CHAPTER- 1

INTRODUCTION

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 INTRODUCTION

The project is undertaken to understand the impact of sales promotion techniques

on customer loyalty of Big Bazaar, Ernakulam. Retail, according to Concise
Oxford English Dictionary, is “the sale of goods to the public for use or
consumption rather than for resale”. Big Bazaar was established in the year 2001,
they are old players in the retail sector. The Big Bazaar follows values such as
Leadership, Respect and Humanity and Nurturing relationships, Simplicity,
Positivity and Adaptability.

Every organisation is ready to pay any means to identify and understand the
customers and their needs. It is an effective reaction of the consumers when their
desires and expectations have been either met or exceeded in the course of
experiencing the service. In the context of a retail supermarket, loyalty could be
interpreted as just meeting the expectations of the customers, not any sort of
exceeding of failing short of the expectations. Most of the retailers try to achieve
competitive advantage by taking the responses of the customers beyond the level
of ‘just satisfied’ towards ‘exceeding their expectations’. Customer satisfaction is
expected to be achieved when the value of customer service provided through a
service experience is either meeting or exceeding consumer expectations and
thereby increases the loyalty of the customers and if the expectations are not met,
the consumer will be dissatisfied. Another consequence can be that if the
satisfaction scores are very low, the service provider might be susceptible to
attacks by the competitors who are prepared to deliver superior value to the
customers.
In retail industry, most of the unsatisfied consumers do not complain, they just
go shopping somewhere else. So the lesson for the retailers is that customer
expectations always move upward and it is only the satisfied customers that are
more likely to remain loyal in the long run.
Every organisation in present tough competitive business environment has to pay
more attention on feedback from the customers over their production. Otherwise,
any firm can’t earn the profit and their existence might be questionable as well.
Marketing starts with customer (i.e. marketing research to identify the potential

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 market opportunities) and ends with them (by delivering goods and service after
sales) as well.
This research study helps us to find out the customer’s view regarding the sales
promotion techniques that are adopted by Big Bazaar to increase their sales and
also to increase the customer loyalty.

OBJECTIVES OF THE STUDY

The objectives of the study are as follows:

1. To find out the various sales promotional techniques adopted by big bazaar.
2. To analyse the various sales promotional activities used by big bazaar.
3. To know the level of satisfaction towards the sales promotional activities carried
by big bazaar.

NEED AND SIGNIFICANCE OF THE STUDY

This study would provide information about the various sales promotional
techniques that are adopted by big bazaar and also it will help to study about how
these sales promotional techniques will help in increasing the loyalty of the
customers.

This study helps in knowing various promotional and marketing techniques that
helps an organisation utilize the skills of their employees and stakeholders and
can help to develop creative approaches to sales and customer service. This study
can also assist in understanding and connecting with clients and customers and
also identify gaps in the market place and provide feasible solutions.

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 RESEARCH METHODOLOGY

Data sources:

Primary data: It is collected through:

 Questionnaires
 Direct observation
 Interview

Secondary data: it is collected through

 Internet
 Published books.

Sampling plan:

Sampling unit : customers of big bazaar, Ernakulam (Central Square)

Sampling type : simple random sampling.

Sampling size : 50

LIMITATIONS OF THE STUDY

This study has a number of limitations that must be acknowledged.

1. The topic of the study is vast and the samples collected are insufficient.

2. The time period for conducting the study was limited.

3. The study was limited to big bazaar Ernakulam (central square) only.

4. To convince the people for a proper interviewing process is also difficult.

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 INDUSTRY PROFILE

Industry Insight - Indian Retail Industry

The retail sector in India is witnessing a huge revamping exercise as traditional
markets make way for new formats such as departmental stores, hypermarkets,
supermarkets and specialty stores. Western-style malls have begun appearing in
metros and second-rung cities alike introducing the Indian consumer to a
shopping experience like never before.

The Indian Retail Sector

The Indian Retail Sector is at an inflexion point, with changing demographics
driving growth of organized retailing and driving growth in consumption.
Along the way, the modern retail business will create about 1.6 million jobs in
the next five years acc. to McKinsey. Modern retailers will not only create
employment opportunities but also would help raise India’s overall economic
productivity and could also result in lowering prices of goods. With changing
demographic and economic profile of the Indian population, it is believed that
India is expected to experience accelerated consumption over the next few years.

Growth in organized retail

In sharp contrast to the global retail sector, retailing in India – though large in
terms of size – is highly fragmented and unorganized. With close to 12 million
retail outlets India has the largest retail density in the world. However, most of
these retail outlets belong to the unorganized sector. The Indian retail industry is
evolving in line with changing customer aspirations across product groups, with
modern formats of retailing emerging. Organized retail derives its advantages in
generating operational efficiencies while simultaneously catering to rising
consumer aspirations. Size drives economies on procurement, and lowers

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logistics and marketing costs while delivering better value to customers in terms
of lower price, better quality, greater selection, improved service and in store
ambience.

RETAILING FORMATS IN INDIA

Malls:
The largest form of organized retailing today. Located mainly in metro cities, in
proximity to urban outskirts. Ranges from 60,000 sq. ft. 7,00,000 sq. ft. and
above. They lend an ideal shopping experience with an amalgamation of product,
service and entertainment, all under a common roof. Examples include Shoppers
Stop, Piramyd, Pantaloons.

Specialty Stores:
Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer
Crossword, RPG's Music World and the Times Group's music chain Planet M,
are focusing on specific market segments and have established themselves
strongly in their sectors.

Discount Stores:
As the name suggests, discount stores or factory outlets, offer discounts on the
MRP through selling in bulk reaching economies of scale or excess stock left over
at the season. The product category can range from a variety of perishable/ non
perishable goods.

Department Stores:
Large stores ranging from 20000-50000 sq. ft., catering to a variety of consumer
needs. Further classified into localized departments such as clothing, toys, home,
groceries, etc.

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Departmental Stores are expected to take over the apparel business from exclusive
brand showrooms. Among these, the biggest success is K Raheja's Shoppers Stop,
which started in Mumbai and now has more than seven large stores (over 30,000
sq. ft.) across India and even has its own in store brand for clothes called Stop!.

Hyper marts/Supermarkets:
Large self service outlets, catering to varied shopper needs are termed as
Supermarkets. These are located in or near residential high streets. These stores
today contribute to 30% of all food & grocery organized retail sales. Super
Markets can further be classified in to mini supermarkets typically 1,000 sq. ft. to
2,000 sq. ft. and large supermarkets ranging from of 3,500 sq. ft. to 5,000 sq. ft.
having a strong focus on food & grocery and personal sales.

Convenience Stores:
These are relatively small stores 400-2,000 sq. feet located near residential areas.
They stock a limited range of high-turnover convenience products and are usually
open for extended periods during the day, seven days a week. Prices are slightly
higher due to the convenience premium.

MBO’s:
Multi Brand outlets, also known as Category Killers, offer several brands across
a single product category. These usually do well in busy market places and
Metros.

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 COMPANY PROFILE

Big Bazaar is an Indian retail store that operates as a chain

of hypermarkets, discount department stores, and grocery stores. The retail chain
was founded by Kishore Biyani under his parent organisation Future Group,
which is known for having a significant prominence in Indian retail and fashion
sectors. Big Bazaar is also the parent chain of Food Bazaar, Fashion at Big
Bazaar (abbreviated as fbb) and eZone where at locations it houses all under one
roof, while it is sister chain of retail outlets like Brand Factory, Home Town,
Central, eZone, etc.

Founded in 2001, Big Bazaar is one of the oldest and largest hypermarkets
chain of India, housing about 250+ stores in over 120 cities and towns across the
country.

Big Bazaar owned by Pantaloon Retail India Limited, the flagship retail chain of
the Future Group, achieved a unique milestone in the history of world retail - by
being the first hypermarket format in the globe to roll-out the fastest 101 stores
in a short span of seven years. This hypermarket chain was introduced in India by
Pantaloon Retail (India) Limited. The year was 2001. The first store opened in
Kolkata and was followed by stores in Hyderabad, Bangalore and Aurangabad in
a short span. It works on the same economy model as Wal-Mart and has had
considerable success in many Indian cities and small towns. The Group is
confident of the Indian retail story. It has not slowed down its expansion plans
despite many other retailers slowing expansion, reducing the number of outlets,
effecting layoffs and even exiting the businesses. In 2006-2007 more Indians
discovered the value of shopping in Big Bazaar. Big Bazaar launched 27 new
stores in 22 cities, covering over 1.40 million square feet. While Big Bazaar
continued to expand in the large cities it also tapped consumptions potential in
smaller cities like Agra, Allahabad, Coimbatore, Surat, Panipat, Palakkad,
Kanpur, Nashik, Jalagaon and Kolhapur. By May 2008, there were 89 Big
Bazaars spread across various cities and towns across the country. Big Bazaar
plans to have 300 stores and is expecting revenues of 130 billion rupees by the
year 2011.

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 At the time of the launch of Big Bazaar there was no real precedent in the Indian
market giants the RPG hypermarkets had opened in Hyderabad only two months
prior to the launch of Big Bazaar. A western model had to be adapted to suit the
needs of the Indian environment various local markets and local market leaders
were studied. This was done to understand the product mix and the prices offered.
Saving is the key to the Indian middle class consumer. The store which would be
created had to offer value to the consumer. Keeping this in mind, the concept of
Big Bazaar was created.

Big Bazaar offers a wide range of products which range from apparels, food,
farm products, furniture, child care, toys, etc. Products of all the major brands are
available at Big Bazaar. Also, there are many in house brands promoted by Big
Bazaar. Big Bazaar sold over 3 lakh pairs of jeans, 50,000 DVD-players and
25,000 microwave-ovens. In all, the fashion, electronics and travel segments
made up about 70 per cent of sales. The tag-line is "Is Se Sasta Aur Accha Aur
Kahin Nahi". They work on the model of economics of scale. There pricing
objective is to get Maximum Market Share.

Marketing Techniques used by Big Bazaar:

1. Value Pricing (Every Day Low Pricing): Big Bazaar promises consumers the
lowest available price without coupon clipping, waiting for discount promotions,
or comparison shopping.
2. Promotional Pricing: Big Bazaar offers financing at low interest rate. The
concept of psychological discounting (Rs. 99, Rs. 49, etc.) is used as promotional
tool. Big Bazaar also caters on Special Event Pricing (Close to Diwali, Gudi
Padva, Durga Pooja, Independence day, Republic day etc.) .
3. Differentiated Pricing: Time pricing, i.e., difference in rate based on peak and
non-peak hours or days of shopping is also a pricing technique used in Indian
retail, which is aggressively used by Big Bazaar.
4. Bundling: Selling combo-packs and offering discount to customers. The combo-
packs add value to customer. Big Bazaar is aggressive on their expansion plans.
Big Bazaar started many new and innovative cross-sell and up-sell strategies in
Indian retail market. The various promotion techniques used at Big Bazaar

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 include "Saal Ke Sabse Saste Teen Din", Future Card (the card offers 3%
discount), Shakti Card, etc.

