Printed Pages: Sub Code: KMB MK02

Paper Id: Roll No.

M.B.A. SOLUTION
(SEM III) THEORY EXAMINATION 2017-18
CONSUMER BEHAVIOUR AND MARKETING COMMUNICATION
Time: 3 Hours Total Marks: 100
Note: 1. Attempt all Sections. If require any missing data; then choose suitably.
2. Any special paper specific instruction.

SECTION A

1. Attempt all questions in brief. 2 x 10 = 20

a. What is the relevance of studying consumer behavior for marketing?
Marketers can understand the expectation of the consumers the likes and dislikes
of consumers and design base their marketing efforts based on the findings. It
helps to understand what makes a consumer to buy a product
b. Discuss the marketing applications of reference group influence?
Marketers view reference groups as important because they influence how
consumers interpret information and make purchasing decisions. Reference groups
influence what types of products you will purchase and which brand of product
you choose. Three factors concerned with Reference Groups are Norms, Status and
Roles.
c. Describe the various personality traits of consumer which a marketer should study
Sometimes referred to as OCEAN, CANOE, or the five-factor model, the big 5
model encompasses five key attributes of a consumer's personality. Those five
traits are openness, conscientiousness, extraversion, agreeableness, and
neuroticism
d. Evaluate how marketers can change the attitude of their customers
When a consumer is having an experience of using a product in past, he will tend
to have positive opinion about it. Therefore the marketer can change the attitude of
consumer by focusing on the utilitarian function which the consumers are not
aware of. Eg: Hit which can be used to kill mosquito and cockroach.
e. Marketing communications play an important role for all companies”; Discuss
Marketing communication helps move products, services, and ideas from
manufacturers to end users and builds and maintains relationships with customers,
prospects, and other important stakeholders in the company. Advertising and sales
promotion will continue to play important roles in marketing communication mix
f. Formulate the changes in marketing communication practices that have been
particularly prominent
Consumers are changing. consumers are better informed and more
communications empowered. They can connect easily with other consumers.
Marketing strategies are changing. marketers are shifting away from mass
marketing. Sweeping advances in digital technology.
g. Define ASCI and its functions.
Advertising Standards Council of India seeks to ensure that advertisements
conform to its Code for Self-Regulation, which requires advertisements to be legal,
decent, honest and truthful, and not hazardous or harmful while observing fairness
in competition.
h. Formulate the relevance of setting advertising budget
Advertisement helps a company to reach out to larger audiences and introduce
them to the company's products and services. Because of this, the sales increase,
this enables the company to earn more profits. It is important that before setting the
advertising budget, the company’s objective is understood.
 i. What are the Objectives of Sales Promotion
The objectives of a sales promotion is to increase consumer demand, stimulate
market demand, to get potential buyers to heed a call to action, increase the size of
purchases and improve product availability using media and non-media marketing
communications.
j. Compare advertising and sales promotion
While advertising presents a reason to buy a product, sales promotion offers a
short-term incentive to purchase. Sales promotions often attract brand switchers
(those who are not loyal to a specific brand) who are looking primarily for low
price and good value.

