Evaluation of the Impact of Sales Promotion and Store Ambience on Customer Purchase Intention: a Case of Supermarkets in Pakistan

Home , Imtiaz (supermarket)

Evaluation of the Impact of Sales Promotion and Store Ambience on Customer Purchase Intention: A Case of Supermarkets in Pakistan

MADIHA KAMRAN [email protected] Karachi University Business School

Dr. Muhammad Asim Karachi University Business School

Salman Manzoor Education and Literacy Department, Govt. of Sindh

ABSTRACT

This research sets out to evaluate the key factors that affect the consumer purchase intention in retail supermarkets of Pakistan. It filled a lack of studies where not many researchers have investigated the most common factors such as the overall store ambience and sales promotion techniques preferences altogether from a customer‘s perspective. A simple random sample of 300 customers was taken who frequently shop from supermarkets. Data was collected through a well-structured questionnaire which was circulated online and analyzed through descriptive and statistical analysis. The key findings of the study indicated that sales promotion variables such as price discounts (PI) and in-store free samples (ISFS) have a significant impact on consumers‘ purchase intention (PI) whereas buy-one-get-one-free (BOGOF) and coupons came out insignificant. Furthermore, the overall store atmosphere including color, lighting, scent, temperature and store‘s design and display directly affect customer‘s buying behavior in supermarkets. This paper has important implications for entrepreneurs and marketers who wish to successfully create and maintain a strong brand connection with the focal consumer market. The present study also has some limitations that are mentioned at the end of the study.

Keywords: Sales Promotion, Store Ambience, Supermarkets, Purchase Intention

INTRODUCTION

Supermarkets are retail outlets that trade all kinds of Fast-Moving Consumer Goods (FMCG) and are often referred as Modern Trade. The idea of modern trade was first introduced in Pakistan in the early 1980‘s and now Pakistan has both local and international modern trade facilities in abundance. Local modern trade is a supermarket that covers an area of at least 5445 sq.ft and has various retail stores across the city while headquarter being located in the same country. Some examples of local supermarkets or local modern trade (LMT) in Pakistan are Imtiaz, Chase, Naheed, Al-Fatah, HKB etc. Contrary to this, chains of international supermarkets are referred to as International Modern Trade (IMT). Some famous international supermarkets that have franchises in Pakistan are Metro, Hyperstar, Carrefour, Spar. In the early days, only a few big cities in Pakistan enjoyed the privilege of these facilities. Soon the trend penetrated deeper into the society, thus allowing hundreds of LMTs to establish in other cities of Pakistan. Consumers from all backgrounds warmly welcomed this trend because of the pleasure and convenience attached to it. As shopping has always observed an increasing trend with the changing market needs, numerous supermarkets can be found in every nook and corner of the big cities in the country. The reason being the hustled bustled lives of the modern age, where to minimize the time and effort in searching the

RJ Journal of Business Management Evaluation of the Impact of Sales Promotion and Store Ambience on & Social Sciences Customer Purchase Intention: A Case of Supermarkets in Pakistan Volume 1, Issue 1 2021 DOI: 10.48112/rjjbmss.v1i1.16 required products consumers prefer shopping everything under one roof. Along with convenience, consumers also desire a pleasant ambience. According to (Turley & Milliman, 2000), the role of store atmosphere in the success of a retail outlet cannot be neglected.

Hence it can be said, there are a number of added beneficial elements on the basis of which customers select a supermarket for their purchases. Sales promotional activities is also one such element. With the trend of retail marketing used by supermarkets expanding at a much greater pace globally, retailers have started using all sorts of sales promotional tools and tactics to attract customers in order to stay relevant in time. Furthermore, because of increasing competition among the retailers, each retailer is putting extra effort to standout in the market. The increasing economy and population have impelled the retailers to think differently and creatively in order to catch customer attention (Shamout, 2016). Supermarket retailers have been using sales promotion activities to grab customer attention from the start of their inception in the market. To generate a favored response from the consumer these retailers use diverse short term planned activities (Gilbert, The efficacy of sales promotions in UK supermarkets: a consumer view, 2002). These activities encourage the customers to assess a brand and explore the prospects of purchasing. Since customer preference is directly linked to sales; marketeers utilize sales promotional activities to know customer preferences and improve their sales. Generally, the term ―SALE‖ triggers a customer mind. In the words of (Gilbert, The efficacy of sales promotions in UK supermarkets: a consumer view, 2002), sales promotional tools such as price discounts, coupons, refunds, free samples and buy-one-get- one-free strongly encourage customers to buy more than they expect. Supermarket retailers thus use a variety of these sales promotion tools and tactics to attract customers that eventually increases their sales.

