how special promotions can increase sales? (case study of a selected mcdonald’s)
DESCRIPTION
Complete Research of special promotion in McDonald’s for increasing Sales.TRANSCRIPT
Dissertation Topic:
How special promotions can increase sales? (Case study of a
selected McDonald’s)
Course:
MBA
Date of Submission:
30th JUNE, 2011
1
Dedication
I dedicate this dissertation to my dear parents who always encouraged me and stand behind
me with lots of prayers. I would also dedicate this dissertation to all my family, sisters and
brothers and my friends who have been very supported to me during all the times in my life.
And finally I want to dedicate this dissertation to my dear fiancée who motivated me
throughout my research work.
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Acknowledgement
First of all I am very thankful to God who gave me the ability and strength to complete my
desertion on time.
Secondly I want to pay gratitude from the depth of my heart to my supervisor Professor
Thomas Reeves for his support throughout my dissertation. His knowledge and skills are
really admirable. His moral support, academic support, continuous feedback and motivation
enabled me to complete my research very interestingly and quiet successfully.
I would also like to say many thanks to all the staff of the McDonalds, the crew and the
managers who allowed me to conduct my research on the organization and provided me all
kind of possible help and information.
And finally I would proudly say thanks to all the teachers and staff of my school London
School of Commerce, who are really providing a high level and top standard education.
Whatever I learnt there was very helpful at this stage and will be very reflective during whole
my life. I am also very thankful to my all family and friends for all their moral support, love
and prayers.
Abstract
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The aim of this research is to identify the importance and role of special promotions for a
selected McDonald’s. Promotion products are most valuable assets of the company. As
market is saturated with tough competition in fast food industry and all competitors are trying
to attract more customers in order to increase their sales. Moreover, the knowledge of
consumer has increased because of advancement in electronic media and people have become
more sensitive about the choice of their food. In these circumstances companies need to be
target oriented in decisions making. The study is focused on a selected McDonald’s
promotions activities. The purpose of the research was to analyse and investigate the effects
of special promotions on sales. Research is conducted on the selected McDonald’s to gain the
aims and objectives of research. Quantitative research method is used to collect the data. Data
is collected through questionnaires method from the customers of the McDonalds. Questions
were organized in way to get information about preferences of consumers of different ages
and sex for McDonald’s food and other fast food companies. Moreover detailed discussions
were made with the staff to get information from the restaurant. The results showed that
consumers were well influenced by special promotions. All the evidences were collected
from the previous work in this field through the review of literature. This research showed
that special promotions play a vital role to boost the sales. As result this is recommended that
the company should continue investing on the promotion products and promotion activities.
Table of Contents
Serial No Topics Page No
1 Title Page 12 Dedication 23 Acknowledgement 34 Abstract 4
4
5 Table of Contents 5
Chapter 1
Introduction
1.1 Introduction 81.2 Purpose of Study 81.3 How to define Special
Promotions?9
1.4 Company overview and business description
9
1.5 Background 111.6 Research Aim 121.7 Research Objectives 121.8 Scope of the study 12
1.9 Research Methods 13
1.10 Scheme of Study 13
Chapter 2
Literature Review
2.1 Sales Promotion 152.2 The growing importance of
sales promotions
16
2.3 Sales Promotion Objectives 172.4 Sales Promotion Techniques 172.5 An Overview of How Sales
Promotions Work25
Chapter 3
Research Methodology
3.1 Introduction 283.2 Research Philosophy 283.3 Research Design 293.4 Questionnaires 313.5 Research Ethics 36
Chapter 4
Finding and Analysis
5
4.1 Introduction 374.2 Questionnaires Findings 374.3 Research Findings 37
Chapter 5
Discussions
5.1 Introduction 485.2 Discussions with
McDonald’s Manager and Staffs
48
Chapter 6
Conclusion and Recommendations
6.1 Introduction 526.2 Conclusion 526.3 Recommendations 586.4 Recommendations for Future
Researcher59
Chapter 7
Reflective Statement
7.1 Reflective Statement 60
References 63Appendixes 66
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Research Topic:
How special promotion can increase sales? (Case study of selected McDonald’s)
Chapter 1
Introduction
1.1 Introduction
This chapter discuss the history of McDonald’s restaurant, background and consumer’s
behaviour towards fast food industry in the UK. Moreover meanings and importance of
special promotions and the tactic McDonald’s uses to introduce promotions in order to attract
more consumers are discussed. This research is conducted on a selected McDonald’s
restaurant. And in this aspect all the discussion is about that particular McDonalds. All the
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research data, figures and discussions describes that selected McDonald’s restaurant that is at
commercial road London. The reasonsthe researcher chose this area for research, purpose and
the aim and objective of this research are being discussed here. Research methods are also
being discussed according to scheme of the study.
1.2 Purpose of Study
The purpose of this research study was to identify the importance of special promotions for
the McDonald’s as well as for the consumers. McDonald’s practices a regular research in
order to read the psychology of consumers. Rather than going in details of fast food giant
overall approach towards promotional activities, the researcher focused on a particular
McDonald’s restaurant for this study as research is carried out in a limited period of time. In
order to achieve their prospective McDonald’s have been using the number of ways to
understand the market, for example consumer welfare program, consumer’s feedbacks and
organised surveys are the part of those activities. This study helped out to analyse how well
McDonald’s understand the importance and intention of people towards spending money and
how successfully the fast food giant is motivating people to spend at the restaurant.
McDonald’s set Psychological prices and monopolies in order to attract more people. The
purpose of this research was to focus on the tactic and important business decision making
(marketing, promotions) which are essential to grow the business and to stay ahead from the
rivals.
This study helped out to identify and understand that how McDonald’s uses special
promotions to attract the consumers. This has been observed that the first thing which makes
customers to step in any shop is the advertisement of the special offers. This is a
psychological factor which motivate customer to go ahead and purchase the product. All the
small and large businesses are using this tactic to promote themselves in the market.
The research identified the importance of special promotions for the McDonald’s as well as
for the consumer. The carried out research showed how successfully McDonald’s achieved
the goals with the help of its special promotions.
1.3 How to define Special Promotions?
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In oxford dictionary the word ‘promotion’ is defined as “activities done in order to increase
the sales of a product or service” (www.oxfordadvancedlearnersdictionary.com). In order to
increase the sales business organisations introduce and offer some new products, discount
prices on particular products or for a particular period of time, new deals, monopoly, loyalty
schemes, these are defined as ‘special promotions’.
1.4 Company overview and business description
McDonald’s restaurants operated by MacDonald’s Corp were number one fast food chain in
the world till March 2011. In March 2011 Subway became the largest fast food chain beating
McDonald’s by its number of outlets.McDonald’s is serving about 49 million customers in
120 countries worldwide every day. The company’s headquartered in Oak Illinois.
McDonaldsoperates and licenses 31000 restaurants. The company generated total $19.06
million revenue in year 2004. McDonald’s brand is one of best brand out of ten most popular
brands in the world. McDonald’s differentiate its name and brand image through continuous
marketing, promotional activities and public related activities from its competitors to stay on
top.
The fast food giant offersa menu uniform to all locations. It emphasizes on low prices menu
as cheese burgers, ham burgers, chicken nuggets, soft drinks, hot drinks and many more. In
addition to its regular menus, McDonald’s introduces some promotional products time to
time. This promotional product plays a vital role to increase the sales of McDonald’s. During
the research number of interesting facts and figures came in the knowledge that how the
company stole the menus and strategies of other fast food companies in order to cover the
vast area of customers. And this has been observed too that how people can be attracted and
motivated through introduction of new products. The psychology of human being is that
every new thing attracts him. No matter it is the new girl, new car or a new burger with
slightly changes in a new box. Whenever people see something new they always go ahead to
try it. That is mean it is always a good and successful strategy to introduce new products time
to time. This is what McDonald’s is practising very nicely and successfully. The business
manager of the selected McDonald’s told that half of their total sales come through special
promotions.
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All the business organisations want to increase their revenue and profits, and this is possible
when an organisation focus on the factors which consumers consider when they spend
money. For this purpose the business organisations make the business strategies. Marketing
and selling promotions is one of the most important strategies of any business organisation,
and its importance is comprehensive. The reason that why introducing promotions is
important is quite debateable.
In order to attract more customers, keeping the existing customers loyal and gaining the
interest of new customers, business organisations introduce some discount prices, new
seasonal products, special offers on some recommended products, monopoly or some
customers loyalty schemes extra. For example, Tesco the largest retailer in the UK started
offering its customers the reward point scheme. That’s mean that any customer who spent £1
at Tesco got 2 club card points. In this way consumercollected club card points every time
when they shop at Tesco. In January 2011, Tesco invested £340 million in order to cut prices
on branded and own brand goods. This helped Tesco to attract the people who were facing an
increase in the VAT in January just after recovering from the festive season. Similarly Tesco
have lots of deals which some times vary from store to store depending on the market, for
example low price meal deals including the bottle of wine in areas where purchase power of
consumer is low, in order to win more market share and remain ahead in the game.
McDonald’s Restaurants, which is the largest fast food operator in the world, have 30,000
outlets in more than 119 countries. McDonald’s serves more than 50 million customers in the
world and more than 2.5 million people in the UK every day. McDonald’s also introduces
special promotions to its customers. The fast food giant has a set regular set scheme of
introducing the new promotions which we read, observe and taste on daily basis.
1.5 Background:
People in the UK are Europe's biggest fast food consumers and McDonald’s was top fast food
company with its number of outlets before beaten by Subway in March 2011. In 2007 figures
showed that UK consumers spent £82 per head just in fast food restaurants and burger chains
that doesn’t even take into account other types of fast food order such as Chinese, Indian or
Pizza. McDonald's opened its first restaurant here in 1974, and now more than 2.5 million
people in the UK are said to visit McDonald's every day. (*Internet).
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As the above study clearly showed that the UK is probably the best market for fast food
business. There are number of reasons that people prefer fast food. One of the main reasons
to buy fast food in the UK is the fast life of people here. As the time is passing life style of
people is changing very fast. There was a time when people used to have time for everything
but as time passed new requirements came into being. Shortly in today’s modern life people
have less time to spend on cooking at home or going out in restaurants where they have to
wait a long time. As a result people prefer to buy fast food as in fast food restaurants waiting
time is too less. Basically the concept of fast food was used to avoid the consumption on food
cooking in modern age. In fast food the restaurants food has been cooked and froze to use on
the time. As a result customers are being served within two three minutes with beef, chicken
and fish which otherwise was not possible. This is also a fact that when people use something
on daily basis no matter what was the reason was to go for it, they get used to with that.
When someone get advantage of enjoy food in a way that at same time one could save time
by avoiding time consuming tasks (cooking at home or restaurants where waiting times are
high), the trend of buying fast food became very popular. Here introducing smart promotions
products to customers so that they could keep changing their tastes played a vital role in the
trend and popularity of fast food.
