A S;fUDY OF EFFICACY OF SALES PROMOTIONS OF TOPS SUPERMARKET IN BANGKOK

By

PIMOLRAT KHUNVIROJPANICH I

A Thesis submitted in partial fulfillment of the requirement for the degree of

Master of Business Administration

Examination Committee :

1. Dr. Ishwar C. Gupta (Advisor)

2. Dr. Thongdee Kijboonchoo (Member) ,{_~-..:..... 3. Dr. Sirion Chaipoopirutana (Member) "?";c"~'j 4. Dr. Jakarin Srimoon (Member) IJ ..(( 14 .. krrt?..0(

5. Assoc. Prof. Poonsak Sangsunt (MOE Representative)

Examined on : 23 June 2004 Approved for Graduation on :

Graduate School of Business Assumption University Bangkok, Thailand June 2004 ABSTRACT

There is an intense competition in the retail business. Customers have many alternatives to select. They move away from tradition trade to modern trade such as supermarket. One of the several reasons is sales promotion tools which are used by supermarkets to attract the customers. Therefore, it is useful and interesting to study the relationship between sales promotion tools and consumers behavior response.

Tops Supermarket is chosen for this study.

The research problem for this study is "What is the relationship between sales promotion tools and consumer behavior". The objective of this research is to find out the relationship of four different sales promotion tools which are coupon, price discount, buy-one-get-one-free, and premium, with four different consumer behavior responses which are brand switching, brand loyalty, stockpiling, and purchase acceleration.

The research instrument was administered 400 respondents, both male and female which were completed by the target population who have experienced in shopping at Tops Supermarket. After data were collected from respondents, the data were processed by SPSS program. Descriptive analysis was used to describe general information of demographic data by showing percentage and frequency analysis.

Pearson Correlation Coefficient was used to test the sixteen hypotheses.

The demographic characteristics of respondents are female between 21-30 years old, with Bachelor degree. The majority of respondents' were employees and the salary between 5,000-20,000 Baht per month.

The result of sixteen hypotheses presented that coupon, buy-one-get-one-free, and premium are low positive related to consumer's brand switching whereas price discount is medium positive related ·10 consumer's brand switching. It is also found that coupon and buy-one-get-one-free are low positive related to consumer's brand loyalty while it is found that price discount does not related to consumer's brand loyalty. However, premium is low negative related to consumer's brand loyalty.

Moreover, it has seen that coupon, price discount, and buy-one-get-one-free are medium positive related to consumer's stockpiling while premium is low positive related to consumer's stockpiling.

Finally, coupon, price discount, and buy-one-get-one-free are medium positive related to consumer's purchase acceleration whereas premium is low positive related to consumer's purchase acceleration.

11 ACKNOWLEDGEMENT

For complete this thesis, cooperation of many people is required. I would like to take this opportunity to convey my gratitude to all of those who helped me in completing this study.

First of all, I would like to specially thank my advisor, Dr.Ishwar C. Gupta for his guidance, support, and encouragement from the beginning till the completion of thesis. Moreover, sincerely thanks to all of the committee members; Dr.Thongdee

Kijboonchoo, Dr.Sirion Chaipoopiruratana, Dr.Jakarin Srimoon for their useful and valuable comments to help me complete this task.

May I extend heartiest thanks to my beloved family for the support, encouragement, understanding, and for their assistance in everything.

Finally, sincerely thanks to all my friends for their care, encouragement, and assistances throughout the making of this thesis.

lll St. Gabriefs l_.ibrary, An

TABLE OF CONTENTS

Page No.

Abstract

Acknowledgement lll

Table of Contents IV

List of Tables Vll

List of Figures x

Chapter 1 Generalities of the Study

1.1 Introduction to the research 1

1.2 Statement of problem 13

1.3 Objective of the research 13

1.4 Scope of the research 14

1.5 Limitation of the research ·14

1.6 Significance of the research 15

1.7 Definition of terms 15

Chapter 2 Review of Related Literature and Studies

2.1 Literature support for Independent variable 18

2.1.1 Definition of sales promotion 19

2.1.2 Types of promotion 20

2.1.3 Types of consumer promotion 22

2.2 Literature Support for Dependent variable 27

2.2. l Consumer responsive to promotion deals 27

2.3 Other Related Literature Support 32

IV 2.3.1 Demographic Factors 32

2.4 Empirical Research 37

Chapter 3 Research Frameworks

3.1 Theoretical Framework 43

3.2 Conceptual Framework 45

3.3 Research Hypothesis 46

3.4 Operational Component Variable 50

Chapter 4 Research Methodology

4.1 Research Methodology 52

4.1.1 Research Method 52

4.2 Respondents and sampling procedures 52

4.2.1 Target Population 52

4.2.2 Sample Unit 53

4.2.3 Sample Size 53

4.2.4 Sampling Procedures 54

4.2.5 Sampling Plan 54

4.3 Research Instrument 55

4.4 Pretest 56

4.5 Collection of Data 58

4.6 Statistical treatment of Data 58

v Chapter 5 Data Analysis

5.1 Descriptive Analysis 62

5.2 Test of the Hypotheses 67

Chapter 6 Summary, Conclusion, and Recommendations

6.1 Summary of Findings 84

6.1.1 Characteristics of Respondents 84

6.2 Hypothesis Testing Results 87

6.2.1 Summary of Hypothesis Testing Results 87

6.2.2 Elaboration of Hypothesis Results 90

6.3 Conclusion 97

6.4 Recommendations 99

Appendix

A Questionnaire in English

B Questionnaire in Thai

C Reliability Test

VI LIST OF TABLES

Page No.

Table 1.1 Expansion outlet of retail 4

Table 1.2 Supermarket in Bangkok 6

Table 1.3 Sales Volume in Tops Supermarket 6

Table 1.4 Customers transaction in Tops Supermarket 7

Table 1.5 Types of promotion in different types of store 9

Table 2.1 Empirical research 37

Table 3.1 Operational definition of variables 50

Table 4.1 Sample sizes used in research studies 53

Table 4.2 Reliability result 57

Table 4.3 r-value and measure the strength of association 60

Table 5.1 Frequency Distribution of Gender of the respondents 63

Table 5.2 Frequency Distribution of Age of the respondents 63

Table 5.3 Frequency Distribution oflncome Level of the respondents 64

Table 5.4 Frequency Distribution of Occupation of the respondents 65

Table 5.5 Frequency Distribution of Level of Education of the respondents 65

Table 5.6 Mean and Standard deviation of sales promotion tools 66

Table 5.7 Pearson Correlation test between coupon and 67

consumer's brand switching

Table 5.8 Pearson Correlation test between coupon and 68

consumer's brand loyalty

Table 5.9 Pearson Correlation test between coupon and 69

Vil consumer's stockpiling

Table5.10 Pearson Correlation test between coupon and 70

consumer's purchase acceleration

Table 5.11 Pearson Correlation test between price discount 71

and consumer's brand switching

Table 5.12 Pearson Correlation test between price discount 72

and consumer's brand loyalty

Table 5.13 Pearson Correlation test between price discount 73

and consumer's stockpiling

Table 5.14 Pearson Correlation test between price discount 74

and consumer's purchase acceleration

Table 5.15 Pearson Correlation test between buy-one-get-one-free 75

and consumer's brand switching

Table 5.16 Pearson Correlation test between buy-one-get-one-free 76

and consumer's brand loyalty

Table 5.17 Pearson Correlation test between buy-one-get-one-free 77

and consumer's stockpiling

Table 5.18 Pearson Correlation test between buy-one-get-one-free 78

and consumer's purchase acceleration

Table 5.19 Pearson Correlation test between premium 79

and consumer's brand switching

Table 5.20 Pearson Correlation test between premium 80

and consumer's brand loyalty

Table 5.21 Pearson Correlation test between premium 80

Vlll and consumer's stockpiling

Table 5.22 Pearson Correlation test between premium 81

and consumer's purchase acceleration

Table 6.1 Summary of Characteristics of Respondents 86

Table 6.2 Summary of Relationship between Independent 87

and Dependent Variable

lX LIST OF FIGURES

Page No.

Figure 2.1 Types of sales promotion 21

Figure 2.2 A Segmentation Model of Consumer Response 28

to Sales Promotion

Figure 3.2 Conceptual Framework 45

x Chapter 1

Generalities of the study

This chapter consists of seven sections. The first section explains the background of the research. The second section and third section present the statement

of problem and the research objectives. The forth and fifth section explain scope and the limitation of the research. The last two sections explain the significance and the

definition of term of the research.

Introduction

There are many types of businesses in retail industries nowadays such as

discount stores, supermarkets, convenience stores and hypermarkets. Among intense

competition, each retailer uses many strategies and tools to satisfy and attract the

customers. Sales promotion is one of the important tools that used by every retailers,

and different promotion tools effect consumer behavior in different ways.

As a result of a globalizing economy, and the exposure of Thai people to a

global culture via the media, flourishing modern shopping environments are now

threatening the existence of traditional Thai shopping environments. Many Thais enjoy

spending time in the comfortable atmospheres of modern shopping environments. As a

consequence, traditional shopping environments are taken for granted and are

beginning to disappear. Consumers are moving away from traditional retail outlets as

they realize that they can get similar or better quality products from modern trades like

supermarkets, superstores, hypermarkets, and cash and carry stores. As a result, there

1 is a high competition in retail business. These retail stores use sales promotion as a tool to attract the customers and stimulate sales. Therefore, it can not deny that sales promotion is a very important tool of retail business.

Tops Supermarket is the first supermarket in Thailand that jointed ventured between foreigner investors and Thailand's company and establish in Thailand around

10 years ago. The company's objective is to expand the market by expanding the branches. Until now it has 48 branches around Bangkok and recently the new branch has just been established. Moreover, Tops has a plan to spend 300 million baht to open

2 new branches in Bangkok in order to serve their customers in every area of Bangkok.

Therefore, Tops has a potential to expand the branches in Bangkok because most of

Tops Supermarkets are located in department stores, office buildings and, business areas which are benefit from high traffic of people.

According to the secondary data of marketing department of Tops

Supermarket, it showed that Tops has a continuing increasing in sales volume from year 2001 to 2003. Sales volume of the year 2001 increased from 2,910,176,641 baht to 11,311,615,894 baht in the year 2002 and, it reached 11,659,818,025 baht in the year 2003 as it can be seen from table 1.5. Moreover the customer transactions are also increasing. Whereas, many retailers competed in price, Tops launches the "Quality

Campaign" of the products as well as uses sales promotion to obtain the customer brand awareness and increase customer satisfaction. In addition it is expected to increase 6-7% profit this year.

2 1.1 Retail Business in Thailand

Thailand's retail business witnessed a sharp increase in new investments from both local and foreign investors in 2002. Most of them were in convenience stores, department stores, shopping complexes and discount stores. Therefore, the dominance of discount stores in the market, department stores are growing dramatically. Until this year, in 2003, the major retailers still increase their promotional budgets by 8-10% in the first two weeks of April and added more activities at their stores. The offerings included discounts, contests, concerts and prize draws. Given the added impetus in the face of unforeseen challenges, total sales in the department store and shopping mall market were predicted to grow by 10% to 367.26 billion baht in the first half, compared with 13-14% in the same period in the year 2002.

Moreover, several retail firms have expanded steadily with investments totaling nearly 17 billion baht injected into hypermarkets, department stores, supermarkets, convenience and specialty stores as it is shown clearly in table 1.1 below

(www.bangkokpost.com/date visited 21/09/03)

3 Table 1.1 Expansion of outlet of retail

Category 1999 2000 2001 2002 2003(F)

Convenience Stores 4,500 5,500 5,700 6,000 6,500

Department Stores 112 103 108 109 109

Hypermarkets 63 77 97 113 127-130

Supermarkets 138 150 170 208 238

Specialty Stores 150 206 239 298 390

Source: CP Seven Eleven Co. Reference: Year 2003

The table 1.1 shows the expansion of the outlet of retail business. As mentioned above, because of the growth in this business so, the modern trade such as convenience stores, hypermarkets, department stores, supermarkets, and specialty stores expanded numbers of outlet since the year 1999 to the year 2003. As you see that supermarket has a continuous growth of expansion from 150 branches in the year 2000 to 238 branches in the year 2003. It approximately increased 58 .66 %.

Supermarket is a kind of retailer that serves Thai people for a long time. In

Thailand the supermarket has been developed as an integral part of the department store which is the primary retail distribution channel for the growing middle class.

There are approximately 100 supermarkets in department stores in Thailand and because there are 14 department store groups, the ownership is quite fragmented.

The one exception is the Central Group which owns Central and Robinson department stores with a total of35 stores, each having a Tops Supermarket.

4 The stand-alone supermarket and supermarket chain has been slowly developing in Thailand. With the exception of Tops with 40 supermarkets, there are no supermarket chains of significant size. It is anticipated that supermarket development in the medium term will be largely in stand-alone stores since economic factors severely restrict the construction of large and expensive new department stores. Tops

Supermarket has plans to continue to open new stand-alone supermarkets to compete with the rapidly developing superstores.

Food Lion is operated in Thailand through the Bel-Thai Supermarket

Company, 40% owned by Delhaize and the balance by The Mall Group and the Saha

Group. Food Lion might indeed be the company that will build a critical mass of supermarkets and provide serious competition to Tops. It is clear that foreign owned supermarkets will be the ones to invest in and enjoy the growth in this sector in the years ahead (agrofoodasia.com/date visited 7111/03).

Rationale Of Studying Tops Supermarket

Tops Supermarket has the highest reach among other supermarkets in

Bangkok. As seen from table 1.2 below, Tops has 48 branches covering the Bangkok area. Also Tops is considered to be a representative of supermarket in Bangkok as seen from the period it was establish; the first brand supermarket in Thailand. Therefore, it is consistent to Thai consumer behavior. Moreover, when consider from its sales volume from table 1.3 and number of customer transaction in table 1.4 below, it has seen that Tops has an increasing of sales volume and consumer transaction and its profit expected to increase 6-7% in this year.

5 St. Gabriel's Lihrarv. An

Table 1.2 Supermarkets in Bangkok

Rank Name Country of No. of store Brand Logo Origin (End of 2000) 1 Tops Supermarket Netherlands 48

2 Food Lion Belgium 32

3 Jusco Japan 10

4 Foodland Thailand 8 N.A.

5 Villa Market Thailand 8 N.A.

Total 106

Source: Siam Future Development PLC. Reference: End of Year 2002

Table 1.3 Sales Volume of Tops Supermarket

Year Sales Volume ( haht)

2003 11,659,818,025

2002 11,311,615,894

2001 2,910, 176,641

Source: Marketing Department of Tops Supermarket Reference: End of Year 2003

From table 1.3, it shows the increasing sales volume from 2,910, 176,641 in

2001to11,659,818,025 in 2003.

