Journal of Critical Reviews

ISSN- 2394-5125 Vol 7, Issue 2, 2020

Review Article

EFFECTS OF SALES PROMOTION CAMPAIGN ADOPTED BY RETAILERS IN INDIA

Dr. Hemant Katole (Associate Professor)

Department of Management Sciences (PUMBA) Savitribai Phule Pune University, Pune, Maharashtra, India-411007
Email: hjkatole@gmail.com

Received: 05.11.2019 Revised: 10.12.2019 Accepted: 11.01.2020

Abstract:
Increasing business prospect in retail has offered a chance to the retailers to build up their business and enlarge customer’s
foundation through promotional tactics. Retailers are paying attention their efforts to enhance the loyalty and footfalls of customers
in the outlet (Moore M., Kennedy K. M. and Fairhurst A 2003). The aim of this paper is to study the effects of sales promotional tools
and understand the satisfaction level of customers for execution of sales promotion campaign. Author observed that sales
promotion strategies are prime factor not only to improve the sales of a store but also enhance the loyalty of customer towards
store. According to study, the most important sales promotion strategies adopted by customers are price and product discount
followed by loyalty program, sweepstakes and premiums. While least important sales promotion strategies are posters and leaflets,
point of purchase material and digital signage. It was also observed that satisfaction level of customer on sales promotion campaigns
depends on creative skills involved in designing the campaigns and the type of its schemes.

Keywords: Retailing, sales promotion, consumer behavior.

© 2019 by Advance Scientific Research. This is an open-access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/)
DOI: http://dx.doi.org/10.31838/jcr.07.02.107

INTRODUCTION: Casielles, 2005). Sales promotions are demand booster that

The final purpose of any business is to elevate the sale of does not preserve the danger connected with the new
product. A number of techniques can be accepted for the products. (Blattberg, Neslin, 1990 and Buzzeli, Quelch, Salmon,
accomplishment of this purpose. Sales promotion is one such 1990). It has reasonably simple to implement with sudden rise
technique. It is “varied set of inducement tools, generally, short in sales (Hanssens D, Parsons L. J., & Schultz R. L 2001). Hence
term designed to motivate faster and/or larger acquire of Linda G. Schneider and Imran S. Currim (1991), acknowledged
meticulous products or services by consumers” (Kotler P, that marketing budget are increasing constantly. Ailawadi
2002). It has become a precious instrument for the producers Kusum & Neslin S (1998) had discovered that sales
and significance of it has been growing quickly. Its spending in promotions influence the consumers to buy more and use it
India, by diverse marketing businesses is predictable to be Rs quick which improve sales and profitability. Pawels K.,
5,000 Cr and usage has amplified by 500 to 600 percent. (Rizvi Srinivasan S., Silva-Risso J., & Hanssen D (2003) shows that
S & Malik S, 2011). In 2001, total 2,050 sales promotion sales promotion influence the company’s short term profits.
schemes of Rs 80,000 Cr being used by fast moving consumer Pauwels K., Hanssens D., & Siddarth S. (2002) has identified
goods ie FMCG business (Dang Jha, Koshy A., & Sharma D., the effect of sales promotion on the sales of storable and
2005). Retailing is developing into a worldwide, ultra-modern perishable products. Also these product categories have short
industry. Retailers are using most advanced information and term effect of sales promotion. Kotler and Armstrong, (2002)
communication system to control business. Retail have identify profitable consumer sales promotion techniques
management is, evolving and employing a promotion plan to like free samples, contest, price pack, sweepstake. Few are
construct store images, catch the attention of customers and actually provide benefit while others are a good
persuade them to purchase products from the store. The communication tool (Kotler P., 2002). This study also support
retailers must create their store brand amongst the consumers this analysis and have studied the sales promotional strategies
by communicating successfully with them. The best way is to which includes. price and product discounts, loyalty programs,
create store brand by means of building awareness and sweepstakes, premium program, posters & leaflets and point
knowledge about product mix, services, store atmosphere, of purchase display & digital signage. Schiffman G and Kanuk L
location of store and special marketing activities specially (2004) have shows that appropriate learning of consumer
sales promotion offer etc. (Kotler P, 2002). Hence should increase the brand loyalty. Rowley J and Dawes J
communication is used to create a brand of an entire store. (1999) have agreed that positive attitude and behavior of
The objective of any promotion is to enhance store traffic and consumer increase brand loyalty by means of word of mouth
generate entertainment and quality experience that increase and repeat purchase. Quester P and Lim L (2003) have
the loyalty of consumer. Also promotions magnetize new identified behavioral and attitudinal loyalty. Behavioral loyalty
customers and offer experience that boost loyalty. The most means repeat purchase while attitudinal loyalty means
important part of promotion is to increase the spending by positive behavior towards product (Dekimpe G, Hanssens M, &
motivating new and loyal customers to buy more from the Risso S 1999).
store. Any promotional method that realizes huge monetary
results can achieve the marketing objectives. Retail promotion Research objectives:
includes advertising, sales promotion, store atmosphere, 1. To study and understand effects of sales
publicity and personal selling. (Levy B. D. Weitz .A. P 2006). promotional tools adopted by retailers.
This study focuses on sales promotion. After implementing a 2. To study satisfaction level of customers for
Sales promotion, there increase in sales figure (Schultz, execution of sales promotion campaign.
Petrison, Robinson 1998). This makes clear to the marketer
that they should use major promotional budget towards sales
promotion activities. Thought disparity in sales promotion
occurs because of attractiveness of the brand (Alvarez,

