TABLE OF CONTENTS
Title Page i
Declaration……………………………………………………………………………... ii
Certification.…………………………………………………………………………… iii
Dedication…...……………………………………………………………………….. iv
Acknowledgements…...…………………………………………………………………v
List of Tables ………………………………………………………………………… ix
List of Figures… ………………………………………………………………………x
Abstract….……… …………………………………………………………………… xi
CHAPTER 1: INTRODUCTION
1.1 Background to the Study…… ……………………………………………… 1
1.2 Statement of the Problem….........……………………………………………… 4
1.3 Objectives of the Study………………………………………………………… 5
1.4 Research Questions..…………………………………………………………… 6
1.5 Research Hypotheses…………………………………………………………… 7
1.6 Significance of the Study……………………………………………………… 8
1.7 Scope of the Study……………………………………………………………… 8
1.8 Limitations.…………………..………………………………………………… 9
1.9 Operational Definition of Terms……………………………………………… 10
CHAPTER 2: REVIEW OF RELATED LITERATURE
2.1 Historical Review (Sales Promotion: Nature and Meaning)………………… 11
2.1.1 Objectives of Sales Promotion 12
2.1.2 Types of Sales Promotion 13
2.1.2.1 Consumers Promotion or Sales promotion Targeted at Consumers 14
2.1.2.2 Trade Promotion or Sales Promotion Targeted at Middlemen 14
2.1.2.3 Business and Sales Promotion or Sales Promotion Targeted at Sales Force 14
2.1.3 Major Consumer Promotion Tools 15
2.2 Conceptual Review of Determinants of Customers Acceptance of Sales
Promotion ………………………………………..…………………………… 17
2.2.1 Customers’ Authenticity Perception and Acceptance of Sales Promotion 17
2.2.2 Income Level and Acceptance of Sales Promotion 18
2.2.3 Customer Promotion Comprehension and Acceptance of Sales Promotion 20
2.2.4 Entry Requirements and Acceptance of Sales Promotion 21
2.2.5 Perceived Reward Value and Acceptance of Sales Promotion 22
2.2.6 Redemption Effort and Acceptance of Sales Promotion 22
2.2.7 Social Benefits and Acceptance of Sales Promotion 24
2.2.8 Promotion Duration and timing and Acceptance of Sales Promotion 25
2.3 Theoretical Framework……………………………………………………… 26
2.3.1 Theory of Reasoned Action 26
2.3.2 Theory of Planned Behaviour 28
2.3.3 Technology Acceptance Model 30
2.4 Review of Empirical Studies………………………………………………… 33
2.5 Operational Conceptual Framework………………………………………… 37
2.6 Summary of Literature Review/Gap………………………………………… 38
CHAPTER 3: RESEARCH METHODOLOGY
3.1 Research Design……………………………………………………………… 40
3.2 Population of the Study……………………………………………………… 40
3.3 Sample Size and Sampling Techniques……………………………………… 40
3.3.1 Sample Size 40
3.3.2 Sampling Technique 41
3.4 Research Instrument……………………………………………………………41
3.5 Validity and Reliability of the Research Instrument…… …………… ………42
3.5.1 Validity of the Instrument 42
3.5.2 Reliability of the Instrument 42
3.6 Administration of the Instrument………………………....……………………43
3.7 Scoring of the Instrument…………………….……………………………… 44
3.8 Sources of Data Collection …………………………………….…………… 44
3.9 Model Specification…………………………………………………………… 44
3.10 Method of Data Presentation and Analysis…………………………………….45
3.11 Test of the Hypotheses…………………………………………………………45
CHAPTER 4: DATA PRESENTATION AND ANALYSIS
4.1 Questionnaire Administration………………………………………………… 46
4.2 Sample Characteristics…………………………………………………………47
4.3 Data Presentation……… ………………………………………………………49
4.3.1 Distribution of Respondents by Gender 49
4.3.2 Distribution of Respondents by Educational Level 49
4.3.3 Distribution of Respondents by Age Groups 50
4.3.4 Distribution of Respondents by Marital Status 50
4.3.5 Distribution of Respondents by Income Level 51
4.3.6 Distribution of Respondents by Occupation 51
4.3.7 Preference of Sales Promotion Rewards 52
4.3.8 Preference of Mode of Communication 53
4.4 Descriptive Analysis of Data on the Determinants and Analysis of
Research Questions...………………….……………………………….. 54
4.4.1 Descriptive Analysis of Data 54
4.4.2 Analysis of Research Questions 56
4.4.2.1 Research Question 1 56
4.4.2.2 Research Question 2 56
4.4.2.3 Research Question 3 56
4.4.2.4 Research Question 4 57
4.4.2.5 Research Question 5 57
4.4.2.6 Research Question 6 57