6 Table 1.4 Customer Transaction of Tops Supermarket

Year No. of customer Transaction

2003 47,911,935

2002 47,185,000

Source: Marketing Department, Tops Supermarket

According to table 1.4, the customer transactions of Tops Supermarket also increase from 47, 185,000 in 2002 to 47,911,935 in 2003; approximately increase 1.54

%.

1.1.1 Types of Sales Promotion used by different stores

As the retail sector in Thailand is undergoing major changes as European investment pours into this sector, many modern supermarkets, hypermarket, discount store, ect. emerge in several areas all over the country especially the big city like

Bangkok. As the time continues, it would be more competitive among those stores obviously. The following explains about the different types of stores.

Supermarket is a store or market that sells food and drinks, and sometimes drugs, clothes, and other household products that are consumed regularly. A supermarket offers a great variety of products. Often, a supermarket is part of a chain that owns or controls (sometimes by franchise) other supermarkets located in the same town or other towns, as this increases the opportunities for economies of scale.

(http://www.wordiq.com/definition/Supermarket.htmljdate visited 30/02/2004)

7 A hypermarket is a major mass merchandising retail store selling a wide range of goods, bigger than a supermarket.

(http ://www.moneyglossary.com/?w= Hypermarket/date visited 30/02/2004)

Superstore is a very large retail store that stocks highly diversified merchandise, such as groceries, toys, and camera equipment, or a wide variety of merchandise in a specific product line, such as computers or sporting goods.

(http://www.yourdictionary.com/ahd/s/s0903800.html/date visited 30/02/2004)

Promotion tool is a short term incentive to attract the consumers that used by every retail stores. Therefore, sales promotion is a very important tool for retail stores.

In the table 1.3 below, it shows the variety of sales promotion in different types of store.

8 Table 1.5 Types of promotion in different types of store.

Types of Retail Stores Types of Promotion store 1. Red Hot presents selected products that are priced the lowest in the market during a promotional period of every one or two weeks. Tops Supermarket 2. Bonus presents a broader range of selected Supermarket products around 1,000 items that offer additional savings and which changes every one to eight weeks. 3. Buy-one-get-one-free 4. Premiums 1. Gift Voucher 2. Roll back are every day low price products that Tesco Lotus offers at reduced rates. 3. Discount Price Tesco Lotus Hypermarket 4. Multi Saver 5. Wow 6. Special Purchase 7. New Product Line 8. Every Day Low Price 1. More Than Just Low Prices_ The prices of the products are lower than those of regular department stores. These products are available everyday at Big c. 2. Special Order Big C offers special priced products during certain periods, for a limited time BigC Superstore and quantity. 3. New Products Brand new products are introduced at special prices. 4. Clearance Products are offered at very special prices during clearance sales. 5. Big Pack Products purchased in bulk are offered everyday

Source: www.tops.co.th, www.bigc.co.th, www.tesco.co.th/ date visited 7/11/03

9 1.1.2 Tops Supermarket Profile

Tops supermarkets are operated by CRC Ahold, a joint venture between

Central Retail Corporation and the international food provider Royal Ahold.

Royal Ahold is expanding Tops in the Asian region m other countries such as

Indonesia and Malaysia with major local partners.

Most of the Tops supermarkets are located m the Central and Robinson department stores. The stores range in size from 1,500 to 5,000 square meters in floor area. There are also free-standing supermarkets that range from 800 to 4,000 square meters in floor area.

Tops is a one-stop-shop supermarket carrying a wide range of fresh vegetables and fruits, meat, fish, seafood, groceries, dairy and bakery products. The stores also carry a great range of international food items and a line of Tops-branded products.

In addition to providing one-stop shopping and quality fresh products, Tops is the home of Supercheap pricing with Everyday low prices on 7,000 key items.

Products and service

• Tops is committed to providing high-quality products at great prices for the

modern family.

• Tops carries fresh vegetables and fruits from all parts of Thailand and exotic fruits

from foreign countries. All vegetables at TOPS are certified by the Department of

Agriculture.

10 • Tops offers high quality "Gold Medal Meat" which is processed, handled,

packed, transport and distributed under the strictest guideline standards set by

FDA.

• Tops offers a wide selection of international and local groceries, including

hundreds of Tops' own private-label products, "The Brand that Saves" good

quality products with good prices.

• Tops makes it easy for shoppers to prepare delicious dishes by offering a selection

of tasty ready-to-eat and ready-to-cook food, or your selection will be prepared for

you while you wait.

• Tops shoppers can also find a fast-food counter, bakery, laundry, photo-express

service and florist in the store.

Prices

Specially-priced items at Tops are identified by two signs:

• Red Hot presents selected products that are priced the lowest in the market during a

promotional period of every one or two weeks.

• Bonus presents a broader range of selected products around 1,000 items that offer

additional savings and which changes every one to eight weeks.

Tops stores are unique in their merchandise display and decor, using the colours of red and yellow including labels, signs, shopping bags, staff uniforms and checkout

11 1.1.3 Promotion of Tops Supermarket

Advertising: In-store and out of store advertising are used by Tops

Supermarket.

• In-store Advertising, there are mobile hangings and, TV. inside department

store which use to advertised the product in Tops Supermarket.

• Out-store Advertising, TV, radio spots and, bill board at BTS stations are

used to advertised Tops Supermarket.(Marketing Department of Tops

Supermarket)

Sales Promotion:

• Price discount: Red Hot and Selected Bonus are used as signs for the price

discount.

• Coupon: Consumers will be offered the coupon to get the discount when

they come to purchase at Tops Supermarket next time and the coupon that

offered the consumers to send the coupon to get the prize from Tops

Supermarket.

• Buy one get one free:

• Premium: Consumers who purchase reach at the point, they can purchase

the premium product at a special price.

Personal Selling: There are staffs to stand nearby each shelf of the products to describes and, demonstrate the products.

12 St. Gabrirfs Lihrary. An

Public Relation: Tops Supermarket participates m charity activities by

supporting the club or foundations such as Unicef to make a sharity together.

(Marketing Department of Tops Supermarket).

1.1.4 Promotion Budget of Tops Supermarket

Tops Supermarket spent 30 % of its sales volumn on the promotion budget in

the year 2002 (Marketing Department of Tops Supermarket).

1.2 Statement of Problem

As supermarkets competitors m Bangkok are now increasing, many

supermarkets attract their customers by vanous promotion tools. Also, Tops

Supermarket is the one among those supermarkets that use many promotion tools to

attract customers and boost its sales.

In fact, most consumers are sensitive to promotion so, before understanding

exactly the consumer buying behavior on promotion, it need to be measured by system

approach and it is important to know "What is the relationship between sales

promotion tools and consumer behavior response?".

1.3 Objectives of the Research

1. To investigate the relationship between consumer behaviors which are

• brand switching, brand loyalty, stockpiling, purchase acceleration with the four

different promotional tools most commonly used by Tops Supermarket: price

discount, buy one get one free, coupon, premiums.

13 1.4 Scope of the Research

This research studied the how factors which are promotional tools of Tops

Supermarket in Bangkok influence customers behavior.

The conceptual framework of this study consists of dependent and independent variables. The independent variables are sales promotion tool which consists of coupon, price discount, buy-one-get-one-free and, premiums. The dependent variable is consumer behavioral response which consists of brand switching, brand loyalty, stockpiling, and purchase acceleration.

This research has been conducted by survey method usmg questionnaire to collect the information. The target population of the study is the customers who have experience in shopping at Tops Supermarket, both male and female. The purpose of this research is gaining the consumer behavioral response to promotion tools used by

Tops Supermarket in Bangkok in order to be able to assess the current efficacy of the budget allocated to promote activities aimed at boosting sales.

1.5 Limitation of Study

First, this research has been conducted on any consumers who came to purchase at Tops Supermarket. Therefore, it cannot be generalized with other consumers who never come to purchase at Tops Supermarket.

Second, this research has been conducted in a specific period of time, therefore its findings cannot be generalized as behavior response of consumer keeping on changing in different time periods.

14 Third, this research has been conducted at Tops Supermarket in Bangkok only.

Therefore, it cannot be generalized for Tops Supermarket in other areas.

Forth, this research used non-probability sampling. Therefore, the finding may not be generalized the whole population.

1.6 Significance of Research

According to the current competitiveness in retail business in Thailand, it will be a competitive advantage for Tops Supermarket to know and understand its consumer behavior because it provides various benefits as follows:

First, to help marketers of Tops Supermarket improve the efficacy budget they allocate to promote activities aimed at stimulating sales.

Second, to enable marketers of Tops Supermarket work and formulate effective marketing strategy and tactic in order to compete with other retailers.

1.7 Definition of terms

Consumer behavior Any activities and factors that affect consumer to

purchase and use any products or services in

order to satisfy his/her need (Aren &

Bovee, 1994)

Demographic characteristics Groups on the basis of variables such as age,

family size, gender, income, occupation,

education, religion, race, generation, nationality,

15 social class (Kotler,2000). However, this research

have only uses gender, age, income, occupation

and, education.

Sales Promotion A diverse collection of incentive tools mostly

short term, designed to stimulate quicker or

greater purchase of particular products or

services by consumers or the trade.

( Kotler,2000)

Coupon A certificates entitling the bearer to a stated

saving on the purchase of a specific product:

mailed, enclosed in other products or attached to

them, or inserted in magazine and newspaper ads.

( Kotler,2000)

Discount A straight discount off the list price on each case

purchased during a stated time period.

( Kotler,2000)

Premium An offer at a relatively low cost or free as an

incentive to purchase a particular product by

merchandise. (Kotler,2000)

16 Brand Switching A consumer is induced to purchase a brand other

than the one that would have been purchased had

the promotion not been available. (Fishbein and

Ajzen 1975, 1980).

Brand Loyalty A commitment due to favorable attitudes learned

from past purchase (Assael, 1987).

Stockpiling Tendency to purchase more quantity of goods

than normally required due to motivation of sales

promotion.( Armstrong & Kotler 2000)

Purchase acceleration A consumer's purchase timing or purchase

quantity is influenced by promotion activities.

(Blattberg et al.,1981)

17 Chapter 2

Literature Revie"v

In the literature review sections to be discussed below, some general concepts are utilized in order to provide the reader with an idea of the two variables, dependent and independent variables. The following sections encompass, the features of the two variables. Theories related to those variables are also discussed. The researcher reviewed all literatures relevant to the topic of the study to build up a research framework. Therefore, the researcher focuses on consumer behavioral response which is dependent variable relating to promotion tools which are independent variable in this research. Therefore, the topics to be discussed are as follows :

1. Defining sales promotion

2. Defining consumer behavior

3. Defining demographic characteristic

4. The empirical research of this study

Section 1 : Literature Support For Independent Variable

Consumers, while shopping in a supermarket, have to make three decisions.

First which category to buy, this in turn leads to a decision of which brand to buy and finally what quantity to buy? There are many factors that affect them when they purchase each time. Sales promotion is the one factor that effect to their purchase varies across the characteristics of consumers.

18 2.1.1 Defining Sales Promotion

Kotler and Armstrong (2001) highlighted that sales promotion is the short-term incentives to encourage purchase or sales of a product or service. Sales promotion targeted toward final buyers (consumer promotion), business customers (business promotions), retailers and wholesaler ( trade promotions), and members of the sales force (sales force promotions).

Kotler (2000) mentioned that sales promotion consists of a diverse collection of incentive tools, mostly short term, designed to stimulate the trade companies use sales promotion tools to draw a stronger and quicker buyer response. Sales promotion can be used for short-run effects such as to dramatize product offers and boost sagging sales.

Blattberg et al., (1990) described sales promotion as an action-focused marketing event whose purpose is to have a direct impact on the behavior of the firm's customers.

Peattie and Peattie (1994) defined that sales promotion is a marketing communication activities which do not include advertising, selling or public relations

:or even more simply as special offers. Sales promotion fall into two types, value increasing and value adding. Value-increasing promotions manipulate the quantity/price equation (and sometimes the quality/price relationship) to increase the perceived value of a product offering. Examples of these would be discounts, coupons, payment terms, multipacks, multibuys or quantity increase. The second group of sales promotions, which are often overlooked, are the value-adding (sometimes referred to as packaged up) promotions. These leave the price and core product untouched, and offer the customer something extra. Examples of these are product trial or samples,

19 valued packaging, free gifts, loyalty schemes or clubs, information (such as a brochure or in-store magazine) or a competition.

In high competition in retail business, sales promotion is the one important tool that many companies or organizations will use to compete with the competitors and stimulate sales. There are many kinds of sales promotion with different response from consumers as follows.

2.1.2 Types of the Promotion

Gilbert (2002) mentioned that there are four types of sales promotion; business-to-business, consumer, trade, and retailer promotions.

Consumer promotions are manufacturer incentives offered directly to consumers, largely bypassing the retailer. They are designed to pull the product through the retail establishment with coupons rebates, and other means that the manufacturer can control from headquarters.

Trade Promotions are provided by manufacturers to distribution channel members. The objective is to give wholesalers and retailers an incentive to sell the manufacturer's brand. Essentially, these promotions make it worthwhile for the channel member to push the product to the customer. Common incentives are advertising allowances and price reductions.

Retailer Promotions are directed at the consumer by the retail outlet. They are often confined to a local area, although large chains such as Best Buy many run many of the same promotions at all locations. This provides a sales level sufficient to obtain quantity discounts from suppliers, which enables prices to be kept low.

20 Business-to-business promotions consist of four main types which are trade show, conventions, sales contests, and specialty items. Often volume discounts and price sales occur in conjunction with these four activities.

Figure 2.1 Types of Promotion

Businesses to Business

Consumer ~----~~Consumer Promotions

Trade Promotions Trade Wholesalers I retailers

Source: Gilbert D. Harrell, (2002), Marketing: connecting with customers, Second edition, Upper Saddle River, New Jersey: Prentice Hall

Figure 2.1 explains four types of distribution channel of promotion tools which consist of business to business promotion, trade promotions, consumer promotions, and retailer promotion. Manufacturers use consumer promotions to influence their market share across all retailing outlets. There are several popular forms which are coupon, rebates, samples, sweepstakes, price and value packs, point-of-purchase

21 displays. This research focused on consumer promotion by usmg pnce discount, coupons, buy-one-get-one-free, and premiums to study.

2.1.3 Types of Consumer Promotion or Sales Promotion

Coupon

Kotler (2000) stated that coupons or certificates entitle the bearer to a stated saving on the purchase of a specific product: mailed, enclosed in other products or attached to them, or inserted in magazine and newspaper ad. Redemption rate varies with mode of distribution. Coupons can be effective in stimulating sales of a mature brand and inducing early trial of a new brand.

