Most Nepalis Very Brand Loyal: Study

Nepali consumers are very brand loyal. Only 15 per cent of them are induced by promotional schemes and offers to change brands, according to Nepali Consumers' Response to Sales Promotion -- a study on Fast Moving Consumer Goods by Kathmandu University School of Management (Kusom).

"Promotional schemes and offers, however, help retain consumers," said Binod K Shrestha, associate professor at Kusom.

The story a decade ago was different. "Sales promotion used to be more effective and influential in getting people to switch brands, bringing almost 100 per cent results," he said adding that chances of consumers switching their brand due to sales promotion are now 15 per cent. "It could not build the brand image as well as it should have," said the associate professor.

Sales promotions also do not make consumers brand loyal as brand loyalty is related to quality of the brand, according to the study that was conducted in major shopping spots in the Kathmandu Valley. "Quality makes consumers repurchase goods," Prof Shrestha said. Sales promotion does not make consumers feel the quality of goods. "They will repurchase a brand with or without promotional schemes,"

he added. "Type of scheme also does not make any difference, though sales promotion and quality perception are interlinked."

The study that took three years to complete and was published recently, reveals that non-price sales promotion is better than pricebased sales promotion.

Non-price sales promotion like offering extra goods indicates that the offers increase consumers' favourable price perceptions. These price perceptions were more favourable when the sales promotions had premium gifts or extra products attached than when the prize-based promotions with scratch cards or lottery coupons, revealed the study.

"Product-based promotions with premium gifts and bonuses were more effective than the prize-based promotions and these programmes are more effective in rewarding loyal consumers than attracting new ones," Prof Shrestha added.