Retail Advertising and Promotional Strategies in Growing Consumer Market

Dr. Mahalaxmi Krishnan1 and Usha Bhandare2

1

Associate Professor of Commerce, K J Somaiya College of Arts and Commerce, Mumbai and PhD Guide, SNDT University Email: kmahalaxmi@live.com 2 Assistant Professor, K B College of Arts and Commerce for Women, Thane E-mail: bhandareusha@gmail.com

ABSTRACT Advertising is a growing business in India today and plays an important role in promoting goods and services. But the growing market-size, intense competition and changing life style and aspirations of people are challenges faced by manufacturers and marketers in sustaining competition. This research paper looks at the advertisement and promotional strategies adopted by retailers and their effectiveness. Field surveys using structured questionnaires were used to collect primary data from retailers and customers in the city of Mumbai. Retailers try to attract the attention of target consumers to their goods and services by providing attractive promotional schemes. To attract consumers, retailers offer inducements such as credit facilities, after sales service, extended warranty, free home delivery, free samples, discounts, gift offers, etc. Retailers adopt a mix of marketing and promotional strategies to withstand competition. Consumers however make informed purchase decisions by sifting through various advertisements and promotional offers.. Indian consumers are maturing and therefore the retailers find it increasingly difficult to influence the purchase decisions of customers merely with promotional offers. Innovations in sales promotion techniques are required to acquire new customers and to retain existing customers, especially the youth, who have no qualms switching brands and or shops.

Keywords: Advertising, Promotional offers, Customer preference, Changing Lifestyle.

INTRODUCTION Advertising is a growing business in India more so after the opening up of the economy. With more players, intense competition and expanding market in both urban and rural areas it is only natural that the marketers and manufacturers would like to reach the vast multitude of customers. The customer purchasing power, life style, and attitudes are all

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changing rapidly. Rising income and young and growing population would need to be tapped so that the manufacturers and retailers can retain if not increase their market share. Advertising, one of the key components among the four Ps in the marketing mix, is gaining ground through innovative methodologies. Advertising has changed its look, feel and perception among the community. Of late, advertisements have started influencing the growth, business operations and effectiveness of marketing strategies. Companies are vying for creating uniqueness in their advertisements. They are trying to create a surprising outcome that will drive business growth and sales, by amazing customers with the nature of content and information provided through the advertisements.. Advertisements are part of society and affect our daily life, both consciously and subconsciously. The content and message of advertisements therefore have a very responsible role to play in the shaping of a society and its mores. With growing productive capacity and output, there is imperative need to identify customers and reach them first. Advertising plays an important role in the process of inducing customers to purchase products from amongst the variety of products on offer. Advertising is a means of reaching target groups as it is a form of mass communication. Advertising has also become an important tool to achieve societal oriented objectives such as dangers of smoking, family planning, physical fitness and elimination of drug abuse. Advertising is only one element of the promotion mix, but it often takes special prominence in the overall marketing mix design. Promotion on the other hand may be defined as the co-ordination of all seller initiated efforts to set up channels of information and personnel to facilitate the sale of a good or services. The bulk of promotion is directed towards facilitating and enhancing specific products often intended to be a supporting component in a marketing mix. The promotion mix consists of four basic elements, viz., Advertising which the dissemination of information by non personal means is through paid media where the source is clearly identified as the sponsoring organization. Personal selling which is the dissemination of information by non personal, usually face to face contacts between audience members and one or more employee of the sponsoring organization. Sales promotion including free samples, free gifts, coupons, point of purchase sign, and display , shows and exhibitions Publicity which is dissemination of information by personal and non personal means is not directed paid by the organization.

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LITERATURE REVIEW Panchali Das in his paper A conceptual review of advertising and standards case study in Indian Scenario observed that advertising does not function in a vacuum but in a market environment where several forces like consumer needs, business interest and regulation are at work. It is powerful force in terms of its persuasiveness and function a critical social life. Bogart reviewed Peckhams rule which suggest that for new brands advertising during the past two years should be 150% of desired sales. After two years advertising should be set at whatever level is required to maintain sale. Henry Saffer in his Tobacco Advertising and promotion describes that if tobacco advertising and promotion increase cigarette consumption they are issue for public health policy. Although public health ads cater assets that tobacco advertising does increases cigarette consumption there is significant empirical literature that finds little or no effects of tobacco advertising on smoking. Economic issues in advertising, according to Becker and Murphy, are an information complement to the good itself. Cigarette advertising is designed to create fantasy, of sophistication, pleasure and social success. The above studies highlight the importance of advertising as a powerful tool of persuasion. Rationale for the Study With the crowding of the urban market place with too many retailers with a mix of organized and unorganized formats competing among and between each other for a slice of the urban market. This research paper therefore looks at the advertisement strategies adopted by retailers and their effectiveness in Mumbai region with the help of field survey. OBJECTIVES OF THE STUDY 1. Customers attitude towards advertisement and promotional strategy 2. Retailers attitudes towards advertisements and promotional strategy 3. Challenges faced by retailers 4. Advertisement and promotional strategies adopted by retailers RESEARCH METHODOLOGY 1. Coverage of the study The research study covers the retail shops and customers in Mumbai and Thane. 2. Sources of Data VOLUME NO.1, ISSUE NO.1 42 ISSN 2277-1166