Shrimp (1986) mentioned that coupon is a promotional device that provides cents-off savings to consumers upon redeeming the coupon. Coupons are delivered through a variety of modes, including newspaper, magazines, free-standing inserts, direct mail, in or on packages, and , increasingly at the point-of-purchase.

Schultz et al., (1998) mentioned that coupons have increased in popularity among marketers because of various reasons as follows:

• Coupons provide a means of distributing a price cut to consumers, who

have become increasingly price sensitive and less brand loyalty.

• Unlike regular price cuts, coupons may make consumers feel that they

are getting a good deal on a particular product, thereby causing them to

increase consumption.

22 • Also unlike regular pnce cuts, coupons provide temporary pnce

reductions; the brand returns to the regular price after the expiration

date.

• Coupons may encourage new consumers to try a product, increasing the

value of the brand over the long run.

• Coupons may be effective in differentiating between price sensitive and

price-insensitive consumers. Those who are price sensitive are assumed

to be more likely to clip coupons whereas those who don't care very

much about how much the product cost are more likely to pay full price.

• Coupon distribution may now be easily targeted to particular areas of

the country or particular types of consumers, helping companies to

accomplish specific targeted marketing goals.

• Consumers who are not particularly price-sensitive may use coupons to

make purchasing decisions. This may be especially true of people who

feel they don't have time to compare shelf prices on a number of

different products, but who still want to feel if they are saving money.

Price Discounts

Schultz et al., (1998) stated that price discounts give consumers an immediate reduction on the amount they have to pay for the product at the point of purchase.

Discount given by the retailer are called" markdowns" while discounts offered by the manufacturer of a product that is sold through a separate retailer are called " price- offs" St. Gabriel's Libr:1ry, Att

Retailers offer price reductions to consumers for a variety of reasons. The most common is to clear the firm's inventory of excess merchandise, so that new items may be warehoused and displayed. Retailers also use price reduction to attract consumers who might buy other products in their stores, and to create an overall low-price image for themselves.

Nowadays, everyday low-pricing strategies seem to have the potential of being attractive to consumers because they may minimize the amount of time people spend searching for a low price. In practice, however, this pricing policy tends to work better in some circumstances than in others. First, everyday low pricing may work best for firms that have lower built-in costs than their competitors, since they are able to offer regular prices that are relatively competitive with other companies' sales prices.

Everyday low pricing may be effective when consumers are relatively unconcerned about prices and value their time more than any money they might save by shopping around for alternatives.

Premiums

Kotler (2000) mentioned that premium or gifts are the incentive to purchase a particular product at relatively low cost or free.

Schultz et al., {1998) mentioned that premiums offer consumers some kind of non-monetary incentive to purchase a particular brand. Premium are traditionally divided into two types. Free premiums are items offered without charge to consumers in exchange for a certain number of proofs of purchase and, perhaps, a small handling charge. Self-liquidators are items that consumers must pay to receive; the money

24 received covers the cost of the product, meaning that the promotion is an inexpensive one for companies to run.

Premiums often provide a good way to create attention for-and excitement

about-a particular product, especially when the item being offered is especially

attractive. Premiums can also be effective at reinforcing brand image and usage habits,

and they may in some cases succeed in persuading consumers to buy additional

product or to switch from one brand to another. They may make consumers feel good

about the brand, thereby providing long-term benefits to the company offering them.

Also, premium offers can be helpful in rewarding and, in some cases, increasing the

immediate consumption of a product by current users.

Finally, for premium promotions to be successful, it is important that the items

being offered are perceived as desirable, and that they appeal to the appropriate

consumer target. Unusual items that can not be purchased anywhere else are often

quite successful, as are items that are less expensive through the promotion than they

might be in a retail store.

Shrimp (1986) stated that premiums are articles of merchandise or services

offered by manufacturers to induce action on the part of the sales force, trade

representatives, or consumers. This section focuses on consumer motivation.

Several forms of premium offers are used to motivate consumers : free-in-the­

mail premiums; in-,on- and near-pack premiums; and self-liquidating premiums. All

three forms serve fundamentally different purposes. Free-in-the-mail premiums are

useful primarily for generating initial brand trial or retrial; in-, on-, and near-pack

25 premmms serve franchise-holding purposes; and self-liquidators perform 1mage­ reinforcement functions.

• Free-in-tlte-mail premium is a promotion in which consumers receive

a premium item from the sponsoring manufacturer in re return for

submitting a required number of proofs of purchase.

• In-, On-, Near-Pack premiums offer a premium item inside a package,

attached to a package, or the package itself is reusable. In general, in-,

on- package premiums offer consumers immediate value and thereby

encourage increased product consumptions.

• Near-pack premiums provide the retail trade with specially displayed

premium pieces that retailers then give to consumers who purchase the

promoted product. Near-pack premiums have the added advantage of

being less expensive than on-pack premiums because additional

packaging is not required. Furthermore, near-pack premiums can build

sales volume in stores that put up displays and participate fully.

• Self-Liquidating premiums gets its name from the fact that the

consumer mails in a stipulated number of proofs of purchase along with

sufficient money to cover the manufacturer's purchasing, handling, and

mailing costs of the premium item. In other word, the actual cost of the

premium is paid for by consumers; for manufacturer's perspective the

item is cost free, or, in other words, self-liquidating.

26 According to various types of sales promotion which is mentioned above, it can be seen that each sales promotion has different impact to consumers' feeling and their purchasing behavior; coupon will encourage new consumers who are price sensitive to try a new product and that showed their behavior; switching brand or the people who like the price discount showed that price discount help them in a making decision; purchase acceleration. While the premiums have an impact to the consumers' feeling in that they are offered a special value such as a gift or added quantity of product so it has an impact to their behavior. Buy one get free, it will make a consumers feel that they are offered one more free products and this also accelerate their purchasing and other behavior.

Section 2 : Literature Support For Dependent Variable

This part will explain the buying behavior and consumer responsiveness to sales promotion.

2.2.1 Consumer Responsiveness to sales promotion deals

This part will explain consumer responsiveness to sales promotional deal which is explained by model below.

Shrimp (J 986) mentioned that the market for any product category is made up of consumers who differ in their responsiveness to deals. Some consumers are loyal to a single brand in a category and buy only that brand. Other consumers have absolutely no brand loyalty and will purchase only those brands that are on deal. Most consumers lie somewhere between these extremes.

27 Figure 2.2 A SegmentatiO'n Model of Consumer Response to Sales Promotion

as l-S8 = Segment l-Segment8

Source: Adapted from Leigh McAlister, "Continued Research into Sales Promotion:

Product Line Management Issue," A Research Report and Proposal Prepared for the

Marketing Science Institute and Other Sponsors (circal 986).

28 As shown in figure 2.2, the most general distinction is between consumers who purchase only when a brand is on deal (Segment 8) and the remaining consumers who do not restrict their purchasing to times when a product is on deal. These on- and off­ deal consumers fall into two general categories, loyalists and switchers. The distinction between loyalists and switchers is based on purchase behavior when no brands in a product category are on deal.

Loyalists are consumers whose purchase patterns reflect that they buy the same brand over and over when no brands are on deal (when the category is off promotion).

Switchers are the consumers who even when all brands in a category are off promotion nonetheless switch among different brands. Like loyalists, switchers may or may not be deal prone. Now let's track the various types of loyalist consumers and then switchers.

Non-deal-prone loyalists (Segment 1) are consumers who invariably buy a single brand in a product category and are not influenced by that brand's deals or the deals from competitive brands. Segment 1 represents consumers who are truly brand loyal. Most brands today have relatively few consumers who are non-deal-prone loyalists.

Non-deal-prone switchers (Segment 5) are like their loyalist counterparts insofar as they are not responsive to deals. They switcher among brands, but this is due to a need for novelty and not to avail themselves of deals.

Deal-prone loyalists come in three varieties:

29 • Stockpiling loyalists (Segment 2) purchase only the single brand to

which they are loyal but take advantage of saving by stockpiling when

that brand is on deal.

• Exceptionist loyalists (Segment3), though loyal to a single brand when

all brands in the category are off deal, will make an exception and

purchase another, nonpreferred brand when it, but not their preferred

brand is on deal.

• Stockpiling-exceptionist loyalists (Segment4) not only make exceptions

by choosing nonpreferred brands but also stockpile quantities q_f other

brands when they are on deal.

Deal prone switchers break into two groups

• Nonstockpiling switchers (Segment6) are responsive tq deals but, do

not purchase extra quantities when any of their acceptable brands are on

deal.

• Stockpiling switchers (Segment?) exploit deal opportunities by

purchasing multiple units when any acceptable brand is on deal.

Because several of the loyalist and switcher segments are conceptually overlapping, we can eliminate any further need to distinguish between Segmentsl and

5, Segments3 and 6, and Segments 4 and 7. All subsequent discussion is based on the following five categories of purchase patterns:

30 • Promotion Insensitive (Segment 1 and 5 )

• Stockpiling Loyalists ( Segment 2 )

• Nonstockpiling Promotion Sensitive (Segment 3 and 6 )

• Stockpiling Promotion Sensitive ( Segment 4 and 7 )

• On -Deal-Only Consumers (Segment 8)

Brand Loyalty

Kotlet (2000) refers that consumers have varying degrees of loyalty to specific brands stores, and other entities. Buyers can be divided in to four groups according to brand loyalty status:

• Hard-core loyal: Consumers who buy one brand all the time.

• Split loyal: Consumers are loyal to two or three brands.

• Shifting loyal: Consumers who shift from one brand to another.

• Switchers: Consumers who show no loyalty to any brand.

Harrell {2002) stated that brand loyalty is a dimension of brand equity that causes consumers to choose one brand over others available.

Brand Switching

Fishbein and Ajzen (1975) states that Brand switching means that a consumer is induced to purchase a brand other than the one that would have been purchased had the promotion not been available.

31 Purchase Acceleration

Blattberg et a., (1981) mentioned that Purchase acceleration means that a consumer's purchase timing or purchase quantity is influenced by promotion activities.

As seen that sales promotion can cause the differences of consumer behavior which are brand loyalty, brand switching, purchase acceleration, and stockpiling.

Section 3 : Other Related Literature Support

This part explains the demographic factors which are gender, age, income, occupation and, education. They are also important factors that were tested in this research. They are demographic and sales promotion tool.

2.3.1 Demographic Factors

Gender

Sheth et al., (1999) mentioned that gender is a group of trait that divides customers into two groups-males and females. Gender has always been a distinguishing segmentation variable.

Kotler (1997) stated that gender influences consumer's thinking, values, attitudes, behavior, wants and purchase decision. Occasionally, other marketers notice an opportunity for gender segmentation.

Solomon (1997) mentioned that one dimension that makes segmenting by gender so interesting is that the behavior and tastes of men and women are constantly evolving.

32 Age

Sheth et al., (1999) mentioned that age refers to the length of time elapsed since a person's birth.

Hawkins et al., (1992) stated that age is a powerful determinate of consumer behavior. A person's age affects his or her interests, tastes, purchasing, ability, political preferences, and investment behavior.

Kotler (2000) mentioned that consumer's wants and abilities change with age.

Solomon (1997) mentioned that consumers of different age groups obviously have different needs and wants. Although people who belong to the same age differ in may other ways, they do tend to share a set of values and common cultural experiences that they carry throughout life.

Schiffman and Kanuk (1997) stated that product needs often vary with consumer age. Marketers have found age to be a particularly useful demographic variable to distinguish segments. Many marketers have curved themselves in niche in the marketplace by concentrating on a specific age segment.

Income

Hawkins et al., (1992) stated that the amount of money or its equivalent one received during a period in exchange for labor or service is called individual income.

Income plays an important role for many products and services. Changes in disposable income ( income after taxes) can be directly linked to changes in market demand for many durable products and nonessential services. The increased buying power will directly affect purchases of assortment of durable and non-durable products.

33 Peter and Olson (1996) stated that people at different income levels tend to have different values, behaviors, and life styles.

Schiffman and Kanuk (1997) quoted that income has long been an important variable for distinguishing market segment. The major problem with segmenting the market on the basis of income alone is that income simply indicates the ability (or inability) to pay for a product, while the actual choice may be based on personal lifestyle, taste, and value-variables largely determined by occupation and education.

Kotler (1997) referred that the consumer forms a purchase intention based on such factors as expected family income, price and expected benefits from the product and services.

Occupation

Kotler (1997) stated that marketers try to identify the occupational groups that have an above-average interest in their products and services. A company can even specialize in producing products needed by particular occupational group. A person's occupational also influences consumer consumption pattern.

Schiffman and Kanuk (1997) mentioned that occupation reflects values, attitudes, taste and lifestyle. Occupation, income, and education tend to be closely correlated on almost a cause-and effect relationship. High-level occupation-those that produce high incomes usually require advanced education training.

Hawkins et al., (2001) claimed that differences in consumption between occupational classes have been found for products such as beer, soft drinks, detergents,

34 dog food, shampoo, and paper towels. Media preference, hobbies and shopping patterns are also influenced by occupation.

Education Level

Schiffman and Kanuk {1997) mentioned that education is also an important segmentation variable. Individuals who have achieved high educational levels often have different product needs and are susceptible to different communication styles than individuals with little education.

Hawkins et al., {1992) stated that education is relatively simple to measure.

Educational level is correlated with both occupation and income. In addition, it influences the lifestyle and therefore consumptions patterns of individuals in a direct manner.

Mathious {1996) mentioned that those with a limited education are generally at a disadvantage not only in earning money but also in spending it wisely.

Skinner {1994) referred that education also influences how decisions are made.

Educated consumers seek more information and demand better-quantity product.

The different demographic factors which consist of gender, ages, income, occupation, education level have an impact on the consumer behavior in this study, which are brand loyalty, brand switching, stockpiling, and purchase acceleration.

These will determine individual lifestyle. As Kotler stated that gender influences consumer's thinking, attitude, and purchasing behavior. Also, age is an important factor to determine the consuming behavior as Hawkins states that a person's age

35 .St_ Gabriefs Librf!ry~ Au

affects his or her interests, tastes, purchasing, ability. Not only, gender and age, but also income occupation and education level also the essential factors to determine consuming behavior. People with different occupation, level of education, and level of income have a different affect to consuming behavior. As Hawkins et.al mentioned that educational level is correlated with both occupation and income and it also influences the lifestyle.

