An Empirical study on impact of advertising Vs Sales

Promotion in consumers buying behavior

A report submitted to Amity University as a part fulfillment of full time MBA Telecom.

Submitted to: Submitted by:

Prof. Marshal Sahni Nidhi kumari
HOD MBA Telecom A1603707038

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 CERTIFICATION

This is to certify that dissertation work done on An Empirical study on impact of

advertising Vs Sales Promotion in consumers buying behaviour. Submitted to
Amity Institute Telecom Technology and Management by Nidhi Kumari in partial
fulfillment of requirement for the award of degree of MBA Telecom, is a bonafide
work out by her in my supervision and guidance. This work has not been submitted
anywhere else for any other degree/diploma. The original work was carried during
26th Jan‟09 to 8 Apr‟09.
th

Date …..April09 Mrs. Poonam Kumar,(Sr. Lecturer),

Amity University,
Sec-125, NOIDA (UP)

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 ACKNOWLEDGEMENT

This project report is the culmination of the efforts over six week’s period from
26th Jan‟09 to 8th Apr‟09. During the course of this project I have had the
privilege to work with many distinguished people and the opportunity to learn
many things from them
I would like to express my sincere gratitude to my mentor Mrs. Poonam Kumar
(Sr. lecturer). Her guidance and advice proposed ideas and constructive
suggestions at the technological as well as in the marketing front towards the
result-oriented approach for the completion of this project.
I also convey my sincere thanks to all faculty members of AITTM for their kind
support and knowledge.

NIDHI KUMARI
AITTM
A1603707038

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 DECLARATION

This Dissertation Report is submitted in partial fulfillment of the requirement for

the award of degree of MBA Telecom at Amity University. I declare that this
Dissertation Report is my own work and it does not contravene any academic
offence as specified in the University’s regulations.
I confirm that this Dissertation Report does not contain information of a
commercial or confidential nature or include personal information other than that
which would normally be in the public domain unless the relevant permissions
have been obtained.

Sign:
Name: NIDHI KUMARI
Date:
Program: MBA (Telecom) – MARKETING

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 Table of content

I. Executive Summary…………………………………………………06

II. Introduction…………………………………………………………07

i. Marketing mix and promotion mix ...........................................08

Advertising vs sales promotion.....................................................09

ii. Communication process..................................................11

iii. Sales promotion...............................................................15

iv. Advertising

v. AIDA model

vi. Consumer buying behaviour

III. Statement of Research Question………………………...................20

i. Objective.........................................................................21

ii. Hypothesis.......................................................................22

iii. Primary Data Collection Method.....................................25

iv. Sample Size......................................................................26

v. Sources of Data................................................................27

vi. Chi Square Test................................................................28

IV. Research Method…………………………………………………...29

V. Procedure……………………………………………………………31

VI. Result and Analysis………………………………………………..33

i. Hypothesis Testing...........................................................34

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 ii. Result Analysis.................................................................37

IX. Conclusion.....................................................................................40
X. Implications………………………………………………………...........43
XI Abstract…………………………………………………………………44
XII Annexure………………………………………………………………46

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 EXECUTIVE SUMMERY

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

A questionnaire is made to gather the information which is a primary method for

collection of data. Collecting data through questionnaire is the most appropriate
method. This questionnaire includes:
a. Contact information about the respondent and
b. 10 questions.
This is a sufficient number which enabled me to analyze and derive the answers
pertaining to my objective.

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

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8
 INTRODUCTION

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

Promotion involves the following steps:

(i) Common Understanding

(ii) Demographic and psychographics profile.
(iii) Media habits
(iv) Level of Awareness.

