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Introduction

Sales promotion includes incentive-offering and interest-creating activities which are generally short-term marketing events other than advertising, personal selling, publicity and direct marketing. The purpose of sales promotion is to stimulate, motivate and influence the purchase and other desired behavioral responses of the firms customers. Sales promotions have become a vital tool for marketers and its importance has been increasing significantly over the years. In India, sales promotions expenditure by various marketing companies is estimated to be Rs 5,000 crores and the emphasis on sales promotion activities by the Indian industry has increased by 500 to 600 percent during the last 3 to 5 years. Given the growing importance of sales promotion, there has been considerable interest in the effect of sales promotion on different dimensions such as consumers price perceptions, brand choice, brand switching behaviour, evaluation of brand equity, and effect on brand perception and so on. One of the purposes of a consumer promotion is to elicit a direct impact on the purchase behaviour of the firms customers. Research evidence suggests that sales promotions positively affect shot-term sales. Research on price promotion has consistently reported high sales effect and high price elasticity for brands which are on promotion. Studies have shown that price promotions enhance brand substitution within a product category, affect aggregate sales, and significantly affect stock piling and purchase acceleration. However, there have also been studies that suggest that sales promotion affects brand perceptions. Researchers have found out that promotions, especially price promotions, have negative effect on brand equity. In another study, Schultz argues that over dependence on promotions can erode consumers price-value equation. The result of a study by Jedidi indicates that in the long term, advertising has a positive effect on brand equity where as price promotions has a negative effect. There is also a managerial belief that if a brand is supported with 1

frequent promotional offers, the equity of the brand tends to get diluted. On the contrary, there have also been studies that indicate brands benefit from promotions. Amongst the elements of marketing mix, sales promotions have long-term influence on brand equity. Mariola & Elina, based on a sample of 167 buyers suggest that monetary and nonmonetary promotions are useful to create brand equity because of their positive effect on brand knowledge structures. The researchers in this study propose to explore whether the phenomenal growth of sales promotion as a promotional tool in marketing products in India is perceived favorably by the consumers and examine the differential effect, if any, of two types of sales promotion namely cash discount and free gift on consumers perception. Dell traces its origins to 1984; when Michael dell created PCs Limited while a student at the University of Texas at Austin. The dorm-room headquartered company sold IBM PC-compatible computers built from stock components. Michael Dell started trading in the belief that by selling personal computer systems directly to customers, PCs Limited could better understand customers' needs and provide the most effective computing solutions to meet those needs. Michael Dell dropped out of school in order to focus full-time on his fledgling business, after getting about $300,000 in expansion capital from his family. In 1985, the company produced the first computer of its own designthe "Turbo PC", sold for US$795. PCs Limited advertised its systems in national computer magazines for sale directly to consumers and custom assembled each ordered unit according to a selection of options. The company grossed more than $73 million in its first year of trading. The company changed its name to "Dell Computer Corporation" in 1988 and began expanding globallyfirst in Ireland. In June 1988, Dell's market capitalization grew by $30 million to $80 million from its June 22 initial public offering of 3.5 million shares at $8.50 a share. In 1992, fortune magazine included Dell Computer Corporation in its list of the world's 500 largest companies, making Michael Dell the youngest CEO of a Fortune 500 company ever. 2

Statement of problems
To evaluate why sales promotion tools are important and how customers view Dell as a brand, their perception towards the brand and to find out the various schemes that can influence them to buy the product.

Importance of study
The project attempts to analyse the degree of the customers satisfaction towards the service rendered by dell at IMC in Ernakulam. This work is a study based on customers response about the various products and schemes offered by dell. This study is done in the form of survey through questionnaire which will be provided to the customers to know about their ratings and opinion.

Objectives
To examine the perception of customers on sales promotion To examine the differential effect, if any of two types of sales promotions Viz., cash discount and free gift on the perception of customers. To find out the level of satisfaction of the customers. To study and understand the type of customers that shop at IMC.

Methodology of the study


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The data collected for this study were delivered from two sources namely: 1) Primary source: The primary data was collected directly from the customers through questionnaire and information given by the staff and the manager about their promotional tools and their services towards customer. 2) Secondary source: The secondary data was collected through internet, magazine and text books.

Size of sample
The sample size is fifty customers to make a survey on effectiveness of sales promotion.

Tools of analysis
The whole data and information that is collected are analysed in graphs and tables.

Limitation of the study


Time limitation was the major line factor for this study. The odd nature of many customers was another limiting factor. Non availability of customers on time. Lack of co-operation of staff Since the sample size is limited it may lead to the partial true factor about the research.

Marketing mix
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The term "marketing mix" was coined in 1953 by Neil Borden in his American marketing association presidential address. However, this was actually a reformulation of an earlier idea by his associate, James Culliton, who in 1948 described the role of the marketing manager as a "mixer of ingredients", who sometimes follows recipes prepared by others, sometimes prepares his own recipe as he goes along, sometimes adapts a recipe from immediately available ingredients, and at other times invents new ingredients no one else has tried. The marketing mix (price, product, distribution, promotion) forms the entire promotional campaign. when these are effectively blended, they form a marketing program that provides want-satisfying goods and services for the companys market." The term became popular in the article written by Niel Borden called The Concept of the Marketing Mix. He started teaching the term to many after he himself learned about it with an associate. The marketing mix is a broad concept which includes several aspects of marketing which all inquire to obtain a similar goal of creating awareness and customer loyalty. The marketing mix is not only an important concept, but a guideline to reference back to when implementing the price, promotion, product, and distribution. Those are the four main ingredients of the marketing mix, but there are other components not already mentioned on the Wikipedia site, including, planning, branding, packaging, display, distribution channels, personal selling, advertising, servicing, and physical handling. All in all the current description of the marketing mix is accurate, but missing some vital pieces of information which will allow individuals to gain a better understanding and implement a more effective marketing mix. A prominent marketer E.Jerome McCarthy proposed a Four P classification in 1960, which has seen wide use.

Figure No: 1

Characteristics of Marketing Mix


(i) Marketing-mix is the crux of marketing process: Marketing mix involves many crucial decisions relating to each element of the mix. The impact of the mix would be the best when proper weightage is assigned to each element and they are integrated so that the combined effect leads to the best results. (ii) Marketing mix has to be reviewed constantly in order to meet the changing requirements: The marketing manager is required to constantly review the mix and conditions of the market, and make necessary changes in the Marketing Mix marketing mix according to changes in the conditions and Complexion of the market. (iii) Changes in external environment necessitate alterations in the mix: Changes keep on taking place in the external environment. For many industries, customer is the most fluctuating variable of environment. Customers tastes and preferences change very fast. Brand loyalty and purchasing power too change over a

period of time. The marketing manager has to carry out market analysis constantly to make necessary changes in the marketing mix. (iv) Changes taking place within the firm too necessitate changes in marketing mix: Changes within the firm may take place due to technological Changes, or changes in the product line, or changes in the size And scale of operation. Such changes call for correspondent Changes in the marketing mix.

Elements of Marketing Mix


As mentioned earlier the elements or constituents of marketing mix may be grouped broadly under four heads:

Figure No: 2

Product
Product refers to a physical product or a service or an idea which a consumer needs and for which he is ready to pay. Physical products include tangible goods like grocery items, garments etc. Services are Intangible products which are offered and purchased by consumers. Services may involve also an innovative idea on any aspect of operation. A product is the key element of any marketing mix. The decisions concerning product may relate to 7

a) Product attributes b) Branding c) Packaging and labeling d) Product support service e) Product mix Product attributes refer to the quality, features and design of the product. A product should serve the purpose for which it is made, in terms of utility and quality. In a competitive market, products are differentiated on the basis of certain features or design. Branding is a crucial decision. In a competitive market, many products are sold by brand names.

