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A PROJECT REPORT
Col. K. Guruswamy
______________________________
Submitted by
JITENDER SINGH
Registration No. - 520834708
______________________________
Of
MBA IN
[Marketing]
ACKNOWLEDGEMENT
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This project means a lot to Me & I had done a lot of ground work and this
acknowledgement is not merely a list of names but an expression of deep sense of
gratitude to all those who have helped in the successful completion of the project.
During the course of this project I have had the privilege to work with many
distinguished people and the opportunity to learn many things from them.
JITENDER SINGH
520834708
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BONAFIDE CERTIFICATE
Certified that this project report titled “An Empirical study on impact of
advertising Vs Sales Promotion in consumers buying behavior”
is the bonafide work of “Jitender Singh” who carried out the project work
under my supervision.
SIGNATURE SIGNATURE
CHARGE
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Table of content
I. Executive Summary…………………………………………………06
II. Introduction…………………………………………………………07
iv. Advertising
v. AIDA model
i. Objective.........................................................................21
ii. Hypothesis.......................................................................22
v. Sources of Data................................................................27
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IV. Research Method…………………………………………………...29
V. Procedure……………………………………………………………31
i. Hypothesis Testing...........................................................34
IX. Conclusion.....................................................................................40
X. Implications………………………………………………………...........43
XI Abstract…………………………………………………………………44
XII Annexure………………………………………………………………46
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EXECUTIVE SUMMARY
The report is based upon the impact of advertising as well as sales promotion in
the consumer buying behavior. The main objective of this research was to compare
efficacy of Product Advertising and Sales promotion on Consumer Buying
Decision.
In accomplishing the objectivity, market visits and interactions were made with the
consumer that included variety of consumers and accordingly tried to analyze the
consumer buying behavior. Various conclusions which came up with such as
Advertising and Sales Promotion play an important role. The Age factor plays a
significant role for the selection of products from advertising and sales promotion.
But the impact of sales promotion is more because they interact with the product
more in this. Hence the touch and feel of product is very important in Indian
market. Otherwise people do not buy the products. All these factors led me to
conclude that the Sales promotion and advertising are not affective at some
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purchase stages. The study should be extended to different product categories in
fast moving consumer durables. The study will be conclusive if Fast Moving
Consumer Goods (FMCG) consumers are also considered for study. The profiles
of the respondents, the geographic, demographic or psychographic are to be
considered for further studies.
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INTRODUCTION
Companies always try to establish the contact with target market. This is a
prestigious status for company to address the customers. Company wanted to
enhance its image in the minds of common man so that in future, whenever it
would be visited to customer court; it would be having enough matter to
communicate the customers. The company presents it's history products history
and even national history. Companies have these processes in all continuance and
consistency. Promotion is a term, which means the moving from one end to
another. In marketing, promotion means all those took that a marketer uses to take
his product from the factory to the customers and it involves the advertising sales
promotion, personal selling, public relations, publicity and merchandising.
Promotions are result oriented. Promotion system works with proper
communication system. This has sender, receivers and feedback system. Feedback
is form of action which customer gives bark to the company about product,
advertisement or strategy.
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The ultimate expectation of the company is to make the people for purchase of
product. The sales promotion and advertising functions and stimulate the customer
purchase decision in accordance with this model. Present research paper will
examine the comparative effectiveness issue of Sales promotion and advertising
measures.
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Marketing mix
Direct
Personal Sales
Advertising Publicity
selling promotion
Marketing
Definition:
Your marketing mix is the combination of the elements of marketing and what
roles each element plays in promoting your products and services and delivering
those products and services to your customers.
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The elements of the marketing mix are also referred to as the 5 P's of
marketing. For years marketers referred to the 4 P's of marketing. Only recently
has a 5th P been added. Whether you subscribe to the theory that there are four P's
or five P's of marketing, this is essentially referred to as your "marketing mix".