1.6 Research Aim:
In the research the researcher was intend to look at:
a) How McDonalds uses special promotions as tool to gain competitive advantages?
b) An investigationto understand how McDonald’s usesvarious tactics to attract the new
customers and lock the existing one through special promotions.
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c) An analysis of McDonald’s promotions strategies to increase the sales and maximise
profits through offering special promotions to people.
1.7 Research Objectives
The purpose of this study was to investigate the effects of especial promotions for the
customers and business organisation. The study in depth analysed the reasons of introducing
offers, it has been also critically discussed that how special promotions can be used for the
growth of a business organisation in both short run and long run.
a) To investigate the effects of special promotions on consumer purchasing
decisions.
b) To analyse how special promotions affectsthe organisational sales.
c) To analyse the importance of special promotions for an organisation.
The following objectives have been achieved during the research.
1.8 Scope of the study
This research was conducted as MBA dissertation that how special promotions can increase
the sales, a case study of a selected McDonald’s. In the research the researcher has examined
the impact and importance of special promotions for a business. The research emphasised the
various tactic of fast food industry towards getting attraction of consumers. To achieve the
goals and to increase the market share, it is essential for business to increase the sales one
hand and the satisfaction of the crew on other hand. No business can be successful unless and
until the staff working their feel job security and progress. So business have both inside
challenges as well as outside challenges to handle That’s why all the business are trying to
increase their sales as more as they can. For this purpose lots of methods have been used in
different periods of times. Today an effective tool of ‘promotions’ is very successful in this
scenario. As the worldwide recession, unemployment and increasing prices of products make
a person to think and go for deals which suits their budget. During this research lots of
interesting information gained, that how McDonald’s was using the promotions tactic to
make people come in. It was a broad field to learn and discuss but due to limited time scale,
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the research has been carried out on a selected McDonald’s restaurant’s’ crew, managers and
customers. Quantitative questionnaire method is used to collect the primary data.
1.9 Research Methods
This research was conducted from a selected McDonald restaurant (commercial road) in the
London UK. In order to select the restaurant the researcher made visits to several
McDonald’s restaurants in the area. The research included the discussion with top level
management to lower level crew working in the restaurant. Quantitative research techniques
have been used to collect the data from customers. The researcher made regular visits to the
restaurant to observe the trend of people towards buying promotion products. Crew members
who directly serve customers are being included in discussions in meetings. The business
manager of selected restaurant has interviewed to get the facts and figures so that meaningful
and realistic conclusion can be achieved. This method of collecting the primary data from all
relevant sources was very helpful and practically possible for the nature of research and
circumstances faced.
1.10 Scheme of Study:
A brief summary of each chapter is discussed below:
Chapter 1: A brief introduction of the topic and selected organisation is defined in this
chapter. This chapter includes aims and objectives of the research.Research methods are also
discussed in this chapter.
Chapter 2: In this chapter key developments in sales promotions are critically discussed.
Different techniques of sales promotions, objective, growing importance of sales promotions,
and how sales promotions work is being discussed.
Chapter 3: This chapterdefines the various ways of research. Moreover, the quantitative
research technique is used to conduct this research. Questionnaires are used as research
method to find different perspectives of consumer purchasing behaviour.
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Chapter 4:The research report is being discussed in detail, which was conducted from store
manager of selected McDonald’s. Personal observations and discussions with crew and
customers are also reported in order to provide in-depth information on given topic.
Chapter 5: The data collected through questionnaires is analysedand critically discussed in
this chapter. In order to analyse and present data in tables exploratory data analysis technique
is used. Each question is analysed and the outcome is discussed in detail in this chapter.
Chapter 6: This chapter includes conclusions which were made on the basis on data in
Chapter 3 and Chapter 4 and further linkcollected data with literature. In addition, research
questions and objectives are being properly conducted through data analysis.
Furthermore, recommendations have been drawn for the selected organisation to improve
their business and recommendations for future researcher are also discussed in this chapter.
Chapter 7:This chapter includes my personal analysis on the research topic. What I learned
in whole research process and how I learned about the research practical implications. How
this research could be done differently if I have to do it again.
Chapter 2
Literature Review
2.1 Sales Promotion:
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The term ‘sales promotion’ covers a wide range of activities intended to provide a short-term
increase in sales. Some sales promotions are aimed at retailers, some at consumers and yet
others at wholesalers, but in all cases the intention is to provide an extra incentive to buy, or
stock, a specific brand or product range (Blythe and Jim, 2006).
Sales promotion includes marketing activities other than personal selling, advertising and
publicity designed to enhance consumer purchasing and dealer effectiveness. Sales promotion
can be traced back 100 years (Kurtz at le. 2009).
The aim of sales promotion is to influence the targeted audience purchasing decisions. In
contrast, advertising are usually used to develop market awareness. Advertising is used to
achieve long term sales, whereas, sales promotion are used to achieve short term sales (Fill,
2009).
Additional value is offered through sales promotion in order to generate an immediate sale.
Sale promotion targeted consumers, distributors, agents and members of the sales force. A
whole range of network members can benefit from the use of sales promotion. This
promotional tool is traditionally referred to as a form of below-the-line communication
because, unlike advertising, there are no commission payments from media owners with this
form of communication. The promotional costs are borne directly by the organisation
initiating the activity, which in most cases is a manufacturer, producer or service provider
(Fill, 2009).
However, the marketers recognise sales promotion as an important part of overall marketing
plan; hence the focus has shifted from short term objectives to long term objectives of
building brand equity and maintaining continuous purchases (Kurtz at le. 2009).
According to Kurtz et al. (2009), sales promotions are used by both retailers and
manufacturers to offer extra incentives to consumer to buy their products. These promotions
are likely to stress price advantage, giveaways or special offerings. The main objective of
sales promotions is to speed up the sales process and increase sale volume. Moreover,
promotions are help in building customer loyalty. The marketer encourages consumers
through consumer promotion to try product and use more of it and buy it again. Similarly,
loyalty programs are more important to organisations than ever before due to wide range of
choices open to consumers than in past. Therefore, marketers need to find ways to build
loyalty among customers (Kurtz at le. 2009).
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Once sales promotions are combined with other marketing activities it produces the best
result. As advertising (for example, ads) create awareness about product or service, while
sales promotions lead to purchase or trail. In addition, sales person may offer a potential
customer a discount coupon for good or service. Due to limited time frame, promotions
encourage immediate action. Therefore, sales promotion produce measurable results, and it
gives marketers to evaluate promotional effectiveness (Kurtz at le. 2009).
According to Kurtz at le. (2009), there are certain elements which need to understand
properly that what sales promotions can and cannot do. Sales promotion on one hand can
encourage consumer interest in both new and mature products, help introduce new products,
encourage trail and repeat purchase, increase product usage, neutralise competition, and
reinforce advertising and personal selling efforts. On the other hand, sales promotions cannot
improve poor brand images, defected products or poor training for salesperson. Sales
promotion increases volume in short term and may not lead sales and profit growth in the
longer time period.
2.2 The growing importance of sales promotions
Sales promotions are the important instrument of the communications mix. In the UK,
estimates suggest that budget of promotion exceed advertising spends. There are number of
factors which can be attributed to this evolution and are shown below in figure 2.2 (Pickton
and Broderick, 2001).
Figure 2.1:
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Sales PromotionBuying decision taken in store
Distribution Channel Power
Measurability
Short-term Orientedness
Lack of differentiation
Declining Brand LoyaltyCommunication Clutter
*Figure 2.1 Factors affecting the increasing use of sales promotion (Pelsmacker, 2010, Page 408)
“Due to an increasing number of product categories, more and more brands and product lines
are offered. Hence, it is getting increasingly difficult for consumers to distinguish brands on
the basis of their intrinsic qualities. In addition, functional differences between brands have
become less important. Therefore, manufacturers find it increasingly difficult to differentiate
their brands on the basis of advertising”, (Pelsmacker, 2010).
According to Pelsmacker, (2010), in order to attract targeted audience promotion is seen as a
useful tool to persuade them to buy their brands. Similarly, through advertising it is relatively
difficult to reach consumer effectively. Sometimes, individual ads get lost in communications
clutter, and are hardly noticed by the majority of consumers. In addition, sometime
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consumers are irritated by advertising and they try to avoid advertising. Therefore, marketers
are using alternatives tools to attract consumer attention to their brands.
According to McDonald, (1992), “consumers, at least for certain fast-moving consumer
product categories, are less brand loyal, and are becoming increasingly price-conscious”.
“This is due to increased response to material incentives, such as promotions. The majority of
buying decisions take place within the retail outlet. An increasing number of product or brand
purchasing decisions are essentially impulse-buying decisions. Since communications efforts
are most effective at the time and place when and where the consumer makes his or her
decision, in-store communications elements and incentives become more attractive tools of
persuasion”, (Pelsmacker, 2010).
Furthermore, companies are becoming increasingly short-term oriented. However, the
traditional advertising campaigns effects can only become visible in the long run. “Product
managers who want to see immediate results from their communications efforts will therefore
be tempted to use promotion tools rather than long-term thematic advertising campaigns”. It
is easy to measure the result of a promotion campaign than that of an advertising campaign.
The aim of advertising is often to obtained intermediate effects, such as awareness and
favourable attitudes, and it eventually leading to increased sales. Similarly, the aimed of
promotions are an immediate behavioural response, which can be readily measured. Product
managers are very keen about the immediate result characteristic of promotion. “Finally,
distribution channels are becoming increasingly powerful. Many brands are jostling for shelf
space and, as a result, retailers are in a position to decide which brands will obtain shelf space
under which conditions. Often, promotional tools are used to persuade the trade channel.
Furthermore, the distribution channel is taking an increasing part in the promotional activity
of manufacturers”, (Pelsmacker, 2010).
2.3 Sales Promotion Objectives:
Sales promotion has significant impact on overall sales. The dramatic increase in sales
promotion spending clearly shows that marketers recognised the potential of promotional
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methods. Sales promotion is widely used in various firms in their overall promotional mix.
Similarly, in order to achieve goal or set of goals, sales promotion activities may be used
singly or in combination. Sales promotion activities are used by marketers for number of
purposes (Hughes al et. 2011). Some of these purposes are mention below.
“To attract new customers
To encourage trail of new product
To invigorate the sales of mature brand
To boost sales to current customers
To reinforce advertising
To steady irregular sales patterns
To build up reseller inventories
To increase traffic un retail stores
To neutralise competitive promotional efforts
To improve shelf space and displays”
Sales promotion objectives should be consistent with the organisation’s strategic objectives
and its marketing and promotional objectives (Hughes al et. 2011).