Price
Price is the amount charged for a product or service. It is the consideration paid by consumers for the benefit of using any product or service. Price fixation is an important aspect of marketing. Pricing decisions of a company are affected by both internal as well as external factors. Internal Factors and External Factors are: Cost of the product Nature of market Marketing objectives pricing or demand for product Marketing mix strategy Decision Competitors' costs and strategy price offers. Organisation for pricing Other environmental factors like economy, governments policies etc. There may be two methods of price-fixation 1. Cost-based approach 2. Competition-based approach

Cost-based approach: This is the simplest method of pricing. Generally companies add a certain percentage of Profit, to the total cost of the product. The total cost of the product is calculated after taking all types of costs into Consideration. While following this approach, no other factors e.g. prices of substitute goods, nature of demand, etc. are considered. Competition-based approach: In competitive market, cost-based approach is not always practicable. The prices are determined on the basis of conditions in the market. Companies may follow any one of the following three approaches. a) Price-in-line b) Market-plus c) Market-minus

Place
Place is another important element of marketing mix. Once the goods are manufactured, packaged, priced and promoted, they must be made available to the consumers. Activities related to placing the products are covered under this element of marketing-mix. It consists of decisions relating to channels of distribution and physical distribution. Channels of distribution refer to the individuals and organizations which facilitate moving the goods from manufactures to consumers. It is important that regular and smooth flow of goods is maintained so that products are not spoiled and supplies are not delayed. To ensure this, various facilitating services need to be arranged like transportation, warehousing, inventory control, and order processing. These are known as components of physical distribution. Let us now study the two sub-elements of place(A) Channels of distribution (B) Physical distribution 9

(A) Channels of Distribution: Channel of distribution denotes the intermediaries involved in the process whereby a product passes from the manufacturer to consumers. It is very important for the producers to involve middlemen in order to reach consumers. Middlemen reduce the problems of both producers and consumers. Secondly, middlemen help in distributing the products over a large area. Middlemen also supply useful market information to the producer for improving the product. Involvement of middlemen adds to the convenience of consumers because they are able to lay many items from a single store. Some people feel that by involving more middlemen in the process of distribution, the final price of a product is considerably raised which is ultimately paid by the consumer. Therefore the number of middlemen involved should be limited, if at all necessary: There can be various levels of channel. It is for the producer to decide which level would suit the sale of his product. (B) Physical Distribution: Physical distribution comprises all those activities which deliver customer satisfaction by supplying right type of products at right place and at right time regularly. Economical and satisfactory customer service is the primary goal of physical distribution. Providing the right type of goal at right place and at right time is the ultimate goal of any marketing department. These goals may be conflicting, sometimes, e.g., for meeting sudden and unforeseen demand for goods, maintenance of large inventory is suggested but this involves cost as well as risk. This means that a proper balance between the cost and service should be achieved.

Promotion
Promotion refers to using methods of communication with two objectives: (1) informing the existing and potential consumers about a product, and (2) to persuade consumers to buy the product. It is an important element of marketing mix. In the absence of communication, consumers may not be aware of the product and its potential 10

to satisfy their needs and desires.

Various tools of communication form part of

promotion mix. Companies must decide which tools should be used for larger sales and in what proportion. The tools should be combined. These decisions are known as promotion-mix decisions. There are four components of promotion-mix i.e., advertising, personal selling, sales promotion and public relations. Thus, promotion mix is a companys total communication program which consists of different Blends of its components and which is used to achieve the companys marketing objectives.

Tools of Promotion-mix
Advertising, personal selling, sales promotion and publicity are the major tools. The marketing manager must recognise the characteristics of each tool and costs involved while deciding on the promotion-mix.

Advertising
Advertising is an impersonal form of communication for which the seller pays in order to promote a physical product or service. It may be in print form as in newspapers and magazines, or in audio form as on the radio and other similar methods, or in audiovisual forms as on the Television, cinema screen, etc. The merits of advertising is that it reaches a larger number of people, the message can be repeated, its cost is not high, and with the development of art and computer graphics, simple statements can be Transformed into forceful messages. The other side of advertising is that it doesnt provide any feed back, it is not as forceful as personal selling, it is not flexible, and good advertisements cost a lot.

Personal selling
Personal selling is a personal communication with one or more prospective buyers for the purpose of selling a product or service. These days, personal selling is considered to be the most effective tool because of various characteristics which are listed below: l) It involves personal interaction; hence feed back is received immediately 11

2) It is quite flexible salesman can adjust communication according to the level of customers understanding. 3) It is more persuasive; buyers can be convinced about the utility of the product; 4) Impressive salesman leaves an impression on the prospective buyer; it may increase sales in the future. Personal selling suffers from a few drawbacks too. It is the most expensive tool of promotion. Secondly, it requires too much dependence on sales force.

Publicity:
Publicity takes place when a favorable presentation is made through mass media about a product or service. People believe more on such news than in advertising. It covers people who do not entertain personal selling and sales promotion approaches. It is a non-paid form of communication but sometimes it is not regarded as a promotional tool within the reach of a company. Very few products or services are covered by publicity Packaging is also considered as a powerful sales promotion tool these days. It immediately attracts the buyer and makes him buy the product. This tool has produced good results in case of consumer goods. To some extend, packaging has replaced the counter salesman. You have now learnt about the various tools of promotion. Each tool has certain merits and demerits. It is very important that promotion mix is so devised that it achieves marketing objectives optimally. It is not an easy task. There are no hard and fast rules of promotion mix. Hence every factor should be paid due attention while deciding on the Promotion mix

Sales Promotion
Sales promotion means the use of short-term incentives which are designed to encourage immediate purchase of a product or service by the buyer. It may includes offer of discounts, free gifts, free sample, Coupons, demonstration, store display, etc. One tooth brush free with one 100gm. Close-up dental cream is an example of sales promotion. Generally this tool supplements the efforts made through personal selling and advertisement. Most of the sales promotion activities come in the form of some incentive 12

for the buyer; hence sales generally increase immediately. Big business enterprises use sales promotion tools while introducing anew product. It adds to the effectiveness of total promotional efforts of a company. Sales promotion has certain demerits e.g. it does not leave a lasting effect. Some customers also feel that sales promotion schemes are launched to clear old stocks.

Factors governing sales Promotion


1. Nature of product: Different types of products require different promotion mix. In Case of consumer goods, advertisement is considered to be the most important because the goods are nontechnical and produced on a large scale. But for industrial goods personal selling is regarded as the most important tool because the products are technical in nature, costly and persuasion is considered essential for their sale. 2. Type of the market: If the number of customers is quite large and they are spread over a vast area, advertisement is more helpful because it can reach people everywhere. However if number of customers is not very large and they are concentrated geographically, personal selling and sales promotion may be more effective. 3. Stage of the product life cycle: The promotional mix depends upon the stage of the product in product life cycle. During introduction, heavy expenditure is incurred on advertisement followed by personal selling and sales promotion. During the growth stage, customers are aware of the benefits of product. Hence advertisement along with personal selling will be more effective. At the maturity stage, competition is more intense. Sales promotion becomes the most important tool to boost sales.

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4. Budget: Funds available for promotion also decide promotion mix, e.g. advertisement is a costly tool. If sufficient funds are not available this tool may not be adopted. Personal selling involves continuous spending. Thus, budget is a deciding factor for promotionmix. 5. Push vs. Pull Strategy: When the firm pushes the product to the middlemen they in turn push it to the consumers, it is known as push strategy. In this case, personal selling or display should be more effective. Pull strategy refers to the policy of a company to strive to build up consumer demand without recourse to middlemen. Generally advertising is considered more important in case of pull strategy. To sum up, it may be said that all promotional tools are complementary and not competitive. The degree of emphasis on each tools will differ depending upon the influence of certain factors. A proper combination of promotional tools should be designed to attain better results.

Evaluation of sales promotion pre testing concurrent testing and post testing
In order to accomplish the activity of measuring the results in any area of business activity related to the objectives for sales promotions evaluation criteria's are laid down to implement the sales promotion programme. Many of which are directly related to sales. For these cases there are not many complexities as a number of objectives as sales based techniques can be used with relative ease. For Example it is very easy to measure sales effect before sales promotion activities, during these activities and post sales promotion activities. In case of objectives not related to sales, such as trial purchase, or changing consumer awareness and attitude as resultant increase and perceived value of the product, measurement is more difficult. In certain types of promotion, the reseller 14

support is important and can have significant effect on marketer's promotion performance.

