ABSTRACT

This project is about A STUDY ON THE EFFECT OF CONSUMER

BEHAVIOUR BY THE SALES PROMOTION DONE WITH RESPECT TO AAVIN MILK & MILK PRODUCTS. The main objective of the study is to

find out the Sales promotion & consumer behavior of Aavin milk and milk products. The research mainly focuses on the factors like quality, consumer preference, price, service, attitudes and experience of consumers. In this study, data are collected from the consumers through questionnaire(interview schedule).,200 samples are selected using

convenience sampling. Using the interview schedule prepared, the 200 consumers are interviewed personally and their opinion was collected. Secondary data was collected from the management. The collected data is analyzed using analytical tools like simple percentage and chisquare test. As per the findings, suggestions are given to the company to take initiation to fulfill the consumer needs

CHAPTER 1

1.1 INTRODUCTION ABOUT THE STUDY: Sales promotion is an important component of a small business's overall marketing strategy, along with advertising, public relations, and personal selling. The American Marketing Association (AMA) defines sales promotion as "media and nonmedia marketing pressure applied for a predetermined, limited period of time in order to stimulate trial, increase consumer demand, or improve product quality. A direct inducement that offers extra value or incentive for the product to the Sales force, distributors, or the ultimate consumer with the primary objective of creating "immediate" sales . Sales promotion is any initiative undertaken by an organisation to promote an increase in sales, usage or trial of a product or service (i.e. initiatives that are not covered by the other elements of the marketing communications or promotions mix). Sales promotions are varied. Businesses can target sales promotions at three different audiences: consumers, resellers, and the company's own sales force. Sales promotion acts as a competitive weapon by providing an extra incentive for the target audience to purchase or support one brand over another.

It is particularly effective in spurring product trial and unplanned purchases. Most marketers believe that a given product or service has an established perceived price or value, and they use sales promotion to change this price-value relationship by increasing the value and/or

lowering the price. Compared to the other components of the marketing mix (advertising, publicity, and personal selling), sales

promotion usually operates on a shorter time line, uses a more rational appeal, returns a tangible or real value, fosters an immediate sale, and contributes highly to profitability.

Popular Sales Promotions Activities: (a) Buy-One-Get-One-Free (BOGOF) Which is an example of a self-liquidating promotion. For example if a loaf of bread is priced at $1, and cost 10 cents to manufacture, if you sell two for $1, you are still in profit - especially if there is a corresponding increase in sales. This is known as a PREMIUM sales promotion tactic. (b) Customer Relationship Management (CRM) incentives such as bonus points or money off coupons. There are many examples of CRM, from banks to supermarkets. (c) New media Websites and mobile phones that support a sales promotion. For example, in the United Kingdom, Nestle printed individual codes on KITKAT packaging, whereby a consumer would enter the code into a dynamic website to see if they had won a prize. Consumers could also text codes via their mobile phones to the same effect.

(d) Merchandising

Additions such as dump bins, point-of-sale materials and product demonstrations. (e) Free gifts E.g. Subway gave away a card with six spaces for stickers with each sandwich purchase. Once the card was full the consumer was given a free sandwich. (f) Discounted prices E.g. Budget airline such as EasyJet and Ryanair, e-mail their customers with the latest low-price deals once new flights ar e released, or additional destinations are announced. (g) Joint promotions Between brands owned by a company, or with another company's brands. For example fast food restaurants often run sales promotions where toys, relating to a specific movie release, are given away with promoted meals. (h) Free samples (aka. sampling) E.g. tasting of food and drink at sampling points in supermarkets. For example Red Bull (a caffeinated fizzy drink) was given away to potential consumers at supermarkets, in high streets and at petrol stations (by a promotions team).

(i) Vouchers and coupons

Often seen in newspapers and magazines, on packs. (j) Competitions and prize draws In newspapers, magazines, on the TV and radio, on TheInternet, and on packs. (k) Cause-related and fair-trade Products that raise money for charities, and the less well off farmers and producers, are becoming more popular. (l)Finance deals For example, 0% finance over 3 years on selected vehicles. Many of the examples above are focused upon consumers. Don't forget that promotions can be aimed at wholesalers and distributors as well. These are known as Trade Sales Promotions. Examples here might include joint promotions between a manufacturer and a distributor, sales promotion leaflets and other materials (such as T-shirts), and incentives for distributor sales people and their retail clients. Sales promotion describes promotional methods using special short-term techniques to persuade members of a target market to respond or undertake certain activity. As a reward, marketers offer something of value to those responding generally in the form of lower cost of ownership for a purchased product (e.g., lower purchase price, money back) or the inclusion of additional value-added material (e.g., something more for the same price). Objectives of Sales Promotion

