International Journal : Behaviour Marketing

Published October 24, 2011 by Kania Sekar Asih

Simulation of Sales Promotions towards Buying Behavior among University Students

Syuhaily Osman

Centre of Excellent for Sustainable Consumption Studies

Human Ecology, Universiti Putra Malaysia

PO box 43400, Serdang, Selangor, Malaysia

E-mail: syuhaily@putra.upm.edu.my

Benjamin Chan Yin Fah

Centre of Excellent for Sustainable Consumption Studies

Human Ecology, Universiti Putra Malaysia

PO box 43400, Serdang, Selangor, Malaysia

E-mail: sb2020@yahoo.com

Yeoh Sok Foon

Management & Information Technology, UCSI University

No. 1, Jalan Menara Gading, UCSI Heights 56000, Cheras, Kuala Lumpur, Malaysia

E-mail: yeohsf@ucsi.edu.my

Received: May 8, 2011 Accepted: June 12, 2011 doi:10.5539/ijms.v3n3p78

Abstract

The purpose of this study was to examine the influence of sales promotion on buying behavior among university students. Specifically, University Putra Malaysia (UPM) was chosen as study location. A total of 150 respondents were recruited using systematic random sampling technique. The data were collected using self-administrated questionnaires. This study found that there was no significant difference between gender and buying behavior (t = 1.569, p > 0.05). On the other hand, a there is a significant differences family monthly income and buying behavior (F = 2.597, p ≤ 0.05). There were significant relationship between attitude towards price discounts (r = 0.351, p ≤ 0.01), coupons (r = 0.392, p ≤ 0.01), free samples (r = 0.491, p ≤ 0.01) and “buy-one-get-one-free” (r = 0.456, p ≤ 0.01) with buying behavior. Results of Hierarchical Multiple Regression found that free samples and buy-one-get-one-free explained 28.7% variance in buying behaviour of the respondents. The findings of this study would help marketers to understand the types of promotion that significantly influence buying behaviour of the respondents. Hence, this could help marketers in their marketing planning to become more competitive and gain profit.

Keywords: Sales promotion, Buying behavior, University students

 

1. Background of Study

Many purchase situations are so habitual that consumers conduct very little cognitive activity (Wathieu & Murre,2007). In such cases, it is hard to motivate behaviors such as brand switching or increases in the number of units purchased. One of the advantages of promotions is that they can stimulate consumers to think and evaluate brands and purchase possibilities when they otherwise may not have. Therefore, many marketers and retailers utilize different kinds of promotion tools and strategies in order to understand the preference of consumers and boost their sales. In Malaysia, there is formulated plan to turn the country’s international profile as a shopping destination (Moon, 2003). Hence, a tri-annual sales promotion event was resulted across nation and discount is one of the severe promotions type. The tri-annual sales promotion event is call as Malaysia Mega Sales Carnival (MMSC), launched in March, August and December every year (Faiz, 2009). Normally, MMSC may attract more customers spend their money, make consumption and purchase the products they wish during this super save period as the they believed that during the sales promotion, prices of all products are cheaper than usual. This phenomenon shows that some of the consumers are easily tempted when they see the word of sales promotion. Other than price reductions, coupon or rebate given by the retailer and other promotional tools like free sample, bonus pack and “buy one get one free” were found to be inducing consumer buy more than they expect (Gilbert, 1999). What are more crucial now are consumers themselves not aware the influence of sales promotion on their buying behavior and especially little is understood about their responds to the various promotional strategies practice by marketers. This will eventually lead to over-consuming and buy the products which are not necessary and useless.

 

2. Purpose and Significant of Study

Research on marketing tools is indeed important to understand the most influencing tools to compete with competitors. Through this information, marketers and retailers could well plan their resources to gain the maximum profit. Thus this study aim to investigate the preference of consumer on different promotional tools, marketers and retailers will able to aware of the consumer behavior so that they can utilize the right and the most effective promotion technique to attract customers. From the consumer perspective, this study will reveal the consumer attitude toward sales promotion and thus raise the awareness of consumers about their behavior that influenced by sales promotion. It also presents better understanding and information to consumers where their purchase behavior will be affected differently due to different type of promotional tools.

