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Finally in the last part, research methodology, conclusion and list of references are discussed. Part -A 1. Title: “Critical evaluation of the effectiveness of sales promotion in creating customer loyalty at USDA 1. 1 Aims: The main purpose of this research is to find out the link between sales promotion and customer loyalty and evaluate the importance of this link in the success of business. 1. 2 Objectives: A critical review of sales promotion from various book, Journal, newspaper To make a sound study effectiveness of sales promotion. To detect various tool of sales promotion and their impact on customer loyalty.
A clear description of customer loyalty in business. A finding of the link between sales promotion and customer loyalty. 1. 3 Introduction Sales promotion is one of the marketing communicating mixes and can bring lots of benefits to the business. One of the great benefits of it is that it creates customer loyalty which enhances the profitability of a business. Customer loyalty means attracting the right customer in right times, make them buy, buy sometimes, buy high quantity. Different kinds of sales promotion offer customer supplementary benefits. It impress customer in a right way.
In this competitive market place, attracting customer is not easy task. Sales promotion reduces some tension of businessman. 1. 4 USDA Background USDA is one of the most renowned retailers in the UK and now it is considered as the subsidiary of Wall-Mart – one of the largest retail companies in the world. It sells various kinds of products foods, cloths, toys and general merchandise etc. Wall-Mart’s strategies are followed by USDA now after it had been owned by Wall-Mart. The marketing promotion of USDA is fundamentally made on price. USDA is setting up itself on the base of their slogan ‘Britain’s Lowest Priced Supermarket’.
It introduces different kinds of sales promotion to promote their target audiences. They always make this popular to attract their upcoming audiences. The more important thing which makes USDA famous is “USDA price”. To make this campaign popular to their existing customers and target customer, USDA always use different techniques like USDA credit card, mobile phone etc. In fact, sales promotion plays indispensable role to become an emerging and potential retailer in the UK supermarket chain. Time to time they offer various sales promotion to their customer. Part-B 2.
Literature Review 2. 1 Introduction: The literature review is the main part of the research because it looks at the theoretical framework of the research. In the literature review I talked about the classification of sales promotion, techniques, and benefits. I also try to demonstrate about the effectiveness of customer loyalty. 2. 2 Sales promotion Sales promotion is one of the most important aspects among four promotional mixes. The main purpose of creating sales promotion is to attract consumers and distributors by including temporary activities to a particular product and service.
Sales promotion includes all kinds of marketing activities that that can make customer incline to buy quickly. Therefore it can be said that sales promotion can create a quick buyer action or immediate sale of a product. The efforts of sales promotion are directed both the consumer and dealer. Though the main target of sale promotion is customer, it also motivate the dealer to provide motivates the dealer to provide the product and service. It refers all the activities which are not included in other promotional activities.
The main intention of it is to increase sales. The activities included in sales promotion are lowering the price, distributing coupons, conducting contexts, giving away of gifts etc. According to A. H. R Dealer “sales promotion is meant any kind of steps that are taken for obtaining or increasing sale”. Apatite & Apatite cited sale promotion is recognized as a marketing activities and specially made to a fixed period of time or a specific group of customer or a distinct place, that inspire customer response directly, through the offer of extra advantages. 2. Benefits of sales promotion Sales promotion helps companies to stand still in a competitive environment, because, company can create shelf differentiation between their products and those of their competitors. It is not quite easy task to make Real product differentiation hose days as there are many convergence of technology. Since the demand of retailer products is to a massive extent determined by price, sales promotions help companies to adapt the retail price of the product. The main purpose of including sales promotion in company is to increase sales in the short-term.
Various activities and techniques are in the business environment. When a sales promotion technique is included in company it increases in sales volume and therefore the market share of the company upgrade. One of the functions of sales promotions is price promotion. By applying it companies can change prices that are dependent on emend supply and forces where there is no changing in permanent list prices. This kind of change in prices enables companies to persuade trade and customer behavior. When a company apply price promotion it can come up with strategies that increase sales during the lean season. . 4 Customer Loyalty Customer loyalty is very imperative objective in business which means a whole feeling or attitudes that inspire customer to repurchase a specific kind of product or brand or visit a particular shop. Dick and Bass define loyalty as “the relationship between the relative attitude towards an entity and patronage behavior”. The definition of customer loyalty can be given based on two different directions: attitudinal and behavioral. The appeal and prescriptions of these two directions are totally different from each other.