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

Advertising or "Mainline" as it is also called, helps an enterprise to launch a

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

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 Marketing-Mix and Promotion-Mix

Marketing mix

Product Price Promotion Place

Direct
Personal Sales
Advertising Publicity
selling promotion
Marketing

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

Elements of the Marketing Mix

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

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The 4 P's of the Marketing Mix

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

• Product – The products or services offered to your customer: Their physical

attributes what they do, how they differ from your competitors and what
benefits they provide.
• Price – How you price your product or service so that your price remains
competitive but allows you to make a good profit. How price plays a role in
your marketing strategy with respect to differentiating your products or
services from your competitors'.
• Place (Also referred to as Distribution) – Where your business sells its
products or services and how it gets those products or services to your
customers. May also be used in your marketing strategy to differentiate you
from your competition.
• Promotion – The methods used to communicate the features and benefits of
your products or services to your target customers. Promotion consists of
following elements.

 Advertising
 Personal selling
 Sales promotion.
 Direct marketing.
 Publicity.

The 5th P of Marketing

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

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

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 Advertising v/s Sales Promotion
Advertising
• A type of marketing tool.
• Advertising is a one-way
communication whose purpose is
to inform potential customers
about products and services and
how to obtain them.
• Increase sales, brand building.
• Long term.
• Expensive in most cases.
• Medium to large companies.
• Assumption that it will lead to
sales.
• Giving an advertisement in the
newspaper about the major
products of a company
Sales Promotion
• A type of marketing tool.
• A Promotion usually involves an
immediate incentive for a buyer
(intermediate distributor or end
consumer). It can also involve
disseminating information about a
product, product line, brand, or
company.
• Increase sales.
• Short term.
• Not very expensive in most cases.
• Small to medium companies.
• Directly related to sales.
• Giving free products, coupons etc.
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 THE COMMUNICATION PROCESS

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

Consumers engage in word-of-mouth communication with other consumers and

publics. Meanwhile each group provides communication feedback to every other
group.

The marketing communication mix (also called the promotion mix) consists of
four major tools:
• Advertising. Any paid form of non personal presentation and promotion of
ideals, goods or services by an identified sponsor.
• Sales Promotion. Short-term incentives to encourage purchase or sale of a
product or service.
• Publicity. Non personal stimulation of demand for a product, service or
business unit by planting commercially significant news about it in a
published medium or obtaining favorable presentation of it upon radio,
television or stage that is not paid for by the sponsor.
• Personal Selling. Oral presentation in a conversation with one or more
prospective purchasers or the purpose of making sales.

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

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 Communication process

Sender Encoding Message / Decoding Receiver

Media

Noise

Feedback Response

These elements are defined as follows:

• Sender. The party sending the message to another party (also called the
source of communicator).
• Encoding. The process of putting thought into symbolic form.
• Message. The set of symbols that the sender transmits.
• Media. The communication channels thought which the Message moves
from sender to receiver.
• RECEIVER. The party receiving the message sent by another party (also called
the audience or destination).
• Response. The set of reactions that the receiver has after being exposed to
the message.
• Feedback. The part of the receiver's response that the receiver
communicates back to the sender.
• Noise. Unplanned static or distortion during the communication process,
resulting in the receiver's receiving a different message than the sender
sent.

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 SALES PROMOTION

INTRODUCTION

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

Concept of Sales Promotion

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

Definitions of Sales Promotion

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

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Objectives of Sales Promotion
The basic objectives of sales promotion are:

i) To introduce new products To induce buyers to purchase a new product, free

samples may be distributed or money and merchandise allowance may be offered
to business to stock and sell the product.
ii) To attract new customers New customers may be attracted through issue of
free samples, premiums, contests and similar devices.
iii) To induce present customers to buy more Present customers may be induced
to buy more by knowing more about a product, its ingredients and uses.
iv) To help firm remain competitive Sales promotions may be undertaken to
meet competition from a firm.
v) To increase sales in off season Buyers may be encouraged to use the product in
off seasons by showing them the variety of uses of the product.
vi) To increase the inventories of business buyers Retailers may be induced to
keep in stock more units of a product so that more sales can be affected.

