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STUDY AND ANALYSE HOW SALES PROMOTION ACTIVITIES INCREASES THE CUSTOMER ACQUISITION ADN RETENTION FOR SAMSUNG AND NOKIA

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Page 1: Study and analyse hwo sales promotion actvigties increases[1]

STUDY AND ANALYSE HOW SALES PROMOTION ACTIVITIES INCREASES THE CUSTOMER ACQUISITION ADN RETENTION FOR SAMSUNG AND NOKIA

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EXECUTIVE SUMMARY

Sales promotion in companies has traditionally been a local affair. Subsidiary managers,

primarily brand managers, have enjoyed great latitude in the formulation and implementation

of promotional programs close to their markets. Although global marketing is influencing

traditional decision making in areas such as product line, branding, pricing, and advertising, it

has had little influence on sales promotion. But for some companies that may be about to

change.

NOKIA experiences with laissez-faire in sales promotion are typical of the problems faced by

many s. In the early 1990s, management delegated to the local organizations many decisions

that had traditionally been made or strongly influenced by the headquarters. Of all marketing

decisions, only branding and packaging were kept at the centre. The rest, including consumer

and trade promotions, became the domain of the company's country operations around the

world.

Although decentralization has helped enhance Samsung’s performance internationally, it has

been less than satisfactory in sales promotion. The problem has to do with two developments

over time: a worldwide shift in emphasis and budget allocation in favor of sales promotion

and away from media advertising, and increasing reliance on price promotion to boost short-

term local sales results, particularly in countries with a powerful trade and/or limited

electronic media advertising. The outcome: reduced brand profitability, contradictory brand

communication, and a serious potential for dilution of brand franchises with consumers.

Today both organisation NOKIA & SAMSUNG is trying to put some central direction back

into its whole country communication practices, including sales promotion. Management is

painfully aware of the damage "brand management by calculators" and "commodity

promotion" can do to its international brands and their long-term profitability. Laissez-faire in

sales promotion is no longer considered a virtue at both of the Mobile handset giants.For

some global brands, the importance of promotion in the marketing mix varies dramatically

from one country to another.

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INTRODUCTION

Sales promotion refers to many kinds of incentives and techniques directed towards

consumers and traders with the intention to produce immediate or short-term sales effects. 

Definition:

“Sales promotion includes incentive-offering and interest-creating activities which are

generally short-term marketing events other than advertising, personal selling, publicity and

direct marketing. The purpose of sales promotion is to stimulate, motivate and influence the

purchase and other desired behavioral responses of the firm’s customers.”

More on it...

Sales promotion offers a direct inducement to act by providing extra worth over and above

what is built into the product at its normal price. These temporary inducements are offered

usually at a time and place where the buying decision is made. Not only are sales promotions

very common in the current competitive market conditions, they are increasing at a fast

apace. These promotions are direct inducements. In spite of the directness, sales promotions

are fairly complicated and a rich tool of marketing with innumerable creative possibilities

limited only by the imagination of promotion planners. Sales promotion is often referred to

by the names of ‘extra purchase value’ and ‘below-the-line selling’. 

 Used to achieve short-term sales :

Sales promotion is a separate and distinct element in the promotion mix and is an important

and powerful tool of marketing. The aim of sales promotion is goal-oriented to achieve

sales/marketing objectives which are short-term and immediate.

Becoming too common :

Today we find companies in almost all sectors offering some sort of a promotion scheme.

These sectors range from automobiles to beverages, from financial services to foods, from

household durables to services, from household products to business products, from personal

care to textiles and apparel.  

Writing about sales promotion tools, Prof. Philip Kotler observes – “they have 3 distinctive

characteristics.” 

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1. Communication: they gain attention and usually provide information that may lead

the customer to the product.

2. Incentive: they incorporate some concession, inducement, or contribution that gives

value to the consumer.

3. Invitation: they include a distinct invitation to engage in the transaction now (offer

valid till …or till stocks last)

 Major users of sales promotions are marketers of soaps, detergents, toiletries, soft drinks,

toothpastes, tea, coffee, footwear, textiles, readymade garments, consumer durable goods,

music systems, autos, televisions, washing machines, microwave ovens, refrigerators, s and

many other household items. In fact the list of product categories using sales promotion is

ever-increasing, no matter what the product category, it could be staples, impulse goods,

emergency goods shopping goods, speciality goods, unsought goods, industrial products, or

different types of services.  

Sales promotion is now established as an important and increasingly respectable element of

the marketing communication tools. Sales promotion expenditures are increasing

dramatically, and economic recession is most likely to fuel this trend further.

Advantages of sales promotion

 Sales promotions have a significant effect on the behaviour of consumers and trades people. 

Such promotions can bring in more profits for the manufacturers because they permit price

discrimination. 

Price discrimination

Producers can introduce price discrimination through the use of sales promotions.  They can

charge different prices to different consumers and trade segments depending on how sensitive

each segment is to particular prices.  Coupons, special sales events, clearance sales and

discounts are examples to explain the phenomenon.

Often such price discrimination are offered in specific cities in the country, .

Such price discriminating sales promotions that enable consumers and traders to pay less in

certain market area or stores usually bring in more contribution than if one price is charged to

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all.  Such price discrimination also held in adjusting to fluctuations in demand and supply

situation without affecting any changes in the list price. 

Effect on consumer behaviour

As sales promotions are mostly announced for a short period, customers may feel a sense of

urgency and stop comparing the alternatives.  They are persuaded to act now rather than later.

With every 500g pack of Bournvita, you get a free mug . Offer valid only till stocks last. 

 

 

 In our over communicated society and because of selective attention, it is not uncommon to

ignore many advertisements.  Sales promotion deals such as discounts, debates, coupons,

premiums, etc also increased the attention getting power of advertisements and convey the

advantages and benefits of the brand, including price information. By using promotions,

marketers can reach the deal prone customers and encourage brand switching.   

Effect on trade behaviour

Short-term promotions present an opportunity and encourage dealers to forward by. This

forward buying ensures that retailers won’t to go out of stocks.  As dealers have more than

the normal stocks, they think it advisable to advertise in local media, arranged displays and

offer attractive promotion deals to consumers.  These actions help in increasing the store

traffic.   

