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Impact of Sales Promotion on Consumer Behavior: An Analytical Study of

Readymade Garments and Footwear Segments

Article · January 2018

DOI: 10.5958/2229-4503.2018.00008.5

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 Al-Barkaat Journal of Finance & Management/Print ISSN: 0974-7281
94
Al-Barkaat Journal of Finance & Management Online ISSN: 2229-4503
10.5958/2229-4503.2018 .00008.5
A Bi-annual Refereed Journal
Volume 10, Number 1, January 2018, pp. 94-102

Impact of Sales Promotion on Consumer Behavior: An Analytical Study

of Readymade Garments and Footwear Segments

Mohd Salman Shamsi* and Mohd Asif Khan**

Abstract
The present day marketing is consumer as well as society oriented. The basic task of
needs and wants satisfaction is performed by marketing management of all the
companies. To accomplish this task of marketing, the management has to aware,
attract and retain consumers for its offerings. Sales Promotion is one such tool which
is extensively used by marketers to attract and retain consumers. It is used as an
incentive or motivation for the consumers to try / buy the product being promoted. A
lot of time, money and other resources are employed in this regard. It is thus very
important to analyze the impact of different Sales Promotion techniques on Consumer
Behavioral variables. The present study uses Structural Equation Modeling to analyze
this impact. Discount and Buy-one Get-one (BOGO) have been taken for Sales
Promotion (SP) while Product Trial (PT), Brand Loyalty (BL) and Spending More
(SM) are the variables considered for Consumer Behavior. Moreover, the differences
between garment and footwear segment have been explored. The data has been
collected through self administered questionnaire using mall intercept method in
Delhi-NCR.

Keywords: Brand loyalty, Discount, Sales promotion, Structural equation modeling.

Introduction:
Marketers use 4 Ps of marketing mix as appropriate ingredients for performing all the
marketing tasks. One component of this mix is Promotion mix which comprises of tools
to be used for the promotional activities of the product. It consists of advertising, sales
promotion, direct selling, public relations (publicity) and direct marketing (Kotler et al.,
2005). These tools are used to make consumer aware about the product, convey the
benefits, attract them, retain them etc. Sales Promotion in particular, is a technique used
by marketers to motivate consumers to buy the promoted product. It “consists of a
diverse collection of incentive tools, mostly short term, designed to stimulate trial, or
quicker or greater purchase, of particular products or services by consumers or the
trade” (Blattberg and Neslin, 1990). It is clearly understood from this definition that it is
used to influence the consumers to accelerate their purchase either in terms of time or
quantity. To influence the consumers, various types of incentives are offered to them
that may be monetary or non monetary. Commonly used Sales Promotion techniques are

*Research Scholar, Department of Commerce, Aligarh Muslim University, Aligarh

**Associate Professor, Department of Commerce, Aligarh Muslim University, Aligarh
E-mail for correspondence: shamsi.sam@gmail.com

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Impact of Sales Promotion on Consumer Behavior: An Analytical Study......... 95

