An empirical study on the influence of independent marketing variables on the purchasing decision of selected personal care products

 

Dr. N. Srinivas Kumar

Professor, SRTIST, Nalgonda

*Corresponding Author E-mail: karthick_narayana@yahoo.com

 

 

ABSTRACT:

In the latest few decades, one of the most indispensable objectives of manufacturing firms is to identify how the consumer will respond to various marketing strategies for achieving their ultimate goal of selling. The study of consumer behavior became a concern of marketers, as they may learn how consumers choose their goods and services required to meet multiple needs and   the factors that influence their choice. The present study focuses on the influence of independent marketing variables such as advertising, sales promotion schemes, attractive packaging, brand loyalty etc on purchasing decision of selected personal care products. The primary data collected using a structured questionnaire from 150 respondents of different age groups was statically analyzed. The results revealed that the implementation of sales promotion schemes and proper advertisement plays significant role in consumer purchase decisions. However, majority of the respondents in the study considered price to be the single most important and deciding factor in the purchase of branded personal care products. This study necessitates the application of suitable sales-promotion instruments, together with aggressive advertising strategies that could results in increased brand loyalty of personal care product manufacturers.

 

KEYWORDS: Advertisements, sales promotion schemes, attractive packaging, brand loyalty, consumer purchase decisions.

 

 


INTRODUCTION:

As the global transformation from the seller’s market to the buyer’s market is captivating, competing firms are placing their offerings strategically in order to attract potential consumers. The modern day customers buy things to reward themselves, to satisfy their psychological needs or to make themselves feel good. They buy things to make a statement, to show off their personality or to boost their self-esteem. Thus it is no longer sufficient to identify simple customer demand and try to satisfy them. 

 

In Indian context, owning to the increase in income and sociological forces, the consumer’s expectations of product quality in general have been steadily rising with high expectations of a better lifestyle. Indian consumers today are looking for aesthetic and social value instead of just focusing on the basic needs of warmth and the protective function of products (Joshi, 2013). The primary objective of marketing is which information regarding products or services is being communicated to customers to change their attitude and behavior.  Sales promotion has been defined as ‘a direct inducement that offers an extra value or incentive for the product to the sales force, distributors, or the final consumer with the primary objective of creating an immediate sale. The intense competition from imported products and diminishing sales as well as increase in competition among firms calls for use of effective sales promotion tools.

 

Today’s consumer is habituated with sales promotional activities. So without such activities, it has become difficult for companies to achieve their targets. Marketers are concerned with effective utilization of promotion-mix to increase sales and market share. Methods of promotion include advertising personal selling, offering promotion schemes and attractive packaging. In order to develop a successful sales promotion strategy a clear definition of the targeted market must be included. According to Low and Mohr (2000), manufacturers continue to spend a large amount from their communication budget on sales promotion. They allocate around 75 percent of their marketing communication budgets to sales promotion.(Hellman, 2005)  A better understanding of the different types of consumer responses to promotions can help managers to develop effective promotional programs as well as provide new insights on consumer behavior.

 

The Indian personal care industry had an excellent growth rate during 2011-12. Since the past few years, people have become more conscious about their appearance and look, leading to a huge demand for these products. New brands of products to appeal various population sectors are constantly being developed. Considering the modern day consumer perceptions, most personal care products are increasingly regarded as essential items for daily use, rather than as luxury products for indulgence (Shallu and Guptha, 2013).  The Indian cosmetics industry can match international standards when it comes to quality, price and range. The industry holds promising growth prospects for both existing and new players. Sales promotional activities are used to create brand awareness and thereby are required by every field and personal care product industry is no exception. In India, many sales promotion schemes are highly successful as the market is price sensitive as well as highly competitive. Presently, the industry is dominated by several large companies that market multiple brands on different levels. Though many of their respective products are relatively similar, all of these product lines must be packaged and advertised differently to reflect the setting at which they are sold. In addition to attractive packaging, the marketers have heavily relied on celebrity endorsements which are widely considered to improve advertisement ratings and positive product evolutions.