Pre-testing
How sales promotion is to be communicated and what would be communicated to the target groups is important and can be pre-tested. For example the pre-tested may find out what is likely to be the perceived value and the risk. A customer considers whether it would be wise to buy an unknown brand of sport shoes at a 45% discount. In this offer was there a risk of buying an unfamiliar brand? The pre-test can be conducted to assess these factors by using focus groups and consumer panels. Another approach, ballot method, consists of kneeling a ballot paper to a list of consumers. They are requested to evaluate different illustrated promotion is and vote for the most right and return the ballot to the firm. A relatively expensive but more accurate method is a portfolio test. A portfolio of sales promotion is prepared and shown to consumers in person and the responses are noted. To test consumers behavior responds such as trial purchase, repeat purchase, etc., pretesting consists of experimenting in certain markets for individual stores in a market. All other factors remain the same; only the sales promotion device being tested is the variable that is manipulated. It is often quite helpful to evaluate the responses of resellers before implementing the promotion programme. The simplest ways to visit several important retailers and wholesalers discuss the programme and seek their opinion and suggestions. This may prove to be quite favorable in case the support of resellers is considered to be of paramount importance for promotion results.

Concurrent testing
This testing is done when the sales promotion is in progress. Concurrent testing permits the promotion manager to modify the sales promotion, if needed. This type of testing is conducted in terms of sales data which can be obtained on a weekly or monthly basis. If the promotion is a consumer contest and the consumer is not require 15

to purchase anything, the response to promotion can be adjudged by the number of entries received at some interval and if need be, the contest period can be extended. In case of a coupon distribution programme, similar approach can be adopted by keeping track of coupons redeemed.

Post-testing
Post-testing is done after the promotion period is over. To assess the changing consumer awareness and attitude, telephone calls, questionnaire mailed to the consumers and personal interviews can be used. In these methods, the most expensive is the million rupees. The sales jumped to in excess of 5.6 million in the promotion period. This would show that the objective was achieved. It is very likely that in the ensuing month after the promotion, the sales will come down to say 3.5 million rupees. In the sales return to 5 million rupees on the long run, then perhaps the sales jump is because of brand features and deal prone customers. However, if the regular sales settle at 5.5 million rupees on the long run, then definitely the promotion proves successful in increasing the long run sales by attracting new customers and we have also attracted customers away from other competing brands personal interview method and the least expensive is the mail. The information sought pertains to the promotion event. In case of samples on premiums distributed through retail stores, intercept interviews at the Point of Sale can reveal more reliable information. To measure the sales affect, sales figures before the promotion period can be compared with figures at the end of promotion and one month after the promotion ends. Suppose that the promotion objective was to increase sales by 30 percent in certain period and the pre-promotion sales for a similar period were worth 5 million rupees. The sales jumped to in excess of 5.6 million in the promotion period. This would show that the objective was achieved. It is very likely that in the ensuing month after the promotion, the sales will come down to say 3.5 million rupees. In the sales return to 5 million rupees on the long run, then perhaps the sales jump is because of brand features and deal prone customers. However, if the regular sales settle at 5.5 million rupees on the long run, then definitely the promotion proves successful in increasing the 16

long run sales by attracting new customers and we have also attracted customers away from other competing brands.

Advantages of sales promotion


Sales promotions have a significant effect on the behavior of consumers and trades people. Such promotions can bring in more profits for the manufacturers because they permit price discrimination. 1. Price discrimination: Producers can introduce price discrimination through the use of sales promotions. They can charge different prices to different consumers and trade segments depending on how sensitive each segment is to particular prices. Coupons, special sales events, clearance sales and discounts are examples to explain the phenomenon. Often such price discrimination are offered in specific cities in the country, 2. Effect on consumer behaviour: As sales promotions are mostly announced for a short period, customers may feel a sense of urgency and stop comparing the alternatives. They are persuaded to act now rather than later. With every 500g pack of Tang, you get a free Tang glass. Offer valid only till stocks last. 3. Effect on trade behaviour: Short-term promotions present an opportunity and encourage dealers to forward buy. This forward buying ensures that retailers wont to go out of stocks. As dealers have more than the normal stocks, they think it advisable to advertise in local media, arranged displays and offer attractive promotion deals to consumers. These actions help in increasing the store traffic. Buy 2 dozen shampoo sachets & get 2 sachets free.

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4. Regional Differences: The South is generally characterized by greater degree of going out and people tend to drink outside the house. The Tamilian, consumer in particular, is value oriented, rational and looks up to film stars, while the Keralite is more international in his outlook. The Bangalorean is as cosmopolitan as his Mumbai or Delhi counterpart. Such factors have to be taken into consideration while providing incentives to the customers. In mid 80s, Philips decided to launch a special project in Tamil Nadu and Andhra Pradesh for their rural buyers. So, for the Tamil Nadu market, they created a special campaign The Super Star of the House and made the cine idol Rajnikant their brand ambassador as in that state he is popularly known as Superstar. Whereas, in Andhra Pradesh, they launched their brand as Mega Star of the House as Chiranjeevi was taken as their brand representative. Sales promotion was done by organizing various super shows and mega-shows for the masses in states of Tamil Nadu and Andhra Pradesh respectively. Both these campaigns became a major success.

Disadvantages of sales promotion


1. Increased price sensitivity: Consumers wait for the promotion deals to be announced and then purchase the product. This is true even for brands where brand loyalty exists. Customers wait and time their purchases to coincide with promotional offers on their preferred brands. Thus, the routine sales at the market price are lost and the profit margin is reduced because of the discounts to be offered during sale-season. The Diwali Bonanza Offers on electronic goods.

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2. Quality image may become tarnished: If the promotions in a product category have been rare, the promotions could have a negative effect about its quality image. Consumers may start suspecting that perhaps the product has not been selling well, the quality of the product is true compared to the price or the product is likely to be discontinued because it has become outdated. The Smile Powder offer of Buy 1 and get 2 free went on and on. Ultimately people stopped asking for the product as the on-going sales promotion strategy made the customers perceive it to be a cheap and an inferior product. 3. Merchandising support from dealers is doubtful: In many cases, the dealers do not cooperate in providing the merchandising support nor do they pass on any benefit to consumers. The retailer might not be willing to give support because he does not have the place, or the product does not sell much in his shop, or may be he thinks the effort required is more than the commission/benefit derived. 4. Short-term orientation: Sales promotions are generally for a short duration. This gives a boost to sales for a short period. This short-term orientation may sometimes have negative effects on longterm future of the organization. Promotions mostly build short-term sales volume, which is difficult to maintain. Heavy use of sales promotion, in certain product categories, may be responsible for causing brand quality image dilution.

