Overview of retail


Retailing includes all the activities involved in selling goods and services directly to final consumers for personal, non-business use. A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing. Any organization selling to final consumers whether it is a manufacturer, wholesaler or retailer is doing retailing. It does not matter how the goods or services are sold by person, mail, telephone, vending machine, or internet or where they are sold in a store, on the street, or in the consumer's home. Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. "retailer" buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like power. Shops may be on residential streets, shopping streets with few or no houses or in a shopping mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. Online retailing, a type of electronic commerce used for business-to-consumer (B2C) transactions and mail order, are forms of non-shop retailing. Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing sometimes it is done as a recreational activity. Recreational shopping often involves window shopping just looking, not buying and browsing and does not always result in a purchase.

Types of retailers

Consumers today can shop for goods and services in a wide variety of retail organizations. These are store retailers, non-store retailers, and retail organization. Perhaps the best - known type of retailer is the departmental store. Retail - store types pass through stages of growth and decline that can be described as the retail life cycle. A type emerges, enjoys a period of accelerated growth, reaches maturity, and then declines. Levels of service Conventional retail stores typically increase their services and raise their prices to cover the costs. These higher costs provide an opportunity for new store forms to offer lower prices and less service. New store types meet widely different consumer preferences for service levels and specific services. Retailers can position themselves as offering one of the four levels of following services.

Four levels of services.

  1. Self Service: Self service is the cornerstone of all discounts operations. Many customers are willing to carry out their own locate compare select process to save money.
  2. Self selection : Customers find their own goods, although they can ask for assistance.
  3. Limited service : These retailers carry more shopping goods, and customers need more information and assistance. The stores also offer services such as credit and merchandise return privileges.
  4. Full service : Salespeople are ready to assist in every phase of the locate-compare-select process. Customers who like to be waited on prefer this type of store. The high staffing cost, along with the higher proportion of specially goods and slower-moving items and the many services, results in high-cost retailing.

Non-store retailing falls into four major categories :

  1. Direct selling: direct selling is also called multi-level selling or network marketing. Well known one-to-one selling is AVON, Electrolux etc. In one-to-many, a salesperson goes to the home of a host who has invited friends the salesperson demonstrates the products and takes orders. Pioneered by Amway, the multilevel marketing sales system consist of recruiting independent businesspeople who act as distributors. The distributors' compensation includes a percentage of sales of those the distributors recruits as well as earnings on direct sales to customers. These direct selling firms, now finding fewer consumers at home, are developing multi-distribution strategies.
  2. Direct marketing: direct marketing has roots in direct mail and catalog marketing. It includes telemarketing, television direct-response marketing home shopping network, and electronic shopping (Amazon.com. Autobytel.com). Of these, electronic shopping experienced a major take off in the late 1990's as consumers.
  3. Automatic vending: automatic vending is used for a variety of merchandise, including impulse goods like cigarettes, soft drinks, coffee, candy, newspapers, magazines, and other products like hosiery, cosmetics, hot food etc.
  4. Buying service: buying service is a store less retailer serving a specific clientele usually employees of large organizations who are entitled to buy from a list of retailers that have agreed to give discounts in return for membership.

Trends in retailing

The retailers and manufacturers need to take into account, in planning competitive strategies.

  1. New retail forms and combinations.
  2. Growth of intertype competition.
  3. Growth of giant retailers.
  4. Growing investment in technology.
  5. Global presence of major retailers.
  6. Selling an experience, not just goods.
  7. Competition between store based and non-store based retailing.

How to run a marketing campaign for retail business?

There are five major steps. These are:

  1. Gather customer information.
  2. Target the "Right" customers.
  3. Create effective communication.
  4. Host an event.
  5. Follow up with guest.

Retail Marketing in India

Number of retailers India has sometimes been called a nation of shopkeepers. retailers has its roots in the huge number of retail enterprises in India, which totaled over 12 million n 2003. About 78% of these are small family businesses utilizing only household labor. Even among retail enterprises that employ hired workers, the bulk of them use less than three workers. India's retail sector appears backward not only by the standards of industrialized countries but also in comparison with several other emerging markets in Asia and elsewhere. There are only 14 companies that run department stores and two with hypermarkets. While the number of businesses operating supermarkets is higher (385 in 2003), most of these had only one outlet. The number of companies with supermarket chains was less than 10.

