The Impact of Sales Promotional tools On Credit Card Holders

Purchase Decision.
(With Special Reference to Bank of Ceylon Credit Card)

CHAPTER ONE

INTRODUCTION
1.1 Background of the study
Bank of Ceylon is the largest and first state owned commercial bank in Sri Lanka established
under the Bank of Ceylon Ordinance No 50. It has a proud history over 70 years. It is the no 01
Bank in Sri Lanka and Bank of the nation. Bank of Ceylon was founded in 1939, with Sir
Ernest de Silva as its first Chairmen. SO ceremoniously open by Sir Andrew Caldecott the
governor of Ceylon on the 1st August 1939 at the city office premises located in Fort Colombo.
Bank of Ceylon first branch was opened in Kandy.
Bank always make adjustments to innovative focus, Service differentiation, diversification, cross
selling ability, government risk and control. Bank of Ceylon employees are done special
commitment their work environment.
The Merchant Bank of Sri Lanka Limited, the first Merchant Bank in Sri Lanka was set up by
Bank Of Ceylon in 1982. Bank of Ceylon achieved its three year corporate plan goals LKR one
trillion assets and LKR 10 billion profits by 2012, the highest number to be achieved in the Sri
Lankan Banking industry.2012 saw the first ever issuance of US Dollar denominated
international bonds were listed in the Singapore stock Exchange. The Bank celebrate its
Diamond Anniversary in 2014 and closed the year by setting an industrial benchmark profit of
LKR 20.3 billion
Bank of Ceylon Credit Card Center is one of the most important part of the Bank of Ceylon. In
collaborate with VISA international, the Bank of Ceylon introduced Ceybank Visa Credit Card in
1989 for the first time in Sri Lanka is now geared to introduce many innovative facilities in the
new millennium. Bank of Ceylon Credit Card is a convenient way of paying for purchasing
goods and obtaining services. It offers a selection of Credit Cards which are designed to pay for
things in shops or online. Also we can use Credit Card for Cash withdrawals from ATMs. Today,
competition is fierce with credit card service offering discount and other benefits to gain market
share. The Bank consciously limited its portfolio growth to avoid assets quality challenge seen in
the industry. However Bank of Ceylon Credit Card center sees potential for growth and has

invested in an enhanced security system, disaster recovery system and data mining system to
support future growth volumes.
Today Bank of Ceylon Credit Card Center Sales is higher than pastes years. Also a profit is high.
That reason is Credit card is new trend to customer purchasing Decision. There for Credit Card
transaction is most increase today. Then the customers know about products usage and benefits.
For these most effective tools is promotion. It includes element like advertising, sales promotion,
personal selling, public relation and direct marketing. It helps to conveying message about the
Service and product. Among the various promotional tools it has been that sales promotion is one
which stimulates quick and large purchases in a limited period of time. When we consider sales
promotion for Service sector, the different effects sales promotion can have on customer
purchasing decision are known as the possible sales promotion reaction. By the today, sales
promotion of the service sector huge effect to customer purchasing decision.

1.2 Research Problem

Shahriar Ansari chaharsoughi, defined The Impact of sales promotion on Customer Purchase
Decision. (Brassington and Pettitt 2000, p. 643)provide a revised definition for sales promotions
A range of marketing techniques designed within a strategic marketing framework to add extra
value to a product or service over and above the normal offering in order to achieve specific sales
and marketing objectives. This extra value may be a short term tactical nature or it may be part
of a longer term franchise building program.
Research shows that customers go through a five-stage decision-making process in any
purchases made. It is a process by which a consumer makes a decision on what to buy, what
quantity to buy, at what price with respect to the factors affecting consumer's attitude during the
procedure. These stages are respectively, Need recognition and problem awareness, Information
Search, Evaluation of Alternatives, purchase, post purchase evaluation (Jobber, 2001).
Sales Promotion is most vital tool for Promotional mix. Most researches have been done about
sales promotion. Their considered Sales promotion as combination of three types such as
consumer sales promotion, trade sales promotion or business sales promotion. Researchers have
been done for sales promotion for product and service. As well as there are number of factors
that influence the purchasing decision other than sales promotion such as price, quality personal
characteristics and so on.one of the purpose of a sales promotion is to elicit a direct impact on the
purchase behavior of the customer purchasing decision.
But in this study we consider about how to impact of sales promotion on customer purchasing
decision with special reference to Bank of Ceylon Credit Card.

