research proposal on sales promotion vs advertisement on uk mobiles

Research proposal on: The allocation of sales promotion Vs advertisement budget on creating brand Identity: The case of Priyo mobile and Bangladeshi ethnic minorities in uk.

By:

Bashir Uj Jaman

[email protected]

Research Proposal on the allocation of sales promotion Vs advertisement budget on brand identity creation

Table of Contents

CHAPTER 1: Introduction.........................................................................................................3

1.1: Research background:.....................................................................................................3

1.2 Rational of the study:........................................................................................................4

1.3 Aim and Objective:..............................................................................................................6

1.4 Hypothesis development:.....................................................................................................7

CHAPTER 2: Literature Review...............................................................................................8

2.1 Brand and Branding activities:.........................................................................................8

2.2 Sales promotion activities and Branding:.......................................................................10

2.2.1. Are sales promotions profitable?................................................................................11

2.3 Advertising and branding:..............................................................................................11

2.3.1 The cognitive school:...............................................................................................11

2.3.2 Brand image school:................................................................................................12

2.4 Advertising vs. sales promotion in brand identity creation:...........................................12

2.5 Budgeting on Advertisement Vs Sales promotion:........................................................13

CHAPTER 3: Research Design and Methodology:.................................................................15

3.1 Process of Research........................................................................................................15

3.2 Research approach:.........................................................................................................16

3.3 Research Strategies:........................................................................................................17

3.4 Data Collection Method and Data analysis:...................................................................18

3.5 Sampling:........................................................................................................................19

3.6 Ethical Issues:.................................................................................................................20

3.7 Research Limitation:......................................................................................................20

4.0 Time table and Resource requirement:..............................................................................21

References:...............................................................................................................................22

Bashir Jaman [email protected] 2

mailto:[email protected]


CHAPTER 1: Introduction

Marketing is integral part of any business. There are many aspects of marketing mix. Sales

promotion and advertisement are two major elements of marketing. Organization builds

brand for long term benefit. Both sales promotion and advertisement influences consumers to

recognize brands. Therefore, organization strategically needs to decide whether to invest their

budget on sales promotion or advertisement. This research aims to find out influences of sales

promotion and advertisement on brand identity.

1.1: Research background:

UK is the most multicultural country in the world with London has the highest concentration

of ethnic minority which is increasing every year according to UK census. Therefore, any

organization produces ethnic minority based product need to understand this segment of

market in order to develop better marketing strategy. It is seen from the census that ethnic

minority group in UK are from low-medium income group. Most of the ethnic minority

people struggle with their day to day expense management. Therefore, organization should

find out whether this segment of market brand sensitive or not. If it is brand sensitive then

what are those factors that influences ethnic minority to recognize a brand. Is it sales

promotion or advertisement? This research has started its journey with this question in mind.

As author is from ethnic minority background and has worked with many ethnic minority

product based organization for last couple of years. Therefore, author is excitingly waiting for

outcomes of this research result with the thrust to know these above factors sales promotion,

advertisement, brand identity in relation to ethnic minority.




1.2 Rational of the study:

Because of the emotional attachment to the home country with family, relatives and friends, it

is natural that ethnic minority people wants to contact with them every now and then.

Therefore, international calling service is increasing day by day in UK with more battle and

competition among rivals in the international mobile industry called MVNO (Mobile virtual

network operator). There are many MVNO’s currently in UK like Lycamobile, Lebara

mobile, Now mobile, Vectone, Simplecall mobile, GT Mobile etc. Some brands leads with

price; some with quality of line and some with brands.

All the organization needs to work within a given budget. Running marketing activities

within the limited budget to bring maximum output for the organization is the motto of any

marketing department. According to mobile industry report, Nomi mobile was the first

MVNO to receive licence from UK telecom regulation protocol which was also first MVNO

to launch its product in UK market in 2007. But even after launching six months later, Lebara

mobile acquired more customer based and achieved better brand identity compared to Nomi

mobile. Within one year Lyca mobile came into the market with bigger budget intensifying

price competition and initiation war for brand identity creation. Afterwards, many more

MVNO’s coming into the market; some struggling to exist like recent Priyo mobile and some

running business very profitable like Lyca mobile, Lebara mobile and Now mobile.

With the course of time, first MVNO in UK market; Nomi mobile is out from market now.

People in the industry thinks it is because of it had failed to establish its brand identity.