Loyalty Program in Big Bazaar:

According to Kishore Biyani, the big brain behind Big Bazaar, price, quality or
services are the only way to retain customers in retail. The repeat customers spend
more than the average customers and need to be encouraged to come back. That’s
why the stores have started offering special discounts to customers who join their
loyalty card programme. Lifestyle, for instance, has a loyalty programme called
`The Inner Circle’, while Pantaloons offers a `Green Card’. Rewards
programmes, Westside have `Club West’ and `First Citizen’ from Shopper’s Stop
to woo the customer. Firstly, Citizen Citibank Card and ICICI Bank had tie-up
with Big Bazaar. The ICICI Credit Card EDC terminals were setup in Big Bazaar.
The company woos the customers to subscribe for Future Credit Card. The Future
card is a loyalty cum credit card of future holdings and the customer will get the
full benefit of this card if and only if the card is used in any of the Future Group
outlets like Big bazaar, and that too if swiped in an ICICI bank EDC machines in
the outlet cash counter.

Different Retail Marketing Schemes Offered By Big Bazar:

1. Exchange offer: A new offer came in from Big Bazaar, to exchange your old
goods for coupons which one can reimburse with goods.
2. Sabse Sasta Din: On the ‘Republic Day’ and ‘Independent Day’ have special
offer for ordinary Indians with Big Bazaar’s mega sales festival, ‘Sabsa Sasta
Din’. No event before had influenced a day’s routine of thousands of people in
different parts of the country like this sales festival.
3. Wednesday Bazaar: Big Bazaar has introduced a ‘Wednesday Bazaar’ concept
called “Hafte Ka Sabse Sasta Din”. The aim, according to the chain, is to give
homemakers the power to save the most and even the stores in the city don a fresh
look to make customers feel that it is their day. The Wednesday Bazaar also offers
clothes, accessories and fashion jewellery and personal care products.
4. Monthly Bachat Bazaar: Big bazaar has scheme of ‘Monthly Bachat Bazaar’
at the starting of every month, its start from date 1 to 8, it’s the time when most

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 of the working people get their salaries, so big bazaar take good advantage of
grabbing these salary by giving this scheme. This offer is on food and beverages.
Most of working people buys food and beverages for whole month during these
days.
5. Sampling of new product: Big Bazaar arranges a sampling stall for a new
product coming into market to introduce. Customers can test those new items on
free of cost and if they like it then make purchase of it. In short customers can
trail a new product. Big bazaar has tie up with those products so that this can be
possible. Big Bazaar has provided sampling for Nescafe, nimbooz, 7 up a new
product of PepsiCo, act to pop corn etc.

Customer Services of Big Bazaar:

Big Bazaar provides a wide range of services to its customers like Trial rooms,
Elevators, Car parking, Security, Baggage counter, Trolleys, Gift wrapping, Free
call in case of emergency, for electronics item provide free home delivery, Wheel
chair is provided at the entrance of the Big Bazaar, stretcher, in any case a mother
wanted to feed her infant child or little child there is mother room to feed the
child, water so that one could shop easily. They even provide them with after sale
services in case of buying electronic items. One of the major services provided
by them are one stop shop as one could get a whole range of items under one shop
and at the most reasonable price. They always have their outlets in such a location
where it is easy to commute. Big Bazaar provides a customer help desk at entrance
of the shop, where customer can get all the necessary information of any new
scheme or offer going on. Customer desk is for helping and guiding the
customers. Customer desk help have complaint or suggestion box in which
customer can write their suggestion and complaint regarding service, product etc.
Big Bazaar provides toll free number for customer care and email id through
which customers can give their complaints and suggestion. A complaint of any
customer can be solved within 24 hrs by a person who handle complaints if he is
not able to solve it within 24 hrs then he try to convince that customer, that it

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 would be solve within few hours or days. If that fellow is not at all able to solve
the problem of the customer then it goes to zonal office.

Basic Marketing Strategy of Big Bazaar:

According to Kishore Biyani’s theory, change and confidence among the entire
population is leading to rise in consumption, through better employment and
income which in turn is creating value to agriculture products across country.

1. Vision: To deliver Everything, Everywhere, Every time for every time for Every
Indian consumer in the most profitable manner.
2. Mission:
 We share the vision and belief that our customers and stakeholders shall be
served only by creating and executing future scenarios in the consumption
space leading to economic development.
 We will be the trendsetters in evolving delivery formats, creating retail realty,
making consumption affordable for all customer segments – for classes and for
masses.
 We shall infuse Indian brands with confidence and renewed ambition.
 We shall be efficient, cost- conscious and committed to quality in whatever we
do.
3. Quality policy: All products sold at Big Bazaar are guaranteed to be at good price
and of good quality.
4. Price guarantee: If within two days of purchase, you find a product of same
brand/quality available at a lesser price, please bring back to us within ten days
along with cash memo and we will give you a gift voucher which will be of
DOUBLE the value of the price difference.
5. Infrastructure Facilities: A typical Big Bazaar store usually consists of 2-3 floors.
The Back office is situated at the ground floor. The Big Bazaar stores are fully air
conditioned and are equipped with music facilities, escalators, Parking facilities.

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 4 P’S of Big Bazaar:

 Product mix:

Apparels Home Chill Farm

Care Station Produce

Denims Shampoos Soft Fruits

& Shirts Drink

Fabrics Detergents Packaged Vegetables

Juices

Formal Soaps Milk Imported

Wear Items Fruits

Casual Liquid Frozen Dairy

Wear Wash Foods Products

 Price Mix:

o Value Pricing.
o Promotional Pricing.
o Low Interest Financing
o Psychological Discounting.
o Special Event Pricing
o Differentiated Pricing.
o Time Pricing.
o Bundling.

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 Place Mix:

o Initially Identifies Future/Potential development areas.

o Acquire such areas at an early phase before the real estate value booms.
o Located at high traffic areas.
o Design to look crowded.

 Promotion Mix:

o “Saal Ke Sabse Saste 3 Din”

o Future Card
o Advertising (Print ads, TV Ads, Radio)
o Brand Endorsement
o Exchange Offer.
o Weekend Discount.
o Point of Purchase Promotion.

Customer Segmentation of Big Bazaar:

 Big Bazaar target higher and upper middle class customers.

 The large and growing young working population is a preferred customer
segment.
 Big Bazaar specially targets working women & home markets who are the
primary decision maker.

Big bazaar uses 8 golden rules to deal with Customer Services:

1. Answer the phone.

2. Don’t make promise unless you will keep them.

3. Listen to your customer.

4. Deal with complaints.

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5. Be helpful.

6. Train your staff to be always helpful, courteous and knowledgeable.

7. Take the extra step.

8. Throw in something extra.

Core Values in Big Bazaar:

The core values in Big Bazaar are:

1. Indianness – Confidence in ourselves

2. Leadership – To be leader, both in thought and in business

3. Respect and Humility – To respect every individual and be humble in our

Conduct.

4. Introspection – Leading to purposeful thinking

5. Openness – To be open and receptive to new ideas, knowledge and information

6. Valuing and nurturing relationships – To build long term relationship

7. Simplicity & positivity-Simplicity and positivity in our thought, business and

action .

8. Adaptability – To be flexible and adaptable to meet challenges

9. Flow – To respect and understand the universal laws of nature

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 REVIEW OF LITERATURE

Several studies have been made on marketing strategies, customer loyalty and
related aspects. In what follows is brief review of such studies:

Customer loyalty represents an essential issue both in the marketing literature and
in the marketing practice. The importance of the concept derives from the benefits
associated with retaining existing customers (McMullan, 2005). Research has
shown that loyalty is linked to business performance (Reichheld, 2003), being an
important predictor of long-term profitability (Salegna and Goodwin, 2005).

Loyalty is a very complex construct (Javalgi and Moberg, 1997), defining the
concept being an extremely difficult task. However, the American Marketing
Association over-simplifies the concept by defining it as the situation in which a
consumer generally buys the same manufacturer-originated product or service
repeatedly over time rather than buying from multiple suppliers within the
category (Moisescu and Vũ, 2011). Moreover, Aaker (1991) defines brand loyalty
as a reflection of how likely a consumer is to switch to another brand, especially
when that brand makes a change in price, product features, communication, or
distribution programs. Nevertheless, loyalty is much more than just repeat
purchases, as a consumer who keeps buying a certain brand may be doing it
because of inertia, indifference, switch or exit barriers and other motives, rather
than actual loyalty (Reichheld, 2003).

One essential contribution to the literature regarding loyalty was that of Jacoby
and Chesnut (1978) who classified the approaches regarding brand loyalty into
three categories: behavioural, psychological commitment, and composite. Their
definition sees brand loyalty as “the biased behavioural response expressed over
time by some decision-making unit with respect to one or more alternative brands
out of a set of brands and is a function of psychological processes” (Jacoby and
Chesnut, 1978). This definition, firstly proposed by Jacoby in 1971, is based on a
composite approach of the concept (Rundle-Thiele and Bennett, 2001), and it
covers the most important aspects of brand loyalty (Mellens et al, 1996), enjoying
widespread support in the marketing literature, and being the most often used in
brand loyalty research (Rundle-Thiele and Bennett, 2001; Mellens et al, 1996).

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Jacoby’s definition outlines the fact that there has to be a systematic tendency to
buy a certain brand or group of brands, and points out the fact that, during a period
of time, both the number of times a brand is purchased and the purchase pattern
over successive buying occasions are important. As a matter of fact, considering
a purchase sequence for two brands (A and B), Brown (1952) distinguishes
between four groups of buyers: hard-core loyals, who buy the same brand over a
given period of time (AAAA), split loyals, who are loyal to more than one brand,
with divided loyalty (ABABAB), shifting loyals with unstable loyalty, who are
loyal to one brand for a period of time, but easily shifting from one brand to
another (AAABBB), and, respectively, switchers or non-loyals, who show no
loyalty to any brand. Jacoby's definition also emphasizes the fact that loyalty is a
function of psychological processes, brands being selected according to internal
criteria resulting in a fundamental element of brand loyalty which is the
commitment towards the brand. Therefore, observed behavior alone is only
capable of partially explaining loyalty, repeat buying behavior being only a part
of brand loyalty which must be accompanied by psychological commitment.

Even though there is a relative agreement in the literature regarding the

conceptual definition of brand loyalty (especially due to the conceptualization
provided by Jacoby and Chesnut in 1978), there is no unified perspective
regarding the measurement of loyalty (Mellens et al, 1996). However, finding an
accurate measure of customer loyalty is essential important due to its link with
profitability (Reichheld, 2003; Salegna and Goodwin, 2005).

Aaker (1991) identifies five levels of brand loyalty and groups customers
accordingly: non loyal buyers - who are completely indifferent to brands, each
brand being perceived to be adequate if the price is accepted; satisfied or at least
not dissatisfied buyers - with no dimension of dissatisfaction sufficient enough to
stimulate a change, especially if that change involves effort; satisfied buyers with
perceived switching costs (loss of time, money, or acquired loyalty advantages,
performance risks associated with switching etc.); likers of the brand – they have
an emotional attachment to the brand, based upon associations such as a symbol,
a set of use experiences, or a high perceived quality; committed customers - to
whom the brand is very important both functionally a as an expression of their

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personality; the value of this category of customers stays in the impact they have
upon others through their recommendations.

Considering the level of involvement and that of perceived differences between

brands, Assael (1992) identifies four brand loyalty driven types of consumers:
complex loyals (firstly do research, then develop beliefs and attitudes about the
brand, and finally make a thoughtful choice), dissonance loyals (shop around and
buy fairly quickly, as they may consider most brands in a given price range to be
the same, even though expensive and self-expressive; after buying, they
experience dissonance noticing certain disquieting features or hearing favorable
things about other brands, but seek information that supports their choice),
habitual loyals (make decisions based on brand familiarity; they keep buying the
same brand out of habit as they are passive recipients of information conveyed by
advertising), and, respectively, variety-seekers (switch brands for the sake of
variety rather than dissatisfaction; these consumers have some beliefs about
brands, choose brands wit).

