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 Mrityunjay Kumar

Place: Navi Mumbai 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 Prof. Dr. Pradip Manjrekar

Director 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 Mrityunjay Kumar

Date: February, 2015

CONTENTS

CHAPTER No.

TITLE PAGE No.

List of the Tables

List of the FigureList of AbbreviationExecutive Summary 1-8

1. Introduction 9-48

FMCG Market 9-11Competitiveness of Indian FMCG Industry 11

The Past & Future of FMCG 11-14Key Trends in Indian FMCG 14-18

The top 10 Companies in FMCG 18-19FMCG category and Products 19Sales Promotion 20-23Sales Promotion Objectives & Effectiveness 24-27Consumer Response to Sales Promotions 27-28FMCG sector and Sales Promotion in India 28-31Brand and its Evolution 31-36Brand Equity and Perception 36-46Indian Middle Class 46-48

2. Literature Review 49-101

Sales Promotions and Consumptions 49-50Sales Promotions and Consumer Preferences 50-59Promotion Thresholds 59-63Valence of a Promotion 63-64Perceived Discount 65-67Immediate Price Reduction 67-69Reference Price 69-73Informative Promotions 70-74Price Elasticity 77-78Shift in Purchase Intention 78-79Price Promotion and Consumer Goals 79-81Store Image 81-82Product Brand and Store Brand 82Effectiveness of Discount and Free Gift 83-86Brand Equity Measurement 86-89

CHAPTER No.

TITLE PAGE NO.

Sales Promotion and Brand Equity 89-94Sales Promotion and Branding 94-95Sales Promotion and Brand Image 95-98Sales Promotion and Brand Knowledge 96-97Monetary & Non -Monetary Promotions and Brand Knowledge

97-100

Short and Long Term Effects of Sales Promotions 100-101Research Gap 101

3. Objectives, Hypothesis & Research Methodology

102-107

4. Data Analysis & Interpretation 108-1745. Major Findings and Conclusions 175-1766. Recommendations 177-178

Bibliography 179-207AnnexureAnnexure Ι- Questionnaire 208-212Annexure ΙΙ- Regional Profile 213-214Annexure ΙΙΙ- Aker’s Brand Equity Framework 215

List of Tables

Table No.

List of Tables Page No.

1. Total Sample Size City wise 72. Pre and Post Liberalisation Scenario of FMCG

sector in India.12

3. Number of sample respondents from each area 106

Demographic Statistics:

4 Residence statistics city wise 1085. Comparison of All the scores with respect to cities 108

6. One Way ANOVA to study difference between the cities

109

7. Respondents’ Family Income statistics 1108. Respondents Age distribution statistics 1109 Respondents’ Gender statistics 111

10. Respondents’ Martial statistics 111

11. Respondents’ Employment status statistics 11212. Respondents’ Educational Qualification statistics. 11213. Respondents’ Family size statistics 11314. Respondents’ family type statistics 11415. Reliability Analysis 114

H01 Testing Tables:-16. Response as per family Income group(getting on

Likert scale)115

17. Pearson chi- square test 11618. K-W test ( favouring cash discount by different

Income group)116

19. Mean rank table 117

20. K-W test result (cd score comparison) 117

21. K-W test Statistics (cd score comparison) 11722. Chi – Square test 11823. Mean Rank table 118

Table No.

List of Tables Page No.

24. Response as per Gender 119

25. Pearson chi- square- gender 119

26. Mann-Whitney-U test- favours cash discount 119

27. U-test result 12028. Mann-Whitney-U test- cd score comparison 120

29. Mean rank table -Gender 12030. Response as per Educational qualification 12131. Pearson chi- square- Educational Qualification 12232. K-W test- cash discount 12233. Mean Rank table –Educational Qualification 12234. Cd score comparison 123

35. Mean rank table educational qualification 123H02 Testing Tables

36. Descriptive statistics cash discount & Free gift 12537. Paired t- test 125

38. Wilcoxon test Rank table 126

39. Wilcoxon test result 126H03 Testing Tables

40 Family income – Mean rank table 127

41 K-W test result 127

42 Mann Whitney U test 12843 Income group with similar attitude 12844 Group with similar attitude towards Deal prone 12945 Mean rank table- Gender 12946 M-U test result-Gender 12947 Mean rank table- Educational Qualification 13048 K-W test- Deal proneness 13049 M-W –U test- below 10th 13150 M-W-U test-10th against 13151 M-W-U test table – 12th , Graduation, & P.G

against131

Table No.

