ABSTRACT

This project is about “A STUDY ON THE EFFECT OF CONSUMER

BEHAVIOUR BY THE SALES PROMOTION DONE WITH RESPECT TO

AAVIN MILK & MILK PRODUCTS”. The main objective of the study is to

find out the Sales promotion & consumer behavior of Aavin milk and milk

products. The research mainly focuses on the factors like quality,

consumer preference, price, service, attitudes and experience of

consumers.

In this study, data are collected from the consumers through

questionnaire(interview schedule).,200 samples are selected using

convenience sampling. Using the interview schedule prepared, the 200

consumers are interviewed personally and their opinion was collected.

Secondary data was collected from the management. The collected

data is analyzed using analytical tools like simple percentage and chi-

square test. As per the findings, suggestions are given to the company to

take initiation to fulfill the consumer needs

CHAPTER – 1

1.1 INTRODUCTION ABOUT THE STUDY:

Sales promotion is an important component of a small business's

overall marketing strategy, along with advertising, public relations, and

personal selling. The American Marketing Association (AMA) defines

sales promotion as "media and nonmedia marketing pressure applied

for a predetermined, limited period of time in order to stimulate trial,

increase consumer demand, or improve product quality.

A direct inducement that offers extra value or incentive for the

product to the Sales force, distributors, or the ultimate consumer with the

primary objective of creating "immediate" sales .

Sales promotion is any initiative undertaken by an organisation to

promote an increase in sales, usage or trial of a product or service (i.e.

initiatives that are not covered by the other elements of the marketing

communications or promotions mix). Sales promotions are varied.

Businesses can target sales promotions at three different audiences:

consumers, resellers, and the company's own sales force. Sales promotion

acts as a competitive weapon by providing an extra incentive for the target

audience to purchase or support one brand over another.

It is particularly effective in spurring product trial and unplanned

purchases. Most marketers believe that a given product or service has an

established perceived price or value, and they use sales promotion to

change this price-value relationship by increasing the value and/or

lowering the price. Compared to the other components of the

marketing mix (advertising, publicity, and personal selling), sales

promotion usually operates on a shorter time line, uses a more rational

appeal, returns a tangible or real value, fosters an immediate sale,

and contributes highly to profitability.

Popular Sales Promotions Activities:

(a) Buy-One-Get-One-Free (BOGOF)

Which is an example of a self-liquidating promotion.

For example if a loaf of bread is priced at $1, and cost 10 cents to

manufacture, if you sell two for $1, you are still in profit - especially if

there is a corresponding increase in sales. This is known as a PREMIUM

sales promotion tactic.

(b) Customer Relationship Management (CRM)

incentives such as bonus points or money off coupons. There are

many examples of CRM, from banks to supermarkets.

(c) New media

Websites and mobile phones that support a sales promotion. For

example, in the United Kingdom, Nestle printed individual codes on KIT-

KAT packaging, whereby a consumer would enter the code into a dynamic

website to see if they had won a prize. Consumers could also text codes via

their mobile phones to the same effect.

(d) Merchandising

Additions such as dump bins, point-of-sale materials and product

demonstrations.

(e) Free gifts

E.g. Subway gave away a card with six spaces for stickers with each

sandwich purchase. Once the card was full the consumer was given a free

sandwich.

(f) Discounted prices

E.g. Budget airline such as EasyJet and Ryanair, e-mail their

customers

with the latest low-price deals once new flights ar e released, or additional

destinations are announced.

(g) Joint promotions

Between brands owned by a company, or with another company's

brands.

For example fast food restaurants often run sales promotions where

toys, relating to a specific movie release, are given away with promoted

meals.

(h) Free samples (aka. sampling)

E.g. tasting of food and drink at sampling points in supermarkets.

For example Red Bull (a caffeinated fizzy drink) was given away to

potential consumers at supermarkets, in high streets and at petrol stations

(by a promotions team).

(i) Vouchers and coupons

Often seen in newspapers and magazines, on packs.

(j) Competitions and prize draws

In newspapers, magazines, on the TV and radio, on TheInternet, and

on packs.