Dick and Basu (1994) provide a key contribution to the loyalty measurement
literature by focusing their research on the relative attitude of consumers (the
degree to which the consumer’s evaluation of one alternative brand dominates
over another), and the moderators of the relative attitude to repeat-patronage
(based on social norms and situational factors). Thus, the authors conceptualize
brand loyalty as the relationship between the relative attitude toward an entity
(brand/service/store/vendor) and patronage behavior, true loyalty only existing
when repeat patronage coexists with high relative attitude. As an interaction of
attitude and behavior, loyalty is determined by the strength of the relationship
between relative attitude and repeat patronage. Moreover, within the established
customer loyalty framework, Dick and Basu (1994) identify four categories of
loyalty: sustainable loyalty (when there is a favorable correspondence between
relative attitude and repeat patronage), latent loyalty (a high relative attitude, with
low repeat patronage), spurious loyalty (a low relative attitude accompanied by
high repeat patronage), and no loyalty.

An important innovation in what concerns the quantification of customer loyalty

comes from Payne (1994) who examines the progress of consumers up or along

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the rungs of a so called “loyalty ladder” from prospects, to customers, clients,
supporters, advocates and, eventually, partners. After converting a prospect into
a customer, the next marketing task is to generate repeat patronage from that
customer. At this point, the customer becomes a client who is neutral, positive or
even negative towards the brand. When the client's attitude towards the brand
becomes positive, the client becomes a supporter, who is typically passive (not
outspoken). At the next level, an advocate is someone who is so pleased with the
brand that they actively recommend it to others. The final step on the (partner)
represents a situation where a very close and long-term relationship is developed
between the brand and the customer, based on satisfaction of mutual needs, this
last step being particularly especially applicable to business-to-business
relationships. According to the author, this evolution requires increased dialogue
between exchange parties, commitment and trust, which develops within a
consumer’s attitude.

Another important perspective on measuring customer loyalty comes from

Hallowell (1996), who examines the links between profitability, customer
satisfaction and customer loyalty. In this case, the author measures loyalty as a
dependent variable, using parameters related to the length of customer
relationship (reflected by the percentage of customers who remained customers
during an analysed time-frame, and the customer-reported relationship tenure),
and, respectively, the depth of customer relationship (measured by cross-sell
rates).

Mellens et al (1996) classify brand loyalty measures into four groups, based on
two dimensions: attitudinal versus behavioral measures, and, respectively, brand-
oriented versus individual-oriented measures. Thus, the author group loyalty
measures into: attitudinal brand-oriented measures (stated purchase intentions,
preference measures, commitment measures), attitudinal individual-oriented
measures (measures on product category level, general measures), behavioral
brand-oriented measures (measures based on aggregated data, measures based on
aggregated switching matrices, measures based on market shares, measures based
on individual-level data), and, respectively, behavioral individual-oriented
measures (proportions of purchase measures, sequence of purchase measures).

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Pritchard et al (1999) conceptualized customer loyalty in a commitment-loyalty
measure, which they termed Psychological Commitment Instrument (PCI). The
brand loyalty measurement instrument is based on a questionnaire comprising
items intended to reflect: resistance to change (e.g.: “My preference to ... would
not willingly change”), position involvement (e.g.: “I prefer ... because their
image comes closest to reflecting my lifestyle”), volitional choice (e.g.: “My
decision to ... was freely chosen from several alternatives”), informational
complexity (e.g.: “I don't really know that much about …”), loyal attitude (e.g.:
“I consider myself to be a loyal patron of ...”), and loyal behavior (e.g.: “Please
estimate how many times during the last 12 months you have purchased ...”

Another important input in the literature regarding customer loyalty measurement

is provided by Gremler and Brown (1999) who extend the concept of customer
loyalty to intangible goods with their definition of service loyalty: “the degree to
which a customer exhibits repeat purchasing behavior from a service provider,
possesses a positive attitudinal disposition toward the provider, and considers
using only this provider when a need for this service arises”. The authors propose
that loyalty measurement be done by surveying customers, using self-
administered questionnaires. “Word of mouth” communication behavior is in this
case measured into two ways: a five-item, 7-point Likert scale, followed by a
question that asks respondents to provide the number of people to whom they had
actually given recommendations about the service provider. Afterwards, a nine-
item index is used to measure service loyalty. The items in the index are 7-point
Likert scales, ranging from 1 (strongly disagree) to 7 (strongly agree), and include
behavioral, attitudinal, and cognitive dimensions of loyalty. Eventually, a service
loyalty score is determined for each respondent, thus being identified low,
medium, and high loyalty customers.

Oliver (1999) emphasizes the notion of brand loyalty situational influences,

proposing a four phase model of customer loyalty development. Thus, the author
describes brand loyalty as “a deeply held commitment to rebuy or re-patronize a
preferred product/service consistently in the future, thereby causing repetitive
same-brand or same brand-set purchasing, despite situational influences and
marketing efforts, having the potential to cause switching behavior”. The model
of customer loyalty development proposed by Oliver (1999) includes the

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following four-phases: cognitive loyalty: the brand attribute information available
to the consumer indicates that one brand is preferable to its alternatives; affective
loyalty: a liking or attitude toward the brand has developed on the basis of
cumulatively satisfying usage occasions; conative loyalty (behavioral intention):
influenced by repeated episodes of positive affect toward the brand, conation, by
definition, implies a brand-specific commitment to repurchase; action loyalty: the
motivated intention in the previous loyalty state is transformed into readiness to
act; this is accompanied by an additional desire to overcome obstacles that might
prevent the act; if this engagement is repeated, an action inertia develops, thereby
facilitating repurchase. Moreover, Oliver (1999) outlines the vulnerabilities
associated to each of the four phases. Thus, in the cognitive loyalty phase
vulnerabilities consist of: actual or imagined better competitive features or price
through communication and vicarious or personal experience, deterioration in
brand features or price, variety seeking and voluntary trial. Further on, in the
affective loyalty stage, induced dissatisfaction, enhanced liking for competitive
brands, variety seeking and voluntary trials, and deteriorating performance
represent the main vulnerabilities. In what concerns the phase of conative loyalty,
the most important vulnerabilities are persuasive counter argumentative
competitive messages, induced trials (e.g., coupons, sampling), and deteriorating
performance, while in the action loyalty stage induced unavailability, and
deteriorating performance are the most important dangers.

Jones et al. (2000) observe that although numerous studies support the importance
of customer satisfaction in the retention process, “the relationship between these
variables often evidences considerable variability”. Presuming that such
variability highlights the possibility that “retention may depend on additional
factors such as switching barriers”, and that the relationship between satisfaction
and retention may be contingent on switching barriers, Jones et al. (2000) develop
and tests a model of customer retention that incorporates such contingencies
between customer satisfaction and switching barriers, by surveying actual
customers about a current provider of either banking services. In order to evaluate
brand loyalty, the authors use a measurement battery comprising several items
grouped as follows: repurchase intentions (unlikely/likely, very un-probable/very
probable, impossible/possible, no chance/certain) - measured using a ten-point

21
semantic differential; core-service satisfaction (very displeased/very pleased,
very unfavorable/very favorable, disgusted with/contented with, very
dissatisfied/very satisfied with, unhappy with/happy with) - measured using a ten-
point semantic differential; attractiveness of alternatives (e.g. "If I needed to
change ..., there are other good ... to choose from") - measured using seven-point
Likert items anchored by strongly disagree/strongly agree; length of patronage:
"Approximately how long have you used ...?" (measured in number of years).

Knox and Walker (2001) develop a measure of customer loyalty (and test it
through an empirical study of grocery brands), finding that brand commitment
and brand support are necessary and sufficient conditions for customer loyalty to
exist. In what concerns brand support, the authors propose a “support index” to
reflect the degree to which purchasing within a product category was devoted to
a limited set of brands from the greater number that were available in the market
place. In order to measure involvement and brand commitment, the authors use a
set of questionnaire items grouped into the following categories (all items, except
those mentioned otherwise, using seven-point strongly agree/disagree scales):
product involvement, brand decision involvement, product sign, product hedonic,
product utility, brand sign, brand hedonic, brand risk, and brand commitment.
Based on their results, Knox and Walker (2001) propose a brand loyalty based
classification of consumers: loyals, with high product involvement and medium
risk, habituals, with low product involvement and low risk, variety seekers, with
medium product involvement and medium risk, and, respectively, switchers, with
low product involvement and low risk.

Wulf et al (2001) propose and empirically cross-validate a loyalty conceptual

model by studying six consumer samples in a three-country, transatlantic,
comparative survey that investigates two industries (food and apparel industries).
In their model, the authors use several dimensions related to customer loyalty:
preferential treatment (makes greater efforts for regular customers than for non-
regular customers), interpersonal communication (takes the time to personally get
to know regular customers), tangible rewards (rewards regular customers for their
patronage), perceived relationship investment (makes efforts to increase regular
customers' loyalty), relationship satisfaction, trust, relationship commitment,
behavioral loyalty (percentage of product category total expenditures spent for

22
the brand), product category involvement, and, respectively, consumer
relationship proneness.

Salegna and Goodwin (2005) propose a service loyalty measurement model in

which loyalty is determined by antecedents such as customer satisfaction, brand
trust, relationship involvement, and emotional commitment. Moreover, the model
implies that customer satisfaction, in its own turn, is also a dimension with several
antecedents such as: service quality, service value and affect, service value
mediating the relationship between service quality and cognitive satisfaction,
while psychological impressions/feelings (or affect) mediating the relationship
between service quality and affective satisfaction.

Rundle-Thiele (2005) provides a step towards simplifying and shortening loyalty

surveys for marketers, summarizing and to categorizing more than 30 survey-
based loyalty measures administered in previous academic surveys. The author
suggests that loyalty should be defined as “the state or quality of being loyal,
where loyal is defined as a customer’s allegiance or adherence towards an object”,
and proposes a measurement model and tests it among a sample of wine clubs
members and, respectively, insurance customers. The assessment model is based
on a questionnaire comprising more than 30 brand loyalty related
measures/questions. Using exploratory analysis Rundle-Thiele (2005) makes a
distinction between impure measures, which can’t be loaded on a specific loyalty
dimension, and, respectively, pure measures, which can be grouped into several
loyalty dimensions such as: attitudinal loyalty - a customer feeling or a customer
attitude of devoted attachment and affection towards the brand, resistance to
competing offers - customer immunity to or protection from competing offers,
behavioral intentions – attitudes towards purchasing the brand, propensity to be
loyal - relates to the characteristics of an individual customer, and is defined as a
characteristic of the consumer; in other words, a tendency to be loyal (e.g. rarely
take chances by buying unfamiliar brands even if it means sacrificing variety,
complaining behavior - expressions of dissatisfaction or disapproval, behavioral
loyalty - the consumer’s tendency to repurchase revealed through behavior which
can be measured and which impacts directly on brand sales.