Retailer promotion: Buy Cadbury’s products worth Rs.3000/- and get any 30

chocolates worth Rs.5 each free.

Buy a box of Munch and get 1 Munch free.

 

Regional Differences  

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The South is generally characterised by greater degree of going out and people tend to drink

outside the house. The Tamilian, consumer in particular, is value oriented, rational and looks

up to film stars, while the Keralite is more international in his Mobile Handset company . The

Bangalorean is as cosmopolitan as his Mumbai or Delhi counterpart."

That sort of diversity believes Coca-Cola, calls for a corresponding variety in promotions. 

The place to attract is the retail zone.  Coca-Cola recently launched a promotion called '

world of Coca-Cola' covering Chennai in Tamil Nadu and Bangalore and Mysore in

Karnataka.  It was a value deal, aimed at the consumer disposed towards global- style

outings.  The consumer pays Rs 20 along with a label of a 500 ml of PET bottle to get a card

that entitles him to gifts and discounts at 29 outlets, including those of global chains such as

TGI Friday and Baskin and Robbins this, in these cities.  About four years ago, Pepsi had a

similar promotion with its Pep cards.  This, however was on a national level, while the Coca-

Cola promotion is South based build retail level activity matters more than it does in the

North.  The primary aim is to help the retail raise volumes.

Disadvantages of sales promotions

 

While sales promotion is a powerful and effective method to produce immediate short term

positive results, it is not a cure for a bad product or bad advertising.  In fact, a promotion is

speed up the killing of a bad product.   

Increased price sensitivity

Frequently promoted brands in the product category, especially on the basis of price, make

consumers and traders more price sensitive not only for the promoted brands but for other

brands as well in the same product category.

Consumers wait for the promotion deals to be announced and then purchase the product. 

This is true even for brands where brand loyalty exists.  Customers wait and time their

purchases to coincide with promotional offers on their preferred brands.   

Quality image may become tarnished

If the promotions in a product category have been rare, or the product happens to be of high

involvement category, the promotions could have a negative effect about its quality image.

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Consumers may start suspecting that perhaps the product has not been selling well, the

quality of the product is true compared to the price or the product is likely to be discontinued

because it has become outdated.  

Dealers forward buy and divert stocks

In case of deals for the trade, many dealers forward buy, in excess of their inventory

requirements.  This is particularly happens if a product is low bulk, much in demand and the

inventory holding costs are favourably low.  This is true both for wholesalers as well as

retailers. Forward buying of excessive stocks on deals or quantity discounts can lead to

diversion of some of the stocks in non-deal areas.  Forward buying of excessive stocks on

deals or quantity discounts can lead to diversion of some of the stocks in non- deal areas.  

Wholesalers and retailers do not hesitate in selling these excess stocks in non- deal areas on

prices that are less than the list price, but keeping some reasonable margin for themselves. 

This is likely to have a negative effect on price discrimination efforts of the company as

dealers and those areas would not be buying even the normal requirements from the

company. 

Merchandising support from dealers is doubtful

One of the trade promotions tool is to offer promotional allowances to trade people to

motivate them to provide merchandising support and to pass on some benefit to consumers.

This generally is the condition attached with such promotional allowances.  In many cases,

the dealers do not cooperate in providing the merchandising support nor do they pass on any

benefit to consumers. The retailer might not be willing to give support because he does not

have the place, or the product does not sell much in his shop, or may be he thinks the effort

required is more than the commission/benefit derived.  

 

Short-term orientation

Sales promotions are generally for a short duration.  This gives a boost to sales for a short

period.  This short-term orientation may sometimes have negative effects on long-term future

of the organization.  Promotions mostly build short-term sales volume that is not maintained. 

Heavy use of sales promotion, in certain product categories, may be responsible for causing

brand quality image dilution. 

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The argument given in favour is that companies should develop superior products or services

which are better than competitors and consumer should be convinced through appropriate and

focused advertising about the superiority of the product and its image. 

This will result in lasting brand identities reflecting brand image will keep customers loyal to

the brand. 

Difference Between Advertising And Sales Promotion

Advertising Sales Promotions

By using a variety of persuasive appeals, it

offers reasons to buy a product or service.

Besides giving reasons in the form of

different appeals, they offer incentive to

the consumers to buy the product or

service now.

Appeals are emotional or functional in

nature

Appeals are rational

Time-frame is long term Time frame is short term

The primary objective is to create an

enduring brand image

To get sales quickly or to induce trial.

Indirect and subtle approach towards

persuading customers to buy a product or

service

Direct in approach to induce consumers to

buy a product or service immediately by

temporarily changing the existing price-

value relationship of the product or

service.

 

 

 

 

But both advertising and sales promotions go hand in hand. Both are very essential to achieve

success. Both are complementary to each other.

Reasons For Rapid Growth Of Sales Promotion

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There are a number of reasons that are favorable to the growth of sales promotion:

Increasing Competition

The air of change is gaining momentum after the introduction of economic liberalisation. Due

to increase in competition, companies are finding it increasingly difficult to compete on

quality. They are therefore resorting to more and innovative methods of sales promotion.

Customers Have Become More Price Sensitive

This increased price sensitivity is a direct result of rampant inflation. Economic recession is

likely to fuel this trend further, as consumers and dealers become more sensitive towards

prices.  

Sales Promotions Generally Create An Immediate Positive Impact On Sales

Advertising, personal selling and other methods of promotion produce slower sales response

compared to sales promotion. Sales promotions are mostly for short duration, for a specified

period, leading to a sense of urgency in consumers to buy now. This creates an immediate

positive impact on sales. With careful planning, it would not be difficult to measure the

impact on sales volume and profit, and see the consequences of running the promotion even

on weekly or daily basis.  

Products have become more standardized

In many product categories, there is a proliferation of brands; many of them are line

extensions and me-too brands. Most brands are being perceived by consumers to be more or

less similar within a given price range because of the inability of manufacturers to develop

truly differentiated products. Under these circumstances, advertising messages are unable to

strongly influence the consumers’ perceptions and create brand franchise. As a result of these

perceptions of similarity among brands, marketers have no way but to compete on the basis

of extra benefit offered through sales promotion. Competing companies struggle to capture

market share by using every tool likely to bring sales success. 

