ABSTRACT
This study is on the impact of sales promotion on sales of soft drinks in Nigeria. A case study of 7up Bottling Company Plc Aba. One of the major problems addressed was due to the low amount of money invested by the company on sales promotion activity result to low sales turnover was addressed which result to the increase in sales turnover. The total population used is two hundred (200) made up of production department, marketing/production and Administration department and sample of 135 employees was randomly drawn from 7up bottling Company Plc Aba depot. The personal interview and questionnaire are as well analyses accordingly. The researcher used the Taro Yemene formular for testing hypotheses formulated. Findings show that inadequate capital base is a major problem responsible for the low company’s sales turnover. The researcher recommended that the marketing manager of 7up Bottling Company Plc, Aba Depot should know that the use of sales promotion activities is the only way to ensure consumers patronage and as such they should maintain its product quality and price. Base on the findings of the study, the following conclusions and recommendations were made: firstly, that sales promotion has effect on the profits of a company, secondly, that customer buy more during a sales promotion customers are gain seekers and will seize any opportunity to obtain more value for less, thirdly, sales promotions remains a veritable tool to be used by a company to project its sales, market share and project and Sales promotions use should not be abused but used when the purchase of the product is likely to be high. Therefore, government through its agencies should regulate the sales promotions of companies and also ensure that their promises are delivered to the later, the company before embarking on a sales promotion, should first carry out a marketing research to ascertain whose its audience is in order to know the type of sales promotion to employ, finally, organizations should not relay on the sales promotion only that should back it up with the other promo-tool in order to achieve higher result.
TABLE OF CONTENTS
Title i
Declaration ii
Certification iii
Dedication iv
Acknowledgement v
Table of content vi
List of tables xi
Abstract xii
CHAPTER ONE: INTRODUCTION
1.1 Background of the study 1
1.2 Statement of problems 4
1.3 Objectives of the study 5
1.4 Research questions 5
1.5 Hypotheses 6
1.6 Significance of the study 6
1.7 Scope of the study 9
1.8 Definition of terms 9
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.0 Conceptual frame work 11
2.1
Historical background of sales promotion 12
2.1.1
Historical background of 7up bottling company PLC 13
2.2
Relevant models of the study 14
2.3.1
Definition and types of consumer sales promotion 16
2.3.2
Sweepstakes 18
2.3.3
Premiums 19
2.3.4
Coupons 20
2.3.5
Games 21
2.3.6
Trades show/exhibitions 22
2.3.7
Product demonstrations 24
2.4
Reasons for sales promotion 25
2.4.1
Profit generation 26
2.5 Benefits of sales promotion 26
2.6
Sales promotion tools 28
2.6.1
Sales promotion directed to the consumers 28
2.6.2
Sales promotion directed to the trade (i.e. Middleman) 29
2.6.3
Sales promotion directed to the company’s sales force: 29
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Research design 31
3.2 Population of the study 31
3.3 Sampling design 32
3.3.1 Sample unit 32
3.3.2 Sample size 33
3.3.3 Sampling procedure 34
3.3.4
Sampling method 34
3.4 Sources of data 35
3.5
Validity and reliability of sampling instrument 35
3.6
Data analysis technique 36
3.6.1
Procedure for using ANOVA as a analysis method 36
CHAPTER FOUR: PRESENTATION, ANALYSIS AND
INTERPRETATION OF DATA
4.1
Tests of hypotheses 53
4.2
Test of hypothesis one 53
4.2.1
Test of hypothesis two 56
4.2.2
Test of hypothesis three 59
4.3 Discussion of findings 61
CHAPTER FIVE: SUMMARY, CONCLUSION AND
RECOMMENDATIONS
5.1 Summary of findings 65
5.2 Conclusion
67
5.3 Recommendations 68
5.4 Suggestion for further studies 70
REFERENCES
71
APPENDIX I 73
APPENDIX
II 74
LIST OF TABLES
Table
3.1 Sample Table 36
Table
3.2 ANOVA TABLE 38
4.1 Presentation and analysis of data 40
Table
4.1: Questionnaire distribution rate and returns 41
Table
4.2: Sales promotion has effect on profits 42
Table
4.3 Customers buy more during sales promotion
42
Table
4.4: Quantity can be compared 43
Table
4.5: Rate of purchase after a sales promotion 44
Table
4.4 All profits should not be attributed to sales
Promotion 45
Table
4.7 Aim of sales promotion 46
Table
4.8 Costs should be compared with sales 47
Table
4.9 High quality product offer 48
Table
4.10 More sales through sales promotion 49
Table
4.11 Effects of perception 50
Table
4.12 Probable higher purchase after sales promotion 51
Table
4.13 Time of highest purchase 52
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
A brief review of the trend of sales
promotion campaign in Nigeria will help us to place in proper contest the
critical and analytical expose of its impact in the marketing of 7up soft
drinks in Nigeria.