According to attitudinal definition of loyalty, loyalty of customers too specific brand or store is laid in their mind, if they contain positive, preferential attitudes towards it. (Peppers&Rogers, 2011). The behavioral definition of loyalty is based on customer actual conduct. By this definition the reason of being loyal is Just only because the customers buy from it and then keep buying from it continuously. Here, repurchase activities are more imperative than attitudes and preferences. (Peppers&Rogers, 2011). 2. Benefits of costumer loyalty The increased profitability associated with customer loyalty occurs because: The acquisition cost is needed at the starting of a relationship; therefore the amortized cost will be lower if the relationship is longer. The maintenance costs decline as a proportion of total expenses There is less possibility of switching of long-term customers and also they are less price sensitive New customers may be introduced by long term customers via word of mouth There is likelihood of archiving add-ones to long-term customers.
Customer loyalty means that the customer is satisfied about the products or cervices. In this case, switching customer to competitors is less likely. Servicing long-term customers are less costly comparing new customers. Proper feedback can be received if the customers are high level of repeating. 2. 6 Technique of sales promotion on customer loyalty Loyalty Cards Loyalty card is very familiar and effective technique of sales promotion strategy to create customer loyalty. The customer who has the loyalty card acquires points all time they expand money at an outlet.
More than 90% of Auk’s have at least one loyalty card and. Cobber, 2010) Buy-one-Get-one-Free (BEFOG) It is an example of a self-liquidating promotion and called PREMIUM sales promotion tactic. For example, a company buys one case of sugar by E, if it sells two for $6; it is still in profit – especially when it increases sales correspondingly. Gifts Sometimes this kind of promotion is offered by the company to their customer. For example; Subway provides a card with six spaces for stickers with each sandwich buyer. When the number was full the consumer could have a free sandwich. Discount
Budget airline such as Easy Jet and Ryan air inform their customers about the latest low-price deals when they release new flights, or about additional destinations. Free samples A technique of sale promotion is giving free samples. For example when a customer buy lots of product by a great amount of money Red Bull (a caffeinated fizzy drink) is offered by the supermarket. Joint promotions This is between brands owned by a company, or with another company’s brands. For example fast food restaurants often offer toys, relating to a specific movie release, as sale promotion. Loyalty marketing programs
Loyalty marketing program or frequent flying program is design for rewording loyal customer for multiple marketing programs. Deal This kind of sales promotion is extensively used in retail sale. A special group of customer can get the discount. 2. 7 Impact of sales promotion on customer loyalty The impact of sales promotion on customer loyalty is immense. Various kind of sales promotion plays a significant role to create customer loyalty. The main purpose of designing sales promotion is to create customer satisfaction which is a key component to lead a customer visit a store or buy a specific kind of product mutinously.
One of the great techniques of sales promotion in this case is loyalty card. It is designed to enlarge customer loyalty directly by giving rewards as an incentive to those who shop regularly. The significance of loyalty card in the success of business can be given by an example of Tests. When it introduced it in 1995, its competitors thought that they customer would be tiered of it soon. But no longer they understand the importance of it on customer loyalty and quickly move to introduced in their scheme. Therefore, sales promotion can create customer loyalty (Tailor & Francis, 2010).
Frequent flying program, deal, continuity program, etc are such kind of sales promotions that offer some extra benefit to loyal customer. Part-c In literature, a research method is a systematic approach to collect and analyze the data and to get information from those data. Amazonian, 2005). Candlewick (2005) recommends four modes of research methods that are: Explicators method: The explicators method is such kind of research method where questions are asked directly to the people. The questions are about understanding the condition of past and present of the firm and about the future plan of the firm.
Case study method: it s research technique and used to inspect different issues of present and past which have effect on organization. It’s a comparative study which focuses on different possibilities regarding organization and comes with future recommendation for the company. Survey method: This method is based on asking questions to the large number of people so that investigate can present issues largely. Experimental method: this method is used to identify significance of variables in situations. In dissertation, both primary and secondary research will be conducted because both of them are very important to complete a research perfectly.
Data can be defined as the quantitative or qualitative values of variables. Data is very important matter of any research studies. 3. 1 Primary research Primary research is needed in the dissertation to get original and accurate data. This primary research would be based on secondary research that has to be done first. Methods of primary research: Face to face interview. Focus Group Postal surveys Questionnaires. Direct observation. Telephone interviews amongst others. 3. 2 The source of primary research Including face to face interview as method of primary research is very useful to elect large amounts of information.
This kind of method can easily attract the attention of respondent and can clarify difficult questions. Respondent can guide researcher, explore issues, and probe as the situation requires. It will be very easy for researcher to ask them to see actual products, advertisements, packages and I can observe and record their reactions and behavior. 3. 3 Advantages of primary research I will get a great advantage from primary research that is I can address specific research issues because in primary research I can controls the research design to fit my needs.
