Introduction

Sales promotions have become a vital tool for marketers and its importance has
been increasing significantly over the years. In India, sales promotions expenditure by
various marketing companies is estimated to be Rs 5,000 crores and the emphasis on
sales promotion activities by the Indian industry has increased by 500 to 600 percent
during the last 3 to 5 years. In the year 2001, there were as many as 2,050 promotional
schemes in the Rs 80,000 crore FMCG Industry. Given the growing importance of sales
promotion, there has been considerable interest in the effect of sales promotion on
different dimensions such as consumers price perceptions, brand choice, brand switching
behaviour, evaluation of brand equity, and effect on brand perception and so on. One of
the purposes of a consumer promotion is to elicit a direct impact on the purchase
behaviour of the firms customers. Research evidence suggests that sales promotions
positively affect shot-term sales. Research on price promotion has consistently reported
high sales effect and high price elasticity for brands which are on promotion. Studies
have shown that price promotions enhance brand substitution within a product category,
affect aggregate sales, and significantly affect stock piling and purchase acceleration.
However, there have also been studies that suggest that sales promotion affects brand
perceptions. Researchers have found out that promotions, especially price promotions,
have negative effect on brand equity. In another study, Schultz argues that over
dependence on promotions can erode consumers price-value equation. The result of a
study by Jedidi indicates that in the long term, advertising has a positive effect on brand
equity where as price promotions has a negative effect. Similarly, Yooetal, based on
structural equation model, suggests that frequent price promotions, such as price deals are
related to low brand equity, where as high advertising spending, high price, good store
image and high distribution intensity are related to high brand equity. There is also a
managerial belief that if a brand is supported with frequent promotional offers, the equity
of the brand tends to get diluted. On the contrary, there have also been studies that
indicate brands benefit from promotions. Amongst the elements of marketing mix, sales
promotions have long-term influence on brand equity. Mariola & Elina, based on a
sample of 167 buyers suggest that monetary and non-monetary promotions are useful to

create brand equity because of their positive effect on brand knowledge structures. The
researchers in this study propose to explore whether the phenomenal growth of sales
promotion as a promotional tool in marketing products in India is perceived favorably by
the consumers and examine the differential effect, if any, of two types of sales promotion
namely cash discount and free gift on consumers perception.
Sales promotion includes incentive-offering and interest-creating activities which
are generally short-term marketing events other than advertising, personal selling,
publicity and direct marketing. The purpose of sales promotion is to stimulate, motivate
and influence the purchase and other desired behavioral responses of the firms
customers.
Dell traces its origins to 1984; when Michael dell created PCs Limited while a
student at the University of Texas at Austin. The dorm-room headquartered company
sold IBM PC-compatible computers built from stock components. Michael Dell started
trading in the belief that by selling personal computer systems directly to customers, PCs
Limited could better understand customers' needs and provide the most effective
computing solutions to meet those needs. Michael Dell dropped out of school in order to
focus full-time on his fledgling business, after getting about $300,000 in expansion
capital from his family.
In 1985, the company produced the first computer of its own designthe "Turbo
PC", sold for US$795. PCs Limited advertised its systems in national computer
magazines for sale directly to consumers and custom assembled each ordered unit
according to a selection of options. The company grossed more than $73 million in its
first year of trading.
The company changed its name to "Dell Computer Corporation" in 1988 and began
expanding globallyfirst in Ireland. In June 1988, Dell's market capitalization grew by
$30 million to $80 million from its June 22 initial public offering of 3.5 million shares at
$8.50 a share. In 1992, fortune magazine included Dell Computer Corporation in its list
of the world's 500 largest companies, making Michael Dell the youngest CEO of a
Fortune 500 company ever.

In 1996, Dell began selling computers via its web site, and in 2002, Dell expanded
its product line to include televisions, handhelds, digital audio players, and printers.
Dell's first acquisition occurred in 1999 with the purchase of Converge Net Technologies.
In 2003, the company was rebranded as simply "Dell Inc." to recognize the company's
expansion beyond computers. From 2004 to 2007, Michael Dell stepped aside as CEO,
while long-time Dell employee Kevin Rollins took the helm. During that time, Dell
acquired Alien ware, which introduced several new items to Dell products,
including AMD microprocessors. To prevent cross-market products, Dell continues to run
Alien ware as a separate entity but still a wholly owned subsidiary.
Lackluster performance, however, in its lower-end computer business prompted
Michael Dell to take on the role of CEO again. The founder announced a change
campaign called "Dell 2.0," reducing headcount and diversifying the company's product
offerings. The company acquired Equal Logic on January 28, 2008 to gain a foothold in
the ISCSI storage market. Because Dell already had an efficient manufacturing process,
integrating Equal Logics products into the company drove manufacturing prices down.
On September 21, 2009, Dell announced its intent to acquire perot systems (based
in Plano, Texas) in a reported $3.9 billion deal. Perot Systems brought applications
development, systems integration, and strategic consulting services through its operations
in the U.S. and 10 other countries. In addition, it provided a variety of business process
outsourcing services, including claims processing and call center operations.
On August 16, 2010, Dell announced its intent to acquire the data storage
company 3PAR On September 2, 2010 Hewlett-Packard offered $33 a share, which Dell
declined to match.
On February 10, 2010, Dell acquired KACE networks a leader in Systems
Management Appliances. Terms of the deal were not disclosed. On November 2, 2010,
Dell acquired Software-as-a-Service (SaaS) integration leader Boomi Terms of the deal
were not disclosed.

Statement of problems
To study how customers view dell as a brand, their perception towards the
brand and its comparison with competitors and to find out the various schemes that can
influence them to buy the product.

Importance of study

The project attempts to analyse the degree of the customers satisfaction towards the
service rendered by dell at IMC in Ernakulam.

This work is a study based on customers response about the various products and
schemes offered by dell.

This study is done in the form of survey through questionnaire which will be
provided to the customers to know about their ratings and opinion.

Objectives

To get customers feedback about the service.

To study and understand the type of customers that shop at IMC.

To find out the level of satisfaction of the customers.

Suggestions to improve the service

To gain experience and knowledge in the field of customer satisfaction.

To examine the perception of customers on sales promotion

To examine the differential effect, if any of two types of sales promotions Viz., cash
discount and free gift on the perception of customers.

Scope of study
The study is intended to find the level of satisfaction of customers at IMC,
Ravipuram, Cochin. This study will be useful to academic and research organization for
future studies.

Methodology of the study

The data collected for this study were delivered from two sources namely:
1) Primary source: The primary data was collected directly from the customers through
questionnaire and information given by the staff and the manager about their promotional
tools and their services towards customer.
2) Secondary source: The secondary data was collected through internet, magazine and
text books.

Size of sample
The sample size is fifty customers to make a survey on effectiveness of sales
promotion.

Tools of analysis
The whole data and information that is collected are analysed in graphs and
tables.

Limitation of the study

Time limitation was the major line factor for this study.

The odd nature of many customers was another limiting factor.

Non availability of customers on time.

Lack of co-operation of staff

Since the sample size is limited it may lead to the partial true factor about the
research.

Marketing mix
The term "marketing mix" was coined in 1953 by Neil Borden in his American
marketing association presidential address. However, this was actually a reformulation of
an earlier idea by his associate, James Culliton, who in 1948 described the role of the
marketing manager as a "mixer of ingredients", who sometimes follows recipes prepared
by others, sometimes prepares his own recipe as he goes along, sometimes adapts a recipe
from immediately available ingredients, and at other times invents new ingredients no
one else has tried. The marketing mix (price, product, distribution, promotion) forms the
entire promotional campaign. As stated in Management of a Sales Force by Rosann L.
Spiro, Gregory A. Rich, and William J. Stanton, when these are effectively blended, they
form a marketing program that provides want-satisfying goods and services for the
companys market." The term became popular in the article written by Niel Borden called
The Concept of the Marketing Mix. He started teaching the term to many after he
himself learned about it with an associate. The marketing mix is a broad concept which
includes several aspects of marketing which all inquire to obtain a similar goal of creating
awareness and customer loyalty. The marketing mix is not only an important concept, but
a guideline to reference back to when implementing the price, promotion, product, and
distribution. Those are the four main ingredients of the marketing mix, but there are other

components not already mentioned on the Wikipedia site, including, planning, branding,
packaging, display, distribution channels, personal selling, advertising, servicing, and
physical handling. All in all the current description of the marketing mix is accurate, but
missing some vital pieces of information which will allow individuals to gain a better
understanding and implement a more effective marketing mix. A prominent marketer
E.Jerome McCarthy proposed a Four P classification in 1960, which has seen wide use.

