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IMPACT OF SALES PROMOTION ON MIDDLE CLASS
CONSUMER AND BRAND EQUITY PERCEPTION, WITH
RESPECT TO SELECTED FMCG PRODUCTS.
Dissertation Submitted
To
D. Y. Patil University, Navi Mumbai
School of Management
In partial fulfilment of the requirements
for the award of the Degree of
Master of Philosophy
In
Management
Submitted by:
Mrityunjay Kumar
Enrollment No. - DYP-M.Phil-11004
Research Guide:
Professor Dr. Pradip Manjrekar
D. Y. Patil University, Navi Mumbai
School of Management
Sector 4, Plot No. 10, CBD Belapur, Navi Mumbai
February 2015
IMPACT OF SALES PROMOTION ON MIDDLE CLASS
CONSUMER AND BRAND EQUITY PERCEPTION,
WITH RESPECT TO SELECTED FMCG PRODUCTS.
DECLARATION
I hereby declare that the Dissertation entitled “Impact of Sales Promotion on
Middle Class Consumer and Brand Equity Perception, with respect to selected
FMCG products” submitted for the Award of Master of Philosophy in Management
at D.Y. Patil University, Navi Mumbai, School of Management is my original work
and the dissertation has not formed the basis for the award of any degree,
associateship, fellowship or any other similar titles.
The material borrowed from other sources and incorporated in the dissertation has
been duly acknowledged.
I understand that I myself could be held responsible and accountable for plagiarism, if
any, detected later on.
The research paper published based on the research conducted out of an in the course
of the study are also based on the study and not borrowed from other source.
Date:
February, 2015
Place: Navi Mumbai
Mrityunjay Kumar
M. Phil Scholar
Enrollment No. DYP-M.Phil-11004
CERTIFICATE
This is to certify that the dissertation entitled “Impact of Sales Promotion on Middle
Class Consumer and Brand Equity Perception, with respect to selected FMCG
products” is the bona-fide research work carried out by Mrityunjay Kumar, in
partial fulfilment of the requirements for the award of the Degree of Master of
Philosophy in Management and that the dissertation has not formed on the basis for
the award previously of any degree, associateship, fellowship or any other similar title
of any University or Institution.
Also certified that dissertation represents an independent work on the part of the
candidate.
Place: Navi Mumbai
Date:
February, 2015
Prof. Dr. R. Gopal
Director
Prof. Dr. Pradip Manjrekar
Research Guide
D. Y. Patil University, Navi Mumbai
D. Y. Patil University, Navi Mumbai
School Of Management
School Of Management
ACKNOWLEDGEMENTS
I am grateful to D.Y. Patil University, Navi Mumbai, School Of Management for
giving me an opportunity to pursue M.Phil. I am especially grateful to Prof. Dr. R.
Gopal, Director and Head of this Institute for his encouragement and guidance.
I would specially like to express deep gratitude to my guide Prof. Dr. Pradip
Manjrekar. It would be no exaggeration to say that this research would not have been
completed today without his rock steady guidance and moral support.
I sincerely thank my family for allowing and supporting me to spend my free time on
this project work and thus have helped me in completing the project work
successfully.
I also wish to thanks all my near and dear ones who have been directly and indirectly
instrumental in the completion of my dissertation.
Lastly, I would like to dedicate this Dissertation to my Grand Parents.
Place: Navi Mumbai
Date:
February, 2015
Mrityunjay Kumar
CONTENTS
CHAPTER
No.
TITLE
PAGE
No.
1.
List of the Tables
List of the Figure
List of Abbreviation
Executive Summary
Introduction
1-8
9-48
2.
FMCG Market
Competitiveness of Indian FMCG Industry
The Past & Future of FMCG
Key Trends in Indian FMCG
The top 10 Companies in FMCG
FMCG category and Products
Sales Promotion
Sales Promotion Objectives & Effectiveness
Consumer Response to Sales Promotions
FMCG sector and Sales Promotion in India
Brand and its Evolution
Brand Equity and Perception
Indian Middle Class
Literature Review
9-11
11
11-14
14-18
18-19
19
20-23
24-27
27-28
28-31
31-36
36-46
46-48
49-101
Sales Promotions and Consumptions
Sales Promotions and Consumer Preferences
Promotion Thresholds
Valence of a Promotion
Perceived Discount
Immediate Price Reduction
Reference Price
Informative Promotions
Price Elasticity
Shift in Purchase Intention
Price Promotion and Consumer Goals
Store Image
Product Brand and Store Brand
Effectiveness of Discount and Free Gift
Brand Equity Measurement
49-50
50-59
59-63
63-64
65-67
67-69
69-73
70-74
77-78
78-79
79-81
81-82
82
83-86
86-89
CHAPTER
No.
3.
4.
5.
6.
TITLE
Sales Promotion and Brand Equity
Sales Promotion and Branding
Sales Promotion and Brand Image
Sales Promotion and Brand Knowledge
Monetary & Non -Monetary Promotions and
Brand Knowledge
Short and Long Term Effects of Sales Promotions
Research Gap
Objectives, Hypothesis & Research
Methodology
Data Analysis & Interpretation
Major Findings and Conclusions
Recommendations
Bibliography
Annexure
Annexure Ι- Questionnaire
Annexure ΙΙ- Regional Profile
Annexure ΙΙΙ- Aker’s Brand Equity Framework
PAGE
NO.
89-94
94-95
95-98
96-97
97-100
100-101
101
102-107
108-174
175-176
177-178
179-207
208-212
213-214
215
List of Tables
Table
No.
1.
2.
3.
List of Tables
Total Sample Size City wise
Pre and Post Liberalisation Scenario of FMCG
sector in India.
Number of sample respondents from each area
Page
No.
7
12
106
Demographic Statistics:
4
5.
Residence statistics city wise
Comparison of All the scores with respect to cities
108
108
6.
109
7.
8.
9
One Way ANOVA to study difference between the
cities
Respondents’ Family Income statistics
Respondents Age distribution statistics
Respondents’ Gender statistics
10.
Respondents’ Martial statistics
111
11.
12.
13.
14.
15.
Respondents’ Employment status statistics
Respondents’ Educational Qualification statistics.
Respondents’ Family size statistics
Respondents’ family type statistics
Reliability Analysis
H01 Testing Tables:Response as per family Income group(getting on
Likert scale)
112
112
113
114
114
17.
18.
Pearson chi- square test
K-W test ( favouring cash discount by different
Income group)
116
116
19.
Mean rank table
117
20.
K-W test result (cd score comparison)
117
21.
22.
23.
K-W test Statistics (cd score comparison)
Chi – Square test
Mean Rank table
117
118
118
16.
110
110
111
115
Table
No.
24.
List of Tables
Response as per Gender
Page
No.
119
25.
Pearson chi- square- gender
119
26.
Mann-Whitney-U test- favours cash discount
119
27.
28.
U-test result
Mann-Whitney-U test- cd score comparison
120
120
29.
30.
31.
32.
33.
34.
Mean rank table -Gender
Response as per Educational qualification
Pearson chi- square- Educational Qualification
K-W test- cash discount
Mean Rank table –Educational Qualification
Cd score comparison
120
121
122
122
122
123
35.
123
36.
37.
Mean rank table educational qualification
H02 Testing Tables
Descriptive statistics cash discount & Free gift
Paired t- test
38.
Wilcoxon test Rank table
126
39.
126
40
Wilcoxon test result
H03 Testing Tables
Family income – Mean rank table
41
K-W test result
127
42
43
44
45
46
47
48
49
50
51
Mann Whitney U test
Income group with similar attitude
Group with similar attitude towards Deal prone
Mean rank table- Gender
M-U test result-Gender
Mean rank table- Educational Qualification
K-W test- Deal proneness
M-W –U test- below 10th
M-W-U test-10th against
M-W-U test table – 12th , Graduation, & P.G
against
128
128
129
129
129
130
130
131
131
131
125
125
127
Table
No.
52
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
82.
83.
84.
85.
86.
List of Tables
Groups with similar attitude – Educational
Qualification
H04 Testing Tables
Cronbach’s alpha test for reliability(for all 32item)
Cronbach’s alpha test for reliability (for 22 itemBQP)
Spearman’s rank correlation
Basic Data Distribution of response
Family Income – Data Distribution
Sum of rank table
K-W test
Data Distribution – Educational Qualification
Sum of Rank table
Chi-square
Mean rank table – Gender
M-W-U test
H05 testing tables
Media preferences
Chi square
H06 Testing Tables
Statistics for scheme preferences
Chi – square test
Factor Analysis
Rotated Component matrix
Most Preferred SPS variables
Preference of SPS 1- Family Income
Chi-square test SPS 1- Family Income
Preference of SPS 1- Educational Qualification
Chi-square test SPS 1- Educational Qualification
Preference of SPS 1- Gender
Chi-square test SPS 1- Gender
Preference of SPS 5- Family Income
Chi-square test SPS 5- Family Income
Preference of SPS 5- Educational Qualification
Chi-square test SPS 5- Educational Qualification
Preference of SPS 5- Gender
Chi-square test SPS 5- Gender
Preference of SPS 6- Family Income
Chi-square test SPS 6- Family Income
Preference of SPS 6- Educational Qualification
Page
No.
132
133
133
134
135
136
137
137
138
139
139
140
141
142
143
144
145
146
147
148
148
149
149
150
150
151
151
152
153
153
154
154
155
156
156
Table
No.
87.
88.
89.
90.
91.
92.
93.
94.
95.
96.
97.
98.
99.
100.
101.
102
103
104.
105.
106.
107.
108.
109.
110.
111.
112.
113.
List of Tables
Chi-square test SPS 6- Educational Qualification
Preference of SPS 6- Gender
Chi-square test SPS 6- Gender
Preference of SPS 9- Family Income
Chi-square test SPS 9- Family Income
Preference of SPS 9- Educational Qualification
Chi-square test SPS 9- Educational Qualification
Preference of SPS 9- Gender
Chi-square test SPS 9- Gender
Preference of SPS 10- Family Income
Chi-square test SPS 10- Family Income
Preference of SPS 10- Educational Qualification
Chi-square test SPS 10- Educational Qualification
Preference of SPS 10- Gender
Chi-square test SPS 10- Gender
Preference of SPS 12- Family Income
Chi-square test SPS 12- Family Income
Preference of SPS 12- Educational Qualification
Chi-square test SPS 10- Educational Qualification
Preference of SPS 12- Gender
Chi-square test SPS 12- Gender
Preference of SPS 13- Family Income
Chi-square test SPS 13- Family Income
Preference of SPS 13- Educational Qualification
Chi-square test SPS 13- Educational Qualification
Preference of SPS 13- Gender
Chi-square test SPS 13- Gender
Page
No.
157
157
158
158
159
159
160
160
161
162
163
163
164
165
165
166
167
167
168
169
169
170
171
171
172
173
173
List of Figures
Figure No.
List of Figure
Page No.
1.
Brand Equity chain
42
2.
Relation between Brand Equity
and Market Power
44
3.
Aker’s Brand Equity Framework
215
Abbreviations
AA – Attribute Additive
ACA – Adaptive Conjoint Analysis
AD- Advertised Discount
ANOVA – Analysis of Variance
AR - Attribute range
Bn- billion
B2B – Business to business
BoP – Bottom of the pyramid
BEQ – Brand Equity
BQP – Brand Equity Perception
Bl- Brand loyalty
Bl (1 to 4) - Brand loyalty (1 to 4)
Ba- Brand Awareness
Ba (1 to 6) - Brand Awareness (1 to 6)
Baso.- Brand Association
Baso (1 to 4) - Band Association (1 to 4)
CI – Consumer Purchase Intentions
CII - Confederation of Indian Industry
CD – Cash Discount
CD (1 to 3) – Cash Discount (1 to 3)
CPG - Consumer packaged goods
DF- Degree of Freedom
DP – Deal Proneness
DP (1 to 3) - Deal Proneness (1 to 3)
FMCG – Fast Moving Consumer Goods
F G- Free Gift
F G (1 to 4) - Free Gift (1 to 4)
GDP - Gross Domestic Product
GST - Goods and services tax
HUL- Hindustan Unilever Limited
IIA - Irrelevance of Independent Alternatives
ITC - Indian Tobacco Company
ITR – Internal Reference Price
MAE - Mean Absolute Error
MNC – Multi national Corporate
mn- Million
NGO – Non Government Organization
No.- Number
NOL - Number of levels effect
OCBs - Overseas Corporate Bodies
P&G – Procter and Gamble
PD – Perceived Discount
POP – Point of Purchase
POS – Point of Sale
RFC - Randomized First Choice
ROI – Return on Investment
SP – Sales Promotion
SPS- Sales Promotion Schemes
SPS (1 to 13) - Sales Promotion Scheme Preference (1 to 13)
Std. - Standard.
SD- Standard Deviation
SS- Sample Size
TV - Television
USA – United States of America
WOM – Word of Mouth
EXECUTIVE SUMMARY
Executive Summary
Introduction
Fast Moving Consumer Goods (FMCG) called as Consumer Packaged Goods
(CPG).FMCG products are those products which normally purchased by the
consumers at a regular interval.
The very purpose of sales promotion is to influence consumer for quick buying. It is
considered as marketing techniques that adds value to the product which is on offer.
The example of sales promotion is to offer winning of prize or extra purchase on same
price, etc.
“The socioeconomic class between the working class and the upper class, usually
including professionals, highly skilled labourers, and lower and middle management
called Middleclass”.
As per the NCAER (2011) study, based on ‘household income’ criterion, a family
with an annual income between Rs 3.4 lakh to Rs 17 lakh (at 2009-10 price levels)
counts in the middle class category.
The four categories of products have been taken for this research. Products are
Tea, Coffee, Detergent and Bathing Soap.
In this research Aakar definition has been considered as a working definition of Brand
Equity, because it is a consumer centric definition of Brand Equity.
Literature Review
The Consumer promotions are at the present more imperative than ever. As per
Manufacturers Coupon Control Center 1988, 215 billion manufacturer coupons
circulated in 1986, up by 500% in the last decade, and manufacturer expenditures on
trade incentives to attribute or exhibit brands totalling more than $20 bn in the same
year, and up by 800% in the last decade [Alsop 1986; Kessler 1986].
Wansink [1996] established that considerable holding costs pressure customers to
consume more products. Wansink and Deshpande [1994] explained that when the
product is perceived broadly substitutable, consumers will consume more than its
close substitutes. They also explained that higher perish ability boosts consumption
rates.
Folkes et al. [1993] adopted scarcity theory and explain that customer lower
consumption of products when supply be limited because they recognize smaller
quantities as more precious.
Chandon and Wansink [2002] explain that stockpiling boosts consumption of high
convenience products more than low convenience products. Assuncao and Meyer
[1993] explained that consumption is an endogenous decision variable motivated by
promotion and promotion added stockpiling resulting by looking ahead behaviour.
Some new practical papers addressing the promotion impact on customer stockpiling
behaviour by price or promotional ambiguity. Gonul and Srinivasan [1996] and
Erdem and Keane [1996] ascertain that customers are forward looking.
Erdem et al. [2003], consumers figure future price opportunity and make a decision
when, what, and how much to purchase.
Sun et al. [2003] reveal that nullifying ahead looking behaviour leads to an excess of
estimation of promotion elasticity.
Blattberg, Peacock, and Sen [1976, 1978] described 16 buying strategy segments
based on three purchase dimensions: brand loyalty (single brand, single brand
shifting, many brands), type of brand preferred (national, both national and private
label), and price sensitivity (purchase at regular price, purchase at deal price).
According to price attribute literature a comparatively lesser price usually considered
as an sign of poorer quality and that effect exaggerated when only price information
offered to reach at a judgment [Etgar and Malhotra 1981; Monroe and Petroshius
1981; Olson 1977; Rao and Monroe 1988].
Consumers found their reference prices regarding their individual purchasing
experience, their findings, and their exposition to the present information on prices or
their subjective understanding.
McAlister [1983] and Neslin and Shoemaker [1983] use certain segments drag from
those of Blattberg, Peacock, and Sen although add a purchase acceleration variable to
learn the profitability of product promotions.
Across the countries, sales promotions are an important part of the marketing mix for
numerous consumer products. Marketing managers employ price oriented promotions
like rebates, coupons, and price discounts to boost sales and market share, persuasion,
and push brand switching.
Non price promotions like sweepstakes, frequent user clubs, and premiums include
enthusiasm and worth to brands and may promote brand loyalty [e.g., Aaker 1991;
Shea, 1996].
In adding, consumers do like promotions. They prefer utilitarian profits like monetary
savings, added value, increased quality, and convenience, with hedonic profits like
entertainment, exploration, and self expression [Chandon, Laurent, and Wansink,
1997].
A big part of literature has examined consumer response to sales promotions, many
noted coupons [e.g. Sawyer and Dickson, 1984; Bawa and Shoemaker, 1987 and
1989; Gupta, 1988; Blattberg and Neslin, 1990; Kirshnan and Rao, 1995; Leone and
Srinivasan, 1996]. In spite of this, main gaps stay to be studied. It is normally granted
that sales promotions are complex to standardize for the reason that of legal,
economic, and cultural differences [e.g., Foxman, Tansuhaj, and Wong, 1988;
Kashani and Quelch, 1990; Huff and Alden, 1998].
MNC’s must recognize how consumer response to sales promotions differs between
country to country, or state to state or province to province.
Thaler [1985)], viewed that the price consumers’ use as an indication in making
buying decisions as the price they expect to pay before to a buying time.
The
expected price may too be called the “internal reference price” [Klein and Oglethorpe
1987] as different to an outside reference price like the manufacturers’/ producers’
recommended list price.
At last, a brand is be on price promotion while it is obtainable on a short term price
slash that is featured in newspaper advertising and/ or attract customers’ interest with
a store display sign.
The price opportunity hypothesis always used to offer an additional description for the
observed unfavourable long term outcome of price promotions on brand selection
[Kalwani et al. 1990]. Earlier research has revealed that reiterate buying probabilities
of a brand after a promotional buying are lower than the related values after a non
promotional buying [Dodson, Tybout, and Sternthal 1978; Guadagni and Little 1983;
Shoemaker and Shoaf 1977].
Dodson, Tybout, and Sternthal suggested the self perception theory to expect that if a
purchase is induced by an external cause (price promotion) the same as opposed to an
internal cause (for e.g., the brand will be reduced when the external cause is apart).
Kalwani et al [1990] said that customers draw opportunity of a brand’s price on the
base of, among other things, its former prices and the rate with which price promoted.
Customers’ reactions to a retail price then after may depend on how the retail price
compares with the price they suppose to pay for that brand.
Particularly, in a price promotion, customers are pertinent to perceive a price “gain”
and respond positively and respectively, when the deal is retracted, customers are
pertinent to perceive a price ‘loss” and they not likely to purchase the brand.
Neslin and Shoemaker [1989] propose another description for the fact of lower
reiterate buying rates after promotional buying. They said that the lesser reiterate
buying rates may be the effect of statistical aggregation rather than real declines in the
buying probabilities of individual customers after a promotional purchase.
Relationship between Advertise discount (Ads) and Perceived discount (Pds), have
been noticed most likely, retailers’ main objective in offering price promotions is to
persuade consumers and influence their purchasing behaviour.
Promotion framing, price promotions appear in different formats such as free gift on
purchase, discount, coupon, and rebate, etc. Some promotion forms engage monetary
savings and some promotions are non-monetary.
Rust, Ambler, Carpenter, Kumar, & Srivastava [2004], it is significant to determine
marketing asset of a organisation which they describe as customer centric measures of
the value of the business and its contributions that may improve the organisation long
term value.
To Measuring brand equity it deals with the measurement of intangible marketing
approaches, like product image (reputation) and brand loyalty.
Monetary promotions form less brand knowledge than non monetary promotions.
Rothschild & Gaidis [1981], monetary promotions compared to non monetary
promotions, the monetary promotions are less efficient in building brand knowledge
because monetary promotions having emphasis on only one brand association (i.e.
price).
According to pricing literature, encoding tends to the subjective understanding and
assignment of result to objective prices and price discounts [Monroe 1984; Olson and
Jacoby 1977; Zeithaml 1984].
On other hand, the concept of reference price, which is regular with adaptation level
theory [Helson 1964] and assimilation contrast theory [Sherif 1963], advocates that
customers have inner reference prices correspond which current prices are evaluated
[Kalwani et al. 1990; Lattin and Bucklin 1989; Urbany and Dickson 1991; Winer
1986].
The PD (perceived discount) is therefore the expected savings from this inner
reference price [Mobley et al. 1988; Monroe 1977; Winer 1986].
The AD (advertised discount), defined in this study as the percentage off on normal
price by retailers increases, customers’ perceptions of the discounts/ savings are likely
to raise. This is evidently the basic premise for general promotional offerings, and it
always supported by many studies [Berkowitz and Walton 1980; Della Bitta, Monroe,
and McGinnis 1981; Mobley et al. 1988].
The question, Do the PD less than the AD?, was addressed by many studies in
contrast to the matter raised by Federal Trade Commission cases handling with the
justice of reference price advertising by retailers. The Critics of advertised reference
price say that retailers normally increase these prices and alter customer perceptions
of the discount offered [Liefeld and Heslop 1985; Urbany, Bearden, and Weilbaker
1988].
Objectives of Study
1. To study the Middle Class Consumer attitude towards Sales Promotion Schemes
i.e. Cash Discount and Free Gift.
2. To study the Deal Proneness of Middle Class Consumer considering Family
Income, Gender and Educational Qualification.
3. To study the Middle Class Consumer Brand Equity perception.
4. To study the Media Preference of Middle Class Consumer to know the Sales
Promotion Schemes.
5. To study the preferences of Sales Promotion Schemes according to different
features i.e. Brand Type, Source of Brand Awareness, Type of Sales Promotion and
Type of Benefits.
Research Methodology
The study is based on both Primary & Secondary Data. The possible insight into study
was investigated with the help of Primary data and Secondary data
This study is conducted in Mumbai, Pune and Nagpur. The close ended 5 pages
Questionnaires were filled by Respondents. The target respondents were Middle class
consumers around Mumbai, Pune and Nagpur.
Sample Size calculation
(Z-score) ² * std.dev*(1-std.dev)
Sample size =
(Margin of error) ²
To get sample size, Confidence level of 95% and margin of error 2% and 0.5 Standard
deviation has been used.
(1.96²) * 0.5*0.5
So, Sample Size (ss) =
=2401
(0.02)²
Table 1:
Area of Residence
Number of Sample Respondents
Mumbai
1801
Pune
300
Nagpur
300
Total
2401
The analysis uses both qualitative & quantitative techniques. For indicating choices of
preference Five point Likert scale has been used. The data initially stored in Ms Excel
from where further fed to SPSS to prove the Hypothesis.
Data collection consider total of 48 Areas from Mumbai, Pune and Nagpur (36 areas
has been taken from Mumbai, 6 areas taken from Pune, and 6 areas taken from
Nagpur).
Convenient Sampling method has been used and Sample size evenly distributed
among 48 areas, so from each area 50 respondents were contacted and one extra from
Mumbai contacted.
Findings and Conclusions
Different Sales Promotional schemes changes with change in income, Gender and
education. Female are more deal prone than male.
Cash discount is preferred to free gifts as sales promotion schemes by Middle class
consumers. The female considers Cash discount as best sales promotion scheme.
Media are not equally preferred .Television is the most preferred than all others and
Point of Purchase material is least preferred.
Income and education affects brand equity, female have rated highly for brand loyalty
and Brand awareness while male have rated highly to perceived quality.
Recommendations
Cash Discount preferred most than Free Gift, hence, marketer should offer attractive
cash discounts.
Immediate benefits consider better than delayed benefits, so, marketer should offer
sales promotions considering this as well.
Cash discount if most preferred, so, company should think more on cash discount /
price off than gift or value added.
Television is most preferred knowledge source and it reaches mass level, so, this
medium should be considered as very effective medium to reach to customers.
Females are Brand Loyal and they are Deal Prone than Males, so, this category should
cater promptly.
Research shows below 10th Standard educated prefer cash discount very much, so,
there is a scope of promotional scheme customization for rural area.
Middle class consumers’ purchasing power is growing and over the years this class
would be big chunk of the Indian population, so, by the years business will much
depend on this class. This fact will attract International players to India and Domestic
players should cater this class very efficiently, so that they will face less competition
by International Companies.
Limitations
The Research is limited to only three cities of Maharashtra, so, findings can not
generalise for Maharashtra or entire India. Respondents approached conveniently.
Research is only focused on Middle Class Consumer, so, result can’t generalise for all
segments of consumers. The Study is limited to FMCG product category and only
four products considered. Research is based on primary data and getting it, a well
structured Questionnaire was employed but the accuracy of the finding is fully
depending upon respondents. Other demographic factors also influence brand equity
perception, in this research only Family Income, Educational Qualification and
Gender were considered.
Chapter 1:
INTRODUCTION
CHAPTER 1:
Introduction
FMCG Market:Fast Moving Consumer Goods (FMCG) called as Consumer Packaged Goods
(CPG).FMCG products are those products which normally purchased by the
consumers at a regular interval. Activities of FMCG industry are Production,
Distribution, Marketing, Selling, Financing, Purchasing, etc. FMCG industry also
actively engaged in Operations, Supply chain, and in General Management.
[Source: cii.in]
FMCG industry is the fourth largest sector with total market size of US$20.1 billion.
Indian FMCG Sector is estimated to grow 60 percent by 2011. FMCG industry
provides a wide range of consumable products. In India the competition among
FMCG companies is gradually increasing and thus investment in FMCG sector is also
increasing. [Source: cii.in]
FMCG products include packaged food, dairy products, detergents, coffee, tea, soaps,
tobacco, cigarettes, glassware, paper products, pharmaceuticals, consumer electronics,
plastic goods, printing and stationery, household products, photography, soft drinks,
dry cells, greeting cards, gifts, watches, etc.
The low operational cost, strong distribution networks, new technologies and growth
in competitive FMCG companies etc. are a few things which holds potential in FMCG
industry. Population growth is also a factor which is responsible of success of this
industry.
Leading FMCG companies are Nestle, Reckitt Benckiser, Unilever, Procter &
Gamble, Coca-Cola, Carlsberg, Kleenex, General Mills, Pepsi, Mars, Nirma, Dabur,
Himani, Sara Lee, etc. [Source: naukrihub.com]
Many MNC presences, established distribution networks, profound competition
between the organized and unorganized segments of FMCG industry and low
operational cost, availability of raw materials, cheaper labour costs favours Indian
FMCG sector and gives distinct advantage.
The FMCG market was put to threefold from US$ 11.6 billion (in 2003) to US$ 33.4
billion (in 2015). Consumption of products like hair wash, jams, skin care, toothpaste,
etc., in India is low and yet an untapped market. The middle class and the rural
population of India offer opportunity to companies to tap consumer for branded
products. [Source: mckinsey.com]
There is need of investment in India around US$ 28 billion in the food-processing
industry. Growth may come in FMCG industry from consumer ‘upgrading’ in the
developed product categories. About 200 million people were expected to shift to
processed and packaged food category by 2012. [Source: ficci.com]
Investment approval of foreign technology agreements with specified norms, up to
100 per cent of foreign stake or 100 per cent for NRI and OCBs (Overseas Corporate
Bodies) investment is allowed in most of the food processing segment. And that will
leads 10 percent of annual growth over a 5-year period. FMCG sector estimated as it
will rise from around Rs.56500 cr (in 2005) to Rs 96100 cr (in 2011). Male
Grooming, Female Hygiene, Chocolates, Hair care, Household care, and
Confectionery are estimated fastest growing segments, says a HSBC report.
As per Mishra & Pradeep Kumar [2006] India’s village population is 12.2 percent of
world population and rural FMCG market has not been catered as much. Farm sector
can boost rural household incomes, and then there will be better ground of growth for
FMCG companies. A good infrastructure facility is needed for better supply chain.
The low per capita consumption of FMCG products in the country, have good
possibilities for growth. If the mindset of consumers be changed to take branded and
new products, i.e. if they are capable to take the consumers to branded products and
offer new generation products, then that would be advantageous for companies in
future. The rural household income is growing and its boost purchasing power but still
demand in urban areas is the key growth for FMCG companies.
The urban population and income levels are also increasing and the presence of new
FMCG categories will help the urban areas to maintain its position in terms of
consumption. At present, urban India holds 66 percent of total FMCG consumption,
and rural area holds remaining 34 percent [Mishra & Pradeep Kumar,2006]. In
categories such as personal care, fabric care, and hot beverages, rural India holds
more than 40 percent consumption.
In home care, personal care, household care and feminine hygiene category, urban
area growing at marvellous rate. In both rural and urban areas the processed foods,
bakery, and dairy products have long-term growth.
Competitiveness of Indian FMCG Industry:Availability of raw materials:
Diverse agro-climatic conditions of India, makes a large raw material base and which
is suitable for food processing industries. The presence of raw materials gives India
the location advantage.
India is a largest producer of spices, coconut, livestock, milk, sugarcane, and cashew
and second largest producer of rice, wheat, fruits and vegetables. India also produces
caustic soda and soda ash, which is raw material for soaps and detergents.
Cheap Labour:
Low cost labour gives India a competitive advantage. After China & Indonesia;
India's labour cost is lowest in the world. Low labour cost supports low cost of
productions. Many MNCs have established plants in India for outsourcing in domestic
and export markets.
Presence across effective supply chain:
From the supply of raw materials to packaged goods in the food-processing
categories, Indian companies have good presence over the value chain. This enables
India a more cost competitive advantage. For example, Amul supplies milk and dairy
products like cheese, butter, etc.
The Past & future of FMCG:Before 1991 India was following socialist principle and always believes self reliance
and independency. But capital gain and economic development was not possible
without outer world influence, so policy makers decided to open the door to foreign
companies and India become liberalize in 1991. Foreign companies attracted toward
India for cheap labour, a literate workforce, democratic governance and for middle
class as potential customers
Primarily in 1991 Indian market was of 950 million people, government estimated
250 million of middle class consumer but recent study conducted by Delhi based
organisation NCAER (National Council on Applied Economic Research) estimated
Indian middle class is 160million in number.
Pre and post liberalization scenario of FMCG Sector in India:
Table 2:
FMCG Sector
Soaps
Major Brands
during 1970- 80s
Lifebuoy, Cinthol,
Liril, Lux,Pears,
Rexona, Mysore
Sandal, Neem,
Margo
Creams & Lotions Fair & Lovely,
Pond’s,Johnson &
Johnson
Detergents
Surf, Nirma,
Wheel
Processed foods
Maggie, Kissan,
Parle,
Britannia
Beverages
Nescafe, Red
Label, Campa,
Thumsup
New Brands 1990s onwards
Indian
Nirma Beauty
soap
International
Palmolive, Dettol,
Dove
Dabur, Himalaya
Oriflame, Avon,
Biotique, Amway,
Garnier
Ariel, Tide,
Henkel
Heinz, Pillsbury
Fena, Lakhani
MTR,
Aashirwaad,
Haldiram, Bikaner
Haldiram, Tata
Pepsi, Coke,
Tea,
Sprite,
Bisleri, Tajmahal 7 up
Reference: Jaspreet Bhasin Chandok and Mr. Hari Sundar G(2007), Strategies for
Survival of Indian FMCGs, Proceeding of Global Competition & Competitiveness of
Indian Corporate , IIMK
A study conducted by Booz & Company (Now Strategy&) found that the FMCG will
be of Rs 400,000 cr industry by 2020 and that will shape its future. As per this, the
anti-ageing skincare category grew five times between 2007 and 2008; it is today’s
fastest-growing segment in the skincare category. Olay, Procter & Gamble’s premium
anti-ageing skincare brand, has made 20 % of the market within a year after its launch
in 2007 and today dominates with 37% share.
No one could think the acceptance of anti ageing creams and lotions about ten years
back. No one could think Indian consumers can take oral hygiene so sincerely. Mouth
rinsing seems to be preferred as a habit; mouthwash penetration is growing at rate of
35 per cent per year. No one could have thought rural consumers would fall for
shampoos. Rural penetration of shampoos increased to 46 % in around 2010.
The Consumption pattern evolved quickly in the last five to ten years. The customer
purchases things for experience the new or what he/she has not. Consumer looks for
products with better functionality, quality, value, and so on. What he needs is fast
replaced with what he wants. A report by Booz & Company for the CII
(Confederation of Indian Industry) called FMCG Roadmap to 2020: The Game
Changers spells out the key growth drivers for the Indian FMCG industry in the last
decade and identifies the factors and big trends that will affect its future.
FMCG sector estimated growth of approximately 11% in the last decade, almost triple
from Rs 47,000 cr in 2000-01 to Rs 130,000 cr now (it accounts for 2.2 per cent of the
country’s GDP). Growth has been fast in the past five years almost 17 per cent
annually since 2005. It infuses good GDP growth, opening of rural markets,
increasing income in rural areas, gradual urbanization, lifestyles and buying
behaviours are the factor of this growth.
FMCG sector estimated of growth at least 12% per annum to become Rs 400,000 cr
in size by 2020. And, if some of the factors play out positive, then, GDP grows a
slight faster, the government removes bottlenecks such as the GST (goods and
services tax), investments in infrastructure pick up, sufficient spending on government
subsidy and so on, the growth may be considerably higher. It could be as high as 17%,
tends to an overall industry size of Rs 620,000 crore by 2020.
Abhishek Malhotra [2010] said that the Indian GDP per capita is low but various
consumer segments which represent rather huge absolute numbers are either close to
or have previously reached the tipping point of fast growth. The sector is poised for
quick growth over the next 10 years, and by 2020, the industry is likely to be larger,
more responsible and more customer centric.
Booz & Company has identified some important trends, based on industry evolutions
study in other markets and talks with industry experts and practitioners that will
modify the face of the industry ended the next ten years.
Key trends in Indian FMCG Industry:Premiumisation:
The rising income of customers has accelerated the trend towards ‘premiumisation’ in
India. The trend can be observed significantly in the top two income groups , the rich
with income more than Rs 10 lakhs per annum, and the upper middle class income
ranging between Rs 5 lakhs to Rs 10 lakhs per annum(at 2000-01 price level). The
rich are keen to satisfy their exclusive feel and emotional value with premium
products and their behaviour is near to consumers of developed economies. They are
well-informed for various products, and willing to purchase products which suit their
style. The upper middle class wishes to parallel the rich and do up-trading lavish
products which offer better functional benefits and experience relative to products
offered for mass consumption. These two income groups estimated 3% of the
population; and estimated it would be double to 7% by 2020. The rich will grow up to
approx 30 million by 2020, which would be more than the total population of Sweden,
Norway and Finland when put together. And, the upper middle class will be about to
70 million by 2020, which would be more than the population of the UK.
In next ten years, both groups will comprise large numbers of population for FMCG
companies. Abhisek Malhotra [2010] mention that they have seen companies focused
on selling mostly to the mid segments. And often, there is no obvious segmentation
being offered. Companies would do well to clearly divide their offerings for the upper
and mid segments, and the two should be treated as separate businesses with a
committed team and planning.
Evolving categories:
The Categories are evolving with fast pace in the market for the middle and lower
income groups. Due to growing economic position of them, they shift from need to
want based product categories. As for example, customers shifted from toothpowders
to toothpastes and now demanding mouthwash within the same product category.
Among consumers there is demand of customised products, specifically tailored to
their individual tastes and needs. Primarily a shampoo product had two variants ;
normal and anti dandruff, and now anti dandruff shampoos for oily hair, short hair,
curly hair etc. are available in the market. Every thing is getting customised as per
customers need.
The mass customization of products prevails among FMCG companies as per profile
of the buyer include age, region, personal attributes, professional choices and ethnic
background. Before the actual product design, micro-segmentation is needed to cater
particular need of the customer.
The beauty care products (skin care& personal care) market will grow by 20 % per
year due to changing socio-economic status of women customer. Middle-class women
customer are now more aware about their look and are eager to use more on beauty
products. Beauty products like colour cosmetics and sun care products advances on
this trend and grow by 46 % and 13 % respectively.
Bottom of the pyramid:
Bottom-of-the-pyramid (BoP) consumers have defined as those who earn less than Rs
2 lakhs per annum per household. This group constitutes 900 to 950 million people
approximately. The middle class consumers segment is largely urban and already
well-served and facing competition. The BoP customer market is largely rural and
poorly served and still need of competition. Numbers of the basic needs of BoP
consumers are yet to be fulfilled, like financial services, mobile phones, internet,
housing, water, electricity and basic healthcare. So there is big opportunity for
companies.
Abhisek Malhotra [2010] mentions that the desire was always there, and money is
coming gradually. The BOP segment is primarily targeted with low-priced consumer
products, like Rs 2 of Parle-G. But now it has need products which deliver more
value, say, Rs 5 of product, so that could serves as dinner and also deliver nutrition
like vitamins, proteins etc. Leading Companies like Tata and Pepsi are working on as
such products.
It is estimated that the rural BoP population is about 78% of the total BoP population.
This BOP section is becoming a significant source of consumption. Due to rising
incomes in rural areas the FMCG market growing by 18% per annum and has passes
over urban FMCG markets of 12% per annum growth. With current growth rate rural
market have 34 percent contribution in total FMCG market; this input is likely to
increase to 45-50 % by 2020. It will need customized products at reasonably priced
prices at large volume of supplies.
The beverage products like fruit juices and hygienic products like pads that had no
regular demand in rural markets previous but now it is available.
Most of the FMCG companies have established them self in rural areas and now new
category products presence is expected and then customised or personalised FMCG
products are expected.
Increasing Globalisation:
Many FMCG MNCs have liberty to work in the country but after next 10 year small
global companies may give strong rivalry to them, and so,many global products can
come in the market.
Decentralization:
There is much diversity in India like language, culture, distance etc., but Indian
market is of homogeneous. Increasing purchasing power may cause set up of product,
branding and operating structure business.
Growing Modern Trade:
In India there is conventional trade and about to 8 Million stores are available and
growing day by day. It is accounted that by 2020 modern trade also will increase up to
30 %.
Major Focus on Sustainability:
Awareness about environment protection is increasing day by day. NGOs and
Government spreading awareness among consumers and consumers are opting
environmental friendly products, and scarcity of natural resources creates problems
for companies.
Technologies act as a Game Changer:
Technology can be a game changer in this complex situation. It will increase
efficiency of companies and can see at back end and at front end process.
Favourable Government Policy:
Government policy related with education and infrastructure will boost good
operating environment for companies. If people be educated they demand quality of
products and hence with good infrastructure it boost supply chain of the company
There are six imperative strategies for FMCG firms, Partnering with modern trade,
Bringing sustainability into the strategic agenda ,Winning the talent wars, Reinventing marketing
for ‘i-consumers’,
Re-engineering supply chains
and
disaggregating the operating model
A trend in India seems that in spite of diversity on the basis of language, culture and
distance the Indian market is homogeneous and same type of products are available
across the country.
But FMCG companies consider that Indian market is not homogenous but it is
heterogeneous market. Maharashtra’s GDP will cross Greece, Belgium Switzerland
by 2020. U.P economic size will cross Singapore and Denmark by 2020.
It is likely that companies will come with regional based products. HUL and pepsi
have initiated with this concept. HUL has different teas for different states and Pepsi
has different Pepsi in Andhra from other states. Regionalisation concept can be good
for FMCG companies and they can made scheme as per preference of consumers
from different states.
Potential for growth of FMCG branded products is high in India. The middle class
and rural area are comprises many consumers and it would be base from companies. It
has been estimated that Indian FMCG market will grow to $33.4 billion by 2015 and
it was $11.6 bilion in 2003. Most of the product categories are not catered like
shampoo, skin care, toothpaste etc., so there is a huge growth potential in India.
According to study conducted by AC Nielsen, among top 100 brands 62 brands
having strong MNCs presence and rest of the 38 product brands are of Indian
companies. HUL has a maximum brand that is 27 out of 62 brands. Pepsi and Thups
up is 3rd and 4th respectively then after Britannia, colgate, Nirma,Coca cola nad Parle
comes. Among 100 brands 35 brands are related with Personal care, cigarette and soft
drinks.
The top 10 companies in FMCG sector:The top 10 companies in FMCG sector are Hindustan Uniliver (HUL), Indian
Tobacco Company (ITC), Nestle India, AMUL, Dabur India, Asian paints, Cadbury
India, Britannia Industries, Procter & Gamble Hygiene and Health care and Marico
industries.
In personal care category HUL has 11 brands among 21 leading brands and HUL
market is 54 percent of personal care category, accounts Rs. 3799 cr. Cigarette is after
personal care category and having 17 percent market presence among 100 FMCG
products. The leading company ITC has alone 60 percent of this market.
There is good presence of HUL, ITC, Goderaj and others in food category market and
with 18 major brands it is market of Rs. 4637cr. This category noticed faster growth
than personal care category. HUL, Amul, Nestle,Godrej and Britannia having good
presence in this market. Britannia is in top 100 brands of FMCG and having strong
presence in biscuits category.
In mosquito repellent category Goderaj and Reckitt are two companies with
Goodnight brand of Rs. 217 cr market and Mortein brand of Rs. 149 cr. Market
respectively. In shampoo category Clinic and sunsilk are leading among, both are
HUL products. Clinic has double market size than Sunsilk. Hed and Shoulder and
Pantene are following (both are P&G product).
In herbal sector Dabur has strong presence, it is among top FMCG companies in India
had
turnover
of
$420 million
in
2005-06.
It
has
brands
like
Dabur
Chyanwanprash,Vatika,Hajmola, Dabur Amla and Real.
In paint segment Asian paint is India’s largest paint company had turnover of $513
million in 2005-06. Forbes considered it in 200 best small companies in the world.
In chocolate segment Cadbury India has strong market presence and having 70
percent market share. Popular brands of Cadbury is 5 Star, Gems, Eclair and Dairy
Milk.
Marico is $ 380 million of company and in Global beauty and wellness segment and
has despite of economic crisis Rs. 85 thousand cr.
FMCG market is growing actively. The increasing income of tier 2 and tier 3 cities
consumers carry this market and consumers’ attitude is shifting from “Money for
Value to “Value for Money”
Passing the years HUL, ITC and Dabur has been creating a strong presence in their
segments. On other hand Colgate Palmolive and Britannia are also strengthen their
presence in single branded segment for which they known, tooth paste and biscuits
respectively.
FMCG Category and products:Household Care:- Fabric wash (laundry soaps and synthetic detergents); household
cleaners (dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners,
insecticides and mosquito repellents, metal polish and furniture polish).
Food and Beverages:- Health beverages; soft drinks; staples/cereals; bakery products
(biscuits, bread, cakes); snack food; chocolates; ice cream; tea; coffee; soft drinks;
processed fruits, vegetables; dairy products; bottled water; branded flour; branded
Rice; branded sugar; juices etc.
Personal Care:- Oral care, hair care, skin care, personal wash (soaps); cosmetics and
toiletries; deodorants; Perfumes; feminine hygiene; paper products
Sales Promotion:The very purpose of sales promotion is to influence consumer for quick buying. It is
considered as marketing techniques that adds value to the product which is on offer.
Advertising influences consumer at mass level and as well as educate. In other way
we can think it is intangible promotion at mass level.
It has been seen that traditional sales promotion budget posses 70% of the total
promotional budget.
The example of sales promotion is to offer winning of prize or extra purchase on same
price, etc.
For big companies like Coca-cola, Pepsi etc., it is considered as brand differentiator.
Advantages & Disadvantages:
There is advantage and disadvantage both associated with sales promotion.
Sales promotion is an easy and inexpensive way to know about responses of
customers. It does not mean sales promotion always create good image before
customers of the product on offer. It can harm brand image in long term. A study was
conducted in 1991 by PIMS stated that sales promotion causes 15 percent low ROI
than balanced promotional activity.
So, Advertisement is best way to promote products.
Objective of sales promotion:
To set promotional events marketers have to identify target group for whom
promotional campaign is going on. They have to identify needs and wants of the
target group apart from mass level consumer, it can study by qualitative research.
After identification of target group it would be easy to promote products among them
then objective of sales promotion can be defined.

