LAYS MA IA I T S I A S R FacultyR of Economics and Business A E W V I A K N U U N I A S M Faculty of Economics and Business CONSUMER PERCEPTIONS TOWARDS SALES PROMOTION TOOLS APPLIED BY HYPERMARKET IN KUCHING Chai Fang Fang Bachelor of Business with Honours (Marketing) 2009 CONSUMER PERCEPTIONS TOWARDS SALES PROMOTION TOOLS APPLIED BY HYPERMARKET IN KUCHING CHAI FANG FANG This project is submitted in partial fulfilment of the requirements for the degree of Bachelor of Business with Honours (Marketing) Faculty of Economics and Business UNIVERSITI MALAYSIA SARAWAK 2009 Statement of Originality The work described in this Final Year Project, entitled “Consumer Perceptions towards Sales Promotion Tools Applied by Hypermarket in Kuching” is to the best of the author’s knowledge that of the author except where due reference is made. 20th April 2009 Date Chai Fang Fang 16049 ABSTRACT CONSUMER PERCEPTIONS TOWARDS SALES PROMOTION TOOLS APPLIED BY HYPERMARKET IN KUCHING By Chai Fang Fang Sales promotion has been constantly growing since the 1960’s and today, it is one of the key factors in the promotional mix. Since the hypermarket format is very new in Kuching retail industry, the choice of appropriate sales promotion tools is important decisions for the retailers. The purpose of this study is to provide a general understanding on consumer hypermarket shopping behaviour in Kuching. This study identifies the consumer segments that visit the hypermarket in Kuching, the sales promotion tool that is favoured most when applied in the hypermarket format, and the effects of seven sales promotion tools, namely sample, coupon, cash refund offer, price-off, premium, patronage reward, and contest and sweepstake on consumers’ purchase intentions. The data base comprising a total of 285 hypermarket consumers in Kuching, Sarawak were surveyed using structured questionnaire. The results show that price-off is the most favoured sales promotion tool but it does not have any effect on consumes’ purchase intentions. Cash refund offer, coupon, premium, and contest and sweepstake are associated with consumers’ purchase intentions. Details of the findings and the implications are discussed. iv ABSTRAK PERSEPSI PELAGGAN TERHADAP ALAT PROMOSI JUALAN YANG DIGUNAKAN OLEH PASAR RAYA BESAR Oleh Chai Fang Fang Promosi jualan telah berkembang sejak tahun 1960an. Kini, ia merupakan salah satu faktor penting dalam promosi campuran. Oleh kerana format pasar raya besar masih baru di Kuching, maka pilihan alat promosi jualan yang bersesuaian adalah penting kepada pihak peruncit. Tujuan kajian ini adalah untuk membekalkan secara umum, pemahaman tentang tabiat membeli-belah pelanggan pasar raya besar di Kuching. Kajian ini mengenal pasti segmen pelanggan yang melawat pasar raya besar di Kuching, alat promosi jualan yang paling diminati apabila digunakan oleh pasar raya besar, dan kesan-kesan tujuh alat promosi jualan iaitu sampel, kupon, bayaran balik tunai, potongan harga, premium, ganjaran naugan, serta pertandingan dan cabutan undi terhadap niat membeli pelanggan. Pangkalan data seramai 285 orang pelanggan pasar raya ditinjau dengan menggunakan borang kaji selidik berstruktur. Keputusan menunjukkan bahawa potongan harga paling diminati tetapi tidak mempunyai kesan ke atas niat membeli pelanggan. Bayaran balik tunai, kupon, premium, dan pertandingan dan cabutan undi adalah berhubungkait dengan niat membeli pelanggan. Hasil temuan dan implikasi turut dibincang. v ACKNOWLEDGEMENT I have been working very hard on writing this Final Year Project for the last nine months, a time full of both expected and unexpected challenges. This project has brought me new impressions and influenced the way I look at research and sales promotions. When this project is finally complete, I hope it can contribute to better understanding of sales promotion tools. I would like to express sincere appreciation to people who have helped and supported me during this project writing. Thank you, Mr Puah Chin Hong, my dedicated supervisor for reserving time for my project consultation and providing me with valuable information regarding project writing. I would like to give my heartiest thanks to him for his active supervision and support throughout the time I was working on my project writing. Without him, this project is impossible to complete. I would like to express my appreciation to my family members for their unending support and encouragement throughout my journey to complete this study. They have given me the precious motivation and warmth needed in completing this project. I would also like to extend my appreciation to the lecturers who have provided me with generous advice, friends and seniors who have given unrelenting help in my endeavour, the staff of Faculty Economics and Business and anyone who has had a hand, either directly or indirectly in the accomplishment of this project. vi TABLE OF CONTENTS Page LIST OF TABLES................................................................................................ ix LIST OF FIGURES.............................................................................................. x CHAPTER ONE: INTRODUCTION 1.0 Hypermarkets............................................................................................. 1 1.1 Hypermarkets in Kuching.......................................................................... 5 1.2 Why Sales Promotion?............................................................................... 9 1.3 Problem Statement.................................................................................... 16 1.4 Objective of the Study............................................................................... 19 1.4.1 General Objective.......................................................................... 19 1.4.2 Specific Objectives........................................................................ 19 1.5 Significance of the Study........................................................................... 20 1.6 Scope of the Study..................................................................................... 21 CHAPTER TWO: LITERATURE REVIEW 2.0 Introduction............................................................................................... 24 2.1 Sales Promotion........................................................................................ 25 2.2 Findings Related to Sales Promotion........................................................ 27 2.3 Sales Promotion Trends............................................................................ 28 2.4 Sales Promotion Tools.............................................................................. 30 2.4.1 Samples......................................................................................... 31 vii 2.4.2 Coupons........................................................................................ 32 2.4.3 Cash Refund Offers....................................................................... 35 2.4.4 Price-off (Price Packs).................................................................. 36 2.4.5 Premiums...................................................................................... 38 2.4.6 Patronage Rewards (Frequency Programmes)............................. 40 2.4.7 Contests and Sweepstakes............................................................ 42 2.5 Purchase Intentions....................................................................... 44 2.6 Theoretical Underpinnings........................................................... 45 2.6.1 Attitude............................................................................. 47 2.6.2 Subjective Norms.............................................................. 47 2.6.3 Perceived Behavioral Control........................................... 48 CHAPTER THREE: METHODOLOGY 3.0 Introduction.............................................................................................. 50 3.1 Research Framework................................................................................ 51 3.2 Research Design....................................................................................... 54 3.2.1 Population..................................................................................... 54 3.2.2 Sample.......................................................................................... 55 3.3 Research Instrument................................................................................. 57 3.3.1 Item............................................................................................... 58 3.3.2 Measurement Scale....................................................................... 61 3.4 Data Analysis............................................................................................ 62 3.4.1 Descriptive Statistics..................................................................... 62 3.4.2 Mean............................................................................................. 63 viii 3.4.3 ANOVA........................................................................................ 63 3.4.4 Reliability Test.............................................................................. 64 3.4.5 Factor Analysis............................................................................. 65 3.5 Hypothesis Statements............................................................................. 65 CHAPTER FOUR: EMPIRICAL RESULTS AND DISCUSSIONS 4.0 Introduction..............................................................................................