Sales promotion is a tool used to achieve most of the five major promotional objectives : Building Product Awareness Several sales promotion techniques are highly effective in exposing customers to products for the first time and can serve as key promotional components in the early stages of new product introduction. Additionally, as part of the effort to build product awareness, several sales promotion techniques possess the added advantage of capturing customer information at the time of exposure to the promotion. In this way sales promotion can act as an effective customer information gathering tool (i.e., sales lead generation), which can then be used as part of follow-up marketing efforts. Creating Interest Marketers find that sales promotions are very effective in creating interest in a product. In fact, creating interest is often considered the most important use of sales promotion. In the retail industry an appealing sales promotions can significantly increase customer traffic to retail outlets. Internet marketers can use similar approaches to bolster the number of website visitors. Another important way to create interest is to move customers to experience a product. Providing Information Generally sales promotion techniques are designed to move customers to some action and are rarely simply informational in nature. However, some sales promotions do offer customers access to product information. For instance, a promotion may allow customers to try a fee-based online service for free for several days. This free access may include receiving product information via email. Stimulating Demand Next to building initial product awareness, the most important use of sales promotion is to build demand by

convincing customers to make a purchase. Special promotions, especially those that lower the cost of ownership to the customer (e.g., price reduction), can be employed to stimulate sales. Reinforcing the Brand Once customers have made a purchase sales promotion can be used to both encourage additional purchasing and also as a reward for purchase loyalty (see loyalty programs below). Many companies, including airlines and retail stores, reward good or preferred customers with special promotions, such as email surprise price reductions at the cash register. special deals and

CONSUMER BEHAVIOUR: Consumer behavior is "The study of individuals, groups, or organizations and the processes they use to select, secure, use, and

dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society." The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products); The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media);

The behavior of consumers while shopping or making other marketing decisions;

 Limitations

in

consumer

knowledge

or

information

processing abilities influence decisions and marketing outcome; How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.

There are four main applications of consumer behavior: The most obvious is for marketing strategy i.e., for making better marketing campaigns. For example, by understanding that

consumers are more receptive to food advertising when they are hungry, we learn to schedule snack advertisements late in the afternoon. By understanding that new products are usually initially adopted by a few consumers and only spread later, and then only gradually, to the rest of the population, we learn that (1) companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success and (2) it is important to please initial customers, since they will in turn influence many subsequent customers brand choices.

A second application is public policy. Social marketing involves getting ideas across to consumers rather than selling something.

As a final benefit, studying consumer behavior should make us better consumers.

Benefit of Studying Consumer Behavior The benefits of studying consumer behavior have significant bearing on marketing and public relations decisions. Studies focusing on consumer behaviors yield important information and insight into what consumers are thinking. With these insights, marketing and public relations firms may enhance their particular marketing campaigns to successfully connect with consumers. 1. Perceptions Studying consumer behavior helps marketers understand consumer perceptions about a particular product or range of products. Uncovering and correcting erroneous perceptions about a particular product may give marketers an additional competitive advantage over competitors.

2.Attitudes Consumer attitudes very often determine consumer beliefs about certain products. Discovering consumer attitudes allows marketers to fine tune their campaigns to resonate with a particular consumer niche and deepen marketing reach. 3. Cultures Changing population demographics around the world affect the way marketing campaigns are designed. Understanding cultural nuances and

subtleties may allow marketers to help further define their particular tar get market. 4. Lifestyles Consumer lifestyles also determine what products appeal to certain consumer markets. Understanding consumer lifestyles is also a key component of consumer behavior that lets marketers make the appropriate appeals in promoting lifestyle products and further consumption of lifestyle products. 5. Experience Like consumer attitudes, experience also colors consumer responses to certain products. By studying consumer behavior, marketing professionals can tap into consumer experiences with similar products to promote consumption and gain competitive advantage over competitors.

1.2 INTRODUCTION ABOUT THE INDUSTRY

Dairy Development in India has been acknowledged the world over as one of the most successful development programme. India is

the second largest milk producing country with the production about 78 million tons during 1999 2000. The milk surplus States in India are Uttar Pradesh, Punjab, Haryana, Rajasthan, Gujarat, Maharastra, Andhra Pradesh, Karnataka and Tamil Nadu. The manufacturing of milk products is concentrated in these milk surplus States. Dairy sector has assumed a great significance by generating income not only to the rural but also to the urban and semi-urban population in the state especially to the women folk by providing self employment opportunity. all walks Milk and milk products provides essential nutrition to of life. It provides the main source of income next to may fail

agriculture.