Another benefit other than convenience that the supermarket trend brought with itself is the shopping experience that it provides to its customers. This shopping experience is largely dependent on the atmosphere that creates the complete ambience of the supermarket. Also, it is the factor that differentiates LMTs and IMTs from traditional retailers. (Kotler, Marketing Management an Asian Perspectives, 2008) describes the atmosphere as ―the design of the of retail chain outlet that produces specific emotional effects on the buyer that enhances his purchasing probability‖ The impressive ambience of a supermarket provides an overall experience to the customers that in turn affects their purchasing intention and decision- making process. According to (Bohl, 2012), a customer spends more time in a supermarket and buys more when he feels satisfied from the complete environment of the store. This happens because of the pleasant environment stimuli. The atmospheric stimulus increases the probability of a consumer to stay longer in a store (Wakefield & Baker, 1998). Thus, other than the convenience of shopping everything at reasonable prices under one roof, the attractive ambience of a supermarket greatly impacts on consumers‘ emotion and satisfaction. Both, the purchase experience and satisfaction of the consumer are enhanced by an impressive atmosphere of a MT facility (Silva & Giraldi, 2010). Regardless of the numerous benefits associated with using sales promotion and improving the store ambience, it is becoming difficult with time for the supermarket owners to balance their own and their stake holder‘s investments sensibly and earn maximum profits and an increased market share. This is because it is tough to make a decision between lasting benefits such as customer loyalty and temporary benefits such as sudden spike in sales and number of customers for a small period of time because of sales promotion and an attractive store ambience (Kotler, Marketing Management an Asian Perspectives, 2008). It has thus become extremely difficult for retailers to offer sales promotion and invest on the creativity of store ambience while maintaining profitability and a reasonable return on investment to the stake holders. Supermarkets are however gradually replacing small traditional retail stores because of the attributed convenience, choice of goods, huge space, and frequent sale promotions.

This study aims to evaluate the impact of sales promotion and store ambience on customer purchase intention in supermarkets. This study becomes more relevant in the milieu of a developing state such as Pakistan, where focusing on store ambience hand in hand with sales promotional activities is a relatively new trend to attract customers. The agenda of

2 RJ Journal of Business Management Evaluation of the Impact of Sales Promotion and Store Ambience on & Social Sciences Customer Purchase Intention: A Case of Supermarkets in Pakistan Volume 1, Issue 1 2021 DOI: 10.48112/rjjbmss.v1i1.16 this study is to explore the relationship between Sales Promotional tools (price discounts, BOGOF, coupons and in-store free samples) and Store Ambience and Customer Purchase Intention especially in the scenario of shopping from supermarkets – both local and international modern trade stores located in Pakistan. Hence, the problem statement is condensed as follows:

Evaluation of the Impact of Sales Promotion and Store Ambience on Customer Purchase Intention – a case study of the Supermarkets in Pakistan.

The following research questions highlight the above problem statement;

 RQ1: What is the influence of Price Discounts (PD) on customer Purchase Intention (PI)?  RQ2: What is the influence of Buy-one-get-one-Free (BOGOF) on customer Purchase Intention (PI)?  RQ3: What is the influence of Coupons (C) on customer Purchase Intention (PI)?  RQ4: What is the influence of In-store Free Samples (ISFS) on customer Purchase Intention (PI)?  RQ5: What is the influence of Store Ambience (SA) on customer Purchase Intention (PI)?

Research Gap

In a pragmatic study done by (Martins, 2018) found that sales promotional tools have a positive significant impact on customer purchase intention. This study was conducted in Portugal and specifically elucidated the effect of sales promotion through perceived risk on purchase intention. The limitation of this study was that it used perceived risk as a mediator upon which sales promotion did not have a statistically significant impact. Also, the study was female predominant that further limited the sample size for this research. One more researcher Wittink (1998) found that the acumen of a store‘s advancement emotionally relates with the extricate utility and store loyalty. The study which was conducted in the United States describes customers‘ perception towards sales promotion as a money saving opportunity and a source of gratification that intensifies their loyalty for a store. (Manoj, 2013) another researcher ascertained that in Indian retail market customers were found more inclined towards sales promotional activities that offered premiums. Hence, he concluded that in a customer‘s buy choice sales advancement plays a decisive role. However, due to a specific topography this study was limited to a certain boundary and could not obtain the consumer information in a proper manner. In another study researchers (Karbasivar & Yarahmadi, 2011) from Iran did an empirical study on the apparel division and determined a positive relationship between consumer impulse purchases (CIP) and sales promotional approaches. This study was limited to the promotional strategies used in the apparel industry and thus did not cover other retail domains that include supermarkets and hypermarkets. (Tanveer & Zubair, 2019) also provided important understanding of the impact of sales promotional tools on consumer buying behavior in the retail sector but this study was only limited to the population of Lahore city and did not cover other cities of Pakistan where consumer might have a different standard of living and brand awareness. In another study, a researcher (Baig & Imtiaz, 2020) observed the buying behavior of housewives in supermarkets during sales promotional activities. As the study of (Martins, 2018) this study also had a limited sample size focusing only on the buying behavior of housewives. An Indonesian group of researchers; (Putri, Salim, Kumbara, & Elfiswandi, 2020) established that price discounts, bonus packs and in store display have a positive influence on the impulse buying behavior of consumers at supermarkets. This research focused limited sales promotional tools and studied the buying behavior of Indonesian population only. A group of researchers from the Islamia University of Bahalwapur (Ashraf, Rizwan, Iqbal, & Khan, 2014) also studied different promotional tools and situational factors that impact consumer buying behavior. Since the study was conducted in Bahawalpur the sample size was limited, also only positively worded questions were used which increased the probability of mechanistic answers, thus leading to deceptive results. (Ismail & Siddiqui, 2019) investigated the short-term impact of sales promotional tools on consumer impulse purchases while

