BRM PROJECTINTERIM REPORT

Submitted To: Prof Sreejesh BRM faculty, Section F

Submitted By: Mayank Tandon Saurabh Ahuja

INTRODUCTION
Consumer has been playing the key role in the business growth models of all sectors. The change from Push to Pull strategy has opened up doors for research on the buying patterns and thereby increasing the sales revenue. However, the pattern is distinct among the consumers in various segments. Again the business segments have been trying hit and trial methods to understand this change. All the studies carried in this aspect has attempted to categorize some of the common attributes of consumer buying which has been supported by extreme market research. Moreover these characteristics have provided fruitful results over a period of time.

RESEARCH QUESTION
What kind of consumer behavior (brand switching, stockpiling, purchase acceleration, product trial and spending larger amounts) follows as a result of various sales promotion activities (free gifts, personal demonstration, multi-brand promotional offers, sweepstakes or games) in a super market?

RESEARCH OBJECTIVES
The basic objective underlying this project is to analyze the response of the consumer towards sales promotion activities. Previous research has shown that sales promotion can encourage behavioral responses such as brand switching, stockpiling, purchase acceleration, product trial and spending larger amounts. Through this research we intend to analyze what kind of behavior follows as a result of non monetary sales promotion. The data then collected would be used to answer two basic questions:

1. Which behavior is most likely to be exhibited for a given sales promotional tool? 2. Which kind of sales promotion is most effective in bringing about one particular behavior? 3. Are the sales promotion activities linked to each other and an overlapping of the consumer behavior exists?

LITERATURE REVIEW

1. A Benefit Congruency Framework of Sales Promotion Effectiveness - Chandon ,Wansink and Laurent (2000) The paper discusses that promotions provide consumers with different levels of three hedonic benefits (opportunities for value-expression, entertainment, and exploration), and three utilitarian benefits (savings, higher product quality, and improved shopping convenience). Based on the distinction between the types of sales promotions and promotion benefits, Chandon Wansink and Laurent showed that monetary promotions provide more utilitarian benefits whilst non-monetary promotions provide more hedonic benefits.
Source: http://www.atypon-link.com/AMA/doi/abs/10.1509/jmkg.64.4.65.18071

2. A Review of Theoretical Perspectives Applied to Sales Promotion and a New Perspective based on Mental Accounting Theory (2003-04) ------------ Priya Jha-Dang This paper includes adaptation level theory, assimilation contrast theory, attribution theory, prospect theory, transaction utility theory, the elaboration likelihood model and the attitude model. It finds that these theoretical approaches have had a single product focus in evaluating consumer response to promotions. It suggests an alternative theoretical perspective to examine consumer response to promotion from a multi product perspective.
Sources: http://ideas.repec.org/p/iim/iimawp/2004-03-04.html

3. The Effectiveness of In-Store Free Samples on Sample Takers Heilman, Lakishyk and Radas (July 2006) This research examines the impact of in-store free samples on samplers (those who accept the free sample). It also provides insights about non-samplers (those who see the sample but do not accept it) by comparing their behavior to that of samplers.
Source: http://www.commerce.virginia.edu/faculty_research/Research/Papers/FreeSamples_July26_2006.pdf

4. Many other research and study has been done as mentioned in the above papers literature review. The most common is the consumer response to price promotions which was also confirmed in several laboratory studies (Gurumurthy and Winer, 1995, Blattberg, Briesch and Fox 1995).

RESEARCH METHODOLOGY The Research methodology is designed keeping in view various parameters. Some of which are: SAMPLING DESIGN For the sake of convenience and in view of certain other limitations we restrict our sample to the students and staff of ICFAI Business School, Hyderabad i.e. convenience (non probability) sampling. Within the campus, however, we seek to target a sample of 125 respondents on the basis of simple random (probability) sampling. This means that within ICFAI the respondents would be chosen on a random basis with the probability of each being included in the sample is equal.

DATA COLLECTION A thorough secondary data analysis is being undertaken in order to plan the research. The previously conducted researches on related topics provided us with the guidelines for the further course of action. Primary data for the research collected through a questionnaire based survey interview.

QUESTIONNAIRE DESIGN The final questionnaire evolved after many stages of reformulating and restructuring. A pilot test was conducted with a sample of 10 respondents (male: female ratio of 2:1) prior to conducting the actual interviews. This was done mainly to test the language of the questionnaire and know whether the respondents interpreted the question as intended. Errors and Confusing words were modified and certain explanations were added. A copy of the final questionnaire has been attached as an annexure to the report. The questionnaire used is an adaptation of a questionnaire used in a survey conducted by Shi, Cheung and Prendergast (2005). The questionnaire was designed basically to extract the following information from the respondents:
1. 2.

