Impact of Promotional Strategies of Hypermarkets

 

M. Vasudevan, Dr. V.M. Senthilkumar

¹Ph.D., Research Scholar, Research & Development Centre,  in Management Studies, Bharathiar University Coimbatore  and Assistant Professor of Institute of Management, Christ University, Bangalore

²Professor, Department of Humanities, Sri Shanmuga College of Engineering and Technology, Sankari

 

ABSTRACT:

The sale of goods or commodities in small quantities for final consumption is retailing. Hypermarkets in India sell different types of essential commodities in addition to luxury items. These Hypermarkets are mainly located in tier I and tier II cities of India. Majority of the hypermarkets sell branded products produced by domestic and International companies. Hypermarkets of India offer products with varied price bands for each and every sections of urban society. Promotion stands for all the communications that a retailer may use in the marketplace. Promotion mix is composed of four distinct elements: Advertising, Sales Promotions, Word of mouth and Public Relations. The present research work examines the impact of promotional strategies employed by Hypermarkets in Bangalore. The survey was carried out in the selected hyper markets of Bangalore city. The primary data was collected from 400 customers of hyper markets. A properly structured questionnaire was used to collect data. Convenience sampling technique was used and data was analyzed by using statistical tools. The results showed that sales promotion has very high impact and other components of promotional mix like advertisements, public relations can be improved. This can be achieved by using an integrated marketing communications approach.

 

 

 

INTRODUCTION:

A  hypermarket  is  an  retail  facility  selling  groceries  and  general merchandise.  It is a big-box store that is a combination of   a supermarket  and a  departmental  store. It displays a wide  range of  products under  one roof. Hypermarkets sells to  a  customer  that satisfies   all  of  his  or  her  routine  weekly/monthly  shopping  requirements  in  one  instance. Hypermarkets, like  other organised retail outlets operates in the concept “ high-volume and low-margin sales” . Hypermarket is any retail entity occupying more than  50,000  square feet area. The Hypermarkets in India sells varieties of products including Groceries, Vegetables and fruits, Electronic goods, , Stationery items, House hold products, Apparels ,Pharmaceuticals and health care products , Furniture etc.

 

Promotion Mix is an important component of the retail marketing mix. The elements of promotion mix include Advertisements, Sales promotion, Word of Mouth Communication etc. Advertising is any form of non-personal communication that is paid. Sales promotional activities are the tactics followed by marketers including offers, discounts, exchange offers etc to motivate customers for increasing their share of wallet. Word of mouth is an informal communication about the product or service by ordinary individuals, satisfied customers. Sales staff plays a vital role in enhancing positive word of mouth and Public Relations.

 

REVIEW OF LITERATURE:

(Chandra and Pattanayak, 2012) in their article, “  Shopping Proclivity for Hypermarkets: An Empirical Study” analysed the factors influencing consumers’ shopping preference for hypermarkets and identified that promotion is one of the most important factor which influences purchase decision. (Racherla and King, 2012) found that the factors that drive consumers to generate eWord of Mouth include importance of self-enhancement, social interaction and altruism. (Yoganandan, Textile export promotion in India, 2015) emphasised that Government of India has put forward many export promotion measures and also introduces many schemes at this moment in order to promote textile exports from India. Promotion is necessary for anything for developments. (Vecchio, Del, and Devon, 2006)  Vecchio, Del, Devon et.al. (2006) ' reported the effect of sales promotion on brand preference through Meta analysis and identified sales promotions never affect general post promotion brand preferences. Instead depending upon nature of sales promotion and the product promoted, promotional activities can increase or decrease preference for a brand.

 

(Vasudevan, Senthilkumar, and Sasikumar, 2013) highlighted that promotion forms the most important component  of retail marketing mix. (Yoganandan, Saravanan, and Ruby, A Study on Online Shopping Behaviour of teachers working in self-financing colleges in Namakkal district with special reference to K.S.R College of Arts and Science, Tiruchengode, 2013) highlighted that the success or failure of a business is determined by the consumers’ perception. The ability to attract and retain consumers is important to the success of online businesses. They found seven factors namely Information, Company and product perception, Safety, Purchase intension, Easiness, Value and Assurance influences the behaviour of the customers towards online shopping. (Yoganandan, Saravanan, and Ruby, A study on households' consumption pattern of Aavin milk in Erode district, 2013) examined the household’s consumption pattern of avin milk in Erode district. Majority of consumers have been purchasing and consuming Aavin milk for more than 10 years. It shows that they are brand loyalist. This group of consumers should be recognized in the form of “membership schemes”, gifts etc., because of this positive word-of-mouth can be enhanced. (Kumar, Swaminathan, and Srinivasan, 2005)  Kumar, V. and Swaminathan, Srinivasan (2005) ' analyzed the influence of coupons on brand sale. The researchers understood that the effect of doubling the face value of coupon result in more than a proportionate increase in promotional elasticity. (Yoganandan and Prabhukumar, Consumer buying behaviour towards books in Erode city, 2015) identified that most of the respondents bought books during book festivals. The study suggested that book exhibitions can be conducted twice or thrice in a year which will improve the awareness about the reading habit among the people and make them to purchase more books.