3 RJ Journal of Business Management Evaluation of the Impact of Sales Promotion and Store Ambience on & Social Sciences Customer Purchase Intention: A Case of Supermarkets in Pakistan Volume 1, Issue 1 2021 DOI: 10.48112/rjjbmss.v1i1.16 stabilizing the promotional competitiveness strategies to maximize the profitability of supply chain. This study was limited to the retailer sector of Karachi and covered limited data. Though (Russell & Mehrabian, 1978) identified the effect of atmosphere on the behavior of consumers in store but (Areni & Kim, 1994); Bitner, 1992 highlighted that in all the previously done researches the scope of consumer studies was narrow. (Zeynep & Nilgun, 2011) supported this impression and established that all previous studies focused only atmospheric variable at a time while neglecting the others when observing consumer buying behavior. Thus, (Hussain & Ali, 2015) made an effort to investigate the collective effect of all major atmospheric variables on consumer purchase intention at one point in time. However, this study was also limited to only one city; Karachi and hence did not have a comprehensive viewpoint. (Khan & Pervaiz, 2015) established in their study a positive relationship between different elements of store image and consumer purchase intention (CPI). The scope of this study was limited as it emphasized only on the buying behavior of youth in Pakistan while ignoring other age groups. (Ilyas, 2017) studied the impact of sales discount on customer buying behavior (CBB) in the context of the clothing industry of Pakistan. The research did not cover all the variables of sales promotion and was also limited to the insights of clothing retail sector.

This study aims to evaluate the individual and collective impact of sales promotional tools and store ambience on customer purchase intention. This paper is an effort to identify and evaluate the impact of the four major sales promotional tools and store ambience; independent variables, on customer purchase intention which is treated as a dependent variable. This research analyzes how sales promotion and store ambience influence the consumer buying patterns and encourage them to buy more or unplanned. The study focusses to evaluate the relationship between customer purchase intention and sales promotion and store ambience in the supermarket industry of Pakistan in particular. It highlights the specific sales promotional tools that influence a product to jump into the shopping basket of a customer. Additionally, it helps to get an insight of consumers‘ mind while decision making during a sales promotion activity and how store ambience influences it. Thus, the primary objective of this research is based on the following;

 To evaluate the impact of Price Discounts (PD) on customer Purchase Intention (PI) in the supermarkets of Pakistan.  To evaluate the impact of Buy-one-get-one-Free (BOGOF) offer on customer Purchase Intention (PI) in the supermarkets of Pakistan.  To evaluate the impact of Coupons (C) on customer Purchase Intention (PI) in the supermarkets of Pakistan.  To evaluate the impact of In-store Free Samples (ISFS) on customer Purchase Intention (PI) in the supermarkets of Pakistan.  To evaluate the impact of Store Ambience (SA) on customer Purchase Intention (PI) in the supermarkets of Pakistan.  To evaluate the individual and collective impact of the aforementioned strategies on customer Purchase Intention (PI) in the supermarkets of Pakistan.

This research work focuses on two variables that may have a significant impact on the purchase intention (PI) of a consumer while visiting a supermarket; sales promotion and store ambience. The study examines the four major tools of sales promotion; price discounts, BOGOF, coupons and in-store free samples, which are widely being used by supermarkets to attract customers. Along with sales promotion, this study addresses store ambience as well, that may also have a significant impact on the purchase intention of consumers in recent era. The study aims to identify how consumers‘ viewpoint changes towards a brand or store because of these aforementioned variables. Furthermore, this research also intends to help the retailers to understand how store ambience and which sales promotional tool gives the optimum advantage to increase the footfall and eventually the sales of supermarket. The study is in the specific context of Pakistan and covers all local and international modern trade facilities. As this research work consists of recent set of first-hand data in

4 RJ Journal of Business Management Evaluation of the Impact of Sales Promotion and Store Ambience on & Social Sciences Customer Purchase Intention: A Case of Supermarkets in Pakistan Volume 1, Issue 1 2021 DOI: 10.48112/rjjbmss.v1i1.16 the selected area, the findings of this study will definitely help the supermarket owners (retailers) to realize the significance of specific sales promotional tools and store ambience in boosting sales, liquidating redundant stock or both.