How Sales Promotion Objectives are set:


Sales promotion has dual objective: (A) Basic objectives (B) Other objectives 19

(A) Basic objectives of sales promotion are: (i) Increasing the buying response of ultimate consumers. (ii) Increasing the selling efforts and intensity by dealers as well as by sales personnel. (iii) Supplementing and co-coordinating the efforts of advertising and personal selling. (B) The other objectives are: (i) Calling attention to new products and product improvements. (ii) Informing buyers of new brand and new packaging. (iii) Improving market share. (iv) Obtaining dealer outlets. (v) Meeting competition. These objectives are set on the basis of following criteria. (i) Cost of reaching an audience member. (ii) Acceptability of the tools to be used These criteria are developed taking into consideration the following Variables/factors: (i) Kinds of product: The product is one of the factors determining the form of promotion. Toys, toilet soaps and cosmetics are effectively shown on television. Mass selling consumer goods can be easily promoted through radio and television. Industrial and specialty goods should be promoted through technical journals and through sales engineers. (ii) The buyer: If the marketers are to provide realistic solutions to the problem of buyers, they must know their customers, their needs and desires, their attitude, values, aspirations and expectations. Hence marketers must have up-to-date information about customer demand and customer behaviour. If the buyers are educated then demonstrations or instructions 20

can be used as sales promotion technique. Similarly, contests and quizzes can be used if buyers are of young age and educated. (iii) Nature and size of market: The number, geographical location and purchasing power of potential Business Studies Customers exercise a significant impact on the sales promotion. Sampling, coupon, money refund orders, premium offer, price-off and trading stamps etc., are suitable for sales promotion in local markets. On the Other hand, fairs, exhibitions and fashion shows are more appropriate for sales promotion on the national level particularly for garments, books and electronic items. (iv) Stages in product life cycle: This is an important managerial tool in sales promotion. A product life cycle consists of four stages. (a) Introduction of the product requires lot of energy to create awareness, acceptance and demand for the product. Introducing a new product for most companies is a costly and difficult exercise that is why they mostly depend on middlemen, (b) Growth. It includes a fast growth both in sales volume and profit. (c) Maturity (Saturation).This stage is longer. But the speed in achieving sales volume reduces during this stage. Profit also starts declining much faster than the sales. (d) Declining. This is the last stage in product life cycle. After a period of stability, the buyers loose interest on the product, And sales start falling more quickly. At this stage either high cost sales Promotion technique may be used or existing product may be improved. (v) Management policy: In the management policy, first of all, sales promotion objectives are set, then communication tools required to achieve these objectives are designed, and the third step is to determine the cost required to execute promotional activities and Programmes. In short sales promotion Expenditure is directly related to the objectives to be achieved.

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(iv) Budget allocation available: The decision on how much to spend on promotion is externally difficult On account of multitude of promotion tools, on the one hand, and Varieties of products and markets on the other. For example, the greater the geographical dispersion of a target market, the greater the Communication expenditure required. Similarly, if an offering is in its early life cycle, there is a greater need of expenditure. But promotion Budget should always justify the tasks to be undertaken. A basic principle would be the cost and returns of sales promotion tools to be adopted. Sales Promotion Hindustan Lever has its well drawn up sales promotion budget. If any Business house does not have its promotion budget fixed, then promotion Programmes will have to be designed to support the marketing plan. (v) Government regulations: Government has passed various laws and made rules to protect the Consumer interest, such as the prevention of Food Adulteration Act, the Drugs and Magic Remedies (Objectionable Advertisements) Act, and Drugs and Cosmetics Act etc. Sales promotion policy must take into Consideration the government regulations relating to the particular Product, e.g. the commodity rates must be specified on the package And in case of medicines drug contents and date of manufacturing, date of expire, and price must be specified

Sales Promotion Tools and Programmes:


Sales promotion techniques are know as promotion tools and the mode of their application is known as sales programme. These tools and Programmes are divided under two heads: 1. Tools and Programmes for consumers sales promotion. 2. Tools and Programmes for dealer / distributor sales promotion Business Studies Tools and Programmes for consumers sales promotion. 22

These tools and Programmes are as follows:(i) Sample: Usually called consumer sample, free samples and given to consumers to introduce a new product or to expand the market. The consumers can try the product. (ii) Demonstrations or instructions: These are instructions given to educate the consumers about using the product. This method may be used in products like Vacuum cleaner. (iii) Coupon: It is a certificate that reduces the price. When a buyer gives a coupon to the dealer or retailer he gets the product at lower price. For example in DCM coupon system if regular price is Rs.20, with a coupon it is Rs.18. These are also known as discount coupons. Coupons are also accepted as cash by retailers. (iv) Money-refund orders: The technique indicates refund of full purchase price if the buyer so wants. It is helpful in the introduction of a new product. Refund offer creates additional interest and increases sales considerably. It is a good Device for creating new user and to strengthen the brand loyalty. (v) Premium (gift) offers: These are temporary price reductions, which appeal to bargain instinct, e.g., instant coffee sold in carafes by one company was very successful. Towels, dinner ware, hair-brushes, key chains, artificial flowers, ball Pens, toilet soaps, blades, were given as in pack premiums. Attractive reusable jars costing separately say Rs. 12 may be given as at an extra charge of Rs. 4 only. Liril gave a soap box almost free with two soap Cakes.

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(vi) Price-off: The price off label is printed on the package, e.g., Rs.4 offers a Brooke Sales Promotion Bond tea pack of 500 grams. It gives a temporary discount to the consumers. (vii) Contests or quizzes: These are held to stimulate consumers interest in the product. In these contests, and quizzers, participants compete for prizes on the basis of their skill or creative ideas. In Sweepstakes, they submit their names to be included in a draw of prize winners. This type of sales promotion is not a lottery because there is chance or luck, prizes are offered and a payment to participant is there. (viii) Trading stamps: Trading or Bonus stamps are issued by retailers to customers who buy goods from there. The number of stamp given to a buyer depends upon the amount of purchases made by him. For instance, in India Roman Bonus Stamps are issued at the rate of 2-1/2 percent of the purchase amount. These stamps are given free of charge and the customers can redeem them to obtain products out of the specified list. This technique Induces customer to buy their requirements from the retailers who offer such stamps. The purpose is to increase customer loyalty. (ix) Fairs and exhibitions: Trade shows, fashion shows or parades, fairs and exhibitions are important technique/tools of sales promotion. They provide a forum for the exhibitions or demonstration of products. Free literature can be distributed to introduce the firm and its products to the public. Fairs and exhibitions are organized usually by big firms or trade associations. At these fairs and exhibitions, business firms are allotted stalls where in they display their products. Fairs and exhibitions have wide appeal as several people visit there. Customer can be attracted through gifts, special concessions and free demonstrations of technical and specialty products. They provide an opportunity to the 24

visitors to observe the competing products and help to promote sales. For instance, the Trade Fair Authority of India organizes Trade Fairs of various types in New Delhi. The National Book Trust organizes World Book Fair, where publishers of all over the world are invited to display their publications. Sometimes sales conventions or conferences of dealers are held. Business Studies Producers of garments often organize fashion shows to promote their products. (x) Public relations activities: These include greetings or thanks in newspapers, donating space for noble causes, offer of Privileged Citizen Card, etc. Their purpose is not to create immediate demand or to increase sales. They are designed to create a good image of the firm in the society. (xi) Exchange scheme: This technique offers to exchange the old product with new in payment of a fixed amount which is less than the original price for example, exchange of old Black & White Television for Colour Television by paying rupees 8000 only (original price is rupees 10000) was offered by a particular producer of colour TV sets. Tools and Programmes for dealers/distributors sales promotion: These tools and Programmes are: (i) Free display: There is provision of free display of material either at the point of purchase (POP) or at the point of sale (POS), depending on ones view point. Display reaches consumers when they are buying and actually spending their money. (ii) Retail demonstrations: These are arranged by manufactures for preparing and distributing the products as a retail sample, for example, Nescafe Instant Coffee was served to consumers for trying the sample on the spot of demonstration regarding the method of using the product. 25

(iii) Trade deals: These are offered to encourage retailers to give additional selling support to the product, e.g., tooth paste sold with 30% to 40% margin. (iv) Buying allowance: Sellers give buying allowance of a certain amount of money for a product bought. (v) Buy-back allowance: It is offered to encourage repurchase of a Product immediately after another trade deal. A buy back is a Sales Promotion Resale opportunity. (vi) Free goods: Seller gives free goods, e.g., one piece free with two, or two pieces free with 10, are common free deals. (vii) Advertising and display allowance: These are also offered to retailers to popularize the product and brand name of the manufacturer. (viii) Contents: Sales contests are held for salesmen. (ix) Dealer loader: A gift for an order is a premium given to the retailer for buying certain quantities of goods or for special display done by the retailer. (x) Training for salesmen: Dealer and distributor training for salesmen, which may be provided to give them a better knowledge of a product and how to use it. Dealer sales promotion provides the 26

selling devices. Sales promotion devices at the point of purchase inform, remind, and stimulate buyers to purchase products. People who see these devices are in a buying mood and thus they can be easily persuaded to buy those products. Tell tags are informative labels affixed on the product, describing in detail the features of the product and its unique selling points. Counter, top racks, posters, mechanized signs are other point-of purchase displays.