Rationale of sales promotion

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

Short-term results:- Sales promotion such as coupons and trade allowances
produce quicker, more measurable sales results. However critics of this strategy
argue that these immediate benefits come at the expense of building brand equity.
Competitive Pressure: - If competitors offer buyers price reductions, contest or
other incentives, a firm may feel forced to retaliate with its own sales promotions.
Buyers’ expectations: - Once they are offered purchase incentives, consumers and
channel members get used to them and soon begin expecting them.
Low quality of retail selling: - Many retailers use inadequately trained sales
clerks or has switched to self service. For these outlets, sales promotion devices
such as product displays and samples often are the only effective promotional tools
available at the point of purchase.

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 ADVERTISING

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

Concept of Advertising

Advertising is a form of communication that typically attempts to persuade

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

Definition of Advertising
The word advertising originates from a Latin word advertise, which means to turn
to. The dictionary meaning of the term is “to give public notice or to announce
publicly”. Advertising may be defined as the process of buying sponsor-identified
Media space or time in order to promote a product or an idea. The American
Marketing Association, Chicago, has defined advertising as “any form of non-
personal presentation or promotion of ideas, goods or services, by an identified
sponsor.”

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The basic objectives of advertising programme:

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

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

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

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

(v) To project an image. Advertising is used to promote an overall image of respect

and trust for an organization. This message is aimed not only at consumers, but
also at the government, shareholders, and the general public.

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 AIDA MODEL

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

The major media types for advertising are:

Newspapers, Television, Direct mail, Radio, Magazines, Internet, Outdoor

(billboards, blimps, etc.), Yellow pages, Newsletters, Brochures, and Telephone

The traditional conceptual model for creating any advertising or marketing

communications message is the AIDA Model: get Attention, hold Interest,
arouse Desire, and then obtain Action.

The AIDA Model

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

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

 Customers who know what they want.

 Customers who do not know exactly what they want but have a need.
 Customers who do not know if they want or need anything.

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

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

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

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

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 CONSUMER BUYING BEHAVIOR

Buying Behavior is the decision processes and acts of people involved in buying
and using products. Consumer Buying Behavior refers to the buying behavior of
the ultimate consumer.
A firm needs to analyze buying behavior for:

• Buyers’ reactions to a firms marketing strategy has a great impact on the

firm’s success.
• The marketing concept stresses that a firm should create a Marketing Mix
(MM) that satisfies (gives utility to) customers, therefore need to analyze the
what, where, when and how consumers buy.
• Marketers can better predict how consumers will respond to marketing
strategies.

Stages of the Consumer Buying Process

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

The 6 stages are:

1. Problem Recognition (awareness of need)—It is the difference between

the desired state and the actual condition. It represents deficit in assortment
of products.
2. Information search : this can be of two types external or internal as follows
o Internal search on the basis of your memory.
o External search if you need more information. Friends and relatives
(word of mouth), public sources etc.
3. Evaluation of Alternatives--need to establish criteria for evaluation,
features the buyer wants or does not want. Rank/weight alternatives or
resume search. Marketers try to influence by "framing" alternatives.
4. Purchase decision--Choose buying alternative, includes product, package,
store, method of purchase etc.
5. Purchase--May differ from decision, time lapse between 4 & 5, product
availability.
6. Post-Purchase Evaluation: Outcome can be Satisfaction or Dissatisfaction.
Cognitive Dissonance, have you made the right decision. This can be
reduced by warranties, after sales communication

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Categories that Effect the Consumer Buying Decision Process

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

factors:

1. Personal
2. Psychological
3. Social

Personal:- These are the reasons which are unique to a particular person. Some
of them are
• Demographic Factors
• Sex
• Race
• Age

Psychological factors:-Psychological factors include

• Motives--

A motive is an internal energizing force that orients a person's activities

toward satisfying a need or achieving a goal. Motives often operate at a
subconscious level therefore are difficult to measure.

• Perception--

Perception is the process of selecting, organizing and interpreting

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

• Attitudes--

Individual learns attitudes through experience and interaction with other

people. Consumer attitudes toward a firm and its products greatly influence
the success or failure of the firm's marketing strategy. Attitudes and attitude
change are influenced by consumer’s personality and lifestyle. Consumers
screen information that conflicts with their attitudes. Distort information to
make it consistent and selectively retain information that reinforces our

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 attitudes. There is a difference between attitude and intention to buy (ability
to buy).