Hence Priyo mobile- a Bangladeshi ethnic minority based MVNO which was launched its

journey on 26th of June; is thinking of launching marketing campaign in order to achieve

brand identity with the lowest possible budget. Therefore, it is very important for them how

to allocate its limited budget for advertisement and sales promotion by understanding these

two factor’s power to influence brand identity creation.

After the initial launch on 26th of June’2011, Priyo mobile faced severe competitions from its

rivals especially Now mobile which had a sales promotional rate to Bangladesh for only

1p/min at that time. But at that time, Priyo mobile had no sales promotion for Bangladesh. It

launch with 4p/min to Bangladesh with some value added service like adding Bangladeshi

song ring tone, Bangla music and news from Priyo mobile. It had an initial assumption that

its target Bangladeshi ethnic minority will respond to this value added services rather than

sales promotion. It advertised heavily both in electronic media and paper media about its

value added services and its origin of being Bangladeshi background. Within course of 6

months at December 2011, Priyo mobile management realized that its marketing strategy

failed as because it recruited not more than 300 customers within 6 months time. On the other

hand, with the limited marketing budget, Priyo mobile was afraid to launch a sales promotion

to Bangladesh because there is no guarantee that with this promotional offer it may recruit a

big customer base of around 5000 in a month but the chance of keeping customer for long

time after the promotional offer is in doubt. Therefore, it has decided to launch a market

research to find out whether ethnic minority, especially Bangladeshi community, is brand

loyal or not. How do they identify a brand; is it by sales promotion or advertisement?

At the end of this research, conclusion can be drawn by identifying the most effective factor

for creating brand identity either sales promotion or advertisement. Also, it may find most




effective elements of sales promotion such as buy one get one free, 10% extra, discounted

price or advertisement such as TV advertisement, paper media advertisement, bill board

advertisement etc.

These finding can not only be used by mobile industry in UK but any industry such as

grocery, clothing will be benefitted by better understanding ethnic minority mindset of

creating brand identity in the most efficient and cost effective way.

1.3 Aim and Objective:

Aim:

To find out how sales promotion and advertisement influences brand identity creation for

ethnic minority based MVNO’s; especially for Priyo mobile.

Objectives:

This report seeks to find out:

Is ethnic minority brand sensitive or not

How and in what extent sales promotion and advertisement influences brand identity

Which factors influences established MVNO’s to have a strong brand identity and

How Priyo mobile can achieve brand identity within limited budget.




1.4 Hypothesis development:

Most of the ethnic minority people in UK are from low-medium income level who are very

price sensitive. Therefore, they will definitely give a try to a new product with discounted

price to check the product quality which brings to the hypothesis:

H1: At the beginning of product life cycle (Launching), an MVNO should keep most of its

budget for sales promotion compare to advertisement.

An organization must have a target of recruiting new customers by initial massive price

discounts. As soon as it hits the target, they should stop price promotion and its focus should

be on retaining initial customer base. Therefore, it should advertise more to build the brand

for long term to get reference from initial customer base to recruit more new customers which

brings us to the second hypothesis:

H2: A MVNO should allocate most of its budget for advertisement compare to sales

promotion at the time of product growth stage when the initial target of having a handsome

customer base is met.

When a product reach maturity stage which means it is doing well in the market then its focus

should be on playing game on both short term and long term profitability of the product. It

should be capable of competing rivals with parallel and counter parallel price promotion on

short term basis as well as advertise for the long term profitability by brand creation which

brings us to the final hypothesis:

H3: A MVNO should have equal budget for both advertisement and sales promotion at

product maturity stage in order to face rivalry in the market and to put barrier for new

entrants.




CHAPTER 2: Literature Review

In this section of report, all the key words such as brand, sales promotion and advertisement

will be defined; relation and influence of these factors will be discussed and a conceptual

framework will be drawn which will identify different variables in terms of research purpose

of this research area.

2.1 Brand and Branding activities:

The most important resource of an organization is brand. A strong brand has more market

acceptance than a weaker brand for long term profitability. A strong brand brings

trustworthiness from customer which support organization both in good time and bad time.

Once John Stuart said, “if the partnership breaks up, I prefer to take the intangible assets such

as brand and good image and other may take all physical resources. But I am confident, I will

outperform them at the long run (Dyson, Farr, and Hollis 1996). Such is the importance of

brand in the business.

A brand can be defined both from customer’s point of view and owner’s point of view.

A company oriented definition of a brand can be given as:

“A name, sign, logo, symbol, color or design, or a combination of them, intended to

recognize the goods or services of one seller to differentiate it from its competitors (The

American Marketing Association, 1960)’’.

