Competition is becoming more and more intense because of rapid globalization; retail chains have been experiencing the changing trends in the nature of consumersâ tastes, consumption patterns and buying behaviors. Pakistan has seen a huge growth in the number of large supermarkets and by the last decade many foreign supermarkets and giant retailers have started their operations in Pakistan such as Metro, Hyperstar, and Dolmen. In addition to this, many local supermarkets have also emerged as big retailers such as Naheed, Imtiaz and Aghaâs. Due to enormous growth in retail sector, consumer impulse buying has turned into a common phenomenon around and hence producers and retailers invest a lot of money to market their brand to consumers with a specific end goal to expand the consumption level of purchasers that will eventually lead towards bigger market share and profitability.Therefore, the retailers and marketers both need valuable and reliable information regarding in-store promotional activities and out of those which in-store promotional activity trigger impulse buying behavior of shopper the most. Kotler was in backing of the in-store promotional activities as (Kotler, 1973) stated that in-store promotional activities are the major stimuli to encourage the consumer for impulse buying.
Therefore, consumers are subjected to stimuli in different methods which may initiate impulse buying behavior because of which consumer buy products that are unplanned and besides the actual orreal needs (Silvera & Zhang, 2007). As indicated by a research done by (Rook, 1987) Impulse buying behavior is exciting and complex in the meantime, it involves an often sudden and powerful force to buy something that is unplanned.
As shopping has become not only a leisure but also a lifestyle activity, consumers have been exposed to several; varieties of products (Bayley & Nancarrow, 1998). According to (Kotler, 1973) consumers are more stimulated by in-store promotional activities such as free gifts, coupons, sampling and buy one get one free. Therefore this research will be conducted to find out the impact of in-store promotional activities on impulse buying behavior of consumers in Karachi-Pakistan.
Impulse buying has been considered an important part of buying action of consumers for decades (Cobb & Hoyer, 1986). Numerous researches have been conducted on impulse buying behavior as the retailers have realized the importance of impulse buying and the benefits they achieve out of it. Impulse buying is not a new word; itâs a very commonly used term around the globe. Empirical suggest that more than 70 percent of sales of Coca Colaâs are from impulse purchases(Karmali, 2007).Similarly, a Canadian grocery store realized that its sales will be increased by 40% if each and every consumer purchases an additional item (Babin&Attaway, 2000). With regarding to stores, if a consumer has trust and in-store environment sounds good, it might lead to a positive evaluation of the products (Guenzi et al., 2009).
An impulse purchase or impulse buying is a spontaneous purchase or otherwise unplanned. Impulse items can be anything, samples a new product or well-established products at unexpected low prices. Parboteeah (2005; based on Piron, 1991:512) explained that impulse purchasing is unplanned, the outcome of an exposure to a stimulus, and is decided on the spot. Impulse buyers begin browsing without having an aim to buy a certain item or visiting a certain store. As buyers browse, they are exposed to the stimuli, which triggers buyersâ urge to buy on impulse. When impulse buyers feel the need to buy, they make a buying decision without searching for data, information, evaluating options or alternatives. Then, consumers may encounter positive or negative consequences by the post-purchase assessment after the buy on impulse. In this process, consumers are influenced by external and internal factors that trigger their impulse purchase behavior.
In-store promotions are frequently aimed at digging deeper into the buyersâ purses at the point of purchase through encouraging impulsivebuying.
Diverse researches have been done on impulse purchasing behavior and it is viewed as emotional rather than rational and its trend is increasing (Cobb & Hoyer, 1986). According to Wells (1986) it was found out that most people buy occasionally on impulse and it happened because of the different stimuli like display of products, in-store promotion which are the key source of stimulation that leads to impulse buying. In-store promotions play a very significant role at the point of purchase (e.g. posters) as it triggers and encourages the impulsive behavior of consumer and it helps to increase revenue and drive profit on a fast pace. As per an exploration by (Gilbert &Jackaria, 2002; Smith & Sinha, 2000; Diamond, 1992) in-store promotional activities influences the consumers buying behavior.
Coupons, free gift, buy one get one free, free sampling play aimportant role in stimulating the impulse purchase (Zhang, X., et al, 2007). (Blattberg and Neslin, 1990) explained that in-store sales promotion directly influence the impulse buying behavior of consumer. According to (Totten and Block, 1994) in-store sales promotion expands to numerous forms of selling procedures which produce immediate effect on sales. Most Supermarkets are designed in a way to encourage and enhance the amount of impulse purchases (e.g. Zhang et al., 2007). An example can be taking of buy one get one free when it is announced in any super store it will encourage the impulse buying of the consumer and trigger the purchases which will boost the sales.
1.2 Problem Statement:
The main aim of conducting this research is to figure out the impact of different in-store promotional activities on impulse buying behavior of consumers. As explained in a research conducted by (Heilman et al., 2002) that 70% (Percent) of the buying decisions are to be made at the point of purchase. As indicated by (Smith & Sinha, 2000; Leone & Srinivasan, 1996) the in-store promotion factors which influence the impulse buying are common in almost every research study such as discounts, free samples, use of coupons, buy one get one free and free gifts which are used as promotional tools. (Kotler, 1973) explained that in-store promotion is one of the activities that influences consumers for impulse buying and he also supported the idea to increase sales through in-store promotion activities.
1.3 Significance of study
This study will benefit retailers and manufacturer to gain valuable information regarding in-store promotional activities and how these activities impact consumer impulse buying.. As explained in a research conducted by (Heilman et al., 2002) that 70 percent of the buying decisions are to be made at the point of purchase. Every retailer need appropriate information regardingconsumer insights and this study will help them to understand right in-store promotional activities that trigger impulse buying and lead towards high sales and profitability which is ultimate goal of every business.