In a tropical country like India, agriculture

sometimes, due to monsoon failure but dairying never fail and gives them regular, steady income. The state Dairy Development was established in 1958. The Administrative and statutory controls over the entire milk cooperative in the State were transferred to the Dairy Development on 01.08.1965. The Commissioner for the Milk Production and Dairy Development is the functional registrar under the Tamilnadu Co-operative Societies Act 1983. With the advent of Anand Pattern in Tamil Nadu, Tamil

Nadu Co-operative Milk Products Federation limited was registered on 1ST February 1981 as the State level organization. The commercial activities of the department such as

procurement, processing, packing and the sale of milk and milk products within and outside the State was entrusted to the Tamil Nadu Co-operative Milk Producers Federation ltd.

In the wake of the liberalization policy, private dairies have entered in the field of dairying. As per the direction of the National Dairy

Development Board and Government of Tamil Nadu high priority has been given for improving the performance of Co-operative by adopting a systematic approach and proper strategy implementation in milk cooperatives. Significant achievement ha been made by Milk Producers Co-operative Societies, Unions and Federation in the state of Tamil Nadu.

TWO FOLD OBJECTIVES OF THE DAIRY DEVELOPMENT DEPARTMENT Assure a remunerative price of the milk produced by the milk producers societies through a stable, steady and well market support. Distribution of quality milk and milk products at reasonable price to the consumers. FUNCTIONS OF THE DAIRY DEVELOPMENT DEPARTMENT The main functions of the Dairy Development Department are organization of societies, registration of societies, supervision and control of primary Milk Co-operative, District Co-operative Milk Producers Union and Tamil Nadu Co-operative Milk Producers Federation. The Dairy Development Department exercise statutory functions like enquiry, inspection, surcharge and super session, appointment of special officers, liquidation and winding up of societies etc. The Commissioner for milk production and Dairy Development, Deputy Milk Commissioner (Co- operative) and circle Deputy Registrars are vested with quasi-judicial power in respect of settlement of dispute,

appeal, revision and review under various provisions of Tamil Nadu Co-operative societies Act 1983 and rule 1988 made there under.

1.3 INTRODUCTION ABOUT THE COMPANY The Erode District Co-operative Milk Producers Union limited is a replica of the District Union in Gujarat state based on the system. AMUL

The Erode Milk Union is therefore sandwiched in the middle

of the 3-tier system popularly known as ANAND or AMUL pattern consisting of an apex State Level Federation at Chennai, the Union at the District level and the primary Co-operative Societies at the village level. The entire project had been funded by the National Dairy Development board, Anand through the government of Tamilnadu and the Tamilnadu Co-operative Milk Producers Federation. The project had been funded under the nationwide operation flood programme with an aim to bring about a socioeconomic awakening in rural India. The district union has 728 primary Milk Co-operative at its base and the Tamil Nadu Co-operative Milk Producers Federation as its apex body. Special features of the Company Weekly four rail milk tankers of about 16000 liters of condensed milk is supplied to Mother Dairy, Delhi from the

Coimbatore Dairy. On an average 80,000 litres of raw chilled milk is supplied for Chennai metro sales from Coimbatore Dairy.

 Milk products like Butter, Ghee, Skimmed milk powder, Milk Peda, Dates khova, Flavoured milk, Butter milk, Badam milk powder, Ice cream are produced at Erode Dairy and selling to customers according their requirements. The company is an ISO 9001 2000 certified and ISI certified for the skimmed milk powder production and the Erode Dairy ghee is sold with AGMARK certificate. National wide database laboratory established at Erode District out of 15 milk producers union selected by National Dairy Development Board in India. Union is selling ghee to Thiruppathi Thirumala

Devasthanam in tankers for Laddu preparation.

Functions of district cooperative milk producers union Establishment of chilling centers Formation of new milk routes to collect the milk produced by the member societies Collection of milk form societies, process and pack in modern Dairy plant by maintaining quality standards Fixation of procurement and selling price of milk

 Increase of milk sales by introducing innovative sales promotion activities Supply of inputs to the member societies obtained from unions Coimbatore union is acting as a feeder balancing Dair y The union spends 154.42 lakhs, 169 lakhs, 187.74 lakhs, 219.28 lakhs for marketing for the past five years, which includes transport and agents commission. The union spends 1.20 lakhs, 3 lakhs for advertisement. To provide artificial insemination and veterinary aid facilities to the milk producers.