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Data and information were gathered from primary source by means of field survey using structured questionnaires covering retail shops and customers on random sample basis in Mumbai and Thane and from secondary published sources. Primary sources included personal interviews, questionnaires and visits to shops. While the retailers were interviewed at their shops, customers were met at shop floors and bus stops. Secondary sources included books, journals, newspapers, websites, and research studies. 3. Sample Size Sample size was 50 retail shops and 50 customers. Separate questionnaires were prepared for the retail shopkeepers and the customers through whom the primary data was collected keeping the objectives of the study in mind. 4. Data Analysis Critical analysis of the data and information collected from primary sources as well as from published sources were made keeping the objectives of the study in mind. PRIMARY DATA ANALYSIS 1. Customers attitude towards advertising and promotion Table 1. Type of Retail Shop Visited by Customers
Type of Retail shop Multi Utility shops Supermarket Shopping Mall Big Bazaar Dmart No. 21 6 6 10 7 50 % 42 12 12 20 14 100

From Table 1, it can be seen that customers generally visit multi-utility stores (42%) (Kirana, grocery, family stores, and convenience stores) and Big Bazaar (20%). Supermarkets (12%) and shopping malls (12%) are visited less frequently Table 2. Frequency of visit to shops
Frequency of Visit Daily Weekly Fortnightly Monthly Total No. 7 14 5 24 50 % 14 28 10 48 100

48% of the respondents said that they visit shops once a month and 28% said that they visit weekly.

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Retail customers get information about promotional offers through various media. But the major sources are newspaper (24%) and TV (20%). Table 3. Source of Information about promotional offers
Media Newspaper Radio Ad TV Ad Pamphlets Internet Neighbors Friends Circle Moving display Cable TV No. 12 1 10 5 9 7 1 4 1 50 % 24 2 20 10 18 14 2 8 2 100

Table 4. Influence of promotional offers for making quick purchases

Always Sometimes Never Total No. 4 40 6 50 % 8 80 12 100

Promotional offers do not influence customers from making impulsive purchases. 80% of the respondents are influenced only sometimes with promotional offers. Table 5. Impact of promotional offer on purchase quantity
Always Sometimes Never Total No. 6 38 6 50 % 12 76 12 100

Retailers make promotional offers to induce customers to make purchase in large quantities. But the survey reveals that promotional offers influence customers only sometimes (76%). Table 6. Types of promotional schemes that attract customers
Discounts After sales service Warranty / Guarantee Free Sample Free gift Exchange offer No. 13 3 6 7 8 5 % 26 6 12 14 16 10

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www.abhinavjournal.com Coupon 4 Extra quantity for same price 4 Total 50

8 8 100

Various promotional offers attract customers to make purchase decisions. However, more than 1/4th of the respondents (26%) are attracted by discount offers. Table 7. Influence of Advertisements on Purchase Decisions
Always Sometimes Never Total No. 7 38 5 50 % 14 76 10 100

76% of the respondents are influenced by advertisements only sometimes for making purchases. Table 8. Mode of Shopping
Personal visit Tel Orders Thro Tele-marketing Sending Servant Spouse / Children Total No. 34 3 0 3 10 50 % 68 6 6 20 100

More than 2/3rds of the respondents carry out shopping through personal visits to shops. Though many of the multi utility shops take telephone orders and shops like Big Bazaar have inline shopping facility, people still prefer to go to shops. 2. Retailers attitude towards advertisement and promotional strategy Table 9. Timing of Promotional Offers
During festivals to dispose old stocks when manufacturer decides During holidays During monsoon To increase sales No. 23 3 2 5 0 17 50 % 46 6 4 10 0 34 100

Retailers generally provide promotional offers during festival seasons (46%). One third of the respondents make such offers to increase their sales target.

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Table 10. Types of Promotional schemes Offered

Discounts After sales service Warranty / Guarantee Free Sample Free gift Exchange offer Coupon Extra quantity for same price Total No. 16 3 9 7 4 3 2 6 50 % 32 6 18 14 8 6 4 12 100

Retailers make different types of promotional offers to attract the customers. But the most prominent among them is the discount offer (32%). Table 11. Attitude of customers to promotional offers
Positive Negative Neutral Total No. 33 7 10 50 % 66 14 20 100

Attitude of customers towards promotional offers are positive as experienced by the retailers (66%). However it is significant to note that 1/5th of the respondents (i.e. retailers) feel that customers are neutral to promotional offers. Table 12. Ad Media used by Retail shops for Promotional offers
Newspaper Radio Ad TV Ad Pamphlets Internet Buntings / posters Hoardings Moving display Cable TV Total No. 11 2 5 12 5 3 6 3 3 50 % 22 4 10 24 10 6 12 6 6 100

Retail shops use pamphlets (24%) and newspapers (22%) to announce their promotional offers such as limited period sales, exhibition, etc. 30% of the retailers are making promotional offers on food products / snacks followed by FMCG products (20%). Food products, snacks and perishable products are the products regularly consumed and on which promotional offers are made to induce repeat purchase. VOLUME NO.1, ISSUE NO.1 46 ISSN 2277-1166

