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An analysis on the impact of sales promotions on increasing sales: A case study of McDonald’s, Stratford, London

Harvard, 15000 Words

Abstract

 

The research paper has an aim to explain the effectiveness of sales promotion in McDonalds, Stratford. The purpose of the study is to explore the impact of sales promotion to improve the profit of the company. Another objective of the study is to discuss the role of marketing communication to reach the target customers of the company. The methodology of the research is mixed method because both quantitative and qualitative research method are applied to conduct the study. Primary and secondary data collection techniques are used to gather information from the respondents and useful ethical issues are considered during the study. The findings and outcome of that show the Unilever can apply useful marketing communication process that helps the company to ensure customer satisfaction and customer retention. It is also found the Unilever has very few limitations of marketing communication and its effects on improving their sales. The benefits and implication of the research is vital for the selected company because the possibilities and opportunities to improve marketing communication are explained in the study. Developing role of marketing department, using modern technologies, integrated marketing communication and use of social media are the major recommendations made in the research. Total sample size of the study is 105 because 100 customers can attend in survey method and more 5 managers can respond the questions of qualitative interview. The samples are chosen by apply purposive sampling technique that is mainly a non-probability sampling method. The descriptive statistics was used to analyse the research findings. This research found that most of the customers are satisfied and overall customer satisfaction to online banking service of McDonalds, Stratford is good. Finally, this research proved that there is significant positive impact of service quality of sales promotion on profit.

 

 

Table of Contents

Declaration

Acknowledgements

Abstract

1        Chapter 1: Introduction

1.1       Background of the research:

1.2       About Organization:

1.3       Rational of the research:

1.4       Problems of the research:

1.5       Aims & Objectives of the research:

1.6       Question of the research:

2        Chapter 2: Literature Review

2.1       Introduction

2.2       Defining Sales Promotion Strategy

2.2.1        Porter Generic Strategies

2.2.2        Cost Strategy

2.2.3        Differentiation Strategy

2.2.4        Focus Strategy

2.2.5        Branding

2.2.6        Growth Strategy

2.3       Concept of Sales Promotion

2.4       Reasons for the growth of sales promotion:

2.5       Strategic approach of sales promotion:

2.6       Conceptual Framework

2.7       Hypothesis

3        Chapter – 3: Research Methodology

3.1       Introduction

3.2       Research Philosophy

3.3       Research Methods

3.3.1        Qualitative Research Method

3.3.2        Quantitative Research Method

3.3.3        Mixed Research Method

3.4       Research Approach

3.5       Research Design

3.6       Research Strategies

3.7       Data Collection Techniques

3.7.1        Primary Data Collection

3.7.2        Secondary Data Collection

3.7.3        Instruments of Data Collection Process

3.8       Sampling Techniques, Sample Size, and Population of the Study

3.9       Data Analysis and Interpretation Methods

3.10         Ethical Considerations

3.11         Limitations of the Methodology

3.12         Conclusion

4        Chapter – 4: Findings and Analysis

4.1       Introduction

4.2       Analysis of the Questionnaire Survey

4.3       Findings of the Qualitative Interview Questions

5        Conclusion & Recommendation

5.1       Conclusion

5.2       Recommendation.

5.3       Fulfil Research Objectives

5.4       Limitation of the research

5.5       Ethical Issue

5.6       Future Research Topic

Appendices

Appendix A

Appendix – B

 

 

 

 

 

 

 

 

 

 

 

List of tables

Table 4.1: Respondent’s Gender Analysis. 21

Table 4.2: Respondent’s Age Analysis. 22

Table 4.3: Sales promotion (IT) ensures proper communication in increasing sales. 23

Table 4.4: Sales promotion (IT) is necessary to collaborate each segment of increasing sales in McDonalds. 25

Table 4.5: McDonalds uses sales promotion to improve performance of increasing sales management 26

Table 4.6: Sales promotion (IT) is effective to utilise organisational information to improve increasing sales. 27

Table 4.7: Eco-friendly manufacturing and distribution channels are ensured by sales promotion (IT) 28

Table 4.8: Sales promotion assures better focus on customer’s needs by profit process. 29

Table 4.9: Developing business process and enhancing increasing sales are two advantages of IT on profit functions. 30

Table 4.10: Sales promotion is required to improve profit information system in McDonalds. 31

Table 4.11: McDonalds can develop service quality for customer relationship management through sales promotion. 31

Table 4.12: Sales promotion is useful for customer satisfaction by improving service quality. 32

Table 4.13: Capability of customer service can be improved through sales promotion. 33

Table 4.14: Resource utilisation and customer responsiveness are two benefits of sales promotion to improve service quality. 34

Table 4.15: Sales promotion improves business operations to achieve competitive advantages. 35

Table 4.16: Sales promotion affects to use new sales promotion for sustainability to attain competitive advantages. 36

Table 4.17: Adoption and management of IT is the key to gain competitive advantages for McDonalds. 37

Table 4.18: Sales promotion affects to increase customers and sales to achieve competitive advantages. 38

Table 4.19: Are resource planning and warehouse management systems hampered by ineffective sales promotion?. 39

Table 4.20: Is IT systems in McDonalds problematic to hinder transaction, communication and transportation process?. 40

Table 4.21: Sales promotion helps to reduce the complexities of profit 41

Table 4.22: Concept of sustainability can be improved through sales promotion to develop increasing sales performance. 42

