Study on the Effect of Sales Promotion On

8/3/2019 Study on the Effect of Sales Promotion On

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A STUDY ON THE INFLUENCE OF

SALES PROMOTION ON CUSTOMER

PURCHASE DECISIONS AT MAX

PREPARED BY

S.ANITHA


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OBJECTIVES

To identify the importance of various attributes on thepurchase of apparels.

To determine the effect of discount on consumers purchasedecisions related to

Frequency

Value

Preference for brands

To find the customers preference for various retail apparelstores.


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LITERATURE REVIEW

Hanna R.C, Berger P.D, Abendroth L.J , Optimizing time limits in retailpromotions: an email application, Published in Journal of the OperationalResearch Society. Vol .56, Issue 1, Jan 2005.

Gendek, Karen, Neslin, Scott A, The role of Retail Promotion ondetermining future brand loyalty: its effect on purchase event feedback,

Published in Journal of Retailing . Vol .75, Issue 4, Jan 1999.

Kincade, Doris H, Woodard Ginger A, Buyer-Seller relationships forpromotional support in the apparel sector Published in Journal ofConsumer Studies.

Speer, Jordan K, Converting your best commodity into cash Publishedin Apparel Magazine. Vol. 49, Issue 3, Nov 2007.

Garbato Debby, Setting Back the color for Back To School apparelPublished in Retail Merchandiser. Vol. 44,Issue 10, Oct 2004.


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LITERATURE REVIEW

Mulhem Francis J, Padgett Daniel T, The relationship between retail pricepromotions and regular price purchases , Published in Journal of Marketing.Vol .59, Issue 4, Oct 1995.

Walter Rockney G, Assessing the impact of retail price promotions on productsubstitution, complementary purchase and interstore sales displacement,Published in Journal of Marketing . Vol .55, Issue 2, Apr 1991.

Kumar V, Leone Robert P, Measuring the effect of retail store promotions onbrand and store substitution Published in Journal of Marketing Research.Vol.25, Issue 2, May 1988

Voss Glenn B, Seiders Kathlun, Exploring the effect of retail sector and firmcharacteristics on retail price promotion strategy Published in Journal ofRetailing. Vol. 9, Issue 1 , Spring 2003.

Alvarez, Cassielles, Consumer evaluations of sales promotion: the effect onbrand choicePublished in Journal of Marketing. Vol . 39, Issue 1


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Research Type Descriptive Research

Research approach Questionnaire

Universe All the customers of max store

Sampling Type Non-Probability sampling

Sampling Method Convenience Sampling

Sample Size 296

Data Collected Primary Data

Statistical Tools Chi-square, Garret ranking

RESEARCH DESIGN


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AWARENESS OF BRAND MAXBEFORE THEIR VISIT TO STORE

YES

80%

NO

20%

BOUGHT THE BRAND BEFORE

YES

80%

NO

20%


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ACCEPTANCE LEVEL OF ATTRIBUTES IN MAXBRAND

1. The reputation of max brand is good

6%

3%

74%

17%

Disagree Neither agree nor disagree Agree Strongly agree


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ACCEPTANCE LEVEL OF ATTRIBUTES IN MAXBRAND

2. Max brand provides more attractive salespromotion offers than competitors

11%

23%

61%

5%

Disagree Neither agree nor disagree Agree Strongly agree


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3. Designs of max brand apparels are fashionable4.Fabric quality of max brand is good

5.Inner circle card(TIC) is useful

6.Product variety of max brand is good

7.Max brand provides lot of color options

8.Preferred sizes are available in max brand

9.Displays are appealing in max brand

10.Salesmen are courteous

11.Salesmen are helpful in choosing the product

12.Exchange scheme of max brand is useful

13.Location of store is convenient

14.Max brand apparels are better when compared with national brands

15. Price matches with the quality

ACCEPTANCE LEVEL OF ATTRIBUTES IN MAX


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CLUSTER 1: Emotional Buyers (Customers who appreciate the aspirational value of maxbrand)

1. The reputation of max brand is good

2. The display of max apparels is appealing

3. The fabric quality of max brand is good

4. The designs of max brand apparels are fashionable

CLUSTER 2: Rational Buyers (Customers who appreciate functional value of max brand)

1. The product variety of max brand is good2. Salesmen of max brand are courteous

3. Max brand apparels provide a lot of options in colors.

4. Max brand apparels prices match its quality.

CLUSTER 3: Deal-loving Buyers (Customers who appreciate the customer focus of maxbrand)

1. The exchange scheme of max brand is useful.

2.Max brand provides more attractive sales promotion offers than competitors.3.The max brand apparels are available in various preferred sizes.

