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A STUDY ON SALES PROMOTION ACTIVITIES OF VOLKSWAGENINDIA WITH REFERENCE TO ABRA MOTORS PVT. LTD.A PROJECT REPORTSubmitted in partial fulfillment of theRequirements for the award of the degree ofMASTER OF BUSINESS ADMINISTRATIONSubmitted byNOOR ASIK AHAMED MARAIKARREG NO:711600281Under the guidance ofDR.S.G. BALAJIMBA., M.Phil., PGDIB., Ph. DAssistant ProfessorFull Time- M.B.AMeasi Institute of Management(Affiliated to the University of Madras)Chennai-600 014JULY-20171
MEASI INSTITUTE OF MANAGEMENT(Affiliated to University of Madras)#87, Peters Road, Royapettah, Chennai-600 014BONAFIDE CERTIFICATEThis is to certify that the project report titled “A STUDY ON SALES PROMOTIONACTIVITIES OF VOLKSWAGEN INDIA WITH REFERENCE TO ABRAMOTORS PVT. LTD.” submitted by NOOR ASIK AHAMED MARAIKAR (Regno:711600281) in partial fulfilment of the requirements of the Post-Graduate Degreecourse in Masters of Business Administration (M.B.A) for the academic year 20162017 is the original work of the above candidate.Dr. S. G. BALAJIAHMEDPROJECT GUIDEDR. D. NISARDIRECTOR2
DECLARATIONI, NOOR ASIK AHAMED MARAIKAR REG NO:711600281 final year student ofM.B.A Department of business Administration of MEASI INSTITUTE OFMANAGEMENT, CHENNAI would like to declare that the project entitled “ASTUDY ON SALES PROMOTION ACTIVITIES OF VOLKSWAGEN INDIAWITH REFERENCE TO ABRA MOTORS PVT. LTD.”, is a bonafide work doneby the researcher in partial fulfilment of M.B.A Degree course affiliated to Universityof Madras. The research submitted is my original work and true to the best of myknowledge and belief.Place:Date:NOOR ASIK AHAMEDMARAIKAR3
ACKNOWLEDGEMENTI take this opportunity to express my gratitude to all those without whom this projectwould not have been possible. First of all, I would like to thank Dr. D. NISARAHMED, Director, Measi institute of management.I am really thankful to Mr. KHALID BUHARI Managing director of ABRA MotorsPvt. Ltd. who was very helpful in securing the project, and also thankful to Mr.VINOTH KUMAR, HR Training and development ABRA Motors Pvt. Ltd. who hasbeen very supportive throughout the project and I am grateful to Mr. ASHRAF Salesmanager of ABRA Motors Pvt. Ltd., who has been very helpful to complete theassignments without any hurdle and for explaining the information needed.Sincere thanks to my guide DR. S. G. BALAJI, Assistant professor, Measi institute ofmanagement, who encouraged and helped me from the beginning to develop theconcept ideas to pursue the project in legit way, I have learnt so many things from him.I also wish to express my gratitude and thank my family and friends who backed methroughout the project. I would like to convey my sincere thanks to those good soulswho helped me to take the project to next level.4
TABLE OF FINITIONS AND CONCEPTINDUSTRY .43.5SCOPE OF INDUSTRYGLOBAL SCENARIOINDIAN SCENARIOSWOT ANALYSIS OF INDUSTRYFUTURE TRENDS OF INDUSTRYCOMPANY PROFILENEED FOR THE STUDYOBJECTIVE OF THE STUDYSCOPE OF THE STUDYREVIEW OF LITERATURERESEARCH METHODOLOGYRESEARCH DESIGNSAMPLING METHODOLOGYDATA COLLECTION METHODOLOGYPILOT STUDYHYPOTHESIS AND STATISTICAL .14.25STATISTICAL PAKAGE USEDLIMITATION OF THE STUDYDATA ANALYSIS AND INTERPRETATIONDESCRIPTIVE ANALYISISSTATISTICAL ANALYSISSUMMARY OF FINDING, SUGGESTIONS STIONNAIRE5
LIST OF .1.254.1.26PARTICULARSAGE OF THE RESPONDENTSGENDER OF THE RESPONDENTSOCCUPATION OF THE RESPONDENTSMARITAL STATUS OF THE RESPONDENTSINCOME OF THE RESPONDENTSVISIT TO SHOWROOMCAME TO KNOW ABOUT USEASE OF LOCATIONAMBIENCE OF LOCATIONAWARENESS EXCHANGE AND LOYALTYPROGRAMMESEFFECTIVE EXCHANGE AND LOYALTYPROGRAMMESAVAILABILITY OF DEMO CARSSATISFACTION LEVEL THROUGH FREEGIFTSTEST DRIVE OFFEREDEXPERIENCE ON TEST DRIVEATTRACTIVENESS OF ADVERTISMENTVISIT OUR WEBSITEVISIT OUR SOCIAL MEDIA PAGEWEBSITE AND SOCIAL MEDIA PAGEATTRACTIVENESS OF THE COMPETITIONINSURANCE POLICY FOR NEW CARSEFFECTIVENESS OF LOYALTYPROGRAMMESDISCOUNT POLICYSATISFACTION LEVEL THROUGHEXTENDED WARRANTYRATINGS OF ABRA MOTORSREFERRALSPAGE 616263646
LIST OF E OF THE RESPONDENTS3924.1.2GENDER OF THE RESPONDENTS4034.1.3OCCUPATION OF THE RESPONDENTS4144.1.4MARITAL STATUS OF THE RESPONDENTS4254.1.5INCOME OF THE RESPONDENTS4364.1.6VISIT TO SHOWROOM4474.1.7CAME TO KNOW ABOUT US4584.1.8EASE OF LOCATION4694.1.9AMBIENCE OF LOCATION47104.1.1048114.1.11124.1.12AWARENESS EXCHANGE AND LOYALTYPROGRAMMESEFFECTIVE EXCHANGE AND LOYALTYPROGRAMMESAVAILABILITY OF DEMO CARS134.1.13SATISFACTION LEVEL THROUGH FREE GIFTS51144.1.14TEST DRIVE OFFERED52154.1.15EXPERIENCE ON TEST DRIVE53164.1.16ATTRACTIVENESS OF ADVERTISMENT54174.1.17VISIT OUR WEBSITE55184.1.18VISIT OUR SOCIAL MEDIA PAGE56194.1.19WEBSITE AND SOCIAL MEDIA PAGE57204.1.20ATTRACTIVENESS OF THE COMPETITION58214.1.21INSURANCE POLICY FOR NEW CARS59224.1.22EFFECTIVENESS OF LOYALTY PROGRAMMES60234.1.23DISCOUNT POLICY61254.1.25RATINGS OF ABRA MOTORS63264.1.26REFERRALS6449507
