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A STUDY ON MARKETING SALES AND PROMOTION IN SREE KARPAGAM

ORGANIC COTTON INDUSTRY AT KARUR


CHAPTER I
INTRODUCTION ABOUT THE STUDY
The role of selling has become more complex because producers are more
technical, buyers are more sophisticated and the competition has become more intense.
This has necessitated the need for proper flow of communication from the producer to the
consumer either along with the product or well in advance of the introduction of a product
into the market. Successful marketing consists in offering the right product at the right price at
the right place and time with right promotion.

Promotion is an exercise in information, persuasion and influence. Promotion has


come to mean the overall co-ordination of advertising, selling, publicity and public relations.
Promotion is a helping function designed to make all other marketing activities more effective
and efficient. Advertising and sales promotion are the central elements in a company's
communication strategy.

DEFINITION

The American marketing Association to bring a semblance of uniformity and better


understanding in the semantics jungle in the field of marketing. It defined `Advertising
as any paid form of non personal presentation and promotion of ideas, goods or services by
an identified sponsor'.
Sales Promotion is defined by the American Marketing Association in a specific sense to
mean: those Marketing activities, other than personal selling. advertising and publicity that
stimulate consumer purchasing behavior and dealer effectiveness, such as display, shows and
exhibitions, demonstrations and various non recurrent selling efforts not in the ordinary routine.
Sales promotion is an important component of a small business's overall marketing strategy,
along with advertising, public relations, and personal selling. The American Marketing
Association (AMA) defines sales promotion as "media and no media marketing pressure applied
for a predetermined, limited period of time in order to stimulate trial, increase consumer demand,
or improve product quality.
A direct inducement that offers extra value or incentive for the product to the Sales force,
distributors, or the ultimate consumer with the primary objective of creating "immediate" sales .
Sales promotion is any initiative undertaken by an organisation to promote an increase in sales,
usage or trial of a product or service (i.e. initiatives that are not covered by the other elements of
the marketing communications or promotions mix).
Sales promotions are varied. Businesses can target sales promotions at three different audiences:
consumers, resellers, and the company's own sales force. Sales promotion acts as a competitive
weapon by providing an extra incentive for the target audience to purchase or support one brand
over another. It is particularly effective in spurring product trial and unplanned purchases.
Most marketers believe that a given product or service has an established perceived price or
value, and they use sales promotion to change this price-value relationship by increasing the
value and/or lowering the price. Compared to the other components of the marketing mix
(advertising, publicity, and personal selling), sales promotion usually operates on a shorter time
line, uses a more rational appeal, returns a tangible or real value, fosters an immediate sale, and
contributes highly to profitability.
POPULAR SALES PROMOTIONS ACTIVITIES:
Buy-One-Get-One-Free (BOGOF) - which is an example of a self-liquidating promotion.
For example if a loaf of bread is priced at $1, and cost 10 cents to manufacture, if you sell
two for $1, you are still in profit - especially if there is a corresponding increase in sales.
This is known as a PREMIUM sales promotion tactic.
Customer Relationship Management (CRM) incentives such as bonus points or money
off coupons. There are many examples of CRM, from banks to supermarkets.
New media - Websites and mobile phones that support a sales promotion. For example, in
the United Kingdom, Nestle printed individual codes on KIT-KAT packaging, whereby a
consumer would enter the code into a dynamic website to see if they had won a prize.
Consumers could also text codes via their mobile phones to the same effect.
Merchandising additions such as dump bins, point-of-sale materials and product
demonstrations.
Free gifts e.g. Subway gave away a card with six spaces for stickers with each sandwich
purchase. Once the card was full the consumer was given a free sandwich.
Discounted prices e.g. Budget airline such as EasyJet and Ryanair, e-mail their customers
with the latest low-price deals once new flights are released, or additional destinations are
announced.
Joint promotions between brands owned by a company, or with another company's
brands. For example fast food restaurants often run sales promotions where toys, relating
to a specific movie release, are given away with promoted meals.
Free samples (aka. sampling) e.g. tasting of food and drink at sampling points in
supermarkets. For example Red Bull (a caffeinated fizzy drink) was given away to
potential consumers at supermarkets, in high streets and at petrol stations (by a
promotions team).
Vouchers and coupons, often seen in newspapers and magazines, on packs
Competitions and prize draws, in newspapers, magazines, on the TV and radio, on The
Internet, and on packs.
Cause-related and fair-trade products that raise money for charities, and the less well off
farmers and producers, are becoming more popular.
Finance deals - for example, 0% finance over 3 years on selected vehicles. Many of the
examples above are focused upon consumers. Don't forget that promotions can be aimed
at wholesalers and distributors as well. These are known as Trade Sales Promotions.