36 Section 4 : The Empirical Research

Table 2.1: The empirical research

Author Article Variable Research Findings Method Huff, An Independent Telephone The result founds that Thais Lenard C. investigation variable is Interview in appears to have highest relative and L. of consumer promotion and Taipei, Mall­ regard for coupons. Taiwanese Alden response to dependent intercept also appear to response more (1998) sales variable is interview in favorably to coupons than promotions in consumer Bangkok and, sweepstakes. Malaysians reports developing response personal the least favorable response markets: A interviews in toward coupons relative to three country Malaysia sweepstakes. analysis

Jaipunya Exposure, Independent Self No significant correlation between Panpim Attitude, and variable is Administered exposure of sweepstakes sales (1999) Behavior of sweepstakes sales questionnaire promotion in television and Female promotion and newspaper and joining the Consumers dependent program among female Regarding variable are consumers, but positive significant sweepstakes exposure, attitude correlation was found in radio sales and, behavior of exposure and joining the program. promotions female consumers DC Gilbert, The efficacy Independent Self Only price discount promotion N Jackaria of sales Variable is sales Administered proved to be statistically (2002) promotions in promotional tools questionnaire significant on consumer's reported UK and Dependent is buying behavior. Purchase supermarkets. consumer acceleration and product trial are response found to be the most influential variables related to a discount.

KusumL Market Independent Self Deals and coupons increase Ailawadi et response to a variable are Administered market penetration and al. (2001) maJor policy advertising and questionnaire surprisingly have little impact on change in the promotion and customer retention as measured by marketing dependent share-of-category requirements mix: Learning variable are and category usage. For the from consumers average brand, advertising works Procter&Gam response primarily by increasing bles' s value penetration, but its effect is weaker pncing than that promotion. strategy

37 !Author Article Variable Research Findings Method Tat and An empirical Independent Telephone Perceived satisfaction with Schwepker investigation variable is rebate interview rebating leads to greater rebate Jr. (1998) of the redemption and redemption. It was also found relationship dependent that satisfaction is affected by between variables are price the time and effort involved in rebate consciousness, rebating. redemption time, and effort motives: and satisfaction. Understandin g how price consciousness , time and effort, and satisfaction affect consumer

Huff, Lenard C. and L. Alden (1998), examined consumer respond to sales

promotion specifically for developing or newly industrialized countries with

collectivist cultures from three countries: Taiwan, Thailand, and Malaysia. This Study

developed and tested models explaining consumers' attitudes toward and use of

coupons (a price-oriented promotion) and sweepstakes (a non-price promotion). In

Taiwan, a market research firm conducted telephone interviews in Taipei, yielding 200

responses. In Thailand, mall-intercept interviews conducted in Bangkok yielding 250

responses. In Malaysia, marketing students conducted personal interviews in urban

areas, yielding 473 responses. Respondents were required to shop at supermarkets at

least once per month and be between 18 and 49 years of age. The results found that

Thais appeared to have the highest relative regard for coupons. Familiarity, attitude,

and use are all significantly higher for coupons than for sweepstakes in Thailand.

Taiwanese also appear to response more favorably to coupons than sweepstakes.

Malaysians reports the least favorable response toward coupons relative to

sweepstakes.

38 Jaipunya (1999) investigated the level of participation toward sweepstakes.

The purpose of her research were to examine exposure of sweepstakes sales promotions in television, radio, and newspaper, attitude toward sweepstakes and behavior of female consumers regarding sweepstakes sales promotions and to find out the correlation among these three variables. Respondents were 400 female consumers

:from ten districts in Bangkok: Prathumwan, Bang Sue, Don Muang, Lad Krabung, Luk

Si, Bangruk, Jatujak, Pasijarern, Bangkok Noi, and Talingchan. According to the result of the research, there were no significant correlation between exposure of sweepstakes sales promotion in television and newspaper and joining the program among female consumers, but positive significant correlation was found in radio exposure and joining the program. Positive significant correlation was found between attitude toward sweepstakes sales promotion and joining program among female consumers. Finally, attitude toward sweepstakes sales promotion explained 7 percent of ferriale consumers' activities regarding sweepstakes while exposure of sweepstakes sales promotion explained 8 percent more of there activities.

D C Gilbert, N Jackaria (2002) investigated the efficiency of sales promotions in UK supermarkets. The purpose of this research is to investigate consumer response to the four different promotion deals most commonly used in UK supermarkets that are coupon, price discounts, samples and buy-one-get-one-free. Multi discriminant analysis was used on a study of 160 respondents to analyze whether there was an association between the four consumer promotional approaches and respondents' reported buying behavior. The independent variables are promotional tools which are coupon, price discount, free sample and, buy-one-get-one-free. The dependent variable

39 are consumer behavioral response which are brand loyalty, brand switching, stockpiling, purchase acceleration and, product trial. The findings indicate that only price discount promotion proved to be statistically significant on consumer's reported buying behavior. Purchase acceleration and product trial are found to be the most influential variables related to a discount. For buy-one-get-one-free, while the result is not significant, the two variables, brand switching and purchase acceleration are statistically.

Kusum L Ailawadi et al., (2001) used Procter & Gamble's & G;value pricing strategy as an opportunity to examine consumer and competitor response to a major, sustained change in marketing-mix strategy. The objective of this research is to find the response of consumers and competitors to short-term changes in advertising and promotion. The study estimates an econometric model to trace how consumers and competitors react to such changes. For the average brand, the study finds that deals and coupons increase market penetration and surprisingly have little impact on customer retention as measured by share-of-category requirements and category usage. For the average brand, advertising works primarily by increasing penetration, but its effect is weaker than that of promotion. The study finds that competitor response is related to how strongly the competitor's market share is affected by the change in marketing mix and the competitor's own response and to structural factors such as market share position and multimarket contact. The net impact of these consumer and competitor responses is a decrease in market share for the company that institutes sustained decreases in promotion coupled with increases in advertising.

40 Peter K Tat, Charles H Schwepker Jr (1998) investigated the relationship between important rebates redemption motives and rebates redemption using response from a random sample of 417 adults consumers collected via telephone interviews. A proposed model of the relationships between price consciousness, time, and effort, time, and rebate redemption is tested is tested via linear structural equation modeling.

The result demonstrated that the effect of price consciousness and perceived, time and effort on rebate redemption are mediated by perceived satisfaction with rebate usage.

Implication and recommendations for effective utilizing a rebate program are discussed. Rebate redemption was measured by the number of redemptions reported by the respondents using a multiple choice question. The three motivational constructs were measured by Likert scale items. Price consciousness (PRICE) was measured by a four item scale developed by Rustad and Pessemier (1974) and included the following items: (1) I shop a lot for specials; (2) I usually check the prices even for inexpensive items; (3) A person can save a lot of money by shopping around for bargains; and (4) I usually pay attention to sales and specials. Perceived time and effort (TIME) associated with rebate redemption was also measured using a four-item scale: (I)

Manufacturers make the rebate process too complicated; (2) Mail in rebates are not worth the trouble involved; (3) It takes too long to receive the rebate check from the manufacturer; and ( 4) Manufacturers could do more to make rebate redemption easier.

Perceived satisfaction (SAT) was measured by the following three item scale: (1) I enjoy redeeming rebates; (2) I feel good about redeeming rebates to save money; and

(3) Redeeming rebates makes shopping more enjoyable. The items used to measure

TIME and SAT were those developed by Tat, Cunningham, and Babakus ( 1988) and

41 Babakus, Tat, and Cunningham (1988) in their studies on consumer perceptions of rebates and the motivational aspects of coupon redemption. For each scaled item, the respondents were asked to indicate their agreement with each statement on a five point scale ranging from "strongly agree" (5) to "strongly disagree" (1). These items were placed randomly in one section of the questionnaire which also consisted of sections probing the respondent's rebate behavior and demographic characteristics. The results of this research found that perceived satisfaction with rebating leads to greater rebate redemption. It was also found that satisfaction is affected by the time and effort involved in rebating. Therefore, to increase satisfaction with rebating, it would appear that the rebate redemption process should be made easier. The process could be improved in several ways. First, the time it takes for the consumer to receive the rebate check should be shortened. Second, rebate redemption forms should be made readily available at the point of purchase. Finally, less strenuous tasks should be required for redeeming rebates. Perhaps manufacturers should only require one type of proof of purchase, such as a receipt or the UPC symbol from the product, depending upon which would be more convenient given the product's packaging. Presently, the redemption process often requires more than one proof of purchase.

From the previous studies, mostly of the topics are about the response of consumer toward sales promotion. As see from the findings, it can be concluded that consumer behavior will different varies with types of the sales promotion. Moreover, it is seen that sales promotion can increase market penetration and satisfaction of

customers. For the methodology, most of them use self-administered as a method and

some research use telephone interview as a method.

42 Chapter 3

Research Framework

In this part of the study, the researcher draws the theories from the literature review to develop the conceptual framework of the research. This chapter consists of 4 sections. The first section of this chapter is the theoretical framework. It is a logically developed, described and elaborated network of associations among studied variables.

The second section is the conceptual framework. It is the researcher's own framework explaining the independent and dependent variables. The third section is research hypotheses that are statements specifying the relationship of variables that will be tested in this research. The last section is operation of related variables that are the examples of all variables and its sub-variables translated in to action.

3.1 Theoretical Framework

From the previous chapter, review of related literature and studies, the researcher drew a theoretical framework to represent a conception related to the research study. The theoretical framework is a conceptual model of how theorizes the relationship among several factors that have been identified as important to the problems. Sekaran (1992) mentioned that it discussed the relationship among the variables that are deemed to be integral to the dynamics of the situation being investigated. Models are used as representations of theoretical systems so that they can be tested, examined, and generally analyzed.

43 Theoretical framework is drawn from Research done by D.C. Gilbert, H

Jackaria "The Efficacy of Sales promotions in UK Supermarket" (2002).

The research relates the theories of promotion tools, consumer behavior, and characteristic demographics in order to develop the conceptual framework. The dependent variables of this research are promotion tools and independent variables of this research are consumer behavioral response of Tops Supermarket in Bangkok.

It studies consumer response to four different promotional tools most commonly used in supermarket. Consumer response is measured by brand switching, brand loyalty, stockpiling and, purchase acceleration.

44 3.2 Conceptual Framework of the relationship between sales promotion and consumer behavioral response.

Independent Variable Dependent Variable

Sales Promotional Tools Consumer Behavioral • Coupon Response • Price Discount • Brand switching • Buy-one-get-one-free ~ • Brand loyalty • Premium • Stockpiling • Purchase acceleration

The framework illustrates the relationship between each of the sales promotional tools and the consumer behavioral response. The independent variables are sales promotional tools which consist of coupon, price discount, buy-one-get-one­ free, and premiums, whereas the dependent variables are consumer behavioral response, which are brand loyalty, brand switching, stock piling, and purchase acceleration. The study focused on the relationship of each sales promotional tool to each consumer behavior response as the one by one relationship. Therefore, there are

16 relationships which are divided into 4 groups as it will have an explanation in the next part.

45 3.3 Research Hypotheses

Sekaran (1992) mentioned that hypothesis can be defined as logically conjectured relationship between two or more variables expressed in the form of testable statements. These relationships are conjectured on the basis of the network of associations established in the theoretical framework.

The hypothesis statements as shown below are relationship between independent variables and dependent variables.

Group A: Coupon and Consumer Behavioral Response

Group B: Price Discount and Consumer Behavioral Response

Group C: Buy-one-get-one-free and Consumer Behavioral Response

Group D: Premium and Consumer Behavioral Response

Group A : Coupon and Consumer Behavioral Response

Hypothesis 1

Hlo: There is no relationship between coupon and consumer's brand switching.

Hla: There is a relationship between coupon and consumer's brand switching.

Hvpothesis 2

H2o: There is no relationship between coupon and consumer's brand loyalty.

H2a: There is a relationship between coupon and consumer's brand loyalty.

Hypothesis 3

H30 : There is no relationship between coupon and consumer's stockpiling.

H3a: There is a relationship between coupon and consumer's stockpiling.

46 Hypothesis 4

H4o: There is no relationship between coupon and consumer's purchase acceleration.

H4a: There is a relationship between coupon and consumer's purchase acceleration.

Group B : Price Discount and Consumer Behavioral Response

Hypothesis 5

H50 : There 1s no relationship between pnce discount and consumer's brand

switching.

HSa: There is a relationship between price discount and consumer's brand switching.

Hypothesis 6

H60 : There is no relationship between price discount and consumer's brand loyalty.

H6a: There is a relationship between price discount and consumer's brand loyalty.

Hvpothesis 7

H7 o: There is no relationship between price discount and consumer's stockpiling

H7 a: There is a relationship between price discount and consumer's stockpiling

Hypothesis8

H8 0 : There is no relationship between price discount and consumer's purchase

acceleration.

H8a: There is a relationship between pnce discount and consumer's purchase

acceleration.

47 Group C : Buy-one-get-one-free and Consumer Behavioral Response

Hypothesis 9

H90 : There is no relationship between buy-one-get-one-free and consumer's brand switching.

H9a: There is a relationship between price discount and consumer's brand switching.

Hypothesis 10

Hl00 : There is no relationship between buy-one-get-one-free and consumer's brand loyalty.

HlOa: There is a relationship between buy-one-get-one-free and consumer's brand loyalty.

Hypothesis 11

H11 0 : There is no relationship between buy-one-get-one-free and consumer's stockpiling.

Hlla: There is a relationship between buy-one-get-one-free and consumer's stockpiling.

Hypothesis 12

H120 : There is no relationship between buy-one-get-one-free and consumer's purchase acceleration.

H12a: There is a relationship between buy-one-get-one-free and consumer's purchase acceleration.

48 Group D : Premium and Consumer Behavioral Response

Hypothesis 13

H130 : There is no relationship between premium and consumer's brand switching.

Hl3a: There is a relationship between premium and consumer's brand switching.

Hypothesis 14

H14o: There is no relationship between premium and consumer's brand loyalty.

H14a: There is a relationship between premium and consumer's brand loyalty.

Hypothesis 15

H150 : There is no relationship between premium and consumer's brand stockpiling.

HlSa: There is a relationship between premium and consumer's brand stockpiling.

Hypothesis 16

Hl6o: There is no relationship between premium and consumer's brand purchase acceleration.

Hl6a: There is a relationship between premmm and consumer's brand purchase acceleration.

3.4 Operational of the dependent and independent variables

Davis and Cosenza (1993) stated that before operationalization takes place,

concepts must be defined first. Concepts are abstract ideas generalized from particular

facts. Without concept, there can be no theory.

Zikmund (2000) mentioned that an operational definition gives meaning to a

concept by specifying the activities or operations necessary to measure it.

49 St Gabrie!'s IJbrary, An

The operational definition specified what must be done to measure the concept

under investigation. Operational definition help the researcher specify the rules for

assigning numbers. The values assigned in the measuring process can be manipulated

according to certain mathematical rules. Once the variables of interest have been

identified and defined conceptually, a specific type of scale must be selected. In this

research, the study applies ordinal scale as a level of measurement.