 

3. Literature Review

Promotion is one of the techniques to attract consumers to purchase more or try a product or service. Severe outcomes of promotion included sales increased, quantity of stock used and attract new consumers. For example, price promotion refers to temporary price reduction which offers to consumers. The characteristic is the retailer would label a specific percentage or cash saving for the products or services. Previous studies indicated that a sudden increase of sales would experience by retailers because of price-conscious of consumers (Banks & Moorthy, 1999; Kopalle & Mela, 1999; Smith & Sinha, 2000; Gilbert & Jackaria, 2002). According to Blackwell, Miniard and Engel (2001), price discounts played significant roles in influencing consumer product trial behavior by which indirectly attract new consumer. In term of coupon promotions, those consumers obtained coupon are entitled to get discount of the products at its original price (Ndubisi & Chew, 2006). Previous study found that coupon promotions do not have significant effect on volume of product purchase by consumer (Gilbert & Jackaria’s, 2002). Later, a study conducted by Ndubisi and Chew (2006) at Malaysia has re-affirmed the statement by Gilbert and Jackaria’s (2002). They also reported that coupon promotion was among the least used and unpopular promotional tools by consumers. However, the results in Dotson’s (2001) research proved that women report being more likely to use only coupons than men (p < 0.05) and the youngest age group (less than 25 years old) reports a higher possibility of taking advantage of bonus packs (p < 0.05), price deals (p < 0.05) and samples (p < 0.05) than the age group of 35 to 54 respectively. According to Kardes (1999), marketing managers aware of product trial related to behavioral experience of consumers towards a product. Thus, sending free sample take place in promotional tools. Free samples refers to consumers are giving a free small sample of the product so that consumers have the chance to try and use the product. Shimp (2003) reported that a free sample had influence on consumer’s buying behavior while Gilbert and Jackaria (2002) have shown otherwise. Free sample was positively related to immediate sales of that particular (Lammers, 1991). Promotion technique of “buy-one-get-one-free” is one of the types of bonus packs in which the consumers are offered the additional product at the ordinary price but are in an enhanced package. Consumer would be easily persuaded to buy products as there is no extra cost need and more valuable perceived by consumers (Sinha & Smith, 2000). Besides, this promotion technique would beneficial to retailers in speed up the stock clearance compared to price promotions (Li, Sun & Wang, 2007). Relating with buying behavior, consumers usually have endless demand to fulfill their needs and satisfaction to obtain something new or better as every individual has their own behavior, attitude and thought while choosing products, services and making purchase decision. Consequently, there is a large body of literature, which has examined consumers buying behavior and the studies have reported that many factor would influence consumer behavior whether buy or not to buy a product. According to Smelser and Baltes (2001), most of the daily life activities dominated by buying goods behavior and also experience which gained from the place such as shopping centers, city centre, shops, recreational park, tourism centre and so on, where some stimulation radius can be stimulated. William (2002) revealed that social class has significant determination on purchase evaluation criteria. Attitude formation, motivation, value orientation, income, socialization during childhood and education levels will influence one’s social class. According to Yip (2003), social class of an individual indirectly shows that low income would cause limited choice when making purchase decisions. High purchasing power, sales person and sales circumstances was among three key factors which influenced impulsive clothes buying practice among women consumer (Naimah & Tan, 1999).

 

4. Methodology

Due to time and money constraint, Universiti Putra Malaysia (UPM), one of the public universities was conveniently selected as location of study. The data collection process was conducted among the students who get access to the library main entrance in UPM. The team of researcher has chosen library as location of data collection because of the unavailability of the list students visiting the library and thus, it is impossible to get the absolute number of the patrons. For sample saiz consideration, there are about 25 thousand in-campus students in the university in year 2009. According to the Salant and Dillman (1994), 96 cases is just sufficient to represent the total sample of 25 thousand using 50:50 split approach and with ±10 sampling error. Even though this small sample might not able to representative of all the population, it is considered as appropriate sampling because of using a relatively homogeneous group and this is helpful to minimize random error that might occur in using a heterogeneous sample such as the general public (Calder, Philips & Tybout, 1981). To be specific, every 5th student who enters the library main entrance was selected to answer the questionnaire, consequently the sampling units would be 5, 10, 15, 20, and so on until a total of 150 cases were selected. Pilot study had been done before the actual study take place. The purpose of pilot study was to assess the reliability of the instruments that used in actual study. For this research, the pilot test had involved a total of 25 students in order to ensure that the question were understandable by the actual respondents. In addition, pre-test allowed the researcher to improve confidence and to make sure that the items that existed in questionnaire was suiting the study’s requirement.

