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A
Major Research Project
Synopsis on

“Advertising and Sales Promotion as Determinants of

Purchase Decision”
(A study on consumer durables)

Guided By Submitted by
Dr. V. K. Jain Khushiyal Manohar Katre
(Director) MBA III Sem
Section-R
(Production + Marketing)
 1. CONCEPTUAL FRAME WORK

1.1 INTRODUCTION

Companies always try to establish the contact with target market. This is a prestigious status for
company to address the customers. Company wanted to enhance its image in the minds of
common man so that in future, whenever it would be visited to customer court; it would be
having enough matter to communicate the customers. The company presents its history, products
history and even national history. Companies have these processes in all continuance and
consistency. Promotion is a term, which means the moving from one end to another. In
marketing, promotion means all those took that a marketer uses to take his product from the
factory to the customers and it involves the advertising, sales promotion, personal selling, public
relations, publicity and merchandising. Promotions are result oriented. Promotion system works
with proper communication system. This has sender, receivers and feedback system. Feedback is
form of action which customer gives back to the company about product, advertisement or
strategy.

Promotion involves the following steps:

(i) Common Understanding

(ii) Demographic and psychographics profile
(iii) Media habits
(iv) Level of Awareness.

The ultimate expectation of the company is to make the people for purchase of product. The
AIDA Model works in this process.

The sales promotion and advertising functions and stimulate the customer purchase decision in
accordance with this model. This research paper will examine the comparative effectiveness
issue of Sales promotion and advertising measures.

1.2 VARIABLE DEFINITION

ADVERTISING

Advertising is a form of communication intended to persuade an audience (viewers, readers or

listeners) to purchase or take some action upon products, ideals, or services. It includes the name
of a product or service and how that product or service could benefit the consumer, to persuade a
target market to purchase or to consume that particular brand. These brands are usually paid for
or identified through sponsors and viewed via various media. Advertising can also serve to
communicate an idea to a large number of people in an attempt to convince them to take a
certain action.
Advertising is a powerful communication force, highly visible and one of the most important
tool of marketing communications that helps to sell products, services, ideas and images etc.
Many believe that advertising reflects the needs of the times. Whether one likes it or not,
advertisements are everywhere. They are seen on walls, on the back of buses, in playgrounds, on
the occasion of sports events, on roadsides, in the stores, and even on aeroplans. Advertisements
are seen in newspapers, magazines, on the television, on internet and on even heard in radio.

Several years ago (1963) the American Marketing Association (AMA) Proposed the following
definition of advertising:

“Advertising is any paid form of non personal presentation and promotion of ideas, goods and
services by an identified sponsor.”

According to John S. Wright, Willis L. Winter, and Sherilyn K. Zeigler:

“Advertising is controlled, identifiable information and persuasion by means of mass
communication media.”

SALES PROMOTION

Sales promotion is one of the four aspects of promotional mix. Media and non-media marketing
communication are employed for a pre-determined, limited time to increase consumer demand,
stimulate market demand or improve product availability. Examples include:

• Contests
• Point of purchase displays
• Rebate (marketing)
• Free travel, such as free flights

Sales promotions can be directed at the customer, sales staff, or distribution channel members
(such as retailers). Sales promotions targeted at the consumer are called consumer sales
promotions. Sales promotions targeted at retailers and wholesale are called trade sales
promotions. Some sale promotions, particularly ones with unusual methods, are considered
gimmick by many.

The definition given by American Marketing Association (AMA 1960):

”In a specific sense, sales promotion include those sales activities that supplement both
personal selling and advertising and coordinate them and help to make them effective such as
display, shows, and expositions, demonstrations and other non recurrent selling efforts not in
the ordinary routine.”

According to Philip Kotler:

“Sales promotion consists of a diverse collection of incentive tools, mostly short term, designed
to stimulate quicker and/or greater purchase of particular products/services by consumers or
the trade.”
PURCHASE DECISION PROCESS

Purchase decision processes are the decision making processes undertaken by consumers in
regard to a potential market transaction before, during, and after the purchase of a product or
service.

More generally, decision making is the cognitive process of selecting a course of action from
among multiple alternatives. Common examples include shopping and deciding what to eat.
Decision making is said to be a psychological construct. This means that although we can never
"see" a decision, we can infer from observable behavior that a decision has been made.
Therefore we conclude that a psychological event that we call "decision making" has occurred. It
is a construction that imputes commitment to action. That is, based on observable actions, we
assume that people have made a commitment to effect the action.

A general model of the purchase decision process consists of the following steps:

1. Problem recognition;
2. Information Search
3. Evaluation of Alternative
4. Purchase decision
5. Purchase
6. Post-purchase behavior/buyer's remorse (cognitive dissonance)

CONSUMER DURABLE GOODS

In economics, a Consumer durable good or a hard good is a good that does not quickly wear
out, or more specifically, one that yields utility over time rather than being completely consumed
in one use. Items like bricks or jewelry could be considered perfectly durable goods, because
they should theoretically never wear out. Highly durable goods such as refrigerators, cars, or
mobile phones usually continue to be useful for three or more years of use, so durable goods are
typically characterized by long periods between successive purchases.

Examples of consumer durable goods include cars, household goods (home appliances,
Consumer electronics, furniture, etc.), sports equipment, and toys.
 2. LITERATURE REVIEW

 Role of Sales and Advertising Promotions in the Purchase Decision

of Consumer Durable Products.

In this research paper Dr. Vijay Pithadia & Aashish Sharma (2005) have highlighted
the effectiveness and applicability factors of sales promotion and advertisement
techniques in the purchase decision of consumer durable goods. How do these techniques
affect the cognitive, affective and connective stages? In this research effects of both
techniques has compared and suggested a balancing role of both the techniques in the
promotion of products.

 Demand creation through right sales promotion management.

In this study Dr. Kavita Kshatriya (2009) has assessed the impact of sales promotion on
different product categories and the impact of brand loyalty of consumers in spite of
luring promotion schemes by competitors. This study is to find out whether sales
promotion scheme are gender biased and to find influence of sales promotion on different
age group.

Effect of consumer behavior on the purchase of refrigerators

Bharat Singh Chauhan, Chinmaya Nagaraj, Gaurav Upadhyaya, Susheel Kumar

Singh, Vijay Jaret (2009) have tried to understand key external variables influencing the
buying behavior of a particular segment of customers towards the product category of
Refrigerator. Consumers get influenced by several major factors while they make their
decisions. These factors can be grouped as demographic, social, cultural factors etc.
Consumers try to purchase and maintain a variety of products that satisfy their current
and future needs.

 An Empirical study on impact of advertising Vs Sales Promotion in

consumers buying behavior

Through this research Nidhi Kumari (2009) has highlighted the effect of advertising and
sales promotion in consumer buying behavior. She has also compared between those two
promotional tools, what attracts more to a consumer, advertising of the product or sales
promotion when the purchase decision is made. She has concluded that the Age factor
plays a significant role for the selection of products from advertising and sales
promotion. But the impact of sales promotion is more because they interact with the
product more in this. Hence the touch and feel of product is very important in Indian
market. Otherwise people do not buy the products.
 The study of advertising agencies.

In this research Mohit Gill (2003) has studied about the various advertising agencies; the
ones having local operations as well as the ones have international scale of operations,
their modus operandi, styles and the manner of functioning, their profiles, their upswing
and their downfall and last but not the least their position in the world of advertising on
the basis of the contributions to the ad world and society at large.

 Advertising after globalization.

In this study Vijay Bhojwani (2009) has explained about globalization and its impact on
business, what are the media are used for advertising, celebrity endorsements, recent
updates on advertising, how to make an constructive effective ad and impact of
advertising on consumer purchase decision.

 Effect of advertising on enhancing brand personality and consumer buying

decisions.

The purpose of Shruti Jain and Kriti Swarup (2009) through this study is to analyze
the strategies of effective brand building & managing the same with reference to
acquiring new customer base along with generating customer satisfaction. They have
conducted a survey targeting different socio demographic categories to study the impact
of advertising on brand personality and consumer buying decision. They also tried to
establish relationship between advertising and brand personality and consumer buying
decision.
3. RATIONALE

This research project is carrying out to identify the various activities that are involved in
advertising and sales promotion of consumer durable goods. It will provide the detailed
information about the impact of advertising and sales promotion techniques on consumer
purchase decision or consumer buying behavior. It will also help to compare the
effectiveness of both the techniques (i.e. advertising and sales promotion) and to suggest
a balancing role of both the techniques in the promotion of products.
4. OBJECTIVES
The research project has following objective

1. To study the effectiveness of sales promotion techniques on purchase decision.

2. To study the effectiveness of advertising on the purchase decision.

3. To compare the impact of advertising and sales promotion on purchase decision.

4. To see relationship between advertising and purchase decision.

5. To see relationship between sales promotion and purchase decision.

6. To see dependent level of purchase decision on advertising and sales promotion.

 5. RESEARCH METHODOLOGY

Research methodology is a way to solve the research problem in a systematic manner. It may
understand as a science of studying how the research is done significantly. The methodology
may differ from problem to problem, yet the basic approach towards the research remains the
same. The sequence or steps followed have been explained as under:

5.1 RESEARCH DESIGN:

This research is exploratory research.

5.2 SAMPLE DESIGN:

Sample design is a definite plan of obtaining some items from the whole population. The sample
design used in this project is convenience sampling.

I will visit retail stores, outlets and shopping malls. The total sample size will be 200.

5.3 TOOLS FOR DATA COLLECTION:

The data, which is collected for the purpose of study, is divided into 2 bases:
A) Primary Data

The data, which are collected for the first time, directly from the respondents to the base of
knowledge & belief of the research, are called primary data.
The primary data will be collected using a self designed questionnaire which will measure the
impact of advertising and sales promotion on purchase decision.

B) Secondary Data

When the data is collected and compiled in the in a published nature it is called Secondary data.
The secondary data is to be collected from:
• References from books
• Journals and magazines.
• Newspapers
 • Websites
5.4 TOOLS FOR DATA ANALYSIS

The data shall be analyzed on the basis of suitable tables by using:

 Mathematical techniques
 Various tests
 Bar graphs, pie graphs and charts
 Correlation
 Multiple regression
6. EXPECTED OUTCOMES

• After the study the importance of advertising and sales promotion can be identified.
• Detail information about the effectiveness of advertising and sales promotion will be
collected.
• The effects of both the technique can be compared and we can know about, which
technique should be used at which place?
• Detail about how to balance role of both the techniques in the promotion of products.
7. REFERENCES

 BIBLIOGRAPHY

• Kazmi S H H, Batra Satish K., “Advertising and Sales Promotion”, Excel Books, New
Delhi, 2008, PP 8-10, 482.

• Aaker David A., Batra Rajeev, Myers John G., A communication task(AIDA model),
Advertising Management, 4th edition, Prentice Hall, New Delhi, PP 98-99.

• Jain Shruti, Swarup Kriti, Effect of advertising on enhancing brand personality and
consumer buying decision, Journal of International Management, Volume 6, No. 2,
July-Dec 2009, pp 19-35

• Kshatriya Dr. Kavita, Demand creation through right sales promotion management,
Journal of IPM Meerut, Volume (10), No. (2), July-Dec 2009, PP 10-23.

 WEBLIOGRAPHY

• http://www.indianmba.com/Faculty_Column/FC174/fc174.html/12/10/2010/7:30P.M
.
• http://en.wikipedia.org/wiki/Consumer_behaviour#Purchase_decision/12/10/2010/7:
40P.M

• http://en.wikipedia.org/wiki/Advertising/12/10/2010/7:50P.M

• http://en.wikipedia.org/wiki/Salespromotion/12/10/2010/7:55P.M

• http://en.wikipedia.org/wiki/Consumerdurables/12/10/2010/8:20P.M

• http://www.scribd.com/doc/28388605/Advertising/12/10/2010/8:40P.M

• http://www.scribd.com/doc/30380210/Advertising-Agency-Project-Report-
MBA/12/10/2010/8:50P.M
• http://www.scribd.com/doc/19448431-Final-Dissertation-Document-
Doc/12/10/2010/9:00P.M