INTRODUCTION1.1 SALES PROMOTIONSales promotion is the process of persuading a potential customer to buy theproduct. Sales promotion is designed to be used as a short-term tactic to boost sales– it is rarely suitable as a method of building long-term customer loyalty. Somesales promotions are aimed at consumers. Others are targeted at intermediariesand at the firm's sales force.Sales promotion is one of the five aspects of the promotional mix. (Theother 4 parts of the promotional mix are advertising, personal selling, directmarketing and publicity/public relations.) Media and non-media marketingcommunication are employed for a pre-determined, limited time to increaseconsumer demand, stimulate market demand or improve product availability.Examples include contests, coupons, freebies, loss leaders, point of purchasedisplays, premiums, prizes, product samples, and rebates.Sales promotions can be directed at either the customer, sales staff, ordistribution channel members (such as retailers). Sales promotions targeted at theconsumer are called consumer sales promotions. Sales promotions targeted atretailers and wholesale are called trade sales promotions. Some sale promotions,particularly ones with unusual methods, are considered gimmicks by many.Sales promotion includes several communications activities that attempt toprovide added value or incentives to consumers, wholesalers, retailers, or otherorganizational customers to stimulate immediate sales. These efforts can attemptto stimulate product interest, trial, or purchase. Examples of devices used in salespromotion include coupons, samples, premiums, point-of-purchase (POP)displays, contests, rebates, and sweepstakes.Sales promotion is implemented to attract new customers, to hold presentcustomers, to counteract competition, and to take advantage of opportunities thatare revealed by market research. It is made up of activities, both outside and inside8
activities, to enhance company sales. Outside sales promotion activities includeadvertising, publicity, public relations activities, and special sales events. Insidesales promotion activities include window displays, product and promotionalmaterial display and promotional programs such as premium awards and contests.Sale promotions often come in the form of discounts. Discounts impact the wayconsumers think and behave when shopping. The type of savings and its locationcan affect the way consumers view a product and affect their purchase decision.The two most common discounts are price discounts (“on sale items”) and bonuspacks (“bulk items”). Price discounts are the reduction of an original sale by acertain percentage while bonus packs are deals in which the consumer receivesmore for the original price. Many companies present different forms of discountsin advertisements, hoping to convince consumers to buy their products.1.2 DEFINTION OF SALES PROMOTIONSales promotion implies a wide variety of promotional activities. In the currentmarketing practices, the role of sales promotion has increased tremendously.Companies spare and spend millions of rupees to arrest consumer attention towardproducts and to arouse purchase interest. Sales promotional efforts also improvefirm’s competitive position.Such efforts seem inevitable in today’s marketing situation. It can also reducethe degree of consumer dissatisfaction. Nowadays, sales promotional efforts areundertaken for variety of purposes. It is among the most critical and expensivemarketing decisions.Sales promotion covers those marketing activities other than advertising,publicity, and personal selling that stimulate consumer purchasing and dealereffectiveness. Sales promotion mainly involves short-term and non-routineincentives offered to dealers as well as consumers. The popular methods used forsales promotion are demonstration, trade show, exhibition, exchange offer,seasonal discount, free service, gifts, credit facilities, contests, and so on.9
Philip Kotler(1936) “Those marketing activities other than personal selling,advertising, and publicity that stimulate consumer purchasing and dealereffectiveness, such as display, shows, demonstrations, expositions, and variousother non-current selling efforts, not in ordinary routine.”Robert C. and Scott A.: “Sales promotion consists of a diverse collection ofincentive tools, mostly short-term, designed to stimulate quicker and/or greaterpurchase of particular products/services by consumers or traders.”Sales Promotion is one of the four aspects of promotion i.e. advertising,personal selling, and publicity/ public relations. According to AMA, “salesPromotion includes all those sales activities that supplement both personal sellingand advertising and coordinate them and help to make them effective such asdisplays, shows and exhibitions, demonstrations and other non-recurrent sellingefforts not used in the ordinary routine.”