• Personality—

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

o Work holism
o Compulsiveness
o Self confidence
o Friendliness
o Adaptability
o Ambitiousness
o Dogmatism
o Authoritarianism.

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

Social Factors: - Consumer wants, learning, motives etc. are influenced by

opinion leaders, person's family, reference groups, social class and culture.

• Opinion leaders--

Marketers try to attract opinion leaders...they actually use (pay)

spokespeople to market their products. Michael Jordon (Nike, McDonalds,
Gatorade etc.)

• Roles and Family Influences--

Individuals role are continuing to change therefore marketers must continue

to update information.

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

o that many family decisions are made by the family unit

o consumer behavior starts in the family unit

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 o family roles and preferences are the model for children's future family
(can reject/alter/etc)
o family buying decisions are a mixture of family interactions and
individual decision making
o Family acts an interpreter of social and cultural values for the
individual.
o
• Culture and Sub-culture--

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

Culture can be divided into subcultures:

o Geographic regions
o Human characteristics such as age and ethnic background.

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26
 OBJECTIVES

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

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

decision.
2. To study the effectiveness of Advertising on the purchase decision.
3. To compare the effects of the both techniques.

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 HYPOTHESIS

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

Assuming a null hypothesis to be H(O) and the alternative hypothesis as H(T)

we formulate the hypothesis as following:

1. H(o) Null Hypothesis:- Effectiveness of sales promotion plays an

important role on consumer’s buying behavior.

2. H(T) Alternative Hypothesis: - Effectiveness of sales promotion does not

play an important role on consumer’s buying behavior

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

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

Where,

O= Observed set of frequencies

E= Expected set of frequencies

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29
 RESEARCH DESIGN

The research design will help in the arrangement of conditions for collection and
analysis of datas as it is a conceptual structure which depicts the advance planning
of the methods to be adopted for collecting datas and the techniques used in the
analysis, keeping in view the objective of the dissertation.
1
Research type: Quantitative marketing Research

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

 Tape of Data: Primary
 Data Analysis: Descriptive analysis through Chi-square Test.
Sources of Data: Personal Interview, Mailing Questionnaire

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

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31
 RESEARCH METHODOLOGY

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

. PRIMARY DATA COLLECTION METHOD

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

• questionnaires

• interviews

• focus group interviews

• observation

• case-studies

• diaries

• critical incidents

• portfolios.

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 SOURCES OF DATA

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

The respondents included retailers from different malls and Surveys included:

• Personal interviews: The investigator follows a rigid procedure and

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

• Mailing of Questionnaires: The researcher and respondents do not

come in contact with each other if this method of survey is adopted.
Questionnaires are mailed to the respondents with a request to return
after completing the same.

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

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 SAMPLING OF RESPONDENT

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

Random Sampling

Sampling can be defined as a part of population. Thus random sampling may be

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

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

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

In public opinion polling by private companies or organizations unable to require

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

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 INSTRUMENT USED

A questionnaire is a research instrument consisting of a series of questions and

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

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

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

Pre-testing the Questionnaire

• Estimate the length of the questionnaire.

• Ensure that words, phrases, and subjects are easily understood by the
respondents.
• Ensure that answer categories match with what the respondents have to say.
• Ensure that the questionnaire achieves the research objectives.

35
36
The dissertation project is carried out in various phases since the project is
exploratory in nature and the data collected for the analysis is collected from
primary research. The research work is carried out in two phases:

FIRST PHASE

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

SECOND PHASE

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

37
38
 HYPOTHESIS TESTING

Procedure in hypothesis testing:-

 Formulate a hypothesis.
 Set up a suitable significance level.
 Choose a test criterion.
 Compute.
 Make decisions.

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

H(O) Null Hypothesis:- Effectiveness of sales promotion plays an important

role on consumers buying behavior.