23
Aydin and ozer (2005) suggest a loyalty measurement model for the telecom
industry, model which should include corporate image, perceived service quality,
trust and customer switching costs as major antecedents of customer loyalty.
Thus, the authors propose the following sets of measures related to customer
loyalty: switching costs (e.g. “Switching to a new operator causes monetary
cost”), customer loyalty (e.g. “I will go on using …”), corporate image (e.g. “This
company is stable and firmly established”), trust (e.g. “I trust this company), and
service quality (e.g. “How would you rate the coverage area for your operator?”).
The authors show that all of the factors have positive effects on customer loyalty,
revealing that trust is the most important determinant of customer loyalty, and
that, even though perceived service quality and perceived switching cost seem to
have the same level of effect on consumer loyalty, the switching cost should be
considered as a more important factor due to its indirect effect.

Söderlund (2006) measures customer loyalty with multi-item scales and with an
explicit assumption that several discrete facets of loyalty exist. The author
conducts two empirical studies in service settings (restaurants and general retail
stores), using multi-item measures to collect data on customer satisfaction, re-
patronage intentions, and word-of-mouth intentions. The empirical findings of
Söderlund (2006) demonstrated that a better measurement model is obtained
when re-patronage intentions and word-of-mouth intentions are modeled as two
separate factors as opposed to one single factor.

McMullan and Gilmore (2003, 2005, and 2008) seek to explore the complex inter-
relationships between the attitudinal and behavioral dimensions of customer
loyalty development, proposing a multiple-item scale for measuring customer
loyalty development. The data collection instrument includes 28 multi-item
loyalty scale, included items, which measure a customer’s loyalty (e.g. “I consider
myself to be loyal to ...”), and the sustainers and vulnerabilities mediating its
development (e.g. “I would try an alternative ... if the alternative offered ...”).
McMullan (2005) identifies three groups of items measuring customer loyalty
development: loyalty sustainers (including cognitive items such as choice,
punctuality, reservation information and facilities, and affective items such as
enjoyment, loyalty and recommendation), price loyalty vulnerabilities (including
price-related items such as bargain hunting and value for money), and service

24
loyalty vulnerabilities (e.g. the challenge posed by a new competing service or
service brand)

Bandyopadhyay and Martell (2007) extend the work done by Dick and Basu
(1994) by introducing a new segment of non-users, and by offering a unique way
to measure attitudinal loyalty, using a unique survey data with a large sample of
1800 respondents that includes both behavioral (purchase) patterns and attitudes
of the respondents for all major brands of tooth paste, to demonstrate that
behavioral loyalty is influenced by attitudinal loyalty across many brands of the
toothpaste category. The authors suggest that true loyalty should be seen as
comprising a favorable repeat purchase (behavioral) pattern, and a favorable
disposition (attitude) towards the brand. To operationalize behavioral pattern,
respondents are grouped into three behavioral categories: single users (highest
level of behavioral loyalty, purchasing only a single brand on every purchase
occasion), multiple users (an intermediate behavioral loyalty), and non-users (the
least amount of behavioral loyalty is shown by those respondents who do not use
the brand even once over the study). The survey includes eight behavioral
questions to measure the respondents’ usage patterns and their satisfaction
towards various brands over a period of six months. Attitudinal loyalty is
operationalized by measuring consumer perceptions of the overall rating of the
brand (30 attribute-related questions on respondents’ beliefs about these brands),
being reflected by the number of positive attributes (or attribute score) associated
with the brand.

Vecchio, Del, Devon et.al. (2006) ' report the results of the study, which examined
the effect of sales promotion on brand preference through Meta analysis. Results
of 51 studies had been integrated. As per the study sales promotions do not affect
post promotion brand preferences in general. But depending upon characteristics
of sales promotion and the promoted product, promotion can either increase or
decrease preference for a brand.

Ndubisi, Oly, Nelson and Moi, Tung, Chiew (2005) in their study evaluated the
impact of sales promotional tools, namely coupon, price discount, free sample,
bonus pack, and in-store display, on product trial and repurchase behaviour of
consumers. The moderation role of fear of losing face on the relationship between

25
the sales promotional tools and product trial was also examined. The results of
study show that price discounts, fiee samples, bonus packs, and in-store display
are associated with product trial. Coupon does not have any significant effect on
product trial. Trial determines repurchase behaviour and also mediates in the
relationship between sales promotions and repurchase. Fear of losing face
significantly moderates the relationship between in-store display and product
trial.

Kumar, V. and Swaminathan, Srinivasan (2005) ' studied the impact of coupons
on brand sale and how that impact decays over the life of the coupon. The authors
use an econometric model to demonstrate the coupon effect in terms of equivalent
price reduction, account for coupon effect over time, allow inference of coupon
effects when retailers decide to double or triple the coupon value and provide both
self-coupon and cross-coupon elasticities at different levels of aggregation.
Results indicate that the effect of doubling the face value of coupon result in more
than a proportionate increase in elasticity and both self and cross- coupon
elasticities are much smaller in magnitude than the average self-cross price
elasticity. Laroche, Michel et.al. (2005) ' studied the effect of coupons on
consumer's brand categorisation and choice process using fast-food restaurants in
China. Results suggest that there are both direct and cross advertising effects i.e.,
the presence of a coupon for a focal brand has an impact on consumer's attitudes
and intentions towards that brand.

Lewis, Michel (2004) developed an approach for simultaneous measurement of

the influence of a dynamic loyalty programme and more traditional short- term
promotions. They argue that the loyalty programmes under examination
successfully alter behaviour and increase retention rates. Email based coupons,
shipping fee and general price levels all significantly affect customers purchase
decisions.

Anderson, T. Eric and Simester LDuncan (2004) investigated how the depth of a
current price promotion affect future purchasing of first time and established
customers based on three large scale field experiments on durable goods sold
through a direct male catalogue. The findings reveal different effect for first-time
and established customers. Deeper price discounts in the current period increased

26
future purchases by the first time customers (a positive long-run effect) but
reduced future purchases by established customers (a negative long- run effect) .

Dawes, John (2004) ' reported the result of his study on the effect of a massively
successfbl price promotion in a consumer goods category. Specifically, he sought
to determine if this large price promotion had any long-term impact on brand
value; short-term impact on total category volume for the retailer; short-term
effect on competing retailers; and long-term effect on category sales for the
retailer who runs the promotion. Results of the study showed that a very
successful promotion did not have any longer-term effect on the brand (positive
or negative), but it did expand the total category for the retailer, though
temporarily. Sales dropped slightly for one competing retailer at the time of
promotion out of the three units studied. It was observed that the promotion was
followed by a decline in the total category volume for the retailer, suggesting
some degree of purchase acceleration or stockpiling by consumers, Longer-term
negative effect on category cancelled out approximately two third of the gain of
the price promotion to the retailer.

Baohong et.al. (2003) ' reviewed various studies relating to the impact of
promotion on brand switching and found that these studies used choice models,
especially logit. According to these studies promotion has a strong effect on brand
switching. The authors show that logit choice model can substantially over
estimate brand switching because they do not take in to account the rational
adjustments that customers make to take advantage of promotion. Logit models
do not take in to account stock piling and deceleration strategies. They use a
dynamic rational model and compare it with a logit model. The result was that
logit models over estimate brand switching, that nested logit helps address the
problem but not completely and that dynamic rational model provide the most
accurate estimate of switching.

Swait, Jofie and Erden, Tulin (2002) in their study focused on a particular aspect
of marketing mix consistency overtime for frequently purchased packaged
consumer goods, the impact of temporal consistency of store promotions as well
as the availability of the product on the shelf; on consumer product evaluations
(utilities) and choices. The empirical results, based on fabric softener panel data,

27
indicate that there insert and availability consistency increase systematic utility in
a statistically significant way over and above the positive effects that displays and
feature have on choice.

Soman, Dilip and Gourville, T. John (2001) 'O investigated how and why price
bundling affect the consumption of a service based product such as a sporting
event or a theatre performance. The results of the study showed that price
bundling leads to a decoupling of the sunk cost and pending benefits of a
transaction there by reducing the likelihood of down stream consumption. Smith,
F. Michael and Sinha, Indrajit (2000) *l examined the relationship between
different types of promotions (straight price promotion, extra-product or volume
promotion and mixed promotion) across four supermarket product categories
controlling separately for the effect of two category-based moderating factors viz.
product stock-up characteristics and price level. Results showed that a majority
of consumers preferred mixed promotions ; type of promotions does influence
store preference (with price and volume promotions having the greatest
influence). Consumers generally preferred price promotion for higher priced
product categories and they preferred volume promotions for lower priced
categories.

Feame, Andrew et.al. (1999) l2 studied the impact of promotions on the demand
for spirits category in the UK market. The results of an econometric analysis of
weekly cross-sectional store data and cluster analysis of consumer panel data
suggested that promotions have had a slight positive impact on the volume of
sales, particularly over the seasonally important Christmas period. Some
promotions, especially multi-buys, reward largely loyal buyers, doing little for
either volume or monetary growth of the spirit category. Other promotions, such
as price and gift offers, appeal more to consumers who do not purchase spirits so
frequently and also attract people who are less brand and store loyal.

Ailawadi, L. Kusum and Nelsin, A Scott (1998) l3 empirically demonstrated the

existence of flexible consumption rate in packaged goods products, how this
phenomenon could be modelled and its importance in assessing the effectiveness
of sales promotion. Results of their study show that sales promotion increases
consumption because of higher usage rate and stockpiling.

28
Mela, F. Carl. et.al. (1997) l4 examined the long-term effect of promotion and
advertising on consumer's brand choice behaviour. They addressed two questions:
1. Do consumers respond to marketing mix variables such as price changes over
a long period of time? 2. If yes, are these changes associated with change in
manufacturer's advertising and retailer's promotional policies? Their results are
consistent with the hypothesis that consumers become more price and promotion
sensitive over time because of reduced advertising and increased promotions.

Gould, W. Brim (1997) in his study, focused on the dynamics of the consumer
purchase process and examined the effect of coupon-based price deals on inter
purchase times. He used econometric models of duration to a formally purchased
food commodity, cheese. Results suggested that use of coupon results in reduced
inter-purchase time for all varieties of cheese products.

Sethuraman, Raj (1996) l6 developed a Separate Effect Model that separates the
total discount effect of competing high-priced brand on the sale of the focal low-
priced brands in to discount effect. Findings from empirical analysis is that the
leading national brand can draw sales from competing brands without reducing
its price below the price of other brands.

Jefii-y, J. and Mc.Alister, Leigh (1994) l7 tested the hypothesis that coupon
redemptions are greatest in the periods immediately following the coupon drop
and decline monotonically. As per the study the hypothesis was rejected and it
was proved that expiration dates induce a second mode in the redemption pattern
just prior to the expiration dates.

Grover, Rajiv and Srinivasan, V. (1992) l* investigated the multiple effect of

retail promotion on brand loyal and brand switching segment of consumer. They
found that the market can be characterised by brand loyal segment and switching
segments; promotional variable have significant effects on segment market
shares, the effect being different across segments; store share is related
significantly to promotional attractiveness of a store; the overall promotional
attractiveness of the product category has significant current and lagged effect on
category volume and the lagged effects resulting from consumer purchase
acceleration and stock-up last longer for brand loyal segments than for switching
segments.

29
Kahn, E. Barbara and Loouise, A. Therse (1990) l9 investigated how in-store
price promotions affect market share after the promotion have been retracted.
They find that the effects of promotion are contingent on both the choice pattern
of subjects- whether or not subjects switch among brands- and the ubiquity of
promotions in a product category. If only one brand is being promoted and
subjects are generally loyal to the last brand purchased, brand choice probability
declines from pre-promotion levels once the promotion is withdrawn. However if
subjects tend to switch among brands in the absence of promotion, or several
brands are being promoted, this decline is mitigated and/or does not occur.