“Sales promotion includes incentive-offering and interest-creating activitieswhich are generally short-term marketing events other than advertising, personalselling, publicity and direct marketing. The purpose of sales promotion is tostimulate, motivate and influence the purchase and other desired behaviouralresponses of the firm’s customers.”Sales promotion offers a direct inducement to act by providing extra worth overand above what is built into the product at its normal price. These temporaryinducements are offered usually at a time and place where the buying decision ismade. Not only are sales promotions very common in the current competitivemarket conditions, they are increasing at a fast pace. These promotions are directinducements. In spite of the directness, sales promotions are fairly complicated anda rich tool of marketing with innumerable creative possibilities limited only by theimagination of promotion planners. Sales promotion is often referred to by thenames of ‘extra purchase value’ and ‘below-the-line selling’.Today we find companies in almost all sectors offering some sort of apromotion scheme. These sectors range from automobiles to beverages, from10
financial services to foods, from household durables to services, from householdproducts to business products, from personal care to textiles and apparel. (Boonrod,2009).In recent years, sales promotion has been used widely to supplement andcoordinate advertising and personal selling efforts. Various sales promotion toolssuch as free samples, premium on sale, prize contests, dealer incentives, couponsand gifts, etc., are being used to stimulate market demand for products of daily use.The basic purpose is to stimulate on the spot buying through short term and nonrecurring incentives.CONCEPTS OF SALES PROMOTIONAL ACTIVITIESThe sales promotion activities are Money off coupon Competition Discount voucher Free gifts Loyalty cards Advertisement Demo Exchange offer Loan Extended warranty Social Media marketingMoney off coupons customers receive coupons, or cut coupons out of newspapersor a products packaging that enables them to buy the product next time at a reducedprice. This money coupon helps the customer to avail the discount on the next orupcoming purchases.Competitions buying the product will allow the customer to take part in a chanceto win a prize. The customers are provided a chance to participate in a competitionand win an exciting prize.11
Discount vouchers a voucher (like a money off coupon). Discount vouchers aresame like the money voucher.Free gifts a free product when buy another product. The customer is provided witha free gift at a time of purchase in order to retain the customer and provided betterpurchasing experience.Point of sale materials e.g. posters, display stands – ways of presenting theproduct in its best way or show the customer that the product is there.Loyalty cards e.g. Nectar and Air Miles; where customers earn points for buyingcertain goods or shopping at certain retailers – that can later be exchanged formoney, goods or other offersLoyalty cards have recently become an important form of sales promotion. Theyencourage the customer to return to the retailer by giving them discounts based onthe spending from a previous visit. Loyalty cards can offset the discounts they offerby making more sales and persuading the customer to come back. They alsoprovide information about the shopping habits of customers – where do they shop,when and what do they buy? This is very valuable marketing research and can beused in the planning process for new and existing products.Advertisement is an audio or visual form of marketing communication thatemploys an openly sponsored, non-personal message to promote or sell a product,service or idea. Sponsors of advertising are often businesses who wish to promotetheir products or services. Advertising is differentiated from public relations in thatan advertiser usually pays for and has control over the message. It is differentiatedfrom personal selling in that the message is non-personal, i.e., not directed to aparticular individual. Advertising is communicated through various massmedia, including oldmedia suchmagazines, Television, Radio, outdoorasadvertising or directnewspapers,mail;or newmedia such as search results, blogs, websites or text messages. The actualpresentation of the message in a medium is referred to as an advertisement or "ad".Commercial ads often seek to generate increased consumption of their products orservices through "branding," which associates a product name or image with12
