ABSTRACT
The
complexity posed by the present global business environment especially the
tragic failure of meeting the corporate objectives experienced by some business
organizations calls for a strategy which will enhance the achievement of sales
and profit objectives and to curb the menace of liquidation that is so rampant
in the business industries of today.
To
this end, the topic “the impact of promotional
strategy on sales and profit” had been chosen as the subject of study.
Meanwhile,
this research report is carried out in order to widen the existing knowledge of
promotion in the field of marketing by enumerating, analyzing and expatiating
on the various elements of promotional strategy, method of its performance and
its great impact on the organizational sales and profit.
Promotional
strategy is one of the variables of marketing mix that is related to
communication mix which marketers implement to stimulate demand and facilitate
purchases which invariably helps the accomplishment of corporate objectives.
TABLE OF CONTENTS
Pages
Title
page i
Certification
ii
Dedication iii
Acknowledgement
iv
Abstract
Table
of Content vi
CHAPTER ONE
1.1
Brief Introduction 1
1.2
Statement of problem 2
1.3
The scope of study 2
1.4
i. Research
questions 3
14. ii. Statement
of hypothesis 3
1.5
Purpose of study 3
1.6
Definition of terms 4
1.7
Limitation of the study 7
1.8
Historical background of the case 7
1.9
Project Budget 9
CHAPTER TWO
2.0
LITERATURE REVIEW 10
2.1 INTRODUCTION 10
2.1.1 History of promotions concept 10
2.1.2 Descriptions of marketing promotion 14
2.1.3 Derivation of promotional strategy 15
2.2 MAJOR TYPES OF PROMOTIONAL STRATEGY 17
2.2.1 Pull Strategy 17
2.2.2 Push Strategy 18
2.3 ELEMENTS OF PROMOTIONAL MIX 19
2.3.1 Demstification of each promotional elements 19
2.3.2 Advertising 19
2.3.3 Types of advertising 20
2.3.4 Major Advertising media 22
2.3.5 Criteria for selecting the appropriate
advertising medium 23
2.3.6 Objectives of advertising 24
2.3.7 Advantage of advertising 24
2.3.8 Disadvantages of advertising 25
2.4 SALES PROMOTION 25
2.4.1 Consideration for Selection of sales
promotion methods 26
2.4.2 Objective (Uses) of Sales Promotion 27
2.4.3 Advantages of Sales promotion 28
2.4.4 Disadvantages of Sales promotion 28
2.5 PERSONAL SELLING 28
2.5.1 Primary objectives of personal selling 29
2.5.2 Roles of Personal Selling 30
2.5.3 Process of personal selling 30
2.5.4 Advantages of personal selling 31
2.5.5 Disadvantages of personal setting 31
2.6 PUBLIC RELATIONS AND PUBLICITY 32
2.6.1
Advantages of Public Relations 34
2.6.2 Disadvantages of Public Relations 34
2.6.3 General objectives of public relations 35
2.7.1 Steps involved in performing promotional mix 35
2.7.2 Consideration
for effective selection of promotional mix
37
2.8.1 Budgeting for promotional activities 40
2.8.2 Methods and approaches used in setting a
promotion budget 41
2.8.3 Explanation of sales, profit and their
relationship
with promotion 44
2.9. Evaluation of the case study 45
CHAPTER THREE
3.0
Research Methodology 50
3.1 Introduction 50
3.2 Preliminary study 50
3.3 Instruments for data collection 50
3.4 Research design 51
3.5 Population and sample size 51
3.6 Sampling technique 52
3.7 Method of data analysis 52
3.8 Hypothesis testing 53
CHAPTER FOUR
4.0
Data analysis and Result Interpretation 54
4.1 Preamble 54
4.2 Table 1 (Analysis of biological data of NBC
Staff respondents) 55
4.3
Table 2 (Analysis of NBC customers’ bio-data. 58
4.4
Table (3 – 4) Analysis of data on the
subject
of
study and interpretation 59
4.5
Hypothesis testing and interpretation 71
CHAPTER FIVE
5.0
Summary, Conclusion and Recommendation 73
5.1 Synopsis of Findings 73
5.2 Conclusion 75
5.3 Recommendations 76
REFERENCES 78
APPENDIX 81
CHAPTER ONE
1.1 BRIEF
INTRODUCTION
Having
observed the inability or difficulty encountered by some business organizations
in meeting their sales and profit targets especially in the face of today’s
intensified global competition, it is therefore necessary to apply an effective
marketing strategy which can make organisation’s dream a reality.