Table 3.1 Operational Definition of Variables

Concept Conceptual Definition Operational Level of Component Measurement Sales Promotional device that provides Customers' level of Ordinal Promotional cents-off saving to consumers upon attractiveness of coupon Tools: redeeming coupon as sales promotion tool. ~Coupon Sales An immediate reduction on the Customers' level of Ordinal I Promotional amount that have to pay on the attractiveness of price Tools: product at the point of purchase discount as sales I Discount promotion tool

Sales A gift or incentive to purchase a Customers' level of Ordinal Promotional particular product at relatively low attractiveness of Tools: cost or free premium as sales Premiums promotion tool Sales Get one more of the product free Customers' level of Ordinal Promotional after purchased attractiveness of buy- Tools: one-get-one-free as sales Buy-one-get- promotion tool one-free Consumer Consumer is induced to purchase a Change in consumers' Interval Behavior brand other than the one that would purchasing behavior Response: have been purchased. response due to offer of Brand sales promotion tools Switching

50 Concept Conceptual Definition Operational Level of Component Measurement Consumer Commitment due to favorable Change in consumers' Interval Behavior attitudes learned from past purchase. purchasing behavior Response: response due to offer of Brand Loyalty sales promotion tools

Consumer Tendency to purchase more quantity Change in consumers' Interval Behavior of goods than normally required due purchasing behavior Response: to motivation of sales promotion response due to offer of Stockpiling sales promotion tools Consumer A consumer's purchase timing or Change in consumers' Interval Behavior ' purchase quantity is influenced by purchasing behavior Response: promotion activities response due to offer of Purchase sales promotion tools acceleration Demographic Sex identification of one person. Male or Female Nominal Factor: Gender Demographic The period of time a person has During oflife specific to Ratio Factor: lived. one person. Ages Demographic The amount of money or its Individual average Ratio Factor: equivalent one received during a income per month Income period of time in exchange for labor or services Demographic An activity that serves as one's The career of the person Nominal Factor: regular source of livelihood. Occupation Demographic The knowledge or skill level one Individual highest Nominal Factor: obtained by a learning process education level Educational through formal instruction at a Level school or college

51 Chapter 4

Research Methodology

This chapter provides an overview of methodology that have been used in this research. Methods and instruments are in the first section. Target population, sample unit, sample size, sample procedures and sampling plan are in the :Second section. The

pretest, collection of data and statistical treatment of data are in the third, forth, and fifth section respectively.

4.1 Research Methodology

4.1.1 Research Method

This research study used Sample Survey as a research method. Survey is the

method to gather the information fr6m a sample of people by use of questionnaire for

the primary purpose of describing or predicting some phenomena. Sample survey

method indicates that the purpose of the contacting sample respondents is to obtain

information about the population.

4.2 Respondents and Sampling Procedures

4.2.1 Target population

Zikmund (1997) stated that the target population is the specific complete group

relevant to the research project. The target population of this research is the people

who go shopping at Tops Supermarket in Bangkok.

52 4.2.2 Sample Unit

Zikmund (1997) stated that sample unit is a single element or group element subject to selection in the sample. (In this study, the sampling unit is the people who are shopping at Tops Supermarket in Bangkok. The researcher collected data during promotion date on April 2003 by launching questionnaires in Bangkok.

4.2.3 Sample Size

The researcher determined the number ofrespondents by using Anderson's table of sample size. According to table 4.1, the total population of this research is 400 people.

Table 4.1: Theoretical Sample Size for Different type of Study

Required sample for Tolerable Error

Size of Population 5% 4% 3% 2%

100 79 85 91 96

500 217 272 340 413

1,000 277 375 516 705

5,000 356 535 897 1,622

50,000 381 593 1,044 2,290

100,000 382 596 1,055 2,344

1,000,000 384 599 1,065 2,344

25,000,000 384 600 1,067 2,400

Source: Anderson, G. ( 1996), Fundamentals of educational research, 1st ed.,London:

Palmer Pr., 1996, pp.202.

53 As number of people who shopping at Tops Supermarket Is not available, therefore, based on the table the sample size should be 384.

4.2.4 Sampling procedures: Non-probability sampling

Churchill (1996) mentioned that Non-probability sample is a sample that relies on personal judgment somewhere in the element selection process and therefore prohibits estimating the probability that any population element will be included in the sample

Zikmund (1997) stated that non-probability sampling is defined as a sampling technique in which units of the sample are selected on the basis of personal judgement, or convenience; the probability of any particular member of the population being chosen is unknown. Moreover, convenient sampling refers to sampling by obtaining units or people who are most conveniently available.

4.2.5 Sampling plan

This research used a survey technique and the questionnaires to distribute to the

400 respondents who experience going to purchase at Tops Supermarket in Bangkok.

The way of distributing the questionnaires to respondents was face-to-face communication because it was a two-way communication between respondents and researchers. This approach is useful for the researchers in that they could ask the respondents to fill up the questionnaire, which was handed to them. The face-to-face method reduced the error of the communication between the researchers and the

54 respondents. Therefore, the researcher could describe the unclear question to the respondents immediately.

4.3 Research Instrument: Structured Questionnaire

The research instrument used for collecting primary data is self-administered questionnaire, which is the most flexible of data collection methods. Farm of questions is closed-ended which helped respondents to answer quickly with ease form among several alternative responses. It consists of questions to be asked to respondents, who have experience go shopping at Tops Supermarket in Bangkok.

The questionnaires are divided in to 4 parts as follows:

Part 1: This part is screening questions. It is designed to screen the person

who experienced about going to purchase at Tops Supermarket with sales promotion.

Dichotomous method is used in this part.

Part 2: The Demographic questionnaire 1s designed to identify personal

characteristics and information of respondents to provide indication of gender, age,

education level, occupation and income. Multiple choice is used in this part.

Part 3: This part is a request for information on consumer behavioral response

to promotion tools of Tops Supermarket. This part consists of 3 sections and each

sections divides into 4 questions. Likert Scale method is used.

Part 4: This part is a request for information about the attractiveness of sales

promotion tool effect to your purchasing.

55 4.4 Pretest

Churchill (J 996) claimed that the questionnaire pretest is vital. It is the use of questionnaire on a trial basis in a small pilot study to determine how reliable and valid the questionnaire is. In the pretest, the interviewer can see whether some questions seen confusing or produce resistance or hesitancy among respondents for one reason or another.

Zikmund (J 996) mentioned that pretests are trial with a group of respondents for the purpose of detecting problems in the questionnaire instructions or design. In a pretest, the researcher looks for evidence of ambiguous questions and respondent misunderstanding, whether the questions mean the same thing to all respondents, the point at which respondent's fatigue sets in, places in the questionnaire where a respondent is likely to terminate, and other considerations. Editing the questionnaires during the pretest stage can prove very valuable. Therefore, this study ·is necessary to do the pretest, which is conducted among respondents similar to those who will be used in the actual study.

Donald and Pamela (2001) mentioned that a pilot test is conducted to detect weaknesses in design and instrumentation and to provide proxy data for selection of probability sample. It should, therefore, draw subjects form the target population and simulate the procedures and protocols that have been designated for data collection.

The size of the pilot group may range from 25 to 100 subjects, depending on the method to be tested, but the respondents do not have to be statistically selected.

Vanichbuncha (2001) stated that in order to conduct the pilot survey or pretest, the number of respondents should be at least 25 samples. Therefore, the researcher

56 examines this questionnaire by trying out the questionnaire with 30 respondents. After pretesting the questionnaire, for some questions wordings improved, some that do not provide adequate information were eliminated and some that caused problems were revised.

In order to find out reliability, the over all questions in the questionnaire are processed in The Statistical Package for Social Science (SPSS) by using the

Cronbach's Coefficient Alpha Scale. After examining the questionnaire, the result of the reliability analysis is in the table.

Table 4.2 Reliability results

Term Cronbach Alpha Coefficient Behavioral Response to Coupon 0.7405 Behavioral Response to Price Discount 0.7452 Behavioral Response to Premiums 0.7288 Behavioral Response to Buy-one-get-one-free 0.8130

Sekaran (1992) stated that if the reliability value is at least 0.6, it is considered reliable. As the result of reliability analysis from the study, the coefficient alpha scores are higher than 0.6 in all parts of the questionnaire, so it is considered reliable. The reliability analysis resulting from the pilot study of the questionnaire indicates that this research is sufficient for examining this research's hypotheses.

57 4.5 Collection of Data

According to the research problem, the data are needed to accomplish the purpose of the research. The procedure of gathering data is showed below.

Primary Data

Malhotra (2000) mentioned that data originated by the researcher for the specific purpose of addressing the research problem. Obtaining primary data can be expensive and time-consuming. Data is collected and assembled specifically for the purpose of investigation at hand. In order to achieve this study, survey by self administered questionnaire is conducted to gather information.

Secondary data

Malholtra (2000) stated that the secondary information is any data originally generated for some purpose other than present research objectives. A search for secondary information generally follows the statement of objectives. These data can be quickly and expensively obtained. Most of the secondary data used in this research is obtained from past empirical studies, textbooks relating to the study, newspaper, article, newspaper and, journals.

4.6 Statistical Treatment of Data

Once the necessary data are collected, the data are analyzed and summarized in a readable and easily interpretable form. The Statistical Package for Social Science

(SPSS) is utilized to summarize the data where needed. After collecting the data from

58 400 questionnaires, the data are coded into symbolic form that is used in SPSS software. The researcher uses SPSS software for window for data processing. The form of data presentation from these procedures would also be presented in an easily interpretable format. SPSS program is used or both descriptive analysis and test of hypotheses.

Descriptive Analysis

Kinnear and James (1991) stated that descriptive statistic is a branch of statistic that provides researchers with summary measures for the data in their samples to provide summary measures of the data contained in all the elements of a sample.

Descriptive statistics consists of the frequency and percentage in order to describe each variable that is associated with respondent data. For this procedure is used to analyze the demographic characteristics and consumer's purchase decision.

Pearson's Product Moment Correlation Coefficient

Zikmund (1997) explained that Pearson's product moment correlation coefficient can be used to a measure of a correlation of two Discrete Random

Variables (DRVs). First of all the data that one wishes to compute Pearson's Product

Moment Correlation Coefficient from must satisfy a set of conditions. Therefore in this study, Interval scale was used. Interval scale is the most suitable scale for Pearson's

Product Moment Correlation Coefficient both when data sets follow the normal distribution, all individuals must be selected at convenient sampling from the population, and all individuals must have equal chances of being selected.

59 Zikmund (1997) proposed to model of Pearson's Product Moment Correlation

Coefficient as follow:

i:(~-X~~-Y) r = r = --;:=i==I======xy yx ~(~-X)2 o;-Y)2

Where r xy= the correlation coefficient between x and y

n = number of paired observations

X =the individual' s score on variable A

Y =the individual' s score on variable B

Table 4.3 r-value and measure the strength of association

Correlation (r) Interpret 1 Perfect positive linear association 0 No linear association -1 Perfect negative linear association 0.90 to 0.99 Very high positive correlation 0.70 to 0.89 High positive correlation 0.4 to 0.69 Medium positive correlation 0 to 0.39 Low positive correlation 0 to -0.39 Low negative correlation -0.40 to -0.69 Medium negative correlation -0. 70 to -0.89 High negative correlation -0.90 to -0.99 Very high negative correlation

Source: http://www.bath.ac.uk/~ma2pm/PPMCC.html/date visited 30/04/2004)

60 According to Zikmund (1997), the correlation coefficient (r) range from + 1.0 to -1.0. If the value of r is 1.0, it means a perfect positive linear (straight-line) relationship. If the value ofr is -1. 0, it mean a perfect negative linear relationship or a perfect inverse relationship is indicated. No correlation is indicated if r = 0. A correlation coefficient indicates both the magnitude of the linear relationship and the direction of the relationship. Table 4.4 summarizes the r value and measurement the strength of association

Summary of the analytic methods used in this research

In this study, at first the primary data that were collected from 400 respondents will be coded and analyzed with SPSS software. It is divided into 2 parts.

1. Descriptive Analysis : The data were analyzed into percentage,

Mean-X, and SD. in order to describe the characteristic of

demographic data in questionnaire part 2

2. Pearson Correlation : technique was used to test the relationship

between sales promotions of Tops Supermarket and consumer

behavior in questionnaire part 3.

61 Chapter 5

Data Analysis

This chapter presents the results from data analysis and interpretation of all gathered data. This chapter is divided into two sections. The first section was descriptive statistic that summarizes data of respondents' demographic profiles and their and their characteristics. The second section was inferential statistics that includes hypothesis testing between independent and dependent variables.

5.1 Descriptive Analysis

Zikmund (1997) stated that descriptive analysis is the transformation of the raw data into a form that will make them easy to understand and interpret. It comprised of frequency and percentage in each category.

In this part, frequency analysis is used to describe the demographic of respondents which consist of gender, age, income, occupation, education. Mean and standard deviation are used to explain the attractiveness of sales promotion tools.

62 Demographic characteristics of respondents

Table 5.1: Frequency Distribution of Gender of the respondents

Gender Frequency Percent Valid Cumulative Percent Percent Valid Male 112 28.0 28.0 28.0 Female 288 72.0 72.0 100.0 Total 400 100.0 100.0

Table 5.1 shows the gender ofrespondents of this research. It composed of 112 male or 28 % of respondents and 288 female or 72 % of respondents. The majority of the respondents is females.

Table 5.2: Frequency Distribution of Age of the respondents

Age Frequency Percent Below or equal to 20 years 21 5.3 21-30 years 241 60.3 31-40 years 79 19.8 41-50 years 30 7.5 Over 50 years 29 7.3 Mean= 30.56 Total 400 100.0

Table 5.2 presents the age category of the respondents who responded to the questionnaires. The average age of respondent is 30.56 years old. The majority of respondents compose of 400 respondents who are in between 21-30 years counted for

241 respondents or 60.3 % of the total respondents. While 79 respondents counted for

63 19.8 % are in between 31-40 years old. 30 respondents counted for 7.5 % are in between 41-50 years old. 29 respondents counted for 7.3 % are over 50 years old.

Finally, 21 respondents counted for 5 .3 % are below 20 years old.

Table 5.3: Frequency Distribution oflncome Level of the respondents

Income Frequency Percent Below or equal to 5,000 41 10.3 baht 143 35.8 5,000-20,000 baht 112 28.0 20,001-40,000 baht 57 14.3 40,001-60,000 baht 47 11.8 Over 60,000 baht Mean= 34,007 Total 400 100.0

Table 5.3 shows that the highest range of income level is between 5,000 to

20,000 Baht counted for 35.8 % or 143 respondents. The rest are 20,001 to 40,000

Baht counted for 28 % or 112 respondents, between 40,001 to 60,000 Baht counted for

14.3 % or 57 respondents, over 60,000 Baht counted for 11.8 % or 47 respondents, and below 5,000 Baht counted for 10.3 % or 41 respondents, respectively.

