Effectiveness of Discounts or Promotional Tools

EFFECTIVENESS OF DISCOUNTS OR PROMOTION TOOLS
AMONG FILIPINO BUSINESSES AND ITS CONSUMERS

IN SCIENCE CITY OF MUNOZ AND SAN JOSE CITY
A Research Proposal Submitted in Partial Fulfilment of the Requirements

In Inquires Investigations and Immersion
ARCE, RENZ CHRISTIAN M.

ALEJANDRO, XYRAN AERIELLE S.
GACUSAN, JOHN LLOYD I.
KIL, SU-YON C.
MARZAN, ABBY JANE N.
MAURO, CHRISTINA MAY A.
PARROCHA, RELIZA A.
RENDON, WILLMHAY H.
RIVERA, ROIVEN E.
TABELINA, KATHERINE T.
TANGI, MERLITA V.
ABM 201 – B
STI College San Jose
HONEYLET L. LAGASCA
Research Adviser
March 2019
II
Abstract
Marketers use sales promotions to boost sales. Sales promotion tools vary in their
effectiveness to elicit different sales responses. Companies have a specific goal when
they choose to use any promotional tool. Many researchers believe that sales promotions
are zero sum game. Unlike in the West, in the Philippines brand loyalists outnumber price
buyers by 200%. This paper investigates the effectiveness of select sales promotional
tools in generating different buying behaviors. The study reveals that sales promotions, in
San Jose City and Science City of Muñoz, Nueva Ecija, do not help in category
expansion. The effect of these sales promotional schemes are measured on seven buying
behavior responses like visit to store, purchasing the product, purchase acceleration,
stockpiling, spending more, trial and brand switching. The sample for the study was the
25 consumers and 25 businesses, 13 coming from San Jose City and 12 from Science
City of Muñoz. It was found out that certain promotional tools were effective in inducing
purchase of product, purchase acceleration and effecting in buying behavior responses.

III
Acknowledgment
We would like to express my deepest appreciation to all those who provided us
the possibility to complete this research. This research was supported by the faculty and
staff of STI College San Jose. A special thanks we give to our research adviser, Ms.
Lagasca, who provided insight and expertise that greatly assisted the research and whose
contribution in stimulating suggestions and encouragement, helped us to coordinate our
research especially in writing this manuscript.
Furthermore we would also like to acknowledge with much appreciation the
crucial role of the school of STI College San Jose, who gave the permission to use all
required equipment and the necessary technology to complete the paper.
We would also like to show our gratitude to the number of businesses and
respondents for sharing their opinion and perspectives with us during the course of this
research. Last but not the least we have given full appreciation to the guidance given by
other supervisor as well as the panels especially in our project presentation that has
improved our presentation skills thanks to their comment and advices.

IV
TABLE OF CONTENTS
Title Page……………………………………………………………………………… i
Abstract……………………………………………………………………………….. ii
Acknowledgement……………………………………………………………………. iii
Table of Contents…………………………………………………………………….. iv
Chapter 1: THE PROBLEM AND ITS BACKGROUND
INTRODUCTION……………………………………………………………. 1
BACKGROUND OF THE STUDY………………………………………….. 6
STATEMENT OF THE PROBLEM…………………………………………. 7
RESEARCH OBJECTIVES………………………………………………….. 8
ASSUMPTION OF THE STUDY……………………………………………. 9
THEORITICAL FRAMEWORK..…………………………………………… 9
SIGNIFICANCE OF THE STUDY………………………………………….. 19
LIMITATION OF THE STUDY……………………………………………... 20
DEFINITION OF TERMS……………………………………………………. 21
Chapter 2: REVIEW OF RELATED LITERATURE
SALES PROMOTIONS………………………………………………………. 22
SALES PROMOTIONAL TOOLS…………………………………………… 27
SALES PROMOTION ON CONSUMER INTEREST………………………. 30
IMPACT OF SALES PROMOTION…………………………………………. 31
CONSUMER BEHAVIOR ON DISCOUNT…………………………………. 32
CONSUMER BEHAVIOR ON PRICE OFF………………………………….. 33
CONSUMER BEHAVIOR ON BUY ONE GET ONE……………………….. 33

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Chapter 3: METHODOLOGY
INTRODUCTION……………………………………………………………… 35
RESEARCH APPROACH AND DESIGN…………………………………….. 35
SAMPLING METHOD………………………………………………………… 37
POPULATION…………………………………………………………………. 37
DATA COLLECTION PROCEDURE………………………………………… 38
STATISTICAL TREATMENT OF DATA……………………………………. 38
DATA ANALYSIS…………………………………………………………….. 40
Chapter 4: PRESENTATION, ANALYSIS & INTERPRETATION OF DATA
PRESENTATION OF DATA ON CONSUMERS……………………….……. 43
PRESENTATION OF DATA ON BUSINESSES…………………………….. 50
Chapter 5: SUMMARY, CONCLUSION AND RECOMMENDATION
SUMMARY OF FINDINGS…………………………………………………... 57
CONCLUSION………………………………………………………………… 58
RECOMMENDATION……………………………………………………...… 60
REFERENCES…………………………………………………………………………. 62
DOCUMENTATION…………………………………………………………………... 64
SAMPLE SURVEY QUESTIONNAIRE……………………………………………… 67

1
CHAPTER 1. THE PROBLEM AND ITS BACKGROUND_____________________
1.1 Introduction
Sales promotions are used by many companies for introducing new products,
increase sales, or to influence the consumer decision process. There are many different
sales promotions such as price discounts, feature advertising, special displays, trade
deals, reward programs, coupons, rebates, contests, and sweepstakes. Much research has
been conducted on the possible positive and negative consequences of sales promotion
for a brand. Although there are some sales promotion that can have negative effect on the
perceived brand quality and brand image, companies still use these promotions despite
the negative consequences, but why?
There is an enormous amount of products available for consumers. To be able to
choose, consumers have certain preferences. Brand preference “represents attitudes
toward one object in relation to another”. Because consumers do not always process price
information accurately and completely, sales promotions can change the purchase
decisions of consumers. Customers make three major purchasing decisions. What to buy?
How much to buy? What brand to buy? Sales promotions can have an impact on all three
broad decisions (Gilbert and Jackaria, 2002). The better deal that consumers can get via a
promoted brand can persuade consumers to choose that certain product. Due to these
promoted brands, this persuades a potential costumer to buy the product, consumers that
use the brand and eventually likes it, it is possible that this person switches to this brand
and will use the product again even when it is not promoted.
2
Another reason why sales promotions are used, and in particular price
promotions, is because that it attracts the consumers. By offering a reduced price on a
popular item, this lures the customers away from other competitors and is drawn to the
brand with the promotion sale. This is due to the price perception of the consumers.
Consumers see every discount as a special price; they use this perception of a special
price as an indicator of a good deal. According to GfK Shopping Monitor (2000), one of
the most important factors for consumers to choose a certain product is the price. With
price being one the most important factor in choosing a certain product, this greatly
influences on which product a consumer will choose. Typically when consumers are
actually asked about the price of a certain product, the actual price knowledge is poor.
There are several reasons why consumers do not check or know the price of a certain
product. Among these reasons are time constrains, trouble in finding the shelf price label
of the product, the price is satisfactory or not very different than was last checked, brand
loyalty or habitual repeat buying, or the belief that the limited total savings from
checking prices is not worth the time or effort (Dickson & Sawyer, 1990).
Sales promotions can affect various aspects of a brand, such as brand image,
brand quality, price orientation, investments and loyalty issues. The impression in the
consumers' mind of a brand's total personality (real and imaginary qualities and
shortcomings). Brand image is developed over time through advertising campaigns with a
consistent theme, and is authenticated through the consumers' direct experience. See also
corporate image). These associations can be influenced by a promotion. A lower price of
a high end brand could for example influence the perceived quality and brand image of
that brand, because a lower price is often associated with lower quality. With the lower
3
price of the product, consumers perceived it to be of lower quality. When people have to
judge the quality between two different brands with different price points, they judge that
the higher the price of the product, the better the quality in contrast to the lower priced
product.
When it comes to investment, not only do sales promotions possibly instill a price
orientation in customers, they can also serve to counter ongoing investment in brand
development or management. Over time, companies invest in advertising to build and
maintain a brand image. Consistently dropping prices can severely undercut promotional
efforts and limit returns. On one hand, ads tell customers how incredible and valuable the
brand is; on the other, sales promotions imply that companies must offer discounts to
attract interest. Another thing that affects the aspect of the brand is loyalty issues.
According to JC Penney, part of branding is connecting with targeted customers and
getting them to feel loyalty to the company or product. Creating sales through discounts
may attract price-conscious consumers, but price alone rarely leads to a strong bond with
the brand. He found this out by trying to change from heavy emphasis on regular sales
promotions to a more value oriented approach with no sales beginning in 2011. As of late
2012, his company still struggled to generate customer traffic and sales because of the
lack of interest from previous customers who were primarily motivated by price and not
loyalty to the store.
Although sales promotion is one of the tools in the marketing mix, it has different
objective from others. For example, advertising is aiming to create brand awareness,
influence and change consumers’ attitudes. Personal selling is aiming to have direct
contact with buyers. The main aim of this connection is to persuade, inform and educate
4
them. Point of purchase communication is to attract consumer to purchase certain product
or service while he/she do a shopping. Sponsorship marketing is aiming to promote the
brand when it helping to do certain event. But ultimately, sales promotion has another
objective, which is stimulate consumers to purchase certain product or service in a lower
price. They are incentives that are offered by manufacturers. The effect sales promotion
can have on consumers depends on different factors, such as the depth of the promotions,
how the offer is presented and whether the original price is mentioned next to the
promoted price. Normally, consumers will be persuaded to buy the product because of
the discount or other promotion stool, specifically price promotion.
In the recent years with the influx of new companies and brand-conscious markets
in the Philippines; sales promotion has been playing a significant role in selling most of
the consumer goods. Sales promotions are securing a greater portion of the promotion
budget due to increased competition, declining brand loyalty and consumer awareness,
especially in because it is the value for money that is the deciding factor for the purchase
and not the aspiration value as created by advertising of goods. In today’s
competitive market, companies view sales promotion as being immensely helpful in
sustaining the tough period. The rise in frequency of sales promotion as a marketing tool
in the recent years can be attributed to the fact that sales promotion clearly generates
sales response that is sizeable. (Putsis, 1998).
Most of the leading advertising agencies in the country are affiliated with
international agencies. Advertising in the Philippines has evolved beyond traditional tri-
media outfits (print, TV and radio). Local advertisers now also use electronic billboards,
web advertising, mass transit or public transport advertising, special events and product
5
launches, direct marketing, social media promotion, and other tools to promote their
products such as coupons, discounts, rebates, voucher codes and etc. Although some
advertisements utilize Western image models or concepts, many market segments are
“localized” versions of product advertising and brand-building. The use of celebrity
endorsers or other high-profile personalities is a well-tested and well received formula for
local advertising.
The National Telecommunications Commission (NTC) reported that broadcast
media in the Philippines is comprised of 132 AM radio stations, and 349 FM radio
stations as of December 2015. The NTC also reports that there are six major television
networks that operate 285 stations that all have advertising commercials to either inform
the consumers of deals.
Print media includes more than nine daily newspapers, 19 national tabloids, over
100 regional newspapers, and more than 100 magazines and publications covering a
diverse range of themes also using different promotion tools in their publications
Internet penetration has increased, but is still relatively low compared to Asian
neighbors such as Singapore, Taiwan, and Japan. Online advertising is gaining
popularity as social networking / marketing captured the younger Filipino market. Web-
based advertising is typically placed on the most-visited local websites. With the use of
other social networks such as Facebook, YouTube, Linked-in, and Twitter, this gained
momentum in reaching niche markets for consumer brands, especially among young
people.
Shultz, et al. says that sales promotion generally works on a direct behavioral
basis rather than affecting awareness or attitude. One of the purposes of a sales promotion
6
is to elicit a direct impact on the purchase behavior of the firm’s consumers. A sales
promotion stimulates customer purchases and the efficiency of distributors through
marketing activities excluding advertising, public relations and so on. Generally, the
purpose of a sales promotion is to attract new customers, maintain existing customers
who are contemplating switching brands and give incentives to customers who are about
to use competing products. Sales promotions vary depending on the situation and need,
and they have an immediate effect on product purchases.
1.2 Background of the Study
The present study focuses on the effects that price promotions can have on
various aspects of a brand. The main focus lies on the effectiveness of various sale
promotion techniques used by businesses on the perspective of the customers and the
business itself. Generally, the objective of this research paper is to study the effectiveness
of sales promotion schemes on consumer buying behavior and how it affects the business.
For this study, six sales promotional schemes were chosen as shown below:
1. Discount – refers to a situation when a bond is trading for lower than its par or
face value.
2. Price off offer – Under this offer, products are sold at a price lower than the
original price.
3. Buy one take one – retailers offer free gift to the customers on the purchase made
without any condition.