(k) Cause-related and fair-trade

Products that raise money for charities, and the less well off farmers

and producers, are becoming more popular.

(l)Finance deals

For example, 0% finance over 3 years on selected vehicles.

Many of the examples above are focused upon consumers. Don't

forget that promotions can be aimed at wholesalers and distributors as

well. These are known as Trade Sales Promotions.

Examples here might include joint promotions between a

manufacturer and a distributor, sales promotion leaflets and other materials

(such as T-shirts), and incentives for distributor sales people and their

retail clients.

Sales promotion describes promotional methods using special

short-term techniques to persuade members of a target market to

respond or undertake certain activity. As a reward, marketers offer

something of value to those responding generally in the form of lower

cost of ownership for a purchased product (e.g., lower purchase price,

money back) or the inclusion of additional value-added material (e.g.,

something more for the same price).

Objectives of Sales Promotion

Sales promotion is a tool used to achieve most of the five major

promotional objectives :

Building Product Awareness – Several sales promotion techniques

are highly effective in exposing customers to products for the first time and

can serve as key promotional components in the early stages of new

product introduction. Additionally, as part of the effort to build product

awareness, several sales promotion techniques possess the added

advantage of capturing customer information at the time of exposure to the

promotion. In this way sales promotion can act as an effective customer

information gathering tool

(i.e., sales lead generation), which can then be used as part of follow-up

marketing efforts.

Creating Interest – Marketers find that sales promotions are very

effective in creating interest in a product. In fact, creating interest is often

considered the most important use of sales promotion. In the retail industry

an appealing sales promotions can significantly increase customer traffic to

retail outlets. Internet marketers can use similar approaches to bolster the

number of website visitors. Another important way to create interest is to

move customers to experience a product.

Providing Information – Generally sales promotion techniques are

designed to move customers to some action and are rarely simply

informational in nature. However, some sales promotions do offer

customers access to product information. For instance, a promotion may

allow customers to try a fee-based online service for free for several days.

This free access may include receiving product information via email.

Stimulating Demand – Next to building initial product awareness,

the most important use of sales promotion is to build demand by

convincing customers to make a purchase. Special promotions, especially

those that lower the cost of ownership to the customer (e.g., price

reduction), can be employed to stimulate sales.

Reinforcing the Brand – Once customers have made a purchase sales

promotion can be used to both encourage additional purchasing and also as

a reward for purchase loyalty (see loyalty programs below). Many

companies, including airlines and retail stores, reward good or preferred

customers with special promotions, such as email special deals and

surprise price reductions at the cash register.

CONSUMER BEHAVIOUR:

Consumer behavior is "The study of individuals, groups, or

organizations and the processes they use to select, secure, use, and

dispose of products, services, experiences, or ideas to satisfy needs and the

impacts that these processes have on the consumer and society."

The study of consumers helps firms and organizations improve their

marketing strategies by understanding issues such as how

The psychology of how consumers think, feel, reason, and

select between different alternatives (e.g., brands, products);

The psychology of how the consumer is influenced by his

or her environment (e.g., culture, family, signs, media);

The behavior of consumers while shopping or making other

marketing decisions;

Limitations in consumer knowledge or information

processing abilities influence decisions and marketing outcome;

How consumer motivation and decision strategies differ between

products that differ in their level of importance or interest that

they entail for the consumer; and

How marketers can adapt and improve their marketing

campaigns and marketing strategies to more effectively reach

the consumer.

There are four main applications of consumer behavior:

The most obvious is for marketing strategy —i.e., for making

better marketing campaigns. For example, by understanding that

consumers are more receptive to food advertising when they are hungry,

we learn to schedule snack advertisements late in the afternoon. By

understanding that new products are usually initially adopted by a few

consumers and only spread later, and then only gradually, to the rest of the

population, we learn that (1) companies that introduce new products must

be well financed so that they can stay afloat until their products

become a commercial success and (2) it is important to please initial

customers, since they will in turn influence many subsequent customers’

brand choices.

A second application is public policy.

Social marketing involves getting ideas across to consumers

rather than selling something.

As a final benefit, studying consumer behavior should make us

better consumers.