27

Dell traces its origins to 1984; when Michael Dell created PCs Limited while a student at the University of Texas at Austin. The dorm-room headquartered company sold IBM PC-compatible computers built from stock components. Dell dropped out of school in order to focus full-time on his fledgling business, after getting about $300,000 in expansion-capital from his family. In 1985, the company produced the first computer of its own design, the "Turbo PC", which sold for US$795. PCs Limited advertised its systems in national computer magazines for sale directly to consumers and custom assembled each ordered unit according to a selection of options. The company grossed more than $73 million in its first year of operation. The company changed its name to "Dell Computer Corporation" in 1988 and began expanding globally. In June 1988, Dell's market capitalization grew by $30 million to $80 million from its June 22 initial public offering of 3.5 million shares at $8.50 a share. In 1992, Fortune magazine included Dell Computer Corporation in its list of the world's 500 largest companies, making Michael Dell the youngest CEO of a Fortune 500 company ever. In 1993 Dell submitted a document to Round Rock officials, titled "Dell Computer Corporate Headquarters, Round Rock, Texas, May 1993 Schematic Design." Despite the filing, during that year the company said that it was not going to move its headquarters. . In 1994 Dell announced that it was moving most of its employees out of the Arboretum, but that it was going to continue to occupy the top floor of the Arboretum and that the company's official headquarters address would continue to be the Arboretum. The top floor continued to hold Dell's board room, demonstration center, and visitor meeting room. Less than one month prior to August 29, 1994, Dell moved 1,100 customer support and telephone sales employees to Round Rock. Dell's lease in the Arboretum had been scheduled to expire in 1994. In 1996, Dell began selling computers through its website, and in 2002, it expanded its product line to include televisions, handhelds, digital audio players, and printers. 28

Dell's first acquisition occurred in 1999 with the purchase of Converge Net Technologies. Dell surpassed Compaq to become the largest PC manufacturer in 1999. By 1996 Dell was moving its headquarters to Round Rock. As of January 1996 3,500 people still worked at the then-current Dell headquarters. One building of the Round Rock headquarters, Round Rock 3, had space for 6,400 employees and was scheduled to be completed in November 1996. In 1998 Dell announced that it was going to add two buildings to its Round Rock complex, adding 1,600,000 square feet (150,000 m 2) of office space to the complex. In 2000 Dell announced that it would lease 80,000 square feet (7,400 m2) of space in the Las Cimas office complex in unincorporated Travis County, Texas, between Austin and West Lake Hills, to house the company's executive offices and corporate headquarters. 100 senior executives were scheduled to work in the building by the end of 2000. In January 2001 the company leased the space in Las Cimas 2, located along Loop 360. Las Cimas 2 housed Dell's executives, the investment operations, and some corporate functions. Dell also had an option for 138,000 square feet (12,800 m2) of space in Las Cimas 3. After a slowdown in business required reducing employees and production capacity, Dell decided to sublease its offices in two buildings in the Las Cimas office complex. In 2002 Dell announced that it planned to sublease its space to another tenant; the company planned to move its headquarters back to Round Rock once a tenant was secured. In 2002, when Compaq merged with Hewlett Packard (the 4th place PC maker), the combined Hewlett Packard took the top spot but struggled and Dell soon regained its lead. In 2003, the company was rebranded as simply "Dell Inc." to recognize the company's expansion beyond computers. In 2004, Michael Dell resigned as CEO while retaining the title of Chairman, handing the CEO title to Kevin Rollins who was the President and COO. Under Rollins, Dell began to loosen its ties to Microsoft and Intel, the two companies which were responsible for Dell's dominance in the PC business. During that time, Dell acquired Alien ware, which introduced several new items to Dell 29

products, including AMD micro processors. To prevent cross-market products, Dell continues to run Alien ware as a separate entity, but still a wholly owned subsidiary. By 2003 Dell moved its headquarters back to Round Rock. It leased all of Las Cimas I and II, with a total of 312,000 square feet (29,000 m2), for about a seven year period after 2003. By that year roughly 100,000 square feet (9,300 m2) of that space was absorbed by new subtenants. However in 2005, while earnings and sales grew, sales growth slowed considerable, and the company stock lost 25% of its value that year. This has been attributed to a decline in consumers purchasing PCs through the Web or on the phone, as increasing numbers were visiting consumer electronics retail stores. As well, many analysts were looking to innovating companies as the next source of growth in the technology sector; Dell's low spending on R&D which worked well in the commoditized PC market prevented it from making inroads into more lucrative segments such as MP3 players. Lastly, Dell's reputation for poor customer service came under increasing scrutiny on the Web. By the fourth quarter of 2006, Dell lost its title of the largest PC manufacturer to Hewlett Packard which was invigorated under Mark Hurd. After four out of five quarterly earnings reports were below expectations, Rollins resigned in 2007 and Michael Dell assumed the role of CEO again. The founder announced a change campaign called "Dell 2.0," reducing headcount and diversifying the company's product offerings. In 2008 Dell switched the power sources of the Round Rock headquarters to more environmentally friendly ones, with 60% of the total power coming from TXU Energy wind farms and 40% coming from the Austin Community Landfill gas-to-energy plant operated by Waste Management, Inc. The company acquired Equal Logic on January 28, 2008, to gain a foothold in the ISCSI storage market. Because Dell already had an efficient manufacturing process, integrating Equal Logic's products into the company drove manufacturing prices down. On September 21, 2009, Dell announced its intent to acquire Perot Systems, based in Plano, Texas, in a reported $3.9 billion deal. Perot Systems provided Dell with applications development, systems integration, and strategic consulting services through its operations in the U.S. and 10 other countries. 30

In addition, the acquisition of Perot brought a variety of business process outsourcing services, including claims processing and call center operations. On February 10, 2010, the company acquired KACE Networks a leader in Systems Management Appliances. The terms of the deal were not disclosed. On August 16, 2010, Dell announced plans to acquire the data storage company 3PAR. On September 2, Hewlett-Packard offered $33 a share for 3PAR, which Dell declined to match. On November 2, 2010, Dell acquired Software-as-a-Service (SaaS) integration leader Boomi. Terms of the deal were not disclosed. Dell facilities in the United States are located in Austin, Texas; Nashua, New Hampshire; Nashville, Tennessee; Oklahoma City, Oklahoma;Peoria, Illinois; WinstonSalem, North Carolina; Eden Prairie, Minnesota (Dell Compellent); and Miami, Florida. Facilities located abroad include Penang, Malaysia; Xiamen, China; Bracknell, UK; Manila, Philippines Chennai, India; Hortolandia, Brazil; Bratislava, Slovakia ; d, Poland, Panama City in Panama and Limerick, Ireland. The US and India are the only countries which have all of Dell's business functions and provide support globally: Research and Development, manufacturing, finance, analysis, and customer care.

Manufacturing
From its early beginnings, Dell operated as a pioneer in the "configure to order" approach to manufacturingdelivering individual PCs configured to customer specifications. In contrast, most PC manufacturers in those times delivered large orders to intermediaries on a quarterly basis. To minimize the delay between purchase and delivery, Dell has a general policy of manufacturing its products close to its customers. This also allows for implementing a just in time (JIT) manufacturing approach, which minimizes inventory costs. Low inventory is another signature of the Dell business modela critical consideration in an industry where components depreciate very rapidly.