7
4. Bundles – is a marketing strategy that joins products or services together in order
to sell them as a single combined unit.
5. Coupons – is a ticket or document that can be redeemed for a financial discount or
rebate when purchasing a product.
6. Rebates – is an amount paid by way of reduction, on what has already been paid.
The paper is divided into 6 sections. After this introduction chapter, the next
chapter of this paper reviews the relevant existing literature on effectiveness of sales
promotion tools. The research design, data and methodology are discussed in section 3
and section 4 is for results and discussions. Section 5 provides limitations and scope for
further research. And in the last section of this paper, based on the results found in the
two studies, conclusions are made and discussed.
1.3 Statement of the Problem
The purpose of this project is to identify the effect of various promotional tools
used by businesses have on different customers and their behavior towards this type of
marketing techniques in Science City of Muñoz and San Jose City.
 How do various sale promotion activities / tools / techniques work?
 When do businesses place promotional tools for different items?
 What type of sale promotions techniques used by different businesses are the most
effective and least effective tool for costumers?

8
 What are the different attitudes or behaviors customers show towards brands that
hosts promotional activities?
 How much price off or what is the percent of discount do consumers consider in
buying an item with such promotional tools?
 What are the consequences of price promotions for different brands?
1.4 Research Objectives
The overall goal of this project is to investigate the relationship between the
customers and businesses towards various promotional tools, the behavior of both
employees and customers regarding the topic, and the overall effect of promotional tools
in the area of Science City of Muñoz and San Jose.
 To know and understand the various sale promotions activities by businesses and
when they take place.
 To know and trace out what promotional tool do businesses widely accept as the
best marketing strategy in attracting consumers. And what is the least effective
promotional tool.
 To analyze the costumer’s attitude towards brands that host promotional
activities.
 To understand the costumer’s perspective on what is the considerable amount of
discount or slashed price of an item.
 To determine the consequences of price promotions for a store brand and a high
9
end brand.
1.5 Assumption of the Study
This research study is anchored on the assumption that:
H 1: There is a significant difference of the businesses' performance in attracting
customers and achieving measurable gain in return on investment through the use of
various sale promotional tools / techniques.
H 2: Businesses have a better marketing performance without the use of sale promotional
tools / techniques.
1.6. Theoretical Background
In the following some cornerstone theories and concepts from research in social
psychology, micro-economics, and behavioral economics will be introduced, that form
the basis for the empirical research conducted later in this thesis and provide explanations
to the observed results.
1.6.1 Prospect Theory and Reference Price Concept
The reference price concept states that consumers do not just evaluate observed
prices on a stand-alone basis and as absolute but rather evaluate them in a relative
10
context. This concept goes back to the prospect theory (Kahneman and Tversky 1979)
and eventually the adaption-level theory (Helson 1964).
According to the adaption-level theory (Helson 1964), consumers compare a state,
i.e. an observed price to a personal reference-level or an adaption-level. These adaption-
levels are formed by the individual response to three classes of cues: focal, contextual
and organic. Focal cues are stimuli that a consumer is directly responding to (i.e. the
observed price), with the contextual cues describing everything in the background to
those cues (i.e. comparison with prices of other products). Organic or residual cues are
built through previous experiences of the consumer (i.e. past prices that consumers have
paid) (Helson 1964). Building on the different cues used to form adaption-levels or
reference prices, there is however a discussion that different types of consumers form
different reference prices. While more brand-loyal customers focus on their internal
reference price, which is built from previous experiences, brand switchers (deal seekers)
focus on external (contextual) reference prices (Puto 1987; Rajendran and Tellis 1994).
Kahneman and Tversky (1979) have built on this concept when formulating the
prospect theory. According to the prospect theory, which then forms the basis for the
reference price concept, consumers do not just look at the actual prices of goods or
services but, in line with the adaption-level theory, always put this price in context
relative to a personal reference price. The price perception of a brand or retailer depends
not only on the actual price of products offered but also on their reference price and the
relationship between the two. A positive deviance of the actual price from this
adaptation-level or reference price, i.e. a lower actual price than the reference price would
in terms of mental accounting be considered a “profit” and lead to a positive price