Consumer Acceptance

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As competition intensifies and promotions proliferate, consumers have learnt to earn the

rewards of being smart shoppers. Over a period of time, they have also learnt that brands on

promotion are not necessarily of lower quality.

Woodland has a scheme of upto 50% off on Woodland shoes and apparel.

This learning based on experience, gets transferred to other product categories as well.

Consumers have learnt that promotions are being extended to many product categories where

such promotions were unheard of.  

Expectations Of Price Decrease

With the entry of many different brands of consumer durable products in the same product

category, consumers anticipate that the prices of durable goods will come down. This

encourages them to postpone their purchases. To speed up the purchase in this segment of

consumers, sales promotions are an effective and attractive method. Consumers evaluate the

incentives associated with their purchase decision and are motivated to act now, rather than

wait for the anticipated decrease in price. The marketers should ensure that the extra benefit

is attractive enough to create a sense of urgency in consumers. 

Advertising Has Become More Expensive And Less Effective

All the advertising media have become quite expensive. Audio-visual medium, which is

considered as the most effective for short-duration ads, may cost in excess of Rs. 1 lakh for a

10 second exposure during prime time. In many cases, consumers have reached a point of

boredom due to excessive advertising on TV. Some consumers even consider advertising as

an intrusion into their privacy, leading to zapping (surfing channels). Firms with small

budgets cannot compete with big companies which spend huge sums of money on

advertising. For these small budget firms, sales promotion is a more cost-effective promotion

method to produce sales results.  

 

Trade Has Become More Powerful

Retailers and wholesalers have become powerful and find themselves in a position to demand

extra facilities from the companies. They Channel members demand more incentives to get

the desired results. Manufacturers do not seem to have any alternatives but to concede to their

demands, keeping in view the competitive market conditions.

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Pepsi offers silver coins to their dealers stocking Pepsi cases during Diwali season.

And the promotions offer differs across dealers.

 

Emphasis On Sales Volumes

Towards achieving the long-term profit goals, manufacturers try to attain high sales volume.

Brand managers and product managers find themselves under pressure to achieve short-term

sales results for the sake of their careers. Compared to any other promotional method, sales

promotion is a more effective method to generate short-term sales volume.  

Sales Promotions Maximize Profits

A number of economic theories conclude that a company can maximise profits by using sales

promotion. Such promotions can permit price discrimination by allowing the brand to

compete in 2 or more different market segments. Sales promotion may allow a premium

brand to compete with a lower tier brand among price sensitive consumers. For example, a

premium band of toilet soap may be on promotion in some price sensitive markets, while in

the remaining markets it is sold at its normal price. 

Introducing An Element Of Interest

There are a number of promotions which are often called interest promotions. Some of the

more popular interest promotion techniques are samples, contests, and sweepstakes, free

premiums and mail-in premiums. These promotions create an element of interest and

excitement, and consumers enjoy these and response enthusiastically to such contests and

sweepstakes, etc.  

 

Impulse Buying Is Increasing

The number of marginal customers is increasing. Displays at the point of purchases lead to

impulse buying by consumers, more so if the items on display are not expensive. There is a

popular saying in Hindi, “jo dikhta hai, voh bikta hai.”

This strategy is followed by soft drink majors like Pepsi and Coke on a large scale. They pay

huge sums of money to keep their products in front so that they are visible.

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These are also known as display promotions 

Sales Promotion Specialists Are Available  

As a result of economic liberalisation, the number of management institutions has increased.

This has lead to the availability of specialists, who are not only well paid but can handle this

specialised work more efficiently in the current market conditions, where sales promotion has

become more important. 

Excess Stocks

Because of increasing number of brands, it is difficult for manufacturers and dealers to

anticipate future sales. This, at times, leads to excessive inventories, and the quickest way to

clear that, is to go for sales promotion. Footwear companies like Bata, Woodland, etc

regularly offer around 50% discount on their products. 

 

Pull And Push Strategies

 

Sales promotion decisions are significantly affected by whether the company decides to do to

pull or push strategies to accomplish its objectives.  Such a decision may require a little or a

lot of cooperation from resellers.  The requirements to implement one strategy might be little

more than to just stock the product by the retailers.  The other strategy may demand more

participation from resellers such as the ability to explain to the consumers as to how a product

works. 

In case of using a pull strategy, marketing efforts are directed at the ultimate consumer and

consumer promotions such as consumer contests and sweepstakes, rebates, coupons, free

samples, consumer premiums, etc are used.  If this strategy is also chosen to include

advertising, there are large advertising expenditures.  The objective of such promotional

efforts would be to create sufficient consumer demand to pull the product through the

channels, that is the consumers are encouraged to demand the product from retailers who in

torn place orders with wholesaler or manufacturer to meet the consumer demand.

  PULL

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 This strategy may require little promotional efforts from the resellers except to stock input

the product on shelves.

A pull strategy is appropriate when

The product demand as high. 

It is possible to differentiate the product on the basis of real or emotional features,

Brand consumers show high degree of involvement in the product purchase,

There is reasonably highly brand loyalty and consumers make brand choice decision

before they go to the store.

PUSH

If a firm decides to use push strategy, its efforts are directed at resellers and the manufacturer

becomes very dependent on their personal selling abilities and efforts.  The promotional

efforts are focused at pushing the product through the distribution channels; the resellers may

be required to display, demonstrate and offer discounts, to sell the product.  The

communication to resellers is generally through trade circulars or the sales force. 

PUSH 

 

 

Push strategies generally appropriate for product categories where there is low brand loyalty

and many acceptable substitutes are available in the market.  It may also be suitable for

relatively new products or when the brand choice is often made in response to displays in the

stores, the product purchase is unplanned or on impulse and the consumer is familiar and has

reasonably adequate knowledge about the product.  Manufacturers, who cannot afford to

engage in sustained mass advertising, often use push strategy and offer effective incentives to

dealers. 