H(T) Alternative Hypothesis: - Effectiveness of sales promotion does not play

an important role on consumers buying behavior.

So considering the hypothesis:

“Effectiveness of sales promotion plays an important role on consumers

buying behavior”.

Set up a suitable significance level

The confidence with which a null hypothesis is rejected or accepted depends

upon the significance level used for the purpose. A significance level of, say 5
per cent, means that in the long run, the risk of making the wrong decision is
about 5 out of every 100 occasions. A significance level of, say 1 per cent,
implies that researcher is running the risk of being wrong in accepting or

39
 rejecting the hypothesis is 1 out of every 100 occasions. Thus, a 1 per cent,
significance level provides greater confidence to the decision than a 5 per cent
significance level.

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

Select Test Criterion

Chi Square

Observed Table:

Yes No Can’t Say

Male 36 30 14 80
Female 13 5 02 20
49 35 16 100(Total)

Expected Table:-
39.2 28 12.8
9.8 7 3.2

Calculation:
O E (O-E) (O-E)^2 (O-E)^2/E
36 39.2 -3.2 10.24 .2612

40
 30 28 2 4 .142
14 12.8 1.2 1.44 .1125
13 9.8 3.2 10.24 1.0489
5 7 -2 4 .5714
2 3.2 -1.2 1.44 .45
2.58

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

Referring to the table:

For υ = 2, for 5% (0.05) = +5.9

DECISIONS AND CONCLUSIONS

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

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

41
 RESULT ANALYSIS

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

Age wise Opinion of Customers about Sales Promotion and Advertising

Age in Sales Promotion Advertising

years Like Dislike Like Dislike
Below 35% 65% 55% 45%
25
25-35 38% 62% 65% 35%
35-45 42% 58% 52% 48%
45-55 51% 49% 53% 47%

SALES PROMOTION

ADVERTISING

42
CONSUMERS PERCEIVED SALES PROMOTION AS A PURCHASE
DECISION FACTOR

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

Perceived Sex
Status Male Female
Heavy 23% 77%
Moderate 55% 45%

43
 Non affected 35% 65%

PERCEIVED STATUS OF ADVERTISING WITH CONSUMER

Sex
Perceived Status
Male Female
Heavy 44% 56%
Moderate 36% 64%
Non affected 40% 60%

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

INTERPRETATION: the data interpretation is that after the survey it was

observed that most of the people get exited by the following sales promotional
tools. And they take advantage of this activity in following proportion.
 Coupons 10%
 Discounts and sales 30%
 contests 15%

44
  Point of purchase displays. 20%
 Rebates. 25%
.

LIMITATION

 The research is confined to a certain parts of Delhi due to time constraints

and does not necessarily shows a pattern applicable to all the places.

 Some respondents were reluctant to divulge personal information which can

affect the validity of all responses.

 In a rapidly changing industry, analysis on one day or in one segment can

change very quickly. The environmental changes are vital to be considered
in order to assimilate the findings.

45
 CONCLUSION

After the survey, the following were the conclusions:

 The hypothesis is accepted i.e. effectiveness of sales promotion plays an

important role on consumers buying behavior (Proved on page no.39).

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

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

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

 Reputation is incredibly important. Without this a brand is nothing but a

product Reputation is best enhanced through experience. What you feel,
touch and smell. If consumers try it, buy it and interact with it, they will
engage more with a brand than seeing an advertisement about it.

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

46
 RECOMMENDATION

 Based on hypothesis an intense AIDA model needs to be adopted the

AIDA model (Awareness, Internet, Desire, and Action). Customers are
aware of majority of products brand to create the awareness regarding
Product.

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

 Giving free gifts for the customer.

 Sales promotion will do more for a brand’s reputation by encouraging

relationships with consumers. Hence forth promotional activity is
important for making brand reach to every individual.

 Since majority of the customers is in favor of live demonstration of

Product. They should prioritize more in rest of the sales promotional
tools to attract more customers work on it.

