The impact sales promotion strategy on consumer

buying behavior
Applied to:

Nestle
A Research Project Submitted to:
The Business Department at Modern Academy in
Maadi
in Partial fulfillment of the requirements of the
degree of
Bachelor of Business Administration

Submitted by
Abdel Rahman Mohamed Kamel
Mahmoud
Karem Ahmed Sherif
Gamil
Mahmoud Mohamed Diaa
Ghobrial

Dina Khaled
Rita Joseph
Nancy Sobhy

Supervised by
Dr. Sameh Sherif
Ass.lect. Sara El-Menawy

June 2013

The impact of sales promotion

strategy on
Consumer buying behavior
Applied on Nestle

Acknowledgement

We would like to express our gratitude for everyone who helped us

during the graduation project starting with endless thanks
especially for our supervisor Dr. Sameh Sherif who didnt keep
any effort in encouraging us to do a great job, providing our group
with valuable information and advices.

Also, we would like thank the assistant professor: Sara Mohamed

El-Menawy for her endless support and her huge effort and for the
continuous support and kind communication which had a great
effect regarding to feel interesting about what we are working on.

Table of Content
Chapter One: Sales Promotion Strategy
Introduction
1.1 Objective of Sales Promotion .... 2
1.2 How to Design a Sales Promotion Strategy ... 4
1.3 Push & Pull Strategies... 7
1.4 Importance of Sales Promotion .. 9
1.5 Tools of Sales Promotions .. 9
1.6 Advantages of Sales Promotion 13
1.7 Disadvantages of Sales Promotion 14

Chapter Two: Consumer Behavior

2.1 Consumer Buying Behavior ... 17
2.2 Importance of Consumer Behavior .... 18
2.3 Factors that affect Consumer Behavior .. 22
2.4 The Consumer Decision-Making Process .. 30
2.5 Stages of Consumer Buying Process .. 31
2.6 Types of Consumer Buying Behavior ... 33

Chapter Three: Emperical Study

1.1 History of Nestle .... 36
Conclusion ... 40
References ... 41
Appendix ... 42

Introduction of the research

Sales promotion is the process of persuading a potential customer to buy the
product. Sales promotion is designed to be used as a short-term tactic to
boost sales it is not really designed to build long-term customer loyalty.
Some sales promotions are aimed at consumers. Others are targeted at
intermediaries (such as agents and wholesalers) or at the firms sales force.
When undertaking a sales promotion, there are several factors that a business
must take into account:
What does the promotion cost will the resulting sales boost justify the
investment?
Is the sales promotion consistent with the brand image? A promotion that
heavily discounts a product with a premium price might do some long-term
damage to a brand
Will the sales promotion attract customers who will continue to buy the
product once the promotion ends, or will it simply attract those customers
who are always on the look-out for a bargain?
Sales promotion generally works on a direct behavioral basis rather than
effecting awareness or attitude. This research strives to understand the
impact of sales promotions on consumer's behavior and how very important
they are.

Importance of the research

The business world today is a world of competition. A business cannot
survive if its products do not sell in the market. Thus, all marketing activities
are undertaken to increase sales. Producers may spend a lot on advertising
and personal selling. Still the product may not sell. So incentives need to be
offered to attract customers to buy the product. Thus, sales promotion is
important to increase the sale of any product. Let us discuss the importance
of sales promotion from the point of view of manufacturers and consumers.

Objective of the research

The purpose of the research was to study how sales promotion influence
Consumer behavior.

Problem of the research

One of the best ways to influence consumer behavior is to give buyers an
acceptable motive. This is somewhat related to the idea of asking what type
of person would buy a certain product in evaluating consumer behavior.
Consumers want to feel they're doing something good, being a good person,
eating healthy, making contacts, keeping up appearances, or that they just
deserve to be spoiled a little bit. If marketers can convince consumers that
they need a product or service for some "legitimate" reason, customers will
be more likely to make a purchase.

Finally, another alternative for influencing customer behavior is by offering

specialized goods. While commonality was once popular, more and more
people are seeking diversity in taste, personal preferences, and lifestyle.
Some successful campaigns touting the way their products stand out from
the crowd include Dodge's "The Rules Have Changed" and Arby's "This is
different. Different is good."
That is to provide better understanding of the factors affecting sales
promotion on influencing consumers buying behavior.

Research Methodology
Time Horizon
The research was conducted in a period of four months.

Data collection
This study used the following methods:
- Survey Questionnaire.
- Structured interview.

Chapter one
Sales Promotion Strategy

Sales promotion Definition:

Sales promotion consists of all promotional activities other than
advertising and personal selling to increase sales of a commodity.

1.1 Objectives of Sales Promotion

o
o
o
o
o

To introduce new products

To attract new customers and retain the existing
To maintain sales of seasonal products
To challenge the competition
Tools / Techniques used in Sales Promotion

Let us learn about these objectives in details:

(I) To introduce new products: Have you ever heard about test
drives?
Perhaps you know that many car companies make test driving
events while introducing new products. The consumers after
using these free test drives may develop a taste for it and buy
the products later for consumption.
(ii) To attract new customers and retain the existing ones: Sales
promotion measures.
Help to attract or create new customers for the products. While
moving in the market.