11
perception, while a negative deviance would be booked as a “loss” (Monroe 1973).
Kahneman and Tversky (1979) found that the utility function for those profits and
losses is concave for profits and convex for losses. Moreover the curve is steeper for
losses than it is for gains. This means that consumers are in general riskaverse and in
absolute terms losses are more negative than the same profit would be positive. In terms
of promotions this means that a temporary discount (promotion), 2.2 Theoretical
Background 11 with an observed price lower than the reference price will be considered a
profit, while the return to the actual price compared to the “new reference price” would
be a loss—with the net of the two effects being negative.
As consumers adjust their expectations to past experiences, e.g. promotions, the
response of a consumer to a certain type of promotion can change over time, given the
changed reference prices (Anderson and Simester 2004). Regarding promotions and in
particular UABPs, historic experiences, and the increased predictability of finding an
article at a lower price in the future, could make non-promotional prices less attractive
and even provide a lower incentive to act on future promotions, given that the observed
promotional price and the new reference price are converging (see Sect. 2.3.2 for a
detailed discussion on long-term promotional effects).
Despite a general acceptance of this theory, the concept of the reference price and
the rational consumer has come under some scrutiny as empirical research has shown that
consumers often have little price knowledge and their internal reference price is often not
very precise (Buzas and Marmorstein 1988; Dickson and Sawyer 1990). In reality, rather
than having precise price knowledge, consumers use external cues while remembering
whether a price was cheap or expensive. This heuristic is in most purchase situations
12
sufficient for making purchase decisions or forming a view about a retailer and brand
(Krishnamurthi and Raj 1988; Mazumdar and Monroe 1990).
For the applicability of the reference price concept on UABPs, it can be assumed
that the “x percent promotion on everything” claim forms a strong enough external claim
itself, so that the relative discount can be viewed as “reference” to what is normally
charged for a product. This would mean that consumers do not compare the actual prices
paid but rather use the heuristic of the existing “x percent promotion on everything”
UABP discount as a reference value. This could lead to consumers expecting a certain
(type) of discount rather than a precise price for an article.
1.6.2 Price Search and Search Costs
The behavioral pricing research differentiates between three phases of how
consumers deal with prices. The first phase sets out how information on prices are
obtained, the second one how those information are processed and the third one how the
processed price information is stored by the consumer (e.g. Homburg and Koschate
2005). The price information search, i.e. the first phase, herein sets the basis for the
processing and acting on the information.
The interest in price information, describes the general desire of a customer to
search for price information and to consider these information in their decision making
process. The greater the interest in price, the higher is the importance of price and the
lower the willingness to pay an above average price (Diller 1999). The interest in price is
increased through promotions, as they put the focus on the price 12 2 Conceptual
13
Framework of a product which can also be tactically used by retailers, aiming at
increasing the interest in price (Dickson and Sawyer 1990; Naik et al. 2005).
While the interest in price describes the original intention to search for prices, the
price search, which is the undertaken effort to look and compare prices, influences the
actual purchase process. In general price search can take place either between-stores
(between-store-search), i.e. comparing prices across different stores for comparable
products or within-stores (in-store-search), which refers to comparing prices for
comparable products and brands within one store (Urbany et al. 1996). The promotion
aspect of within-store search is less relevant for Uniform Across Board Promotions,
which is why the focus will be more on between-store search elements. Understanding
the factors influencing the intensity of between-store search will help to better understand
in which retail settings UABPs might work better than in others (see also Chap. 3).
Various older research studies conclude that regardless of the degree of price variability,
consumers tend to put only relatively little effort in the actual process for price search
(Beatty and Smith 1987; Grewal and Marmorstein 1994).
1.6.3 Behavioral Learning Theory
The central concept behind behaviorism or behavioral learning theory, introduced
by Skinner (1953) and Thorndike (1911), states that positively reinforced behavior is
more likely to reoccur than non-reinforced behavior. Nord and Peter (1980) as well as
Rothschild and Gaidis (1981), have summarized the general concepts and 14 2
Conceptual Framework applied them to the field of marketing. Applied to marketing the
14
behavioral learning theory suggests, that a transaction or purchase (response) takes place
once a product (stimulus) is favorably received by the customer. If the customer is
satisfied with the product (positive reinforced), the probability of repeat purchases
increases. Marketers enhance the value of the product through additional stimuli, like
adapting price, distribution or promotional variables. Such positive reinforcement,
through favorable variables, further increases the purchase probability of the product. In
the following some core components of behavioral learning in marketing will be quickly
introduced and their potential impact on the purchase behavior for Uniform Across the
Board Promotions.
The first step is called shaping, which derives a new behavior, such as choosing a
new brand or store. This first step is essential as positive reinforcement, i.e. learning, can
only occur, once behavior has already occurred. Rothschild and Gaidis (1981) suggest
that shaping occurs through rewarding many small existing patterns, out of which a new,
more complex behavior can occur. For example by advertising and promoting one can
attract a consumer to a specific store once she already has the intention to buy in a certain
product category. However the visit to the store is in this instance closely connected and
reinforced by the specific additional stimulus (promotion, advertising). To ultimately
achieve a change in behavior that is linked to the store rather than the additional stimulus,
the ancillary incentives, such as the promotions and advertising need to fade out. A
common problem and significant risk in the use of those promotions stimuli is either the
improper fading out or the over-usage of promotions/UABPs. If promotions/UABPs are
not fading, i.e. being decreased over time, store sales may decrease significantly the
moment those promotions are eventually dropped (see also Praktiker example and
15
analysis in Chap. 4). This is caused by people switching back to a different store as the
stimuli has become the main cause for choosing a certain store, rather than the store’s
products, features etc. Moreover an over usage of promotional or advertising aids may
causes the consumer store choice to be contingent upon and overshadowed by those tools
—once these aids are dropped, consumers might also switch back to a different store. To
cause a long-term change in shopping behavior, promotional tools, hence also the UABPs
can only be used to draw customers to a store, while continuously removing the
correlation between the response (store selection) and the reward (UABP), to put the
inherent store benefits back in focus (Rothschild and Gaidis 1981).
1.6.4 Sales Promotion Effectiveness
Sales promotions can be divided into monetary and non-monetary sales
promotions. Monetary sales promotions are also called price promotions. Price
promotions can be communicated in different ways. They can be shown as percentage-off
or as cents-off. Next to that, a reference price or original price can be shown next to the
promoted price. Researchers thought for a long period of time that monetary savings were
the only benefit consumers could get from a sales promotion (Chandon et al., 2000). In
their Multibenefit Framework, Chandon, Wansink and Laurent (2000) found six different
benefits of sales promotions which can be divided into two groups; utilitarian benefits
(saving, quality improvement, and convenience) and hedonic benefits (value expression,
exploration, and entertainment). The central premise that these researchers have is that
“the value that sales promotions have for brands is related to the value, or benefits, that
16
sales promotions have for consumers” (p. 65). Non-monetary and monetary promotions
give certain benefits for the consumer. For example a price promotion of 30 percent gives
the consumer a saving benefit and a possible quality improvement, because the consumer
can purchase the product at a lower price where he or she is normally not able to buy that
particular product. Sales promotions could also be fun, for example sweepstakes or
contests. In these cases there is no monetary saving, but the entertainment benefit is more
important for the consumer.
Products can also be divided into having a utilitarian (bought for their practical
use) or a hedonic (bought because of the pleasure, fun or enjoyment they can give)
benefit. To develop an effective sales promotion, it is important to know what kind of
benefit the consumer is looking for. The benefits from the sales promotion should be
congruent with the benefits that the product gives 9 to the consumer (both utilitarian or
both hedonic), which is known as the Benefit Congruence Framework (Chandon et al.,
2000). According to the framework, sales promotions are more effective in influencing
brand choice when the benefits sought in the product are coherent with the benefits of the
sales promotion. Thus, a utilitarian sales promotion is more effective when it is used for a
product with utilitarian features. Therefore a sweepstake on Facebook will probably not
be used to promote a store brand toilet paper. The utilitarian feature of the toilet paper
(cost-saving benefit) is not coherent with the hedonic benefit of the promotion
(entertainment benefit).
There are different variables that affect consumers’ evaluation of sales promotions
(Chen et al. 1998; DelVecchio et al., 2007; Krishna et al., 2002; Montaner & Pina, 2008).
First of all situational factors influence this perception. Krishna and her colleagues (2002)
17
found that the type of store or brand has an influence on the evaluation of the deal, where
for example larger deals were more effective at specialty stores compared to discount
stores, because of the higher deal frequency at discount stores. The offer is less special at
a discount store; the deal is therefore less effective.
Furthermore, the way the promotion is communicated, which is known as price
framing, influences consumers’ perception. Research from DelVecchio, Krishnan and
Smith (2007) showed that people choose a promotion they can easily calculate above
ones they cannot easily figure out. This is caused by the fact that people have to put effort
in calculating the price. When they think this effort will not exceed the benefit, they will
use heuristics to estimate the price (Morwitz et al., 1998; Neslin, 2002). This heuristic
way of thinking can be influenced via price promotions, for example via changing the
anchor-point, which is known as the anchoring and adjustment theory (DelVecchio et al.,
2007). When the original price is mentioned next to the promoted price, consumers tend
to use the original price as an anchor-point to evaluate the attractiveness of the deal.
Sales promotion’s effectiveness is also influenced by the characteristics of the
deal. One example is the depth of the promotion. If the depth of the promotion is outside
the latitude of price acceptance, consumers will see the price reduction as untrustworthy
(Morwitz et al., 1998). DelVecchio, Henard and Freling (2006) conducted a meta-
analysis of 51 studies in which they concluded that price promotions of more than 20
percent of the original value of the product have a negative effect on the post-promotion
brand preference. The reason for this effect is that the purchase is attributed to the
promotion instead of the product itself. When the promotion stops, the consumer has no
reason to buy the product anymore. The negative effect on the post-promotion preference
18
indicates that a deep promotion is viewed with suspicion and seen as less trustworthy
compared to a smaller discount (under 20 percent). Jany (2009) elaborated on this result,
finding that a 40 percent discount for hot wings at a Kentucky Fried Chicken restaurant
was perceived as untrustworthy.
1.6.5 Conceptual Framework
Concepts stated above depicts the natural behavior of consumers as well as their
common response to sales and promotion. This includes their deep analysis of what the
change of prices are all about. Consumers consider relationship of this occurrence to
somewhere logical—which can either be the reason in buying them or not. They do not
only look for their convenience in having goods lesser the price, they also assess what
such product can give them as a whole. With this said, businesses are most likely to
decrease the price of selected items for its consumer to be attracted to. This can only be
considered as a risk if high quality products are promoted, if not, such business can have
all the gain they want. However, a small part of this idea gives the store an image that
sales are just the business’ form of profit, which can result to decrease in its sales.
Decreasing the price might give a point to its customers but the fact that the quality is not
proportional to what customers have expected will bring the negative side of such price.
This cannot only lead to low profit, but also the expected customers to visit the store. In
addition, people might spread unwanted news to other customers that can lead to
something worse—a massive net loss.
1.7 Significance of the Study

