A STUDY ON IMPACT OF PROMOTIONAL ACTIVITIES AND CONSUMER SATISFACTION

[AMONG AUTOMOBILES]

Submitted by

Saumya ParmarthiDivision B; Roll No. 3; PRN: 11010224063

Manu GuptaDivision C; Roll No. 39; PRN: 11010224161

Rohit NemaDivision C; Roll No. 52; PRN: 11010224063

Batch: 2011-16; BBA.LLB

Of

Symbiosis Law School, NOIDA

Symbiosis International University, PUNE

In

March, 2014

Under the guidance of

Dr. Sunita DwivediFaculty-in-Charge

Customer Relationship ManagementEmail id: sunita.dwivedi@scms.edu.in

CERTIFICATE

The Project entitled “A Study on Impact of Promotional Activities and Consumer Satisfaction- among Automobiles” submitted to the Symbiosis Law School, NOIDA for Customer Relationship Management as part of internal assessment is based on our original work carried out under the guidance of Prof. Sunita Dwivedi from December’2013 to April’2014. The research work has not been submitted elsewhere for award of any degree.

The material borrowed from other sources and incorporated in the thesis has been duly acknowledged.

I understand that I myself could be held responsible and accountable for plagiarism, if any, detected later on.

Signature of the candidates

Date: 3rd April’2014

ACKNOWLEDGEMENT

Foremost, we would like to express my sincere gratitude to our advisor Prof. Sunita Dwivedi the continuous support, patience, motivation, enthusiasm, and immense knowledge which she has provided.

Finally, we take this opportunity to extend our deep appreciation to our family and friends, for all that they meant to us during the decisive times of the completion of our project.

INDEX

S. No. Particulars Page No.

1. Introduction

2. Object of the Study

3. Literature Review

4.

5. Research Methodology

6. Data Analysis

7.

8. Conclusion

9. References

LIST OF FIGURESFig. Page No.

For Manufacturers:

1. Are there any promotional activities being conducted presently by your company?

2. What kinds of activities are being conducted?

3. What was the date of commencement of such offer/s?

4. If more than one, which one of such offers has enhanced the customer satisfaction the most?

5. How are the sales figures of your company affected after such an offer?

For Customers:

6. What car do you drive?

7. What offers did you get on such purchase, if any?

8. Did these offers incline you towards making such purchase?

9. Did you compare the offers by other car manufacturers too while purchasing this car?

10. Are you satisfied with the offers you got?

OBJECTIVE OF THE STUDY

To know about the impact of promotional activities done by the organisation and their customer’s response/ satisfaction level with respect to automobile sector.

RESEARCH METHODOLOGY

The group will be conducting a quantitative primary empirical research as a part of the research thesis of Customer Relationship Management. And also will be referring to Secondary data provided in:

• Books• Journals • Articles• Cyber space

HYPOTHESIS

Assuming

INTRODUCTION

Customer Relationship Management:In the mid-twentieth century, mass production techniques and mass marketing changed the competitive landscape by increasing product availability for consumers. However, the purchasing process that allowed the shopkeeper and customer to spend quality time interacting with each other was also fundamentally changed. As a result, customers lost their uniqueness becoming an “account number”. Shopkeepers lost track of their customers’ individual needs as the market became full of product and service options. Many companies today are striving to re-establish their connections to new as well as existing customers to boost long-term customer loyalty (Chen and Popovich, 2003).

Most companies engage in some form of customer relationship management. When a company builds a customer list, assigns opportunities to sales representatives, or handles customer support cases, they are undertaking CRM-related activities.

CRM applications standardize, automate, and share these activities across organizations to improve how companies interact with their customers.

An integrated approach to identifying, acquiring and maintaining customers.

Allows companies to coordinate their approach across channels, departments and also geographically.

Pre-CRM Practices:

Before adopting a CRM application, companies should understand how they interact with customers in order to understand the benefits they can derive from CRM applications. 

Customer satisfaction: The degree of satisfaction by the goods and services of the company as measured by the number of repeat customers.

Importance of promotional activities

LITERATURE REVIEW

Modern marketers are rediscovering the ancient mantras for success in corporate world and blending them with contemporary marketing practices. Long term survival and competitive advantage can only be attained by establishing an emotional bond with the customers. A shift is taking place from marketing to anonymous masses of customers to developing and managing relationships with more or less well known or at least some identified customers (Gronroos, 1994).

CRM refers to all business activities directed towards initiating, establishing, maintaining, and developing successful long-term relational exchanges (Heide, 1994; Reinartz & Kumar, 2003). One of the results of CRM is the promotion of customer loyalty (Evans & Laskin, 1994), which is considered to be a relational phenomenon, (Chow & Holden, 1997; Jacoby & Kyner, 1973; Sheth & Parvatiyar, 1995; cited by Macintosh & Lockshin, 1997). The benefits of customer loyalty to a provider of either services or products are numerous, and thus organizations are eager to secure as significant a loyal customer base as possible (Gefen, 2002; Reinartz & Kumar, 2003; Rowley & Dawes, 2000). Recent developments in Internet technology have given the Internet a new role to facilitate the link between CRM and customer loyalty (Body and Limayem, 2004). It is common knowledge that a dissatisfied and unhappy customer will share his unfortunate experience more than a satisfied customer. It is also observed that a fraction of unhappy customers choose to complain while others simply switch their loyalty to others service providers. Loss of customer is loss of business along with the opportunity for business growth and profitability. Feedback collection from the customer is essential for the supplier to ascertain customer satisfaction and scope for improvisation (Sugandhi, 2002).

QUESTIONNAIRE

We are students of Symbiosis University and conducting a research study to examine the customer satisfaction. Your participation in this research project is entirely voluntary and your responses will be kept completely CONFIDENTIAL.

