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Marketing communication is a demand generator strategy that combines with a marketing mix in order to create a need for vehicles like Skoda and Vauxhall.
The scope of this report is to take an in-depth view of the advertising campaigns, sales promotions, direct marketing and personal selling used by the two competitors in their attempt to win a growth in their market share. Furthermore, the socio-cultural environment is set with the purpose of portraying the influence of those factors on consumers purchase intent.
A research was developed in order to explore the influence of the marketing tools and how can they affect market share in a competitive environment.
However the report was designed to understand a specific target market, more exactly the students’ perceptions and attitudes towards the brands. Therefore, the population was segmented after the following criteria: age, gender, occupation and the research was carried out through 50 surveys.
Secondary research carried out through journals and newspapers was meant to set the framework for further examination of the communication tools used by both Skoda and Vauxhall in order to reach their audiences.
The context in which each brand was situated affected the way they have carried out communications and brand identity. As a preferred manufacturer Vauxhall could afford to engage in innovative marketing campaigns that focused on it’s key attributes as a brand (reinforcing the strength of the brand) whether Skoda had to engage in re-building its brand by challenging its customers attitudes and behaviour towards its products.
3.1. Skoda – Re-branding of the image
When acquired by VW, Skoda was suffering from low brand credibility and started being the subject of jokes within the UK as a result of near to the ground level of reliability of the cars and as a consequence of the communist image still being associated with its country of manufacture.
4. Management of SP
3 - 1. SP in Strategy
3 - 1 - 1. Achieving Customer Loyalty Through SP
3 - 1 - 2. Achieving Competitive Advantage in SP
3 - 2. SP Methods
3 - 3. Case: Success of Job Smiths Company
3 - 4. Budgeting of SP Programs
4. Facts About Advertisement
The aim of this research is to expand the learner's knowledge of the role of Sales Promotion in modern marketing. Primary objective is to point the reasons leading this rising trend and its benefits to the marketer. In the following chapters, SP is defined, different types and methods, strategies and budgeting issues regarding promotional programs have been explained. Major benefits to marketers as well as customers are pointed following with advantages and disadvantages of todays advertisement methods and their related costs, to provide clear understanding of what benefits are available to marketers and what can SP do that ads cannot achieve.
The environments will be limited to stores and supermarkets, since these are almost the only places for conducting consumer oriented promotions.
2. Terms Defined: What is Sales Promotion?
Sales promotion has been defined as a direct inducement that offers an extra value or incentive for the product to the sales force, distributor, or the ultimate consumer with the primary objective of creating an immidiate boost in sales. But this research will focus on consumer oriented sales promotions, which are tangible items, such as an additional product give-away, coupons, or price reductions, which can also be considered tangible since they represent a certain amount of money that has been saved. Consumer oriented sales promotions include couponing, sampling, premiums, bonus-packs ,Citation styles:
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sales volume well planned cash-flow, technological, service and after sales activity leadership, build brand awareness and loyalty. It needs to identify competitors' strategy through product quality, pricing policy, distribution coverage, sales force strategy and advertising and sales promotion.
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Comparative role of sales promotion and advertising to overturn brand loyalty taking into consideration its important constructs like brand credibility, brand preference and brand commitment has not been explored empirically. Previous researches have focused brand loyalty either to establish it or to break in terms of brand switching. This research is an attempt to fill the literature gap regarding role of sales promotion and advertising to overturn true brand loyalty being essential for competition among brands. Underlying psychological pattern of repeat purchase resulting in sequential constructs of brand loyalty have been selected to evaluate true loyalty and the possibilities to overturn it either with the help of sales promotion or advertising. For empirical testing, SDS questionnaire was used to get feedback from 300 respondents of which 213 were useful. Collected data was analysed using factor analysis, regression and correlation coefficient. The results evidenced that sales promotion techniques especially free sample and buy1 get1 free offer are the superior toll to overturn brand loyalty. Although advertising is secondary, yet electronic media is more effective than print media in this regard.