To get response from customers about product on offer.

To reiterate purchase from target customers.

To act as introductory plan for new products.

To defend business from competitors and by offering of different offers like
coupons, money back guarantees and price off, exercises to bound customer to
repurchase.

To find a new target customer group by
Types of Sales Promotion:
Sales promotion is of two types Consumer’s sales promotion and Dealer’s sales
promotion.
Consumer’s sales promotion can not vary for same product but Dealer’s sales
promotion can vary dealer to dealer on same product.
Classification of Sales promotion:
It can be classified as followingTrade sales promotions:
To improve distribution channels trade sales promotions are very important. In Trade
sales promotion marketers used display, discount, shelf facing and point of sales
materials as techniques to promote products.
Incentives, Buying allowances, Trade shows, Advertising allowances promotion and
Free Training are example of Trade sales promotions.
Incentives are generally given by manufacturers to increase sales by giving cash
bonus and /or prize on sales.
Buying allowance is reduction of price on product for a period of time.
Trade shows caters a lot of purpose for a marketers/ companies. This is just extension
of Exhibition. One hand it is a platform to introduce product to customers and second
hand this platform is used for selling of products, and this practice also generate leads
of prospective customers.
In Advertising allowances promotion practice manufactures give allowance to
retailers in form of money on given order by retailers.
For complicated and expensive products, customers do need some authentic and
technical information, so the training for sales personal is needed. In free training
retailers are equipped with brochures and informative documents.
Consumer Sales Promotion:
Sampling, Couponing , Contests and Sweepstakes , Money refunds , Premiums and
bonus packs, Loyalty schemes, Exhibitions
and Packaging are the example of
Consumer sales promotion
To trail the products in market, sampling is one of the effective ways of sales
promotion. This Sampling promotion is good for low value products which have
highly visible properties of benefits to the target customers. It is performed by
delivering sample products door to door or via mailing.
Coupon is used for stimulate the sales instant, it can harm the brand name. it is also
used to attracts new customers by offering price reduction.
Contests and Sweepstakes are cost effective and popular method of sales promotion.
It is an effective way of educating target customers because customers would give
attention while competition and it will be easy to promote products.
Money back offer act in a way of security to customers. In this point of view it is
good promotional offer for customers. It is successful with Cell phone provider and
web hosting companies.
Premium and bonus pack sales promotion offer is effective on brand switching
customers. It offers an extra or same product on low rice or on same price.
For many marketers Loyalty scheme is frequent purchasing scheme. In this scheme
customers get some points on each purchase and they can convert it is in some other
purchase or as discount on same product.
The purpose of exhibition is to educate customers about product and to gain
interaction between customers and product. It is very efficient way to reach out
among customers. This is not really a Trade show. Example of Exhibition is Motor
Show etc.
Packaging is important for Sales. Psychological and brand image is associated with
packaging. It lures customers to purchase the products and works like a pseudo sales
man, so marketers should understand the importance of packaging.
Packaging is not only for attract customers but also to protect products efficiently. It
carries brand value and establishes an emotional link with customers.
B2B & Industrial sales promotion:
Business to business and Industrial sales promotional idea is more over same as
customer related promotional idea but in context of Industrial environment. As for
example “buy one get one free” promotional idea can be “buy one get service free” in
Industrial environment.
For best Return on investment (ROI), marketers should choose best promotional
offers, so that it could not harm brand image. Marketers should give attention on
quality of products with improvement of products and should avoid price war.
Sales promotion activities influence the customers and stimulate to purchase the
product. It is non repetitive and one time activity than advertising, personal selling
and publicity.
Purpose of sales Promotions:The very purpose of sales promotion is to increase sales for company or dealer.
Sales promotional approach and techniques are different from advertising and
personal selling. Personal selling is face to face activity and advertising is informative
activity on mass level.
Advertising and personal selling is of recurring and routine method. While Sales
promotion is free from recurring and routine method. In advertising advertiser can not
controlled media while sales promotion is controlled and targets small groups.
Sales Promotion Objectives and effectiveness:Sales promotion has two objectives Basic objectives and, other objectives
.
Basic objectives:

To get response from customers

To intensify selling efforts

To be helping hand to advertising and personal selling.
Other objectives:

To give attention on product and its development.

To inform customers about brand and packaging.

To improve market penetration.

To get maximum dealer outlets.