Retailer promotion: Buy Cadbury’s products worth Rs.3000/- and get any 30 chocolates

worth Rs.5 each free.

Through this offer the company is pushing its product to the retailers and now that the retailer has

enough incentive the retailer stocks more and thus it becomes essential for the retailer to push the

product to the consumers.

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Pull promotions

(Manufacturer to consumer)

Push promotions

(Offered to trade)

Push promotions

(Offered by retailer)

Sampling

Coupons

Price packs

Rebates

Continuity programs

Contests

Sweepstakes

Tie-in promotion

Financing incentives

Special events

Premiums

Bonus packs

Exchange offers

Discounts

Display allowance

Advertising allowance

Free goods

Contests

Trade coupons

Quantity discounts

Price cut

Free goods

Premiums

Displays

Feature advertising

Quantity discount

Clearance sale

Product life cycle and pull or push strategies

 It is quite important for brand managers to analyze and identify the stage of a particular

brand in its life cycle before deciding about using sales promotion.  During the stage of

product introductions, a product requires different sales promotional tactics.

Likewise, during the product growth stage, its maturity and the decline stages, the sales

promotion tactics required are likely to be quite different.  Promotional strategies are also

likely to be affected for different non-durable and durable products.  Also important in the

development of promotional strategy would be the target audience is towards whom the 

Introduction stage

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When the product is being introduced, the major objective is to increase the trial rate and

distribution of the product.  For increasing trial sampling, coupons, demonstration which are

all pull promotions, can be used.  To make the product available in distribution channels, it

may become necessary to use some kind of incentive scheme for the resellers to encourage

them and minimise their risk associating stalking a new product.  Manufacturers can offer

display allowances to resellers to make the product highly visible.  There could be liberal

guarantees to take back the stocks, if unsold, to reassure the trader.  These are all push

promotions.  For most new products, it would be difficult to be successful without pull

promotions.  In fact when new products are introduced, much more emphasis is given to pull

rather than push promotions.

Cadbury is introducing the new brand bytes having an introductory offer Rs5 off

which will be available through the coupons that are distributed with newspapers like

the Times of India.

 Growth stage

In this stage, the dominant objectives are to expand the market for increasing the number of

new customers who would try the product for the first time and to encourage the repeat

purchase by those who have already tried the product.  Another important objective is to

expand or at least maintain the distribution.  For increasing trial, pull promotions are

appropriate however as the trial rate increases free samples become quite an expensive

proposition.  To encourage repeat purchase by consumers, in pack or on-pack coupons can be

used. 

This would also help in converting those customers who have already tried the product into

regular users of the product.  Another tool of sales promotion that can be used is to offer

bonus packs containing additional quantity at the same price as an incentive to encourage

repeat purchase.  To expand the distribution, push promotions such as different types of

discounts, free goods that increase the profitability of the trade, can be used. 

Maturity stage

When the product is in maturity stage, many similar brands are available to customers.  Due

to price discounts or other extra benefits, consumers often switched brands.  This

phenomenon of brand switching is more common if the product category happens to be one

of low involvement.  The sales promotional strategy in this stage can focus on attracting

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maximum number of brand switchers, reward and reinforce the loyalty of regular users and

use more of push promotions to build inventories with resellers.  Many tools of sales

promotion such as premiums, price discounts, extra goods, displays, dealer contests, feature

advertising become important.

Generally a combination of pull and push promotions prove more effective during maturity

stage of a product life cycle.  The market share of the brand is an important factor in gaining

the support of resellers. 

Techniques Of Sales Promotions

Consumer market sales

promotions

Trade sales promotions Sales force sales promotions

Price discounts Off-Invoice Allowance Sales contests

Price pack deals Buying allowance Incentives

Rebates/refunds Display and advertising

allowance

Awards and prizes

Continuity programs Buy back allowance Premiums (gifts)

Coupons Bill back allowance Sales meetings

Samples Count and recount

allowance

Training

Contests and sweepstakes Slotting allowance Sales manuals etc.

Premiums and advertising

specialties

Merchandise allowance  

Free trials POP displays  

Brand placement Cash rebate  

Event sponsorship Free goods  

Product warranties Trade coupons  

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Exchange offers Dealer listing  

Internet promotions Dealer loaders  

Low interest financing Sales contests  

Free service camps SPIFFS (push money)  

  Incentives  

  Sales training programs  

  Trade shows  

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Statement of research & hypothesis

The major objective of the study is

“To analyze the Sales promotion activities for the Samsung and Nokia and its customer

acquisition and retention strategy”

The consumer durable market has grown considerably in last few years in India. With the

growth, the level of competition has grown as well. Literally every day companies come up

with new attractive offers to grab the better share of the market. The challenge is not only to

get the new customer but also to continue with the existing customers

Hypotheses of the study

H0: Sales promotion activity increases the customer acquisition.

H1: Sales promotion activity does not help to retain the existing much longer period.

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SCOPE OF STUDY:

1. The study is being taken on the consumers in Amity and Friends circle.

2. Analysing sales promotional strategy of Samsung with other Nokia

Research design

The research design will help in the arrangement of conditions for collection, and analysis of

data as it is a conceptual structure which depicts the advance planning of the methods to be

adopted for collecting data and the techniques used in the analysis, keeping in view the

objective of the dissertation.

While choosing products/ brands for this study number of criteria was kept in mind. As the

study was focused on youth, it was decided to select products, which are used by youth either

individually or along with their families. It may be mentioned that youth are strong influences

on family purchase decisions. The youth exert a big influence on the purchase decisions of

their parents. In addition to providing ‘helpful’ advice to parents, they are increasingly

buying products on behalf of the family.

Research Design: Exploratory research study

Research Duration:

Type of Data: Secondary and Primary

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Methodology

The questionnaire was prepared. It was a structured questionnaire (appendices)

The Data was collected from 200 customer of Nokia and Samsung through walk in mobile

handset dealers store and via mail on www.surveyshare.com

“Research is the systematic design, collection, analysis and reporting of data and findings

relevant to specific situation”.

Method of Data collection: In order to study the consumer perception regarding the uses of

Samsung Products with respect to Nokia both primary and secondary data will be collected.