Guptha, Sunil (1988) 20 explains how sales promotion affect consumer's

purchase decisions and thus the sale of a brand. He argues that the effect of a sales
promotion can be examined by decomposing the sales bump during the sales
promotion period into sales increase due to brand switching, purchase time
acceleration and stock piling. The author proposed a method for such
decomposition whereby brand sales are considered the result of consumer
decision about when, what and how much to buy. The impact of marketing
variables on these three consumer decisions is captured by an Erlang-2 inter-
purchase time model, a multinomial logit model of brand choice and a cumulative
logit model of purchase quantity. The models are estimated with IRI scanner
panel data for regular ground coffee. The result indicates that more than 80% of
the sales increase due to promotion comes fi-om brand switching. Purchase
acceleration in time accounts for less than 14% of the sales increase, where as
stock piling due to promotion is a negligible phenomenon accounting for less than
2% of the sales increase.

30
 CHAPTER - 2
THEORITICAL BACKGROUND

31
 THEORITICAL BACKGROUND

Customer Loyalty

Understanding Customer Loyalty

According Sipatuhar (2000), customers are all demanding the bank to meet a
certain quality standard. Meanwhile, according to the median (1995), is a good
customer, without them the bank will be closed or bankrupt. From the above
definition can be concluded that the customer is demanding to meet customer
desires. The definition of loyalty is expressed in Oliver (2005: 129) declared
Customer loyalty is deeply held commitment to rebuy or repatronize a preferred
product or service consistently in the future, despite situational Influences and
Marketing Efforts having potential to cause switching behavior.

From the definition, customer loyalty is to survive in a deep commitment to

subscribe again or re-purchase the product / service consistently chosen in the
future, although the influence of the situation and marketing efforts, have the
potential to cause changes in behavior.

Typical characteristics of Loyal Customers

Customers who are loyal according to Griffin (2002: 31) has characteristics
including: (1) make a purchase re-seacar regularly, (2) buy out the product line /
services, (3) invites another person, (4) indicates immunity from the pull of
competitors. Understanding customer loyalty is not only seen from the transaction
just or repeat sales. Griffin (2003: 23) promoted seoarang there are some features
could be considered loyal customers. Among others:

a. Makes regular repeat purchase

b. Purchase across product lines and service

c. Refers others

32
 d. Demonstrates in immunity to the pull not the competition.

Loyal customers are loyal to their bank customers. Griffin (2002: 13) suggests
the benefits - benefits that would be obtained if the company has loyal customers
that include: (1) reduce marketing costs (because the cost to attract new customers
is more expensive), (2) reduce transaction costs (such as costs of contract
negotiations, order processing), (3) reduce customer turnover costs (because
fewer consumers replacement), (4) to increase cross selling which will enlarge
the company's market share, (5) word of mouth is more positive, with the
assumption that consumers are loyal bearti also those who feel satisfied, and (6)
reduce the cost of failure (such as replacement cost).

Loyalty Levels

Kartajaya (2003:100) divides into five stages of customer loyalty levels, as

follows:

1. Terrorist Customer, are customers who like menjelek-jelekan brand because the
company did not like or ever not satisfied with the services provided by the
company. Customers like this act like terrorists who like to bother the company.

2. Customer transactional, i.e. customers who have relationships with companies

that are limited to the transaction, customers like this to buy one or two times,
after that not to repeat purchase, or if doing pembelin again it is only sometimes.
Customers who have properties like these easily come and go because they do not
have a good relationship with the product / brand company, its base is a
transactional relationship.

3. Customer Relationship, where this type of customer equity value is higher than
the above two types of customers. Customers of this type have been doing repeat
buying and patterns to do with the product or the brand of the company is rational.

33
4. Loyal Customer, customers are not only doing this type of repeat buying, but even
further is very loyal to the company's products and brands. If there are other
people who discredit the company, subscribers to survive and remain with the
company anything as bad as people vilify the company.

5. Customer Advocator, types of customers with the highest level, this kind of very
special customers and excellence, they became the biggest assets if the company
had it. Advocator Customer is a customer who always defended the company's
products and brands, customers who become a good spokesman to another
customer and angry customers if there are other people who speak ill of the
company's brand.

Another approach is to segment loyalty behavior into several groups, namely:

1. Non-customers, to those who choose the brand competitors

2. Price Switcher, i.e. groups that are sensitive to price, brand loyalty easy to

waver Because there is another brand that is cheaper.

3. Passively loyalist, to those who buy out of habit and not for some reason

4. Fence Sitter, to those who feel no difference between brand A and B. This

group is those who have committed to buy our brand back.

34
Factors Affecting / Establishing Loyalty

A consumer is loyal to a brand in general is very difficult to change in the use of

other products, where consumer loyalty to a brand has increased, then the threat
of similar competitor products will be reduced. Cause of brand loyalty is due to
inability of the company in maintaining stability and kuaitas quality of products
or specific brands. According to Gunawan's view of business practitioners
(2004:21) customer loyalty will be created if the company is able to create quality
standards and quality of product, one way is done by a company within the created
is by forming a team of marketing intelligence yangmerupakan who served in
responding to and researching consumer behavior towards products such as
changes in tastes, trends, society and the threat from competitors' products. After
all the "necessary information can be collected then the change of an analysis of
all possibilities that will happen to the products they hasikan and then create a
strategy that will serve as a tool to maintain consumer trust and loyalty. Sudjana
(2001: 19) revealed that a company has a customer base that has a high brand
loyalty can provide many benefits for companies that can reduce marketing costs,
high brand loyalty can increase trade, attract new customers and brand loyalty
gives time or breathing space, at a company to quickly respond to competitors'
movements.

Loyalty Indicators

Consumers who are loyal very great significance for the company. According to
Kotler (2002:25) there are five indicators that loyal customers, namely:

a. Customers tend to buy more and longer loyal.

b. Customers tend cross-selling or add-on-selling.

c. Customers are not sensitive to price.

d. Customers will make a positive word of mouth.

e. Offer ideas to the company's goods or services.

35
 SALES PROMOTION

Introduction

Sales are the lifeblood of a business, without sales there would be no business in
the first place; therefore it is very important that if a business wants to succeed, it
should have a sales promotion strategy in mind. The primary objective of a sales
promotion is to improve a company's sales by predicting and modifying your
target customer's purchasing behavior and patterns.

Sales promotion is very important as it not only helps to boost sales but it also
helps a business to draw new customers while at the same time retaining older
ones. There are a variety of sales promotional strategies that a business can use to
increase their sales, however it is important that we first understand what a sales
promotion strategy actually is and why it is so important.

A sales promotion strategy is an activity that is designed to help boost the sales
of a product or service. This can be done through an advertising campaign, public
relation activities, a free sampling campaign, a free gift campaign, a trading
stamps campaign, through demonstrations and exhibitions, through prize giving
competitions, through temporary price cuts, and through door-to-door sales,
telemarketing, personal sales letters, and emails. The importance of a sales
promotion strategy cannot be underestimated. This is because a sales promotion
strategy is important to a business boosting its sales.

When developing a sales promotion strategy for your business, it is important

that you keep the following points in mind.

 Consumer attitudes and buying patterns.

 Your brand strategy Your competitive strategy.
 Your advertising strategy.
 And other external factor that can influence your products availability and
pricing.

36
“Sales promotion comprises a range of tactical marketing techniques designed
within a strategic marketing framework to add value to a product or service in
order to achieve specific sales and marketing objective.”
Sales promotion is a technique which has significant potential to
improve short term sales and like direct response work; its effectiveness can
be tightly measured. Although its strategic value is the subject of considerable
debate, nevertheless, it is an important tool of marketing. There are few markets
or products where it cannot be used and few brands to which it cannot be applied.

Types of sales promotion:

(i)Consumer oriented sales promotions: Targeted to the ultimate users of a

product or service. Coupons, sampling, premiums,rebates,contests,
sweepstakes, and POP materials are induced the sales
(ii)Trade oriented sales promotions: Toward marketing intermediaries such as
retailers, wholesalers, or distributers. Promotion allowances, merchandise
allowances, price deals, sales contest and trade shows.

Sales promotion methodology

The traditional business world suggests that there are three different
types of sales promotion techniques: the push, the pull, and the combination.

(i) The push theory

The push strategy of sales promotion techniques supports that you promote
your goods to a retailer, who will then pass the wares along to their consumers.
A “ p u s h ” p r o m o t i o n a l s t r a t e g y m a k e s u s e o f a c o m p a n y' s s a l e s
f o r c e a n d t r a d e p r o m o t i o n activity to create consumer demand f o r
a p r o d u c t . T h e p r o d u c e r p r o m o t e s t h e p r o d u c t t o wholesalers, the
wholesalers promote it to retailers, and the retailers promote it to consumers. A
good example of "push" selling is mobile phones, where the major handset
manufacturers such as Nokia promote their products via retailers such as
Carphone Warehouse. Personal selling and trade promotions are often the
most effective promotional tools for companies such as Nokia -for

37
example offering subsidies on the handsets to encourage retailers to
sell higher volumes. A "push" strategy tries to sell directly to the consumer,
bypassing other distribution channels (e.g. selling insurance or holidays
directly). With this type of strategy, consumer promotions and
advertising are the most likely promotional tools.

(ii)The pull theory

The pull theory varies by focusing on the consumer himself. Go directly to the
source to introduces your goods, and encourage a direct
purchase.A “ p u l l ” s e l l i n g s t r a t e g y i s o n e t h a t r e q u i r e s h i g h s p e
nding on advertising and consumer promotion to build up
consumer demand for a product. If the strategy is successful,
consumers will ask their retailers for the product, the retailers will ask the
wholesalers, and the wholesaler sw i l l a s k t h e p r o d u c e r s . A g o o d
example of a pull is the heavy advertising and promotion
o f children's’ toys – mainly on television. Consider the recent BBC
promotional campaign for its new pre-school programme – the
Fimbles. Aimed at two to four-year-olds, 130 episodes of Fimbles have
been made and are featured everyday on digital children's channel
CBeebies and BBC2.As part of the promotional campaign, the BBC
has agreed a deal with toy maker Fisher-Price to market products based
on the show, which it hopes will emulate the popularity of the
Tweenies. Under the terms of the deal, Fisher-Price will develop,
manufacture and distribute arange of Fimbles products including soft,
plastic and electronic learning toys for the UK and Ireland.

(iii)The combination theory

It is a slight part of both. You may supply a retailer with your consumable.
He or she will then offer this to a customer with incentives for shopping with
them.

This strategy is usually used if the distributor is hesitant to carry a product, since
it gets its required consumers without having to go to retail outlets. “Car dealers
often provide a good example of a combination strategy. If you pay attention to

38
car dealers’ advertising, you will often hear them speak of cash-back offers and
dealer incentives.” Because sales promotion is an initiative carried out by an
organization to promote a product to ensure increase in sales so it has
varied methods of promotion. Most of the time, sales promotions are creative and
original therefore providing a comprehensive list of all methods is not possible,
however some examples of the regularly used sales promotions activities are as
follows:

•Buy-One-Get-One-Free

•NewMedia

•Merchandising

• CRM (customer relationship management)

• Free gifts

• Discounted prices

• Free samples

• Vouchers & coupons

• Joint promotions

• Competitions and prize draws/Cause-related or fair

• Finance deals

Sales promotion is directed at sales staff, customers and distribution

channel members whichmay include wholesalers, retailers etc. When
targeted at consumers it is called consumer sales promotion, when it is
targeted at wholesalers and retailers it is called trade sales promotions.

