautyaids to introduce a new or larger size. A bonus packrewards present users but may have little appeal to usersof competitive brands. It is also a way to "load"

customers up with the product.


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When two or more units of a product are sold at areduction of the regular single-unit price, a banded packoffer is being made. Sometimes the products are

physically banded together, such as in toothbrush andtoothpaste offers. More often, the products are simplyoffered in a two-for, three for, or ten-for format. In othercases, a smaller unit of the product may be attached toone of the regular size.

Cents-off deal-

Offers a brand at a lowerprice. Price reduction may be a percentagemarked on the package.

Loss leader:The price of a popular product is temporarilyreduced in order to stimulate otherprofitable sales.

Free-standing insert (FSI):A coupon booklet is inserted into the localnewspaper for delivery.

On-shelf couponing:Coupons are present at the shelf where theproduct is available.

Checkout dispensers:


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On checkout the customer is given a couponbased on products purchased.

On-line couponing:Coupons are available on line. Consumersprint them out and take them to the store.

Mobile couponing:

Coupons are available on a mobile phone.Consumers show the offer on a mobilephone to a salesperson for redemption.

Online interactive promotiongame:

Consumers play an interactive gameassociated with the promoted product. Seean example of the Interactive Internet Ad fortomato ketchup.

REFUNDS AND REBATES.

A refund or rebate promotion is an offer by a marketer

to return a certain amount of money when the product ispurchased alone or in combination with other products.Refunds aim to increase the quantity or frequency of

purchase, to encourage customers to load up. Thisdampens competition by temporarily taking consumersout of the market, stimulates purchase of postponablegoods such as major appliances, and creates on-shelfexcitement or encourages special displays. Consumers


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seem to view refunds and rebates as a reward forpurchase. They appear to build brand loyalty rather thandiminish it.

COUPONS.

Coupons are legal certificates offered by manufacturersand retailers. They grant specified savings on selected

products when presented for redemption at the point ofpurchase. Manufacturers sustain the cost of advertisingand distributing their coupons, redeeming their face

values, and paying retailers a handling fee. Retailerswho offer double or triple the amount of the couponshoulder the extra cost. Retailers who offer their owncoupons incur the total cost, including paying the facevalue. Retail coupons are equivalent to a cents-off deal.In 1859, Grape-Nuts cereal created this promotionaltechnique by offering a $.01 coupon.

Manufacturers disseminate coupons in many ways.They may direct deliver by mailing, dropping door todoor, or delivering to a central location such as ashopping mall. They may distribute them through themediamagazines, newspapers, Sunday supplements,or freestanding inserts (FSI) in newspapers. They may

insert a coupon into a package, attach it to, or print it ona package. Coupons may also be distributed by aretailer who uses them to generate store traffic or to tiein with a manufacturer's promotional tactic. Retailer-sponsored coupons are typically distributed through

print advertising or at the point of sale. Sometimes,specialty retailers such as ice cream or electronics stores


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Besides legal changes, concern for costs favored aswitch to sweepstakes; in some cases sweepstakes can

be cheaper to run than contests. In addition,

participation in contests is very low compared to that ofsweepstakes. Contests require participants to competefor a prize or prizes based on some sort of skill orability. Sweepstakes, on the other hand, require onlythat participants submit their names for a drawing oranother type of chance selection. Although the figuresare rough, an estimated $87 million was spent oncontests and sweepstakes in 1977, and $175 million in1989.

Nonetheless, according to one estimate fewer than 20percent of all households have ever entered a contest orsweepstakes. Even worse, some consumers feel connedwhen sweepstakes make aggressive or overly ambitious

claims, such as that a particular individual is very closeto winning. In the late 1990s some of the best-knownU.S. sweepstakes such as American Family andPublishers Clearinghouse, firms that market magazinesubscriptions alongside their much-touted sweepstakes,were under scrutiny by a number of state attorneysgeneral and federal legislators, raising the possibility

that new federal legislation would place limits on whatsweepstakes could claim and in what manner.

SPECIAL EVENTS

By some estimates companies around the world spentover $15 billion a year as of 1997 to link their productsand corporate identities with everything from jazz

festivals to golf tournaments to stock car races. In fact,


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a number of large corporations have special divisions ordepartments that handle nothing but special eventssponsorships. One of the world's largest agencies,

Saatchi & Saatchi DFS Compton, has a group calledHMG Sports that manages sports events, including theOlympics, a ski tour for Sanka and Post Cereals, bass-fishing contest for Hardee's, and a worldwide yacht-racing event for Beefeater's Gin.

Several good reasons explain why so many marketers

have jumped on the special events bandwagon. First,events tend to attract a homogeneous audience veryappreciative of the sponsors. Therefore, if a product fitswith the event in terms of the expected stereotypicalhomogeneity of the audience, the impact of the sales

promotion dollars will be quite high. To illustrate,Lalique Crystal should not sponsor a tractor pull, but

Marlboro should. Second, events sponsorship may buildsupport from trade and from employees. Thoseemployees who manage the event may receiveacknowledgment and even awards. Little is moreappealing to the president of Kemper Insurance than

presenting a $300,000 check to the winner of theKemper Open on national television. Finally, compared

to producing a series of ads, event management issimple. Many elements of events are prepackaged. Forexample, a firm can use the same group of people tomanage many events. It can use booths, displays,

premiums, and ads repeatedly by simply changingnames, places, and dates.

PREMIUMS


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A premium is tangible compensation, an incentive,given for rendering a particular deed, usually buying a

product. The premium may be free, or, if not, the cost is

well below the usual price. Getting a bonus amount ofthe product is a premium, as is receiving the prize in acereal box, a free glass with a purchase of detergent, ora free atlas with a purchase of insurance.

Incentives given free at the time of a purchase are calleddirect premiums. With such bonuses there is no

confusion about costs, returning coupons or box tops,clipping weight circles or bar codes, or saving proofs.Plus there is instant gratification.

Four variants of direct premium programs may beidentified. First, the simple direct premium provides anincentive given separately as a product is purchased.For instance, when a shopper pays for a new coat, she

learns it has a direct premiuma hanging travel bag.Second, in-packs may be enclosed with a package at thefactory. A snack food company, for example, mayinclude a serving tin inside its holiday package. On-

packs are another type of factory-added packaging thatlies outside the package, well attached by a plastic strip,wrapper, or other apparatus. Free dental floss attachedto toothpaste is an example. Fourth, container premiumsreverse the presentation of the in-pack by placing the

product inside the premium such as fancy liquordecanters which often hold the goods at Christmas.

Other types of direct premium are traffic builders, door-openers, and referral premiums. The traffic-builder

premium is an incentivesuch as a gift of a small


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represents a bargain because the customer cannotreadily buy the item for the same amount.

CONTINUITY PROGRAMS

Continuity programs retain brand users over a longperiod by offering ongoing motivations; in this sense,long-term continuity programs differ somewhat frommost other forms of sales promotions since they are

relatively permanent. Self-liquidating premiums areone-time opportunities, whereas continuity programsdemand that consumers keep saving something in orderto get the premium in the future. Trading stamps,

popularized in the 1950s and 1960s, such as S&H andGold Bond, are prime examples. The bonus was usually

one stamp for every dime spent at a participating store.The stamp company provided redemption centers wherethe stamps were traded for merchandise. A cataloglisting the quantity of stamps required for each item wasavailable at the participating store.

Today, airlines' frequent-flyer clubs, hotels' frequent-traveler plans, as well as bonus-paying credit card

programs have replaced trading stamps continuityprograms. Looking back, it seems that when competingbrands have reached parity, continuity programs haveprovided the discrimination factor among thosecompetitors. Continuity programs have also opposed anew threatening competitor by rewarding long-standingcustomers for their continuing loyalty. A continuity

program is all about sustaining brand loyalty through


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body of an ad. Direct sampling is achieved throughprime media using scratch 'n'-sniff cards and slim foilpouches.