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Table 13. Type of Goods on which promotional offers are made

FMCG / Essential items Luxurious goods Perishable goods Consumer durables Food products / snacks Soft drinks Beverages Medicines Total No. 10 4 7 3 15 6 3 2 50 % 20 8 14 6 30 12 6 4 100

Table 14. Reason for Promotional Offers

Increase sales Create brand image Repeat purchase Competition Attract customers Pass mfgs benefits Total No. 17 1 4 4 17 7 50 % 34 2 8 8 34 14 100

Large majority of retailers are providing promotional offers in order to attract customers (34%) and to increase their sales (34%) 3. Correlation of Responses of Retailers and Customers Closer examination of the responses of retailers and customers reveals the following: One of the significant finding of the survey among retailers and customers is that customers are not always motivated by promotional offers. 80% of the respondents are motivated to take quick purchase decisions on the basis of the promotional offers only sometimes The study also reveals that it is only sometimes that the customers buy more than the required quantity when a promotional offer is made. While the retailers feel that the attitude of the customers to promotional offers is positive, the customers are only sometimes motivated to make quick purchases or they buy more than the required quantity to take advantage of the promotional offer Discount offers are the predominant promotional choice of retailers (32%); customers are also attracted towards discount offers (26%). The study also reveals that only sometimes the customer s are influenced by advertisements for making purchases VOLUME NO.1, ISSUE NO.1 47 ISSN 2277-1166

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The survey reveals that 1/5th of the retailer respondents feel that customers are neutral to promotional offers. The study also reveals that the customers prefer to visit shops themselves to make purchases. Tele-orders and on line shopping are still at its nascent stage with very few takers. The study reveals that there is a disconnect between the retail shops advertising and promotion strategy and the consumer behaviour. Indian consumers are maturing and therefore the retailers find it increasingly difficult to influence the purchase decisions of customers merely with promotional offers. They would therefore need to innovate 4. Challenges faced by retailers There is intense competition among the retailers which is putting pressure on the retailers margin. Retaining customers has become a challenge due to changing lifestyle, consumer behaviour, needs and wants, values, and mobility. Youth customers do not mind traveling distances to the shop of their choice which again changes from to time. Physical dcor, maintenance, appropriate window displays / POP displays influences consumer audience and hence play an important role in advertising and promotion. Right type of promotional offers and ad media mix are challenges effecting sales. 5. Advertisement and Promotional Strategies adopted by retailers Retailers make use of all media mix combinations while advertising to different consumer audience. All types of customers viz., children, college stud ents, working men and women, housewives and senior citizens visit all types of retail shops in both organized and unorganized sectors. Therefore promotional strategies are important to influence the buying decisions of heterogeneous consumers. Retailers generally provide promotional offers during festival seasons. Retailers make different types of promotional offers to attract the customers and non customers. The study reveals that the most prominent among them is the discount offers. Retail shops use pamphlets and newspapers to announce their promotional offers such as limited period sales, exhibition, etc. Food products, snacks and perishable goods are the products regularly consumed and on which promotional offers are made by retail shops to induce repeat purchase as well as to build and create brand loyalty. VOLUME NO.1, ISSUE NO.1 48 ISSN 2277-1166

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Large majority of retailers are providing promotional offers in order to attract customers and to increase their sales CONCLUSION Advertising is a growing business in India today and it plays an important role in promoting goods and services. But the growing market-size, intense competition and changing life style and aspirations of people are challenges faced by manufacturers and marketers in increasing their turnover. The study reveals that 1. Retailers try to attract the attention of the target consumers to their goods and services by providing promotional schemes. 2. To attract consumers, retailers offer inducements such as credit facilities, after sales service, extended warranty, free home delivery, free samples, discounts, gift offers, etc. 3. Customers are attracted only sometimes to the promotional offers of the retail shops. 4. Indian consumers are maturing and therefore purchase decisions are not influenced merely by media advertisements and promotional offers. 5. While promotional offers help retailers increase sales, it is at the cost of their margins. 6. Discount offers are the most commonly accepted form of promotional offer made by retailers and preferred by customers as well. Retailers adopt a mix of marketing and promotional strategies to withstand competition. Consumers however often make informed purchase decisions by sifting through various advertisements and promotional offers. Innovations in sales promotion techniques are required to acquire new customers and to retain existing customers as the customers have no qualms to switch over to other brands and shops. REFERENCES
1. Ghosal, S. N. (2009) Innovations in Advertising Creating Added Values in Advertising. Marketing Mastermind, November, pp 41-44 2. Mrudula, G. P. (2009) Advocacy Advertising Generating Sales by Promoting an Opinion, Marketing Mastermind, January, pp 63-66 3. Roy, S., Lall, S. (2008) The New Humour in Advertising, Marketing Mastermind, September, pp 45-48 4. Srivastava, M. K., Kochar, B. (2009) Women in Indian Advertising From Lalita to Lolita, Marketing Mastermind, July, pp 29-32 5. Websites.

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