LITERATURE REVIEW

Sales Promotion

Promotion has been proved to be a key element and a valuable tool for retailers or manufacturers that gives them a competitive advantage over rivals, and it has a huge positive impact on sales and customer‘s attraction. From buyer‘s point of view, promotions influence their usual buying habits and shorten the time for decision-making. According to Sales‘ promotion only consists of temporary incentives to boost company‘s sales which leads to more product sales than usual. Moreover, its main purpose is to increase profits quickly as possible . In supermarkets, there are numerous options for customers to select brands/products according to their needs or preferences. Due to which, customers do not feel the urge to stick with the same brands for a longer period of time . Instead, in today‘s era, consumers tend to switch brands so that they could enjoy greater deals that add value to their own self-perception, leaving them more prone to promotional activities. Furthermore, retailers incorporate three main strategies namely, push, pull and the combination of pull and push to make themselves standout in the market. Push means the product is pushed from manufacturers to the end consumer through different promotions like discounts, buy back guarantee, free samples, contests etc. While pull takes the opposite approach, where businesses attract the customers through different sales promotion strategies for instance samples, coupons, premiums, rebates . Multiple studies have concluded that there is no definite answer, and a mixed relationship between the sales‘ promotion and the customer‘s purchase intention was observed ; .

Price Discounts

The effect of price discounts was compulsory in the analysis of customers buying behavior towards sales promotions. Discounted price means where company marks down the sale prices while providing the same standard of products/services to increase consumer traffic. According to , Price discount positively influences the purchase intention of buyers towards high-end brands, which in turn increases the value of such marketed products/services. It also plays a key role in showing off merchandise, where customers‘ attention span automatically increases when confronted with price discounts on specific products . However, states that newly launched products somehow take extra advantages of this strategy since price reduction creates sudden consciousness and anxiousness in customer‘s mind, enticing them to complete their purchase process promptly. This marketing technique also includes seasonal price discounts to target new customers who prefer to purchase new products during promotions rather than buying the same old product . In addition, reveals that approx. 50% of buyer‘s purchase intention is affected when products are offered at discounted price. Whereas a study conducted by on Ice-Cream eaters in Thailand, states that 95% of consumers enjoy eating ice-creams when there are sold on reduced prices. Interestingly, price discount technique not only benefits the end consumers but also generates sales for retailers who execute them intelligently .

Buy One Get One Free

―Buy one get one free‖ is a common form of promotional strategy in which a company offers an extra product at original price but with improved package to entice customers. Since shoppers like getting an item for free, companies incorporate this tactic to make buyers perceive that they are getting a product without any additional cost, hence it‘s only adding value . A study conducted by , revealed that a product‘s size and its advertisement play a significant role to catch customers‘ attention during promotion. This argument is further supported by the research of that because of these free products, customers tend to purchase more than then regular purchasing. A few more researchers and have reached to the

5 RJ Journal of Business Management Evaluation of the Impact of Sales Promotion and Store Ambience on & Social Sciences Customer Purchase Intention: A Case of Supermarkets in Pakistan Volume 1, Issue 1 2021 DOI: 10.48112/rjjbmss.v1i1.16 conclusion that BOGOF offers have made consumers purchase even those products which they never intended to. This clearly implies that, BOGOF leads to extra purchasing and is considered to be the most widely used tool by retailers .

Coupons

Coupon marketing is another widely used tool by supermarkets. It includes those customers who are eligible to buy on discounted price through vouchers provided by the companies . In simple words, coupons are defined as discounted vouchers or certificates with codes applicable on a specific product, which play a key role in attracting and retaining consumers . A research conducted by stated that 25% or more price reduction is super effective in gaining customers‘ attention which in turn helps in building brand image and strong loyalty. It is important to set a specific value of price cut and the coupon with codes must be presented before the purchase. Furthermore, this strategy not only benefits the end consumers, but also provides numerous advantages to businesses regardless of their size and type, if thoughtfully executed. Specifically, it encourages retailers achieve their sales goals faster while growing their customer base and ultimately beating off the competition . However, there‘s no denying to the fact that any marketing strategy unaligned with customers‘ needs will only make things worse. This is where Coupons come into play. The research done by confirmed that customers tend to switch brands more swiftly if offered discounts are fulfilling their usual needs. That said, communication with the audience is extremely crucial and coupons are one way of achieving this. As the primary goal is to speed up your own sales cycle by getting customers to act sooner rather than later, the study conducted by claims that limited-time offers impel customers to purchase products in six months who may acquire those services again. However, ‘s paper disagreed with the above-mentioned researchers, stating that although coupon programs escalated brands‘ sales, marketers prefer other promotional tactics since it is still not widely accepted among customers.