31

Dell's manufacturing process covers assembly, software installation, functional testing (including "burn-in"), and quality control. Throughout most of the company's history, Dell manufactured desktop machines in-house and contracted out manufacturing of base notebooks for configuration in-house. However, the company's approach has changed. The 2006 Annual Report states "we are continuing to expand our use of original design manufacturing partnerships and manufacturing outsourcing relationships." The Wall Street Journal reported in September, 2008 that "Dell has approached contract computer manufacturers with offers to sell" their plants. Assembly of desktop computers for the North American market formerly took place at Dell plants in Austin, Texas (original location) and Lebanon, Tennessee (opened in 1999). The plant in Winston-Salem, North Carolina (opened in 2005) is scheduled to cease operations in November 2010, while the Miami, Florida facility of its Alien ware subsidiary remains in operation. Dell servers come from Austin, Texas. Dell's desktop plant in Austin, Texas was shut down in 2008. It closed its desktop manufacturing in Lebanon in early 2009. The last major U.S. plant in North Carolina is scheduled to close in November 2010. It is expected that most of the work carried out in North Carolina will be transferred to contract manufacturers in Asia and Mexico, though Dell said some of the work will move to its own factories overseas. Dell assembles computers for the EMEA market at Limerick in the Republic of Ireland, and employs about 4,500 people in that country. Dell began manufacturing in Limerick in 1991 and went on to become Ireland's largest exporter of goods and its second-largest company and foreign investor. On January 8, 2009, Dell announced that it would move all Dell manufacturing in Limerick to Dell's new plant in the Polish city of todz by January 2010. European Union officials said they would investigate a 52.7million aid package the Polish government used to attract Dell away from Ireland. European Manufacturing Facility 1 (EMF1, opened in 1990) and EMF3 form part of the Raheen industrial estate near Limerick. EMF2 (previously a Wang facility, later occupied by Flextronics, situated in Castle troy) closed in 2002, and Dell Inc. has 32

consolidated production into EMF3 (EMF1 now contains only offices). Subsidies from the Polish government did not keep Dell for a long time. Manufacturing Facility in Lodz was sold to Fox Conn as announced in Dec 2009. Dell's Alien ware subsidiary also manufactures PCs in an Athlone, Ireland plant. Construction of EMF4 in todz, Poland has started: Dell started production there in autumn 2007. Dell opened plants in Penang, Malaysia in 1995 and in Xiamen, China in 1999. These facilities serve the Asian market and assemble 95% of Dell notebooks. Dell Inc. has invested an estimated $60 million in a new manufacturing unit in Chennai , India, to support the sales of its products in the Indian subcontinent . Indian-made products will bear the "Made in India" mark. In 2007 the Chennai facility had the target of producing 400,000 desktop PCs, and plans envisaged it starting to produce notebook PCs and other products in the second half of 2007. Dell moved desktop and Power Edge server manufacturing for the South American market from the Eldorado do sul plant opened in 1999, to a new plant in Hortolandia, Brazil in 2007.

Dell Facilities
Dell's headquarters are located in round rock, Texas. As of 2010 the company employs about 16,000 people in the facility which has 2,100,000 square feet (195,000 m2) of space. As of 1999 almost half of the general fund of the City of Round Rock originates from sales taxes generated from the Dell headquarters. The company previously had its headquarters in the Arboretum complex in northern Austin Texas In 1989 Dell occupied 127,000 square feet (11,800 m2) in the Arboretum complex. In 1990 Dell had 1,200 employees in its headquarters. In 1993 Dell submitted a document to Round Rock officials, titled "Dell Computer Corporate Headquarters, Round Rock, Texas, May 1993 Schematic Design." Despite the filing, during that year the company said that it was not going to move its headquarters. In 1994 Dell announced that it was moving most of its employees out of the Arboretum, but that it was going to continue to occupy the top floor of the Arboretum and that the company's official headquarters address would continue to be the Arboretum. The top floor 33

continued to hold Dell's board room, demonstration center, and visitor meeting room. Less than one month prior to August 29, 1994, Dell moved 1,100 customer support and telephone sales employees to Round Rock. Dell's lease in the Arboretum had been scheduled to expire in 1994. By 1996 Dell was moving its headquarters to Round Rock. As of January 1996 3,500 people still worked at the then-current Dell headquarters. One building of the Round Rock headquarters, Round Rock 3, had space for 6,400 employees and was scheduled to be completed in November 1996. In 1998 Dell announced that it was going to add two buildings to its Round Rock complex, adding 1,600,000 square feet (149,000 m2) of office space to the complex. In 2000 Dell announced that it would lease 80,000 square feet (7,400 m2) of space in the LAS Cimas office complex in unincorporated Travis County, Texas, between Austin and west lake hills, to house the company's executive offices and corporate headquarters. 100 senior executives were scheduled to work in the building by the end of 2000. In January 2001 the company leased the space in Las Cimas 2, located along Loop 360. Las Cimas 2 housed Dell's executives, the investment operations, and some corporate functions. Dell also had an option for 138,000 square feet (12,800 m2) of space in Las Cimas 3. After a slowdown in business required reducing employees and production capacity, Dell decided to sublease its offices in two buildings in the Las Cimas office complex. In 2002 Dell announced that it planned to sublease its space to another tenant; the company planned to move its headquarters back to Round Rock once a tenant was secured. By 2003 Dell moved its headquarters back to Round Rock. It leased all of Las Cimas I and II, with a total of 312,000 square feet (29,000 m 2), for about a seven year period after 2003. By that year roughly 100,000 square feet (9,300 m2) of that space was absorbed by new subtenants. In 2008 Dell switched the power sources of the Round Rock headquarters to more environmentally friendly ones, with 60% of the total power coming from TXU Energy wind farms and 40% coming from the Austin Community Landfill gas-to-energy plant operated by Waste Management, Inc. Dell facilities in the United States are located 34

in Austin, Texas; Nashua, New Hampshire; Nashville, Tennessee; Oklahoma City, Oklahoma; Peoria, Illinois; Winston-Salem, and Miami, Malaysia; Xiamen, North Carolina; Eden Facilities located Prairie, abroad Minnesota (Dell include Penang, Compellent); Florida.

China; Bracknell,

UK; Manila,

Philippines, Bangalore, India, Hortolandia, Brazil and Limerick, Ireland. The US and India are the only countries which have all of Dell's business functions and provide support globally: Research and Development, manufacturing, finance, analysis, and customer care.

Marketing
Dell advertisements have appeared in several types of media including television, the Internet, magazines, catalogs and newspapers. Some of Dell Inc's marketing strategies include lowering prices at all times of the year, offering free bonus products (such as Dell printers), and offering free shipping in order to encourage more sales and to stave off competitors. In 2006, Dell cut its prices in an effort to maintain its 19.2% market share. However, this also cut profit-margins by more than half, from 8.7 to 4.3 percent. To maintain its low prices, Dell continues to accept most purchases of its products via the Internet and through the telephone network, and to move its customer-care division to India and El Salvador. A popular United States television and print ad campaign in the early 2000s featured the actor Ben Curtis playing the part of "Steven", a lightly mischievous blondhaired youth who came to the assistance of bereft computer purchasers. Each television advertisement usually ended with Steven's catch-phrase: "Dude, you're getting a Dell!" A subsequent advertising campaign featured interns at Dell headquarters (with Curtis' character appearing in a small cameo at the end of one of the first commercials in this particular campaign).A Dell advertising campaign for the XPS line of gaming computers featured in print in the September 2006 issue of wired. It used as a tagline the common term in Internet and gamer slang: "FTW", meaning "For the Win". However, Dell Inc. soon dropped the campaign. In the first-person shooter game F.E.A.R extraction point, 35

several computers visible on desks within the game have recognizable Dell XPS model characteristics, sometimes even including the Dell logo on the monitors. In 2007, Dell switched advertising agencies in the US from BBDO to working mother Media. In July 2007, Dell released new advertising created by Working Mother to support the Inspiron and XPS lines. The ads featured music from the Flaming lips and Devo who re-formed especially to record the song in the ad "Work it out". Also in 2007, Dell began using the slogan "Yours is here" to say that it customizes computers to fit customers' requirements.