 Sales promotional strategies should be evaluated twice. First at the stages

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

47
 IMPLICATIONS

 Sales Promotion, a short-term inducement, offered to a consumer or trade

has gained momentum as a promotional tool world over. It represents
nearly three fourth of the marketing budget at most consumer product
companies.

 Sales promotion is used to reduce dissonance and in turn the risk

involved in the purchase process of a consumer. The risk could be
financial, functional, social or psychological.

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

 Monetary promotions like price-off are primarily evaluated by a

consumer on utilitarian benefits like savings in time and money,
convenience and quality.

 The study should be extended to different product categories in fast

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

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

48
 This is applicable for consumer durable products. Where promotion plays
important role in the consumers mind.

49
 ABSTRACT

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

Research Question

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

Methodology

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

Conclusion

50
Now a days sales promotion’s impact is more than the others because customers
are very smart and they value money. Sales promotion is a most important aspect
for any company, and the impact of sales promotion is more because in this the
people interact with the product more.

51
 REFERENCES

(1) Brain sternthal and C Samuel Craig – "Humor in Advertising"

Journals of Marketing Oct.73, pp 17-18.
(2) Joe David son Alice Tybout and Brainsternthal "Impact of Deals and
Deal Retraction in Brand Switching" Journals of Marketing
Research, Feb. 1978, pp 72-81.
(3) Aaker, David, A. Batra, Radeev and Myers, John G "Advertising
Management", Prentice Hall, New Jersey, 1992, p.196.
(4) Evesett M Rogers, Diffusion of Innovations Free Press, New York,
1962
(5) www.google.com
(6) http://www.focusedperformance.com/articles/ccpm.html
(7) http://www.pmforum.org/library/tips/2007/PDFs/Hass-5-07.pdf
(8) http://www.projectsmart.co.uk/introduction-to-prince2.html
(9) http://www.cutter.com/events/jim-highsmith-apm-innovation.pdf
(10) http://www.pdf-search-engine.com/etom-pdf.html
(11) http://www.sei.cmu.edu/cmmi/2007results.

52
53
 QUESTIONNAIRE
Personal profile:

Name:_________________________________
Occupation:_____________________________
Age:___________________________________
Sex:___________________________________

Q.1 what you feel is the best medium for advertising which leave impact in your mind.
Television

Newspaper

Hoardings

Pamphlets

Others

Q.2 Do you take the advantage of promotional activity which is given below.

Coupons
Discounts and sales
contests
Point of purchase displays.
Rebates.

Q.3 Have you bought anything which was beyond your choice but you purchased that only
because advertisement has influenced you a lot.

Yes
No , If yes then kindly specify the name of product __________

Q.4 Have purchase anything whose ads you never saw but the promotion of that produt has
attracted you and you bought that particular product

54
 Yes
No . If yes then how frequent _____________________________

Q.5 Do you take advantage of promotional activity such as discount.

Yes
No

Q.6 when you go to buy a product what makes your mind to buy a product.

The advertisement of product

Promotion or discount.

Q.7 which is the best advertisement you found. Did you buy that product?

______________________________________________________________

Q.8 which is the most attractive offer you get when you were planning to buy a significant
product. Please mention that.

_______________________________________________________________

Q.9 which brand you like the most due to advertising of that brand? Specify.

______________________________________________________________

Q.10. Do you waits to buy certain product for the discount. And you take advantage of
discount seasons?

Yes
No

55
 APPENDICES
The survey questionnaire was filled by the people of Delhi and NCR, by on-
line procedure as well as personal meeting and face to face interaction. They
are from various places of India.