 Customers are generally attracted towards the product that

offers discount, gift, prize, etc on buying. These are some of the
tools used to encourage the customers to buy the product.
Thus, it helps to retain the existing customers, and at the same
time it also attracts some new customers to buy the product.
(iii) To maintain sales of seasonal products: There are some
products like air conditioner , fan, refrigerator, cooler, winter
clothes, room heater, sunscreen lotion, glycerin soap etc., which
are used only in particular seasons. To maintain the sale of these
types of products normally the manufacturers and dealers give
off-season discount. For example, you can buy air conditioner in
winter at a reduced price. Similarly you may get discount on
winter clothes during summer.
(iv) To meet the challenge of competition: Todays business
faces competition all the time. New products frequently come to
the market and at the same time improvement also takes place.
So sales promotion measures have become essential to retain the
market share of the seller or producer in the product-market
Free samples
Premiums or Bonus offer
o Exchange schemes
o Price-off offer
o Coupons
o Fairs and Exhibitions

o Trading stamp
o Scratch and win offer
o Money Back offer

1.2 How to design a sales promotion strategy

For a sales promotion strategy to be successful there needs to be a
plan in place. When you design a sales promotion strategy, you
need to make sure that the company is getting the best return on
investment and good marketing exposure in exchange for the
promotional part of the strategy. If a company is using a buy one,
get one free promotional strategy, then there needs to be sufficient
return for the item that will be given for free to make sales
promotion a success.
Reaching Sales Representatives
Step 1
Determine if you want the sales promotion to be a short-term or
long-term promotion. For a product just being introduced, you will
want to use a long-term promotion to help establish the product in
the sales representatives' minds. A product that is at the end of life
would be a short-term promotion as you are trying to get old
product off shelves.
Step 2
Create a spiff-based promotion for your product that will entice
sales representatives to want to push your product. The spiff can be
done on a per-unit basis where every unit sold gets a bonus, or you

can create a spiff based on volume where the bonus is not paid
until a certain volume of sales is reached.
Step 3
Develop a registration system that will require sales representatives
to sign up to be part of the sales promotion. The registration will
not only track sales volume for each representative, it can also be
used as a contact database for future sales promotions involving
sales representatives.
Step 4
Create marketing material that outlines the complete program to
sales representatives, gives registration information and offers
sales pitch information that representatives can use when trying to
sell your product.
Step 5
Stay in touch with registered sales representatives with weekly
sales pitch information updates, and updates on how each
representative is performing in the promotion. This will help to
stoke the competitive fires among the sales representatives and
drive revenue.

Promoting to Retail Customers

Step 1
Focus your promotion on one product, or one family of products. If
you make the promotion too broad, then retail customers may get

confused and not participate. If the promotion works for one

product, then you can replicate it for other products as well.
Step 2
Determine which kind of retail sales promotion strategy you want
to use. Some of the popular retail promotions are buy one, get one
free as well as free sample, buy a product and get a free accessory
or a mail-in rebate.
Step 3
Create a comprehensive set of rules for the promotion and include
those rules on all of the promotional material. Work with your
company's legal department to ensure that the rules of your
promotion are complete and effective.
Step 4
Develop a website where customers can register to receive
promotional rewards and find out more information about the
product and company. Ask customers to give their email address
for future promotions. Designate a toll-free phone number where
customers can call and ask for more information on the promotion.
Step 5
Create a retail display that gives all of the details of the promotion
to be placed in all of your retail outlets.

1.3 Push and pull strategies

Push or Pull"?

Marketing theory distinguishes between two main kinds of

promotional strategy - "push" and "pull".
Push
A push promotional strategy makes use of a company's sales
force and trade promotion activities to create consumer demand for
a product.
The producer promotes the product to wholesalers, the wholesalers
promote it to retailers, and the retailers promote it to consumers.
A good example of "push" selling is mobile phones, where the
major handset manufacturers such as Nokia promote their products
via retailers such as Car phone Warehouse. Personal selling and
trade promotions are often the most effective promotional tools for
companies such as Nokia - for example offering subsidies on the
handsets to encourage retailers to sell higher volumes.
A "push" strategy tries to sell directly to the consumer, bypassing
other distribution channels (e.g. selling insurance or holidays
directly). With this type of strategy, consumer promotions and
advertising are the most likely promotional tools.
Pull
A pull selling strategy is one that requires high spending on
advertising and consumer promotion to build up consumer demand
for a product.

If the strategy is successful, consumers will ask their retailers for

the product, the retailers will ask the wholesalers, and the
wholesalers will ask the producers.

1.4 Importance of Sales promotion

For manufacturers
For consumers
Increases the volume of Goods are available cheaper
sales
rate
Helps to introduce new Financial benefits to the
products in the market
customers
Enables quick disposal of Generates awareness about
existing stocks

new brands
Stabilizes the volume of
sales
Creates confidence in the
mind

of

customers

regarding quality
Raise standard of living

1.5 Tools of Sales Promotion

To increase the sale of any product manufactures or producers
adopt different measures like sample, gift, bonus, and many more.
These are known as tools or techniques or methods of sales
promotion. Let us know more about some of the commonly used
tools of sales promotion.