SECTION B

2. Attempt any three of the following: 10 x 3 = 30

a. Describe Consumer behavior and explain its significance in current market
conditions
Consumer behavior covers a broad variety of consumers based on diversity in age,
sex, culture, taste, preference, educational level, income level, etc. Consumer
behavior can be defined as “the decision process and physical activity engaged in
evaluating, acquiring, using or disposing of goods and services.”
Significance of Studying Consumer Behaviour:
A study of consumer behaviour is significant (or rather imperative) for the
following reasons:
(i) Realistic Implementation of the Marketing Concept:
The modern marketing concept is consumer-oriented. To give a realistic
implementation to this concept, a study of consumer behaviour is imperative. More
specifically, a study of consumer behaviour is a must for developing an ideal
marketing-mix; which is the cornerstone of the concept of marketing.
It is, in fact, very true to state that unless the marketer knows what consumers buy
and why; it is not possible to design and implement a successful scheme of
marketing-mix to, beat the completive elements.
(ii) Planning Product Differentiation and Market Segmentation:
For planning product differentiation strategies (i.e. making the product so
differentiated and unique that consumer may be tempted to buy only that product
due to its unique features); a study of consumer behaviour is very significant or
necessary.
Again, for designing schemes of market segmentation (a process of dividing a
potential market into distinct sub-markets of consumers with common needs and
characteristics), a study of consumer behaviour is very necessary.
As a matter of fact, the success of marketing management depends on designing
schemes of product differentiation and market segmentation, the background data
for which is furnished by a study of consumer behaviour.
(iii) Selection of Distribution Channels:
A study of consumer behaviour not only includes what consumers buy; but also the
source from where they buy’. For example, men of status in society may never buy
things from ordinary shops and ordinary markets. They may prefer to buy from
prestigious stores and markets; even though they may have to pay a higher price
and so on for various categories of consumers.
Thus a study of consumer behaviour guides the marketer to select suitable channels
of distribution, to provide maximum convenience and satisfaction to different
groups of consumers.
(iv) Designing Promotional Techniques:
Promotional techniques include advertising message and media, personal selling
approaches and special sales promotional devices. Designing promotional
 techniques is much facilitated by a study of consumer behaviour; which may throw
light on the psychology of people as to the factors which affect their buying
decisions.
Those factors which affect consumers’ buying behaviour may be suitably
incorporated into the promotional techniques of the organisation.
(v) Trade-Off between Price and Quality:
A study of consumer behaviour is likely to reveal whether target consumers of the
enterprise emphasize more on the price of the product or its quality. On this basis,
the marketer can device suitable pricing strategies and programmes aimed at
upgrading the quality of organisation’s products to suit the needs, habits and
behaviour of consumers.

b. Post purchase behavior of consumer is more important for marketing manager than
pre purchase behavior.” Do you agree? Discuss.

Post-purchase behaviour describes the way a customer thinks, feels, and acts after
they have bought something. This is when a customer is assessing whether or not
they are happy with their purchase. How they feel will affect whether they make
further purchases from your brand. Post purchase is also a time when the customer
can affect whether others buy from you. It’s human nature to rave (or rant) about a
recent purchase, whether that’s on social media or face-to-face. Sometimes
customers feel anxious after they’ve bought something. They’ve just splashed their
cash, so it’s natural for them to question if this was well spent. Competing brands
can play havoc on a customer’s anxiety levels post purchase. If they see a
competitor product now, they might wish they’d bought this instead. This is called
“buyer’s remorse”.

Post-purchase marketing is your brand’s opportunity to influence how your

customer feels about their purchase.
Post-purchase marketing can:
• encourage your customer to feel good about what they’ve bought
• combat buyer’s remorse
• increase the likelihood your customer will buy from you again
• Post-purchase marketing also represents an opportunity to turn happy
customers into brand advocates through reviews and social sharing.
Post-purchase is the perfect time to get feedback on your products and customer
service. This helps you get to know your customer to improve your customer
experience. But feedback doesn't just benefit you. Offering your customers an
opportunity to give you feedback shows them that you care
c. Differentiate the terms promotion and marketing communications, and list the
primary tools of marketing communications
Promotion is used to communicate with customers with respect to product
offerings. Promotion has a key role in determining profitability and market success
and is one of the key “Four Ps” of the marketing mix. The tools that can be
employed in the promotional mix include: advertising; direct marketing, sales
promotion; public relations and publicity; personal selling and sponsorship.
In marketing, promotion refers to any type of marketing communication used to
inform target audiences of the relative merits of a product, service, brand or issue,
most of the time persuasive in nature. The aim of promotion is to increase
awareness, create interest, generate sales or create brand loyalty. Promotion
activities are initiated by firm to keeps the product in the minds of the customer
and helps stimulate demand for the product. Promotion involves ongoing
advertising and publicity. Marketing communications (also known as marcom) is
the messages and media that marketers use to communicate with target markets.
 Examples of marketing communications include traditional advertising, direct
marketing, social marketing, presentations and sponsorships.
Following are the best marketing communication tools to reinforce brand message
and promote sales:
• Advertising.
• Sales promotion.
• Direct marketing.
• Email campaigns.
• Newsletter.
• Personal selling.
• Public relations.
• Social media.
d. Explain Surrogate advertising with the help of an example of your choice
The word surrogate means a ‘substitute’. Usually, brands use surrogate advertising
to promote a banned product under the veil of a substitute good.
Surrogate advertisements are used to promote and advertise products of brands
when the original product cannot be advertised on mass media. Some instances of
surrogate advertisements are: Bagpiper Soda, Cassettes and CDs, Royal Challenge
Golf Accessories and Mineral Water, Imperial Blue Cassettes and CDs etc.
Surrogate advertising is a form of advertising which is used to promote regulated
products, like cigarettes and alcohol, in the disguise of another product. In India
there is a large number of companies doing surrogate advertising, from Bacardi
Blast music CD's, Bagpiper Club Soda to Officers Choice playing cards. Since
Indian law prohibits advertisements that promote, directly or indirectly,
production, sale or consumption of cigarettes, tobacco products, alcohol in India,
these products are advertised through surrogate advertising or brand extension
notifications prohibiting/regulating advertisement of these products in India.
Surrogate advertising refers to a form of advertisement that duplicates the brand
image of one product to promote another product of the same brand Surrogate
goods could either resemble a similar commodity or an entirely different product.
Meaning, companies advertise their products and services by disguising them for
some other product under the same brand name. A popular instance of this can be a
liquor product advertised as either a soda drink or an entirely unrelated product like
music CDs within the same brand name.
e. Interpret the consumer pricing and risk perception correlate to sales promotion?
Customers get to see the products first through advertisements and therefore
become one of the biggest factors that influence customer perception. The
advertisement and campaigns that a company runs will help to build a positive
customer perception. Consumers' perceptions of product quality and monetary
sacrifice are derived from consumers' perceptions of price. Consumers infer that a
higher price signals a higher quality, but at the same time, the higher price
indicates a greater monetary sacrifice in purchasing the product. Consumers build
internal reference prices in time through exposure to different prices. When they
see a new price tag, they compare it to the reference price and form an opinion.
Price-Quality Relationship: The impressive research done in pricing is about the
consumer's quality perception and their quality of products. Consumers perceive
price as the prime indicator to presume the quality of the product. Many consumers
believe that high priced products attribute better quality and lasts longer.