CLUSTER 4: Loyal Buyers (Customers who are loyal to max brand)

1.The location of the max brand store is convenient.

2.The salesmen of max brand are helpful in choosing the right product.

3.The loyalty card of max brand, Inner Circle Card(TIC) is very useful.

4.Apparels of max brand are better than that of national brands.

CLUSTER ANALYSIS


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CUSTOMERS PREFERENCE FOR PRODUCTTYPE

MenApparels

25%

KidsApparels

24%

LadiesApparels

51%


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RANKING OF STORES FOR PURCHASINGMENS APPARELS

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Max Lifestyle Reliance

Trends

Upbeat RMKV


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RANKING OF STORES FOR PURCHASINGLADIES APPARELS

9639 9622

8309

70626449

Max Lifestyle Brocade Reliance

Trends

RMKV


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RANKING OF STORES FOR PURCHASINGKIDS APPARELS

0

1000

2000

3000

4000

5000

6000

Max Lifestyle Lilliput Mom &

Me

RMKV


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To determine the effect of discount on

consumers purchase decisions related

to frequency of purchase

Without discount With discount

20.3

54.1

19.9

5.7

Every

weekend

Every

month

Quaterly Festival

seasons

3.7

49.3

31.4

15.5

Every

weekend

Every

month

Quaterly Festival

seasons


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FREQUENCYOF PURCHASE vs. GENDER

Null Hypothesis: Gender does not influence the frequency of

purchase

Without discountFrequency Gender

Male Female

Oi Ei Oi Ei

EveryWeekend

4 4.3 7 6.1

Every

Month

60 57.2 86 88.8

Quarterly 33 36.4 60 56.6

Festival

seasons

19 18 27 28

Since the significance is greater than 0.05(level of significance), Nullhypothesis is accepted i.e., gender does not influence frequency of purchase

(without promotions).

Chi-Square Tests

Value df

Asymp.Sig. (2-sided)

Pearson Chi-Square

.882a 3 .830


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FREQUENCYOF PURCHASE vs. GENDER

Null Hypothesis: Gender does not influence the

frequency of purchase

With discountFrequency Gender

Male Female

Oi Ei Oi Ei

EveryWeekend

34 23.5 26 36.5

Every

Month

46 62.7 114 97.3

Quarterly 24 23.1 35 35.9

Festival

seasons

12 6.7 5 10.3

\Chi-Square Tests

Value df


Pearson Chi-Square 22.095a 3 .000

Since the significance is less than

0.05(level of significance), Null

hypothesis is rejected i.e.,

gender influence the frequency of

purchase (with promotions).

From the above table we understand thatMale prefer to purchase every weekendFemale prefer to purchase every month


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to brand preference


Max

Brand65%

Other

Brands

35%

MaxBrand

71%

Other

Brands

29%


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to value


500-100024%

1001-200045%

2001-300026%

3001-4000

3%>4000

2%500-1000

2%

1000-2000

30%

2001-3000

36%

3001-400021%

>400011%


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IMPORTANCEOF DISCOUNT

IN PURCHASE

Extremely

important

18%

Important

66%

Neither

Important

nor

unimportant

10%

unimportant

6%


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TYPEOF OFFER

PREFERENCE FROMMAX

Percentage

discount

40%

Buy1

get1

34%

Combo

offers

26%


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TYPEOF OFFER vs. INCOME

Null Hypothesis: Income does not influence the

offer preferenceType of Offer Income Level(amt in Rs)

6000-

10000

10000-

15000

15000-

25000

>25000

Oi Ei Oi Ei Oi Ei Oi Ei

PercentageDiscount

8 3.6 20 18.2 21 32.4 68 62.8

Buy 1 get 1 0 3.1 15 15.9 29 28.3 58 54.8

Combo

Offers

1 2.3 11 12.0 32 21.3 33 41.4

Chi-Square Tests

Value df

Asymp.