(i) Free samples: You might have received free samples of

shampoo, washing powder, coffee powder, test drive invitations
etc. while purchasing various items from the market. Sometimes
these free samples are also distributed by the shopkeeper even
without purchasing any item from his shop.
These are distributed to attract consumers to try out a new product
and thereby create new customers. Some businessmen distribute
samples among selected persons in order to popularize the product.
For example, in the case of medicine free samples are distributed
among physicians, in the case of textbooks, specimen copies are
distributed among teachers
(ii) Premium or Bonus offer: car insurance for one year free with
the new car, a milk shaker along with Nescafe, mug with creamer,
toothbrush with 500 grams of toothpaste, 30% extra in a pack of
one kg. Are the examples of premium or bonus given free with the
purchase of a product? They are effective in inducing consumers to
buy a particular product. This is also useful for encouraging and
rewarding existing customers
(iii) Exchange schemes: It refers to offering exchange of old
product for a new product at a price less than the original price of
the product. This is useful for drawing attention to product

improvement. Bring your old car and exchange it for a new one or
exchange your black and white television with a color television
are various popular examples of exchange scheme.
(iv)Price-off offer: Under this offer, products are sold at a price
lower than the original price. 3000L.E off on a car purchase, 3L.E
off on a pack of 50 tea bags of Lipton, 500L.E off on Nestle
cooler etc. are some of the common schemes. This type of scheme
is designed to boost up sales in off-season and sometimes while
introducing a new product in the market.
(v) Coupons: Sometimes, coupons are issued by manufacturers
either in the packet of a product or through an advertisement
printed in the newspaper or magazine or through mail. These
coupons can be presented to the retailer while buying the product.
The holder of the coupon gets for example 25% off. Under this
scheme attracts the attention of the prospective customers towards
new or improved products.
(vi) Fairs and Exhibitions: Fairs and exhibitions may be organized
at local, regional, national or international level to introduce new
products, demonstrate the products and to explain special features
and usefulness of the products. Goods are displayed and

demonstrated and their sale is also conducted at a reasonable

discount. As at Formula one which is held in Egypt at the
beginning of each year where cars are demonstrated by the
company & observed by the consumers, furthermore offers are
held.
(vii) Trading stamps: In case of some specific products trading
stamps are distributed among the customers according to the value
of their purchase. The customers are required to collect these
stamps of sufficient value within a particular period in order to
avail of some benefits. This tool induces customers to buy that
product more frequently to collect the stamps of required value. As
in Wataneya fvc"sheraton" car wash; where a card is given with 5
empty slots to b e stamped, when all are stamped in 2 months one
free car wash is rewarded
(viii) Scratch and win offer: To induce the customer to buy a
particular product scratch and win scheme is also offered. Under
this scheme a customer scratch a specific marked area on the
package of the product and gets the benefit according to the
message written there. In this way customers may get some item
free as mentioned on the marked area or may avail of price-off, or

sometimes visit different places on special tour arranged by the

manufacturers.
(ix) Money Back offer: Under this scheme customers are given
assurance that full value of the product will be returned to them if
they are not satisfied after using the product. This creates
confidence among the customers with regard to the quality of the
product. This technique is particularly useful while introducing
new products in the market.

1.6 Advantages of Sales Promotion

Sales promotions have a significant effect on the behavior of
consumers and trades people. Such promotions can bring in more
profits for the manufacturers because they permit price
discrimination.
1. Price discrimination:
Producers can introduce price discrimination through the use of
sales promotions. They can charge different prices to different
consumers and trade segments depending on how sensitive each
segment is to particular prices. Coupons, special sales events,
clearance sales and discounts are examples to explain the
phenomenon.

2. Effect on consumer behavior:

As sales promotions are mostly announced for a short period,
customers may feel a sense of urgency and stop comparing the
alternatives. They are persuaded to act now rather than later.
With every 500g pack of Tang, you get a free Tang glass. Offer
valid only till stocks last.
3. Effect on trade behavior:
Short-term promotions present an opportunity and encourage
dealers to forward buy. This forward buying ensures that retailers
wont to go out of stocks. As dealers have more than the normal
stocks, they think it advisable to advertise in local media, arranged
displays and offer attractive promotion deals to consumers. These
actions help in increasing the store traffic.

1.7 Disadvantages of Sales Promotion

While sales promotion is a powerful and effective method to
produce immediate short term positive results, it is not a cure for a
bad product or bad advertising. In fact, a promotion will speed up
the killing of a bad product.

1. Increased price sensitivity

Consumers wait for the promotion deals to be announced and
then purchase the product. This is true even for brands where
brand loyalty exists. Customers wait and time their purchases to
coincide with promotional offers on their preferred brands. Thus,
the routine sales at the market price are lost and the profit margin
is reduced because of the discounts to be offered during saleseason. The RadioShack Offers on electronic goods
2. Quality image may become tarnished:
If

the promotions in

product category have

been

rare,

the promotions could have a negative effect about its quality

image.

Consumers

may

start

suspecting

that

perhaps the

product has not been selling well, the quality of the product is true
compared to the price or the product is likely to be discontinued
because it has become outdated.
The Etisalat offers of talking for free all day long from Etisalat to
Etisalat went on and on. Ultimately people stopped asking for the
product as the on-going sales promotion strategy made the
customers perceive it to be a cheap and an inferior product. Many
people think that Etisalat is the worst amongst.

3. Merchandising support from dealers is doubtful:

In many cases, the dealers do not cooperate in providing the
merchandising support nor do they pass on any benefit to
consumers. The retailer might not be willing to give support
because he does not have the place, or the product does not sell
much in his shop, or maybe he thinks the effort required is more
than the commission/benefit derived.

4. Short-term orientation:
Sales promotions are generally for a short duration. This gives a
boost to sales for a short period. This short-term orientation may
sometimes have negative effects on long-term future of the
organization. Promotions mostly build short-term sales volume,
which is difficult to maintain. Heavy use of sales promotion, in
certain product categories, may be responsible for causing brand
quality image dilution.