Characteristics of Marketing Mix

(i) Marketing-mix is the crux of marketing process:
Marketing mix involves many crucial decisions relating to each element of the
mix. The impact of the mix would be the best when proper weightage is assigned to each
element and they are integrated so that the combined effect leads to the best results.
(ii) Marketing mix has to be reviewed constantly in order to meet the changing
requirements:
The marketing manager is required to constantly review the mix and conditions of
the market, and make necessary changes in the Marketing Mix marketing mix according
to changes in the conditions and Complexion of the market.
(iii) Changes in external environment necessitate alterations in the mix:
Changes keep on taking place in the external environment. For many industries,
customer is the most fluctuating variable of environment. Customers tastes and
preferences change very fast. Brand loyalty and purchasing power too change over a
period of time. The marketing manager has to carry out market analysis constantly to
make necessary changes in the marketing mix.
(iv) Changes taking place within the firm too necessitate changes in marketing mix:
Changes within the firm may take place due to technological Changes, or changes
in the product line, or changes in the size And scale of operation. Such changes call for
correspondent Changes in the marketing mix.
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Elements of Marketing Mix

As mentioned earlier the elements or constituents of marketing mix may be grouped
broadly under four heads:

Product
Product refers to a physical product or a service or an idea which a consumer needs
and for which he is ready to pay. Physical products include tangible goods like grocery
items, garments etc. Services are Intangible products which are offered and purchased by
consumers. Services may involve also an innovative idea on any aspect of operation. A
product is the key element of any marketing mix. The decisions concerning product may
relate to
a) Product attributes
b) Branding
c) Packaging and labeling
d) Product support service
e) Product mix

Product attributes refer to the quality, features and design of the product. A product
should serve the purpose for which it is made, in terms of utility and quality. In a
competitive market, products are differentiated on the basis of certain features or design.
Branding is a crucial decision. In a competitive market, many products are sold by brand
names. You might have come across brand Names, like Sony, Samsung, dell, Lenovo,
HCL are well known. Brand is an identification of product. It plays an important role in
creation of demand while branding a Product, it should be ensured that the name is
simple, easy to read and pronounce and if possible, it should have an appeal. Packaging
and labeling of product are quite important decisions Packaging means putting the
products in suitable containers or packets such as tin, plastic jar or card board box, etc.
Packaging should be such that product is protected and easily handled. Sometimes, the
Container may have its own usefulness. For instance Baidyanath chyawanprash (pack) is
available in a plastic jar which can be reused after consuming the chyawanprash. Certain
polythene and plastic are not considered good as packaging material from the
environment point of view. Their usage should be avoided. Labeling serves the purpose
of indicating the contents, weight or measure, instructions for use, price, name of the
producer, date of manufacture and expiry, etc. The information on the label is essential
for various reasons. For example, the date of expiry in case of medicines, and date of
manufacture in the case of eatables prevent the sale of products which may prove
harmful. Product support service is another important element of product decision. It
includes decision pertaining to the type of service and availability of the service. Service
may be by way of installation service, training in product use, after sale service, credit
and financing service, etc. It should be decided whether services would be provided free
or against Separate charge. Secondly, how the services would be made available by the
producers or agencies, are also important decisions to be made particularly with respect
to durable consumer goods like TV, washing Machines electric fans, etc. The markets in
which products will be offered are yet another important decision. A company may
decide to a single or a variety of products, add new products, or withdraw certain
products. Relevant decisions are made keeping in view the scope of marketing. Such
decisions are called product line or product mix decisions. Product life cycle is a guiding
factor while decisions are made.

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Product life cycle

Product life cycle denotes different stages through which the sale of any product
changes over a period of time. Generally, there are four stages in the life of each product
introductory stage, growth stage, maturity stage, and declining stage. When any product
is introduced in the market, heavy expenditure is incurred on advertising and other
methods of increasing the sale. This is known as introductory stage. During the growth
period, sale of the product increases fast and cost of production comes down due to
increase in scale of production. Profits earned increase substantially. During the maturity
stage, the growth in sale of the product slows down. Profits also start declining. After the
maturity stage there is a stage of decline, when the product starts losing its acceptance.
There is a pressure for price cut. Firms generally start withdrawing the product after
maturity stage. Some firms start preparing for introducing alternative product at the end
of growth stage. Product life cycle, thus, helps in deciding about the product or products
which should be offered in different markets.

Price
Price is the amount charged for a product or service. It is the consideration paid
by consumers for the benefit of using any product or service. Price fixation is an
important aspect of marketing. Pricing decisions of a company are affected by both
internal as well as external factors.

Internal Factors and External Factors are:

Cost of the product Nature of market
Marketing objectives pricing or demand for product
Marketing mix strategy Decision Competitors' costs and strategy price offers.
Organisation for pricing Other environmental factors like economy, governments
policies etc.

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Internal factors:
Internal factors, affecting the price of a product, are many. Cost of the product sets
the floor. Any company would like to charge a price which covers the cost of the product
and a fair rate of return. Cost of the product means total cost i.e., fixed plus variable
costs. Fixed costs do not change with the change in volume of production up to a certain
level. Variable costs change proportionately. In the period of recession, companies
continue to supply at a rate which covers variable costs and as much of costs as possible.
The Companys marketing objective is yet another important variable for price fixation.
If it is survival, the company would stay in the market as long as it covers variable costs
fully and fixed costs partly. In case it is market leadership, a low price will be fixed
initially. After wards prices may be enhanced. Surf Excel is an example. At the time of
introduction, its price was just equal to other close substitutes, but today it has its own
market. It is bought by consumers without comparing its price with other substitutes. The
relative importance of pricing decision in marketing mix, also affects price fixation.
Sometimes pricing decision is the control decision and all other decisions are taken
afterwards. It may also happen that other variables of marketing mix like promotion
become more important. Price is fixed after considering other variables. Who will fix the
price is yet another important decision. In small organizations top management sets the
price. In large companies, product line managers perform this job. For industrial markets,
sales managers are permitted to negotiate prices within a specified range. These days
many companies set up a separate department to handle pricing decision. External factors
besides internal factors, external factors also influence the pricing decision of a company.
These factors are called environmental factors. Nature of demand, competitors costs,
price offers and government policy are very important factors to be considered while
fixing prices. The relationship between price and demand should be analysed properly.
No company can ignore the costs, prices and offers of substitute items from competitiors.
Economic factors, like rate of interest, state of industry (boom or recession), inflation,
etc. affect the price-fixing decision. In case of certain products, e.g. products which fulfill
basic needs, government may impose price control. Thus, it would also affect price of the
product.
There may be two methods of price-fixation

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1. Cost-based approach
2. Competition-based approach
Cost-based approach:
This is the simplest method of pricing. Generally companies add a certain
percentage of Profit, to the total cost of the product. The total cost of the product is
calculated after taking all types of costs into Consideration. While following this
approach, no other factors e.g. prices of substitute goods, nature of demand, etc. are
considered.
Competition-based approach:
In competitive market, cost-based approach is not always practicable. The prices
are determined on the basis of conditions in the market. Companies may follow any one
of the following three approaches.
a) Price-in-line
b) Market-plus
c) Market-minus
Price-in-line means prices fixed nearly equal to the prices of close alternatives. Generally
this happens under free market conditions i.e. when the number of buyers and sellers is so
large that they cannot affect the prices. Prices are decided by the market forces of demand
and supply. When companies charge (fix up) a price which is more than the price of
existing substitutes, it is called market plus pricing. This approach is adopted when the
quality of a product is better, or it has a popular brand name, or its packaging is attractive
and useful. Consumers will pay more only when they find distinctive differences in the
product and its substitutes. Sometimes business enterprises get ready to supply products
at a price lower than the market price. It may be adopted to grab a larger market share or
to make a newly introduced product more popular. This approach is called market-minus
approach. Companies having shorter channels of distributions or direct selling facilities
can afford to fix a price lower than the prevailing market price.

Place
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Place is another important element of marketing mix. Once the goods are
manufactured, packaged, priced and promoted, they must be made available to the
consumers. Activities related to placing the products are covered under this element of
marketing-mix. It consists of decisions relating to channels of distribution and physical
distribution. Channels of distribution refer to the individuals and organizations which
facilitate moving the goods from manufactures to consumers. It is important that regular
and smooth flow of goods is maintained so that products are not spoiled and supplies are
not delayed.

To ensure this, various facilitating services need to be arranged like

transportation, warehousing, inventory control, and order processing. These are known as
components of physical distribution. Let us now study the two sub-elements of place(A) Channels of distribution
(B) Physical distribution
(A) Channels of Distribution:
Channel of distribution denotes the intermediaries involved in the process whereby
a product passes from the manufacturer to consumers. It is very important for the
producers to involve middlemen in order to reach consumers. Middlemen reduce the
problems of both producers and consumers. Secondly, middlemen help in distributing the
products over a large area. Middlemen also supply useful market information to the
producer for improving the product. Involvement of middlemen adds to the convenience
of consumers because they are able to lay many items from a single store. Some people
feel that by involving more middlemen in the process of distribution, the final price of a
product is considerably raised which is ultimately paid by the consumer. Therefore the
number of middlemen involved should be limited, if at all necessary: There can be
various levels of channel. It is for the producer to decide which level would suit the sale
of his product.
(B) Physical Distribution:
Physical distribution comprises all those activities which deliver customer
satisfaction by supplying right type of products at right place and at right time regularly.
Economical and satisfactory customer service is the primary goal of physical distribution.