Historical has proved that the use of
sales promotion techniques in modern marketing in Nigeria started with the
multi-national trading companies like leventis, UTC stores and Nigeria Bottling
company. The sales promotion activities of some of these companies came mainly
in the form of price-off, offers of gift items like balloons and Christmas
trees. Those promotion efforts which were seasoned, resulted in high customers
traffic for the companies.
However, it was not until the 1980’s
that sales promotion witnessed a dramatically change in Nigeria scene
particularly in 7up bottling company. This period marks the beginning of what
is now described by Nigeria marketing experts as the “high profile promotional
era”. Which was characterized by fabulous cash and other material incentive to
customers. Soft-drinks producers appear more attracted to the use of customer
sales promotion.
Companies like 7up bottling company Plc,
Nigeria bottling companies Plc among others have at various times resorted to
sales promotion as an effective marketing tool in a depressed economy like
ours.
In 1978, for instance, the 7up bottling
company made an aggressive re-entry into the soft drink king sub-sector of
beverage industry with its lemon line that was supposed to compete with sprite.
This aggressive competition, which came with intensive advertising and sales promotion,
was between the 7up bottling company Plc and the Nigeria bottling company Plc.
The gifts offered in contemporary Nigeria sales promotion scene ranges from
cars, motorcycles, and scholarships. Overseas tops, refrigerators, deep
freezer, colored television, video sets, sewing machines and others.
It will not be far fetched to table 1991
and 1992 as the most significant or outstanding sales promotion years in
Nigeria’s contemporary history. This is because of the volume and intensity of
sales promotion efforts that were under taken in the country that year as well
as the large amount of money spent by the various companies involved in the
sales promotion campaign.
Statistics has been shown that in 1991,
the Nigeria bottling company Plc spent over seven million Naira in its
coco-cola family bonanza two weeks later, its rival, 7up bottling company Plc
included its own campaign tagged “7up express promotion” which was estimated to
have consumed the sum of seven million naira. Between these periods, to date,
these companies have lunched much sales promotion campaign.
Now given the increased use of sales
promotion as an effective marketing tool, there is need for firms to research
on various customer motivational appeals, develop a good sales promotional
programme, implement and evaluate its impact in attracting customers during and
after promotion in terms of boosting sales and increasing both market share and
brand loyalty so as to meet the marketing objectives which would be on other
business functions in order to achieve the overall goals of the 7up bottling
company Plc.
1.2 Statement of problems
7up-bottling company Plc has several
brands of soft drinks and has been operating in Nigeria for many years. The
performance of this company in the market could be said to have been
satisfactory. Most of the consumers of these products prefers their brands to
competing brands. But thus, have remained one of the leaders in the market for some
time now. One of the reasons for these is probably the reduction in the sales
promotional strategies by the management of 7up bottling company Plc.
However, a decrease in the investment on
the sales promotional strategies such as buying gifts, awarding scholarships,
overseas trip, refrigerators, deep-freezers, video sets, color TV, sewing
machines, and others will be the consequence, upon the decrease in sales and
profitability of the overall activities of the company.
Therefore, this research will be aimed
at finding ways of increasing awareness, sales and profitability of sales
promotion in 7up bottling company.
