THE IMPACT OF PROMOTIONAL ACTIVITIES ON CUSTOMER PURCHASING BEHAVIOUR

THE IMPACT OF PROMOTIONAL ACTIVITIES ON CUSTOMER PURCHASING BEHAVIOUR

INTRODUCTION

BACKGROUND OF THE STUDY

Marketing is the management process aimed at identifying, anticipating, analysis and satisfying human needs and wants through exchanges as efficiently and effectively as possible (Adirika, 1990:38)

Its concept is a philosophy of business which states that the customer want-satisfaction is the economic and social justification for a firms is existence.  However, no matter how a product completely meets the requirements of the consumers, its existence has to be made known to the consumers, hence, the need for advertising which serves as an awareness creation.

Equally, the multiplication of beverage (Bournvita) producing companies implies that for a firm in the industry to survive, grow or improve its markets share, it must control its market share, it must direct its energies towards some form of product high quality development, fair pricing, effective promotional,  activities, and wide distribution network. Besides competitors, the growth of this industry creates other problems which include that by presenting a variety of choice tot he customers, the management of the company face the problem of identifying which of these varieties that exert greatest influence on consumer preference on one brand of beverage product over the other.  This has led to the policy of most companies marketing department investing so heavily on advertizing as the surest means of reaching their target markets.  Nigerian businessmen always neglects the role of advertising in business because of their pursuit for quick money and profits. They often erroneously regard advertising expenditure as money wasted.  This is unfortunate indeed, advertising is perhaps the most effective way of communicating with customers and the general public.  Through advertizing, a company communicates the information a consumer needs to evaluate a product or the ability of the company to offer a product or service.

Advertizing can be inform of newspaper and magazine, direct mail trade exhibitions, television, radio, catalogue, product demonstration etc.

Finally, the role of advertising in motivating consumers, play a major role in beverage industries.  Some consumers are being moved by the nature of advertisement of a particular product irrespective of the price attached to it.

As stated by “[t]he European Vice-President of a major toiletries group, … [i]t's no longer enough to have an excellent product at an excellent price; I need a tie-breaker” (Cummins, 1998). This holds true today for not only toiletries groups but products in general and the idea extends itself to supermarkets as well. Therefore, to keep and increase revenues, supermarket chains must find some way of differentiating themselves from each other and “[s]ales promotion[s] offer a tie-breaker in markets in which most products are excellent” (Cummins, 1998, p. 5).

According to the British Chamber of Commerce of Thailand, “Tesco Lotus has grown to [become] the No. 1 modern retailer in Thailand through a multi format platform, which includes Hypermarkets, Compact Hypermarkets for upcountry communities, Express stores for convenience ‘top up’ shopping and Talad Lotus community stores” (British Chamber of Commerce Thailand,

internet, 2010) and is currently present in more than 60 Thai provinces. “Tesco Lotus stores carry over 60,000 products items and service over 1 million customers per day” (British Chamber of Commerce Thailand, internet, 2010).

This research will study the various forms of promotions used by Tesco Lotus. How consumers rank the promotions relative to each other and how those promotions affect consumer purchasing behavior at Tesco Lotus will be the main focus of this study.

1.2 Statement of Problem

Many methods of marketing can and are employed by businesses to gain a stronger hold of their respective markets. Within the supermarket business, with many of the major competitors offering the same or similar products at the same or similar prices, it is necessary for businesses to stand out from each other so that they can maximize profits. Various means of marketing are employed to attract customers and as promotion is both one of the major forms of marketing and in some regards, one of the forms of promotion with the quickest results, it is in the best interest of supermarket stores (as well as business owners in general) to understand effective means of promotion and how promotion affects consumers and consumer behavior.

With the recent and ongoing economic downturn, it is even more imperative that supermarkets entice consumers into supermarkets and get them to make purchases. Therefore, it is more important now that supermarkets are able to deduce what affect promotional activities have on consumer purchasing behavior and how consumers rank promotions relative to each other. Knowledge of how customers rank promotions relative to each other and how those promotions affect consumers can be useful in deciding which promotions made need to be altered and which promotions should be used more frequently.

This research study will analyze various forms of promotion and how those promotion methods affect consumers and their behavior. Tesco Lotus and how Tesco Lotus has used promotions will be the principal focus of this research study. Membership rewards, mailings, pricing, and other methods of promotion at Tesco Lotus will be analyzed so that the effects of those promotions on consumers and on consumer purchasing behavior can be better understood.