19
The findings of the study will redound to the benefit of the society considering
that marketing overall plays an important role in economics today. Having a higher
chances of having promotional techniques on a brand’s item/s justifies that there is a
higher chance in attracting and luring customers in their business and opening to several
new and modern way of approaches in marketing strategies. Thus, other brands that apply
the recommended approach derived from the results of the study will be able to craft a
better and more secure future for the brand. Owners will be guided on what should be
emphasized by store managers in the company to improve their customer account and
also their demographics. For the researchers, the study will help them uncover critical
areas in the marketing process that many researchers were not able to explore. Thus, a
theory regarding the topic may be arrived at.
1.8 Limitation of the Study
The first limitation is the respondents of this study. The respondents is only
limited to consumers and any business employee only disregarding their gender. Any
respondent must be conducted within dimensional entities; meaning a perceived need to
understand the economic, political, educational and sociological factors on what effect
sale promotional tools have on either the consumers or the businesses.
The second limitation of this study is the sample size. The sample size is only
limited to 50 respondents consists of Filipino consumers and businesses issued by the
government. The sample size is relatively small in order to make a general conclusion
20
based on the effectiveness of promotional tools among Filipino businesses issued by the
government and its consumers.
The third limitation is the place that this study will be conducted. The population
were taken from a few government issued businesses and consumers at San Jose City,
Nueva Ecija and Science City of Muñoz, Nueva Ecija chosen randomly. Furthermore, the
study only focuses in Philippine context only because this study in only conducted for
respondents in the Philippines. The result will be concluded based on the population and
it might not be the same for other countries but it can be used worldwide if there is any
further related study regarding the effectiveness of various sale promotional tools among
different demographics.
1.9 Definition of Terms
The key terms in the study are given the following operational definitions.
ADVERTISING – is a marketing communication that employs an openly sponsored,
non-personal message to promote or sell a product, service or idea.
BRAND – is an overall experience of a customer that distinguishes an organization or
product from its rivals in the eyes of the customer.
BUSINESSES – is the activity of making one's living or making money by producing or
buying and selling products such as goods and products Simply put, it is any activity or
enterprise entered into for profit.
CONSUMER – a person who purchases goods and services for personal use.
21
INCOME – is money that an individual or business receives in exchange for providing a
good or service or through investing capital.
INVESTMENT – is a monetary asset purchased with the idea that the asset will provide
income in the future or will later be sold at a higher price for a profit.
MONETARY – relating to the money in a country.
PREFERENCE – a greater liking for one alternative over another or others.
PROMOTIONAL TOOLS – are tactics or activities that one plans and executes to
persuade consumers to buy your products or services.
SALES – are activities related to selling or the number of goods or services sold in a
given time period.
TRANSACTION – an instance of buying or selling something; a business deal.
CHAPTER 2. REVIEW OF RELATED LITERATURE________________________