In today's monopolistic competition, breaking the barriers to entry is a challenge as a few players occupy major market share everywhere in almost every product segment particularly in mature categories. Because loyalty is a strong determinant of purchase behaviour, it is used to create barrier for new brands to enter the market. So, it is probably the most important factor in competition. Extensive research literature is available on creating and maintaining brand loyalty which is second step in the ladder to climbing successful brand (e.g. Raj 1985, Raj 1982, Tellis 1988, Narasimhan 1988, Krishnamurthi, & Raj 1991, Fader et al 1993, Chaudhuri 1999, Jacoby et al 1978, Jacoby et al1973 etc.). The first step is to attract customers who purchase established brands. So, overturning brand loyalty is as much important as establishing and maintaining it.
Designing successful marketing strategies require understanding of the pattern of the markets and framing promotional policies accordingly. In mature product categories, advertising and sales promotions are extensively used to attract, persuade, induce and remind the customer. Effects of advertising and sales promotion on brand health have been explored extensively in research literature (Begoña Alwarez et al 2005, Ehrenberg et al 1994, Pauwels 2002, Peckham 1981, Dawes 2004, Neslin and Shoemaker 1989, Aaker, 1991; 1996 Quelch, 1989 Alden et al. 1999; Wansink and Ray, 1996 Demetrios et al 1999, Cobb-Walgren et al. 1995 Aaker et al, 1993 Jones, David 1994, David Stewart et al 1998, Reed, Peter et al 2004, Buzzell et al 1990; Mohr et al 1993 Scott Davis et al 1992, Peattie & Peattie 1995). Yet the relative efficacy of sales promotion and advertising to overcome brand loyalty has failed to attract due attention of researchers and academicians. Whatever research is available, it identifies groups of competing products based solely on brand switching. The impact of other promotion mix elements such as incentives and advertising on brand choice competition is not considered (e.g. see Fraser and Bradford 1983; Kalwani and Morrison 1977; Lehmann 1972; Srivastava, Leone, and Shocker 1981; Rubinson, Vanhonacker, and Bass 1981; Urban, Johnson, and Hauser 1984). This research intends to explore superior agent and a gizmo to overcome brand loyalty by evaluating consumer sales promotions and advertising for mature product categories in FMCG.Theoretical Framework Advertising
In accordance with its objectives, advertising works as a channel that provides valuable information to consumers, enabling them to make rational choices by reducing informational product differentiation. Advertising also works as a device that persuades consumers by means of intangible and/or psychic differentiators (Banerjee & Bandyopadhyay 2003). It creates differentiation among products (Comanor and Wilson 1974), which at times may not be real (Tirole 1990).
For most of the time, it is argued that advertising is the most favourable tool in promotion mix to acquire objectives like increasing market share, building brand image and equity etc. The impact of advertising on consumer attitude and brand equity has been studied extensively. The power of advertising in building strong brands has been proposed by marketing practitioners (e.g. Martin, 1989) and academics (Aaker, 1991; 1996). Most advertising dollars are directed at consumers and typically are accompanied by specific objectives to improve consumer attitudes (Quelch, 1989). By building a strong position in the market, advertising allows a firm to command higher prices for its products, and thus increases profits. This rationale is borne out by studies on the effects of advertising towards consumer attitudes e.g. Alden et al. 1999; Wansink and Ray, 1996). Aaker (1991) and Shimp (1997) propose that higher relative spending on advertising can generate favourable consumer attitudes towards the advertised product in the form of brand loyalty.