And a consumer-oriented definition of a brand can be given as:

“A factor or group of factors that promises customers about satisfaction .Factors that make

up a brand may be genuine or imaginative, logical or psychological, tangible or intangible

(Ambler,1992)’’.




These elements of brands come from the fundamentals of marketing mix. The attributes of a

brand are shaped using the marketing mix, and are subject matter to understanding by the

consumer. Creating and maintain a brand value is the most important task of any organization

by which a strong brand is presented to customers in order to gain the competition (de

Chernatony 1998).Branding comes with following concepts:

Brand management: Brand management is a complex task which starts with the right

selection of brand name that represents the quality of product and service correctly to

enhance consumer’s observation of image of the product (Keller, 1993). A brand is a

psychological image which stays in consumers’ minds that influence their buying behavior.

Brand awareness: It is the main step where organization needs to educated consumers about

brand which will enable consumers to differentiate the brand from other competitors while

making purchase decisions (Percy and Rossiter, 1992). A brand aware customer will easily

recall its familiar brand with simplicity with different brand attributes such as logo, color or

slogan.

Brand recognition implies that when many similar brands of a chosen product is presented

in front of a customer, he should be able to easily identify the strong brand from the crowd

(Hoyer and Brown 1990).

Brand attitudes are means what consumers describe a brand in brief. A customer can

remember a brand with either good experience or bad experience. Therefore, organization

should try to create positive attitudes about the brand which will helps in getting customers

recommendation (Zeithaml 1988).




2.2 Sales promotion activities and Branding:

Blattberg and Neslin (1990) defined sales promotion as a marketing activity which has direct

affect on the performance of customers attitudes and buying behaviours of the product which

influences identifying brand. Sales promotion activities can be classified in many ways which

is presented in the table below.

2.2.1. Are sales promotions profitable?

Whether sales promotion brings profit to the organization and how it affects brand identity is

a major unanswered question so far. There is two major issues which are:

Lack of report on how sales promotion affects brand performances; and

The methodology to assess sales promotion influence is not effective.

Promoting with price can boost sales for short period of time (Banks and Moorthy, 1999;

Smith and Sinha, 2000). But on the other hand, it is also found that customers who take

advantages of discounted price return to original brands after the promotional offer

(Brandweek 1994; Ehrenberg et al., 1994).




Therefore, whether sales promotion brings any profit to organization for both short term and

long term is under question mark.

2.3 Advertising and branding:

Advertisement is regarded as the major element of image creation for the organization .One

of the most important aspect of marketing is to understand how advertisement influences

consumer behaviour. Therefore, let us analyse advertisement from the angle of two school of

thoughts of marketing management.

2.3.1 The cognitive school:

This school considers customers from rational point of view where customer analyse the

product from mathematical angle- what we pay to what we get. This activity can be termed as

left side brain work where customers judge the product logically not emotionally.

2.3.2 Brand image school:

On the other hand, brand image school as supported by (Ogilvy, 1963), humanistic

advertising (Lannon and Cooper, 1983) and right-hand side of brain approach (McDonald,

1992) which describes customer judge a product from right hand side of brain which evaluate

a product from emotional point of view. Therefore, it gives importance to image and brand

on consumption decision making.

2.4 Advertising vs. sales promotion in brand identity creation:

Sales promotion and advertisement is different from each other both in nature and role

(Quelch, 1983). Advertisement is seen as strong tool for long term brand identify creation

whereas sales promotion is a tool to boost up short term sales. In most of the cases,

organization emphasizes on price rather than branding while doing sales promotion. Sales

promotion directly affects sales price hence profitability of every single unit of products




whereas advertisement cannot be measured in this way. Sales promotion is often referred as

‘’below the line activity’’ because it directly affects profitability by discounted sale price.

On the other hand, advertisement informs people about product speciality and brand

difference which brings customer awareness and brand loyalty. Since advertisement is treated

as an expense on profit and loss account of the organization, it is called ‘’above the line

activity’’.

In an international study of price promotion Ehrenberg et al. (1994) has shown how

continuous price promotion effect a brand’s value and brand identity. They describes that

within six weeks after the price promotion, there is no significant effect of price promotion.

They conclude that price promotion as a tool to force customer switch from other brand is

not effective because customers go back to original brand after the sale is gone.

Secondly, most of the customers who are taking advantages of price promotion are existing

customers. If price promotion were not there they would have buy the product with regular

price any way. Therefore, price promotion negatively affects profitability. On the other han,

frequent price promotion, negatively affects psychology of customers about standard price

which may stop customers to buy product when price promotion is not there. It also put

question mark to customer’s mind about the strength of the brand. Finally, sales promotion

is seen only as an effective tool to recruit customers to try the product quality and compare it

with other competitors. Price promotion may sometimes help organization to keep exsiting

customer’s attention away from other competitor’s activities.