Benefit of Studying Consumer Behavior

The benefits of studying consumer behavior have significant bearing

on marketing and public relations decisions. Studies focusing on consumer

behaviors yield important information and insight into what consumers are

thinking. With these insights, marketing and public relations firms may

enhance their particular marketing campaigns to successfully connect with

consumers.

1. Perceptions

Studying consumer behavior helps marketers understand consumer

perceptions about a particular product or range of products. Uncovering

and correcting erroneous perceptions about a particular product may give

marketers an additional competitive advantage over competitors.

2.Attitudes

Consumer attitudes very often determine consumer beliefs about

certain products. Discovering consumer attitudes allows marketers to fine

tune their campaigns to resonate with a particular consumer niche and

deepen marketing reach.

3. Cultures

Changing population demographics around the world affect the way

marketing campaigns are designed. Understanding cultural nuances and

subtleties may allow marketers to help further define their particular tar get

market.

4. Lifestyles

Consumer lifestyles also determine what products appeal to certain

consumer markets. Understanding consumer lifestyles is also a key

component of consumer behavior that lets marketers make the appropriate

appeals in promoting lifestyle products and further consumption of

lifestyle products.

5. Experience

Like consumer attitudes, experience also colors consumer responses

to certain products. By studying consumer behavior, marketing

professionals can tap into consumer experiences with similar products to

promote consumption and gain competitive advantage over competitors.

1.2 INTRODUCTION ABOUT THE INDUSTRY

Dairy Development in India has been acknowledged the world

over as one of the most successful development programme. India is

the second largest milk producing country with the production about 78

million tons during 1999 – 2000. The milk surplus States in India are

Uttar Pradesh, Punjab, Haryana, Rajasthan, Gujarat, Maharastra, Andhra

Pradesh, Karnataka and Tamil Nadu. The manufacturing of milk products

is concentrated in these milk surplus States.

Dairy sector has assumed a great significance by generating income

not only to the rural but also to the urban and semi-urban population in

the state especially to the women folk by providing self employment

opportunity. Milk and milk products provides essential nutrition to

all walks of life. It provides the main source of income next to

agriculture. In a tropical country like India, agriculture may fail

sometimes, due to monsoon failure but dairying never fail and gives them

regular, steady income.

The state Dairy Development was established in 1958. The

Administrative and statutory controls over the entire milk cooperative in

the State were transferred to the Dairy Development on 01.08.1965.

The Commissioner for the Milk Production and Dairy Development is the

functional registrar under the Tamilnadu Co-operative Societies Act 1983.

With the advent of Anand Pattern in Tamil Nadu, Tamil

Nadu Co-operative Milk Products Federation limited was registered on

1ST February 1981 as the State level organization.

The commercial activities of the department such as

procurement, processing, packing and the sale of milk and milk

products within and outside the State was entrusted to the Tamil

Nadu Co-operative Milk Producers Federation ltd.

In the wake of the liberalization policy, private dairies have entered

in the field of dairying. As per the direction of the National Dairy

Development Board and Government of Tamil Nadu high priority has been

given for improving the performance of Co-operative by adopting a

systematic approach and proper strategy implementation in milk co-

operatives. Significant achievement ha been made by Milk

Producer’s Co-operative Societies, Unions and Federation in the state of

Tamil Nadu.

TWO FOLD OBJECTIVES OF THE DAIRY DEVELOPMENT

DEPARTMENT

Assure a remunerative price of the milk produced by the milk

producer’s societies through a stable, steady and well market support.

Distribution of quality milk and milk products at reasonable price to

the consumers.

FUNCTIONS OF THE DAIRY DEVELOPMENT DEPARTMENT

The main functions of the Dairy Development Department are

organization of societies, registration of societies, supervision and

control of primary Milk Co-operative, District Co-operative Milk

Producers Union and Tamil Nadu Co-operative Milk Producers Federation.