To reduce competition
Above objectives are based on Cost effectiveness and acceptability of tools, the
criteria are based on following:Kinds of product:
Different products required different techniques of promotion. General products like
soaps or cosmetic can promote easily through mass media than Industrial goods.
Industrial goods required specialist sales men or technical print media etc. to
introduce among target customers.
The buyer:
Buyer is key factor for any business, so their need and wants should understand by
marketers. Marketers should be up to date about choice, attitude and expectation of
target customers. Organising Contest and Quiz can be in favour of business if buyer
be young and educated.
Nature and size of market:
The population of target customers, their geographical area and their purchasing
power must have impact on sales promotions. For local market price off, coupon,
sampling etc. are better options of sales promotion, but at large scale exhibition, trade
show type activity are more important.
Stages in product life cycle:
There are four stage in a product life cycle; Introduction, Growth, Maturity, and
Decline. At different stage different type of sales promotions are required.
At Introduction level market penetration is a main objective for a business and then
after demand creation comes. So at this stage middle men/ dealers act main role to
establish product in market, hence sales promotion is designed as per them.
At growth and maturity stage sales promotion is required as per need. But at decline
stage heavy sales promotion is required to promote and establish once again to the
product.
Management policy:
Sales promotion is directly related to set objectives. If once objective be set then sales
promotion designed and then costing comes. This sequence formulate by management
policy.
Budget allotment existing:
Budget allocation for sales promotion is very difficult task for a business. It differs
from area to area and also as per stage of product on product life cycle. At
introduction product need heavy budget and if geographical area be big then budget
will be expand than normal. Any budget should be designed to consider cost and
return.
Government rules:
To protect consumer Government has passed many regulations like Food Adulteration
Act, Drug and Cosmetic Act, etc. Policy makers consider these regulation when
formulate sales promotion plan.
Sales Promotion effectiveness:Pierre Chandon, Brian Wansink et al (2000) explained that there are two types of
benefits (monetary and non-monetary) provide to customers with three hedonic
benefits (opportunities for value expression, entertainment, and exploration) and with
three utilitarian benefits(savings, higher product quality, and improved shopping
convenience). They added that monetary promotions are more effective for utilitarian
products than hedonic products.
Market leaders and Academicians regularly sight the dependence on sales promotions,
particularly monetary promotions, as a sub-optimal outcome of price contest cause by
prejudiced management [Buzzell, Quelch and Salmon 1990].
Above scholars urged that, in the short-run, the increase of monetary promotions
erodes their competence to lease market share, which explain why many are
unbeneficial [Abraham and Lodish 1990; Kahn and McAlister 1997]. In long run, it is
feared that sales promotions add to price sensitivity and demolish brand equity both
with customers and retailers [Mela, Gupta, and Lehman 1997]. So, numerous business
experts are vocation for additional effective and cost-efficient promotions that rely a
little on price [Promotion Marketing Association of America 1994], and a few go
beyond as to advocate eliminating the majority promotions by switching to a regular
low price course of action [Kahn and McAlister 1997; Lal and Rao 1997].
Considering customers view point the cost that sales promotions have for its brands is
associated to the benefits that sales promotions have for customers. Hence, it tends to
the basic question of why customers reply to sales promotions. Generally gametheoretic or econometric studies believe that money savings are the single benefit that
sales promotions have for the customers. If it is true, a regular low-price may presents
an effective clarification for provide customers with these savings whilst minimize
search costs for the customer and logistical costs for the business.
And, if, sales promotions offer customers with a group of utilitarian and hedonic
benefits ahead of money savings, general low prices may not change sales promotions
exclusive of the threat of alienate customers who worth the non-monetary profit of
sales promotions. The continuation of many customers profits can also aid recognize a
few confusing customers response to sales promotions that can’t be entirely explained
by seek of the savings [e.g., Dhar and Hoch 1996; Hoch, Drèze and Purk 1994;
Inman, McAlister, and Hoyer 1990; Schindler 1992; Soman 1998]. Ahead of its
planned input to the common argue on the worth of sales promotions or on the
experience of customers reply to them, to study the consumer profits of sales
promotions as sensible implication for getting better their efficacy. It is clear because
of non-monetary and monetary sales promotions propose unlike benefits; they have to
be more effective for various types of products.
Consumers Response to Sales Promotions:
Behavioral research on sales promotions intended to the demographics of deal prone
customers [Bawa and Shoemaker 1987; Blattberg et al. 1978; Narasimhan 1984], and
on the recognition of individual persona such as “value-consciousness”, “market
mavenism” or “coupon proneness” [Feick and Price 1987; Lichtenstein, Netemeyer,
and Burton 1990 and 1995; Mittal 1994]. Studies propose a logical representation of
the psychographic and demographic features of deal prone customers [for a review,
see Blattberg and Neslin 1990, pp. 65-82]. Though, study spotlight was on personal
trait, so studies don’t study the personality, and the number, of the particular customer
benefits of the sales promotions.
Therefore, generally econometric and analytical model of sales promotions believe
that monetary savings are the single benefit motivating customers to reply to sales
promotions [Blattberg and Neslin 1993]. However, a number of practical results
propose that monetary savings can’t completely describe how and why customers
respond to sales promotions. At a instance, why do customers respond more to
coupons than to temporarily price off which offer the same monetary savings? [Dhar
and Hoch 1996; Schindler 1992], why do customers reply to unimportant price off
[Hoch, Drèze, and Purk 1994; Inman, McAlister, and Hoyer 199], and why do
customers change brands because of a rebate or a coupon, except then don’t use it
[Bawa and Shoemaker 1989; Dhar and Hoch 1996; Soman 1998]?
There are superior explanation associated to accomplishment motives [Darke and
Freedman 1995], own perception [Schindler 1992], and justice perception [Thaler
1985] or quality and price inferences in low participation process [Inman, McAlister
and Hoyer 1990; Raghubir 1998; Raghubir and Corfman 1999]. Though, the degree of
sustain for a few of these explanations is partial. At instannt, the accomplishment and
own percept arguments are contradict to the finding that “lucky” bargain enjoyed so
far as those acquired competently [Darke and Freedman 1995], and that number of
customers might experience self-conscious to purchase a promoted product
[Simonson, Carmon, and O‘Curry 1994].
This is reality that customers like paying prices that are lesser than the mention price,
and which are not good to the sellers, indicates that fairness perception can’t only
describe the puzzles mentioned prior. Most of the studies observe just the result of
these non monetary benefits lacking openly measuring them.
Contributions to the trait studies, the cost-cutting to the financial point of view, and
the active work on the non-monetary benefits of sales promotions have very much
aided to our perceptive of consumer reaction to sales promotion. An incorporated
study of the consumer benefits of sales promotions, on the other hand, would help
resolve the disjointed nature, as well as the practical and theoretical boundaries, of
apparently distinct studies.
FMCG Sector & Sales Promotions in India:Fast Moving Consumer Goods segment reserved the maximum advertisement
expenses, has set aside the advertisement costs approximately in proportion to
increase in net sales. The elasticity of advertisement of this sector stands at 0.80 % to
their net sales throughout the analyzed stage. Expenditure and Income report of the
key companies in the segment analyzed for the FMCG companies, which used to be
keen advertisers in the precedent, have slightly hiked their advertisement funds in
2008-09 in contrast with 2007-08.
According to the study of FMCG market, HUL hiked its promotion expenses in 200809 by 48 % to 2,130.92 cr and which was at 440.22 cr in 2007-08. A FMCG major,
ITC Limited, used up just about 33 % additional in 2008-09 than the preceding year,
when the company earned 8.37 % development in net sales in the same time while
Britannia spent nearly 17.47 % extra on advertisements in 2008-09 compare to
preceding year recorded development of 20.44 % in the same time.
Dabur spent about 14.85 % additional compare to previous year on advertisements in
2008-09 whereas the company’s net sales jumped by 15 % in 2008-09. Marico
Limited cut its advertisement expenses in 2008-09 by 6.05 % show growth rate of
22.52 % in the net sales in 2008-09 compared to 2007-08.
Indian FMCG market is the 4Th largest sector in the economy having a total market
size of US$ 13.1 billion and more. It has a major MNC existence and considered a
well recognized supply network, strong competition among the unorganized and
organized segments and with low functioning cost. Accessibility of input raw
materials, cheaper labor expenses and existence across the complete significance
networks gives India a reasonable benefit.
The FMCG section is expected from US$ 11.6 billion in 2003 to US$ 33.4 billion in
2015. Per capita consumption and Penetration level
in nearly everyone product
segment like skin care, hair wash, jams, toothpaste, etc in India is short indicative of
the unexploited market. Indian population, mainly the the rural and middle class,
presents a chance to manufacturer of branded products to switch customers to branded
products.
Development is as well probable to come from customers ‘upgrading’ in the advanced
product segments. By 200 million people likely to move to packaged and processed
food category by 2010, India expects about US$ 28 billion of investment in the foodprocessing manufacturing.
India is a large consumer goods spender:
A common Indian spends about to 40 % of his income on grocery and 8% on personal
care products. The huge share of FMCG in whole personal expenditure beside the
large population stand is an additional feature that makes India one of the major
FMCG market.
However, on global level, total shopper spending on food in India is at US$ 120
billion and which is largest among the emerging markets, and is next to China.
Selected Products and offered sales promotional schemes:There are 4 categories of products has been taken for this Study. Products are Tea,
Coffee, Detergent and Bathing Soap.
Primary Data collection has been done on these mention products regarding sales
promotion sachems available in the market (data collection is available with data
collection). In view of above mentioned Product categories, observed that there are
two types of sales promotion schemes are extremely fashionable among the marketers
that are Value added and Price off sales promotion schemes. In value added schemes
% extra and free gift are extensively used.
This is appropriate to Local, National, International brands of the FMCG products. In
consumer’s benefits point of view, delayed and immediate types of profit offered by
different sales promotion schemes. And immediate types of benefits are extensively
used.
The discussion among academician and the experts, it is obtained that the means
through which promotional schemes knowledge spread among customers plays a vital
role to favour the exacting sales promotional schemes.
Mukherjee et al. [2012] found on the survey of 300 individuals of middle class and
high income consumers that middle class consumers from Kolkata and Chennai prefer
Indian brands and mid priced products(e.g shoes, hand bag) but Mumbai and Delhi’s
Middle class prefer luxury brands or unbranded products as well. This study also
shows the preferences of brands vary product to product.
As for example watches and dietary supplements, consumers mostly buy branded
products and categories like footwear ,apparel and handbags, consumer purchase both
branded and non-branded products, but in categories like fresh vegetables and fruits,
the volume of the purchases are non-branded products.
Different studies draw attention to that the Indian middle class has a different kind of
preference for foreign brands [Mukherjee et al, 2012].
Indian middle class are distinct to their global counterpart and they are less aware of
branded purchases. And brand knowledge and loyalty is as well low [Mukherjee et al.
2012].
Chattopadhyay et al., 2011, the popular luxury brands like Signature Kitchens
(Malaysia), Crocs Inc. (United States of America), Louis Vuitton (France), Rino
Greggio (Argentina) and Giorgio Armani (Italy) have entered into the Indian market
after 2006 when the government approved 51% Foreign Direct Investment (FDI) in
single-branded retail.
Mukherjee et al. [2012] by using an aided awareness method found that globally well
advertised brands are likely to be well acknowledged.
So, for measuring the customers liking of sales promotion schemes there are four
attributes and corresponding levels have been known as below
With above all of the discussions and findings it can say that Middle class consumer
prefer sales promotion regarding Brand type (International, Domestic-branded,
Domestic- Local), awareness media (Point of purchase, Mouth advertising and Mass
media like T.V, Radio), schemes type (price off, gift and, or %extra) and perceived
benefits (Immediate, Delayed).
Brand and its Evolution:There are numerous definitions of what is branding and the same in most of these
definitions is that a brand have to be visibly differentiated. The former definition of a
brand was given by the American Marketing Association “a brand is a name, term,
sign, symbol, or design, or a combination of them, intended to identify the goods or
services of one seller or group of sellers and to differentiate them from those of
competitors” [O‘Malley, 1991:107]. Though this definition was criticized for being
excessively product-oriented and with an importance on visual character as a
differentiating aspect Simkin, Pride Dibb & Ferrell [1997] customized this unique
definition to a name, term, symbol, design, or any other feature that identify one
seller's good or service as separate from other sellers. The main alter in the definition
by Dibbs et al [1997] is “any other feature” as this allows for intangibles like “brand
image” as point of isolation and not merely the physical visual characteristics.
Ambler [2003] takes a same view to as of Dibb et al [1997] by explaning the
definition as a name, design or symbol which identifies products and which is
something that is purchased by the customers.
Ambler [2003] again highlighted the distinction linking a brand and a product by
emphasizing that dissimilar a product that may be manufactured in an industrial unit
and it may be copied by a rival manufacturer, a brand is distinctive. Previous
definitions by Ambler [1995], was consumer oriented by defining a product as a
guarantee of bundles of utilities that somebody purchase and get pleasure.
The utility that makes a brand can be illusory or real, emotional or rational, invisible
or tangible. Wood [2000] assures this sight and emphasize that a brand may be
defined from distinct point of view such like brand owner's view and consumers'
view. Adding up, brands are now and then expressed in terms of their characteristics
and their purpose.
As per Leiser [2004], the perceptive of brands nowadays is ahead of the basic view of
tagline, a logo, and advertising representation but a combination of associations and
expectations evoke from familiarity with a product or business.
Besides, it is concerning how customers feel and thinks about what the product or
business can convey across the board.
Batey [2008] draw out differences involving a brand and a product as below:
1. People purchase a product for what it does; people prefer a brand for what
does it means.
2. A product sits on retailer’s shelf, but a brand do exists in customers’ mind.
3. A product can hastily be out of date, but a brand is everlasting.
4. A product can be copied by a competitor, but a brand is distinctive.
Davis [2002] says that consumer does not have association with product or service
except he/she might have a association with a brand name since a brand is a
combination of promises and so the stronger brands possess a position in the
customer’s mind. Besides, strong brands can add to the worth of a business as
investors are keen to pay additional for intangible asset such as a strong brand
[Ambler 2003, Rooney 1995, Motameni and Shahrokhi 1998, Davis 2002].
As per Aaker [1996], strong brands always have a strong brand equity which is a set
of Brand loyalty, Perceived quality, Brand associations and Brand name awareness.
Though building strong brand is a challenge in today’s environment as there are
significant barriers and pressures both external and internal. Aaker [1996], added that
one requirements to recognize these barriers and pressures in order to build up strong
brand strategy. Several barriers recognised by Aaker [1996] are price, fragmented
media, proliferation of competitors, and so on.
Barron [2003] has a view that strong brand does build on a strong internal base of four
basics; Create brand purpose, Support the organization, Deliver consumer experience
and Determine & refine.
To create brand intent, maximize the area of connection between what a business does
well specifically and what its targeted consumers’ want /need. When brand intent is
clear, it is significant the entire organization is united to make certain that the entire
organization is capable to deliver the brand intent since this will help deliver
consumers experiences through organizational potential and processes. Ultimately, a
good assessment programme will make sure that brands live on intent [Barron, 2003].
Nandan [2005] suggest that a strong brand has two very key individual characteristics
such as brand identity and brand image, but no matter how good a company having a
unique vision, superior product strong management, if the core benefits of the brand
be not clear to the right target, the brand will eventually fail.
This is evidenced by well branded such as Mac Donald‘s, Nike, Apple, Coke, Pepsi
etc.,always communicate with clear benefits, brand image and brand identity.
Managers of strong brands realize the changing needs or wants of customers and the
macro and micro environments.
As per Davis [2000], a perceptive of competitors is imperative in building a success
brand and the failure to recognize one's competitors is eventually the failure to
identify one's customers: how they think, who they are, and how the brand (product)
can adapt to meet their needs.
Strong brands are developed by over the time and the branding all the time suggest
that the strength of the brand is due to the meaning that the brand creates, not due to
the strength of creating a difference in customers’ perception [Kay, 2005].
Brands need to be relevant and as per demand of the new generation consumers and
so that branding has evolved by the years and the strong brands are all the time
maintains relevancy and attraction.
Evolution of branding:
Branding definitions has evolved over the years and as per Oxford English dictionary
[Oxford, 2009] , the development of the word “brand” is from the German word
“brandr” which means- mark made by burning with a hot iron and used first in 1552.
According to Jevons [2005], branding has been existed before the earliest definition
of marketing which was in 1561; therefore suggests that branding was defined before
the marketing subject existence.
Branding has been defined over the years and evolved from referring a brand as a
name, symbol or logo [O‘Malley, 1991:107] to peoples’ perception regarding a
product or a company [Barron, 2003] and over the time definitions included value
development or adding up value [Jevons, 2005].
As per Rooney [1995], the apply of branding in large business is not new and the
branding itself is more than one hundred years old as far back as 1890 by the many of
countries having started trademark acts to set up the legitimacy of a protected asset.
The years of 1800 during to 1925 were recognized as the richest era of name giving
[Hambleton, 1987]. The 90’s saw a transform in branding with a focus on creating
equally beneficial situations for the brand and consumer.
As per Berry [1993], various companies realized that they needed adequate price
manage methods and useful and efficient brand building actions to support the brand
equity. Companies initiated applying brands to additional diverse settings where the
task of branding has become more significant.
The bad business environments in the 90’s affected organizations to work harder to
get profits and therefore there was a change in the approach brand management was
planned as it became a group effort within organizations with a focus on enhancing
the consumer experience [de Chernatony, 1996].
The concept of branding also became more globalise with global brands getting more
value and recognition. As per Motameni and Shahrokhi [1998], brands that are
available in many countries having more value than that are available in a few
markets.
Companies have used branding as a part of marketing strategy to develop and
diversify their businesses and throughout 1980’s, brands were used like valuable
assets for takeovers in the open market and this saw an increase in possession of
branded companies [Rooney, 1995].
The raises in acquisitions in the 80’s resulted in many brands suffer because of the
change in management that is constantly related with acquisitions and many brands
losing a clear picture in the customers mind [Rooney, 1995].
As per Beverland [2005], brands have been commercial agents and brand managers
take self-importance in their capability to meet up the needs of their target market.
Though, these two desires are in difference with the current trend to positioning
brands as authentic, emphasizing the timeless values needed by customers during
downplaying clear commercial motives.
The dual difficulty for the business is in creating images of authenticity while dealing
the challenge that authenticity represents for brand management. Brands that be too
focused on the bottom line and not on societal issues are often viewed as not
authentic.
As per Henkel, Tomczak, Heitmann & Herrmann [2007], market saturation and
consumer perplexity have changed the character of branding dramatically in the last
decade. Customers thus try to handle the flood of apparently exchangeable products
and services by demanding those products and services that provide a coherent and
holistic consumption experience.
As a outcome, brands are no longer simple product labels but
also they are
communication platforms towards consumers and stakeholders that express definite
attributes of products/services as well as company values and mission statements.
Kunde [2002], highlights that these days, the western world is excess supplied and
there is an over abundance of the whole thing and we live in a time of excess. The
same thing offering more is no longer a practical option and uniqueness and
differentiation are significant.
Kunde [2002] added that there is only one place that marketers have to be serious and
that is the human mind.
As mentioned in the previous sections, consumers do not buy products/ services but
buy brands and so top of mind awareness is vital. If your brand can maintain top of
mind awareness and is unique and different than other, then it be easy to consumers to
choose this brand above competitors’ brands and it becomes part of their selection.
Though no issue how a lot marketing support goes behind a brand, it is imperative
that the true meaning about what the brand stand for is communicated. These days,
brand management is still as complex as it was previous to, since brands are not static
but develop all the time and the job of brand custodians is to make sure that the brand
remains important in consumers’ mind and in selection.
Brand Equity and Perception:Brand equity is usually used by organizations like a measure of how strong the brand
is. Brand equity has been considered in many context, Aaker [1991], defines brand
equity in consumer perspective of brand loyalty, awareness, brand image and
perceived quality where other authors such as Farquhar [1989] defined brand equity in
financial perspective ; additional value endowed by the brand. Since brand equity is
vital for marketers, millions are invested in marketing activities that are supposed to
boost it; though there appear to be no link between brand equity and financial
performance. So Many organizations follow brand equity always in order to ascertain
customers’ awareness, satisfaction, and loyalty among other things. Though this is a
good tradition, it does not put value if this message is not shared with the rest of the
group especially with the executives.
As per Ambler [2003], there is a huge difference among measuring brand valuation,
brand equity and market share and often most companies not focus on brand valuation
rather than brand equity. Brand equity is the asset itself while brand valuation
measures what the asset is worth full.
Therefore it is logical to put measures in place to track how the brand equity (asset) is
performing. In core, building strong brand equity may influence prospective consumer
behaviour and hence increase the value of a brand [Ambler, 2003].
As per a survey on 100 top most important global brands in 2009, to knowing a brand
value is imperative as it enables investors, business leaders and other stakeholders to
make better decisions as such the return on investment(ROI) in marketing initiative
[Millward Brown, 2008].
The brand value is measured based on the basic value of the brand derived from its
capability to produce demand and is based on customer opinion i.e. brand equity and
financial performance [Millward Brown, 2008]. Therefore this supports the view that
brand equity tracking is essential to make sure that the value of the asset is continued.
Hong-bumm, Woo & Jeong [2003] conducted a study, on the effect of consumerbased brand equity on organisational financial performance, they done with that a lack
of brand equity in hotel businesses can harm potential sales flow and that strong brand
equity can reason a major increase in revenue.
These result were based on the fact that consumers base their option of hotel and how
a lot they are ready to pay on key factors such as; brand loyalty, perceived quality,
brand awareness and brand image all are key factors of measuring brand equity.
From the above argument, it is obvious that brands are the spirit of any business and if
fine managed, they may increase the business financial worth though the question is
how many organizations/ business are centric on the short term like sales and market
share, vs. long term like investing in brand building activities .Brand equity is another
concept that is narrowly linked to branding and brand management. The concept of
brand equity was came in 1980’s and gained recognition in the 1990’s [Aaker, 1991].
Therefore it is still new and difficult concept that is often not easy to describe. The
gradually growing literature contains
have some conflicting viewpoints on the
dimensions of brand equity, the factors that affect, the perspectives from which it
have to studied, and the ways to measure it.
Though, there is conformity among researchers on the general definition of this
concept. Brand equity is defined as the marketing outcome or effects that build up a
product with its brand name compared with if the same product did not have the
brand name [Aaker 1991; Leuthesser 1988 Dubin, 1998; Fuqua 1989; Keller 2003;].
Ambler [2003], defined brand equity as
an important intangible asset for the
company, it can be seen as the reservoir of results gained by good marketing but not
yet delivered to the profit and loss account. Yoo, Donthu & Lee [2000], defined brand
equity as the distinction in consumer’s choice between branded and unbranded
product known the same level of product characteristics.
Aaker [1991] defined brand equity as a set of assets and liabilities associated to a
brand that append or detract from its value to the consumer and to the business and
creating brand equity involves the recognition of the diverse consumers associations
with a brand and the levels of customer awareness and the loyalty that put it distant
from competitors.
Leiser [2004], adds that all those associations such as positive, negative and neutral,
comes from consumer’s experiences with a brand come together to create the brand
equity.
Brand equity is such a difficult subject that it can be viewed from diverse
perspectives. Motameni and Shahrokhi [1998], added that brand equity is usually
viewed from two perspectives; financial perspective and marketing decision making
perspective and there is a need to analysis brands from a global perspective
particularly, since successful maintenance of global figure and recognition translates
into hard currency in international business perspective such as is the case with the
Coca Cola and McDonald’s.
The Marketing assessment includes aspects such as loyality, awareness, quality and
propriety brand assets with an aspire of getting better efficiency of the marketing
development. On the other hand financial decisions having financial market value
based techniques [Motameni and Shahrokhi, 1998].
According to Best [2005] in a business, the owner’s equity is the value of the owner’s
holdings in the company and is defined by a difference between what a company
posses in assets and what a company owes in liabilities, so the larger the ratio of
assets to liabilities then greater the owner’s equity.
Brand equity may also be measured in the same way and to compute brand equity,
simply subtract the total brand liability score from the total brand asset score [Best,
2005].
Brand equity may also be used to separate selling from marketing as in core selling
seeks an instant order for a product and aims to boost the revenue line of a profit and
loss account instantly while marketing invests assets before expect to obtain the
rewards [Ambler, 2003].
Brand equity has become the most precious asset for many companies. Kohli and
Thakor [1997], highlighted that consumers do not purchase jeans but purchase Levi’s
and no one purchase corn flakes but Kellogg’s.
The power of the brand names has resulted in acquisitions amounting to billions for
the companies like Phillip Morris acquired Kraft for $13 billion. Nabisco was sold for
over $25 billion. And Nestle acquired Perrier for $2.5 billion.
As per Ambler [2003] there is difference between the brand equity (asset) and the
brand valuation (what the asset is worth). Brand equity also plays a vital role in
growing the value of the business and companies pay good money for these assets
[Ambler, 2003; Motameni and Shahrokhi, 1998].
Aaker [1996] highlighted that there are four main assets by which brand equity
generates value; brand name and awareness, brand loyalty, brand associations and
perceived quality. Due to the value that brand equity adds for shareholders and it is
yet amazing that there are still debates over building brand equity activities are
essential or not and as a result companies that are focused on short term gains do not
consider brands as important assets.
By presentation brands as assets, companies are better competent to put their brand
building expenditure in perspective with the value that those brands deliver [Davis,
2002].
As per Yoo et al[2000], there are many scope of brand equity and every marketing
action has the potential to influence brand equity because it shows the effect of
accumulated marketing investments into the brand.
In addition, brand name identify with strong associations, supposed quality of
product, and brand loyalty can be developed through cautious long-term investments.
In a study to check selected marketing mix and brand equity, Yoo et al [2000],
accepted that there are two types of marketing management efforts (in a long term
perspective of brand management) namely brand building activity and brand-harming
activity.
It was observed that regular use of price promotions is a classic example of brand
harming activity while high price, high advertising spending and distribution through
retailers with store images and high distribution passion are good examples of brand
building activity.
The results of frequent price cutting may negatively affect brand equity and a
perception is that product quality has been compromised. Yoo et al [2000], suggested
that managers must avoid regular price cuts or a consistent low price strategy because
they lesser perceived quality and product image.
As per above argument, it is obvious that brand equity is a main marketing asset of
various firms and that it may be used to drive long term development and bring value
for shareholders.
Although brand equity acting a important role in growing shareholder value, it is
significant that measures are set in place to follow it. This is a well recognized matter
that what is not measured is not managed and hence measuring and tracking brand
equity support in creating brands that always deliver their assures.
Since brand equity is an intangible asset, many people struggle to calculate it however
different tools are used efficiently by several organizations to measure brand equity.
An effort to define the association between brand and customer produced the term
“brand equity” in the marketing literature. The idea of brand equity has been debated
both in the marketing and accounting literatures and has highlighted the meaning of
having a long term focus in brand management.
Though there have been important moves by companies to be tactical in the manner
that brands are managed, a lack of general philosophy and terminology between and
within disciplines exists and may obstruct communication.
Brand equity, like the concepts of brand and additional value has proliferated into
several meanings. Accountants do define brand equity in a different way from
marketers, with the concept being defined both in terms of the relationship between
consumer and brand (consumer oriented definitions), or as somewhat to the brand
owner (company oriented definitions).
It has been simplified that the many of approaches, by given that a categorization of
the different meanings of brand equity as: 1. The total worth of a brand as a separate asset when it is sold, or integrated on a
balance sheet;
2. A determine of the power of consumers’ connection to a brand;
3. A picture of the relations and viewpoint the consumer has for the brand.
The first of them is frequently called brand value or brand valuation, and is the sense
normally adopted by financial accountants. The conception of measuring the
consumers’ level of connection to a brand can be called brand strength or brand
loyalty. The third called brand image, while used the term brand description. When
marketers use the term “brand equity” they likely to denote brand strength or brand
description. Brand strength and brand description are occasionally referred to as
“consumer brand equity” to differentiate them from the asset evaluation meaning.
Brand description is different because it would not be likely to be quantified, but
brand strength and brand value are measured quantifiable. Brand value thought to be
different as it refers to a definite or estimated business transaction, whereas the other
two focus on the consumers. There is a supposed relationship between the
interpretations of brand equity.
This relationship implies the fundamental chain shown below.
The brand equity chain:Brand description
Brand Strength
Brand Value
Figure1.
Simply, brand description or brand identity or brand image is modified to the needs
and wants of target markets by using the marketing mix (product, price, place, and
promotion). The achievement or else of this practice determines the brand strength or
the degree of the brand loyalty. A brand’s value is determined by the degree of brand
loyalty, since this implies an assurance of future cash flows.
It always considered that using the term “brand equity” creates the illusion that a
working relationship exists among brand strength, brand description and brand value
which cannot be confirmed to operate in practice.
Given that
brand strength and brand description are generally speaking, in the
concern of marketers brand value has been considered basically an accounting issue.
Though, for brands to be managed tactically as long term assets, the relationship
outlined in above figure needs to be functioning in the management accounting
method.
The efforts of managers for brands would be reviewed and assessed by the
measurement of brand value and brand strength, and brand strategy adapted so, While
not a easy procedure, the measurement of outcomes is useful as component of a scope
of analytic tools for management.
Where there remain a variety of beliefs on the definitions and basis of brand equity,
mostly approaches believe brand equity to be a strategic matter, though often
implicitly. It has been recommended that managers of brands prefer between storing
them for the future or making profits for today, by brand equity being the store of
profits to be realised in later.
The above definition of brand equity distinct the brand asset from its valuation. This
approach is basically strategic in character, with the importance away from short term
profits.
Davis [1995] too emphasized that the strategic importance of brand equity when he
defined brand value in form of brand equity as “the potential strategic contribution
and benefits that a brand can make to a company”. In this definition, brand value is
the outcome form of brand equity in above Figure, or the effect of customer based
brand equity.
Keller [1993] too takes the customer based brand strength approach to brand equity,
suggesting that brand equity represents a state in which the consumer is well-known
with the brand and recalls some favourable, strong and distinctive brand associations.
Therefore, there is a dissimilarity effect of brand information on consumer response to
the marketing of a brand. This way is associated to the relationship described in above
Figure, where brand strength is a function of brand description. It always related that
brand equity to additional value by suggesting that with in brand equity the value
added to a product by consumer’s relations and perceptions of a particular brand. It is
vague in which mode additional value is been used, however brand equity fits the
categories of brand description and brand strength as mentioned above.
Leuthesser [1988] told a broad definition of brand equity as the set of behaviour and
associations on the part of a brand’s customers, channel members and Parent
Corporation that allows the brand to get greater margins or greater volumes than it
might without the brand name.
Marketers lean to explain, rather than attribute a figure to, the outcomes of brand
strength. It has been recommended that brand equity gains the possibility of brand
selection, leads to brand loyalty and isolates the brand from determine of competitive
threats. Aaker [1991] suggested that strong brands will generally afford higher profit
margins and better right of entry to distribution channels, with a broad platform for
product line extensions.
Brand extension is a normally cited benefit of high brand equity, Keller and Aaker
[1992] suggested that doing well brand extensions can too build brand equity. Loken
and John [1993] and Aaker [1993] given advice care in that deprived brand extensions
can erode brand equity.
Farquhar [1989] suggests an association between high brand equity and market power
asserting that The reasonable advantage of firms that have brands with high equity
includes the chance for doing well extensions, flexibility against competitors
promotional pressures, and formation of barriers to aggressive entry.
The relationship between brand equity and market power is as follows;
Brand description
Brand Strength
Market Power
Figure 2;
This connection is concise in Figure 2. Figure 2 shows that there can be more than the
one outcome determined by brand strength separately from brand value. It is argued
by Wood [1999] that brand value measurements might be used as a sign of market
power.
To achieve a high degree of brand strength might be measured a very important
objective for managers of brands. If we agree to that the associations highlighted in
Figures 1 and 2 are somewhat that it must be aiming for, then it is rational to focus
our concentration on optimizing brand description. This requires a rich kind of the
brand build itself.
However, in spite of a plenty of literature, the best brand build has yet to be created.
Arguments explore the brand build itself and highlight the definite association
between brands and added value. This association is measured to be key to the
diversity of approaches to brand definition within marketing, and is at present an area
of inappropriateness between marketing and accounting.
The question of the short term efficacy of sales promotions (or not have of it) is
mostly significant for brands with a high level of consumer based brand equity
referred to “high equity brands” since concerns about the long term effects of sales
promotions on brand equity active analytical models deviate that, in such a
circumstances, the high equity brand must do price discount to capture the purchaser
of the private label [Rao 1991].
Though, experimental facts on the efficacy of sales promotions for high and low
equity brands is not clear. whilst a number of studies found that higher quality brands
get more due a price cut than lower quality brands [Blattberg and Wisniewski 1989],
others get the opposite [Bronnenberg and Wathieu 1997]
Keller [1993] defined the brand equity as it states that customers are quicker to
respond to the marketing mix of brands with high levels of brand equity. Blattberg
and Wisniewski [1989] give practical facts of the higher advertising elasticity of high
quality brands in the case of a duopoly between brands of disagreeing perceived
quality.
There are moreover theoretical opinions supporting the leveraging impact of brand
equity on profit suitability. Compared to high equity brands, low equity brands do not
give as many benefits, hedonic or utilitarian, and are buy as of their lower price. Low
equity brands have to be less responsive than high equity brands to the suitability
between their lower profit and those of the promotion. Previous researches provide
facts following this statement.
The cross promotion asymmetry acknowledged by Blattberg and Wisniewski [1989]
implies that financial promotions have to be less effective for the low equity
utilitarian brand in spite of their profit congruency as of their incapability to draw the
price not sensitive buyers of the high equity brand. The loss dislike argument explains
the cross promotional asymmetry for financial promotions applies to non financial
promotions as well.
Non financial promotions should be less effective for the low equity hedonic brand
than of its opposite high equity brand since the buyers of high equity brands are more
hesitant to do business down, i.e. a loss, in hedonic product than buyers of low equity
brands are to do business up , i.e. a gain.
Coupons and short term price off are the most frequent form of sales promotions,
many researches has supposed that the monetary savings is the single consumer
benefit of sales promotions.
Therefore, while several studies have examined the expenditure of promotion
practice, relatively a few have examined their benefits to the customers. It has been
finished that:
1. Sales promotions can offer consumers with a selection of utilitarian and hedonic
benefits further than monetary savings. The Hedonic benefits include value
expression, exploration and entertainment. Beside easy monetary savings, utilitarian
benefits consist of product quality and shopping convenience.
2. Non monetary promotions offer a fewer utilitarian and more hedonic benefits than
monetary promotions. All benefits, apart from quality, contribute to the general
assessment of non monetary and monetary promotions. Though, each type of
promotion is mainly evaluated based on leading benefits it offers.
3. In support of high equity brands, sales promotions are more effective when they
offer benefits that are immediate with those provided by the product being promoted.
Particularly, monetary promotions are more useful for utilitarian products than for
hedonic products. On the other hand, non monetary promotions are comparatively
more useful for hedonic products than utilitarian products.
In this research Aakar definition has been considered as a working definition of Brand
Equity, because it is a consumer centric definition of Brand Equity.
Indian Middle class:“The socioeconomic class between the working class and the upper class, usually
including professionals, highly skilled labourers, and lower and middle management,
called Middleclass”. [Source: thefreedictionary.com]
India is one of the fastest emerging economies in the world. In 2000-2010, India’s
gross domestic product, GDP, has grown at an average rate of 7.27%. Planning
Commission is projected to grow at the rate of 9-9.5% for the 12th Five Year Plan
period that is 2012-2017. Since 1985 the disposable income for households becomes
more than doubled. Due to rise in income, consumption patterns have changed and a
new middle class has emerged, which is rising at a fast pace. Many studies have
projected the next decade middle class would be the leading segment of the Indian
population.
McKinsey & Company [2007] projected that if the Indian economy will continue to
grow at the rate of 7.3% for 2005 to 2025, then by 2025, 583 million Indians
individuals will be in the middle class category and middle class population increase
from 5% to 41% population of India. The Middle class consumptions will account for
59% of the total consumption of the India by 2025. These facts support India’s
position for promising consumer market. By 2025, India is expected to be the 5th
largest consumer market (in 2007 ranked 12th) followed by United States (US), Japan,
China and the United Kingdom (UK).
India Middle class consumption pattern has drawn global attention. A large proportion
of India’s GDP is consumed. According to the CSO (Central Statistical Organisation)
60 % of the GDP was consumed in year 2010 and which is much higher than China.
The consumption pattern of India in 2025 will lead by Middle class and it will be
different from 2005.
Mukherjee et al. [2012] found on the survey of 300 individuals of middle class and
high income consumers that middle class consumers from Kolkata and Chennai prefer
Indian brands and mid priced products(e.g shoes, hand bag) but Mumbai and Delhi’s
Middle class prefer luxury brands or unbranded products as well. This study also
shows the preferences of brands vary product to product.
As for example watches and dietary supplements, consumers mostly buy branded
products and categories like footwear ,apparel and handbags, consumer purchase both
branded and non-branded products, but in categories like fresh vegetables and fruits,
the volume of the purchases are non-branded products.
Different studies draw attention to that the Indian middle class has a different kind of
preference for foreign brands [Mukherjee et al, 2012].
Indian middle class are distinct to their global counterpart and they are less aware of
branded purchases. And brand knowledge and loyalty is as well low [Mukherjee et al.
2012].
Chattopadhyay et al., 2011, the popular luxury brands like Signature Kitchens
(Malaysia), Crocs Inc. (United States of America), Louis Vuitton (France), Rino
Greggio (Argentina) and Giorgio Armani (Italy) have entered into the Indian market
after 2006 when the government approved 51% Foreign Direct Investment (FDI) in
single-branded retail. Mukherjee et al. [2012] by using an aided awareness method
found that globally well advertised brands are likely to be well acknowledged.
National Council for Applied Economic Research's (NCAER) Centre for Macro
Consumer Research’s report said that the Indian middle class household population
would be of 53.3 million (267 million individual) by 2015-2016 .By 2025-26 the
middle class households population would be more than double from the 2015-16
levels to 113.8 million households (547 million individuals).
The NCAER report said a typical Indian middle class household spends about 50% of
the total income on daily expenditure and remaining for savings. That shows middle
class family has strong purchasing power.
As per NCAER (2011) the middle class represents only 13.1% of the Indian
population. As per the findings, the middle class population will increase to 20.3 % by
2015-16 and 37.2% by 2025-26.
At present Indian middle class households population is 31.4 million (160 million
individuals).
As per the NCAER (2011) study, based on ‘household income’ criterion, a family
with an annual income between Rs 3.4 lakh to Rs 17 lakh (at 2009-10 price levels)
counts in the middle class category.
(As per 2000-01 price levels, middle class defined as of annual income range between
Rs 2-10 lakh.)
Chapter 2:
LITERATURE REVIEW
CHAPTER 2
Literature Review:
Sales Promotion & Consumption: Numerous studies have centred on the effects of promotions on brand switching,
purchase quantity, and stockpiling and accepted that promotion makes consumers to
switch brands and buy earlier or additional. The consumers’ consumption decision or
choice has long been uncared, and it remains uncertain how promotion impacts
consumption [Blattberg et al. 1995].
Traditional choice models cannot address this issue since several of these models
suppose steady consumption rates over the time. It is generally defined as the total
purchases over the whole sample periods divided by the number of the time periods.
Although this assumption can be suitable for some product categories like detergent
and diapers, it may not hold for several other product categories like packaged tuna,
candy, yogurt or orange juice. For these categories, promotions can essentially arouse
consumptions in totalling to causing brand switching and stockpiling. So, for product
categories with a changing consumption rate, it is crucial to know the awareness of
consumptions to promotion for measure the effectiveness of promotions on sales more
specifically.
New literatures in economic and behavioural theory support the facts that
consumption of a few product categories responds to promotion. Wansink [1996]
establishes that considerable holding costs pressure customers to consume more
products. Wansink and Deshpande [1994] explain that when the product is perceived
broadly substitutable, consumers will consume more than its close substitutes. They
too explain that higher perish ability boosts consumption rates.
Folkes et al. [1993] adopted scarcity theory and explain that customer lower
consumption of products when supply be limited because they recognize smaller
quantities as more precious.
Chandon and Wansink [2002] explain that stockpiling boosts consumption of high
convenience products more than low convenience products. Assuncao and Meyer
[1993] explain that consumption is an endogenous decision variable motivated by
promotion and promotion added stockpiling resulting by looking ahead behaviour.
Some new practical papers addressing the promotion effect on customer stockpiling
behaviour by price or promotional ambiguity. Gonul and Srinivasan [1996] and
Erdem and Keane [1996] ascertain that customers are forward looking.
Erdem et al. [2003], consumers figure future price opportunity and make a decision
when, what, and how much to purchase.
Sun et al. [2003] reveal that nullifying ahead looking behaviour leads to an excess of
estimation of promotion elasticity.
Sales Promotion and Consumer Preference: The Consumer promotions are at the present more imperative than ever. As per
Manufacturers Coupon Control Center 1988, 215 billion manufacturer coupons
circulated in 1986, up by 500% in the last decade, and manufacturer expenditures on
trade incentives to attribute or exhibit brands totalling more than $20 bn in the same
year, and up by 800% in the last decade [Alsop 1986; Kessler 1986].
Hence not a lot work has been completed to recognize the purchasing strategies that
consumer accept in response or preference to particular promotion, or to study how
imprative these strategies are in a population oconcern. Blattberg, Peacock and Sen
[1976] defined a purchase strategy as a common purchasing pattern which
incorporates a number of dimensions of buying behaviour such as brand loyalty, deal
proneness and private brand proneness. A better perceptive of the diverse types of
consumer responses to promotions can help managers to build up successful
promotional programs and provide recent insights for consumer behaviour’s theorists
who explore to understand the influence of diverse types of environmental actions on
consumer behaviour.
Blattberg, Eppen, and Liebermann [1981], Gupta [1988], Neslin, Henderson, and
Quelch [1985], Shoemaker [1979], Ward and Davis [1978], and Wilson, Newman,
and Hastak [1979] get facts that promotions are connected with purchase increase of
rate in terms of quantity purchased and, to a smaller level, decreased inter purchase
timing.
Researchers studying the brand selection decision for an example, Guadagni and
Little [1983] and Gupta [1988] have get promotions to be connected with brand
switching. Montgomery [1971], Schneider and Currim [1990], and Webster [1965]
get that promotion prone households were related with lower levels of brand loyalty.
Blattberg, Peacock, and Sen [1976, 1978] describe 16 buying strategy segments based
on three purchase dimensions: brand loyalty (single brand, single brand shifting,
many brands), and type of brand preferred (national, both national and private label),
and price sensitivity (purchase at regular price, purchase at deal price).
There are many variables that can be used to explain purchase strategies, examples are
whether household buy a major or minor national brand, store brand, or whether it is
store loyal or not or generic.
McAlister [1983] and Neslin and Shoemaker [1983] use certain segments drag from
those of Blattberg, Peacock, and Sen although add a purchase acceleration variable to
learn the profitability of product promotions.
Across the countries, consumer sales promotions are an important part of the
marketing mix for numerous consumer products. Marketing managers employ price
oriented promotions like rebates, coupons, and price discounts to boost sales and
market share, persuasion, and push brand switching.
Non price promotions like sweepstakes, frequent user clubs, and premiums include
enthusiasm and worth to brands and may promote brand loyalty [e.g., Aaker 1991;
Shea, 1996].
In adding, consumers do like promotions. They prefer utilitarian profits like monetary
savings, added value, increased quality, and convenience, with hedonic profits like
entertainment, exploration, and self expression [Chandon, Laurent, and Wansink,
1997].
A big part of literature has examined consumer response to sales promotions, many
noted coupons [e.g. Sawyer and Dickson, 1984; Bawa and Shoemaker, 1987 and
1989; Gupta, 1988; Blattberg and Neslin, 1990; Kirshnan and Rao, 1995; Leone and
Srinivasan, 1996]. In spite of this, main gaps stay to be studied. It is normally granted
that sales promotions are complex to standardize for the reason that of legal,
economic, and cultural differences [e.g., Foxman, Tansuhaj, and Wong, 1988;
Kashani and Quelch, 1990; Huff and Alden, 1998].
MNC’s must recognize how consumer response to sales promotions differs between
country to country, or state to state or province to province.
Thaler [1985)], viewed that the price consumers’ use as an indication in making
buying decisions as the price they expect to pay before to a buying time.
The
expected price may too be called the “internal reference price” [Klein and Oglethorpe
1987] as different to an outside reference price like the manufacturers’/ producers’
recommended list price.
At last, a brand is be on price promotion while it is obtainable on a short term price
slash that is featured in newspaper advertising and/ or attract customers’ interest with
a store display sign.
The price opportunity hypothesis always used to offer an additional description for the
observed unfavourable long term outcome of price promotions on brand selection
[Kalwani et al. 1990]. Earlier research has revealed that reiterate buying probabilities
of a brand after a promotional buying are lower than the related values after a non
promotional buying [Dodson, Tybout, and Sternthal 1978; Guadagni and Little 1983;
Shoemaker and Shoaf 1977].
Dodson, Tybout, and Sternthal suggest self perception theory to expect that if a
purchase is induced by an external cause (price promotion) the same as opposed to an
internal cause (for e.g., the brand will be reduced when the external cause is apart).
Then again, Kalwani et al. said that customers draw opportunity of a brand’s price on
the base of, among other things, its former prices and the rate with which price
promoted. Customers’ reactions to a retail price then after may depend on how the
retail price compares with the price they suppose to pay for that brand.
Particularly, in a price promotion, customers are pertinent to perceive a price “gain”
and respond positively and respectively, when the deal is retracted, customers are
pertinent to perceive a price ‘loss” and they not likely to purchase the brand.
Neslin and Shoemaker [1989] propose another description for the fact of lower
reiterate buying rates after promotional buying. They said that the lesser reiterate
buying rates may be the effect of statistical aggregation rather than real declines in the
buying probabilities of individual customers after a promotional purchase.
Particularly, if the promotion attracts several customers who is in non promotion
conditions would have extremely low probabilities of buying the brand, then on the
subsequent purchase time the low probabilities of these consumers get down the
average repurchase rate among promotional purchases.
The willingness of households that have low probabilities of purchasing a brand ahead
the withdrawal of a deal can be explained clearly in a price anticipation framework. It
suggested that the price they suppose to pay for the brand may be close to the deal
price and househlods may give up buying the focal brand when it is not promoted
because its retail price extreme exceeds what they suppose(expect) to pay for it.
It has been shown that the influence of price promotions on customers’ price
opportunity and brand preference in an interactive computer controlled testing.
Manohar U. Kalwani and Chi Kin Yim illustriated that expected prices were
responded openly from respondents in the experiment and used in the practical
investigations of the influence of price promotions on customers’ price supposition.
And, consumers assessed the importance of the active or long term effects of a chain
of price promotions rather than studying the influence of presently a solo price
promotion and its withdrawal. They finished that both, size of price discounts and
price promotion frequency have an adverse impact on a brands’ expected price.
Raman and Bass [1988] and Gurumurthy and Little [1989], also found proof in
support of a region of comparative (relative) price insensitivity about the expected
(supposed) price such that changes in price inside that region generate no obvious
change in customers’ perceptions.
The Price changes outer that region, although, are found to have an important effect
on consumer reaction. Additional, they discussed that promotion opportunity
(expectation) are significant as price expectations in knowing consumers’ buying
behaviour. In exacting, customers who have been showing to regular price promotions
in support of a known brand may come to shape promotion opportunity and in general
will buy the brand just when it is price promoted.
Further, in the case of price expectations (opportunity), customer reaction to
promotion opportunity was asymmetric in that losses appear larger than gains.
Applying the adaptation level theory of Helson’s [1964] to price perceptions, Sawyer
and Dickson [1984] propose that price promotions may come in the short run as
costumers may use the regular price of brands as an indication and then are induced
by the lesser deal price to buy the brand.
Though, regular short term price promotions may lesser the brand’s expected price
and direct customers to put back buying of the brand when it is on hand at the regular
price.
Tversky and Kahneman [1974] have exposed that people believe on a few number of
heuristic doctrine that diminish difficult tasks of assessing probabilities and predicting
principles to easier judgmental operations.
In a few cases, people may attach and adjust their forecasts by initiate with a fixed
point and consider that point seriously in arriving at a decision. When the regularity of
past price promotions be very low, customers recognize a price promotion offer like
an outstanding event and might be adjust the brand’s expected price.
Brands’ expected price then will be around the usual price as of inadequate
adjustment. In many cases, people may appear at a judgment on the base of how
related or representative the event is to a set of events.
Thus, when a brand is price promoted too often, consumers appear to suppose a deal
with each one purchase and so suppose to pay just the discounted price on the basis of
its representative ness.
Obviously, given an assured level of price discount, the brand’s expected price will be
enclosed by the usual price and the implicit sale price. The line of reasoning suggests
so as to the association between the price promotion frequency and the expected price
can be summed by a sigmoid function.
If a price discount will influence the brand’s expected price rest on how customers
notice the discount. Uhl and Brown [1971] suggest that the perception of a retail price
vary depends on the size of the price change. Both reported results from an
experiment and which representing that 5 percent deviations were known exactly 64
percent of the time while 15 percent deviations were known exactly 84percent of the
time.
Della Bitta and Monroe [1980] found that consumer’s perceptions of savings from a
promotional offer do not vary considerably among 30, 40, and 50 percent discount
levels. Though, they find considerable differences between the 10 percent and 30 to
50 percent levels. They too consider some manager thinking that at least a 15 percent
discount is required to draw consumers to a sale.
Actually, a little price changes might be noticed and even a big price reduction like,
60 or 70 percent might be influence the brand’s expected price whether it is
considered exceptional. Therefore, the impact of the depth of price discounts on
lowering the brand expected price is expected to happen when the price discount
offered by the brand is comparatively large but not too large as it be seen as an
exceptional event.
Berkowitz and Walton [1980], Curhan and Kopp [1986], Price discounts range from
10 to 40 percent, a range normally used in past research on price discounts in the
consumer packaged goods categories. In that range, the result of Uhl and Brown
[1971] and Della Bitta and Monroe [1980] suggested that it is logical to expect the
association between the brand’s expected price and the depth of price discounts to be
concave.
Though, Manohar U. Kalwani and Chi Kin Yim [1992] stated that the brands
supposed (expected) price is a linear function of the price promotion rate and the
depth of price discounts at usual importance levels.
Even so, the results give some directional support for nonlinear associations between
the two elements of a price promotion schedule and the expected price. Known the
main implications of such possible nonlinear effects of price promotions on brand’s
expected price, further research testing that nonlinear effects of price promotions have
to prove productive for the plan of optimal price promotion policies.
Both also contributed that promotion expectations propose that disappointed
promotion expectation events among customers who have approach to suppose
promotions on a brand since regular exposure to them will have an unfavourable
influence on the brand.
Similarly, unanticipated promotion events will improve the probability of buying a
brand among customers who haven’t been showing to many price promotions and
thus do not as a rule anticipate the brand to be offered on a promotional deal. They
suggested that results are reliable with the logical expectations view that any policy
rule that is systematically associated to economic circumstances, as for example,
individual observed with fixation in mind, will be rightly expected, and thus have no
effect on output or employment [Maddock and Carter 1982]. Strategy activities that
appear as a surprise to people, in compare, will normally have a few real effects.
Obviously, the plan of optimal price promotion schedules requires concern of the fact
that a boost in the use of price promotions could gradually destroy the long term
consumer demand by lowering the prices that consumers expect paying for the brand.
The Price promotional deals may come to be perfectly anticipated and having much
less impact on customers reply than they do when they approach as a surprise to
customers. Along with it they suggested that assessment of the trade off between the
short term sales increase as of a price promotion and the unfavourable effect on
potential sales for the reason that of consumers forming price and promotion
opportunity requires facts of how price promotions influence the development of
consumers’ expectations in changed market conditions.
Promotion has increased popularity in the past few decades. The optimistic short term
impact of price promotions on brand sales is fine documented. A price promotion
normally lower the price for a given quantity or increases the quantity offered at the
same price, in this manner attracting importance and creating an economic incentive
to buy.
Though, if customers connect promotions with poorer brand quality, then, to the
extent that quality is essential, a price promotion may be not getting the extent of sales
raise the economic incentive or else might have produced.
Price promotions frequently are used to promote testing among nonusers of products/
services.
Therefore, it is imperative to know the effect of promotions on decision made by
customers who don’t have past experience with the promoted brand. Those
promotions comprise for new brand initiation, and try to have an effect on group of
nonusers of a recognized brand.
Also, who buy for the first time due to the promotion may be not as much of expected
to buy again when the promotion lasts.
Blattberg and Neslin [1990] observed that although for years advertising personnel
have been warning marketing personnel that promotions will demolish their brands
image, it is not obvious that promotions differ from a brand’s consumer authorization.
It was done that price promotions adversely influence brand evaluations [Ogilvy
1963] with educational research, which has originate diverse facts of this effect.
particularly, although it is fine known that the possibility of buying a brand following
a deal withdrawal is lesser if the previous purchase was a promotional [Guadagni and
Little 1983; Shoemaker and Shoaf 1977], and it is controversial whether this decline
is due to lowered brand evaluations.
One of the explanations presented for this result is that there is an attitude vary at the
personal level [(Dodson, Tybout, and Stemthal 1978; Doob et al. 1969; Scott 1976].
Dodson.Tybout, and Stemthal [1978] studied that, if an individual purchase a brand
on deal, individual is expected to attribute his/her behaviour to the deal rather than to
having a positive attitude toward the brand, like compared with consumers who
purchased the brand at full price.
Though their results are consistent with personal level attitude vary due to
acknowledgment opinion after a buy on deal.
This study does not determine brand evaluations clearly and thus cannot exclude other
explanations for the model of results [Neslin and Shoemaker 1989].
Scott et al have examined the consequence of promotions on evaluations at the
personal level after customers tried a promoted brand. They find that promotions
could influence brand evaluations negatively, but this consequence depended on
whether customers attention about the reasons for their preference before selecting
[Scott and Yalch 1980], when they consider on their behaviour [Scott and Tyboul
1979], and whether they had previous brand information [Tybout and Scott 1983].
Davis, Inman, and McAlister [1992] study the variation between pre and post
promotion brand evaluations at the personal (individual) level however come across
no facts that price promotions have an effect on evaluations for regularly purchased
branded packaged goods. The three promoting brands in all of four unlike product
categories, evaluators of promoted brands in the post promotional time are not found
to be lesser than in the pre promotional time.
Scott and colleagues indicate that promotions include a negative effect on post trial
evaluations; but Davis, Inman, and McAlister’s advised that the influence of
promotions on brand evaluations in these packaged goods categories is, on normal or
average, missing.
There are some probable explanations for this apparent unpredictability. These induce
to (a) the situation of the promotional disclosure and brand evaluation relate to trial,
(b) whether the customer has found promotions for the goods(products) prior, and (c)
dislike among product categories.
The majority of study which has assessed the influence of price promotions on brand
evaluation has considered the influence post product trial rather than pre trial [Scott
and Tybout 1979; Scott and Yalch 1980; Tyboul and Scott 1983]. That is a significant
difference as the influence of promotions has been found to be lesser in the existence
of fit defied inner information structures [Tybout and Scott 1983].
This advised that the influence of promotions on brand evaluations is expected to be
moderated by the level of customer skill in a product category, mainly pre trial, when
experience with the brand is not present as a supply of information.
Since promotions are short term prices, the attachment and withdrawal include
information that customers may be use to arrive at judgments associated to the
product. The price promotion and or its non existence may be provide a plain
informative function [Inman, Peter, and Raghubir 1997; Raghubir 1998].
Promotion Thresholds: The promotion threshold is the least value of discount essential to modify customers’
motive to purchase. The idea of a threshold can be associated to the psychological
process of distinction in which a customer would not respond to stimuli factor except
the perceived changes were more than a just visible difference [Luce and Edwards
1958].
The idea of a threshold is broadly known and recognized by both practitioners and
researchers. In the perspective of advertising effectiveness, Eastlack and Rao [1986]
found that a least level of advertising is required before advertising has some
considerable impact on sales.
The employ of the S-shaped response function as well testifies to the suitability of the
threshold concept. Gurumurthy and Little [1989], for the existence of a price
threshold, on the basis of assimilation contrast theory, suggested that customers have
range of acceptance about their reference price. So, a little price differences in this
range are less expected to be known than prices exceeding or under this range.
Kalwani and Yim [1992] found some facts to support the region of relative price
insensitivity about the reference price, such that only price varies outer this region had
a significant influence on customer brand preference.
Several Managers too consider that price off about 15% is required to draw customers
to a sale or deal [Della Bitta and Monroe 1980]. Hence, Sunil Gupta and Lee G.
Cooper [1992], promotion thresholds be present such that customers don’t vary their
purpose to purchase the product except the price reduction or price off be greater than
some threshold value.
Since, due to promotion, the Consumer purchase intensions is expected to be better
for a name brand than a store brand, retailers promoting a name brand have to be
competent to alter consumers’ purchase intentions by advertising a lesser discount
(reduction) than required discount for a store brand.
Likewise, high image stores have to be competent to draw customer by offering a
lesser discount or reduction than that required by low image stores.
Sunil Gupta and Lee G. Cooper [1992] accepted that the promotion threshold for a
name brand and a high image store is lesser than for the store brand and a low image
store.
Sunil Gupta and Lee G. Cooper [1992] give some results regarding the effect of
Advertise discount on customers’ perceptions of this discount and subsequently on
vary in their intentions to purchase the product. Both found that customers discount
the price discounts, i.e., customers’ perceptions of discounts are naturally fewer than
the advertise discount.
The discounting of discounts increases with the raise in Advertise discount. These
consequences are reliable with the results of several prior studies.
As for example, Fry and McDougall [1974], Liefeld and Heslop [1985], Sewall and
Goldstein [1979], and Urbany et al. [1988] as well found that customers are skeptical
regarding the advertised claims of retailers and thus discount such claims.
Sunil Gupta and Lee G. Cooper [1992] specify that the discounting of discounts is
higher for the store brands than the name brands. Parallel effects on consumer
purchase intention are as well found.
As for example, offering a discount on a name brand has additional influence on
customers’ intentions to purchase when a similar discount on a store brand. They
likely to find as same differences between low image stores and high image stores.
Though, store effect was not found to be there vital.
In to some extent different perspective, Rao and Monroe [1989] did a Meta analysis
of studies which were dealing with the effect of brand name, store name and price on
customers’ perceptions of product quality.
And, they found that, when price and brand name effect were strong and significant,
the effect of store name on perceived qualities of product was usually little and was
not statistically significant.
Also, they show an approach to know saturation points and promotion threshold. The
being of a threshold says managerial insight that price discount of about 15% is
required to draw customers to a sale or deal [Della Bitta and Monroe 1980].
The study refines this insight by telling that the threshold levels differ by brand name.
As typical, the threshold for the store brand was found to be higher than that of the
name brand.
So, to draw customers a store desires a lower level of discount or reduction on a brand
name than on a store brand.
They added that promotions attain a saturation level so that their impact on
customers’ buying intentions is nominal outside this discount level. For the stores and
products used, the saturation levels were approximate in range of 20-30% discount
level.
Therefore, it might be valuable to propose discounts under the threshold level or over
the saturation level.
Each and every year, companies expend billions of dollars on trade promotions to
make retailers to offer stronger merchandising maintenances as for e.g., price
reduction, feature, special display etc., for their brands.
Although current research has accepted the success of promotion and pricing in
inspiring instant sales response [as example Guadagni and Little 1983; Gupta 1988;
Neslin, Henderson, and Quelch 1985], there is worry about the long run implications
of that activities.
Some business experts argue that often price discount mix up the difference between
the baseline price and the deal price of the product [Marketing News 1985].
If customers arrive to find deals like the rule rather than the exception, reduction
prices drop their capability to boost up sales. To the use price discounting effectively,
executives should recognize the association between pricing activity and consumer
desire.
Many research fond this association is based on the belief that the customers made a
reference price for a product or a brand [Monroe 1979; Winer 1986]. The reference
price shows the perception of the customers that are established by the previous
pricing activity of the brand. Consumers then expect the future price of the brand in
corresponding to this reference point and their reaction is associated to the difference
between the two.
Therefore, customer’s response to an unanticipated price reduction i.e. a “pleasant
surprise” is better than the response to a likely price reduction. The reference price
frame work is reliable with numerous psychological theories of consumer behaviour
and price perception, together with assimilation contrast theory [Sherif 1963] and
adaptation level theory [Helson 1964].
Experimental work by Winer [1986] and Raman and Bass [1986] support the
existence of common reference price impact on consumers’ brand choice behaviour.
However, Product pricing is not only the activity influencing the desire of customers.
In current years, retail promotion like non price merchandising activity as for example
special displays and store features has had an progressively more significant impact
on consumer choice behaviour.
As for example, Fader and McAlister [1988] advocate that the large number of
promotional activities in number of product categories may be educating customers to
purchase on promotion.
Thus, customers’ expectations regarding future promotional activities are as
imperative to recognise customer preference behaviour as customer expectations of
price.
James M. Lattin and Randolph E. Bucklin [1989] found that the reference effects of
promotion and price on customer choice behaviour. The model was based on the basis
that customers shape expectations regarding the future marketing activities of a brand
from their previous experience with as such activity. The model shows reference price
and the consumer’s promotional reference point for the brand.
They supposed that customers utilize these points of references in evaluating a brand
at every buying opportunity and that customer’s reply was effect by the difference
between their actual price, reference points and promotional status of that brand.
These assumptions support them to standardize a brand choice model and assessment
for the presence of reference effects.
Again, James M. Lattin and Randolph E. Bucklin [1989] projected and tested a model
of consumer response to include the reference effects of promotion and price. Their
finding supported the concept that customers establish expectations based on
experiences to promotional activities and that expectations effects the patterns of
brand choice.
Valence of a Promotion:According to price attribute literature a comparatively lesser price usually is consider
as an sign of poorer quality and that
effect is exaggerated when only price
information is offered to reach at a judgment [like Etgar and Malhotra 1981; Monroe
and Petroshius 1981; Olson 1977; Rao and Monroe 1988].
Though the economic feature of price leads to discourage demand at high prices, the
quality deduction leads to improved demand at high prices or need a trade off between
price and inferred quality [Hagerty 1978; Levin and Johnson 1984].
The level to which customers utilize price like a sign of quality depends on the
accessibility of other analytical facts [Szybillo and Jacoby 1974]. Rao and Monroe
[1988] come across facts that, with improved product awareness, people gradually
more used intrinsic (vs. extrinsic) product quality order to make quality judgments.
The superior the other information existing, the less significant will be the influence
of price on supposed quality [Rao and Monroe 1988].
Since price promotions cut price and lower prices are connected with inferior quality,
we expect that when other information investigative of quality is not present, inducing
price promotions will guide to inferences of inferior quality.
The Predictions of a negative influence too are inferred via attribution theory.
Attribution theory advocates that customers allocate causes for managerial activities
[Folkes 1988].
While customers are exposed out to a promotion, they attribute a cause for it. These
attributions may be to the brand or to some outside force. A study examines
attribution valence and found that brand particular attributions for a promotion were
valences negatively, where non brand cause were neutral or positive [Lichtenslein,
Burton, and O‘Hara 1989]. While subjects were asked why a brand may be endorsed,
the brand particular reasons they gave were related with perceptions of inferior
quality, but the non brand reasons were impartial or approving to the brand.
Likewise, Lichtenstein and Bearden [1986] scrutinize product, person attributions and
circumstance for a promotion. They found that product attributions were valence
negatively.
Hence, if customers assume attribution thinking when got to a price promotion and if
these attributions are towards the brand, the attributions are more possible to guide to
adverse brand evaluations.
Perceived Discount:Customers encode and evaluate information or facts given to them, and it is their
awareness of the information and not the information itself that influence their
behaviour.
Olson and Jacoby [1977] note, External stimuli factors do not apply direct influence
upon behaviour but simply indirect influence. Stimuli factors have to primary
perceived and interpreted prior to they can influence judgment processes and obvious
behaviour.
Thus, valuation and encoding of observed prices (or price discounts) (which are the
external stimuli factors) is likely to be accepted. Studies such as information addition
describe evaluation as the psychological processes which take out information from
physical stimuli factors [Anderson 1981].
According to pricing literature, encoding tends to the subjective understanding and
assignment of result to objective prices and price discounts [Monroe 1984; Olson and
Jacoby 1977; Zeithaml 1984].
On other hand, the concept of reference price, which is regular with adaptation level
theory [Helson 1964] and assimilation contrast theory [Sherif 1963], advocates that
customers have inner reference prices correspond which current prices are evaluated
[Kalwani et al. 1990; Lattin and Bucklin 1989; Urbany and Dickson 1991; Winer
1986].
The PD (perceived discount) is therefore the expected savings from this inner
reference price [Mobley et al. 1988; Monroe 1977; Winer 1986].
The AD (advertised discount), defined in this study as the percentage off on normal
price by retailers increases, customers’ perceptions of the discounts/ savings are likely
to raise. This is evidently the basic premise for general promotional offerings, and it
always supported by many studies [Berkowitz and Walton 1980; Della Bitta, Monroe,
and McGinnis 1981; Mobley et al. 1988].
The question, Do the PD less than the AD?, was addressed by many studies in
contrast to the matter raised by Federal Trade Commission cases handling with the
justice of reference price advertising by retailers. The Critics of advertised reference
price say that retailers normally increase these prices and alter customer perceptions
of the discount offered [Liefeld and Heslop 1985; Urbany, Bearden, and Weilbaker
1988].
The Defenders of reference price advertising assert that customers find out discount
reference price claims, consequently defensive themselves from cheating [Blair and
Landon 1981].
Customers’ doubt about advertised price offers or discounts has been verified by
numerous prior studies [Fry and McDougall 1974; Liefeld and Heslop 1985; Sewall
and Goldstein 1979].
As for example, Liefeld and Heslop [1985] stated that possibly the sale perspective is
so overused that the objective of these practices is transparent to customers leading
them to disbelieve and very much discount the claims inferred by such advertising
practices.
Blair and Landon [1981] showed that reference price claims were always discounted
by about 25%. Then even when reference prices are not clearly introduced, customers
appear to discount the perceived discount or saving level. Mobley et al. [1988]
showed that 25% and 50% discount claims elicited 21 percent and 45 percent
perceived price off, respectively.
Urbany et al. [1988], has been recommended that discounting happen when customers
suspicion the trustworthiness of the advertised savings or discount, but in its place of
totally rejecting it they cut it to a level deemed more practical.
Della Bitta et al. [1981] recommended that, if the price cut is too large, customers
may observe that the offer is not promising. Fry and McDougall [1974] showed that
higher claimed savings or discounting resulted in smaller number respondents trust
the reference price.
Urbany et al. [1988] recommended that discounting or savings may be a normal
response of customers, mainly to advertisements making apparently inflated savings
claims.
Della Bitta and Monroe’s [1980] result suggest that customers’ perceptions of savings
do not extensively vary between 30% and 50 % discount levels, therefore in some
way suggesting a big discounting of claimed savings at 50% than at 30%.
Immediate price reductions:Promotion and Price strategies are directly associated. It is hard to differentiate price
variances that are caused by judgement draws from the prices strategy from those
formed as a effect of the promotion strategy.
According to Cummins [1998], sales promotion should prevent being a component of
the communication mix to turn into an independent variable.
If promotion stops, sales declined even less than the normal levels. For the long
period, the sales level goes reverse to a position close to the primary position.
Mela et al. [1998] verify that long period price promotions guide the customer to be
more sensitive with price and thus their effectiveness is lack with the following
negative result on profit. These outcomes are consistent with those found by Mela et
al. [1997].
However, to explain that the effects produced by promotions differ according to
various factors like the sum of discount given or the category of product to that the
promotion is functional and the type of incentive, etc.
These days the customer find that the type of products is systematically affected by a
few promotional activities, and for result he/she will not vary the plan of his/her
purchase [Fader and Lodish, 1990; Lal, 1990].
Retails have to adjust their promotional strategies to not to lose the necessary
objectives- to modify satisfactorily the consumer purchasing behaviour amazing him
with a promotion activity. This constituent of amaze is at the present in risk.
As well, the existence of promotional activities attractive to customers may be
creating this change establishment [Tellis, 1997]. This outcome is associated to the
change of brand, i.e., customer who doesn’t generally attain the brand feel attracted
and purchase it. The better boost in sales occurs as a result of this truth [Blattberg and
Neslin, 1990; Gupta, 1993].
This is essential to be always in contact with the market, since on certain time the
exercise of promotions might cause unnecessary effects. That happens when the
customer found that he/she is paying for useless product positioning and highlighting
actions, that will create his/her behaviour, turn from the required one, and hence,
he/she will end purchase the promoted brand [Simonson et al., 1994].
At a few time the customer can also end purchasing a brand, if it is promoted so as
should not validate his behaviour ahead of the group [Simonson, 1989], or the
customer just think not to purchase the promoted product since he/she assumes that he
is being to manipulated and he/she will take action punishing the retailers.
Suri et al. [2000], notice the essential to initiate promotions as clear factor of the
consumer purchasing behaviour. Begona Alvarez Alvarez and Rodolfo Vazquez
Casielles [2008] done that the brand preference and buying behaviour formed by
customers and it is a complex fact.
The variables which affects are many and this is required to identify them to perform
and expand valuable strategies that attain the objectives expected in every case. The
affect of prices on this procedure is so significant.
It generally accepted that customers purchase a product they judge its price with a
individual level. The difficulty focuses on decision the very sufficient way of
evaluating that level.
Some theoretical trends believe that the consumer made his reference price to the
examination of the prices at the dealing, others support that the consumer remembers
the prices paid on past events and he will establish his reference price as from them.
Begona Alvarez Alvarez and Rodolfo Vazquez Casielles [2008] have established the
significance of prices in the buying practices. The things obtained from their
fluctuations based on the features of the brand. Particularly, they obtained differences
in the intensity of respond to price between store brands and manufacturer brands.
Very extensively used way of sales promotion are immediate discounts or price off,
they have measured it essential to explain the things this may generate. The discount
supposed as attractive and provided to change customer preferences, but also depends
upon the category of product.
Lan Xia and Kent B. Monroe [2008] have differentiated between customers who have
previous goals to purchase the product compared to those who havn’t such purchase
goals.
They have said further whether consumers’ responses to diverse promotion matters
making and price presentations fluctuate when they have or haven’t pre-purchase
goals.
Because the similar promotion messages might direct to diverse perceptions as
customers’ goals differ [Shavitt et al., 1994], considering how customers having
different purchase goals respond to different promotional information may aid sellers
promotional programs plan effective.
Reference prices:Consumers found their reference prices regarding their individual purchasing
experience, their findings, and their exposition to the present information on prices or
their subjective understanding. 26 different definitions of the concept “reference
price” have been found [Lowengart, 2002].
And may be classified as per; type of used information (external or internal) and
behavioural character.
The reference price depends upon complexity and multidimensional nature of the
customer’s price estimation similarly numerous alternatives of estimation of reference
prices have been proposed.
Even as some research support that the customer will carry out price estimations from
prior information and experiences [Winer, 1986; Lattin and Bucklin, 1989; Kalwani et
al., 1990; Mayhew and Winer, 1992; Krishnamurthi et al., 1992; Hardie et al., 1993;
Kalyanaram and Little, 1994; Rajendran and Tellis, 1994; Mazumdar and Papatla,
1995, 2000; Kopalle et al., 1996; Kopalle and Winer, 1996; Bell and Bucklin, 1999;
Erdem et al., 2001], others retain that the customer will utilize the stimulus present
there at the purchasing instant to shape his reference price [Hardie et al., 1993;
Rajendran and Tellis, 1994; Mazumdar and Papatla, 1995].
In other hand the different approaches to the judgment of the reference price can be
measured the continuation of the external and internal reference prices. The internal
reference price is an estimation of the price which a consumer holds in his mind. In
development of internal reference price, contextual and temporal factors are involved.
Contextual factors are associated to the different brand’s prices in the same product
category at the purchasing time. Temporal factors are more related to the prices on
prior occasions or purchasing experiences of the customer. The significance of the
contextual and temporal factor may differ as the customers’ characteristics or
behaviour.
Therefore, for the customers it is possible that with a strong preference for the brand
the temporal factor may be more established whereas for the customers that varies the
purchase of numerous brands the contextual factor may hold more weight.
Similarly, the purchasing occurrence can as well have various effects. So, the
customer who purchase the category of product more frequently will be likely to
memorize more obviously the prices they paid
previous or in past and as a
consequence the temporal factor will be more significant [Rajendran and Tellis,
1994].
The external reference price can be measured by some announcement of the prices
that consumer found from some external information channel and which he use to
make comparisons. There is an obvious recognition of the external reference price
with the contextual factors that impacts the internal reference price; so as such
concepts are directly associated. The external reference price can be brand leader’s
price, or the brand’s price that is generally acquired or the selling price (SP) suggested
by the producer on the product.
It is needed for these to be believable so that the customer can include them as an
orientation in his evaluation [Yadav and Seiders, 1998; Chandrashekaran (2004)]. The
central objective of the external reference price is to boost the internal reference price
as that the existing MSP (market selling price) becomes more attractive and this
pushes the customer build up his mind and purchase the product [Compeau et al.,
2004].
Due to the buyer’s and the obtained characteristics of the products, the influence of
the internal or external reference price will differ. So, in research of Winer [1986] or
Lattin and Bucklin’s [1989], on the brand choice, the impact of the reference prices is
studied, and there were no clear difference between external and internal reference
prices.
Other researchers like Bell and Bucklin [1999] and Mazumdar and Papatla [2000]
focus their research works on the difference between both reference prices
(internal/external) and their significance in the purchasing process.
Mazumdar et al. [2005] established a reference since they propose a combination of
the major conclusions to draw in the study of the reference prices:

Customer’s previous buying experiences have revealed to influence IRP
(internal reference price)
(a) The strongest determinant of a customers’ internal reference price (IRP) is the
previous prices that they observes;
(b) Recent occasion’s prices have a big impact on internal reference price (IRP) than
previous ones; and
(c)The higher the share of previous promotional purchases and the lower is the
customer’s internal reference prices.

The pessimistic effect of deal occurrence on customers’ internal reference
prices (IRP) is moderated:
(a) The dealing prototype, like regular or random, of the bought brands;
(b) The dealing prototype of rival brands; and
(c) The formulation of the deal as percentage or cents off (price off).

Internal reference prices for consumer durable products are influenced by such
comprehensive factors like household demographics and expected economic
conditions:
(a) For consumer durable products aggressive prices and differences in characteristic
configurations and quality across alternatives are more prominent than historical
prices;
(b) For consumer durables products historical prices are used only to distinguish a
price trend, when it be exist;
(C) Price expectations are influenced by the technology used in a particular brand
compared with other brands (in the same durable product category).

How earlier encountered prices are integrated to establish a reference price?
(a) Adaptive expectation model and assimilation contrast theory appear to describe
the development of integration of previous prices and contextual information exactly;
(b) Customers revise their reference prices:
1. Give importance their active reference price and observed prices; and
2. Factor in a price development find from previous prices.

Accumulation of the information at the store surroundings:
(a) Retailer provided ARP (advertised reference price) that excess the SP (selling
price) increase the customer’s internal reference price (IRP), even while advertise
reference point is consider to be overstated;
(b) The use of competitive assessment is more intended in increasing internal
reference price than is the use of temporal assessment;
(c) when customers have ample of external information, customers are careful in
deciding on which pieces of contextually available information are significant.