2.5 Budgeting on Advertisement Vs Sales promotion:

Roger Strang conducted a research several studies at 1976 on how to plan for the promotional

activities. There was more research at 1980’s regarding how organizational fund should be

allocated for sales promotion VS advertisement. Finally, Strang pointed out those factors

which influence determining budget ratios for sales promotion vs advertisement (Strang,

1980).

In another study Low and Mohr (1991) showed the budget allocation process and they

developed a theoretical framework to show the impact of key factors on the allocation of

budget to advertising, consumer promotion and trade promotion.

Previous experiential research on advertising and sales promotion budgeting has examined

the relationship between product and market characteristics and advertising/sales ratios

(Farris, 1977; 1978; Lancaster, 1986), promotion/ sales ratios (Quelch et al. 1984), and

advertising-and-promotion/sales ratios (Balasubramanian and Kumar, 1990;Farris and

Buzzell, 1979). The amount budgeted to advertising and promotion relative to sales is an

important issue. However, none of these studies examines the firm’s relative allocation to

advertising versus sales promotion.

This clearly brings the importance of current research on how an organization should allocate

its marketing budget for advertisement Vs sales promotion for brand identity creation for

long term profitability to the organization.




CHAPTER 3: Research Design and Methodology:

In this section of the report, researcher identifies research methods whether it is inductive or

deductive. Sampling technique is determined for data collection and data collection method

is discussed. Researcher should be also able to explain data analysis techniques. All the

ethical limitations to carry out research should be taken care of. Also, if there is any

limitations in research should be mentioned to give directions to future researcher on the

topic.

3.1 Process of Research

Sanuders (2003) has proposed a model named onion model to help researchers visualize

research process at step by step which is consist of five layers; research philosophy, research

approaches, research strategies, time horizons and data collection methods.


Figure1: Onion Model

Source: Saunders et al (2003)



3.2 Research approach:

There is mainly two research approach; inductive and deductive. Inductive research is a

bottom up approach where researcher moves from specific observation to generalize broader

theories. On the other hand, Deductive research is a top down approach where researcher first

draw the foundation of research by developing possible hypothesises and then confirm it to

get more specific results. In the current research, hypothesis is already been made based on

previous market experience and observation. Therefore this research will follow an deductive

research approach to confirm this hypothesis in order to develop a theory.

Figure 2: Deductive research approach




3.3 Research Strategies:

There are different research strategies such as experimental, survey, case study, grounded

theory, ethnography and action research. Different research strategy is suitable for different

types of research. Such as in any scientific innovation, researcher should go through trial and

error basis with experimental strategy to find the answer of research question. On the other

hand, in business research, survey and case study are most suitable and favourite research

strategies as because it collects data about human mind and behaviours. In any business

research, if researcher mainly looking to collect quantitative data to find out felling, comment

or vote of majority people on a subject matter than survey based research strategy is the best

selection.

This research seeks to find out how customers react and change behaviour upon different

activities of organization mainly sales promotion and advertisement and how these two

factors influences behaviours of customers in identifying brand. At the end of this research,

researcher is looking to briefly prepare a recommendation to help Priyo mobile on

determining budget allocation at different stages of product life cycles. Therefore, getting the

data from users of MVNO’s about how they react and change their buying behaviour in

relation to identifying a brand; survey based research strategy is the best selection for this

research.




3.4 Data Collection Method and Data analysis:

After determining research strategy, a researcher should select the suitable data collection

method. A research can be of different types; secondary research, primary research or a

mixture of both. A secondary research only deals with secondary data and information of

previous research, report and findings. On the other hand, primary research brings new

findings to the industry by collecting data from the field. This research will be a mix research

which will use both secondary and primary data. Secondary data will be collected from

different journals, articles, dissertations and books etc which will be collected from university

library. And to collect primary data strategy explained below will be adopted.

There are different instruments for data collections such as observation, interviews,

questionnaire, focus group etc. And a survey can be done physically in the field by face to

face questionnaire distribution, email distribution, using online platform such as

surveymonkey.com etc. This research aims to find out influences of sales promotion and

advertisement on brand identity for Bangladeshi ethnic minority. Therefore, Whitechaple-the

centre of Tower Hamlet council which is the biggest Bangladeshi populated council in UK

has been selected to do the face to face survey by distributing questionnaire. Because of

questionnaire is the best instrument for face to face survey where data needs to be collected

from a big quantity of respondents.