FOR THE MANUFACTURERS:

1. Are there any promotional activities being conducted presently by your company?

⃝ Yes ⃝ No

2. What kinds of activities are being conducted?

O Cash discount/ Corporate discount

O Exchange bonus

O Loyalty bonus

O Limited editions/ special editions

O Free goodies

O Introductory Price

O Any other ______________________________

3. What was the date of commencement of such offer/s?

___________________________________________________________

4. If more than one, which one of such offers has enhanced the customer satisfaction the most?

___________________________________________________________

5. How are the sales figures of your company affected after such an offer?

___________________________________________________________

FOR THE CUSTOMERS:

1. What brand’s car(s) do you drive?

O Hyundai O Maruti-Suzuki O Honda O Toyota

O Volkswagen O Ford O Chevrolet O Tata

O Skoda O Renault O Any Other ___________

2. What offers did you get on such purchase, if any?

O Cash discount/ Corporate discount

O Exchange bonus

O Loyalty bonus

O Limited editions/ special editions

O Free goodies

O Introductory Price

O Any other ______________________________

3. Did these offers incline you towards making such purchase?

Yes⃝ No⃝4. Did you compare the offers by other car manufacturers too while purchasing this car?

Yes⃝ No⃝5. Are you satisfied with the offers you got?

Yes⃝ No⃝DATA ANALYSIS

Manufacturers:

1. Promotional activities in companies

Yes No

80%

20%

2. Kinds of promotional offers in companies

Cash discount

Exchange bonus

Loyalty Bonus

Special/ Ltd editions

Free Goodies Intro price0

2

4

6

8

10

12

3. Age of such offers

01-01-13 to 31-06-13

01-07-13 to 31-12-13

After 01-01-140

2

4

6

8

10

12

14

16

Customers:

4. Car owned

Hyundai

Maruti Suzuki

Honda Toyota Volkswa-gen

Ford Chevrolet

Tata Skoda Re-nault

0

1

2

3

4

5

6

5. Offers Received

Cash discount

Exchange bonus

Loyalty Bonus

Special/ Ltd editions

Free Good-ies

Intro price0

1

2

3

4

5

6

7

8

6. Inclination towards making purchase due to offers

Yes No

70%

30%

7. Comparisons of offers by other car manufacturers

Yes No

90%

10%

8. Customer Satisfaction

Yes No

80%

20%

RESULTS

• As we can see from Graph 1, from all the manufacturers we approached to, 100% of the manufacturers were continuing with promotional activities in their companies as a tool for increasing the sales figures and enhancing the customer satisfaction and experience levels.

• The manufacturing concerns concentrate on indulging in the promotional activities like Cash discount, Exchange bonus and Loyalty bonus with bonuses like free goodies coming at the last as seen in Graph 2.

• From Graph 3 we can see that these offers do not continue till a long time and the frequency of the commencement of ongoing offers in the last six months is significantly more than the preceding six months or before that.

• Graph 4 shows the ownership of cars among the customers of different brands.

• We can see from Graph 5 that the customers received the Loyalty bonus and Cash discount more as compared to promotional activities like free goodies and introductory price.

• 70% of the customers incline towards the purchase as a result of such offers as shown by Graph 6

• 90% of the customers compare the offers by different car manufacturers before making the decision of buying an automobile as shown in Graph 7.

• Lastly, 80% of the respondent customers are reportedly satisfied with all the promotional offers they got with their purchase of the automobile as seen in Graph 8 but still, 20% of the customers are not satisfied with the available offers in the market.

CONCLUSION

This project report was to analyze the satisfaction among customers resulting out of the promotional activities carried out by the manufacturing concerns in the automobile industry. At the end of this research thesis, we have learnt that promotional activities form a major component in enhancing the customer satisfaction and can affect the buying decision of a customer.

From the empirical research we found out that almost every automobile manufacturing company uses promotional activities to lure more and more customers. And the customer's decision to buy a product or not can be affected by the offers he is getting on different products and their alternates in the market. As a matter of fact, in our study, 90% people admitted that they compare the offers given by different manufacturing companies before buying an automobile.

We also found out that the companies, from their previous experiences, have learnt that the customers want something new in the offers department so they do not run these offers for a long time and terminate and initiate new promotional offers within 6 months or an year of the commencement of such offer.

Considering the fact that our study showed that 80% of the people are satisfied with their purchase of an automobile as a result of the ongoing promotional offers going on them, what we have derived from this empirical research thesis is that the customer satisfaction is affected to a large extent by promotional activities in the automobile industry and the companies need to focus more towards satisfying the needs of the customers in this regard and make an attempt to cater to that remaining 20% of the people as well so as to increase their sales volume and in turn their market presence, productivity and brand value.

REFERENCES

JOURNALS:

Macintosh, G., & Lockshin, L. S. (1997). “Retail relationships and loyalty: A multi-level perspective”, International Journal of Research in Marketing, 14(5), 487-497.

McDonald, L. (2002), “Customer Relationship Management - An Overvie”w, Available at:

http://www.brillianceweb.com/betterwebdesign/tips_48.aspx, Accessed on July 30, 2006

Gronroos, C. (1983), “Strategic Management and Marketing in the Service Sector”, Report No. 83-104, Marketing Science Institute, Cambridge, MA.

Buttle, F. (2004), Customer Relationship Management: concepts and tools, Oxford: Elsevier Butterworth-Heinemann

Anonymous, “Research variables: Reliability and Validity of Measurement”, available on:

http://cbdd.wsu.edu/edev/NetTOM_ToT/Resources/Other/TOM614/page68.htm, [last accessed on September 3, 2006]

NON-PERIODICAL DOCUMENTS ON THE INTERNET:

Businessdictionary.com

Qualtrics.com