 

STATEMENT OF THE PROBLEM:

Promotion is the most important elements of the marketing mix of the retailers. Because of the advent of online retailers the customers purchase products online which negatively influence the sales of brick and mortar stores. The hyper markets which involve huge investments must concentrate on devising marketing strategies to attract and retain customers. Promotion is the area where the retailers have to concentrate for increasing customer traffic.

 

OBJECTIVES OF THE STUDY:

Ø To identify the impact of promotional strategies in purchase decisions

Ø To find the customer preference of promotional activities of hyper markets.

Ø To understand the existing promotional strategies and suggesting for improvements.

 

RESEARCH METHODOLOGY:

Research Design:

In the present study exploratory research design is employed by the researcher. The nature of data was primary data. Convenience sampling technique has been used by the researcher for conducting the survey.  The sample size of this survey was 400. Mall intercept method is used to collect data from the customers.

 

Tools used for analysis:

Simple Percentage Method: Percentage are used to compare the relatives terms, the distribution of two or more series of data and are presently by way of bar diagram and pie diagram in order to have a better understanding.

 

Chi-Square Analysis: Chi-square test is used most frequently to test the hypothesis. Helps in identifying the relationship between variables.

Null Hypothesis (H₀): The hypothesis, or assumption, about a population parameter we wish to test.

Alternative Hypothesis (H₁): The conclusion we accept when the data fail to support the null hypothesis.        

Statistical Test:

Chi–square test (c²)           =             

Degrees of freedom             =              (R-1) (C-1)

Whereas,               O             =              Observed frequency

                                E                     =              Expected frequency

                                R             =              Number of rows

                                C             =              Number of columns            

Level of Significance (a):

A value indicating the percentage of sample values that is outside certain limits. The level of significance is assumed to be 5%.

DATA ANALYSIS AND INTERPRETATION:

1.     52% of the respondents are male and 48% are female respondents.

2.     54% are under the age group of 30-40 years where most of them are males, 22% of the respondents are below 20-30 years of age where most of them are females, 14% of respondents are in the age group of 40-50 years where most of them are males and 10% respondents are above 50 that include mostly male.

3.     48% of the respondents are employees, 24% of the respondents are self employed, 10% are students, 18% of the respondents are home makers.

4.     31% of the respondents belong to income group of Rs25,000-50,000/month, 23% are in the income group of Rs. 50000-75000, and12% of the respondents are in the income group of above Rs.75,000, 8% respondents are in the income group of below Rs.25,000 per month.

5.     40% of the respondents visit hypermarkets once in a month, 30% of the respondents visit hypermarket once in week, 26% of the respondents visit hyper markets occasionally and 2% respondents visit two to three times in a week.

6.     32% respondents visit hypermarkets on Sunday, 27% respondents visit on Saturday, 26% respondents visit on week days, 15% respondents prefer to visit any day in a week.

7.     42% respondents prefer to visit Hypermarket due to offers and discounts, 28% respondents due to more varieties of products, 30% of the respondents due to low prices, and 8% of the respondents due to customer convenience and 4% of the respondents due to some other reason.

8.     80% of respondents are aware of promotional offers and 20% of respondents are not aware of promotional offers provided by hypermarkets.

9.     58% of respondents are aware of discounts, 22% of respondents on buy one get one free offer, 13% of respondents prefer odd/even pricing and 7% of the respondents are aware of exchange offers.

10.  It is found that 48.7% of the respondents prefer special offers and discounts than the other promotional strategies of hypermarkets.

11.  35% of the respondents opine that most effective form of awareness is created   through flyers and pamphlets, 28% respondents opined TV and Newspaper advertisements, 20% of the respondents feel word of mouth is source of awareness about hypermarkets, 18% of the respondents feel Hoardings and 4% respondents got awareness through other sources.

12.  45% respondents believe offers and discounts is the most influencable,28% respondents say Word of mouth, 18% respondents say Advertisements,  8%  respondents says hoardings and 1% respondents believes other factors like exchange offers, timely promotions etc.

13.  71% of the respondents agree that promotional offers positively influences purchasing decisions and 16% respondents strongly agree, 6% respondents feel neutral and 5% of the respondents disagree the same.

14.  52%  of the respondents expect promotional schemes  for Groceries, 30% of the respondents for Apparels, 10% of the respondents for electronic items, and 8% respondents for furniture.

15.  85% of the respondents communicate about offer provided by hypermarkets to their friends/ relatives regarding and 20% of the respondents never used to do the same.

16.  From Chi Square Test:

Null Hypothesis: Ho: The offers and discounts provided by hypermarkets do not attract and positively influences purchase decision of the customers.