The Dairy Development Department exercise statutory functions

like enquiry, inspection, surcharge and super session, appointment of

special officers, liquidation and winding up of societies etc. The

Commissioner for milk production and Dairy Development, Deputy

Milk Commissioner (Co- operative) and circle Deputy Registrars are

vested with quasi-judicial power in respect of settlement of dispute,

appeal, revision and review under various provisions of Tamil Nadu

Co-operative societies Act 1983 and rule 1988 made there under.

1.3 INTRODUCTION ABOUT THE COMPANY

The Erode District Co-operative Milk Producers Union limited is a

replica of the District Union in Gujarat state based on the AMUL

system. The Erode Milk Union is therefore sandwiched in the middle

of the 3-tier system popularly known as ANAND or AMUL pattern

consisting of an apex State Level Federation at Chennai, the Union at the

District level and the primary Co-operative Societies at the village level.

The entire project had been funded by the National Dairy

Development board, Anand through the government of Tamilnadu and

the Tamilnadu Co-operative Milk Producer’s Federation. The project had

been funded under the nationwide operation flood programme with

an aim to bring about a socioeconomic awakening in rural India.

The district union has 728 primary Milk Co-operative at its

base and the Tamil Nadu Co-operative Milk Producer’s Federation as

its apex body.

Special features of the Company

Weekly four rail milk tankers of about 16000 liters of

condensed milk is supplied to Mother Dairy, Delhi from the

Coimbatore Dairy.

On an average 80,000 litres of raw chilled milk is supplied

for

Chennai metro sales from Coimbatore Dairy.

Milk products like Butter, Ghee, Skimmed milk powder,

Milk Peda, Dates khova, Flavoured milk, Butter milk,

Badam milk powder, Ice cream are produced at Erode

Dairy and selling to customers according their requirements.

The company is an ISO 9001 – 2000 certified and ISI

certified for the skimmed milk powder production and the

Erode Dairy ghee is sold with AGMARK certificate.

National wide database laboratory established at Erode

District out of 15 milk producers union selected by National

Dairy Development Board in India.

Union is selling ghee to Thiruppathi Thirumala

Devasthanam in tankers for Laddu preparation.

Functions of district cooperative milk producers union

Establishment of chilling centers

Formation of new milk routes to collect the milk

produced by the member societies

Collection of milk form societies, process and pack in

modern Dairy plant by maintaining quality standards

Fixation of procurement and selling price of milk

Increase of milk sales by introducing innovative sales

promotion activities

Supply of inputs to the member societies obtained from

unions

Coimbatore union is acting as a feeder balancing Dair y

The union spends 154.42 lakhs, 169 lakhs, 187.74 lakhs,

219.28 lakhs for marketing for the past five years, which

includes transport and agents commission.

The union spends 1.20 lakhs, 3 lakhs for advertisement.

To provide artificial insemination and veterinary aid

facilities to the milk producers.

CHAPTER-2

2.1OBJECTIVES OF THE STUDY

Primary objective:

The main objective of the study is to study the Sales

promotion & consumer behaviour of Aavin milk and milk

products in Coimbatore city

Secondary objective:

To identify the sales promotion strategies adopted by the

aavin milk company

To study the quality and consumer preferences towards

aavin milk& milk products.

To identify the satisfaction level of customers towards

the price & service provided by the company.

To study the attitudes and experience of customers towards

aavin products and to suggest the valuable measures based on

the findings.

2.2 SCOPE OF THE STUDY

The scope of the study is to identify and analyse the consumer

behavior towards the service, price & quality of aavin milk & milk

products and also to analyse the sales promotional strategies adopted by

the company.This study will help the organization to increase the sales of

the Aavin milk and milk products and to strengthen the sales

promotion strategies.

2.3 REVIEW OF LITERATURE

Ketelaar, et al., (2001), As the flow of online sales increases and

more companies begin to move into the digital arena, advertisers and

digital designers are forced to stay on the cutting edge in terms of website

design and content presentation. In a search to find website design

techniques that increase information flow and website stickiness, two

possibilities were found, persuasive navigation and "open", or visually

rhetorical, online advertising. These two techniques focus on presenting

targeted information to consumers, in the form of website content

advertisements, while they browse a given website.