64 Table 5.4: Frequency Distribution of Occupation of the respondents

Occupation Frequency Percent Valid Percent Cumulative Percent Valid Student 65 16.3 16.3 16.3 Housewife 51 12.8 12.8 29.0 Employee 162 40.5 40.5 69.5 Business Owner 32 8.0 8.0 77.5 Others 90 22.5 22.5 100.0 Total 400 100.0 100.0

Table 5.4 presents that the majority of respondents' occupation are employee, counted for 40.5 % or 162 respondents. Whereas, the other groups of respondents which are government employees, counted for 22.5 % or 90 respondents. The remaining are students, counted for 16.3 % or 65 respondents, housewife 12.8 % or 51 respondents, business owner 8% or 32 respondents, respectively.

Table 5.5: Frequency Distribution of Level of Education of the respondents

Education Frequency Percent Valid Percent Cumulative Percent Valid Primaiy 11 2.8 2.8 2.8 Secondaiy 19 4.8 4.8 7.5 Diploma 19 4.8 4.8 12.3 Bachelor 221 55.3 55.3 67.5 Higher than 130 32.5 32.5 100.0 Bachelor Total 400 100.0 100.0

65 According to table 5.5, the majority of respondent's education level is Bachelor degree, counted for 55.3 % or 221 respondents. The minority is higher than Bachelor degree, counted for 32.5 % or 130 respondents. The remaining are secondary level, counted for 4.8 % or 19 respondents. Similarly to secondary level, diploma counted for

4. 8% or 19 respondents. Finally, primary level counted for 2. 8% or 11 respondents, respectively.

The attractiveness of sales promotion tools and to consumer's purchasing behavior.

To analyze the attractiveness of sales promotion tools to consumer's purchasing, it is divided into 5 levels which are always, often, sometimes, rarely, and never. The analysis presents the mean and standard deviation as following.

Table 5.6: Mean and Standard deviation of sales promotion tools

Descriptive Statistics N Minimum Maximum Mean Std. Deviation coupon 400 1 5 2.54 1.14 discount 400 2 5 4.08 .73 buy1 get1 free 400 1 5 3.52 1.01 premium 400 1 5 3.36 1.05 Valid N (listwise) 400

Table 5.6 shows the result of attractiveness of sales promotion tools used by

Tops Supermarket. The Mean of coupon is 2.54, price discount is 4.08, the premium is

66 3.36, and buy-one-get-one-free is 3.52, respectively. Most attractive sales promotion tool is price discount.

5.2 Test of the Hypotheses

Zikmund 1997) mentioned that inferential analysis is used to make inference or judgments about a population on the basis of a sample. The theory is principally based on probabilities and logic in random sampling. The Statistical Package for Social Science (SPSS) is utilized to summarize the

data when needed. Hypothesis statements are operationalized into two logical

statement that is Null Hypothesis State and Alternative Hypothesis State. The

Hypotheses stated in Chapter 3 divided into four groups which are Group A, Group B,

Group C, and Group D.

Group A: Coupon and Consumer Behavioral Response

Hypothesis 1

H1 0 : There is no relationship between coupon and consumer's brand switching.

Hla: There is a relationship between coupon and consumer's brand switching.

Table 5. 7: Pearson Correlation test between coupon and consumer's brand switching

Correlations coupon brand switching coupon Pearson Correlation 1.000 .335* Sig. (2-tailed) .000 N 400 400 brand switching Pearson Correlation .335* 1.000 Sig. (2-tailed) .000 N 400 400 ** Correlation is significant at the 0.01 level (2-tailed).

67 According to table 5. 7, correlation test shows the significant value of .000, which is less than .01. Therefore, the null hypothesis is rejected. It means that there is a relationship between coupon and consumer's brand switching. Pearson Correlation's r value is 0.335 means that there is low positive relationship between coupon and consumer's brand switching at 0.335.

Hypothesis 2

H2o: There is no relationship between coupon and consumer's brand loyalty.

H2a: There is a relationship between coupon and consumer's brand loyalty.

Table 5.8: Pearson Correlation test between coupon and consumer's brand loyalty

Correlations coupon brand loyalty coupon Pearson Correlation 1.000 .138* Sig. (2-tailed) .006 N 400 400 brand loyalty Pearson Correlation .183* 1.000 Sig. (2-tailed) .006 N 400 400 ** Correlation is significant at the 0.01 level (2-tailed).

According to table 5.8, correlation test shows the significant value of .006, which is less than .01. Therefore, the null hypothesis was rejected. It means that there is a relationship between coupon and consumer's brand loyalty at the .01 significant level. Pearson Correlation's r value is 0.138 means that there is a low positive relationship between coupon and consumer's brand loyalty at 0.13 8.

68 Hypothesis 3

H30 : There is no relationship between coupon and consumer's stockpiling.

H3a: There is a relationship between coupon and consumer's stockpiling.

Table 5.9: Pearson Correlation test between coupon and consumer's stockpiling

Correlations coupon stockpiling coupon Pearson Correlation 1.000 .420* Sig. (2-tailed) .000 N 400 400 stockpiling Pearson Correlation .420* 1.000 Sig. (2-tailed) .000 N 400 400 ** Correlation is significant at the 0.01 level (2-tailed).

According to table 5.9, correlation test shows the significant value of .000, which is less than .01. Therefore, the null hypothesis was rejected. It means that there is a relationship between coupon and consumer's stockpiling at the .01 significant level. Pearson Correlation's r value is 0.420 means that there is a medium positive relationship between coupon and consumer's stockpiling at 0.420.

Hypothesis 4

H40 : There is no relationship between coupon and consumer's purchase acceleration.

H4a: There is a relationship between coupon and consumer's purchase acceleration.

69 St. Gabriefs Library, Au

Table 5.10: Pearson Correlation test between coupon and consumer's purchase acceleration

Correlations

coupon purchase acceleration coupon Pearson Correlation 1.000 .468* Sig. (2-tailed) .000 N 400 400 purchase acceleration Pearson Correlation .468* 1.000 Sig. (2-tailed) .000 N 400 400 ** Correlation is significant at the 0.01 level (2-tailed)

According to table 5.10, correlation test shows the significant value of .000, which is less than .01. Therefore, the null hypothesis was rejected. It means that there is a relationship between coupon and consumer's purchase acceleration at the .01 significant level. Pearson Correlation's r value is 0.468 means that there is a medium positive relationship between coupon and consumer's purchase acceleration at 0.468.

Group B: Price Discount and Consumer Behavioral Response

Hypothesis 5

H5o: There 1s no relationship between pnce discount and consumer's brand switching.

H5a: There is a relationship between price discount and consumer's brand switching.

70 Table 5.11: Pearson Correlation test between price discount and consumer's brand switching

Correlations discount brand switching discount Pearson Correlation 1.000 .465* Sig. (2-tailed) .000 N 400 400 brand switching Pearson Correlation .465* 1.000 Sig. (2-tailed) .000 N 400 400 ** Correlation is significant at the 0.01 level (2-tailed).

According to table 5.11, correlation test shows the significant value of .000, which is less than .001. Therefore, the null hypothesis was rejected. It means that there is a relationship between price discount and consumer's brand switching at the .001 significant level. Pearson Correlation's r value is 0.465 means that there is a medium positive relationship between price discount and consumer's brand switching at 0.465.

Hypothesis 6

H6o: There is no relationship between price discount and consumer's brand loyalty.

H6a: There is a relationship between price discount and consumer's brand loyalty.

71 Table 5.12: Pearson Correlation test between price discount and consumer's brand loyalty

Correlations

discount brand loyalty discount Pearson Correlation 1.000 .048 Sig. (2-tailed) .341 N 400 400 brand loyalty Pearson Correlation .048 1.000 Sig. (2-tailed) .341 N 400 400

According to table 5.12, correlation test shows the significant value of .341, which is less than .05. Therefore, the null hypothesis was accepted. It means that there is no relationship between price discount and consumer's brand loyalty at the .05 significant level.

Hypothesis 7

H7 o: There is no relationship between price discount and consumer's stockpiling.

H7a: There is a relationship between price discount and consumer's stockpiling.

72 Table 5.13: Pearson Correlation test between price discount and consumer's stockpiling

Correlations discount stockpiling discount Pearson Correlation 1.000 .440* Sig. (2-tailed) .000 N 400 400 stockpiling Pearson Correlation .440* 1.000 Sig. (2-tailed) .000 N 400 400 ** Correlation is significant at the 0.01 level (2-tailed).

According to table 5.13, correlation test shows the significant value of .000, which is less than .01. Therefore, the null hypothesis was rejected. It means that there is a relationship between price discount and consumer's stockpiling at the .01 significant level. Pearson Correlation's r value is 0.440 means that there is a medium positive relationship between price discount and consumer's stockpiling at 0.440.

HypothesisS

H80 : There is no relationship between pnce discount and consumer's purchase acceleration.

HSa: There 1s a relationship between pnce discount and consumer's purchase acceleration.

73 Table 5.14: Pearson Correlation test between price discount and consumer's purchase acceleration

Correlations discount purchase acceleration discount Pearson Correlation 1.000 .430* Sig. (2-tailed) .000 N 400 400 purchase acceleration Pearson Correlation .430* 1.000 Sig. (2-tailed) .000 N 400 400 ** Correlation is significant at the 0.01 level (2-tailed).

According to table 5.14, correlation test shows the significant value of .000, which is less than .01. Therefore, the null hypothesis was rejected. It means that there is a relationship between price discount and consumer's purchase acceleration at the

.01 significant level. Pearson Correlation's r value is 0.430 means that there is a medium positive relationship between price discount and consumer's purchase acceleration at 0.430.

Group C : Buy-one-get-one-free and Consumer Behavioral Response

Hypothesis 9

H9o: There is no relationship between buy-one-get-one-free and consumer's brand switching.

H9a: There ts a relationship between buy-one-get-one-free and consumer's brand switching.

74 Table 5.15: Pearson Correlation test between buy-one-get-one-free and consumer's brand switching

Correlations buy1get1 free brand switching buy1 get1free Pearson Correlation 1.000 .304* Sig. (2-tailed) .000 N 400 400 brand switching Pearson Correlation .304* 1.000 Sig. (2-tailed) .000 N 400 400 ** Correlation 1s significant at the 0.01 level (2-tailed).

According to table 5.15, correlation test shows the significant value of .000, which is less than .01. Therefore, the null hypothesis was rejected. It means that there is a relationship between buy-one-get-one-free and consumer's brand switching at the

.01 significant level. Pearson Correlation's r value is 0.304 means that there is a low positive relationship between buy-one-get-one-free and consumer's brand switching at

0.304.

Hypothesis 10

HlOo: There is no relationship between buy-one-get-one-free and consumer's brand loyalty.

HlOa: There is a relationship between buy-one-get-one-free and consumer's brand loyalty.

75 Table 5.16: Pearson Correlation test between buy-one-get-one-free and consumer's brand loyalty

Correlations buy1 get1 free brand loyalty buy1 get1 free Pearson Correlation 1.000 .139* Sig. (2-tailed) .005 N 400 400 Brand loyalty Pearson Correlation .139* 1.000 Sig. (2-tailed) .005 N 400 400 ** Correlation is significant at the 0.01 level (2-tailed).

According to table 5.16, correlation test shows the significant value of .005, which is less than .01. Therefore, the null hypothesis was rejected. It means that there is a relationship between buy-one-get-one-free and consumer's brand loyalty at the .01 significant level. Pearson Correlation's r value is 0.139 means that there is a low positive relationship between buy-one-get-one-free and consumer's brand loyalty at

0.139.

Hypothesis 11

Hl lo: There IS no relationship between buy-one-get-one-free and consumer's stockpiling.

Hlla: There IS a relationship between buy-one-get-one-free and consumer's stockpiling.

76 Table 5.17: Pearson Correlation test between buy-one-get-one-free and consumer's stockpiling

Correlations buy1get1free stockpiling buy1 get1 free Pearson Correlation 1.000 .518* Sig. (2-tailed) .000 N 400 400 stockpiling Pearson Correlation .518* 1.000 Sig. (2-tailed) .000 N 400 400 ** Correlation is significant at the 0.01 level (2-tailed).

According to table 5.17, correlation test shows the significant value of .000, which is less than .01. Therefore, the null hypothesis was rejected. It means that there is a relationship between buy-one-get..:one-free and consumer's stockpiling at the .01 significant level. Pearson Correlation's r value is 0.518 means that there is a medium positive relationship between buy-one-get-one-free and consumer's stockpiling at

0.518.

Hypothesis 12

H12o: There is no relationship between buy-one-get-one-free and consumer's purchase acceleration.

H12a: There is a relationship between buy-one-get-one-free and consumer's purchase acceleration.

77 Table 5.18: Pearson Correlation test between buy-one-get-one-free and consumer's purchase acceleration

Correlations buy1 get1 free purchase acceleration buy1 get1 free Pearson Correlation 1.000 .462* Sig. (2-tailed) .000 N 400 400 purchase acceleration Pearson Correlation .462* 1.000 Sig. (2-tailed) .000 N 400 400 ** Correlation 1s significant at the 0.01 level (2-tailed).

According to table 5.18, correlation test shows the significant value of .000, which is less than .01. Therefore, the null hypothesis was rejected. It means that there is a relationship between buy-one-get-one-free and consumer's purchase acceleration at the .01 significant level. Pearson Correlation's r value is 0.462 means that there is a positive relationship between buy-one-get-one-free and consumer's purchase acceleration at 0.462.

Group D : Premium and Consumer Behavioral Response

Hypothesis 13

H130 : There is no relationship between premium and consumer's brand switching.

Hl3a: There is a relationship between premium and consumer's brand switching.

78 Table 5.19: Pearson Correlation test between premmm and consumer's brand switching

Correlations premium brand switching premium Pearson Correlation 1.000 .322* Sig. (2-tailed) .000 N 400 400

brand switching Pearson Correlation .~2* 1.000 Sig. (2-tailed) .000 N 400 400 ** Correlation is significant at the 0.01 level (2-tailed).

According to table 5.19, correlation test shows the significant value of .000, which is less than .01. Therefore, the null hypothesis was rejected. It means that there is a relationship between premium and consumer's brand switching at the .01 significant level. Pearson Correlation's r value is 0.322 means that there is a positive relationship between premium and consumer's brand switching at 0.322.

Hypothesis 14

H14o: There is no relationship between premium and consumer's brand loyalty.

H14a: There is a relationship between premium and consumer's brand loyalty.