SECTION C
3. Attempt any one part of the following: 10 x 1 = 10
(a) Apply the use of family life cycle concept to plan your marketing effort for:
 Launching computer training courses for undergraduates

Identifying the family life cycle stage correctly helps marketers develop
appropriate products and services that can meet specific needs at each family
stage. It also helps them design specific promotional strategies that meet the
needs of the specific target audience.

By understanding in which stage a person is in the family life cycles, marketers

can anticipate their needs, and determine the products and services they can
provide him. Basically, the family life cycles model describes the stages through
which consumers pass through their lives when they have families.

(b) Discuss the interrelationship between Consumer Behavior and Marketing

Mix Strategies with suitable examples
Companies use marketing to promote and sell their products or services, and
consumer behavior is how consumers act and respond in the retail environment.
Creating a strong marketing campaign requires an understanding of how a
customer will respond to certain promotions.
The psychological processes that a consumer goes through to recognize his
needs and finding ways to fill the gaps formed by these needs, making
decisions about a purchase (eg., whether or not to pay for a product and, if they
are then, which brand do they want to buy and where), process information,
planning and implementation of these plans (eg., by engaging in comparison or
window shopping or actually paying for a product).

It is often necessary to understand the customer and his/her regional and

cultural influences. Chances of an Indian or a Chinese bargaining at a retail
store are higher than that of an American customer. This affects the pricing and
the promotion done for the product. Often, the advertisements and the
promotion strategy are re-used in different parts of the world on account of the
type of customer. This make a difference on spends and proper consumer
behaviour can often bring the difference between a successful and an
unsuccessful campaign.

Decision making by customers include the availability of the product in the

region and information that helps him/her make the required decision
pertaining to the purchase of the product.

Let us use a few examples to explain the link between the marketing mix and
consumer behaviour.

The denim and jeans industry which include some internationally recognised
brands including Levi’s, Lee and Pepe understand that within their target range,
 we include the young crowd. Commonly people up to 30 years of age. They,
therefore make sure that the campaigns and marketing include a specific
intention to pull these customers in. The ads therefore include several young
people in harsh surroundings.

KFC and McDonalds have learnt that people tend to eat more in bright
coloured surroundings. Therefore, all their outlets usually have bright colours
across the walls.