Following
this, promotional strategy is one of the overall marketing strategies that can
be used by marketers to communicate and inform the public about the existence
of company’s product or services.
It
generally entails all the activities required to co-ordinate all the seller’s
initiated efforts to set up channels of information and persuasion in order to
facilitate the sale and acceptance of goods and services. It comprises of advertising, personal
selling, sales promotion and publicity, each providing the necessary and
adequate information to the consumers about the organizational products or
services, brand name, quality, price and the uses.
Consequentially,
promotional strategy serves as a useful device for achieving sales and profit
objectives.
1.2 STATEMENT
OF PROBLEM
Due
to the fact that, promotion is a sine-qua nor for any organization who wants to
make an economic head way in today’s global and competitive world of business.
Therefore,
this work will be prepared to critically examine promotion as one of the major
strategies that can be used by business organizations, which invariably has a
very great impact on sales and profit using Nigeria Bottling Company (NBC) as a
case.
1.3 THE
SCOPE OF STUDY
This
work will be limited to business organizations and these shall be represented
by the Nigeria Bottling Company. This is
due to the fact that, all other business organizations possess almost the same
features with the case to be studied.
Apparently,
all business organizations in Nigeria
including the case of this study are governed by similar or same rules,
regulations and policies of company and Allied Matter, Acts (CAMA), National
Agency for Food and Drug Administrative Control (NAFDAC), Standard Organisation
of Nigeria (SON) e.t.c.
1.4 (i) RESEARCH QUESTIONS
Research
questions to use consist of the following;
i)
What strategy really helps business
organizations to achieve sales and profit objectives?
ii)
Does promotional strategy has any effect
on sales and profit?
iii)
Can high sales and profit be attained
without the application of promotional strategy?
1.4 (ii) STATEMENT OF HYPOTHESES
Hi: Sales and profit are affected by the promotional
activities
Ho: Promotional strategy has no any effect on
sales and profit.
1.5 PURPOSE
OF STUDY
The
main purpose of this study among others is to fully discuss the demystification
of promotional strategy, method and its great impact on sales and profit. The inevitable roles it plays in helping
organizations to achieving corporate goals.
For
instance, in learning from successful organization, this study will show how it
has really helped Nigeria Bottling Company (NBC) in reaching and capturing
wider market which invariably can serve as a path to tread for others.
Also,
this work is aimed at creating more knowledge in addition to the researched
works in the relevant field of study.
1.6 DEFINITION
OF TERMS
i) PROMOTION:-
This is one of the marketing mix which is the co-ordination of all sellers initiated efforts to set up channels
of information and persuasion to
facilitate the sales and acceptance of
goods or services.
ii) ADVERTISING:-
Any paid form of non-personal presentation and
promotion of ideas, goods or services by an identified sponsor.
iii) PERSONAL
SELLING:- This is the use of speech and personal conviction to persuade potential customers to buy one’s product or service.
iv) PUBLICITY:- This is the non-personal stimulation of
demand for product or service by planting
commercially significant news about
published medium or obtaining favourable presentation
of it over the radio, television or stage (theatre) that is not paid for.
v) SALES
PROMOTION:- This is any promotional activity other than advertising, publicity and personal selling that stimulates consumers’ purchase and
dealers’ effectiveness such as
displays, shows, exhibition e.t.c.
vi) PROMOTIONAL
MIX:- This is made up of four
elements of promotion viz;
advertising, sales promotion, personal selling and
publicity.
