GAMBLING RELATED SALES PROMOTIONAL TOOLS AND ITS INFLUENCE ON CONSUMER BUYING BEHAVIOUR

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1 GAMBLING RELATED SALES PROMOTIONAL TOOLS AND ITS INFLUENCE ON CONSUMER BUYING BEHAVIOUR DIVYA GEORGE 1 Dr. THOMAS PAUL KATTOOKARAN 2 1 Assistant Professor and Research Scholar,Research Department of CommerceSt. Thomas College,(Autonomous)Thrissur 2 Associate Professor and Head,Research Department of Commerce St. Thomas College, (Autonomous)Thrissur ABSTRACT The sales promotion strategies adopted by some business houses are closely related to gambling but most of the customers are unaware about it. The customers are knowingly or unknowingly indulge in these activities. This involuntary participation will cause major changes in the buying behaviour of customers and ends up in severe changes in the buying culture and spending habit. Usually customers have an affinity towards gambling and business houses are trying to exploit this, through Gambling related sales promotional tools. Majority of the customers shows irrational buying behaviour and this may end up in various problems like stock piling, repeated purchase behaviour, brand switching, purchase acceleration/ delay and searching for promotions. This may result in a spend thrift culture among customers and gradually it will affect the savings and investment culture of people. This study concentrates on the influence of gambling related sales promotion tools on customers buying behaviour. Both primary and secondary data were collected. 100 respondents from two districts of Kerala (Thrissur and Ernakulam) were approached with structured questionnaire to collect the primary data. The gambling related sales promotional tools selected for this study are coupons, prize offers, sweepstakes and loyalty cards. Five point likert scale and percentage analysis (SPSS) were used to analyse the data. Frequency table and bar charts were used to present the data.. This will help the customers to think before indulging themselves in to these types of gambling related sales promotional activities. Key Words: Gambling related sales promotion tools, Buying behaviour, Stock piling, Purchases acceleration/ delay, brand switching, Coupons, Prize offers, Sweepstakes, loyalty cards. Introduction. Customers are knowingly or unknowingly indulge in these activities. Majority of the customers are unaware about their participation in gambling related sales promotional tools and they fail to identify these gambling nature of sales promotional tools. This involuntary participation in these activities will cause major changes in their Buying Behaviour. This may cause a serious impact on the buying culture and spending habit of our people. Business houses are trying to exploit this affinity of people towards gambling. The actual buying process involves a five step process starts with recognition of unsatisfied needs, identification of alternatives, evaluation of alternatives, purchase decision and ends with post purchase behavior. This buying process is hard to find in present buying behavior of customers. Most of them are jumping in to buying decision without considering this rational buying process. There are various factors attract customers towards irrational and sudden purchases. The colourful sales promotional offers and schemes are also one of the factor attracts customers towards this irrational buying behavior. In this study researcher is trying to correlate the relationship between gambling related sale

2 promotional tools and Changing buying Behaviour. Buying decision is the choice of ultimate decision maker, but every decision will be influenced by various factors. While making buying decisions customers needs support from various sources to satisfy their decisions. Sometimes they find this satisfaction from their own mind and brain otherwise they will depend or believe others. While involving in gambling related sales promotional activities people are not thinking about the probabilities of winning. If they are thinking about that they could save themselves from its clutches. Knowingly or unknowingly customers are getting involved in this strategies of business houses. By exploiting these unawareness and affinity towards shopping business houses are making heavy profits and achieve huge sales turnover during their offer period. Surely this unhealthy change in buying behavior will create an imbalance in our economy. Sales Promotion Promotion is one of the relevant market mix in present scenario. Promotion is a vast term it involves six elements advertising, sales promotion, public relation, direct marketing, personal selling and online marketing. Among these sales promotion is a key ingredient in marketing campaigns consists of a collection of incentive tools. Majority of them were short term designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade where advertising offers reason to buy sales promotion offe rs an incentive to buy. Sales promotion includes tools for consumer promotion like Samples, coupons, cash refund offers, price off, premium, prizes, patronage rewards, free trials, warranties tie in promotions, cross promotions, point - of - purchase displays and demonstrations. Trade promotions include prize off, advertising and display allowances and free goods and business and sales force promotions include trade shows and conventions, contests for sales representatives and specialty advertising. A decade ago the advertising to sales promotion ratio was about 60:40. Today in many consumer packaged goods companies, sales promotion accounts for 75% of the combined budget (roughly 50% is trade promotion and 25% is consumer promotion) (Philip Kotler and Kevin Lane Keller 2006). Sales promotion expenditure has been increasing as a percentage of budget expenditure annually for the last two decades. Sales promotion is now more accepted by top management as an effective sales tool. More product managers are qualified to use sales promotion tools and product managers are under greater pressure to increase current sales. The question of whether or not sales promotion weakens brand loyalty is subject to interpretation. Sales promotion, with its incessant prices off, coupons, deals and premiums may devalue the product offering in buyers minds. Certain types of sales promotions can actually enhance brand image. Gambling Related Sales Promotion It may be amazing while correlating the term gambling with sales promotion. Nobody knows how these are related and how it affects the buying behavior of consumers. Some of the consumer promotional tools as well as trade promotional tools are of gambling nature and the customers who have an instinct towards gambling will easily get attracted in these types of sales promotional tools and unknowingly it will result in stock piling, purchase acceleration and also ends up in purchase extra quantities than the actual requirement. So these types of promotional tools includes coupons, prize offers (contest, games), sweepstakes, loyalty cards, tie in promotions etc.