 

REVIEW OF LITERATURE:

Although sales promotion has become a ubiquitous element of consumer marketing, large portions of ineffective promotional activities indicate a great need of refining and redirecting the focus on the impact sources.  Koekemoer, (2005) differentiates between three different types of sales promotions, namely: consumer-oriented sales promotions, retail promotions and trade promotions. Consumer-oriented sales promotions refer to incentives that are offered directly to a firm’s customers or potential customers, and are used to accelerate the decision-processes of consumers (Moriarty et al.,2012). Earlier studies have made on consumer attitudinal and behavioral responses to price promotion and its utilitarian benefits (Smith and  Sinha, 2000; Gilbert and Jackaria, 2002). According to Blackwell et al., (2001), price discounts played a significant role in influencing consumer product trial behavior and indirectly attract new consumers. The consumer would be easily persuaded by promotion techniques which offer an additional product free of cost or as bonus packs (Smith and Sinha, 2000),. Besides, this the technique would beneficial to retailers in speed up the stock clearance compared to price promotions (Li and Wang, 2007).  This type of gift promotions are widely used in marketing, however, academic research into this subject is limited (Prendergast et al., 2008). Laroche et al., (2003) explained sales promotion in the context of a cognitive-affective-behavioral model and suggested that compared to other tools in the marketing mix, sales promotion has the strongest effect on the consumers. Previous research has shown that sales promotion can encourage behavioral responses such as brand switching, stockpiling, purchase acceleration, product trial and spending larger amounts (Laroche et al., 2003, Gilbert and Jackaria, 2002).  

 

Numerous studies have examined the effectiveness of advertising in the past decade. (Kumar and Raju, 2013; Adelaar et al., 2013; Goldsmith and Lafferty, 2002). Promoting the advertisements on mass media like television, internet, radio and newspaper are the paid and formal sources of promotional on convincing of consumer towards purchase of a particular goods or services (Carl et al., 1998). Here it can be added that the consumer is not only sensitive to price but also to the firm,s advertising efforts. Continuous improvement of an advertised brand may generate long-term effect in consumer’s minds that can lead to a further sales outcome which can be very beneficial (Huang et al., 2012). According to Vani et al., (2010), brand awareness precedes all other steps in the buying process. A brand attitude cannot be performed, unless a consumer is aware of the brand. Del Rio et al., (2001) explained that customers recognize the value of any brand with respect to its different functional trustworthiness like guarantee, value for money, social and status symbol etc. Packaging communicates the marketing objective a specific product to the consumer. Sauvage (1996) examined the importance of shape in creating an image about the product and the brand. He also mentioned that the material of a package affected consumer thought buying process. According to Rundh (2005), packaging has a great impact as far as brand is concerned, and people are more attracted because of the brand and they got a perception about a product in advance.

 

OBJECTIVES OF THE STUDY:

The present empirical study highlights consumer behavior and purchase decisions made in response to various sales promotion schemes. The study was carried out with the objective to investigate the influence of various sales-promotion schemes, advertisement strategies, packaging and brand loyalty on consumer purchase decision and to identify statistically significant differences between the various age groups with regard to their buying behavior patterns.

 

RESEARCH METHODOLOGY:

The study was carried in Hyderabad city during July 2011 to February 2012. As the study is related to personal care products, the primary data was collected by interviewing visitors of supermarkets, provision stores and pharmaceutical outlets. A sample of 150 respondents was considered for the present study. A structured questionnaire with each question contributing to research objectives of the study was used for the collection of primary data. The questions covered were double checked with two store managers to assess their relevance. The data collection was done by convenience sampling method. Five different areas of Hyderabad city were covered to collect the data. The survey was done during different time periods of the day in order to cover the customers of all demographic profiles.  The respondents were initially classified as the age groups of 20-30 years (42%), 30-40 years (34%), 30-40 years (12%) and 40-50 years (12%).  The data gathered through questionnaires have been analyzed interpreted by descriptive statistics instruments such as frequency relationships and graphs. The following hypotheses were placed corresponding to each question area which was tested one by one by with chi-square test.

 

1.    Advertisement

 

Ho:   Not have any significant impact on the buying behavior of all age groups.

H1 :  Have significant impact on the buying behavior of all age groups.

 

2.            Sales Promotion Schemes

 

Ho:   Not have any significant impact on the buying behavior of all age groups.

H1 :  Have significant impact on the buying behavior of all age groups.

 

 

 

 

 

3.            Attractive Packing

 

Ho:   Not have any significant impact on the buying behavior of all age groups.

H1 :  Have significant impact on the buying behavior of all age groups.

