THE ROLE OF SALES PROMOTION ON CONSUMER BEHAVIOUR IN THE BEVERAGE INDUSTRY (A CASE STUDY OF NIGERIA BOTTLING COMPANY PLC)


Content

ABSTRACT

The Purpose of this research study is to examine the role of sales promotion on consumer behavior in the beverage industry using Nigerian Bottling Company Pic., as a case study.

 

The researcher made use of both primary and secondary sources of data collection which include the use of questionnaires to elicit information, and review of textbooks, journals, internet sources etc. Statistical tools such as frequency distribution, simple percentage tables and the Chi-Square (x2) were used to analyze the data received and test of hypotheses.

 

The findings in the hypotheses tested showed that; that inadequate knowledge of consumers' taste, behavior, and poor need identification affects sales promotion strategies, and that sales level will continue to increase as the level of promotional activities increases in the organization. Also, findings show that the level of resources available for executing sales promotional activities can eventually affect the success or otherwise of the sales promotion.

 

The researcher also made the following recommendations based on the findings; that Organizations should appreciate the importance of promotion on sales of their products; hence, they should have a well structured promotional strategy. The best combinations of promotional mix strategies that a company may use to achieve optimum sales were not identified. In fact, the research revealed that the combination of these strategies does not lead to low sales or otherwise. What matters most is the efficiency of resources needed for the promotion and the timing of the promotional activities.

 

Also, adequate knowledge of consumers taste, behaviour, and poor need identification which affects sales promotion strategies must be ensured before embarking on the sales promotion activities.


TABLE OF CONTENT

Title Page                                                                                                    i

Certification                                                                                                ii

Dedication                                                                                                  iii

Acknowledgement                                                                                      iv

Abstract                                                                                                      v

Table of Content                                                                                         vii

 

CHAPTER ONE:         INTRODUCTION

1.1     Background of the Study                                                                    1

1.2     Statement of the Problem                                                                    3

1.3     Objectives of the Study                                                                     4

1.4     Research Questions                                                                           4

1.5     Research Hypotheses                                                                        5

1.6     Significance of the Study                                                                    6

1.7     Scope of the Study                                                                             7

1.8     Limitations of the Study                                                                       7

1.9     Definitions of Term                                                                           8

 

CHAPTER TWO:  LITERATURE REVIEW

2.1     Conceptual Definition of Sales Promotion                                        10

2.2     Sales promotion Objectives                                                               12

2.3     The Importance of Sales Promotion                                                 14

2.4     Sales Promotion Tools                                                                      15

2.5     Major Sales Promotion Decisions                                                     20

2.6     Factors Affecting Sales Promotion Effectiveness                              22

2.7     Sales Promotion and Consumer Behavior                                        23

2.8     Factors influencing Use and Form of Sales Promotion                     25

 

CHAPTER THREE:  RESEARCH METHODOLOGY

3.1     Population and Sample Size                                                             28

3.2     Research Design                                                                                28

3.3     Data Collection Instrument                                                               29

3.4     Administration of Instrument                                                           30

3.5     Method of Data Analysis and Procedure                                          30

3.6     Restatement of Hypotheses                                                              31

3.7     Validity of Research Instrument                                                       32

 

CHAPTER FOUR:  DATA PRESENTATION AND ANALYSIS

4.1     Introduction                                                                                    33

4.2     Analysis of Personal Data of Respondents                                       34

4.3     Analysis of Data form Questionnaire                                                37

4.4     Test of Hypotheses                                                                         46

 

CHAPTER FIVE:  SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1     Summary                                                                                          56

5.2     Conclusion                                                                                        58

5.3     Recommendation                                                                              58

5.4     Suggestions for Further Study                                                          59

          Bibliography                                                                                     61

          Questionnaire                                                                                    63


CHAPTER ONE

INTRODUCTION

 

1.1    BACKGROUND OF THE STUDY

Promotion is an important element of the marketing mix known as the four p's of marketing. The promotional mix consists of Advertising, Personal selling, Sales promotion, Publicity, and Public relations. As marketers communicate to encourage and influence consumers to accept and adopt their goods and services, the company that can establish a reputation for trustworthiness, progressiveness and social responsibility stands an advantage over other firms in the mind of both actual and potential consumers.

 

In recent times, the promotional strategy used to propel sales growth has witnessed tremendous increase in volume, complexity, competitiveness, customer sophistication and globalization of customer service. Therefore, is becomes imperative to evaluate the effect of promotional strategies on the sales growth of an organization with reference to Nigerian Bottling Company, makers of ranges of cosmetic products.

 

A strategic planner should determine the blend of activities that will achieve the company's promotional goals. These promotional goals are set to positively affect the sales growth of the company. In order to accomplish these promotional objectives, a marketer must take decisions in five key areas namely:


Ø Who are the target audience?

Ø What are the desired responses from the audience?

Ø What message should be developed?

Ø What media should be used?

Ø What source attributes should accompany the message?

The fundamental question arising from this scenario is how the company determines what mix of promotion tools it will use. Each promotion tool has unique characteristics and costs, and marketers must understand these characteristics in selecting their mix of tools.

According to Kotler (2006), "marketers can choose from two basic promotional mix strategies - push promotion or pull promotion". The combination of the promotion tools to form a promotion strategy, given the fad that, each of the promotion tool vary with stages of the product life cycle, situation, and for products.

In the face of stiff competition in the dynamic market, the marketer has no choice if he still wants to remain in business, to strategies means of positioning his products favorably in the minds of consumers than competitors’ products. Hence, the importance of the promotion tools.

