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Abstract 1 | Retail | Coupon

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PRICE PROMOTIONS BASED ON BRAND LOYALTY IN FMCG ABSTRACT This paper examines that the price promotion strategy used by retailing units in 200 FMCG products, because of the competition, in order to stay alive in the market. It also studies that when the product category expands, the price promotion is used frequently to attract the consumer. Big players in the market can survive to a greatest extent with is brand name and of loyal customers, small players enter into the market with the competiti
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  PRICE PROMOTIONS BASED ON BRAND LOYALTY IN FMCG ABSTRACT This paper examines that the price promotion strategy used by retailing units in 200FMCG products, because of the competition, in order to stay alive in the market. It also studiesthat when the product category expands, the price promotion is used frequently to attract theconsumer. Big players in the market can survive to a greatest extent with is brand name and of loyal customers, small players enter into the market with the competitive pricing, they promotethe product easily with price discounts, this can be examined on the basis of premium customersand non premium customers. The brand likelihood depends on the price promotions with subjectto number of competitions brands in the market by analyzing the perceptions of the customer  based on their age, gender and profession are known as UCP (unique customer perception).Discriminative analysis was used to find out the price promotions strategies, used frequently bythe low loyalty brand than the brand with stronger loyalty and also to compete with the stronger  brands the low loyalty brand has to spend, more on advertising and discounts to make themavailable in the market. Keywords: Brand, promotions, UCP and Market. INTRODUCTION Retailers frequently use price promotions, especially temporary price reductions. The price promotions lead to large increases in sales during the promotion period. However, there isconcern about post-promotion effects, especially on brand loyalty. In contrast to the short termsuccess of price promotions, the impact of coupons and multi-item promotions on customers  future brand choices is vague. From a managerial perspective it is crucial whether promotionsincrease or decrease brand loyalty. Managers hope that price promotions encourage brandloyalty, but recent research shows that price promotions, especially temporary price reductions,reduce brand loyalty. Brand loyalty is more than simple repurchasing, however. Customers mayrepurchase a brand due to situational constraints a lack of viable alternatives, or out of convenience. Such loyalty is referred to as spurious loyalty . True brand loyalty exists whencustomers have a high relative attitude toward the brand which is then exhibited throughrepurchase behavior. This type of loyalty can be a great asset to the firm: customers are willingto pay higher prices, they may cost less to serve, and can bring new customers to the firm. For example, if Joe has brand loyalty to Company A he will purchase Company A's products even if Company B's are cheaper and/or of a higher quality. The term FMCG (fast moving consumer goods), although popular and frequently used does not have a standard definition and is generallyused in India to refer to products of everyday use. Conceptually, however, the term refers torelatively fast moving items that are used directly by the consumer. Thus, a significant gap exists between the general use and the conceptual meaning of the term FMCG. OBJECTIVE OF THE STUDY 1.Analyzing the factor which influences the buyer sensitivity2.Analyzing the relationship between brand loyalty and price of the product category HYPOTHESIS OF THE STUDY ARE H0: There is no significant relationship between price promotion and brand loyaltyH1: There is a significant relationship between price promotion and brand loyalty  DEFINING THE TERMS USED IN THE STUDY For the purpose of our study, we follow the definition of sales promotions as a “diversecollection of incentive tools, mostly, short term designed to stimulate quicker and/ or greater  purchase of particular products/services by consumers” (Kotler, 1998). Sales promotions areclassified as price and non- price based on the nature promotions (Campbell and Diamond, 1992;Blattberg and Neslin, 1990). Price promotions are defined as ‘promotions such as Coupons,Cents off, Refunds, and Rebates that temporarily reduce the cost of the goods or service’ (Cooke,1983). Non- price promotions are defined as promotions such as giveaways (freebees), or contests in which value is temporarily added to the product at full price. VARIABLES1.Coupons Coupon is the oldest and most widely used way of sales promotion. Coupons have beenused since 1895. It is mostly used by packaged goods. It is worthwhile to use coupon as a promotion tool because data shows that market for packaged goods increased from 16 billion in1968 to 310 billion in 1994. To boost up the sales not only manufacturer but retailers personallycan also used. A coupon leads to price reductions so as to encourage price sensitive customers. Non users can try a product which may leads to regular sales. 2.Price-off  A price-off is simply a reduction in the price of the product to increase sales and is veryoften used when introduction a new product. A reduction in price always increases sales but theuse of this technique should be carefully considered in the current market situation.Price-off is the most preferred sales promotion technique because consumers responsevery positively to this scheme. Not only that but it also cause large increase in sales volume.Price-off reductions are typically offered tight on the package through specially marked price packs. E.g. Krack Jack offers 30% Price-off.  3.Freebies Freebies are a popular form of modern marketing and are some of the best things aboutthe internet. The definition of freebies is products or services given away for free at no cost tothe consumer. Well that’s the definition we came up with. I am a bargain freebie shopper, prettymuch going for any free product and informing everyone about it.At different times, big and small companies often give away prizes and money which istoo good to be true. Often it’s in the pursuit of more customers or a larger fan base and it oftenworks. 4.Scratch Cards A scratch card (also called a scratch off, scratch ticket, scratcher, scratchie, scratch-it,scratch game, scratch-and-win or instant game) is a small token, usually made of cardboard,where one or more areas contain concealed information: they are covered by a substance thatcannot be seen through, but can be scratched off. 5.Bundling Offers Product bundling is amarketingstrategy that involves offering several productsfor sale as one combined product. This strategy is very common in thesoftwarebusiness (for example: bundle aword processor , aspreadsheet,and adatabaseinto a singleoffice suite), in thecable  televisionindustry (for example, basic cable in theUnited Statesgenerally offers many channels at one price), and in thefast foodindustry in which multiple items are combined into acomplete  meal.A bundle of products is sometimes referred to as a package deal or a compilation or ananthology.
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