List of Tables Page No.

52 Groups with similar attitude – Educational Qualification

132

H04 Testing Tables53. Cronbach’s alpha test for reliability(for all 32item) 13354. Cronbach’s alpha test for reliability (for 22 item-

BQP)133

55. Spearman’s rank correlation 13456. Basic Data Distribution of response 13557. Family Income – Data Distribution 13658. Sum of rank table 13759. K-W test 13760. Data Distribution – Educational Qualification 13861. Sum of Rank table 13962. Chi-square 13963. Mean rank table – Gender 14064. M-W-U test 141

H05 testing tables65. Media preferences 14266. Chi square 143

H06 Testing Tables67. Statistics for scheme preferences 14468. Chi – square test 14569. Factor Analysis 14670. Rotated Component matrix 14771. Most Preferred SPS variables 14872. Preference of SPS 1- Family Income 14873. Chi-square test SPS 1- Family Income 14974. Preference of SPS 1- Educational Qualification 14975. Chi-square test SPS 1- Educational Qualification 15076. Preference of SPS 1- Gender 15077. Chi-square test SPS 1- Gender 15178. Preference of SPS 5- Family Income 15179. Chi-square test SPS 5- Family Income 15280. Preference of SPS 5- Educational Qualification 15381. Chi-square test SPS 5- Educational Qualification 15382. Preference of SPS 5- Gender 15483. Chi-square test SPS 5- Gender 15484. Preference of SPS 6- Family Income 15585. Chi-square test SPS 6- Family Income 15686. Preference of SPS 6- Educational Qualification 156

Table No.

List of Tables Page No.

87. Chi-square test SPS 6- Educational Qualification 15788. Preference of SPS 6- Gender 15789. Chi-square test SPS 6- Gender 15890. Preference of SPS 9- Family Income 15891. Chi-square test SPS 9- Family Income 15992. Preference of SPS 9- Educational Qualification 15993. Chi-square test SPS 9- Educational Qualification 16094. Preference of SPS 9- Gender 16095. Chi-square test SPS 9- Gender 16196. Preference of SPS 10- Family Income 16297. Chi-square test SPS 10- Family Income 16398. Preference of SPS 10- Educational Qualification 16399. Chi-square test SPS 10- Educational Qualification 164100. Preference of SPS 10- Gender 165101. Chi-square test SPS 10- Gender 165102 Preference of SPS 12- Family Income 166103 Chi-square test SPS 12- Family Income 167104. Preference of SPS 12- Educational Qualification 167105. Chi-square test SPS 10- Educational Qualification 168106. Preference of SPS 12- Gender 169107. Chi-square test SPS 12- Gender 169108. Preference of SPS 13- Family Income 170109. Chi-square test SPS 13- Family Income 171110. Preference of SPS 13- Educational Qualification 171111. Chi-square test SPS 13- Educational Qualification 172112. Preference of SPS 13- Gender 173113. Chi-square test SPS 13- Gender 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:

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.

FMCG Sector Major Brands during 1970- 80s

New Brands 1990s onwards

Indian InternationalSoaps Lifebuoy, Cinthol,

Liril, Lux,Pears, Rexona, MysoreSandal, Neem, Margo

Nirma Beauty soap

Palmolive, Dettol,Dove

Creams & Lotions Fair & Lovely, Pond’s,Johnson & Johnson

Dabur, Himalaya Oriflame, Avon,Biotique, Amway,Garnier

Detergents Surf, Nirma, Wheel

Fena, Lakhani Ariel, Tide, Henkel

Processed foods Maggie, Kissan, Parle,Britannia

MTR, Aashirwaad,Haldiram, Bikaner

Heinz, Pillsbury

Beverages Nescafe, Red Label, Campa,Thumsup

Haldiram, Tata Tea,Bisleri, Tajmahal

Pepsi, Coke, Sprite,7 up

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, Re-

inventing 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 following-

Trade 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 game-

theoretic 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 2008-

09 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 food-

processing 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 consumer-

based 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 self-

esteem.

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

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 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 Df

Mean Square F Sig.