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Providing the right type of goal at right place and at right time is the ultimate goal of any
marketing department. These goals may be conflicting, sometimes, e.g., for meeting
sudden and unforeseen demand for goods, maintenance of large inventory is suggested
but this involves cost as well as risk. This means that a proper balance between the cost
and service should be achieved.
Components of physical distribution:(I) Order Processing:
Physical distribution begins with customers order. Both the company and customer
are benefitted if order processing is carried out quickly and accurately. These days
computers are used which establish a link between retailers and producers. Producers
keep a watch on the stock position at retailers place retailers may also place orders
through computer. This facility speeds up the process.
(ii) Warehousing:
Every company must store goods to maintain a proper flow. Storage facilities are
important because production and consumption cycles generally do not match.
Companies need to decide the number, space and location of warehouses. The cost of
these should be in balance with customer service. Companies may own warehouses or
take them on rent.
(iii) Inventory:
Inventory level also affects customer satisfaction. Marketers would like that
company having enough stock to fulfill all customers order immediately. But it involves
heavy cost. Companies should, Therefore, carefully plan when to order and how much to
order.
(iv) Transportation:
Transportation has infact, facilitated the physical distribution of goods and services
over a larger area. Modes of transportation may include road, rail, water, air, etc. The

15

choice of mode of transport affects the pricing and condition of goods. Hence this is an
important decision and requires lot of thinking.

Promotion
Promotion refers to using methods of communication with two objectives: (1)
informing the existing and potential consumers about a product, and (2) to persuade
consumers to buy the product. It is an important element of marketing mix. In the
absence of communication, consumers may not be aware of the product and its potential
to satisfy their needs and desires.

Various tools of communication form part of

promotion mix. Companies must decide which tools should be used for larger sales and
in what proportion. The tools should be combined. These decisions are known as
promotion-mix decisions. There are four components of promotion-mix i.e., advertising,
personal selling, sales promotion and public relations. Thus, promotion mix is a
companys total communication program which consists of different Blends of its
components and which is used to achieve the companys marketing objectives.

Tools of Promotion-mix
Advertising, personal selling, sales promotion and publicity are the major tools.
The marketing manager must recognise the characteristics of each tool and costs involved
while deciding on the promotion-mix.

Advertising
Advertising is an impersonal form of communication for which the seller pays in
order to promote a physical product or service. It may be in print form as in newspapers
and magazines, or in audio form as on the radio and other similar methods, or in audiovisual forms as on the Television, cinema screen, etc. The merits of advertising is that it
reaches a larger number of people, the message can be repeated, its cost is not high, and
with the development of art and computer graphics, simple statements can be
Transformed into forceful messages. The other side of advertising is that it doesnt

16

provide any feed back, it is not as forceful as personal selling, it is not flexible, and good
advertisements cost a lot.

Personal selling
Personal selling is a personal communication with one or more prospective buyers
for the purpose of selling a product or service. These days, personal selling is considered
to be the most effective tool because of various characteristics which are listed below:
l) It involves personal interaction; hence feed back is received immediately
2) It is quite flexible salesman can adjust communication according to the level of
customers understanding.
3) It is more persuasive; buyers can be convinced about the utility of the product;
4) Impressive salesman leaves an impression on the prospective buyer; it may increase
sales in the future.
Personal selling suffers from a few drawbacks too. It is the most expensive tool of
promotion. Secondly, it requires too much dependence on sales force.

Publicity:
Publicity takes place when a favorable presentation is made through mass media
about a product or service. People believe more on such news than in advertising. It
covers people who do not entertain personal selling and sales promotion approaches. It is
a non-paid form of communication but sometimes it is not regarded as a promotional tool
within the reach of a company. Very few products or services are covered by publicity
Packaging is also considered as a powerful sales promotion tool these days. It
immediately attracts the buyer and makes him buy the product. This tool has produced
good results in case of consumer goods. To some extend, packaging has replaced the
counter salesman. You have now learnt about the various tools of promotion. Each tool
has certain merits and demerits. It is very important that promotion mix is so devised that
it achieves marketing objectives optimally. It is not an easy task. There are no hard and
fast rules of promotion mix. Hence every factor should be paid due attention while
deciding on the Promotion mix

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Sales Promotion
Sales promotion means the use of short-term incentives which are designed to
encourage immediate purchase of a product or service by the buyer. It may includes offer
of discounts, free gifts, free sample, Coupons, demonstration, store display, etc. One
tooth brush free with one 100gm. Close-up dental cream is an example of sales
promotion. Generally this tool supplements the efforts made through personal selling and
advertisement. Most of the sales promotion activities come in the form of some incentive
for the buyer; hence sales generally increase immediately. Big business enterprises use
sales promotion tools while introducing anew product. It adds to the effectiveness of total
promotional efforts of a company. Sales promotion has certain demerits e.g. it does not
leave a lasting effect. Some customers also feel that sales promotion schemes are
launched to clear old stocks.

Factors governing Promotion-mix

1. Nature of product:
Different types of products require different promotion mix. In Case of consumer
goods, advertisement is considered to be the most important because the goods are nontechnical and produced on a large scale. But for industrial goods personal selling is
regarded as the most important tool because the products are technical in nature, costly
and persuasion is considered essential for their sale.
2. Type of the market:
If the number of customers is quite large and they are spread over a vast area,
advertisement is more helpful because it can reach people everywhere. However if
number of customers is not very large and they are concentrated geographically, personal
selling and sales promotion may be more effective.
3. Stage of the product life cycle:
The promotional mix depends upon the stage of the product in product life cycle.
During introduction, heavy expenditure is incurred on advertisement followed by
personal selling and sales promotion. During the growth stage, customers are aware of

18

the benefits of product. Hence advertisement along with personal selling will be more
effective. At the maturity stage, competition is more intense. Sales promotion becomes
the most important tool to boost sales.
4. Budget:
Funds available for promotion also decide promotion mix, e.g. advertisement is a
costly tool. If sufficient funds are not available this tool may not be adopted. Personal
selling involves continuous spending. Thus, budget is a deciding factor for promotionmix.
5. Push vs. Pull Strategy:
When the firm pushes the product to the middlemen they in turn push it to the
consumers, it is known as push strategy. In this case, personal selling or display should
be more effective. Pull strategy refers to the policy of a company to strive to build up
consumer demand without recourse to middlemen. Generally advertising is considered
more important in case of pull strategy. To sum up, it may be said that all promotional
tools are complementary and not competitive. The degree of emphasis on each tools will
differ depending upon the influence of certain factors. A proper combination of
promotional tools should be designed to attain better results.

Factors that influence the selection of promotion mix

1) Budget Available:
For many companies, the budget available to market a product determines what
elements

of

the

promotion

mix

are

utilized.

The

budget

affects

promotions reach (number of people exposed to the message) and frequency (how often
people are exposed). For example, many smaller companies may lack the money to create
and run commercials on top-rated television shows or during the Super Bowl. As a result,
they may not get the exposure they need to be successful. Other firms such as
McDonalds may come up with creative ways to reach different target markets. For

19

example, For example, McDonalds targeted college students with a special promotion
that it filmed live in a Boston University lecture.
2) Stage in the product life cycle:
The stage in the product life cycle also affects the type and amount of promotion
used. Products in the introductory stages typically need a lot more promotional dollars to
create awareness in the marketplace. Imagine how much more fuel an airplane needs for
takeoff than it needs once it is in the air. The same is true of communication. More fuel
is needed in the beginning to help with the takeoff.
3) Type of product and type of purchase decision:
Different products also require different types of promotion. Very technical
products and very expensive products often need personal selling so the customer
understands how the product operates and its different features. By contrast, advertising
is often relied upon to sell convenience goods and products purchased routinely since
customers are familiar with the products.
4) Target market characteristics and consumers readiness to purchase:
In order to select the best method to reach their target market(s), organizations
must also understand how ready different target markets are to make purchases. For
example, some people are early adopters and want to try new things as soon as they are
available, and other groups wait until products have been on the market for a while. Some
consumers might not have the money to purchase different products, although they will
need the product later. For example, are most college freshmen ready to purchase new
cars?
5) Consumers preferences for various media:
Weve already explained that different types of consumers prefer different types of
media. In terms of target markets, as we mentioned, college-aged students prefer online,
cell phone, and social media more than older consumers do. Consumers media
20

preferences have been researched extensively by academics and marketing research

companies. Companies also do their own research and conduct surveys of their
consumers to find out how they want to be reached.
6) Regulations, competitors, and environmental factors:
Regulations can affect the type of promotion used. For example, laws in the United
States prohibit tobacco products from being advertised on television. In some Asian
countries, controversial products such as alcohol cannot be advertised during Golden
(prime) time on television. The hope is that by advertising late at night, young children do
not see the advertisements. The strength of the economy can have an impact as well. In a
weak economy, some organizations use more sales promotions such as coupons to get
consumers into their stores. The risk is that consumers may begin to expect coupons and
not want to buy items without a special promotion.
7) Availability of media:
Organizations must also plan their promotions based on availability of media. The
top-rated television shows and Super Bowl ad slots, for example, often sell out quickly.
Magazines tend to have a longer lead time, so companies must plan far in advance for
some magazines. By contrast, because of the number of radio stations and the nature of
the medium, organizations can often place radio commercials the same day they want
them to be aired. Uncontrollable events can affect a companys promotions, too. For
example, when a disaster occurs, TV stations often cut advertisements to make way for
continuous news coverage. If there is a crisis or disaster and your company is in the
middle of a promotion being advertised on TV, you will likely have to scramble to reach
consumers via another medium.
8) Push versus pull strategy:
Businesses must also decide whether to use a push strategy, a pull strategy, or both
push and pull strategies. A push strategy involves promoting a product to middlemen,
such as wholesalers and retailers, who then promote the product to consumers.