The original 4 P's of marketing (although they have been renamed a bit over the
years) that were the elements of marketing mix is:
Advertising
Personal selling
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Sales promotion.
Direct marketing.
Publicity.
Some marketing theorists have added a 5th P of marketing to the elements of the
marketing mix: People
When referred to as an element in the marketing mix, this 5th P refers to how your
level of service and the expertise and skills of the people who work for you can be
used to set you apart from your competitors.
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Advertising v/s Sales Promotion
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THE COMMUNICATION PROCESS
Modern marketing calls for more than developing a good product, pricing it
attractively and making it accessible to target customers. Companies must also
communicate with their present and potential customers. Every company is
inevitably cast into the role of communicator and promoter. What is
communicated, however, should not be left to change. To communicate
effectively, companies hire advertising agencies to develop effective ads; sales
promotion specialists to design sales incentive programs and public relations firms
to develop the corporate image. They train their sales people to be friendly and
knowledgeable. For most companies, the questions are not whether to
communicate but rather what to say, to whom, and how often. A modern company
manages a complex marketing communications system. The company
communicates with its middlemen, consumers and various publics. Its middlemen
communicate with their consumers and various publics.
The marketing communication mix (also called the promotion mix) consists of
four major tools:
• Advertising. Any paid form of non personal presentation and promotion of
ideals, goods or services by an identified sponsor.
• Sales Promotion. Short-term incentives to encourage purchase or sale of a
product or service.
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• Publicity. Non personal stimulation of demand for a product, service or
business unit by planting commercially significant news about it in a published
medium or obtaining favorable presentation of it upon radio, television or stage
that is not paid for by the sponsor.
• Personal Selling. Oral presentation in a conversation with one or more
prospective purchasers or the purpose of making sales.
Over the years, a communication model with nine elements has evolved, that
shown in figure 8. Two elements represent the major parties in a communication
sender and receiver. Another two represent the major communication tools
message and media. Four represent major communication functions encoding,
decoding, response and feedback .The last element represents noise in the system.
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Commun
Sender Encoding
These elements are defined as follows:
• Sender. The party sending the message to another party (also called the
source of communicator).
• Encoding. The process of putting thought into symbolic form.
• Message. The set of symbols that the sender transmits.
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• Media. The communication channels thought which the Message moves
from sender to receiver.
• RECEIVERS. The party receiving the message sent by another party (also
called the audience or destination).
• Response. The set of reactions that the receiver has after being exposed to
the message.
• Feedback. The part of the receiver's response that the receiver
communicates back to the sender.
• Noise. Unplanned static or distortion during the communication process,
resulting in the receiver's receiving a different message than the sender sent.
SALES PROMOTION
INTRODUCTION
Sales promotion is one of the most loosely used terms in the marketing vocabulary.
We define sales promotion as demand. Stimulating devices designed to
supplement advertising and facilitate personal selling. In other words, sales
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promotion signifies all those activities that supplement, co-ordinate and make the
efforts of personal selling and advertising more effective. It is non recurrent in
nature which means it can’t be used continuously.
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The basic objectives of sales promotion are:
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Competitive Pressure: - If competitors offer buyers price reductions, contest or
other incentives, a firm may feel forced to retaliate with its own sales promotions.
Buyers’ expectations: - Once they are offered purchase incentives, consumers and
channel members get used to them and soon begin expecting them.
Low quality of retail selling: - Many retailers use inadequately trained sales
clerks or has switched to self service. For these outlets, sales promotion devices
such as product displays and samples often are the only effective promotional tools
available at the point of purchase.
ADVERTISING
INTRODUCTION
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Adverting is only one element of the promotion mix, but it often considered
prominent in the overall marketing mix design. Its high visibility and
pervasiveness made it as an important social and encomia topic in Indian society.
Concept of Advertising
Definition of Advertising
The word advertising originates from a Latin word advertise, which means to turn
to. The dictionary meaning of the term is “to give public notice or to announce
publicly”. Advertising may be defined as the process of buying sponsor-identified
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Media space or time in order to promote a product or an idea. The American
Marketing Association, Chicago, has defined advertising as “any form of non-
personal presentation or promotion of ideas, goods or services, by an identified
sponsor.”