CD Between Groups

.008 2 .004 .004 .996

Within Groups 2264.988 2398 .945

Total 2264.996 2400

FG Between Groups

.022 2 .011 .021 .980

Within Groups 1262.736 2398 .527

Total 1262.758 2400

BL Between Groups

.043 2 .021 .028 .972

Within Groups 1836.930 2398 .766

Total 1836.973 2400

BA Between Groups

.051 2 .026 .049 .952

Within Groups 1263.904 2398 .527

Total 1263.955 2400

BASO Between Groups

.079 2 .039 .056 .946

Within Groups 1688.589 2398 .704

Total 1688.667 2400

PQ Between Groups

.024 2 .012 .025 .976

Within Groups 1170.903 2398 .488

Total 1170.927 2400

DP Between Groups

.069 2 .034 .044 .957

Within Groups 1857.594 2398 .775

Total 1857.662 2400

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

Total 2400 100.0

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

RespondentsPercentage

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

Total 2400 100.0

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:

Type of OrganizationNumber of Sample

respondentsPercentage

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

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

12th Standard 590 24.6

Graduation 1072 44.7

P.G 637 26.5

Above P.G 32 1.3

Total 2400 100.0

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

Total2400 100.0

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:

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.

Cronbach's Alpha N of Items

.614 32

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

3-6 6-9 9-12 12-15 15-18 Total

Strongly disagree 102 1 33 0 0 137

Disagree 136 0 33 34 0 203

Neither agree and NorDisagree

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 dfAsymp. Sig.

(2-sided)

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 340.367

Df 4

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 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:

Family IncomeN 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

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:

Table 21: Test Statisticsa,b

Cdscore

Chi-Square 55.271

df 4

Asymp. Sig. .000

a. Kruskal Wallis Test

b. Grouping Variable: income

Ranks

Family Income N Mean Rank

Cdscore 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

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 K-

W test has been taken:

Table 23:

Mean Rank table:

Family IncomeN 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

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

TotalNumber of responses

PercentageNumber of responses

Percentage

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%280

Agree 447 45.3% 483 34.2% 930

Strongly agree 369 37.5% 481 34.0% 850

Total 986 100 1414 100 2400

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

Pearson Chi-Square 106.230a 4 .000

Likelihood Ratio 114.274 4 .000

N of Valid Cases 2400

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:

SexN

Percentage of those agree and strongly agree

Mean Rank

Male 1414 68.2 3.80

Female 986 82.8 4.03

Total 2400

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 N Mean Rank

Male 1414 1106.63

Female 986 1336.43

Total 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:

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.

Below 10th

Std.10th

Std.12th

Std.Gradua

te PGAbove

PG Total

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

Table 31:

Value dfAsymp. Sig. (2-

sided)

Pearson Chi-Square 1769.329a 20 .000

Likelihood Ratio 1254.374 20 .000

Linear-by-Linear Association

369.679 1 .000

N of Valid Cases 2400Interpretations:

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 RankRanking of

Groups

Below 10th Standard 35 69.00 6

10th Standard 34 1596.09 2

12th Standard 590 829.97 4

Graduate 1072 1170.63 3

PG 637 1685.25 1

Above PG 32 239.00 5

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 RankRanking of

Groups

Below 10th Std. 35 2315.50 1

10th 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

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 N Std. Deviation Std. Error Mean

Cash Discount 3.0012 2400 .97147 .01983

Free Gift2.8990 2400 .72536 .01480

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 df p-value

CD – FG 3.998 2400

6.58171665357665E-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

NMeanRank

Sum of Ranks

FG – CD Negative Ranks

1157a 933.95 1080582.00

Positive Ranks 827b 1074.41 888538.00

Ties 416c

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 -3.801

p-value .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:

Family IncomeN 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

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 76.638

df 4

p-value .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

Mann-Whitney U

344656.0 122859.0 73974.0 30690.0 32554.5 23002.0 13629.0

Wilcoxon W

493987.0 1284909.0 1236024.0 32901.0 181885.5 172333.0 15840.0

Z -6.29 -0.51 -0.51 -5.63 -6.12 -2.91 -3.87

P-value3.13E-10*

0.611 0.6081.79E-08*

9.36E-10*

0.004*1.09E-04*

*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

Z -0.84 -8.31 -5.30

P-value 0.4 9.85E-17* 1.18E-07*

*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 ProneModerate Deal

ProneHigh Deal prone

66 15 - 18 lakhs

546 6 - 9 lakhs

1523 3 - 6 lakhs 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 Mean Rank

Male 1414 1148.49

Female 986 1276.36

Total 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 623287.500

Wilcoxon W 1625107.500

Z -4.724

p-value .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:

EducationalQualification

N Mean RankRanking of

Groups

Below 10th

Standard35 2247.00 1

10th Standard 34 1498.91 3

12th Standard 590 1298.54 4

Graduate 1072 1162.40 5

PG 637 1078.22 6

Above PG 32 1680.50 2

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 153.800

df 5

p-value .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

10th 12th Graduate PG Above PG

Mann-Whitney U .000 1785.000 1820.000 1190.000 .000

Wilcoxon W 595.000 176130.000 578021.000 204393.000 528.000

Z -8.049 -8.612 -9.659 -10.077 -8.124

Asymp. Sig. (2-tailed) .000* .000* .000* .000* .000*

Table 50:

10th Standard against:

10th Std.

12th Std. Graduate PG Above PG

Mann-Whitney U 8899.000 12923.000 6490.000 480.000

Wilcoxon W 183244.000 589124.000 209693.000 1075.000

Z -1.171 -3.094 -4.473 -1.987

Asymp. Sig. (2-tailed) .242 .002* .000* .047*

Table 51:

12th Standard against, Graduation against and P.G against

12th Std. Grad PG

Graduate PG Above PG PG Above PG Above PG

Mann-Whitney U

280307.500 154668.000 7184.000 316984.000 9488.000 4288.000

Wilcoxon W 856508.500 357871.000 181529.000 520187.000 585689.000 207491.000

Z -4.085 -5.714 -2.414 -2.724 -4.613 -6.293

Asymp. Sig. (2-tailed)

.000* .000* .016* .006* .000 .000

*Significant Difference

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 ProneModerate Deal

ProneHigh Deal prone

637 PG

1072 Graduate

590 12th Std. 12th Std.

34 10th Std. 10th Std.

32 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 Loyalty

Brand Awarenes

sBrand

AssociationPerceived

Quality

Brand Loyalty

Correlation Coefficient 1.000 .048* .396** .167**

Sig. (2-tailed) .020 .000 .000

N 2400 2400 2400

Brand Awareness

Correlation Coefficient 1.000 -.046* .550**

Sig. (2-tailed) .023 .000

N 2400 2400

Brand Association

Correlation Coefficient 1.000 .092**

Sig. (2-tailed) .000

N 2400

Perceived Quality

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

DisagreeNeither agree nor disagree

AgreeStrongly

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:

Brand Loyalty

Brand Awareness

Brand Association

Perceived Quality

3 - 6 lakhs

1172.15(4)

1282.72 (1) 1151.23 (4) 1250.49 (1)

6 - 9 lakhs

1265.63 (2)

1167.45 (3) 1291.07 (2) 1212.92 (3)

9 - 12 lakhs

1084 (5) 1196.2 (2) 1210 (3) 1233.4 (2)

12 - 15 lakhs

1259.56 (3)

715.54 (4) 1099.18 (5) 680.03 (4)

15 - 18 lakhs

1536.25 (1)

339 (5) 1736.75 (1) 668 (5)

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:

Brand Loyalty

Brand Awareness

Brand Association

PerceivedQuality

Chi-Square 29.374 181.764 61.677 110.629

df 4 4 4 4

Asymp. Sig. .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

Std.10th Std. 12th Std. Graduate 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 AssociationPerceived 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:

Brand Loyalty

Brand Awareness

Brand Association

PerceivedQuality

Chi-Square 126.764 129.033 371.557 224.999

df 5 5 5 5

Asymp. Sig. .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 N Mean Rank

Brand Loyalty Male1414 1115.65

Female 986 1323.49

Total 2400

Brand Awareness Male1414 1075.97

Female 986 1380.43

Total 2400

Brand Association Male1414 1192.27

Female 986 1213.53

Total 2400

Perceived Quality Male1414 1237.20

Female 986 1149.06

Total 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

Brand Awareness

Brand Association

PerceivedQuality

Mann-Whitney U 576819.000 520679.500 685237.000 646378.000

Wilcoxon W 1578639.000 1522499.500 1687057.000 1132969.000

Z -7.372 -10.834 -.758 -3.164

Asymp. Sig. (2-tailed)