21

Manufacturers may set up displays in retail outlets for new products so the retailer can
promote the product to consumers. A pull strategy involves promoting a product to final
consumers. For example, a manufacturer promotes its new product on television to
consumers and places coupons in the newspaper inserts to get the consumers demanding
the product. Their pull causes wholesalers and retailers to buy the product to try to meet
their demand.

Evaluation of sales promotion pre testing concurrent testing and

post testing
In order to accomplish the activity of measuring the results in any area of business
activity related to the objectives for sales promotions evaluation criteria's are laid down
to implement the sales promotion programme. Many of which are directly related to
sales. For these cases there are not many complexities as a number of objectives as sales
based techniques can be used with relative ease. For Example it is very easy to measure
sales effect before sales promotion activities, during these activities and post sales
promotion activities. In case of objectives not related to sales, such as trial purchase, or
changing consumer awareness and attitude as resultant increase and perceived value of
the product, measurement is more difficult. In certain types of promotion, the reseller
support is important and can have significant effect on marketer's promotion
performance.

Pre-testing
How sales promotion is to be communicated and what would be communicated to
the target groups is important and can be pre-tested. For example the pre-tested may find
out what is likely to be the perceived value and the risk. A customer considers whether it
would be wise to buy an unknown brand of sport shoes at a 45% discount. In this offer
was there a risk of buying an unfamiliar brand? The pre-test can be conducted to assess
these factors by using focus groups and consumer panels. Another approach, ballot
method, consists of kneeling a ballot paper to a list of consumers. They are requested to
evaluate different illustrated promotion is and vote for the most right and return the ballot

22

to the firm. A relatively expensive but more accurate method is a portfolio test. A
portfolio of sales promotion is prepared and shown to consumers in person and the
responses are noted. To test consumers behavior responds such as trial purchase, repeat
purchase, etc., pretesting consists of experimenting in certain markets for individual
stores in a market. All other factors remain the same; only the sales promotion device
being tested is the variable that is manipulated. It is often quite helpful to evaluate the
responses of resellers before implementing the promotion programme. The simplest ways
to visit several important retailers and wholesalers discuss the programme and seek their
opinion and suggestions. This may prove to be quite favorable in case the support of
resellers is considered to be of paramount importance for promotion results.

Concurrent testing
This testing is done when the sales promotion is in progress. Concurrent
testing permits the promotion manager to modify the sales promotion, if needed. This
type of testing is conducted in terms of sales data which can be obtained on a weekly
or monthly basis. If the promotion is a consumer contest and the consumer is not require
to purchase anything, the response to promotion can be adjudged by the number of
entries received at some interval and if need be, the contest period can be extended. In
case of a coupon distribution programme, similar approach can be adopted by keeping
track of coupons redeemed.

Post-testing
Post-testing is done after the promotion period is over. To assess the
changing consumer awareness and attitude, telephone calls, questionnaire mailed to the
consumers and personal interviews can be used. In these methods, the most expensive is
the million rupees. The sales jumped to in excess of 5.6 million in the promotion period.
This would show that the objective was achieved. It is very likely that in the ensuing
month after the promotion, the sales will come down to say 3.5 million rupees. In the
sales return to 5 million rupees on the long run, then perhaps the sales jump is because of
brand features and deal prone customers. However, if the regular sales settle at 5.5
million rupees on the long run, then definitely the promotion proves successful in
23

increasing the long run sales by attracting new customers and we have also attracted
customers away from other competing brands personal interview method and the least
expensive is the mail. The information sought pertains to the promotion event. In case
of samples on premiums distributed through retail stores, intercept interviews at the Point
of Sale can reveal more reliable information. To measure the sales affect, sales figures
before the promotion period can be compared with figures at the end of promotion and
one month after the promotion ends. Suppose that the promotion objective was to
increase sales by 30 percent in certain period and the pre-promotion sales for a similar
period were worth 5 million rupees. The sales jumped to in excess of 5.6 million in the
promotion period. This would show that the objective was achieved. It is very likely that
in the ensuing month after the promotion, the sales will come down to say 3.5 million
rupees. In the sales return to 5 million rupees on the long run, then perhaps the sales jump
is because of brand features and deal prone customers. However, if the regular sales settle
at 5.5 million rupees on the long run, then definitely the promotion proves successful in
increasing the long run sales by attracting new customers and we have also attracted
customers away from other competing brands.

Advantages of sales promotion

Sales promotions have a significant effect on the behavior of consumers and trades
people. Such promotions can bring in more profits for the manufacturers because they
permit price discrimination.
1. Price discrimination:
Producers can introduce price discrimination through the use of sales promotions.
They can charge different prices to different consumers and trade segments depending on
how sensitive each segment is to particular prices. Coupons, special sales
events, clearance sales and discounts are examples to explain the phenomenon. Often
such price discrimination are offered in specific cities in the country, Bajaj Auto Ltd.
started the scheme on 20th august 2001, where by if you buy a Bajaj Spirit two-wheeler
you get Rs.3000/- off, valid only in Ahmedabad.

24

2. Effect on consumer behaviour:

As sales promotions are mostly announced for a short period, customers may feel a
sense of urgency and stop comparing the alternatives. They are persuaded to act now
rather than later. With every 500g pack of Tang, you get a free Tang glass. Offer valid
only till stocks last.
3. Effect on trade behaviour:
Short-term promotions present an opportunity and encourage dealers to forward
buy. This forward buying ensures that retailers wont to go out of stocks. As dealers have
more than the normal stocks, they think it advisable to advertise in local media, arranged
displays and offer attractive promotion deals to consumers. These actions help in
increasing the store traffic. Buy 2 dozen shampoo sachets & get 2 sachets free.
4. Regional Differences:
The South is generally characterized by greater degree of going out and people
tend to drink outside the house. The Tamilian, consumer in particular, is value oriented,
rational and looks up to film stars, while the Keralite is more international in his outlook.
The Bangalorean is as cosmopolitan as his Mumbai or Delhi counterpart. Such factors
have to be taken into consideration while providing incentives to the customers. In mid
80s, Philips decided to launch a special project in Tamil Nadu and Andhra Pradesh for
their rural buyers. So, for the Tamil Nadu market, they created a special campaign The
Super Star of the House and made the cine idol Rajnikant their brand ambassador as in
that state he is popularly known as Superstar. Whereas, in Andhra Pradesh, they
launched their brand as Mega Star of the House as Chiranjeevi was taken as their brand
representative. Sales promotion was done by organizing various super shows and
mega-shows for the masses in states of Tamil Nadu and Andhra Pradesh respectively.
Both these campaigns became a major success.

Disadvantages of sales promotion

1. Increased price sensitivity:
25

Consumers wait for the promotion deals to be announced and then purchase the
product. This is true even for brands where brand loyalty exists. Customers wait and
time their purchases to coincide with promotional offers on their preferred brands. Thus,
the routine sales at the market price are lost and the profit margin is reduced because of
the discounts to be offered during sale-season. The Diwali Bonanza Offers on electronic
goods.
2. Quality image may become tarnished:
If the promotions in a product category have been rare, the promotions could have
a negative effect about its quality image. Consumers may start suspecting that perhaps the
product has not been selling well, the quality of the product is true compared to the price
or the product is likely to be discontinued because it has become outdated. The Smile
Powder offer of Buy 1 and get 2 free went on and on. Ultimately people stopped asking
for the product as the on-going sales promotion strategy made the customers perceive it
to be a cheap and an inferior product.
3. Merchandising support from dealers is doubtful:
In many cases, the dealers do not cooperate in providing the merchandising support
nor do they pass on any benefit to consumers. The retailer might not be willing to give
support because he does not have the place, or the product does not sell much in his shop,
or may be he thinks the effort required is more than the commission/benefit derived.
4. Short-term orientation:
Sales promotions are generally for a short duration. This gives a boost to sales for
a short period. This short-term orientation may sometimes have negative effects on longterm future of the organization. Promotions mostly build short-term sales volume, which
is difficult to maintain. Heavy use of sales promotion, in certain product categories, may
be responsible for causing brand quality image dilution.