Retail sales

Retail sales, which amounted to about Rs.7, 400 billion in 2002, expanded at an average annual rate of 7% during 1999-2002. With the upturn in economic growth during 2003, retail sales are also expected to expand at a higher pace of nearly 10%. In a developing country like India, a large chunk of consumer expenditure is on basic necessities, especially food related items. Hence, it is not surprising that food, beverages and tobacco accounted for as much as 71% of retail sales in 2002. The remaining 29% of retail sales are non-food items. The share of food related items fell over the review period, down from 73% in 1999. This is to be expected as, with income growth, Indians, like consumers elsewhere, spent more on non-food items compared with food products. Sales through supermarkets and department stores are small compared with overall retail sales. However, their sales grew much more rapidly about 30% per year during the review period. As a result, their sales almost tripled during this time. This high acceleration in sales through modern retail formats is expected to continue during the next few years with the rapid growth in numbers of such outlets in response to consumer demand and business potential.

Government policy

There has been vigorous opposition to foreign direct investment (FDI) in retailing from small traders who fear that foreign retailing companies would take away their business, lead to the closure of many small trading businesses and result in considerable unemployment. Given the political clout of the small trading community, because of their enormous numbers, the government has barred FDI in retailing since 1997. Hence, at present, foreign retailers can only enter the retailing sector through franchising agreements.

Development of the retail sector in India

Given the traditional and underdeveloped state of the Indian retail sector, the organizational characteristics of retail enterprises are rudimentary. Most of them belong to independent enterprises in the form of small family businesses. Cooperatives have been present in India for several decades, spurred by the encouragement given by the Indian Government, which viewed the cooperative movement as an integral component of its erstwhile socialist policies. However, since the 1990s, there has been a reduction in government support for cooperatives. In 2002, there were about 35,000 outlets run by cooperatives. Economic liberalization, competition and foreign investment since the 1990s led to a proliferation of brands with both foreign and Indian companies acquiring a strong brand equity for their products. Hence, franchising emerged as a popular mode of retailing. Sales of franchises grew at a rapid pace of 14% per annum over the review period. In 2002, there were over 5,000 franchised outlets. The other major retailing organization format is multiples, better known as "chain stores" in India. In 2002, there were about 1,800 chain stores. Among the various organizational formats, sales of chain stores grew at the fastest pace, with sales growth during the review period averaging 24% per year.


Influenced by the new forms of advertising, the meaning of the commercial exchange altered fundamentally people paid money for product image and personality instead of product utility, as in earlier transactions. A combination of factors interacted to promote the mergence of product-image and product-personality advertising between the 1920's and the early 1950's. Among the most significant were technological innovations, especially photography and radio, the rise of parity products -- manufactured items so nearly identical that special efforts had to be exerted to discriminate one brand from the other -- and the beginnings of statistically-based audience demographics and market segmentation strategies.

The technological developments offered better opportunities for product presentation. Radio's sound transcended distance and time limitations in transmitting commercial messages. The realistic representations of photography conveyed images in ways that the older forms of illustrations could not. Advertisers used the possibilities of photography by intensifying the symbolic association between goods and the consumer's self-image. These possibilities in advertising stimulated the development of emotional, affective, or "mood" advertising. Under the influence of photography, facts about the product had to give way to product fictions, and utility became less important than fantasy. Likewise, marketers exploited the potential of radio by commercializing its content and revolutionizing advertising's form.

Products which were physically indistinguishable and were set apart only by their brand names still could differ in the image given to the product. A fictitious distinction, a belief, became a product attribute. Marketers began to differentiate goods less by describing the real or reputed character of the product itself and more by product imagery. Audience demographics and market segmentation strategies developed out of this urge to set the product apart. With data about prospective consumers including geography, social and psychological characteristics and buying behavior the advertiser could more easily reach distinct market segments with appropriate commercial messages.