Alternate Hypothesis: H₁: The offers and discounts provided by hypermarkets attract and positively influences purchase decision of the customers.

The calculated value, X² = 17.13 is greater than table value 9.488. Alternate hypothesis is accepted and Null hypothesis has been rejected at 5% levels of significance. Hence it is concluded that the offers and discounts provided attract and positively influences purchase decision of the customers.

17.  From Chi Square Test:

Null Hypothesis: Ho: The advertisements provided by hypermarkets do not attract and positively influences purchase decision of the customers.

Alternate Hypothesis: H₁: The advertisements provided by hypermarkets attract and positively influences purchase decision of the customers.

The calculated value, X² = 6.09 is lesser than table value 9.488. Null hypothesis is accepted and Alternate hypothesis is rejected at 5% levels of significance. Hence it is concluded that the advertisements provided by hypermarkets do not attract and positively influences purchase decision of the customers.

18. From Chi Square Test:

Null Hypothesis: Ho: The word of mouth from the customers do not attract and positively influences purchase decision of the customers.

Alternate Hypothesis: H₁: The word of mouth from the customers attracts and positively influences purchase decision of the customers.

The calculated value, X² = 9.79 is greater than table value 9.488. Alternate hypothesis is accepted and Null hypothesis is rejected at 5% level of significance. Hence it is concluded that the Word of Mouth from the customers attract and positively influences purchase decision of the customers.

 

FINDINGS AND SUGGESTIONS:

·       It is found that majority of the customers are employees and of the income group Rs.25,000 to 50,000 per month. Hence promotional strategies targeting such segment are advisable.

·       Majority of the customers visit the hypermarkets in the weekends and so week end promotions can be enhanced.

·       Maximum number of customers prefers offers and discounts in hypermarkets therefore such strategies can be increased, customized and communicated to customer.

·       Hoardings, in store promotional activities, signage and display boards must be improved

·       Majority of the customers feel that promotional activities of the hypermarkets positively influence their purchase decisions. Especially sales promotional activities take a lead.

·       Many of the customers expect more promotional activities for groceries

·       From the chi-square analysis it is evident that offers and discounts, word of mouth communications positively influences the customer. The retailers must concentrate on advertisements that play a significant role in influencing purchase decisions of the customers.

 

CONCLUSION:

The research conducted on the promotional strategies of the hypermarkets in Bangalore, identified the customers’ opinion towards the promotional activities of the hypermarkets. Majority of the customers are aware of the promotions used by the hypermarkets and they were highly attracted by sales promotional activities than any other forms of promotion. The retailers must focus on enhancing the week end promotions and improving the advertisements provided by the hypermarkets. Overall hypermarkets must carefully employ the elements of the promotion mix properly based on the needs and expectation of the target customers.

 

REFERENCES:

1.   Chandra, B., and Pattanayak, J. K. (2012). Shopping Proclivity for Hypermarkets: An Empirical Study. The IUP Journal of Marketing Management, 84-105.

2.   Kumar, N. S., Rajiv, S., and Jeuland, A. P. (2001). Effectiveness of Trade Promotions: Analyzing the Determinants of Retail Pass-Through. Review of Marketing Science WP No. 317 .

3.   Kumar, Swaminathan, and Srinivasan. (2005). Two Different Faces of Coupon Elasticity. Journal of Retailing, 81(1), 1-13.

4.   Racherla, P., and King, R. A. (2012). What We Know and Don’t Know About Online Word-Of-Mouth: A Systematic Review and Synthesis of the Literature.

5.   Vasudevan, M., Senthilkumar, V., and Sasikumar, K. (2013). Marketing Mix: A review on the ‘P’s of marketing. international journal of research in commerce, IT and Management, 3(9), 37-39.

6.   Vecchio, Del, and Devon. (2006). The Effect of Sales Promotion on Post-Promotion Brand Preference: A Meta Analysis. Journal of Retailing, 82(3), 203-213.

7.   Yoganandan, G. (2015). Textile export promotion in India. Bonfring International Journal of Industrial Engineering and Management Science, 1(1), 1-4.

8.   Yoganandan, G., and Prabhukumar, G. (2015). Consumer buying behaviour towards books in Erode city. International Journal of Research, 2(1), 609-614.

9.   Yoganandan, G., Saravanan, R., and Ruby, N. (2013). A study on households' consumption pattern of Aavin milk in Erode district. International Journal of Research in Commerce Economics and Management, 3(7), 6-10.

10. Yoganandan, G., Saravanan, R., and Ruby, N. (2013). A Study on Online Shopping Behaviour of teachers working in self-financing colleges in Namakkal district with special reference to K.S.R College of Arts and Science, Tiruchengode. International Journal of Research in Commerce Economics and Management, 3(6), 31-38.

 

 

 

 

 

 

Accepted on 21.04.2017          © A&V Publications all right reserved