In-Store Free Samples

Free sample marketing is the act of delivering products to prospective customers without charging them any cost. To gather customer‘s attention, retailers either provide trial sized or full-sized products which is called sampling . Such taster packets significantly influence consumers‘ beliefs, attitudes and might affect their purchase intentions towards the brand . Having said that, this free sampling technique is considered to be a crucial sales promotion tactic for several products (Schultz et al, 1998). Numerous scholars have agreed that supplying products for free not only increases sales but also inspires loyalty with existing customers ; . Other studies claim that people love to get trial products of the brands they have not tried before, hence, there is a strong relationship between Free Samples and Customer Purchase Intention ; ; . Furthermore, a research conducted by stated that it offers great advantages to businesses that are looking forward to launching new products in the market as it entices consumers to try out new and different things which in turn leads to increased market share. On the other hand, argued that consumers‘ buying decision is not significantly affected by obtaining free samples of certain products, thus a weak relationship was observed between the two variables.

Store Ambience

Alma (2013) claims store atmosphere to be one of the most deciding factors for consumers as they are prompted to buy product/service which is not forced by something or someone, but is influenced by store‘s attraction or vision. In simple words, Atmosphere is a term that defines our intrinsic feelings with regards to the shopping experience which cannot be visibly seen . A research conducted by revealed that customers tend to buy impulsively if the visual appearance of stores relaxes them. argues that it is extremely important for retailers to fulfil the following values: store aesthetics, efficiency, product assortments, lightings, music, odor and overall a shopping-friendly layout. Nevertheless, the outcome of research reveals that visual merchandising helps in creating a pleasant image in customer‘s mind which in turn leads to improved brand loyalty. According to , Cleanliness is one of the most important factors that portrays an image of a luxurious or

6 RJ Journal of Business Management Evaluation of the Impact of Sales Promotion and Store Ambience on & Social Sciences Customer Purchase Intention: A Case of Supermarkets in Pakistan Volume 1, Issue 1 2021 DOI: 10.48112/rjjbmss.v1i1.16 comfortable store outlet for which customers would willingly stay for more time and may shop impulsively. Music is another factor which significantly impacts buyer‘s purchase intention. in their research found out that different music styles and tempos pleasantly influence consumer‘s mind which unintentionally boost sales. Pleasant music is mainly associated with increased connectivity. That said, the variety of the background music played in store outlets directly effects the perceptions and preferences of consumers . Moreover, another important factor is Scent which has a slightly subliminal impact on customer‘s buying behavior. says that it positively affects customers‘ mood and emotions, making them feel more excited while unintentionally extending their shopping time. The theory is further supported by that the right use of odor improves customers‘ attention towards products that are seemingly unknown or not well-preferred. In addition, Temperature at supermarkets is one of those atmospheric variables that significantly influence the consumer purchase intention. In other words, extreme temperature — either very low or very high — discourages customers to feel comfortable in the stores as it provokes strong negative feelings in their minds; resulting in severe dissatisfaction and even negative word of mouth . Another worth-noting factor which affects consumer purchase intention towards grocery shopping is ‗Lighting‘. examined buyers‘ response on in-store lighting and the outcome revealed that consumers are more likely to assess the quality of products quite comfortably if retail outlets have good lighting. Stores that take lighting, colour, odor and displays seriously have the most consumer retention rate . Whereas, states that both lighting and layout of the store moderately influence the customer‘s choice of store. Lastly, In-store Design and Display also lead to positive brand loyalty and improved sales . Retail store displays comprises of various factors such as the placement of shelves on the entrance, well-fitted mannequins across the floor, shelf space, décor and basically any items or signs that are placed to grab customer‘s attention quickly. This is further supported by research, claiming that customer's movement in the retail supermarkets is tremendously influenced by the way products and other items are displayed inside the stores.

Purchase Intention

Purchase intention is defined as the consumer‘s preference towards buying the product or service. It also has another aspect that examines consumer‘s decision making after assessing that certain product. claims that it is the intention of buying the same product repeatedly and refusing to switch to other brands available in the market. This research paper will use items developed by to evaluate customer purchase intention towards supermarket shopping in relation with sales promotion and store ambience.

Conceptual Framework

The conceptual framework serves as the foundation for any research. This study has a conceptual framework that is based on two independent variables and one dependent variable. The first independent variable is Sales Promotion that further has 4 sub-independent variables; Price Discounts, BOGOF, Coupons and In-store Free samples. The second independent variable is Store Ambience whereas, the only dependent variable is Customer Purchase Intention.

