EFFECT OF SALES FORCE MOTIVATION ON SALES PERFORMANCE: A STUDY OF NIGERIA BREWERIES PLC.

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Product Code: 00008325

No of Pages: 62

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ABSTRACT


This study was conducted to evaluate the effects of sales force motivation on sales performance of Nigeria Breweries plc Ama Enugu State, Nigeria. The major objective of this work is to examine the comparative implications of motivational tools on sales force performance. Sales force are not active and effective as most of them are always late to appointments, fail to keep business appointments, give incorrect information to customers, supply wrong product brand and poorly manage customer relationship. Non- probability analysis was adopted and data was sourced from primary areas. Data generated was analyzed using tables, statistical tools and descriptive analysis. The copies of the questionnaire were directed to a sample size of 133 marketing and sales personnel which were deduced from a population of 200 using Taro Yamane formula. The hypotheses were tested using Chi-square. From the test of hypotheses, it was revealed that there was no significant effect in the level of sales forces motivation on sales performance; it was observed that straight salary, straight commission and combination plan, were some of the motivational tools mostly used. Conclusively; it was revealed that straight commissions, straight salary and combination plan had significant effect as most effective motivational tools used on sales force. Based on the findings, Recommendations were made: financial support, commission and motivation should be maintained and increased because they are good motivating factors, every employee should be highly motivated because comfortable employees will never think of acting negatively.







TABLE OF CONTENTS

Title page                                                                                                    i

Declaration                                                                                                ii

Certification                                                                                              iii

Dedication                                                                                                iv

Acknowledgement                                                                                    v

Table of content                                                                                      vii

List of tables                                                                                              x

Abstract                                                                                                   xii


CHAPTER 1: 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                                                                       5

1.5       Hypotheses of the Study                                                                 5

1.6       Significance of the Study                                                               5

1.7       Scope of the Study                                                                          6

1.8       Limitations of the Study                                                                 6


CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1       Conceptual Frameworks                                                                 7

2.1.1    Overview of Sales Force                                                                8

2.1.2   Sales Performance                                                                         13

2.1.3    Sales Quotas                                                                                 14

2.2       Theoretical Framework                                                                17

2.2.1    Abraham Maslow’s Hierarchy of Needs                                      17

2.2.2   Herzberg’s Two Factor Theory of Motivation                              19

2.2.3    J.S Adam’s Equity Theory                                                           20

2.2.4    Reinforcement Theory                                                                  20

2.3       Empirical Review                                                                         22


CHAPTER 3: RESEARCH DESIGN AND METHODOLGY

 3.1      Research Design                                                                           25

3.2       Study Area                                                                                    25

3.3       Population of the Study                                                                26

3.4       Sample Size                                                                                  26

3.5       Sampling Technique                                                                     27

3.6       Research Instrument                                                                     27

3.6.1   Validity of the Instrument                                                            28

3.6.2   Reliability of the Instrument                                                         28

3.7       Methods Of Data Collection                                                         28

3.8       Method of Data Analysis                                                              29

3.9       Model Specification                                                                     29


CHAPTER FOUR: RESULTS AND DISCUSSIONS OF FINDINGS

4.1:      Result                                                                                            30

4.2       Testing of Hypothesis                                                                   39


CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION

5.1       Summary                                                                                       44

5.2       Conclusion                                                                                    44

5.3       Recommendation                                                                          45             

Questionnaire                                                                                            47

References                                                                                                51






 

LIST OF TABLES

Table 2.1:  Financial and non-financial                                                      9

Table 4.1:  Questionnaire Distributed and Returned  30

Table 4.2:  Responses on sex                                                                    30

Table 4.3:  Responses on marital status                                                   31

Table 4.4:  Responses on age brackets                                                     31

Table 4.5:  Responses on Educational Qualification                                32

Table 4.6:  Responses on how long the respondents have worked with the organization                                                                                              32

Table 4.7:  Responses on whether the organization has engaged on any motivational packages for their staff                                                           33

Table 4.8: Responses on the types of sales force motivational packages the organization has embarked on                                                               33

Table 4.9: Responses on why the organization engaged in sales force motivation                                                                                                 34

Table 4.10: Responses on whether straight commission influences level of sales performance 34