discount, premium, bonus, free sample, contest, product display, buy-one get-one, etc.
Sales Promotion can be divided as Monetary & Non-Monetary Sales Promotion based
on the type of benefit; and Consumer & Trade Sales Promotion based on who is getting
benefitted (Kotler, 2000). It is considered as a quick action generating activity to boost
up sales of a product in short run. It is used quite often with products belonging to
following categories: FMCG, telecommunication, readymade garments, footwear,
consumer durables, etc. The objectives of Sales Promotion are achieved through
influencing the consumer Behavior in general and purchase decision in particular.
Consumer Behavior includes all those activities or decisions through which a consumer
passes for obtaining, consuming and disposing of products and services (Blackwell et
al., 2001). It is a very wide field that includes searching for a required product, gathering
information, selecting the desired product, buying decision, usage pattern, disposal,
recommendation, repurchase decision and so on. As per Kotler (2000) “The field of
consumer behavior studies how individuals, groups, and organizations select, buy,
use, and dispose of goods, services, ideas, or experiences to satisfy their needs and
desires”. It can be understood from this that every decision, activity, behavior etc.
shown by a consumer comes under the Consumer Behavior. While making a purchase
decision, a consumer may follow different purchase designs or a combination of them,
namely, product trial, brand switching, purchase acceleration, stockpiling, etc. Sellers
use Sales Promotion incentives to attract new product triers (Product trial), reward the
loyal consumers (Brand Loyalty), attract other brand’s consumers (Brand Switching)
etc (Kotler, 2000). For implementing these Sales Promotion techniques, a huge amount
of money and other resources are employed. In certain product categories a significant
amount of expenditure is dedicated for advertising and sales promotions that may go as
high as an average of 42 per cent of sales (Kotler et al. 2005). This makes it quite
inevitable to analyze the impact of Sales Promotion techniques on Consumer Behavioral
responses. Thus, present study has been taken up to address this issue with regard to
Readymade Garments as well as Footwear segments. The Sales Promotion techniques
considered for the present study are Discount and Buy-one Get-one as these are very
commonly used by most of the brands in the selected segments. The Consumer Behavior
is studied using the Product Trial, Brand Loyalty and Spending More as dependent
variables.

Literature Review
Sales Promotion has been defined comprehensively by many previous researchers. As
per Blattberg and Neslin (1990) “Sales promotion consists of a diverse collection of
incentive tools, mostly short-term, designed to stimulate quicker and/or greater purchase
of particular products/services by consumers or traders”. Kotler defines it as “Those
marketing activities other than personal selling, advertising, and publicity that stimulate
consumer purchasing and dealer effectiveness, such as display, shows, demonstrations,
expositions, and various other non-current selling efforts, not in ordinary routine”.
Sales Promotion is a very important promotion technique that can be used efficiently to
increase the sales and eventually profits of the company (Weerathunga and Pathmini,
2015). Although, marketers are using it since decades, but rising competition and freely
available market information makes it very important to plan & execute Sales Promotion
carefully (Shamsi and Khan, 2017).

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Santini et al. (2015) analyzed discounts influence on consumer buying intention along
with moderating effect of attractiveness. The study was done using experimental research
on 662 students. It was found that discount positively influence consumers’ purchase
intent. Moreover, impulsiveness and hedonic perception have significant positive
relation with purchase intent of discounted product but financial risk has a negative
relation.
Chaharsoughi and Yasory (2012) studied “effect of Sales Promotion on Consumer
Behavior based on culture”. The study employed different cross cultural models to
analyze the effect. It was found that culture as well as sales promotion has a strong
effect on consumer behavior however Sales Promotion can independently influence
consumer behavior.
Gilbert and Jackaria (2002) studied the efficiency of Sales Promotion with respect to UK
supermarkets. The study compared coupon, price discount, sample and buy-one get-
one free. The efficacy of these tools is analyzed towards brand switching, brand loyalty,
stockpiling, product trial and purchase acceleration. A sample of 160 has been studied
through questionnaire survey. The influence of different sales promotion tools was
found significantly different from each other. Buy-one get-one free was found to be the
most preferred promotional tool followed by discount, sample and coupon.
Shamsi and Khan (2017) tested the efficiency of Sales Promotion with respect to
influencing different consumer behavior factors. The study analyzed data collected
from 415 consumers in Delhi-NCR using repeated measures ANOVA. It was found that
all the select Sales Promotion techniques influence consumer behavior differently.
Discount was found to be most effective Sales Promotion technique followed by Product
display and Buy-one Get-one.
Salvi (2013) tested different Sales Promotion techniques (discount, price-off, buy one
get one) with respect to different consumer behavior variables (store visit, purchase
and earlier purchase). Using friedman t-test, discount and price-off were found effective
for store visit, purchase and earlier purchase while BOGO was found influencing store
visit and purchase. Weerathunga and Pathmini (2015) states that Sales Promotion
techniques have a significant correlation with consumer impulse buying behavior.
However, Nagadeepa et al. (2015) adds that rebates and discounts are the sales promotion
techniques that motivate impulse buying among consumers more than other promotional
tools. Offer, premium and contest significantly stimulate consumer purchase decision
(Neha and Manoj, 2013). Chakrabortty et al. (2013) suggests that Sales Promotion is
more influential than advertisement.