4.4.2.7 Research Question 7 58
4.4.2.8 Research Question 8 58
4.5 Test of Hypotheses…………………………………………………………… 58
4.5.1 Check for Model Fit 59
4.5.2 Result for the Test of Hypotheses 59
4.5.3 Test of Hypothesis 1 60
4.5.4 Test of Hypothesis 2 60
4.5.5 Test of Hypothesis 3 61
4.5.6 Test of Hypothesis 4 61
4.5.7 Test of Hypothesis 5 62
4.5.8 Test of Hypothesis 6 62
4.5.9 Test of Hypothesis 7 63
4.5.10 Test of Hypothesis 8 63
4.6 Discussion of Findings…………………………………………………………63
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Major Findings……………………………………………………68
5.2 Conclusion…………………………………………………………………… 68
5.3 Recommendations…………………………………………………………… 69
5.4 Contribution to Knowledge…………………………………………………… 70
5.5 Suggestions for Further Studies……………………………………………… 72
References……………………………………………………...........................
LIST OF TABLES
3.1 Reliability test………………………………………………………… 43
4.1 Questionnaire response rate………………………………………….. 46
4.2 Distribution of respondents by sex………………………………........ 49
4.3 Educational level of respondents ………………………………......... 49
4.4 Age distribution of respondents……………………………………… 50
4.5 Marital status distribution…………………………………………….. 50
4.6 Monthly income distribution………………………………………….. 51
4.7 Occupational distribution……………………………………………… 51
4.8 Respondents preference of sales promotion rewards………………… 52
4.9 Preference of mode of communication……………………………….. 53
4.10 Data on respondents’ opinion on factors that influence sales
Promotion Campaign Acceptance…………………………………….. 54
4.11 Data on Respondents Opinion on Acceptance of Sales Promotion Campaign………….…………………………………………………… 55 4.12 Determinants of Sales Promotion Campaign Acceptance……………... 60
LISTS OF FIGURES
2.1 Theory of reasoned action………………………………………… … 27
2.2 Theory of planned behaviour………………………………………… . 29
2.3 Technology acceptance model……………………………………..... .. 31
2.4 Proposed research model…………………………………………....... 37
5.1 Sales promotion acceptance model…………………………………… 7
ABSTRACT
This study analysed those factors that affect customers’ acceptance of sales promotion campaigns of deposit money banks in Abia state, Nigeria. The study used the survey design and was conducted in Abia state, Nigeria. The population for the study included bank customers of selected deposit money banks. A sample size of 400 respondents was obtained using Taro Yamene’s formular. The study employed stratified and purposive sampling technique. Data collection was by a researcher-developed structured questionnaire. A total of 400 copies of questionnaire were distributed to the respondents. Data were analyzed using Binary Logistic Regression. Probability value less than 0.05 was considered statistically significant. The study found that customer comprehension of sales promotion, income level, perceived reward value, customer authenticity perception, and promotion duration and timing are significant determinants of customers’ acceptance of sales promotion campaigns in Abia state, Nigeria. Entry requirements, social benefits and redemption effort were found not to be predictors of customers’ acceptance of sales promotion campaigns. The study therefore recommends that: deposit money banks should ensure that customers really comprehend or understand the sales promotion especially key and basic areas (e.g. entry process, how the sales promotion works, instructions, terms & conditions, and rewards and its redemption); deposit money banks should continuously study the dynamics of income level of their customers before embarking on any sales promotion; the reward or prize of the promotion should align properly with the target audience. It should be something that customers place value on or prefer; deposit money banks should ensure that they run their sales promotion in such a manner that customers perceive such promos to be authentic - true, real and genuine; and banks should carefully choose the right start and end dates for sales promotion. The duration of a sales promotion should be moderate, neither too short nor long.