The study proposed to collect Primary data through questionnaire using survey

method. So as to give a precise, accurate, realistic and relevant data.

www.surveyshare.com

The secondary data as it has always been important for the completion of any

report provides a reliable, suitable, equate and specific knowledge.

SAMPLING TECHNIQUE

Sampling Technique: The study proposed to use convenience sampling.

Sample Area: The data for the study has been collected through a survey of the customer

from various Handset store available in New Delhi and friends of Amity university.

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DESIGN OF INSTRUMENT

Instruments refer to questionnaires, secondary analysis models.

So to prove the Statement of Research and Hypotheses, one management models (Push and

pull model) is used along with white papers, case studies and product reviews at YouTube

has been taken as references.

Procedure

In order to study the consumer acquisition and retention the uses of Samsung Products with

respect to Nokia both primary and secondary data will be collected.

The study proposed to collect Primary data through questionnaire using survey

method.

www.surveyshare.com

The secondary data was based upon the Push and pull strategy of the two brands

i.e. Nokia and Samsung

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"PUSH OR PULL"?

Marketing theory distinguishes between two main kinds of promotional strategy - "push" and

"pull".

PULL STRATEGY

A “pull” selling strategy is one that requires high spending 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 wholesalers will ask the producers.

A good example of a pull is the heavy advertising and promotion of 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

a range of Fimbles products including soft, plastic and electronic learning toys for the UK

and Ireland.

Pull promotions Push promotions (Manufacturer to consumer) (Offered to trade)Sampling Discounts Coupons Display allowancePrice packs Advertising allowanceRebates Free goodsContinuity programs ContestsContests Trade couponsSweepstakes Quantity discountsTie-in promotion Financing incentives Special events Premiums

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Bonus packs Exchange offers

  Pull promotions (Manufacturer to consumer)

  NOKIA SAMSUNG

SAMPLING All Customer i.e. Lower to luxury mobile

users

For Lower segment

samsung coming with

various mobile service

provider like Reliance,

Airtel etc. for Middle to

higher end phone they

sample every customer

Coupons

Promotional Programme like Discount

coupons or winning prize through

coupon codes.

Samsung does not offer

such kind of offer recently

Price Packs Consisting from Rs 1200 to Rs. 36000

Middle range start with

Rs.2,500 to Rs. 54000

Rebates

During IPL session they provide up to

10% rebates on the Mobile handset price

above than Rs.5000

Samsung does not offer

such kind of offer recently

Continuity Programme

Service absurdity, with better looks

Launching new product

with special features like

with recently launched by

Samsung Marine

Contest

Nokia India in association with NDTV

presents the Nokia N97 Widget Master

Contest. This is a promotional contest.

All you need to do is to ideate and

conceptualise a widget that you would

like to have, on a topic of your own

choice

Contest like "battle of the

Bands" contest is for life

tour package to became

part of rock band

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Sweep Stakes

Nokia stop this strategy after flashing out

world wide scam with getting fake

emails

Samsung Mobile's online

and offline sweepstakes

targets mostly young

males who can't live

without their mobile

phones and use them

extensively for texting

and entertainment,

Tie-in promotion

Nokia promoting there product with

presenting short movie festival ,

participating with Air travel house

Samsung doe the tie in

promotion with co

sponsoring Aamir Khan

every movie and

programme

Financing incentives

Higher end phone available at EMI, and

zero interest rate. Insurance of the high

end mobile

Samsung also follows

Nokia strategy to sell

Higher end phone which

available at EMI, and zero

interest rate, Insurance of

the high end mobile

Special events

Replacement Nokia Screens For Mobile

Phones i.e kind of special event

company organise to retain more and

more customer

Samsung recently

launched Guru mobile

series which is part of the

youth nexus event to

attract more and more

customer

Premiums Generally every mobiles provide 1 year

warranty and the servicing centre offer

which can count as a premiums, but

resale value of the Nokia is better than

other company handset

Samsung follows same

Nokia patter with

providing 1 year warranty

and service canter option

Bonus packsGiving mobile accessories with handset

like leather bag, hands free

Giving mobile accessories

with handset like leather

bag, hands free

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Exchange offers Does not exist Does not exist

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PROMOTION MIX

USE OF AIDA MODEL IN NOKIA – N SERIES AND SAMSUNG OMNIA

When Nokia launched its N Series of phones, it used the AIDA model to great perfection.

Before N Series phones came in the market, cell phones were primarily used as a

communication tool. Features like cameras, MP3 Players, Radio, and Bluetooth were the ones

which used to catch attention of the users. N Series phones revolutionised the cell phone

industry with features such as High Data Storage, High Quality camera, amazing sound

quality, professional usage etc.

Nokia first gained ATTENTION by highly publicising N Series phones as a lifestyle product.

Then it began to hold INTEREST of the people by coming up with new models and variety

of features in the N Series. This also helped in arousing DESIRE in the market, which helped

the company to make N Series a great success despite the high prices of the phones.

Samsung Omnia recently launched in India likewise Nokia N series or E series Samsung does

not has any brand group in Omnia but yes it has The Omnia looks and feels solid. The touch

screen dominates the front of the handset with call answer and end keys, plus a touch

sensitive optical mouse pointer below it.

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Promotion Mix Tools

a) Advertising

One of the strongest aspects of Nokia is its advertising strategy. Nokia’s ad campaigns are

have a short shelf life as they are known to be coming up with one new model for each

class(basic, mid, high end) in two months. So they have something or the other new for the

consumers, thanks to their excellent innovation.

Nokia also come up with customised ads during specific events and festivals. For example,

they came up with an ad for Nokia 1110 during Holi last year, with the concept that it’s a

colour phone for the festival of colours.

For the Samsung Omnia as a product launched by the veteran actor Aamir khan who is also

the brand ambassador for the Samsung mobile, Samsung recently announced the evolution of

TouchWiz (effectively TouchWiz 2.0); it adds better support for 'rich connected applications'

(web-enabled widgets) and includes the provision of an SDK and IDE which will allow third

party developers to create widgets for the TouchWiz platform. The Omnia HD will be using

this 'evolved' version of TouchWiz, but the exact mechanics of third party support and which

features will be supported is currently unclear. However it does suggest that TouchWiz on the

Omnia HD has the potential to move in the same direction as the Nokia N97's widget-based

homescreen.