79 Table 5.20: Pearson Correlation test between premium and consumer's brand loyalty

Correlations premium brand loyalty premium Pearson Correlation 1.000 -.128* Sig. (2-tailed) .010 N 400 400 Brand loyalty Pearson Correlation -.128* 1.000 Sig. (2-tailed) .010 N 400 400 * Correlation is significant at the 0.05 level (2-tailed).

According to table 5.20, correlation test shows the significant value of .010, which is less than .05. Therefore, the null hypothesis was rejected. It means that there is a relationship between premium and consumer's brand loyalty at the .01 significant level. Pearson Correlation's r value is -0.128 means that there is a negative relationship between premium and consumer's brand loyalty at -0.128.

Hypothesis 15

H15o: There is no relationship between premium and consumer's brand stockpiling.

H15a: There is a relationship between premium and consumer's brand stockpiling.

Table 5.21: Pearson Correlation test between premium and consumer's stockpiling

Correlations premium stockpiling Premium Pearson Correlation 1.000 .119* Sig. (2-tailed) .018 N 400 400 stockpiling Pearson Correlation .119* 1.000 Sig. (2-tailed) .018 L N 400 400 * Correlation 1s significant at the 0.05 level (2-tailed).

80 According to table 5 .21, correlation test shows the significant value of .018, which is less than .05. Therefore, the null hypothesis was rejected. It means that there is a relationship between premium and consumer's stockpiling at the . 01 significant level. Pearson Correlation's r value is 0.119 means that there is a low positive relationship between premium and consumer's stockpiling at 0.119.

Hypothesis 16

H16o: There 1s no relationship between premmm and consumer's brand purchase acceleration.

H16a: There 1s a relationship between premmm and consumer's brand purchase acceleration.

Table 5.22: Pearson Correlation test between prermum and consumer's purchase acceleration

Correlations premium purchase acceleration premium Pearson Correlation 1.000 .165* Sig. (2-tailed) .001 N 400 400 purchase acceleration Pearson Correlation .165* 1.000 Sig. (2-tailed) .001 N 400 400 ** Correlation is significant at the 0.01 level (2-tailed).

According to table 5.22, correlation test shows the significant value of .001.

Therefore, the null hypothesis was rejected. It means that there is a relationship between premium and consumer's purchase acceleration at the . 01 significant level.

81 Pearson Correlation's r value is 0.165 means that there is a low positive relationship between premium and consumer's purchase acceleration at 0.165.

82 St. Gabriel's Library, Au

Discussion of Results

The result of the research indicates that coupon has a positive relationship to all behavioral response in purchasing which are brand switching, brand loyalty, stockpiling, and purchase acceleration. For discount, it presented that there are positive relationship of price discount with brand switching, stockpiling, and purchase acceleration. Only brand loyalty shows that there is no relationship with price discount.

It shows that customers prefer to switch to the other brand anytime when they are offered the discount. Similar to coupon, premium has a positive relationship with all consumer behavioral response. The last one is buy-one-get-one-free, it has a positive relationship with consumer behavioral response. Only brand loyalty presents the low negative relationship with buy-one-get-one-free. As well as the price discount, it indicates that majority of customers prefer to switch brand when they are offered buy­ one-get-one-free. However, most of customers stockpile and they are accelerated in purchasing when they are offered coupon, price discount, premium, and buy-one-get­ one-free.

83 Chapter 6

Summary, Conclusion and Recommendations

This chapter presents summary, conclusion and recommendations based on the results of the study. It is divided into four sections. The first section summarizes the conclusion of demographic characteristics. In the second section, conclusion of hypothesis will be discussed. The third section offers the conclusion based on the findings of the study. Finally, suggestions are made for further study.

6.1 Summary of Findings

6.1.1 Characteristics of Respondents

The researcher has selected a sample size of 400 tn order to collect the necessary information.

Gender: Among 400 respondents, 112 are male while 288 are female that

represent 28.0% and 72.0% respectively. The majority of the

respondents in this research are male while females are the

minority.

Age: The average respondents' age is counted for 30.56 years old. The

majority lies between the ages of 21-30 years old, counted for

60.3 %. The minority is between 31-40 years, counted for 19.8 %

and the last rank is below the 20 years old, counted for 5.3%.

Income: For Income, The majority of respondent's income is also

between 5,000-20,000 Baht, counted for 35.8 %. The minority

84 ranges between 20,001-40,000 Baht, counted for 28.0 %, and the

last rank below 5,000 Baht, counted for 10.3 %.

Occupation: The majority ofrespondents are employees, counted for 40.5 %.

The minority of them is government employees, counted for

22.5 %, the last rank is business owner, counted for 8%.

Education Level: 55.3% of them have a Bachelor Degree. The minority of the

respondents holding the degree higher than Bachelor degree

counted for 32.5 %, and the last rank is primary level, counted

for 2.8%.

85 Table 6.1: Summary of Characteristics of Respondents

...... ···················· Minority (percentage)

Female= 72.0% Male= 28.0%

Age 21-30 years= 60.3% 31-40 years= 19.8%

Bht.5,000-Bht20,000 = Below Bht5,000 = 10.3% Income 35.8.0%

Primary Level= 2.8% 55.3%

86 6.2 Hypothesis Testing

6.2.1 Summary of Hypothesis Testing Results

Table 6.2: Summary of Relationship between Independent and Dependent Variable

Statistical Significant Correlation Result Test Value (alpha) Coefficient

0.335 relationship between coupon Pearson 0.000 Reject Ho and consumer's brand Positive switching. Correlation ......

0.138 relationship between coupon Pearson Reject Ho and consumer's brand Positive Correlation Correlation

0.420 Pearson relationship between coupon Reject Ho

87 ...... Statistical Significant Hypothesis Result Test Value (alpha) Coefficient

.•..•....•...... 0.440 relationship between price Pearson 0.000 Reject Ho discount and consumer's Correlation Positive stockpiling. Correlation

...... ••••...... H8o:There is no relationship 0.430 between price discount and Pearson 0.000 Reject Ho consumer's purchase Positive acceleration Correlation ...... H9o: There is no relationship between buy- 0.304 Pearson one-get-one-free and 0.000 Reject Ho Positive consumer's brand Correlation

0.139 relationship between buy- Pearson 0.008 Reject Ho one-get-one-free and Correlation Positive consumer's brand loyalty. Correlation

HI lo: There is no 0.518 relationship between buy- Pearson 0.000 Reject Ho one-get-one-free and Correlation Positive consumer's stockpiling. Correlation ......

relationship between buy- 0.462 Pearson one-get-one-free and 0.000 Reject Ho Positive consumer's purchase Correlation acceleration

88 Test Value (alpha)

············································· 0.322 relationship between Pearson Reject 0.000 premiums and consumer's Correlation Positive Ho brand switching. Correlation

·············································

Pearson -0.128 relationship between Reject 0.010 premiums and consumer's Negative Ho Correlation

Pearson 0.119 relationship between Reject 0.018 premiums and consumer's Positive Ho stockpiling. Correlation

Pearson 0.165 relationship between Reject 0.001 premiums and consumer's Positive Ho purchase acceleration Correlation

89 6.2.2 Elaboration of Hypothesis Results

6.2.2.1 Relationship between coupon and consumer's brand switching

According to the test, there was significant relationship between coupon and consumer's brand switching. The results of hypothesis testing stated the significance value less than 0.01, Pearson Correlation's r value is 0.335 which is positive relationship. Therefore the alternative hypothesis (Hal) was accepted and null hypothesis (Hol) was rejected. The Pearson Correlation's r value is 0.335 shows it has a low positive correlation between coupon and consumer's brand switching. It means the more Tops Supermarket use coupon as a sale promotion, the more customer switch from one brand to other brand.

6.2.2.2 Relationship between coupon and consumer's brand loyalty

According to the test, there was significant relationship between coupon and consumer's brand loyalty. The results of hypothesis testing stated the significance value less than 0.01, Pearson Correlation's r value is 0.138 which is positive relationship. Therefore the alternative hypothesis (Ha2) was accepted and null hypothesis (Ho2) was rejected. The Pearson Correlation's r value is 0.138 shows it has a low positive correlation between coupon and consumer's brand loyalty. It means the more Tops Supermarket use coupon as a sale promotion, the more customer has loyalty toward Tops Supermarket's products.

6.2.2.3 Relationship between coupon and consumer's stockpiling

According to the test, there was significant relationship between coupon and consumer's stockpiling. The results of hypothesis testing stated the significance value

90 less than 0.01, Pearson Correlation is 0.420 which is positive relationship. Therefore the alternative hypothesis (Ha3) was accepted and null hypothesis (Ho3) was rejected.

The Pearson Correlation's r value is 0.420 shows it has a medium positive correlation between coupon and consumer's stockpiling. It means the more Tops Supermarket use coupon as a sale promotion, the more customer buy more quantities of the products.

6.2.2.4 Relationship between coupon and consumer's purchase acceleration

According to the test, there was significant relationship between coupon and consumer's purchase acceleration. The results of hypothesis testing stated the significance value less than 0.01, Pearson Correlation is 0.468 which is positive relationship. Therefore the alternative hypothesis (Ha4) was accepted and null hypothesis (Ho4) was rejected. The Pearson Correlation's r value is 0.468 shows it has a medium positive correlation between coupon and consumer's purchase acceleration.

It means the more Tops Supermarket use coupon as a sale promotion, the more customer buy the product earlier than planned.

6.2.2.5 Relationship between price discount and consumer's brand switching

According to the test, there was significant relationship between price discount and consumer's brand switching. The results of hypothesis testing stated the significance value less than 0.01, Pearson Correlation is 0.465 which is positive relationship. Therefore the alternative hypothesis (Ha5) was accepted and null hypothesis (Ho5) was rejected. The Pearson Correlation's r value is 0.465 shows it has

a medium positive correlation between price discount and consumer's brand switching.

91 It means the more Tops Supermarket use price discount as a sale promotion, the more customer switch from one brand to other brand.

6.2.2.6 Relationship between price discount and consumer's brand loyalty

According to the test, there was no significant relationship between pnce discount and consumer's brand loyalty. The results of hypothesis testing stated the significance value more than 0.05. The Pearson Correlation's r value is 0.341 shows it does not has relationship between price discount and consumer's brand loyalty. It means that people buy the product because they prefer this product not because of the price discount.

6.2.2.7 Relationship between price discount and consumer's stockpiling

According to the test, there was significant relationship between price discount and consumer's stockpiling. The results of hypothesis testing stated the significance value less than 0.01, Pearson Correlation is 0.440 which is positive relationship.

Therefore the alternative hypothesis (Ha7) was accepted and null hypothesis (Ho7) was rejected. The Pearson Correlation's r value is 0 .440 shows it has a medium positive correlation between price discount and consumer's stockpiling. It means the more Tops Supermarket use price discount as a sale promotion, the more customer buy more quantities of the products.

6.2.2.8 Relationship between price discount and consumer's purchase acceleration

According to the test, there was significant relationship between price discount and consumer's purchase acceleration. The results of hypothesis testing stated the

92 significance value less than 0.01, Pearson Correlation is 0.430 which is positive relationship. Therefore the alternative hypothesis (Ha8) was accepted and null hypothesis (Ho8) was rejected. The Pearson Correlation's r value is 0.430 shows it has a medium positive correlation between price discount and consumer's purchase acceleration. It means the more Tops Supermarket use price discount as a sale promotion, the more customer buy the product earlier than planned.

6.2.2.9 Relationship between buy-one-get-one-free and consumer's brand switching

According to the test, there was significant relationship between buy-one-get­ one-free and consumer's brand switching. The results of hypothesis testing stated the significance value less than 0.01, Pearson Correlation is 0.304 which is positive relationship. Therefore the alternative hypothesis (Ha9) was accepted and null hypothesis (Ho9) was rejected. The Pearson Correlation's r value is 0.304 shows it has a low positive correlation between buy-one-get-one-free and consumer's brand switching. It means the more Tops Supermarket use buy-one-get-one-free as a sale promotion, the more customer switch from one brand to other brand.

6.2.2.10 Relationship between buy-one-get-one-free and consumer's brand loyalty

According to the test, there was significant relationship between buy-one-get­ one-free and consumer's brand loyalty. The results of hypothesis testing stated the significance value less than 0.01, Pearson Correlation is 0.139 which is positive relationship. Therefore the alternative hypothesis (HalO) was accepted and null hypothesis (HolO) was rejected .. The Pearson Correlation's r value is 0.139 shows it

93 has a low positive correlation between coupon and consumer's brand loyalty. It means the more Tops Supermarket use buy-one-get-one-free as a sale promotion, the more customer has loyalty toward Tops Supermarket's products.

6.2.2.11 Relationship between buy-one-get-one-free and consumer's stockpiling

According to the test, there was significant relationship between buy-one-get­ one-free and consumer's stockpiling. The results of hypothesis testing stated the significance value less than 0.01, Pearson Correlation is 0.518 which is positive relationship. Therefore the alternative hypothesis (Hal 1) was accepted and null hypothesis (Ho 11) was rejected. The Pearson Correlation's r value is 0. 518 shows it has a medium positive correlation between buy-one-get-one-free and consumer's stockpiling. It means the more Tops Supermarket use price buy-one-get-one-free as a sale promotion, the more customer buy more quantities of the products.

6.2.2.12 Relationship between buy-one-get-one-free and consumer's purchase acceleration

According to the test, there was significant relationship between buy-one-get­ one-free and consumer's purchase acceleration. The results of hypothesis testing stated the significance value less than 0.01, Pearson Correlation is 0.462 which is positive relationship. Therefore the alternative hypothesis (Hal2) was accepted and null hypothesis (Ho 12) was rejected. The Pearson Correlation's r value is 0.462 shows it has a medium positive correlation between buy-one-get-one-free and consumer's purchase acceleration. It means the more Tops Supermarket use buy-one-get-one-free as a sale promotion, the more customer buy the product earlier than planned.

94 6.2.2.13 Relationship between premium and consumer's brand switching

According to the test, there was significant relationship between premium and consumer's brand switching. The results of hypothesis testing stated the significance value less than 0.01, Pearson Correlation is 0.332 which is positive relationship.

Therefore the alternative hypothesis (Hal3) was accepted and null hypothesis (Ho13) was rejected. The Pearson Correlation's r value is 0.332 shows it has a low positive correlation between premium and consumer's brand switching. It means the more Tops

Supermarket use premium as a sale promotion, the more customer switch from one brand to other brand.

6.2.2.14 Relationship between premium and consumer's brand loyalty

According to the test, there was significant relationship between premium and consumer's brand loyalty. The results of hypothesis testing stated the significance value less than 0.05, Pearson Correlation is -0.128 which is negative relationship.

Therefore the alternative hypothesis (Hal4) was accepted and null hypothesis (Hol4) was rejected. The Pearson Correlation's r value is -0.128 shows it has a low negative correlation between premium and consumer's brand loyalty. It means the more Tops

Supermarket use premium as a sale promotion, the more customer does not has loyalty toward Tops Supermarket's products.