The role of advertising goes beyond creating favourable attitude towards a brand. 'Advertising was thought to facilitate choice in two ways. First, it stimulated competition, providing people with more alternatives, and, second, it told people about those alternatives' (Stephanie Oâ€²Donohoe 1994). So, according to one school of thought, advertising facilitates brand switching. But according to the other, advertising does not strongly influence brand switching; it does not facilitate market entry. Displays, features, and coupons are more effective in that respect (Gerard J. Tellis 1988). Overall, because advertising is one of the less important determinants of purchase behaviour, its power to deter or facilitate entry, or otherwise affect purchase behaviour, appears limited. Because loyalty is such a strong determinant of purchase behaviour, the order in which brands enter the market is probably an important factor in competition (Gerard J. Tellis 1988). Yet, according to another view, customers may be persuaded to increase their purchase of the advertised brand. It is frequently believed that the major effect of advertising is to persuade buyers of competitive brands to adopt advertised brand (Raj, S.P. 1982). In short, the existing literature is not only vague but contradictory also about the role of advertising to do away with loyalty for a specific brand.Sales Promotion
Blattberg and Neslin (1990) describe sales promotion as an action-focused marketing event whose purpose is to have a direct impact on the behaviour of the firm's customers. According to Lamb et al (1966) Sales Promotions consist of a diverse collection of mostly short-term incentives designed to motivate consumers or the trade to purchase a product immediately and/or in larger quantities by lowering the price or adding value (Lamb et al. 1996, p. 573).
So, sales promotion techniques are intended to have a direct impact on buying behaviour. It is possible that consumers who do not buy the brand will want to acquire it because they are attracted by the sales promotion (Gupta, 1993). Bell et al (1999) decomposed product demand into primary and secondary type and validated the findings of Gupta (1988) and Ghiang (1991) that the dominant effect of promotion is on switching (secondary demand). Yet the long term impact of sales promotion on long term objective of building loyalty is controversial. Evidence is found in literature about both positive and negative effects of sales promotion on building brand loyalty. There are a number of well-documented negative effects which sales promotion activity has on the long-term strength of a brand (Buzzell et al. 1990; Mohr and Low, 1993). Price and non-price promotions are particularly important in this regard. Nevertheless, there is research gap regarding ability of sales promotion to overcome brand loyalty, and more conspicuously the relative power of sales promotion and advertising to overthrow brand loyalty taking into account attitudinal constructs. At the same time, in so far we have studied; there is lack of empirical evidence to evaluate the effects of sales promotion techniques in conjunction to overcome brand loyalty, which is another important aspect of marketing.Brand Loyalty
The development and maintenance of consumer brand loyalty is placed at the heart of marketing plans, especially in the face of highly competitive markets with increasing unpredictability and reducing product differentiation (Fournier and Yao, 1997). The interest in adopting this strategic approach derives from the value that brand loyalty generates to companies in terms of :
a substantial entry barrier to competitors,
an increase in the firms' ability to respond to competitive threats,
greater sales and revenue, and
a customer base less sensitive to the marketing efforts of competitors.
Given this, it is not surprising that in the academic field; a lot of consumer behaviour literature is concerned with the study of the sources of loyalty and mechanism trough which it comes about (Wernefelt 1991). It encompasses both psychological and behavioural processes (Knox, Simon et al 2001 ).
In FMCG markets, where involvement is relatively low, consumers purchase on a portfolio basis as the norm rather than display single brand loyalty (Ehrenberg, 1988; Uncles et al. 1995; Kennedy and Ehrenberg, 2000). Consequently, we adopted the Jacoby and Chestnut (1978) definition since it provides the underlying psychological patterns of repeat purchasing and commitment within product categories.
'The biased (non-random) behavioural response (purchase) expressed over time by some decision-making unit with respect to one or more alternative brands out of a set of brands and is a function of psychological processes".
Furthermore true loyal buyers who have consistent attitudes towards the brand tend to behaviourally loyal compared to those with inconsistent attitudes (Baldinger and Rubinson 1996). Therefore we suggest that the level of attitudinal loyalty is a better indicator of retention, rather than the level of behavioural loyalty. That is why we have adopted attitudinal / psychological loyalty for our research as it provided the constructs for true loyalty.