7 RJ Journal of Business Management Evaluation of the Impact of Sales Promotion and Store Ambience on & Social Sciences Customer Purchase Intention: A Case of Supermarkets in Pakistan Volume 1, Issue 1 2021 DOI: 10.48112/rjjbmss.v1i1.16

Hypothesis

 H1: Price Discounts (PD) have a positive influence on Customer Purchase Intention (PI) during sales promotions.  H2: Buy-one-get-one-Free (BOGOF) has a positive influence on Customer Purchase Intention (PI) during sales promotions  H3: Coupons (C) have a positive influence on Customer Purchase Intention (PI) during sales promotions  H4: In-store Free Samples (ISFS) have a positive influence on Customer Purchase Intention (PI) during sales promotions  H5: Store Ambience (SA) has a positive influence on Customer Purchase Intention (PI).

METHODOLOGY

Descriptive analysis has been chosen as the methodology for this research, followed by statistical analysis that was used to analyze the quantitative data collected through primary means and test the hypothesis that established on the basis of literature reviewed. Since individuals are the unit of analysis in this study, a cross sectional survey research design has been followed and participants from all over Pakistan were randomly selected without making any changes to their natural environment that may influence them to participate. An online medium (survey form) was selected to collect the data as a precaution against COVID-19.

Population and Sampling

The population of this research work comprises of all adult customers with the minimum age threshold of 20 years. The selected population is the customer of different local and international supermarkets located within Pakistan. Since the population size is very large and considering the health threat because of COVID-19, a sample size of 300 customers was selected from all over Pakistan that participated in this research. The effective responses were found to be 296 out of 300, after omitting the forms that were not correctly filled.

Research Instrument

A questionnaire survey was opted as the research instrument for this study. This questionnaire was developed on the basis of the aforementioned research objectives and contained closed ended questions based on five-point Likert Scale ranging

8 RJ Journal of Business Management Evaluation of the Impact of Sales Promotion and Store Ambience on & Social Sciences Customer Purchase Intention: A Case of Supermarkets in Pakistan Volume 1, Issue 1 2021 DOI: 10.48112/rjjbmss.v1i1.16 from ―Strongly disagree‖ to ―Strongly agree‖. The survey questionnaire consisted of three sections. The first section intended to collect the information related to the demographics of the respondents measured using 4 items. The second section included questions related to the two independent variables i.e. Sales Promotion having sub-independent variables Price Discounts consisting 5 items 1-4 - , 5 - , BOGOF 1,3 - , 2,4 - and , Coupons 1-4 - , Free in-store Samples, 1- , 2-4 each consisting 4 items and Store Ambience consisting 5 items 1, 3-5 - and , 2 - . The last and the third section evaluated the dependent variable Customer Purchase Intention using 3 items . The survey was done electronically using Google forms and relevant statistical techniques were applied using SPSS software (v25.0, IBM Corporation; Armonk, NY, USA) to analyze the data and test the developed hypothesis.

Data Collection

Both primary and secondary resources were utilized to collect the data for this study. The primary data was collected from randomly selected people using an online questionnaire survey (google form). Whereas, the secondary data was collected from the varied literature of different researchers who studied and explained numerous sales promotional tools and strategies and the influence of store ambience on customer purchase intentions. It was made certain that all the selected data is from valid sources for the analysis to be done appropriately and also maximize the probability of the sample.

RESULTS AND DISCUSSION

The Reliability Analysis

To determine that each variable of the instrument used lies in the satisfactory range, the reliability of the questionnaire was first analyzed through acceptable values of Cronbach Alpha (α) i.e., an α-value of more than 0.5 is acceptable . The table 1 below exhibits the summary for all the independent and dependent variables. The Cronbach alpha (α) values for all the variables in this study were found to be in the satisfactory range and a summary of them is exhibited below in Table 1;

Table 1: Reliability Statistics Variable Name Cronbach's Alpha No. of Items Price Discounts 0.546 5 BOGOF 0.691 4 Coupons 0.828 4 In-Store Free Sample 0.839 4 Store Ambience 0.822 5 Purchase Intention 0.628 3

Demographic Analysis

Empirical findings of the collected data are revealed in this part of the study. The Table 2 below exhibits the profile of 300 respondents which was the sample size for this research. It includes the frequency and percentage of all the demographic variables selected for this study. As shown, the male participants have a higher frequency rate of 169 than the female participants that have a frequency rate of 127. The highest age group frequency rate has been found to be 129 that lies in the range of 26-30, with the age group of 20-25 having the second highest rate of frequency with 66 while 31-35 having the third, 36-40 having the fourth and 40 above having the least frequency rate. The most dominant income group has been found to be between 26,000 - 50,000 with the occupation section giving the highest frequency rate of 176 for employed.