According to the Bank of Ceylon annual report Fact and figures can get idea about increasing
Credit Card Sales is higher than pastes years. Also a profit is high. (2011 2014 Bank of Ceylon
annual report) That reason is Credit card is new trend to customer purchasing Decision. There for
Credit Card transaction is most increase today.

According to the 2014 Bank of Ceylon annual report, Bank of Ceylon Credit Card income,
Profit, Profit Growth rate respectively 190 LKR Million,103 LKR Million,48%. So income is
high because of customer interest to credit card purchase is high. That reason is promotion is
impact to purchase credit card.

(Bank of Ceylon annual report 2014)

According to 2014 Bank of Ceylon annual report, credit card transaction is high because of sales
promotion impact to Credit Card purchasing behavior.

1.3 Research Questions

Having gone through the study, following objective have been set with the hopes of
achieving the same.
1

Does Consumer Attention on sales promotion activities significantly effect for purchasing
decision of credit card?

2. Does Consumer interest on sales promotion activities significantly effect for purchasing
decision of credit card?
3. Does Consumer desire on sales promotion activities significantly effect for purchasing
decision of credit card?
4. Does Consumer action on sales promotion activities significantly effect for purchasing
decision of credit card ?

1.4 Research Objective

There are four main objective are identified in this research work
1. To identify the impact of Consumer attention on sales promotion activities purchase
decision of credit card
2. To identify the impact of Consumer interest on sales promotion activities purchase
decision of credit card
3. To identify the impact of Consumer desire on sales promotion activities purchase
decision of credit card
4. To identify the impact of Consumer action on sales promotion activities purchase
decision of credit card

1.5 Significant of the study

Study result gives information and findings about relationship or how sales promotion influence
to purchasing decision of customer with special reference to Bank of Ceylon Credit Card. So in
that Bank of Ceylon Credit Card Center can identifies how sales promotion impact of customer
purchasing decision of the Bank of Ceylon Credit card center can improve those qualities and
though that they can achieve customer satisfaction and objective of the organization.
This research finding also can be used in marketing perspective when planning the promotion
program and it gives more benefits to Bank of Ceylon Credit Card Center. It is very important to
the bank for plan the promotion campaigns. Finally researcher finding new suggestions the Bank
of Ceylon credit Card Center can be increasing their Sales

1.6 Model of the Research

AIDA Model

Marketing today is fiercely competitive and products despite having quality need support from
promotional team of the organization. AIDA however is an acronym to sales promotion that is
necessary to learn in marketing. Using a system like this, allows a general understanding of how
to target a market affectively. Moving step by step, AIDA model aims to affectively influence the

consumers. It proposes combination of promotional tools that help drawing consumers interest
and generate interest.
1. Attention where the consumer becomes aware of the product.
2. Interest where an interest in the product develops.
3. Desire Where the consumer has developed a sense of wanting the product.
4. Action where a purchase is made.
(Strong, 1925)
Source of AIDA model, Strong (1925

1.7 Research Hypothesis

H1 Consumer attention on sales promotion activities significantly effect on purchase decision
of Credit card
H0 Consumer attention on sales promotion activities does not have significantly effect on
purchase decision of Credit card
H2 Consumer interest on sales promotion activities significantly effect on purchase decision of
Credit card
H0 Consumer interest on sales promotion activities does not have significantly effect on
purchase decision of Credit card
H3Consumer desire on sales promotion activities significantly effect on purchase decision of
Credit card
H0 Consumer desire on sales promotion activities does not have significantly effect on
purchase decision of Credit card
H4Consumer action on sales promotion activities significantly effect on purchase decision of
Credit card
H0 Consumer action on sales promotion activities does not have significantly effect on
purchase decision of Credit card