1.4 Research Questions:
ï What are the impacts of in-store promotional activities on impulse buying behavior of consumer?
ï Which in store sales promotional activities contribute most to buy impulse?
ï What is the correlation between impulse buying behavior and in store sales promotional tools?
1.5 Research Objective:
ï To identify the impact of in-store promotional activities on impulse buying behavior of consumer
ï To identify the sales promotion tools contributing the most to impulse buying behavior
ï To identify the correlation between impulse buying behaviors and in-store sales promotion tools.
ï To find out the impact of free samples on impulse buying behavior of consumer
ï To find out the impact of point of purchase promotion on impulse buying behavior of consumer
ï To find out the impact of coupons on impulse buying behavior of consumer
ï To find out the impact of discounts on impulse buying behavior of consumer
ï To find out the impact of free gifts on impulse buying behavior of consumer
ï To find out the impact of buy one get one free on impulse buying behavior of consumer
In this period of rapid globalization and the intense competition as well as increased consumerism, retailers think about increasingconsumer purchases and motivate consumers to purchase more in order to maximize revenue or profits. Many of the research finding are different about whether in-store promotional stimuli would increase consumer buying additionally on impulse. The main reason to conduct this research is to give benefits to big retail stores so they can increase their efficiency level to reach the maximum possible level of profit through the use of in-store promotional activities.
1.7 Limitations of the study:
The study is limited to only one city of Pakistan which is Karachi and the survey is conducted at the outlets of the big retail chains of Karachi; it does not cater to other small mom and pop shops. It is focused on the impulse buying behavior within superstores only.The research does not generalize to country level because of the sample size which is not diverse and specifically focusing on Karachi city.
1.8 Scope of the Study:
The geographical scope of the study is limited to Karachi and the goal of this research is to know the impact of in-store promotional variables like coupons, discounts,and point of purchase free sample free gift and buy one get one free on the consumer impulse buying behavior. The research will be focusing on key retailers that have more customer traffic in their stores and besides that the respondents will be those who regularly buy from the superstores and big retailers.
Consumer behavior indicates how and why most of the people make the purchase decisions. Marketers trying to investigate the consumer buying behavior so they can better come up with suitable and proper marketing mix that will result in bigger sales and brand loyalty. It is all about the way people purchase and consume products and services. Understanding consumer behavior can help you be more efficient and effective at marketing, product development, design, and every other initiative that influences your customers.
Marketing professionals and experts want to know the answer to these queries and question. Once they realize that they do have those answers, so they will have a better probability of creating and communicating about products that you and people like you will want to purchase.
Consumer buying behavior
The consumer buying behavior refers to the final consumers and households that buy products and services for own consumption.
The collective actions, including the searching, evaluation, selection, purchasing, consuming, disposing of products, taken by consumers in determining which goods and services hold the most value for meeting their wants and needs.
Impulse Buying Behavior
Impulse buying behavior is defined as an unplanned, on the spot purchase triggered by stimulus.
Impulse buying, according to research done by Beatty and Ferrell (1998) is a immediate and sudden buying with no pre-shopping intentions or aims either to purchase the specific product category or to fulï¬ll a speciï¬c purchasing task.
Marketers and retailers tend to exploit these impulses which are tied to the basic want for instant gratification. For example, a shopper in a supermarket might not specifically be shopping for confectionary. However, candy, gum, mints and chocolate are prominently displayed at the checkout aisles to trigger impulse buyers to buy what they might not have otherwise considered. Impulse buying defined as âany purchase which a consumer makes but has not decided in advanceâ.
The impulse buying behavior is further categorized into four kinds Pure; Reminder; Planned and Suggestion. Pure impulse is described as where the buying is out of normal purchase behavior and is trigged by emotional call or appeal. Suggestion impulse purchasing occurs when the buyer sees the product application & visualizes then decides to purchase. Reminder impulse buying occurs when a purchase is made based upon something reminding the shopper to make the purchase. Planned impulse buying occurs when the consumer purchase a product based on price or product specials.
The promotional mix is the integration of marketing activities which in lists advertising, publicity, direct marketing, sales promotion and personal selling.
Involves the use of short-term tactics, often in the form of incentives, to motivate buyers to respond or carry out some activity.
In-store promotion is a marketing strategy that is meant to bring people into the store and to purchase specific items that are portion of the in-store promotions.
The strategies come from manufacturers most of the times in terms of discounts and offers but sometimes retailers also do it. The main behind all kinds of store promotion is to maximize the profit through impulse buying. The in-store promotion plays aessential role in switching of brands by the consumers. The features that are generally used are Coupons, signs, banners, TV videos, announcements etc. Product display and location is another type of in-store promotion technique that is being followed.
A reduction in price, which is received by a customer after the purchase has been made, is termed as refund or rebate. Discount is the offer when products and services are sold at a price lower than the original price.
Coupon is the voucher by which the voucher’s holder is qualified for a discount on a specific product for which retailers retain the original price.
Buy one get one free
Buy one get one free is one of promotion tactic of sales promotion in which an extra product is offered to the consumers at normal price.
Point of Purchase
Point of purchase can be explained as any promotional display set up at the retailerâsLocation to build traffic, advertise the product, or induce impulse buying (McDaniel et al.,2011).A spot where sales are made retailers consider a point of purchase to be the area nearby the counter where buyers pay.
Kotler and Amstrong (2010) define sampling as an offer of a trial amount of a product.
A product that is given to a customer free when they purchase something in order to encourage people to buy more of it