6.2.2.15 Relationship between premium and consumer's stockpiling

According to the test, there was significant relationship between premium and consumer's stockpiling. The results of hypothesis testing stated the significance value less than 0.05, Pearson Correlation is 0.119 which is positive relationship. Therefore

95 St. Gabriel's Library. Au

the alternative hypothesis (Hal 5) was accepted and null hypothesis (Ho 15) was rejected. The Pearson Correlation's r value is 0.119 shows it has a low positive correlation between premium and consumer's stockpiling. It means the more Tops

Supermarket use price premium as a sale promotion, the more customer buy more quantities of the products.

6.2.2.16 Relationship between premium and consumer's purchase acceleration

According to the test, there was significant relationship between premium and consumer's purchase acceleration. The results of hypothesis testing stated the significance value less than 0.01, Pearson Correlation is 0.165 which is positive relationship. Therefore the alternative hypothesis (Hal6) was accepted and null hypothesis (Hol6) was rejected. The Pearson Correlation's r value is 0.165 shows it has a low positive correlation between premium and consumer's purchase acceleration.

It means the more Tops Supermarket use premium as a sale promotion, the more customer buy the product earlier than planned.

96 6.3 Conclusion

The purpose of the research is to investigate the relationship between sales promotion tools of Tops Supermarket and consumer behavioral response in Bangkok area.

It can be reasonably concluded that coupon, buy-one-get-one-free, and premium are low positive related to consumer's brand switching whereas price discount is medium positive related to consumer's brand switching.

Moreover, coupon and buy-one-get-one-free are low positive related to consumer's brand loyalty while it is found that price discount does not related to consumer's brand loyalty. However, premium is low negative related to consumer's brand loyalty.

However, it has seen that coupon, price discount, and buy-one-get-one-free are medium positive related to consumer's stockpiling while premium is low positive related to consumer's stockpiling.

Also, coupon, price discount, and buy-one-get-one-free are medium related to consumer's purchase acceleration whereas premium is low positive related to consumer's purchase acceleration.

Besides, according to characteristics of respondents of Tops Supermarket, it represented that most of respondents are female who are working people age between

21-30 years old with the income range between 5,000-20,000 baht holding Bachelor's degree. This implied that most customers of Tops Supermarket are female are favorable go shopping more than male. When consider from age, occupation, and

97 education level of respondents, it will let marketers know most target are the people who are in young working age which has a medium income level, working as an employee which holding Bachelor degree. Since most of respondents in this group are university graduated so, they will find, learn more information about product before they buy as Skinner (1994) refer that educated consumers will seek more information and demand better-quantity product.

Therefore, there are difference relationship in each sales promotion and consumer behavior. This result will be important for marketer to gain the information to handle with their budget that it will be allocated and also work effectively to compete with other retailers.

98 6.4 Recommendations

According to this study, the result will be beneficial for marketer of Top

Supermarket to study and use the information to allocate budget in sales promotions and also, formulate the strategy for Tops Supermarket in the near future so that it can help them step forward in retail business competition. Moreover, this research will be useful for the researcher who would like to study in this topic in more detail. The recommendations will be presented as follows.

Based on the result, marketers of Tops Supermarket should concern on the proportion of budget. They should allocate budget on price discount which is medium related to consumer's brand switching in case it would like consumer to switch the brand or clear the stock of slow moving product following by coupon, buy-one-get­ one-free, and premium which are low positive related to consumer's brand switching.

Moreover, in case they would like consumer has a loyalty toward the product in

Tops Supermarket, marketers of Tops Supermarket should allocate budget on coupon and buy-one-get-one-free which are positive related to consumer's brand loyalty.

Whereas it is found that price discount does not related to consumer's brand loyalty and premium is low negative related to consumer's brand loyalty. Since, price discount and premium is found that it is quite not practical to attract the customers. Therefore, marketers should find the method to improve their sales promotion in order to gain more loyalty from the customers.

It is also found that coupon, pnce discount, and buy-one-get-one-free are medium positive related to consumer's stockpiling. Therefore, marketers should

99 allocate budget to these three sales promotions in case Tops Supermarket would like to increase their sales volume. However, marketers also should improve premium which is found that it is quite not attractive.

In addition, it is found that coupon, discount, and buy-one-get-one-free are medium positive related to consumer's purchase acceleration. Therefore, in order to stimulate purchasing of customers toward the product, marketers should use these three sales promotions as tools. Moreover, they should allocate the budget on these three sales promotions in the appropriate proportion. However, premium is found to be a low positive to consumer's purchase acceleration, so it should develop the premium that would be attractive.

100 Table 6.3: Summary of Recommendations for Tops Supermarket Hypothesis Findings Recommendations

1 There is low positive • Marketers should not allocate too relationship between coupon much proportion of the budget on and consumer's brand coupon which is low related to switching (Pearson consumer's brand switching correlation's r value at based on the result. 0.335) • Marketers should learn and improve the efficiency of coupon in order to convince the consumer to switch the brand e.g.,Tops Supermarket would like to clear the slow moving products. 2 There is low positive • Marketers should not allocate too relationship between coupon much proportion of the budget in and consumer's brand sales promotion on coupon which loyalty(Pearson correlation's is quite not practical based on the r value at 0.138) result. • Marketers should improve the efficiency of coupon to compatible with consumer's brand loyalty e.g., the product and price in the coupon should be attractive. 3 There is moderate positive • Marketers should allocate budget relationship between coupon to coupon because it has a and consumer's potential to encourage consumer stockpiling(Pearson to stockpiling and also correlation's r value at Marketers should continue 0.420) • improve the interest of coupon e.g., the product, price, and expiration date that will satisfy the customer's need. 4 There is moderate positive • Marketers should pay attention to relationship between coupon allocate budget to coupon and consumer's purchase because there is an enough accel eration(Pearson relationship in order to encourage correlation's r value at the purchasing of consumer who 0.468) may don't have time to compare

101 Hypothesis Findings Recommendations.

shelf prices on the product, but still want to feel they are saving money. 5 There is moderate positive • Marketers should pay attention to relationship between price allocate sales promotion budget discount and consumer's to price discount to attract the brand switching (Pearson customers who concern about the correlation's r value at money they can save by 0.465) shopping around for many alternatives. 6 There is no relationship • Marketers should investigate and between price discount and improve the efficiency of price consumer's brand discount before allocate the loyalty(Pearson correlation's budget to the price discount in r value at 0.048) order to maintain the consumer's brand loyalty e.g., Tops Supermarket would like to attract the customer to buy the house- branded product and maintain the loyalty to product in Tops. 7 There is moderate positive • Marketers should pay attention to relationship between price allocate budget to discount discount and consumer's because it has a potential enough stockpil ing(P earson to stimulate consumer to buy correlation's r value at more quantities of product. 0.440) • Marketers should concern about the period oftime that they handle price discount to each product e.g., marketers should handle the price discount on the beginning of the month that customer will get the salary and spend their money on shopping. 8 There is moderate positive • Marketers should pay attention to relationship between price allocate sales promotion budget discount and consumer's to price discount because it has a purchase potential to encourage consumer acceleration(Pearson to buy the product earlier than correlation's r value at planned. 0.430)

102 Hypothesis Recommendations Findings

9 There is low positive • Marketers should not pay relationship between buy- attention to allocate sales one-get-one-free and promotion budget on buy-one- consumer's brand switching get-one-free because it low (Pearson correlation's r value related to consumer's brand at 0.304) switching • Marketers should improve the efficacy of buy-one-get-one-free e.g., handle type of interesting product to do this promotion or cooperation with supplier to handle with the product in order to benefit both of them. 10 There is low positive • Marketers should not pay relationship between buy- attention to allocate too much

one-aet-one-free0 and sales promotion on buy-one-get- consumer's brand one-free because it low related to loyalty(Pearson correlation's consumer's brand loyalty. r value at 0.139) 11 There is moderate positive • Marketers should pay attention to relationship between buy- allocate sales promotion budget one-get-one-free and on buy-one-get-one-free because consumer's it has a potential to stimulate stockpiling(Pearson consumer to buy more quantities correlation's r value at of product. 0.518) 12 There is moderate positive • Marketers should pay attention to relationship between buy- allocate sales promotion budget one-get-one-free and on buy-one-get-one-free because consumer's purchase it can encourage consumer to buy acceleration(Pearson the product earlier than planned. correlation's r value at 0.462)

103 Hypothesis Findings Recommendations

13 There is low positive • Marketers should not allocate too relationship between much budget of sales promotion premium and consumer's to premium because it low brand switching (Pearson related to consumer's brand correlation's r value at switching. 0.322) • Marketers should improve the premium to be more attractive and should to be match with consumer's usage habits which can be used in everyday live. 14 There is low negative • Before consider to allocate sales relationship between promotion budget to premium premium and consumer's which is low related to brand loyalty(Pearson consumer's brand loyalty, correlation's r value at marketers should improve the 0.-0128) efficacy of premium in order to attract consumer to pay loyalty toward product of Tops Supermarket e.g., the price of premium, usefulness, design. 15 There is low positive • Before consider to allocate sales relationship between promotion budget on premium premium and consumer's which is low related to stockpiling(Pearson consumer's stockpiling, correlation's r value at marketers should improve the 0.119) premium to be attractive enough. 16 There is low positive • Before concern on allocate sales relationship between promotion budget on premium premium and consumer's which is low related to purchase consumer's purchase acceleration(Pearson acceleration, marketers should correlation's r value at improve and try to provide the 0.165) attractive premium to match to encourage consumer's purchasing. • The premium should match the consumer's usage habits and concern about the usefulness, design, price.

104 Further Study

This research aims to study the relationship between sales promotion and

consumer behavioral response of Tops Supermarket in Bangkok area.

The scope of research of this research is conducted on respondents located only

in Bangkok area, therefore further research should be extended to other region of

Thailand in order to obtain more information of consumer's need which may be

different in different region. In addition, it may concern the customers or competitors

who are in the same business; other types of supermarket, other types of retail stores,

and specified product category in order to gain the information to adapt in marketing

plan. This will be beneficial for marketers to study, formulate, and implement the

marketing plan in order to appropriate for each region.

105 APPENDIX A Assumption University

Questionnaire

This questionnaire is a part of thesis entitled "Consumer Respond to Sales

Promotion of Tops Supermarket in Bangkok". The survey is conducted for the purpose of the preparation of a thesis for the completion of Master Degree in Business

Administration (MBA), Assumption University.

The questions in this questionnaire are divided into 4 parts.

Part I: Screening Questions

Part II: Personal Information

Part III: Consumer Behavioral Response

Part IV: Attractiveness of sales promotion tools

Part I: Screening Questions

Instruction: Please mark "-/" in D which is the most applicable to your case as follows:

1. Do you purchase the product from Tops Supermarket?

D I.Yes (Continue) D 2.No (Quit)

2. Did you purchase product with sales promotion at Tops Supermarket?

D l.Yes (Continue) 02.No (Quit) Part II: Demographic Factors

Instruction: Please mark "I/" in 0 which is the most applicable to your case as follows:

1. Gender

0 Male

0 Female

2.Age

...... years

3. Income

...... bath/month

4. Occupation

0 Student

0 Housewife

0 Employee

0 Business Owner

0 Others

5. Education

0 Primary Graduated

0 Secondary Graduated

0 Higher than secondary education but, less than bachelor degree

0 Bachelor Degree

0 Higher than bachelor degree Part ID Please indicate your op101on on 5 point scale of frequency (Always, Often, Sometimes, Rarely and, Never)

Factors 5 4 3 2 1 (Promotion) Always Often Sometimes Rarely Never 1.Behavioral Response to Coupon Brand 1. l .A coupon has allowed you to Switching buy another brand which you do not regularly buy Brand 1.2. You usually buy the same Loyalty brand even when you are offered the coupon for other brands Stockpiling 1.3. A coupon has allowed you to buy more quantities of the products Purchase 1.4. A coupon has allowed you Acceleration to buy the product earlier than planned. i ! 2. Behavioral Response to Discount Brand 2.1.A discount has allowed you to buy another brand which you do not regularly buy Brand 2.2. You usually buy the same Loyalty brand even when you are offered the price discount for other brands Stockpiling 2.3. A discount has allowed you buy more quantities of the products. I L 5 4 3 2 l I Always Often Sometimes Rarely Never I Purchase 2.4. A discount has allowed you Acceleration to buy the product earlier than planned. 3. Behavioral Response to Buy- one-get-one-free Brand 3. lBuy-one-get-one-free has Switching allowed you to buy another brand which you do not regularly buy Brand 3 .2. You usually buy the same Loyalty brand even when you are offered buy-one-get-one-free for other brands. Stockpiling 3.3 Buy-one-get-one-free has allowed you to buy more " quantities of the product. Purchase 3.4. Buy-one-get-one-free has Acceleration allowed you to buy the product earlier than planned. 4. Behavioral Response to premium Brand 4.1.A premium has allowed you Switching to buy another brand which you do not regularly buy

Brand 4.2 You usually buy the same Loyalty brand even when you are offered a premium for other brands.

Stockpiling 4.3 A premium has allowed you to buy more quantities of the product. 15 4 3 2 1 Always Often Sometimes Rarely Never Purchase 4.4. A premium has allowed you Acceleration to buy the product earlier than planned.

Part IV Please indicate your opinion on 5 point scale of frequency that indicate how attractive

of these promotion tools effect to your purchasing. (Strongly Agree, Agree, Neutral,

Disagree, and strongly disagree)

Promotion tools Strongly Agree Neutral Disagree Strongly Disagree Agree Coupon Discount Buy-One-Get-One-Free Premiums APPENDIXB Assumption University

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****** Method 1 (space saver) will be used for this analysis ******

R E L I A B I L IT Y A N A LY S I S - SC A L E (A L P H A)

Reliability Coefficients

N of Cases= 30.0 N of Items= 4

Alpha = .7 405

Reliability

******Method 1 (space saver) will be used for this analysis******

R E L I A B I L IT Y A NA LY S I S - SC A L E (A L P H A)

Reliability Coefficients

N of Cases= 30.0 N of Items= 4

Alpha = .7452 Reliability

******Method 1 (space saver) will be used for this analysis******

R E L I A B I L IT Y A N A LY S I S - SC A L E (A L P H A)

Reliability Coefficients

N of Cases= 30.0 N of Items= 4

Alpha= .7288

Reliability

****** Method 1 (space saver) will be used for this analysis ******

R E L I A B I L IT Y A N A LY S I S - SC A L E (A LP H A)

Reliability Coefficients

N of Cases = 30.0 N of Items= 4

Alpha = .8130

,,~r r ·.· 1" _;u.,.. "-'-··-·