CHAPTER-2 2.1OBJECTIVES OF THE STUDY

Primary objective: The main objective of the study is to study the Sales promotion & consumer behaviour of Aavin milk and milk products in Coimbatore city Secondary objective: To identify the sales promotion strategies adopted by the aavin milk company To study the quality and consumer preferences towards aavin milk& milk products. To identify the satisfaction level of customers towards the price & service provided by the company. To study the attitudes and experience of customers towards aavin products and to suggest the valuable measures based on the findings.

2.2 SCOPE OF THE STUDY The scope of the study is to identify and analyse the consumer behavior towards the service, price & quality of aavin milk & milk

products and also to analyse the sales promotional strategies adopted by the company.This study will help the organization to increase the sales of the Aavin milk and milk products and to strengthen the sales promotion strategies.

2.3 REVIEW OF LITERATURE Ketelaar, et al., (2001), As the flow of online sales increases and more companies begin to move into the digital arena, advertisers and digital designers are forced to stay on the cutting edge in terms of website design and content presentation. In a search to find website design techniques that increase information flow and website stickiness, two possibilities were found, persuasive navigation and "open", or visually rhetorical, online advertising. These two techniques focus on presenting targeted information to consumers, in the form of website content advertisements, while they browse a given website. Bright (2004) , The concept of intra-site advertising was tested by him and was found to be effective in terms of increasing information flow on a controlled website. Open advertising has not yet been tested in the online environment, with current studies focusing on print media, however it presents promises potential as an online persuasion technique. This paper will further explore the application of open advertising in the online context as well as elements of interactivity and design. (Zakon, 2002) says that the Web has come to encompass some 38 million plus websites. It is a tossup as to whether any of these websites effectively communicate with their target audience in a manner that is both user-friendly and efficient in terms of brand impact and sales. As most consumer advocates have come to know, digital

environments that frustrate users dramatically decrease brand loyalty and can cause consumers to completely abandon a brand community in both real and virtual worlds. In an effort to stem off this flow of frustration, two new digital design techniques provide an intriguing way to increase information flow within digital environments while providing imager y and content that makes users feel intelligent and engaged. These new design techniques are persuasive navigation and open online

advertising, respectively. One technique deals with the information architecture of the website, while the other addresses imagery; both in an equally seductive fashion.

Kioumarsi et al.,(2009),says that Personality characteristics impact consumer behavior because they shape the way in which consumers respond to messages at a given time. This response changes minute to minute based upon the unique characteristics of the target consumer and their ongoing life experience. The online environment presents a vast opportunity for companies to interact with consumers on a personal, customized level. Individual differences are an important aspect of this interaction as they provide insight into how people with varying levels of experience with the online environment respond to interactive persuasion techniques.

Friestad and Wright (1994), in their presentation of the PKM, posit that the effectiveness of advertising persuasion techniques depends upon the level of persuasion expertise each individual possesses. In an online environment, measurement of this effect can be achieved by looking at user experience levels, self efficacy, and

number of hours spent online. General knowledge gleaned from the PKM dictates that consumers with more experience in the online environment will be better at coping with persuasion techniques therein, such as open, visually rhetorical advertisements. Ketelaar et al(2004), conducted the study that an individual's need for cognition refers to their motivation to engage in meaningful cognitive thought or undertaking. A consumer's need for cognition will impact their ability to deal with tasks and social settings, such as responding to advertising messages or calls to action. This applies directly to the concept of open, visually rhetorical advertising because such messages require a higher cognitive processing load to be understood and learned. Although need for cognition was not found to impact interpretations of open advertisements in the Ketelaar et al.

study, it is still an interesting variable that can be effectively measured and manipulated for this type of research endeavor. Additionally, cognitive response, and the need therein serve an important part in the development of brand attitudes within a target consumer.

McGinnis and Jaworski(1989),The concept was elaborated upon by in their seminal piece regarding information processing in

advertising: "Cognitive and emotional responses related to imagined product consumption experiences are the strongest determinants of brand attitude. As shown, need for cognition is linked to the

development of brand attitude in consumers. When examined in terms of its relationship to time spent processing online, visually rhetorical advertising, need for cognition could prove to be an interesting

differentiator within the sample group. In addition to need for cognition, an internal motivation toward the product being advertised should be apparent within driven consumers. This motivation helps push the consumer toward unraveling the visual riddle presented in an open advertisement. Type of motivation, either utilitarian ("goal-oriented") or hedonic ("expressive"), is a diverse and interesting factor to analyze across consumer groups. Phillips (2000), shown in research undertaken by, consumers with utilitarian, goal-oriented motivations are keen on evaluating product attributes and therefore less likely to be attracted to open advertisements. Consumers with hedonic or "expressive" goals are more likely to seek out the entertainment value in the open advertisement. Huang (2003), in his online study of websites, found that level of attention in consumers is most linked to utilitarian design while both control and interest are linked to hedonic performance measures.

