CHAPTER 2
LITERATURE REVIEW
In this chapter, the author introduces the theoretical foundations of this research. The
author would provide definitions and understanding of each variable used in this
research. This chapter would also provide a detailed analysis of the hypothesis and
findings acquired from academic researchers in the past. In the end the author would
present the theoretical framework which consists of the entire hypothesis in order to
provide a clear image of this research.
2.1 Theoretical Foundation
2.1.1 Promotion and the Marketing Mix
The concept of marketing mix was developed by McCarthy in 1964 whereby it
serves as platform for marketers to transform the marketing plan into action (Bennett,
1997). Most companies rely on the concept of marketing mix as a principle in
developing their product offerings to meet consumer needs and satisfaction as well as
achieving its company’s goals. (Goi, 2009). The marketing mix could be used by
companies to form long term strategic plans and short term tactical plans (Palmer,
2004). The marketing mix consists of 4 components or commonly referred as the
4P’s. They include the product, price, place and promotion.
The product comprises of characteristics and specifications of a particular product
such as size, features, product name, etc. The price consists of the pricing techniques
and value analysis in which the company would offer to consumers. This includes
analysis of the price points for sales, discounts or rebates, price sensitivity of
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