4.1  Instrumentation

The present study used the questionnaire as the instrument of the study. The questionnaire was divided into three parts that were background of the respondents, the respondent’s attitude and perception with regards to different promotional tools and buying behavior of respondents. In first part of questionnaire, each respondent was asked

to answer both open-ended and close-ended questions. Open-ended questions allowed respondents to generate an answer without limitations such as age and family monthly income. On the other hand, close-ended questions required respondents to select from a set of answer already provided such as gender and race. Second part of the questionnaire was consisted of thirty two items where each different promotional tool was measured using eight items. The items developed to determine respondent’s attitude towards different promotional tools. There were four different promotional tools tested (i.e., price discounts, coupons, free samples and “buy-one-get-one-free”). Respondents were required to give a respond on a four point ordinal scale (strongly disagree, disagree, agree, strongly agree). The last of the questionnaire was also used four points ordinal scale (strongly disagree, disagree, agree, strongly agree) where there were thirteen items measuring the consumer’s buying behavior, adopted from Bakewell and Mitchell study. In the addition, the responses are given from one point in one end to four points in the other end. The Statistical Package for Social Science (SPSS) version 16.0 was used to analyze data. For analytical purposes, each scale of the total attitude score (price discounts, coupon discount, free samples and buy-one-get-one-free approach) were categorized into two categorized, solely based on the mean score of each measurement. The reliability for attitude towards price discounts scale was 0.752 while the reliability of attitude towards coupons scale was 0.827. Furthermore, the reliability for attitude towards free samples scale was 0.862 and the reliability for attitude towards “buy-one-get-one-free” scale was 0.806. Buying behavior scale had achieved reliability of 0.680. These five instruments had achieved acceptable reliability for business and social science research.

5.  Research Finding and Discussion

5.1  Respondents’ Socio-Demographic Background

A total of 150 respondents in this study, with the age ranges from 19 to 26 years old (M = 21.75). Most of the respondents were in the age between 23 to 24 years old which was 38% while the respondents who were between 19 to 20 years old and 21 to 22 years old showed 26.7% and 33.3% respectively. Only two percent of the total respondents were 25 years old and above. Majority of the respondents (71.3%) were female. In term of ethnicity, this study equally has 42.0% of Chinese and Malay respondents while the remaining (16.0%) were Indian. Looking into the financial sources of respondents, 36.7% of respondents received pocket money from their parent or by scholarship (10.0%). For the household monthly income, 35.0% of the respondents were in the range of RM3,000 to RM4,000, followed by RM2,000 to RM2,999 (28.0%) and RM1,000 to RM1,999 (27.0%). In term of monthly income of the respodents, majority of them have part time job and being sponsored, about 90.0% of them have received monthly income below RM1000.

5.2  Attitude towards Price Discounts

Table 1 demonstrated that higher percentages in responses of agree and strongly agree in general. Generally, 98.0% of the respondents agreed first two statements that are a brand which offer price discount could be a reason for them to buy and also make them feel they are getting a good buy. There were only 2.0% of the respondents disagreed on these two statements. In addition, majority of the respondents have favourite brands, but most of the time they buy a brand that offers price discount (85.3%) and agreed that promotions in the form of price discount has allowed them to buy the product earlier than planned (87.3%). However, there are more than half of the respondents (53.3%) disagreed that they usually buy the same brand even when they have a price discount on the other brands. This statement was supported by Gupta (1988), which he suggested that sales promotion was very effective in attracting consumer of other brands competitor. Furthermore, findings from Bucklin, Gupta and Siddarth (1998) also indicated that price discounts induced households to switch brands and buy earlier than planned. This study also interested in indentifying about the category of attitude towards price discounts. The scale of the total attitude towards price discounts was then categorized into two equal groups. Respondents who scored above the mean scale (23 point) were categorized as having favourable attitude towards price discounts and respondents who scored below of the mean scale were categorized as having unfavourable attitude towards price discounts. Table 1 showed that less than half of the respondents (40.0%) had unfavourable attitude towards price discounts, where as there were 60.0% of the respondents have favourable attitude towards price discounts.