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b) Sales Promotion

Nokia does stress much on Sales Promotion. This is because today the cell phone market is

moving really very fast with new models coming up every third month, and even the

consumers are ready to change at such a short period. Like IPL contest is one of the region to

promote by the Nokia.

For the Omnia Sales promotion done by the Samsung with releasing the Amir khan film

Gajhni, which is one of the hit and Omnia is featured in that movies also, company opted out

rage of commercial advertisement on TV , POP and hoardings.

c) Public Relations (PR)

Nokia has strong PR. They keep on doing some or the other new events, programmes and

publicity, so as to keep up with the brilliant image of the company and also to enhance the

brand equity.

One of the instance is they sponsored the COUNTDOWN event for NEW YEAR 2007,

wherein they used Nokia 5200 as their prime product. The event featured NELLY

FURTADO performing live. The event also concentrated on GLOBAL WARMING.

The new Samsung mobile phone is set to receive a flagship marketing campaign

encompassing a £5 million spend across out-of home, press and online advertising,

experiential activity and PR, along with a strong focus on channel specific activity. The debut

of the Samsung Tocco Ultra Edition handset comes ahead of Mobile World Congress 2009 in

Barcelona, where the handset will have a prominent place. The Tocco Ultra Edition is set to

launch in UK stores in March 2009.

d) Direct Marketing

Nokia does not perform Direct Sales activities on its official website www.nokia.com.

However, they do have contractual tie ups with other e-commerce websites like

www.ebay.com, www.amazon.com etc.

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Nokia does use DEMO style of Direct Marketing. They set up kiosks extensively at various

locations such as malls; business parks etc. and had its latest product N 95 for demo.

Nokia does not use Direct Mail or Telemarketing styles of Direct Marketing.

Samsung also follow the same pattern to promote ominia through e marketing and so

extensively they put kiosk , hoarding and the direct mailers they put to promote their product

to the next level.

Consumer Behaviour

1. Social Factors

Social factors like feedback on a specific product from family, friends and peers influence the

decision of a person whether to buy a product or not. For example, Nokia xpress music is

technically one of the best phones by Nokia. However, in terms of features it is similar to

Nokia xpress music new version. So, the review was not good and hence it affected the sales

of Nokia xpress music.

Samsung Omnia recently launched in India likewise Nokia N series or E series Samsung does

not has any brand group in Omnia but yes it has The Omnia looks and feels solid. The touch

screen dominates the front of the handset with call answer and end keys, plus a touch

sensitive optical mouse pointer below it.

The biggest flaw of the Omnia thought is that the handset runs on Windows Mobile 6.1.

Although currently there's no Smartphone alternative operating system until Symbian

launches a touch screen version, you just can't get over the irritation of having to use

Windows Mobile.

2. Personal Factors

Personal Factors like age, occupation, lifestyle, income and personality affect the consumer

behaviour. For example, a young college going person may consider music and gaming as the

add on features. So, he or she may choose a Nokia N – Gage. On the other hand, a

professional may consider utility and may buy an N Series phone. Omnia patented Touch

Wiz user interface makes entering data and text simple The 2.2 inch screen would

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elaborate the details of the displayed images with distinct clarity, as it has the capability to

support 16 million color shades.

3. Psychological Factors

Psychological factors like perception make difference in consumer behaviour. For example, a

consumer may not buy a flip or a slide phone if he or she thinks they are delicate handsets.

Omnia is Samsung flagship mobile devices in the portfolio roles for the Samsung, because of

the two reasons one is highly advertised product in Samsung mobile device and the Amir

promotional strategy.

4. Cultural Factors

Not Applicable with respect to Nokia.

Place Mix

Market Channels- Nokia uses both dealership as well as direct selling strategy. It has opened

its retail outlet ‘Nokia Priority’ as well has many authorised dealers at various places. So

Nokia uses 0 level, 1 level & 2 level Market channel levels.

Not applicable for Samsung

Consumer

Manufacturer Dealer

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PUSH

A “push” promotional strategy makes use of a company's sales force and trade promotion

activities to create consumer demand for a product. The producer promotes the product to

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 PRIORITY DEALERS

Warehouse. Personal selling and trade promotions are often the most effective promotional

tools for companies such as Nokia - for 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.

Push promotions (OFFERED TO TRADE)

  NOKIA SAMSUNG

Discounts Nokia provide 3 to 4% margin over

the product to retailers to sell the

Mobile handset

Samsung giving 2 to 3% margin to sell there

product to retailers

Display allowance Nokia provide Rs. 3000 per sq foot

display allowance but this depends

upon the foot fall of the customer to

that area

Samsung some time paid Display allowance

with their other electronic item like fridge or

TV on an average Rs. 1500 to 2000

Advertising

allowance Rs. 1000 to 35000 Rs. 300 to 12000

Free goods Free good will get to the wholesaler

after achievement of the target of Rs.

19 Lacks with Nokia N series phone

Samsung does not have such offers till now

Contests Available contest for dealers like go

to Malaysia trip after achievement of

the targets

Outside country trip like Japan, hong kong etc.

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Trade coupons Not available Available for the dealers

Quantity discounts Yes with purchasing of every Rs.

100000 they will get 1% cash back

offers

No Discount

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Result and Interpretation

I conducted a survey with the sample size of 200 different customer Amity and few from my

friends circle. This includes a questionnaire having questions and the data got is then

analyzed and following are the results for the same.

Questionnaire – Appendices

Q1. Which brand comes to your mind when you think of high end mobiles?

Nokia 65

Sony Ericson 28

Samsung 59

Motorola 32

Other 16

As per this study suggested that Nokia is still has market leadership in India because 32% of

the people has recalled Nokia adding to this 30% of the people suggested that they have

Samsung in top of the mind recall activity similar to the that 16% of the people like Motorola

and 14% of the people suggested that Sony Ericson.

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Q2. Which brand of mobiles do you use at present?