2.4 Sales Promotion Techniques:
There are numerous sales promotion techniques. All these techniques offers a direct
inducement or an incentive to encourage target audience of these promotional messages to
buy a product/service sooner rather than later. The inducement (for example, price deals,
coupons, premiums) is presented as an added value to the basic product, and it encourages
buyers to act now rather than later. Sales promotions are used to accelerate sales. The
acceleration represents the short time period in which the whole transaction is completed
relative to the time that would have elapsed had there not been a promotion. It does not mean
that extra sales have been achieved, but it is just a potential future exchange which is
confirmed and transacted upon now. Sales promotions consist of a wide range of tools and
methods. There are many consideration of what constitutes sales promotion methods is
important. In many cases, price is the determinant variable and can be used to distinguish
between instruments. Sales promotions are often perceived purely as a price discounting
mechanism through price deals and the use of coupons. This, however, is not the whole
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picture, as there are many other ways in which incentives can be offered to buyers (Fill,
2009).
Promotions are a way of providing value, and it is this value orientation that should be used
when considering the nature and essential characteristics of sales promotions. Peattie and
Peattie (1994) established a useful way of discriminating between price and non-price sales
promotion instruments. They refer to sales promotions that are value increasing and sales
promotions that are value adding. This demarcation is important because a large amount of
research into sales promotion has been based on value-increasing approaches, most notably
price deals and coupons (Gupta, 1988; Blattberg and Neslin, 1990; Krishna and Zhang,
1999). This tends to distort the way sales promotions are perceived and has led to some
generalisations about the overall impact of this promotional discipline. There is a large range
of other sales promotion instruments that added value and enhance the offering and which
provide opportunities to drive longer-term benefits. However, research into these is limited
(Gilbert and Jackaria, 2002).
Sales promotion techniques can further classified as promotional techniques for either
consumer-oriented sales promotion or trade-oriented sales promotions. Consumer-oriented
sales promotion methods are trying to attract consumers to particular retail store and motivate
them to purchase certain new or existing products. Whereas, trade-oriented sales promotion
encourages wholesalers and retailers to stock and actively promote a manufacturer’s
products. Various incentives such as money, gifts, merchandise and marketing assistance are
awarded to reseller who buy products or responded positively (Hughes al et. 2011).
2.4.1 Retailer promotions:
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Various retailer promotions are used to attract customers to spend more in-store. Some of the
major promotional activities of retailers are as follows:
To increase store traffic: As sales promotion helps to increase the number of people
come into store, but retailer would use sales in special events or seasons.
To increase frequency and amount of purchase: This kind of sales is widely used
by the retailers. Buy two-for-one offers, buy one get another product for 50% and so
are the examples of such kind of sales promotion.
To increase store loyalty: Most retailer issues cards which offers economic benefits
to customers, this not only help spending in-store but it also help to increase customer
loyalty. For example, Tesco Club card or Sainsbury Nectar Card (Verhoef 2003).
To increase own-brand sales: As own brands have often higher profit margin than
national brands. Own-brands are usually perceived as low quality and therefore, an
increase promotion can help in increase own-brand sales.
To even out busy periods: Most retailers use seasonal sales, but in order to gain high
market share some retailers also promote at busy times.
2.4.2 Consumer-Oriented Sales Promotion:
Marketers in promotion industry uses all kind of sales promotions such as, games, contests,
and coupons to persuade new and existing customers to try their products. Consumer-oriented
sales promotions help to encourage repurchases by rewarding current users, boost sales of
complementary products, and increase impulse purchases. It also helps to attract consumer
attentions in the midst of advertising clutter (Kurtz at le. 2009).
It is important for the marketers to use sales promotions selectively because if they using
excessive, then customer will begin to expect more price discounts all times, which will
ultimately damage brand equity.
The figure 2.2 illustrates the objectives of popular sales promotion alternatives and identifies
their strengths and weaknesses and will be further discussed in detail below.
Kind of Promotion Objectives Strengths Weaknesses
Coupons Stimulate trail or Attract price- Not all retails accept
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brand switching sensitive customers
who might not
otherwise buy.
Encourage retailer
support.
coupons. Have often
been counterfeited or
redeemed by some
retailers without
consumer purchases.
Refunds (or
rebates)
Encourage customers
to buy
Help half sales
declines or reduce
inventories if new
products are about to
enter the market
May reduce
perceived value of
the product.
Easy for competition
to match
Samples Stimulate trail of new
products
Low customer risk
creates awareness
and trail
May be very costly
for the company
Premiums Encourage customers
to buy and minimise
brand switching
Reward loyal
customers for
continued purchase
Customers will not
need to repurchase
for a longer period
Contests Stimulate trail or
create goodwill
Customers like free
merchandise and may
induce trail of
complementary
product
May be costly for the
company
Sweepstakes Encourage
consumers to buy
and minimise brand
switching
A predetermined
number of winners,
hence cost is usually
predictable.
Consumers like them
because little effort is
required
Requite careful
thought to be creative
and to avoid costly
legal responsibilities
Specialty
Advertising
Encourage customer
loyalty
Create awareness and
help to reinforce
previous and future
advertising messages.
Good customer
acceptance
May be very costly
for company and
may become less
effective, if
competition offers a
better promotional
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item.
*Figure 2.2 Most Popular Sales Promotional Alternatives Figure (Kurtz at le. 2009)
There are number of factors considered when marketing decisions are made about which and
how many sales promotion methods to use. The most important are the objectives of
promotional effort. Marketer must consider product characteristic (such as, size, weight, cost,
durability, uses, features, and hazards) and target market profiles (such as, age, gender,
income, location, density, usage rate and buying patterns). Similarly, distribution channels
and availability of appropriate reseller also influence the choice of sales promotion methods.
In addition, competitive and regulatory forces in the environment have also great influence on
sales promotion methods (Hughes at le.2011).
Few important sales promotion methods are discussed below.
1) Coupons:
A coupon reduces the retail price of particular item by a stated amount at the time of
purchase. Coupons may be worth anywhere from few pence to a few pounds, they are
made available to customers through newspapers, magazines, direct mail, online, and
shelf dispensers in stores. Some coupons are precisely targeted at customers (Hughes
at le.2011).
2) Rebates:
A rebate is a return of part of the product’s purchase price. Usually, the refund is
offered by the producer to consumer who sends in a coupon along with specific proof
of purchase. Rebating is relatively low-cost promotional method. Once used mainly to
help launch new product items, it is now applied to a wide variety of products. The
main problem in rebates is that many people perceive the redemption process as too
complicated. Only half of individuals who purchase rebated products actually apply
for the rebates (Hughes at le.2011).
3) Samples:
A sample is a free product given to customers to encourage trail and purchase.
Marketers use free samples to stimulate trial of product, increase sales volume in the
early stages of a product’s life-cycle, and obtain desirable distribution. Samples may
be offered via online coupons, direct mail, or in stores. Though many customers
prefer to receive their samples by mail. It is the most expensive sales promotion
23
technique. Although it is used often to promote new products, or sometime used to
promote existing brands. In designing free sample, organisations must consider
factors such as seasonal demand for the product, market characteristics and prior
advertising (Hughes, at le. 2011).
4) Premiums:
A premium is a gift that producer offers a customer in return for buying a product.
They are used to attract competitors’ customers, introduce different sizes of existing
products, add variety to other promotional efforts, and stimulate consumer loyalty.
Creativity is essential when using premiums: to stand out and achieve a significant
number of redemptions, the premium must match both the target audience and the
brand’s image. Premiums must need to be easy recognisable and desirable. Premiums
are placed on or inside packages and also can be distributed through retailers and
through the mail (Hughes, at le. 2011).
5) Contests:
Contests are the special types of promotion where the winner is awarded value solely
on basis of his/her skills they showed compared to others. As it is very natural that
customer are being attracted when the winning value is very high. But in contests
there are quite few lucky winners who will receive the value of which is offered in
promotion. The main problem with this method is that relatively very costly for
company (Christ, 2008).
6) Sweepstakes
Sweepstakes are not skill-based but it’s rather based on luck. Winners are selected
randomly. There are chances of winning higher prices and sweepstake occurs
automatically when purchase is made. Moreover, in some case there is no requirement
to make a purchase, but it is wise to be more creative and try to avoid the costly legal
responsibilities (Christ, 2008).
2.5 An Overview of How Sales Promotions Work
Sales promotion need to be more effective in order to accelerate or bring forward future sales,
and need to have better understanding about behavioural change. New behaviour patterns
need to be used for better results. If sales promotions are used for long term then it brings
repeat purchase behaviour, than on permanent basis new behaviour patterns needs to be
24
learned and adopted. It is one of the most complicated tasks and is also referred by
behaviourists as shaping. It is advocated by Rothschild and Gaidis (1981). They argued that
overall task needs to be segmented into constituent parts and it will help in smaller sequential
tasks can be learned. The successive action leads to new desired pattern of behaviour. “This
view emphasises the impact of external stimuli in changing people behaviour. The cognitive
view of the way sales promotions operate is based on the belief that consumers internally
process relevant information about a sales promotion, including those of past experiences,
and make a reasoned decision in the light of the goals and objectives that individuals set for
themselves”. According to ELM that individuals using peripheral route will consider only
simple strategies such as display boards and sign of price reductions. “Those individuals who
are using ELM central route have a higher need for information and will develop the
promotional signal to evaluate the value represented by the relative price and the salient
attributes of the promoted product, before making a decision (Inman et al., 1990)”. “The main
difference between the views of the behaviourists and those of the cognitive school of
thought is that the former stress the impact of externally generated stimuli, whereas the latter
emphasise the complexity of internal information processing”.
There are series of concern regarding the costs and its impact on overall activities due to the
increase budget allocated to sales promotions and temporary price reductions (TPRs).
However, the use of temporary price reduction (TRP) can increase sales volumes (Ehrenberg,
2000). But in stable market the long-term upward shift in demand is totally unrealistic.
Ehrenberg (2000) further argued that people who are frequently use TPRs are infrequent
purchasers of given category. The research further suggested that these types of promotion do
not attract new buyers.
According to Dawes (2004) research that in the promotion period there are as many buyers in
market when TPR was running. “Promotional activity does not take place in a vacuum with
new products: competitors will be attracted and some customers lost to competitive offerings;
in mature markets, non-loyal will take advantage of a sales promotion and then revert to
competitors sales promotions when they re-enter the market”.
