A

Dissertation Report On

Impact of Sales Promotion on Consumer Behaviour: An Analytical Study

of Readymade Garments and Footwear Segments
Submitted in the partial fulfilment of the degree
Of
Bachelor of commerce (Hons.)

Faculty Guide:
Rama Singh
Assistant Professor

Submitted By:
Ankit Mishra
AJU/190184
2019-2022
 Impact of Sales Promotion on Consumer Behaviour: An Analytical Study

of Readymade Garments and Footwear Segments

Author 1

Ankit Mishra

Student (B.Com (H)),

ARKA JAIN University, Jamshedpur, Jharkhand

Author 2

Rama Singh

Assistant Professor

ARKA JAIN University, Jamshedpur, Jharkhand

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 analyse the impact of different Sales Promotion techniques on
Consumer Behavioural variables. The present study uses Structural Equation Modelling to
analyse 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 Behaviour. 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 Jamshedpur , Jharkhand.

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

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 adverse 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 issued 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
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 Behaviour in general and
purchase decision in particular. Consumer Behaviour includes all those activities or decisions
through which a consumer passes for obtaining, consuming and disposing of products and
services (Blackwell teal., 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 behaviour 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, behaviour etc. Shown by a consumer comes
under the Consumer Behaviour. 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 analyse the impact of Sales Promotion techniques on Consumer Behavioural
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 Behaviour’s studied using
the Product Trial, Brand Loyalty and Spending More as dependent variables.

Objectives
1, To study the concept of Sales Promotion and Consumer Behaviour of
2To analyse the impact of Sales Promotion techniques (discount & Buy-one Get-one) on
consumer behaviour variables (Product Trial, Brand Loyalty and Spending More)
3. To check if differences exist in results between readymade garments and footwear.
Literature Review
Sales Promotion has been defined comprehensively by many previous researchers. Asper
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 (Wreathing 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).

Santini et al. (2015) analysed 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 Behaviour
based on culture”. The study employed different cross-cultural models tantalize the effect. It
was found that culture as well as sales promotion has a strong effect on consumer behaviour
however Sales Promotion can independently influence consumer behaviour.

Gilbert and Jackaria (2002) studied the efficiency of Sales Promotion with respect to
Supermarkets. The study compared coupon, price discount, sample and buy-one get one free.
The efficacy of these tools is analysed 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 behaviour factors. The study
analysed data collected from 415 consumers in Delhi-NCR using repeated measures ANOVA.
It was found that all the select Sales Promotion techniques influence consumer behaviour
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 behaviour 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.
Wreathing and Pashmina (2015) states that Sales Promotion techniques have a significant
correlation with consumer impulse buying behaviour. However, Naga Deepa 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). Chakraborty et al. (2013)
suggests that Sales Promotion is more influential than advertisement.
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 analysing relationship between
independent and dependent variables.

Sampling
The data has been collected using mall intercept method in Jamshedpur. A self-administered
close ended questionnaire was used to collect data from consumers. A total of 34 questionnaires
were completely filled.

Data Analysis
For analysing data, Microsoft Excel software have been used. Firstly, the reliability has been
checked using Cronbach’s alpha followed by checking validity and model fit (using CFA).
After confirming reliability and model fit, Structural Equation Modelling 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 behavioural 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.

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

The hypothesized paths have been tested using Structural Equation Modelling. The regression
estimates extracted from SEM output have been used to analyse 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.

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 positive and a significant impact of discount on
product trial (p < 0.05). It is clear thatH01 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 is no 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:
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
behaviour towards Discount for both the products. However, in terms of Buy-one Get-one,
consumers show a difference in their behaviour 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 behaviour 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 behaviour variables
which may be influenced by it.

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