Chapter Two
Consumer buying behavior

2.1 Consumer buying behavior

Definition of Buying Behavior:
Buying Behavior is the decision processes and acts of people
involved in buying and using products.
Need to understand:

Why consumers make the purchases that they make?

What factors influence consumer purchases?

The changing factors in our society.

Consumer Buying Behavior refers to the buying behavior of the

ultimate consumer. A firm needs to analyze buying behavior for:

Buyers reactions to a firms marketing strategy has a great

impact on the firms success.

The marketing concept stresses that a firm should create

a Marketing Mix (MM) that satisfies (gives utility to)
customers, therefore need to analyze the what, where, when
and how consumers buy.

Marketers can better predict how consumers will respond to

marketing strategies.

2.2 Importance of consumer behavior

The study of consumers helps firms and organizations improve
their marketing strategies by understanding issues such as how
The psychology of how consumers think, feel, reason, and select
between different alternatives (e.g., brands, products);
The psychology of how the consumer is influenced by his or her
environment (e.g., culture, family, signs, media);
The behavior of consumers while shopping or making other
marketing decisions;
Limitations in consumer knowledge or information processing
abilities influence decisions and marketing outcome;
How consumer motivation and decision strategies differ between
products that differ in their level of importance or interest that they
entail for the consumer; and
How marketers can adapt and improve their marketing campaigns
and marketing strategies to more effectively reach the consumer.
One "official" definition of consumer behavior is "The study of
individuals, groups, or organizations and the processes they use to
select, secure, use, and dispose of products, services, experiences,
or ideas to satisfy needs and the impacts that these processes have
on the consumer and society."
The study of consumer behavior (CB) is very important to the
marketers because it enables them to understand and predict

buying behavior of consumers in the marketplace; it is concerned

not only with what consumers buy, but also with why they buy it,
when and where and how they buy it, and how often they buy it,
and also how they consume it & dispose it. Consumer research is
the methodology used to study consumer behavior; it takes place at
every phase of the consumption process: before the purchase,
during the purchase, and after the purchase. Research shows that
two different buyers buying the same product may have done it for
different reasons; paid different prices, used in different ways, have
different emotional attachments towards the things and so on.
According to Professor Theodore Levitt of the Harvard Business
School, the study of Consumer Behavior is one of the most
important in business education, because the purpose of a business
is to create and keep customers. Customers are created and
maintained through marketing strategies. And the quality of
marketing strategies depends on knowing, serving, and influencing
consumers. In other words, the success of a business is to achieve
organizational objectives, which can be done by the above two
methods. This suggests that the knowledge & information about
consumers is critical for developing successful marketing
strategies because it challenges the marketers to think about and
analyze the relationship between the consumers & marketers, and
the consumer behavior & the marketing strategy.

Consumer behavior is interdisciplinary; that is, it is based on

concepts and theories about people that have been developed by
scientists, philosophers & researchers in such diverse disciplines as
psychology, sociology, social psychology, cultural anthropology,
and economics. The main objective of the study of consumer
behavior is to provide marketers with the knowledge and skills that
are necessary to carry out detailed consumer analyses which could
be used for understanding markets and developing marketing
strategies. Thus, consumer behavior researchers with their skills
for the naturalistic settings of the market are trying to make a
major contribution to our understanding of human thinking in
general.
The study of consumer behavior helps management understand
consumers' needs so as to recognize the potential for the trend of
development of change in consumer requirements and new
technology. And also to articulate the new thing in terms of the
consumers' needs so that it will be accepted in the market well.
The following are a few examples of the benefits of the study of
consumer behavior derived by the different categories of people
A marketing manager would like to know how consumer behavior
will help him to design better marketing plans to get those plans
accepted within the company.

In a non-profit service organization, such as a hospital, an

individual in the marketing department would like to know the
patients' needs and how best to serve those needs.
Universities & Colleges now recognize that they need to know
about consumer behavior to aid in recruiting students. "Marketing
Admissions" has become an accepted term to mean marketing to
potential students.
Consumer behavior has become an integral part of strategic market
planning. It is also the basis of the approach to the concept of
Holistic

Marketing.

(See

the

article

on

"HOLISTIC

MARKETING written by the author). The belief that ethics and

social responsibility should also be integral components of every
marketing decision is embodied in a revised marketing concept the societal marketing concept - which calls on marketers to fulfill
the needs of their target markets in ways that improve society as a
whole.

2.3

Factors that affect consumer behavior

There are two major forces that shape who we are and what we
buy. They are the internal influence and the external influence.

Figure 2.1 the relationship between consumer and things that

influence his decision.
Fig. (1) Shows the relationship between consumer and things that
influences his decision, before and after the purchasing.
Internal Factors:
Consumer

behavior

is

influenced

by:

demographics,

psychographics lifestyle, personality, motivation, knowledge,

attitudes, beliefs, and feeling. Consumer behavior concern with
consumer actions in the direction of satisfying needs leads to his
behavior, behavior of every individual depend on thinking process.