Similarly, Dawes also found that price promotion has negative impact on brand, as sales
volume increases but it drastically lower down the profitability. There are number of hidden
cost associated with sales promotion. Although there was perception that sales promotion
cost are relatively low as Buzzell et al. (1990) and other demonstrated, but the other indirect
25
costs also need to considered. For example, a manufacturer uses promotional deals to induce
reseller to buy their stock at promotional price, in addition to their normal buying
requirements. The additional stock is being held for resale at later dates at regular retail
prices. However, the cost of this forward buying can be enormous. Buzzell et al. (1990)
further suggested that promotion stock attracts higher interest charges, warehouse costs, cost
associated for transferring of stock to various geographical areas and cost relating to separate
promotional stock from normal. When all these associated costs are added to the
manufacturer forward buying costs then costs overweight the benefits of sales promotion
uses. In order to demonstrate the above point that the use of sales promotion especially Buy
One Get One Free (BOGOFS), are used by supermarkets to change consumer purchasing
behaviour and influence consumer purchasing decision to try the new product. in addition,
Simms (2007) reports that they as effective as television advertising to encourage trail. Still
there are numerous problems with BOGOFS. According to Binet by Simms, around 84 per
cent of trade promotions are unprofitable. Every year volumes are added into next year
targets, which force manufacturer to increase their volume due to average price down, and it
untimely lower down the profitability. Promotions do promote the brand image but they also
create difficulties for retailers. This is because of the impact promotions can have on the
relatively stable logistics associated with normal trading patterns. Therefore, it very important
for resellers and manufacturers to work together such promotions in order to cover all the
associated costs and both parties can benefit from them. The associated cost with sales
promotion is not only evaluated for short-term but also for long-term costs as well.
“Jones (1990) refers to this as the double jeopardy of sales promotions. He argues that
manufacturers who participate extensively in short-term sales promotions, mainly for
defensive reasons, do so at the expense of profit. The generation of sales volume and market
share is at the expense of profit. The long-term effects are equally revealing. As the vast
majority of sales promotions are TPRs, the opportunity to build a consumer franchise, where
the objective is the development of brand identity and loyalty, is negated. Evidence shows
that as soon as a sales promotion is switched off, so any increased sales are also terminated
until the next promotion. The retaliatory effect that TPRs have on competitors does nothing
to stabilise what Jones calls volatile demand, where the only outcome, for some products, is
decline and obscurity”.
Due to regular sales promotion most consumers totally depends on the presence of promotion
before any purchases. If preferred product does not carry a coupon, premium or TPR, then
26
they may switch to competitors product that does offer some promotional element with
products. A related issue concerns the speed at which sales promotions are reduced following
the introduction of a new product. If the incentives are removed too quickly, it is will be hard
to build relationship with the products. Similarly, if these incentives stayed for too long, then
its might possible consumer only identified product by the value of the incentive, not the
actual value of product itself. The process by which a sales promotion is removed from a
product is referred to as fading and its rate can be crucial to the successful outcome of a
product launch and a sales promotion activity.
Chapter 3
Research Methodology:
3.1 Introduction:
27
In Chapter 3 an in-depth analysis of research methodologies is being made for collecting
data. Various research methods are being discussed in this chapter to support the aims and
objectives of research. The desired objectives of this chapter to achieve the aim and
objectives of research for the selected organisation. Different theories are discussed in order
to support the research work.
3.2 Research Philosophy:
There are various ways of thinking, categorising and rich variety of methods are available for
designing, carrying out and analysing the results of research. Some of the research
philosophies are discussed below.
i) Positivism
Positivism is a single, tangible reality "out there" that can be separated into parts and which is
competent to study independently. For being a positivist, in order to have great effect on
social world has use scientific methods and aim to discover the regularities and patterns of
social world. These patterns and regularities are determined for having their own existence.
Similarly, an assumption is being made that there is no effects without causes and vice versa
(Dencombe, 2007).
ii) Realism
The reality of truth is what our senses show us and object existence is independent of the
mind. In this context realism contradicts with idealism, which is theory defines that only
mind and its contents exist. Realism and positivism both believe that the development of
knowledge can be done through scientific approach. This believe supports understanding and
collection of data. It would be further clearer when comparison is being made in between two
forms of realism (Saunders at el. 2007).
There are two types of realism, which have different opinion and are totally different from
each other.
Direct Realism: It argues that you get what you see. It actually means that through our senses
of experience we can depict the world accurately (Saunders at el. 2007).
28
Critical Realism: It is totally opposite to direct realism. It argues that our senses of experience
are mere the images of things in real world and it’s not the things actually. Further, it point
out how our senses misled us on numerous occasions (Saunders at el. 2007).
3.3 Research Design
There are two types of research used for the analysis and data collection which are qualitative
research and quantitative research. Both these methods are widely used for data analysis.
Each type of research has merits and demerits. A brief comparison has been made below.
3.3.1 Qualitative Research and Quantitative Research:
Qualitative approach is used to explore those areas where there is little or no knowledge
exists and the results are conducted in words, whereas, quantitative approach is used to make
comparison, usually result oriented and often expressed in numbers (Tench & Yeomans,
2006).
“The aim of qualitative is to identify and explore in-depth phenomena such as reasons and
attitudes (Tench & Yeomans, 2006)”.
“Whereas, the aim of quantitative research to quantify variables such as attitudes or
behaviours and points out co-relations between them. Results can be generalised which
means research that generates findings that can be applied to a wider public or situation
(Tench & Yeomans, 2006)”.
Quantitative Approach Advantages and Disadvantages:
The main advantages of quantitative approach are to generate comparable results can
be generalised. Moreover, non-experienced researchers can be guided and it has
higher acceptance by clients.
29
Similarly the main disadvantages of quantitative approach is that result can be
generated what is coded in prepared questions. It may distract respondents into no
relevant direction. It does not help to make deeper analysis of reasons (Tench &
Yeomans, 2006).
Qualitative Approach Advantages and Disadvantages:
The main advantage of qualitative approach is that it provides deeper understanding
of causes and motivations. It also helps to explore information which are unknown or
unpredicted.
Similarly, the potential disadvantage of qualitative approach is that it is costly and
time consuming. Qualified researchers are needed to conduct this kind of research.
Moreover, researcher can easily influenced by the results (Tench & Yeomans, 2006).
3.3.2 Quantitative Research Method:
Saunders et al. (2007) suggested that quantitative data is in raw form and data need to be
processed and analysed in order to make them useful or turn them into information. In order
to explore, present, describe and examine the relationships and trends within data various
quantitative techniques can be used such as graphs, charts, and statistics. Mostly all business
and management research involve some amount of numeric data or contains data that can be
usefully quantified to answer the research questions and meet research objectives (Saunders
at el. 2007).
“Quantitative data ranges from simple counts to more complex data. These data need to be
interpreted and properly analysed. This process can be assisted by quantitative analysis
techniques. This range includes the creating simple tables or diagram that shows the
frequency distribution and using statistics that help in making comparison, through
establishing statistical relationships between variables to complex statistical modelling
(Saunders at el. 2007)”.
There are number of quantitative methods that data can be collected and analysed. The main
method which is used for quantitative research technique is the questionnaires.
Questionnaires are used to collect primary data for the selected research.
30
In this research questionnaires are used as the main research technique. This will be discussed
later in current chapter in detail.
3.4 Questionnaires
Bryman, (2004), argues that questionnaires are designed to be completed by the respondents.
Self-administered questionnaires are also being referred to such kind of questionnaires. In
research management the most frequent method used for data collection is questionnaires.
As questionnaires are relatively cost effective, easy to use and usually the most reasonable
alternative for measuring unobservable constructs such as attitudes, values and preferences,
intentions, and personalities (Moorman & Podsakoff, 1992).
“Moreover, questionnaires are commonly associated with co-relational field study (survey)
designs, of which the mail (postal) questionnaire is the most popular. Questionnaires can be
designed either by hand or online or via email. Questionnaires are highly structured
instruments composed of pre-set standardised questions. Due to their highly structured
format, questionnaires are used where the aim is to generate quantitative data from a large
sample to test research questions and/or hypotheses”.
Method Used in Research:
Quantitative method of research is being used in given research. Questionnaires
method is used to collect the data from the customer of selected McDonald’s
restaurants. Discussions with store manager and some staff is also being conducted.
They were asked the relevant questions to get information about sales promotion.
These activities were helpful to know the tactic of sales promotion. Personal
observations were also conducted that how consumer are influenced by the promotion
tactics of McDonald’s and try to understand the perception of consumers and
employees.
The purpose to use these methods was to classify features, count them and construct
statistical models in an attempt to explain what has been observed. All the aspects of
study were clearly designed in advance.
31
3.4.1 Types of Questionnaires:
As mentioned above that respondents usually filled self-administered questionnaires. There
are various ways to administered questionnaires such as electronically via email, postal or
mail questionnaires (where questionnaires are posted to respondents and they posted after
completion), delivery and collection questionnaires (where questionnaires are being handed
respondents personally and collected later). Similarly, telephonic questionnaires for survey
are also widely used in area of market research. In structured interview the respondents are
interviewed face to face from selected questionnaires.
Delivery and Collection Questionnaires:
This type of questionnaire method is used in research for collection of data. Questionnaires
were handed out to various respondents and respondents filled those questionnaires right in
selected organisation and collected at same time. Questionnaires were designed in such way
that respondents are easily understandable and the sequence of questionnaires was in such
way that respondents easily follows what questions is coming next. Before handling
questionnaires all respondents were taken in confidence that their responses will completely
remain anonymous and all their data will not be shared with any individual or organisation.
Method used for Research:
I have used two methods of getting my questionnaires done from customers. I
delivered the questionnaires to the customers and collected later on an agreed time.
And the second way I used was, I went to McDonald’s, met the people over there and
explained what I am doing and it was all about and requested them to fill up my
questionnaires. Most of the people agreed to fill up questionnaires. During that time
when the targeted people were filling my research questionnaires, I had time to chat
with them. This helped me to ask them more oral questions regarding my research. I
took their opinion on the promotions, what they feel about all that activities of
McDonald’s. During conversations, I recognised that people perception about
products promotions. Questionnaires were delivered by hand to each respondent and
collected later on agreed time. I ensured that questions I have designed are simple and
easy to understand, followed with proper covering letters, which will help the
respondents to know what the research is all about. That was the best type of
questionnaire I have used to gather data from respondents in limited time.
32
3.4.2 The choices of questionnaires:
Researcher can used various choices of questionnaires while designing questionnaires and
some these choices are used for the selected research.
i) Closed-Ended Questions
In closed questions there are ranges of responses that respondent many choose. It is useful to
use highly structured closed question in order to generate frequencies of the response which
are capable for analysis of data in statistical form. It helps to enable comparison among
groups in sample (Oppenheim 1992:115). “Moreover, their coding is much quicker and
analyse than word-based data (Bailey 1994: 118) and, they are focused more than open-ended
questions”.