4. Attempt any one part of the following: 10 x 1 = 10

(a) How does Maslow's Hierarchy of needs can be applied in
understanding Consumers buying behavior?
In 1943, the psychiatrist Abraham Maslow introduced a theory of human
motivation which proposed that people are motivated to satisfy several
needs, and that some of those needs take precedence over others. Maslow
argued that human needs are arranged in a hierarchy, with basic
physiological needs (food, water, etc.) at the lowest level, and self-
actualization at the highest. The hierarchy of needs is usually depicted as a
pyramid like the one shown below. Maslow contended that people must
satisfy lower level needs before they will be motivated to satisfy the needs
on the next higher level of the hierarchy.

As the diagram indicates, these customer experience needs are arranged in a

hierarchy, but as with Maslow's model, the hierarchy is not based on the
absolute importance of the needs. Instead, the hierarchy describes
the sequence in which customers focus on and prioritize each type of need.
As a general rule, customers will focus first on the needs at the bottom of
the hierarchy. Once those lower levels needs have been met, their attention
will shift to the need in the next higher level of the hierarchy. The hierarchy
reflects the natural and common-sense way that most customers think about
their experiences with a company, product, or service. For example, when
customers first encounter a product or service, their attention will be on
functional performance and economic impact. Once customers have
determined that the product or service is providing an acceptable level of
functional and economic performance, they will focus more on whether the
vendor is easy to do business with. As a general rule, customers will focus
first on the needs at the bottom of the hierarchy. Once those lower level
needs have been met, their attention will shift to the need in the next higher
level of the hierarchy

(b) In a highly competitive Marketing Environment, it is only those firms

which have been able to define their market in terms of consumer needs
they will satisfy, will be termed as successful marketers." Explain the
above statement with reference to the impact that Motivation has on
 Consumer Behavior
The Key To A Marketer's Success is Understanding Consumer Motivations.
That's because motivations are the primary drivers of purchase decisions.
Marketers need to understand the decision-making and purchasing process
in order to champion relevant products, feature innovation and create
effective marketing communications.
Consumer behavior is influenced by many different factors. A marketer
should try to understand the factors that influence consumer behavior. When
a person is motivated enough, it influences the buying behavior of the
person. A person has many needs such as the social needs, basic needs,
security needs, esteem needs and self-actualization needs. Out of all these
needs, the basic needs and security needs take a position above all other
needs. Hence basic needs and security needs have the power to motivate a
consumer to buy products and services. The main takeaway point for
marketing is Motivation which occurs when there is a gap between the
desired state and the actual state. Hedonic needs appeal the emotional and
aesthetic desires of an individual, and can be used in your marketing to
create a greater motivational pull. That's because motivations are the
primary drivers of purchase decisions. Marketers need to understand the
decision-making and purchasing process in order to champion relevant
products, feature innovation and create effective marketing
communications. It helps to understand what makes a consumer to buy a
product. It is important to assess the kind of products liked by consumers so
that they can release it to the market.
Marketers have to understand the motives of their potential customers to
enjoy good sales. A buyer has several motives and each change with various
elements. In such cases the marketers can readily help their customers by
changing their marketing strategy so that the conflict is resolved. Following
are the major conflicts that may arise.
Approach Conflict − This conflict arises when a consumer has two different
choices of similar products or services. He gives equal importance to them,
but is unable to choose one over the other.
Approach Avoidance Conflict − This type of conflict happens when the
consumer decides in favor of a product, but is unhappy with a particular
feature of the product and wants to avoid it. Under such circumstances, the
marketer may come up with few modifications in the existing product and
make it suitable for the consumer.
We can conclude that Motivation is the reason, conscious or non conscious,
for behaving a particular way in a certain situation. Brands are constantly in
search of new ways to motivate consumers to engage with, promote, and
ultimately buy their products and services. The decision-making science
behind motivation is an essential element to building brand equity and a
loyal customer base

5. Attempt any one part of the following: 10 x 1 = 10

(a) Determine the various elements of the communications process. Find an
example of an advertising campaign being used by a company and analyze
this campaign in terms of these elements of the communications process

