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Table of contents........................................1
1.0 Introduction: Broad Statement of the
Research Problem......................................2
2.0 Background of the Study and
Research Problem......................................3
3.0 Research Objectives.............................4
3.1 To identify the amount of consumers who think promotional tools are useful in
saving money................................................................................................................4
To evaluate whether a favourable attitude towards the tools would lead to product
trial................................................................................................................................4
To determine the level of tools’ awareness as a moderating factor towards product
purchase and trial..........................................................................................................5
To examine which promotional tools are the most effective in inducing product trial
and purchase..................................................................................................................5
3.5 Research Plan - Diagram 1 (Malhotra et al, 2004)..........................................6
8.0 References...........................................16
9.0 Research budget.................................18
10.0 Questionnaire ..................................19
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Research proposal title:
Impact of promotional tools on product trial with
attitude and awareness of tools as moderating
variables
A Klang Valley Study
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been much research carried out on Western consumer markets, less of Eastern consumer
markets, and even less so in Malaysia in particular. We have chosen to focus on Klang
Valley particularly as it has the most dense population and bustling retail environment in
Malaysia. We aim for this research to come useful for firms to determine which
promotional tools are most efficient to adopt, how significant the impact of each
promotional tool is to product trial - substantiated by statistical evidence - that will also
help prove the differences between the impacts of different promotional tools on product
trial. Therefore, this research will explore, calculate, analyze and explain the relationship
between promotional tools and product trial, with the attitude of consumers as well as
their awareness of the tools, as acting moderating factors.
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are earned according to shopping frequency (Mauri, 2003). Moreover, if the company is
successful in creating consumer awareness towards the tools, consumers may form
favourable attitudes towards the products and hence form intention to purchase the
product in greater amounts (Shimp, 2000). Usually, expenditure on promotional tools
account for a quarter of the marketing budget, asserting its significance (Honea and
Dahl, 2005).
The marketing research problem is derived from the management decision
problem and it is the duty of the marketers to first find out what information is needed in
order to determine the management problem, before it can be solved. In this case, the
marketing research problems or questions are:
1. Which promotional tool is the most effective in inducing product trial and purchase?
2. Do consumers have favourable attitudes towards these promotional tools?
3. How aware are the consumers of these promotional tools?
4. Do the consumers respond to the promotional tools positively to the extent it induces
product trial/purchase? Which ones specifically, to what degree are they effective, and
why?
3.1 To identify the amount of consumers who think promotional tools are useful in
saving money.
The proportion of consumers who have tried to save money using
promotional tools will inform and recommend it to other friends, indirectly promoting
the product and increasing brand awareness..
The company, which develops the most successful or effective
promotional tool mix, will beat the other competitors and own majority market share.
To evaluate whether a favourable attitude towards the tools would lead to product
trial.
Customers who have favourable attitudes towards the tools are likely
to purchase or try out the products on promotion.
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The tri-component attitude model (cognitive, affective, behavioural)
represent three different stages which can be conceptualized to show an integrated
picture of how the consumers respond towards the tools (Laroche, 2003).
Most of the promotional tools tend to focus on the behavioural stage
because it leads to actual product purchase and trial (Shi, Cheung and Prendergast,
2005).
To examine which promotional tools are the most effective in inducing product trial
and purchase.
Among the promotional tools chosen are coupons, personal selling,
‘buy 1 free 1’ and loyalty cards. All these promotional tools are used heavily as
incentives for product trial (Liao,2006).
The consumers’ evaluation of the tools is based on how successfully it
manages to induce them into purchasing the product (be it switching brands, new
product trial or even buying more quantities of the same item). This evaluation is
measured through the Likert scale system in the questionnaires.
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Definition of the
Evaluation problem or opportunity Clarification
and
monitoring
Management
Management
decision problem
decision making
6. Report
preparation
and presentation Marketing
research problem
5. Data preparation
3.5 Research Plan - Diagram 1 (Malhotra et al, 2004)
and analysis 2. Development of an
approach to the
problem
Establish Revise
research costs
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4.0 Justifications of the Study
Diagram 2: Marketing Strategy Justification
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To reward the current customers using reward points or coupons
(single usage, according to their purchase amount and hence turn them into
multiple, trial) loyal customers.
To determine rate of trial usage and how to transform trial into
adoption and long-term usage
Enable management to emphasize on tools that need more
improvement or change and thus positively change the
consumers’ attitudes toward the tools and the products.
Consumer
Understand consumer attitudes better, hence allowing for better
attitude
prediction of future purchase behaviour .
Comprehend the consumer’s attitude in a better perspective so
that the management can satisfy them by adjusting or tailor-
making the promotional tools according to their needs and
demands.
Investigate current level of tools’ awareness of the consumers so
that the management can increase the awareness of the tools by
employing more advertising through mass media.