It will help me to keep better control over how information is collected. Therefore I can easily take decision on the size of project, timeshare and goal. 3. 4 Disadvantages of primary research To collect and to carry out data in primary research will be more expensive than that in secondary research. This is because producing the paper for questionnaires or the equipment for an experiment of some sort is more costly. Another disadvantage of primary research is that the data which will be collected may be false and inaccurate. 3. Secondary research Secondary data are those kinds of data which have already been collected for other seasons other than the problem in hand secondary data can be easily accessible and relatively inexpensively . By analyzing secondary data, a researcher can define the marketing research problem and develop an approach before formulating research design for collecting primary data. Secondary data is very important to be analyzed when there is a limited data. Research is largely confined to analyze is of secondary data be come some special problem may be identified by only secondary data. 3. Advantage of secondary research There are some extra advantages of secondary data over then primary data . T is easier to collect more accessible, quickly of tainted and relatively inextensible. In some eases for example, Secondary data given by the Us bureau of the census are on topics where to obtain primary data is not possible from the firm . Through secondary data is unable to give all the answers for a non routine research problem such data may be helpful in a variety of ways . 3. 7 Disadvantage of secondary research The main disadvantage of secondary research is that data is collected for another reason not for the problem at hand.
Therefore it may not best suited to the problem . The second reason is that it may be inaccurate or it may not be dependable because the information may not be upgrade. It may be two or three years back. 3. 8 The source of secondary research I will go through various types of sources for getting up to date information. I will use my college library, local library and British library, online library of University of Wales to read different books about the topics. Reading newspaper, Managing, Journal will also be helpful to get information. To get the information about the company I will use the search engine. . 9 Method of Data Analysis and Findings of the Research When Data is collected from a study, there is possibility of it not being in a quantitative form. If this is the case, analyzing data need to be carried out dependent on experiences of individual participants. When data are in the form of quantitative we can start working on explanatory figures to outline the pattern of findings. The researcher can summarize the finding by using graphs and figures. (www. Multidimensional. TV/files/posts/research_methods_chapter/documents/psych methodspdPDF3. 0 Qualitative research and Quantities research Qualitative research provides the deep insights and understandings of the problem t hand. It is unstructured, exploratory research methodology and based on small sample. Sometimes it explains the finding of quantitative research. The reason of using qualitative research is that people do not want to give right answer of some specific questions for their privacy, embarrass them. For example, did you buy sanitary napkin? In such cases qualitative research finds out the right information. Quantitative research is used to evaluate data and statistical analysis and it is structural.
When a researcher conducts a quantitative research, he expresses the nfinformations a numerical form. Researchers express the information obtained as numerical form while conducting a quantitative research. In my research I will use both the Quantitative research and Qualitative research. As a qualitative research, I will take an in-depth interview that will help me to find out underlying impacts of sales promotion on customer loyalty. Additionally, quantitative approach of my research will assist me to evaluate data and analyze it statistically. 3. 1 Hypothesis HyHypothesiss generally known as an idea or assumption and the base of it is some nonowacts but all those facts are proved yet. There are lots of theories in this research and those can create many assumptions in our mind which may be right, may be wrong depend on the many things to be proved. To prove a hypothesis we need to do many things like collecting information, facts and files about particular ororganizationnd combined these with our own observation. The following two hypothesizes can be prepared for this research: HI: Sales promotion can create customer loyalty.
H2H2OSales promotion can greatly contribute to the profitability of an organization. 3. 12 Justification There is a question why sales promotion is an influential matter to customer and how it increase sales in any company. It is known to all that any kind of people like to look at beneficial thing, want to save money which are offered by sales promotion. When consumer find extra benefit from any company they like to buy products and than there create a good relation with them and the company. Consumers become influenced by sales promotion to purchase the products. It is a short term technique to attract customer.
This sales promotion increase the sale of a company and the company makes more profit. . 13 Limitations At the time of doing the research I may find some limitations of research. One of the great problems may be the problem of generalizing the outcomes and information from interview of a single case study OaAnionic2005). Transparency of collecting information is also another limitation of research because to do it in a research is very hard. The date to submit the research is also fixed; all the information regarding research within this time may be difficult for me. 3. 4 Ethics At the time of my research I have to consider some ethical esissuesAs I will do ndindividualnterview I may uncover some sensitive information. For example, it is possible to reveal the inefficiency about the work. There is also possibility to get some vogue information about the ASUSDAr worker of ASUSDAr would not expose the real feel for fear of contradiction with ASUSDAtself. This may finally affects the overall information. I have to be enough careful about all the issues above. 3. 15 Conclusion In the summery, it can be said that there are needed some ingredients to do any kind of research which are the basis of research.