effect of coupon on deals on dairy product sales

REPORT Of

BUSINESS COMMUNICATION

EFFECT OF COUPON DEALS ON DAIRY PRODUCT SALES

Presented To:

Madam Saiqa Imtiaz Asif

Presented By:

Ghulam Khadija Roll # 13Shagef Akram Roll # 17Amara Fayyaz Roll # 45

MBA (I) 2nd Semester27-11-2000

Department of Business

Administration

Bahauddin Zakariya University, Multan

CONTENTS

1- INTRODUCTION

2- BODY OF REPORT

3- CONCLUSION

4- RECOMMENDATION

5- GRAPHS

INTRODUCTION

For many year green Valley Dairies, Inc. was using a Coupon Plan to

promote its product, with the help of grocers. For this they applied the

technique of newspaper advertisement of cooperating grocers. This incentive

plan includes discount on nine categories of their products and this discount

cost will be covered by green valley themselves rather than the grocers.

They were sure that campaign would increase their sale, thereby overcoming

these costs. Management felt that the plan had been successful but they had

no hard facts. So, a research was conducted to evaluate the effects of

Coupon deals a dairy products sales. So a panel of 500 household were

selected. Each was requested to keep a diary of dairy products purchases and

sales figure were calculated before and after discount deals.

BODY OF THE REPORT

Dairy records were submitted by the respondents and they covered three

periods.

1- Two week period, ending one month before the discount period.

2- Two week period in which discount was offered.

3- Two week period beginning while month after the discount period.

This plan was made to determine short run and long run effects of this

offer.

Average qualities of dairy products

purchased by house holds two-week

periods before, during and after coupon

promotion.

Product group Before During After (During)

% age

% age

(After)

Fluid Milk (Half gallons) 5.9 7.6 5.9 29% 0%

Cottage cheese (Pounds) 1.3 3.7 1.7 184% 31%

Yogurt (half Pints) 1.7 5.8 2.2 24% 29%

Ice cream (gallons) 0.7 1.5 0.9 114% 28%

Ice Milk (gallons) 0.4 1.4 0.6 250% 50%

Process cheese (pounds) 0.7 2.9 0.7 314% 0%

Natural cheese (pounds) 0.7 2.7 1.1 286% 57%

Butler (Pounds) 1.2 2.8 1.2 133% 0%

Cream Products (Pints) 1.2 1.9 1.2 58% 0%

13.8

30.3 15.5 120% 12%

1. FLUID MILK

The table shows the effect of discount on sales of fluid milk. The sale

before this incentive was 5.9 half-gallons by an average consumer.

During those two weeks in which discount was offered, Sales rose to 7-6

half-gallon which shows that discount offered has positive impact an

sales.

The data calculated after the discount offered was withdrawn, sales again

come to the original place of 5.9 half-gallons.

2. COTTAGE CHOOSE

The consumption of cottage cheese during the discount

period was increased and it raises the sales to 180% when the

discount was withdrawn. The level of increase was only 31%. It means

that after the withdrawn of discount sales continue to increase but at

lower rate.

3. YOGURT

The effect of discount an yogurt consumption was in upward

direction and sales figure increased to 241% to this Item However

after this discount period the sale of yogurt increased 29% as

compared to original sales.

4. ICE CREAM

114% increase in sales of ice cream was observed during the

discount period and sale-figure continued to grow 28% even after the

discount period.

5. ICE MILK

The percentage of increase in sales of ice-milk was observed 114%

during the discount period while there was even 50% increase in sales

when the discount was withdrawn.

6. PROCESS CHEESE

There was 314% increase in sale of process cheese when the

discount was offered. However sales figure again came to original. Level

when the discount was withdrawn

7. NATURAL CHEESE

The consumption of natural cheese showed an increase

During discount period, which results in 286% increase in

sales.57% increase in sales was observed after the end of discount period.

8. CREAM PRODUCTS

Cream product showed 58% increase during discount period.

however after discount period sales again came to original position.

BUTTER

During discount period the sale of butter raise to 133% however sales again

come to original position after end of discount period.

After this we selected one item fluid milk from these items category and

calculated the relationship between demographic characteristics and effect of

coupen discount on sales. Necessary calculations are as below:

Total effects of coupen discount promotion on sales of fluid milk by

demographic characteristic percentage change from before period.

Demographic During After

Education

Grade school +58 +27

High school +28 +8

College +20 -1

OCCUPATION

Labour and crafts +41 +5

Professional and clerical +14 -7

Farmer +41 -9

Retired and unemployed +69 +17

RACE

White +27 -3

Non-white +68 +14

EMPLOYMENT STATUS

Wife employed +54 +7

Wife unemployed +6 0

CITY SIZE

Less than 2,500 +28 -1

2500-49,999 +26 -2

50,000-49,99999 +28 +9

500,000-999,999 +39 +17

1,000,000 and over +33 +13

INCOME OF HOUSEHOLD

$30,000 and over +43 +4

$20,000-$29,999 +17 +2

$15,000-$19,999 +21 +1

$10,000-$14,999 +8 +3

Under $10,000 +49 0

We covered almost all the demographic characteristics of our target

population in this research. The objective was to find how different

categories of population respond towards the some discount offered on the

sale of certain dairy products.

EDUCATION

The consumption of fluid milk by grade school children was increased and it

results in 58% increase in sale during discount period and 27% increase was

observed after withdrawn of discount 28% increase in sales was observed

during the increase the consumption of high school students and this

category has contributed to 8% increase in sales even if the discount was

withdrawn.

However during the discount period college students increased the

consumption by 20% but after discount they reduced the consumption of

fluid milk and which results in 1% decline in sales figure.

OCCUPATION

In this category the response of people form different occupation towards

incentive system was observed 41% increase in sales was observed during

discount period because of the increase consumption from people in

professions of labour and farming. However after discount period 5%

increase in sales was contributed by labourers and craftsman while farmer

decrease these consumption by 9%. During discount period professionals

and clerical, retired and unemployed increased the consumption of fluid

milk, while after the discount 7% decrease in consumption was observed

from professionals and clerical people while retired and unemployed people

showed 17% increase in consumption compared to consumption before

discount period.

RACE

New white people show positive response towards sales during the discount

period. However after the discount period white people reduced their

consumption.

EMPLOYMENT STATUS

It both the members of the family are employed then more increase in sales

was observed as compare to family where wife is unemployed.

CITY SIZE

The area having population between 500,000 – 499,999 showed more

response towards increase in sale during discount.

INCOME OF HOUSEHOLDS

People having income level under $10,000 available the maximum discount

opportunity and showed 49% increase in sales.

CONCLUSION

After collection and analysis we conclude that overall effect of discount on

sales was in direction and it increase the total sale figure to 120% during the

discount and even after the discount was withdrawn 12% increase in sales, in

sales, compared to the original sales before discount was observed which

shows that discount has the positive impact an future sales.

726% increase in sales was observed from all the demographic

characteristics of population during the discount and 10% increase in sales

was even observed after the discount.

RECOMMENDATION

Green Valley dairies should continue such kind of incentive plans

in future which will help in increasing their revenues and in

return their profits will also increase.

Before

During

After