All these factors distanced advertising from product information. Product identity and product identification became important, rather than the character and quality of the product itself. In the 1950's and 60's, notions of lifestyle also became increasingly important. Greater affluence and the popularity of television, among other things, made it easy for advertisers to promote the lifestyle ethic. Advertising told commercial stories that linked the individual to a social group or an economic class and associated products with the style of consumption of that group or class. The lifestyle format widened even more the gap between advertising, on one hand, and the utilitarian messages and their "reason-why" logic, on the other. Commercial television and refined demographic research strategies stimulated lifestyle advertising. Programs were delivered in a format suited for the sale of advertising blocks. Time became expensive when commercial television was the medium. The original one-minute commercial, replaced by the thirty-second one, became a fifteen-second flash because of rising costs. This had significant impact on the presentation little time was left for a reasoned argumentation, comparative analysis, or meaningful product information.

As a result of all this, changes have occurred in the way products are consumed. Today's advertising and consumer-culture have roots in the changing nature of the market in the late 19th century. Those changes paralleled changes in the modes of transportation and communication, urban growth and a cultural climate for social and geographical mobility. In the 1950's, people had more money and could afford to purchase more goods. Slowly the companies started to sell in a different way. From the selling concept, "Try to sell everything you produce without considering if there is any need for it", manufacturers came to use the marketing concept, "Discover and appeal to the existing needs and wants". But, only a small range of needs were appealed to. Many of the needs satisfied were environmentally wasteful, materialistic and short-term. Other needs were and still are un satisfied.

One more negative scholarly view of advertising is that there may be no use in studying the social and cultural effects of advertising alone. They are part of a larger system in which large conglomerates control our culture. One of their tools is advertising. This view certainly is correct in insisting that advertising must be studied in its proper context and as one influence interacting with many others. Advertising is a product of industrialized society. Since a coherent and viable economy today is largely dependent on mass industrialization, advertising will continue to be a factor in our lives.

But advertising is what we see and hear all day long. All conceivable media are filled with it. The study of the social and cultural effects of commercial advertising is in itself a negative one. Social and cultural effects are not the intended effects of advertising, because it is not designed to change social behavior or cultures.

Advertising functions only to sell products or ideas. Therefore, it is not surprising that this topic is not dealt with much in advertising textbooks, which stress "how-to-advertise". Social and cultural effects are by-products of advertising, but they are central to the interest of those who are fearful that advertising has too much influence on our view of the world. And it does. Exactly how advertising works on consumer's minds is still a matter for continuing research, but that it works cannot be denied.

Review of Literature

This study explored the effect of advertisement in sales of lifestyle, attitudes toward lifestyle merchandising, attitudes toward lifestyle advertising, and behavioral intention to purchase lifestyle products. In addition, consumer consumption characteristics, involvement and media preference for information concerning lifestyle brands were investigated. Although limited, previous studies of lifestyle merchandising and lifestyle advertising served as a foundation for this research.

Kowalski(1983) was founded renovating a Red Owl Country Store and differentiating itself from the discounters by adding value to the shopping experience. Kowalski's specializes in providing fresh bakery products, specialty meats, and organic and natural foods. To expand Kowalski's market area the traditional path has been to buy underperforming grocery stores and covert them into Kowalski's Markets, but in the past 7 years they have also built a couple of stores. In the first part of the analysis, GIS will be used to determine new potential store locations based on key demographic information from two of the most successful Kowalski's stores. The second part of the analysis will be to use the gravity model to determine the domestic market potential for each town.

Englis etal (1995) investigated lifestyle merchandising and advertising by examining how the media, merchandisers, and advertisers shape consumers' perceived realities regarding how others live. Television shows and advertisements in mass media were found to influence consumers' perceived reality of certain lifestyle categories. Consumers incorporate media depictions of these realities into their assumptions about how others live and what they consume, thus creating an aspired-to-lifestyle (Englis & Solomon, 1995). However, lifestyle merchandising is only successful if these depictions are meaningful and have symbolic value to the consumer.

Wu(2001) investigated consumers' degree of involvement and advertising effectiveness. The results of the study found that there was a positive correlation between a high degree of consumer involvement and high advertising effectiveness. Involvement as a catalyst for motivating consumers' attention and comprehension process was investigated by Celsi and Olson Findings of this study indicated that involvement was a motivator in consumers' attention and comprehension processes, and thus affected the specific meanings that are produced regarding products.