Our consumption behavior is a function of who we are as

individuals. Our thoughts, feelings, attitudes, and patterns of
behavior determine what we buy, when we buy it, and how we use
it. Internal factors have a major impact on consumer behavior.
Consumer motivation: A marketer's job is to figure out what
needs and wants the consumer has, and what motivates the
consumer to purchase. Motivation is the drive that initiates all our
consumption behaviors, and consumers have multiple motives, or
goals.
Consumer information processing: The consumer informationprocessing approach aids in understanding consumptive behavior
by focusing on the sequence of mental activities that people use in
interpreting and integrating their environment.
The sequence begins with human perception of external stimuli.
Perception is the process of sensing, selecting, and interpreting
stimuli in one's environment.
Attitude formation and change: The set of beliefs consumers
have stored in long-term memory provides another critical function
to marketers: It provides the basis for a consumer's attitude toward
a brand or an ad. An attitude is an overall evaluation of an object,

idea, or action. Attitudes can be positive or negative, and weakly or

strongly held. The statement "I love Ben & Jerry's Vanilla Toffee
Crunch" is a strong, positively valenced attitude toward a product.
The statement "I dislike the new Toyota ad" is a weak, negatively
valenced attitude toward an advertisement. Marketers work hard to
continuously monitor consumer attitudes toward their products.
Among other things, attitudes can indicate problems with a product
or campaign, success with a product or campaign, and overall
strength of the brand or brand equity.
A popular perspective is that attitude has three components:
cognitive, affective, and co native. The cognitive component
reflects the knowledge and beliefs one has about the object (e.g.,
"Digital Club Network is an on-line live music Internet site."), the
affective component reflects feelings (e.g., "I like the Digital Club
Network site") and the co native component reflects a behavioral
tendency toward the object (e.g., "I will become a registered user
of digitalclubnetwork.com"). Thus, attitudes are predispositions to
behave in a certain way.

External Factors
Consumer behavior is influenced by: culture, sub-culture, location,
royalty, ethnicity, family, social class, reference groups, life style,
and market mix factors.

In addition to the internal factors, consumer behavior is also

shaped to a large extent by social factors, such as culture, family
relationships, and other aspects of the external environment.
Awareness of these influences can help marketers to identify
groups of consumers who tend to think, feel, or act similarly and
separate them into unique market segments. Aspects of the
marketing programsuch as product design, advertising, and
pricingcan then be tailored to meet the unique needs, values, and
goals of these distinct groups.
Group influences on individual consumer behavior: Group
influences on consumer behavior can impact motivation, values,
and individual information processing; they can come from groups
to which consumers already belong or from groups to which they
aspire to belong (aspirational groups). Groups can exert a variety
of influences on individuals, including: (1) informational
influences where the group acts as a source for expert opinions; (2)
comparative influences such that the group provides opportunities
to manage the individual's self-concept with respect to the group's
identity; and, (3) normative influences, whereby the group
specifies guidelines and sanctions for appropriate or inappropriate
individual behaviors.

The influence of groups on consumer behavior tends to vary with a

variety of group and product-related factors. For example, the
more the group is perceived to be a credible, valued source of
approval or disapproval to the consumer, the more likely that
consumer is to conform to group values. In addition, the more
frequently group members interact, and the more outwardly visible
use of the product is to group and non-group members, the greater
the group's influence on individual consumption behavior.
Family influences on consumer behavior: Families have a
particularly significant influence on consumer behavior. For
example, consumption behavior often changes substantially as
family status changes over time. Thus, young unmarried adults,
who are often focused on individual self-definition, tend to
purchase products that enhance or define their self-concepts. In
contrast, couples with children may be more interested in
purchasing items or experiences that can be shared by all family
members and, as a result, may spend less on individually oriented
products.
Family membership also leads to a greater need for joint rather
than individual decision making, further complicating consumer
behavior at the household level. For example, the person who buys
a product may not be the ultimate consumer of the product. Or

perhaps the husband and wife have differing levels of involvement

with certain product decisions, leading to different types of
separate decision processes that must be integrated before a choice
is ultimately made.
Cultural and sub-cultural influences on consumer behavior:
Culture comprises the common meanings and socially constructed
values accepted by the majority of members of a society or social
group. It includes such things as shared values, beliefs, norms, and
attitudes, as well as affective reactions, cognitive beliefs, and
patterns of behavior. Typically, when we think of culture, we tend
to think of differences among individuals from different countries
or regions of the world. With the increasing globalization of the
world economy, understanding differences and similarities in
consumer

behavior

across

cultures

becomes

increasingly

meaningful, with important implications about the degree to which

marketing strategies can be standardized across countries and
cultures, or localized to reflect country or region-specific cultural
distinctions.
One important cultural difference is the degree to which the self is
defined as independent from others versus interdependent with
important others. Individualistic cultures, such as the United
States, tend to foster an independent sense of self, with the self

believed to be a set of internal attributes unique to each person.

Collectivist cultures, however, such as China, foster an
interdependent sense of self, with the self believed to be
inseparable from others and the social context; person-specific
attributes are less important in self-definition than are interpersonal
relations. These differences in self-definition affect a variety of
consumer

behaviors,

including

emotional

reactions

to

advertisements, the degree to which information from others is

valued when making consumption decisions, and gift-giving
behavior.
In addition to cultural differences that exist across countries,
marketers are also increasingly recognizing the importance of
cultural differences within a society. Subcultures are distinctive
groups within a society that share common meanings. Subcultures
can often be identified based on demographic characteristics, such
as geographic location (e.g., the southern United States), ethnicity
(e.g., Hispanic Americans), or age (e.g., baby-boomers). Polaroid's
I-Zone camera is targeted in the United States to appeal to the
teenage subculture.
Subcultures can also be identified based on common lifestyles. For
example, a strong subculture exists around Harley-Davidson
motorcycles and the Harley Owners Group (HOG). Members of
this group share a core cultural value of personal freedom, which is

exemplified in both the experience of using the product (taking to

the open road) and in the company's marketing strategy (e.g., the
open-winged

insignia

[Schouten

and

Alexander,

1995]).