(i) To stimulate sales amongst present, former and future consumers. It involves a
decision regarding the media, e.g., TV rather than print.
(iii) To retain the loyalty of present and former consumers. Advertising may be
used to reassure buyers that they have made the best purchase, thus building
loyalty to the brand name or the firm.
(iv) To increase support. Advertising impliedly bolsters the morale of the sales
force and of distributors, wholesalers, and retailers;it thus contributes to
enthusiasts and confidence attitude in the organizational. :
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There are three goals of advertising. These goals are to: Inform, Persuade, and
Remind.
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The AIDA Model
AIDA The selling process, originally conceived as a guide for the creator of good
advertising copy, is called AIDA. Shoppers are at some point in this selling
process when they enter the store. Salespeople who can recognize at which step of
the process the customer is when they meet him can accurately classify the
customer and use the information to help make the sale.
Consider the three basic types of customers and at what step they are in the selling
process.
Action -- Customers who know what they want are at the action step of the selling
process. These customers have given some thought to what they want and can
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request a particular type of merchandise or service. The salesperson's chief task is
to get the merchandise to the customer or to supply the service along with some
information.
Desire -- Customers who know they have a need for merchandise show both an
interest and a desire. This person is looking for something but is not sure what. It is
up to the salesperson to help the customer toward the action step by turning the
interest in merchandise to an actual desire to purchase the item. The salesperson
should demonstrate the merchandise and explain the benefits and features. This
person has many open options. The salesperson must discover them and fill the
needs.
Attention -- Customers who do not know if they want or need any merchandise
are at the attention state of the selling process. This group of "lookers" or
"shoppers" presents a real challenge to the salesperson. They need to be introduced
to the selling process. Talking with these customers may trigger a momentarily
forgotten need for merchandise.
Attention, interest, desire and action. Find out where the customer is in the selling
process, and then begin your job of selling from there.
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CONSUMER BUYING BEHAVIOR
Buying Behavior is the decision processes and acts of people involved in buying
and using products. Consumer Buying Behavior refers to the buying behavior of
the ultimate consumer.
A firm needs to analyze buying behavior for:
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1. Problem Recognition (awareness of need)—It is the difference between
the desired state and the actual condition. It represents deficit in assortment
of products.
2. Information search : this can be of two types external or internal as follows
o Internal search on the basis of your memory.
o External search if you need more information. Friends and relatives
(word of mouth), public sources etc.
3. Evaluation of Alternatives--need to establish criteria for evaluation,
features the buyer wants or does not want. Rank/weight alternatives or
resume search. 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 can be Satisfaction or Dissatisfaction.
Cognitive Dissonance, have you made the right decision. This can be
reduced by warranties, after sales communication
1. Personal
2. Psychological
3. Social
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Personal:- These are the reasons which are unique to a particular person. Some of
them are
Demographic Factors
Sex
Race
Age
• Motives--
• Perception--
• Attitudes--
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screen information that conflicts with their attitudes. Distort information to
make it consistent and selectively retain information that reinforces our
attitudes. There is a difference between attitude and intention to buy (ability
to buy).
• Personality—
All the internal traits and behaviors that make a person unique, uniqueness
arrives from a person's heredity and personal experience. Examples include:
o Work holism
o Compulsiveness
o Self confidence
o Friendliness
o Adaptability
o Ambitiousness
o Dogmatism
o Authoritarianism.
Traits affect the way people behave. Marketers try to match the store image to the
perceived image of their customers. There is a weak association between
personality and Buying Behavior; this may be due to unreliable measures.
Consumers buy products that are consistent with their self concept.