Short-term marketing activities such as promotional tools are traditionally used to induce brand switching. (Knox, 1996). These short-term tools have to be balanced with long-term activities, e.g. advertisement to create a favourable brand image. Deepak Agrawal (1996) views advertising as a "defensive" strategy used to build brand loyalty which helps in retaining the loyal customers, and price promotions as an "offensive" strategy used to attract the customers away from the rival brand. For example, one result is that the stronger brand invests less in advertising than the weaker brand. Anyhow, no broad comparative discussion is found in literature on the role of advertising and sales promotion to overcome brand loyalty. Moreover, compared to the literature on advertising, the literature on sales promotion expenditure is fairly meagre. Similarly, however, it contains inconsistent findings (Ortmeyer et al 1986). At a fundamental level, there is a lack of agreement about what sales promotions accomplish and how they should be viewed. In reviewing empirical findings on sales promotion, Bearden, Teel, and Williams (1981) note those promotions seem to be most effective for unfamiliar brands, and that promotions can generate immediate effects in terms of sales (discarding loyalty). The conflicting empirical results in the literature regarding advertising and sales promotion raise the importance as how appropriate it is to study the both in comparison to find out superior brand loyalty change agent. Here comes our major research objectiveâ€¦
'May sales promotion and advertising overturn brand loyalty? Will it be Sales Promotion or advertising more important in this regard?'Brand Credibility
The brand credibility construct is similar to source credibility (Aaker and Brown, 1972). Hovland et al. (1953) proposed the most influential conceptualization of credibility in the marketing literature (Erdem and Swait, 2004; Goldsmith et al. 2000; Trimble and Rifon, 2006), in which source credibility components constitute a bidimensional model composed of source expertise and trustworthiness. They define expertise as "the extent to which a communicator is perceived to be a source of valid assertions" and trustworthiness as "the degree of confidence in the communicator's intent to communicate the assertions he considers most valid" (Hovland et al. 1953, p. 21). Thus, brand credibility can be defined as the extent to which a consumer perceives that the brand expresses sincerity and goodwill (trustworthiness) and has the skill and experience necessary (expertise) to associate to the specified social cause.
So, brand credibility has itself two components: trustworthiness (believability) and expertise (capability). If customers believe that the firm is delivering on its promises of quality, i.e. it is performing well; this should directly contribute to higher satisfaction and thus preference for the brand, which ultimately leads towards brand loyalty. Thus, brand's credibility subcomponents, trustworthiness and expertise, are drivers of brand loyalty.
Credibility is time sensitive: the entity's perceived credibility today can differ immensely from its perceived credibility by the same firm on a previous or future date. Credibility is based on a firm's intention; the entity's actions will either confirm or disconfirm the other firm's beliefs in the entity's indications (Paul Herbig, 1997). Credibility exists when one can confidently use past actions to predict future behaviour.
Any signal or message will be evaluated by the receiver by, among other factors, the credibility of the source. The higher the credibility, the more persuasive the source is (Sobel, 1985). To achieve credibility for high quality, a company must first develop a reputation for producing and delivering quality products. To achieve credibility a competitor must first develop a reputation (Bell, 1984) and it usually takes many periods before a reputation can be established. Credibility is therefore dependent on reputation as well as the just prior transaction. Credibility influences reputation only through the final outcome: promised quality must be delivered to build a positive reputation (Fitzgerald, 1988). It shows that free samples, demonstrations and occasional price reductions are more effective to establish brand credibility. There is no evidence in literature to show comparative efficacy of sales promotions and advertising on brand credibility. Our conceptualization of brand credibility in response to sales promotion and advertising will narrow the gap as indicted. Here emerges our research objective that is to find outâ€¦
'Whether is it sales promotion or advertising more important to overturn brand credibility in terms of brand trustworthiness and expertise?'Brand Preference
After establishing credibility of a particular brand, the next important step in building brand loyalty is brand preference. Both advertising and sales promotion can play important role in this regard. Advertising has a small effect in winning new buyers but a relatively stronger effect in reinforcing intensity of preference (Tellis 1988). First, the only field study that addressed this issue (Raj 1982) also found advertising exposure to be more effective in increasing volume purchased than in promoting brand preference. If advertising affects loyal buyers more than non-loyal buyers, we should expect it to affect the quantity purchased of the preferred brand rather than which brand is purchased. Because of consumer inertia and selective information processing, untried brands probably require very high levels of exposure before they begin to get their message across and induce trial. Indeed, it is consistent with conventional wisdom that new brands need heavy advertising (Michelle Roehm et al 2002).