.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 1396.320a

Df 7

Asymp. Sig. .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:

Sps1sps2 sps3 sps4 sps5 sps6 sps7 sps8 sps9 sps10 sps11 sps12 sps13

1 0 0 174 34 35 34 277 242 0 35 306 377 377

2 68 72 312 236 0 0 134 308 0 35 786 281 282

3 106 102 136 853 34 34 170 201 35 70 244 174 173

4 0 137 242 374 238 0 579 208 0 34 242 34 34

5 101 0 207 489 34 34 415 577 0 34 200 137 137

6 0 244 578 140 34 34 134 314 0 33 242 408 408

7 70 104 273 138 174 136 138 169 69 167 70 649 649

8 347 274 102 0 348 171 137 34 137 540 141 67 67

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

11 308 273 0 34 208 751 139 70 307 208 34 68 68

12 309 174 102 0 334 205 70 141 754 241 0 70 70

13 274 239 35 0 202 519 68 0 716 211 102 35 35

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 dfAsymp. Sig. (2-

sided)

Pearson Chi-Square30105.818a 144 .000

Likelihood Ratio28321.407 144 .000

Linear-by-Linear Association 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

Component

Initial EigenvaluesExtraction Sums of Squared Loadings

Rotation Sums of Squared Loadings

Total

% of Variance

Cumulative % Total

% of Variance

Cumulative % Total

% of Variance

Cumulative %

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 78.951 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 2.201E-16

1.693E-15

100.000

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

Variables1 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:

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.

Family Income Group

Total

Preference

3 - 6 lakhs

6 - 9 lakhs 9 - 12 lakhs

12 - 15 lakhs

15 - 18 lakhs

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

Chi-square test value:

Table 73:

Value dfAsymp. Sig.

(2-sided)

Pearson Chi-Square 774.380a 36 .000

Likelihood Ratio 776.884 36 .000

Linear-by-Linear Association

51.872 1 .000

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

Total

Preference

Below 10th Std. 10th Std.

12th

Std. Graduate PGAbove PG

SPS1 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

Total 35 34 590 1072 637 32 2400

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 dfAsymp. Sig.

(2-sided)

Pearson Chi-Square 1336.982a 45 .000

Likelihood Ratio 1298.543 45 .000

Linear-by-Linear Association

23.299 1 .000

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:

Interpretation:

Maximum number of responded preferred this scheme 8th as a choice. This scheme

preferred 2nd 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.

Gender

TotalPreference Male Female

SPS1 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

Total 1415 985 2400

Chi- Square test:-

Table 77:

Chi-Square Tests

Value dfAsymp. Sig.

(2-sided)

Pearson Chi-Square 340.908a 9 .000

Likelihood Ratio 370.063 9 .000

Linear-by-Linear Association

.000 1 .990

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 SPS 5 while considering Family Income:

Table 78:

Preference Family Income

Total3 - 6 lakhs 6 - 9 lakhs 9 - 12 lakhs

12 - 15 lakhs

15 -18 lakhs

SPS5 1 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

Total 1523 546 165 100 66 2400

Interpretation:

Maximum number of responded preferred this scheme 10th 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 test:

Table 79:

Chi-Square Tests

Value dfAsymp. Sig. (2-

sided)

Pearson Chi-Square1527.491a 44 .000

Likelihood Ratio1423.470 44 .000

Linear-by-Linear Association

175.060 1 .000

N of Valid Cases2400

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

Total

Preference

Below 10th 10th 12th Graduate PG Above PG

SPS5 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

Total 35 34 590 1072 637 32 2400

Interpretation:Maximum number of responded preferred this scheme 10th as a choice. This scheme

preferred 1st 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 dfAsymp. Sig.

(2-sided)

Pearson Chi-Square 1553.969a 55 .000

Likelihood Ratio 1432.722 55 .000

Linear-by-Linear Association

48.269 1 .000

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 5 while considering Gender:

Table 82:

Gender

TotalMale Female

SPS 5 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

Total 1414 986 2400

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 dfAsymp. Sig.