Bright (2004) , The concept of intra-site advertising was tested by

him and was found to be effective in terms of increasing information flow

on a controlled website. Open advertising has not yet been tested in the

online environment, with current studies focusing on print media, however

it presents promises potential as an online persuasion technique. This paper

will further explore the application of open advertising in the online

context as well as elements of interactivity and design.

(Zakon, 2002) says that the Web has come to encompass some 38

million plus websites. It is a tossup as to whether any of these

websites effectively communicate with their target audience in a

manner that is both user-friendly and efficient in terms of brand impact and

sales. As most consumer advocates have come to know, digital

environments that frustrate users dramatically decrease brand loyalty

and can cause consumers to completely abandon a brand community in

both real and virtual worlds. In an effort to stem off this flow of frustration,

two new digital design techniques provide an intriguing way to

increase information flow within digital environments while providing

imager y and content that makes users feel intelligent and engaged. These

new design techniques are persuasive navigation and open online

advertising, respectively. One technique deals with the information

architecture of the website, while the other addresses imagery; both in an

equally seductive fashion.

Kioumarsi et al.,(2009),says that Personality characteristics impact

consumer behavior because they shape the way in which consumers

respond to messages at a given time. This response changes minute to

minute based upon the unique characteristics of the target consumer and

their ongoing life experience. The online environment presents a vast

opportunity for companies to interact with consumers on a personal,

customized level. Individual differences are an important aspect of this

interaction as they provide insight into how people with varying levels of

experience with the online environment respond to interactive persuasion

techniques.

Friestad and Wright (1994), in their presentation of the PKM,

posit that the effectiveness of advertising persuasion techniques

depends upon the level of persuasion expertise each individual

possesses. In an online environment, measurement of this effect can be

achieved by looking at user experience levels, self efficacy, and

number of hours spent online. General knowledge gleaned from the

PKM dictates that consumers with more experience in the online

environment will be better at coping with persuasion techniques

therein, such as open, visually rhetorical advertisements.

Ketelaar et al(2004), conducted the study that an individual's need

for cognition refers to their motivation to engage in meaningful

cognitive thought or undertaking. A consumer's need for cognition

will impact their ability to deal with tasks and social settings, such

as responding to advertising messages or calls to action. This applies

directly to the concept of open, visually rhetorical advertising because

such messages require a higher cognitive processing load to be

understood and learned. Although need for cognition was not found to

impact interpretations of open advertisements in the Ketelaar et al.

study, it is still an interesting variable that can be effectively measured

and manipulated for this type of research endeavor. Additionally, cognitive

response, and the need therein serve an important part in the development

of brand attitudes within a target consumer.

McGinnis and Jaworski(1989),The concept was elaborated upon

by in their seminal piece regarding information processing in

advertising: "Cognitive and emotional responses related to imagined

product consumption experiences are the strongest determinants of

brand attitude. As shown, need for cognition is linked to the

development of brand attitude in consumers. When examined in terms of

its relationship to time spent processing online, visually rhetorical

advertising, need for cognition could prove to be an interesting

differentiator within the sample group. In addition to need for cognition,

an internal motivation toward the product being advertised should be

apparent within driven consumers. This motivation helps push the

consumer toward unraveling the visual riddle presented in an open

advertisement. Type of motivation, either utilitarian ("goal-oriented")

or hedonic ("expressive"), is a diverse and interesting factor to analyze

across consumer groups.

Phillips (2000), shown in research undertaken by, consumers

with utilitarian, goal-oriented motivations are keen on evaluating

product attributes and therefore less likely to be attracted to open

advertisements. Consumers with hedonic or "expressive" goals are more

likely to seek out the entertainment value in the open advertisement.

Huang (2003), in his online study of websites, found that level of

attention in consumers is most linked to utilitarian design while both

control and interest are linked to hedonic performance measures.

Liu, et al (2002), based on their online research, concluded that

higher levels of active control within consumers resulted in being geared

towards more utilitarian, goal-based website designs. As shown in these

studies, motivation is an individual difference worth characterizing. Type

of consumer motivation is extremely important when analyzing online

consumer behavior as it helps categorize amongst user groups, across sites.