Without question, loyalty is the strongest determinant of purchase behaviour: brand loyalty on brand choice and volume loyalty on units bought. The other marketing variables, especially price, are also more effective than advertising. The strong effect of loyalty indicates that the preponderance of purchase behaviour is characterized by inertia or predetermined preferences (Tellis 1988). Separate studies have been conducted to evaluate consumer preferences in perspective of advertising and sales promotion like Scott, et al (1976), Papatla, et al (1996), Heerde et al (2003) Adeolu et al (2005) etc. But no study has been conducted to show whether it is sales promotion or advertising that can effectively facilitate the change in consumer preferences. It provides basis for another objective of our research â€¦
'Do sales promotions help diverting brand preference more effectively than advertising?'Brand Commitment
In our view, the next most important construct to brand loyalty is "brand commitment". In psychology, the concept of commitment is regarded as having intentional aspects, as evidenced by Kiesler's definition of commitment: "the pledging or binding of an individual to behavioural acts" (1971, p. 30) which is result of continuous brand preference. Contrary to many studies that viewed brand commitment as a direct indicator (i.e. a scale item) of brand loyalty, we regard it as most important construct preceding brand loyalty behaviour.
In fact, recent literature has viewed brand commitment as a necessary and sufficient condition of brand loyalty (e.g. Knox and Walker 2001). The evidence presented in the literature is still co-relational rather than causal, however. Some scholars used brand commitment as an item of brand loyalty measurement (e.g. Bloemer and Kasper 1995), rather than a distinct and anteceding construct. Cunningham (1969) was one of a few early efforts viewing brand commitment as an antecedent of brand loyalty, but no distinction between true and spurious loyalty was made in the study. We do not agree with Warrington et al (2000) who consider brand commitment superior to brand loyalty saying 'in absence of a preferred brand, brand-loyal consumers are likely to switch to an alternative brand, whereas brand-committed consumers will not' Rather we agree with Pascale et al (2003) Knox and Walker (2001) and Kimet et al (2008) who through empirical evidence have confirmed commitment as antecedent to true brand loyalty.
Specifically, we define the consumer's commitment to the brand as his predisposition to purchase the brand across a range of conditions: those favouring the brand's choice and those favouring the choice of other brands. The lowest level of commitment to a brand corresponds to routine avoidance across all promotional conditions. Strongest commitment corresponds to routine choice of a brand across all competitive conditions. Mid-range commitment (implying some commitment to more than one brand) corresponds to switching behaviour. A consumer's commitment to a brand is related to his relative preference for the brand; in general, the more strongly preferred the brand, the greater the commitment to the brand.
Ortmeyer et al (1986) studied the impact of advertising and promotion on brand switching behaviour of the switching consumer. They concluded that through successful advertising, the consumer who switches may become more predisposed to notice the advertised brand, and a promotion may be more likely to lead to purchase. In each case, advertising has encouraged a re-evaluation of the consumer's purchase routines (i.e. why not include the advertised brand in the switching set?), while the promotion reduces the risk of trial. In combination, coordinated advertising/promotion plans can be used to trigger a re-evaluation and alteration of established purchase routines. As a whole, there is no evidence in literature about the impact of either advertising or sales promotion on diverting consumer commitment towards a brand. This lead to derive here another important research objectiveâ€¦
'May sales promotions help more efficaciously than advertising to abandon brand commitment?'Conceptual Framework Research Hypothesis:
Based on the literature review, the following hypotheses have been formulated.