Research Gap
There are many previous studies discussing about impact / effect / influence of Sales
Promotion on Consumer Behvaior. Different aspects are discussed by different
researches in various categories. However, no study was found studying the impact
with reference to Delhi-NCR concentrating on Readymade Garments and Footwear. The
use of Structural Equation Modeling for this type of study makes results more reliable
but such studies were not found.

Objectives
1. To study the concept of Sales Promotion and Consumer Behavior.

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Impact of Sales Promotion on Consumer Behavior: An Analytical Study......... 97

2. To analyze the impact of Sales Promotion techniques (discount & Buy-one Get-one)
on consumer behavior variables (Product Trial, Brand Loyalty and Spending More).
3. To check if differences exist in results between readymade garments and footwear.

Research Methodology
Research Design
The present study is a combination of exploratory as well as descriptive research. The
initial phase is exploratory in nature as this phase involved formulating the problem,
developing a research design and exploring the underlying factors of the variables
being studied. The descriptive design has been followed in describing and analyzing
the relationship between independent and dependent variables.

Sampling
The data has been collected using mall intercept method in Delhi NCR. A self administered
close ended questionnaire was used to collect data from consumers. A total of 396
questionnaires were completely filled.

Data Analysis
For analysing data, IBM SPSS and IBM SPSS AMOS software packages have been
used. Firstly, the reliability has been checked using Cronbach’s alpha followed by
checking validity and model fit (using CFA). After confirming reliablity and model fit,
Structural Equation Modeling is used and hypotheses are tested.

Hypotheses for the Study

Based on the research gap and objectives of the research, hypotheses have been framed
out of independent & dependent variables. Since independent variable is measured on
likert scale using consumer’s perception towards them, the impact of perception towards
discount & BOGO is hypothesised on consumer behavioral variables. These hypotheses
are tested for both the segments, i.e readymade garments and footwear, separately.

H01: There is no significant impact of perception towards discount on product trial.

H02: There is no significant impact of perception towards discount on brand loyalty.
H03: There is no significant impact of perception towards discount on spending more.
H04: There is no significant impact of perception towards buy-one get-one on product
trial.
H05: There is no significant impact of perception towards buy-one get-one on spending
more.
H06: There is no significant impact of perception towards buy-one get-one on product
trial.

Reliability
Cronbach’s alpha is used to test the reliability of the scale. The internal consistency as
well as inter item consistency is assessed using the alpha value. A value less than 0.6
depicts poor reliability while it is considered better as it gets closer to 1 (Sekaran, 2003).

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Table-1: Cronbach’s Alpha

S.No. Dimension Alpha Alpha
(Garment) (Footwear)
1. Overall Scale 0.878 0.871
2. Product Trial 0.736* 0.773
3. Brand Loyalty 0.771 0.764
4. Spending More 0.777 0.793
5. Discount 0.738 0.759
6. Buy one Get one 0.829 0.826
Source: Author’s own findings.
The alpha values for all the constructs are found satisfactory ( > 0.7) except Product trial
in Readymade Garments segment. An item coded as PT2 had to be deleted to get an
alpha value above 0.7.

Confirmatory Factor Analysis

CFA has been run to check the model fit of the variables. Different fit indies are to be
seen in order to determine the model fit. For the purpose of present study, CMIN/DF,
GFI, AGFI, CFI and RMSEA are the indices which have been checked.