3 Literature Review Siby Zacharia (2011) made an attempt to find out the effects of sales promotion on Consumer Based Brand Equity. The four dimensions of Brand equity under study were Brand Awareness, Brand Association, Perceived Quality and Brand Loyalty. Three products under convenience, shopping and specialty categories were selected. The study used scale developed by Yoo and Donthu (2001) in measuring Consumer Based Brand Equity and the study clearly establishes that the sales promotion effects Consumer Based Brand Equity in all the products categories examined. Over emphasis of sales promotion is found to dilute the perceived quality, Brand Loyalty and overall Brand Equity of the Brands. Even though the Brand Awareness and Brand Associations may go up, in the long run sales promotions will affect Consumer Based Brand Equity adversely. Abdul Majeed C (2007). Study concentrated on the effects of sales promotion on consumers buying and consumption behavior. He also analysed consumers habit of accepting promotional offers and how it influence them to show repeated purchasing behavior. Another important area of the study is to understand the consumers level of awareness of important consumer sales promotion techniques adopted by marketers and their attractiveness to them. For this he selected five scale promotional tools. They are 1. Price of discount 2. Couponing, 3. Premium (including gifts, compliments, bonus packs and bundling of products) 4. Sampling and 5. Point-of Purchase (POP) promotions. It was identified that there is significant difference among various sales promotion tools in their level of consumer awareness. Price off discount is the most popular sales promotion tool in terms of their level of awareness. Regarding the repeated purchase behavior it was identified that majority of consumers who try a particular brand under the influence of any of the sales promotion tools repurchase it only under the scheme followed by price off, sampling, couponing and POP promotions. Asha Sindhu (2011) studied on the role of sales promotion strategy in progressing the number of customers, sales volume, profits and progress of the business as a whole. Researcher selected four companies to understand their interest to offer sales promotion and they were ranked as under HLL, Nestle, Colgate and P&G in consecutive order. Always the business houses are enjoying benefits of sales promotion schemes as to increase sales push up sales during off season, increase sales of products out of demand and neutralize competition effect. Among the promotional tools sales promotion methods attract more customers and mostly accepted sales promotion tool was Price off discount. Customers were very specific that the timing for sales promotions schemes are off season, during falls in sales volume and during festival and peak season. Linda H Teunter ( 2002). Here it was investigated the impact of sales promotions on purchase behavior at the individual household level. One central research question was framed to resolve this problem. Under which conditions and in what way do sales promotions influence household purchase behavior? It was found that several household variables such as size and composition of the household, social class, employment situation, store loyalty, purchase frequency, average basket size etc affects the buying behavior and the impact may be in the following manner, increase consumption, switch stores, search for promotions, but not all customers are influenced in the same way. Blallberg and Neslin(1990) concluded that how individual households respond to promotion is multidimensional. Kurt Alan Jetta (2008). Some of the expected issues related to price promotions are discussed here. What is the short term (immediate), intermediate and long term effects of sales promotion? These