Table 4.11: Responses on whether bonus influences level of sales performance                                                                                              35

Table 4.12: Responses on whether prompt/straight salary influences the level of sales performance                                                                  36

Table 4.13: Responses on whether combination plan influences the level of sales performance.36

Table 4.14:  Responses on the extent straight/prompt salary increases sales quota                                                                                                37

Table 4.15: Responses on the extant by which straight commission increases sales volume38

Table 4.16: Responds on the extent combination plan increases market share    38

Table 4:17: Responses on the extent straight/prompt salary increases sales quota                                                                                                40

Table 4.18: Responses on the extent which straight salary increases sales quota   40

Table 4.19: Responses on the straight commission increases sales volume                                                                                                      41

Table 4.20:  Responses on the extent straight commission increases sales volume.                                                                                                     42

Table 4.21: Responses on the extent combination plan increases market share    43

Table 4.22: Response on the extent combination plan increases market share    43

 

 


 

 

 

CHAPTER ONE

INTRODUCTION


1.1       BACKGROUND OF THE STUDY

To compete in today’s global markets, organizations strive to deliver their products (physical) and services (intangible) in both an efficient and effective manner. In manufacturing supply chain, human labour forms a significant component of the value delivery process and physical handling of a product leads to standardized and centralized procedures and controls in manufacturing supply chains, (Sengupta et al., 2008).

The focus of efficiencies in service supply chains is on management of capacity, flexibility of resources, information flows, service performance and cash flow management. Critical factors are demand management, customer relationship management and supplier relationship management in manufacturing supply chains. Sales forces in any company – big or small, manufacturing or service, are charged with generating product sales from assigned customer accounts in independent territories. However, the evolving selling environment today is much more complex, demanding significant changes in performance metrics, goals, control and compensation, Ubanagu,O (2006).

South-East zone is an epitome of developing and concentrated businesses that engage sales force east of the Niger. The role of sales and marketing is becoming increasingly important to manufacturing firms (big and small) in the South-East. Unfortunately, most of these companies do not apply the theories of sales management to their sales operations. They usually rely on past experience or judgment. Sales management is considered to be recognized management process activities involving the need to plan, set objectives, develop policies, procedures, strategies and tactics, to organize and co-ordinate, direct operations, motivate, communicate, develop staff, supervise and control and evaluate results, (kalu 2005).

In sales management, Alexander Hamilton Institute reported in Kalu (2005) that motivation and supervision are two of the most important topics. Four success factors for sales success include: Product and Application, Selling Skills, Time and Territory Management, and Motivation. Among these elements, only motivation is important in all kinds of selling. Ubanagu (2006) stated that motivation is the effective managerial application of tangible and intangible incentives to improve the performance of the workforce. The obvious and distinctive feature of sales force activity is that it involves personal contact with the customers, that is, the need to persuade through personal visits, and the need to undertake other activities not directly associated with presentation personal visits, and the need to undertake other activities not directly associated with presentation. Thus, all classes of sales force or salespeople, namely Route sales people, Sales clerk, Detail sales persons, Account representatives, Sales engineers and Creative sales persons require adequate and proper motivation. The three popular methods of compensating sales people identified by Ubanagu (2006) are straight salary, straight commission and combined plans. He further explained thus: - Straight salary: This system is mostly adopted when the management wants to motivate sales people to achieve objectives other than short run volume. Straight salary method of compensation is adopted in the following situations. When the individual sales person’s impact on sales volume is very difficult to measure in a reasonable time; where the sales people are engaged in missionary selling as in the Nigeria Breweries Plc Ama Branch; and when the selling process is complex and involves a team or multi-level selling effort as in that of Nigeria breweries Plc Ama branch. Straight commission: Commissions is payment for achieving a given level of performance and are based on a certain percentage (%) of the sales essence unit’s volume. However, Ama Breweries plc bases their commission on the profitability of sales to motivate the sales force in order to extend effort on the most profitable product or customers. 3. Combination Plan: It put the basic salary with commissions/bonus or both. If salary is combined with commission, the commission is tied to sales volume as in the case of straight commission plan. A bonus is a payment made at the discretion of management for achieving or surpassing some level of performance. The attainment of quota is often the minimum requirement for a sales person to earn a bonus as it is the case in Ama brewery Nigeria Plc. The purpose of motivating subordinates/sales force is to get them to achieve objectives (results) that help the organizations, how to motivate employees remains a perennial challenge faced by managers. This study will therefore examine the effects of motivation on sales force performance in manufacturing  company with a view to making a comparative analysis, bringing out the areas of differences and similarities, and projecting more effective and modern ways of  motivating the sales force for optimum productivity.

