Impact of Sales Promotion on Buyers Behavior

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Research Articles Impact Of Sales Promotion On Buyers Behaviour: An Empirical Study Of Indian Retail Customers Gopal Das Lecturer, NSHM Business School, Kolkata Dr. Rohit Vishal Kumar Reader, Xavier Institute of Social Service, Ranchi

Abstract In the Global Context of open market economics of today, the consumer has become the king. He operates through his autonomous power. He enjoys a lot of freedom in his purchase decision. A consumer is in a position to influence the manufacturer or marketer regarding size, quality and contents of the product, price, and post-sale service, among other things. As a result the markets no longer remained “sellers markets”, it obviously turned into “buyers markets”. With the Indian retail boom many players are entering with different retail formats. As a result, competition is becoming very tough. Keeping in mind that Indian consumers are price sensitive, each player is trying to attract more customers through different sales promotional activities. But the exact picture of the impact of sales promotion on consumer behaviour is yet unclear to the retailers. This paper tries to find out the impact of retail sales promotion on consumer’s buying behaviour. GMJ,VOL 3,ISSUE 1,JANUARY - JUNE 2009

Keywords: Attract Customer, Buying Decision, Buyers Market, Retailing, Sales Promotion Introduction Considering the truth that the customer is the king, every organization wants to increase market share and profit. Day by day the different types of business formats are also coming to the Indian market. In today’s scenario, organized retail sector is the most important addition in Indian economy. The Indian retail sector continues to be one of the largest sectors attracting fresh investments from private sector. Currently Indian retail distribution is completely fragmented with about 12 million players. The majority of these are very small players operating from small shops (below 50 square feet in size) and handcarts. These retail outlets are spread across the country in over 5,000 cities and 6,00,000 villages. India presents a huge opportunity to the world at large, to use as a business hub. A “Vibrant Economy”, India tops in the list of emerging markets for global retailers. The second fastest

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Gopal Das & Dr. Rohit Vishal Kumar growing economy in the world, the third largest economy in terms of GDP and the fourth largest economy in purchasing power parity(PPP) after USA, China and Japan; India is also rated among the top 10 FDI destinations. At present, the organized sector accounts for only 2 to 4 percent of the total market, although the Economist Intelligence Unit forecasts that on current trends, it will rise up to 20 to 25 percent of the total by 2010 (Ramanathan V and Hari K, 2008). So there is a tremendous growth scope in organized retail sector. More and more players are coming in the market with new attractive retail formats like malls, supermarkets, departmental stores. India Retail Report (2007) reviewed that food and grocery comprises 62 per cent of the ($ 270 billion (Rs. 12,00,000 crore) Indian retail market. Only 0.8 per cent of this segment is in organized sector, and it witnessed a year-on-year growth of 30.8 per cent in 20052006 as against 2.2 per cent growth of the total food and grocery retail market (Refer to Exhibit 1 for the major players in India and their projected sales) (India Retail Report, 2007). Exhibit 1: Major Grocery Retailers in India Retailer Retail Sales (INR Crore) (2006-2007) Nilgiris 110 Spinach 90 Subhiksha 334 Taj 19 Fab Mall (Trinethra) 277.99 Trumart Data Not Available Food Bazaar Data Not Available Spencer’s Data Not Available SPAR Data Not Available Nature’s Bazaar Data Not Available Namdhari’s Fresh Data Not Available Big Apple Data Not Available Reliance Fresh Data Not Available C3 14.4 Monday to Sunday Data Not Available Foodworld Data Not Available Fresh@ Data Not Available (Heritage Foods) Arambagh Food 26 Mart Retail Space (Sq Ft)...
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