22
2.1 Sales Promotions
Kotler (2003) claims that while advertising is used as a long term technique for
enhancing the brand value, sales promotions are mostly used in order to create a short
term demand for the products, hence sales promotions are actively and increasingly used
by brand managers because of their effectiveness in some of the cases. Taking this into
account, it is worthwhile for every marketer to review such an important tool as sales
promotions.
Diamond and Cambell (1989), together with Lowengart (2002) propose the
definition of a sales promotion, characterizing it as short term stimulations of purchase or
sales of a products or service. To add, Lowengart (2002), after the analysis of many
sources suggest more comprehensive definition, describing it as a number of tactical (but
not strategic) tools developed as a part of strategic marketing framework, with the aim of
adding a value to the products of services to attain a specified marketing objectives.
Although varied within different groups and targeted markets, sales promotions is proved
to be an effective tool in increasing the sales, in addition to the relative ease of measuring
this effectiveness (Kwok and Uncles 2005, Brookins 2009, Odunlami and Ogunsiji,
2011). It is also considered as an effective technique while targeting sales promotions to a
range of the particular niches, and also while trying to increase the level of
differentiation, in order to develop more precise campaign with the high chances for
success (Diamond and Campbell 1989, Boulding et. al. 1994, Lichtenstein et. al. 1997,
Chandon et. al. 2000). However, Uva (2000) and Lichtenstein (1997) give notice about
23
the dangers related to the decreased perceived value if the sales promotions are
improperly targeted, Uva also notices that the most effective implementation of sales
promotion can be done providing the superior product quality and value, but which has a
sign of low product awareness, implying the fact that it can be a good tool during the
introduction of a new product. Kotler (2003) notes that sales promotions can be used as
an alternative for increasingly costly advertising campaigns, while Philip Jones (1990)
notes that there are the dangers of the prices promotions related to the dramatic decrease
in profits as the result of improperly developed tactics of sales promotions. To add, Low
and Mohr (2000) claims that brands with higher spending on advertising, comparing to
sales promotions, usually have more positive customer attitudes, higher value of brand
and higher market share.
Therefore the appeal of using the sales of promotions related to the increase of the
advertising costs can be disputable in some of the cases, as many academic sources
suggest.
According to Srinivasan and Anderson (1998), and also d'Astous and Landreville
(2003), there are several main objectives for implementing sales promotions, which were
revealed in their researches. One of the most evident reasons for sales promotions’
implementation is to increase the short term sales, but it also used for increasing the
awareness of already existing product and stimulating the sales during the off-peak time,
they suggest. To add, employing sales promotions during the introduction of a new
products and even an entire new product line is considered as very effective way to
accept the expansion or switch to a new product, because of the lowered hesitations in
trying a new product or product line, and this is true for both goods and service
24
companies (Kalish 1985, Pauwels et. al. 2003). Anderson (2009) also notes that the best
tools during the introduction of the sales of a new product or product line are discounted
or free accessories and discounts towards a purchase of the already popular product
providing the customer purchases the new products or disseminating pricing coupons –
all of them are evidently increasing the sales of new products (Kalish 1985, Infosino
1986). Anderson (2009), together with Taylor et al. (2004), state that implementing sales
promotions can help establish the high level of brand loyalty for the customers mainly
oriented on the prices, and also increase the brand loyalty of the customers who tend not
to have any preferences regarding the brand choice. However this statement is actively
challenged and disputed by Mela et. al. (1997) who notices that sales promotions increase
the prices sensitivity of non-loyal and low-loyal customers, deteriorating brand equity in
the long run, while Lichtenstein (1993) also reveals that the price is considered as indirect
measure of the standards of the products’ quality perceived by the customers, thus
decreased costs would mean deteriorated quality. To add, Yoo et. al. (2000) summarizes
the previous researches and concludes that sales promotions and especially prices
promotions are decreasing the value and equity of a brand, despite of the well-defined
and known short term benefits to both consumer and producer. Also, one of the reasons
for employing sales promotions is boosting volumes of sales via motivating supply chain,
in spite of the fact that the results can be unprofitable in some of the cases (Abraham and
Lodish 1990). However, this method can lead to bullwhip effect - extremely volatile
demand patterns as the result of improperly managed sales promotions (Mentzer et
al.2001, Disney and Towill 2003).
The previous part of the review has demonstrated that there is a separation of the
25
sales promotion on three main types according to their targets. For instance, consumer
promotion is aimed at the end consumer, trade promotions are targeted at the participants
of the channel of distribution, while sales force promotions are used to induce the sales
force (Boulding et al. 1994, Cengage 2002). According to Cengage (2002) consumers
promotions are the types of sales promotions targeted to final users in order to stimulate
their purchasing both home and in-store. This is done with the aim of increasing the sales
and usage, in addition to it frequency, to enhance the sales of unwanted products or
products during the off-peak. Cengage (2002), Alvarez and Casielles (2005), together
with Kwok and Uncles (2005) suggest that there is plenty of techniques, from coupons
and samples, to rebates, loyalty cards and bargain packs. It is therefore worthwhile to
consider the academic sources on the most popular techniques, such as price and coupon
promotions, which are often suggested the two most popular approaches to consumer
promotions, in order to gain the comprehension of the consumer promotions in general.
One example is prices promotions, also known as price discounting, which offer a
discount comparing to the usual prices of a products or services, or offering increased
amount of the products at the same prices (Sethuraman and Tellis 1991, Gendall et al.,
2006, Wise Geek 2011). Thus there is a higher level of loses as the result of price
promotions which are done at the price of certain profit loss, and also possible negative
influence on brand value, therefore it should be managed accurately, as Sethuraman and
Tellis (1991) notices. Another tool is implementing coupons, more versatile way of
offering discounts, for example giving them on pack for the purpose of enhancing the
repeat purchases, cut-out coupons as an integral part of an ad, or offering internet coupon
(Volk 2007). The main emphasis is usually done on encouraging the redemption rate, or,
26
in other words, the share of the customers who are using these coupons (Gupta 1988,
Chandon et al. 2000). The difficulties in using coupons, according to Chandon and Volk,
are related to the management of the level of stock in case of sudden increase of the
purchase and the fact that the products would be bought without coupon anyway. All this
leads to the conclusion that coupon promotions should be mainly used for offering new
products or selling the unwanted goods. Trade promotions, also often referred as the sales
force promotions are implemented to encourage the further reselling and supporting the
retailers in sailing the products to receive good shelf space, increase the network of
distribution and also enforce the sale of unwanted products, in addition to some other
benefits (Neslin et al. 1995, University of Dayton 2007, Drypen.in 2010). The authors
suggest that the methods of trade promotions include the promotion allowances, sales
contests, aiding in merchandise, cooperating in the advertisement of reseller and using
special price deals. To add, sales force promotions are therefore created in order to
motivate the selling personnel to increase their efforts and market the products more
effective, and this can be done by the appropriate system of rewards and bonuses, sales
aids in competition, in addition to arranging meetings with the sellers of the products
(Schuler and Jackson 1987, Low and Mohr 2000, Chapman 2010).
The literature review that was done has revealed that sales promotions have an
array of reasons and arguments for their employing. Sales promotions are proved to be a
solid support of the tradition media advertising, however, the certain ratio of the budgets
allocated to advertisement on the one hand, and sales promotions one the other are
disputable. But, it is undisputable that it actively encourages the increase of short term
sales, it also gives an additional incentive to purchase if the customer is not sure about the
27
choice. It also a convenient tool for measuring own effectiveness. But, it is worthwhile to
mentions that the majority of these benefits do not continue for a long time, especially if
the promotional campaign is over. To add, sales promotions often harm the value of
brand and image of a company, as many sources suggest.
To conclude, this literature review was very useful for comprehending the issue of
sales promotion. However, the topic of the research could be more specific in order to
make it less descriptive and more engaged in comparing and contrasting different
academic articles and researches.
2.2 Sales Promotion Tools
There have been many attempts in the past to study the effectiveness of sales
promotion tools. According to Ndubisi and Moi (2005) sales promotion tools used
strategically not only increase brand awareness but also encourage consumers to buy new
product. There is substantial evidence that sales promotions are associated with increased
purchase quantities and shorter inter purchase times (Neslin, Henderson and Quelch,
1984). Gardener and Trivedi (1998) have found premium offers effective as more of the
product is included at no extra cost, they found, that the consumers can easily be
persuaded to buy the product. Shimp (2003) and Fill (2002) have documented a link
between the price promotion and product trial. According to Gilberth and Jackaria (2002)
pack with buy one and get one free offers facilitate Brand recognition and Brand recall
for future purchases. They also suggested that the price discounts are effective in
inducing purchase acceleration and product trials. Blackwell et. al. (2001) showed that
28
coupons encourage consumers to try new flavored product than the same flavor they
would normally buy at full price. Coupons are easily understood by the consumers and
can be highly effective in trial purchase (Cook 2003). Robinson and Carmack (1997)
found that Coupons could induce new product trial.
Effectiveness of sales promotion varies across the product categories and Brands.
Chandon (1996) demonstrated that there are important differences across categories.
Promotional packs leads to faster consumption for fruit juices and biscuits but not for the
laundry detergents. Research findings suggest that promotions induce switching across
the brand in asymmetric fashion and that the weaker brands find it difficult if not
impossible to steal share from the stronger brands (Blattberg & Wisniewski 1989,
Allenby & Rossi 1991). More recent research suggests that this asymmetry can be
reversed if the weaker brand has advantage in terms of price relative to quality
(Bronnenberg & Wathieu, 1996).
Positive after-effects from promotions could occur if promotions attract some new
consumers who would repeatedly buy later. However the evidence suggests no long-term
favorable effects on brands. The reason being sales promotion attracts mostly existing
infrequent buyers and a small number of new buyers have the propensity to re buy
(Ehrenberg et al 1994). The moment sales promotions are taken off the customers switch
to their preferred brands rather than buying the promoted brand at full price. Research
evidence suggests that gains of a promoted brand are primarily at the expense of other
brands due to brand substitution. Gupta (1988) showed that out of the total increase in
sales due to promotion 84% is accounted for by brand switching. He concluded that the
impact of sales promotion is limited on the purchase time and purchase quantity, which
29
account for only 14% and 2% of the increased sales. In a similar research Bell et. al.
(1999) studied 13 different product categories and found that an average 75% of the
short-term effect of price promotion was Brand Switching and 25% was purchase
acceleration. Papatla & Krishnamurthy (1996) suggest that sales promotion reduce the
likelihood of repeat purchases.
There is overwhelming evidence that consumer sales effect is limited to the time
period of the promotion itself. Sales promotion causes sales to increase but once the
promotion stops it returns to the original level. The promotions produce what Neilson
calls ’mortgaging’ effect by bringing forward sales from later period (Jones, 1990).
Promotion also fuels the flames of competition retaliation. Though the cost incurred on
promotions do not yield significant benefits in terms of enduring sales growth, yet it’s a
catch 22 situation for companies. “If you do not someone else will and there goes the
consumer” says Hoshedar K Press, President of Godrej Consumer Care (Economic
Times, 2006). The long-term result of such retaliation would be elimination of all profits
from total market categories. The laundry detergents in Denmark during the ’60s and fruit
concentrate market in Britain had the similar fate (Jones, 1990). Promotions are also said
to devalue the image of the promoted brand in consumer’s eyes. This evidently happened
in the late 1970’s and the early 1980 when Burger King became locked in a promotion
war with Mc Donald’s (Jones, 1990). Kahn & Louie, 1990 found that promotion resulted
in lower purchase rates from loyal customers.
Sales promotion varies across countries too. According to Hallberg (n.d.) in the
US, the most promotionally developed nation, there is a striking imbalance between the
price buyers & the brand loyalist virtually across all the categories. The ratio is greater
30
than 2:1. The price buyers will go in for any brand as long as it is the cheapest, as against
brand loyalist who would consider purchasing only one (their) brand. On the other hand
in Germany where price promotion is not only very recent but also limited the ratio is
4:3.In the developing country like India the situation is just reverse. Brand loyalists
outnumber price buyers by a margin of greater than 2:1. In the recent years sales
promotions have emerged as a very prominent and effective means to attract consumers.
30% of television advertisement in India can be classified as sales promotion
advertisements. Even in print media there has been a 25% increase in the sales promotion
advertising from 2004 – 2006 (AdEx, India, 2006) (Fig. 1). There has been an increase in
the advertisement spent on all types of promotional activities except the volume
promotions (AdEx India, 2006) (Fig. 2). The increase in advertisement volumes suggests
that marketers feel that the sales promotion tools are effective way to market products in
a developing country like India. While there have been numerous researches done abroad.
2.3 Sales Promotion on Consumer Interest
Promotion is more important in changing the timing rather than the level of
purchasing because customers tend to buy earlier (Doyle and Saunders, 1985). Promotion
is the marketing effort designed to communicate to an organization’s target market.
Promotion is, undoubtedly, the most visible element of the marketing mix (Govoni, Eng
and Galper, 1986; Guiltinan and Paul, 1994; Lamb, Hair and McDaniel, 1992; Pride and
Ferrel, 1989). There is a growing emphasis on designing the best marketing promotional
strategies, sales promotion, public relations and personal selling in order to communicate
31
with their present and potential consumers (Kotler, 1994). Promotions is responsible for
moving the demand curve upward and to the right by utilizing some or all of the elements
of the mix – advertising, personal selling, and publicity along with sales promotions
(Ward and Hill, 1991).
Promotion is essentially the sales of efforts of a business enterprise and includes
the function of informing, persuading and influencing the purchase decision of existing
the prospective consumers with the object of increasing sales volume and profits.
Promotion is the efforts of the seller to sell the product effectively. Promotion is the
communication with the customers to pursue them to buy the product. It is the duty of the
marketing manager to choose the communication media and blend them into an effective
programme.
2.4 Impact of Sales Promotion on Consumer Buying Behavior
Balaghar, Majidazar, and Niromand (2012) described Sales promotion as most
effective tool after advertising. According to them, sales promotion increases sales
volume. Blattberg, Eppen and Lieberman (1981) described that Sales promotion increases
purchase acceleration in terms of quantity purchased. It also decreases timing between
two purchases. Ailawadi and Neslin (1998) argued that Sales promotion induces purchase
of more quantity of product than without sales promotion. Even, it also increases the
quantity consumed by the customers. Sales promotion also leads to brand switching
among consumers. However, some of the authors have reported that sales promotion does
not have significant impact on consumer buying behavior. Manalel, Jose and Zacharias
32
(2007) found that Consumers do not perceive sales promotion scheme favorably.
According to Das and Kumar (2009), Retail sales promotion plays limited role on
consumer buying behavior.
2.5 Discount Offer and Consumer Behavior
There is a large body of research which is aimed at identifying impact of price
promotion like discount on consumer buying behavior. Fill (2002) stated that discount is
the simplest technique to offer a direct reduction in the purchase price with the offer
clearly labeled on the package or point of purchase display. Ndubisi (2005) reported that
price discount play significant roles in influencing consumer product trial behavior. Price
Discount plays significant role in brand switching, purchase acceleration, stock piling,
product trial and spending more in the store (Farrag, 2010). Also, Shi, Cheung, and
Prendergast (2004) reports that Price discount induces purchase acceleration, spending
more and stockpiling among customers. Osman , Fah, Foon (2011) described that Price
discounts play significant roles in influencing consumers’ purchase trial behavior and
increase short term sale. According to Mittal and Sethi (2011), Price discounts are found
to be more effective in inducing stock piling, and purchase acceleration, moderate in
brand switching, and new product trial in that order, but are not effective enough to
induce people to spend more.
2.6 Price off Offer and Consumer Behavior