H1: Advertising is more effective than Sales Promotion to overcome trustworthiness of an established competitor brand.
H2: Advertising is more effective than Sales Promotion to overcome image of expertise of an established brand.
H3: Advertising helps inducing brand preference of another brand more than Sales Promotion
H4: Advertising is more effective than Sales Promotion to do away with commitment of preferred brand resulting in overturning brand loyalty.
H5: Advertising has more potential than Sales Promotion to overturn brand loyalty.Figure 1. The Research Model Belief in Expertise Brand Trust Methodology & Data Analysis
In the consumer decision-making process, consumers spend a lot of time, effort, and energy for more expensive and personal products which are called "high-involvement products" (e.g. computers, automobiles and medical care); they spend less time, effort, and energy for inexpensive and less exciting products which are called "low-involvement products" e.g. soft drinks, cereals, and washing powders (Wells et al. 1995). Consumer loyalty in FMCG sector is not as committed as in high involvement products because the switching penalty may not be much higher. Furthermore, FMCG sector attracts more promotional budget than any other sector around the globe and hence selected for this research.
FMCG sector can be classified into four categories i.e. household care, personal care, food and beverages and cigarettes. FMCG business growth is directly linked to the economy of a nation. The key demand drivers include rising disposable income, rapid urbanization and the deepening penetration of organized retail (Sobia Muhammad Din et al, 2008). The major portion of consumer spending is directed towards food and beverages sector in this sector. For example, although the consumer spending in FMCG sector in Pakistan is not as much as in countries with higher per capita income, yet the major household budget is consumed to buy FMCG products particularly food and beverages (Pakistan Household Economic Survey 2005-06). Again, it makes it an attractive sector for research. In so far advertising and sales promotion are concerned, we have selected the most popular types in the context of Pakistan. We have selected print and electronic media for advertising while for sales promotion four techniques have been chosen i.e. free sample, sales or price reduction, buy one get one free and lucky draws.Research Instrument:
Semantic Differential Scale was used to develop instrument as it had been used as a measure of attitude in a wide variety of projects. Osgood, et al. (1957) report exploratory studies in which the Semantic Differential Scale (SDS) was used to assess attitude change as a result of mass media programs (pp. 305-311) and as a result of messages structured in different ways (pp. 240-241). Their chapter on attitude balance or congruity theory (pp. 189-210) also presents significant applications of the SDS to attitude measurement. Regarding its practical application in marketing, researchers have used it to measure attitude towards advertising and promotions (e.g. Burton and Lichtenstein, 1988; Lichtenstein and Bearden, 1989; Zaichkowsky's 1985, Bruner and Hensel 1992).
We developed 7-point, 9-item scale to get response from respondents. The scales were divided from -3 to +3 denoting Great, Fair and Little for both negative and positive poles with zero or neutral as centre point. A group of four faculty members at Institute of Management Sciences was formed to identify, discuss and finalize most appropriate adjectives for different constructs of loyalty. Scale was developed, originally, in English containing twelve questions in total. It was translated in Urdu as people in the area of study were more conversant with this language and they were expected to understand and answer the questions comfortably with greater intelligibility. The translation was vetted by two faculty members of Urdu Department and the more suitable Urdu adjectives were adopted according to their suggestions and recommendations.