OBJECTIVES OF SALES PROMOTION


SALES PROMOTION IS A TOOL USED TO ACHIEVE MOST OF THE FIVE MAJOR
PROMOTIONAL OBJECTIVES:
Building Product Awareness
Several sales promotion techniques are highly effective in exposing customers to products for
the first time and can serve as key promotional components in the early stages of new product
introduction. Additionally, as part of the effort to build product awareness, several sales
promotion techniques possess the added advantage of capturing customer information at the time
of exposure to the promotion. In this way sales promotion can act as an effective customer
information gathering tool (i.e., sales lead generation), which can then be used as part of follow-
up marketing efforts.
Creating Interest
Marketers find that sales promotions are very effective in creating interest in a product. In fact,
creating interest is often considered the most important use of sales promotion. In the retail
industry an appealing sales promotions can significantly increase customer traffic to retail
outlets. Internet marketers can use similar approaches to bolster the number of website visitors.
Another important way to create interest is to move customers to experience a product.
Providing Information
Generally sales promotion techniques are designed to move customers to some action and are
rarely simply informational in nature. However, some sales promotions do offer customers
access to product information. For instance, a promotion may allow customers to try a fee-based
online service for free for several days. This free access may include receiving product
information via email.
Stimulating Demand
Next to building initial product awareness, the most important use of sales promotion is to build
demand by convincing customers to make a purchase. Special promotions, especially those that
lower the cost of ownership to the customer (e.g., price reduction), can be employed to stimulate
sales.
Reinforcing the Brand
Once customers have made a purchase sales promotion can be used to both encourage additional
purchasing and also as a reward for purchase loyalty (see loyalty programs below). Many
companies, including airlines and retail stores, reward good or preferred customers with
special promotions, such as email special deals and surprise price reductions at the cash
register.

REVIEW OF LITERATURE
Ketelaar, et al., (2001), As the flow of online sales increases and more companies begin
to move into the digital arena, advertisers and digital designers are forced to stay on the
cutting edge in terms of website design and content presentation. In a search to find
website design techniques that increase information flow and website stickiness, two
possibilities were found, persuasive navigation and "open", or visually rhetorical, online
advertising. These two techniques focus on presenting targeted information to consumers,
in the form of website content advertisements, while they browse a given website.
Bright (2004) , The concept of intra-site advertising was tested by him and was found to
be effective in terms of increasing information flow on a controlled website. Open
advertising has not yet been tested in the online environment, with current studies
focusing on print media, however it presents promises potential as an online persuasion
technique. This paper will further explore the application of open advertising in the
online context as well as elements of interactivity and design.
(Zakon, 2002) says that the Web has come to encompass some 38 million plus websites.
It is a tossup as to whether any of these websites effectively communicate with their
target audience in a manner that is both user-friendly and efficient in terms of brand
impact and sales. As most consumer advocates have come to know, digital environments
that frustrate users dramatically decrease brand loyalty and can cause consumers to
completely abandon a brand community in both real and virtual worlds. In an effort to
stem off this flow of frustration, two new digital design techniques provide an intriguing
way to increase information flow within digital environments while providing imagery
and content that makes users feel intelligent and engaged. These new design techniques
are persuasive navigation and open online advertising, respectively. One technique deals
with the information architecture of the website, while the other addresses imagery; both
in an equally seductive fashion.
Kioumarsi et al.,(2009),says that Personality characteristics impact consumer behavior
because they shape the way in which consumers respond to messages at a given time.
This response changes minute to minute based upon the unique characteristics of the
target consumer and their ongoing life experience. The online environment presents a
vast opportunity for companies to interact with consumers on a personal, customized
level. Individual differences are an important aspect of this interaction as they provide
insight into how people with varying levels of experience with the online environment
respond to interactive persuasion techniques.
Friestad and Wright (1994), in their presentation of the PKM, posit that the effectiveness
of advertising persuasion techniques depends upon the level of persuasion expertise each
individual possesses. In an online environment, measurement of this effect can be
achieved by looking at user experience levels, self efficacy, and number of hours spent
online. General knowledge gleaned from the PKM dictates that consumers with more
experience in the online environment will be better at coping with persuasion techniques
therein, such as open, visually rhetorical advertisements.
Ketelaar et al(2004) conducted the study that an individual's need for cognition refers to
their motivation to engage in meaningful cognitive thought or undertaking. A consumer's
need for cognition will impact their ability to deal with tasks and social settings, such as
responding to advertising messages or calls to action. This applies directly to the concept
of open, visually rhetorical advertising because such messages require a higher cognitive
processing load to be understood and learned. Although need for cognition was not found
to impact interpretations of open advertisements in the Ketelaar et al. study, it is still an
interesting variable that can be effectively measured and manipulated for this type of
research endeavor. Additionally, cognitive response, and the need therein serve an
important part in the development of brand attitudes within a target consumer.
McGinnis and Jaworski (1989) ,The concept was elaborated upon by in their seminal
piece regarding information processing in advertising: "Cognitive and emotional
responses related to imagined product consumption experiences are the strongest
determinants of brand attitude. As shown, need for cognition is linked to the development
of brand attitude in consumers. When examined in terms of its relationship to time spent
processing online, visually rhetorical advertising, need for cognition could prove to be an
interesting differentiator within the sample group. In addition to need for cognition, an
internal motivation toward the product being advertised should be apparent within driven
consumers. This motivation helps push the consumer toward unraveling the visual riddle
presented in an open advertisement. Type of motivation, either utilitarian ("goal-
oriented") or hedonic ("expressive"), is a diverse and interesting factor to analyze across
consumer groups.
Phillips (2000) shown in research undertaken by, consumers with utilitarian, goaloriented
motivations are keen on evaluating product attributes and therefore less likely to be
attracted to open advertisements. Consumers with hedonic or "expressive" goals are more
likely to seek out the entertainment value in the open advertisement. Huang (2003), in his
online study of websites, found that level of attention in consumers is most linked to
utilitarian design while both control and interest are linked to hedonic performance
measures. Liu, et al (2002), based on their online research, concluded that higher levels of
active control within consumers resulted in being geared towards more utilitarian, goal-
based website designs. As shown in these studies, motivation is an individual difference
worth characterizing. Type of consumer motivation is extremely important when
analyzing online consumer behavior as it helps categorize amongst user groups, across
sites.