33
It is a reduction in a brand’s regular price. According to Blair and London (1981),
the major reason for marketers to use the price-off reductions is that this type of deal
usually presents a readily apparent value to shoppers, especially when they have a
reference price point for the brand, therefore they can recognize the value of the discount.
According to Martinez-Ruiz et al (2006), temporary retail price reductions increase sales
of the brand. Percy et al (2001) reported that consumers pay attention to price-off
promotions.
2. 7 Buy – one – Get – One – Free and Consumer Behavior
Promotion technique of “buy-one-get-one-free” is one of the types of bonus packs
in which the consumers are offered the additional product at the ordinary price but are in
an enhanced package. Consumer would be easily persuaded to buy products as there is no
extra cost need and more valuable perceived by consumers (Sinha & Smith, 2000). Lee
(1963) mentioned that factory bonus pack is used to increase consumer trial of the brand.
Gardener and Trivedi (1998) wrote that bonus packs are offers by the manufacturer that
add value to the product by offering additional product at the regular price. According to
Percy et al (2001), bonus packs do create an immediate incentive to buy. Seibert (1996)
reported that manufacturers like bonus pack because they increase brand trial, switching
and stocking up. Ndubisi (2005) mentioned that Bonus pack is instrumental in increasing
consumer trial of a brand, thus, the more of the product included at no extra cost, the
greater the likelihood of consumers buying the product for trial. However, in other
34
research by the same author it was found that Bonus pack is bit weaker in inducing
product trial compared to other three types of sales promotion. Farrag (2010) stated that
Buy- one-Get-one free has profound effect on stock piling and purchase acceleration but
limited impact on brand switching, product trial and spending more. Shi, Cheung and
Prendergast (2004) reported that “buy-one-get-one-free” offers are most effective in
inducing stockpiling and purchase acceleration, less effective in inducing additional
spending, and least effective in promoting product trial and brand switching. Ong et al.
(1997) found that consumers appeared to be slightly skeptical of the bonus pack offer, but
somewhat more trusting of the price and quantity claimed. The report speculated that this
happens because consumers suspect that manufacturers do raise prices slightly in
conjunction with bonus pack offerings. According to Mittal and Sethi (2011), Buy one
and get one free offer was found to be particularly effective in inducing brand switching.
Moderate effective in purchase acceleration and new product trial but were ineffective as
a medium for stock piling and spending more.
CHAPTER 3. METHODOLOGY___________________________________________
35
3.1 Introduction
The section for methodology illustrates research approach and design considered
for current study. It has been noted as an endeavor towards the process of elucidating as
well as justifying apt mode of research design in terms of apprehending the problem of
the research. It is the source to imply the collection of data as well as techniques to attain
analysis of the data. According to Lee and Lings (2008) methodology is subject to offer
connection between research problem and the procedure by which this problem can be
analyzed.
This chapter on Methodology offers an overview about the research design, the
geographical area where the study was conducted, the study design and the population
and sample. Finally the instrument used to collect the data, including methods
implemented to maintain validity and reliability of the instrument are described.
3.2 Research Approach and Design
Generally, research design means a structure to plan and execute a particular
research. Research design is the crucial part of the research as it includes all the four
important considerations: the strategy, the identification of whom and what to study on
and the tools and procedures to be used for collecting and analyzing data.
The research design basically is divided into several types for example qualitative
36
research and quantitative research.
In order to satisfy the objectives of the dissertation, the research used both
quantitative and qualitative approach. The quantitative method
specification of dependent and independent variables and allows for longitudinal
measures of subsequent performance of the research subject that is also a formal,
objective, systematic process to describe and test relationships and examine cause and
effect interactions among variables, while qualitative method permits a flexible approach.
The value of quantitative research is compatible with the study because it allows
the research problem to be conducted in a very specific and set terms (Cooper &
Schindler, 1998). Besides, quantitative research plainly and distinctively specifies both
the independent and the dependent under the investigation.
On the other hand, qualitative research, one of its primary advantage, is that it
offers a complete description and analysis of a research subject, without limiting the
scope of the research and the nature of participant’s responses (Collis & Hussey, 2003).
The research approach that was followed for the purpose of the paper was causal
– comparative design. According to this approach, this research design seeks to find
relationships between independent and dependent variables after an action or event has
already occurred. The researcher's goal is to determine whether the independent variable
affected the outcome, or dependent variable, by comparing two or more groups of
individuals (Salkind 2010).
3.3 Sampling Method

37
Simple random sampling will be used for the procedure of data gathering since
everyone has an equal chance of being selected thus eliminating bias. Likewise, this
strategy enables the researcher to collect relevant and useful information for answering
the research question.
3.4 Population
The study was conducted at Science City of Muñoz and San Jose City which fall
under Central Luzon (Region III) in Nueva Ecija. The researchers chose these cities since
the socio – economic conditions present in the area that is relevant to the study and also
as it fits the time frame and resources of the researcher.
The target population for this research defined to include the businesses that offer
various kinds of sale promotional tools and daily consumers / shoppers in the Nueva
Ecija, while the accessible population is the businesses and consumers in Science City of
Muñoz and San Jose City, since these are the students within the researcher’s reach.
A convenient sample of 50 subjects was selected from the two institutions. The
sample included established 25 businesses and 25 consumers. Available subjects were
entered into the study until a sample size of 50 was reached. Subjects who met the sample
criteria were identified first before being asked to participate in the one – month period of
data collection
3.5 Data Collection Procedure

38
For this research, a survey questionnaire was selected because it provides an
accurate portrayal or account of the characteristics, for example behavior, opinions,
abilities, beliefs, and knowledge of a particular individual, situation or group. In this
study the information was collected through self-administered questionnaires in English
language distributed personally to the subjects by the researcher.
The questionnaires consisted mostly of closed-ended questions and a few open-
ended questions, as these provide more diverse detail. Open-ended questions were
included because they allow subjects to respond to questions in their own words and
provide more detail. Closed-ended questions were included because they are easier to
administer and to analyze.
3.6 Statistical Treatment of Data
To interpret the date effectively, the researcher will employ the following
statistical treatment. The Percentage, Weighted Mean and T-test are the tools use to
interpret data.
1. Percentage
This will employ to determine the frequency counts and percentage distribution
of personal related variables of the respondents.
F
Formula: %= x 100
N
39
% is percentage
F is the frequency
N is the total number of respondents
100 is constant value
2. Average Weighted Mean
This will be used to determine the assessment of the respondents with regards to
their personal profiles.
FX
Formula: X=
N
X is the weighted mean
F is the frequency
x is the weight of each item
N is then number of classes
3. Mean
This will be used to calculate the central value of the set of numbers.
Formula: = ( Σ xi ) / n.
All that formula is saying is add up all of the numbers in your data set ( Σ means
“add up” and xi means “all the numbers in the data set) and divide by the number
of respondents.
3.7 Data Analysis

40
3.7.1 Qualitative Data Analysis
In order to gather a complete description and analysis of a research subject,
without limiting the scope of the research and the nature of participant’s responses, the
researchers collected data through the use of open ended and less structured survey
questionnaires that depend on interactive interviews. Which then produces meaningful
and experienced results.
3.7.2 Quantitative Data Analysis
There are multiple methods of analyzing quantitative data collected in surveys. In
this study however, the cross tabulation method is used. Cross-tabulation is the most
widely used quantitative data analysis methods. It is a preferred method since it uses a
basic tabular form to draw inferences between different data-sets in the research study. It
contains data that is mutually exclusive or have some connection with each other.
CHAPTER 4. PRESENTATION, ANALYSIS & INTERPRETATION OF DATA__

41
This chapter presents the findings, analysis and interpretation of data gathered
whose main objective is to find out the expectations and perceptions of Filipino
businesses and its consumers towards the effectiveness of promotional tools in Science
City of Muñoz and San Jose City, Nueva Ecija which is intended for educational
purposes only, and not for any commercial purposes.
Thise study addressed the following ten major quantitative research questions and
several qualitative research sub-questions as follows:
QUESTIONS YES NO
1. Does advertising a certain product help you / customers

buy a product from a business?
2. Do promotional tools such as discounts, buy one take

ones, bundles, coupons and etc. provide an effective way
to encourage you / customers to buy the products?
3. Do these promotional tools attract you / more
customers?
4. Does the business still profit even though there are
discounts?
5. Do you / customers often buy discounted products?
6. Do discounted products affect the your / customers’
decision to buy more?
7. Do you / customers save money from sales and
discounts? Or end up spending more?
8. Do you / customers often ask the original price of a
discounted item before buying?
9. Do you or have you ever bought from a supermarket
food that is discounted because the item’s sell by date is
approaching?
42
10. Do you often see businesses put up discounts on

selected items during holidays or special occasions?
Table 4.0 Quantitative Questionnaire
1. What promotional tools do you / customers prefer the most? And why?
2. What is the most effective promotional tool to a customer / businesses? And why?
( ) Discount ( ) Bundles
( ) Price Off Offer ( ) Rebates
( ) Buy One Take One ( ) Coupons
3. How does a business make profit when they are on sales or under the use different
promotional tools?
4. How does promotional tools affect the behavior of a customer / you?
5. What is the percent of discount do you consider in buying a discounted item? And
why?
( ) 10% discount ( ) 30% discount
( ) 15% discount
( ) 20% discount
( ) 50% discount
( ) 70% discount
43
The conducted survey from the businesses and consumers of Science City
of Muñoz and San Jose City has shown the factors that mainly influenced their
perspective in the effectiveness of discounts or various promotional tools. 12
consumers and businesses were surveyed in Science City of Muñoz and 13 from
San Jose City, with the total of 25 successfully surveyed businesses and
consumers.
4.1 Presentation and Interpretation of Data on Consumers
No
4%
Yes
96%
Yes No
Pie Chart 4.1.1 Question 1 in Quantitative Questionnaire
Assessing this question enables the researcher to know from a customer’s
perspective if it helps them decide to buy a product or not. Having 12 respondents
in Muñoz and 12 respondents in San Jose City who considered that
advertisements helps customers buy a product from a business, which is 96% of

44
the respondents. While 1 or 4% from San Jose City of the respondents answered
that they did not considered such in buying a product
No
8%
Yes
92%
Yes No
The second question will determine how effective promotional tools are
for customers and such can be seen in the result. 23 respondents agreed that they
agree that various promotional tools encourage them to buy a product, 12 from
Muñoz and 11 from San Jose. This answer is 92% of the respondents all in all. On
the other hand, 2 respondents from San Jose did not agree on the statement which
is 8% of the respondents.
45
No
4%
Yes
96%
Yes No
The majority of the respondents said yes that they indeed become more
attracted and engaged with the product with promotional tools—with 24
respondents or 96% of the consumers, 12 from Muñoz and 12 from San Jose. On
the other hand, 1 respondent from San Jose or 4% of the respondents answered
no.
No
8%
Yes
92%
Yes No

46
This will determine whether or not the consumers are aware if a business
still profits from promotional tools. And 92% of the respondents with 11
respondents from Muñoz and 12 from San Jose agreed that the business profits
from them, while 8% of the respondents having 1 respondent from Muñoz and
San Jose disagreed that businesses don’t profit from it.
Yes
100%
Yes No
This questions assesses if respondents experienced buying an advertised