Basic demographic information regarding the age, gender, occupation and income. Their shopping frequency and their average spending per visit to the super market. Such questions act as a screen to identify whether the respondents is aware of the super market sales promotional activities or not. This is important in order to be able to get unbiased responses. If the respondent is not clearly aware of such activities his responses may be prejudiced or based on certain preconceived ideas. The responses of the respondents towards different types of sales promotion activities: In this part the consumer was asked to rank the five different behaviors that he is likely to exhibit as a result of a particular sales promotional activity on a scale of 1 to 5. The five types of promotional tools and the behavioral responses have been identified on the basis of several past researches on related topic and through analysis of other secondary data available on the topic. These responses were analyzed using various statistical tools and helped us get answers to the research question.

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QUESTIONNAIRE

EFFECT OF PROMOTIONAL ACTIVITIES ON CONSUMER BUYING BEHAVIOR

ICFAI BUSINESS SCHOOL, HYDERABAD

NAME: ________________________________________

GENDER: (a) Male (b) Female

OCCUPATION: (a) Self-employed (b) Professional (c) Service (d) Student

(e) Homemaker

AGE:

(a) 18 to 25

(b) 25 to 35

(c) 35 to 50 (d) 50 to 65

(e) Above 65

ANNUAL FAMILY INCOME:

(a) Below 1, 50,000 (b) 1, 50,000 - 3, 00,000 (c) 3, 00,000 5, 00,000 (d) 5, 00,000 7, 00,000 (e) Above 7, 00,000

How often do you shop in a super market? (a) Once in two weeks (b) Once a week (c) Twice a week (d) Three times a week

(e) Any other (please specify) _________________

What is your average expenditure per visit to a super market? (a) < 1000 (b) 1000-2500 (c) 2500-5000 (d) 5000-7000 (e) >7000

The questionnaire aims to obtain your response to the five different kinds of sales promotional strategies listed below. You are required to choose from the following options for each of the questions: 1 = strongly disagree 2 =moderately disagree 3 =do not know 4 =moderately agree 5 = strongly agree 1. FREE GIFTS (Complementary gifts offered, generally on purchase of a specific amount) a. A free gift has led me to buy another brand which I do not regularly buy. b. A free gift has led me to buy the product earlier than planned. c. A free gift has led me to buy more quantities of the same product. d. A free gift has led me to buy a product which I have never tried before. e. A free gift has led me to spend more in each visit to the supermarket.

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5 5 5 5 5

2. PERSONAL DEMONSTRATION (A live demonstration of how to use the product e.g. a demonstration of how to use a vegetable cutter and the different designs you can make by using it.) a. A demonstration has led me to buy another brand which I do not regularly buy. 1 2 3 4 5 b. A demonstration has led me to buy the product earlier than planned. 1 2 3 4 5 c. A demonstration has led me to buy more quantities of the same product. 1 2 3 4 5 d. A demonstration has led me to buy a product which I have never tried before. 1 2 3 4 5 e. A demonstration has led me to spend more in each visit to the supermarket. 1 2 3 4 5 3. MULTI BRAND PROMOTIONAL OFFER (Gillette shaving cream is given free with a Razor) a. A multi brand offer has led me to buy another brand which I do not regularly buy. b. A multi brand offer has led me to buy the product earlier than planned. c. A multi brand offer has led me to buy more quantities of the same product. d. A multi brand offer has led me to buy a product which I have never tried before. e. A multi brand offer has led me to spend more in each visit to the supermarket.

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5 5 5 5 5

4. SWEEPSTAKES OR GAMES (Contest like that conducted by VIP Apparels CHADDI PE GADDI offer where you become eligible to win exciting prizes like foreign trips, cars, etc.) a. Sweepstakes or games have led me to buy another brand which I do not regularly buy. 1 2 3 4 5 b. Sweepstakes or games have led me to buy the product earlier than planned. 1 2 3 4 5 c. Sweepstakes or games have led me to buy more quantities of the same product. 1 2 3 4 5 d. Sweepstakes or games have led me to buy a product which I have never tried before. 1 2 3 4 5 e. Sweepstakes or games have led me to spend more in each visit to the supermarket. 1 2 3 4 5 5. GUARANTEES OR WARRANTIES a. An additional guarantee has led me to buy another brand which I do not regularly buy b. An additional guarantee has led me to buy the product earlier than planned. c. An additional guarantee has led me to buy more quantities of the same product. d. An additional guarantee has led me to buy a product which I have never tried before. e. An additional guarantee has led me to spend more in each visit to the supermarket.

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THANK YOU