Make use of of memory for previous prices and external
provided
information:
(a) Customer utilize memory and external information both, however they give
priority to every one that depend upon customer and product features;
(b) The priority on memory is connected:
1. pessimistically to the size of customer’s thought set;
2. pessimistically to the rate of purchases at promotions time like displays and
features
3. optimistically to the price level of the product category;
4. pessimistically to the increment of inter purchase time of the category
5. Pessimistically to the rate of promotions in the category.
Even so, Begona Alvarez Alvarez and Rodolfo Vazquez Casielles [2008] pointed out
the significance of the reference prices in recent research works such as those by
Klapper et al. [2005],Fibich et al. [2005] and Moon et al. [2006], illustrate the
importance and interest in the study of reference prices.
Informative promotion:Heider [1958], have found that observers attribute a different individual’s behaviour
to intrinsic qualities instead of temporary or situational factors, even when the
behaviour simply could be understandable by the latter. This happening, called the
correspondent inference theory or fundamental attribution error [Jones and Davis
1965], find that customers attribute promotional behaviour to the nature of the brand r
instead industry characteristics.
So, as customers are more prone to attribute promotions to brand related (vs. industry
related) factors and since these factors are characteristically negative, contributing a
promotion have to influence brand evaluations adversely.
If a brand that has been promoted regularly in the past is promoted at present, the
present promotion conveys little that is new as regards the brand to customers, and
they are unlikely to give the present behaviour much consideration.
On the other hand, but a brand that has never been promoted in the past is promoted,
this is instructive or informative and more expected to lead to a re assessment of the
brand. This create, properly termed “consistency” in the attribution literature, always
exposed to influence the level to which people make behaviour inferences about a
different individual given his/her actions [Einhorn and Hogarth 1986; Hastie 1984;
Hilton and Slugoski 1986; Jones and Davis 1965; Kelly 1967, 1972].
Reliable with this logic, in the perspective of reference prices, Lichtenstein and
Bearden [1989] find that customers’ price expectations were dependent on the
uniformity of merchants’ price maintain policies. Costumers must find promotional
behaviour more informative or instructive of a brand’s feature when it is
unpredictable with past behaviour than when it is regular.
The intrinsic positive or negative characteristic of a behaviour has been fine
researched in social psychology and revealed to influence the salience [Fiske 1980]
and the dealing out of information [Fiske 1980; Skowronski and Carlston 1989].
Taylor [1991] concluded the disparity effects of negative and positive information, in
conflict they have asymmetric effects. These effects comprise, as for example, that
negative experience or events are enlarge further than positive experiences or events,
that individual explore more for negative vs. positive information while making
judgments, and that people influence this information more profoundly since they find
it more investigative than positive information [ as e.g., Fiske 1980; Hamilton and
Zanna 1972. 1974; Herr, Kardes, and Kim 1991; Kanouse and Hanson 1972].
In a few studies that consider the things of valence on attributional idea, [Gidron,
Koehler. and Tversky 1993] express that the numeral times a behaviour must be
performed by an individual for the personality related with that behaviour to be
recognized to the individual was considerably superior for positive behaviours than
for negative behaviours.
In last it can say, it is more complicated to change people’s negative attitudes in a
positive way than it is to affect their positive attitudes negatively.
Priya Raghubir and Kim Corfman [1991] consider that price promotions affects pre
testing brand evaluations and execute so adversely, except only in a few specific
conditions. The moderators recognized were past promotional record, personal skill in
the category, and expectation of how general promotions are in business, together
manipulated within business and examined across different businesses.
Particularly, (1) present a promotion is more expected to poorer a brand’s evaluation
when the brand has not been promoted formerly, compared with when it has been
regularly promoted;
(2) Promotions are used as a basis of information or knowledge regarding the brand
to a larger extent when the evaluator is not an proficient but has a few fundamental
business knowledge;
And (3) promotions are more expected to consequence in negative evaluations when
they are infrequent in the businesses.
Davis, Inman, and McAlister’s [1992] find that promotions do not influence brand
evaluations can be known better. They found categories with which customers had
significant previous experience and in which promotions were general. Besides, the
brands they scrutinize had been promoted in the precedent (previous to the
experiment).
Stores often employ price promotions to draw consumers. This is not unusual to find
stores advertising 50, 60, or 70% discounts on a number of products. Except do
customers consider these promoted discounts. Earlier studies advocate that they do
not consider these promoted discounts.
It has been seen that customers’ expectation of discounts are normally minus than the
advertised discounts [e.g., Blair and Landon 1981; Mobley, Bearden, and Teel 1988].
So, customers discount the price discounts.
Perception has been comprehensive by telling that the discounting of discounts sets on
the discount intensity, store image, and whether the advertised product is a name
brand or a store brand. Because the discounting of discounts is expected to influence
customers’ motive to purchase the product, influence of the discount level, store
image, and product advertised on customers’ buying motives.
A improved perceptive of customer responses or reaction to price discounts for many
different stores and brands too help out explore the existence of promotion threshold.
A threshold is the minimum or initial value of price promotion vital to alter
customers’ buying intentions. Whereas many executives consider that price reductions
of concerning 15% are required to draw customers to a deal [Della Bitta and Monroe
1980], a few studies have validate this managerial insight. Sunil Gupta and Lee G.
Cooper [1999] used the experimental numbers and an easy econometric method to
show promotion thresholds. They have found whether the thresholds are unlike for
different brands and stores.
Results presents an improved perceptive of customers reply or response to price
promotions.
Store image and brand name are main appropriate variables influencing response of
the customers to price and promotion.
Although price and other important cues are the influential factors to which customers
react straight, the effects of price cue knowledge are reasonable by other
informational cues presented to customers [Olson 1977].
These conditions or related cues are all other influential in the behavioural conditions
that offer the perspective in which the central cues are functioning [Monroe 1977].
These comprise cues like store image, brand name, and brand familiarity. Where as a
lot of studies have illustrated at the effect of central cues and the persuasion of
relative prices [Lichtenstein and Bearden 1989], a few have examined the related
effects of store image and brand name.
In a research of comparison prices and coupon and brand effects, Bearden,
Lichtenstein, and Teel [1984] advised the need for research to know improved the
brand and store effects at changing discount levels.
Price elasticity:Conventionally the price has been known as an informative factor, and from which a
customer can build a belief on the quality of the product to obtain [Leavit, 1954; Tull
et al., 1964; McConnell, 1968; Lichtenstein et al., 1988].
Likewise, producers and retailers perform on the price policy to attain increment in
their sales of products. By reductions in prices, customers are likely to purchase a
greater total of the product or brand.
Though these are common effects depend upon the brands submitted to as such
fluctuations [Hoch and Banerji, 1993; Aggarwal and Cha, 1998].
To the study of impacts of price fluctuations, the conception of price elasticity of the
demand should be necessarily mentioned. Fibich et al. [2005] mention that price
elasticity of demand is the percentage change in quantity demanded as a result of 1
per cent change in price.
The individual sensitivity to price is conditioned by a sequence of factors as like
market share, brand loyalty level of competition, activity in display or other factors
associated to the customer as per his income [Lambin, 1991].
The Cross price elasticity is sufficient to identify the level to which a variance in a
brand price changes the demand of the competitor brands. Various issues of interest in
association to this have been scrutinized in the prior literature; asymmetric price effect
[Lemon and Winer, 1993; Bronnenberg and Wathie, 1996; Sethuraman et al., 1998],
proximity to neighbor effect [Sethuraman et al., 1998] and asymmetric share effect
[Sethuraman, 1995; Sethuraman and Srinivasan, 1999].
Sethuraman [1995] showed that reductions in the price of producer brands with
greater market share will affects the store brands’ sales, it is less possible that
producer brands are affected by reductions in the price of store brands.
The choice of brand build up by the customers at the time of the buying will be
influenced by the price of the diverse brands of products. In this approach, the
reduction in the price of a costly brand may build this more attractive for the
customers and, thus, the chances of the choice of this brand may be better to the
disadvantage of the rest.
Shift in Purchase Intention:
The Relationship between Advertise discount (Ads) and Perceived discount (Pds),
have been noticed most likely, retailers’ main objective in offering price promotions
is to persuade consumers and influence their purchasing behaviour.
So, one of the main objective for retailers and consumer researchers is to know how
promotions influences customers’ buying motives. argument about the association
between advertise discount and perceived discount helps in knowing this matter as it
is normally understood that Advertised discount affects Perceived discount, which
affects customers’ motive to purchase the product.
As for example, an increase in Advertise discount is expected to increase customers’
perception of the discount that is then expected to increase customers’ motive to
purchase [Berkowitz and Walton 1980]. As the discounting of discounts is expected
to differ across stores (low versus high image) and across brands (store brands versus
name brands), the changes in CIs (customers’ purchase intentions) are also expected
to follow this pattern.
As per Monroe [1990], customers’ buying measures of a product are based on its
perceived value, and that is defined as the ratio of perceived quality of a product and
the perceived price; i.e., perceived value is equal to perceived quality/perceived price.
As prior, a brand name lends reliability to a product hence a PD on a name brand does
not influence its perceived quality as much as a discount or price off on a store brand.
Thus, while promotion of a store brand, perceived price be going down and so does its
perceived quality. If a similar promotion for a name brand cuts its perceived price,
however the going down in its perceived quality is expected to be fewer than that of
the store brand.
The consequences is that a promotion is expected to encourage a larger vary in the
perceived value and so a better CI (customers’ purchase intention) for a name brand
than for a store brand.
Also, fewer discounting of discounts is expected to happen for the big image stores
than for the short image stores, hat leads to superior perceived savings for the big
image or high image stores.
Price promotions and Consumer goals:Goals enact a crucial role in influencing how promotional message will be processed
[Shavitt et al., 1994]. If an individual have several information processing strategies
existing, they choose among them on the base of goals, motives, and the
environmental circumstance [Taylor, 1998].
Therefore, information for a particular product attracts more attention when
consumers have a pre purchase goal for that particular product category relative to
when customers haven’t pre-purchase goal.
Howard and Kerin [2006] establish that customers with different levels of
participation by whether they are in the search for a specific product have different
information evaluating style and thus respond to different price promotion activities.
Price promotion features can be grouped as price presentation, deal characteristics,
situation factors, and study effect [Krishna et al., 2002].
Price presentation study examines if customers’ perceptions of a promotion are
motivated by how the promotion is informed. Study on deal characteristics studies the
effects of factors like free gift value, deal percentage, and size of the product.
Situation factor shows to the on the whole situation of the price promotion counting
types of brands ,stores and also the promotional information is communicated in the
store or at home.
At last, study effect tends to measurement issues as well as factors as number of
participants and number of variables processed. Different promotion features motivate
present and future buying intentions [DelVecchio et al., 2006].
Lan Xia and Kent B. Monroe [2008] examined a number of vital issues associated to
deal characteristics and price presentations of price promotions concentrating on
promotion framing, format, and promotion depth.
Most of the consumer buying decisions are goal oriented [Bagozzi, 1997; Bagozzi and
Dholakia, 1999]. So goals are as important
that they influence other stages of the
customers’ assessment process. Generally, there are different levels of customer goal
specificity [Lawson, 1997].
Customers with diverse goals (abstract goal) want to look for across the product
categories and think a maximum scope of information as important. a lot of options
are appropriate and attentions are widen across multiple product categories. On the
other hand, if the goal is concrete goal, only fixed information are appropriate and
tends to catch customers attention.
Customers’ goals differ along no goal, abstract goal to concrete goal. Goal direct
customers’ messages obtaining and assessment processes. Goals are connected with
different levels of customer participation [Howard and Kerin, 2006] which direct the
distribution of attention as well as other cognitive resources for information meting
out [Peterman, 1997].
If consumers have an abstract goal or no goal, the participation with any exacting
acquirement is low and they might widen out their attention and no only bit of
information may be treated as mostly relevant.
If they have an exact purchase goal, their participation is high and they are more
purposeful in their information investigate and processing and observe a few types of
information to be more relevant than other one. As per Bargh [2002], the exacting
goal in place changes all the attention and the assessment of events and objects, along
with remembrance for events
While purchasing customers may meet diffrent price promotion information regarding
products and services for which they have or haven’t particular buying goals. Lan Xia
and Kent B. Monroe [2008] examined how customers’ previous purchase goals relate
with promotion features to persuade their perceptions of price promotions and their
readiness to purchase.
Store Image:The key motive for the discounting of discounts is being short of reliability of
advertised savings or discounting, mainly when the advertised savings level inflates.
Barnes [1975] showed that respondents gave superior department stores’
advertisements always high mean scores on believability than respondents gave to
advertisements for inferior discount stores.
As of the high reliability of high image stores, the reliability of discounts offered by
them will also be higher. Biswas and Blair [1991] showed that reference price claims
of discount stores are discounted excess than of non discount stores.
As per attribution theory, information that is “more of the same” is less expected to be
elaborated by customers [Kelley 1973]. And as per, information processing literature
advocates that customers are less expected to process and elaborate stimuli factors
that are professed in contexts they have encountered prior.
Lichtenstein and Bearden [1989] said that the stability and uniqueness of pricing
practices of a retailer are significant related variables in the development of
customers’ inner price pattern.
Particularly, they suggest that customers’ inner price pattern, supposed value of the
trade or deal, and resource reliability perceptions are expected to be higher when they
meet an advertisement from a store that does not always make reference price claims
and is highly unique in its price promotion behaviour.
This shows that, if a store advertises its products very often, customers are expected to
make references as like- "this store always offers deals, so its regular price is really
not a regular price”. Like a claim of 50% off the regular price by an often promoting
store is so expected to be discounted further because it’s usual price is supposed to be
lesser than claimed or inferred by the store. Hence, the store image and regularity of
promotion are generally negatively correlated.
Product Brand and Store Brand:Similar to store image, brand name is as well an essential contextual factors that
affects customers’ reaction to price and price discounts. The well established brand
name promises high image and high quality perceptions. So many studies on the
price, quality association have showed that brand name is a significant moderating
factor that helps manage or stabilize the quality perceive of a branded product even
while its price is abridged.
Della Bitta et al. [1981] influence different discount levels for a Texas Instruments
calculator and got the perceived or supposed quality was not affected by the amount
of the discount. They done that this attested to the influence of Texas Instruments (the
brand name).
Dickson and Sawyer [1984] suggest that, in the existence of a manufacturer’s name,
customers are not want to use low price same as a sign of low or inferior quality. In
other expression, at the place of using discounted or low price as a cue to assume the
quality of a brand name product, the brand name
indicate or continue quality
perceptions.
Therefore, Customers have to be more prone to accept the usual price claims of a
name brand. The offered discount on a brand name will be more credible than offered
on store brand. Bearden et al. [1984] and Blair and Landon [1981], who recommend
that customers will do less discounting of offered discounts for nationwide or name
brands than for lesser-known or private brands.
Effectiveness of Discount and Free Gift:Promotion framing, price promotions appear in different formats such as free gift on
purchase, discount, coupon, and rebate, etc. Some promotion forms engage monetary
savings and some promotions are non-monetary.
In comparison with price discounts, non-price promotions (free gifts) are probable to
supposed as small gains [Diamond and Johnson, 1990] and continue product quality
perceptions comparing to discounts [Darke and Chung, 2005]. Discount reduces the
price that customers have to give for the product but in a free gift promotion case the
value of the promotion may be corresponding to a discount.
Diamond and Abhijit [1990] mention that a price discount was more prone to be
chosen even while the discount was fewer than the retail value of the free product.
Customers who are willing to purchase a product are more focused on the monetary
savings so they will prefer a price discount (price off) than a free gift promotion. And
customers who are not willing to purchase may be more attracted to a small gain as
like free gift.
Lan Xia and Kent B. Monroe [2008] finished how customers with/without a definite
pre-purchase goal react in a different way to a price promotion. They found effect of
goal on consumers’ willingness to purchase.
This major effect was not mediated by expected value. This effect is consistent with
the perception that consumers are responsive to information that corresponding to
their needs. Product or brand level price promotion information is not as much of
significant when customers do not have a pre-purchase goal.
They found a main effect of promotion format, Customers favoured discount over free
gift and higher discount level over lesser discount level despite of the existence of a
pre-purchase goal. All these main effects were mediated by perceived business deal
value. Further added that the main effect of promotion format possibly according to
fact that the two promotion framing represented the same price savings.
They confirm how customers’ goals relate with some vital features of price
promotions to persuade their willingness to purchase. The effect of the promotion
information framing is conditional on customers’ previous purchase goals.
Customers willing to buy a product are very responsive to promotion information
framed as reduction of losses (e.g. pay less and a discount) even as customers without
a goal are very responsive to information framed as additional gains (e.g. save more
and free gift).
The perception that targeted deals are very competent than across the board sales
promotions that offer needless discounts to price-insensitive customers has
encouraged a impressive growth in modified or customize pricing and sales
promotions [Acquisti and Varian 2005].
Though, a point have been raised for the effectiveness of targeted offers in common
[Homburg, Droll, and Totzek 2008] and customized price promotions in specific
[Acquisti and Varian 2005; Feinberg, Krishna, and Zhang 2002].
Hence, companies should be rely on customized promotions still an open question,
stress the necessity for further research into how consumers respond to targeted
discounts with contingencies that influence their response to these offerings [Franke,
Keinz, and Steger 2009; Simonson 2005].
Therefore, in the literature the relative exclusivity of targeted price promotions is
noticed. As such promotions are offered selectively to some customers i.e., deal
recipients but not to others customers i.e., deal non recipients.
Targeted price promotions engage a level of exclusivity that over that the related with
more inclusive offers. Most exclusive, price discounts can be customized to maximize
promotional well with individual customers [Simonson 2005]. On further modest
levels of exclusivity, targeted promotions may be selectively offered to whole groups
of customers, like with affinity marketing programs.
Feinberg, Krishna, and Zhang [2002] study provided facts of a betrayal effect, in
which loyal customers of a brand offered not as much of favourable preferences for
that brand when they are excluded from a targeted deal offered only to competitor’s
customers.
Equity frameworks [Adams 1965; Bolton and Ockenfels 2000; Greenberg 1986]
assume that people will connect in interpersonal comparisons that aspect not only the
outcomes received i.e. non social utility but also how as such outcomes judge with
that others received i.e. social utility.
If customers respond to marketing offers with the goal of maximizing individual
interests, the finding of an exclusive deal tends to profitable inequity that advances
evaluations of the targeted discount among deal recipients customers [Greenberg
1987; Loewenstein, Thompson, and Bazerman 1989]. On other hand non recipients
have to evaluate this type of promotion less positively.
Hence, as a result of their individual outcomes, non recipients and recipients have to
vary in their evaluations of a targeted deal.
This theory also suggests that evaluations of a targeted deal will based not only on the
relative outcomes related with the offer or deal but also on the Inputs (values) or costs
related with acceptance of the promotion.
In regard of targeted deals, these inputs may be represented by the invested efforts by
the customers in their association with a marketer [Feinberg, Krishna, and Zhang
2002; Homburg, Droll, and Totzek 2008]; in turn, these inputs have influence how
customers react to a targeted offer [Verhoef 2003]. The negative effect of deal non
recipients [Feinberg, Krishna, and Zhang 2002] probable arose due to disparities in
together exchange components.
In contrast of deal recipients, the customers found unfavourable inequity in terms of
together the relative outcomes related with the offer and the relative inputs. Being
positioned in of unfavourable inequity apparently encouraged negative emotions
[Tabibnia, Satpute, and Lieberman 2008] that destabilized the preferences of non
recipients for the brand to which they had formerly been loyal. Though, [Michael J.
Barone & Tirthankar Roy 2010], investigate was When, whether, and how recipients’
evaluations of a targeted price promotion may be affected by the deals’ exclusivity. If
exclusion from a targeted offer can produce unfavourable inequity for non recipients
[Feinberg, Krishna, and Zhang 2002], it stands to cause that receipt of an exclusive
discount have to produce beneficial equity for deal recipients.
In addition, recent literatures on inequity aversion [Fehr and Gintis 2007; Fehr and
Schmidt 1999] said that some people wish outcomes that stabilise self-regarding
comfort with other-regarding comfort.
Therefore, some customers may be unwilling to employ in exchanges that grant them
with valuable inequity, and this unwillingness is probable to rise with the level of
inequity characterizing the exchange [Scheer, Kumar, and Steenkamp 2003].
Inequity avers deal recipients have to estimate a deal likely to less favourably as it
becomes more exclusive. As per result of their
motivation to keep away from
experiencing the negative influence that may add to valuable inequity [Scheer,
Kumar, and Steenkamp 2003].variations in inequity aversion have been evaluated at
more macro levels [Scheer, Kumar, and Steenkamp 2003], a little work has found
personal distinction factors that describe inequity-averse people.
Though, such an assessment affords a way of identifying in theory with significant
variables that reasonable customers’ tendencies for inequity aversion, information that
is helpful in making strategies intended to more efficiently and effectively delivering
targeted deals to the marketplace.
Brand Equity Measurement:As per Rust, Ambler, Carpenter, Kumar, & Srivastava [2004], it is significant to
determine marketing asset of an organisation which they describe as customer centric
measures of the value of the business and its contributions that may improve the
organisation long term value.
To determine this, they centre on two approaches; brand equity and customer equity.
To Measuring brand equity it deals with the measurement of intangible marketing
approaches, like product image (reputation) and brand loyalty. Rajagopal [2008]
supports the view of measuring the marketing asset of an organisation/ business and
shows that the most important benefit of a brand measurement system is that it
associates brand management and business performance of the organisation and is a
strategic management instrument for uninterrupted development rather than a stagnant
snapshot in time of the brand’s performance.
An efficient brand measurement system thus helps businesses/ organisations to
recognize how the brand is performing with the frame work of customer ethics and
not in favour of competing brands.
As per Ambler[2003] numerous companies determine brand equity to make sure that
marketing performance are associated with the company’s strategy and to make sure
that investment is used for the true brands.
Ambler [2003] further defines marketing metrics like quantified performance process
often reviewed by apex management which can be classified into six categories as
following:

Consumer intermediary:
as consumer responsiveness and attitudes. The
measure lies in advertising (inputs) and sales (behaviour).

Consumer behaviour: like quarterly infiltration.

Competitive market measures: measure relatively to a competitor or to the
whole market (market share).

Innovation: distribution of earnings due to new products.

Direct trade customer: allocation accessibility.

Financial measures: advertising expenses or brand assessment.
MNC’s like PepsiCo, McDonald’s, Coca Cola, IBM and numerous others have
marketing metrics in place which are used worldwide to measure and access brand
equity.
As per Kish, Riskey & Kerin [2001], PepsiCo measures and find brand equity via a
propriety model called Equitrak that is based on two factors;
Recognition – how deep and broad a brand’s awareness is?And, Regards- that
measures how people believe regarding the brand and added brand reputation,
momentum, affiliation and differentiation.
The Equitrak model used by PepsiCo not only to know the company brands but also
competitor brands and is used by every subsidiaries in different countries.
McDonald’s UK has major areas for metrics to know their marketing quarterly:

Brand equity and Market share measures -knowledge and advertising recall

Sales operation that includes customer satisfaction, worth for money and
sanitation