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 EFFECTS OF SALES PROMOTION CAMPAIGN ADOPTED BY RETAILERS IN INDIA

Research Hypothesis: promotion tools having high impact on customer includes

1. Satisfaction level of customer on sales promotion price & product discount followed by loyalty programs,
campaigns depends on creative skills involved in sweepstakes and premium. While the least important one are
designing sales promotion schemes. posters and leaflets followed by point of purchase material and
2. Effect of sales promotion campaign depends on the type digital signage.
of sales promotion tools.
3. Sales promotion campaign increases the sales. From Table 4 chi-square test table, it is observed that
Pearson Chi-Square, asymptotic significance (2-sided) is
0.000 which is less than 0.05, hence reject H0 and accept H1.
RESEARCH METHODOLOGY: Hence researcher concludes that effect of sales promotion
This is an exploratory research and identifying the behavior of campaign depends on the type of sales promotion tools.
consumer with special reference to sales promotion campaign.
Researchers used convenience sampling. To start with the Hypothesis 3 :
sample size assigned was 100 customers in the target stores of Sales promotion campaign increases the sales.
Pune, India. These stores are stretched across the city. For this H0: Sales promotion campaign doesn’t increases the sales.
type of data it was requisite to have a one-on-one interrogative H1: Sales promotion campaign increases the sales.
conversation with customers of various malls across the city.
The samples were selected at random across stores in the city. Researcher used linear regression analysis to verify the
The retail stores were covered under this study are Piramyd, hypothesis. The general linearregression equation is,
Shoppers Stop, Max 10/10, Big Bazaar, Pune Central, Y = a + bX
Pantaloons, Ozone, Westside. For data analysis & hypothesis Where,
testing, researchers used SPSS software and used t-test, chi Y= Effect on customer about sales promotion
square test and regression equation. a= constant
b= coefficient of usage of sales promotion tools
Data Analysis: X= Usage of sales promotion tools
The different sales promotion schemes considered by
researcher for this study are loyalty programs, sweepstakes, From Table 5, linear regression equation is as follow,
price & product discount, premiums, POP & digital signage,
posters & leaflets. From image 1, It was observed that sales Y (Impact on customer about sales promotion) = 0.131+
promotional schemes have an major impact on customers 0.777* (Usage of sales promotion schemes)
includes price and product discounts 41% followed by loyalty
programs 17%, sweepstakes 14%, premium program 12% , From the above regression equation, it was observed that
posters & leaflets 9% and POP & digital signage 7%. dependent variable will influenced by independent variable. In
other words if the usage of sales promotion schemes increase
by one unit then the effect on customer for rising sales will be
HYPOTHESIS TESTING: increase by 0.777 times of existing sales.
From Table 5 observed that significance level of usage of sales
Hypothesis 1: promotional schemes is 0.000 which is less than 0.05, hence
Satisfaction level of customer on sales promotion campaigns reject H0 and accept H1, which is, sales promotion campaign
depends on creative skills involved in designing sales increases the sales.
promotion campaigns
CONCLUSION:
H0: Satisfaction level of customer on sales promotion Retail promotion notifies, convinces and be reminiscent the
campaigns doesn’t depends on creative skills involved in customer regarding all facet of the store (Berman, Evans,
designing sales promotion campaigns Mathur 2016). Sales promotion is in paid form that motivates
H1: Satisfaction level of customer on sales promotion consumer purchase and dealer success. Its goals include
campaigns depends on creative skills involved in designing escalating immediate sales volume and sustain loyalty of
sales promotion campaigns customer. It boosts impulse purchase of the store. This paper
focuses on the effects of sales promotional tools adopted by
To test the hypothesis researchers used independent sample t- retailers. It was observed that the most important sales
test. From the independent sample t-test following things are promotion schemes having high impact on customer includes
observed, price & product discount followed by loyalty programs, and
From Table 1, Group Statistics, the mean for creativity in sales premium. Study also reveals that effect of sales promotion
promotion is 2.0986. The mean for no creativity in sales campaign on customers depends on the type of sales
promotion is 4.1034. The standard deviation for creativity in promotion schemes. From regression equation it was observed
sales promotion is 0.8969 and for no creativity in sales that sales promotion campaign improves sales. This paper also
promotion, 0.67320. The number of participants in each studies the satisfaction level of customers for execution of
condition (N) is 100. sales promotion campaign. It was concluded that satisfaction
From Table 2, independent sample t-test, it is also observed level of customer on sales promotion campaigns depends on
that significance level (2-tailed) is 0.000 which is less than creative skills involved in designing sales promotion
0.05, hence reject H0 and accept H1. Hence researchers campaigns.
concludes that satisfaction level of customer on sales
promotion campaigns depends on creative skills involved in REFERENCES
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Table 1: Group statistics