5.3  Attitude towards Coupons

Table 1 indicated that the first statement was agreed by most of the respondents which were 78.0%. They acknowledged that a brand offers coupon would be a reason for them to buy. It followed by 73.4% of the respondents agreed when they buy a brand that offers coupon, they feel they are getting a good buy and also 66.0% of them usually buy the same brand even when they have a coupon on the other brands. While in the statement of “I have favourite brands, but most of the time I buy a brand that offers coupon”, there were least people agreed on this statement which was only 42.0% versus 58.0% of the respondents disagreed this statement. This is proved by the research of Gilbert and Jackaria (2002) who reported that coupon ranked last as the promotional least widely used by consumer. The data in Table 3 showed that the score of total attitude towards coupons of the respondents were commonly in range of lower than 23 points which were 70.7% of the respondents have unfavourable attitude towards coupons. On the other hand, there was only 29.3% of the respondents have favourable attitude towards coupons. This indicated that only 44 from 150 respondents have positive attitude towards coupons promotion in this research.

5.4  Attitude towards Free Samples

According to Table 1, majority of the respondents were agreed that when they buy a brand that offers free sample, they feel they were getting a good buy (72.7%) and a free sample has allowed them to buy the product earlier than planned (61.3%). There was also some statements have not much differences in the percentage between both groups which are agreed and disagreed were not significant. For example, 43.3% of the respondents agreed that “A free samples has allowed them to buy more quantities of the same product” versus 56.7% of the respondents disagreed this statement. However, Shimp (2003) reported that free sample had influence on consumers’ buying behavior. As presented by Table 3, the scale of the total attitude towards free samples score cut point for two equal groups was 23 points which mean the group who scored higher than the mean scale of 23 has favorable attitude towards free samples and respondents who scored below of the mean scale were classified as having unfavorable attitude towards free samples. Based on Table 9, it proved that majority of the respondents (77.3%) have unfavorable attitude towards free samples while there were only 22.7% of the respondents have favorable attitude towards free samples. This showed that there were only 34 respondents (22.7%) out of the 150 respondents willing to consume more during the sales promotion with free samples technique.

5.5  Attitude towards “Buy-One-Get-One-Free”

Table 1 illustrated the respondents in this study have agreed perception on all of the eight statements related to “buy-one-get-one-free” promotion tool. It showed that the percentage of the respondents who agreed on the statements was more or higher than respondents who disagreed on it. For example, almost all of the respondents (96.7%) agreed that a brand offers “buy-one-get-one-free” could be a reason for them to buy. Besides, there were 74.7% of the respondents agreed that a “buy-one-get-one-free” has allowed them to buy another brand which they do not regularly buy and 76.7% of the respondents concurred that compared to most people, they are more likely to buy brands that offers “buy-one-get-one-free”. The result of present study was consistent with the result from Li, Sun and Wang’s (2007) study which found that extra product promotions would speed up clearance sales more than do price promotions. Based on Table 1, it presented the scale of the attitude towards buy-one-get-one-free cut point for two equal groups were 23. Respondents who scored below the mean scale (≤ 23 points) of the attitude towards buy-one-get-one-free were categorized as having unfavorable attitude where as respondents who scored above the mean scale (>23 points) were categorized as having favorable attitude towards buy-one-get-one-free. In Table 3, there were 40.7% of the respondents have unfavorable attitude towards buy-one-get-one-free while 59.3% of the respondents have favourable attitude towards buy-one-get-one-free.