Products can also be sampled directly through theretailer who sets up a display unit near the product orhires a person to give the product to consumers as they

pass by. This technique may build goodwill for theretailer and be effective in reaching the right consumers.Some retailers resent the inconvenience and require

high payments for their cooperation.The last form of distribution deals with specialty typesof sampling. For instance, some companies specialize in

packing samples together for delivery to ahomogeneous consumer group such as newlyweds, new

parents, students, or tourists. Such packages may bedelivered at hospitals, hotels, or dormitories.

TRADE PROMOTIONS

A trade sales promotion is pointed toward resellers whodistribute products to ultimate consumers. The term"trade" traditionally refers to wholesalers and retailerswho handle or distribute marketers' products. Otherterms for wholesalers and retailers include "resellers"

and "dealers."Commonly, a senior marketing officer or productmanager is responsible for planning a trade promotion.Decisions about the nature of the deal and its timing aremade jointly by the marketing officer, sales manager,and campaign manager. Because such deals have direct

bearing on the pricing strategy and resulting


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profitability, they may require clearance by topmanagement as well.

The objectives of sales promotions aimed at the trade

are different from those directed to consumers. Tradesales promotions hope to accomplish four overall goals:

1. Develop in-store merchandising support or othertrade support. Strong retail support at the storelevel is the key to closing the loop between thecustomer and the sale.

2. Control inventory. Sales promotions are used toincrease or deplete inventory levels and toeliminate seasonal peaks and valleys.

3. Expand or improve distribution. Sales promotionscan open up new areas or classes.

4. Motivate channel members. Sales promotions can

generate excitement about the product among thoseresponsible for selling it.

TYPES OF TRADE SALES PROMOTIONS

POP DISPLAYS.

Manufacturers provide point-of-purchase (POP) displayunits free to retailers in order to promote a particular

brand or group of products. The forms of POP displaysinclude special racks, display cartons, banners, signs,price cards, and mechanical product dispensers.Probably the most effective way to ensure that a resellerwill use a POP display is to design it to generate salesfor the retailer.

High product visibility is the basic goal of POP

displays. In industries such as the grocery field where a


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shopper spends about three-tenths of a second viewing aproduct, anything increasing product visibility isvaluable. Beyond getting attention for a product, POP

displays also provide or remind about importantinformation such as the product name, appearance ofthe product, and sizes. Consumers may have seen orheard some of the information in ads before entering thestore. The theme of the POP should be coordinated withthe theme used in ads and by salespeople.

SALES CONTESTS.For salespeople, sales contests can be an effectivemotivation. Typically, a prize is awarded to theorganization or person who exceeds a quota by thelargest percentage. For example, Cepacol Mouthwashoffered supermarket managers cash prizes matched tothe percentages by which they exceeded the sales quota,

plus a vacation to Bermuda for the manager whoachieved the highest percentage. Often such programsmust be customized for particular reseller groups.

TRADE SHOWS.

Thousands of manufacturers display their wares andtake orders at trade shows. In the United States

companies were spending some $13 billion each yearon trade shows as of the late 1990s. For manycompanies, maximum planning effort and much of themarketing budget are directed at the trade show.Success for an entire year may hinge on how well acompany performs there.

Trade shows provide unique opportunities. First, tradeshows provide a major opportunity to write orders for


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products. Second, they are a chance to demonstrateproducts, provide information, answer questions, and becompared directly with competitors. Since typically at

least several direct competitors will be pitching theirproducts to potential customers under the same roof,buyers have the opportunity to quickly judge quality,features, prices, and technology at these events.Similarly, such events also provide sellers with a chanceto size up the competition and fortify theircompetitiveintelligence.

SALES MEETINGS.

Related to trade shows but less elaborate are salesmeetings sponsored by manufacturers or wholesalers.Whereas trade shows are open to potential customers,sales meetings are targeted to the company sales forceand/or independent sales agents. These meetings are

usually conducted regionally and directed by salesmanagers and their field force. Sometimes a majormarketing officer from corporate headquarters directsthe proceedings. The purposes of sales meetings vary.The meetings may occur just prior to the buying seasonand are used to motivate sales agents, to explain the

product or the promotional campaign, or simply toanswer questions.

PUSH MONEY.