How Sales Promotion Objectives are set:

26

Sales promotion has dual objective: (A) Basic objectives

(B) Other objectives
(A) Basic objectives of sales promotion are:
(i) Increasing the buying response of ultimate consumers.
(ii) Increasing the selling efforts and intensity by dealers as well as by sales personnel.
(iii) Supplementing and co-coordinating the efforts of advertising and personal selling.
(B) The other objectives are:
(i) Calling attention to new products and product improvements.
(ii) Informing buyers of new brand and new packaging.
(iii) Improving market share.
(iv) Obtaining dealer outlets.
(v) Meeting competition.
These objectives are set on the basis of following criteria.
(i) Cost of reaching an audience member.
(ii) Acceptability of the tools to be used
These criteria are developed taking into consideration the following
Variables/factors:
(i) Kinds of product:
The product is one of the factors determining the form of promotion. Toys, toilet
soaps and cosmetics are effectively shown on television. Mass selling consumer goods
can be easily promoted through radio and television. Industrial and specialty goods
should be promoted through technical journals and through sales engineers.
(ii) The buyer:
If the marketers are to provide realistic solutions to the problem of buyers, they
must know their customers, their needs and desires, their attitude, values, aspirations and

27

expectations. Hence marketers must have up-to-date information about customer demand
and customer behaviour. If the buyers are educated then demonstrations or instructions
can be used as sales promotion technique. Similarly, contests and quizzes can be used if
buyers are of young age and educated.
(iii) Nature and size of market:
The number, geographical location and purchasing power of potential Business
Studies Customers exercise a significant impact on the sales promotion. Sampling,
coupon, money refund orders, premium offer, price-off and trading stamps etc., are
suitable for sales promotion in local markets. On the Other hand, fairs, exhibitions and
fashion shows are more appropriate for sales promotion on the national level particularly
for garments, books and electronic items.
(iv) Stages in product life cycle:
This is an important managerial tool in sales promotion. A product life cycle
consists of four stages. (a) Introduction of the product requires lot of energy to create
awareness, acceptance and demand for the product. Introducing a new product for most
companies is a costly and difficult exercise that is why they mostly depend on
middlemen, (b) Growth. It includes a fast growth both in sales volume and profit. (c)
Maturity (Saturation).This stage is longer. But the speed in achieving sales volume
reduces during this stage. Profit also starts declining much faster than the sales. (d)
Declining. This is the last stage in product life cycle. After a period of stability, the buyers
loose interest on the product, And sales start falling more quickly. At this stage either
high cost sales Promotion technique may be used or existing product may be improved.
(v) Management policy:
In the management policy, first of all, sales promotion objectives are set, then
communication tools required to achieve these objectives are designed, and the third step
is to determine the cost required to execute promotional activities and Programmes. In
short sales promotion Expenditure is directly related to the objectives to be achieved.

28

(iv) Budget allocation available:

The decision on how much to spend on promotion is externally difficult On
account of multitude of promotion tools, on the one hand, and Varieties of products and
markets on the other. For example, the greater the geographical dispersion of a target
market, the greater the Communication expenditure required. Similarly, if an offering is
in its early life cycle, there is a greater need of expenditure. But promotion Budget should
always justify the tasks to be undertaken. A basic principle would be the cost and returns
of sales promotion tools to be adopted. Sales Promotion Hindustan Lever has its well
drawn up sales promotion budget. If any Business house does not have its promotion
budget fixed, then promotion Programmes will have to be designed to support the
marketing plan.
(v) Government regulations:
Government has passed various laws and made rules to protect the Consumer
interest, such as the prevention of Food Adulteration Act, the Drugs and Magic Remedies
(Objectionable Advertisements) Act, and Drugs and Cosmetics Act etc. Sales promotion
policy must take into Consideration the government regulations relating to the particular
Product, e.g. the commodity rates must be specified on the package
And in case of medicines drug contents and date of manufacturing, date of expire, and
price must be specified

Sales Promotion Tools and Programmes:

Sales promotion techniques are know as promotion tools and the mode of their
application is known as sales programme. These tools and Programmes are divided under
two heads:
1. Tools and Programmes for consumers sales promotion.
2. Tools and Programmes for dealer / distributor sales promotion Business Studies Tools
and Programmes for consumers sales promotion
These tools and Programmes are as follows:(i) Sample:

29

Usually called consumer sample, free samples and given to consumers to introduce
a new product or to expand the market. The consumers can try the product.
(ii) Demonstrations or instructions:
These are instructions given to educate the consumers about using the product. This
method may be used in products like Vacuum cleaner.
(iii) Coupon:
It is a certificate that reduces the price. When a buyer gives a coupon to the dealer
or retailer he gets the product at lower price. For example in DCM coupon system if
regular price is Rs.20, with a coupon it is Rs.18. These are also known as discount
coupons. Coupons are also accepted as cash by retailers.
(iv) Money-refund orders:
The technique indicates refund of full purchase price if the buyer so wants. It is
helpful in the introduction of a new product. Refund offer creates additional interest and
increases sales considerably. It is a good Device for creating new user and to strengthen
the brand loyalty.
(v) Premium (gift) offers:
These are temporary price reductions, which appeal to bargain instinct, e.g., instant
coffee sold in carafes by one company was very successful. Towels, dinner ware, hairbrushes, key chains, artificial flowers, ball Pens, toilet soaps, blades, were given as in
pack premiums. Attractive reusable jars costing separately say Rs. 12 may be given as at
an extra charge of Rs. 4 only. Liril gave a soap box almost free with two soap Cakes.
(vi) Price-off:
The price off label is printed on the package, e.g., Rs.4 offers a Brooke Sales
Promotion Bond tea pack of 500 grams. It gives a temporary discount to the consumers.
(vii) Contests or quizzes:

30

These are held to stimulate consumers interest in the product. In these contests,
and quizzers, participants compete for prizes on the basis of their skill or creative ideas.
In Sweepstakes, they submit their names to be included in a draw of prize winners. This
type of sales promotion is not a lottery because there is chance or luck, prizes are offered
and a payment to participant is there.
(viii) Trading stamps:
Trading or Bonus stamps are issued by retailers to customers who buy goods from
there. The number of stamp given to a buyer depends upon the amount of purchases made
by him. For instance, in India Roman Bonus Stamps are issued at the rate of 2-1/2 percent
of the purchase amount. These stamps are given free of charge and the customers can
redeem them to obtain products out of the specified list. This technique Induces customer
to buy their requirements from the retailers who offer such stamps. The purpose is to
increase customer loyalty.
(ix) Fairs and exhibitions:
Trade shows, fashion shows or parades, fairs and exhibitions are important
technique/tools of sales promotion. They provide a forum for the exhibitions or
demonstration of products. Free literature can be distributed to introduce the firm and its
products to the public. Fairs and exhibitions are organized usually by big firms or trade
associations. At these fairs and exhibitions, business firms are allotted stalls where in they
display their products. Fairs and exhibitions have wide appeal as several people visit
there. Customer can be attracted through gifts, special concessions and free
demonstrations of technical and specialty products. They provide an opportunity to the
visitors to observe the competing products and help to promote sales. For instance, the
Trade Fair Authority of India organizes Trade Fairs of various types in New Delhi. The
National Book Trust organizes World Book Fair, where publishers of all over the world
are invited to display their publications. Sometimes sales conventions or conferences of
dealers are held. Business Studies Producers of garments often organize fashion shows to
promote their products.

31

(x) Public relations activities:

These include greetings or thanks in newspapers, donating space for noble causes,
offer of Privileged Citizen Card, etc. Their purpose is not to create immediate demand or
to increase sales. They are designed to create a good image of the firm in the society.
(xi) Exchange scheme:
This technique offers to exchange the old product with new in payment of a fixed
amount which is less than the original price for example, exchange of old Black & White
Television for Colour Television by paying rupees 8000 only (original price is rupees
10000) was offered by a particular producer of colour TV sets.
Tools and Programmes for dealers/distributors sales promotion:
These tools and Programmes are:
(i) Free display:
There is provision of free display of material either at the point of purchase (POP)
or at the point of sale (POS), depending on ones view point. Display reaches consumers
when they are buying and actually spending their money.
(ii) Retail demonstrations:
These are arranged by manufactures for preparing and distributing the products as a
retail sample, for example, Nescafe Instant Coffee was served to consumers for trying the
sample on the spot of demonstration regarding the method of using the product.
(iii) Trade deals:
These are offered to encourage retailers to give additional selling support to the
product, e.g., tooth paste sold with 30% to 40% margin.

(iv) Buying allowance:

Sellers give buying allowance of a certain amount of money for a product bought.

32

(v) Buy-back allowance:

It is offered to encourage repurchase of a Product immediately after another trade
deal. A buy back is a Sales Promotion Resale opportunity.

(vi) Free goods:

Seller gives free goods, e.g., one piece free with two, or two pieces free with 10,
are common free deals.
(vii) Advertising and display allowance:
These are also offered to retailers to popularize the product and brand name of the
manufacturer.
(viii) Contents:
Sales contests are held for salesmen.
(ix) Dealer loader:
A gift for an order is a premium given to the retailer for buying certain quantities of
goods or for special display done by the retailer.
(x) Training for salesmen:
Dealer and distributor training for salesmen, which may be provided to give them a
better knowledge of a product and how to use it. Dealer sales promotion provides the
selling devices. Sales promotion devices at the point of purchase inform, remind, and
stimulate buyers to purchase products. People who see these devices are in a buying
mood and thus they can be easily persuaded to buy those products. Tell tags are
informative labels affixed on the product, describing in detail the features of the product
and its unique selling points. Counter, top racks, posters, mechanized signs are other
point-of purchase displays.