1.2       STATEMENT OF THE PROBLEM

According to Ezekwe (2011) posited that Customers are now more demanding today than ever before. The target market requires better goods, services and quick and reliable support than they had in the past. The sales force in the field who should have some wealth of knowledge and experience about the products, market, competitors, industry trends, do not seem to be active and effective as exemplified by failure to keep business promises, giving incorrect information to customers, and poor customer relationship management.

Specifically, greater percentage of the sales force in manufacturing  company have been major culprits in these practices including lateness to work and not keeping appointment at all. Others could be very unfriendly and even become hostile while attending to customers. Some sales force loses focus and consequently supply wrong brand of products to customers. These result in long waiting time for customers to receive the needed goods and services, and the consequent low performance as some customers lose patience and consequently take their leave and even go the alternatives. The poor attitudes of the sales force such as lateness to work, delayed sales calls, lack of information for customers problems, could contribute to the low growth of sales force performance in manufacturing and service companies (Jobber and Lancaster 2006).

The foregoing situations of the sales force in manufacturing company in relation to economic performance raise issues on whether these companies can achieve and sustain high rates of output and growth, able to generate and sustain large numbers of employees, and whether they can compete effectively in the global market. The failure of sales force could have industrial, managerial and marketing implications which this study is set to explore, and which constitutes its research problem. Particularly in the context of how the sales force are motivated towards improving productivity using the incentives of salaries, sales calls allowances, sales bonuses, access to sales vans, product availability and continuous training and updating of the sales force (Jobber et al 2006).

1.3       OBJECTIVES OF THE STUDY

 The general objective of this study is to examine the effect of sales force motivation on sales performance of industrial product; the specific objectives are to:  

i)           Determine the effects of straight salary on sales quota        

ii)          Determine the effects of straight commission on sales volume.

iii)        Determine the effects of combination plan on market share.

 

1.4       RESEARCH QUESTIONS

Based on the background of the study, statement of the problem and the objectives of the study, the following research questions were raised to guide the study:-

1. What is the effect straight salary on sales quota?

2. What effect does straight commission have on sales volume?

3. What effect does combination plan have on market share?

1.5       HYPOTHESES OF THE STUDY

Following the statement of the problem, the objectives of the study and the research questions raised there from, the following hypotheses were formulated to guide the survey:-

H01. There is no significant effect of straight salary on sales quota.

H02. There is no significant effect of straight commission on sales volume.

H03. There is no significant effect of combination plan on market share.

1.6       SIGNIFICANCE OF THE STUDY

The study was completed and gives the researchers an insight into a practical situation. The following also benefit from the study;

Policy makers: the study encourages the management of various companies and corporations to make policies that harvested happy sales force and happy company situations.

Marketing managers: the study refreshes and educates more on the needed adequate knowledge and application of appropriate motivations and strategies that was more satisfactory and will motivate them to put in more marketing efforts.

Academia: finally, the study would be helpful to any researcher carrying out a research of this nature. It could serve as the resource material.

1.7       SCOPE OF THE STUDY.

This study covered Nigerian Breweries Plc Ama and its sales force within Ama Brewery, Enugu, Nigeria. It focused on the effect of sales force motivation on sales performance of industrial products. It identifies the contribution of motivation on sales performance.

1.8       LIMITATIONS OF THE STUDY

Because of time constraints, the research was limited only to Ama Breweries, Enugu which could not allow a comprehensive research on a large scale. Furthermore, the research works as limited by the unwillingness of Ama Breweries management to provide certain vital information which they claimed an open-ended pattern of interviewing was utilized to elicit information. Equally, the initial unwillingness of the respondents to the questionnaire was a great limiting factor. This was conquered after brief explanations about the essence of the research.


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