OBJECTIVES OF THE STUDY


PRIMARY OBJECTIVE:
The study on marketing sales and promotion activities with special reference to
SREE KARPAGAM ORGANIC COTTON INDUSTRY AT KARUR

SECONDARY OBJECTIVE:
To find out the factors that influences the purchase decision of consumers.
To identify need of new innovations of the company towards sales promotion.
To know about the different strategies for sales promotion.
To suggest to be strengthened after sales services of SREE KARPAGAM ORGANIC
COTTON INDUSTRY AT KARUR
To provide suggestions and recommendations for further improvements

SCOPE OF STUDY
The function of marketing is to ensure that the right product is made available at
the right place, in the right quality, at the right price, at the right time and under the
right impressions to the consumer.
All these righteousness is made possible by performing the sales function. Thus, sales
function is the pivotal factor in any organization. It is even capable of deciding
the very existence of an organization.
The various promotional mix elements are designed for achieving better sales.
Advertising is a necessisity with a view to maximization of the return on the money
invested.
The probability of securing the optimum effectiveness is greater when advertising is
adequately planned, executed and constantly evaluated in terms of carefully crystallized
objectives.
Thus, advertising offers a reason to buy while; sales promotion offers an incentive to
buy.

LIMITATIONS OF THE STUDY

Time Factor: The researcher had only limited period of one month for study. The
elaborate topic could not be fully covered; hence a complete picture could not be obtained.
Experience: The researcher had limited experience in the field being a student.
Response: Some of the respondents failed to express their reactions clearly.
Sample Survey: Since the information is being collected from a sample of population, their view
cannot be generalized on large population.

CHAPTER III
RESEARCH METHODOLOGY
RESEARCH METHODOLOGY
MEANING OF RESEARCH:-
Research is a systematic method of finding solutions to problems. Research simply means a
search for knowledge. Research is an original contribution to the existing stock of knowledge
making for its advancement. It aims at discovering the truth. Research is a process of systematic
and in-depth study or search of any particular topic, subject or area of investigation backed by
collection, computation, presentation and interpretation of relevant data.
MEANING OF METHODOLOGY:-
Methodology means methods of conducting research and the logic behind the methods. The
methodology is the theory of how research should be undertaken. It is the tools and techniques
used to obtain and analyze data.
MEANING OF RESEARCH METHODOLOGY:-
Research methodology means the method adopted in studying the problem. It helps in explaining
the tools and techniques used in studying the problem under study. It is necessary that the
researcher should know which tool is used and for what purpose. Research methodology is a way
to systematically show the research problem. The research methodology not only talk about the
research methods but also consider the logic behind the method we sue in the context of our
research study and explain why we are using others so that the research results are capable of
being evaluated either by the researcher himself or by others.
DEFINITION