33

International Marketing Co. (IMC) is one of the fastest growing Information

Technology sales and marketing Company based at Ernakulam. Since its incorporation
in 1994 the company has shown tremendous progress. In addition to being the distributor
for Dell range of Consumer Notebook and Sony VAIO range of Notebooks, we are also
a reseller for all the leading brands like INTEL,AMD ,SEGATE ,HP, Compaq
,SAMSUNG, ASUS ,LOGITECH ,TVSE and all the other leading Brands.
To live up to the latest trends and the array of accessories that come with a
computer our categorization is meant to suit your needs. You will find options of
Computers and Laptops as per your customized needs and moreover you will find all the
latest and popular accessories including Storage devices, Printers, Headphones, Speakers,
UPS, Webcams, and much more to enhance your computer in the best possible way

34

considering your budget. We also specialize in bespoke computing solutions for business
and corporate (Business to Business) supply. From custom built laptops to PC systems
suited to your specific needs or application. We can cater a complete solution for your
computing needs - available complete direct from us. Whether its just hardware or
software - we can supply all the latest leading brands and products on the market at
competitive prices but with the added enhanced after sales technical support that
sometimes the latest technology requires, this should be an important factor and make
buying your purchase from IMC, the right and only choice.
International marketing (IM) or global marketing refers to marketing carried out by
companies overseas or across national borderlines. This strategy uses an extension of the
techniques used in the home country of a firm. It refers to the firm-level marketing
practices across the border including market identification and targeting, entry mode
selection, marketing mix, and strategic decisions to compete in international
markets. According to the American marketing association "international marketing is the
multinational process of planning and executing the conception, pricing, promotion and
distribution of ideas, goods, and services to create exchanges that satisfy individual and
organizational objectives." In contrast to the definition of marketing only the
word multinational has been added. In simple words international marketing is the
application of marketing principles to across national boundaries. However, there is a
crossover between what is commonly expressed as international marketing and global
marketing, which is a similar term.
The intersection is the result of the process of internationalization. Many American and
European authors see international marketing as a simple extension of exporting;
whereby the marketing mix 4Ps is simply adapted in some way to take into account
differences in consumers and segments. It then follows that global marketing takes a
more standardized approach to world markets and focuses upon sameness, in other words
the similarities in consumers and segments.

Business overview

35

We would like to introduce ourselves as the technology innovators existing in the

IT market for the past 17 years. Way back in 1994 when there was high demand for
Computer due to Mass computerization of all fields in the society, Mr. Divakar Prabhu
has started this business. This was the beginning of INTERNATIONAL MARKETING
COMPANY as a dealership organization in the field of computer consumables. Divakar
started with a minimum capital. Initially he was supplying to some corporate and small
resellers which include some semi wholesalers. Divakar applied his sales skills to his
maximum use and very soon it reaped benefits and sales grossed. Naresh on his part had
now blossomed into a full fledged businessman, however the fundamentals of the
business were still dealers network, backed by good pricing & promotional schemes.
Now IMC has reached a considerable level in business with a turnover of Rs 100 Crores
We

are

the

Exclusive

distributor

for

Dell

range

of

Consumer Notebook

and Sony VAIO range of Notebooks. We are the Channel Partners for all the leading
brands like INTEL, AMD, SEGATE, HP, Compaq, SAMSUNG, ASUS, LOGITECH,
TVSE and all the other leading Brands.

Business strategy
IMC remains focused on the future, looking beyond the horizon to predict, plan
and deliver the products and services to keep us at the forefront of the industry. As we
boldly lean in to the future , we foresee a number of opportunities to exploit , based on
increasing demand of storage solutions , Memory solutions ,Flash cards & drives , Laptop
&Notebooks Digicams/Camcorders , LCD Monitors & Digital Lifestyle products Our
strong presence of 17 years , our solid Techno-commercial team , our distribution
network and strong high quality products. IMC is positioned to capture a substantial
portion of increasing demand of different segments of IT products. Behind every
successful company, is a group of very satisfied customers. At International
marketing Co, this is achieved through regular innovation and improvement upon
existing service and sales levels; so as to always provide the best possible attention to our

36

customers and dealers. For to all of us here at IMC, nothing matters more than our
customers continued interest and faith. It is through this philosophy that we have
developed a strong 300 Dealers and clientele base of over 200 very well-regarded
organizations, which include: Cochin Ship Yard ltd, Catholic Syrian Bank, Federal Bank,
Kerala Police Head Quarters, BPCL Cochin Refineries, Joy Alukas, Keltron Ltd, C E P Z,
Lakshmi Hospitals, H D F C Bank, High Court Of Kerala, C I F T, R F Motors, Idduki
District Co Operative Bank, KAMCO, ICES.

Sales and marketing

International Marketing Co had 17 direct sales persons, 7 focusing on end
customers, and 10 focusing on resellers. Sales operations were spread throughout Kerala.
Sale was directly handled by Divakar.
Dell traces its origins to 1984; when Michael dell created PCs Limited while a
student at the University of Texas at Austin. The dorm-room headquartered company
sold IBM PC-compatible computers built from stock components. Michael Dell started
trading in the belief that by selling personal computer systems directly to customers, PCs
Limited could better understand customers' needs and provide the most effective
computing solutions to meet those needs. Michael Dell dropped out of school in order to
focus full-time on his fledgling business, after getting about $300,000 in expansion
capital from his family.
In 1985, the company produced the first computer of its own designthe "Turbo
PC", sold for US$795. PCs Limited advertised its systems in national computer
magazines for sale directly to consumers and custom assembled each ordered unit
according to a selection of options. The company grossed more than $73 million in its
first year of trading. The company changed its name to "Dell Computer Corporation" in
1988 and began expanding globallyfirst in Ireland. In June 1988, Dell's market
capitalization grew by $30 million to $80 million from its June 22 initial public
offering of 3.5 million shares at $8.50 a share. In 1992, fortune magazine included Dell

37

Computer Corporation in its list of the world's 500 largest companies, making Michael
Dell the youngest CEO of a Fortune 500 company ever. In 1996, Dell began selling
computers via its web site, and in 2002, Dell expanded its product line to include
televisions, handhelds, digital audio players, and printers. Dell's first acquisition occurred
in 1999 with the purchase of Converge Net Technologies. In 2003, the company was
rebranded as simply "Dell Inc." to recognize the company's expansion beyond computers.
From 2004 to 2007, Michael Dell stepped aside as CEO, while long-time Dell
employee Kevin Rollins took the helm. During that time, Dell acquired Alien ware,
which introduced several new items to Dell products, including AMD microprocessors.
To prevent cross-market products, Dell continues to run Alien ware as a separate entity
but still a wholly owned subsidiary.
Lackluster performance, however, in its lower-end computer business prompted
Michael Dell to take on the role of CEO again. The founder announced a change
campaign called "Dell 2.0," reducing headcount and diversifying the company's product
offerings. The company acquired Equal Logic on January 28, 2008 to gain a foothold in
the ISCSI storage market. Because Dell already had an efficient manufacturing process,
integrating Equal Logics products into the company drove manufacturing prices down.
On September 21, 2009, Dell announced its intent to acquire perot systems (based
in Plano, Texas) in a reported $3.9 billion deal. Perot Systems brought applications
development, systems integration, and strategic consulting services through its operations
in the U.S. and 10 other countries. In addition, it provided a variety of business process
outsourcing services, including claims processing and call center operations.
On August 16, 2010, Dell announced its intent to acquire the data storage
company 3PAR On September 2, 2010 Hewlett-Packard offered $33 a share, which Dell
declined to match. On February 10, 2010, Dell acquired KACE networks a leader in
Systems Management Appliances. Terms of the deal were not disclosed. On November
2, 2010, Dell acquired Software-as-a-Service (SaaS) integration leader Boomi Terms of
the deal were not disclosed.