“Closed questions are relatively easy to code and quick to complete and its do not
discriminate on the basis of respondents reacts (Wilson and McLean 1994:21)”.
ii) Multiple choice questions
Researcher can use multiple choice question, where the range of choices are designed to
capture the likely range of responses to given statements. A complete guidance need to be
given to participants and clarify on the completion of multiple choice, whether respondents
are able to select single response or several responses from the list. In addition, multiple
choices should also include that enable respondents to select the response that most closely
represent their view. Hence a pilot is needed to ensure that the categories are comprehensive,
exhaustive and representative. This will help the researcher to figure the response categories
only. Rankings are useful in indicating degree of response (Morrison el at. 2007).
iii) Rating scales
“Dichotomous questions have managed to move away from the degree and intensity of
response and can be seen in the spectrum of rating scales – Likert scales. This method is
useful for the researcher to generate numbers and help to understand the sensitivity and
33
differentiation of responses. All the categories need to be discrete and to exhaust the range of
possible responses which respondents many wish to give. The opinion of respondents can be
traced by selecting or ticking on that position on the scale which they feel comes closer to
their mind (Morrison el at. 2007)”.
“A Likert scale (Rensis Likert 1932) provides a range of responses to a given question or
statement”, for example, in given questionnaires the researcher used wide range of responses
to a given statement in the following order:
Strongly Disagree
Disagree
Neither Agree/Disagree
Agree
Strongly Disagree
iv) Ratio Data:
Ratio data avoids forcing responses into categories. It allows for greater accuracy. It enables
the researcher to calculated proportions or ration. Similarly, it also enables high level
statistics to be computed, such as regression and factor analysis. There is no fixed answer or
category provided, and the respondent puts in the numerical answer that fits his/her exact
figure, i.e. the accuracy is higher, much higher than in categories of data (Morrison el at.
2007)”.
The researcher also used ration data in various parts of questionnaires in order to find the
responses of participants. It will help to complete the research with higher accuracy.
3.4.3 Sequencing the Questions
The important part of any questionnaire is the ordering, first set the tone for early questions
and then mindset in later questions. Oppenheim (1992:121) argues that each question purpose
is to ensure that the respondents will cooperate continuously.
34
Moreover, questions need to be designed in such method that respondent clearly read the
signs through seeking similarities and resonances between statements so that responses to
early statements will affect responses to later statements and vice versa. Due to multiple
sections questionnaires acts like cross check and the whole process might irritates some
respondents.
Similarly, Krosnick and Alwin (1987) also found a ‘primacy effect’ (discussed earlier), i.e.
respondents tend to choose items that appear earlier in a list rather than items that appear later
in a list. This is particularly important for branching instructions, where the instruction,
because it appears at the bottom of the list, could easily be overlooked. Krosnick (1999) also
found that the more difficult a question is, the greater is the likelihood of ‘satisfying’, i.e.
choosing the first reasonable response option in a list, rather than working through a list
methodically to find the most appropriate response category”. It is therefore important to
begin the questionnaires with friendly questions that respondents can readily answer and then
move towards more personalised questions.
Completing questionnaires can be seen as learning process in which respondents goes deep as
it proceed. Therefore, the initial questions need to be simple, which would be more
interesting and encourage participation. It helps to build motivation and confidence among
respondents. Difficult questions need to be arranged in the middle section of the
questionnaire and most interested questions should be put in last section in order encourage
respondents to return the completed questionnaires.
3.4.5 Administration of Questionnaires:
In order to maximise the response rate sample is taken which will help the validity
questionnaires. It will help whether the questionnaires is good method for collecting data.
This stage of questionnaires is also called as administration of questionnaire (Edwards et al.
2002).
35
More than hundred and twenty questionnaires were distributed in selected McDonalds and
almost hundred completed filled questionnaires were collected. Sample of hundred
questionnaires were selected for research and all the data were analysed and frequency
distribution table was designed for various variables. The frequencies were further converted
into percentage in order make analyse data more accurately. The overall result was compared
with research aims and objectives which are mentioned in Chapter 1.
3.5 Research Ethics:
“Ethics are the norms of behaviour that helps moral choices about our relationships with
other. In research context, ethics is the suitable behaviour of researchers in relation to the
rights of those who become the subject or affected by it (Saunders et al 2007)”.
There are various ethical elements while conducting research. The followings are some key
ethical issues which the researcher need to following in doing research.
Willingness of respondents
Valid permission from the selected organisation.
Confidentiality of data
Anonymity of participants.
Researcher behaviour
Respondent reaction
Chapter 4
Finding and Analysis:
4.1 Introduction:
This is the core chapter of research work in which data would be analysed that how special
promotion can increase sales in McDonald’s. The data was collected through questionnaires
36
from various customers of McDonalds. In this chapter data and results are analysed and are
related to the research objectives specified in Chapter 1. Furthermore, all the data collected is
presented in tables form and each variable is examined through frequency distribution.
Similarly, this chapter includes the information gathered from the McDonald’s manager and
staff. Regular visits were made to the selected McDonald’s and had detailed discussions with
the store manager and crew. Moreover, information gathered through personal observations is
also discussed in this chapter.
4.2 Questionnaires Findings:
A total of 120 questionnaires were distributed among various customers in McDonalds. 100
out of total questionnaires were completed filled, whereas, 20 out of total questionnaires were
not completely filled. Therefore, sample of 100 questionnaires are used for final data
analysis. All questionnaires were filled by customers in McDonald’s. Different choices of
questionnaires were used such as open question, category questions and rating question. In
addition, all the responses were properly organised and presented in tabulation form in
revealed the specified facts.
4.3 Research Findings:
The data gathered through questionnaires are thoroughly analysed and the final result values
are given in percentage. The percentage is taken from total of 100 responses. All gathered
data is presented in tables which shows the respondents reply in approx value. The
questionnaires finding are shown below with results and tables.
1. What is you gender?
Male 60%
Female 40%
37
The about table shows that out of total respondents the male customers are of 60%, whereas
40% are female customers of out of total respondents. It clearly shows that McDonalds is
attracting both gender groups. Moreover, as McDonalds is fast food chain hence it attracts
different class people through various promotional activities.
2. What is your age?
10-20 Years 28%
21-30 Years 24%
31-40 Years 20%
41-50 Years 22%
51or above 8%
According to research 28% of total respondents were in ages from 10 till 20. While out of
total 24% of respondents were in age from 21-30 years. Whereas, 20% out of total
respondents were in age group of 31 to 40 years. Moreover, 22% out of total respondents
replied that they were in age group of 41-50 years, while 8% out of total respondents were 51
or above age group.
This clearly shows that McDonalds are targeting every age group. Though their main target
are children as it clearly shows in the above table but recently they are targeting every age
group in order to maximise their sales. Children can easily be motivated through promotional
activates and different in store activities in McDonalds such as birthdays parties. Families are
targeted through various promotional activities. Hence, it finding clearly shows that
McDonalds target audience is at large proportion. They are trying to reach to every age group
in order to increase their customer base and it will ultimately increase McDonald’s sales.
3. Do you often visit McDonalds?
Yes 30%
Sometimes 60%
38
The resultin above table shows that most customers “sometimes” visit McDonalds; it might
be due to their various deals offered to customers. Furthermore, it also shows that due to
promotional activates McDonald’s attracted their competitors customers. As promotional
activates are result oriented and their result can be identified by the manager very easily
through sales. If the sales increase in specific time period when they are doing promotional
activities, it means that their promotional activates are successful.
4. Do you aware of any McDonald’s promotional offers?
Yes 35%
No 65%
The result shows that 65% out of total respondents replied “No” that they are not aware of
any McDonald’s promotional offers. Whereas, 35% out of total respondents replied that they
are not aware of any McDonald’s promotional offers.
The above result clearly shows that majority of customers do not know the role of
promotional activities on their purchasing decisions. Customers do not know the importance
of promotional activates for any product. As advertising helps to create awareness regarding
product and its attributes and promotional activities helps to customer to buy their product.
5. Did McDonald’s promotional offer attract you to visit here?
Yes 25%
No 75%
According to research 75% out of total respondents replied “No” that McDonald’s
promotional offers do not attract them. Whereas, 25% out of total respondents replied “Yes”
that McDonald’s promotional offers did attract them to visit McDonald’s.
The above finding further specifies the role of promotion and what’s the perception of
customer regarding promotional offers. The finding give significant picture of customer
perception regarding McDonalds promotional offers. As most of the customer replied that
promotion has little or almost nothing effect on their purchasing behaviour. This is
39
remarkably opposite to what the marketers think about the role of sales promotion. Customers
are right on their place but promotional activities do have significant role on the purchasing
decision of consumer. In fast food industry the price of product are minimum and mostly
affordable and the companies do their promotional campaign in such manner where
customers do not feel that promotional activities have any effect their purchasing behaviour.
6. On average, how many days in month do you visit McDonalds?
1-2 Days 15%
3-5 Days 50%
6-10 Days 10%
More than 10 Days 25%
According to the results 50% out of total respondents replied that on average they visit
McDonalds 3-5 days in a month, and 15% out of total respondents replied that on average
they visit McDonalds 1-2 days in a month. While 10% out of total respondents said 6-10 days
in month they visit McDonalds and 25% out of total respondents replied that on average they
visit McDonalds more than 10 days a month.
The above results shows that majority of customers spend on average 3-5 days in month in
McDonalds. This shows that most of customers are loyal and they often visit McDonald’s
alone, with friends or family. Moreover, it also shows that McDonald’s promotions
successfully targeting the right audience. Similarly there were some customers that they are
visiting McDonalds more than 10 days a month. This shows that McDonald’s has appropriate
promotion strategy to maintain good relations with existing loyal customers and trying to
attract new or competitive customers. Promotional strategies have the significant effect on the
purchasing behaviour of consumer.
7. How many times in a month do you visit to fast foods other McDonalds?
1-2 times 65%
3-5 times 15%
6-10 times 10%
40
More than 10 times 10%
According to the results out of total respondents 65% replied that they do visit other fast food
restaurants once or twice in a month, while 15% out of total respondents replied that they do
visit other fast food restaurants 3-5 times in month. Furthermore, 20% out of total
respondents replied that do visit other restaurants 6-10 or more than 10 times in month.
The above result clearly shows that McDonald’s customers very rarely visit other fast food
restaurants. There are number of reasons that customer are willing to visit McDonalds more
often than their competitors. McDonald’s approach to sustain their customer for longer time
period through various strategies such as pricing strategies, promotional strategies and
product differentiation strategies. Moreover, McDonald’s to keep their customer happy
through best customer services.
8. How long you have been visiting McDonalds?
Less than a Year 10%
2-5 Years 15%
6-10 Years 15%
More than 10 Years 60%
The results shows that 60% out of total respondents have been visiting McDonald’s from
more than 10 years, while 15% out of total respondents have been visiting McDonald’s 2-5
years and 6-10 years consecutively. Whereas, about 10% out of total respondents have been
visiting McDonald’s from less than year.
The above result shows that majority of McDonald’s customers are happy with McDonald’s
product and services. Furthermore, they are the loyal customers and they regular do visit to
McDonald’s. This shows the McDonald’s are highly customer focused organisation and it
helps them to increases their market share in UK market and it will untimely leads to high
returns on revenue.