Figure-1: CFA model (Prepared by Author)

Figure 1 shows the CFA model that has been tested using datasets for Readymade
Garments as well as Footwear segment. A few items were deleted to get satisfactory
model fit.
Table-2: CFA model fit indices
Fit Indices Observed Observed Recommended Remarks
(Garment) (Footwear)
1. CMIN/DF 2.576 2.79 1.5-3.5 Satisfactory
2. GFI 0.926 0.922 =0.9 Satisfactory
3. AGFI 0.9 0.9 =0.9 Satisfactory
4. RMSEA 0.063 0.067 <0.09 Satisfactory
5. CFI 0.933 0.927 =0.9 Satisfactory
Source: Author’s own findings.

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Impact of Sales Promotion on Consumer Behavior: An Analytical Study......... 99

Structural Equation Modeling

SEM is an advanced technique to test complex conceptualize models based on some
underlying theory. It can be used to study the latent variables with the help of the
observed underlying concepts. It has the power to test multiple regression relationships
integrated into a single conceptualized model. The data for both the segments have
been tested using the SEM model.

Figure-2: SEM Model (Prepared by Author)

Figure 2 shows the SEM model that has been conceptualized for the study. The model
fit of the SEM model is also found to be satisfactory with values above the thresholds
defined.
Table-3: SEM estimates
Readymade Garment Footwear
Relationship Path
Estimate P Estimate p
PT <--- disc .480 0.000 0.271 0.005
BL <--- disc .205 .189 0.068 0.568
SM <--- disc .839 0.000 0.571 0.000
PT <--- BO_GO .079 .482 0.325 0.000
BL <--- BO_GO .213 .106 0.120 0.237
SM <--- BO_GO -.122 .267 0.027 0.757
Source: Author’s own findings.
Table 3 shows the estimates of SEM for both the product segments. The significance
values (p) < 0.05 are considered depicting statistically significant paths rejecting the
respective null hypothesis.
Results of Hypotheses
The hypothesized paths have been tested using Structural Equation Modeling. The
regression estimates extracted from SEM output have been used to analyze the impact
and the relationships having a p value less than 0.05 are considered significant. The
results of hypotheses for Readymade Garments as well as Footwear segments are
presented below.

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H01: Table 3 shows the impact of Discount on Product Trial for both the segments. The
estimate is 0.480 and the p value (sig.) comes out to be 0.000 for readymade garments.
The result indicates a positive and significant impact of discount on product trial (p <
0.05). This means H01 is rejected for readymade garments.
For footwear segment, the estimate is 0.271 and the p value (sig.) is 0.005. This indicates
a positive and a significant impact of discount on product trial ( p < 0.05). It is clear that
H01 is rejected for footwear segment also.
H02: Table 3 shows the impact of Discount on Brand Loyalty for both the segments. The
estimate is 0.205 and the p value (sig.) comes out to be 0.189 for readymade garments.
The result indicates that there is no significant impact of discount on brand loyalty (p >
0.05). This means H02 is accepted for readymade garments.
For footwear segment, the estimate is 0.068 and the p value (sig.) is 0.568. This indicates
that there is no significant impact of discount on brand loyalty ( p > 0.05) in footwear
segment. It is clear that H02 is accepted for footwear segment also.
H03: Table 3 shows the impact of Discount on Spending More for both the segments.
The estimate is 0.839 and the p value (sig.) comes out to be 0.000 for readymade garments.
The result indicates that there is a positive and significant impact of discount on
spending more (p < 0.05). This means H03 is rejected for readymade garments.
For footwear segment, the estimate is 0.571 and the p value (sig.) is 0.000. This indicates
that there is a positive and significant impact of discount on spending more ( p < 0.05)
in footwear segment. It is clear that H03 is rejected for footwear segment also.
H04: Table 3 shows the impact of Buy-one Get-one on Product Trial for both the segments.
The estimate is 0.079 and the p value (sig.) comes out to be 0.482 for readymade garments.
The result indicates that there is no significant impact of Buy-one Get-one on Product
Trial (p > 0.05). This means H04 is accepted for readymade garments.
For footwear segment, the estimate is 0.325 and the p value (sig.) is 0.000. This indicates
that there is a positive and significant impact of Buy-one Get-one on Product Trial ( p <
0.05) in footwear segment. It is clear that H04 is rejected for footwear segment.
H05: Table 3 shows the impact of Buy-one Get-one on Brand Loyalty for both the
segments. The estimate is 0.213 and the p value (sig.) comes out to be 0.106 for readymade
garments. The result indicates that there is no significant impact of Buy-one Get-one on
brand loyalty (p > 0.05). This means H05 is accepted for readymade garments.
For footwear segment, the estimate is 0.120 and the p value (sig.) is 0.237. This indicates
that there is no significant impact of Buy-one Get-one on brand loyalty ( p > 0.05) in
footwear segment. It is clear that H05 is accepted for footwear segment also.
H06: Table 3 shows the impact of Buy-one Get-one on Spending More for both the
segments. The estimate is -0.122 and the p value (sig.) comes out to be 0.267 for readymade
garments. The result indicates that there is no significant impact of Buy-one Get-one on
spending more (p > 0.05). This means H06 is accepted for readymade garments.
For footwear segment, the estimate is 0.027 and the p value (sig.) is 0.757. This indicates
that there isno significant impact of Buy-one Get-one on spending more ( p > 0.05) in
footwear segment. It is clear that H06 is accepted for footwear segment also.