38

Dell Facilities

Dell's headquarters are located in round rock, Texas. As of 2010 the company
employs about 16,000 people in the facility which has 2,100,000 square feet (195,000 m2)
of space. As of 1999 almost half of the general fund of the City of Round Rock originates
from sales taxes generated from the Dell headquarters.
The company previously had its headquarters in the Arboretum complex in
northern Austin Texas In 1989 Dell occupied 127,000 square feet (11,800 m2) in the
Arboretum complex. In 1990 Dell had 1,200 employees in its headquarters. In 1993 Dell
submitted a document to Round Rock officials, titled "Dell Computer Corporate
Headquarters, Round Rock, Texas, May 1993 Schematic Design." Despite the filing,
during that year the company said that it was not going to move its headquarters. In 1994
Dell announced that it was moving most of its employees out of the Arboretum, but that it
was going to continue to occupy the top floor of the Arboretum and that the company's
official headquarters address would continue to be the Arboretum. The top floor
continued to hold Dell's board room, demonstration center, and visitor meeting room.
Less than one month prior to August 29, 1994, Dell moved 1,100 customer support and
telephone sales employees to Round Rock. Dell's lease in the Arboretum had been
scheduled to expire in 1994. By 1996 Dell was moving its headquarters to Round
Rock. As of January 1996 3,500 people still worked at the then-current Dell headquarters.
One building of the Round Rock headquarters, Round Rock 3, had space for 6,400
employees and was scheduled to be completed in November 1996. In 1998 Dell
announced that it was going to add two buildings to its Round Rock complex, adding
1,600,000 square feet (149,000 m2) of office space to the complex.
In 2000 Dell announced that it would lease 80,000 square feet (7,400 m2) of space
in the LAS Cimas office complex in unincorporated Travis County, Texas, between
Austin and west lake hills, to house the company's executive offices and corporate
headquarters. 100 senior executives were scheduled to work in the building by the end of
2000. In January 2001 the company leased the space in Las Cimas 2, located along Loop

39

360. Las Cimas 2 housed Dell's executives, the investment operations, and some
corporate functions. Dell also had an option for 138,000 square feet (12,800 m2) of space
in Las Cimas 3. After a slowdown in business required reducing employees and
production capacity, Dell decided to sublease its offices in two buildings in the Las Cimas
office complex. In 2002 Dell announced that it planned to sublease its space to another
tenant; the company planned to move its headquarters back to Round Rock once a tenant
was secured. By 2003 Dell moved its headquarters back to Round Rock. It leased all of
Las Cimas I and II, with a total of 312,000 square feet (29,000 m 2), for about a seven year
period after 2003. By that year roughly 100,000 square feet (9,300 m2) of that space was
absorbed by new subtenants.
In 2008 Dell switched the power sources of the Round Rock headquarters to more
environmentally friendly ones, with 60% of the total power coming from TXU
Energy wind farms and 40% coming from the Austin Community Landfill gas-to-energy
plant operated by Waste Management, Inc. Dell facilities in the United States are located
in Austin, Texas; Nashua, New Hampshire; Nashville, Tennessee; Oklahoma City,
Oklahoma;

Peoria,

Minnesota (Dell

Illinois; Winston-Salem,

Compellent);

include Penang,

and Miami,

Malaysia; Xiamen,

North

Florida.

Carolina; Eden
Facilities

China; Bracknell,

located

Prairie,
abroad

UK; Manila,

Philippines, Bangalore, India, Hortolandia, Brazil and Limerick, Ireland.

The US and India are the only countries which have all of Dell's business functions and
provide support globally: Research and Development, manufacturing, finance, analysis,
and customer care.

Manufacturing
From its early beginnings, Dell operated as a pioneer in the "configure to order"
approach to manufacturingdelivering individual PCs configured to customer
specifications. In contrast, most PC manufacturers in those times delivered large orders to
intermediaries on a quarterly basis.

40

To minimize the delay between purchase and delivery, Dell has a general policy
of manufacturing its products close to its customers. This also allows for implementing
a just in time (JIT) manufacturing approach, which minimizes inventory costs. Low
inventory is another signature of the Dell business modela critical consideration in an
industry where components depreciate very rapidly.
Dell's manufacturing process covers assembly, software installation, functional
testing (including "burn-in"), and quality control. Throughout most of the company's
history, Dell manufactured desktop machines in-house and contracted out manufacturing
of base notebooks for configuration in-house. However, the company's approach has
changed. The 2006 Annual Report states "we are continuing to expand our use of original
design manufacturing partnerships and manufacturing outsourcing relationships." The
Wall Street Journal reported in September, 2008 that "Dell has approached contract
computer manufacturers with offers to sell" their plants.
Assembly of desktop computers for the North American market formerly took
place at Dell plants in Austin, Texas (original location) and Lebanon, Tennessee (opened
in 1999). The plant in Winston-Salem, North Carolina (opened in 2005) is scheduled to
cease operations in November 2010, while the Miami, Florida facility of its Alien
ware subsidiary remains in operation. Dell servers come from Austin, Texas.
Dell's desktop plant in Austin, Texas was shut down in 2008. It closed its desktop
manufacturing in Lebanon in early 2009. The last major U.S. plant in North Carolina is
scheduled to close in November 2010. It is expected that most of the work carried out in
North Carolina will be transferred to contract manufacturers in Asia and Mexico, though
Dell said some of the work will move to its own factories overseas.
Dell assembles computers for the EMEA market at Limerick in the Republic of Ireland,
and employs about 4,500 people in that country. Dell began manufacturing in Limerick in
1991 and went on to become Ireland's largest exporter of goods and its second-largest
company and foreign investor. On January 8, 2009, Dell announced that it would move
all Dell manufacturing in Limerick to Dell's new plant in the Polish city of todz by
January 2010. European Union officials said they would investigate a 52.7million aid
package the Polish government used to attract Dell away from Ireland. European

41

Manufacturing Facility 1 (EMF1, opened in 1990) and EMF3 form part of the Raheen
industrial estate near Limerick. EMF2 (previously a Wang facility, later occupied by
Flextronics, situated in Castle troy) closed in 2002, and Dell Inc. has consolidated
production into EMF3 (EMF1 now contains only offices). Subsidies from the Polish
government did not keep Dell for a long time. Manufacturing Facility in Lodz was sold to
Fox Conn as announced in Dec 2009.
Dell's Alien ware subsidiary also manufactures PCs in an Athlone, Ireland plant.
Construction of EMF4 in todz, Poland has started: Dell started production there in
autumn 2007. Dell opened plants in Penang, Malaysia in 1995 and in Xiamen, China in
1999. These facilities serve the Asian market and assemble 95% of Dell notebooks. Dell
Inc. has invested an estimated $60 million in a new manufacturing unit in Chennai ,
India, to support the sales of its products in the Indian subcontinent . Indian-made
products will bear the "Made in India" mark. In 2007 the Chennai facility had the target
of producing 400,000 desktop PCs, and plans envisaged it starting to produce notebook
PCs and other products in the second half of 2007. Dell moved desktop and Power Edge
server manufacturing for the South American market from the Eldorado do sul plant
opened in 1999, to a new plant in Hortolandia, Brazil in 2007.

Marketing

Dell advertisements have appeared in several types of media including television,

the Internet, magazines, catalogs and newspapers. Some of Dell Inc's marketing strategies
include lowering prices at all times of the year, offering free bonus products (such as Dell
printers), and offering free shipping in order to encourage more sales and to stave off
competitors. In 2006, Dell cut its prices in an effort to maintain its 19.2% market share.
However, this also cut profit-margins by more than half, from 8.7 to 4.3 percent. To
maintain its low prices, Dell continues to accept most purchases of its products via the

42

Internet and through the telephone network, and to move its customer-care division to
India and El Salvador.
A popular United States television and print ad campaign in the early 2000s
featured the actor Ben Curtis playing the part of "Steven", a lightly mischievous blondhaired youth who came to the assistance of bereft computer purchasers. Each television
advertisement usually ended with Steven's catch-phrase: "Dude, you're getting a Dell!" A
subsequent advertising campaign featured interns at Dell headquarters (with Curtis'
character appearing in a small cameo at the end of one of the first commercials in this
particular campaign).A Dell advertising campaign for the XPS line of gaming computers
featured in print in the September 2006 issue of wired. It used as a tagline the common
term in Internet and gamer slang: "FTW", meaning "For the Win". However, Dell Inc.
soon dropped the campaign. In the first-person shooter game F.E.A.R extraction point,
several computers visible on desks within the game have recognizable Dell XPS model
characteristics, sometimes even including the Dell logo on the monitors.
In 2007, Dell switched advertising agencies in the US from BBDO to working
mother Media. In July 2007, Dell released new advertising created by Working Mother to
support the Inspiron and XPS lines. The ads featured music from the Flaming lips and
Devo who re-formed especially to record the song in the ad "Work it out". Also in 2007,
Dell began using the slogan "Yours is here" to say that it customizes computers to fit
customers' requirements.

Criticisms of Dell's marketing of laptop security

In 2008, Dell received press coverage over its claim of having the world's most
secure laptops, specifically, its Latitude D630 and Latitude D830. At Lenovo's request,
the (U.S.) National Advertising Division (NAD) evaluated the claim, and reported that
Dell did not have enough evidence to support it.

43

Dell kiosks
Starting in 2002, Dell opened kiosk locations in shopping malls across the United
States in order to give personal service to customers who preferred this method of
shopping to using the Internet or the telephone-system. Despite the added expense, prices
at the kiosks match or beat prices available through other retail channels. Starting in
2005,

Dell

expanded kiosk locations

to

include

shopping

malls

across

Australia, Canada, Singapore and Hong Kong. On January 30, 2008, Dell shut down all
140 kiosks in the U.S. due to expansion into retail stores.