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Sales promotion has become an essential instrument and its significance has grown over the years. Every year, companies go into one form of sales promotion or the other. At times it is targeted at the consumers, some other times at the middlemen or sales force. The aims of such sales promotion could be to boost sales volume; introduce new product; to attract new customers and retain existing ones; or to match competition. At the centre of all these aims is the consumer who is dynamic in nature. It is consumers’ or customers’ acceptance that defines sales promotion success or otherwise. It is customers’ acceptance that translates into their active participation. This acceptance is not just done for the fun of it. A closer attention at this indicates that this acceptance has strings of ‘conditions’ or factors tied to it. In other words, there are underlying factors or determinants that drive customers’ acceptance of sales promotion campaign (Dastidar, 2016; Chaharsoughi & Yasory, 2012; Ndubisi & Tung, 2005; Buil, Chernatony & Martinez, 2013; Reid, Thompson, Mavondo & Brunso, 2015).
Deposit Money Banks are set up to offer financial services at a profit. The fierce competition that play out in the financial services sector poses a serious task to the profitability of retail banking institutions irrespective of their sizes (Okpara & Onuoha, 2013). The relevance of banks in any economy is measured by their contributions to economic development and growth. Due to banks ability to retain deposits from customers and give loans to users, they are involved in capital creation which yields profit to banks, and revenue to the nation in the long-run. The major assets of a bank are the security it buys and the loan it makes to individuals and households, and to business for investment (Ekankumo & Henry, 2011; Uduak, 2009). Generating funds, especially through deposits mobilization, is very critical in carrying out banking business. Looking at how significant funds generation is to the business and corporate survival of deposit money banks, it only becomes imperative to evolve strategies that will see to funds (or deposit) mobilization. In order to generate the funds, the bank must receive deposits from customers who keep their money with them. One of the potent strategies for raising funds for bank business, especially at the short term, is running sales promotion campaign. Thus sales promotion campaign encourages deposits as well as increases and stimulates customers to deposit their money with banks. It is not enough to run sales promotion campaign but ensuring that it is accepted by the target audience as this is a key success factor. The target audience will not accept a sales promotion campaign for the fun of it but certain factors also inform their acceptance.
Also, deposit money banks operate in a highly competitive sector especially a developing economy like Nigeria. They are faced with several challenges especially those that border on how to attract and retain new customers, maintain existing ones and also make these customers increase and maintain their deposits over a time period. The fierce competition and the strive for survival have led to massive use of sales promotion schemes. It becomes very imperative to unravel and understand the underlying factors that drive customers’ acceptance of sales promotion.
The motivation into the study was driven by the gap observed in literature such that researches on sales promotion response were modelled to heavily focus on consumers’ demographics and personal traits like value consciousness, coupon proneness, and market mavenism. Very few studies had beamed its searchlight majorly on characteristics of sales promotion coupled with other consumer features. Also, vast amount of research on consumers response to sales promotion were heavily focused on goods and very little on services especially within the financial sector. The quest in the determination of critical factors that drive customer response to sales promotion of financial services especially in a study area where no such study has been carried out were in the fore in the motivation to carry out this study. Furthermore, the researcher’s examination of several banks sales promotion handbills and materials as well as interview with respondents and staff of the selected banks on how banks carry out sales promotion campaign in the financial service sector revealed some interesting issues. One, sales promotion which sought to encourage people to save money monthly were carried out even in festive period that is majorly characterised by heavy spending. Secondly, in a country where many lie below poverty line and the national minimum wage of N18,000.00 cannot meet citizens needs, one begins to wonder if income is not critical in planning sales promotion campaign considering the entry requirements. For instance, most of the sales promotions seen by the researcher from banks handbills and sales promotion materials require that customers have an account balance of at least N 20,000.00 and make monthly deposit of same amount or over that over a time period. Thirdly, sales promotion presentation style in terms of language, setting, raffle draw timing, media platform and personality used seems to indicate that the target audience are the very educated and the elites. Fourthly, most deposit money banks carry out sales promotion campaign year after year in a way and manner that seems to suggest that customers were not firstly consulted through research on reward or prizes they most value. Also, customers perception of sales promotion authenticity seems not to be consistently factored considering that customers expectation and perceptions are dynamic and constantly changing with time. The banks seem also not keenly interested to know if customers response to sales promotion are driven by hedonic benefits like social benefits or not. Lastly, in doing sales promotion campaign, deposit money banks seem not to review consistently how customers perceive the reward redemption process to be either convenient and simple or otherwise.