Importantly, identification of lifestyle subcultures, and the

corresponding development of an inventory of shared meanings, is
typically

more

difficult

than

the

development

of

such

understanding of subcultures based on observable demographic

characteristics.

2.4 The Consumer Decision-Making Process

What consumers think and the social environment they live in
determine what they buy and how that purchase decision is made.
Typically, the decision process is described as a series of five
stages. The first stage, need recognition, occurs when consumers
perceive a difference between their ideal and actual states. Need
recognition

is often

prompted

by

persuasive

advertising.

Consumers then begin the information search process by

conducting an internal search of their own knowledge structures,
followed by an external search for information from friends,
family members, salespeople, and advertisements. This step can
clarify the problem, providing criteria to use for assessing product
alternatives and resulting in a subset, or "consideration set," of
potential choices. These options are then assessed more completely

in the third stage, alternative evaluation. In this stage, products in

the consideration set are compared with one another. Sometimes a
simple heuristic rule of thumb, such as "I'm going to buy the
cheapest product" is used. At other times a more complex strategy,
such as a weighted-average model that compensates for product
strengths and weaknesses, is used. After examining each
alternative, consumers are ready to purchase, the fourth step in the
decision process. Finally, after buying, the consumers enter the
post-purchase phase of the process, during which the performance
of the chosen alternative is evaluated in light of prior expectations.
Consumers will be satisfied with the product if it meets or exceeds
expectations; dissatisfaction occurs if the product does not meet
expectations.
This model of consumer behavior, while very useful, is highly
simplified and does not always accurately reflect the decision
process consumers follow. Consumers may not always proceed
linearly through the five steps as described, and sometimes they
may skip certain steps entirely. However, the model is a close
approximation of the process for most consumers for most
purchase occasions.
We are all consumers. Understanding why we behave as we do is
integral to an efficient transfer of goods and services in a marketdriven economy.

2.5 Stages of the Consumer Buying Process

Six Stages to the Consumer Buying Decision Process (For
complex decisions). Actual purchasing is only one stage of the
process. Not all decision processes lead to a purchase. All
consumer decisions do not always include all 6 stages, determined
by the degree of complexity...discussed next.
The 6 stages are:
1. Problem Recognition (awareness of need)--difference between
the desired state and the actual condition. Deficit in assortment of
products. Hunger--Food. Hunger stimulates your need to eat.
Can be stimulated by the marketer through product information-did not know you were deficient? I.E., see a commercial for a new
car, stimulates your recognition that you need a new car.
2. Information search-o

Internal search, memory.

External search if you need more information. Friends and

relatives

(word

of

mouth).

Marketer

dominated

sources;

comparison shopping; public sources etc.

A successful information search leaves a buyer with possible
alternatives.

3.Evaluation of Alternatives--need to establish criteria for

evaluation, features the buyer wants or does not want. Rank/weight
alternatives or resume search. May decide that you want to eat
something

spicy,

Indian

gets

highest

rank

etc.

If not satisfied with your choice then returns to the search phase.
Can you think of another restaurant? Look in the yellow pages etc.
Information from different sources may be treated differently.
Marketers try to influence by "framing" alternatives.
4.Purchase decision--Choose buying alternative, includes product,
package, store, method of purchase etc.
5. Purchase--May differ from decision, time lapse between 4 &
5, product availability.
6. Post-Purchase

Evaluation--outcome:

Satisfaction

or

Dissatisfaction. Cognitive Dissonance, have you made the right

decision. This can be reduced by warranties, after sales
communication

etc.

After eating an Indian meal, may think that really you wanted a
Chinese meal instead.

2.6 Types of Consumer Buying Behavior

Types of consumer buying behavior are determined by:

Level of Involvement in purchase decision. Importance and

intensity of interest in a product in a particular situation.

Buyers level of involvement determines why he/she is

motivated to seek information about a certain products and
brands but virtually ignores others.

High involvement purchases--Honda Motorbike, high priced

goods, products visible to others, and the higher the risk the higher
the involvement. Types of risk:

Personal risk

Social risk

Economic risk

The four types of consumer buying behavior are:

Routine

Response/Programmed

Behavior--buying

low

involvement frequently purchased low cost items; need very little

search and decision effort; purchased almost automatically.
Examples include soft drinks, snack foods, milk etc.

Limited Decision Making--buying product occasionally. When

you need to obtain information about unfamiliar brand in a familiar

product category, perhaps. Requires a moderate amount of time for

information gathering. Examples include Clothes--know product

class but not the brand.
Extensive Decision Making/Complex high involvement,

unfamiliar, expensive and/or infrequently bought products. High

degree of economic/performance/psychological risk. Examples
include cars, homes, computers, education. Spend a lot of time
seeking

information

and

deciding.

Information from the companies MM; friends and relatives, store

personnel etc. Go through all six stages of the buying process.

Impulse buying, no conscious planning.

The purchase of the same product does not always elicit the same
Buying Behavior. Product can shift from one category to the next.
For example:
Going out for dinner for one person may be extensive decision
making (for someone that does not go out often at all), but limited
decision making for someone else. The reason for the dinner,
whether it is an anniversary celebration, or a meal with a couple of
friends will also determine the extent of the decision making.