Kincade etal(2002) studied buyer seller relationship for promotional support in apparel sector which was critical for success. The purpose of the study was to describe the promotional activities offered to apparel retailers by manufactures. The study was trying to find out the retailers perceptions of the offering frequency and importance of the promotional support, and investigate the relationship between offering frequency and perceptions of importance. It was found that monetary support was regarded as the most important

Pand etal(2003) they studied the requirement for inducing a consumer to become a customer of an online store and increasing his/her switching cost is to reduce the cost of information search and to maximize the predictability of product quality by providing tailored information to consumers. Although the consumer may receive a tangible good at the end of the online transaction, the benefits to the consumer are not in the purchased good, which could have been obtained through alternative channels. Instead, the unique benefits to the consumer are in the performance of the online shopping transaction itself such as saved time, increased convenience and reduced risk of dissatisfaction.Thus,customer service and promotion are also critical in designing an online store promotional support.

Broad bridge etal(2002)emphasis was given to the fact that in an age of increasing competition from large scale organized grocery retailers, local shops need to have the commitment and willingness to cater to the local community for survival which means focusing more closely on local resident wants and need.

Knox etal(2003)they studied about the existence of week but significant relationship between the involvement and brand loyalty in grocery markets .they found the older consumer are very price- conscious, with an often exacting memory for the price of frequency purchased items necessitating food store to use frequent price reduction promotion, enjoy interaction and prefer to shop in a store where they can receive special assistance services such as valet parking, assistance, carry out assistance, liberal product return and refund policies

Mindranda etal(2005) they studied overall satisfaction with a store does not significantly customer loyalty to that store. And shopper intention to remain loyal to their primary store was in fact influenced by several other reason such as frequently buyer reward schemes, travel distance, preference for an in store delicatessen, size of the average grocery bill, store signage and the level of sale assistance.

Vyass(2005) found that72%of the respondents are deal prone in all income categories, more than 60%of the sample was found to be deal prone. In fact in higher income category,75% were found to be deal prone. Respondents were asked about their preference for price cut or value added promotions for the FMCG category.60% of the sample preferred price cut nature of promotions and the best preference was given to value added promotions.

Hyllegard etal(2005)they studied focused that specialty retailers success international markets is contingent upon their knowledge of culturally defined value, norms and behavior that influences consumer decision making and impacts acceptance of products and services. It was found that perception concerning quality, product assortment, quality of customer service etc differed from person to person.

Myer etal(2006) studied the impact of loyalty programmers on repeat purchase in the context of the French market. It was found that the loyalty programmer did not substantially change market structure, when all companies had loyalty programmer the market was characterized by an absence of change of the competitive situation.

Yaping (2007) Studied on the long term impact of loyalty programs purchase behavior and loyalty, it was found that consumer who were heavy buyers at the beginning of loyalty program were most likely to claim their qualified rewards, but program did not prompt them to change their purchase behavior. For lightly buyer, the loyalty program broadened their relationship with the firm into other business areas.

Purpose of Study

The purpose of this study was to provide insight into lifestyle concept as it relates to lifestyle merchandising and advertising of sales of lifestyle. In order to assess these perceptions, this study employed Ajzen and Fishbein's (1980) theory of reasoned action as a conceptual framework for investigating the effect that lifestyle orientation has on consumer attitudes toward lifestyle merchandising and lifestyle advertising. In addition, this study examined lifestyle orientation, attitudes toward lifestyle merchandising, and attitudes toward lifestyle advertising as predictors of behavioral intention to purchase lifestyle merchandising products.

Objectives of the study

  • To analyze the effect of advertisement in sales of lifestyle.
  • To examine the pattern of consumer choice in lifestyle merchandising.
  • To study various factor that influence the decision of consumer while choosing the retail format.

Research Methodology

Before explaining the data that should be gathered from the target, methodology of this research will be explained. The methodological choices reported in this study give us guidelines for the way we should gather required information for our research and analyzing matters. This method increases the possibility to receive appropriate answers to our research questions and helps to gain valuable conclusions. Likert scaling method that will be used in the questionnaire will be discussed and the path analysis that will be used in analyzing the data will be widely covered. In the final part, we will talk about validity and reliability tests that will be used to test the results.

