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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