However by many it is considered as ‘gimmick’ because of the unusual methods

some marketers use for sales promotion. All of these sales promotion strategies
can be victorious. Your business may choose to use one or all of them when
trading your products. When working to implement your technique,
you may also want to utilize some other methods. Allow people to try samples
of your goods. Engage the free advertising of in-store demonstrations and

39
exhibitions. All of these can be wonderful sales advancement strategies for your
business.

Sales Promotion Theory

Sales promotion is giving the customer something extra, rewarding
them for their behavior on this particular purchasing occasion. There
are several theories which support the concept of reward as a motivator.
The conditions of sales promotion are classical and operant conditioning.
Whereas classical conditioning is largely associated with advertising operant
conditioning is seen as an explanation for consumer behaviour in relation
to sales promotion. Operant conditioning suggests the response of the
individual is likely to be affected by positive reinforcement (reward)
or negative reinforcement (punishment), although the affect i
s l i k e l yt o c e a s e w h e n t h e s e reinforcements are taken away. Edward
Thorndike suggested that the ‘law of effect’, which had to do with positive and
negative consequences of actions, is also relevant to sales promotion. The law
states that the consequences of behaviour now will govern the consequences of
that behaviour in the future. In other words once a buying pattern is
achieved it will continue into the future. John Watson, US psychologist
and founding father of American behaviourism, introduced the concept of
shaping, chaining, and priming.

Shaping:
John Watson states shaping suggests that a final response can be
explained as ‘appearing after preceding acts which; taken together,
constitute a chain of successive approximations’. Shaping breaks the desired
behaviours in a series of stages and the parts are learnt in sequence.
Chaining:
Chaining suggests behavior emerges from sequences of actions in
which the preceding action becomes the discriminative stimulus for the final
response (inducement > purchase).
Priming:
De Pelsmacker (2001) states, priming suggests that a short exposure to a
particular stimulus can evoke an increased drive to consume more of a product.
So this all theories offer reasons why we c a n m o t i v a t e p e o p l e t o b u y

40
more by offering incentives although the continuation of
t h e s e behaviour is open to doubt.

ADVANTAGES OF SALES PROMOTION

• Importance to Consumers

• Increased Buying Confidence

• Distribution of free samples is probably the fastest and best way through

which manufacturers can push consumers to try a product.

• Once satisfied with the quality of the sample product, consumers become

more confident about buying a new product.

• Reduced Rates

• During promotional campaigns, companies offer their products at

discounted rates.

• Consumers like to make use of such occasions to buy larger quantities of

such products.

• A sales promotion campaign makes the job of the sales team much easier.

Thanks to the offers and sales, customers are positively inclined towards

buying a particular product.

41
METHODS OF SALES PROMOTION

Some of the most common methods used in sales promotion strategies include:

1) Discounts – Trade / consumer

The most common type of sales promotions is consumer discounts or trade

discounts. We don’t even need to to explain this to everyone because we are
bombarded with discount offers everyday. Be it E-commerce stores, retail stores
or anything else. The reason discount is most used is because it actually works .if
there is a 10% discount on the product for the consumer, then it is known as
consumer discount. However, if there is a 10% discount to the dealer when he
is purchasing from the company, it is known as trade discount. In trade discounts,
the dealer may or may not forward the discount to the customer. It is not necessary
that the dealer will give additional 5% discount to customers when he is himself
receiving 10% additional discount. However, many dealers know the importance
of achieving sales volumes hence they pass on discounts to customers whenever
they receive trade discounts.

2) Gifting

One of the most common ways to promote your store during festival time or when
there is a huge walk in expected is Gifting. It is also a way to increase the sales
of the products because customers have an anticipation that they might win a gift
from the store.

Another popular way to use gifting is to advertise “Assured gifts”. Basically, you
have different gifts on offer like a mixer grinder or a steam iron. A customer who
purchases a set amount of products will get the “Assured gift” from you. This
creates excitement in the mind of the customer and he received something for
“free”. He might visit again and again.

3) Coupons

42
Quite commonly used to motivate people to purchase when they think the price
is high or it can be incentive to buy your product above the competitors.
Domino’s, Pizza hut and McDonalds very prominently use coupons in their
marketing. If you have their coupon in hand, you get a discount of X amount on
the purchase. What the coupon does is, it instigates you to take action. If today i
get a coupon saying i will get 10% off on whatever i purchase from an XYZ store,
then i will surely get off my butt and go purchasing. I will purchase all those
products anyways. But the coupon got me purchasing from the XYZ showroom.
That’s the objective of the coupon which it has accomplished.

4) Financing

Financing is ingenious amongst the various types of sales promotions. It is a

combination of various factors. Companies which have huge resources generally
act as Financers. They allow customers to purchase a product on EMI or on
different financing options. All this happens for a minor processing fee and less
interest.

As a result, the customer, who does not have complete money to buy the product,
will likely purchase the product using financing options. Such financing helps the
dealer to liquidate the product faster and also helps the customer in making
purchasing decisions.

5) Sampling

It is predominantly used in the FMCG industry for perfumes, deodarants, soaps

or even eatables. Sampling is an excellent way to introduce your product in the
market and at the same time to increase the awareness of the product. The
customers who are being targeted by sampling carry a huge lifetime value. Once
they get hooked onto your product, they won’t leave it that early. Hence,
Sampling might be of higher cost to the company but it is quite successful in the
various types of sales promotions.

43
6) Bundling

Bundling is when you put a combination of products on sale for the same price.
So, for example, normally a 100 dollars might buy you just a shirt. However, with
product bundling, 100 dollars might buy you a set of shirt and pants. As a result,
the consumer is much more likely to buy this bundled offer as compared to a
single offer.

We see bundling strongly in retail where a shampoo might be bundled with a soap
or we can see a bundled combinations of many different items. The disadvantage
of bundling is that customer might think one of the products is of poor quality.
However, if the products are bundled together and both products are of an
excellent brand, then the bundled product will sell much higher quantities and
will defeat competition in numbers. Hence, Bundling is commonly used as a type
of sales promotion.

7) Contests

There are different forms of contests which can be run to gather more customer
information or to motivate the customer to try the product or to create awareness
about the new retail place. Contests can be as simple as winning a gift through a
scratch card, or it can be an in house game in a retail showroom or it can be an
online contest for which users have to enter their information.

Due to the phenomenal rise of the internet, online contests have become very easy
and important. They also penetrate faster and reach a lot of customers.

8) Refunds & Rebates

As the name suggests, refunds are a marketing tactic when you get a partial
amount refunded to you based on an action you have taken. For example – if you
bring the parking ticket to the showroom, your parking amount will be refunded
by the store. Such refunds make the customer excited to visit a store.

44
Similarly, rebate is a type of partial refund which is most popular in the United
states, though not much popular in other countries. In rebates, you fill forms while
checking out of stores. And if you have won the rebate, you will have to mail your
details to the company and the company will refund you the rebate amount in
your bank or via a paypal account.

9) Exchange offers

Exchange offers are quite commonly used all across the world and used strongly
in festive season when sales will be more and people are in a purchasing mood.
In exchange offer, you can exchange an old product for a new product. You will
receive a discount based on the valuation of your old product. So, if you had an
old washing machine at home and there was an Exchange offer in the market,
then you will receive an X amount for the washing machine which is decided by
the parent company or the retailer. This X amount will be deducted from your
final payable amount and will be reduced under the header of “Exchange offer
reimbursed”.

10) Free trial

Chances are, you have come across several softwares or online programs which
offer a free trial to you before you purchase the product. Shareware programs are
also a kind of free trial programs where you can use the product for some time
but later on have to purchase the product to use it completely.

This is done so that the customer gets a chance to trial run the product before he
pays for the product in full. Programs like Adobe Photoshop, Microsoft office
365 and others are known to give free trial programs of upto a month so that the
customer can know more about the product, he can try it and then purchase.

11) Email Marketing

Email marketing was, is and is touted to always be one of the best ways to
promote your business. It is one of the most commonly used types of sales
promotions across the world because of its ease of implementation and because

45
of its penetration. Each and every one of us has an email account which we access
regularly. Thus, an Email is personal to us when received in our phone and we
are bound to check it out.

Chances are, email marketing bundled with an exciting and irresistible offer can
really entice the customer in purchasing your product. As a result, Email
marketing is actually widely used, be it online industry or offline.

12) Exhibitions

More commonly used in Food, Jewellery, Clothing, Chemicals and similar such
industries where sellers want to showcase the products they have to their buyers.
These buyers might be consumers or they may be industrial buyers. An exhibition
generally consists of one player who is exhibiting his goods. However, it can also
be a combination of players who are all there to showcase their wares.

13) Trade Shows

While exhibitions are targeted towards individual buyers, Trade shows are
targeted towards resellers, dealers, distributors and bulk buyers. A trade show is
typically a display point for all top companies within an industry. These
companies are there to compete and grab the maximum eyeballs of retailers,
dealers and distributors. While Exhibitions are concentrated mostly on individual
buyers, trade shows are concentrated towards bulk buyers.

14) Demonstrations

One of the most popular products to be sold through product demonstrations were
vacumm cleaners which used to be sold house to house. However, because of
privacy concerns, such type of promotional activities were stopped. Instead, now
you will see water purifiers being promoted through demonstrations in malls,
showrooms and other places.

Demonstrations are an excellent way to create more awareness of the product and
to make customers comfortable towards a technical product. Technicality of the

46
product can be a barrier to purchase. By demonstrating the actual working of a
product, you are removing a barrier to purchase. Hence demonstration is a type
of sales promotion mostly used for technical type of products.

15) Continuity programs

One of the best example of continuity programs is the frequent flyer program
introduced by most airlines. These airlines give more “miles” to the customers
who are flying more and more with the airline. Because you are awarded gifts the
more you fly with one airline, you are likely to continue flying with that airline
so that you receive more miles.

Another example of the continuity program is when a super market advertises that
customers who buy 5 times in this month from that super market will get a gift.
This ways, the customer will not shift anywhere else but will do shopping from
that super market. Such continuity programs not only aim at getting new
customers, but they also retain old customers effectively.

16) Quantity Discount

The more quantity of the product you buy, the more is the discount. So for
example, a single soap may cost $1 but a combined package of 5 units of soap
might cost you $4, giving you a 20% discount on the purchase. Such type of
quantity discount is common for customers.

However, the quantity discount is not applicable only to consumers. It is also

applicable in trade where a dealer or distributor might be given a discount of 5-
10% if he purchases a higher quantity of product. So, a kitchen appliance
distributor might be given a discount if he buys higher number of units in the
festive season. The higher he sells and the more aggressive he is, the better he
will earn.

Above are all the different types of sales promotions. Each and every business is
different and therefore, the type of sales promotion used by each business needs to
be different. Being a competitive world, most companies use a combination of

47
 various sales promotional methods to defeat competitors, attract and retain
customers and most importantly, to increase the sale of their products or services.