It was against this background that this study sought to examine the determinants of customers’ acceptance of sales promotion campaign of deposit money banks in Abia state, Nigeria.
1.2 STATEMENT OF THE PROBLEM
Research on sales promotion proneness or acceptance has somewhat been skewed towards consumer demographics and personal traits like coupon proneness, value consciousness, and market mavenism. These studies offer a coherent portrait of the demographic and psychographic characteristics of deal-prone consumers (Chandon, Wansink & Laurent, 2000; Blattberg & Neslin, 1993; Saif, Hameed, Tapal, & Firdous, 2014; Ndubuisi, 2005; Kwon & Kwon, 2007). However, due to their attention on consumers or customers variables, these studies do not examine the features of sales promotion along side with the customers’ characteristics.
Another issue is that sales promotion researches have tended to focus heavily on different product categories especially fast moving consumer goods and very little on services especially financial services with bias for determinants of consumers acceptance of sales promotion (e.g. Dahl & Johnson, 2015; Buttner, Florack & Goritz, 2015; Sasmita & Suki, 2015; Ramezani & Heidarzadeh, 2014; Kim, Natter & Spann, 2014; Andrew, Xueming, Zheng & Aspara, 2014; Weng & de Run, 2013; Lowe & Barnes, 2012; Chen, Marmorstein, Tsiros & Rao, 2012; Groot & Monsters, 2005; Pauwel, 2007; Amor & Guilbert, 2009; Garrelson & Burton, 2003; Kalra & Shi, 2010; Kalwani & Yim, 1992; Smith & Sinha, 2000; Simpson, 2006; Rao, 2009). Also, literature on customers’ acceptance of sales promotion of deposit money banks, especially monetary sales promotion incentives that encourage customers to save money over a time frame, is sparse.
Furthermore, the determinants that were pooled together for test in this study were from literatures that were empirical and non-empirical in nature which cut across different industries. Some of these determinants were also observed in sales promotion handbills of banks as well as opinions from respondents at the pilot study stage. There is no study known to the researcher were these determinants were pooled together to see their interactive effect on customers’ acceptance or response to sales promotion in the banking industry. This empirical lacuna in the literature informed this study.
1.3 OBJECTIVES OF THE STUDY
The broad objective of the study is to analyse those factors that determine customers’ acceptance of sales promotion campaign of deposit money banks in Abia state, Nigeria. However, the specific objectives are to:
(1) ascertain the influence of entry requirements on customers’ acceptance of sales promotion.
(2) determine the effect of customers comprehension of promotion on customers’ acceptance of sales promotion.
(3) examine the influence of income level on customers’ acceptance of sales promotion.
(4) discover the effect of perceived reward value on customers’ acceptance of sales promotion.
(5) ascertain the influence of customers authenticity perception on customers’ acceptance of sales promotion.
(6) determine the effect of social benefits on customers’ acceptance of sales promotion.
(7) examine effect of sales promotion duration and timing on customers’ acceptance of sales promotion.
(8) find out the influence of redemption effort on customers’ acceptance of sales promotion.
1.4 RESEARCH QUESTIONS
The following are the research questions for which this study provided answers to.
(1) How does entry requirements influence customers’ acceptance of sales promotion?
(2) What effect does customers’ comprehension of promotion have on customers’ acceptance of sales promotion?
(3) To what extent does income level have influence on customers’ acceptance of sales promotion?
(4) What effect does perceived reward value have on customers’ acceptance of sales promotion?
(5) To what extent does customers’ authenticity perception have influence on customers’ acceptance of sales promotion?
