Measuring the effectiveness of promotional mixes in retail stores

Abstract

The focus of this report has been on measuring the effectiveness of any promotional mix in a retail store. The retail sector in India is in an age of immense competition and the customer is being flooded with various promotional offers by these retail stores. Thus it is not possible for every promotional deal to generate desired sales and it becomes all the more important to analyse any promotional deal. The effectiveness of any deal depends on two perspectives the buyer and the seller. Hence in this study, we have focused on both these perspectives. The first part of our report is about how a customer evaluates a deal. Various aspects like Emotional, Evaluation and Economic have been taken into account and two groups of customers (15 24 and 25 40) are compared. The comparisons are done on the basis of survey of hundred customers of large retail stores in Chennai and Bangalore The two metro cities in South India. The focus in this part of the study has been on different aspects which a customer looks for in a deal and also how these preferences vary with age. Within promotional mixes, our focus has been on sales promotion and the stores chosen for the study have been large format retail stores in Chennai and Bangalore. The second part of our report focuses on the seller s perspective of a deal; i.e. how a manager evaluates a promotional deal. The analyses in this part are based on our conversations with industry experts. We have also covered the intentions of any manager behind a deal, how he decides the timing of promotion and at the end of promotional period, how he evaluates the effect of a deal. We have also analysed financials of two very famous large format retail stores, Westside and Shopper s Stop according to their promotion mix during the year and presented our interpretations. Towards the end of the report, we have tried to commingle the two different perspectives and give our views on how a manager can go one step ahead to please their customers in this era of cut throat competition in the retail sector.