Sr. no. Name of the Customer Contact no. Postal Address

1 Shiv Kumar Sharma 09313522154 Raghu-nagar Janak puri- 45
2 Akash 0980500543 Gaziabad
3 Sunita 09213575854 Raghu nager janakpuri
4 Priyanka 01143004752 Mayur vihar new delhi
5 Nishita 9999265261 Noida
6 Mukul 09868405810 Palam vihar
7 Anil kumar 9416051400 Janakpuri
8 Isha 9953097787 Ashok vihar New-
Delhi
9 Praphu Narayan 99269900 Raghu nager New Delhi
10 Sanju Sharma 09871220123 Dwarka New Delhi
11 Pamela paul 09999050792 Noida sec-125
12 Akhil mohan 9953452520 Noida sec-125
13 Priyanka joshi 09953290200 New Delhi
14 Neha ghai 099999914687 Pitampura New Delhi
15 Annu 01122305637 Shahadra
15 Mr. Daljeet Singh 9810598120 E-1, Janakpuri DMRC

16 Mr. C.P. Singh 9810848159 E-2, Metro Enclave,

17 Mr. Vikash Rawat 9910484389 PushVihar ,New Delhi-
110017, India

18 Mr. Sunil Kataria 9971598608 PushVihar , New Delhi-

110017, India

19 Mr. V. C. Gandhi 9971598574 Push New Delhi-110017,

India

20 Mr. A. S. Rao 9891173666 E-6, PushVihar ,New

Delhi-

21 Mr. Gautam Kumar 9971598589 vikash puri sector A New

delhi -56

56
22 Mr. N. P. Singh 9810598148 NOIDA SECTOR 11 India

23 Mr. Hari Ram 9891025582 NOIDA SECTOR 11 India

24 Mr. R.C.Kulshrestha 9871130998 Janakpuri C block new-

Delhi-45
25 Mr. Pramod Kumar 9810738914 janakpuri c block New
Delhi-45

26 Mr. Sanjeev Sharma 9212045886 RZ- B1 41 raghu nager

27 Miss. Suiti Mittal 9212038937 H-4, Metro Enclave,
DMRC
28 Mr. M.C. Gupta 9810160154 Metro Enclave, DMRC
shahadra

29 Mr. Alok Ranjan 9810998363 DMRC Officer's Colony,

New Delhi-110017, India

30 Mr. nishant Kumar 9313083576 17 Mr. Ramakant singh H-8,

Metro PushVihar ,

31 Miss. Arvinda Tiwari 9810996743 Distict center New

Delhi-110017 India
32 Mr. Chandan Bhatia 921250367 PushVihar ,
New Delhi-17, India

33 Mr. Pankaj Saxena 9871374626 vasant vihar New Delhi-

17, India

34 Mr. Saral Dwivedi 9910376097 Noida

35 Mr. Dharmendra Kumar 9910478524 Noida
36 Mr. Shiv Singh 9818250486 Mathura road A-112

37 Mr. Kumar Keshav 9810854812 New Delhi-110018, India

38 Mr. Pradeep Kharab 9910484377 New Delhi-110067, India

39 Mr. Atul Gadgil 9818313973 Raghu nager

New Delhi-110087, India
40 Mr. Yashpal Mehta 9810848117 uttam nager
New Delhi-110016, India
41 Avinash 09818848827 Dwarka New Delhi
42 Babla 9911269900 Raghu nager-45
43 Bunti 09312385921 Raghu-nager

57
Results for: Sales promotion vs Advertising Effectiveness Survey

Q.1 what you feel is the best medium for advertising which leave impact in your
mind.
Television _____

Newspaper ____

Hoardings ____

Pamphlets _____

Others ____

Q.2 Do you take advantage of promotional activity which is given below.

 Coupons
 Discounts and sales
 contests
 Point of purchase displays.
 Rebates.

58
Q.3 Have you bought anything which was beyond your choice but you purchased
that only because advertisement has influenced you a lot.

Yes
No

Q.4 Have purchase anything whose ads you never saw but the promotion of that
produt has attracted you and you bought that particular product

Yes ______ No ________. If yes then how frequent

_____________________________

59
Q.5 Do you take advantage of promotional activity such as discount.

Yes
No ________

Q.6 when you go to buy a product what makes your mind to buy a product.The
advertisement of product __ 29%

Promotion or discount __ 68%

60
Q.10. Do you waits to buy certain product for the discount. And you take
advantage of discount seasons? Yes _________ No __________

TIME SCALE

GANTT chart

61
62