Dell kiosks
Starting in 2002, Dell opened kiosk locations in shopping malls across the United States in order to give personal service to customers who preferred this method of shopping to using the Internet or the telephone-system. Despite the added expense, prices at the kiosks match or beat prices available through other retail channels. Starting in 2005, Dell expanded kiosk locations to include shopping malls across Australia, Canada, Singapore and Hong Kong. On January 30, 2008, Dell shut down all 140 kiosks in the U.S. due to expansion into retail stores.

Sales and marketing


International Marketing Co had 17 direct sales persons, 7 focusing on end customers, and 10 focusing on resellers. Sales operations were spread throughout Kerala. Sale was directly handled by Mr.Divakar Prabhu. Dell traces its origins to 1984; when Michael dell created PCs Limited while a student at the University of Texas at Austin. The dorm-room headquartered company sold IBM PC-compatible computers built from stock components. Michael Dell started trading in the belief that by selling personal computer systems directly to customers, PCs Limited could better understand customers' needs and provide the most effective computing solutions to meet those needs. Michael Dell dropped out of school in order to 36

focus full-time on his fledgling business, after getting about $300,000 in expansion capital from his family. In 1985, the company produced the first computer of its own designthe "Turbo PC", sold for US$795. PCs Limited advertised its systems in national computer magazines for sale directly to consumers and custom assembled each ordered unit according to a selection of options. The company grossed more than $73 million in its first year of trading. The company changed its name to "Dell Computer Corporation" in 1988 and began expanding globallyfirst in Ireland. In June 1988, Dell's market capitalization grew by $30 million to $80 million from its June 22 initial public offering of 3.5 million shares at $8.50 a share. In 1992, fortune magazine included Dell Computer Corporation in its list of the world's 500 largest companies, making Michael Dell the youngest CEO of a Fortune 500 company ever. In 1996, Dell began selling computers via its web site, and in 2002, Dell expanded its product line to include televisions, handhelds, digital audio players, and printers. Dell's first acquisition occurred in 1999 with the purchase of Converge Net Technologies. In 2003, the company was rebranded as simply "Dell Inc." to recognize the company's expansion beyond computers. From 2004 to 2007, Michael Dell stepped aside as CEO, while long-time Dell employee Kevin Rollins took the helm. During that time, Dell acquired Alien ware, which introduced several new items to Dell products, including AMD microprocessors. To prevent cross-market products, Dell continues to run Alien ware as a separate entity but still a wholly owned subsidiary. Lackluster performance, however, in its lower-end computer business prompted Michael Dell to take on the role of CEO again. The founder announced a change campaign called "Dell 2.0," reducing headcount and diversifying the company's product offerings. The company acquired Equal Logic on January 28, 2008 to gain a foothold in the ISCSI storage market. Because Dell already had an efficient manufacturing process, integrating Equal Logics products into the company drove manufacturing prices down. On September 21, 2009, Dell announced its intent to acquire perot systems (based in Plano, Texas) in a reported $3.9 billion deal. Perot Systems brought applications 37

development, systems integration, and strategic consulting services through its operations in the U.S. and 10 other countries. In addition, it provided a variety of business process outsourcing services, including claims processing and call center operations. On August 16, 2010, Dell announced its intent to acquire the data storage company 3PAR On September 2, 2010 Hewlett-Packard offered $33 a share, which Dell declined to match. On February 10, 2010, Dell acquired KACE networks a leader in Systems Management Appliances. Terms of the deal were not disclosed. On November 2, 2010, Dell acquired Software-as-a-Service (SaaS) integration leader Boomi Terms of the deal were not disclosed.

Competition
Dell's major competitors include Hewlett-Packard (HP), Acer, and Toshiba, gateway, Sony, Asus, Lenovo, IBM, Samsung, Apple and sun Microsystems. Dell and its subsidiary, Alien ware, compete in the enthusiast market against AVA Direct, Falcon northwest, Voodoo PC (a subsidiary of HP), and other manufacturers. In the second quarter of 2006, Dell had between 18% and 19% share of the worldwide personal computer market, compared to HP with roughly 15%. In late 2006, Dell lost its lead in the PC-business to Hewlett-Packard. Both Gartner and IDC estimated that in the third quarter of 2006, HP shipped more units worldwide than Dell did. Dell's 3.6% growth paled in comparison to HP's 15% growth during the same period. The problem got worse in the fourth quarter, when Gartner estimated that Dell PC shipments declined 8.9% (versus HP's 23.9% growth). As a result, at the end of 2006 Dell's overall PC market-share stood at 13.9% (versus HP's 17.4%). IDC reported that Dell lost more server market share than any of the top four competitors in that arena. IDC's Q4 2006 estimates show Dell's share of the server market at 8.1%, down from 9.5% in the previous year. This represents an 8.8% loss year-overyear, primarily to competitors EMC IBM 38

IMC (International Marketing Co.)


International Marketing Co. (IMC) is one of the fastest growing Information Technology sales and marketing Company based at Ernakulam. Since its incorporation in 1994 the company has shown tremendous progress. In addition to being the distributor for Dell range of Consumer Notebook and Sony VAIO range of Notebooks, we are also a reseller for all the leading brands like INTEL, HP, Compaq, Samsung, LOGITECH, and all the other leading Brands. To live up to the latest trends and the array of accessories that come with a computer our categorization is meant to suit your needs. You will find options of Computers and Laptops as per your customized needs and moreover you will find all the latest and popular accessories including Storage devices, Printers, Headphones, Speakers, UPS, Webcams, and much more to enhance your computer in the best possible way considering your budget. We also specialize in bespoke computing solutions for business and corporate (Business to Business) supply. From custom built laptops to PC systems suited to your specific needs or application. We can cater a complete solution for your computing needs - available complete direct from us. Whether its just hardware or software - we can supply all the latest leading brands and products on the market at competitive prices but with the added enhanced after sales technical support that sometimes the latest technology requires, this should be an important factor and make buying your purchase from IMC, the right and only choice. International marketing (IM) or global marketing refers to marketing carried out by companies overseas or across national borderlines. This strategy uses an extension of the techniques used in the home country of a firm. It refers to the firm-level marketing practices across the border including market identification and targeting, entry mode selection, marketing mix, and strategic decisions to compete in international markets. According to the American marketing association "international marketing is the multinational process of planning and executing the conception, pricing, promotion and 39

distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives." In contrast to the definition of marketing only the word multinational has been added. In simple words international marketing is the application of marketing principles to across national boundaries. However, there is a crossover between what is commonly expressed as international marketing and global marketing, which is a similar term. The intersection is the result of the process of internationalization. Many American and European authors see international marketing as a simple extension of exporting; whereby the marketing mix 4Ps is simply adapted in some way to take into account differences in consumers and segments. It then follows that global marketing takes a more standardized approach to world markets and focuses upon sameness, in other words the similarities in consumers and segments.

Business overview
We would like to introduce ourselves as the technology innovators existing in the IT market for the past 17 years. Way back in 1994 when there was high demand for Computer due to Mass computerization of all fields in the society, Mr. Divakar Prabhu has started this business. This was the beginning of INTERNATIONAL MARKETING COMPANY as a dealership organization in the field of computer consumables. Divakar Prabhu started with a minimum capital. Initially he was supplying to some corporate and small resellers which include some semi wholesalers. Divakar applied his sales skills to his maximum use and very soon it reaped benefits and sales grossed. Naresh on his part had now blossomed into a full fledged businessman, however the fundamentals of the business were still dealers network, backed by good pricing & promotional schemes. Now IMC has reached a considerable level in business with a turnover of Rs 100 Crores We are the Exclusive distributor for Dell range of Consumer Notebook and Sony VAIO range of Notebooks. We are the Channel Partners for all the leading

40

brands like INTEL, AMD, SEGATE, HP, Compaq, SAMSUNG, ASUS, LOGITECH, TVSE and all the other leading Brands.

