Sales Promotion And Brand Choice

The researcher in this thesis investigates the influence of sales promotion on the brand loyalty of regular customers and how it affects their brand choices. The significance of sales promotion as a key component of the communication mix offers an extra value to the purchaser. The effect of sales promotion generates additional value in the growth of the business (Fill, 2006).

The benefits achieved by this sales promotion not only benefit the manufacturer, but also the consumers. Sellers are seeking to increase their market share through sales promotion, because manufacturers are designing less differentiated products, and as a result, consumers are inclined more towards promotions (Kotler, 1999).

The expenses on sales promotion were not as high as ever before. The expenses on sales promotion have increased compared to the past, while the expenses on advertisement have decreased (Kotler, 1999). It was only a decade ago that the ratio between sales promotion and advertisement was 40:60; however, today, many consumer goods companies allocate 60 to 75% of their whole financial program to sales promotion.

Sales promotion is a division of the communication mix that conveys “one-way non-personal communication” to their clients (Duncan, 2002). Manufacturers use the technique of sales promotion to gain a strategic position in the retail industry.

Retailers attract their clients by providing value-added products. With the development of relationship marketing, companies are using sales promotion strategically to attract and retain the attention of clients.

There are several different perspectives regarding the influence of sales promotion on sales and consumer behavior. Some practitioners and academics believe that the function of sales promotion is limited to achieving short-term sales gains, while others believe that sales promotion brings long-term constructive growth on sales (Smith and Sinha, 2000; Banks and Moorthy, 1999; Kopella and Mella, 1999).

Copley and Paul (2004) discuss that sales promotion is a division of strategic and integrated marketing approach that helps in structuring brand image by offering some extra incentives, such as special gifts or large financial or personal rewards.

Research by Pauwels et al. (2008, p.293) has revealed that sales promotion has a very positive and long-lasting effect on brands with growing equity. Similarly, low-equity brands can achieve greater benefits from sales promotion when launching new products.

LITERATURE REVIEW:

Introduction:

Does sales promotion affect brand loyalty and brand choice?

In this subsection, the research worker will begin by discussing some of the background theories on sales promotion and brand loyalty and the reasons by which one influences the other. The chapter will start with some definitions given by famous marketers of their time.

The research worker will also discuss the views and findings of various research scholars regarding the importance, types, and influence of sales promotion on brand loyalty and brand choice. At the end of this chapter, the research worker will make some concluding remarks with specific reference to research objectives.

Definition of Sales Promotion:

There are many definitions of sales promotion. Some famous marketers believe that the benefits or advantages of sales promotion will not last for a long period of time. One such marketer is Kotler, who defines sales promotion as “various collections of incentive tools, mostly short-term, designed to stimulate faster and/or greater purchase of a specific product or service by the consumer or the trade” (Kotler, 1997, p.624).

Institutions of sales promotion also believe that sales promotion is a tool that provides short-term encouragement for sales. Therefore, they define sales promotion as “a variety of strategically marketing techniques designed within a strategic marketing structure to add value to a product or service in order to achieve specific sales and marketing objectives” (Brassington et al., 1997, p.653).

According to Brassington et al. (1997, p.662), the significance of tactics in sales promotion is defined as a “short-term burst of activity.” The purpose of this short-term activity is to achieve an immediate desired result. It not only brings the desired result but also helps other marketing tools like advertising to achieve strategic objectives.

As discussed in the previous paragraph, sales promotion is considered a marketing tool that helps achieve good sales for a short time. However, with the passage of time and the development of relationship marketing, the position of sales promotion has changed. Marketers are using this tactic of sales promotion to build loyalty towards customers.

There are many marketing giants who use the maneuver of gross revenue publicity for long-term benefits for their clients instead of short-term benefits. The best illustration of this is Tesco nine-card, Shell smart card, Boots rank cards, and Sainsbury’s nectar card.

These cards offer benefits to their clients not on a short-term basis but on a long-term basis, and this tactic also helps the client remain loyal to the company. There are many scholars who believe that sales publicity does not benefit the sellers for a short period of time; it benefits the sellers for a long period of time, and it also gives a good boost to the business.

According to Copley and Paul (2004), sales publicity is a part of strategic and integrated marketing, building towards brand image and brand equity by offering their clients something extra than other sellers, like offering the clients vouchers, gifts, or personal rewards.

Similarly, Pauwels et al. (2008, p.293) have revealed that sales publicity has a long-term positive and permanent effect on brands with higher equity. In the same manner, brands with lower equity can achieve good market capture at the time when they are launching new products by offering sales publicity on their product.

Research was conducted by Gilbert and Jackaria (2002) in the UK supermarket, their research was about different promotions like vouchers, samples, buy-one-get-one-free, or price reductions. After their research, they came to the point that these sales publicity methods are very helpful and effective in attracting clients towards the product.

These promotions also help clients in brand shift and product testing, and they help manufacturers by accelerating product sales in the market. Fill (2006, p.650) argued that sales publicity can be helpful in bringing long-term positive consequences by designing them for a long time, like three to four years, and they should be coordinated with other marketing activities like advertising and incorporated with the business activities.

The discussion on sales publicity and its impact on brand loyalty is not in its final stage; the researcher will discuss all of this in detail in his upcoming thesis.

METHODOLOGY:

In the last chapter, the researcher discussed the impact of sales publicity on brand loyalty and brand choice in the literature review. In this chapter, the researcher plans to discuss all the methods and procedures that he will use to complete his research.

This means the researcher will discuss the design of his research, method of data collection, how the researcher will analyze his collected data, and step-by-step discussion of strength and reliability.