D. Slesinger and M. Stephenson in the Encyclopedia of Social Sciences define research as the
manipulation of things, concepts or symbols for the purpose of generalizing to extend, correct or
verify knowledge aids in construction of theory or in the practice of an art.
Redman and Mory define research as a systemized effort to gain new knowledge.
RESEARCH DESIGN
The research design chosen is descriptive as the study reveals the state of facts existing.
Descriptive research design: Descriptive research studies are those studies which are concerned
with describing the characteristics of a particular individual, or a group. The study is concerned
whether certain variables are associated with the study. And also the study is concerned with
specific predictions, with narration of facts and characteristics concerning an individual, group or
situation.
METHODS OF DATA COLLECTION:
While deciding about the method of data collection for the study the researcher should
keep in mind the two types of data collection.
Primary Data:
Data has been collected from few respondents by communicating with them directly and
discussing their views about the organization. Most of these included informal discussion with
the employees. One of the other sources of collecting the primary data was by distributing the
questionnaires and getting back the responses for them. Such questionnaires were distributes
among the production employees and also the executive level employees.
Secondary Data:
Secondary data has been collected from the following sources: Books and journals at the
organization and the college library. Through the internet.
SAMPLING:
Sampling is that part of statistical practice concerned with the selection of individual
observations intended to yield some knowledge about a population of concern, especially for the
purposes of statistical inference.
CONVENIENCE SAMPLING:
Convenience sampling is a type of nonprobability sampling which involves the sample
being drawn from that part of the population which is close to hand. That is, a sample population
selected because it is readily available and convenient. It may be through meeting the person or
including a person in the sample when one meets them or chosen by finding them through
technological means such as the internet or through phone. Sample Size The size of the sample
selected for study is 200 units.
DATA ANALYSIS
Collected primary and secondary data are scheduled to suitable table for the purpose of
analysis. Suitable statistical tools were applied in various places for analysis.
SAMPLING TECHNIQUES
The sampling method adopted is the non-probability sampling method. In non-probability
sampling method the convenience sampling method is used here. In convenience sampling
method the researcher can collect the samples as per his or her convenience. This is usually
adopted when the population is unknown and the area of study is very wide.
Population Size:-
Population Size of this project is 500 employees in SREE KARPAGAM ORGANIC
COTTON INDUSTRY AT KARUR
Sample Size: -
It is the number of items that has been selected from a population to make the study. Sample
size of 50 samples was considered for this study
AREA OF THE STUDY:

The study has been conducted only on the SREE KARPAGAM ORGANIC COTTON
INDUSTRY AT KARUR

SAMPLING METHODS

The sampling method adopted is the non-probability sampling method. In non-probability


sampling method the convenience sampling method is used here. In convenience sampling
method the researcher can collect the samples as per his or her convenience. This is usually
adopted when the population is unknown and the area of study is very wide.
TOOLS USED FOR DATA ANALYSIS

The collected data were analyzed with the help of simple percentage analysis, chi-square
test and weighted average method.

PERCENTAGE ANALYSIS

Percentage refers to a special kind of ratio in making comparison between two or more
data and to describe relationships. Percentage can also be used to compare the relation terms the
distribution of two or more sources data.

Number of Respondents
Percentage of Respondent = x 100
Total Respondent

CHI-SQUARE ANALYSIS
Chi-square is a non-parametric test of statistical significance for bi-variant tabular
analysis. A non-parametric test like chi-square is a rough estimate of confidence. Chi-square is
used most frequently to test the statistical significance of results reported in bi-variant tables and
interpreting bi-variant tables is integral to interpreting the results of a chi-square test.

H0 = Null Hypothesis

The hypothesis to be tested is usually referred to as Null Hypothesis.


H1 = Alternative Hypothesis

If H0 is rejected it means that the data on the hand are not compatible
with the null hypothesis H0 but are compatible with some other hypothesis,
that is the Alternative hypothesis.

The chi-square method is the application of testing the significance difference between observed
and expected.

( Oij Eij )2
Chi-square test =
Eij

Oij = Observed frequency of the cell in the i th row and j th column.


Eij = Expected frequency of the cell in the i th row and j th column.

Significance level = 5%
Degree of freedom = (R-1) (C-1)
Where as
O = Observed Frequency
E = Expected Frequency
R = No of rows
C = No of columns
WEIGHTED AVERAGE METHOD

Weighted average methods are normally used in the comparison of two or more activities
regarding to the products. The result is on the basis of the value we obtained. If the value of the
weighted average is more effective.

Weighted Average = WX / W

Where as WX = Multiply the weights by the variable X.


W = Total of Weights.

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