(2-sided)

Pearson Chi-Square 290.162a 11 .000

Likelihood Ratio 339.327 11 .000

Linear-by-Linear Association

6.665 1 .010

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 SPS 6 while considering Family income

Table 84:

Family Income

Total3 - 6 lakhs

6 - 9 lakhs

9 - 12 lakhs

12 - 15 lakhs

15 - 18 lakhs

SPS6 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

Total1523 546 165 100 66 2400

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 dfAsymp. Sig.

(2-sided)

Pearson Chi-Square 827.537a 40 .000

Likelihood Ratio 937.981 40 .000

Linear-by-Linear Association

27.825 1 .000

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

TotalBelow

10th Std.10th

Std. 12th Std. Graduate PGAbove

PG

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

Total 35 34 590 1072 637 32 2400

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 dfAsymp. Sig.

(2-sided)

Pearson Chi-Square 1369.683a 50 .000

Likelihood Ratio 1105.710 50 .000

Linear-by-Linear Association

25.706 1 .000

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

TotalPreference Male Female

SPS6 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

Total 1414 986 2400

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 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 dfAsymp. Sig.

(2-sided)

Pearson Chi-Square 278.511a 10 .000

Likelihood Ratio 330.378 10 .000

Linear-by-Linear Association

2.467 1 .116

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 SPS 9 while considering Family income:

Table 90:

Family Income

Total

Preference

3 - 6 lakhs

6 - 9 lakhs

9 - 12 lakhs

12 - 15 lakhs

15 - 18 lakhs

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

Total 1523 546 165 100 66 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 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 dfAsymp. Sig.

(2-sided)

Pearson Chi-Square 671.531a 28 .000

Likelihood Ratio 673.009 28 .000

Linear-by-Linear Association

19.654 1 .000

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

TotalPreference Below 10th 10th 12th Graduate PG Above PG

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

Total 35 34 590 1072 637 32 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 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 dfAsymp. Sig.

(2-sided)

Pearson Chi-Square 1066.343a 35 .000

Likelihood Ratio 961.596 35 .000

Linear-by-Linear Association

34.438 1 .000

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 9 while considering Gender:

Table 94:

Gender

TotalPreference

Male Female

SPS9 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

Total 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 dfAsymp. Sig. (2-

sided)

Pearson Chi-Square397.968a 7 .000

Likelihood Ratio519.563 7 .000

Linear-by-Linear Association

7.044 1 .008

N of Valid Cases2400

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

Total3 - 6

lakhs6 - 9

lakhs9 - 12 lakhs

12 - 15 lakhs

15 - 18 lakhs

SPS10 135 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

Total1523 546 165 100 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 dfAsymp. Sig. (2-

sided)

Pearson Chi-Square 1545.022a 48 .000

Likelihood Ratio 1195.754 48 .000

Linear-by-Linear Association

73.428 1 .000

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 10 while considering Educational qualification:

Table 98:

Educational qualification

TotalBelow 10th

Std.10th

Std. 12th

Std. Graduate PG

Above

PG

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

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 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 dfAsymp. Sig. (2-

sided)

Pearson Chi-Square3979.164a 60 .000

Likelihood Ratio2010.355 60 .000

Linear-by-Linear Association

.911 1 .340

N of Valid Cases2400

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

TotalMale Female

SPS10 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

Total 1414 986 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 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 dfAsymp. Sig.

(2-sided)

Pearson Chi-Square 419.020a 12 .000

Likelihood Ratio 507.242 12 .000

Linear-by-Linear Association

52.527 1 .000

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 SPS 12 while considering Family income

Table 102:

Family Income

Total3 - 6 lakhs 6 - 9 lakhs9 - 12 lakhs 12 - 15 lakhs

15 - 18 lakhs

SPS12 1 174 103 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

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 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 dfAsymp. Sig.

(2-sided)

Pearson Chi-Square 900.738a 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

TotalBelow 10th Std. 10th Std. 12th Std. Graduate PG

Above PG

SPS12 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

Total 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 dfAsymp. Sig. (2-

sided)

Pearson Chi-Square1456.946a 60 .000

Likelihood Ratio1391.845 60 .000

Linear-by-Linear Association

72.441 1 .000

N of Valid Cases2400

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

TotalMale Female

SPS12 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

Total 1414 986 2400

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 dfAsymp. Sig.