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• Opinion leaders--
Family is the most basic group a person belongs to. Marketers must
understand:
Culture refers to the set of values, ideas, and attitudes that are accepted by a
homogenous group of people and transmitted to the next generation. Culture
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also determines what is acceptable with product advertising. Culture
determines what people wear, eat, reside and travel. Cultural values in the
US are good health, education, individualism and freedom
o Geographic regions
o Human characteristics such as age and ethnic background.
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OBJECTIVES
The Dissertation Report will highlight the effectiveness and applicability factors of
sales promotion and advertisement techniques. The research study is of empirical
in nature. It has the following objectives:
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HYPOTHESIS
Hypothesis testing for this report has evolved around formulating a null
hypothesis and an alternative hypothesis as regards to the difference in the
customer acquisition by both Advertising and Sales promotion.
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RESEARCH DESIGN
The research design will help in the arrangement of conditions for collection and
analysis of datas as it is a conceptual structure which depicts the advance planning
of the methods to be adopted for collecting datas and the techniques used in the
analysis, keeping in view the objective of the dissertation.
1
Research type: Quantitative marketing Research
Tape of Data: Primary
Data Analysis: Descriptive analysis through Chi-square Test.
Sources of Data: Personal Interview, Mailing Questionnaire
Research Design focuses primarily on providing help with the tool and techniques
used in research process. These tools and techniques differ from discipline to
discipline. The Research design was a blend of descriptive and exploratory
research design. The respondents have been selected through random sampling
method. The customers have been presented with an advertising campaign and
sales promotion schemes.
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RESEARCH METHODOLOGY
The Research exercise has been accomplished with the sample size of 50
customers and few retailers. The questionnaire method was applied for this
exercise. The Research design was a blend of descriptive and exploratory research
design. The respondents have been selected through Random sampling method.
The research study has investigated the effect of advertising Vs Sales Promotion
in both test marketing stage and post launch stage. The study involved a field
survey conducted across different malls in the NCR regions. The respondents
were approached at the web sight of www.survey.com. And also by interviewing
the customer. The statistical tools were run using Statistical Package for Social
Sciences (SPSS) and MS Excel to get inferences.
In primary data collection, you collect the data yourself using methods such as
interviews and questionnaires. The key point here is that the data you collect is
unique to you and your research and, until you publish, no one else has access to it.
There are many methods of collecting primary data and the main methods include:
• questionnaires
• interviews
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• focus group interviews
• observation
• case-studies
• diaries
• critical incidents
• portfolios.
SOURCES OF DATA
There are two main sources of data collection i.e. through Primary data collection
or Secondary data collection method. I have adopted Primary data collection
method for the survey. Under this method the method of survey was best suited
with my sample size and the requirement of data.
The respondents included retailers from different malls and Surveys included:
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• Mailing of Questionnaires: The researcher and respondents do not
come in contact with each other if this method of survey is adopted.
Questionnaires are mailed to the respondents with a request to return
after completing the same.
Through these methods survey was done and the required data was collected from
the respondents. Respondents were not easy to tackle as many of them sounded
uninterested in even listening to me. I collected the required information from the
respondents depending upon their reaction only.
SAMPLING OF RESPONDENT
Survey sampling
Random Sampling
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Sampling can be defined as a part of population. Thus random sampling may be
defined as the selection of a portion from the whole population in which each
elements of the population has an equal chance of being selected. A more please
definition is that each element in the population has a non-zero and known
probability of selection a randomly drawn sample is an unbiased sample. In this
research survey 50 people were surveyed at random to get the relevant information
The most elementary methodology is called simple random sampling. Most of the
theory of statistics assumes this kind of sampling unless otherwise noted. In theory
it ensures that all subsets of the population are given a balanced probability of
selection.
The possibility of very expensive or very a typical sample has led to a variety of
modifications such as stratified sampling, cluster sampling, and multistage
sampling.
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INSTRUMENT USED
Questionnaires have advantages over some other types of surveys in that they are
cheap, do not require as much effort from the questioner as verbal or telephone
surveys, and often have standardized answers that make it simple to compile data.