An extra payment given to salespeople for meeting aspecified sales goal is called push money; it is alsoknown as spiffs or PM. For example, a manufacturer ofrefrigerators might pay a $30 bonus for sales of model

A, a $25 bonus for model B, and a $20 bonus for model


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C between March 1 and September 1. At the end of thatperiod, the salesperson would send evidence of thesesales to the manufacturer and receive a check in return.

Although push money has a negative image since ithints of bribery, many manufacturers offer it.

DEAL LOADERS.

A deal loader is a premium given by a manufacturer to aretailer for ordering a certain quantity of product. Twotypes of deal loaders are most typical. The first is a

buying loader which typically is a gift given for makinga specified order size. The second is a display loaderwhich means the display is given to the retailer after thecampaign. For instance, General Electric may have adisplay containing appliances as part of a special

program. When the program is over, the retailerreceives all the appliances on the display if a specified

order size was achieved. Trade deals are often specialprice concessions superseding, for a limited time, thenormal purchasing discounts given to the trade. Tradedeals include a group of tactics having a common theme

to encourage sellers to specially promote a product.The attention may be generated by special displays,

purchase of larger-than-usual amounts, superior in-storelocations, or greater advertising effort. In exchange,retailers may receive special allowances, discounts,goods, or money.

TRADE DEALS.

Money spent on trade deals is considerable. In manyindustries, trade deals are the primary expectation for


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immediately after the first trade deal once the producthas depleted warehouse stock.

The slotting allowance is the most controversial form of

buying allowance. Slotting allowances are fees retailerscharge manufacturers for each space or slot on the shelfor warehouse that new products will occupy. Thecontroversy stems from the fact that in many instancesthis allowance amounts to little more than paying a

bribe to the retailer.

The final type of buying allowance is a free goodsallowance. The manufacturer offers a certain amount of

product to wholesalers or retailers at no cost if theypurchase a stated amount of the same or a differentproduct. The bonus is in the form of free merchandiseinstead of money. For example, a manufacturer mightoffer a retailer one free case of merchandise for every

20 purchased.An advertising allowance is a common methodexercised primarily for consumer products. Themanufacturer pays the wholesaler or retailer a dividendfor advertising the manufacturer's product. The moneycan only be used to purchase advertising. Controlling

this scheme may be difficult. Some resellers may viewthe advertising allowance as a type of personal bonusand engage in devious behavior such as billing themanufacturer at the much higher national rate ratherthan at a lower local rate. Therefore, manymanufacturers require some verification.

A display allowance is the final form of promotional

allowance. Some manufacturers pay retailers to select


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may present logistical troubles, and for established softdrinks, presumably most potential customers alreadyknow how they taste. As with any marketing

communication, in sales promotions companies must becareful not to violate their brand image with the

promotion. A classic example is with luxury or statusproducts. In these categories discounting and evensweepstakes may send mixed messages to customers, asthe assumption is usually that being able and willing to

pay the full price is an intrinsic component of buying astatus product. If the company violates its luxury brand

by "cheapening" it (symbolically or economically), thepromotion may alienate the established client base.Instead, the luxury marketer may wish to offer as a

premium another luxury item or establish a continuityprogram.

5.

CHAPTER-4


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Research

methodology

Problem definition-IDENTIFYINGTHE PREFERENCE OF CONSUMERS FOR



Purpose of research- Purpose of thisresearch is to understand the consumer

behavior towards different types of salespromotion techniques and to know theirpreference about these sales promotiontechniques.

Research design-descriptive researchThis is a descriptive research study because indescriptive research we find out thecharacteristics of variable and in my research Ineed to find out the sales promotiontechniques and its characteristics and


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preference of consumers towards thesetechniques.

Sampling design-

Sampling technique- Non-probabilitysamplingNon-probability sampling technique has been

used because the population which includes allthose people preferring these techniques inJaipur is very large. Secondly, source list ofthe population can not be made available.

Sampling method- convenience samplingConvenience sampling method has been usedbecause I didnt have sufficient time,moneyand could not have put lot of efforts.

Sample size- 100

Data collection instrument-questionnaire

Data collection method-Interrogationthrough Personal


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interview.

CHAPTER-5

Data tabulation & Findings


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identifying the preference of consumers for different sales promotion techniques in the

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