Chapter three
Empirical Study

History:

For over 100 years, Nestl has been nourishing Egyptian homes and
.sustaining healthy foundations for Good food, Good life
We are proud that weve earned the trust of Egyptians and that Nestl has
become a staple name in Egyptian homes, providing them with tasty and
.healthy food & beverage products for all occasions and all life stages
As we continue to grow, we hope to keep fortifying the foundations of
healthy living and nutrition for a 100 more years to come, in a country that
.opened its doors to us well over 100 years ago
Pre 1900 The Dawning of a New Era
the twentieth century is dawning and Egypt is transforming in ways it never
had before. Ambitious and dreaming to create a Paris along the Nile.
Records indicate that in 1870 a salesman by the name of E. Serra sold 230
tons of Nestls Infant Food in Alexandria, making it the first sale of a
Nestl product in the Ottoman Empire and Middle East. Three years later, a
salesman named Sommer sold the same product in Cairo until finally the
.year 1900 witnessed Nestls first trademark registration in Egypt
The Belle poque 1900-1925
The year 1911 marked the founding of Nestls first sales agency on Cherif
Pacha St. in Alexandria followed by another office in 1914 on Game3
Sharkass St. in Cairo. With the onslaught of World War I taking its toll on
the European economy, many European businesses spread out to countries
like Egypt to stay afloat and government contracts kept many companies in
.business
Nestl's condensed milk was indispensible among the soldiers of the allied

.forces stationed in Egypt, unaccustomed to the countrys scorching sun

By 1918, representatives of Nestl & the Anglo-Swiss Condensed Milk
Company were listed as Petersen & Co on 7 Adeeb St. in Alexandria, Rich
& Co on 18 Nubar Pacha St. in Cairo, and eventually the opening of a sales
agency in Port Said in 1920 selling the products of Nestle Kohler Cailler
. and Peter
The Golden Years 1925-1950
Two major events in the 1920s left their mark on Egypt forever, the
discovery of the tomb of Tutankhamen by Howard Carter and independence
.from the Ottoman Empire
By 1930, Egypt ranked 6th worldwide in the sales of condensed milk, and
the companys product range expanded to include Nestogen, Quick Oats and
.Nestls Milk
In 1936 Egypts King Fuad died, leaving the throne of Egypt to his 17 year
old son Farouk. The queen mother, Nazli, wanting to lift the familys spirits,
took her children and a few friends to Switzerland to ski and make a few
semi-official visits, like the one to the Nestl Cailler chocolate factory in
.Broc
During their Swiss sojourn, the young Farouk would grow close to the 17
year old Safinaz (the aristocratic daughter of Queen Nazlis lady-in-waiting,
.who would later change her name to Farida)
The couple got married soon after returning home from their trip. In honor
of their wedding, Nestl created special edition chocolates with the young
kings silhouette on the classic Nestl Milk Chocolate Bar. Nestl AngloSwiss Condensed Milk Co. was then represented by Joseph Behar, who
.headed the office well into the 1950s

The address of the head office had moved to the Posh Fouad Street (which is
today named The 26th of July Street) in Cairo. Nestl also began to address
native Egyptians in addition to foreigners and brought itself closer to the
.Egyptian people by publishing its advertisements in Arabic
Although not registered until 1958, Nescaf was first sold in Egypt, directly
imported from UK, in October 1939. Egyptians still preferred Turkish coffee
exclusively, and Nescafe was growing more popular among the foreigners
.living in Egypt and was advertised in Egyptian-based French publications

The Nationalization Years 1950-1975

The early 1950s brought major changes to Egypt, wherein the militarys Free
Officers movement deposed King Farouk and turned Egypt into a republic
state. A few years later, President Gamal Abdel Nasser focused on the
nationalization of Egypt; Nestl began focusing on extensive marketing of
its products through publications and periodicals specifically targeting
Egyptians. Under the leadership of Sherif & Ne3mat Alexane, the company
also added a new product range with goods such as Swiss Petit Gruyere
.Cheese, Maggi, Nido, Nestl Cocoa and many more

1975-2000s The Globalization Years

In 1987, Nestle S.A. acquired Industrie du Froid expanding its product range
to include ice cream and yoghurt and on 26th October 1988 Nestl Egypt
.S.A.E. was officially registered
Months later, the construction of the first production facility in 6th of October
city led to the manufacturing of MAGGI bouillon in 1990 and
CERELAC in 1991, followed by re-packing NIDO, NESCAFE and
.NESQUIK in 1991, 94 and 98 respectively
At the second plant constructed in 6th October, ice cream manufacturing
started in 1994. Since then, Nestl brands have increased in popularity,
offering generations of Egyptians a diverse range of food and beverage
.products catering to all life stages
More so, Nestl Egypt has maintained the same core values upheld by Henri
Nestle more than 140 years ago, by giving back to the Egyptian community
.and creating long-term sustainable value for the society in which it operates
Over its long history in the market, Nestle has grown to become a real office
serving Egypt, Libya and Sudan with more than 3000 employees in 9
business units and 3 factories dedicated to the manufacturing of dry goods,
.ice cream and water products
With over 100 years of shared history, Nestle remains committed to its
promise in fortifying the foundations of nutrition, health and wellness in
.Egypt

Questionnaire analysis

1. Age
18-25
26-40
Over 40

18-25

26-40

20
12
8

Over 40

The Majority of the sample 20 customers out of 40 in range 18-25

years and the minority of the sample over 40 years.

2. Gender

Male

25

Female

15

The majority of the gender 25 customers male and 15 customers

female.