However, such standardized answers may frustrate users. Questionnaires are also
sharply limited by the fact that respondents must be able to read the questions and
respond to them. Thus, for some demographic groups conducting a survey by
questionnaire may not be practical.
As a type of survey, questionnaires also have many of the same problems relating
to question construction and wording that exist in other types of opinion polls.
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• Ensure that answer categories match with what the respondents have to say.
• Ensure that the questionnaire achieves the research objectives.
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The dissertation project is carried out in various phases since the project is
exploratory in nature and the data collected for the analysis is collected from
primary research. The research work is carried out in two phases:
FIRST PHASE
In the first phase, I collected the primary data from the customers with the help of
a questionnaire. The questionnaire was filled by a sample size of 50 respondents.
After the questionnaire being filled, the null hypothesis made was tested using the
Chi-Square test. As per the Chi-Square test the null hypothesis was accepted and it
was found that the effectiveness of sales promotion plays an important role in the
consumers buying behavior.
SECOND PHASE
In the second phase, I have given the briefings about the hypothesis testing from
both the primary sources i.e. through questionnaires and through the secondary
sources like Internet. In this phase I have done the research and analysis of the
responses. At the end I have drawn a conclusion on the basis of my analysis of the
data collected from primary as well as secondary sources
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HYPOTHESIS TESTING
FORMULATE A HYPOTHESIS
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“Effectiveness of sales promotion plays an important role on consumers
buying behavior”.
For our calculations, we take the significance level of: 5 per cent.
Chi Square
Observed Table:
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Female 13 5 02 20
49 35 16 100(Total)
Expected Table:-
39.2 28 12.8
9.8 7 3.2
Calculation:
O E (O-E) (O-E)^2 (O-E)^2/E
36 39.2 -3.2 10.24 .2612
30 28 2 4 .142
14 12.8 1.2 1.44 .1125
13 9.8 3.2 10.24 1.0489
5 7 -2 4 .5714
2 3.2 -1.2 1.44 .45
2.58
The last step in hypothesis testing is to draw a statistical decision, involving the
acceptance or rejection of hypothesis. This will depend upon whether the
computed value of the test criterion falls in the region of acceptance or in the
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region of rejection at a given level of significance. It may be noted that the
statement rejecting the hypothesis is much stronger than the statement accepting
the hypothesis.
In our calculations: The calculated value of is LESSER than the table value.
So, the hypothesis is ACCEPTED i.e. effectiveness of sales promotion plays an
important role on consumers buying behavior.
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RESULT ANALYSIS
The age factor was an important issue. The age wise variations have been
highlighted in the research process. The age factor has become a factor for the
comparative analysis of advertising and sales promotions.
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SALES PROMOTION
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ADVERTISING
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The perception is in effective stage. Female have 77% as a heavy perceived mind
with the selection of consumer durable. The Non-affected stage is also very high in
this regard.
Perceived Sex
Status Male Female
Heavy 23% 77%
Moderate 55% 45%
Non affected 35% 65%
Sex
Perceived Status
Male Female
Heavy 44% 56%
Moderate 36% 64%
Non affected 40% 60%
Advertising presents the perceived state of mind of the consumers. It affects the
Male and Female in the different propositions.
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INTERPRETATION: the data interpretation is that after the survey it was
observed that most of the people get exited by the following sales promotional
tools. And they take advantage of this activity in following proportion.
Coupons 10%
Discounts and sales 30%
contests 15%
Point of purchase displays. 20%
Rebates. 25%
.
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LIMITATION
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CONCLUSION
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RECOMMENDATIONS
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IMPLICATIONS
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ABSTRACT
If consumers try it, buy it and interact with it, they will engage more with a brand
than seeing an advertisement about it. Experience of a brand equals interaction,
and promotions force this interaction between the consumer and a brand, and
hence sit at the heart of the interaction that forges reputation. Sales promotion can
be used both for shaping of new behavior as well as reinforcing existing behavior.