Unknown diners who visit the stores to estimate the service level [Ambler,
2003].
Shell too uses a global tracker that gives metrics and diagnostics for their brand vs.
competitors across 70 countries and has a selection of questions as well as purchase,
loyalty, awareness, trial, and image [Ambler, 2003].
Hence, balance financial and non financial goals and several authors have the same
opinion that top management should support this and frequent check of both financial
and non financial goals is essential to drive a market orientated business.
Dunn and Davies [2004], propose that have a brand centric business have to be a top
bottom approach determined by the top managers. The market orientation concept
plays an important role.
As per Barwise & Farley [2004], both internal and external forces are progressively
forcing business to be more market oriented and research says that market oriented
business be likely to enjoy better performance.
Best [2005], supported this and said that a strong market orientation cannot be formed
by a simple announcement but by adopting a market based management philosophy
and where every one members of the firm are be responsive to consumers’ needs and
should be aware of those needs.
The profits of strong market orientation are: Customer focused, customer satisfaction,
high profits and better understanding of competitors, [Best, 2005; Ambler, 2003].
Davis [2002] append that brands have to be managed since assets using a top down
approach and top managers hold the conception that marketing must have on leading
seat at the plan table and employ the brands to make key plan decisions.
And if top managers are verbal and point up devotion to the brands, then workforce
within an organization will start taking possession of the brand.
Sales promotion and brand equity:Sales promotion in Fast Moving Consumer Goods (FMCG) industries is to produce a
temporary incentive on the sales of a brand by providing special offer to the
customers. This promotional stimulus is component of the marketing offer made up of
factors such as price, availability, product features and benefits, customer service and
quality. Customers are likely to be active on this offer, which, in revolve, has a direct
effect on the sales of an organization. Market based assets (Brand Equity), are the part
of the beneficial accruing to the organization as an effect of trading.
These benefits comprise the growth over the time of positive brand awareness, brand
image, brand equity, secured distribution, brand franchise and as well positive affairs
with customers and intermediaries.
The factors acting under the banner of sales promotion are diverse and complex both,
and propose to management the opportunity and deal with a range of diverse
marketing situations. Its reason may be to arouse immediate response in the market,
as a retaliatory tool, or to retain and reward existing customers [Totten et al. 1994].
When practices are measured independently, maximum of them perhaps, and indeed
are, used as retaliators. Price associated promotions shape a big share of customer
promotional activity. They correspond to the most concern in terms of potential
damage to brand equity since price acting a significant role in the assessment of a
brand.
Therefore, it is important in terms of potential equity outcomes to consider the
influence of using price based promotions [Keller 1993; Mela et al. 1997].
Most of the sales promotion literature is particularly associated to price-based
promotions [Gabor and Granger 1972; Sawyer and Dickson 1984; Lattin and Bucklin
1989; Kalwani and Yim 1992; Wakefield and Inman 1993; Ehrenberg et al. 1994],
and some recognized negative effects appear most strongly associated to promotions
with a centre on price.
Customers build up their perceptions and value of a brand on the strong point of the
market offering. If customers observe the offer as extremely positive, then it may be
that the relationship between the brand and consumer is strengthened.
Therefore, it recommended that maximum use of sales promotion potentially results
the brand to be devalued by the customer, and the later franchise or equity enjoyed by
the brand may also be damaged.
It is recognized that building and maintaining positive brand equity with consumer
base is measured to be significant for long term survival [Farquhar 1990; Keller 1993;
Blackston 2000; Ambler 2001].
Srivastava [1991] noticed the subject matter of the significance of Brand Equity. a
number of information recognized for future research associated to management that
they were likely to potentially use active Brand Equity to capitalize short-term sales.
In spite of the significance of literature on the separate issues of Brand Equity and
sales promotion, to meeting there has only been a comparatively little amount that
particularly addresses the association between the two; additional it has been
supported that they do not actually know a lot so far.
On the other hand there have been a number of debates about whether continued
promotional activity is expected to decrease a brand’s franchise and the literature has
diverse or mixed findings [Blattberg et al. 1995; Roberts 1995].
It is broadly usual that, sales promotion have positive effects on trading by
introducing a short-term sales spike [Dodson et al. 1978; Neslin and Shoemaker
1989]. Though, there is some argument in prior study result concerning the long-term
effect of sales promotion and how customers value a brand.
The views are following:(1) A view is that the excess use of particular forms of sales promotion (particularly
price-based promotions), possibly will effect in a brand being devalued in the
customers’ mind, in case when a temporary promotion is removed [Dodson et al.
1978; Lattin and Bucklin 1989; Simonsen et al. 1994; Chandon 1995]
(2) There is no negative effects expected to outcome from the rising use of sales
promotion as (for instance) the customer quickly forgets the offers [Neslin and
Shoemaker 1989; Davis et al. 1992; Ehrenberg et al. 1994].
Sales promotions were established as a general used component of marketing
communication with company marketing food products. Sales promotions were
mostly seen like a tool to attract consumers, get better brand awareness and arouse
sales, and the frequently used techniques included point of purchase displays, free
product, product sampling and cut prices.
Executives assert to use sales promotion like a tool to improve brand and market
position, but in actuality, employ it to follow competitive goals as like retaliation.
Also, the protection of brand equity is seen as essential and price based promotions,
when considered most probable to harm brand equity, be not used excessively. There
are a few evidences that notice is given to evaluating the impacts of sales promotion
on brand equity [Sandra Luxton. 2001]
East’s remarks [1995] highlighted the importance of proper concern to promotional
planning and its measurement. “In aggregate, the effects of sales promotions seem to
cancel out; leaving a cost that has to be added to the price of goods. Would not we all
be better off (except the promotion agencies) if this activity was stopped? . . .” . “To a
company, the value of a sales promotion depends upon the extra sales generated and
the cost of running the promotion. Whether or not sales promotions lose their
prominence depends in part upon their evidence about their effects on profit. . . .”
There are various complex issues to concentrate when endeavouring to know how and
why a promotional plan has developed to this point in time. Executives in the FMCG
companies appear at least to be alert of the issues at hand and along with the
advantage of considering how others players in the industry think and perform, there
is improved anticipation that sales promotion can turn into a more precious tool, used
properly to meet the exact needs of the company and its markets [Sandra Luxton
2001].
Studies have conventionally set that sales promotions gradually destroys brand equity.
Though, in present management practices observe that companies plan promotional
strategies to distinguish and transform their brand image and make brand awareness.
This disagreement between practices in companies and the common academic
observation should certainly direct to a rethink as regards the goals assigned to sales
promotions. Therefore, the vital question is, can sales promotions support to build
brand equity?
Following a consumer oriented brand knowledge in view of brand equity and it has
been append that monetary and non monetary promotions are helpful to build brand
equity as of their positive impact on brand knowledge structures.
Mariola Palazón-Vidal & Elena Delgado-Ballester [2005] recommended that non
monetary promotions are more suitable as a brand building activities and that the
product type influence a reasonable impact on the association between sales
promotions and brand knowledge.
To Building a strong brand in the market is the present goal of numerous
organizations. There is a fact that brand equity has been found to direct to high prices
[Firth 1993], better market share [Park & Srinivasan 1994], more responsive
advertising and promotions [Keller 1998], prior market penetration [Robertson 1993]
and competent product line extensions [Keller & Aaker 1992].
So it is not hard to realize why brand equity has emerged as a fundamental concept in
marketing in the last 20 years. a lot has been learned throughout the last 20 years
regarding brand valuation [e.g. Aaker 1991; Keller 1998; Yoo & Donthu 2001], the
leverage of brand equity by brand extensions [Broniarczyk & Alba 1994], the
influence of such extensions on the central brand [Loken & John 1993], and its
various benefits for a company and its customers [Keller 1998]. Though, researchers
have not been committed to addressing, how brand equity may be built during
marketing activities?
Particularly, building brand equity seems to be valuable of investigation in the
perspective of sales promotions. In last, the recent practices in the industry differ from
the common academic view point that sales promotions gradually destroy brand
equity [Mela et al. 1997; Yoo et al. 2000].
Therefore, it emerge that, apart from the conventional goals assigned to sales
promotions like increase trial and price-discriminate, are too used in the industry as a
brand building activities.
Here a question is arise, is this communication tool suitable for building brand equity.
Mariola Palazón-Vidal and Elena Delgado-Ballester [2005] have used brand equity
from the viewpoint of the customer in the research and addressed below questions in
their research:
Do sales promotions (as promotional mix) have potential to build brand equity?
What type of sales promotions (monetary or non-monetary), is more efficient for
building brand equity?
How does the type of product influence the usefulness of monetary and non monetary
promotions?
Keller [1993, 1998] defines brand equity as ‘the differential effect that brand
knowledge has on consumer response to the marketing of that brand’.
As per this definition, and due to cognitive psychology viewpoint, brand equity is
based on brand knowledge that having of many of relations related to a brand node in
remembrance. These relations stand for the individual sense regarding a brand and
that is, all evaluative and descriptive brands associated information [Keller 1993].
It is necessary to attention that the different response or feed backs that makes up and
about brand equity comes as of different characteristics of brand associations in the
consumer’s memory.
Krishnan [1996], based on Keller’s research, verified that association characteristics
such as valence, number of associations and uniqueness are behind consumer based
brand equity. Therefore, brands with high equity are characterized by having a
maximum number of associations, and net positive and unique associations.
Sales Promotion and Branding:Sales promotions have different types of marketing tools, and that are planned to
encourage buying by offering incentives. There are plenty of reasons for sales
promotion to having importance on severe competition [Ehrenberg et al. 1994], high
cost of marketing communications mediums, turn down of the traditional marketing
communications mediums and short term goals.
In the FMCG markets above factors can be seen frequently with low involvement
products. There is a lack of obvious differentiation between brands and intense
competitiveness. Best brands and market influential brands have not been excluded
from these problems, therefore it has been seen that market leaders and followers
experience the same level of competition [Kitchen, J.P. 1989], even though their
brand features may differ much.
Further, perhaps the stressed matter for Producer Company is a growing power of
retailers and growing potency of retailers’ own label brands. Now a days Retailers
acquired a significant part of the market share and may command the trading terms
with producer. Retailers do face competition from other retailers and it creates
pressure on them, so they must to find new ways of offering additional value to
customers. Factors such as price, layout, product range, location and sales personnel
do influence to the customers and hence they demand to retailers as per their choices.
Due to increasing retailer power, number of demanding customers and gradual
increase in competition, companies are required to exercise sales promotions to retain
market share in common, but firmly, to get more shelf space and improved conditions
for their products. Companies require to counterpart the promotions of their
competitors and exhibit the flexibility required in the retail market. This is particularly
imperative for recognized brands and new brands should use sales promotions as a
way of encouraging brand switching and betrayal existing loyalty.
Due to these pressures in marketing environment, it becomes obvious that companies
have to deal with the issue of sales promotions.
The general assumed image of Sales promotion is that long term effects may distress
the brand, and it is particularly with premium brand positioning. Premium brand
positioning based on core values, as for example sophistication and high quality,
which justify the premium price.
Premium brands generally include both the intrinsic and extrinsic attributes. Gabor, A.
and C. W. J. Granger [1972] have mention that a strong brand image is mostly
important for premium brands, as a “perceived risk is reduced and high quality is
conveyed through trust and experience formed through an association with the brand”.
Sales Promotions & Brand image:In the marketing communications mix Sales promotion considered as an important
instrument. Several companies experienced the impact of sales promotions and issues
related with long term effectiveness of it. Sales promotion mostly focused on price
reductions.
Danijela Mandic [2009] argued if sales promotions used properly and in planned way
then it have long term impact on brands (especially on premium brands in the FMCG
category).
Fill, C [2005] found that in the competitive marketing communication industry it is
important for companies to identify that customers recognize a brand through all the
communication tools. This illustrates the significance of marketing communications
strategy, because brand building is a long term work. A brand involves a build “of,
first, an identity that managers wish to portray and secondly, images construed by
audiences of the identities they perceive”.
The brand image refers to the customers’ perception about the brand and every
association that are formed. Companies should recognize the effectiveness of all
available communication tools to long term impact on brand image of the company.
Attributes (descriptive features that describe a brand), Benefits (individual value
attach to the attributes) and Attitudes (common evaluations of the brand) are
dimensions of Brand image and association, (Ibid., pp. 411).
For cost effective marketing communication and attain marketing objectives, the
analysis of long term impact of promotional tools becomes vital.
We are seeing extreme competitions among companies for their product positioning;
growth in mass communication and in new technologies fuels it. In FMCG industry
every company have to use sales promotion as a defensive or an offensive tool.
Sales promotions and Brand knowledge: Previous, it was cited that brand knowledge is a source of brand equity. So any
potential encounter with a brand may influence brand equity and it changes the mental
image of the brand and the types of information that can emerge in the memory of the
consumers.
Particular price promotions (among sales promotions tools), are supposed to destroy
brand equity because they improve only short term performance by stimuli sales and
brand switching [Dobson et al. 1978; Gupta 1988] and may be express a low quality
of brand image [Yoo et al. 2000].
Though, Mariola Palazón-Vidal and Elena Delgado-Ballester [2005] taken a
consumer based approach [Chandon & Laurent 1999; Chandon et al. 2000] to think
about that sales promotions (a part of marketing communications), also have an
impact on emotional and cognitive level, and offer the customers with several
utilitarian and hedonic benefits.
Brand knowledge includes various kinds of information associated to a brand such as
experiences, benefits, thoughts, feelings, attributes etc. [Keller 1998], it follows that
brand knowledge may be potentially changed and affected by the sales promotions
experience.
Primary, this experience may change the number of links stimuli about a brand since
sales promotions have brand association enhancing power.
Next, they may also produce positive links (association) if the links are desirable to
customers and effectively conveyed by the following promotional operation for the
brand.
So, the value (benefits) that sales promotions having for brands are associated to the
value or benefits they have for customers [Chandon et al. 2000].
At last, sales promotions may increase important points of distinction to the brand
(exclusive relations) if the promotional activity is not attributed to any more brand or
is not seen as a general promotion of the product category, Mariola Palazón-Vidal &
Elena Delgado-Ballester [2005].
Monetary and Non-monetary promotions and Brand knowledge: Chandon & Laurent 1999; Chandon et al. 2000; there is need to differentiate between
monetary and non-monetary promotions, since there are essential differences between
them.
Monetary promotions like free product, coupons are primarily related to utilitarian
benefits having functional, instrumental and cognitive nature. They help customers to
boost the attainment utility of their buying and improve the efficiency of their
purchasing experiences.
And non-monetary promotions like free gifts, loyalty programmes, contests, are
related to hedonic benefits with a non-instrumental, practical and affective nature,
because they are basically rewarding and associated to emotions, pleasure and selfesteem.
On the basis of diverse nature of the profit provided by the sales promotions, Mariola
Palazon-Vidal & Elena Delgado-Ballester [2005] proposed that -
1. Monetary promotions form less brand knowledge than non monetary promotions.
Rothschild & Gaidis [1981], monetary promotions compared to non monetary
promotions, the monetary promotions are less efficient in building brand knowledge
because monetary promotions having emphasis on only one brand association (i.e.
price).
Monetary promotions lead customers to think above all about deals, easy shopping
but not about the brand [Yoo et al. 2000].
But, Non monetary promotions induce more associations with the brand personality,
pleasant experience, belief and emotions. As per Nunes and Park [2003], the use of
discounts or price off having greater emphasis on price, infusing people to find the
incentive on what they pay, while non monetary promotions price centric.
2. Sales promotions vary in the favourability of the brand knowledge produced. This
is confirmed by the detail that monetary benefits can be viewed as producing
functional links due the utilitarian benefits provided, but non monetary benefits
generate more abstract links due to their hedonic benefits.
Known that associations getting from types of sales promotion vary in their level of
abstraction and qualitative nature, as per Keller [1998], this influence the uniqueness
and favourability of associations because abstract links tend to be more durable and
evaluative in the memory.
From Studies centred on hedonic and utilitarian aspects of consumption and
purchasing a related reasoning is found. When the buying decision has hedonic
motives; the enjoyment, fun etc. arise influence on brand perceptions [Hirschman &
Holbrook 1982] and build the customer’s attitude more favourable [Childers et al.
2001].
Thus, when sales promotion experience is related to these types of thoughts, belief
and benefits, more favourable and positive brand associations are associated to the
brand. As recommended by Pham et al. [2001], the valence and the number of
unprompted thoughts can better predicted by feeling responses.
3. At last, since hedonic benefits are more subjective and personal than utilitarian
benefits, and hedonic benefits are more complex to imitate and more competent to
provide unique brand associations [Babin et al. 1994].
Hence, in the case of non monetary promotions, sales promotion experience provides
these types of benefits [Chandon et al. 2000], provide more unique brand associations
are related to the brand.
Mariola Palazon-Vidal & Elena Delgado-Ballester [2005] cited that monetary and non
monetary incentives were not uniformly useful in building brand equity due to the
different influence on brand knowledge.
To infer the hedonic or utilitarian nature of the buying decision is to observe the type
of products being thought [Mao & Oliver 1993], so they decided on the moderator
effect that such type of product influence on the usefulness of each promotional type.
Chandon et al. [2000] supported this and emphasize that promotional effectiveness
may depend upon the match between benefits of promotions (congruence) and that of
the promoted products (i.e the Benefit Congruency Framework). The principle of
congruency is established on the thought that sales promotions that are matched with
the promoted product (because they provide as same benefits) have a big influence on
the demand of this product than sales promotions that provide incongruent benefits.
Hence, it is usual that utilitarian products would be more influenced by monetary
promotions and, on the other hand, hedonic products will be well matched with non
monetary benefits. Holbrook and Hirschman [1982] stated that all products may have
a symbolic (hedonic) meaning.
Sometime this meaning is more relevant and better than in others, though it seems that
non monetary sales promotions not only benefit hedonic products (as per congruency
principle) but also utilitarian products.
Arnold and Reynolds [2003] assert that the looking for hedonic experiences is often
more important than only gaining of the utilitarian benefits provided by the product.
In the choice of products the emotional desires dominate utilitarian motives
[Hirschman & Holbrook, 1982; Dhar & Wertenbroch 2000] and it is expected that
promotional incentives don’t add value to the hedonic products. And, non monetary
sales promotions may infuse a utilitarian product with a meaning that supplements the
more useful.
Short and long term effects of Sales Promotion:It is recommended that Sales promotion may induce brand awareness and motivate
trial it provides more exact assessment methods because they are more immediate and
activate in a definite time frame [Pham, M.T., Cohen, J.B., Pracejus, J.W. & Hughes,
G.D., 2001], effects sales [Roberts, John H., 1995], increase the target market
[Robertson, T.S., 1993] and attain competitive advantage [Rothschild, M.L. & Gaidis,
W.C., 1981].
Sales promotions are often useful in promoting action because they persuade
customers to be active on a promotion. And, the potency of Sales promotion lies in its
flexibility to fast respond to rival attacks [Sandra Luxton 2001].
Sawyer, A. and P. Dickson [1984] and Simonson, I., and Z. Carmon [1994] found that
Sales promotions having a negative influence on brands, particularly related to
advertising and
argued that Sales promotion doesn’t have
brand building
(strengthening) effect and it may lead to deteriorating impacts for the brand, mostly
well established brands.
However, the Ehrenberg et al. research illustrate that price associated sales
promotions don’t have any impact on brand performance (sales or repurchase). Sales
promotions influence existing customers in the first place, this is unease for
companies, because their main aim is to target new customers and gain more long
term benefits, may be new customers only take benefit of the sales promotion and
then go back to their favoured brand.
And, even the existing customers are pursued and the respond be good, the price
sensitivity of these customers may be enhanced, causing complications in the long
run.
The premium brands always need to justify their brand images and high price, and
often that is by advertising and advertising expenses may found not the use of money
if the brand image be affected via some other communication channels. To avoid
Sales Promotions may be the easiest suggestion due to its potential risk, however in
the FMCG markets, Sales promotions can’t easily avoided and industry environment
forces companies to coup up with this issue. Further, FMCG markets face a big
concern of competition and having lack of differentiation among brands (products).
These problems can be short out by successful branding. It has been found that the
circumstance in which a brand is seen affected the brand image perception then it
might damage the brand in some situations.
As for example, exhibit features in a store may produce different responses in
customers. In establishing a high quality brand image, if a company has invested in
marketing communications activities ,and then product be positioned in an unwanted
context (for example, in closeness to the brands associated with lesser quality),
customers may perceive less brand value [Wakefield, K. L. and Jeffrey J. Inman
1993]. Therefore, retailers should have decisive control over the brand image.
The Sales promotion activities of companies can have an additional influence over the
entire market category as well. It exists that a successful sales promotion (price
promotion) can expand the category even the sales promotion lasted, whereas having
a negative long term effect as of declined sales after the sales promotion. The cause is
that customers prefer to purchase much quantities throughout the promotion, and this
leads to low demand after the promotion be over.
Other worrying fact about the promotional influence on the category is that the
category doesn’t get advantage as a whole as customer switch to even lower priced
products, as Sales promotion supports brand switching,
Research Gap:From the Above Literature Review it is found that there is no research has been done
on Effect of Sales promotion on Middle class consumer preferences and Brand equity
perception with respect to selected FMCG products while considering geographical
area Maharashtra’s major cities, Mumbai,Pune and Nagpur.
Chapter 3:
OBJECTIVES, HYPOTHESIS & RESEARCH METHODOLOGY
CHAPTER 3:
Objectives, Hypothesis & Research Methodology
Scope of the Study
This research is subjected to Effects of Sales Promotions on Middle Class Consumer
and Brand Equity Perception with respect to selected FMCG products (Tea, Coffee,
Detergents and Bathing Soaps) with in three major cities of Maharashtra; Mumbai,
Pune and Nagpur.
Objectives of Study
1. To study the Middle Class Consumer attitude towards Sales Promotion Schemes
i.e. Cash Discount and Free Gift.
2. To study the Deal Proneness of Middle Class Consumer considering Family
Income, Gender and Educational Qualification.
3. To study the Middle Class Consumer Brand Equity perception.
4. To study the Media Preference of Middle Class Consumer to know the Sales
Promotion Schemes.
5. To study the preferences of Sales Promotion Schemes according to different
features i.e. Brand Type, Source of Brand Awareness, Type of Sales Promotion and
Type of Benefits.
Hypothesis of Study
Based on the objectives, the following hypotheses are proposed:
H01: There is no significant difference in the attitude of Middle Class Consumer
towards the Cash Discount as a Sales Promotion Scheme with respect to Family
Income, Gender & Educational Qualification.
H11: There is significant difference in the attitude of Middle Class Consumer towards
the Cash Discount as a Sales Promotion Scheme with respect to Family Income,
Gender & Educational Qualification.
H02: There is no significant difference in Middle Class Consumer preferences of Cash
Discount and Free Gift.
H12: There is significant difference in Middle Class Consumer preferences of Cash
Discount and Free Gift.
H03: Demographic parameters as Family Income, Gender & Educational Qualification
do not affect Middle Class Consumer Deal Proneness.
H13: Demographic parameters as Family Income, Gender & Educational Qualification
do affect Middle Class Consumer Deal Proneness.
H04: There is no significant difference in Brand Equity Perception with respect to
Family Income, Gender & Educational Qualification.
H14: There is significant difference in Brand Equity Perception with respect to
Family Income, Gender & Educational Qualification.
H05: There is no media preference to know about sales promotion schemes.
H15: There is media preference to know about sales promotion schemes.
H06: Demographic parameters as Family Income, Gender & Educational Qualification
do not affect Sales Promotion Schemes preferences.
H16: Demographic parameters as Family Income, Gender & Educational Qualification
do affect Sales Promotion Schemes preferences.
Research Methodology
Research Methodology chapter presents the methods and procedures used to explore
and investigate the effects of sales promotion on Middle Class Consumer and Brand
Equity Perception, with respect to selected FMCG products.
The study is based on both Primary & Secondary Data. The possible insight into study
was investigated with the help of Primary data and Secondary data.
The research methodology which is presented below specifies the method &
procedures for the collection of data, sample selection, measurement and analysis of
data.
Descriptive Research
Descriptive research is used to obtain information concerning the effects of sales
promotion on Middle Class Consumer Preferences and Brand Equity Perception.
Review of literature and other available information from various published and
unpublished reports, journals, periodicals, books, news papers, websites etc.
The descriptive research helped in preparing the ground work for the survey.
Understanding the issue
The research had to start by understanding the FMCG market, sales promotional tools,
effects of sales promotion, who is middle class consumer and how they choose
particular schemes as per FMCG products in major cities (Mumbai, Pune and Nagpur)
of Maharashtra.
To identify sales promotion schemes a data collection has been done on selected
FMCG products (Tea, Coffee, Detergents and Bathing Soaps).
Secondary data collected through various sources to define Middle Class consumer
and their population percentage of the total population of India and including
Maharashtra Govt. website, the population of the cities, Mumbai, Pune and Nagpur
get. Hence, secondary data analysis was very essential.
Sampling Design
Major 3 cities of Maharashtra (Mumbai, Pune and Nagpur) were selected as a
geographical area for this study.
For data collection total of 48 Areas has been considered (36 areas has been taken
from Mumbai, 6 areas taken from Pune, and 6 areas taken from Nagpur).
The close ended 5 pages Questionnaires were filled by Respondents.
Total Urban population of Middle Class Consumer in these cities are 23.58 lakh (from
Mumbi 16.35 lakh, from Pune 4.08 lakh and from Nagpur 3.15 Lakh), are major
concern for this research.
Sample size
Since, the results of Study depend upon the response of individuals, hence, large
sample size is needed, and so, to get large sample size Cochran’s (1977) sample size
formula has been used.
(Z-score) ² * std.dev*(1-std.dev)
Sample size =
(Margin of error) ²
To get sample size, Confidence level of 95% and margin of error 2% and 0.5 Standard
deviation has been used.
(1.96²) * 0.5*0.5
So, sample size (ss) =
(0.02)²
=
2401
In this research maximum sample size 2401 is used. Convenient Sampling method
has been used.
Sample size has been evenly distributed among 48 areas (Approximately 800 Middle
Class Family contacted to get 2401 individual respondents).
Table 3:
Mumbai North: Borivali [50], Dahisar [50], Magathane [50], Kandivali (E) [50],
Charkop [50], Malad (W) [50]
Mumbai North West:Jogeshwari (E) [50], Dindoshi [50], Goregaon [50], Versova [50],
Andheri (W) [50], Andheri (E) [50]
Mumbai
Mumbai North East:Mulund [50], Vikhroli [50], Bhandup (W) [50], Ghatkopar (W) [50],
Ghatkopar (E) [50], Mankhurd [50],
Mumbai North Central:Vile Parle [50], Chandivali [50], Kurla [50], Vandre (E) [50], Vandre
(W) [50], Kalina [50]
Mumbai South Central: Anushakti Nagar [50], Chembur [50], Dharavi [50], Sion Koliwada
[50], Wadala [50], Mahim [50]
Mumbai South: Worli [50], Shivadi [50],Byculla [50], Malabar Hill [50], Mumbadevi
[50], Colaba [51]
Pune
Vadgaon Sheri [50], Shivajinagar [50], Kothrud [50], Parvati [50],
Pune Cantonment [50]and Kasba Peth[50]
Nagpur
Nagpur South West [50], Nagpur South [50], Nagpur East [50],
Nagpur Central [50], Nagpur West [50]and Nagpur North [50].
Interpretation:
Above table represents all the 48 areas and number of contacted respondents from
each area (which is assigned in bracket).
Statistical tools Used for Data Analysis:
Firstly data has been fed in Excel then data analysed through SPSS. In this study
various statistical tools has been used.
Non Parametric test has been used. Non Parametric tests are distribution free. It does
not depend on any assumption about the Population distribution.
In this Study, K-W test, Mann –Whitney –U test or Wilcoxon test, Spearmans’ rank
co-relation, and Chi – Square test, Factorial Analysis has been done.
For reliability analysis Cronbach’s alpha test has been used.
The analysed data were finally interpreted to draw the inferences and objectives of the
study in view.
Limitations of the study:
The Research is limited to only three cities of Maharashtra, so, findings can not
generalise for Maharashtra or entire India.
Respondents approached conveniently. The Study is limited to FMCG product
category and only four products considered.
Research is only focused on Middle Class Consumer, so, result can’t generalise for all
segments of consumers.
Research is based on primary data and getting it, a well structured Questionnaire was
employed but the accuracy of the finding is fully depending upon respondents.
Other demographic factors also influence brand equity perception, in this research
only Family Income, Educational Qualification and Gender were considered.
Chapter 4:
DATA ANALYSIS & INTERPRETATION
Chapter 4:
Data analysis & Interpretation
Demographic Statistics:City of Residence:
Table 4:
City of residence
Number of Valid
Responses
Percentage
Mumbai
1800
75
Pune
300
12.5
Nagpur
300
12.5
Total
2400
100.0
Interpretation:
It is interpreted that in 2401 sample size, total number of valid responses are 2400 and
01 response was missing. Maximum numbers of sample respondents were from
Mumbai followed by Pune and Nagpur. The participated respondents from Mumbai
were 1800(75%) in number and participated respondents from Pune were 300(12.5%)
in number and from Nagpur 300(12.5%) Middle class individuals were participated.
Comparison of All the scores with respect to Cities:
Table 5:
City of Residence
Mumbai
Pune
Nagpur
Mean
SD
Mean
SD
Mean
SD
CD
3.03
.97
3.1
.98
3.00
.97
FG
2.85
.73
2.90
.73
2.95
.72
BL
3.12
.87
3.12
.88
3.13
.87
BA
3.33
.73
3.32
.73
3.33
.72
BASO
3.20
.84
3.18
.84
3.19
.84
PQ
3.14
.70
3.14
.70
3.15
.69
DP
2.50
.88
2.52
.88
2.48
.87
Interpretation:
Above table shows all the scores as well as Mean and Standard Deviation with respect
to three different areas (Cities).
One Way ANOVA result:
Table 6:
ANOVA
Sum of
Squares
CD
FG
BL
BA
BASO
PQ
DP
Between
Groups
Mean
Square
Df
.008
2
.004
Within Groups
2264.988
2398
.945
Total
2264.996
2400
.022
2
.011
Within Groups
1262.736
2398
.527
Total
1262.758
2400
.043
2
.021
Within Groups
1836.930
2398
.766
Total
1836.973
2400
.051
2
.026
Within Groups
1263.904
2398
.527
Total
1263.955
2400
.079
2
.039
Within Groups
1688.589
2398
.704
Total
1688.667
2400
.024
2
.012
Within Groups
1170.903
2398
.488
Total
1170.927
2400
.069
2
.034
Within Groups
1857.594
2398
.775
Total
1857.662
2400
Between
Groups
Between
Groups
Between
Groups
Between
Groups
Between
Groups
Between
Groups
F
Sig.
.004
.996
.021
.980
.028
.972
.049
.952
.056
.946
.025
.976
.044
.957
Interpretation:
One Way ANOVA has been used to study difference between the three Cities.
Since p-value for the ANOVA is greater than that of 0.05 indicates no significant
difference between the average scores with respect to Areas of the respondent.
Family Income:
Table 7:
Family Income
Number of Sample Respondent
Percentage
3-6 lakh
1523
63.5
6-9 lakh
546
22.7
9-12 lakh
165
6.9
12-15 lakh
100
4.2
15-18 lakh
66
2.8
2400
100.0
Total
Interpretation:
It is interpreted that maximum number of respondents falling in 3-6 lakh of Family
Income group that is 1523 in number, represents 63.5 percentage of the sample size
and least number of respondents falls in 15-18 lakh of family income group,
represents 2.8 percentage of the sample size.
Further, 6-9 lakhs of family income group having 546 individuals i.e. 22.7 percentage
of the total sample size. 165 respondents were from 9-12 lakhs of family income
group and 66 respondents were from 15-18 laks of family income group.
Age Distribution:
Table 8:
Age
Number of Sample
Respondents
Percentage
Below 20
270
11.2
21 - 30
1542
64.3
31 – 40
378
15.7
41 – 50
139
5.8
Above 50
71
3.0
2400
100.0
Total
Interpretation:
It is interpreted that maximum number of respondents comes from 21-30 year of age
group and least comes from above 50 of age group.
In below 20 age group there were 270 respondents (11.2%) participated, in 21-30 of
age group there were 1542 (64.3%) number of respondents participated, in 31-40 of
age group 378 (15.7%) number of respondents participated, in 41-50 of age group
139 (5.8%) number of respondents participated and in above of 50 age group only 71
(3%) number of respondents participated.
Gender:
Table 9:
Number of Sample
Respondents
Percentage
Male
1414
58.9
Female
986
41.1
Total
2400
100.0
Interpretation:
It is interpreted that among respondents maximum were Male and represents 58.9
percentages i.e. 1414 in number of the sample size. Females are of 986 in number and
represent 41.1 percentage of the sample size.
Marital Status:
Table 10:
Number of Sample Respondents
Percentage
Married
588
24.5
Single
1812
75.5
Total
2400
100.0
Interpretation:
Among respondents single people are higher in number than married. Single marital
status represents 75.5 %( 1812 individual) of the total number of participants and
Married are 588 in number at 24.5%.
Employment status:
Table 11:
Number of Sample
respondents
Percentage
Employed Govt.Org.
104
4.3
Employed Pvt.Org.
1445
60.2
Not Employed
682
28.4
Self Employed
169
7.0
Total
2400
100.0
Type of Organization
Interpretation:
Respondents working in Private Organisation are maximum in number than
employment status with Govt. Organisation, Not Employed and Self Employed.
There are 1445(60.2%) number of respondents working in Private organisation and
682 (28.4%) respondents are not employed, self employed are 169 (7%) in number
and employment status with Govt. Organisation is 104 (4.3%) in number.
Educational qualification:
Table 12:
Educational Qualification
Number of Sample
Respondents
Percentage
Below 10th Standard
35
1.5
10th Standard
34
1.4
12 Standard
590
24.6
Graduation
1072
44.7
P.G
637
26.5
Above P.G
32
1.3
2400
100.0
th
Total
Interpretation:
As per educational qualification, graduates respondents are maximum that represents
44.7 percentages (1072 respondents) of total number of respondents. Below 10th were
only 1.5 percentages i.e. 35 in number. Above P.G was least that represents merely
1.3 percentages (32 respondents) of the total number of the respondents. Educational
qualification of 12th and 10th standards with 24.6 percentages (590 respondents) and
1.4 percentages (34 respondents) respectively found.
Family Size:
Table 13:
Family size
Number of Sample Respondents
Percentage
1 member
15
.6
2 member
50
2.1
3 member
453
18.9
4 member
1120
46.7
5 member
499
20.8
More than 5
263
11.0
2400
100.0
Total
Interpretation:
It is interpreted that, 1120 number of respondents’ family having 4 members. Other is
very less. But family size of 3 and 5 are nearly same. One members’ of family size
were very less that represents 0.6 percentage , respondents comes from this family
size are 15 in number.
Family Type:
Table 14:
Number of Sample
Respondents
Percentage
Individual
1283
53.5
Joint
1117
46.5
Total
2400
100.0
Interpretation:
Respondents comes from Individual type of family is higher in number than Joint
type. Individual family represented by 53.5 percentages (1283) of respondents and
respondents comes form Joint family are 1117 in number i.e. 46.5% of total
respondents.
Reliability analysis:
The reliability is calculated for the questionnaire as a whole to check the consistency.
Table 15:
Cronbach's Alpha
N of Items
.614
32
Interpretations:
Since, Cronbach's Alpha is greater than that of 0.6 indicates very good reliability to
go further to test Hypothesis. 32 items represents questions related to demographic
and brand equity responses.
H01: There is no significant difference in the attitude of Middle Class Consumer
towards the Cash Discount as a Sales Promotion Scheme with respect to Family
Income, Gender & Educational Qualification.
H11: There is significant difference in the attitude of Middle Class Consumer towards
the Cash Discount as a Sales Promotion Scheme with respect to Family Income,
Gender & Educational Qualification.
For this hypothesis we considered two variables the first variable is Cash Discount
variable 1 and then we calculated the median score for all the three questions asked in
the Cash Discount scheme. The new variable will be called as CD Score. This
variable then considered as second variable for the comparison.
Testing of Hypothesis while considering Family Income:
Table 16:
Family Income in Lakhs
9-12 12-15 15-18
Total
3-6
6-9
Strongly disagree
102
1
33
0
0
137
Disagree
136
0
33
34
0
203
Neither agree and Nor
Disagree
244
36
0
0
0
280
Agree
657
208
66
0
0
930
Strongly agree
384
301
33
66
66
850
Total
1523
546
165
100
66
2400
Interpretation:
On the basis of above table it can be interpreted that maximum number of respondents
(930 in number) agree with cash discount, from this, maximum (657) comes from 3-6
laks of Family Income group. Least number of people were strongly disagree with
cash discount, 3-6 laks of income group of respondents represents maximum in
number. In 6-9 lakhs of Income group no one were found disagree, maximum were
strongly agree. From 9-12 laks of family income group strongly disagree and disagree
were in 50, 50 ratio. Strongly agree were just half of the agree response. From 12-15
lakhs of family income group maximum were strongly agree. All from 15-18 lakhs of
family income group mention strongly agree.
Chi- Square test:
Table 17:
Value
Asymp. Sig.
(2-sided)
df
Pearson Chi-Square
623.403
16
.000
Likelihood Ratio
713.517
16
.000
N of Valid Cases
2400
Interpretations:
Since the p-value for the chi-square is less 0.05 indicates that there is association
between responses and Income groups. To find out which of these two favours more
to for the cash discount as scheme. To find out this Kruskal-Wallis test (Non
parametric ANOVA) has been used.
Kruskal-Wallis test results:
Table 18:
Cash discount
Chi-Square
Df
Asymp. Sig.
340.367
4
.000
Interpretations:
Since p-value for K-W test is less than that of 0.05 indicates that there is significant
difference between the ratings as per income group.
To find out which of these groups rated highly to the cash discount the reference of
the Mean rank table of the K-W test below, taken:
Mean Rank table:
Table 19:
N
Mean Rank
Ranking of
Groups
3 - 6 lakhs
1523
1069.11
4
6 - 9 lakhs
546
1535.13
2
9 - 12 lakhs
165
891.30
5
12 - 15 lakhs
100
1385.75
3
15 - 18 lakhs
66
1976.50
1
Family Income
Total
2400
Interpretations:
Group with Family income of 15-18 lakhs has very strongly rated cash discount as
sales promotional scheme. While Family income group of 9-12 lakhs falls last in the
rating as per Family Income group.
CD score comparison:
Kruskal-Wallis test results:
Table 20:
Ranks
Family Income
Cdscore
N
Mean Rank
3 - 6 lakhs
1523
1233.68
6 - 9 lakhs
546
1152.27
9 - 12 lakhs
165
1055.90
12 - 15 lakhs
100
943.13
15 - 18 lakhs
66
1603.00
Total
2400
Table 21: Test Statisticsa,b
Cdscore
Chi-Square
df
Asymp. Sig.
a. Kruskal Wallis Test
b. Grouping Variable: income
55.271
4
.000
Interpretation:
Above table 20 and table 21 is part of K-W test. Table 16 represents cd score
comparison with variable Family Income group.
Table 22:
Cash discount
Chi-Square
55.271
Df
4
Asymp. Sig.
.000
Interpretation:
Since p-value for K-W test is less than that of 0.05 indicates that there is significant
difference between CD score ratings as per income group. To find out which of these
groups rated highly to the cash discount the reference of the Mean rank table of the KW test has been taken:
Table 23:
Mean Rank table:
N
Mean Rank
Ranking of
Groups
3 - 6 lakhs
1523
1233.68
2
6 - 9 lakhs
546
1152.27
3
9 - 12 lakhs
165
1055.90
4
12 - 15 lakhs
100
943.13
5
15 - 18 lakhs
66
1603.00
1
Family Income
Total
2400
Interpretations:
Family income group of 15-18 lakhs found to be consistent in rating and has very
strongly rated cash discount as sales promotional scheme. While Family income
group of 9-12 lakhs which was at the fourth place shuffled its position. The major
shift was observed for the group with Family Income of 3-6 lakhs, which was at
fourth position earlier got shifted to second position in the table.
Testing of Hypothesis while considering Gender:
Table 24:
Female
Male
Total
Number of
Number of
Percentage
Percentage
responses
responses
Strongly disagree
68
6.9%
70
4.9%
138
Disagree
34
3.5%
168
11.9%
202
Neither agree and
Nor Disagree
68
6.9%
212
15.0%
Agree
447
45.3%
483
34.2%
930
Strongly agree
369
37.5%
481
34.0%
850
Total
986
100
1414
100
2400
280
Interpretation:
From above table it can say that most of the Male and Female are agree with cash
discount.
Chi-square value:
Table 25:
Value
df
p-value
a
4
.000
Likelihood Ratio
114.274
4
.000
N of Valid Cases
2400
Pearson Chi-Square
106.230
Interpretations:
Since p-value for chi-square is less than that of 0.05 indicates that Gender has effect
on opinion for cash discount. To find out which of these two favours more to for the
cash discount as scheme, Mann-Whitney – U test has been used.
Mann-Whitney – U test:
Table 26:
N
Percentage of those agree and strongly
agree
Mean Rank
Male
1414
68.2
3.80
Female
986
82.8
4.03
Total
2400
Sex
Interpretation:
It can be interpreted that percentage of Female are high than Male to respond agree
and strongly agree.
U test result:
Table 27:
value
Mann-Whitney U
620829.500
Wilcoxon W
1624065.500
Z
- 4.842
Asymp. Sig. (2-tailed)
.000
Interpretations:
Since p-value for the M-U test is less than that of 0.05 indicates that there is
significant difference between the opinion of male and female. The Percentage value
and mean value indicates that female are more agree than that of male for the opinion
that cash discount as a sales promotion scheme.
CD Score Comparison (Gender):
Mann-Whitney U test:
Table 28:
Cd score
Mann-Whitney U
564062.000
Wilcoxon W
1565882.000
Z
-8.457
Asymp. Sig. (2-tailed)
.000
Mean Rank table:
Table 29:
Sex
Male
Female
Total
N
Mean Rank
1414
1106.63
986
1336.43
2400
Interpretations:
From above Table28 and Table 29, it can interpreted that p-value for the M-U test
is less than that of 0.05 indicates that there is significant difference between the
opinion of male and female. The mean rank table values indicate that the female
considers Cash discount as best sales promotion scheme.
Testing of Hypothesis while considering Educational qualification:
Table 30:
Below 10th
Std.
10th
Std.
12th Gradua
Std.
te
PG
Strongly
Agree
35
0
34
68
0
0
137
Agree
0
4
98
35
34
32
203
Neither
agree nor
disagree
0
4
170
106
0
0
280
Disagree
0
0
210
578
142
0
930
Strongly
Disagree
0
26
78
285
461
0
850
Total
35
34
590
1072
637
32
2400
Above
PG
Total
Interpretation:
It can interpreted that all the below 10th Standard educated people were strongly agree
with cash discount while all the above P.G were found agree with cash discount. From
10th Standard educated responded maximum to strongly disagree. From 12th Standard
maximum number of respondent were disagreeing. 461 number of respondent from
P.G were strongly disagreeing.
Table 31:
Value
Asymp. Sig. (2sided)
df
a
20
.000
Likelihood Ratio
1254.374
20
.000
Linear-by-Linear
Association
369.679
1
.000
Pearson Chi-Square
1769.329
N of Valid Cases
Interpretations:
2400
Since p-value for chi-square is less than that of 0.05 indicates that Educational
qualification has effect on opinion for cash discount. To find out which of these
favours more to for the cash discount as scheme K-W test did.
Kruskal-Wallis test results:
Table 32:
Cash discount
Chi-Square
723.898
df
5
Asymp. Sig.
.000
Interpretations:
Since p-value for K-W test is less than that of 0.05 indicates that there is significant
difference between the ratings as per education. To find out which of these groups
rated highly to the cash discount the reference of the Mean rank table of the K-W test,
taken.
Mean Rank table:
Table 33:
Educational
qualification
N
Mean Rank
Ranking of
Groups
Below 10th Standard
35
69.00
6
10th Standard
34
1596.09
2
12 Standard
590
829.97
4
Graduate
1072
1170.63
3
PG
637
1685.25
1
Above PG
32
239.00
5
th
Total
2400
Interpretations:
Group with PG and 10th Standard education has very strongly rated cash discount as
sales promotional scheme. While below 10th Standard group as well as above PG falls
last in the rating.
CD score comparison:
Kruskal-Wallis test results:
Table 34:
Cash discount
Chi-Square
156.579
df
5
Asymp. Sig.
.000
Interpretations:
Since p-value for K-W test is less than that of 0.05 indicates that there is significant
difference between the average CD score ratings as per education. To find out which
of these groups rated highly to the cash discount the reference of the Mean rank table
of the K-W test below, taken
Mean Rank table:
Table 35:
Educational
Qualification
N
Mean Rank
Ranking of
Groups
Below 10th Std.
35
2315.50
1
10 Std.
34
1307.82
2
12th Std.
590
1191.68
4
Graduate
1072
1160.53
5
PG
637
1250.54
3
Above PG
32
411.50
6
th
Total
2400
Interpretations:
For overall rating of CD the education group with education below 10th Standard
found rating very highly for cash discount as sales promotional scheme. While highly
educated people falls last in the rating.
Conclusion:
From all the above discussion it can be concluded that there is significant difference
in the attitude of Middle class Consumer towards the cash discount as a sales
promotion scheme with respect to Family Income, Gender & Educational
Qualification.
Hence, Null Hypothesis H01: There is no significant difference in the attitude of
Middle Class Consumer towards the Cash Discount as a Sales Promotion Scheme
with respect to Family Income, Gender & Educational Qualification, rejected.
And, Alternate Hypothesis H11: There is significant difference in the attitude of
Middle Class Consumer towards the Cash Discount as a Sales Promotion Scheme
with respect to Family Income, Gender & Educational Qualification, accepted.
H02: There is no significant difference in Middle Class Consumer preferences of Cash
Discount and Free Gift.
H12: There is significant difference in Middle Class Consumer preferences of Cash
Discount and Free Gift.
Descriptive Statistics:
Table 36:
Mean
Cash
Discount
N
Std. Deviation
Std. Error Mean
3.0012
2400
.97147
.01983
2.8990
2400
.72536
.01480
Free Gift
Interpretation:
Mean value, standard deviation and standard error mean for cash discount and free
gift has been calculated. Mean value of Cash discount is greater than the Free gift.
Paired t-test:
Table 37:
t
CD – FG
df
3.998
p-value
2400
6.58171665357665
E-5
Interpretations:
Since p-value for the test is less than that of 0.05 indicates that null hypothesis H02
can be rejected and conclude that Cash Discount is preferred to Free gift as Sales
Promotion Scheme by Middle Class Consumers.
This result has been verified using Wilcoxon test further;
Rank table:
Table 38:
Ranks
Mean
Rank
N
FG – CD
Negative
Ranks
Positive Ranks
Sum of
Ranks
1157a
933.95
1080582.00
827b
1074.41
888538.00
c
Ties
416
Total
2400
a. FG < CD
b. FG > CD
c. FG = CD
Interpretation:
It can be interpreted that Negative ranks of preference of free gift over Cash discount
is higher than Positive rank of preference of free gift over Cash discount.
Table 39:
FG - CD
Z
p-value
-3.801
.000
Interpretations:
Since p-value for the test is less than that of 0.05 indicates that null hypothesis is
rejected and conclude that Cash Discount is preferred to Free Gifts as sales promotion
schemes by Middle Class Consumers.
Hence, Null Hypothesis H02: There is no significant difference in Middle Class
Consumer preferences of Cash Discount and Free Gift, rejected.
And, Alternate Hypothesis H12: There is significant difference in Middle Class
Consumer preferences of Cash Discount and Free Gift, accepted.
H03: Demographic parameters as Family Income, Gender & Educational Qualification
do not affect Middle class Consumer Deal Proneness.
H13: Demographic parameters as Family Income, Gender & Educational Qualification
do affect Middle class Consumer Deal Proneness.
Testing of Hypothesis while considering Family Income:
To identify which of the income group is highly Deal prone Mean rank table has been
used.
Mean Rank table:
Table 40:
N
Mean Rank
Ranking of
Groups
3 - 6 lakhs
1523
1257.37
3
6 - 9 lakhs
546
1047.53
4
9 - 12 lakhs
165
1316.70
1
12 - 15 lakhs
100
1272.84
2
15 - 18 lakhs
66
771.00
5
Family Income
Total
2400
Interpretation:
Mean rank table shows 9-12 lakhs of Family income group of middle class consumer
are number one in rank towards Deal prone. 15-18 lakhs of Family income group of
middle class consumer are least in rank table shows least Deal prone.
Kruskal-Wallis Test:
Table 41:
Deal Proneness
Chi-Square
df
p-value
76.638
4
.000
Interpretations:
Since p-value for K-W test is less than that of 0.05 indicates that Family income
affects the deal proneness of the consumer. To identify which of these groups differ
significantly Mann-Whitney U test has been carried out.
Mann-Whitney U test Table:
Table 42:
3 - 6 lakhs
6-9
lakhs
6 - 9 lakhs
9 - 12
lakhs
12 - 15
lakhs
15 - 18
lakhs
9 - 12
lakhs
12 - 15
lakhs
15 - 18
lakhs
MannWhitney 344656.0 122859.0 73974.0
30690.0 32554.5 23002.0 13629.0
U
Wilcoxon
493987.0 1284909.0 1236024.0 32901.0 181885.5 172333.0 15840.0
W
Z
-6.29
-0.51
-0.51
-5.63
-6.12
-2.91
-3.87
P-value
3.13E10*
0.611
0.608
1.79E08*
9.36E10*
0.004*
1.09E04*
*Significant Difference
Table 43:
9 - 12 lakhs
12 - 15 lakhs
12 - 15 lakhs
15 - 18 lakhs
15 - 18 lakhs
Mann-Whitney U
7788.0
2178.0
2178.0
Wilcoxon W
12838.0
4389.0
4389.0
-0.84
-8.31
-5.30
0.4
9.85E-17*
1.18E-07*
Z
P-value
*Significant Difference
Interpretations:
By considering Table 42 and Table 43, it can be interpreted that the respondents with
Family Income of 3-6 lakhs, 9-12 lakhs and 12 – 15 lakhs do differ significantly for
their opinion on Deal proneness and from rank table it can be concluded that they are
deal prone. While as respondents with income group 6-9 lakhs are next to above three
groups in deal proneness but respondent with Family income group 15 to 18 lakhs are
last in the table for deal proneness.
The following table depicts the groups with similar attitude.
Groups with Similar attitude:
Table 44:
N
Less Deal Prone
66
15 - 18 lakhs
Moderate Deal
Prone
546
6 - 9 lakhs
1523
3 - 6 lakhs
High Deal prone
3 - 6 lakhs
165
9 - 12 lakhs
100
12 - 15 lakhs
Interpretation:
It can be interpreted that 9-12 lakh and 12-15 lakh of Family Income group of middle
class consumer are highly deal prone. 3-6 lakh of Family income group of consumers
are found both moderate and high deal prone. 15-18 lakhs of Family Income group of
consumer are less deal prone.
Testing of Hypothesis while considering Gender:
Table 45:
Sex
N
Male
Female
Total
Mean Rank
1414
1148.49
986
1276.36
2400
Interpretation:
Number of Male respondents are high in number than Female respondents. Numbers
of Male are 1414 and mean rank is 1148.49. Number of Female are 986 and mean
rank is 1276.36 which is higher than Male.
Mann-Whitney U test result:
Table 46:
DP
Mann-Whitney U
Wilcoxon W
Z
p-value
623287.500
1625107.500
-4.724
.000
Interpretations:
Since p-value for the M-U test is less than that of 0.05 indicates that there is
significant difference between the opinion of male and female. The mean rank value.
is higher for Female than that of male indicates that Female are more deal prone than
male.
Testing of Hypothesis while considering Educational Qualification:
Mean Rank table:
Table 47:
Educational
Qualification
N
Mean Rank
Ranking of
Groups
Below 10th
Standard
35
2247.00
1
10th Standard
34
1498.91
3
12 Standard
590
1298.54
4
Graduate
1072
1162.40
5
PG
637
1078.22
6
Above PG
32
1680.50
2
th
Total
2400
Interpretation:
To find out which of the Qualification group rate high towards deal prone this table
has been used. Ranking of below 10th Standard were high followed by Above P.G and
group of P.G were rated least.
Kruskal-Wallis Test:
Table 48:
Deal Proneness
Chi-Square
df
p-value
153.800
5
.000
Interpretations:
Since p-value for K-W test is less than that of 0.05 indicates that Educational
background affects the deal proneness of the consumer. To identify which of these
groups differ significantly Mann-Whitney U test has been carried out.
Mann-Whitney U test Tables:
Table 49:
Below 10th against
Below 10th
12th
10th
Mann-Whitney U
.000
Wilcoxon W
Z
Asymp. Sig. (2-tailed)
Graduate
1785.000
1820.000
PG
Above PG
1190.000
.000
595.000 176130.000 578021.000 204393.000
528.000
-8.049
-8.612
-9.659
-10.077
-8.124
.000*
.000*
.000*
.000*
.000*
Table 50:
10th Standard against:
10th Std.
12th Std.
Mann-Whitney U
Wilcoxon W
Graduate
PG
Above PG
8899.000
12923.000
6490.000
480.000
183244.000
589124.000
209693.000
1075.000
-1.171
-3.094
-4.473
-1.987
.242
.002*
.000*
.047*
Z
Asymp. Sig. (2-tailed)
Table 51:
12th Standard against, Graduation against and P.G against
12th Std.
Graduate
MannWhitney U
Grad
PG
280307.500 154668.000
Above PG
PG
7184.000 316984.000
PG
Above PG Above PG
9488.000
4288.000
Wilcoxon W 856508.500 357871.000 181529.000 520187.000 585689.000 207491.000
Z
-4.085
Asymp. Sig.
.000*
(2-tailed)
*Significant Difference
-5.714
-2.414
-2.724
-4.613
-6.293
.000*
.016*
.006*
.000
.000
Interpretations:
It can be interpreted from Table 49, Table 50 and Table 51 that the respondents with
different background differ significantly for their opinion on Deal proneness and from
rank table it can be concluded that respondents with lowest education category and
highest education category are highly deal prone. While as respondents with
graduation are last in the table for deal proneness. On the basis of difference in the
ranks from rank table it can be obtained that the table depicting similar attitude. The
following table depicts the groups with similar attitude.
Groups with Similar attitude:
Table 52:
N
Less Deal Prone
Moderate Deal
Prone
637
PG
1072
Graduate
590
12th Std.
12th Std.
34
10th Std.
10th Std.
32
High Deal prone
Above PG
35
Below 10th Std.
Interpretation:
It can interpret that below 10th Standard were highly deal prone, all graduates and all
P.G respondents were less deal prone. 12th Standard as well as 10th Standard both
having both type of deal prone less deal prone and moderate deal prone
Conclusion:
From all the above discussion it can be concluded that there is significant difference
in the attitude of Middle class Consumer towards the Deal prone as with respect to
Family Income, Gender & Educational Qualification.
Hence, Null hypothesis H03: Demographic parameters as Family Income, Gender &
Educational Qualification do not affect Middle class Consumer Deal Proneness;
rejected. And alternate hypothesis H13: Demographic parameters as Family
Income, Gender & Educational Qualification do affect Middle class Consumer Deal
Proneness; accepted.
H04: There is no significant difference in Brand Equity Perception with respect to
Family Income, Gender & Educational Qualification.
H14: There is significant difference in Brand Equity Perception with respect to
Family Income, Gender & Educational Qualification.
Reliability analysis: The reliability is calculated for the questionnaire as a whole to
check the consistency.
Cronbach’s Alpha:
Table 53:
Cronbach's Alpha
N of Items
.614
32
Interpretations:
Since Cronbach's Alpha is greater than that of 0.6 indicates very good reliability
Reliability analysis (for Response on Likert scale related to Brand Equity)
Table 54:
Cronbach's Alpha
N of Items
.616
22
Interpretations:
Since Cronbach’s Alpha is greater than that of 0.6 indicates very good reliability to go
further analysis
Spearman’s rank correlation:
Table 55:
Brand
Brand Awarenes Brand Perceived
Loyalty
s
Association Quality
Brand
Loyalty
Correlation
Coefficient
.048*
.396**
.167**
Sig. (2-tailed)
.020
.000
.000
N
2400
2400
2400
1.000
-.046*
.550**
Sig. (2-tailed)
.023
.000
N
2400
2400
1.000
.092**
Brand
Correlation
Awareness Coefficient
Brand
Correlation
Association Coefficient
Perceived
Quality
1.000
Sig. (2-tailed)
.000
N
2400
Correlation
Coefficient
1.000
Sig. (2-tailed)
N
Interpretation:
Above table shows that Brand Loyalty, Brand Awareness, Brand Association and
Perceived Quality are highly co- related, hence, Hypothesis analysis can go further.
Basic data distribution for Brand equity:
Table 56:
Strongly
disagree
Disagree
Neither agree
nor disagree
Agree
Strongly
Agree
bl1
137
582
649
825
208
bl2
68
447
959
718
209
bl3
171
689
892
511
138
bl4
103
552
380
1089
277
ba1
274
927
589
441
170
ba2
137
240
441
1067
516
ba3
103
536
723
766
273
ba4
205
1026
550
378
242
ba5
33
275
696
1093
304
ba6
103
172
848
799
479
baso1
203
433
660
971
134
baso2
212
551
684
853
101
baso3
242
243
483
1094
339
baso4
245
376
859
752
169
pq1
173
706
687
628
207
pq2
34
276
869
1119
103
pq3
173
923
859
379
67
pq4
103
347
417
1156
378
pq5
313
921
486
442
239
pq6
211
243
883
827
237
pq7
207
411
846
623
314
pq8
71
545
683
794
308
Interpretation:
Above table shows that Number of responses gets on particular question on response
sheet. As for example 313 numbers of respondents are Strongly Disagree with 5th
question of Perceived quality and so on.
Testing of Hypothesis while considering Family Income:
Data distribution for Brand Equity Family income wise:
Table 57:
Family Income
3 - 6 lakhs
6 - 9 lakhs
9 - 12 lakhs
12 - 15 lakhs
15 - 18 lakhs
Mode
Mode
Mode
Mode
Mode
bl1
4.00
3.00
2.00
2.00
3.00
bl2
3.00
4.00
3.00
4.00
3.00
bl3
3.00
2.00
3.00
1.00
3.00
bl4
4.00
4.00
4.00
4.00
4.00
ba1
3.00
2.00
4.00
4.00
2.00
ba2
4.00
4.00
3.00
4.00
4.00
ba3
4.00
2.00
3.00
2.00
2.00
ba4
2.00
2.00
4.00
2.00
2.00
ba5
3.00
4.00
4.00
4.00
4.00
ba6
4.00
3.00
3.00
2.00
3.00
baso1
4.00
2.00
1.00
2.00
2.00
baso2
4.00
3.00
2.00
4.00
4.00
baso3
4.00
4.00
4.00
1.00
4.00
baso4
3.00
3.00
1.00
4.00
3.00
pq1
4.00
3.00
2.00
2.00
2.00
pq2
3.00
4.00
4.00
4.00
4.00
pq3
3.00
2.00
3.00
2.00
2.00
pq4
4.00
4.00
4.00
4.00
4.00
pq5
2.00
2.00
2.00
4.00
2.00
pq6
3.00
4.00
3.00
2.00
3.00
pq7
4.00
3.00
4.00
2.00
3.00
pq8
4.00
4.00
3.00
3.00
2.00
Interpretation:
Above table shows the central tendency of responses with Brand Equity. Maximum
frequency or mode vale for each questions related to Brand Equity as per family
income for all respondents has been calculated.
Sum of Ranks Table:
Table 58:
3-6
lakhs
6-9
lakhs
9 - 12
lakhs
12 - 15
lakhs
15 - 18
lakhs
Brand
Loyalty
1172.15
(4)
1265.63
(2)
Brand
Awareness
Brand
Association
Perceived
Quality
1282.72 (1)
1151.23 (4)
1250.49 (1)
1167.45 (3)
1291.07 (2)
1212.92 (3)
1084 (5)
1196.2 (2)
1210 (3)
1233.4 (2)
715.54 (4)
1099.18 (5)
680.03 (4)
339 (5)
1736.75 (1)
668 (5)
1259.56
(3)
1536.25
(1)
Interpretation:
Above table shows the ranking of Brand loyalty, Brand Awareness, Brand
Association and perceived quality regarding family income group. 15-18 lakh of
family income group found rank 1 for the Brand Loyalty and Brand association. 3-6
lakh of family income group found rank 1 for the Brand Awareness and Perceived
Quality and so on.
Kruskal-Wallis test:
Table 59:
Chi-Square
df
Asymp. Sig.
Brand
Loyalty
Brand
Awareness
Brand
Association
Perceived
Quality
29.374
181.764
61.677
110.629
4
4
4
4
.000*
.000*
.000*
.000*
Interpretations:
Since p-value for the Kruskal-Wallis test is less than that of 0.05 indicates that as
income changes there is change in the perception of people for Brand loyalty, Brand
awareness, Brand association and Perceived quality. The highest value in mean rank
table indicates that the group is strongly agreed for respective category. This indicates
that more the mean rank value least the importance of sales promotion scheme and
more the brand loyalty, brand awareness, Brand association and perceived quality.
Conclusion:
Since income affects all the parameters of brand equity so, it concludes that income
affects brand equity.
Testing of Hypothesis while considering Educational Qualification:
Basic data distribution Educational qualification wise:
Table 60:
Below 10th
10th Std. 12th Std. Graduate
Std.
PG
Above PG
Mode
Mode
Mode
Mode
Mode
Mode
bl1
2.00
3.00
4.00
4.00
4.00
4.00
bl2
2.00
3.00
3.00
3.00
4.00
2.00
bl3
4.00
3.00
3.00
3.00
4.00
2.00
bl4
1.00
3.00
4.00
4.00
4.00
4.00
ba1
5.00
3.00
3.00
2.00
2.00
5.00
ba2
1.00
3.00
4.00
4.00
4.00
3.00
ba3
4.00
3.00
3.00
4.00
2.00
1.00
ba4
4.00
3.00
3.00
2.00
2.00
1.00
ba5
2.00
3.00
4.00
4.00
4.00
4.00
ba6
1.00
3.00
3.00
4.00
3.00
3.00
baso1
1.00
4.00
4.00
4.00
2.00
4.00
baso2
2.00
3.00
3.00
4.00
4.00
5.00
baso3
1.00
4.00
4.00
4.00
4.00
5.00
baso4
3.00
3.00
3.00
4.00
4.00
2.00
pq1
3.00
4.00
4.00
3.00
2.00
2.00
pq2
4.00
3.00
3.00
3.00
4.00
3.00
pq3
4.00
3.00
3.00
3.00
2.00
3.00
pq4
1.00
3.00
4.00
4.00
4.00
4.00
pq5
1.00
5.00
3.00
2.00
2.00
5.00
pq6
1.00
3.00
3.00
4.00
3.00
3.00
pq7
1.00
5.00
2.00
4.00
3.00
3.00
pq8
1.00
3.00
3.00
4.00
2.00
3.00
Interpretation:
Above table shows the central tendency of responses with Brand Equity. Maximum
frequency or mode vale for each questions related to Brand Equity as per Educational
Qualification for all respondents has been calculated.
Sum of Ranks Table:
Table 61:
Brand
Loyalty
Brand Awareness
Brand Association
Perceived
Quality
Below 10th
259.50 (6)
901.00 (5)
138.00 (6)
35.00 (6)
10th
1174.41 (3)
1059.41 (3)
1428.38 (2)
1098.29 (3)
12th
1105.28 (4)
1268.53 (2)
884.29 (5)
1197.17 (2)
Graduate
1180.35 (2)
1323.59 (1)
1243.72 (4)
1364.36 (1)
PG
1383.47 (1)
971.06 (4)
1413.41 (3)
1011.09 (4)
Above PG
1084.00 (5)
901.00 (5)
2300.50 (1)
959.00 (5)
Interpretation:
Above table shows the ranking of Brand loyalty, Brand Awareness, Brand
Association and Perceived Quality regarding Educational Qualification. P.G found
rank 1 for the Brand Loyalty and given rank 3 to Brand association. Graduates found
rank 1 for the Brand Awareness and Perceived Quality and so on.
Table 62:
Chi-Square
df
Asymp. Sig.
Brand
Loyalty
Brand
Awareness
Brand
Association
Perceived
Quality
126.764
129.033
371.557
224.999
5
5
5
5
.000*
.000*
.000*
.000*
Interpretations: Since p-value for the Kruskal-Wallis test is less than that of 0.05
indicates that as educational qualification changes there is change in the perception of
people for Brand loyalty, Brand awareness, Brand association and Perceived quality.
The highest value in mean rank table indicates that the group is strongly agreed for
respective category. This indicates that more the mean rank value least the importance
of sales promotion scheme and more the brand loyalty, brand awareness, Brand
association and perceived quality.
Conclusion:
Since Educational Qualification affects all the parameters of Brand Equity, hence it
can conclude that Educational Qualification affects brand equity.
Testing of Hypothesis while considering Gender:
Mean rank table as per Gender:
Table 63:
Sex
Brand Loyalty
Male
Female
Total
Brand Awareness
Male
Female
Total
Brand Association
Male
Female
Total
Perceived Quality
Male
Female
Total
N
Mean Rank
1414
1115.65
986
1323.49
2400
1414
1075.97
986
1380.43
2400
1414
1192.27
986
1213.53
2400
1414
1237.20
986
1149.06
2400
Interpretation:
The highest value in mean rank table indicates that the group is strongly agreed for
respective category. It can be inferred that female have rated highly for brand loyalty
and Brand awareness while male have rated highly to perceived quality.
Table 64:
Brand
Loyalty
Mann-Whitney U
Wilcoxon W
Z
Asymp. Sig. (2tailed)
576819.000
Brand
Awareness
520679.500
Brand
Association
685237.000
Perceived
Quality
646378.000
1578639.000 1522499.500 1687057.000 1132969.000
-7.372
-10.834
-.758
-3.164
.000
.000
.448
.002
Interpretations:
Since p-value for the Mann-Whitney test is less than that of 0.05 indicates that gender
wise there is change in the perception of respondent for Brand loyalty, Brand
awareness, and Perceived quality. While for Brand association they do not differ.
Conclusion:
Since Gender affects three of the four parameters of brand equity, so, it can conclude
that gender affects brand equity.
Hence, Null Hypothesis, H04: There is no significant difference in Brand Equity
Perception with respect to Family Income, Gender & Educational Qualification,
rejected.
And, Alternate Hypothesis,H14: There is significant difference in Brand Equity
Perception with respect to Family Income, Gender & Educational Qualification,
accepted.
H05: There is no media preference to know about sales promotion schemes. i.e. all
media is equally preferred for the sales promotion.
H15: There is media preference to know about sales promotion schemes. i.e. some of
the media is preferred more than that of other.
Testing of hypothesis for media Preferences:
Data for different media preference:
Table 65:
Observed N Expected N
Residual
Television
886
300.0
586.0
News paper
203
300.0
-97.0
Radio
242
300.0
-58.0
Internet
313
300.0
13.0
SMS
172
300.0
-128.0
Pamphlet
239
300.0
-61.0
Banners/ Hoardings/ Wall
painting
243
300.0
-57.0
Point of Purchase Materials
102
300.0
-198.0
Total
2400
Interpretation:
It is interpreted that Television preference is higher than above all medium of
information for sales promotion schemes. In table observed frequency and expected
frequency calculated and difference between observed frequency and expected
frequency calculated i.e. Residual, calculated for Chi-Square test. The residual of
Television is higher than above all media preference frequency.
Chi-square test:
Table 66:
Media
Chi-Square
Df
Asymp. Sig.
1396.320a
7
.000
Interpretations:
Since p-value for the chi-square is less than that of 0.05 hence null hypothesis,
rejected and alternative hypothesis, accepted.
Conclusion: Hence from above discussion it can conclude that all media’s are not
equally preferred but Television is the most preferred than all others.
Hence, Null Hypothesis, H05: There is no media preference to know about sales
promotion schemes. i.e. all media is equally preferred for the sales promotion,
rejected.
And, Alternate Hypothesis, H15: There is media preference to know about sales
promotion schemes. i.e. some of the media is preferred more than that of other,
accepted.
H06: Demographic parameters as Family Income, Gender & Educational Qualification
do not affect Sales Promotion Schemes preferences.
H16: Demographic parameters as Family Income, Gender & Educational Qualification
do affect Sales Promotion Schemes preferences.
Basic data distribution of Sales Promotion scheme preference:
Table 67:
Sps1
1
2
3
4
5
6
7
8
0
sps2 sps3 sps4 sps5 sps6 sps7 sps8 sps9 sps10 sps11 sps12 sps13
34
35
34 277 242
0
35
306
377
377
72 312 236
0
0 134 308
0
35
786
281
282
106 102 136 853
34
34 170 201
35
70
244
174
173
0 137 242 374 238
0 579 208
0
34
242
34
34
68
101
0 174
0 207 489
34
34 415 577
0
34
200
137
137
0 244 578 140
34
34 134 314
0
33
242
408
408
70 104 273 138 174 136 138 169
69
167
70
649
649
34 137
540
141
67
67
347 274 102
0 348 171 137
9
383 505 172
33 313 135
34
68 212
479
34
33
33
10
434 276
67
69 446 347 105
69 171
314
0
68
68
308 273
0
34 208 751 139
70 307
208
34
68
68
11
12
13
309 174 102
0 334 205
70 141 754
241
0
70
70
274 239
0 202 519
68
211
102
35
35
35
0 716
Interpretation:
Table 66 represents the data distribution of preference of respondents in order, for all
the Sales Promotion Schemes (SPS 1 to SPS 13).
Chi- Square Test:
Table 68
Value
Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear
Association
Asymp. Sig. (2sided)
df
30105.818a
144
.000
28321.407
144
.000
1125.196
1
.000
N of Valid Cases
31206
Interpretation:
Since p-value for the chi-square is less than that of 0.05 indicates that attribute
response and categories are not independent. It means respondent have some kind of
preference for some of the sales promotional schemes than other.
To identify which of the schemes are preferred more Factor Analysis has been
used.
Factor Analysis:
Factor analysis is carried out to extract important sales promotional schemes
according to respondent. Factor analysis is carried out by considering all 13 sales
promotional schemes. The important factors are extracted using eigen value rule of
“greater than 1.0”. Principle component method is used as method for extraction with
varimax rotation procedures. Once number of factors are extracted then number of
variables are extracted using rotation component matrix by the rule “variable
corresponding to Maximum value in column and row”.
Table 69:
Total Variance Explained
Initial Eigenvalues
Extraction Sums of
Squared Loadings
Rotation Sums of
Squared Loadings
% of
Compo
Varian Cumulati
nent
Total ce
ve %
Total
% of
% of Cumul
Varian Cumulat
Varia ative
ce
ive %
Total nce
%
1
2.939 22.607 22.607
2.939
22.607 22.607
2.521 19.395 19.395
2
2.700 20.773 43.380
2.700
20.773 43.380
2.238 17.215 36.610
3
1.882 14.478 57.859
1.882
14.478 57.859
1.998 15.370 51.980
4
1.666 12.818 70.676
1.666
12.818 70.676
1.839 14.149 66.130
5
1.076 8.274
78.951
1.076
8.274
1.667 12.821 78.951
6
.777 5.973
84.924
7
.581 4.467
89.390
8
.466 3.581
92.972
9
.335 2.578
95.550
10
.307 2.364
97.914
11
.228 1.751
99.665
12
.044 .335
100.000
13
2.201 1.693E100.000
E-16 15
78.951
Extraction Method: Principal
Component Analysis.
Interpretation:
Using eigen value rule of greater than 1.0, 5 components are extracted as important
components. To identify the corresponding variable we use the values of rotation
component matrix.
Rotated Component Matrix:
Table 70:
Component
Variables
1
2
3
4
5
SPS1
-.060
.491
.609*
-.395
.029
SPS2
-.608
.543
.092
-.222
.302
SPS3
.219
.009
.043
-.111
-.900
SPS4
-.302
-.598
-.067
-.036
-.608
SPS5
-.049
.753*
.059
.327
.156
SPS6
.105
-.020
.800*
-.201
.260
SPS7
-.066
-.799
-.165
.001
.189
SPS8
-.238
-.213
-.516
-.343
.386
SPS9
-.049
.247
-.025
.807*
-.128
SPS10
-.051
-.076
.000
.808*
.216
SPS11
.069
-.137
-.818
-.198
.227
SPS12
.981*
.060
.051
-.078
-.044
SPS13
.981*
.060
.051
-.078
-.044
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 6 iterations.
Interpretation:
The Maximum value in column identified to extract important contributor for the
maximum variance of 78% explained by these five factors. The numbers with asterisk
sign are the maximum value in the column. It is suggested that choose the variable
with value greater than that of 0.6. Therefore it identified the important variable
contributing for maximum variance by the rule of value greater than that of 0.6 in the
rotation component matrix. Therefore though there exist 5 components but according
to rule there is no variable with value 0.6 or more in the component 5 columns and
hence we rely discard the fifth component and rely on 4 components only. The
extracted Sales promotional schemes are:
Most preferred SPS variables:
Table 71:
Sales promotional schemes
SPS1
SPS5
SPS6
SPS9
SPS10
SPS12
SPS13
Preference of SPS1 while considering Family Income:
Table 72:
Family Income Group
Prefere 3
nce
lakhs
66 lakhs
9
12 9 - 12 lakhs lakhs
15 15 lakhs
18
Total
2
34
34
0
0
0
68
3
72
34
0
0
0
106
5
67
34
0
0
0
101
7
70
0
0
0
0
70
8
310
37
0
0
0
347
9
211
105
33
34
0
383
10
203
99
33
33
66
434
11
241
67
0
0
0
308
12
177
66
66
0
0
309
13
138
70
33
33
0
274
Interpretation:
Maximum number of responded preferred this scheme10th as a choice. This scheme
preferred 2nd as a Choice by 68 number of respondent and among of them maximum
were from 3-6 lakh and 6-9 lakh of Family Income group. This scheme preferred last
as a choice by 274 number of respondent and among of them maximum was from 3-6
lakh of family income group.
Chi-square test value:
Table 73:
Value
Asymp. Sig.
(2-sided)
df
a
36
.000
Likelihood Ratio
776.884
36
.000
Linear-by-Linear
Association
51.872
1
.000
Pearson Chi-Square
774.380
N of Valid Cases
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that income has
effect on this particular sales promotional scheme.
Preference of SPS1 while considering Educational qualification:
Table 74:
Educational Qualification
SPS1
Prefer Below
ence 10th Std.
12th
10th Std. Std.
Graduate PG
Above
PG
Total
2
0
0
34
1
33
0
68
3
0
0
0
106
0
0
106
5
0
0
34
34
33
0
101
7
0
0
34
36
0
0
70
8
0
4
135
208
0
0
347
9
0
0
105
240
38
0
383
10
0
0
102
107
225
0
434
11
0
4
69
130
105
0
308
12
0
26
77
106
68
32
309
13
35
0
0
104
135
0
274
35
34
590
1072
637
32
2400
Total
Interpretation:
Maximum number of responded preferred this scheme 10th as a choice. This scheme
preferred 2nd Choice by 68 number of respondent and among of them maximum was
from 12th Standard. This scheme preferred last choice by 274 number of respondent
and among of them maximum was from Below 10th Standard group.
Chi- square test:
Table 75:
Chi-Square Tests
Value
Pearson Chi-Square
Asymp. Sig.
(2-sided)
df
a
45
.000
1298.543
45
.000
23.299
1
.000
1336.982
Likelihood Ratio
Linear-by-Linear
Association
N of Valid Cases
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that education has
effect on this particular sales promotional scheme.
Preference of SPS1 while considering Gender:
Table 76:
Gender
Preference
SPS1
Total
Male
Female
Total
2
34
34
68
3
72
34
106
5
34
67
101
7
36
34
70
8
312
35
347
9
176
207
383
10
165
269
434
11
241
67
308
12
207
102
309
13
138
136
274
1415
985
2400
Interpretation:
Maximum number of responded preferred this scheme 8th
preferred 2
nd
as a choice. This scheme
Choice by 68 number of respondent and among of them Male and
Female were equal in number. This scheme preferred last choice by 274 number of
respondent and among of them maximum was from Male group.
Chi- Square test:Table 77:
Chi-Square Tests
Value
Asymp. Sig.
(2-sided)
df
a
9
.000
370.063
9
.000
Linear-by-Linear
Association
.000
1
.990
N of Valid Cases
2400
Pearson Chi-Square
340.908
Likelihood Ratio
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that gender has
effect on this particular sales promotional scheme.
Preference of SPS 5 while considering Family Income:
Table 78:
Prefe
rence
Family Income
12 - 15 15
-18 Tota
3 - 6 lakhs 6 - 9 lakhs 9 - 12 lakhs lakhs
lakhs
l
SPS5 1
Total
35
0
0
0
0
35
3
0
34
0
0
0
34
4
204
34
0
0
0
238
5
34
0
0
0
0
34
6
0
34
0
0
0
34
7
140
0
0
34
0
174
8
246
69
33
0
0
348
9
279
34
0
0
0
313
10
277
70
99
0
0
446
11
139
36
0
33
0
208
12
67
135
33
33
66
334
13
102
100
0
0
0
202
1523
546
165
100
66
2400
Interpretation:
Maximum number of responded preferred this scheme 10th
as a choice. This scheme
st
preferred 1 Choice by 35 number of respondent and among of them maximum was
from 3-6 laks of Family Income Group. This scheme preferred last choice by 202
number of respondent and among of them maximum was from 3-6 lakhs of Family
Income Group.
Chi- square test:
Table 79:
Chi-Square Tests
Value
Pearson Chi-Square
Asymp. Sig. (2sided)
df
1527.491a
44
.000
1423.470
44
.000
175.060
1
.000
Likelihood Ratio
Linear-by-Linear Association
N of Valid Cases
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that Family Income
has effect on this particular sales promotional scheme.
Preference of SPS 5 while considering Educational Qualification:
Table 80:
Educational Qualification
SPS5
Prefer Below
ence 10th
10th
12th
Graduate PG
Above PG
Total
1
0
0
0
0
35
0
35
3
0
0
34
0
0
0
34
4
0
0
103
102
33
0
238
5
0
0
34
0
0
0
34
6
0
0
0
1
33
0
34
7
0
0
34
106
34
0
174
8
0
26
119
65
106
32
348
9
0
4
65
210
34
0
313
10
35
0
67
306
38
0
446
11
0
0
105
70
33
0
208
12
0
0
0
109
225
0
334
13
0
4
29
103
66
0
202
35
34
590
1072
637
32
2400
Total
Interpretation:
Maximum number of responded preferred this scheme 10th
as a choice. This scheme
st
preferred 1 Choice by 35 number of respondent and among of them maximum was
from P.G educational group. This scheme preferred last choice by 202 number of
respondent and among of them maximum was from Graduate group.
Chi – Square test:
Table 81:
Chi-Square Tests
Value
Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear
Association
N of Valid Cases
Asymp. Sig.
(2-sided)
df
a
55
.000
1432.722
55
.000
48.269
1
.000
1553.969
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that education has
effect on this particular sales promotional scheme.
Preference of SPS 5 while considering Gender:
Table 82:
Gender
Male
SPS 5
Female
Total
1
35
0
35
3
0
34
34
4
171
67
238
5
0
34
34
6
0
34
34
7
70
104
174
8
245
103
348
9
177
136
313
10
207
239
446
11
140
68
208
12
235
99
334
13
134
68
202
1414
986
2400
Total
Interpretation:
Maximum number of responded preferred this scheme 10th
as a choice. This scheme
preferred 1st Choice by 35 number of respondent and all were Male. This scheme
preferred last choice by 202 number of respondent and among of them maximum was
from Male group.
Chi- Square test:
Table 83:
Chi-Square Tests
Value
Asymp. Sig.
(2-sided)
df
a
11
.000
339.327
11
.000
Linear-by-Linear
Association
6.665
1
.010
N of Valid Cases
2400
Pearson Chi-Square
Likelihood Ratio
290.162
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that gender has
effect on this particular sales promotional scheme.
Preference of SPS 6 while considering Family income
Table 84:
Family Income
3-6
lakhs
SPS6
6-9
lakhs
9 - 12
lakhs
12 - 15
lakhs
15 - 18
lakhs
Total
1
34
0
0
0
0
34
3
34
0
0
0
0
34
5
0
34
0
0
0
34
6
34
0
0
0
0
34
7
68
68
0
0
0
136
8
135
36
0
0
0
171
9
69
33
33
0
0
135
10
244
103
0
0
0
347
11
350
236
66
33
66
751
12
172
0
0
33
0
205
13
383
36
66
34
0
519
1523
546
165
100
66
2400
Total
Interpretation:
Maximum number of responded preferred this scheme 11th
as a choice. This scheme
preferred 1st Choice by 34 number of respondent and among of them maximum was
from 3-6 laks of Family Income Group. This scheme preferred last choice by 519
number of respondent and among of them maximum was from 3-6 lakhs of Family
Income Group.
Chi-Square Tests:
Table 85:
Chi-Square Tests
Value
Asymp. Sig.
(2-sided)
df
827.537a
40
.000
Likelihood Ratio
937.981
40
.000
Linear-by-Linear
Association
27.825
1
.000
Pearson Chi-Square
N of Valid Cases
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that Family income
has effect on this particular sales promotional scheme.
Preference of SPS 6 while considering Educational qualification:
Table 86:
Educational qualification
Below
10th Std.
th
10
Std.
12th Std. Graduate
Above
PG
PG
Total
SPS6 1
0
0
0
1
33
0
34
3
0
0
0
1
33
0
34
5
0
0
0
34
0
0
34
6
0
0
34
0
0
0
34
7
0
0
68
35
33
0
136
8
0
4
64
103
0
0
171
9
0
0
36
34
33
32
135
10
0
0
0
247
100
0
347
11
35
4
168
282
262
0
751
12
0
0
103
69
33
0
205
13
0
26
117
266
110
0
519
35
34
590
1072
637
32
2400
Total
Interpretation:
Maximum number of responded preferred this scheme 11th
as a choice. This scheme
preferred 1st Choice by 33 number of respondent and among of them maximum was
from P.G group. This scheme preferred last choice by 519 number of respondent and
among of them maximum was from Below Graduate group.
Chi-Square Tests:
Table 87:
Chi-Square Tests
Value
Pearson Chi-Square
Likelihood Ratio
Asymp. Sig.
(2-sided)
df
a
50
.000
1105.710
50
.000
25.706
1
.000
1369.683
Linear-by-Linear
Association
N of Valid Cases
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that education has
effect on this particular sales promotional scheme.
Preference of SPS 6 while considering Gender:
Table 88:
Sex
Preferen
ce
SPS6
Total
Male
Female
Total
1
0
34
34
3
34
0
34
5
0
34
34
6
34
0
34
7
34
102
136
8
137
34
171
9
102
33
135
10
212
135
347
11
481
270
751
12
102
103
205
13
278
241
519
1414
986
2400
Interpretation:
Maximum number of responded preferred this scheme 11th
as a choice. This scheme
st
preferred 1 Choice by 34 number of respondent and among of them only Female
were found. This scheme preferred last choice by 519 number of respondent and
among of them maximum was from Male group
Chi-Square Tests:
Table 89:
Chi-Square Tests
Value
Asymp. Sig.
(2-sided)
df
278.511a
10
.000
330.378
10
.000
Linear-by-Linear
Association
2.467
1
.116
N of Valid Cases
2400
Pearson Chi-Square
Likelihood Ratio
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that gender has
effect on this particular sales promotional scheme.
Preference of SPS 9 while considering Family income:
Table 90:
Family Income
Prefe 3 - 6
rence lakhs
6-9
lakhs
9 - 12
lakhs
12 - 15
lakhs
15 - 18
lakhs
Total
SPS9 3
35
0
0
0
0
35
7
69
0
0
0
0
69
8
70
0
33
34
0
137
9
142
70
0
0
0
212
10
104
34
0
33
0
171
11
204
70
33
0
0
307
12
517
170
66
0
0
753
13
382
202
33
33
66
716
1523
546
165
100
66
2400
Total
Interpretation:
Maximum number of responded preferred this scheme 12th
as a choice. This scheme
rd
preferred 3 Choice by 35 number of respondent and among of them maximum was
from 3-6 laks of Family Income Group. This scheme preferred last choice by 382
number of respondent and among of them maximum was from 3-6 lakhs of Family
Income Group.
Chi-Square Tests:
Table 91:
Chi-Square Tests
Value
Asymp. Sig.
(2-sided)
df
a
28
.000
Likelihood Ratio
673.009
28
.000
Linear-by-Linear
Association
19.654
1
.000
Pearson Chi-Square
671.531
N of Valid Cases
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that income has
effect on this particular sales promotional scheme.
Preference of SPS 9 while considering Educational qualification:
Table 92:
Educational qualification
Prefer
ence Below 10th
10th
12th
Graduate
PG
Above PG
Total
SPS9 3
0
0
0
0
35
0
35
7
0
0
69
0
0
0
69
8
0
0
101
36
0
0
137
9
0
26
15
98
73
0
212
10
0
0
68
36
67
0
171
11
0
0
34
173
100
0
307
12
35
4
167
444
104
0
754
13
0
4
136
285
258
32
715
35
34
590
1072
637
32
2400
Total
Interpretation:
Maximum number of responded preferred this scheme 12th
as a choice. This scheme
preferred 3rd Choice by 35 number of respondent and among of them all was from P.G
group. This scheme preferred last choice by 715 number of respondent and among of
them maximum was from Graduate group.
Chi-Square Tests:
Table 93:
Chi-Square Tests
Value
Asymp. Sig.
(2-sided)
df
a
35
.000
Likelihood Ratio
961.596
35
.000
Linear-by-Linear
Association
34.438
1
.000
Pearson Chi-Square
N of Valid Cases
1066.343
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that education has
effect on this particular sales promotional scheme.
Preference of SPS 9 while considering Gender:
Table 94:
Gender
Preference
SPS9
Total
Male
Female
Total
3
35
0
35
7
35
34
69
8
0
137
137
9
144
68
212
10
171
0
171
11
137
170
307
12
415
339
754
13
477
238
715
1414
986
2400
Interpretation:
Maximum number of responded preferred this scheme 12th
as a choice. This scheme
preferred 3rd Choice by 35 number of respondent and among of them only Male
found. This scheme preferred last choice by 715 number of respondents and among of
them maximum was from Male group
Chi-Square Tests:
Table 95:
Chi-Square Tests
Value
Pearson Chi-Square
Likelihood Ratio
Asymp. Sig. (2sided)
df
397.968a
7
.000
519.563
7
.000
7.044
1
.008
Linear-by-Linear
Association
N of Valid Cases
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that gender has
effect on this particular sales promotional scheme.
Preference of SPS10 while considering Family income
Table 96:
Family income
SPS10
3-6
lakhs
6-9
lakhs
9 - 12
lakhs
12 - 15
lakhs
35
0
0
0
0
35
2
35
0
0
0
0
35
3
36
0
0
34
0
70
4
34
0
0
0
0
34
5
34
0
0
0
0
34
6
0
0
33
0
0
33
7
134
33
0
0
0
167
8
208
167
33
66
66
540
9
276
170
33
0
0
479
10
212
69
33
0
0
314
11
139
36
33
0
0
208
12
170
71
0
0
0
241
13
210
0
0
0
0
210
1523
546
165
100
1
Total
15 - 18
lakhs Total
66 2400
Interpretation:
Maximum number of responded preferred this scheme 8th
as a choice. This scheme
preferred 1st Choice by 35 number of respondent and among of them maximum was
from 3-6 laks of Family Income Group. This scheme preferred last choice by 202
number of respondent and among of them maximum was from 3-6 lakhs of Family
Income Group.
Chi-Square Tests:
Table 97:
Chi-Square Tests
Value
Pearson Chi-Square
df
a
48
.000
1195.754
48
.000
73.428
1
.000
1545.022
Likelihood Ratio
Linear-by-Linear
Association
N of Valid Cases
Asymp. Sig. (2sided)
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that income has
effect on this particular sales promotional scheme.
Preference of SPS 10 while considering Educational qualification:
Table 98:
Educational qualification
th
th
th
12
Std. Graduate
Abo
ve
PG PG
Below 10
Std.
10
Std.
SPS10 1
35
0
0
0
0
0
35
2
0
0
0
0
35
0
35
3
0
0
34
36
0
0
70
4
0
0
34
0
0
0
34
5
0
0
0
1
33
0
34
6
0
0
0
0
33
0
33
7
0
4
63
66
34
0
167
8
0
0
0
247
293
0
540
9
0
0
238
143
98
0
479
10
0
30
82
97
73
32
314
11
0
0
0
170
38
0
208
12
0
0
69
172
0
0
241
13
0
0
70
140
0
0
210
Total
35
34
590
1072
637
32
2400
Total
Interpretation:
Maximum number of responded preferred this scheme 8th
as a choice. This scheme
st
preferred 1 Choice by 35 number of respondent and among of them maximum was
from Below 10th. This scheme preferred last choice by 210 numbers of respondents
and among of them maximum was from Graduate group.
Chi-Square Tests:
Table 99:
Chi-Square Tests
Value
Pearson Chi-Square
Likelihood Ratio
Asymp. Sig. (2sided)
df
3979.164a
60
.000
2010.355
60
.000
.911
1
.340
Linear-by-Linear
Association
N of Valid Cases
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that education has
effect on this particular sales promotional scheme.
Preference of SPS10 while considering Gender:
Table 100:
Gender
Male
SPS10
Female
Total
1
0
35
35
2
35
0
35
3
0
70
70
4
0
34
34
5
0
34
34
6
33
0
33
7
99
68
167
8
340
200
540
9
308
171
479
10
248
66
314
11
70
138
208
12
139
102
241
13
142
68
210
1414
986
2400
Total
Interpretation:
Maximum number of responded preferred this scheme 8th
as a choice. This scheme
preferred 1st Choice by 35 number of respondent and among of them only Female
found. This scheme preferred last choice by 210 number of respondent and among of
them maximum was from Male group.
Chi-Square Tests:
Table 101:
Chi-Square Tests
Value
Asymp. Sig.
(2-sided)
df
a
12
.000
Likelihood Ratio
507.242
12
.000
Linear-by-Linear
Association
52.527
1
.000
Pearson Chi-Square
N of Valid Cases
419.020
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that gender has
effect on this particular sales promotional scheme.
Preference of SPS 12 while considering Family income
Table 102:
Family Income
9 - 12
3 - 6 lakhs 6 - 9 lakhs lakhs
SPS12 1 174
Total
15 - 18
12 - 15 lakhs lakhs Total
103
66
34
0
377
2 211
70
0
0
0
281
3 174
0
0
0
0
174
4 34
0
0
0
0
34
5 137
0
0
0
0
137
6 239
136
33
0
0
408
7 348
103
66
66
66
649
8 34
33
0
0
0
67
9 0
33
0
0
0
33
10 33
34
0
0
0
67
11 34
34
0
0
0
68
12 70
0
0
0
0
70
13 35
0
0
0
0
35
546
165
100
66
2400
1523
Interpretation:
Maximum number of responded preferred this scheme 7th
as a choice. This scheme
st
preferred 1 Choice by 174 number of respondent and among of them maximum was
from 3-6 laks of Family Income Group. This scheme preferred last choice by 35
number of respondent and among of them maximum was from 3-6 lakhs of Family
Income Group.
Chi-Square Test:
Table 103:
Chi-Square Tests
Value
Asymp. Sig.
(2-sided)
df
Pearson Chi-Square
a
900.738
48
.000
Likelihood Ratio
1031.055
48
.000
Linear-by-Linear
Association
1.007
1
.316
N of Valid Cases
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that income has
effect on this particular sales promotional scheme.
Preference of SPS 12 while considering Educational qualification:
Table 104:
Educational Qualification
SPS12
Total
Below
10th Std. 10th Std. 12th Std. Graduate PG
Above
PG
Total
1
0
0
171
108
66
32
377
2
0
30
82
131
38
0
281
3
0
0
34
107
33
0
174
4
0
0
34
0
0
0
34
5
0
0
70
67
0
0
137
6
0
4
97
204
102 0
407
7
35
0
34
317
263 0
649
8
0
0
0
33
34
0
67
9
0
0
0
1
32
0
33
10
0
0
0
68
0
0
68
11
0
0
68
0
0
0
68
12
0
0
0
36
34
0
70
13
0
0
0
0
35
0
35
35
34
590
1072
637 32
2400
Interpretation:
Maximum number of responded preferred this scheme 7th
as a choice. This scheme
preferred 1st Choice by 171 number of respondent and among of them maximum was
from 12th. This scheme preferred last choice by 35 number of respondent and among
of them maximum was from P.G Educational group.
Chi-Square Tests:
Table 105:
Chi-Square Tests
Value
Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear
Association
N of Valid Cases
Asymp. Sig. (2sided)
df
1456.946a
60
.000
1391.845
60
.000
72.441
1
.000
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that education has
effect on this particular sales promotional scheme.
Preference of SPS12 while considering Gender
Table 106:
Gender
Male
SPS12
Female
Total
1
173
204
377
2
247
34
281
3
36
138
174
4
0
34
34
5
69
68
137
6
135
273
408
7
515
134
649
8
33
34
67
9
0
33
33
10
34
34
68
11
68
0
68
12
70
0
70
13
34
0
34
1414
986
2400
Total
Interpretation:
Maximum number of responded preferred this scheme 7th
as a choice. This scheme
preferred 1st Choice by 204 number of respondent and among of them maximum was
Female and 204 in number. This scheme preferred last choice by 34 number of
respondent and among of them only Male found.
Chi-Square Tests:
Table 107:
Chi-Square Tests
Value
Asymp. Sig.
(2-sided)
df
679.197a
12
.000
Likelihood Ratio
790.559
12
.000
Linear-by-Linear
Association
69.454
1
.000
Pearson Chi-Square
N of Valid Cases
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that gender has
effect on this particular sales promotional scheme.
Preference of SPS13 while considering Family income
Table 108:
Family Income
3 - 6 lakhs 6 - 9 lakhs
SPS13
9 - 12
lakhs
12 - 15
lakhs
15 - 18
lakhs
Total
1
174
103
66
34
0
377
2
212
70
0
0
0
282
3
173
0
0
0
0
173
4
34
0
0
0
0
34
5
137
0
0
0
0
137
6
239
136
33
0
0
408
7
348
103
66
66
66
649
8
34
33
0
0
0
67
9
0
33
0
0
0
33
10
34
34
0
0
0
68
11
34
34
0
0
0
68
12
70
0
0
0
0
70
13
34
0
0
0
0
34
Total
1523
546
165
100
66
2400
Interpretation:
Maximum number of responded preferred this scheme 7th
as a choice. This scheme
preferred 1st Choice by 377 number of respondent and among of them maximum was
from 3-6 laks of Family Income Group. This scheme preferred last choice by 34
number of respondents and among of them maximum was from 3-6 lakhs of Family
Income Group.
Chi-Square Tests:
Table 109:
Chi-Square Tests
Value
Asymp. Sig.
(2-sided)
df
Pearson Chi-Square
900.369a
48
.000
Likelihood Ratio
1030.483
48
.000
Linear-by-Linear
Association
1.015
1
.314
N of Valid Cases
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that income has
effect on this particular sales promotional scheme.
Preference of SPS13 while considering Educational qualification:
Table 110:
Educational Qualification
SPS13
Below
10th
10th
12th
Gradua
te
1
0
0
171
108
66
32
377
2
0
30
82
132
38
0
282
3
0
0
34
106
33
0
173
4
0
0
34
0
0
0
34
5
0
0
70
67
0
0
137
6
0
4
97
205
102
0
408
7
35
0
34
317
263
0
649
8
0
0
0
33
34
0
67
9
0
0
0
1
32
0
33
10
0
0
0
68
0
0
68
11
0
0
68
0
0
0
68
12
0
0
0
35
34
0
69
13
0
0
0
0
35
0
35
Total
35
34
590
1072
637
PG Above PG Total
32 2400
Interpretation:
Maximum number of responded preferred this scheme 7th
as a choice. This scheme
preferred 1st Choice by 377 number of respondent and among of them maximum was
from 12th. This scheme preferred last choice by 35 number of respondent and among
of them maximum was from P.G group.
Chi-Square Tests:
Table 111:
Chi-Square Tests
Value
Pearson Chi-Square
Asymp. Sig.
(2-sided)
df
1455.721a
60
.000
1391.298
60
.000
72.420
1
.000
Likelihood Ratio
Linear-by-Linear
Association
N of Valid Cases
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that education has
effect on this particular sales promotional scheme.
Preference of SPS13 while considering Gender
Table 112:
Gender
Male
SPS13
Female
Total
1
173
204
377
2
247
35
282
3
36
137
173
4
0
34
34
5
69
68
137
6
135
273
408
7
515
134
649
8
33
34
67
9
0
33
33
10
34
34
68
11
68
0
68
12
70
0
70
13
34
0
34
1414
986
2400
Total
Interpretation:
Maximum number of responded preferred this scheme 7th
as a choice. This scheme
preferred 1st Choice by 377 number of respondent and among of them Male was 173
and Female was 204 in number. This scheme preferred last choice by 34 number of
respondent and among of them maximum was from Male group
Chi-Square Tests:
Table 113:
Chi-Square Tests
Value
Asymp. Sig.
(2-sided)
df
676.193a
12
.000
Likelihood Ratio
786.826
12
.000
Linear-by-Linear
Association
69.569
1
.000
Pearson Chi-Square
N of Valid Cases
2400
Interpretations:
Since p-value for the chi-square is less than that of 0.05 indicates that gender has
effect on this particular sales promotional scheme.
Conclusion:
Since for all the Extracted SPS p-value for the chi-square is less than that of 0.05 with
respect to Family Income, Gender and Educational qualification so, null hypothesis
can be rejected and conclude that preferences for different SPS changes with change
in Family Income, Gender and Educational Qualification.
Hence, Null hypothesis, H06: Demographic parameters as Family Income, Gender &
Educational Qualification do not affect sales promotion schemes preferences,
rejected
And, Alternate Hypothesis, H16: Demographic parameters as Family Income,
Gender & Educational Qualification do affect sales promotion schemes preferences,
accepted.
Chapter 5:
MAJOR FINDINGS & CONCLUSIONS
Chapter 5
Major Findings and Conclusions:
The major Findings and Conclusions of the Study:
1. There is significant difference in the attitude of Middle Class Consumer
towards the cash discount as a sales promotion scheme with respect to Family
Income, Gender & Educational Qualification.
2. Family Income group of 15-18 lakhs has very strongly rated Cash Discount
as sales promotional scheme.
3. The female considers Cash discount as best sales promotion scheme.
4. Education below 10th Standard found rated very highly for Cash Discount as
Sales Promotional Scheme. While highly educated people falls last in the
rating as per Family Income group
5. There is significant difference in Middle Class Consumer preferences of
Cash Discount and Free Gift.
6. Cash discount is preferred to Free gifts as sales promotion schemes by
Middle class consumers.
7. Demographic parameters as Family Income, Gender & Educational
Qualification do affect Middle class Consumer Deal Proneness.
8. The respondents with different background differ significantly for their
opinion on Deal proneness and respondents with lowest education category
and highest education category are highly deal prone.
9. Female are more deal prone than male.
10. There is significant difference in Brand Equity Perception with respect to
Family Income, Gender & Educational Qualification.
11. Family Income and Educational Qualification affects Brand Equity
perception.
12. Female have rated highly for Brand Loyalty and Brand Awareness while
Male have rated highly to Perceived Quality.
13. There is media preference to know about sales promotion schemes. i.e. some
of the media is preferred more than that of other.
14. Television is the most preferred than all others and Point of Purchase
material is least preferred.
15. Different Sales Promotional schemes preference changes with change in
Family Income, Gender and Educational Qualification.
16. Sales Promotion Schemes of International product with Price off and Local
with gift/%extra are most preferred by Middle Class Consumers in Mumbai,
Pune and Nagpur.
17. No significant difference has been found in attitude as per area of residence,
towards Sales Promotion among all respondents from three cities.
18. Demographic parameters as Family Income, Gender & Educational
Qualification do affect Sales Promotion Schemes preferences
Chapter 6:
RECOMMENDATIONS
Chapter 6
Recommendations:

Cash Discount preferred most than Free Gift, hence, marketer should offer
attractive cash discounts.

Highly Income group of Consumers as well strongly rated Cash Discount as
sales promotional scheme, so marketer should emphasis more on cash
discount as Sales promotion schemes

Immediate benefits consider better than delayed benefits, so, marketer should
offer sales promotions considering this as well.

Cash discount if most preferred, so, company should think more on cash
discount / price off than gift or value added.

Television is most preferred knowledge source and it reaches mass level, so,
this medium should be considered as very effective medium to reach to
customers.

Females are Brand Loyal and they are Deal Prone than Males, so, this
category should cater promptly. Female are now consider 50% of the India’s
population so marketer should make effective sales promotion strategy to cater
this group.

Male have rated highly to Perceived Quality, therefore this section shows very
rational attitude towards purchasing, so marketer should be also careful about
this category.

Family Income and Educational Qualification affects Brand Equity perception
most. So for better Brand equity creation demographic variable Family
Income and Educational Qualification should consider by marketers for
implementation of better sales promotion schemes.

The respondents with different background differ significantly for their
opinion on Deal proneness. Respondents with lowest education category and
highest education category are highly deal prone. Therefore Deal Proneness
should also consider by marketers for effective sales promotion.

Research shows below 10th Standard are prefer cash discount very much, so,
there is a scope of promotional scheme customization for rural area.

Sales Promotional schemes preferences do vary with Family income, Gender
and Educational Qualification. So demographic variable become important in
formulation of Sales promotion schemes.

International products with Price off and Local products with gift/%extra are
most preferred, so marketers should think carefully about sales promotion
schemes on these type of products

Middle class consumers’ purchasing power is growing and over the years this
class would be big chunk of the Indian population, so, by the years business
will much depend on this class. This fact will attract International players to
India and Domestic players should cater this class very efficiently, so that they
will face less competition by International Companies.
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ANNEXURE-Ι:
QUESTIONNAIRE
Annexure-Ι:
Questionnaire:
1. Personal Information:1. Name:-……………………………………
2. Age group :- [Below 20] [21-30] [31-40] [41-50] [Above 50]
3. Gender:-
[M]
[ F]
4. Marital Status:- [Single] [Live in] [Married] [Separated]
5. Employment Status: [Not employed] [Self employed] [Employed(Private org.)]
[Employed(Govt. org.)]
6. Educational Qualification:[Below 10th] [10th Pass] [12th Pass] [Graduate] [Post graduate]
[Above P.G]
7. Annual Family Income:- (3.14 to 17 lakhs only)
[3-6 lakhs] [6-9 lakhs] [9-12 lakhs] [12-15 lakhs] [15-18 lakhs]
8. Family Size:[Single] [2 members] [3 members] [4 members] [5 members]
[Above 5 members]
9. Family Type:- [Joint] [Individual]
10. a. Name of the city: - [Mumbai] [Pune] [Nagpur]
b. Area of Residence:-……………
2. Tick out only one number (1 to 5 indicated in the given boxes) corresponding
to your answer. For each statement, please consider below mentioned scale:5=Strongly Agree; 4=Agree; 3=Neutral; 2=Disagree;
1= Strongly Disagree
A. Cash Discount:
1. I do think cash discount is the good choice as a scheme.
1 2 3 4 5
2. I do get satisfaction to find cash discount on purchase.
1 2 3 4 5
3. I do think cash discount is not good choice as a scheme.
1 2 3 4 5
B. Free Gift:
1. I wish to receive free gift than cash discount.
1 2 3 4 5
2. Free gift with a product doesn’t have good quality.
1 2 3 4 5
3. There is no worth of free gift with purchased product.
1 2 3 4 5
4. I worth free gift most.
1 2 3 4 5
C. Brand Loyalty:
1. I don’t care about sales promotion schemes to purchase
products.
1 2 3 4 5
2. I do purchase products with sales promotion schemes.
1 2 3 4 5
3. I get satisfaction after purchase with sales promotion
schemes.
1 2 3 4 5
4. I think quite a little about sales promotion schemes.
1 2 3 4 5
D. Brand Awareness:
1. I generally informed about sales promotion schemes of products which I do
purchase.
1 2 3 4 5
2. I generally don’t want to know about sales promotion
schemes.
1 2 3 4 5
3. I accept it is good to know the sales promotion schemes
for purchase.
1 2 3 4 5
4. My Purchase is independent of knowledge about sales
promotion schemes.
1 2 3 4 5
5. I never eager to know about sales promotion schemes.
1 2 3 4 5
6. Usually, we do know about sales promotion schemes of
familiar products.
1 2 3 4 5
E. Brand Association:
1. Sales promotion schemes make products likeable.
1 2 3 4 5
2. I do think products are unique without considering sales
promotion schemes.
1 2 3 4 5
3. Good products have often sales promotions.
1 2 3 4 5
4. I do think sales promotion schemes makes good
impression for products.
1 2 3 4 5
F. Perceived Quality:1. Generally products with sales promotion schemes are
better products.
1 2 3 4 5
2. Usually companies make available products with schemes
when they do
not capable to sell.
1 2 3 4 5
3. People purchase products with sales promotions, then
they do
Logical and having ability to find reason.
1 2 3 4 5
4. Often products with sales promotion schemes are not
good products.
1 2 3 4 5
5. Sales promotion schemes are planned as per customer
need.
1 2 3 4 5
6. I feel consumer should not notice to sales promotion
schemes to purchase the products.
1 2 3 4 5
7. Sales promotion schemes are advantageous to me.
8. Sales promotion schemes distract to purchase good
products.
1 2 3 4 5
1 2 3 4 5
G. Deal Proneness:
1. I give priority to stay for a time to take benefit of
schemes.
1 2 3 4 5
2. I generally purchase a branded product with deal.
1 2 3 4 5
3. I never consider promotional schemes
1 2 3 4 5
3. Please tick out the boxes, from where you do prefer to find sales promotion
schemes information.
Television [ ]; News paper [ ]; Radio [ ]; Internet [ ]; SMSs [ ]; Pamphlet [ ];
Banners/ Hoardings/ Wall painting [ ]; Point of Purchase Materials [ ]
4. Please Rank the following Sales Promotional scheme combinations with No.s
1, 2, 3--------13.
[Note: “1” assumed as most preferred and “13” assumed least preferred.]
SPS
Type
Brand Type
SPS1
Domestic(Local)
SPS2
Domestic(Branded)
SPS3
International
SPS4
Domestic(Local)
SPS5
Domestic(Branded)
SPS6
International
SPS7
Domestic(Local)
SPS8
Domestic(Branded)
SPS9
International
SPS10
Domestic(Local)
SPS11
Domestic(Branded)
SPS12
International
SPs13
Domestic(Local)
Source of Sales
Brand
promotio
awareness n
schemes
Mass
Price off
Media
Mass
Price off
Media
Mass
Price off
media
Point of
Price off
Purchase
Point of
Price off
Purchase
Point of
Gift/%Ex
Purchase tra
Mouth
Price off
Publicity
Mouth
Gift/%Ex
publicity
tra
Mouth
Price off
publicity
Point of
Price off
Purchase
Mass
Price off
media
Mass
Price off
media
Mass
Gift/%Ex
media
tra
Benefit
Delayed
Immediate
Delayed
Immediate
Immediate
Delayed
Delayed
Immediate
Immediate
Delayed
Delayed
Immediate
Immediate
Ranking
of the
scheme
ANNEXURE-ΙΙ:
REGIONAL PROFILE
Annexure-ΙΙ:
Regional profile:
This research is conducted in Mumbai, Pune and in Nagpur. All three are major cities
of Maharashtra.
Mumbai:The total area of Mumbai is 603.4 km2, the island city spans 67.79 km2, while the
suburban district spans 370 km2, together accounting for 437.71 km2 under the
administration of Brihanmumbai Municipal Corporation (BMC). Mumbai is bounded
by the Arabian Sea to the west. Many parts of the city lie just above sea level, with
elevations ranging from 10 m (33 ft) to 15 m (49 ft); the city has an average elevation
of 14 m (46 ft). Coordinates: 18°58′ N 72°49′ E
As per population census 2011, Mumbai (Municipal Corporation) population is
12,478,447.
There are six parliamentary constituencies in Mumbai and each having six assembly
constituencies.
Mumbai North: Borivali, Dahisar, Magathane, Kandivali (E), Charkop, Malad (W)
Mumbai North West:Jogeshwari (E), Dindoshi, Goregaon, Versova, Andheri (W), Andheri (E)
Mumbai North East:Mulund, Vikhroli, Bhandup (w), Ghatkopar(w), Ghatkopar (E), Mankhurd ,
Mumbai North Central:Vile parle, Chandivali, Kurla, Vandre (E), Vandre (W), Kalina
Mumbai South Central: Anushakti nagar, Chembur, Dharavi, Sion Koliwada, Wadala, Mahim
Mumbai South: Worli, Shivadi,Byculla, Malabar Hill, Mumbadevi, Colaba
Pune:Total area of Pune is 710 km2 under the Pune Municipal Corporation. Pune is located
560 m (1,840 ft) above sea level on the western margin of the Deccan plateau. It is
situated on the leeward side of the Sahyadri mountain range, which forms a barrier
from the Arabian Sea. It is a hilly city, with its tallest hill, Vetal Hill, rising to 800 m
(2,600 ft) above sea level. The Sinhagad fort is located at an altitude of 1300 m. The
Coordinates of Pune 18°31′ N 73°51′ E .
As per population census 2011, Pune (Municipal Corporation) population is
3,115,431.
There is only one parliamentary constituency in Pune and each having six assembly
constituencies:
Vadgaon Sheri, Shivajinagar, Kothrud, Parvati, Pune Cantonment and Kasba Peth
Nagpur:The total area of Nagpur is 228 km2, under the administration of Nagpur Municipal
Corporation. Many parts of the city lie just above sea level of (an average elevation)
310 m (1,020 ft). Density 11,000/km2 (27,000/sq mi).It lies between 21.15°North
latitude and 79.09° East longitude.
As per population census 2011, Nagpur (Municipal Corporation) population is
2,405,421.
There is only one parliamentary constituency in Nagpur and having six assembly
constituencies:
Nagpur South West, Nagpur South, Nagpur East, Nagpur Central, Nagpur West and
Nagpur North.
ANNEXURE-ΙΙІ:
Aker’s Brand Equity Framework
Annexure-ΙΙΙ:
Aaker’s Brand Equity Frame work:-
Brand Equity
Brand Loyalty
Brand Awareness
Reduced marketing
costs, Trade leverage
Attracting new
customers
 Create
awareness
 Reassurance
Time to respond to
competitive threats
Anchor to which other
association can be
attached
Familiarity- Liking
Signal of
substance/commitment
Brand to be
considered
Providing value to customer by enhancing
customers interpretation/ processing of
information
Confidence in the purchase decision
Use satisfaction
Perceived
Quality
Brand
Association
Reason to buy
Differentiate/position,
Price,
channel member
interests, extensions
Other
Proprietary
Brand
Assets
Help
process/
Retrieve
information,
Differentiate/po
sition,
Reason to buy,
create positive
attitude/
feelings,
extensions
Competitive
Advantage
Provide value to firm by enhancing
 Efficiency and effectiveness of marketing
programme
 Brand loyalty
 Prices/ margins
 Brand Extensions
 Brand leverage
 Competitive advantage