Uses of sales promotion:

 Introduce new products

 Get existing customers to buy more.
 Attract new customers
 Tackle competitions.
 Maintain sales in off seasons
 Increases retail inventories

48
49
 CHAPTER - 3
DATA ANALYSIS AND
INTERPRETATION

50
 1. NUMBER OF RESPONDENTS WHO FREQUENTLY SHOP
The following table shows the response of the respondents for the question
do you frequently shop at big bazaar. The data are both expressed in numbers
and percentage.
TABLE NO.3. 1. RESPONDENTS WHO FREQUENTLY SHOP
RESPONSE NUMBER PERCENTAGE
yes
38 76%
no
12 24%
total
50 100%
(source of data: primary)
INTERPRETATION
From the above table, it is observed that majority of the respondents shop
frequently at big bazaar, i.e. 76 percentage and 24 percentage of the respondents
does not shop frequently at big bazaar. For the purpose of the study I have
collected a sample of 50 numbers by simple random sampling method.
FIGURE NO.3.1. RESPONDENTS WHO FREQUENTLY SHOP
The following figure shows the response of the respondents on percentage basis
where the responses are taken on the x-axis and the percentages are taken on the
y-axis.

80% 76%

70%

60%

50%

40%

30%
24%

20%

10%

0%
yes no

51
2. REASON FOR CHOOSING BIG BAZAAR.
The following table shows the reason for which the respondents choose
big bazaar to shop.
TABLE NO.3.2. REASONS FOR CHOOSING BIG BAZAAR.
PARTICULARS NUMBER PERCENTAGE

Near to home 14 28%

Customer service 4 8%
Offers 30 60%
Others 2 4%
Total 50 100%
(source of data: primary)
INTERPRETATION
60 % of the respondents answered that they shop at big bazaar because of the
offers that are provided by big bazaar. 28% of the respondents shop at big
bazaar because its near to their home and 8% of the respondents shop because of
the services that are provided by big bazaar and 4% of the respondents shop at
big bazaar due to other reasons.
FIGURE NO.3.2. REASONS FOR CHOOSING BIG BAZAAR.
The following figure represents the reasons why the respondents shop from big
bazaar.

70%

60%

50%

40%

30% 60%

20%

28%
10%

8%
4%
0%
near to home customer service offers others

52
3. FREQUENCY OF SHOPPING AT BIG BAZAAR.
The following table represents the time period by which the respondents shop
from big bazaar.
TABLE NO.3.3. FREQUENCY OF SHOPPING
TIME PERIOD NUMBER PERCENTAGE
Every week 23 46%
Once in 2 17 34%
week
Once in a 10 20%
month
total 50 100%
(source of data: primary)
INTERPRETATION
From the above table, it is concluded that the 46% of the respondents come
every week to shop from big bazaar and 34% of the respondents come in every
2 weeks to shop and only 20% of the respondent come to shop once in a month.
FIGURE NO.3.3. FREQUENCY OF SHOPPING
The following figure represents the time period and the percentage of the
respondents who shop at big bazaar.

50%

45%

40%

35%

30%

25%
46%
20%
34%
15%

10% 20%

5%

0%
every week % once in 2 week % once in a month %

53
4. MODE OF MEDIUM USED BY RESPONDENTS TO KNOW ABOUT
BIG BAZAAR.
The following table represents the media through which the respondents
came to know about big bazaar.
Table no.3.4. MODE OF MEDIUM
PARTICULARS NUMBERS PERCENTAGE
T.V advertising 5 10%
hoardings 8 16%
newspaper 37 74%
others 0 0%
total 50 100%
(source of data: primary)
INTERPRETATION
From the above table it is observed that majority of the respondents, i.e. 74%
came to know about big bazaar through newspapers and 16% came to know
about big bazaar through hoardings and 10% of the respondents came to know
about big bazaar through T.V advertisements
FIGURE NO.3.4. MODE OF MEDIA
The following figure will help us to know about the media through which the
respondents came to know about big bazaar.

0%

10%

16%

74%

t.v advertising% hoardings %

newspaper % others%

54
5. FACTORS THAT ATTRACTED TO SHOP FROM BIG BAZAAR.
The following table will represent the factors that leads the respondents to
shop from big bazaar.
TABLE NO.3.5. FACTORS ATTRACTED TO SHOP
FACTORS NUMBERS PERCENTAGE
Offers 34 68%
Product 6 12%
availability
Quality 6 12%
others 4 8%

TOTAL 50 100%
(source of data: primary)
INTERPRETATION
From the above table, it is concluded that the majority of the respondents, i.e.
68% of them shop at big bazaar due to the offers provided by the store. 12% of
respondents are attracted because of the product availability and another 12% of
respondents are attracted due to the quality of the products and the rest 8% of
the respondents are attracted because of other reasons.
FIGURE NO.3.5.FACTORS ATTRACTED TO SHOP
The following figure represents the factors that attracts the respondents to shop
from big bazaar.

OTHERS% 8%

QUALITY% 12%

PRODUCT
12%
AVAILABILITY%

OFFERS% 68%

0% 10% 20% 30% 40% 50% 60% 70% 80%

55
6. AWARENESS ABOUT THE PROMOTIONAL ACTIVITIES.
The following table will show the opinion of the respondents for the
question are
TABLE NO.3.6. RESPONSE OF PROMOTIONAL ACTIVITY
OPINION NUMBER PERCENTAGE
Yes 45 90%
No 5 10%
TOTAL 50 100%
(source of data: primary)
INTERPRETATION
From analysing the data from the above table, it is concluded that majority, i.e.
90% of the respondents are aware of the promotional activities of big bazaar and
only 10% of the respondents are not aware of the promotional activities.
FIGURE NO3..6. RESPONSE OF PROMOTIONAL ACTIVITY
The following figure will represent the opinion of the respondents.

2
10%

1 2

1
90%

56
7. LEVEL OF ATTRACTIVENESS OF PROMOTIONAL ACTIVITIES.
The following table will show the opinion of the respondents regarding the
promotional activities attracts the customers
TABLE NO.3.7.OPINION ABOUT THE PROMOTIONAL ACTIVITES
OPINION NUMBERS PERCENTAGE
Strongly agree 9 18%
Agree 28 56%
Neutral 9 18%
disagree 4 8%
Strongly 0 0%
disagree
Total 50 100%
(source of data : primary)
INTERPRETATION
From the above table we can analyse that majority of the respondents, i.e. 56%
agree that the promotional activities of big bazaar attracts and induce them to
make a purchase and 18% of the respondents strongly agree to it and another
18% does not agree nor disagree to this statement and the rest of the 8%
disagree to the statement that the promotional activities induced them to make a
purchase.
FIGURE NO.3.7. OPINION ABOUT THE PROMOTIONAL ACTIVITES
The following figure will represent the opinions of the respondents whether the
promotional activities attracts them to make a purchase.

60% 56%

50%

40%

30%

18% 18%
20%

8%
10%
0%
0%
strongly agree neutral disagree strongly
disagree disagree

57
8. MAJOR SALES PROMOTIONAL ACTIVITIES OF BIG BAZAAR.
From the below table we can analyse the various promotional activities
of big bazaar and can analyse whether the respondents are satisfied with these
strategies.
TABLE NO.3.8. SALES PROMOTIONAL ACTIVITIES KNOWN BY
RESPONDENTS
PARTICULARS NUMBERS PERCENTAGE
Payback offer 28 56%
Monthly saving 4 8%
offer
Gift voucher 4 8%
Big day offer 2 4%
Profit club 2 4%
Future pay app 10 20%
others 0 0%
TOTAL 50 100%
(Source of data: primary)
INTERPRETATION
From the above table we can come to the conclusion that 56% of the
respondents are satisfied with the payback offer while 10% are satisfied with the
future pay app and other 4% are satisfied with the monthly savings offer and gift
vouchers and the rest 2% are satisfied with the big day offers and profit club.
FIGURE NO.3.8. SALES PROMOTIONAL ACTIVITIES KNOWN BY
RESPONDENTS.
The following figure will represent the responses of the respondents regarding
the various strategies of big bazaar.

60%

50%

40%

30%
56%

20%

10% 20%
8% 8%
0% 4% 4%
0%
payback offer monthly gift voucher big day ofer profit club future pay app others
savings offer

58
9. OPINION ABOUT EXCHANGE MELA
The following table will show the opinions of the respondents about the
exchange mela of big bazaar.
TABLE NO.3.9. OPINION ABOUT EXCHANGE MELA
OPINION NUMBER PERCENTAGE
Excellent 0 0%
good 0 0%
Average 2 4%
Poor 40 80%
Very poor 8 16%
TOTAL 50 100%
(source of data: primary)
INTERPRETATION
From the above table we can analyse that 80% of the respondents are
dissatisfied with the exchange mela of big bazaar and another 16% strongly
dissatisfied .only 4% of the respondents responded that the exchange mela is
average.
FIGURE NO.3.9.OPINION ABOUT EXCHANGE MELA
The following figure shows the opinion of the respondents regarding the
exchange mela.

80% 80%

70%

60%

50%

40%

30%

20% 16%

10% 4%
0% 0%
0%
EXCELLENT GOOD AVERAGE POOR VERY POOR

59
10. Opinion about big bazaars advertisement.
The following table will represent the opinion of the respondents
regarding the advertisements of big bazaar.
TABLE NO.3.10. OPINION ABOUT ADVERISEMENT
OPINION NUMBERS PERCENTAGE
Highly 0 0%
satisfied
satisfied 10 20%
Average 35 70%
Dissatisfied 5 10%
Highly 0 0%
dissatisfied
TOTAL 50 100%
(source of data: primary)
INTERPRETATION
From analysing the table given above, we can conclude that 70% of the
respondents are neither satisfied nor dissatisfied for the advertisements of big
bazaar. Only 20% of the respondents are satisfied with the advertisements of big
bazaar ant the rest 10% is dissatisfied with the advertisements.
FIGURE NO.3.10.OPINION ABOUT ADVERTISEMENT
The following figure will show the various opinions of the respondents
regarding the advertisements of big bazaar.

80%
70%
70%

60%

50%

40%

30%
20%
20%
10%
10%
0% 0%
0%
highly satisfied satisfied average dissatisfied highly dissatisfied

60
 11. RATING THE PRODUCTS OF BIG BAZAAR.
The following table will show how the respondents rate the products of
big bazaar
TABLE NO.3.11. PRODUCT RATING OF BIG BAZAAR
PARTICULARS NUMBER PERCENTAGE
Above average 5 10%
Average 41 82%
Below average 4 8%
TOTAL 50 100%
(source of data: primary)
INTERPRETATION
From the above table, we can analyse that the 90% of the respondents say that
the quality of the products are average. 10% says that the products are of above
average quality while the rest 8% of the respondents says that the products are
of below average quality.
FIGURE NO.3.11. PRODUCT RATING OF BIG BAZAAR
The following figure will show how the respondents rate the products that are
offered by big bazaar.

below average 8%

above average
average 82%
average
below average

above average 10%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

61
12. DURATION OF USING THE PRODUCTS FROM BIG BAZAAR.
The following table will represent the time span from which the respondents
are using big bazaar to shop their products.
TABLE NO.3.12. DURATION OF USING THE PRODUCTS
TIME SPAN NUMBERS PERCENTAGE
<1 year 10 20%
1-5 years 35 70%
>5 years 5 10%
TOTAL 50 100%
(source of data: primary)
INTERPRETATION
From analysing the data given above, we can analyse that majority, i.e. 70% of
the respondents uses big bazaar to shop the products below 5 years and above 1
year. 20% of the respondents are shopping from big bazaar from less than a year
and only 10% used big bazaar to shop more than 5 years.
FIGURE NO.3.12.DURATION OF USING THE PRODUCTS.
The following figure will represent the time period from which the respondents
uses to shop from big bazaar.