vii) PROMOTIONAL
STRATEGY:- This is a marketing plan designed for the purpose of informing and
persuading present and potential
consumers.
viii) OUT DOOR MEDIA:- These are bill boards, sign post,
posters, hand bills e.t.c. used
in communicating advertising messages to
the consumers.
ix) TRANSIT
ADVERTISEMENT:- This is a relatively
minor volume of advertisement placed on
public buses, taxes and other
commercial vehicles.
x)
MISSIONARY:-
It’s
an indirect sales of company’s goodwill by the sales person that leads to
repeat sales of a product.
xi)
SAMPLES:-
This
is the process of giving away or dashing out a product to a potential
customers.
xii)
INFORMATION:-
This
is the full product awareness created by the promotional programme.
xiii)
TRADE
FAIR:- This is an exhibition of commercial and industrial
goods usually on a large piece of open ground.
xiv)
FOLLOW-UP
ON SALES:- This is the post sales activities that
aimed at enticing customers to make a repeat purchase.
xv)
EXHIBITION:- This is the act of displaying set of
goods or services publicly for sale.
xvi)
PUBLIC
RELATIONS:- This is the company’s or firm’s relationship and
communication with its public aiming at creating familiarity.
1.7 LIMITATION
OF THE STUDY
Quite
a number of constraints serve as limitations to this study. It is envisaged that much finances, time,
dedication and energy will be required.
At
times, this work will have to be done even at the expense of other because it
requires great attention and sacrifice.
Besides,
considering the efforts in preparing and administering the questionnaires, the reluctance
on the part of the respondents and the inadequacy of all other resources needed
may constitute a limiting factor to this project.
Meanwhile,
the performance of the promotional activities in question is not such an easy
task.
1.8 HISTORICAL
BACKGROUND OF THE CASE
The
Nigerian Bottling Company Plc (NBC), which is part of Coca-Cola HBC (an anchor
bottling group operating in 26 countries), was incorporated in November 1951 to
bottle and sell carbonated non-alcoholic beverages. The company has the sole franchise to bottle
Coca-Cola products in Nigeria.
Production of Coca-Cola began in 1953 at
a bottling facility in Lagos
and new plants at Kano,
Port Harcourt
and Ibadan were
opened shortly afterwards (Ikeja plant was commissioned in 1978). NBC became a public company in 1972 with its
shares listed on the Nigerian Stock Exchange.
The
company generates its own power and is self – sufficient in CO2 and
water production. It has 16 bottling
facilities located around the country, and it uses over 80 distribution
warehouses and 200,000 distribution outlets.
NBC’s head office is located in the Lagos mainland at Ebute-Metta.
NBC Products and Marketing
The
range of Coca-Cola beverages in Nigeria
includes:
·
Coca-Cola (Classic, Diet Coke and
Vanilla Coke)
·
Fanta: Orange, Lemon, Pineapple and Blackcurrant
Flavours
·
Sprite
·
Schweppes: Bitter Lemon, Club Soda,
Tonic Water (these “Mixers” were previously bottled under the Krest brand. NBC re-acquired the Schweppes Franchise in
August 2001) and Pineapple.
All
of the above products are bottled in returnable glass manufactured locally,
while Coca-Cola (classic), Fanta Orange and Sprite are also bottled in 50cl PET
bottles and the 1.25 litres PET bottles.
·
Eva Table water in PET bottles
·
Five Alive Fruit Juice (Citrus Burst,
Berry Blast and Tropicla Hit flavours)
Promotional
Strategy and broad community support has helped to make NBC, the largest
employer of labour in the non-oil private sector in Nigeria, one of the country’s most
admired companies.
1.9 PROJECT
BUDGET
The
fund budged for this project is N10,000 because it is anticipated that the
project will cost nothing less than that.
Meanwhile,
the actual budget is N8,000 while contingent and unforeseen occurrence is
expected to be N2,000 totaling N10,000.
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