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Table 2: Demographic Measures

Characteristic Scale/Measure Frequency Percent Male 169 57.1 Gender Female 127 42.9 Total 296 100.0 20-25 66 22.3 26-30 129 43.6 31-35 35 11.8 Age Group 36-40 34 11.5 40 above 32 10.8 Total 296 100.0 Below 25000 59 19.9 26000-50000 90 30.4 51000-75000 50 16.9 Income Group 76000-100000 33 11.1 Above 100000 64 21.6 Total 296 100.0 Student 32 10.8 Employed 176 59.5 Self Employed 47 15.9 Occupation Un Employed 7 2.4 House Wife 34 11.5 Total 296 100.0

Descriptive Analysis

The data was analyzed to ascertain the descriptive values including the minimum, maximum, mean and standard deviation for each variable. The findings of this analysis are illustrated in Table 3 below;

Table 3: Descriptive Statistics of independent and dependent variables

Variable Minimum Maximum Mean Std. Deviation Price Discounts 1.00 4.60 3.1716 0.62208 BOGOF 1.00 5.00 3.2525 0.75506 Coupons 1.00 5.00 2.8851 0.82794 In-Store Free Samples 1.00 5.00 3.0895 0.88754 Store Ambience 1.00 5.00 4.0041 0.72138 Purchase Intentions 1.00 5.00 3.5158 0.73935

N=296

10 RJ Journal of Business Management Evaluation of the Impact of Sales Promotion and Store Ambience on & Social Sciences Customer Purchase Intention: A Case of Supermarkets in Pakistan Volume 1, Issue 1 2021 DOI: 10.48112/rjjbmss.v1i1.16

Statistical Analysis

In this study the data was statistically analyzed using the Pearson Bivariate Correlation and Regression analysis to determine the positive or negative impact of independent variables on the dependent variable.

Correlation Analysis

It is a statistical analysis used to determine the relationship strength, direction and nature between two individual variables. The literal meaning of correlation is that with a unit change in one variable there is a unit change in the other variable as well. The Pearson Bivariate Correlation has been analyzed for all the variables in this study and are illustrated in Table 4. The Bivariate Correlation here shows that there is significant relationship between the independent variables; sales promotion (price discounts, BOGOF, coupons, in-store free samples) and store ambience and dependent variable; purchase intention.

Table 4: Pearson Bivariate Correlations

Variable Price Discounts BOGOF Coupons In-Store Free Samples Store Ambience Purchase Intentions Price Discounts 1 .578** .378** .349** .373** .506**

BOGOF 1 .519** .581** .376** .478**

Coupons 1 .470** .264** .379**

In-Store Free Samples 1 .266** .416**

Store Ambience 1 .408**

Purchase Intentions 1 **. Correlation is significant at the 0.01 level (2-tailed).

Regression Analysis

It is a statistical analysis undertaken to test the developed hypothesis. As the research model being studied has two independent (with four sub independent) variables and one dependent variable therefore multiple linear regression was applied in this research work. The value of R square determines how much the independent variables influence the dependent variable. Table 6 below illustrates the results of the multiple linear regression and shows an R square value of 0.374 which indicates a variance of 37.4% in purchase intention.

Table 6: Hypothesis Testing

Hy IV DV R2 F β t-test Sig/p

H1 Price Discount Purchase Intention 0.374 36.642 0.339* 4.872 0.000

H2 BOGOF Purchase Intention 0.374 36.642 0.093 1.384 0.167

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H3 Coupon Purchase Intention 0.374 36.642 0.082 1.628 0.105

H4 In-Store Free Sample Purchase Intention 0.374 36.642 0.138* 2.817 0.005

H5 Store Ambience Purchase Intention 0.374 36.642 0.202* 3.84 0.000

*β statistically significant

Table 7: ANOVAa

Model Sum of Squares Df Mean Square F Sig. Regression 60.300 5 12.060 34.642 .000b Residual 100.959 290 0.348

Total 161.260 295

a. Dependent Variable: Purchase Intentions b. Predictors: (Constant), Store Ambience, Coupons, Price Discounts, In-Store Free Samples, BOGOF

The ANOVA table 7 above clearly represents that the significance value of the regression model for this research is 0.000 which satisfies the accepted level of p < 0.05.

The regression equation for the analyzed model has been developed using the variables that have a statistically significant impact on the dependent variable whereas, the variables having an insignificant impact i.e., a p-value > 0.05 are neglected.

Y = 0.666 + 0.339X1 + 0.138X2 + 0.202X3

In the equation above, the independent variables are represented as follows;

X1: Price Discount

X2: In-Store Free Sample

X3: Store Ambience

RESULTS AND DISCUSSION

This section aimed to interpret the findings presented in the previous section. It can be established from the Pearson Bivariate Correlation and Regression analysis that the overall model is a good fit for the selected data and is statistically significant.