Key Findings
Based on the statistical techniques used and the hypotheses tested, few key findings
have been obtained. These findings are as follows:

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Impact of Sales Promotion on Consumer Behavior: An Analytical Study......... 101

1. There is a significant impact of Discount on Product Trial and Spending More in both
the select segments but no significant impact is seen on Brand Loyalty in both the
segments.
2. Buy-one Get-one is found having a significant impact on Product Trial in Footwear
segment but not in Readymade Garments segment. However no significant impact is
found on Brand Loyalty and Spending more in both the segments.
3. By comparing the results of both the segments, it is found that consumers show
similar behavior towards Discount for both the products. However, in terms of Buy-one
Get-one, consumers show a difference in their behavior when it comes to Product Trial.

Conclusion
Sales promotion techniques are effective for influencing consumer purchase decision.
Different promotional tools influence consumer decisions in varying trend. The managers
of companies dealing with the select product categories can benefit with the results and
implement the promotional strategies accordingly. As discount is found significant for
stimulating Product Trial as well as Spending More in Readymade Garments and Footwear
segments, it can be used by marketers when they wish to attract new consumers and get
their products tried by them while Buy-one Get-one has to be used with caution as it is
not found much impactful in the selected segments. Santini et al. (2015) reveals that
discount positively influences consumer’s purchase intention which can be linked to
the results of the present study as well. The results are also in line with Salvi (2013) and
Shamsi and Khan (2017) which suggest discount to be more effective than Buy-one Get-
one. However the results of present study oppose Gilbert and Jackaria (2002) which
says Buy-one Get-one is more influential as compared to discount. When shopping for
both the categories of products, consumers may show different behavior but their
preference for discount is similar for both the product categories. Through further
research and analysis, the impact of Buy-one Get-one may be studied on other consumer
behavior variables which may be influenced by it.

References

Blattberg, R. C., & Neslin, S. A. (1990). Sales Promotion: Concepts, Methods, and
Strategies. Upper Saddle River, NJ: Prentice-Hall.

Chaharsoughi, S., & Yasory, T. (2012). Effect of sales promotion on consumer behavior
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Familmaleki, M., Aghighi, A., & Hamidi, K. (2015). Analyzing The Influence Of Sales
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Gilbert, D. C., & Jackaria, N. (2002). The Efficacy Of Sales Promotions In UK Supermarkets:
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Volume 10, Number 1, January 2018

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