Sig. (2-

sided)

Pearson Chi-Square 21.398a 6 .002

Since the significance is less than 0.05

(level of significance),Null hypothesis is rejected i.e.,

income influence the type of offer.

Percentage Discount:

1.6000-10000

2.10000-15000

3.>25000Combo Offers:

1.15000-25000


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TYPEOF OFFER vs. AGE

Null Hypothesis: Age does not influence the

offer preferenceType of Offer Age

18-25 25-30 30-35 >35

Oi Ei Oi Ei Oi Ei Oi Ei

Percentage

Discount

59 53.8 29 31.2 8 19.0 21 13

Buy 1 get 1 45 46.9 26 27.2 23 16.5 8 11.4

Combo

Offers

32 35.4 24 20.6 17 12.5 4 8.6

Since the significance is less than 0.05

(level of significance),Null hypothesis is rejected i.e.,

age influence the type of offer.

Percentage Discount:

1. 18-25

2. >35

Buy 1 g e t 1

1. 30-35Combo Offers:

1.25-30

Chi-Square Tests

Value df


Pearson Chi-Square

20.502a 6 .002


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FREQUENT COMMUNICATION

ABOUT THE OFFERS FROM

M

AX

Yes78%

No

22%


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MEDIA PREFERENCE FORGETTING

INFORM

ATION FROM

M

AX

Sms66%

Phonecalls

12%

Newspaper

14%

Leaflets by

post

7%

Information

at the point

of purchase

1%


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PROFILEOF CUSTOMERS:

GENDER:

39%

61%

Male

Female

AGE:

46%

27%

16%

11%18-25

25-30

30-35

>35

OCCUPATION:

38%

31%

17%

14%

Student

EmployeeBusiness

Housewife

MARITAL STATUS:

60%

40%

Single

Married

MONTHLY INCOME:3%

15%

28%54%

6000-10000

10000-15000

15000-25000

>25000


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FINDINGS

The majority of max customers prefer FabricQu

ality as the majorattribute for their purchase.

80% of customers are aware of brand maxbefore coming to store.

80% of customers have bought the brand max(among the customers who

are aware of brand max before coming to store).

33% of customers neither agree nor disagree that the max brand is betterthan other national brand.

The majority of max customers preferLadies Apparels as the major

category for purchase from max.

The majority of max customers preferMax forpurchasingMens

apparels when compared with other stores like Lifestyle, Rmkv, RelianceTrends, Upbeat

The majority of max customers preferMax forpurchasing Kids

apparels when compared with other stores like Lilliput, Rmkv,

Mom &Me, Lifestyle.


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FINDINGS

The majority of max customers preferMax forpurchasing Ladies apparels

when compared with other stores like Brocade, Reliance Trends, Rmkv,

Lifestyle,Max.

The majority of max customers prefer to buy apparels every month with and

without discounts

The majority ofmale customersprefer to purchase apparels every weekend andfemale customersprefer to purchase apparels every month(with discount)

71% of max customers prefermax brand when there is discount.

The majority of max customers increase theirvalue of purchase when there is

discount.

The majority of max customers prefer percentage discount from max.

The majority of max customers prefer to get information about offers through

SMS.


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CONCLUSION & SUGGESTIONS

Discounts affect consumers purchase decisions related to

Frequency

Value

Preference for brands

Customers will be loyal to max brand when they get a best deal indiscount offers.

Female customers traffic can be increasedby giving monthly discount.

Customers of max can be communicated through SMS about thediscount offers.

Percentage discount can be offered to attract the customers.


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LEARNINGS

COMPETITOR ANALYSIS: Fixtures and wall allotment for brands.

Sq. feet allocation for brands.

Volume of purchase in mens category is more when compared to ladies

category.

The majority of customers are satisfied with the

Discount offers from max

Product variety of max brand

Location of max store

Customer service in max store

Documents

Study on the Effect of Sales Promotion On