A pilot survey was conducted to affirm reliability of the instrument that was finalized. For this purpose, response on 40 questionnaires was obtained as per sample scheme. Calculated value Cronbach's alpha was .84, which indicated reliability as meritorious (Sharma 1996) for conducting further research.Sample and sample size:
A non-random convenient sampling was used to collect the data. In order to qualify as our respondent, they were asked to report their level of involvement in purchase decision. They might have the highest level of responsibility or not at all, which was measured on a four-point scale (anchored by 1 = complete responsibility; 4 = not at all). The respondents, opting for point 1 and 2, were considered to qualify for inclusion in the data for analysis.
The questionnaire was served to 300 respondents to get their response. It was served to the customers in the market place with the logic that they would be having fresh purchase experience after comparing different alternatives. So, it was planned that the respondents should be familiar about the things they were going to be asked, and able to provide information which was required for the study.
Of filled questionnaire, 213 were selected for analysis as 87 were rejected because of disqualification either due to low involvement in purchase decision or missing answers/values. Of qualifying respondents, 138 were male and 75 were females with 65 and 35 percent ratio respectively.Data Analysis:
To test the appropriateness of factor analysis, two measures were used as shown in Table 1. The Kaiser-Meyer-Olkin overall measure of sampling adequacy was .87, which falls within the acceptable level. In addition, Bartlett's test of sphericity was 3626.376, df 435, significant at p .000, which showed a significant correlation among the variables (Hair, Anderson, Tatham, & Black, 1998), which showed that factor analysis can be administered on this data. In so far as reliability of the instrument is concerned, Cronbach's alpha was calculated. With a value of .927, it indicated the maximum reliability-ranked as marvellous by Sharma (1996). The reliability test was used to test internal consistency for each of the construct also-credibility (brand trust and belief in manufacturer's expertise), preference and commitment as given in Table 2. Calculated value of alpha for each of the construct is .673. 78. 811. 839 and .856 respectively showing reliability from acceptable to marvellous.
In order to evaluate dimensions of our model (Figure 1), we calculated correlation coefficient of these dimensions for brand loyalty to check the validity of the model, as given in Figure 2. Calculated value of correlation, which is .475, demonstrates a positive relationship between brand credibility and brand loyalty. Similarly correlation between brand preference and brand loyalty is .590, which is again positive. Correlation between brand commitment and brand loyalty is .586. These values confirm that our model is logically valid for research.
We employed exploratory factor analysis for each construct of brand loyalty separately to find out the most effective promotional tool/ tools to knock over the allegiance for a brand. Instead of using cutoff eigenvalue of 1, we fixed the extraction to 2, as our objective was evaluation of two major factors-sales promotion and advertising. In Table 2 percentage of variance explained by two factors for brand loyalty constructs (i.e. brand trust and belief in manufacturer's expertise, brand preference and brand commitment) and brand loyalty is given. The first component accounts for maximum variance for each construct which is 38.832, 47.888, 51.597 & 55.725 respectively. Percentage of variance for 2nd Factor, i.e. advertising, for the aforementioned constructs is 23.64, 17.112, 18.273 & 15.451. This result is further explained by rotated component matrix with the rule of .5 cutoff value. Rotated component matrix in Table 3 for each of the dimensions exhibits that promotional offer of buy1 get1 Free has the highest loadings followed by Free Sample except brand preference, where the order is reverse. Similarly, for advertising Electronic Media has the higher loading than Print Media. It is evidenced that Sales Promotion in general and free sample and buy1 get1 free offer in particular are the major components that subverts brand loyalty.