47
product or a product with an applied promotional tool or technique. All of the
respondents said yes. This can be concluded that consumers prefer discounted
products most of the time.
No
8%
Yes
92%
Yes No
Pie chart 4.1.6 reveals that discounted products does affect the customers’
decision to buy more compared to those without. 11 consumers from Muñoz and
12 from San Jose agreed while 1 consumer from Muñoz and San Jose did not.
No
24%
Yes
76%
Yes No
48
In this pie chart, it shows if consumers save money from sales or discounts
or they end up spending more. 10 respondents from Muñoz and 9 from San Jose
said that they were able to save money from products with promotional tools
which is 76% of the respondents in terms of consumers while 2 from Muñoz and
4 or 24% from San Jose did not agree.
No
48% Yes
52%
Yes No
In this pie chart, it reveals how many consumers ask the original price first
or look for the original price first before buying the discounted or heavily
promoted item. It can be seen that 6 respondents from Muñoz and 7 respondents
from San Jose or equal to 52% of the consumer respondents look or ask for the
original price first before buying while 6 respondents from Muñoz and San Jose
do not or 48%.
49
No
32%
Yes
68%
Yes No
Respondents with a total of 17(68%), 6 from Muñoz and 11 from San
Jose, said that they have bought from a supermarket food that is discounted
because the item’s sell by date is approaching while 8(32%), 6 from Muñoz and 2
respondents from San Jose said they did not.
No
12%
Yes
88%
Yes No

50
11 respondents from both Muñoz and San Jose or 88% of the respondents
said yes, they often see businesses put up discounts on selected items during
holidays or special occasions while 1 from Muñoz and 2 from San Jose or 12% of
the respondents say they do not.
4.2 Presentation and Interpretation of Data on Businesses
Yes
100%
Yes No
Assessing this question enables the researcher to know from a businesses
perspective if it helps consumers decide to buy a product or not. Having 12
businesses in Muñoz and 13 businesses in San Jose City considered that
advertisements helps customers buy a product from their business, which is 100%
of the respondents.
51
Yes
100%
Yes No
The second question will determine how effective promotional tools are
for customers and such can be seen in the result. 25 businesses agreed that they
agree that various promotional tools encourage consumers to buy their product, 12
from Muñoz and 13 from San Jose. This answer is 100% of the businesses all in
all.
No
4%
Yes
96%
Yes No
52
The majority of the businesses said yes that the businesses indeed attracts
more customers and engages them with the products with promotional tools—
with 24 business or 96% of the respondents, 12 from Muñoz and 12 from San
Jose. On the other hand, 1 business from San Jose or 4% of the respondents
answered no.
No
4%
Yes
96%
Yes No
This will determine whether or not if a business still profits from
promotional tools. And 96% of the respondents with 12 businesses from Muñoz
and 12 from San Jose agreed that the business profits from them, while 4% of the
businesses having 1 business from San Jose disagreed that businesses don’t profit
from it.
53
No
12%
Yes
88%
Yes No
This questions assesses if the customers of businesses often buy an
advertised product or a product with an applied promotional tool or technique.
88% of the businesses or 11 from Muñoz and 11 from San Jose said yes, on the
other hand 12% said no with 1 from Muñoz and 2 from San Jose.
No
4%
Yes
96%
Yes No

54
Pie chart 4.2.6 reveals that discounted products does affect the customers’
decision to buy more compared to those without. 12 businesses from Muñoz and
12 from San Jose agreed while 1 buseinsses from San Jose did not.
No
8%
Yes
92%
Yes No
In this pie chart, it shows if customers save money from sales or discounts
or they end up spending more. 12 businesses from Muñoz and 11 from San Jose
stated that most consumers were able to save money from products with
promotional tools which is 92% of the respondents in terms of consumers while 2
or 8% from San Jose did not agree.

55
No
36%
Yes
64%
Yes No
In this pie chart, it reveals how many consumers ask the original price first
or look for the original price first before buying the discounted or heavily
promoted item. It can be seen that 8 respondents from Muñoz and 8 respondents
from San Jose or equal to 64% of the consumer respondents look or ask for the
original price first before buying while 4 respondents from Muñoz and 5 from San
Jose do not or 36%.
No
44%
Yes
56%
Yes No
56
Respondents with a total of 14(56%), 8 from Muñoz and 6 from San Jose,
said that they have bought from a supermarket food that is discounted because the
item’s sell by date is approaching while 8(11%), 4 from Muñoz and 7 respondents
from San Jose said they did not.
Yes
100%
Yes No
All of the businesses from Muñoz and San Jose often put up discounts on
selected items during holidays or special occasions.

57
CHAPTER 5. SUMMARY, CONCLUSION AND RECOMMENDATION________
5.1 Summary of Findings
Based from the conducted survey, most consumers and businesses prefer
and for them is the most effective in purchasing a certain product are discounts,
next with buy one take ones, bundles, price off offer, coupons and then rebates. 33
respondents or 66% of the respondents answered that they prefer and think
discounts are the most effective, concluding that majority of Filipino consumers
will choose discounts over other promotional tools. Many respondents stated that
because this type of promotional tool is widely accessible and most used by
businesses compared to other techniques. Respondents also stated that discounts
offer the best deals in terms of price and quality of products. Next to discounts are
buy one take ones where 18 respondents or 36% preferred the promotional tool,
mainly because they are paying the price of for two. They also indicated that buy
one take ones are not usual that’s why most consumers get them. Then 5
respondents answered bundles, 3 preferred price off offers and 1 preferred rebates
and coupons.
When it comes to how a business makes profit from promotional tools,
majority of the respondents mentioned that businesses makes profit out of
discounts and other products with promotional tools because it attracts customers
thus creating a loyal customers fan base that leads to more and more products to
be sold. While other respondents mostly respondents from the businesses stated
58
that when companies give discounts during periods, it is generally the variable
margin which is allocated to the product which is given as discount and the
company still earns the basic profit that they have considered during project
calculations.
As for the behavior of the consumers regarding promotional tools on
certain products, most of the consumers tend to buy more than what they have to.
Promotional tools encourage and attract more customers to businesses specially
during festive periods, some respondents also indicated that when they know that
there will be a sale coming, they will prepare for the drop of prices.
And lastly most customers defined that the percent of discount they
consider before buying a discounted item is at least an item with a discount of
50% with 15 respondents agreeing on the said percentage. 13 respondents
answered 70% and 8 respondents answered 10, 15, 20 and 30% discount
consideration before buying a product. From this data, it can be concluded that
most Filipino consumers will buy items with at least 10% discount mainly
because consumers are always up for a better deal.
5.2 Conclusion
This research investigated the effectiveness of the sales promotion tools to
induce
different buying response among the Filipino businesses and its consumers . The study
revealed that the discount offers are the most effective tool of sales promotion in Science
59
City of Muñoz and San Jose City. Buy one take ones and price off offers have also been
found effective, occupying the second and the third places respectively. Coupons and
rebates card are not as effective as the other tools mentioned above, with rebates being
the least effective. The reason may be because the top three promotional tools are easy to
use and provide transaction utility at the time of the purchase itself. For a country like the
Philippines where the consumers are less educated and are more concerned about the
‘value for money’ this argument seems valid. Another point which our results suggests is
that the Filipino consumers buy and large favor passive promotions rather than active
promotions like coupons and rebates because they find it inconvenient to undertake an
active search before taking the buying decision.
Discount offers were found to be the most effective tool. As from the
previous shopping experience the consumer has an understanding of what the fair
price of the product is. When they realize that the effective price of the same
product is much less than the fair price they are most likely to respond to it
quickly. They do not mind buying more than the immediate requirement if they
feel that they can use the product sometime in future. The same hold true for buy
one take one packs as well. Price off offers are more easy to understand and does
not result in buying more than the immediate consumption but are not as effective
as the discount offers because most of the price off offers discounts are very low
and hence the utility derived from them is lesser than that derived from the
discount offer where the effective price is 50% (or less) of the fair price.
The study suggests that coupons and rebates are not very effective tools of
sales promotion in a developing country like Philippines because they involve

60
active search which the Filipino consumers find inconvenient. With coupons, the
Filipino consumers are not comfortable as they find it niggling to collect them,
remember to bring them along at the time of next purchase and buy something
they do not intend to consume immediately. The coupon deals also tend to be
insignificant in providing the transaction utility because of the fact that there is a
time lag between the purchasing decision and enjoying the benefit of the deal.
Though the rebates cards are very popular they are least effective possibly
because of its overuse. Many supermarkets and small shoppers as well as online
transactions have used the rebates as the promotional tools. These rebates
schemes promises very high returns to attract the consumers but the consumers
feel cheated when they get very nominal actual returns/gifts. Other reason being
that in all other promotional tool there is an assured return but in the case of
rebates the probability of returns/gift is very low.
Companies have a specific goal when they choose to use any promotional
tool. The study revealed that discount offers and buy one take one offers were
particularly effective in inducing brand switching and new product trial. Price off
offers were found to be useful in inducing stock piling and to a certain extent
category expansion. The promotional tools were found to be effective for brand
switching, purchase acceleration, stock piling and new product trial but are
ineffective in motivating the consumers to spend more than their monthly budget.
The research validates that the sales promotions are a zero sum game.
5.3 Recommendation
61
After a thorough analysis of data, the following recommendations are
hereby made: The study centers on the effectiveness of promotional tools among
Filipino businesses and its consumers, it represents the idea given that students
encounter a crossroad that in either way may impact their future:
1. The improved scope of hypothesis and researches. The researchers must try to
comply with the nature of the participants in order to accomplish the
completeness of the study in its deepest sense.
2. Direct interview from the participants is might as well encouraged to prepare and
wring the consistency of their answers.
3. This study will be able to help students consider their skills and abilities and how
such may fit a particular occupation which is included in the strand. Also, this
study would classify what matches one's personality characteristics and personal
preferences to job characteristics as this will help one to avoid job mismatch and
unemployment in the future.
4. This study will help schools, teachers and counselors in exerting right powerful
influence on consumers’ promotional tool preference. Since they have the power
to provide an atmosphere for continuing self-development in relation to
achievement and work, and has enough resources to help students, they will help
consumers as well as businesses to evaluate and assess the best of the best
promotional tool to use or to look for.

