EFFECT OF SALES PROMOTION ON CONSUMER PURCHASE BEHAVIOUR (A STUDY OF NIGERIA BOTTLING COMPANY, ABA-ABIA STATE)

ABSTRACT

The study examines the effect of sales promotion on consumer purchase behaviour (a study of Nigerian Bottling Company, Aba-Abia State). However, the general objective of this study is to examine the effect of sales promotion on consumer’s purchase behaviour while the specific objectives of the study include to examine the benefits associated with the use of promotional tools and to examine how promotion stimulates consumers’ purchase behaviour. The study employed a correlational design method and a simple descriptive statistics. The finding shows that there are significant benefits associated with the use of promotion tools. The study therefore concludes that the sales promotion is important to every manufacturing company; helps in creating awareness of a particular product to consumers and customers, the study also went further to conclude that sales promotion helps in profit maximization and consumer’s decision making. Therefore the study recommends that Nigeria Bottling Company Plc and other manufacturing organizations in general should always engage in more promotional mix strategies that are innovative and creative to consumers; sales promotions budget should always be adequate in organizations, and companies should be mindful of the type of the sales promotion that they will adopt in order not to spend all their resources on sales promotion that would turn to be a loss instead of benefits.

TABLE OF CONTENTS

Title page i

Declaration ii

Certification iii

Dedication iv

Acknowledgement v

Table of content vi

List of Tables viii

Abstract ix       

CHAPTER ONE

Introduction

1.1 Background of the Study                                                              1

1.2 Statement of the Problem 3

1.3  Objective of the study 3                                                                                                                                                                     

1.4  Research Questions 3                                                                                        

1.5 Research hypothesis 3                                                                   

1.6 Significance of the study 3                                                                           

1.7 Scope of the study 4

1.8 Limitation of the study 4                                                     

CHAPTER TWO

Literature Review

2.1 Conceptual framework 6

2.2 Review of related literature 6

2.2.1 Benefits associated with the use of promotional tools 6

2.2.2 Effects of sales promotion in stimulating consumer purchase Behaviour 9

2.2.3 Effects of continuous use of sales promotion on organizational Performance 9

2.2.4 Sales promotion programme 12

2.2.5 The role of the consumer in marketing 13

2.2.6 Consumer purchasing behaviour 14

2.2.7 Types of sales promotion 16

CHAPTER THREE

Research Methodology

3.1 Research design 18

3.2 Area of the study 18

3.3 Sources of Data/method of collection 18

3.4 Population of the Study                                                                            18

3.5 Sampling techniques and sample size 19

3.6 Validity of the research instrument 19

3.7 Reliability of the research instrument 19

3.8 Method of data analysis 20

3.9 Model specification 20

CHAPTER FOUR   

Data Presentation, analysis and interpretation

4.1 Data Presentation 21

4.2 Test of hypotheses 29

4.3 Discussion of Findings 31

CHAPTER FIVE

Summary of findings, Conclusion and Recommendation                                     

5.1 Summary of findings 33                                                                                                       

5.2 Conclusion 33                                                                               

5.3 Recommendation 33                                                                                        

REFERENCES                                                                                                               

Appendix-Questionnaire

Questionnaire                                                                                                       

LIST OF TABLES

Table 4.1: Distribution of questionnaire and response rate 21

Table 4.2: Distribution of respondents according to age 22

Table 4.3: Distribution of respondents according to educational qualification 23

Table 4.4: Distribution of respondents according to years of services 24

Table 4.5: Religion 25

Table 4.6: Benefits associated with promotional tools 35

Table 4.7: Promotion stimulates consumers’ purchase behaviour 26

Table 4.8: Use of promotion has a positive influence on organizational performance  26

Table 4.9: Sales promotion contributes to profit maximization 27

Table 4.10: Companies adopt sales promotion in order to create awareness 28

Table 11: Sales promotion increases cost 28  

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF THE STUDY

Marketing activities go beyond producing products at attractive prices and ensuring their availability to potential customers. Companies must be able to communicate with their potential customers about the product offering, with the aim of achieving desired responses such as an increase in the company’s sales volume in other to maximize profit and at the same time satisfy the targeted customers by meeting their needs and wants.

The aim of marketing is to know and understand customers so well that the product or service that suits them and sells itself. There are various marketing tools, which companies use to achieve these goals, which are the promotional activities.    Promotion is said to be the communication aspect of marketing which consists of those activities which are designed to bring the company’s goods and services to the awareness of favorable attention of potential customers with the primary purpose of increasing profit by increasing sales (Berkowitz et al., 1992).

Through promotional activities, customers are informed about the existence of a product in the market as well as its satisfactory benefits to them. Creating awareness in the market is not enough to capture the interest of the customers but needs to be persuaded to take part in the purchase of the product in expectation of a desired satisfaction (Stanton, 1981).

There are several communications or promotional activities which companies can use to bring their products to the knowledge of potential customers. These activities can also be said to mean promo tools or promotional mix and they include advertising, personal selling, publicity and sales promotion. These component or promotional activities can be used independently or in combination. For example, sales promotion could be used to compliment the effectiveness of any of the above mentioned promotional tools, in combination, to produce an effective communication with desired goods achieved. But for the purpose of this study, sales promotion will solely be concentrated on.