1.8 Research Design

This is a quantitative study aimed at impact of sales promotion on customer purchasing decision.
The researcher used the cross sectional study design since this is best suited to studies aimed at
finding out the prevalence of a phenomenon, situation and problem by taking a cross section of
the total population. This is useful in obtaining an overall picture as it stands at the time of the
study. Research design includes the research context, methods of data collection, sample, sample
selection procedure, data processing scales, data presentation and analysis.

Research Context
The survey is going to be carried out in the context of banks in Sri Lanka. Because of researcher
hopes to collect details from respondents who are purchase Credit Card facilities by using Bank
of Ceylon.
Determination of Population and Sample
Population
Population of this study is the credit card holders in Sri Lanka, who are using Credit Card
Sample
The sample consisted of 150 units who are living in Western Province. The researcher used
convenience sampling method for this study.
Sampling Scale
In this research, researcher collects details from the sample by using questionnaire.
Types of Data
1. Secondary Data
Before going through the time and expense of collecting primary data, the researcher can check
for the secondary data that previously may have been collected for other purposes but that can be
used in this study. Therefore secondary data were collected through internet, websites of Bank of

Ceylon, Annual report of Bank of Ceylon, newspaper articles, previous research articles and
books.
2. Primary data
Since the secondary data may not fit the problem perfectly researcher had to collect primary data
for the study. It means primary data are the data freshly gathered for a specific purpose. The
researcher wishes to collect primary data through a survey. The questionnaires will distribute
among the 150 respondents or units of the sample to collect primary data for the study.
Data Collection Method
To collect primary data from respondents self administrated questionnaires will prepare and
hope to distribute among the 150 respondents of the sample. To prepare those questions
researcher used scales of measurements such as nominal scale, ordinary scale, and interval scale.
The main purpose of the questionnaire is to identify impact of sales promotion on Customer
purchasing decision

Data Presentation and Analysis Method

The analysis was done by using the package SPSS (Statistical Package for Social Science). The
measures of central tendency like arithmetic mean, median, mode and measures of dispersion
like standard deviation, variation and range used to describe the data. Factor analysis was utilized
to explore the impact of sales promotion on customer purchase decision.

1.10 Limitations of the study

1. Time frame/ Resources
Time frame for this study will be consisting of four months. Scope of this study was
selected based on this time frame.

2. Geographic location
The sample has been selected from the in western province Colombo area. Therefor the
finding of research will be based on the ideas of the above and the result could be
different if takes the sample from all island.
3. Narrow down the theoretical concept.
4ps are influence the customer purchase decision. Narrow down the concept and get the
sales promotional tool do the research and so easy to perform the research findings.

4. 4.The sample size limited only to 150 respondents, generalization of findings to the larger
population is harder
5. Obtaining accurate information from respondents is somewhat difficult since some
respondents hesitate to reveal their actual information.

6. The study is limited only to Western Province and therefore simplifying results to other
areas should be done carefully.

1.9 Proposed time schedule for the study

Month

December

January

February

March

Reference
Blattberg, Robert C. and Scott A. Neslin (1990), Sales Promotion, Concepts, Methods and
Strategies, Englewood Cliffs, New Jersey: Prentice Hall.
[2] Brassington, F. and Pettitt, S. (2000), Sales Promotion. In: Principles of Marketing, 2nd ed.,
FT Prentice Hall, Harlow, pp. 642-685
Dotson M. J. Hyatt, Eva, Sales Promotion Preferences : A
Demographic Analysis, Society for Marketing Advances,
1(4), 123-131 (2012)