Liu, et al (2002), based on their online research, concluded that higher levels of active control within consumers resulted in being geared towards more utilitarian, goal-based website designs. As shown in these studies, motivation is an individual difference worth characterizing. Type

of consumer motivation is extremely important when analyzing online consumer behavior as it helps categorize amongst user groups, across sites.

2.4 RESEARCH METHODOLOGY RESEARCH DESIGN

The research design chosen is descriptive as the study reveals the state of facts existing. Descriptive research design: Descriptive research studies are those studies which are concerned with describing the characteristics of a particular individual, or a group. The study is concerned whether certain variables are associated with the study. And also the study is concerned with specific predictions, with narration of facts and characteristics concerning an individual, group or situation. METHODS OF DATA COLLECTION: While deciding about the method of data collection for the study the researcher should keep in mind the two types of data collection. Primary Data: Data has been collected from few respondents by communicating with them directly and discussing their views about the organization. Most of these included informal discussion with the employees. One of the other sources of collecting the primary data was by distributing the questionnaires and getting back the responses for them. Such questionnaires were distributes among the production employees and also the executive level employees.

Secondary Data: Secondary data has been collected from the following sources:

 Books and journals at the organization and the college library. Through the internet. SAMPLING: Sampling is that part of statistical practice concerned with the selection of individual observations intended to yield some knowledge about a population of concern, especially for the purposes of statistical inference. Convenience sampling: Convenience sampling is a type of nonprobability sampling which involves the sample being drawn from that part of the population which is close to hand. That is, a sample population selected because it is readily available and convenient. It may be through meeting the person or including a person in the sample when one meets them or chosen by finding them through technological means such as the internet or through phone. Sample Size The size of the sample selected for study is 200 units. DATA ANALYSIS Collected primary and secondary data are scheduled to suitable table for the purpose of analysis. Suitable statistical tools were applied in various places for analysis.

TOOLS FOR DATA ANALYSIS

The collected data have been analyzed with the help of tools like simple percentage method, chi square test. Data collected was analyzed using tools like; Percentage analysis Chi-Square test SIMPLE PERCENTAGE ANALYSIS Simple percentage analysis refers to a ratio. With the help of absolute figures it will be difficult to interpret any meaning from the collected data, but when percentages are found out then it becomes easy to find the relative difference between two or more attributes. No. of Respondents Percentage = ______________________ 100 Total Number of Respondent

CHI-SQUARE TEST The Chi-square test is for testing the independence of two variables and testing hypotheses concerning proportions. One of the tests of

proportions is that of testing the differences among several population proportions, which is an extension of testing the difference between two population proportions. This Chi-square test is used for testing the difference between two population proportions, testing the difference among several population proportions. The Chi-square test can be used to test the differences among (c) population proportions by using a tabular design for the analysis of the frequencies Chi-Square test enables whether or not two attributes are associated. Chi-Square is calculated as follows.

Where O = observed frequency of the cell in row and column E= expected frequency of the cell in rows and column

Degree of freedom ( DF ): DF = (r-1)* (c-1) Where R=Number of rows in the table. C=Number of columns in the table.

2.5 LIMITATIONS OF THE STUDY

 Some customers hesitate to fill the questionnaire. It is not assured that the responses from all the respondents are true as some of them may like to tell the incorrect information. The survey was conducted in a short period as a part of the curriculum. Certain individuals took more time than require for answering the questionnaire

CHAPTER -3 ANALYSIS AND INTERPRETATION

Table No.1 Table showing the Opinion about Gender

Particulars Male

No. of Respondents 152

Percentage 76

Female TOTAL

48 200

24 100

Interpretation From the above table it is clear that 76% of the respondents are male and the remaining 24 % of the respondents are female.

CHART NO.1 Chart showing the Opinion about Gender

TABLE NO.2 Table showing the Opinion about Age Particulars (In years) 18-20 20 10 No. of Respondents Percentage

21-30

85

42.5

31-40

65

32.5

Above 41

30

15

TOTAL

200

100

Interpretation From the above table 42.5 % of the respondents are coming under the age group of 21 30 yrs and 32.5 % of the respondents are under the age group of 31 40 years and Above 41 are 15%.