62
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A Study on Effectiveness of Various Sales Promotional Activities of Arpita Bajaj. (n.d.).
Hassan, Karnataka, India: Projects Kart. Retrieved from
https://www.slideshare.net/hemanthcrpatna/a-study-on-effectiveness-of-various-
sales-promotional-activities-of-arpita-bajaj
Bazarov, M. (2011). Literature Review on Sales Promotion. Retrieved from
https://www.slideshare.net/MirazizBazarov1/literature-review-on-sales-
promotions?fbclid=IwAR1Y4DZPuC22plSe8tfm8V0SLFlW-
IBHP9q3JT1H8wh8Q_qvijSLwhug2UM
Choudhary, R. (2013). The Affect of Sales Promotion on Consumer Interest to Purchase
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cfnVU
Dr. M Galetzka, Dr. S.E. Bialkova. (2013). The Effectiveness and Consequences of Price
Promotions. Koen Waanders. Retrieved from
https://essay.utwente.nl/63489/1/Waanders_Koen_-s_1177281_scriptie.pdf
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Joseph, & Chris. (n.d.). Sales Promotion Advantages. Small Business - Chron.com.
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1059.html
Juach. (2014). Uniform Across the Board Promotions (Vol. XVII). SPRINGER.
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%20School/9783319071145-c1.pdf
Kokemuller, N. (n.d.). Effect of Sales Promotion on Brands. Retrieved from
https://yourbusiness.azcentral.com/effect-sales-promotion-brands-11919.html
Langos, S. (2014). Athens as an international tourism destination: An empirical
investigation to the city’s imageray and the role of local DMO’s. Athens.
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https://www.researchgate.net/publication/270956555_CHAPTER_3_-
_RESEARCH_METHODOLOGY_Data_collection_method_and_Research_toos
Lee, I. (n.d.). Management Practices of American International Assurance Company.
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Methodology
Mittal, M. (2018). The Effectiveness of Sales Promotion Tools among Indian Consumers:
An Empirical study. Indore, India. Retrieved from
https://www.researchgate.net/publication/232924959_The_Effectiveness_of_Sale
s_Promotion_Tools_among_Indian_Consumers_An_Empirical_Study
Mohamad, N. N. (2014). The Study on Learning Mathematics through Art by using
Education Games among Students at Secondary School. Retrieved from
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Philippines - Trade Promotion and Advertising. (2018). export.gov. Retrieved from
https://www.export.gov/article?id=Philippines-Trade-Promotion-and-Advertising
Salvi, P. (2013). Effectiveness of Sales Promotional Tools: A Study on Discount, Price
Off, and Buy One Get One Free Offers in Branded Apparel Retail Industry in
Gujarat (Vol. IV). Gujarat, India: ELK Asia Pacific Journals. Retrieved from
https://www.academia.edu/7427586/EFFECTIVENESS_OF_SALES_PROMOTI
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The Theories of Sale Promotion. (n.d.). SCRIBD. Retrieved from
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65
DOCUMENTATION
Renz Arce conducting a survey at Shoekay-Shoekay in Science City of Muñoz

66
A survey regarding the effectiveness of promotional tools
being conducted by Renz Arce at Barangay Shawarma in
Science City of Muñoz
Roiven Rivera asking a daily consumer to answer a questionnaire
about the effectiveness of promotional tools among Filipino
consumers.
67
Renz Arce conducting a survey at Toss That Wing Muñoz on the afternoon of the 1st of March
EFFECTIVENESS OF DISCOUNTS QUESTIONNAIRE
This study is being conducted by STI College San Jose students as a part of the In
Inquires Investigations and Immersion partial requirement for the semester. This is a
questionnaire survey about the effectiveness of discounts or promotional tools among
Filipino businesses and its consumers. This survey is done to determine the elements that
greatly affects the topic. The questionnaire will take you about 5 minutes to answer.
This study is intended for educational purposes only, and not for any commercial
purposes. This questionnaire is randomly distributed among businesses and consumers of
Science City of Muñoz and San Jose City. It will be completely anonymous.
Name / Company Name: _______________________________ Date: __________
Age: ______
In this section, please read carefully and check (✓ ) the corresponding boxes for your
68
answers(s).
QUESTIONS YES NO
1. Does advertising a certain product help you / customers

buy a product from a business?
2. Do promotional tools such as discounts, buy one take

ones, bundles, coupons and etc. provide an effective way
to encourage you / customers to buy the products?
3. Do these promotional tools attract you / more
customers?
4. Does the business still profit even though there are
discounts?
5. Do you / customers often buy discounted products?
6. Do discounted products affect the your / customers’
decision to buy more?
7. Do you / customers save money from sales and
discounts? Or end up spending more?
8. Do you / customers often ask the original price of a
discounted item before buying?
9. Do you or have you ever bought from a supermarket
food that is discounted because the item’s sell by date is
approaching?
10. Do you often see businesses put up discounts on
selected items during holidays or special occasions?
For the next section of the questionnaire, kindly respond to the following questions by
giving your honest opinion / answer in the blanks regarding what is being asked.
6. What promotional tools do you / customers prefer the most? And why?
__________________________________________________________________
7. What is the most effective promotional tool to a customer / businesses? And why?
69
( ) Discount ( ) Bundles
( ) Price Off Offer ( ) Rebates
( ) Buy One Take One ( ) Coupons
__________________________________________________________________
70
8. How does a business make profit when they are on sales or under the use different
promotional tools?
__________________________________________________________________
9. How does promotional tools affect the behavior of a customer / you?
__________________________________________________________________
10. What is the percent of discount do you consider in buying a discounted item? And
why?
__________________________________________________________________

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EFFECTIVENESS OF DISCOUNTS OR PROMOTION TOOLS

AMONG FILIPINO BUSINESSES AND ITS CONSUMERS

A Research Proposal Submitted in Partial Fulfilment of the Requirements

ARCE, RENZ CHRISTIAN M.

purchase of product, purchase acceleration and effecting in buying behavior responses.

We would like to express my deepest appreciation to all those who provided us

contribution in stimulating suggestions and encouragement, helped us to coordinate our

research especially in writing this manuscript.

Furthermore we would also like to acknowledge with much appreciation the

required equipment and the necessary technology to complete the paper.

improved our presentation skills thanks to their comment and advices.

Chapter 1: THE PROBLEM AND ITS BACKGROUND

BACKGROUND OF THE STUDY………………………………………….. 6

STATEMENT OF THE PROBLEM…………………………………………. 7

ASSUMPTION OF THE STUDY……………………………………………. 9

SIGNIFICANCE OF THE STUDY………………………………………….. 19

LIMITATION OF THE STUDY……………………………………………... 20

Chapter 2: REVIEW OF RELATED LITERATURE

SALES PROMOTIONAL TOOLS…………………………………………… 27

SALES PROMOTION ON CONSUMER INTEREST………………………. 30

IMPACT OF SALES PROMOTION…………………………………………. 31

CONSUMER BEHAVIOR ON DISCOUNT…………………………………. 32

CONSUMER BEHAVIOR ON PRICE OFF………………………………….. 33

CONSUMER BEHAVIOR ON BUY ONE GET ONE……………………….. 33

RESEARCH APPROACH AND DESIGN…………………………………….. 35

DATA COLLECTION PROCEDURE………………………………………… 38

STATISTICAL TREATMENT OF DATA……………………………………. 38

Chapter 4: PRESENTATION, ANALYSIS & INTERPRETATION OF DATA

PRESENTATION OF DATA ON CONSUMERS……………………….……. 43

PRESENTATION OF DATA ON BUSINESSES…………………………….. 50

Chapter 5: SUMMARY, CONCLUSION AND RECOMMENDATION

SAMPLE SURVEY QUESTIONNAIRE……………………………………………… 67

CHAPTER 1. THE PROBLEM AND ITS BACKGROUND_____________________

the negative consequences, but why?

There is an enormous amount of products available for consumers. To be able to

choose, consumers have certain preferences. Brand preference “represents attitudes

promotions, is because that it attracts the consumers. By offering a reduced price on a

corporate image). These associations can be influenced by a promotion. A lower price of

development or management. Over time, companies invest in advertising to build and

According to JC Penney, part of branding is connecting with targeted customers and

loyalty to the store.

them. Point of purchase communication is to attract consumer to purchase certain product

or service while he/she do a shopping. Sponsorship marketing is aiming to promote the

objective, which is stimulate consumers to purchase certain product or service in a lower

the discount or other promotion stool, specifically price promotion.

and not the aspiration value as created by advertising of goods. In today’s

competitive market, companies view sales promotion as being immensely helpful in

sales response that is sizeable. (Putsis, 1998).

“localized” versions of product advertising and brand-building. The use of celebrity

The National Telecommunications Commission (NTC) reported that broadcast

the consumers of deals.

diverse range of themes also using different promotion tools in their publications

neighbors such as Singapore, Taiwan, and Japan. Online advertising is gaining

promotion stimulates customer purchases and the efficiency of distributors through

marketing activities excluding advertising, public relations and so on. Generally, the

purpose of a sales promotion is to attract new customers, maintain existing customers

and they have an immediate effect on product purchases.

1.2 Background of the Study

without any condition.

4. Bundles – is a marketing strategy that joins products or services together in order

to sell them as a single combined unit.

5. Coupons – is a ticket or document that can be redeemed for a financial discount or

rebate when purchasing a product.

two studies, conclusions are made and discussed.