 

4.            Brand Loyalty

 

Ho:   Not have any significant impact on the buying behavior of all age groups.

H1 :  Have significant impact on the buying behavior of all age groups.

 

RESULTS AND DISCUSSION:

The primary data collected on the impact on influence of advertisement, sales promotion schemes, attractive packaging and brand loyalty on the purchasing decisions was tested one by one against the hypotheses stated above using chi-square test.  The calculated chi-square values for each variables were 63.001 (advertisement), 60.178 (sales promotion schemes), 30.177 (attractive packaging) and 38.545 (brand loyalty). The table value was taken as 16.919 with degrees of freedom 9 at a level of significance of 5%. Since all the calculated chi-square values was greater than the tabulated value the null hypothesis (Ho) i.e ‘the tested variables does not have any significant impact on the buying behavior of all age groups’ was summarily rejected. By accepting the alternative hypothesis (H1), it can be concluded that advertisement, sales promotion schemes, attractive packaging and brand loyalty are the most important marketing tools which have significant impact on the buying behavior of customers irrespective of the age group.

 

The data presented in the table 1 below shows the overall customer response towards the influence of advertisement, sales promotion schemes, attractive packaging and brand loyalty on their purchasing decisions. In order to obtain  a conclusive outcome in the present study, the ‘most important’ and ‘important’ responses were considered as significantly influencing factors while ‘neutral’ and ‘unimportant’ responses were considered as least significant factors. Among the 63 respondents in the age group of 20-30 years, 76.19% believed that the sales promotion schemes offered by the manufacturer significantly influence their purchasing decision followed by advertisement (38.10%), brand loyalty (26.67%) and attractive packaging (23.81%). However, 76.19% of the respondents felt that attractive packaging is the least influenced factor as expressed by their neutral or unimportant view points. The brand name created little influence (73.33% neutral or unimportant responses) in this particular age group.

 

 


Table 1: Overall Customer response towards the influence of Advertisement, Sales Promotion Schemes, Attractive Packaging and Brand Loyalty on their purchasing decisions.

 

 

20-30 yrs (N=63)

30-40 yrs (N=51)

40-50yrs (N=18)

50-60 yrs (N=18)

Most Important

Advertisement

14.29%

-

50.00%

50.00%

Sales Promotion Schemes

9.52%

-

-

40.00%

Attractive Packaging

9.52%

23.53%

33.33%

50.00%

Brand Loyalty

13.33%

23.53%

28.57%

27.27%

 Important

Advertisement

23.81%

70.59%

33.33%

33.33%

Sales Promotion Schemes

66.67%

30.77%

83.33%

50.00%

Attractive Packaging

14.29%

11.76%

-

-

Brand Loyalty

13.33%

11.76%

-

36.36%

Neutral

Advertisement

52.38%

29.41%

16.67%

16.67%

Sales Promotion Schemes

19.05%

61.54%

16.67%

10.00%

Attractive Packaging

71.43%

64.71%

66.67%

33.33%

Brand Loyalty

66.67%

64.71%

71.43%

18.18%

Unimportant

Advertisement

9.52%

-

-

-

Sales Promotion Schemes

4.76%

7.69%

-

-

Attractive Packaging

4.76%

-

-

16.67%

Brand Loyalty

6.67%

-

-

18.18%

 


A total of 51 responses were taken from the age group of 30-40years. The subjects were mainly influenced by advertisements (70.59%). Nevertheless the influence of other variables on the purchasing decisions of the age group was least significant as revealed by the high proportion of neutral or unimportant responses for sales promotion schemes (69.23%), attractive packaging (64.71%) and brand loyalty (64.71%). In the third age group of 40-50yers, we collected data from 18 respondents. As per the results, advertisement (83.33%) and sale promotion schemes (83.33%) was the most important factors that influenced the purchasing decisions of the subjects. However, 71.43% of the respondents endorsed that they are least influenced by brand name or attractive packaging (66.67%) of the product. The last age group of 50-60 years consisted of 18 respondents. Of this 90% of the respondents agreed that sales promotion schemes offered by the manufacturer of retailer can significantly influence their purchasing decisions. Other factors such as the influence of advertisements (83.33%), attractive packaging (50%) and brand loyalty (63.63%) also received significant endorsements from this particular age group. The graphical representations of the data collected in the present study on  the influence of advertisements, sales promotion schemes, attractive packaging of the product, brand loyalty on the purchasing decisions of customers belonging to different age groups is given in Fig. 1, 2, 3 and 4 respectively. 