Marketing communication aims at conveying a firm’s message as effectively

and accurately as possible. The Basic Process of Marketing Communication is
Sender→ Encoding→ Message→Medium→ Decoding→Receiver→Noise→
 Feedback
The five elements of the Marketing Communication mix are Advertising,
Direct marketing, and Personal selling, Public relations and Sales promotion.
The Marketing Communication Process, Marketing Communication Strategy
and Marketing Communication Plan pages also provide additional thoughts and
tools for optimizing your marketing communication mix. The components of
the marketing communication mix are discussed below and put into perspective
for successful marketing to today’s consumers by today’s business. Although
marketing underwent a great transformation similar to that of business as a
whole in the twentieth century, the traditional components of the marketing
communication process are still in use and important today.
An advertising campaign is a series of advertisement messages that share a
single idea and theme which make up an integrated marketing communication
(IMC) Advertising campaigns are built to accomplish a particular objective or a
set of objectives.
Steps of campaign includes:
• Create and establish goals of your ad campaign.
• Establish your target audience.
• Plan the details of your ad Campaign.
• What media channels best represent your target audience?
• Negotiate, negotiate, and negotiate.
• Measure your success.
Example of Ad campaign: Coke: Share a Coke
Big brands are often hard-pressed to do something ground-breaking when
they're already so big. So, what did Coca-Cola do to appeal to the masses?
They appealed to individuals — by putting their names on each bottle. The
Share a Coke campaign began in Australia in 2011, when Coca-Cola
personalized each bottle with the 150 most popular names in the country. Since
then, the U.S. has followed suit, printing first names across the front of its
bottles and cans in Coke's branded font. You can even order custom bottles on
Coke's website to request things like nicknames and college logos. It was a
breaking story across the marketing and advertising industry. Many consumers
were enchanted by it, while others were confused by it — why make a
temporary item so personal? Pepsi even released counter-ads shortly after the
campaign launched. Nonetheless, Coke received immediate attention for it.
Coke fans are regular buyers, and the company leaned into that sense of
individual ownership with full force. Wondering what name you'll get out of
the vending machine was a fun thrill in and of itself even if it isn't yours, it
encourages you to "share a Coke" with whomever's name is on the front.
(b) Assume that you are the marketing communications manager for a brand
of paper towels. Discuss how the low involvement hierarchy could be of
value in developing and advertising and promotion strategy for this brand

Low involvement hierarchy is a part of an advertising model where some

products require low involvement from the consumer as they are taken through
the process of awareness, knowledge, liking and then finally a purchase.
How do you promote low involvement products?
Consumers of Low Involvement Products may not know what product they
want themselves until they are in the store. To increase sales, you can use in-
store-promotion like in-store-displays or eye-catching packaging. Price
promotions like price discounts or coupons also work well. Low involvement
products are those products that are inexpensive or maybe moderately priced;
 they are low in value and risk; and, are frequently purchased. Often, they are
purchased as a matter of routine. Example, toothpaste, soap, bread etc.
Krugman proposed this sequence of consumer behaviour for products that do
not have major difference between their alternatives (e.g., detergents, flour).
Krugman had observed through the television commercials the low learning
and involvement. Habitual Buying Behavior is depicted when a consumer has
low involvement in a purchase decision. In this case the consumer perceives
only a few significant differences between brands. Low-involvement decisions
are more straightforward, require little risk, are repetitive, and often lead to a
habit. In effect, these purchases are not very important to the consumer.
Financial, social, and psychological risks are not nearly as great. In these cases,
it may not be worth the consumer’s time and effort to search for exhaustive
information about different brands or to consider a wide range of alternatives.
A low-involvement purchase usually involves an abridged decision-making
process. In these situations, the buyer typically does little if any information
gathering and any evaluation of alternatives is relatively simple and
straightforward. Consumers are diligent enough to get a product they want, but
they generally spend no more time or effort than is needed. So paper towel
being a low involvement product the above things will be considered for its
promotion.