Level of Identify certain promotional tools (unpopular, costly/ ineffective)
awareness of the to be eliminated, so new and more popular tools such as loyalty
consumer towards card (in higher demand) can be added into the Promotion and
promotional tools marketing mix.
Degree of Predict future behaviour of consumers towards product purchase
Satisfaction and product trial.
Find out customer’s favourite tools – the ones that we need to
place more emphasis upon, expand tool usage, invest more
money
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which are price oriented particularly such as coupons increases brand awareness, market
share, encourages brand switiching as well as induces product trial usage (Lee,2002).
Shea (1996, as cited in Lee 2002) compares non-price promotions’ use instead, like
loyalty cards which are adopted for their ability to meet longer-term objectives such as
increasing brand loyalty, enhancing brand image and brand associations. Furthermore,
non-price promotions are framed as “gains” whereas price-oriented promotions are
perceived as “reduced losses”. Lee suggests that managers (especially in the competitive
retail grocery industry) use price-oriented promotions more because they are concerned
more with short-term pressures compared to building the brand’s long term health.
Moreover, Kahneman and Tversky (1979, as cited in Lee,2002)’s prospect theory states
that people generally place more importance on avoiding losses than seeking gains. Shi et
al (2005) however, posit that coupons are favoured less by consumers, compared to price
discounts and in-store displays because they require greater involvement, and contrary to
Lee’s observation of managers’ preferences, are relatively less effective in product trial
and brand switching.
Loyalty cards besides having the motive of repeat purchase and brand loyalty,
also serves the purpose of tracking consumer purchase histories as well as creating a
customer profile database to better meet the demands of their customers (Bellizzi and
Bristol, 2004). However, Mauri (2003) had come to the same conclusion as Bellizzi and
Bristol, that is, that not all subscribers to a loyalty card are all even card-loyal. They
found that these loyalty card holders had many ‘loyalty’ cards. Bellizzi and Bristol (2004)
found that both card usage and card ownership are inversely related with supermarket
loyalty, and that card users were actually less likely to be loyal supermarket shoppers.
Personal Selling is “face-to-face interactions with one or more prospective
purchasers, for the purpose of making sales’ (Rowley,1998,p.384), particularly famous in
business-to-business marketing. Kim and Merrilees (1998) put deeper meaning to
personal selling, as they attribute it as an important tool for relationship marketing. They
find that consumers are increasingly turning to salespeople as a source of information and
reliability, more applicable to medium and high-price retail firms, compared to low
involvement products.
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Buy-One-Free-One offers may be offered at the regular price, thus adding value
to the product – persuading consumers to buy the product because an additional amount
is given free of charge (Shi et al, 2005). It is also used to trigger unplanned purchases
(Inman et al.,1990, as cited in Laroche et al.,2003). However, further researched showed
that it only proved most effective in stockpiling, but least effective in product trial usage.
Value packs are considered similar to Buy-One-Free-One offers as it gives more value
compared to the usual retail package.
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Coupon
Personal Selling
Value Pack Product Trial
Buy 1 Free 1
Loyalty cards
Attitudes
Awareness
The following hypothesis for the study was developed based on the preceding review of
literature.
H2: There is a significant positive relationship between “Personal selling” and product
trial.
H3: There is significant positive relationship between “Value pack” and product trial.
H4: There is significant positive relationship between “Buy 1 free 1” and product trial.
H5: There is significant positive relationship between “Loyalty cards” and product trial.
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7.0 Research Methodology
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questionnaires. It also means that face to face communication between interviewer and
respondent is enabled, which means that the interviewer can screen the most suitable
respondents, and has the chance to pick up more samples should the ones already
collected be faulty (Malhotra et al, 2004, pp. 224-232).
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7.4 Method of processing and analysis
The method of processing and analyzing the data of the impact of promotional tools on
product trial is as follows (Malhotra, 2004, pp. 254-262):
• Coding: is the process of grouping and assigning numeric codes to the various
responses to a particular question. It allows the transfer of data from the
qualitative nature of the answers in the questionnaire to numerical, quantitative
data in the computer.
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• Associative Analysis: It examines if and how two variables are related. For
instance, can the promotional tools induce consumers to trial purchase? Basic
associative analysis methods used in marketing research are cross-tabulations and
correlations.
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8.0 References
Journals
Bellizzi, J.A. and Bristol T. (2004), “An assessment of supermarket loyalty cards in one
major US market”, Journal of Consumer Market, Vol. 21, No. 2, pp. 144-154.
Honea, H. and Dahl, D.W. (2005), “The Promotion Affect Scale: Defining the Affective
Dimensions of Promotion”, Journal of Business Research, Vol. 58, pp. 543-551.
Kim, S.F. and Merrilees, B. (1998), “Cultural Values and Personal Selling, a comparison
of Australia and Hong Kong’s retailers’ promotion preferences”, International Marketing
Review, Vol. 15, No. 4, pp. 246-256.
