study and analyse hwo sales promotion actvigties increases[1]
TRANSCRIPT
STUDY AND ANALYSE HOW SALES PROMOTION ACTIVITIES INCREASES THE CUSTOMER ACQUISITION ADN RETENTION FOR SAMSUNG AND NOKIA
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.
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.”
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
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
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.
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.
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
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
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.
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.
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
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.
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
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
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
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
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.
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
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.
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
"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
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
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
Exchange offers Does not exist Does not exist
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.
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.
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.
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
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
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.
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
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.
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.
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
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.
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.
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.
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.
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
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
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
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.
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
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
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).
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%.
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
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
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
"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