 

 

List of Figures

Figure 4.1: Respondent’s Gender Analysis. 22

Figure 4.2: Respondent’s Age Analysis. 23

Figure 4.3: Sales promotion (IT) ensures proper communication in increasing sales. 24

Figure 4.4: Sales promotion (IT) is necessary to collaborate each segment of increasing sales in McDonalds. 25

Figure 4.5: McDonalds uses sales promotion to improve performance of increasing sales management 26

Figure 4.6: Sales promotion (IT) is effective to utilise organisational information to improve increasing sales. 27

Figure 4.7: Eco-friendly manufacturing and distribution channels are ensured by sales promotion (IT) 28

Figure 4.8: Sales promotion assures better focus on customer’s needs by profit processes. 29

Figure 4.9: Developing business process and enhancing increasing sales are two advantages of IT on profit functions. 30

Figure 4.10: Sales promotion is required to improve profit information system in McDonalds. 31

Figure 4.11: McDonalds can develop service quality for customer relationship management through sales promotion. 32

Figure 4.12: Sales promotion is useful for customer satisfaction by improving service quality. 33

Figure 4.13: Capability of customer service can be improved through sales promotion. 34

Figure 4.14: Resource utilisation and customer responsiveness are two benefits of sales promotion to improve service quality. 35

Figure 4.15: Sales promotion improves business operations to achieve competitive advantages. 36

Figure 4.16: Sales promotion affects to use new sales promotion for sustainability to attain competitive advantages. 37

Figure 4.17: Adoption and management of IT is the key to gain competitive advantages for McDonalds. 38

Figure 4.18: Sales promotion affects to increase customers and sales to achieve competitive advantages. 39

Figure 4.19: Are resource planning and warehouse management systems hampered by ineffective sales promotion?. 40

Figure 4.20: Is IT systems in McDonalds problematic to hinder transaction, communication and transportation process?. 41

Figure 4.21: Sales promotion helps to reduce the complexities of profit 42

Figure 4.22: Concept of sustainability can be improved through sales promotion to develop increasing sales performance. 43

 

 

 

 

 

 

 

 

 

 

 

1        Chapter 1: Introduction

1.1       Background of the research:

Sales promotion can be defined as an offer, direct inducement, material, activity or both of them that provides incentive or extra value to the products the resellers sell to the customers (Parvinen, Tikkanen and Aspara, 2007; Harvey et al., 2011). Customers become attracted and their current buyers (not for later necessarily) and thus the company’s incentives are increased by using several kinds of offers. The intention of sales promotion is to make a marketing strategy in order to increase the sales for a short term basis and make the market share and volume healthy (Nemkova, Souchon and Hughes, 2012). This research will highlight impact of the strategies of sales promotion, picking up suitable strategies for particular situation, reasons for increasing the importance of the sales promotion and issues with McDonalds McDonalds is the hot favourite among the young generation. Since 1937, they have kept a strong position in the market place of fast food industry. But, a lot of rival groups or competitors are waiting for seeking customers by offering better service and options. In this world of competition, different incentives and offers including unplanned purchase and product trial should be made by following the sales promotion strategy (Liu et al., 2008; Paswan, Blankson and Guzman, 2011).  That’s why, this research will focus on the relationship between sales increase and promotional sales as well as how McDonalds is increasing their sale by using promotional strategy. For centuries sales promotion has been much known. Traders have been used free samples, money-off and additional price (e.g. two for one) etc. to attract customers for a long time. American Marketing Association (AMA), 1988 defined the sales promotion as a media and non-media marketing demands applied for a prearranged, short time in order to stimulate trial and impulse purchases, increase consumer demand, or improved product quality. Sales promotion comprises some strategic role to take part in the promotional mix. Usually sales promotion is a short-term tactical tool that can be used offensively to provoke the trial of new products, or defensively for well-known products to keep shelf space and consumers. Actually sales promotion is oriented to purchaser deals and temporary price reduction, in particular, do modest to supply to the overall tactic adopted for an organisation or even manufactured goods. So, sales promotion must be a part of an advanced and longer-term approach.

This competitive world offers so many choices to the customers that they are no more confined in a particular brand. They are free to choose. A well planned strategy regarding sales promotion is able to increase sales opportunity by attracting people in a better way than before. (Pride, W., 2008). Present competition has made the market environment strict. Companies have to compete with other companies with the same products. It is impossible to face the competition and survive with profit without using sales promotional strategy that temporarily boosts up the sales. For these reasons, the impact of the sales promotional strategies on the sales increasing is vital nowadays. Recently, McDonalds has come to the realization that customers are no blinder for the brands. They have positive attitude towards the brands but they are interested to explore new products too. Among the crowd of so many prospective restaurants, customers may find out one with better offer and incentives. If they find any that is better than McDonalds, they will surely change the brand, no doubt. (Kapferer, J., 2008). A number of fast food shops are offering facilities and coupons to the customers. So, it is not impossible for them to attract the customers and increase the sales. The main concern of this research is to highlight how a company’s sales opportunity can be increased by following the strategy of sales promotion. It will be also dealing with the impact of sales promotion on McDonald’s, Stratford. People who are connected with McDonalds will get a vast idea about the increase of sales opportunity using sales promotion strategies.