9. In each visit, how often you buy promotional products?
1 Time 75%
41
2 Times 10%
3 Times 5%
4 Times 5%
More 5%
According to the results 75% out of total respondents replied that they buy promotional
products just once each time they visit McDonalds. Whereas, about 25% of total respondents
replied that they buy promotional products 2, 3, 4 and more each time they visit McDonalds.
This shows that most customers are actively taking the benefit from McDonald’s promotional
products. Hence promotional products are very attractive and McDonald’s generate revenue
from other products when customer bought other products with promotional products. Due to
these promotional products customers can be attracted and it will help them to maintain as
market leader.
10. Do you think McDonald’s promotions influence you to come to visit
McDonald’s?
Yes 40%
No 60%
The results shows that 40% out of total respondents replied “Yes” that McDonald’s
promotion have an influence when they do visit McDonald’s. Whereas, 60% out of total
respondents replied “No” that McDonald’s promotion have an influence when they do visit
McDonald’s.
This shows that most of customers do not the active role of promotional activities on their
purchasing decisions. While some customers do know that promotions do have influence on
their purchasing decisions.
11. Among the following factors choose those which you consider when visiting
McDonald's?
42
Costumers were being asked to choose the factors they considered while choosing the
McDonald’s to buy their food. They have to rate each factor as not important, less important,
important and very important. The questioned were designed in a sequence in order to make
them easily understandable. Out of ten questions three questions were designed on prices and
promotions. The final results were arranged in table and table shows that the factors on top
priorities of customers along with all other factors.
Special promotion (70%), product assortment (75%), price (90%), food quality (80%),
discounts/coupons/offers (75%), travelling time (85%), and good services (80%) are among
the top factors which customers consider important or very important factors while visiting
McDonald’s. The purpose of these factors was to gain in-depth analysis about consumer
perception regarding price, promotion and other services. Price plays considerable role in
today’s competitive market. Similarly, promotions do have considerable effect on consumer
perception. Promotions not only help in purchasing decisions but it also help to attract more
customers to buy their products. Services are the part of product and best service help to keep
long term relationship with consumer.
12. To what degree do you agree/disagree with the following statements:
43
Not
Importan
t
Less
Importan
t
Importan
t
Very
Importan
t
Special Promotion 20% 10% 45% 25%
Product Assortment 10% 25% 40% 25%
Price 10% 55% 35%
Food Quality 20% 35% 45%
Discounts/Coupons/
Offers
10% 15% 40% 35%
Waiting Time 20% 45% 25% 10%
Travelling Time 15% 35% 50%
Good Services 5% 15% 45% 35%
Convenience 25% 45% 20% 10%
Socially Responsible
Organisation
30% 40% 15% 15%
Strongly
Disagree Disagree
Neither
Agree/Disagre
e
Agree
Strongly
Agree
I will keep
visiting
McDonalds.
15% 10% 30% 45%
I will visit if
there are
more
promotions.
25% 20% 20% 20% 15%
McDonalds
have better
offers than
the other fast
food
restaurants.
10% 30% 35% 30%
I would
recommend
McDonalds
to my family
and friends.
15% 50% 35%
According to the results 75% out of total respondents agree or strongly agree that they will
keep visiting McDonalds, while 25% out of total respondents disagree or neither
agree/disagree that they will keep visiting McDonalds.
Similarly, 35% out of total respondents are strongly agree or agree that they will visit if there
are more promotions, 45% out of total respondents are strongly disagree or disagree that they
will visit if there are more promotions, whereas, 20% neither agree/disagree that they will
visit if there are more promotions.
44
Moreover, 65% out of total respondents strongly agree or agree that McDonalds have better
offers than other fast food restaurants, while 10% out of total respondents disagree that
McDonalds have better offers than other fast food restaurants, whereas, 30% out of total
respondents neither agree/disagree that McDonalds have better offers than other fast food
restaurants.
Furthermore, 85% out of total respondents strongly agree or agree that they would
recommend McDonald’s to their friends and families. Whereas, 15% out of total respondents
either agree/disagree that they would recommend McDonald’s to their friends and family.
These result shows that McDonald’s has the unique brand image and their customers are
highly satisfied with McDonald’s products and services. The analysis also shows that people
considered the McDonald’s special promotions as best. The increased promotional activities
will help not only attract customers but it will ultimately help to increase sales.
13. What is reasonable travelling time you are willing to spend to visit McDonalds?
Less than 5 Minutes 5%
5-15 75%
16-25 10%
More than 25 Minutes 5%
The result shows that 75% out of total respondents are willing to spent 5-15 minutes on
travelling to visit McDonald’s, while 10% out of total respondents are willing to spent 16-25
minutes on travelling to visit McDonald’s. Moreover, 5% out of total respondents are willing
to spent less than 5 minutes on travelling to visit McDonald’s and 5% out of total respondents
are willing to spent more than 25 minutes on travelling to visit McDonald’s.
Travelling time is one of the unique aspects for every business and for that it needs the best
location which is near main shop malls, public transport and amenities. The location of this
McDonald’s is at unique place where there are no other fast food restaurants nearby. It has
huge parking area and is near to local amenities and public transport. It will only take up-to
15 minutes to travel to McDonalds and customers will be willing to travel at-least 15 minutes.
45
14. How much time is spent on each visit to McDonald?
Less than 5 Minutes 5%
5-10 15%
11-15 15%
16-20 45%
More than 20 Minutes 25%
According to the results about 45% out of total respondents spent 16-20 minutes time on each
visit to McDonald’s, while 35% out of total respondents spent less than 5 minutes, 5-10
minutes or 11-15 minutes on each visit to McDonald’s. Whereas, 25% out of total
respondents spent more than 20 minutes time on each visit to McDonald’s.
It clears shows that most of McDonald’s customers spent reasonable time in McDonalds.
Hence it needs good customer service along with reasonable products. McDonald’s have
enough space to accommodate large number of customer who wants to eat in and are trying
to change this trend to take away products with them. This totally up-to customers whether
they want to eat in or take away, but McDonalds can try to influence their customer
behaviour through constructive strategies.
15. How much average money is spent on McDonalds on each visit?
£3-£5 55%
£6-£8 35%
More than £9 15%
The result shows that 55% out of total respondents spent £3-£5 on average on each visit to
McDonald’s. Whereas, 35% out of total respondents spent £6-£8 on average on each visit to
McDonald’s, while 15% out of total respondents are willing to spent more than £9 on average
on each visit to McDonald’s.
46
The above result shows that majority of customers are willing to spent average money and
some customers are willing to spend even more on their each visit. This helps to maintain the
balance in between product cost and promotion cost. In today’s market there is trend if
business has more customers it means that business is generating profit. The same goes in this
case as well. The more customer McDonalds are attracting the more they will spend on their
product. It will help McDonald’s to keep balance in between the associated cost on products
and promotions and profit they made from those products.
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Chapter 5
Discussions
5.1 Introduction:
In this chapter the perception about McDonald’s manager and staff are discussed in detail.
Various promotional offers and its benefits and how McDonalds promotion influence
consumer purchasing decisions are discussed in this chapter.
5.2 Discussions with McDonald’s Manager and Staffs:
The McDonald’s which I have chosen for my research works 24 hours in a day and 7 days of
weak. The reason behind to choose that particular restaurant have number of aspects, I was
interesting. First of all I chose that restaurant because as I mentioned above, it is 24/7 open.
So their number of customer, sales and promotional activities were obviously more as
compare to other. The location of that restaurant was ideal as that was only the one restaurant
in the 60 km of area which serves the people 24/7. I discussed the reason that why they think
that it was a good idea to open 24/7, as I was told by the business manager it used to work
from 5 pm till 2300 hours in the beginning. The manager told me that idea behind was to
cover all the customers who work in the nights. They realised that especially the night cab
drivers and people who go out for clubbing can be targeted. For this initially they offered
some special deals for them to attract them. As they have the advantage of good location and
were able to target the great number of customers, they started the offer of serving a large cup
of coffee when a customer will buy a breakfast meal.
*(www.mcdonalds.co.uk)
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On top of that they started to sell three filet-o-fish burgers for £3.99 which normally was
£2.09, and two apple pies for £1 which was £0.89 each at that time. These promotional
activities were very successful which boost up their sales. Telling me more about the
promotions of McDonald’s and their benefits for the organisation, he told me that apart from
the regular set promotions of McDonald’s organisation they introduce some promotions by
themselves. For example they offer two sausage and egg muffin and bacon and egg muffin
sandwich for £2 which was £1.79 each. He mentioned that that offer was very successful and
dragged a majority of people into their restaurant. Moreover I was told that McDonald’s have
lots of fantastic offers for their customers. McDonald’s offer the student customers an option
to get one of these free (Cheese Burger, Ham Burger, Fries and McDonald’s special flavour
Mcflury ice cream) when they buy a meal. During my visits there I observed the long queues
of students who were buying the meals to get advantage of that offer. A number of students
among those were coming from university for lunch, approximately from 10km distance
especially for this promotion. He further told me the history that in the begging McDonald’s
was focusing on the burgers and was only famous for that. But later on realising the tastes of
customers and beat the competitors, brought more variety in the menu.
*(www.mcdonalds.co.uk)
McDonald’s introduced the special wrap and deli sandwiches to customers on very
competitive prices as compare to the rivals. During the research I observed that those wrap
were also very popular I customers specially when they were getting those on very low prices
as compare to burger King’s wrap and subway’s sandwiches. On top of that McDonald’s very
intelligently introduced the promotion. Now McDonald’s sell a deli sandwich on price of
£1.99 which otherwise was £3.29 and they kept changing the daily sandwiches on daily bases
whole the week. Now McDonald’s is bringing some more promotions to the people. Adding
49
the new flavour of coffee for example espresso (etc) is the part of those promotion activities.
Basically McDonald’s is trying to target the whole customer of the market. Their intention is
to capture the people who visit Starbucks, Prêt a manager and other local coffee shops. As
their philosophy is that once they will be able to make the people step in their restaurants
with the help of these promotional activities, the customers definitely will buy more products.
This is in fact right thing to do as the prices of McDonald’s are very suitable to purchasing
power of majority of consumers. When consumer will have the option of getting all the food
of their choices (burgers, sandwiches, wrap, shakes and coffee) under one roof, they will
always prefer to buy from McDonald’s. From June, 2011 McDonald’s will offer the
customers to choose their food to have in wrap or in roll. This they call “a little bit extra”
service to their customers. The major special promotions of McDonald’s are the variety of
burgers, drinks and desserts. They felt that if they offer the same set menu to people whole
the year, people become fed up. That is why they introduced these promotional foods to give
them new taste. For that they sell promotion products in different but particular periods of
time and keep changing the promotion whole the year. These promotional products are very
popular among the customers. According to the business manager of selected McDonalds,
half of their sales come through those promotions. I observed that the crew who were serving
the people were offering and motivating the customers to buy promotions. They told that they
have special instructions from the management to do that, when they were being asked.