3. How often do you consume Nestle products?

Daily

10

2-4 days a week

25

2-4 times monthly

The majority of the customers 25 out of 40 buy Nestle products 2-4 days
weekly and the minority 2-4 times monthly.

Which of the following brands of Nestle can you recall?

Kitkat
Nescafe

12
15

Nesquick
Maggie
Pure life (drinking water)

3
2
8

The majority of the customers will buy Nescafe again followed by

Kit-Kat, Pure life.
The minority of the customers will buy again Maggie and
Nesquick.

What do you think about Nestle products?

Very good
Good

25
8

Average
Poor
Very poor

5
1
1

The majority of the customers thinks the Nestle products are very
good 25 customers out of 40 customers.
The minority of the customers thinks that Nestle products poor 1
customer out of 40 and 1 customers think that Nestle products very
poor.

How satisfied are you with the QUALITY of Nestle products?

Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied

15
13

8
2
2

 It could be concluded that the majority of the customers very satisfied

from the quality of Nestle products.
The minority of the customers 2 out of 40 very dissatisfied from the
quality of Nestle products.

Do you think discount offer made by Nestle is beneficial for you?

Yes

30

No

10

 The majority of Nestle customers got beneficial from Nestle offers 30

customers out of 40.
The minority 10 customers out of 40 customers didn't get beneficial
from Nestle offers.

How satisfied are you with the promotions of Nestle products?

Very satisfied
Satisfied
Neutral

18
12

Dissatisfied
Very dissatisfied

3
2

The majority of Nestle customers 18 out of 40 very satisfied with

Nestle promotions.
The minority 2 customers out of 40 very dissatisfied with Nestle
promotions.

Conclusion

- The majority of Nestle customers use its products 2-4 days a week which
is means that Nestle products are very essential to every home especially for
women as the majority of our sample was women.
- The most important Nestle products to the customers was Nescafe, Kitkat,
Pure life (drinking water)
- The majority of Nestle customers were satisfied from its promotion and
also satisfied from the quality of the products.
- The most influential factors on consumer buying behavior according to our
sample:
1. Brand name
2. Quality
3. Price
4. Availability
5. Attractive package

Recommendation

Promotion plays an important role on improving consumer behavior

toward the product/service according to our surveys which distributed to 40
customers.
The company strategy to have a way in promotion that is a very
important method to attract customers by knowing how they feel
about it.
Nestle achieved most of their goal in the categories from 18 to 25. But they
need to be more creative and updated because the consumer always looking
for new thing.
And they have to find another ways to reach for the category of over 40
years old because we discovered in the survey that they arent that satisfied.

Interview analysis held with Mr. Jimmy Bassily dated

21.05.2013

According to our interview with Mr. Jimmy Bassily, he stated that the
objective of Nestle is For Nestle overall, the vision is to be the recognized
Nutrition Health and Wellness company in Egypt.
When we asked him about their promotion strategy the answer was:
We use promotions to generate hype and increase demand in certain
occasion, for example in sham el Neseem the trade and the consumer always
wait for the exciting ice cream promotions and gifts in the beginning of the
ice cream season.
When we asked him why customers prefer youre offering versus that
offering by the competitors the answer was:
Nestle is a name that is synonymous with quality. We ensure in every
product that we produce that our consumer will find a top quality, healthy
and fresh product. Also the strength of our brands and their emotional link
with the consumer helps the consumer to favor our products.
When we asked which companies pose the greatest threat
For ice cream, the main competitor is Ice Man, which is a Syrian company
operating in Egypt. They compete in terms of distribution but to date they
have not done enough communication to build differentiated brands.

When we asked what improvements can Nestle make to its offers to

better meet customer needs?

The Egyptian market is a big market and still is filled with opportunities; we
think we can improve by widening our distribution and enhancing our
product range availability.

When we asked which promotional tools are more effective for Nestle?
Why?
When discussing effectiveness on the bigger scale, first of all the product
and the brand proposition has to perfectly strike a chord with the consumer.
Communication is a key driver to build a profound relationship and generate
a loyal consumer. All the other methods mentioned above should be used
and mixed evenly according to what the situation needs. But no method of
the above could be ignored.

Conclusion
We found that sales promotion is important for manufacturers
for the following reasons:
i. It helps to increase sales in a competitive market and thus,
increases profits.
ii. It helps to introduce new products in the market by drawing the
attention of potential customers.
iii. When a new product is introduced or there is a change of
fashion or taste of consumers, existing stocks can be quickly
disposed off.
iv. It stabilizes sales volume by keeping its consumers with them.
In the age of competition it is quite much possible that a customer
may change his/her mind and try other brands. Various incentives
under sales promotion schemes help to retain the customers.
Sales promotion is important for consumers because:
i. The consumers get the product at a cheaper rate
ii. It gives financial benefit to the customers by way of providing
prizes and sending them to visit different places.
iii. The consumer gets all information about the quality, features
and uses of different products.
iv. Certain schemes like money back offers create confidence in the
mind of customers about the quality of goods and in the market
.Use such goods improves their image in society.

References:

http://www.nios.ac.in/Secbuscour/24.pdf

http://www.davedolak.com/promo.htm

http://drypen.in/sales-promotion/advantages-of-salespromotion.html

http://drypen.in/sales-promotion/disadvantages-ofsales-promotion.html

http://sceco.univ-poitiers.fr/IP2006/W9K_halarescu.pdf

Online database:
AUC library
Emerald insight

Appendix