 


 


 

Fig 1: Influence of advertisements on the purchasing decisions of customers belonging to different age groups.

 

Fig 2: Influence of sales promotion schemes on the purchasing decisions of customers belonging to different age groups.

 

Fig 3: Influence of attractive packaging of the product on the purchasing decisions of customers belonging to different age groups.

 

Fig 4: Influence of brand loyalty on the purchasing decisions of customers belonging to different age groups.

 

 


Majority of the respondents in the present study were of the age group of 20-30 (42%) and 30-40 years (34%) which holds ample purchasing supremacy. The sales promotion schemes offered by the manufacturer as well as advertisements significantly influenced the purchasing decisions of this age group. Sales promotion means any activity that is utilized by the producer to encourage the trade as well as make customers to purchase a brand and boost sales force to aggressively sell it. The term sale promotion refers to several types of selling incentives and methods indented to yield immediate sales effects (Totten and  Block, 1994). It was previously reported that sales promotion schemes could make strongest impact on short-term consumption behavior.  (Laroche et al., 2003). Throughout the world, sales promotion offered to consumers are an integral part of the marketing mix for many consumer products (Huff and Alden. 1998; Chandon and  Laurent,  2000). Advertising provides a major tool in creating product awareness and stimulate the mind of a potential consumer to take final purchase decision. As advertiser’s primary mission is to reach potential customers and influence their awareness, attitudes and buying behavior (Kumar and Raju, 2013). Marketers have relied heavily on different forms of advertisement strategies like celebrity endorsement, because they believe in its positive impact of assisting in improvement of brand awareness in young customers particularly in the age group go 20-30 years.(Shallu and Guptha,  2013).  Based on the present empirical study, it was found that the sales promotion and advertising place a product strongly in the mind of the consumer in order to encourage repeated purchase of the product. This also necessitates the application of suitable sales-promotion instruments, together with aggressive advertising strategies that can actually result in increased brand loyalty when targeting consumers below 40 years.

 

The influence of other marketing variables such as brand image and attractive packaging in the present study revealed mixed responses. Over the last decade, firms have markedly increased their investments in the creation and development of brands. The creation of a brand implies communicating a certain brand image in such a way that all the firm's target groups link a brand with a set of associations. People prefer the branded products with lower prices because they consider that branded items have more quality then non branded products. However, there exists a class of customers who still consider quality and brand as the deciding factor, but their number is comparatively less. Majority of the respondents in the study, consider price to be the most important and deciding factor in the purchase of personal care products. Consumer buying behavior is based on the concept and idea that he/she simply decided to purchase a product or service at the spot.  (Adelaar et al., 2003). A product’s packaging is something which all buyers experience and which has strong potential to engage the majority of the target market. This makes it an extremely powerful and unique tool in the modern marketing environment. Due to increasing self-service practices in supermarkets  and changing consumer lifestyles, the interest in attractive packages as a tool of sales promotion and stimulator of impulsive buying behavior is growing constantly (Mitul and Parmar; 2012). For products with limited advertising support, packaging makes a significant role as the key medium for communicating the brand positioning.

 

CONCLUSION:

The study was carried out to understand the influence of independent marketing variables such as advertising, sales promotion schemes, attractive packaging, brand loyalty etc on the dependent variable i.e consumer buying behavior. On the basis of the present findings it can be concluded that implementation of sales promotion schemes and advertisement plays significant role in consumer purchase decisions. Sales promotions schemes proved highly effective in exposing consumers to products for the first time and can serve as key promotional components for a new product. However the marketers need to be regularly updated with the customers demand in this perspective. For this regular customer satisfaction surveys should be conducted regarding effectiveness of the promotional schemes. The marketers should focus on reframing of the other marketing variables such as attractive packaging, brand image etc. for stimulating purchase decision of the potential consumers of personal care products. By offering the right promotional incentives, proper marketing strategies in place,  the manufacturer can increase sales by creating repeat buying behavior to their product.

 

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Received on 09.03.2015               Modified on 25.03.2015

Accepted on 22.04.2015                © A&V Publication all right reserved

Asian J. Management; 6(2): April-June, 2015 page 128-134

DOI: 10.5958/2321-5763.2015.00019.0