Management told me that apart from regular basis advertisement of promotion, they also give
awareness to the customers in the store. That meant selling promotion was important for them
as promotion products were high in cost as compare to regular menu and as a result increase
the sales. So what McDonald’s did regarding those promotions. They always bring some new
burgers along with new flavour milk shakes and desserts. For example on top of their regular
burgers they sell promotion burgers such as Big Tasty, special taste of America, chicken
supreme, quarter deluxe etc. along with the regular Mcflury (ice cream) flavour, McDonald’s
sell Orea, Egg Cream, and Drifter with new flavours and toppings.
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*(www.mcdonalds.co.uk)
As for as shakes are concern they have promotions such as vanilla flavour, caramel,
shamrock etc. McDonaldsalso introduced two new flavours (double chocolate and double
tropical and vanilla) serving in new glasses in order to expand their product range. All these
promotions are being set to sell on particular times such as summer and Christmas. People are
well influenced through these promotions to buy their products.
51
Chapter 6
Conclusion and Recommendations
6.1 Introduction:
In this chapter the final conclusion is being drafted on basis of research findings which are
mentioned in Chapter 4. Furthermore, conclusion is being drawn from the questionnaires and
discussion with selected McDonald’s manger and staff. The research is based on McDonald’s
promotional activities and how important is role of promotional activities to increase sales
and customer base. It could be done through comparing literature with research findings. In
addition, all the research findings will be evaluated to get clear picture whether promotional
activities and techniques are being used by McDonalds to achieve its objectives.
6.2 Conclusion:
Conclusion is being drawn from the research findings through questionnaires and discussion
with McDonald’s manager and employees and that promotional activities help in increasing
sale of products and maximise profit.
i) Findings of ResearchQuestion
From all the finding it is clear that McDonald’s have clear vision and are well aware of the
importance of using promotion activities to increase short term sales. McDonalds are using
various sales promotions techniques in order to reach the targeted audience.
In the prism of all the research work the most significant factor which arises are the customer
perceptions about promotional activities. In retail sector promotional activities are widely
visible and customers can get those promotional offers quite often. Those promotional
activities are very obvious and can be determined easily. Whereas, for fast food franchise like
McDonalds it is hard for the customer to notice promotional activities because the price of all
those products are much lower and affordable. Therefore, sometime customer even do not
realise that promotional activities have a greater effect on their purchasing decisions.
Similarly, all promotion techniques need to be tested in order to show their validity, but the
finding shows that all McDonald’s promotion techniques are very appealing and it helps to
boost their sales. The performance of promotion techniques can easily identified by the
manager through sales at the end of day. If the sales are not increase then they change their
promotion techniques. Therefore, McDonalds are using promotion methods quite perfectly in
52
order to increase their short term sales. Whereas, advertising help to create awareness among
target audience and it help to achieve long-term sales. In my opinion promotion methods are
vital for increasing McDonald’s sales and it also helps to attract new customers and they can
became loyal McDonald’s customer for longer time period. McDonald’s need to have clear
promotion objectives and need to relate all these objectives with their marketing objectives. It
will help McDonald’s to achieve short-term as well as long-term goals.
ii) Findings Analysis
McDonalds are attracting various age group audiences. Initially their main target was families
with kids but they changed their tactic and start to attract all types of people in order to
increase the sales. As United Kingdom economy is based on two main industries i.e. tourism
and international students and McDonalds are using various promotional tactics in order to
reach wide range of audience. Moreover, McDonalds is located at place which cover
surrounding area up-to 60 km. Due to 24 hour service all week McDonald’s are using various
promotional tactics in order to attract all types of customer whether they are working (in
morning, evening or night), families, students or tourists. McDonald’s did attract all types of
customer through greater emphasis on their promotional activities. For example, McDonald’s
have special arrangement for birthday parties, customers can celebrate their birthdays in
McDonalds and is they give away toys to kids, which could helpful for McDonalds in longer
time period. Because kids would only go to McDonald’s and they can change their parents
mind. Furthermore, McDonald’s are cutting down various meal or deal prices as promotional
tactic in order to attract various group of customer. It will help them to further increases their
sales for short time period. This will help in to boost the morale of customers and they can
become loyal to McDonald’s. Due to continuously introducing new flavours to their menus
McDonalds is way ahead of the competitors and is continuously trying to widen their range
of menus in order to attract customers from competitors. Through this way McDonalds can
increase their market share and help to boost their sales.
Similarly, in research findings the significant thing is that most of customers do not know the
role of promotion and its influence on their purchasing decision. They do not even know that
it because of promotional activities of McDonalds which help the customers to make decision
whether to buy that specific product/service or not. Therefore, promotional activities play
vital role in purchasing decision. The McDonalds need to do their promotional activities in
particular way that their message reaches the targeted audience with or without letting them
53
know and it also helps them to increase their sale. It will help to achieve their both objectives
through promotion.
Furthermore, product assortment, price, quality, waiting time, travelling time, good services
and convenience are the few main elements which the customer rate them the most important
while doing any special promotional activities. Therefore, McDonalds need focus their
attention on these elements in order to get the best possible result. In addition, from research
finding it is clear that majority of McDonald’s customer spent about £3-5 on each visit to
McDonalds. Therefore McDonalds need to improvise their techniques not only provide the
best quality product and service at very minimum price but they need to have to attract more
customers in order to cut down the overhead costs. It is only possible through proper
promotional strategies to achieve this objective.
iii) Links with literature review
According to Fill (2009) that sales promotion aims is to influence the targeted audience
purchasing decisions. Sales promotions are used to achieve short-term sales. Whereas,
advertising are usually used to develop market awareness. Moreover, advertising are used to
achieve long term sales.
This statement will helps McDonald’s to focus their attention solely on promotion in order to
boost their sales. This could only be achieved if McDonalds wisely targeted the audience and
sales promotion will help to achieve to increase short-term sales. The most important part in
sales promotion is how to use the best technique to reach the targeted audience. It is
therefore, important that marketing strategy would be related to promotional mix in order to
get the best possible result.
According to Hughes at le. 2000, that there are many factors when marketing decisions are
made about which and how many sales promotion methods to use. The most important are
the objectives of promotional effort. Marketer must consider product characteristic (such as,
size, weight, cost, durability, uses, features, and hazards) and target market profiles (such as,
age, gender, income, location, density, usage rate and buying patterns). Similarly, distribution
channels and availability of appropriate reseller also influence the choice of sales promotion
methods. In addition, competitive and regulatory forces in the environment have also great
influence on sales promotion methods.
54
McDonalds are using sales promotion methods by considering many factors when marketing
decisions are made. The marketers of McDonalds consider the product characteristics such as
weight, cost, size, and features. In addition, they also consider the target audience on basis of
age, gender, income, location, and buying patterns. All these factors were identified in
research finding in discussion with McDonalds manger and staff. The most important aspect
of for any product promotion they consider the main product characteristics such as the cost,
size, cost, and features. Whereas, McDonalds are trying to target the audience on basis of age,
gender, income, location, and customer buying patterns. These all elements are considered
while using any decision on the sales promotion method. The marketer knew the pro and cons
of all the methods. If the specific method of sales promotion failed to achieve the result then
the method is review and making possible changes or can introduce entirely new sales
promotion method. This will help in continuous increase in McDonald’s sales.
According to McDonald, (1992), “consumers, at least for certain fast-moving consumer
product categories, are less brand loyal, and are becoming increasingly price-conscious”.
Similarly, McDonald’s is fast food franchise and one of the most loving fast food franchises
of United Kingdom. Thought the current UK market is saturated with competitors but
McDonald’s are always market leader and take a competitive advantage over its competitors.
McDonalds can be categorised as a fast moving consumer product and most of their
customers are not loyal and while some customer became increasingly price-conscious.
Therefore, due to such perception of consumer leads franchises to price-war and where most
of franchises cut down their product price and sell them at relatively lower prices. Hence, at
this point different sales promotion methods are being used in order to influence on consumer
purchasing behaviour. Therefore, it is important for McDonalds to use the best possible
option in order to create customer base. McDonald’s has relatively lower price than its
competitors as mentioned in Chapter 4.
Once sales promotions are combined with other marketing activities it produces the best
result. As advertising (for example, ads) create awareness about product or service, while
sales promotions lead to purchase or trail. In addition, sales person may offer a potential
customer a discount coupon for good or service. Due to limited time frame, promotions
encourage immediate action. Therefore, sales promotion produce measurable results, and it
gives marketers to evaluate promotional effectiveness (Kurtz at le. 2009).
55
Moreover, sales promotion in McDonald’s is combined with various marketing activities
such as advertising and personal selling in order to get the best result. Advertising and
personal selling are used for the awareness of product and services of McDonald’s. Due to
the shorter time period McDonalds are expecting that promotion encourages immediate
action. Furthermore, the sales promotion produce measurable results at the end of day and it
also give the marketers of McDonalds to evaluate the effectiveness of promotional activities.
According to Hughes al et. (2011), that sales promotion objectives should be consistent with
the organisation’s strategic objectives and its marketing and promotional objectives.
The McDonald’s are consistent sales promotion objective with their strategic, marketing and
promotional objectives. The basic promotion objectives of McDonald’s are as follows:
Attraction of new customers.
Introducing new products
Maximise sales from current customers
Improve product service
High competitive promotional activities
These few are the promotion objective where McDonalds are way ahead of its competitors
like Burger King, KFC and Subway. McDonalds have relatively lower prices than its
competitors and huge customer base due to their promising promotion methods. It could only
done through clear objective and have the consistency with strategic, marketing, promotional
objectives.
Furthermore, McDonald’s identified different types of customers through market research. As
this is essential for McDonald’s to retain people once they have become their customers, they
use different marketing and promotions tactic to target different people. Children happy
meals, free coffee coupons, premiums, contests, free WIFI and saver menu are the part of
those activities. McDonalds look forward for the loyal customers and provide extra value to
them. Customers are given free coupons for coffee. That’s mean when a customer buy six
coffee cups at same time or during different times, they give free coupons which can be used
in any McDonalds restaurant to get free coffee. This is a successful promotion activity which
helps McDonalds to lock the loyal customers on long term basis. Similarly McDonald’s offer
free coke glasses or free coffee mugs (premium) when a customer buy a meal. This premium
technique helped McDonald’s to motivate the consumers to buy their meals. In addition to
that McDonalds offer contests to its customers. Here McDonald’s give free stickers with
56
some particular food (promotion burgers, promotion Mcflury, promotion desserts) to
customers. Customers can use those stickers to participate in contests. On the basis of skills
they get rewards such as high cash prizes. These contests develop a strong interest of
consumers in the products of McDonald’s. And McDonald’s get an increase in number of
customers and money spent in the restaurant and increases sales as a result. Happy meals of
McDonald’s are very popular among children. McDonald’s attracts families to give a treat on
very affordable prices with nice sitting arrangements. Kids feel like a fun coming in
McDonald’s getting free toys and balloons with their meals as McDonald’s is considered as a
family restaurant. Saver menu and free WIFI helped McDonald’s to attract teenager.