Developing and executing sales No. of Mean Standard Standard
promotion campaigns respondent value Deviation Error Mean
Creativity in Sales Yes 71 2.0986 .89690 .10644
promotion No 29 4.1034 .67320 .12501

Table 2: Independent sample T test

Levene's Test t-test
F significance t Degree of significance level
level freedom (2-tailed)
Creativity in Identical 13.568 0.000 -10.842 98 0.000
Sales variancespresume
promotion
Identical variances -12.211 68.843 0.000
not presume

Table 3: Crosstabulation between effect on customer about sales promotion and Most attractive sales promotion
tools
Most attractive sales promotion tools Total
Loyalty Sweepstakes Price and Premiums POP and Poster
programs product digital s &
discounts signage leaflets
effect on 1.0 17 6 0 0 0 0 23
customer about 2.0 0 8 26 0 0 0 34
sales 3.0 0 0 15 4 0 0 19
promotion 4.0 0 0 0 8 7 3 18
5.0 0 0 0 0 0 6 6
Total 17 14 41 12 7 9 100

Table 4: Chi-Square Tests

Value Degree of asymptotic

freedom significance
(2-sided)
Pearson Chi-Square 223.674 20 0.000
Likelihood Ratio 199.860 20 0.000
Linear-by-Linear Association 84.703 1 0.000

No. of respondent valid Cases 100

(N)

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Table 5: Linear regression analysis

Linear regression model unstandardized standardized t value signific
regression coefficients regression ance
coefficients level
Beta Standard Beta
value Error
(B)
1 (Constant ‘a’) .131 .109 1.204 .231
Usage of sales .777 .032 .925 24.096 .000
promotion tools
(X)
a. Dependent Variable: effect on customer about sales promotion

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