6. Attempt any one part of the following: 10 x 1 = 10

(a) Classify the various media available for advertising today? Which of them
is most successful in your opinion and why?
Nine types of advertising media available to an advertiser includes:
• Direct Mail: This is one of the oldest types of advertising media. Under
this method message is sent to the prospective buyers by post. A
mailing list is prepared for this purpose. Circular letters, folders,
calendars, booklets and catalogues are sent under this type of
advertising. In the sales letter an appeal is made to the buyers
separately.
• Newspapers And Magazines: These are the important forms of press
advertising, newspapers are the most effective and powerful medium of
advertising. Newspapers contain valuable information with regard to
different current events. It may be referred to as ‘a store house of
information’. There are daily, bi-weekly and weekly newspapers.
Newspapers have widest circulation and read by many people. The
newspapers may be local, provincial or national. Magazines or
periodicals are other important media of communication. Magazines
may be released weekly, monthly, quarterly, bi-annual or annual.
• Radio Advertising: Radio advertising is very popular these days. The
advertisements are broadcasted from different stations of All India
Radio. Radio advertising can be explained as “word of mouth
advertising on a wholesale scale”. The advertising messages can be in
different regional languages.
• Television Advertising: This is the latest and the fast developing
medium of advertising and is getting increased popularity these days. It
is more effective as compared to radio as it has the advantages of sound
and sight. On account of pictorial presentation, it is more effective and
impressive and leaves ever lasting impression on the mind of the
viewer.
• Film Advertising: This is also known as cinema advertising. This also
provides sight and hearing facilities like television. Short advertisement
 films are not prepared by big business houses which are sent to different
cinema houses to be shown to the audience before the regular shows or
during the intermission. It has more repetitive value but not to the same
viewers. Its coverage is limited which benefits the local population
only.
• Outdoor Advertising: This type of advertising include different media
like posters, placards, electric displays or neon signs, sky writing, bus,
train and tram advertising. This is also known as ‘Mural advertising’.
The main aim of outdoor advertising is to catch the attention of
passerby within twinkling of an eye.
• Window Display: It is a common method which is usually undertaken
by retailers who display their products in the shop windows in order to
attract the customers. This is also known as exterior display.
• Fairs and Exhibition: A trade exhibition or a fair is organized on
extensive scale which is attended by different manufacturers and traders
along with their products to be sold to the large number of people who
visit the exhibition. The exhibition may be either organized on local,
provincial or international basis. The examples of some of the
international exhibitions are EXPO 70 of JAPAN, ASIA 72 and recent
trade fair at Delhi every year.
• Specially advertising: Most of the business houses in order to increase
their sales, advertise their products, give free gifts like diaries, purses,
paper weights and calendars to the customers. The name of the firm or
the dealer is inscribed on the articles presented.
(b) Explain the meaning of advertising budget and how it should be prepared?
Also Describe the various methods of setting advertising budget
An advertising budget is an amount set aside by a company planned for the
promotion of its goods and services. Promotional activities include conducting
a market survey, getting advertisement creatives made and printed, promotion
by way of print media, digital media and social media, running ad campaigns
etc
Advertising Budget Basis
The advertising budget of a company is based on the following factors:
• Type of advertising campaign that it intends to run
• Selection of target audience
• Type of advertising media
• Company’s objective of advertising
• Process of Creating Advertising Budget
Following steps are followed to set up this budget –
• Setting advertising goals based on the company’s objectives.
• Determine the activities that are required to be done.
• Preparing the components of the advertising budget.
• Getting the budget approved by management.
• Allocation of funds for activities proposed under the advertisement
plan.
• Periodically monitoring the expenses being incurred on the advertising
process.
Advertising Budget Methods
Most common methods are as follows:
• Percentage of Sales: Under this method, the advertising budget is set
as a percentage of either the past sale or expected future sales. Small
businesses usually use this method.
• Competitive Parity: This method advocates that a company sets an
 advertising budget similar to the one that is set up by its competitor
to yield similar results.
• Objective and Task: This method is based on the advertising
objectives under this method. Once the objectives are decided, the
cost is estimated to complete those objectives, and accordingly, a
marketing budget is set.
• Market Share: In this method, the advertising budget is based on the
market share of a company. For a higher market share, less
marketing budget is set.
• All available Funds: This is a very aggressive method under which
all available profits are allocated towards advertising activities. This
method can be used by start-up businesses that need advertisements
to attract customers.
• Unit Sales: Under this method, the cost of advertisement per article
is calculated and based on the total number of articles, it is set.
• Affordable: As the name suggested, the company sets its budget
based on how much it can afford to spend.