certain qualities in the minds of consumers. On the other hand, ads that intend toelicit an immediate sale are known as direct response advertising. Noncommercial advertisers who spend money to advertise items other than a consumerproduct or service include political parties, interest groups, religious organizationsand governmental agencies. Advertising may also be used to reassure employeesor shareholders that a company is viable or successful.In 2015, the world spent an estimate of US 529.43 billion on advertising. Itsprojected distribution for 2017 is 40.4% on TV, 33.3% on digital, 9% onnewspapers, 6.9% on magazines, 5.8% on outdoor and 4.3% on radio.Internationally, the largest ("big four") advertising conglomerates are Interpublic,Omnicom, Publicis, and WPP.In Latin, ad vertere means "to turn toward".Demo A demonstration of a product or technique.Exchange offer An exchange offer, in finance, corporate law and securities law, isa form of tender offer, in which securities are offered as consideration instead ofcash.Loan A loan is a debt provided by an entity (organization or individual) to anotherentity at an interest rate, and evidenced by a promissory note which specifies,among other things, the principal amount of money borrowed, the interest rate thelender is charging, and date of repayment. A loan entails the reallocation of thesubject asset(s) for a period of time, between the lender and the borrower.The loan is generally provided at a cost, referred to as interest on the debt, whichprovides an incentive for the lender to engage in the loan. In a legal loan, each ofthese obligations and restrictions is enforced by contract, which can also place theborrower under additional restrictions known as loan covenants. Although thisarticle focuses on monetary loans, in practice any material object might be lent.Acting as a provider of loans is one of the principal tasks for financialinstitutions such as banks and credit card companies. For other institutions, issuingof debt contracts such as bonds is a typical source of funding.Extended warranty An extended warranty, sometimes called a service agreement,a service contract, or a maintenance agreement, is a prolonged warranty offered13
to consumers in addition to the standard warranty on new items. The extendedwarranty may be offered by the warranty administrator, the retailer or themanufacturer. Extended warranties cost extra and for a percentage of the item'sretail price. Occasionally, some extended warranties that are purchased for multipleyears state in writing that during the first year, the consumer must still deal withthe manufacturer in the occurrence of malfunction. Thus, what is often promotedas a five-year extended guarantee, for example, is actually only a four-yearguarantee.Extended warranties have terms and conditions which may not match the originalterms and conditions. For example, these may not cover anything other thanmechanical failure from normal usage. Exclusions may include commercial use,"acts of God", owner abuse, and malicious destruction. They may also excludeparts that normally wear out such as tires and lubrication on a vehicle.These types of warranties are provided for various products, automobileand electronics are common examples. Warranties which are sold through retailerssuch as Best Buy may include significant commission for the retailer as a resultof reverse competition. For instance, an auto warranty from a car dealership maybe subcontracted and vehicle repairs may be at a lower rate which couldcompromise the quality of service. At the time of repair, out-of-pocket expensesmay be charged for unexpected services provided outside of the warranty terms oruncovered parts.Social Media Marketing is the use of social media platforms and websites topromote a product or service. Most of these social media platforms have their ownbuilt-in data analytics tools, which enable companies to track the progress, success,and engagement of ad campaigns. Companies address a range of stakeholdersthrough social media marketing including current and potential customers, currentand potential employees, journalists, bloggers, and the general public. On astrategic level, social media marketing includes the management of theimplementation of a marketing campaign, governance, setting the scope (e.g. moreactive or passive use) and the establishment of a firm's desired social media"culture" and "tone". To use social media effectively, firms should learn to allowcustomers and Internet users to post user-generated content (e.g., online comments,product reviews, etc.), also known as "earned media", rather than use marketer14
prepared advertising copy. While social media marketing is often associated withcompanies, as of 2016, a range of not-for-profit organizations and governmentorganizations are engaging in social media marketing of their programs or services.15
1.2 PROFILE OF AUTOMOBILE INDUSTRYThe automotive industry in India is one of the larger markets in the world. It hadpreviously been one of the fas
21 4.1.21 INSURANCE POLICY FOR NEW CARS 59 22 4.1.22 EFFECTIVENESS OF LOYALTY PROGRAMMES 60 23 4.1.23 DISCOUNT POLICY 61 25 4.1.25 RATINGS OF ABRA MOTORS 63 26 4.1.26 REFERRALS 64 . 8 INTRODUCTION 1.1 SALES PROMOTION Sales promotion is the process of persuading a potential customer to buy the