First Hypothesis

H1: Price Discounts (PD) have a positive influence on Customer Purchase Intention (PI) during sales promotions.

H1 is accepted because the independent variable ―price discount‖ has p < 0.05 (ref: table 6) which represents that there is a significant relationship between the independent variable; price discount and dependent variable; customer purchase intention. Furthermore, it indicates that there is a strong positive influence of price discounts on customer purchase intentions in supermarkets.

12 RJ Journal of Business Management Evaluation of the Impact of Sales Promotion and Store Ambience on & Social Sciences Customer Purchase Intention: A Case of Supermarkets in Pakistan Volume 1, Issue 1 2021 DOI: 10.48112/rjjbmss.v1i1.16

Second Hypothesis

H2: Buy-one-get-one-Free (BOGOF) has a positive influence on Customer Purchase Intention (PI) during sales promotions

H2 has been rejected as it has p > 0.05 (ref: Table 6) which is greater than the defined limit. This exhibits that there is an insignificant relationship between the independent variable; BOGOF and dependent variable; customer purchase intention.

Third Hypothesis

H3: Coupons (C) have a positive influence on Customer Purchase Intention (PI) during sales promotions.

Likewise, H3 is rejected as it also has p > 0.05 (ref: Table 6). Here it also exhibits that since the significance value is greater than the accepted range there is almost no significant relationship between the independent variable; coupons and dependent variable; customer purchase intention.

Fourth Hypothesis

H4: In-store Free Samples (ISFS) have a positive influence on Customer Purchase Intention (PI) during sales promotions

H4 has been accepted because p < 0.05 (ref: Table 6). The significant value shows that the independent variable; in-store free sample has a relationship with the dependent variable; customer purchase intention. The value thus computed through statistical analysis explains that in-store free samples have a positive influence on customer purchase intention.

Fifth Hypothesis

H5: Store Ambience (SA) has a positive influence on Customer Purchase Intention (PI).

H5 is also accepted with p < 0.05 (ref: Table 6) which is less than the defined limit. Since the significant value is a lot less than the defined limit the model strongly elucidates that there is a strong positive influence of store ambience on customer purchase intention while shopping from a supermarket.

CONCLUSION

This study which is in the context of the supermarkets in Pakistan can be condensed to a conclusion that it is not imperative that all sales promotional tools and techniques have a positive impact on customer purchase intention. The research study after in depth descriptive and statistical analysis identified that only price discounts and in-store free samples have a significant impact on the customer purchase intention while shopping from supermarkets. Whereas, BOGOF and coupons were found to be less to not significant in driving the customer purchase intention during shopping from a supermarket. The most possible reasons for these findings can be customer perception towards sales promotion techniques. Where some customers find sales promotions as an opportunity to avail, others find it as a redundant stock release strategy run by stores. The purpose of this study was also to identify the role of store ambience in changing customer purchase intention. It is evident from the data analysis and hypothesis testing that store ambience has a strong positive influence on customer purchase intention. The factors of cleanliness, temperature, store layout, display and odor play a major part in influencing the customer purchase intention. It can thus be concluded from this study that if sales promotional tools; (price discounts and in-store free samples in specific), together with store ambience are focused and optimally utilized by the supermarket owners/retailers, sustainable sales growth can be observed with an increased profitability ratio.

13 RJ Journal of Business Management Evaluation of the Impact of Sales Promotion and Store Ambience on & Social Sciences Customer Purchase Intention: A Case of Supermarkets in Pakistan Volume 1, Issue 1 2021 DOI: 10.48112/rjjbmss.v1i1.16

Limitations and Future Recommendations

Despite that this research study provides significant understanding of four major sales promotional techniques and store ambience with their individual and collective impact on customer purchase intentions in supermarkets, it also has its limitations. This study specifically targeted and analyzed the behavior of customers shopping from the local and international supermarkets following modern trade in Pakistan. Though the population of this research represents whole Pakistan but due to the ongoing pandemic the actual sample size of the data included mostly people from Karachi whereas, very little amount of people participated from the other cities or areas of the country. As a precautionary measure against COVID-19 the data was collected from a limited number of local supermarkets based in Karachi and through online medium using different social media platforms.

Henceforth, the areas that can be covered majorly include; increasing the sample size by encouraging equal participation from all the major cities of the country. Ideally a sample size of 1000 participants or above is considered as first-rate sample size . Furthermore, other than customer behavior towards local and international modern trade chains during sales promotion, customer behavior towards small scale local retailers during sales promotions can also be studied. The impact of store ambience on customer purchase intentions in other retail industries than supermarkets specially the luxury retail stores can also be investigated. A demographic based comparative study between male and female audience can also be undertaken in the same context. Thus, because of limited time and resources there are a variety of prospects that are yet to be discovered and can be explored.

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