Nokia 123

Sony Ericson 14

Samsung 30

Motorola 23

Other 10

As per this study suggested that 61% of the people currently using Nokia which show there

market leadership in the Indian market, and 15% of the people using Samsung and 12% of

the people using Motorola this kind of output is also we are getting because of the People

perceiving that Nokia is the best brand which can be used for.

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Q3. What do you look for in mobiles?

Most Important Somewhat Important Least Important

Price

Safety

Looks

Brand Name

Reliability

  Most Important Somewhat Important Least Important

Price 98 35 67

Safety 78 87 35

Looks 134 23 43

Brand Name 141 32 27

Reliability 88 99 13

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As per our study suggested that 98 people out of 100 are suggested that Price is the most

important factor to choosing the Any Mobile Phone adding to this 67% of the people

suggested that Price is the Least important for them when purchasing to the Mobile phone. It

is found that Indian consumer are very price sensitive, 87 people suggested that safety is the

somewhat important for the Mobile purchasing 134 people out of 200 suggested that they

purchase the Mobile phone according to the Looks wise where an Brand name is playing very

important role to purchasing the Mobile.

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Q4. Which mode has motivated your purchase for the particular brand?

a) Newspaper b) Television

b) Family and friends d) dealers e) Others

Newspaper 46

Television 76

Family & Friends 43

Dealers 22

Others 13

Customer purchasing power is also influenced through the advertisement and the channel that

chosen by the Mobile company to promote their individual brands. As per our study

suggested that 38% of the people out of 200 got the relevant information of the product from

the Television, 23% of the people suggested that the News paper is the Best Medium where

they can get the Maximum knowledge of the brand and there offers. 21% of the people

suggested that the family and friends motivate them to purchase any particular mobile phone.

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Q5. Are you satisfied with the current purchase?

Fully Satisfied Somewhat Satisfied Not Satisfied

Fully Satisfied Somewhat Satisfied Not Satisfied

87 77 36

This question suggested and judge the satisfaction level of the existing consumer towards

their Mobile phone, 43% of the people who contributed their views in the survey suggested

that the that they are fully satisfied with the mobile phone which they are using adding to this

39% of the people suggested that they are somewhat satisfied with their current Mobile

phone, 18% of the people suggested that they are not happy with the current handset which

they are using. It is very great opportunity for the mobile phone company to use unsatisfied

customer to turn them out to their potential customer.

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Q6. Which brand are you looking for the purchase in future and why?

Nokia 87

Sony Ericson 23

Samsung 80

Motorola 8

Other 2

This question gives an insight people perception towards purchasing the New handset which

also reflects the customer perception towards the customer preference. As per our data

suggested that 12% of the people want to purchase Sony Ericson mobile whether 43% of the

people would like to purchase Nokia so clearly Nokia is the Market leader , surprisingly

Samsung scored 40% people prefer to purchase this brand as they also come with various

inbuilt feature in that. For example recently launched Samsung Marine is launched against of

the Nokia 1100 which said the shock proof.

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Que7: Which promotional activities influence your decision to go for mobile handset

rank in a preference order?

Discounts

Coupons

Accessories

Free Gifts

Contest

Others (Plz specify)

  Promotional Activity

  Excellent Very good Good Fair Worst

Discount 34 28 18 12 8

Coupons 12 16 37 22 13

Accessories 15 19 42 14 10

Free Gifts 38 21 15 16 10

Contest 19 18 38 16 9

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This question is giving an insight of the sales promotion activity which influence customer

buying behaviour towards the mobile handset as per our data suggested that 34% of the

people would prefer Discount over the purchase, and 22% of the people suggested that

coupons with handset would be the good sales promotional technique opted by the company.

In adding to this free accessories like carry bag , mobile ring would be another area which

liked by the people for sales promotion primarily for the Nokia and Samsung.

Que8: Which promotional activities do you want in near futures which influence your burying behaviour rank in a preference order?

1. Price-off Promotion 2. Premium offers3. Couponing4. Loyalty schemes5. Guarantees6. Welcome-Cocktail

  Future Promotional Activity  Excellent Very good Good Fair Worst Price-off 14 15 38 27 6

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Promotion Premium offers 27 18 39 7 9Couponing 18 19 43 17 3Loyalty schemes 17 21 47 10 5Guarantees 12 32 20 14 22Welcome-Cocktail 21 22 38 12 7

This question suggested that how future sales promotion of the company like NOKIA and

Samsung will influence the customer retention for the company, as per our data suggested

that 38% of the people suggested that they want price off promotion, adding to this 39% of

the people suggested that they want premium offers in near future, 47% of the people

suggested that Mobile handset company Like NOKIA and SAMSNUNG should provide the

loyalty scheme so they can prefer those mobiles brand.

Q9. Quality of Sales Promotion and schemes

Frequency of sales promotion/schemes

Attractiveness of sales promotion/schemes

Innovativeness of sales promotion

Promptness of response to competitive sales schemes

Sufficient supply of stocks provided with schemes/offers

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  Frequency of sales promotion

Attractiveness of sales promotion

Innovativeness of sales promotion

competitive sales schemes

Sufficient supply of stocks

Excellent 43 64 43 75 67

Very good 32 11 32 10 10

Good 1 6 12 9 7

Fair 9 6 2 1 8

Poor 6 7 9 1 1

Don’t Know 7 4 1 2 4

Refused 2 2 1 2 3

This question gives the what kind of sales promotion does company encourage in near

future , so they can retain more customer and attract more customer. As per our study

suggested that 75% of the people said Innovativeness of the sales promotion is required

adding to this 67% of the people suggested that sufficient stocks of the good would be

required if the sales promotion scheme is launched so they can attract more and more

customer.

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Q10. Advertising and merchandising

Adequacy of the advertising support during launches

Effectiveness of the advertising in increasing sales

Adequacy of the shop based material-poster, danglers, stickers etc

Quality of media advertising

Special support during festive occasions

Ease of storage and display of the shop based material

  Advertising and merchandising

advertising support 24

advertising in increasing sales 27

shop based material-poster 19

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Quality of media advertising 11

Special support during festive occasions 10

Ease of storage a 9

As per the data suggested is advertisement and merchandising playing the very important role

to increase the penetration and the brand visibility of the Mobile Handset company as per the

data suggested is 19% of the are having adequate number of material like poster or banner to

promote the product while 27% of the has in mind that if they advertise product get sold

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Hypothesis Testing

H0: Sales promotion activity increases the customer acquisition.