Descriptive research

Descriptive research provides data about the population. It is a research conducted in order to explain any behavior in market. It could be done through using questionnaire. Descriptive research includes surveys, facts, finding and inquiries of different kinds. The major purpose for conducting this research would be to descriptively study the methods and techniques being in the lifestyles store. It was decided that a descriptive study using primary data would be appropriate to investigate the objectives. The instrument used to collect the data was questionnaire.

Sampling Design

The following factors are considered in the selection of selection of sample for the study:

Sample size: the study is intended to be conducted on the owner and the employees of the lifestyle outlets in the region. the study will be divided in to two different parts and in to two distinct sample that is for consumer and for employees of lifestyle and owner. The two parallel studies will conclude to find out the advertising methods beings used by lifestyles and reaction of advertisement in sale of lifestyle. The sample size for the respondents would be nearly 300. A sample is a part of the target population, carefully selected to represent the population. In this study, the sampling process must then give every person within the target population a known zero chance of selection if probability sampling is used (Cooper et al 2003, pp. 81).

Sample unit: In this research work sampling unit is all the empolyees, customers of the city they visit the lifestyle retail outlets.

Sampling Technique: Random sampling is used for the research. Randomly different respondent from different areas of jalandher and Chandigarh city those who have work in lifestyles outlets, are offered to fill the questionnaire .The responses of the employees are too be collected via the filling of the questionnaire.

Formulation of the hypothesis

These are objectives behind any study which one tries to fulfill through the research. This research study was also conducted to fulfill following objectives:

  1. H0- There is no significant difference in the effect of advertisement of lifestyle.
  2. H0: There is no significant difference in the pattern of consumer choice of lifestyle outlets.
  3. H0:There is no significant difference in source of information for choosing lifestyle outlets.

Source Of Data

There are two source of data collection first is primary data collection and secondary data. data collection processes, which create the need for follow-up procedure (Cooper et al 2003, pp. 147)

Primary data

Primary data is new data which is collected by researcher to do a particular research to find out the answer of research question. In this research primary data is gathering through questionnaire. The questionnaire is filled by the retail consumer from jalandher and Chandigarh.

Secondary data

Secondary data is the data which is collected for some other purpose or the data which is gathered by previous researches. This study includes the secondary data from article, books, data bases, and internet. This data is necessary part of the research especially in social sciences to value and compare primary data. Secondary data in shape of literature review is the guide lines for data analysis.

Research Design

Both qualitative and quantitative approaches are aimed at creating a better understanding of the society and to comprehend how individuals, groups and institutions act and have an influence on each other (Creswell 1994).

Qualitative study is designed to be consistent with the assumptions of a qualitative paradigm. The qualitative study is defined as an inquiry process understanding a social or human problem, based on building a complex, holistic picture, formed with words, reporting detailed views of informants, and conducted in a natural setting. In many qualitative studies a theory does not guide the study because those available are inadequate, incomplete, or simply missing (Creswell 1994).

A quantitative study, consistent with the quantitative paradigm, is an inquiry into a social or human problem, based on testing a theory composed of variables, measured with numbers, and analyzed with statistical procedures, in order to determine whether the predictive generalizations of the theory hold true (Creswell 1994). Quantitative research is most often used in studies with clearly stated hypotheses that can be tested. This deductive path makes a distinction between science and personal experience and tends to concentrate more on description, explanation, generalization, and abstraction. It focuses on well-defined, narrow studies. Quantitative research strives to use a consistent and logical approach toward what is being investigated and uses statistical inferences and mathematical techniques for processing the data (Ungar et al 1998).

This study as it is designed on the hypotheses to be tested. It will be measured by the questionnaire and the result are specified by the measuring the results from the distributed questionnaire. So we have to come to analyze the numeric data. Thus, it is mentioned as quantitative study.

Tools of data collection & analysis

The next step after collecting data, is analyzing with powerful statistical program. In this study, we have used SPSS (Afshini et al 2007), for the descriptive data. Techniques will used in analysis of data chi square and multidimensional scaling.


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