4 issues can be grouped under the general heading of sales promotion decomposition research. Here the immediate effect of price promotion can be considered positive beyond any controversy. By using econometric techniques it was found that a dip in intermediate period sales due to promotion and it was demonstrated that a long term negative impact on sales promotion. Statement of problem It is an era where we can see heavy competition between business houses and one of the major strategy used by the business houses to dilute the effect of competition is to focus on sales promotion. Variety of sales promotional tools are adopted by business houses to attract customers to them. But some of the sales promotional tools have gambling elements. People who have a natural affinity towards gambling will get attracted towards this and they are not aware that their weakness in this area is exploited by the business people. This may result in an irrational buying behavior of the customers and ends up in various activities like stock piling, repeated purchase behavior, purchase acceleration, delay, brand switching, searching for promotions etc. Most of them were not desirable actions, while thinking from the point of the customers. This may create a spend thrift culture among customers, and gradually it will affect the savings and investment culture of the people. This unwanted spending and shopping culture will affect our economy adversely. Objectives of the study 1. To identify the sales promotional factors causing changes in consumer buying behaviour. 2. To analyse the impact of gambling related sales promotional tools on the buying pattern of customers. 3. To identify the level of irrational buying behaviour of customers. Research Methodology Data Collection Both primary and secondary sources were tapped to collect data. Primary data were collected by administering questionnaires among the customers of Fast moving consumer goods (FMCG) in Thrissur and Ernakulam Districts in Kerala. The period of study was in the month of June-November Primary data were collected from 100 customers of these two districts. Questionnaire was designed in such a way that it analyse the various factors relating sales promotion and consumer buying behaviour. The first part of the questionnaire seeks the demographic information about the respondents. The second part was directed towards finding out the views of the respondents on different areas of the objectives. The literature on sales promotion and consumer behaviour constitute the secondary data. Sample selection The 100 respondents were selected from two districts of Kerala (Thrissur and Ernakulam). Non probabilistic sampling method is used in current research.. The sample constitutes 50 women respondents and 50 male respondents. It is also ensured that the respondents have two qualities to participate in surveys. All of them possess minimum education to understand the questionnaire by themselves and secondly they are the consumers of consumer durable goods. Members are selected from different urban groups. The three main groups targeted to collect data are business/professionals, homemakers, youngsters/college students. The gambling related sales promotion tools selected for this study are coupons, prize offers (contests/games), sweepstakes and loyalty cards.

5 Data analysis The following statistical tools were used to analyse and interpret the primary data collected from the field. 1. Socio economic status of the respondents and variables are analysed using percentage analysis, Cross tabs and frequencies using SPSS. 2. Five point Likert scale were used to measure the variables through questionnaire. (Strongly agree-5, Agree-4, Moderately Agree-3, Disagree-2, and Strongly Agree-1) Demographic Tables Frequency Valid Percent Cumulative Percent Valid female male Total Age Valid Above 50 Frequency Valid Percent Cumulative Percent _ _ _ _ Total Status Frequency Valid Percent Cumulative Percent Valid Youngster/ Students Home Makers Business/ Professionals Total Income Frequency Valid Percent Cumulative Percent Valid above _ _ Total

6 Gambling Related Sales Promotion results in stock piling * Crosstabulation GRSP results in stock piling male female Total Strongly agree Count % within 18.0% 26.0% 22.0% Agree Count % within 40.0% 34.0% 37.0% Moderately Agree Count % within 24.0% 22.0% 23.0% Disagree Count % within 14.0% 12.0% 13.0% Strongly disagree Count % within 4.0% 6.0% 5.0% Total Count % within 100.0% 100.0% 100.0% Fig:1.1 Gambling Related Sales Promotion results in stock piling * Cross tabulation From the above table and figure 1.1 it is clear that 82% of the respondents are agreeing to the fact that the Gambling related sales promotion tools are the main reason for stock piling in FMCG sector. Among these 82% of males and 82% of females were agreeing with this fact. This study also identifies that the respondents belongs to an age group showing stock piling trend, these respondents belongs to students and home maker status.

7 Gambling Related sales promotion influence Repeated Purchase behaviour * Crosstabulation Repeated Purchase behaviour male female Total strongly agree Count % within 24.0% 18.0% 21.0% Agree Count Moderately Agree % within 48.0% 44.0% 46.0% Count % within 22.0% 22.0% 22.0% disagree Count Strongly Disagree % within 4.0% 12.0% 8.0% Count % within 2.0% 4.0% 3.0% Total Count % within 100.0% 100.0% 100.0% Fig 1.2 Gambling Related sales promotion influence Repeated Purchase behaviour * Crosstabulation