Teenager affords that saver menu and prefers to visit. A pound burger deal in Central London
is indeed an appealing offer to customers.
iv) Research Evaluation
Through proper evaluation of research finding I consider all my judgement on research work
as the best as I thoroughly keep the main theme of my research under my prism. The most
important part of any research work that sometime researcher lost the research main
objectives and question set while doing research. Whereas, I was consistent with my
questions and stick to the research topic and its objectives. The research I have conducted by
using two way i.e. questionnaires and discussion with McDonalds manager and staff.
The questionnaires were designed in such way that it helps me to identify different
perspective of customers. That what they perceive about the promotional activities and how it
could affect their daily life. Whereas, in discussion with manager and staff help me identify
the various factors which are important while using any promotional method. Furthermore, it
helps me to identify how promotions can effects the organisations and knew the importance
of special promotion for an organisation.
The main thing which is quite new that I have identified in questionnaires that most
customers do not know the influence of promotion activity on their purchasing decisions.
When the same query was asked from the manager then he said sometime customer do not
know that promotion can actually influence their purchasing decision because there are
certain other elements such as promotion methods, location of franchise, product
characteristics, age, gender, customer income and their perception about McDonalds. These
all things are part of promotion where organisation decides to implement specific promotion
method in order to increase sales and customer base.
57
6.3 Recommendations:
On the basis of research findings and conclusion the following are the main recommendations
for the selected McDonald’s to maximise their sales through promotion.
1. Healthy Nutrition:
McDonalds need to focus their attention on healthy and low fats products. In today’s most
customers are heath conscious and deliberately avoiding fast food restaurants. If McDonald’s
want to gain more market share, then they need to focus on niche market. Through proper
promotions McDonald’s can attract customers who are more heath conscious. McDonald’s
can attract various competitor customers such as Subway, Prêt and Burger King. This will
help to further increase their sales and gain high market share.
2. Staff Training:
McDonalds need to train their staff so that they can serve the entire customer properly. It will
help high customer satisfaction and it will lead McDonalds to high revenue. Training of
employees is as important as customers to the business. Employees are the main asset of an
organisation and proper training will help to polish their skill and it will help in assisting
customers in store. Employees training will help to flourish McDonald’s brand image,
because these employees would satisfy customers on front line. Staffs need to be trained in all
areas, so they can easily adjust at any place on particular event. This will help McDonald’s to
have various options and put the best candidate on best position.
Moreover, staffs need regular motivation and McDonald’s need to regular assessment of their
employees and employees need to be reward on the basis of their performance. This will help
in motivating staff at different levels.
3. In-Store Advertising:
McDonald’s need to in-store advertising in order to create awareness regarding new products
launched in market. In-store advertising will help McDonald’s to attract new customer
towards its products. Different advertising techniques such as posters on walls should be used
to create awareness about product existence and its benefits. This will help to attract more
customers and it will enhance store sales. In order to support in-store advertising, regular
promotion activities are also need to done for both short-term and long-term increasing sales.
58
6.4 Recommendations for Future Researcher:
I have gathered research data through questionnaires and discussion with manager and its
staff due to the time limitation. It would be more appropriate if the researcher use some other
research techniques in order to gather more accurate data. Apart from questionnaires and
discussion the researchers can use structured interviews with various McDonald’s franchises
and include more participants in order to do in-depth analysis of data. Data need to be
compared with research question and objectives. It will help the researcher to focus their
attention on various aspects of sales promotion activities. The following the main
recommendation for future researcher in order to get clearer picture about the research topic
and its objectives.
The future researcher needs to identify the various methods of sales promotion and
define its advantages and disadvantages. It will help the researcher to explore various
other methods which could help to increase organisation sales.
The future researcher need to explore the research topic and data gathered through
various options need to be properly examined in order to identify the different
perspectives.
Future research need to stated clear purpose of research and research objectives in
order to use specific research technique to gather the specified data.
They need to ensure that the data they are gathering are reliable and accurate.
Future researcher need to use various techniques such as un-structured interviews
with more participants and then draft all the gathered data in suitable manner that it
can answer all the research objectives.
The future research need to ensure the privacy of all participants and no individual or
company need to be identified.
During data gathering the future researcher need to tell the purpose of their research to
all participants.
Future researcher need to focus more on interviews and if possible record their
interviews.
59
Chapter 7
Reflective Statement
7.1 Reflective Statement
The purpose of this study was to identify the importance of special promotions for the
business organisations as well as for the consumer and what is the perception of consumer
about special promotion. The aim of the research is to investigate “How special promotion
can increase the sales? (A case study of selected McDonald’s)”. The whole research is
conducted over during of one month, which is long enough to discover the perception of
consumer and staff regarding special promotion. In addition, over this period of one month
the perception of consumers are slightly different from that of employees and manager of
McDonalds. The whole process of contacting McDonalds and seeking permission to filled
questionnaires from their customers was indeed a great experience. I really appreciate the
extremely friendly behaviour of McDonald’s staff and its customers. Most of them gave me
their contact details and are very happy to say in contact.
Furthermore, the collection of data through research questions is severed as guide in this
study. The collected data was processed thoroughly. Systemised process began, I depend on
the concepts and information emerged from the data to form analysis. The research questions
provide a framework to collect the data. The perspective theory derived from the data was
linked with literature.
Almost 100 questionnaires were distributed among various customers of selected McDonalds
in London. 60% of the respondents were male while 40% were female. The respondents were
among all age starting from as 13 years to 65 years old. Self-administered questionnaires
were arranged.
The research questionnaires contains total of 15 questions. The initial two questions were
very basic while the rest questions focused on getting better understanding of consumer
perception towards McDonald’s promotional activities and how promotion help to influence
on their consumer purchasing decisions.
The attitude and perception of consumers were analysed under different statements regarding
sales promotion, and are shown below.
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1. Do you aware of any McDonald’s promotional offers?
2. Did McDonald’s promotional offer attract you to visit here?
3. In each visit, how often you buy promotional products?
4. Do you think McDonald’s promotions influence you to come to visit McDonald’s?
Although beside the above statements there are numbers of other question which were
focused on dynamics of consumer behaviour and the role of sales promotion on consumer
purchasing decisions, how it help in gaining competitive advantage and how to attract new
customers through these sales promotion activities. The role of sales promotion concepts
were used as the main objective for better understanding the perception of consumer and
employees regarding performance appraisal through self-administrated questionnaires and
discussions.
I learned various lessons from questionnaires which help me in my research work. All finding
assisted me throughout the research process. Proper questionnaires guide was develop to
assist asking questions.
The respondents were enjoying the questionnaires process and they were freely sharing their
ideas, experiences, opinions and feelings. Most of respondents shared their personal stories
regarding promotion in their particular organisation and elsewhere.
This research gave me an opportunity to thoroughly analyse how I learn and in order to fully
understand an idea how I should learn. In order to learn new theories and models and I must
need to learn their practical implications. I thoroughly link literature with my findings and it
shows that I am able to link theory with their practical implications. Though it was
challenging task but I love to do new innovative ideas and their practical implications. In this
case the relationship between sales promotion, consumer purchasing patterns and increasing
sales was a topic of great interest for me to their relationship in practical world. The whole
process of research is very interesting and it would help me making decisions on practical
occasions. On daily basis this research help me to observe numerous other business products
that are doing promotion offers to attract wide range of customers in order to increase their
sales. I learned that many businesses doing their promotion for short-term increase in sales. I
learned how businesses attract new customers due to various promotion activities and which
give them leading edge on its competitors.
61
Due to time limitation for this research, I might have used interviews with my participants
rather than using questionnaires. Face-to-face interviews would be more helpful to have an
in-depth analysis of participant responses.
Overall, it was fascinating experience and made me realise the relationship between sales
promotion and its influence on consumer purchasing patterns. After comparison I easily say
that similar perception can be found regarding my work-feedbacks. This research help in
better undertaking the competitor market of fast food restaurants and the importance of
promotional activities regular in such a competitive market. I noticed that only promotions
activities do not help business but it need great team to offer their best services so that no
customers left unsatisfied. McDonald’s had the most dedicated staff that was busy all time to
serve customers. Even after my research, I am still in touch with some McDonald’s staff and
research participants. We regularly meet for cup of coffee, sometime drink and share great
discussion on the importance of sales promotion and how it helps in increasing sales.
62
References
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65
Appendixes
Research Questionnaires
Please tick () the appropriate option which seems closer to your opinion. This questionnaire
will not take longer than 10 minutes. Thank you for helping me with my research.
1. What is you gender?
Male
Female
Other
2. What is your age?
3. Do you often visit McDonalds?
Yes
No
Sometime
4. Do you aware of any McDonald’s promotional offers?
Yes
No
5. Did McDonald’s promotional offer attract you to visit here?
Yes
No
6. On average, how many days in month do you visit McDonalds?
1-2 days 3-5 days 6-10 days More than 10 days
66
7. How many times in a month do you visit to fast foods other McDonalds?
1-2 times 3-5 times 6-10 times More than 10 times
8. How long you have been visiting McDonalds?
Less Than a year 2-5 Years 6-10 Years More than 10 Years
9. In each visit, how often you buy promotional products?
1 times 2 times 3 times 4 times More
10. Do you think McDonald’s promotions influenceyou to come to visit McDonald’s?
Yes
No
11. Among the following factors choose those which you consider when visiting
McDonald's?
Factors
Not
Important
Less
Important Neutra
l
Important
Very
Important
Special Promotion
Product Assortment
Price
Food Quality
Discounts/Coupons/
Offers
Nutrition’s
Waiting Time
Travelling Time
Good Services
Convenience
Socially Responsible
67
Organisation
12. To what degree do you agree/disagree with the following statements:
Strongly
Disagree Disagree
Neither
Agree/Disagree Agree
Strongly
Agree
I will keep
visiting
McDonalds.
I will visit if
there are more
promotions.
McDonalds
have better
offers than the
other fast food
restaurants.
I would
recommend
McDonalds to
my family and
friends.
13. What is reasonable travelling time you are willing to spend to visit McDonalds?
Less than 5 Minutes 5-15 16-25 25-40 More than 40 Minutes
14. How much time is spent on each visit to Mc Donald?
Less than 5 Minutes 5-10 11-15 16-20 More than 20 Minutes
15. How much average money is spent on McDonalds on each visit?
68
Less than £1 £1-£ 2 £3-£5 £6-£8 More than £9
69