5.6  Respondents’ Buying Behavior

According to Brown (2007), buying behavior refers to the decision processes and acts of people involved in buying and using products. There were total of 13 statements used to examine the respondents’ buying behavior. The responses were scored by four point ordinal scale. Table 2 indicated the descriptive analysis of each question for buying behavior. The analysis had been divided into two levels of buying behavior: agree and disagree. From Table 2, it showed that majority of the respondents (96%) agreed in general, they try to get the best overall quality and 93.3% of them agreed they look very carefully to find the best value for money. More to the point, there were 92.7% of respondents agreed once they find the product they like, they will buy it regularly and 90.0% of them would carefully watch how much they spend. Among the 13 statements, the statement of “I normally shop quickly, buying the first product or brand I find that seems good enough” agreed by most least respondents which were 64.7% of respondents. The results of buying behavior level as shown in Table 3. Equal range was used to categorize the buying behavior that is low and high level. Respondents who under 37 points and above were categorized as having high levels of buying behavior and vice versa. There were 24.0% of respondents in category of low level buying behavior and 76.0% of respondents have high level of buying behavior. The respondents, who have high level of buying behavior normally, have high level of involvement where they are paying more attention towards sales promotion (Raaij et al, 2001). The result of Independent Samples T-test showed that there was no significant difference between buying behavior and gender (t = 1.569, p > 0.05). It was consistent with previous study by Chu (2006). However, the mean score of buying behavior of male (M = 40.63) respondents is slightly higher tha female respondents (M = 39.51). In term of family monthly income, this study found that there was a significant difference between family monthly income and buying behavior (F = 2.597, p ≤ 0.05). The respondents with family monthly income above RM 4000 had the highest mean score of buying behavior (M = 41.15) while the lowest mean score of buying behavior was those family monthly income below RM1000 (M = 37.50). The result indicated that the higher the family monthly income among respondents, the higher the mean scores of buying behavior.

5.7  The relationship between the selected variables and buying behavior

The result of Pearson Correlation test revealed that there was a significant relationship between attitude towards price discounts and buying behavior among respondents (r = 0.351, p ≤ 0.001) (refer to Table 4). The results of this study reaffirmed that findings of previous study by, Blackwell, Miniard and Engel (2001) that price discounts play significant roles in influencing consumers’ purchase trial behavior, and Smith and Sinha (2000), price promotions can induced consumers’ buying behavior and result in a short term increases in sales. There was a significant relationship between attitude towards coupons and buying behavior (r = 0.392, p ≤ 0.001). The result of this study was inconsistent with previous study in Kota Kinabalu, Malaysia which found that coupons have no significant relationship on product trial purchase (Ndubisi & Chew, 2006). This may caused by locality difference. This study also found that, there was a significant relationship between attitude towards free samples and buying behavior (r = 0.491, p ≤ 0.001). The result is consistent with Shimp (2003) that a free sample had influence on consumers’ buying behavior. Besides, Lammers (1991) also verified that free samples did have a positive impact on immediate sales of the product. Lastly, there was a significant relationship between attitude towards “buy-one-get-one-free” and buying behavior (r = 0.456, p ≤ 0.001). It showed that the promotion tools with “buy-one-get-one-free” did attract and induce consumers’ favarouble attitude on buying behavior. Table 5 summarizes results of a multiple regression analyses of the buying behaviour. All the four selected variables namely: price discounts, coupons, free samples and buy-one-get-one-free which significantly related to buying behaviour was regressed using hierarchical method. Model 2 was used to in interpreting the buying behaviour of the respondents. The F statistic for the overall goodness of fit of model 2 is 29.554, which is significant at α =0.01. In model 2, price discounts and coupons were excluded, thus the equation of the buying behaviour is equal to 26.411 + 0.349 (total of free sample) + 0.246 (total of buy-one-get-one free) + error. This final model explained 28.7% variance in buying behaviour and this indicated that about 30.0% of the dependent variable was explained by the two factors. Of the two variables, total free sample (β = 0.342) was more influential that total of buy-one-get-one free (β = 0.260). This result indicated that respondents would free samples and buy-one-get-one-free would lead the respondents to spend more.