 

1.2    STATEMENT OF PROBLEM

Promotion essentially is meant to stimulate demand, communicate effectively to the consumers the product benefits, and inform consumers about what they ought to know. However, problems have arisen as a result of combining the different promotional tools to increase sales growth are as follows:

Ø Consumers in some cases see promotional strategies as means whereby marketers unnecessarily force them to buy what they do not want to buy.

Ø Another issue arising is that organizations do use some other marketing mix elements to increase sales, especially, price mix and product.mix, therefore consumers do not respond to promotion tools alone.

Ø Many organizations do not appreciate the importance of promotion on sales of their products; hence, they hardly have a well structured promotional strategy.

Ø The best combinations of promotional mix strategies that a company may use to achieve optimum sales growth have continued to be a nightmare. The ineffective combination of these promotional mixes has often times led to low sales and loss of customers.

 

1.3    OBJECTIVES OF THE STUDY

One of the objectives of this study is to examine the consumer's perception about promotional activities carried out by an organization.

Also this research work is aimed at examining the various promotional tools used by the case study, and find out if only such promotional strategies are necessary for improving sales growth.

The research work shall also look at the importance of the promotional strategies to sales growth and eventually examine the various combinations of promotional mix used by Nigerian Bottling Company.

 

1.4   RESEARCH QUESTIONS

This research work will seek to answer questions related to problems that have been stated earlier on in this chapter. The questions are as follows:

RQ 1     \what are the consumer's perceptions about promotion in their buying decision process?

RQ 2     Are promotional tools the only strategy for improving safes growth in an organization?

RQ 3    What is the importance of promotional strategy to sales growth in the manufacturing industry?

RQ 4    What are the best combinations of promotional mix strategies that a company may use to achieve optimum sales growth?

 

 

1.5     RESEARCH HYPOTHESIS

Hypotheses are tentative statements about the relationship between two or more variables. For the purpose of this study, the following hypotheses will be tested:

 

The Null Hypothesis (Ho) and the Alternate Hypothesis (Hi)

HYPOTHESIS 1

Ho:    Inefficient combination of promotional strategies will not bring about low sales growth.

Hi:     Inefficient combination of promotional strategies will bring about low sales growth.

 

HYPOTHESIS 2

Ho:    Increase in sales is not affected by the level of sales promotional activities

Hi:     Increase in sales is affected by the level of sales promotional activities

 

HYPOTHESIS 3

Ho:    Adequate resources needed for executing sales promotional strategies to increase sales volume has no effect on the company's ability to engage in it.

Hi:     Adequate resources needed for executing sales promotional strategies to increase sales volume has no effect on the company's ability to engage in it.

 

1.6    SIGNIFICANCE OF THE STUDY

The major significant of this research work is to the researcher. This is because the research work is required in partial fulfillment of the requirement for the award of the Bachelor of Science (Bsc) in Marketing.

 

The research work is also of great Significance to the case study as a source of eliciting information for the best combination of the promotional mix strategies.

 

Also, the research work is of great significance to the manufacturing sector or firms in order to realize the importance of promotion in the present complex and dynamic business world. This is the ideology behind the slogan, "To sell, you have got to tell".

 

Lastly, the research work will ultimately criticize the past work of different scholars in order to validate their assertions on the subject matter. Findings shall determine if such assertions shall be accepted or refuted.

 

1.7    SCOPE OF THE STUDY

This research project is mainly concerned with the study of the effect of sales promotional strategies on the sales of an organization, with Nigerian Bottling Company as the case study. The study will cover the sales promotional tools used by the company on one of its products -Coca Cola. Questionnaires shall be distributed to the staff of the company in their various departments and top personnel. The scope of the study will also be limited to the company's head office at Ikeja, Lagos State.

 

1.8    LIMITATION OF THE STUDY

These are the major factors that inhibit the research work. Among other things are the following:

The inability to accurately complete the questionnaire, and the difficulty in comprehending what is actually required stands as hindrances to the research work.

The lack of financial aid also stands as a bottleneck to the progress of this research work. In as much as virtually all companies engaged in one form of advertising or the other are unevenly dispersed around the town, it becomes a tedious task if not impossible for the researcher to go round all the companies in the country to make enquiry.  


Accurate data is basic to any research work, so to say, but it is quite unfortunate that accurate data is not obtainable in Nigeria. Data required are not available and where available, they are mere estimates and not obtained through rigorous research work. Inadequate texts in the library are also a constraint here.

Other factors that stood as constraint to this research are time factors, secrecy on the part of the respondents to give vital information.

 

1.9   DEFINITION OF TERM.

ADVERTISING: This is defined as ant paid form of non - personal presentation and promotion of ideas, goods or services by an identified sponsor.

PERSONAL SELLING: Personal presentation by the firm's sales force for the purpose of making sales and building customer relationship.

SALES PROMOTION: Short - term incentives that encourages the purchase or sale of a product or service.

PUBLIC RELATIONS: Building god relations with the company's various publics by obtaining favorable publicity, building up a good "corporate image," and handling or heading off unfavorable rumors, stories, and events.

DIRECT MARKETING: Direct communications with carefully targeted individual consumers - the use of telephone, mail, fax, e-mail, the internet, and other tools to communicate directly with specific consumers.

STRATEGY: It is a game plan for getting or achieving goals or objectives. SALES VOLUME: The term is used to describe the sales realized by an organization and it is expressed in quantitative physical and volume terms.

 


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