Dissertation topic:

“Impact of Sales promotions in Indian

Apparel Segment on consumer buying
behavior of Branded Apparels”

Submitted by: Tahir Hameed

Class & Roll no – MBA-IB – 0920928
Christ University
 Introduction

Sales promotion is one of the most loosely used terms in the marketing
vocabulary. In a way Sales promotion is defined as stimulating devices
designed to entice customers into purchasing. Better known to
supplement advertising, brands often use sales promotion to create a
flutter in the market. Price and competition keep marketers adverse to
spend huge budgets on advertising their brand. But advertising is known
to create awareness. Sales promotion on the other hand is time a tested
marketing skill which is less expensive and which can translate into
sales. The drawback of sales promotion is that it can’t be used
‘continuously’. It is used only for short period of times and effective
only for short durations. In a nutshell, Sales promotion signifies all those
activities that supplement, co-ordinate and make the efforts of personal
selling and advertising more effective.

Sales promotions are well-suited to accomplishing various marketing

objectives, such as stimulating sale force enthusiasm, invigorating sales
for a mature brand, facilitating the introduction of new products,
increasing on- and off-shelf merchandising space, encouraging
Repeat purchases, and reinforcing advertising (Shimp 2000).
Objective of this study:
This study is done to understand and investigate various sales promotion
activities undertaken by Indian Apparel brands, understand the Indian
consumer buying behavior with relation to any kind of sales promotion
activities and their effectiveness w.r.t. creating brand loyal customers
and increasing revenues/sales.
Literature Review
Sales Promotion Practices in Indian Apparel Retail Sector –
Indian organized retail industry is poised for growth. Apparel sector in
particular has a great opportunity with alignment of Indian economy to
globalised markets. With the widespread use of sales promotions- short
term activities which provide material inducements to consumers and
trade it becomes imperative for managers to understand such practices
and understand challenges.
India as an Apparel Retail sector has grown to accommodate and use
sales promotion as an important tool to push sales and more importantly
create brand loyal customers. Retailers like Lifestyle, for instance, has a
loyalty programme called `The Inner Circle', while Pantaloons offers a
`Green Card' Rewards programmes, Westside has `Club West' to woo
the customers.
Marketers use price oriented promotions such as coupons, rebates and
price deals to increase sales and market share, to entice trial, and to
encourage brand switching. Gupta (198 8) suggests that 84% of the
sales increases due to promotion come from brand switching.
Loyalty or continuity programs such as frequent user programs and
shoppers' cards, which reward consumers' repeat purchasing of a
particular brand or at a particular outlet, have their greatest value
encouraging consumers with divided loyalty to purchase a given brand
(Shimp 2000).

The Indian retail industry is undergoing major revolutions. Retailing in

India is gradually becoming the next boom industry. The consumer
buying patterns and behavior are changing steadily. The growth of
India's retail sector not only limited to urban areas but also growing in
rural areas. In the next five years, it is expected that, India's retail
industry will expand more than 80%. (Supriya Pal, 2008)
With the advent of modern format retailers and the growth of plastic
cards, affluent urban Indian women are shopping like never before. They
spend mornings browsing in stores looking for deals or latest styles. It’s
here the role of sales promotion becomes prominent. Indian shoppers are
deal hungry and rely heavily on price deals, off the shelf discounts and
gift vouchers. In the large urban centers, apparel retailers, like Shoppers
Stop, Westside and Pantaloon have popularized loyalty cards, gift
vouchers and price deals. This sales promotion can be categorized as the
new form of promotional activity which the Indian Apparel industry is
offering and making the best out of it. Shoppers stop for instance has
over 60% of its revenues from its “First citizen” card holders who are
entitled for various discounts and loyalty points.
This highlights the importance of sales promotions and Apparel retailer
needs to understand critical role of sales promotions. Attractive
promotions induces purchase acceleration, stock piling and brand
switching on the part of a consumer which substantially reduces retailers
financial and inventory risk and consumer’s psychological risk.
Many studies have been done in the past to analyze sales promotions and
relative consumer buying behavior
1. Kincade, Doris H.; Woodard, Ginger A.; Park, Haesun (2002)
studied Buyer–seller relationships for promotional support in the
apparel sector which is critical for success.
The purpose of the study was to define promotional support
categories offered to apparel retailers by manufacturers, to identify
the retailer's perceptions of the offering frequency and importance
of the promotional support
2. Liu, Yuping, (2007) found out the Long-Term Impact of Loyalty
Programs on Consumer Purchase Behavior and Loyalty. The study
found out that consumers who were heavy buyers at the beginning
of a loyalty program were most likely to claim their qualified
rewards
3. An Investigation of Consumer Response to Sales Promotions in
Developing Markets: A Three-Country Analysis. Journal of
Advertising Research | May 01, 1998 | L., Lenard C.; Alden Huff
Dana studied consumers' attitudes towards the use of coupons (a
price-oriented promotion) and sweepstakes (a non-price
promotion). The models were designed specifically for developing
or newly industrialized countries with collectivist cultures and
were tested with consumer samples from Taiwan, Thailand, and
Malaysia. The study suggested that Marketing managers use price-
oriented promotions such as coupons, rebates, and price discounts
to increase sales and market share, entice trial, and encourage
brand switching. Also the use of Non-price promotions such as
sweepstakes, frequent user dubs, and premiums add excitement
and value to brands and encourage brand loyalty

In view of above research studies, the emergence of sales promotions

in Indian retail segment needs to be identified. This research will look
into the aspect of sales promotional activities in Indian Apparel Retail
segment. Also this study will encompass the promotional strategies of
major retail brands like Westside, Lifestyle and Shopper Stop among
others. The effectiveness of these sales promotion activities will be
studied w.r.t increasing sales/revenues as well as creating and
building brand loyal customers.