(6) What effect do social benefits have on customers’ acceptance of sales promotion?
(7) How does promotion duration and timing influence customers’ acceptance of sales promotion?
(8) What effect does redemption effort have on customers’ acceptance of sales promotion?
1.5 RESEARCH HYPOTHESES
The following hypotheses were tested in the study.
Ho1: entry requirements do not have significant influence on customers’ acceptance of sales promotion
Ho2: customers comprehension of promotion do not have significant effect on customers’ acceptance of sales promotion
Ho3: income level do not have significant effect on customers’ acceptance of sales promotion
Ho4: perceived reward value do not have significant influence on customers’ acceptance of sales promotion.
Ho5: customers’ authenticity perception do not have significant effect on customers’ acceptance of sales promotion.
Ho6: social benefits do not have significant effect on customers’ acceptance of sales promotion.
Ho7: sales promotion duration and timing do not have significant influence on customers’ acceptance of sales promotion.
Ho8: redemption effort do not have significant effect on customers’ acceptance of sales promotion.
1.6 SIGNIFICANCE OF THE STUDY
The result of the study would help managers of deposit money banks see sales promotion campaign issue from another perspective which would contribute to them appreciating the factors that drive customers’ acceptance of sales promotion. It is expected that this study would provide insight into preference of sales promotion rewards in the study area. Deposit money banks stand to know consumers preferred means of being communicated to. All these issues would help deposit money banks understand the customers better and provide superior value to them; increase their marketing performance and also help them make well informed sales-promotion-related decisions.
This study would help bridge the gap in the literature as earlier highlighted. It would contribute to the enrichment of the literature on sales promotion especially in the financial services area. In the academia, it would help create a base for further research works. Government agencies stand to benefit in the sense that it would help them in making policies that would benefit average bank customers who may choose to accept sales promotion.
1.7 SCOPE OF THE STUDY
The focus of this study was on promotional strategy, which is an aspect of marketing management, with emphasis on sales promotion. Sales promotion determinants of interest are entry requirements, customers’ comprehension, income level, perceived reward value, customers’ authenticity perception, social benefits, sales promotion duration and timing, and redemption effort. The area scope of the study was the three senatorial zones of Abia state and five deposit money banks (Ecobank, Access Bank, First Bank, Zenith Bank and Union Bank) within them. The sampling units included persons who operate savings or current account with deposit money banks.
1.8 LIMITATIONS
The area of coverage of the research was limited geographically to selected local government areas across the three senatorial zones of Abia state, Nigeria. The sample size was scientifically constrained to 400 which was determined from the study population of 757,406. In other words, the research was limited to the sample drawn from the selected banks that had branches in the selected LGAs in each of the three senatorial zones of Abia state. It was the opinions of the sampled customers of these selected banks that formed the basis of this research. This limitation was however managed by ensuring that the sample is representative enough of the study population in the study area.
The research was also limited to selected descriptive and inferential statistical tools used. In using descriptive statistics, only frequency tables were used in describing the data in terms of frequency and percentage. Binary logistic regression was used as the only inferential statistics in testing the study hypotheses. Also, the operationalization of variables was limited to the researcher’s literature search and the opinions of respondents at the pilot study stage.
Respondents’ attitude also formed part of the limitations. The attitude of whether to cooperate with the researcher and research assistants as well as expression of fear owing to privacy concerns was encountered. This was managed by assuring the respondents of their privacy.
1.9 OPERATIONAL DEFINITION OF TERMS
Sales Promotion: This is a short term incentive or inducement for individuals or customers to deposit money over a time frame or use a service in order to retain existing customers or attract new ones.
Deposit Money Banks: Financial institutions that accept deposit, through the instrument of savings, current or fixed deposit accounts, from their customers.
Acceptance: The willing and active participation of customers in sales promotion campaign.
Customers: Those who operate current or savings account with deposit money banks.
Sales Promotion Campaign: A series of planned short term incentives or inducement for customers (actual and potential) to maintain a given account balance, deposit and save a given minimum and regular amount of money over a time frame in order to retain or attract existing or new customers respectively as well as use such pooled fund for bank business.
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