(2-sided)

Pearson Chi-Square 679.197a 12 .000

Likelihood Ratio 790.559 12 .000

Linear-by-Linear Association

69.454 1 .000

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

Total3 - 6 lakhs 6 - 9 lakhs9 - 12 lakhs

12 - 15 lakhs

15 - 18 lakhs

SPS13 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 dfAsymp. Sig.

(2-sided)

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

TotalBelow

10th 10th 12thGradua

te PG Above PG

SPS13 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 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 dfAsymp. Sig.

(2-sided)

Pearson Chi-Square1455.721a 60 .000

Likelihood Ratio1391.298 60 .000

Linear-by-Linear Association

72.420 1 .000

N of Valid Cases2400

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

TotalMale Female

SPS13 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

Total 1414 986 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 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 dfAsymp. Sig.

(2-sided)

Pearson Chi-Square 676.193a 12 .000

Likelihood Ratio 786.826 12 .000

Linear-by-Linear Association

69.569 1 .000

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.

2. I do get satisfaction to find cash discount on purchase.

3. I do think cash discount is not good choice as a scheme.

B. Free Gift:

1. I wish to receive free gift than cash discount.

2. Free gift with a product doesn’t have good quality.

3. There is no worth of free gift with purchased product.

4. I worth free gift most.

C. Brand Loyalty:

1. I don’t care about sales promotion schemes to purchase products.

2. I do purchase products with sales promotion schemes.

3. I get satisfaction after purchase with sales promotion schemes.

4. I think quite a little about sales promotion schemes.

D. Brand Awareness:

1. I generally informed about sales promotion schemes of products which I do purchase.

2. I generally don’t want to know about sales promotion schemes.

3. I accept it is good to know the sales promotion schemes for purchase.

4. My Purchase is independent of knowledge about sales promotion schemes.

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

5. I never eager to know about sales promotion schemes.

6. Usually, we do know about sales promotion schemes of familiar products.

E. Brand Association:

1. Sales promotion schemes make products likeable.

2. I do think products are unique without considering sales promotion schemes.

3. Good products have often sales promotions.

4. I do think sales promotion schemes makes good impression for products.

F. Perceived Quality:-

1. Generally products with sales promotion schemes are better products.

2. Usually companies make available products with schemes when they do

not capable to sell.

3. People purchase products with sales promotions, then they do

Logical and having ability to find reason.

4. Often products with sales promotion schemes are not good products.

5. Sales promotion schemes are planned as per customer need.

6. I feel consumer should not notice to sales promotion schemes to purchase the products.

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

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

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.

2. I generally purchase a branded product with deal.

3. I never consider promotional schemes

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 [ ]

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

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 Source of Brand awareness

Sales promotion schemes

Benefit Ranking of the scheme

SPS1 Domestic(Local) Mass Media

Price off Delayed

SPS2 Domestic(Branded) Mass Media

Price off Immediate

SPS3 International Mass media

Price off Delayed

SPS4 Domestic(Local) Point of Purchase

Price off Immediate

SPS5 Domestic(Branded) Point of Purchase

Price off Immediate

SPS6 International Point of Purchase

Gift/%Extra

Delayed

SPS7 Domestic(Local) Mouth Publicity

Price off Delayed

SPS8 Domestic(Branded) Mouth publicity

Gift/%Extra

Immediate

SPS9 International Mouth publicity

Price off Immediate

SPS10 Domestic(Local) Point of Purchase

Price off Delayed

SPS11 Domestic(Branded) Mass media

Price off Delayed

SPS12 International Mass media

Price off Immediate

SPs13 Domestic(Local) Mass media

Gift/%Extra

Immediate

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

Reduced marketing costs, Trade leverageAttracting new customers

Create awareness

ReassuranceTime to respond to competitive threats

Anchor to which other association can be attachedFamiliarity- LikingSignal of substance/commitmentBrand to be considered

Reason to buyDifferentiate/position,Price, channel member interests, extensions

Providing value to customer by enhancing customers interpretation/ processing of information

Confidence in the purchase decision

Use satisfaction

Provide value to firm by enhancing Efficiency and effectiveness of marketing

programme Brand loyalty Prices/ margins Brand Extensions Brand leverage Competitive advantage

Other Proprietary Brand Assets

Brand Awareness Perceived Quality Brand

Association

Help process/ Retrieve information, Differentiate/position,Reason to buy, create positive attitude/ feelings, extensions

CompetitiveAdvantage