2.4 RESEARCH METHODOLOGY

RESEARCH DESIGN

The research design chosen is descriptive as the study reveals the

state of facts existing.

Descriptive research design:

Descriptive research studies are those studies which are concerned

with describing the characteristics of a particular individual, or a group.

The study is concerned whether certain variables are associated with the

study. And also the study is concerned with specific predictions, with

narration of facts and characteristics concerning an individual, group or

situation.

METHODS OF DATA COLLECTION:

While deciding about the method of data collection for the study the

researcher should keep in mind the two types of data collection.

Primary Data:

Data has been collected from few respondents by communicating

with them directly and discussing their views about the organization. Most

of these included informal discussion with the employees. One of the other

sources of collecting the primary data was by distributing the

questionnaires and getting back the responses for them. Such

questionnaires were distributes among the production employees and also

the executive level employees.

Secondary Data:

Secondary data has been collected from the following sources:

Books and journals at the organization and the college

library.

Through the internet.

SAMPLING:

Sampling is that part of statistical practice concerned with the

selection of individual observations intended to yield some knowledge

about a population of concern, especially for the purposes of statistical

inference.

Convenience sampling:

Convenience sampling is a type of nonprobability sampling which

involves the sample being drawn from that part of the population which is

close to hand. That is, a sample population selected because it is readily

available and convenient. It may be through meeting the person or

including a person in the sample when one meets them or chosen by

finding them through technological means such as the internet or through

phone.

Sample Size

The size of the sample selected for study is 200 units.

DATA ANALYSIS

Collected primary and secondary data are scheduled to suitable table

for the purpose of analysis. Suitable statistical tools were applied in

various places for analysis.

TOOLS FOR DATA ANALYSIS

The collected data have been analyzed with the help of tools like

simple percentage method, chi square test.

Data collected was analyzed using tools like;

Percentage analysis

Chi-Square test

SIMPLE PERCENTAGE ANALYSIS

Simple percentage analysis refers to a ratio. With the help of

absolute figures it will be difficult to interpret any meaning from the

collected data, but when percentages are found out then it becomes easy to

find the relative difference between two or more attributes.

No. of RespondentsPercentage = ______________________ ×100

Total Number of Respondent

CHI-SQUARE TEST

The Chi-square test is for testing the independence of two variables

and testing hypotheses concerning proportions. One of the tests of

proportions is that of testing the differences among several population

proportions, which is an extension of testing the difference between two

population proportions. This Chi-square test is used for testing the

difference between two population proportions, testing the difference

among several population proportions. The Chi-square test can be used to

test the differences among (c) population proportions by using a tabular

design for the analysis of the frequencies

Chi-Square test enables whether or not two attributes are associated.

Chi-Square is calculated as follows.

x2=∑ ¿

Where

O = observed frequency of the cell in row and column

E= expected frequency of the cell in rows and column

Degree of freedom ( DF ):

DF = (r-1)* (c-1)

Where

R=Number of rows in the table.

C=Number of columns in the table.

2.5 LIMITATIONS OF THE STUDY

Some customers hesitate to fill the questionnaire.

It is not assured that the responses from all the respondents

are true as some of them may like to tell the incorrect

information.

The survey was conducted in a short period as a part of the

curriculum.

Certain individuals took more time than require for answering

the questionnaire

CHAPTER -3

ANALYSIS AND INTERPRETATION

Table No.1

Table showing the Opinion about Gender

Particulars No. of Respondents Percentage

Male 152 76

Female 48 24

TOTAL 200 100

Interpretation

From the above table it is clear that 76% of the respondents are male

and the remaining 24 % of the respondents are female.

CHART NO.1

Chart showing the Opinion about Gender

TABLE NO.2

Table showing the Opinion about Age

Particulars

(In years)

No. of Respondents Percentage

18-20 20 10

21-30 85 42.5

31-40 65 32.5

Above 41 30 15

TOTAL 200 100

Interpretation

From the above table 42.5 % of the respondents are coming under

the age group of 21 – 30 yrs and 32.5 % of the respondents are under the

age group of 31 – 40 years and Above 41 are 15%.