7. Attempt any one part of the following: 10 x 1 = 10

(a) Define Price Deals, Coupons Contests and sweepstakes with examples
Sales promotion is a marketing strategy in which a business uses a temporary
campaign or offer to increase interest or demand in its product or service. There
are many reasons why a business may choose to use a sales promotion (or
'promo'), but the primary reason is to boost sales.
Most Popular Types of Sales Promotions
• Discounted products: Adding a discount to your products is possibly the
most popular type of promotion. Customers love to grab a bargain, so it
makes sense to offer discounts every now and then.
• Free Shipping/Free Returns: Free shipping and returns gives the
customer a sense of security that they won’t lose out if they wanted to
send the product back.
• Flash Sale: A flash sale is basically an offer that only lasts for a limited
time and it’s a great way to create a sense of urgency for the customer to
buy. Many retailers are now adopting this strategy as a way to sell more
products and get rid of surplus stock
• Buy More, Save More: This kind of deal entices the customer to buy
more of your stock, so it’s kind of a win, win. There will be plenty of
potential customers visiting your store that want to buy, but feel guilty
because of the price. Giving them a discount if they spend more, may
just give them a little shove in the right direction. You don’t have to
offer a huge discount, but make sure it’s attractive enough to convert
visitors.
• Product Giveaways/Branded Gifts: Let’s be honest, everyone loves a
freebie so this really is a great promotion. Not only does it give
potential customers the chance to test out your product, but also it
entices people to buy your stuff!
• Loyalty Points: Rewarding your customers will help you build a solid
base of loyal fans and it will entice people to shop more at your online
store
• Coupon Giveaway: This is a different way of promoting discounts.
Sending your customers virtual coupons will make the promotion seem
more exclusive and will give the customer more of a push to visit your
online store. Think about sending coupons to loyal customers that have
 spent over a certain amount.
• Competitions: The great thing about running a competition is that you
only have to give away one thing, but you gain so much – making it a
popular type of promotion! It will not only help raise your profile, but
every person that enters, will then become an email contact that you can
try and convert into a sale.
• Price Match Promise: Price match promise has fast become one of the
most popular ways to promote your brand, particularly if you have a lot
of competitors out there. It allows your customers to shop with you and
will be safe in the knowledge that if they can get it cheaper somewhere
else, you’ll refund the difference.
• Holiday Promotions: There is a reason that holiday promotions are so
successful. Customers always like to spend more around the holidays,
making it the perfect opportunity for you to get your brand out there and
sell more products.

(b) Summarize the different types of trade promotion. Also define the various
tools and techniques used in trade promotion.
Trade Promotion is a marketing technique aimed at increasing demand for
products in retail stores based on special pricing, display fixtures,
demonstrations, value-added bonuses, no-obligation gifts. Companies can
utilize Trade Promotions to increase product visibility and brand awareness
with consumers. Trade promotion programs are pivotal to driving sales,
building brand equity with consumers & shoppers, and strengthening channel
partnerships
Types of Trade promotions
• Discounts / Increased margin of sale: By this method, the dealer himself
is motivated to run ideas so that he can promote the product in his
locality. Each locality and region is different. Hence, by using this
method, each dealer will run a different style of trade promotion to
achieve his targets.
• Incentives to Sales staff / Gifting: Another excellent type of trade
promotion is to give incentive to sales staff. Ultimately, the sales staff is
the one which is going to be in touch with the customer. The sales staff
also get very happy whenever monetary awards are announced and the
aggressive ones will go all out to achieve the targets.
• Coupons / rebates: Coupons are always attractive to end customers
because they ensure a guaranteed discount at the retailer or the dealers
outlet. This is also a method to drive traffic to the retailer’s store and
can be especially used when the retail outlet is brand new or when it is
losing out to a competition.
• Dealer competition: A fantastic way to motivate your dealers to perform
better is to keep dealer competitions. These dealer competitions can be
short term or long term. Short term ones can actually be regional, for
example, the best sales dealer in territory X gets a free print ad in
newspaper from the company or he gets free incentives for all his sales
people.
• Exhibitions / Trade shows: By arranging trade shows and exhibitions
where the dealers get to meet their top customers and answer the queries
by these top customers. At the same time, such exhibitions also help in
acquiring new channel members as well.
• Co operative advertising: The co operative advertising actually helps
the awareness of the channel dealer in that region. This in turn helps the
overall sales of the products and the brand. Co operative advertising
 should be done when the dealer has launched or prior to seasonal sales.
This increases the recall of the brand in the mind of the consumers.
• Providing demonstrators: When a customer enters a multi brand
showroom, then he himself is confused with regards to which brand to
purchase. At such times, in-shop demonstrators, who are sponsored by
the company can help a lot in convincing the customer and converting
them. These in shop demonstrators are trained to have the complete
knowledge of the product at their fingertips
• POP material or Sampling of product: Using various POP materials
such as danglers in showroom, on product display, pillar branding etc
can help the brand retention in the mind of the customers.