8 From the above figure 1.2 it is evident that out of 100 respondents 89% agrees with the fact that the gambling related sales promotional tools influence them to make repeated purchase of those product and service offering these promotions. It includes 94% of males and 84% of females. Here repeated purchases behaviour is showed by the respondents belong to an age group of above. At the time of their genuine purchase they will try to get the same benefits they enjoyed previously. Majority of People belongs to the status of home makers and professionals/business is showing this repeated purchase behaviour. Respondents, belongs to an income group of shows this trend of repeated purchase behaviour. Gambling Related sales promotion insists to switch brand or shop * Crosstabulation GRSP insists to switch brand or shop male female Total strongly agree Count % within 32.0% 18.0% 25.0% agree Count % within 24.0% 32.0% 28.0% moderately agree Count % within 24.0% 28.0% 26.0% disagree Count % within 16.0% 14.0% 15.0% Strongly disagree Count % within 4.0% 8.0% 6.0% Total Count % within 100.0% 100.0% 100.0% Fig: 1.3 Gambling Related sales promotion insists to switch brand or shop * Crosstabulation

9 Out of the 100 respondents 79% opined that gambling related sales promotion tools influence them to change their brand or shop they are regularly purchasing. 80% of male and 78% of female respondents agrees that they are willing to change their brands or regular shop especially for enjoying the benefits of Gambling Related sales promotion.. People from youngsters and homemaker status belong to an age group of is showing readiness to switch their brands and shops. Gambling Related sales promotion influence to change purchase timings * Crosstabulation GRSP influence to change purchase timings male female Total strongly agree Count % within 32.0% 38.0% 35.0% agree Count % within 26.0% 34.0% 30.0% moderately agree Count % within 20.0% 18.0% 19.0% disagree Count % within 14.0% 6.0% 10.0% strongly disagree Count % within 8.0% 4.0% 6.0% Total Count % within 100.0% 100.0% 100.0% Fig 1.4 Gambling Related sales promotion influence to change purchase timings * Cross tabulation

10 84% of the respondents agrees that their purchase timings are influenced by gambling related sales promotion tools. 78% of males and 90% of females are willing to postponed or pre pond their purchase timings for getting the benefits of gambling related sales promotion. Female respondents are mainly showing a trend to change their purchase timings. They are ready to postponed or pre pond their timings to get the promotional benefits. Homemaker and professionals/ business people are showing this type of behavioural changes. How long Gambling Related Sales Promotion influences your purchases * Crosstabulation How long GRSP influences your purchases male female Total long period Count % within 24.0% 14.0% 19.0% Medium period Count % within 24.0% 24.0% 24.0% short period Count % within 52.0% 62.0% 57.0% Total Count % within 100.0% 100.0% 100.0% This table analyse the period for which the gambling related sales promotion tools influence the respondents. 57% of the people opined that they are influenced only for a short period. 24% and 19% responded that they are influenced for medium period and long period respectively. This table shows a very relevant factor regarding the changes in buying behaviour that majority of the respondents are of the opinion that this gambling related sales promotional tools are influencing them for a short period. Especially in FMCG sector customers are flooded with these types of sales promotional tools, its effect will last only for a short period

11 Most relevant sales promotional factors attracts customers * Crosstabulation Sales promotional factors attracts customers Most relevant sales promotional factor considered by the participants male female advertisement Count Total % within 6.0% 8.0% 7.0% ambeance Count % within 6.0% 6.0% 6.0% buy one get one Count % within 26.0% 40.0% 33.0% loyalty cards Count % within 12.0% 4.0% 8.0% discounts Count prize offers, coupons, scratch card % within 14.0% 24.0% 19.0% Count % within 36.0% 18.0% 27.0% Total Count % within 100.0% 100.0% 100.0% Fig: 1.5 Most relevant sales promotional factors attracts customers * Crosstabulation This table and fig:1.6 helps to identify which sales promotion tools attracts the respondents to the maximum. 40% of the female respondents opined that Buy one Get One offers (BOGO) attracts them and 36% of the male respondents agrees that prize offers, coupons, scratch cards are the factors