Sales promotion has been described as a short-term incentive designed to stimulate the interest of the target audiences in the goods and services that are being promoted. Sales promotion has a stimulating effect on the sales of products or services and is usually employed once or over a specific period of time. Also for the sales stimulation, sales promotion tools such as coupons, context, premiums, samples, price off, gift, bonus pack, refunds, trade allowances, dealers incentive and tradeshows are used to create a stronger and quicker response in order to increase or boost the sales volume of the company thereby profit maximization will be achieved.

The world of business today calls for a great sophisticated competitors producing similar products. One of the major concerns of business enterprises in an environment is to identify and develop an effective marketing strategy for its products. Some companies try to improve their product package, some try to offer free products manufacturers, who want to win the mind of the buyers of their products and drive away the interest those consumer have over competitors products, usually adopt marketing concept that sees the interest and satisfaction of the consumers as a focal point for any reasonable promotional strategies. Sales promotion has been the major factor stimulating sales of a product. It is one of the major parts of marketing communication mix. Apart from sales promotion we have other promotional mix but basically the study is focused on how effective sales promotion is on Coca-Cola products in particular.    

1.2 STATEMENT OF THE PROBLEM                        

The most widely used promotional tools by the companies are advertisement and personal selling. These two promotional tools can be used in combination. Consumers are therefore more exposed to the influences of these promotional tools mentioned above.

However, this era of business competition ushered most business organization to adopt the most effective promotional tool in marketing their products. The Nigeria bottling company as patient to coca-cola has tried to adopt sales promotion, and other promotional activities in the sales of their product. Though sales promotion have been the most effective tools used of the sales force, producer and product. Sales promotion offers incentive of buying their product like giving free drinks, and other price that could be won during their promotion period. They have been large sales of coca cola product due to product performance and sales promotion they gain competitive advantage over their competitors.             

Lastly, the problem of the study is to examine how effective sales promotion is in marketing and sales of Coca-Cola products. If they continue to adopt sales promotion, will it increase brand awareness, attract new users or buyers of their product, stimulate repeat purchase of their product?

1.5  OBJECTIVE OF THE STUDY                                                                                                                                      

This study is intended to achieve the following:-

i) To reveal the benefits offered by exploiting sales promotion tools as Instruments or means to increase sales volume of Nigeria bottling company.

ii) To show the extent to which sales promotion activities have achieved set Objectives in respect to sales volume of Nigeria bottling company products

iii) To offer suggestion and recommendation based on the findings.

1.6  RESEARCH QUESTIONS

With regard to the statement of the problem, this research study is intended to give answers to the following research questions:

1) Does sales promotion help as tool used to constantly clear built up inventory or reduce stocks?

2) Does sales promotion revive a company’s declining sales volume?

3) How sales force promotions do influence their sales performance?

4) Can sales promotion be said to be the most effective promotional tool that could be used to induce or stimulate consumers to purchase a company’s product?

5) Can sales promotion help as a means to stop the loss of old and bring back lost customers?

1.5 RESEACH HYPOTHESIS   

Ho₁: Sales promotion does not enhance the sales of company’s product

Ho₂: Sales promotions do enhance the sales performance of company’s product.

 1.6 SIGNIFICANCE OF THE STUDY  

This study when successfully carried out and supervised will go a long way to offer practitioners experts and scholars in marketing communication a lot of information on promotional mix decision as well as operation of sales promotion. This study is expected to provide information to the Nigerian bottling company to achieve their target goals. It will help them to know while they should continue to adopt sales promotion and its positive effect in marketing their products.   

1.7 DELIMITATION OF THE STUDY

This study is limited to staff of Nigeria bottling company Abakaliki involve in promotion and marketing and consumers within Abakaliki. External bodies may not be duel required due to time constraints and other factors that include:

Ø Time: The research work is limited hence the problem of time is even more amplified when considered that the researcher had to attend to other aspects of her study order than the research work since both academic studies and research work run concurrently.

Ø Literacy level: Low literacy level of some of the respondents was very low. As a result, problems were encountered in the completion of the questionnaire as some were properly or wrongly filled.

Ø Cost: As student with limited income constraint the cost of travelling to the head office of NBC Enugu branch and other branches outside Ebonyi state was one of the factors that limited the study to NBC Abakaliki depot.

Ø Attitude of respondents: Some respondents may find it difficult to give information about them while others may give wrong information about themselves.

   1.8 DEFINITION OF TERMS

v Sales promotion: Sales promotion is any activity that is used to stimulate sales of a product and which occurs once or over a limited time period (Nwokoye, 1996). Sales promotion can also be defined as those marketing activities that provide extra value or incentives to the sales forces, distributors or the ultimate consumer and can stimulate immediate sales (Belch, 2001).

v Coupon: A coupon is a promotional device that provides cents-off savings to consumers upon its redemption. Coupon are developed through newspapers, magazines, free standing inserts, direct mail in or on packages and increasingly at the point of purchase by package, shelf and electronic-delivery (Shimp,1999).

v Free samples: This is an offer of a free sample or trial of a product to the consumer. The offer is usually a miniature size of the product and is expected to last a much shorter time than the regular package (Nwokoye, 1996).

v Promo tools: These are tools available for the execution of the communication arm of marketing and they include advertisement, personal selling, sales promotion, public relation and publicity (Anyanwu, 2003).

v  Marketing: Is the management process responsible for the identifying, anticipating and satisfying customers wants profitably.

v  Product: Is anything tangible and intangible that is offer to the market for attention, acquisition, use or consumption that might satisfy a want or need.

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