Effectiveness of Sales Promotion on

the Buying Behavior of Customers

Introduction
In a competition world a business cant survive if its products unable to
fetch its customer in the market. Thus all sort of marketing tactics
are undertaken to maximize sales and offering incentives to its
customer is one of the way to attract customers to buy the product.
Thus, sales promotion is important to increase the sale of any
product.

Every businessman wants to increase the sale of goods. There are
many offers in the markets notices of winter sale, summer sale,
trade fairs, discount upto 50% and many other schemes to attract
customers to buy certain products.

These offers are not available to the customers throughout the year.
During festivals, end of the seasons, year ending and some other
occasions these schemes are generally found in the market.
Objectives

To analyze the customers type of buying decision in response to
sales promotion strategies.

To explore logic behind such sales promotional activities by
examining consumer behavior.

Sales Promotion Concept
Sales promotion includes incentive-offering and interest-creating
activities which are generally short-term marketing events other than
advertising, personal selling, publicity and direct marketing.

The purpose of sales promotion is to stimulate, motivate and influence
the purchase and other desired behavioral responses of the firms
customers.

Sales promotion offers a direct inducement to act by providing extra
worth over and above what is built into the product at its normal
price.
Tools of Sales Promotion
Commonly used tools of sales promotion are

(i) Free samples:
(ii) Premium or Bonus offer:
(iii) Exchange schemes:
(iv) Price-off offer:
(v) Coupons:.
(vi) Scratch and win offer:
(vii) Money refund offer.
Buying Behavior
Need recognition
Occurs when a person feels a gap between his actual sate and a
desired state.
Arises due internal and external stimuli: internal stimulus
E.g. hunger will push a certain person to search for a meal.
A new ad of a new luxurious car represents an external stimulus that will
make an individual to feel that there is a discrepancy between the new,
state of the art car and his/her old car.

Magnitude of the gap between the actual and the desired state and
relative importance of the recognized problem, will make a person
eager to overcome the discrepency. (Hawkins et al 2004:504-507).

Information search
Seek searching for information about the different brands
and the different alternatives available.
The amount of search carried out depends mainly on the
importance of the product and its price.
Information could be acquired from sources like :-
Personal experience with using such products.
Surrounding environment like
Family.
Friend
Colleagues
Commercial sources like :-
Printed and TV ads.
Packaging displays.
Dealers,

Evaluation of alternatives
At this stage customer evaluate several available alternatives.
This necessitates the use of a certain evaluative criteria.
Customer facing the decision of the purchase of a new car.
Interested in three features:
Price,
Warranty
Fuel economy.
This customer will value the options available for him and select the one
that best fits his desires. The example represents an attribute-based
alternatives evaluation.
A customer who is examining the attributes of alternatives to pick the one
that best fits him/her is carrying out an attribute-based alternatives
evaluation process.
If a customer loves a certain brand and goes for it directly, then he/she has
made an attitude based choice
Purchase decision
Other factors are influencing on consumer buying behavior
Attitudes of others:
It is the other consumers opinion and preference regarding certain
brand.
Other consumers could be member in a family or friend, who may
influence on consumers decision making and change their brand
preference.
Unanticipated factors: For instances
Functional risk: the product may not perform as it was expected
Physical risk: the product may have a negative influence on consumers health
Financial risk: the price of product is higher than the products value.
Psychological risk: the product may influence on consumers psychology.


Post purchase evaluation

At this stage the customer starts to test the product and
will end up by being satisfied or dissatisfied by that
experience.
Degree of satisfaction or dissatisfaction is the degree of
discrepancy between what expected from the product
and its current state.

Expectations Product performs Degree of Satisfaction
High Low Disatisfied
Low High Satisfied
Effects Of SP Offers On Buying Behavior

For certain current brand users will purchase their product in higher
quantities for their future needs and wants.
Consumers of competing brands may switch and purchase other
branded products because of the reduction in the product price.
However, repeat purchase by these consumers is not known.
Purchasing a product they did not need
Purchasing a product they have never tried before since its value is
very high and wants will be satisfied with minimum cost and risk.
Purchasing sooner than usual and later than usual
Effects Of SP Offers On Buying Behavior
Sales promotions are playing an important role in consumer
perception.
According to self-perception theory consumers prefer to purchase products
based on external attributes, which is taking advantage of price reduction,
instead of internal attributes, which is brand preferences.
However, the main weakness point of sales promotion in influencing consumer
buying behavior is that
Consumers mainly build a reference based on the previous prices of the product.
Then this reference is used to compare between the current price of this product
and pervious prices as well.
Using sales promotion is mainly increasing the degree of
hesitation to buy a certain brand in its non promotion period.
As a result it may increase sales for short term.
but it influence negatively on brand equity in long term.
Effects Of SP Offers On Buying Behavior
Sales promotion does not help to switch brand loyal buyers to
other brands.
Sales promotion is more efficient than advertising in influencing
consumer buying behavior.
A real life example which is AKAI in India used heavily sales promotion when
they offered good trade in value on black and white TV sets at buying a new
color TV. In matter of fact, AKAI become a market leader when they did such
strategy
Conclusion
Consumer buying behavior is influenced on its pre purchase
evaluation and purchase stages by sales promotions.
Sales promotion has only short term effect on consumer buying
behavior
It is a tool that encourages consumers to try a new product.
The main aim of using such marketing tool is increasing sales in
short run.
Sales promotion is used when certain company launch a new
product.
If this new product exceeds customers expectations, it will lead to
customer satisfaction and may be lead to customer loyalty.
Sales promotions are not only effective in attaining short-term sales
as they are also more cost-effective compared to other integrated
marketing communications tools such as advertising.
Sales promotion tools are supplementary or complementary to
existing business as an additional marketing strategy.
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