12 mostly attracts them. Both of them agrees that these factors influence them to change their buying behaviour. Respondents belongs to an income group of and age group of are considering prize offers, coupons, scratch cards as a relevant factor attract them to sales promotion. Income group of and age group of consider BOGO offers as the important factor. Major findings of the study This study concentrates on the sales promotional tools that have gambling nature and also tries to analyse its influence on the customer s buying behaviour. This study identify the fact that majority of the male respondents are of the opinion that the attractive sales promotional tools offered by business houses are coupons, prize offers and scratch cards. All these three sales promotional tools are gambling natured. Female respondents are of the opinion that the most attractive factor among sales promotional tools are Buy one get one (BOGO) offers. The next major finding was the period for which gambling related sales promotion influence the customers. Maximum number respondents opined that their effects last long only for a short period. Only a small segment agrees that it influence them for a long period. This may be the main reason that every business houses are offering these type of sales promotion tools repeatedly. Then it was identified that the Gambling related sales promotion tools affects the buying culture of customers. Majority of the customers are ready to change their purchase timings for getting the benefits of gambling related sales promotion tools. Change in purchase timings means purchase acceleration or purchase delay. Purchase acceleration means they may speed up their purchases only because of the existence of sales promotional offers. Purchase delay means customers may postponed their purchases and they will wait for the global related sales promotional tools to make their purchases. It is also noticed that these sales promotional tools cause repeated purchase behaviour. Whenever they need products or services they will approach those shops or companies offering GRSP strategies. Sometimes the GRSP tools may results in irrational buying behaviour like stock piling and frequent brand / shop switching. Stock piling means maintain stocks which was not really useful to the customers. They increase their purchase not to meet their unsatisfied needs but only to get the benefits of sales promotional tools. This will results in unwanted collection of stocks which will seriously affects the saving habit of our customers. Without any rational thinking customers are willing to change their regular brands/ shops only for getting the offers. While switching the brand/shops they may not even look for the quality of products and services. These are the reasons which influence the buying behaviour of customers and it shows that the strong influence of GRSP tools on customers may lead to an unsatisfactory situation which affects the economic situation of our state and also create a negative impact on the saving culture and spending habit of our people. Recommendations Some of the suggestion that the research scholar want to disclose is that, GRSP tools have strong impact on customers buying behaviour, but they are not aware that they are indulging in gambling activities. So first thing we have to do is to create awareness among the customers regarding these types of tools. Customers must think about their chances of winning these offers especially those offers with coupons/tickets and prize offers. They must be motivated to avoid unnecessary purchases which results in stock piling.

13 Even though these tools increase sales turnover as well as profitability of business houses, they must be genuine to their customers to make their purchases rationally. Exploiting the irrational buying behaviour should be avoided by the business houses. Customers may not be aware about their changing buying cultures which will effects their spending and saving habit adversely. So it is the duty of our government to impose some control and regulations over these type of sales promotional tools which will leads to money concentration in the hands of few and also leads our people to a poor savings and investment culture. Conclusion Sales promotional tools are considered as one of the relevant marketing tool to promote products and services. It has several benefits with which the sellers can serve their customers. But the importance given by the retail business houses to theses tools, in the changing business environment is visible. This leads to an irrational buying behavior among customers. This study is an attempt to analyse the effects of gambling in sales promotional tools and recommendations will be provided to maintain a balance between savings and spending culture of our people. Positive aspects have to be maintained and the negatives are to be nullified. And the study also concentrates to change the buying culture of our society which will be beneficial to them. This study helps the customers of FMCG sector to inject rationality in their purchase decisions and also helps them to go through the formal buying process before making their purchases References Abdul Majeed C.(2007) A study of the effect of sales promotion on consumption of fast moving consumer goods in Kerala Thesis. Department of Commerce & Management Studies, University of Calicut, Ali Akbar Balaghar and M. Majidazar and M. Niromand (2012): Evaluation of Effectiveness of Sales Promotional Tools on Sales Volume (Case Study: Iran Tractor Manufacturing Complex (ITMC)] Middle-East Journal of Scientific Research 11 (4): , 2012 Asha Sindhu. (2011) Sales Promotion Strategy of Selected Companies of FMCG Sector in Gujarat RegionDepartment of Business ManagementSaurashtra UniversityRajkot(Gujarat) B. Nwielaghi Michael & E. Ogwo2 (2013) Trade Sales Promotion Strategies and Marketing Performance in the Soft Drink Industries in Nigeria. International Journal of Marketing Studies; Vol. 5, No. 4; 2013 Dr.Siby Zacharia (2011) The effect of sales promotion on consumer based Brand Equity,cochin University Ph.D Thesis Unpublished. Kurt Alan Jetta (2008) A Theory Of Retailer Price Promotion Using Economic Foundations: It s All Incremental Lal, R. (1990), Competitive promotions: limiting competitive encroachment, Marketing Science Linda H. Teunter (2002) Analysis of Sales Promotion Effects on Household Purchase Behavior ERIM Ph.D. Series Research in Management Erasmus University Rotterdam

14 Mela, C.F., Gupta, S. and Lehmann, D.R. (1997), The long-term impact of promotion and advertising on consumer brand choice, Journal of Marketing Research, Vol. 34, pp Philip Kotler and Kevin Lane Keller (2006), Marketing Management Pearson Prentice Hall, 12 th edition