A Comparative Study between Price and Non-Price Sales Promotional Strategy in the Introduction Stage of Consumer Products

Abstract: Either it is because of some significant active trends in the business world, or the attractive cut of cost and increase in profit, companies now days are focusing on sales promotion activities. But in reality, most of companies that are introducing new products are not getting what they intend to get. They are facing loses. One of the reasons is lack of understanding which specific sales promotion is preferable at that stage. As the authors described on the background of the study, a lot of studies have been done to indicate preferable sales promotional tools for consumer’s goods. Even though those studies have found significant results, there is still a gap which needs further investigation. According to those studies, the result that indicates the more preferable sales promotional tool have to be tested under different discount magnitude range and variety of products. Based on the above gap the study has been undertaken with the purpose of comparing two dominant sales promotional tools: price and non-price sales promotion. This comparison has been done on three new different consumer goods that have different characteristics. The authors believe that this will contribute to fill the gap on the findings of previous researches on the area of sales promotion. To fulfill the purpose of the study, descriptive and comparative type of study has been conducted by using controlled field experiment. Data has been collected by using structured questionnaire from three undergraduate classes of Umea University, Umea, which are (i.e., classes) selected using judgmental sampling. Collected data has been analyzed using SPSS-descriptive statistics. The result reveals that, consumers of newly introduced consumer good will use the price of the product as a cue for a quality and prefer to have cash discount rather than gift offers. More ever, marketing stimuli (i.e. sales promotion) can have impact on the occurrence of the impulse buying behavior. Therefore, companies that are introducing a new consumer product and using price sales promotion as a strategy are more likely to attract new consumers and create impulse buying behavior, which result in an increase in sales.