Correlations

Frequency of sales

PromotionAttractivenes

sInnovative

nessCompetitiv

enessSufficient

Stocks

Frequency of sales Promotion

Pearson Correlation 1 .832(*) .935(**) .811(*) .819(*)

Sig. (2-tailed) .020 .002 .027 .024

N 7 7 7 7 7

Attractiveness Pearson Correlation .832(*) 1 .825(*) .993(**) .993(**)

Sig. (2-tailed) .020 .022 .000 .000

N 7 7 7 7 7

Innovativeness Pearson Correlation .935(**) .825(*) 1 .826(*) .803(*)

Sig. (2-tailed) .002 .022 .022 .030

N 7 7 7 7 7

Competitiveness Pearson Correlation .811(*) .993(**) .826(*) 1 .994(**)

Sig. (2-tailed) .027 .000 .022 .000

N 7 7 7 7 7

Sufficient Stocks Pearson Correlation .819(*) .993(**) .803(*) .994(**) 1

Sig. (2-tailed) .024 .000 .030 .000

N 7 7 7 7 7

* Correlation is significant at the 0.05 level (2-tailed).

** Correlation is significant at the 0.01 level (2-tailed).

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H3: Sales promotions are effective in giving Mobile Handset Company a competitive edge.

As per our study suggested that the quality of sales scheme of the Mobile

Handset company is very satisfactory while we analyze the data, Innovativeness

and the Frequency of sales promotion is the biggest factor which contributed to

the sales promotion of the Mobile Handset company while this has been proved

through the correlation test which we applying above 93.5% chances of the

getting best deal through these situation. While as per the correlation test also

showing the sufficient stock would necessarily to have when any new sale

promotion launched by the Mobile Handset company these factor are highly

correlated to each other which is about to 99.3%.

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H1: Sales promotion activity does not help to retain the existing much longer period.

It is evident from the SPSS data tools the significance value for this test is zero The

correlation is in minus so it is clearly stated that the co brand for any organization in the

context of mobile handset would not sustained till the time they don’t have other activity like

sales support, better quality and the technical features. Would not retain the customer.

Correlation test

showing Negative and less

than 90% in many case

Correlation test

showing Negative and less

than 90% in many case

Page 49: Study and analyse hwo sales promotion actvigties increases[1]

Hence, we reject this null hypothesis (H1),thus we can stated that without umbrella brand N

Series or E series or Omnia could sustained in this market.

Discussion/Conclusion

As per this study suggested that Nokia is still has market leadership in India because 32% of

the people has recalled Nokia adding to this 30% of the people suggested that they have

Samsung in top of the mind recall activity similar to the that 16% of the people like Motorola

and 14% of the people suggested that Sony Ericson. Adding to this that 61% of the people

currently using Nokia which show there market leadership in the Indian market, and 15% of

the people using Samsung and 12% of the people using Motorola this kind of output is also

we are getting because of the People perceiving that Nokia is the best brand which can be

used for. As per our finding highlights that 67% of the people suggested that Price is the

Least important for them when purchasing to the Mobile phone. It is found that Indian

consumer are very price sensitive, 87 people suggested that safety is the somewhat important

for the Mobile purchasing 34 people out of 100 suggested that they purchase the Mobile

phone according to the Looks wise where an Brand name is playing very important role to

purchasing the Mobile.

Analysing the sales promotion technique for the both of company we found sales promotion

activity which influence customer buying behaviour towards the mobile handset as per our

data suggested that 34% of the people would prefer Discount over the purchase, and 22% of

the people suggested that coupons with handset would be the good sales promotional

technique opted by the company. In adding to this free accessories like carry bag , mobile

ring would be another area which liked by the people for sales promotion primarily for the

Nokia and Samsung. company like NOKIA and Samsung will influence the customer

retention for the company, as per our data suggested that 38% of the people suggested that

they want price off promotion, adding to this 39% of the people suggested that they want

premium offers in near future, 47% of the people suggested that Mobile handset company

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Like NOKIA and SAMSNUNG should provide the loyalty scheme so they can prefer those

mobiles brand.

Abstract

This paper studies the impact and effectiveness of a type of sales promotion often used in the

NOKIA & SAMSUNG to stimulate sales, in which a value pack is sold containing the issue

plus another product simultaneously with and without promotion at different prices, and

promotions are serialized by fractioning the additional product across different issues of the .

We find that promoted product contemporarily cannibalize non-promoted sales; but this loss

is compensated by a medium term increase of non-promoted sales. These results show that

this sales promotion strategy is an effective way to diminish the decline rate of periodical

sales.

The objective of this paper is to analyze the effect on sales of an innovative type of sales

promotion which seems to be effective in diminishing the decline rate of periodical sales in

some European countries. In order to plan their product Nokia must look at what area of the

market they want to aim the products at, as the current youth market

is more or less saturated Nokia will have to research into a new

market.

Most forms of promotion are based around the idea of having an image

to go with the product. Brand imaging plays a dominant part in an

organizations marketing strategy. This is because people make a

purchase they aren't just buying a product, they are buying a

lifestyle or an image. If branding can make people believe that the

branded product is better then an un-branded product, more people will

buy it and they will also be willing to pay higher prices for the

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"extra quality" and lifestyle they are receiving with the product.

Because a lot of rival products are more or less the same (Pepsi and

Coke) the main way of making your product stand out is through

aggressive branding, This is usually achieved by companies using

slogans, logos and distinctive packaging.

References

Marketing Management: by Philip Kotler

C.R Kothari “Research Methodology” Methods And Techniques.

www.surveyshare.com

www.Samsung.com

www.lgindia.com

http://edweb.sdsu.edu/triton/SDBiarritz/Rubric.html

www.winebusiness,com

www.marketingpower.com

www.youtube.com

m.youtube.com