80%

70%

60%

50%

40%
70%
30%

20%

10% 20%
10%
0%
<1 year 1-5 years >5 years

62
13. WILL YOU RECOMMEND THE PRODUCTS OF BIG BAZAAR TO
YOUR FRIENDS AND RELATIVES.
The following table will help to analyse the whether the respondents
will recommend to shop from big bazaar.
TABLE NO.3.13. RECOMMENDED BY RESPONDENTS
OPINION NUMBER PERCENTAGE
Yes 48 96%
No 2 4%
TOTAL 50 100%
(source of data: primary)
INTERPRETATION
From analysing the data given above we observed that every respondent will
recommend their friends and relatives to shop from big bazaar.
FIGURE NO.13. RECOMMENDED BY RESPONDENTS
The following figure will represent the opinion of the respondents.

120%

100%

96%

80%

60%

40%

20%

4%
0%
yes no

63
14. DOES THESE STRATEGIES ATTRACT YOU TO COME AGAIN TO
BIG BAZAAR.
The following table will show the opinion of the respondents regarding whether
these strategies help to come again to big bazaar.
TABLE NO.3.14. OPINION OF THE RESPONDENTS.
OPINION NUMBERS PERCENTAGE
Yes 45 90%
No 5 10%
TOTAL 50 100%
(source of data: primary)
INTERPRETATION
From analysing the data given above we come to the conclusion that 90% of the
respondents are satisfied with the strategies and only 10% are not satisfied with
the strategies of big bazaar.
FIGURE NO.3.14. OPINION OF THE RESPONDENTS
The following figure will show the various opinions of the respondents
regarding the strategies.

100%
90%
90%

80%

70%

60%

50%

40%

30%

20%
10%
10%

0%
yes no

64
15. OPINION ABOUT FUTURE PAY.
The following table will show the opinion of the respondents regarding the
future pay app of big bazaar.
TABLE NO.3.15. OPINION ABOUT FUTURE PAY.
OPINION NUMBER PERCENTAGE
Excellent 5 10%
good 30 60%
average 12 24%
poor 3 6%
Very poor 0 0%
TOTAL 50 100%
(source of data: primary)
INTERPRETATION
From the above table it is observed that majority of the respondents i.e. 60%
says that the future pay app is good and are getting benefits from the app. 24%
says that it is neither good nor bad. While 10% says that the app is very useful
for them and the other 6% says that it is not useful for them.
FIGURE NO.3.15. OPINION ABOUT FUTURE PAY
The following figure will show the opinion of the respondents about the future
pay app.

70%

60%
60%

50%

40%

30%

20% 24%

10%
10%
6% 0%
0%
excellent good average poor very poor

65
16. OPINION ABOUT PROFIT CLUB
The following table will represent the opinions of the respondents about
the profit club of big bazaar.
TABLE NO.3.16. OPINION ABOUT PROFIT CLUB
OPINION NUMBER PERCENTAGE
Excellent 0 0%
good 2 4%
average 5 10%
poor 43 86%
Very poor 0 0%
TOTAL 50 100%
(source of data: primary)
INTERPRETATION
From the above table it is observed that 86% of the respondents does not think
that the profit club is effective while 10% says that they didn’t like nor dislike it.
The rest 4 % says that it is useful for them.
FIGURE NO.3.16.OPINION ABOUT PROFIT CLUB
The following figure will show the opinions of the respondents about the profit
club of big bazaar.

90%

80%

70%

60%

50%
86%
40%

30%

20%

10% 10%
4%
0% 0%
0%
EXCELLENT GOOD AVERAGE POOR VERY POOR

66
17. PROMOTIONAL ACTIVITIES WHICH NEED IMPROVEMENT.
The following table will represent the promotional activity that
need better improvement.
TABLE NO.3.17. PROMOTIONAL ACTIVITIES WHICH NEED
IMPROVEMENT.
PARTICULARS NUMBER PERCENTAGE
Payback offer 0 0%
Monthly saving offer 0 0%
Gift voucher 3 6%
Big day offer 0 0%
Exchange mela 10 20%
Profit club 7 14%
Future pay app 0 0%
T24 Free recharge 30 60%
TOTAL 50 100%
( source of data: primary)
INTERPRETATION
From the above table it is interpreted that 60% of the respondents says that t24
free recharge need better improvement and other 20% says that the exchange
mela needs improvement and 14% of respondents says that profit club needs
improvement while only 6% suggested that gift vouchers needs to be improved.
The following figure will represent the promotional activity that need better
improvement.
FIGURE NO.3.17. PROMOTIONAL ACTIVITIES WHICH NEED
IMPROVEMENT.

70%
60%
60%

50%

40%

30%
20%
20% 14%
10% 6%
0% 0% 0% 0%
0%
Payback Monthly Gift Big day Exchange Profit club Future pay
T24 Free
offer saving voucher offer mela app recharge
offer

67
18. OVERALL RATING OF BIG BAZAAR.
The following table will represent the overall rating of big bazaar
provided by the respondents.
TABLE NO.3. 18. OVERALL RATING OF BIG BAZAAR.
PARTICULARS NUMBER PERCENTAGE
Excellent 43 86%
Good 5 10%
Average 1 2%
Poor 1 2%
Very poor 0 0%
TOTAL 50
100%
(Source of data: primary)
INTERPRETATION
From the above table we can analyse that 86% of the respondents think that the
overall performance of big bazaar is excellent and 10% gave the opinion that the
performance is good and only 2% said the performance is average and only 2%
of the respondents Rate the performance as bad.
FIGURE NO.3.18. OVERALL RATING OF BIG BAZAAR.
The following figure represents the opinion about the overall performance of
big bazaar by the respondents.

86%
90%

80%

70%

60%

50%

40%

30% 22%

20%
10%
10% 2%
0%
0%
excellent good average poor very poor

68
CHAPTER-4
FINDINGS

69
 FINDINGS

According to the study conducted on the topic “A study on Impact of sales

promotion techniques on customer loyalty of big bazaar” the findings of the study
are as follows:

1. The various sales promotional techniques that are used by big bazaar are as follows:
offers, Payback offers, Monthly saving offers, Gift vouchers, Big day offer, Profit
club, exchange mela, t24 free recharge and Future pay app.

2. Among the various sales promotional techniques the most preferred technique is
payback offer.

3. Big Bazaar has been preferred by most of the households frequently and they
use to purchase daily requirement material from there. While still 24% of people don’t
prefer to buy daily requirement items from organized formats

4. M o s t o f t h e c u s t o m e r s f e e l satisfied with the promotional programs that are

offered by Big Bazaar so it has been successful in fulfilling customer’s expectations.
While 8%-10% of customers still want to get some more benefits in return of their
loyalty to the store.

5. Customers feel motivated to shop from Big Bazaar due to their loyalty
programs.

6. Some customers are not aware with the benefits of the loyalty programs.

7. The various kinds of offers that are provided by big bazaar helps a lot to attract
the customers.

8. Most of the customers are not aware of the t24 free recharge (big bazaar telecom
service).

9. Newspaper advertising is the most effective method to convey the offers to the
customers.

70
 SUGGESTIONS

1. The company should focus on t24 free recharge (big bazaar telecom service),
because this scheme was not reach for many customers. Many of the customers
suggest that t24 need better improvement.

2. The pay back offer is one of the most important loyalty program of big bazaar,
the company should appoint an employee to convey the details of the payback
offers to the customers.

3. Advertising is the basic and most prominent tool to increase the awareness of
product. So, Big Bazaar should use this tool. The advertisements of the company
is also in neutral for most of the customers. The company should frequently
telecast about the products and offers of the company.

4. Do the better way of the exchange mela for the customers. For example, instead
of giving the discount coupons give any products which worth for the old one.

5. Store must work upon its idea of shopping at home facility and also
delivery facilities should be improved.

6. The profit club of big bazaar is beneficial for the customers but they are not
properly aware of its benefits. The company should concentrate on this and should
take necessary steps to make the customers aware of it.

7. Retail business is successful only when they have a good customer services.
Customer loyalty can only be gain by providing good or satisfied services to the
customers.

71
 CONCLUSION

In my 30 days study on the sales promotional techniques of big bazaar and their
impact on customer loyalty I have concluded the following:

The retail industry in India is likely to grow every year but then also the India
fallen downwards in the world ranking just not only because of the different
government policies which needs some amendments but also because the
Retailers are not able to understand their customer and failed to make a strong
bond between them. The big bazaar is the top most retail industry in India with
251 stores in 101 cities.

The customers are interested to do shopping at one place where they get all the
products from pin to fin under one roof so they rush to the Big Bazaar. In this
manner they once come in the store then they must come again and become our
regular customer, for this the loyalty programs are offered to them. Some
customers are not aware of these loyalty programs but then also they visit the
store frequently and do their shopping which is strange to hear. Most of the
customers buying decision are depended on the offers that are provided. Its time
to understand the customers want and to increase the sales and loyalty of
consumer.

72
 BIBLIOGRAPHY

BOOK REFERENCE

1.Customer loyalty- how to earn it, how to keep it. - jill griffin

2.Retail management - Gibson G. vedamani

3.Marketing management - sreedhar p nair.

SITE REFERENCE

1.www.google.co.in

2.www.bigbazzar.com

3.www.managementparadise.com

4.www.scribd.com

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 APPENDIX

QUESTIONNAIRE

TOPIC: A study on impact of sales promotion techniques on customer

loyalty of big bazaar, Ernakulam.

NAME :
1. Do you frequently shop at Big bazaar?

Yes
No

2. Why you choose big bazaar?

Near your home

Customer service
Offers
Others

3. How frequently you shop at big bazaar?

Every week
Once in 2 week
Once in a month

4. Through which media you came to know about big bazaar?

T.V advertising
Hoardings
Newspapers
Others

5. What attracts you to buy product from big bazaar?

Offers
Product availability

74
 Quality
Others

6. Are you aware of the promotional activities of big bazaar?

Yes
No

7. The promotional activities of big bazaar are attractive and induce me to make a
purchase.
Strongly agree
Agree
Neutral
Disagree
Strongly disagree

8. In which sales promotional activities are you satisfied in big bazaar?

Payback offer
Monthly saving offer
Gift voucher
Big day offer
Profit club
Future pay app
Other

9. What do you think about exchange mela?

Excellent
Good
Average
Poor
Very poor

10. What is our opinion about big bazaar’s advertisement?

75
 Highly satisfied
Satisfied
Average
Dissatisfied
Highly dissatisfied

11.How will you rate the products offered by big bazaar?

Below average

Average

Above average

12.How long have you been using the product of big bazaar?
<1 year
1-5 year
>5 years

13.Will you recommend the products of big bazaar to your friends and relatives?
Yes
No

14.Does this strategies attract you to come again to big bazaar?

Yes
No

15.Your opinion about future pay app?

Excellent
Good
Average
Poor
Very poor

76
16.Your opinion about profit club?
Excellent
Good
Average
Poor
Very poor

17.Which promotional activities need better improvement in big bazaar?

Payback offer
Monthly saving offer
Gift voucher
Big day offer
Profit club
Future pay app
T24 Free recharge

18.How will you rate big bazaar overall?

Excellent
Good
Average
Poor
Very poor

77
78