Partnership with EMC


The Dell/EMC brand applies solely to products that result from Dell's partnership with EMC corporation In some cases Dell and EMC jointly design such products; other cases involve EMC products for which Dell will provide support generally midrange storage systems, such as fiber channel and ISCSI storage area networks. The relationship also promotes and sells OEM versions of backup, recovery, replication and archiving software. On December 9, 2008, Dell and EMC announced the multi-year extension, through 2013, of their strategic partnership that began in 2001. In addition, Dell plans to expand its product line-up by adding the EMC celerra NX4 storage system to the portfolio of Dell/EMC family of networked storage systems, as well as partnering on a new line of de-duplication products as part of its Tier Disk family of data storage devices

4.1 Gender of the respondents


41

Response
Male Female

No. of customers
12 38

Chart 4.1

24%

Male Female

76%

Inference:
From this graph it can be inferred that there are more number of females than males who answered the survey.

4.2 Table representing price of products

42

Response
high reasonable
competitive low

No. of customers
4 22 18 6

Chart 4.2
25 20 15 No. of customers 10 5 0
re as on ab le co m pe tit iv e hi gh lo w

Inference:
Majority of the respondents opine that the prices of the products are reasonable though competitive.

4.3 Do you think the products attached with schemes are of inferior quality to the ones which are not offering any schemes?

43

Response
Yes No

No. of customers
22 28

Chart 4.3

44% 56%

Yes No

Inference:
Customers say that the products attached with schemes are of inferior quality to the ones which are not offering any schemes.

4.4 Do you think distribution of free samples will help establishing new brands or products?

44

Response
Yes No

No. of customers
32 18

Chart 4.4

36% Yes No 64%

Inference:
It is inferred that distribution of free samples will help establishing new brands or products.

4.5 Money back offers create confidence in the mind of customers about the quality of goods

Response

No. of customers
45

Yes No

42 8

Chart 4.5

16%

Yes No

84%

Inference:
Many customers say that Money back offers create confidence in the mind of customers about the quality of goods

4.6 Buy back offers help to raise the standard of living of people by exposing them the latest items available in the market

Response

No. of customers
46

Yes No

31 19

Chart 4.6

38% yes no 62%

Inference:
Buy back offers help to raise the standard of living of people by exposing them the latest items available in the market

4.7 What do you think is the most effective way of communicating a sales promotion?

Response
Print media

No. of customers
14

47

Television Internet Telephone

19 13 4

Chart 4.7
20 18 16 14 12 10 8 6 4 2 0
Pr in tm Te le ph on e Te le vi In te rn et ed i sio n a

No. of customers

Inference:
Television and print media is considered as an effective way of sales promotion.

4.8 Which is the most effective sales promotion activity?

Response
A gift that is bundled along with the product

No. of customers
43

48

gift

redeemed redemption
7

through given later

coupons which will be

Chart 4.8

14% A gift that is bundled along with the product A gift redeem ed through redem ption c oupons which will be given later 86%

Inference:
A gift that is bundled along with the product is considered as an effective promotional tool here.

4.9 Consumers prefer small instant gifts or money back than a delayed trip or lucky draws

49

Response
Yes No

No. of customers
39 11

Chart 4.9

22%

yes no

78%

Inference:
It is inferred that Consumers prefer small instant gifts or money back than a delayed trip or lucky draws.

4.10 Which is the most attractive sales promotion you consider while you purchase a laptop?

Response
A foreign trip to Les Vegas

No. of customers
12

50

through scratch & win A 8 GB pen drive free of cost along with the laptop A free gift voucher Rs.2,000/from a textile shop
21 17

Chart 4.10

24% 42%

A foreign trip to Les Vegas through scratch & win A 8 GB pen drive free of cost along with the laptop A free gift v oucher Rs.2,000/- from a textile shop

34%

Inference:
From this it is understood that people will avail product when there is a free product with it.

4.11 Do you think only nonmoving brands come up with promotional events or freebies?

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Response
Yes No

No. of customers
14 36

Chart 4.11

28%

Yes No

72%

Inference:
It can be inferred that not only non moving brands but also branded products can come up with promotional activities

4.12 Will you prepone or postpone your purchase to avail the promotional offers?

Response
Yes No

No. of customers
52 31 19

Chart 4.12

38% Yes No 62%

Inference:
It is understood that people will prepone or postpone their purchase to avail the promotional offers.

FINDINGS
1) Quality as the most influencing factors in the purchase decision while price is also an important for purchase decision. 53

2) Schemes always attract more and more consumers towards particular brand. Simultaneously it gives idea about the factors which consumers look most in the product before they make final decision 3) Price off and extra quantity is the two main offers/schemes which consumers have came across at the time of purchase 4) TV as the best media to market the product which will cover majority of the viewer ship. On the second place it shows mass media as the best way to promote the product in the market 5) People are not much aware of the schemes which continue in the market it may be because of the present stock of the product at their place. 6) 1+1 or 2+1 or other free schemes are more demanded and more aware schemes in the market. 7) People are ready to switch over to another brand if they find better promotional schemes which suits their budget means more qyt + less cost + quality. 8) Extra quantity with less or same price, more satisfaction, quality and other factors influence consumers to switch over too other brands. 9) Extra quantity with less or same price, more satisfaction, quality and other factors influence consumers to switch over too other brands. 10) People are more quality and price oriented 11) Consumer remember that name of the product by the company name and also from the past performance of that company 12) Customers are looking for any type of the promotions on the product before them going to purchase.

SUGGESTIONS
The findings of the empirical study indicate that unless the brand to be promoted is in the consideration set of the consumer, sales promotion by itself is unlikely to have any major impact. Clearly this shows that managers need to invest into brand building 54

exercise so that his/her brand appears in the consideration set of the target consumers. Only after this should he spend time, money and energy on sales promotion activities. Sales promotion should not be used in isolation but need to be integrated with other tools and in line with the overall positioning of the brand. Also the importance of the role of television and mass media came out clearly in the study. Companys need to create sufficient awareness about sales promotion schemes through television in order to create awareness. Also the person going to the shop for the purchase of laptop is the final decision maker of the brand. Hence it is essential that company needs to design attractive, striking, visible POPs for scheme announcements. With respect to nature of scheme, the finding suggested that premium (free gift) was popular with companies. While both retailers and consumers preferred price offs. So it is necessary that the perceived value of a free gift has to be appealing and high for the target consumers. Repetitive use of the same premium for a prolonged period may have negative effect on the loyal customers. When the company is giving its own product free as premium, it needs to ensure the quality of the product from it as it is likely to jeopardize the image of both its products.

The findings exhibited that both the retailers and consumers perceived that sales promotion activities carried out by the companies for increasing sales in short term and clearing excess stocks. What it implies is that companies need to use sales promotion synergistically and communicate so that they provide value to the target audience and enhance brand quality/image perceptions.

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Companies need to systematize information flow regarding sales promotion activities particularly at dealer and retailer level. Ensuring proper information flow and devising checks and measures to reduce misappropriations and implementation flows should be considered critical aspects for the success of sales promotion activities by the companies. As retailing is fragmented, direct reach by companies is next to impossible. Through dealers and proper feedback mechanism, companies keep in touch with the market. Developing a system to tap such responses from time to time both at retailer and consumer level would be helpful for planning future sales promotion activities. In order to build trust and commitment companies should tap preferences, perceptions of retailers as well as consumers.

CONCLUSION
The study is aimed at making the analyses of dell in order to find out which sales promotional activities are helping them to increase their sales. The main rationale behind an analysis is to gain realistic corporate knowledge and for the purpose of value addition. 56

Management thesis helps in every possible way to get knowledge about sales promotion activities and its impact on Dell. The findings and suggestions helps dell to improve their existing strategies and to overcome any obstacles so that it results in long term survival of an organization. Thesis study provides the data to know how sales promotion activities are building awareness about the organization and its products on a regular basis and what needs to be expected from the customers in return. The study is full fledged in all magnitude here and the same has been collected by using primary data with market survey and by using questionnaires. By conducting this study it has come to light the effect of sales promotional activities on Dell and different sales promotion strategy followed by Dell to increase customer and sales.

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