Laroche, M. et al. (2003), “A model of consumer response to two retail sales promotion
techniques”, Journal of Business Research, Vol. 56, pp.513-522.
Lee, C.W. (2002), “Sales promotion as strategic communication: the case of Singapore”
Journal of Product and Brand Management, Vol. 11, No. 2, pp.103-114.
Liao, S.L. (2006), “The effects of non monetary sales promotions on consumer
preferences: The contingent role of product category”, The Journal pf America Academy
of Business, Cambridge, Vol.8, No.2, pp. 196-203.
Mauri, C. (2003), “Card Loyalty: A new emerging issue in grocery retailing”, Journal of
Retailing and Consumer Services, Vol. 10, pp. 13-25.
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Ndubisi N. O. and Chew T M. (2005), “Customers behavioural responses to sales
promotion : the role of fear of losing face”, Asia Pacific Journal of Marketing and
Logistics, Vol.17 No. 1, pp. 32-49.
Shi, Y.Z., Cheung K.M. & Prendergast, G. (2005), “Behavioural response to sales
promotion tools, A Hong Kong study”, International Journal of Advertising, Vol. 24, pp.
467-486.
Textbooks
Kotler, P. (2000), Marketing Management, Prentice-Hall International, London, United
Kingdom.
Malhotra, N.K., Hall, J., Shaw, M. and Oppenheim, P. (2004), Essentials of Marketing
Research: An Applied Orientation, Pearson/Prentice Hall, New South Wales, Australia.
Shimp, T.A. 2000, Advertising promotion, supplementary aspects of Integrated
Marketing Communications, 5th edition, The Dryden Press, United States.
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9.0 Research budget
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10.0 Questionnaire
We are conducting this survey as an aid for our market research on “Impact of promotional tools on
consumer’s attitudes toward the product/product trial”. This survey is carried out purely for academic
purposes as required in this course. The results will not be revealed to persons other than the researchers
and the examiner for purposes of examination only.
PLEASE ANSWER BY MARKING [X] AT ONLY ONE OF THE BOXES BELOW, UNLESS
INDICATED OTHERWISE.
Section 1: Accessibility
Section 2: Expenditure
2) How much do you spend on average, on each shopping trip to a retail grocery outlet (eg: Tesco,
Carrefour, Giant, TMC)?
____________________
4) How many promotional tool sales items do you use or purchase, on average, on each grocery shopping
trip?
Personal Selling
[ ] Never
[ ] One or Two
[ ] Three or four
[ ] Five and above
Coupons
[ ] Never
[ ] One or Two
[ ] Three or four
[ ] Five and above
Loyalty card
[ ] Never
[ ] Rarely
[ ] Sometimes
[ ] Always
Value pack
[ ] Never
[ ] Rarely
[ ] One or Two
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[ ] Three or more
Buy 1 free 1
[ ] Never
[ ] Rarely
[ ] One or Two
[ ] Three or more
6) Which promotional tool is more familiar to you, please rank them from 1(most familiar) to 5(least
familiar)
[ ] Personal selling
[ ] Coupon
[ ] Value pack
[ ] Buy 1 free 1
[ ] Loyalty card
Section 4: Awareness of promotional tools (adapted from Shi, Y.Z. , Cheung, K.M. and Prendergast,
G. (2005)
1=strongly disagree, 7= strongly agree
7) Personal Selling
a. Personal selling has led me to buy another brand which I do not regularly buy.
1 2 3 4 5
b. Personal selling has led me to buy the product earlier than planned.
1 2 3 4 5
c. Personal selling has led me to buy more quantities of the same product.
1 2 3 4 5
d. Personal selling has led me to buy a product which I have never tried before.
1 2 3 4 5
e. Personal selling has led me to spend more in each visit to the hypermarket.
1 2 3 4 5
8) Coupon
a. Coupon has led me to buy another brand which I do not regularly buy.
1 2 3 4 5
b. Coupon has led me to buy the product earlier than planned.
1 2 3 4 5
c. Coupon has led me to buy more quantities of the same product.
1 2 3 4 5
d. Coupon has led me to buy a product which I have never tried before.
1 2 3 4 5
e. Coupon has led me to spend more in each visit to the hypermarket.
1 2 3 4 5
9) Loyalty card
a. Loyalty card has led me to buy another brand which I do not regularly buy.
1 2 3 4 5
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b. Loyalty card has led me to buy the product earlier than planned.
1 2 3 4 5
c. Loyalty card has led me to buy more quantities of the same product.
1 2 3 4 5
d. Loyalty card has led me to buy a product which I have never tried before.
1 2 3 4 5
e. Loyalty card has led me to spend more in each visit to the hypermarket.
1 2 3 4 5
We appreciate your time, co-operation and effort participating in this survey. Thank you.
Prepared by,
Syarifah Anita Ibrahim, Lim Ying Ying and Sia Kok Liang
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