DATA COLLECTION:

For the choice of methodology, there are many forms of research available. However, it can be divided into two major categories:

Secondary Data

Primary Data

SECONDARY DATA:

“The research for good marketing always begins with secondary data” [Iacobucci, D. 8th edition]. The available information and data are called secondary data [Saunders, P., and Wong, J.]. To analyze the given information is always easy and quick because it has already been done by others [Lancaster et al., 2002].

The internal and external data sources are the main sources of acquiring secondary data. Examples of internal sources are salesmen call reports, sales bills, and warranty cards, while financial records, magazines, and newspapers are considered external sources [Iacobucci, D. 8th edition].

The problems and basic aims of the research will be identified by the secondary data.

PRIMARY DATA:

The gathered information for basic research is called primary data [Saunders, P., and Wong, J.]. Primary data helps the researcher to get a good result for their research and is considered to be very valuable. However, it is also considered to be a difficult, expensive, and time-consuming method [Saunders, P., and Wong, J.]. Primary data is further classified into two major categories:

Quantitative Qualitative

To meet the needs of the thesis, the research is carried out on the basis of secondary and primary data. Appropriate, correct, and impartial data collection can lead to valuable solutions to the research problem [Kotler et al., 199, p.326]. For qualitative research, the researchers used different techniques such as group interviewing, depth interviewing, projective techniques, and electronic interviewing.

Due to the following reasons, in this research, the researcher has planned to conduct qualitative research:

1. A reaction of a large sample size can be achieved, which could provide better insight into customer buying characteristics.
2. As the research is concerned with testing of theories, not creation [Bryman, A., and Bell, E. 2003]. The objective of the researcher is testing theories of sales promotion.
3. It involves low risk of any delay. The researcher is positive about the return of questionnaires within time, which will ensure completion of the research on time.

HOW TO DESIGN A QUESTIONNAIRE:

The following are the parameters to structure the questionnaire.

1. Before moving on to the next topic, the questions on one subject should be completed, and all the questions in the questionnaire should be discussed systematically.
2. To achieve the task, the questionnaire will start with simple, attractive, and specific questions.
3. Sensitive questions such as the respondent’s income will be placed at the end of the questionnaire.
4. The supervisor will approve the questionnaire.
5. The questionnaire is a combination of structured and unstructured questions.

When designing the questionnaire for this thesis, the research worker will take the following client features into account.

According to Gilbert and Jackaria (2002), when shopping at a shopping mall, consumers make choices regarding the type of product and category they buy, which, in turn, guides their choice about the quantity to purchase.

The research worker has selected five types of multiple-choice survey statements, among which four were from the survey work of Gilbert and Jackaria (2002), and the last one will be planned by the research worker. As the main aim of this investigation is to find out the impact of sales promotion on brand loyalty and choice, the research worker has selected the following five types of promotional tools:

1. Coupon
2. Price decrease
3. Free sample
4. Buy one get one free
5. Price decrease on customer purchasing behavior

For this information-gathering research, the research worker has selected Westfield Shopping Mall. The selected area is famous for its diverse culture, representing most of the cultural groups existing in London.

To get an improved understanding of customer purchasing behavior, the research worker has decided to collect data at the shopping mall because generally, most people visit the mall for the purpose of shopping.

The research is based on data collection through a survey, and a suitable sample will be used to conclude this research. As it is the easiest sampling method and can be conducted within a short distance of time (Malhotra, 2004), the interviewer can choose respondents at his own convenience.

Examples of convenience sampling comprise students, mall intercepts, members of social groups, people on the street, departmental stores using charge account lists, people on the street, and questionnaires incorporated in magazines (Malhotra, 2004, p.321).

Mention:

1. Fill, C. (2006) Marketing Communications; Sales Promotion; Methods and Techniques. 4th ed. London: Prentice Hall.
2. Kotler, P. (1997) Marketing Management; Managing advertising, sales promotion, and public relations. 9th ed. London: Prentice Hall International.
3. Astous, A., Jacob, I. (2002) “Understanding Consumer Reactions to premium based promotional offer”. European Journal of Marketing, 36(11/12), pp.1270-1286. Emerald [Online]. Available from: http://www.emeraldinsight.com/0309-0566.htm (Accessed on 12 August 2008).
4. Alvarez, B., Casielles, V. (2005) “Consumer Evaluations of sales promotion: The effect on brand choice”, European Journal of Marketing 39(1/2), pp.54-70. Emerald [Online]. Available from: http://www.emeraldinsight.com/0309-0566.htm (Accessed on 12 August 2008).
5. Brassington, F., Pettit, S. (1997) Principles of Marketing; Promotion. 4th ed. London: McGraw-Hill Pitman Publication.
6. Fill, C. (2006) Marketing Communications; Sales Promotion; Methods and Techniques. 4th ed. London: Prentice Hall.
7. Gilbert, D., Jackaria, N. (2002) “The efficacy of sales promotion in UK supermarkets: a consumer view”. International Journal of Retail and Distribution Management, 30(6), pp.315-322. Emerald [Online]. Available from: http://www.emeraldinsight.com/0959-0552.htm (Accessed on 15 August 2008).
8. Armstrong, G., Kotler, P., Saunders, J., Wong, V. (1999) Principles of Marketing; Mass Communication; Advertising, sales promotion and public relations. 2nd ed. Italy: Prentice Hall Europe.
9. Bell, E., Bryman, A. (2003) Business Research Methods: Business Research Strategies, books 24/7 Online [Online]. Available at: http://library.books24/7.com/book/id_12878/viewer.asp?bookid=12878&chunkid=625715391 (Accessed 30 July 2008).
10. Churchill, G., Iacobucci, D. (2002) Marketing Research: Methodological Foundations. 8th ed. USA: South Western.