Monetary promotions like price-off are primarily evaluated by a consumer on
utilitarian benefits like savings in time and money, convenience and quality. While
value added promotions like contests, premiums provide both utilitarian as well as
hedonic benefits like value expression, entertainment and exploration. An intense
AIDA model needs to be adopted the AIDA model (Awareness, Internet, Desire,
and Action). Customers are aware of majority of products brand.
Research Question
This research was done among 50 respondents. And it has been observed that all
the respondent where buying the product with the influence of sales promotion.
Advertising helps in giving information about the product but sales promotion
makes the buyer to purchase the product.
Methodology
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To prove the hypotheses, exploratory research was used and data was collected
from Primary sources with the help of Questionnaires and Secondary sources like
white papers/case studies/journals of various industries.
Conclusion
Now a days sales promotion’s impact is more than the others because customers
are very smart and they value money. Sales promotion is a most important aspect
for any company, and the impact of sales promotion is more because in this the
people interact with the product more.
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REFERENCES
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QUESTIONNAIRE
Personal profile:
Name:_________________________________
Occupation:_____________________________
Age:___________________________________
Sex:___________________________________
Q.1 what you feel is the best medium for advertising which leave impact in your
mind.
Television
Newspaper
Hoardings
Pamphlets
Others
Q.2 Do you take the advantage of promotional activity which is given below.
Coupons
Discounts and sales
contests
Point of purchase displays.
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Rebates.
Q.3 Have you bought anything which was beyond your choice but you
purchased that only because advertisement has influenced you a lot.
Yes
No , If yes then kindly specify the name of product __________
Q.4 Have purchase anything whose ads you never saw but the promotion of that
produt has attracted you and you bought that particular product
Yes
No . If yes then how frequent _____________________________
Yes
No
Q.6 when you go to buy a product what makes your mind to buy a product.
Q.7 which is the best advertisement you found. Did you buy that product?
______________________________________________________________
Q.8 which is the most attractive offer you get when you were planning to buy a
significant product. Please mention that.
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_______________________________________________________________
Q.9 which brand you like the most due to advertising of that brand? Specify.
______________________________________________________________
Q.10. Do you waits to buy certain product for the discount. And you take
advantage of discount seasons?
Yes
No
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APPENDICES
The survey questionnaire was filled by the people of Delhi and NCR, by on-
line procedure as well as personal meeting and face to face interaction. They
are from various places of India.
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16 Mr. C.P. Singh 9810848159 E-2, Metro Enclave,
17 Mr. Vikash Rawat 9910484389 PushVihar ,New Delhi-
110017, India
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27 Miss. Suiti Mittal 9212038937 H-4, Metro Enclave,
DMRC
28 Mr. M.C. Gupta 9810160154 Metro Enclave, DMRC
shahadra
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39 Mr. Atul Gadgil 9818313973 Raghu nager
New Delhi-110087,
India
40 Mr. Yashpal Mehta 9810848117 uttam nager
New Delhi-110016,
India
41 Avinash 09818848827 Dwarka New Delhi
42 Babla 9911269900 Raghu nager-45
43 Bunti 09312385921 Raghu-nager
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Results for: Sales promotion vs Advertising Effectiveness Survey
Q.1 what you feel is the best medium for advertising which leave impact in your
mind.
Television _____
Newspaper ____
Hoardings ____
Pamphlets _____
Others ____
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Discounts and sales
contests
Point of purchase displays.
Rebates.
Q.3 Have you bought anything which was beyond your choice but you purchased
that only because advertisement has influenced you a lot.
Yes
No
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Q.4 Have purchase anything whose ads you never saw but the promotion of that
produt has attracted you and you bought that particular product
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Q.5 Do you take advantage of promotional activity such as discount.
Yes
No ________
Q.6 when you go to buy a product what makes your mind to buy a product.The
advertisement of product __ 29%
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Q.10. Do you waits to buy certain product for the discount. And you take
advantage of discount seasons? Yes _________ No __________
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