6.  Implications, Recommendations and Conclusions

6.1  Implications

Every consumer has their own personal characteristic especially in choosing and making purchase decision. With the growing number of sales promotion, it is important to determine the consumers’ perception towards their buying behavior. Besides, this study also examines several factors which included socio-demographic background (gender and family monthly income) and attitude towards four different promotional tools on buying behavior. From the findings, it was noticed that consumers were respond positively to the various promotional tools that promoted by the marketers. It is because consumers are believed that during the sales promotion, prices of all products are cheaper than usual and they felt they are getting a good buy. It meant that the more positive or favourable the attitude towards promotional tools, the more increasing possibility consumers make purchase decision during sales promotion. Gender was found to have no significant difference on buying behavior but family monthly income shown there was a significant difference on buying behavior. The results of this study have several implications that would be beneficial to marketers, consumers and future research. From the marketer’s perspective, they can have a better understanding of UPM students’ buying behavior so that they can better predict the wants and needs of potential consumers. The information derived from this research enable marketers to aware of the consumer behavior. It will help them utilize the right and the most effective promotion technique to attract customers. Moreover, the study from Ndubisi and Chew (2006) also supported that by offering the right promotional tools, it can help organizations carefully plan their promotional strategies by giving preference to the more effective tools. It is vital because the precise marketing strategies decision assists the company to minimize cost and maximize their profit. In addition, the current research made consumers more aware of their easily influence behavior to sales promotion because it present better understanding and information to consumers where they respond differently due to different type of promotional tools. The research also created consumer awareness to make careful analysis before they decide to buy products and services. Hence, the consumers will realize the importance of understand the changing environment and update themselves from time to time (Hing, 2008). Finally, consumers were benefited through this study and becoming smarter day by day. This study was also useful to academicians where current study could serve as a reference and may provide some guides for researchers who would like to study about the same topic.

6.2  Recommendations

Although this research has taken vital steps to identify the factors that influence buying behavior, it also has certain limitations. Firstly, the limitation of the data prevents further exploration of the study. There was an age limit and only 150 respondents have been participated in this study. The respondents were almost homogenous for age types because there were between 19 to 26 years old and represent early adulthood only. Different stages of life cycles of respondents would yield different results. Therefore, future researchers are suggested to increase the sample size variety especially in respondents’ age to decrease the error for the purpose of the generalizing result to a wider population. They can do comparison among early, middle and late adolescents in regards to buying behavior.

Secondly, future researchers may further scope to duplicate the study in different environment and different geographical locations. Different environment played a significant factor that influence respondents behavior specifically workplace, supermarkets and shopping complexes or malls. Working individuals could behave in a different manner compared with this sample. Besides, the individuals who do not have occupation such as housewife and retired person may also behave differently because the understanding and experience of respondents towards the questions might influence their answers. Since this study was conducted in Universiti Putra Malaysia, it could not represent other people in urban or rural areas where the quality of life is different.

Thirdly, future researchers are suggested to use interview technique in doing research especially at the place where transactions happen. This will enable the researchers obtain an accurate information based on the respondents’ fresh memory. Last but not least, this research has only examines four promotional tools that influence buying behavior. Future researchers are suggested to determine other promotional tools such as rebates, sweeptakes, in pack premiums and so forth. Besides, the study can also specify in category of products or services to have more focus information.

However, for more meaningful findings the different promotional tools can be investigate together rather than separately so that the interactions among them can be better understand. As a result, it can assist marketers and consumers understand other promotional tools that may influence the buying behavior.

6.3  Conclusions

Sales promotions play an important role in the marketing programs of marketers and retailers. A large percentage of marketers’ sales are made on promotion. This situation is becoming apparently when the financial crisis and economic downturn happened in 2008. The marketers are rather use variety of promotional tools to offers consumers an extra inducement to buy their products than advertising in classic media. It is supported by the research from Cuizon (2009) who stated that sales promotions are not only effective in attaining short-term sales as they are also more cost-effective compared to other integrated marketing communications tools such as advertising. In conclusion, the consumers’ attitude towards different promotional tools on buying behavior is favourable. It showed that sales promotion tools are supplementary or complementary to existing business as an additional marketing strategy. This research demonstrated that consumers’ buying behavior were motivated by multiple types of factors, including socio-demography, promotional tools such as price discounts, coupons, free samples and “buy-one-get-one-free”. In addition, the framework provides new insights into the understanding of how UPM students respond to various promotional tools offered by marketers and the impacts on their buying behavior, which may be essential for marketers in order to utilize accurate marketing strategies to promote products.

 

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Published by Canadian Center of Science and Education International Journal of Marketing Studies Vol. 3, No. 3; August 2011 (www.ccsenet.org/ijms)

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