1.3
Objectives
of the study
To bring to focus, impact of sales
promotion in the marketing of Seven up Bottling Company PLC, the following
objectives were reviewed to,
1. Find
out if sales promotion increase the demand rate of the firms product .
2. Find
out how sales promotion create awareness for a product.
3. Determine
if sales promotion have effect on over all profitability.
1.4
Research
questions
In view of determining the impact of
sales promotion in the marketing of Sevenup soft drinks in
Nigeria, the researcher put up the following questions, which will help in
determining and evaluating the impact of sales promotion.
1. To
what extent does sales promotion increase the demand rate of the firms product
?
2. How
does sales promotion create awareness for a product?
3. How
does sales promotion have effect on over all profitability?
1.5
Research
Hypotheses
In order to accomplish the purpose of this
study the following hypothesis would be tested in the course of this study.
Hypotheses
One
Ho1: sales promotion does not
increase the demand rate of products.
Hypotheses
Two
Ho2: sales promotion does not
create awareness for a product.
Hypotheses
Three
Ho3: sales promotion does not
have effect of over all profitability.
1.6
Significance
of the study
The significance of the
study is attributed to several areas, the society, business organizations and
government.
Society:
The society would be society sales promotion as more inducement compelling them
to buy. They would know that firms are sales promotion to market their products
which could not be marketed ordinarily without it, the findings of the study
would equip them to stand to their fact whenever an unhealthy products are
being offered to them through sales promotion.
Government:
On completion of this study the government complains measures to boycott the
efforts of companies using sales promotion to dispose unhealthy and substandard
products. Government, at the end of this study, can through standard
organization of Nigeria and National Agency for food and Drug Administration
and control (NAFDAC) ensure that substandard products are not allowed into the
country as some of the products traded upon during sales promotion are mainly
substandard.
Business
organization: Through sales promotion is a
short-term event business organization, at the end of the study would find it
worthwhile to use as a competitive strategy to fight their rivals. They can equally
strengthen their brand image through great awareness thereby boosting the
morals of the sales forces, as a result
of the study.
In
addition, companies that experience decline in sales growth in their
competitive market environment may embark on sales promotion campaigns strategy
and incentive proposed to attract more customers relationships or call their
existing and unalloyed loyal customers or expand their market shares.
Also,
at the end of this study, business organizations would benefit from the study
on matter relating to the following:
1. Improving
customer loyalty.
2. Stabilizing
fluctuation in sales level.
3. Decongesting
warehouses through aggressive customer motivation.
4. Increasing
resellers incentives for better point of sales activities.
5. Giving
the consuming public the sense of trust on the sales promotion.
1.7
Scope
of the study
The scope of this study
covers the areas of sales promotion. The study is designed to look into sales
promotion in terms of the techniques adopted by the companies, the different
forms of sales promotion programmes, how sales promotion influences behavior.
It also looks at the
various ways companies can improve their sales promotion efforts to reliance
increased sales volume.
1.8
Definition
of terms
1. Sales promotion:
It has been described as a short-term incentive designed to formulate the
interest of the target audience in the goods or services being promoted. Or
sales promotion is a short-term incentive offered by the seller to the
consuming members of the public with a view to inducing them to buy and by his
good service or idea. Anyanwu (2003)
2. Advertising:
Defined as any paid form of non personal communication about an organization,
person, good, service, or idea by an identified sponsor through a medium or a
combination of media with a view to generation sales. SandageC.H, Fiburge,
Vernon and Rotzou K. (1976) been quoted by Anyanwu (2003)
3. Product:
Is a physical goods, services, idea, person or place that is capable of
offering tangible and intangible attributes that individuals or organizations
regard as so necessary, worthwhile or satisfying that they are prepared to
exchange money, patronage or some other unit of value in order to acquire it.
(Brassingten and Petti 2006)
4. Volume:
This refers to the sales realized by a firm after definite period of time put
in a questionnaire, physical and measurement item. (Okpara 2002)
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