Data can be of mainly two types quantitative and qualitative. Quantitative data can be

numbers and measured but qualitative data is cannot be put into numbered but translated into

information. This research aims to find out mainly quantitative data leaving some space for

qualitative data as well. Therefore, questionnaire will be designed both with close and open




ended questions. Close ended questions will be framed with multiple choice questions, likert

scale, categorical and numerical questions.

Collected data will be inserted into spread sheet and will be analysed with the use of different

charts such as pie chart, bar diagram etc.

3.5 Sampling:

In order to devise a theory on the selected title for Bangladeshi ethnic minority in UK, it is

not possible to do survey on whole 2 million Bangladeshi living in UK. Therefore, a

representative sample should be selected for survey.

Sample Population

Fig 5: Population and Sample

Source: Saunders, et al (2003), p.151.

Sampling technique helps researcher to collect data in most cost effective way within a

limited time period. It saves money as well.

Sampling can be of many types such as simple random sampling, stratified sampling,

multistage sampling, convenience sampling, judgement sampling etc.




For this current research, a mixture of simple random sampling and convenience sampling

will be used. Most of the immigrant Bangladeshi ethnic minority regardless of age and sex

make international call services. Therefore, Simple random sampling is the best method. On

the other hand, as Whitechaple is the most populated Bangali community area where it is

easy to find respondents of this background is selected because of convenience of survey.

A sample six of 350 is selected which is representative for whole population. Because of

small sample size compared to 2 million population , there is a chance of small percentage of

error. But because of time and cost limitation of this research, sample size should not be

bigger than this.

3.6 Ethical Issues:

A researcher should keep in mind that while collecting data for the research, it should not

violate academic restriction of ethical issues. An ethics form will be filled up by researcher

before submitting this report to make sure it complies with academic guideline on ethical

issues. This report does not require collecting any sensitive data such as blood group, blood

samples or any kind of personal information. Neither, it requires disclosing identity of any

respondents. Therefore, it will follow academic guidance on ethical issues.

3.7 Research Limitation:

Though, Priyo mobile is launched in UK to serve any customers want to make international

calls. This research will be done on its main target of Bangladeshi ethnic minority. If any

decisions made on budget allocation of sales promotion Vs advertisement for brand identity

creation, it may not represent other ethnic minority in UK. It may affect Priyo mobile

negatively at the long run. Therefore, more research is required in order to reach final

decision on this issue.




4.0 Time table and Resource requirement:

Activities

The dissertation plan

March April May June July

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Research

background

development

Collecting related

literature

Writing literature

review

Formulating

Questionnaire

Doing Surveys

Analysing data

Presenting result

Drawing

conclusion

Preparing

recommendation

Writing up the

report

Checking for

correction

Resource requirement:

It is natural that respondents in the street may feel reluctant to give time for survey.

Therefore, a Priyo mobile sim with £5 top up will be given as an incentive to respondents.

This will allow Priyo mobile to have its test customer base on board who may top up later on.




References:

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Terms, AMA, Chicago.

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Strategies”, Prentice-Hall, Englewood cliffs, NJ.

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Thomas (ed), The Chartered Institute of Marketing Handbook of Strategic Marketing,

Oxford: Butterworth Heinemann.

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pp 11-21

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Ratio: A comparison of industry and Firm Studies, Report No. 80-107, Marketing science

Institute, Cambridge, MA

Hoyer, Wayne D and Steven P. Brown (1990), “Effects of Brand Awareness on Choice for a

common, Repeat-Purchase Product”, Journal of Consumer Research, 17 (September),pp 141-

148




Keller, Kevin Lane(1993), “Conceptualizing, measuring and managing customer-based brand

equity”, Journal of Marketing, 57(1) pp. 1-22

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analysis and normative pricing implications”, Marketing Science, vol. 18 No 3, pp 317-32

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59, No 3,pp 509-26

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International Journal of Advertising, vol 2, pp. 195-213

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practice”, MSI Report Summary, Marketing Science Institute, Report No 92-127, pp 1-55

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3rd ed., p. 90 – 94, Pearson Education Limited, Essex, England.

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preference”, international Journal of Retail & Distribution Management, vol. 28. No 2/3, pp.

83-92




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research proposal on sales promotion vs advertisement on uk mobiles

Documents

bashir jaman

achieve brand

bangladeshi

simple random

brand identity

long term

ethnic minority

creating brand