Competition

Dell's

major

competitors

include Hewlett-Packard (HP), Acer, and

Toshiba, gateway, Sony, Asus, Lenovo, IBM, Samsung, Apple and sun

Microsystems.

Dell and its subsidiary, Alien ware, compete in the enthusiast market against AVA
Direct, Falcon northwest, Voodoo PC (a subsidiary of HP), and other manufacturers. In
the second quarter of 2006, Dell had between 18% and 19% share of the worldwide
personal computer market, compared to HP with roughly 15%.
In late

2006, Dell

lost its

lead

in the PC-business

to Hewlett-Packard.

Both Gartner and IDC estimated that in the third quarter of 2006, HP shipped more
units worldwide than Dell did. Dell's 3.6% growth paled in comparison to HP's 15%
growth during the same period. The problem got worse in the fourth quarter, when
Gartner estimated that Dell PC shipments declined 8.9% (versus HP's 23.9% growth). As
a result, at the end of 2006 Dell's overall PC market-share stood at 13.9% (versus HP's
17.4%).
IDC reported that Dell lost more server market share than any of the top four competitors
in that arena. IDC's Q4 2006 estimates show Dell's share of the server market at 8.1%,
down from 9.5% in the previous year. This represents an 8.8% loss year-over-year,
primarily to competitors EMC IBM
44

Partnership with EMC

The Dell/EMC brand applies solely to products that result from Dell's partnership
with EMC corporation In some cases Dell and EMC jointly design such products; other
cases involve EMC products for which Dell will provide support generally midrange
storage systems, such as fiber channel and ISCSI storage area networks. The relationship
also promotes and sells OEM versions of backup, recovery, replication and archiving
software.
On December 9, 2008, Dell and EMC announced the multi-year extension, through 2013,
of their strategic partnership that began in 2001. In addition, Dell plans to expand its
product line-up by adding the EMC celerra NX4 storage system to the portfolio of
Dell/EMC family of networked storage systems, as well as partnering on a new line
of de-duplication products as part of its Tier Disk family of data storage devices.

45

1.1

Gender

Response
male
female

No. of customers
12
38

46

Inference:
From this graph it can be inferred that there are more number
of females than males who answered the survey.
1.2

Table representing price of products

Response
high
resonable
competitive
low

No. of customers
5
28
10
7

47

Inference:
Majority of the respondents opine that the prices of the products are
reasonable though competitive.

1.3

Do you think the products attached with schemes are of

inferior quality to the ones which are not offering any

schemes?

Response
yes
no

No. of customers
34
16

48

Inference:
Customers say that the products attached with schemes are of inferior quality to
the ones which are not offering any schemes.

1.4

Do you think distribution of free samples will help

establishing new brands or products?

Response
yes
no

No. of customers
28
22

49

Inference:
It is inferred that distribution of free samples will help establishing new brands or
products.

1.5

Money back offers create confidence in the mind of

customers about the quality of goods

Response
yes
no

No. of customers
42
8

50

Inference:
Many customers say that Money back offers create confidence in the mind of
customers about the quality of goods

1.6

Buy back offers help to raise the standard of living of

people by exposing them the latest items available in
the market

Response
yes
no

No. of customers
31
19

51

Inference:
Buy back offers help to raise the standard of living of people by exposing them
the latest items available in the market

1.7

What do you think is the most effective way of

communicating a sales promotion?

Response
Print media
Television
Internet
Telephone

No. of customers
14
23
9
4

52

Inference:
Television and print media is considered as an effective way of sales promotion.

1.8 Which is the most effective sales promotion activity?

Response

No. of customers

A gift that is bundled

along with the product
A

gift

through

43

redeemed
redemption

coupons which will be

given later

53

Inference:
A gift that is bundled along with the product is considered as an effective
promotional tool here.

1.9 Consumers prefer small instant gifts or money back than

a delayed trip or lucky draws

Response
yes
no

No. of customers
39
11

54

Inference:
It is inferred that Consumers prefer small instant gifts or money back than a
delayed trip or lucky draws.

1.10

Which is the most attractive sales promotion you

consider while you purchase a laptop?

Response

No. of customers

A foreign trip to Les Vegas

through scratch & win

12

A 8 GB pen drive free of cost

along with the laptop

17

A free gift voucher Rs.2,000/-

21

55

from a textile shop

Inference:
From this it is understood that people will avail product when there is a free
product with it.

1.11

Do you think only nonmoving brands come up with

promotional events or freebies?

Response
yes
no

No. of customers
14
36

56

Inference:
It can be inferred that not only non moving brands but also branded products can
come up with promotional activities

1.12 Will you prepone or postpone your purchase to avail the

promotional offers?

Response
yes
no

No. of customers
31
19

57

Inference:
It is understood that people will prepone or postpone their purchase to
avail the promotional offers.

FINDINGS

1) Quality as the most influencing factors in the purchase decision while price is also an
important for purchase decision.
2) Schemes always attract more and more consumers towards particular brand.
Simultaneously it gives idea about the factors which consumers look most in the product
before they make final decision

58

3) Price off and extra quantity is the two main offers/schemes which consumers have
came across at the time of purchase
4) TV as the best media to market the product which will cover majority of the viewer
ship. On the second place it shows news papers as the media to promote the product in
the market
5) People are not much aware of the schemes which continue in the market it may be
because of the present stock of the product at their place.
6) 1+1 or 2+1 or other free schemes are more demanded and more aware schemes in the
market.
7) People are ready to switch over to another brand if they find better promotional
schemes which suits their budget means more qyt + less cost + quality.
8) Extra quantity with less or same price, more satisfaction, quality and other factors
influence consumers to switch over too other brands.
9) Extra quantity with less or same price, more satisfaction, quality and other factors
influence consumers to switch over too other brands.
10) People are more quality and price oriented
11) Consumer remember that name of the product by the company name and also from
the past performance of that company
12) Customers are looking for any type of the promotions on the product before them
going to purchase.

SUGGESTIONS
The findings of the empirical study indicate that unless the brand to be promoted
is in the consideration set of the consumer, sales promotion by itself is unlikely to have
any major impact. Clearly this shows that managers need to invest into brand building
exercise so that his/her brand appears in the consideration set of the target consumers.
Only after this should he spend time, money and energy on sales promotion activities.

59

Sales promotion should not be used in isolation but need to be integrated with
other tools and in line with the overall positioning of the brand. Also the importance of
the role of mass media came out clearly in the study.
Companys need to create sufficient awareness about sales promotion schemes
through mass media in order to create awareness. Also the person going to the shop for
the purchase of laptop is the final decision maker of the brand. Hence it is essential that
company needs to design attractive, striking, visible POPs for scheme announcements.
With respect to nature of scheme, the finding suggested that premium (free gift)
was popular with companies. While both retailers and consumers preferred price offs. So
it is necessary that the perceived value of a free gift has to be appealing and high for the
target consumers.
Repetitive use of the same premium for a prolonged period may have negative
effect on the loyal customers. When the company is giving its own product free as
premium, it needs to ensure the quality of the product from it as it is likely to jeopardize
the image of both its products.
The findings exhibited that both the retailers and consumers perceived that sales
promotion activities carried out by the companies for increasing sales in short term and
clearing excess stocks. What it implies is that companies need to use sales promotion
synergistically and communicate so that they provide value to the target audience and
enhance brand quality/image perceptions.
Companies need to systematize information flow regarding sales promotion activities
particularly at dealer and retailer level. Ensuring proper information flow and devising
checks and measures to reduce misappropriations and implementation flows should be
considered critical aspects for the success of sales promotion activities by the companies.

60

As retailing is fragmented, direct reach by companies is next to impossible. Through

dealers and proper feedback mechanism, companies keep in touch with the market.
From the study it was found that smaller retailers felt neglected and not enthused to
implement the schemes, particularly when additional handling, stocking, accounting was
required on the part of a retailer without compensatory margins. It can be seen that the
retailer and consumer perceptions matched with respect to preferences of schemes,
underlying motivations and role of mass media. This implies that the retailer would be a
rich source of information about the consumer and the likely response to sales promotion
activities.
Developing a system to tap such responses from time to time both at retailer and
consumer level would be helpful for planning future sales promotion activities. In order
to build trust and commitment companies should tap preferences, perceptions of retailers
as well as consumers.

CONCLUSION
The study is aimed at making the analyses of dell in order to find out which sales
promotional activities are helping them to increase their sales. The main rationale behind
an analysis is to gain realistic corporate knowledge and for the purpose of value addition.

61

Management thesis helps in every possible way to get knowledge about sales
promotion activities and its impact on dell. The findings and suggestions helps dell to
improve their existing strategies and to overcome any obstacles so that it results in long
term survival of an organization.
Thesis study provides the data to know how sales promotion activities are building
awareness about the organization and its products on a regular basis and what needs to be
expected from the customers in return. The study is full fledged in all magnitude here and
the same has been collected by using primary data with market survey and by using
questionnaires.
By conducting this study I came to know about the impact and effect of sales
promotional activities on dell and different sales promotion strategy followed by dell to
increase customer and sales.

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