Essay On Sales Promotion

2. LITERATURE REVIEW

2.1 THEORITICAL BACKGROUND:

A practical meaning of sales promotions is “marketing activities that has been executed for a specific time period, place or customer group, which arouse an instant reply from customers or marketing mediators, by offering extra benefits” (Peattie and Peattie, 1994).

Consumer may like and appreciate temporary reduction in price but they can also change their “reference price”, which will result in “considerably reduced loyalty the time promotion is over” (Dodson et al., 1978)

A certain service markets i.e. travel and fast food uses coupons and other forms of promotional pricing but there are some problems and risks also associated with the implication of many related services which is partly because setting prices is already problematic (Thomas, 1978), and consumer often use price as a substitute measure of quality, moreover one more problem for the price based promotion is that, it is assumed buy organizations that customers price averse or looking for value and are aware of the price, while in reality it is assumed by consumers that price is directly associated with quality which make them to some extent “price seeking”. (Tellis and Gaeth,1990), and consumers are often amazingly out-of-focus about pricing information for their buying decision (Dickson and Sawyer, 1990).

Other group of sales promotion who are more focused to “Value Adding” Promotions they leave the price and quantity of the main product untouched and package something else for increasing value to consumers. Now these other package can be a free gift, a complementary product, a competition. Such value adding promotions and competitions, in actual it makes an increasing impact. In the Donnelley survey, sweepstakes (pl...

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...ondents were requested to fill out the structured questionnaire, for data evaluation chi-square test were used. Result states that Sales promotion is most effective on the consumers who travel through the peripheral route and it can lead the consumer’s mind to brand switching. This study also found that Sales promotion and advertising has more influencing effect on low involvement Category products where a simple promotional signal can result in buying decision from customers, moreover it also suggest to the marketers to be aware of the new or unknown product, as sales promotion can also have significant negative effect on consumers’ internal price reference and perceived quality. This study also highlights the importance of integrating the advertising with different promotional activities to improve sales growth of a product.

2.2 CONCEPTUAL FRAMEWORK: