An analysis of the influence of sales promotion on customer purchase behaviours in the retailing industry – Tesco as a case


An analysis of the influence of sales promotion on customer purchase behaviours in the retailing industry – Tesco as a case

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Chapter 1 – Introduction

1.1 Study background

Tesco PLC is general merchandise and multinational grocery in the United Kingdom founded in 1919 by jack Cohen (Tesco PLC, 2014).Tesco PLC is one among the top four retail shops in the world. It is the number one retailer shop in the world appraised by profit and second-largest retailer worldwide measured by revenue (Winterman, 2013). Apart from the supermarket services, Tesco operate, garden centres, internet retailing, financial services, petrol stations, telecom services and many others. The company is one among the major UK supermarkets that is listed on the London stock market and form a constituent of the FTSE 100 index. As at august 2014, Tesco had a market capitalisation of £20.5 billion meaning the company enjoys basic listing on the London stock market.

However, according to Davey and Maidment, (2014), Tesco’s share in the UK market has been gradually decreasing. They cite the Kantar World-panel report (2012) to buttress their argument. In 2011 for instance, the report revealed that the shares of Tesco in UK was 30.6% while 2012, the company had a share of 30.2%. The decrease in shares is partly attributed to the cutthroat competition Tesco is experiencing from UK’s giant retailers like, Sainsbury, Asda, Morrison, Aldi and Lidl. According to Warrender (2014), a decrease in shares can also be as a result of the changing shopping habit of Briton consumers who prefer hard discount retailers. In august 2014 Dave Lewis the current CEO of Tesco announced that the company expected their full year profit to be £2.4 billion, rather than the £2.8 billion that was earlier anticipated (Haslett, 2014). The latest figure from Kantar World-panel places Tesco’s overall share of the UK market at 25.2% lower than in 2013 that it recorded 26.7%. The main supermarkets that pose a real threat to Tesco are Aldi and Lidl and Morrison that offer discounts and engage in intense sales promotion activities (Ruddick, 2014).

According to Kotler and Keller (2006), organizations facing such competition must be determined in ensuring satisfaction of customers’ needs and wants effectively and efficiently than its competitor. Tesco realized that such an environment requires a concise strategy that will help insulate its customers against threat posed by its competitors. The company devised market strategies that not only help in winning consumers, but also help retain them. Before its fall in shares, Tesco ignored consumers and focused at buying and selling goods. However, after the company started registering fall in shares, Tesco commenced investing on the things that only matters to the consumers (Estelami, 2008).

The company launched a loyalty scheme club, Tesco.Com, online home shopping and also intensified its sales and promotion services. The main goal of Tesco is making consumers lives better and easier. Currently, Tesco has a fivefold business strategy and yarns to be the most successful global retailer in the non-food items (Humby et al., 2008). One among the strategy Tesco has adopted to understand the buying behaviour of its consumers is sales and promotion. In 2013, Tesco allocated 1billion to sales and promotion of its groceries (Tesco PLC, 2013)

Wathieu and Murre (2007) assert that most purchase situations are habitual to an extent that the consumers conduct very little cognitive activities. Murre (2007) proceeded that in such circumstance, it is extremely hard motivating consumer behaviours like brand change or increasing of unit bought. One merit of sales and promotions is their ability to stimulate buyers to think and examine brands as well as purchase possibilities when otherwise they may not have (Nederkoorn, 2013). Thus, Tesco makes use of dissimilar kinds of promotions strategies and tools to make sense of consumers’ preferences and also boost their sales. Among the programs, they employ include money-off promotions, coupon promotion, free gifts promotion and bonus packs promotions.

Tesco PLC undertakes this initiative to promote and increase sales, usage and trial of its products and services (Aderemi, 2003). Sales promotion denotes the provision of motivators to consumers or distributors to stimulate the demand for a specific product (Gilbert & Jackaria, 2002). It is considered a crucial component of Tesco overall marketing strategy together with advertisement, personal selling and public relations. Tesco uses the strategy as a competitive weapon to provide extra motivators to the targeted consumers. Peculiarly, the strategy spurs product trials and impulsive purchases (Aderemi, 2003). Nagar (2009) submits that only buyers with repeat purchase are lucrative. He further asserts that not all purchases that consumers make have connection with loyalty of the brand.

Nevertheless, consumer’s loyalty is authoritative for a repeat purchase. Nagar (2009) concludes his submission by stating that firm operators must advance marketing programmes that reinforce encourage repetitive purchase. Hence, sale promotion should promote repeat purchase and customer loyalty. Dekimpe and Hansen (2001) notes that sales promotion has a wide effect on myriad aspects of consumer’s buying decisions; such decisions include; brand choice, quality, purchase time and brand switching. Consumers are always very sensitive to price changes and are under pressure to buy products during promotions thinking that they will either not have money in future to buy the item, or the price of the item will shoot (Bridges, et al., 2006). Consumers get tempted when they see words like “buy one, get one free” such words according to Gilbert &Jackaria. (2002), provokes consumers to purchase the item even if they did not intend to. What excites marketers most is the fact that up to date, the consumers are still oblivious of the influence sales promotion has in their buying behaviours and especially little is still understood about consumer’s response to promotional strategies exercise by the marketers. While focussing on Tesco, this paper analyses the influence of sales promotion on consumer’s purchase behaviours.

1.2 Study rationale

The stiff competition in the retail industry requires retail operators like Tesco to offer services that satisfy consumers need and expectations to be assured of their economic survival (Kotler & Keller, 2006). In achieving this feat; therefore, retailers need to have a keen understanding of consumer’s purchase behaviours to help them examine the products and services they offer (Friedman & Gould, 2007). Just like consumers in all the sectors, retail consumers go through a cycle of the decision-making process before they settle on the product to purchase or service to be received. It is this decision that describes their character in the consumption of either products or services they buy from different retail companies. The process of purchase is complex and involves both external and internal ingredients that influence the decision to purchase a product (Mullins &Walker, 2013). This research, therefore, while help the consumers in making appropriate purchase decisions.

According to Liao et al., (2009), buyers normally make purchase decisions by evaluating alternatives prior to the purchase. It is not obvious that the purchase will conform to the decision earlier made. Often, consumers do a post-purchase examination after buying and consuming the service. At this stage, the consumer determines if he derived any satisfaction from consuming the service or product (Hamzaoui & Zahaf, 2007). It is the post-purchase evaluation result that acts as a reference point for future engagement between the consumer and the service provider. Products and services are known to elicit moods and emotions that are critical in shaping the behavioural process of buyers. Particularly, consumers purchase behaviour are altered by brand loyalty, composition and size of the evoked a set of alternatives and attribution of dissatisfaction as Tesco is involved in both service and production industry (McEwen, 2005). With that background, this research will help Tesco understands the most influential promotional programmes to adopt so as to remain afloat in the competitive retail industry. It will also help retailers understand reasons that may prompt consumers to deviate from the established purchase processes.

1.3 Research aim and objectives

The general aim and objective of this study is to analyse the influence of sales promotion on customer’s purchase behaviours in the retail industry while using Tesco as a case study. However, the study relies on key specific objectives vindicate the general objective.

1.4 The dissertation structure

The current study analyses the influence of sales promotion on customer purchase behaviour in the retail industry. The study uses Tesco as a case in point. The research is organised in five chapters. Chapter one gives detailed background of Tesco and sales promotion, study rationale, and the aims and objectives of the study. Chapter two of this research covers the literature review and includes previous theoretical literature on sales promotion and how it affects consumers’ behaviours. Chapter three of this research tackles the methodology part and includes: research philosophy, research design, data collection and data analysis methods. Chapter four of this research analyses the data collected. Finally, chapter five covers the discussion part and also includes the recommendations, limitation as well as suggestions for further research.

Chapter 2 – Literature Review

2.1 Introduction

This second chapter of the study provides a detailed theoretical framework that is used to guide the research process in the current study. In particular, the chapter is dedicated to the critical review of extant literature that investigates the topic of sales promotion and consumer behaviour in the retail industry. The literature reviewed in this section is consistent with each of the study objectives. Further, this chapter seeks to identify the missing gaps in the extant literature that will enable the current study to contribute to already existing knowledge. A summary of the literature review is provided towards the end of the chapter.

2.2 The meaning and definition of sales promotions

Sales promotion has in the contemporary times gained the attention of academics and practitioners such as marketers. McNeill (2012) in particular notes that for quite a long time, sales promotion was considered as a minor relative to advertising and personal selling. It is for this reason that sales promotion was often unplanned and in most cases used to help clear old stock. Similarly, Maxwell et al., (2012) note that sales promotion have been traditionally been considered as a marketing activity that can help put some extra pressure on slow moving products. However, the recent times have seen modern marketers attach greater importance to sales promotion. In particular, sales promotion is considered in modern marketing as a strategic tool that can facilitate the promotion of sales, as well as prepare the ground for the future expansion of retailers (McNeil, 2012).

Within the above context, a review of extant literature shows that yet to be a consensus on a universal definition of sales promotion. Glowik and Smyczek (2011) for instance define sales promotion as any incentive by the retailer to the consumer to buy a brand through aggressive selling. The incentive offered by the retailer is in addition to the basic benefits offered by the brand. The rationale is to temporarily change the perceived price or value of the brand or product. Maxwell et al., (2012) on the other hand considers sales promotions as an activity that offers incentives often for a limited period with the main aim of inducing a desired response from the target consumers. Further, Maxwell et al., (2012) emphasise that sales promotion is different from other marketing activities such as personal selling, advertising and publicity. In this case, promotional activities are meant to simulate interest, trial or purchase by the target customers. The American Marketing Association (AMA) has also made inputs into this area. It defines sales promotion as the use of media and non-media marketing pressure for a specific or pre-determined period of time to stimulate trial, improve product availability and increase the target consumer demand (Kotler, 2011).

From yet another perspective, Kumar (2009) notes that most definitions of sales promotion fail to make reference to the fact that sales promotion is not only a promotional activity. Rather, it also includes the use of specially designed materials such as simple ‘give-aways’ or other more sophisticated items. In an effort to make a distinction between sales promotion and other marketing activities such as advertising and publicity, recent studies have considered sales promotion as an activity that involves the use of demand stimulating devices. Examples of such devices include trade shows, samples, in-store displays, coupons, contests, sponsorships and in-store demonstrations (Shimp & Andrews, 2013). From the above definitions the basic meaning derived is that sales promotion is mostly short-term; used in the stimulation of quicker purchase; and put pressure on consumers to purchase greater volumes of a product.

Elements of an effective sales promotion activity

Sales promotion is recognised as having greater ability to be targeted to smaller audiences when compared to advertising and personal selling. This is as a result of its more controllable nature (Shimp & Andrews, 2013). However, the effectiveness of this tool is dependent on several factors. Within this context, Ferrell et al., (2011) offers an elaborate discussion of elements that should be considered in designing an effective sales promotion. To begin with, these scholars underscore that a sales promotion should be action focused. In greater detail, sales promotion should be designed with the aim of eliciting a specific response from the target customers in the short-term. This is unlike advertising and personal selling, which may be used by marketers to build a brand image as well as establish long-term relationships. Second, an effective sales promotion should be planned and considered as a specific marketing event. The implication in this case is that sales promotion should be considered as a stand-alone activity, which is incorporated into the overall marketing communication strategy of the retailer. As Kolah (2013) expounds, considering sales promotion as a separate and unique marketing event helps in measuring its effectiveness.

Third, an effective sales promotion activity should have a tangible component. Such components can include give-aways and displays that help in creating interest among the target audience (Ferrell et al., 2011). Lastly, Ferrell et al., (2011) underscore that effective sales promotions should be designed in such a way that they facilitate the achievement of short-term results. As such, time should be considered as an important aspect of the sales promotion activity. In this case, sales promotion should be a one-time only event or one that is limited to few days.

2.3 Analyse the influence of different sales promotion programs on consumer purchase behaviour

In essence modern marketing seeks to determine the needs and wants of a firm’s target market and consequently adopt the organisation in such a way that it satisfies consumers more effective and efficiently than it market rivals. It is on this basis that the study and understanding of consumer behaviour is considered as instrumental to a firm’s success. Consumer behaviour in this context entails the acts of individuals that guide the obtaining and use of goods and services. Such acts further include the decision making processes that precede and determine purchase of products and services (Szmingin & Paicentini, 2014).

In line with the focus consumer behaviour, previous research work indicates that sales promotions have several effects on consumer purchase. Chakrabortty et al., (2013) for instance undertook a study that sought to investigate the extent to which sales promotions affected the purchase decisions of consumers. Based on the results of the study, it was found out that majority of the respondents who indicated that promotions were the main reason for visiting the store spent more on regular priced goods than on the goods being promoted. Further the study discovered that much of the promoted purchases were actually purchased by consumers who did not visit the store as a result of the sale promotions. Chakrabortty et al., (2013) thus concluded that sales promotions especially those based on price enhance substitution and complementary effects within a given store. In both cases, the retailer is set to benefit from the sales promotion activity. In line with these views from past research, this part of the chapter focuses on the influence of various sales promotion devices on consumer purchase behaviour.

2.3.1 Coupons

Coupons are defined as vouchers/certificates that entitle the consumer to price reduction on a specific product. The value of the reduction is usually pre-determined and known to both the retailer and the customer. The coupon must also be presented at the time of purchasing (Gedenk et al., 2010). Ross (2013) while on the same context notes that the use of coupons is one of the proven and reliable methods which manufacturers and retailers can use to communicate with their customers. Coupons are in this case effective sales promotion devices that can be used to pressurise the target audience to engage in brand switching. Similarly, a study by Schultz and Block (2014) indicates that coupons through one-time price reductions facilitate brand awareness and loyalty. The use of coupons to induce brand switching and purchase of products have in this case been linked to consumer preference and attraction to the discount stated in coupon.

From a consumer behaviour perspective, extant literature shows in some retail markets, consumers have over time become strongly attached to coupons (Gedenk et al., 2010). An explanation for this behaviour is that coupons are not only considered as an effective way of reducing prices, but also have psychological benefits. Some consumers as Gedenk et al., (2010) points out derive a sense of achievement from the purchase of products on deal. Shimp and Andrews (2013) while focusing on in-store instant coupons such as coupons that can be peeled off from product packages indicates that they generate a ‘surprise’ effect that lead to higher basket-spend. The reason for increase in spending through unplanned purchase is attributed to the notion that coupons have a psychological income effect. In other words, consumers tend to view coupons as an unexpected financial gain. Second, the increase is spending is attributed to the perception that coupons raise the consumers’ mood. It is for these reasons that Shimp and Andrews (2013) conclude that coupons are not just a form of price reduction. In this case, the use of coupons as part of the sales promotions activity gives consumers a range of hedonic and utilitarian benefits. Examples of hedonic benefits include entertainment, opportunities for value expression and exploration. Utilitarian benefits may include improved shopping convenience and savings on the shopping budget.

Coupons have also been found in extant marketing studies as an effective way of implementing price discrimination and hence a positive effect on total sales. Venkatesan and Farris (2012) in this context note that price-sensitive consumers are usually highly motivated to use coupons in order to pay less. On the other hand, less-price sensitive consumers make little efforts to redeem the coupon. They therefore end up paying higher for the same product. Such price discrimination benefits the retailers in that they do not have to sell products at a low price that is attractive to all customers.

Several disadvantages are however associated with the use of coupons as a sales promotion device. Kaser (2012) for instance notes that coupons lead to high administrative costs. In addition, a study by Garver et al., (2014) indicates that the response to coupon promotions may not always be predictable. Unpredictability may be as a result of factors such as value, timing, brand share and competitiveness within the industry. As an example, in-pack coupons have been found to be less effective in attracting new product users. In addition, consumers have been found to ignore coupons for products whose value they do not know or the brand is not well established in the market (Kaser, 2012).

2.3.2 Free gifts

Free gifts constitute a popular sales promotions device used by retailers in collaboration with manufacturers of specific products (Raghubir & Celly, 2011).  Free gifts are in this case offered following the purchase of a product. According to Raghubir and Celly (2011) free gifts can be effective in encouraging consumers to purchase higher volumes of a product. A free gift may for instance be offered for the purchase of 1000ml of a soft drink but is not available for lower volume quantities. Further, free gifts are considered as effective in ensuring high appeal for a given target market. As an example, Laran and Tsiros (2013) note that McDonalds, the world’s leading fast food restaurant, often give free toys of popular cartoons to children. The aim is to entice them to pressure their parents to take them for a meal at the McDonald’s restaurants. According to Laran and Tsiros (2013), the free gift should not be necessarily the same product or a complementary one. In this case, the retailer and manufacturer may offer an unrelated item in order to encourage its trial.

From a consumer behaviour perspective, it is acknowledged that free gifts tend to motivate indecisive consumers to purchase a given products rather than that of a competitor (Liu et al., 2011). In addition, free gifts such as ‘buy 1 get 1 free’ have been found to be effective in encouraging the trial of a given product from purchasers of competitive brands. Such purchases are often willing to switch in order to make monetary savings as the buy 1 get 1 free promotion is equivalent to buying at half the price of the unit. Similarly, Khouja et al., (2011) note that free gifts are popular with customers due to the immediacy of the reward. Unlike other promotional devices such as contests and coupons, consumers do not need to wait to receive the reward in the case of free gifts. In the context of the current study, it will therefore be important to evaluate the extent to which the immediacy of the reward influences the attractiveness of the sales promotion program offered by Tesco.

While free gifts are generally considered as effective, research shows that consumers’ response to a free gift in a promotion depends on the value of the brand (Liu et a., 2011). More specifically, if the free gift is considered to be from a brand that is of low value, then the consumer may not be motivated to purchase. In addition, a free gift from a brand that is not well established when offered for the purchase of a premium product may result a damaged brand image of the sponsoring brand (Khouja et al., 2011). As such, it is necessary to further extend the existing literature with respect to the use of free gifts with respect to national and private label brands. As Pepe (2011) notes, most supermarkets in the UK have aggressively promoted their private label brands. However, there is little research on the outcomes of promoting these products through sales promotion devices such as free gifts.

2.3.3 Rebates

Rebates are quite similar to coupons in the sense that they also involve a price reduction to the consumer. The consumer is refunded a proportion of the amount paid for a specific product or service (Mullin, 2010). Rebates are however different from coupons in that the rewards are not immediate. In addition, rebates require more effort on the part of the consumer in order to obtain the price reduction. The consumer is for instance required to mail a form requesting for the rebate (McNeill et al., 2014). According to Mullin (2014) the long processes and delayed reward make rebates less popular among most consumers. They are however preferred by firms due to a number of reasons. First, the company offering the rebate often have greater control over this promotional device as it can be launched and ended very quickly. Second, firms are able to collect important consumer details that can be used to build their databases. Lastly, it has been observed that majority of the consumers never request for the rebates. As a result, the expenses incurred by the firm through the support of this promotional program are significantly reduced. With regard to industries, Mullin (2014) suggests that rebates are not effective for sectors such as supermarkets which are involve in the sales of relatively inexpensive fast moving consumer goods (FMCG). They are considered to be more effective in sectors where the goods or services are more expensive such as mortgages. In such sectors, the amount of rebate is usually substantial enough to generate the interest of the consumer.

2.3.4 Bonus packs

A bonus pack by definition is an extra quantity of a given product that a marketer offers to consumers without a subsequent increase in price (Chen et al., 2012). As an example, a consumer may be given an additional 50ml of a liquid detergent free as part of the regular package at the regular price. A specially made product package is used, which is used to provide information often through the word ‘extra’. While this sales promotion tools is mainly used by manufacturers, the growing sale of private label products has seen it become popular among retailers (Xu & Hang, 2011). As Xu and Hang (2011) further note, this promotional device rewards present customers and encourages impulse buying in the case of utilitarian products but may not have an impact on the consumers of competitive brands. However, Mishra and Mishra (2011) suggest that bonus packs can still be used for competitive purposes. The retailer or manufacturer can for instance develop special packs that contain a greater quantity but disproportionately low price. This method is considered as one that is effective in loading the consumer with the product and hence discourages the use of competitor products.

2.3.5 Loyalty card programs

As part of their promotional activity large retailers have in the recent years increased their use of loyalty card programs (Dorotic et al., 2012). By definition, loyalty card programs are incentive plans that are offered to customers with the main aim of encouraging repeat business. A customer who possesses a card earns points from each purchase and can redeem the points by purchasing products worth the number of points (Miguéis et al., 2011). While loyalty card programs are primarily focused on long-term objectives such as customer loyalty, recent research shows that they are increasingly been used for promotional purposes. García et al., (2012) for instance notes that retailers occasionally reward certain purchases with more points on loyalty cards in order to encourage their purchase.

Within the above context considerable research on the use of loyalty card programs as a promotion device has been conducted from a consumer purchase behaviour perspective. One of the areas of focus has been on price sensitivity as a key aspect of consumer behaviour. A research study by Banasiewicz (2013) indicates that loyalty card programs attract a large number of price sensitive customers. According to Banasiewicz (2013) such consumers tend to hold the view that the use of loyalty cards allow them to shop at low prices.  The same study however found out that while there is usually an initial rush by consumers to register for loyalty card programs, the increase is purchases is usually disproportionately smaller. The price sensitive consumers are in this case considered as cherry pickers as their purchases do not make a significant impact on profits. A study by Wang (2007) suggests that loyalty programs may not necessarily attract price sensitive consumers. On the contrary, they attract premium and high income customers who are likely to make substantial gains from the programs as their basket-spend is higher. As Wang (2007) further notes, such customers are generally less price sensitive. These contrasting finings necessitate further research in order to conclusively establish the effect of loyalty cards on price sensitivity when used for promotional purposes.

Propensity to switch to competitors has also been a key area of interest that is related consumer behaviour. Schwartz (2009) in this case notes that the large number of retailers in most developed retail markets results into greater choice among consumers and hence the ease of switching. Within this context, some researchers indicate that loyalty card programs are an effective way of reducing the chances that consumers will switch from one retailer to another. Smith and Potter (2010) for instance argue that loyalty programs create switching costs as consumers who shop at competitors’ store lose the opportunity to earn points and the subsequent rewards. As such, the loyalty cards reduce the chances of defection by the rational consumers. Nonetheless, a research study by Soberman (2012) notes that in the contemporary times loyalty programs may not necessarily stop customer from defecting. This is the case as the similarity of rewards offered by such programs has resulted into consumers holding cards from more than one retailer. This aspect has been referred to as polygamous loyalty (Omar et al., 2013). According to Omar et al., (2013) consumers may engage in polygamous loyalty in order to take advantage of advertised offers in other stores.

2.3.6 Contests

Contests also constitute one of the popular sales promotions devices used by retailers. A contest in this case requires the consumer to perform some tasks. They could for instance create a design, answer questions or write a slogan (Wu et al., 2013). As Reid et al., (2014) note, the use of contests in the contemporary times has been made easier through the use of an online platform such as websites. Retailers in this case collaborate with manufacturers to offer participants prizes such as shopping vouchers, gift hampers and holidays. According to Wu et al., (2013) contests can be used for a wide range of product categories as well as cover low and high-involvement products. Shimp and Andrews (2013) further notes that among all sales promotions devices, contests are considered by consumers as the most exciting and highly rewarding. As a result, they attract a very large number of consumers to participate. This is despite the fact that the chances of winning are usually low. In terms of effectiveness, existing studies indicate that contests can allow for generate of interest and awareness to a considerably large number of consumers (Reid et al., 2014). Consequently, the retailer can benefit from large sales increases. Sharma (2014) however notes that consumers’ response to contests depends to a large extent on selection of prizes and prize structure. The most successful ones are those that adopt a typical pyramid structure. This means that there should be a bumper prize often of very high value at the top and a relatively large number of lesser value prizes at the bottom.

2.4 Sales promotion and customer loyalty in the retail industry

2.4.1 Consumer loyalty

Consumer loyalty comprises of three aspects: repeat purchase intentions, primary behaviour and secondary level behaviour (Chen et al., 2007). Repeat purchase intensions entail the consumer’s future intention to re-purchase a given product. Primary behaviour on the other hand implies the practical revisiting of a consumer’s behaviour while secondary level behaviour is the willingness by the consumer to recommend the product to other consumers (Chen et al., 2007). From another perspective, Panda (2009) considers loyalty as the consumer’s commitment to patronize a given store or repeatedly purchase the same brand. Further, consumer loyalty has been assessed from behavioural and attitudinal dimension. Notably, the behavioural dimension focuses on consequential actions that emerge from loyalty. Attitudinal loyalty on the other hand encompasses the formative behaviour that leads to the desire to maintain a valuable relationship (Rai, 2012).  

In studying the effect of sales promotion of customer loyalty, two types of customers are identified in existing research: hardcore loyal customers and brand switchers (Rai, 2012). The hardcore loyal customers are less sensitive to prices while brand switchers are likely to switch from one brand to another due to factors such as price and advertising influence. In this case some studies suggest that a positive relationship exists between sales promotion and consumer loyalty (Blut et al., 2014). This is because sales promotions provide incentives for the consumer to keep purchasing from a given brand. However, research in this area is largely mixed. Buil et al., (2013) for instance argues that sales promotion is an effective tool for differentiating brand switchers and hardcore loyal customers. The implication in this case is that sales promotions are mainly considered important by brand switchers. In essence the divergent views as well as research dearth in this area requires the current study to fill the gap by further exploring the relationship between these aspects.

2.4.2 Influence of sales promotion on store choice and traffic

In assessing consumer loyalty, one of the main issues has been on the extent to which sales promotion influence the consumer’s choice of store or the destination for shopping (Kazmi & Batra, 2009). The importance of this aspect within the context of sales promotion is that the consumers’ decision with regard which store to shop at translates into increased store traffic. As Kazmi & Batra (2009) note, such a choice has both short-term and long-term implications.

From a long-term perspective, a study by Goel and Dewan (2012) suggests several attributes that customers take into consideration when making the decision to shop at a given retail store. They include location, quality of assortments, price, promotions, sales personnel, services offered and store atmospherics. These attributes are in terms of the importance that the consumer attaches to them. According to Goel and Dewan (2012) consumers first consider the store locations before evaluating the other attributes. Although some scholars in this field of marketing consider store decisions as a high involvement decisions, others suggests that consumers in most cases have well-formed evaluative criteria (Lumpkin et al., 2011). In this case, the consumer will shop at the most convenient store as long as it consistently satisfy those criteria. Notably, the well informed criteria constitute the store image. Store image by definition is a cognition which is inferred from a set of memory inputs attached to the store and represents what the store signifies to the shopper (Kumar et al., 2014). According to Kumar et al., (2014) store image can be formed from four intermediary macro-measures. They include price, selection, convenience and quality.

While focusing on price image as one most important aspects of store image, it has been found that presentation of prices in advertisements and promotions influence the consumers’ price image of the store (Kumar et al., 2014). In particular, consumers will perceive the overall price level in a given store to be lower when the advertised prices are depicted as reductions from higher previous prices. This occurs even when other prices may remain the same. These studies therefore conclude that sales promotions may in the long-term translate into higher customer patronage as they improve the store’s price image.

Several studies have also been conducted to evaluate the effect sales promotion on store choice in the short-term. Kyureghian and Nayga (2013) found that 37% of the respondents in the survey indicated that they had chosen a specific store due to its convenient location. One in every five respondents indicated that the choice of a specific store was as a result of habit. Only 3% of the respondents indicated that they chose the specific store in order to take advantage of a price deal. Further, 5% of the respondents indicated that the store choice was a result of the store’s assortment. Kyureghian and Nayga’s (2013) findings thus suggest that sales promotion may not be very important to the consumer when choosing a store in the short term.

While still on the short-term, Zhang and Kang (2014) studied store competition using scanner panel data with respect to liquid detergents. The study found that there was no significant effect of the retailers’ promotional effects with regard to store traffic. Put differently the choice of store by the consumer was not influenced by sales promotions for the detergents. Similarly, Haans and Gijsbrechts (2011) add that promotions for single products may not have an effect on store traffic. This is because competitors often offer hundreds of products on sale on a frequent basis. Haans and Gijsbrechts (2011) in this case reached the conclusion that sales promotions may have an effect on store traffic in the short term but this is often overshadowed by competitors’ actions.

While still on the context of consumer loyalty, gender differences during sales promotions have also been studied with respect to their effect on consumer behaviour. Some of the areas of focus in this context have been on whether there is a relationship between one’s gender identity and the perception of masculinity and femininity in products, gift shopping, product preference and response to marketing activities (Arnold & Reynolds, 2012). The study findings on an area such as the importance of considering masculinity and femininity of the target audience have been mixed. Gamliel and Herstein (2011) for instance found that masculinity is a significant predictor of purchase intentions while Jackson et al., (2011) found that femininity was more important in shopping behaviour such as the purchase of Christmas gifts. Within the context of sales promotion, a study by Ndubisi (2005) focusing on consumers in Malaysia found that there were no significant gender differences on the consumer loyalty outcomes of using various promotional tools. In particular, the study found out that both males and females were likely to respond in a similar manner to promotional devices such as the use of free samples and coupons and in-store product differences. The study however controlled for the effects of education and income levels. Given that consumer behaviour differs across various countries, it is important to consider whether there are any significant differences in response to sales promotions by Tesco based on gender roles in the UK.

2.4.3 Implementing sales promotions as part of the integrated marketing communication (IMC) strategy

While previous research suggests that sales promotions can be used to improve customer loyalty, there is also evidence that not all sales promotion efforts are successful. Consequently, various efforts have been taken by scholars and practitioners to establish factors that limit the effectiveness of sales promotion programs. According to Baker et al., (2012), one of the main causes of ineffective sales promotion is the firm’s failure to coordinate the sales promotion strategy with other marketing activities. Baker et al., (2012) in particular underscores that spending large sums of money on sales promotion but failing to ensure the right quality, proper pricing and adequate distribution is likely to lead to sub-optimal outcomes. Within this context, several studies suggest that marketers should roll out their sales promotion programs as part of the integrated marketing communication (IMC) strategy (O’guinn, 2014). IMC involves the coordination of various promotional elements with other marketing activities that a firm uses to communicate with its customers. As Shimp and Andrews (2013) explain, IMC is based on the view that customers’ perceptions of a firm and its brands are a function of the synthesis of various messages that they receive of have contact with. Such messages include advertisements, sales promotions, point-of-purchase displays, packaging design and direct marketing efforts among others.

By engaging in IMC firms are able to coordinate their marketing activities in such a way that a consistent and unified image to the marketplace is projected (Shimp & Andrews, 2013). In this case, the firm is able to communicate a common theme and positioning. IMC is also recognised as an effective way of maximising returns on the promotional budget. According to Thorson and Moore (2013) coordination of sales promotion with other communication functions avoids duplication as well as helps take advantage of synergy among various promotional tools. The result is a more efficient and effective marketing communication program that costs the firm less financial resources.

2.4.4 Criticism of sales promotion

Critiques of sales promotions have raised several issues as to why this marketing activity may not be effective. Most importantly, there is the general view that sales promotion such as the use of coupons makes consumers more prone to promotions (Bonnici et al., 2011). In greater detail, existing research indicates that sales promotion tend to be attractive mainly to consumers who are highly promotion prone. Further, a research study by Luk and Yip (2008) underscores that monetary based sales promotions could leads to cases of negative impact on brand trust and preference. The underlying reason is that monetary promotions in most cases diverts the attention of consumers to financial incentives which in turn encourages increases in price sensitivity, brand switching behaviour and less importance to quality criterion.

Manzur et al., (2011), however note that the reason for being prone to prices often extends beyond price savings. In particular, this group of consumers is likely to switch brands in order to receive special deals. From a psychological perspective, such deals reflect and reinforce their self-perception of being smart shoppers. In this case, the highly promotion prone consumers may try a new product that is on promotion but there is no guarantee that they will continue to purchase it after the promotion period.  There is therefore a need to extend research on this area in order to have a better understanding on the long-term effect that sales promotions have on consumer loyalty and purchase behaviour.

2.5 Conclusions

In conclusion, this chapter sought to review extant literature on the topic of sales promotion and consumer purchase behaviour. Based on previous research work, it has been indicated that sales promotions mainly focus on gaining the attention of consumers and is consequently used in the stimulating quicker purchases and putting pressure on consumers to purchase greater volumes of a product. The review of various sales promotion devices further shows that they have different impacts in terms of consumer behaviour. These may range from impulse buying, purchase of larger volumes to trying of new products among others. In terms of effect on consumer loyalty, the existing research is largely mixed with some studies indicating that sales promotions have a positive impact on consumer loyalty which others indicate that it encourages consumer switching.

Chapter 3: Methodology

3.0 Introduction

This section includes the research methodology. The section offers an elaborate analysis of the methods, philosophy, strategies, ethical considerations and other paradigms that are applied in the research. Essentially, the chapter starts by discussing the basis of the philosophical stance. Secondly, the research discusses and justifies the research strategy in light of existing research strategies. Following the research strategy is a discussion of the research instruments and explanation on the choice of instruments. Later on, chapter discusses sampling and data collection methods. Lastly, the chapter focuses on data analysis methods and ethical considerations of the research.

3.1 Research philosophy

Research philosophy is concerned with beliefs, style of working and practical considerations when doing research Philosophy, given that is has a link with the nature and development of knowledge, influences the researcher’s choice of the research strategy (Collins, 2010). The research approaches give the researcher a lens through which to view the world and this means ascribing to some basic assumptions about the nature of knowledge. There are various research philosophies but the main ones are positivism and interpretivism (Collins, 2010). According to Salazar, Crosby and DiClemente (2011), positivism is the view which posits that scientific inquiries are not supposed to establish ultimate causes by sourcing for proof from an unidentifiable exterior source but rather confine itself to a fact-finding study of relations between facts that are accessible to observation. On the other hand, interpretivism is formed on the idea that social reality is a product of its inhabitants; the world can be interpreted by a complete consideration of the interaction between each activity and members. Thusly, arguments are made based on observations and interpretations of the existing situation (Blaikie, 2010).

This research sought to analyse the relation between sales promotion and customer purchase behaviour in the retailing industry. In addition, the research sought to better understand the literature that exists on the research topic. In order to achieve the aforementioned objectives, the research conducted a description and also measurement of directly observable facts such as consumer loyalty, repeat purchases and choice of stores. Similarly, scientific methods of data collection such as questionnaires and convenience sampling were used and an analysis done in order to arrive at empirical results. Thusly, noting that this research applied scientific measurement instruments and sought to establish relations through observable reality, then it can be termed to have taken a positivism approach. Te advantage of this philosophy is that it observes a strict methodological protocol in establishing relationships (Chui, 2007).

3.2. Research approach

In this study, as noted in the research philosophy segment, the researcher used scientific instruments to measure observable facts in order to arrive at empirical conclusions. In addition, the study the researcher formulated hypothesis based on observable characteristics of sales promotion in the retail industry. The researcher also gathers data from various respondents; collecting information on the influence of sales promotions on consumer purchase behaviour in the retail industry – specifically Tesco. Through observation of similarities and trends in the gathered data, the researcher proceeds to carry out data analysis. Consequently, the researcher makes conclusions on purchase behaviour as influenced by sales promotions based on the analysis of findings.

From the analysis above, it is apt to conclude that the research applied an inductive approach. In Crowther, Lancaster and Lancaster’s (2009) description of the inductive method as a research approach, the researcher comes up with hypothesis and theories as a way of explaining empirical observations in the study area. In general, according to Babbie (2015), the research begins with observation of patterns and then goes on to use scientific method to study and come up with a theory to explain the patterns. Moreover, Gratton and Jones (2010) notes that the inductive approach seeks to answer a question of “how” in explaining the relationship between the study variables – in this case sales promotion and customer purchase behaviours. Basically, the inductive approach emerges as superior to the deductive approach given its flexibility. This means, in inductive studies, the researcher has the liberty to come up with own theories and hypotheses with disregard to previously developed theories in the area (Crowther, Lancaster and Lancaster, 2009). The result is that a singular study phenomenon can be approached from countless perspectives.

3.3. Research strategy

Although there are numerous retail businesses operating in the UK, the researcher chose to focus on a single retail firm in the UK. The study analyses sales promotion activities of Tesco PLC and the relationship with customer purchase behaviour. This brings out the aspect of case analysis method under which the elements of a single or limited variety of cases are extensively analysed by the researcher. The choice of case study method is beneficial in that it gives the researcher the room to conduct an in-depth research on the study subject. In addition, the researcher has more flexibility in terms of research methods and thus an achievement of rich findings; case study offers a leeway for both qualitative and quantitative data collection and analysis (Saunders, Lewis and Thornhill, 2009). Moreover, besides Tesco meeting the fundamental criteria of the research (being a retail firm), the company offers a good basis for extrapolation of the results and recommendations given its size. Tesco has a team of over 500,000 people that cover over 12 markets including the UK, India, China, Hungary, and Ireland among others (Tesco plc, 2015). Tesco also serves as an ideal case study because it has been listed in the London Stock Exchange since 1947 and thus most of the trade information, such as financial records and market performance, is available publicly (London stock exchange, 2015).

3.4. Research design

This study sought to analyse the impact of sales promotion on customer purchase behaviour in the retail industry and more specifically the case of Tesco PLC. To facilitate this, and to initiate the study, the researcher conducted an in-depth review of literature surrounding the topic of sales promotion and customer behaviour in the retail industry. This led to the development of the conceptual model under which the researcher used the knowledge from the literature review and observable facts to create a set of objectives and hypothesis. In order to achieve the objectives, the research utilised an inductive approach to the case study of Tesco PLC. Research data was gathered from 150 customers at Tesco. The researcher argued that it was impractical to survey the entire retail market and thus settled on 150 respondents – all customers of Tesco PLC.

The researcher then designed close-ended survey questionnaires that, as earlier mentioned, offered a variety of advantages. The questionnaires were categorized into three sections including the demographics section, the sales promotion tools and their effect on customer behaviour section and the attitudes towards sales promotions at Tesco section. These three sections of the questionnaire utilise the effectiveness of close-ended question structures to attain both scope and similarity in responses across the respondents. The researcher also ensured that the simplicity of the questions and the choice responses to ensure respondents comprehend the intent of the questions. Additionally, the number of questions in each section was kept on the minimal level to ensure that boredom would not emerge as an issue. Of the total questionnaires handed out, 121 of them were returned and 93 of them contained information valid to be used for the analysis. The study then applied content analysis in which the volumes of text found through literature review as well as the responses in the questionnaires we analysed through coding. The table 3-1 below shows the general format of the questionnaire outline. The specific questions are found in the appendices section.

Research ObjectiveInterview question
To obtain demographic informationQ1-Q4 (Section A)
To analyse the effect of sales promotion tools and effect on consumer behaviourQI-QVI (Section B)
To analyse attitudes towards sales promotion at TescoQ1-Q8 (Section C)

3.5. Data collection and analysis

This study was conducted using the survey method. The intent of survey in research is to obtain information relevant to the researcher from a sample of persons. The mode of conducting surveys is usually through question and answers attained through interviews or questionnaires (Marsden and Wright, 2010). A total of 150 respondents got administered the questionnaires using the face to face method, 121 of which were returned. The survey method was arguably ideal for data collection attributing to the fact that it offered a way of reaching a relatively large number of people with considerably low costs. The method also offered the necessary anonymity to the respondents and facilitated the coverage of various topics about the study. The questionnaire applied the close-ended questions that restrict responses to the choices offered. The questions were structured along the five-point likert scale and the responses were allocated scores ranging from 1 to 5 basing on the “strongly-agree to strongly-disagree” band.

The application of the close-ended questionnaire lessened up the work for the researcher and enabled similarity of meaning to all the respondents in the study. Another accrued benefit of the close-ended questionnaire is that the words of the respondents are restricted and thus the researcher was in a better position to compare responses and their meanings across all the 150 respondents. On matters of time-consciousness, the close-ended questionnaire enabled the researcher to avoid time-consuming activities associated with open-ended questions. The primary data that the researcher obtained from the survey questionnaire was complemented by the secondary data obtained from different sources including academic journals, books and online databases.

On data analysis, the study used content analysis to arrive at the conclusions. Content analysis, according to Krippendorff (2013), involves a variety of techniques that are applied in the analysis and deciphering understanding from large collections of text. Specifically this study analysed a combination of literature on sales promotions and customer behaviour and also the responses from the survey questionnaires. Content analysis was aided by the fact that the questionnaires were coded, for example, categorizing sales promotion on rebates, contests, coupons, gift cards and price discounts. In addition, since each of the questionnaire had a recorded answer below the question, the researcher’s work on comparison of the different answers across the respondents was easier and similarly interpretation.

3.6. Ethics  

A study needs to attain some fundamentals before it can be considered as ethical. According to Jessop et al. (2012), the application of ethical considerations in research has proliferated and thus it is imperative that any qualitative research applies ethical considerations. Imperative to ethics is the consent of the respondents who need to volunteer, have the capacity to respond and have the information needed (Gratton and Jones, 2010). The researcher thus used convenience sampling which is based on the availability of respondents on a voluntary basis. In addition, the respondents were informed of the intent of the research before being handed the questionnaires. Moreover, as a way of upholding privacy, the research questions were tailored in a way as not to reveal the identity of the respondents and the researcher clarified to them that the responses would be used for the purposes of the study only. The results were made available to the respondent on request. Lastly, the questionnaires were handed to the respondents in a serene environment away from Tesco premises to further enhance confidentiality.

3.7. Chapter Summary

This chapter has outlined and offered justification to methodologies applied in the research. The study takes a positivist philosophy. In addition, in line with the philosophy, the study applies an inductive approach. The research strategy involved the use of survey questionnaires handed over to 150 respondents who are all customers of Tesco PLC. The respondents were arrived at through convenience sampling. The study used the content analysis method in the analysis of literature and result findings and to arrive at the conclusions and recommendations.

Chapter 5 – Conclusions and recommendations

5.1. Introduction

In this chapter the researcher summarises the major findings of the study. Further, these major findings are contrasted against the extant literature on sales promotion and consumer behaviour. Specifically, the discussion leans towards sales promotions tools including price discounts, gifts, contests, coupons and rebates. Lastly, the research offers recommendations based on findings, identifies the limitations of the study and offers direction for future research.

5.2. Conclusions

The first objective of the study was to gain an understanding on the topic of sales promotion based on the current literature review. In line with this, the study concludes that the imperative nature of sales promotion as a trigger to effective demand is apparent in the contemporary use of sales promotion. This may be well contrasted with the historical application of sales promotion tools as inferior to advertisement and publicity. Various scholars point to the distinctive nature of sales promotion, including its application of tangible tools such as give-aways and gifts, as pointed out by Ferrell et al. (2011), which make it more effective than advertising and personal selling. Conclusively, it is paramount to note the proliferating application of sales promotion in achieving effective demand and, as Chakrabortty et al., (2013) put it, in attaining substitution and complementary effects on competitor’s products. The second objective of the study was to analyse the effect of sales promotion programs on customer purchase behaviour in the retail industry. The study considered coupons, price discounts, gifts, rebates, gifts and contests as the programs and the following conclusions can be drawn from the findings.

5.2.1 Coupons and price discounts

Coupons upon presentation at the time of purchase entitle a consumer to price reduction (price discounts) on a specific product. Extant literature on coupons and their effect on consumer buying behaviour suggest that coupons are an effective way of firms communicating with their customers. Coupons open a leeway to price discrimination and thus wholesomely achieve more sales. The study findings, through the survey questionnaires, majority of the responses were in favour of the questions that coupons create a need to buy products that one has never used before and similarly to buy products that one has no intent of buying. This conclusively rules out coupons as effective in boosting sales through effective demand. This is consistent with the previous researches in this area where, for example, Schultz and Block (2014) posit that coupons are pressurise the audience to consider brand switching – often leading to what Shimp and Andrews (2013) call more basket-purchase.

5.2.2. Gifts

Gifts, in accordance to scholarly researches, serve two major purposes. Firstly, gifts encourage customers to purchase products of high volumes with the gift as the incentive. Secondly, the gifts are applied as a way of creating trial interests on new products. This means that gifts do not need to be entirely related to a product. According to the findings of the study, free gifts are effective in creating spontaneous purchases. In the literature review, the study noted that gifts help settle decisions for indecisive customers (Liu et al., 2011). This shows congruence between the findings of the study and the extant literature.

5.2.3 Rebates

In regards to rebates, this study concludes that rebates are effective in getting the customers to purchase more goods in advance and generally in pushing purchase volumes up. Rebates as the findings indicate made a majority of the customers to purchase more goods than they intended. In addition, the study concludes that rebates, on the end of the firm, allow for better customer profiling as well as reduced costs on the promotional activities. Thusly, according to the study findings, rebates are effective in controlling purchase behaviour. A keen comparison between the previous researches as shown in the literature review and the findings of the study shows a disconnect in term of popularity of rebates. Mullin (2014) indicates that rebates are less popular whilst the findings show that Tesco has rebates as one of the popular promotion strategies. However, the contemporary increase in application of rebates may be attributed to increased awareness on its cost-cutting advantages.

5.2.4. Contests

Contests call for more input from the customer and though involving, contests are a popular contemporary tool for effecting purchase in large volumes. This is according to the analysis of the study on impact of contests. In addition, as noted in the literature review, contests are more popular if applied online as opposed to at the stores. This ensures they reach a wider mass. On comparison of the findings with previous researches, the findings agree with the literature review that contests boost the sales in a firm. In addition, Reid et al.’s (2014) claim that contests drawn in large number of participants is consistent with the study since the findings indicate that at Tesco there is considerably a large category of customers that take part in the contests regularly.

Essentially sales promotion activities achieve more benefits than personal selling and advertising. Sales promotion also achieve both hardcore loyalty and brand-switcher royalty  from customers. However, sale promotion has been criticised as ineffective because it creates customers that are inclined to financial incentives and thus makes them more price sensitive. Price sensitivity is the cause of customers switching from a brand to another.

5.3. Recommendations

Based on the findings the conclusions drawn from the study, recommendations on how to enhance the use and impact of sales promotion on positive customer buying behaviour are presented in this section Firstly, from the findings, it is evident that Tesco has accorded lot of emphasis on sales promotion tools with great emphasis on the price discounts, coupons and rebates. According to the extant literature, it is paramount to strike a balance between advertising, personal selling and sales promotion. Essentially, sales promotion has been attacked by critics because it makes current customers and creates new customers more dependent on financial incentives from the firm. In this regard, it is important that sales promotion activities be run as one-time activities and not all year round. Secondly, as seen from the analysis, rebates rank lowest on the list of claims made by customers and thus more emphasis needs to be placed on them as a way of cutting costs and also attenuating consumer dependability on price cuts.  The study also recommends selective application of sales promotion tools. For example, in the findings, most customers showed contempt in trying new products that are tagged along with coupons whereas the findings on price discounts indicated that most customers found it easier try new products if there was a price discount on them. In addition, the findings show that gifts are effective in gaining large quantity purchases as well as effecting trial of new products among customers.

Another fundamental concern that arises from the findings on the attitudes of customers towards sakes promotion activities at Tesco is that a majority of Tesco customers view sales promotion as an attempt by the firm to get rid of unattractive products. This is consistent with the literature findings that historical attitudes towards sales promotion were that it was an attempt by organisations to clear stock that has overstayed its sale period in a store. The effectiveness of sales promotion activities is thus compromised if the customer doubts the intent of the same. As a way of achieving more from sales promotion, this study recommends that the firm adopts a strategy to change the attitudes of customers towards sales promotions. This can be achieved through sales promotion via the unlikely avenues, that is, products and services of high quality, which will alter the belief that the firm is getting rid of unattractive stock. The findings also indicate the majority of sales promotion products at Tesco are of average of low quality. The aforementioned strategy will also serve to alter this.

The findings of the study also evidence that aggressive sales promotion activities at Tesco lead to brand mistrust and lower preference for the brand. This, in regard to the literature review on integrated marketing communication, may be attributed to the possible sole focus on sales promotional activities with disregard to other marketing tools. In addition, sub-optimal outcomes are often associated with heavy investment on sales promotion while neglecting important tenets such as proper pricing and distribution. Since the aim of marketing is achieving a unified and consistent marketing image, this study suggests that Tesco should use integrated marketing communication (IMC) in rolling out its marketing programs to the customers. IMC is founded on the concept that customers’ attitudes and perception of the firm are entirely influenced by the various communications from the firm. Thusly, a harmonised and consistent communication system is imperative in building trust and preference for the brand.

Sales promotion has been highlighted by many scholarly studies but their long term impact on customer loyalty still remains a topic to be researched. In addition, it is important to note that the various tools used in sales promotion at Tesco, though in different measure, achieve effective demand and consequentially successful purchase decisions by customers. From the literature review also, it is evidenced that customers who are treated to sale promotions often end up being price sensitive and become more prone to brand switching. Customers who switch brands view themselves as smart shoppers and – given they switch based on sales promotion activities – are less likely to stick to a single brand. To this end, this study recommends that sales promotion activities be complemented by other marketing tools such as advertising, direct marketing, publicity and personal selling. This is because the latter are more effective in achieving customer loyalty. The following table 5-1 shows the implementation plan for the recommendations.

Table 5.1. Implementation of recommendations

RecommendationSuggested actionManagement actionTime required
 Selective application of sales promotion toolsManagement to analyse the situation and match sales promotion tools with the desired objectiveOn a need basis
 To change the attitudes of customers towards the intent of sales promotion practicesManagement to adopt sales promotion practices on quality products for a period long enough to change customer perspectiveUntil objective is attained
 To use integrated marketing communication to enhance trust and brand preferenceThe sales and marketing department to harmonise the messages let out through all the marketing avenuesA continuous measure
 To use complementary marketing tools in achieving the best possible customer loyaltyThe management needs to implement marketing tools in equal measureA continuous measure

5.4. Research limitations

During the conduct of the research, there were a number of factors that limited the research and which could have an impact on the reliability and validity of the research. One of the factors was financial constraints. In the conduct of a research of this nature, the financial implications are dire if an in-depth research and analysis is to be attained. Whilst the researcher applied methods that would cut on costs, such as the convenience sampling and survey questionnaires, the costs were still high given other areas also necessitated financial commitment. For example, commuting to the study area and hiring fellow students to aid in administering of questionnaires necessitate relatively huge sums of money. Consequentially, the researcher had to limit the study to one firm and the questionnaires to 150 respondents. Thusly, the research may not have entirely satisfied the recommendations of future researchers as stipulated by previous researches in the same field.

Besides financial limitations, time also emerged as a limiting factor. The study involved collection of data from customers at Tesco PLC and most of them were in a rush to attend to other duties which made it difficult to secure enough time for survey questionnaires. As seen from the methodology section, the researcher, out of the 150 questionnaires administered managed to get back 93 valid ones. On the part of the researcher, time was also an issue due to other commitments. In addition, lack of prior experience in conducting a research proved to be an issue though to a limited extent.

5.5. Direction for future research

Although studying the impact of sales promotion on customer purchase behaviour in the retail industry, this research focused on a single case study – Tesco PLC. This generally limited the ability to generalise research findings to other cases. The researcher thus suggests that future research in this area needs to focus on multiple case studies in order to attain results that can be generalised over the wider retail industries. Some of the organisations that may be considered alongside Tesco PLC are Sports Direct PLC, Burberry Inc, Wal-Mart, Woolworths and IKEA PLC. In addition to the study of multiple cases, the researcher recommends that future research should focus more on primary data. Among the objectives of this research was to understand literature existent in this field and thus the researcher borrowed heavily on secondary data. However, future researches can focus on primary data in order to eliminate possible bias in secondary data.


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