Besides studying precursors of brand loyalty in a logical order, direct response to brand loyalty was also obtained because FMCG is low involvement sector and it is not necessary that a customer goes through that sequence to cast away loyalty of a particular brand. The last row of Table 2 shows that first Factor is responsible for maximum variance of 57.473, followed by the second, which is 15.873. Rotated component matrix in Table 3 shows that in the first factor, sales promotion technique of buy1 get1 free loads highest followed by a Free Sample. Regarding advertising, electronic media again loads higher than print media. This is consistent with the results about different dimensions of brand loyalty-brand credibility, brand preference and brand commitment.Test of Hypotheses:
Table 4 presents the results for test of our hypotheses. Hypothesis 1 and 2 address the question of credibility and the comparative influence of advertising and sales promotion. Hypothesis 1 states that advertising is more effective than sales promotion to overcome trustworthiness of an established competitor brand, while hypothesis 2 stated that advertising is more effective than sales promotion to overcome image of expertise of an established brand. Brand credibility having two elements i.e. brand trust and belief in manufacturer's expertise (Hypothesis 1& 2), is not affected by advertising as much as by sales promotion (t-value = .697 and .519 @ significance level = .2435 and .375 respectively for brand trust and belief in manufacturer's expertise).
Hypothesis 3 states that advertising helps inducing brand preference of another brand more than sales promotion. Results do not support the hypothesis as value of t = .618 with significance level of .2685 at 95% confidence interval. So, once again advertising appears to be secondary in importance to alter the preference for a brand.
Hypothesis 4, which states that Advertising is more effective than sales promotion to do away with commitment of a preferred brand resulting in overturning brand loyalty, is not supported. Our calculated t-vlaue .716 at significance level .2375 with 95% confidence interval again demonstrates that advertising cannot be considered a superior tool to distract brand commitment.
Hypothesis 5 states that advertising has more potential than sales promotion to overturn brand loyalty. Calculated t-vale 1.028 at significance level .1525 does not support this assumption. Again, advertising fails to get primary position to overturn brand loyalty.Discussion and Conclusion
Breaking away loyalty of established brands cannot be belittled as it is an imperative step for a new or weaker brand to get success in the market place. Brand Loyalty is not created haphazardly. Rather it goes through a sequence of attitudinal events like brand credibility, brand preference and brand commitment, whereas brand credibility diverges in two other attitudinal elements i.e. brand trust and belief in manufacture's expertise in making that product. So, we followed this logical sequence to explore the affects of sales promotion and advertising on all these dimension of brand loyalty as per our objectives. According to our results of factor analysis and test of hypotheses, sales promotion is found to be a superior gizmo to overturn brand loyalty. All the constructs of brand loyalty including brand loyalty itself appear to be influenced predominantly by free sample and buy1 get1 free offer. It is consistent with previous findings to conclude that deals adversely affect brand loyalty (Joe A. Dodson et al 1978). But at the same time the study disapproves the previous research (e.g. Begoña Alvarez Alvarezet et al 2005) that price reduction is more important to influence brand choice. In so far advertising is concerned, not a single dimension is predominantly affected by it. Its position, throughout, remains secondary. Amongst advertising, electronic media has greater significance followed by print media.Limitations and Further Research
The present study is a part of PhD dissertation. So, it has some limitations as it is part of a whole. It would be pertinent to point out the most conspicuous limitations here. Firstly, the study had been conducted in a big metropolitan city and hence the results may not be applicable to whole of the population as demographic variables do affect life style and spending patterns, preferences, commitment and allegiance to brands.
Secondly, the results are quite different form previous studies as mentioned earlier in discussion and conclusion section. We have found free sample and buy1 get1 free offer as most effective technique in lieu of price reduction. The results may be different due to cultural norms and values that vary from country to country and region to region.
Nevertheless, this study attempted to present a broad-based, theoretically guided field study of the effects of sales promotion and advertising on brand loyalty based on consumers' psychological states and resulting influences for subverting loyalty. The results are promising and indicate the possibility of fruitful future research. First, it would be helpful, for example, to ascertain the effects of other elements of promotion mix on defection of brand loyalty. Future research may include behavioral brand loyalty measures.
Secondly, the area of research and demographics should be broadened to maximize the representation of whole population within a country or region. Finally, future research could examine the differences in other cultural contexts. Perceived brand loyalty may vary across cultures, as brand loyalty constructs may be perceived differently by people of different countries.KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity