Effectiveness of Sales Promotions

Abstract

Sales promotions have been described as an effective means of inducing customers to change their attitude or behavior favorably towards a product. Both monetary and nonmonetary promotions have been effectively used over time to generate additional sales for a product. This research is based on the Benefit Congruency Framework and is used to test the effectiveness of different types of sales promotions for hedonic and utilitarian products available in Pakistan. The purpose of this study is to analyze the effectiveness of sales promotions on consumers’ preferences and the impact of monetary and non-monetary promotions on hedonic and utilitarian goods The hypothesis that were based upon the Benefit Congruency Framework and used for this study are; 1. Monetary promotions are relatively more effective (compared to Nonmonetary promotions) for utilitarian products than for hedonic products. 2. Non-Monetary promotions are relatively more effective (compared to monetary promotions) for hedonic products than for utilitarian products. For this purpose a consumer survey was undertaken with the help of a questionnaire. Four brands in two product categories were chosen. In the findings it was seen that monetary promotion for both the utilitarian products (Brooke Bond Supreme and Dalda) increased the number of potential users by a higher margin as compared to non-monetary promotions. In the findings it was also seen that non-monetary promotion for both the hedonic products (Khaadi and Bhabi’s) increased the number of potential by a higher margin as compared to monetary promotion. NUST Institute of Management Sciences