TABLE OF CONTENTS
Contents Page
Title
page
Certification i
Dedication ii
Acknowledgment iii
Table
of Contents v
CHAPTER
ONE
1.1
Introduction 1
1.2
Statement of the Problems 4
1.3
Objective of Study 4
1.4
Relevance of Study 5
1.5
Scope of Study 5
1.6
Limitation of Study 6
1.7
Research Questions 6
1.8
Research Hypothesis 6
1.9
Research Methodology 7
1.10 Mode
of Data Collection 7
1.11 Data
Analysis 8
1.12 Definition
of Terms 8
References 10
CHAPTER TWO: LITERATURE
REVIEW
2.1
Introduction 11
2.2
Historical Background of the Company 11
2.3
General Overview 13
2.4
Importance of Sales Promotion 18
2.5
Advertising 26
2.6
Personal Selling 31
2.7
Sales Promotion 35
2.8
Publicity and Public Relations 36
References 43
CHAPTER THREE:
RESEARCH METHODOLOGY
3.1
Introduction 45
3.2
The Research Instrument 46
3.3
Research Population 46
3.4
Sampling Method 46
3.5
Sample Size 47
3.6
Nature and Description of Questionnaire 47
3.7
Questionnaire Administration 48
3.8
Method of Data Analysis 48
References 53
CHAPTER FOUR: DATA
ANALYSIS AND INTERPRETATION
4.1
Analysis of Biodata 54
4.2
Analysis of Research Questions 58
4.3
Analysis of Open Ended Questions 76
4.4
Testing of Hypothesis using Chi-square Method 78
4.5
Testing of Hypothesis using Anova Method 89
References 100
CHAPTER
FIVE: FINDINGS, CONCLSION AND
RECOMMENDATIONS
5.1
Summary of Findings 101
5.2
Conclusion 102
5.3
Recommendations 103
5.4
Suggestions for further studies 104
Bibliography 106
Appendix – A Letter of Introduction 108
B Questionnaire 109
C Statistical Table
for Chi-square Test 117
CHAPTER ONE
1.1 INTRODUCTION
In
the 1970’s as well as early 1980’s the Nigeria market was favourable to the
producers of various products. At that
time, we had what was called “sellers’ market”.
However,
with the current economic trend in Nigeria markets, especially at the inception
of Structural Adjustment Programme (SAP), the reversal is the case. Manufacturers have shifted considerable
attention to the consumer particularly in the consumable goods sector, they now
regard the consumer as the king. We now
have what is popularly termed the “Buyers market”.
Producers
have now resorted to numerous means of sales promotion to increase the sales
volume and profitability. According to
the American Marketing Association (1990 p 25) sales promotion is
defined as those marketing activities, other than personal selling, advertising
and publicity, that stimulate consumer purchasing and dealer effectiveness,
such as displays, shows, expositions, demonstrations and various concurrent
selling efforts not in the ordinary routine.
Thus, sales promotion is any promotional effort that falls outside the
other four statements of the promotional mix.
Marcarthy
(1998 p 386) defined sales promotions as “all
activities/variables involved in communicating information between seller and
buyer with a view to changing attitude and behaviour towards a product or
service. And the variables are
advertising, personal selling, publicity, public relations and sales promotions”.
Stanton
(1998 p 75) defined sales promotion, as the component of
marketing that is used to inform and persuade the market regarding a company’s
product. It includes those efforts a
company embarked upon to effectively communicate the services and to persuade
target customers to patronize them. In
order to achieve its aims, the company employs the services of the various
promotional mix, notably among which are: Advertising, Publicity, Personal
selling and Sales promotion.
However,
Wentz and Leyrich (2000 p 262) describe promotion as “the most nebulous
of the six basic marketing instruments”.
According to them, it is not surprising that it lends itself more
readily to contradiction, conversely, conformity, imagination, subjective
judgement and bizarre management decisions than other marketing variables.
Sales
promotion embraces all activities and devices that are designed to sell more
products and to create goodwill, directly or indirectly. A wise commonly accepted view, however is
that sales promotion concerns only those activities and devices whose primary
function is that of inviting, persuading and otherwise encouraging and
stimulating trade.
The
relative importance and effectiveness of the different types of promotional
effort naturally vary considerably from industry and from time to time. Success with these sales building tools
depends upon ability to organize and coordinate them into a unified programme,
tailored to the specific needs of a particular industry and its products.
Promotions
including selling and advertising has received the greatest attention in
marketing practice and research according to Sheth and Garrett (1986
p 86). There are several emerging
issues in promotional management. First,
there is a growing belief that companies need integrated communications across
all channels, such as selling, advertising, packaging, sales promotional and
public relations. This integration has
been lacking in the past, with inconsistencies in the brand product or
corporate positioning. Also there is a
growing interest in electronic shopping and selling and their impact in the
promotional function. For the first time
it seems possible to bring the producer and the customer closer to each other
on a direct and “real-time” basis through the current innovative sales
promotion strategies.
A
sales promotion strategy prescribes the role to be played by every means of
disseminating information to customers about a particular product. This aspect of formulating this strategy
includes such factors as determining information to be communicated to
consumers, the objectives of the promotions strategy, the budget for the sales
promotions and the means or tools for disseminating information. The aim of every promotional strategy being
the purchase and use of a product or service.
1.2 STATEMENT
OF THE PROBLEM
The
major focus of this study is to solve the problem that arises from a company’s
sales promotion method on its product performance and the market share of the
organization. Basically, the main issue
is to know the extent which promotional effort has led to increase in sales
volume and profitability.
1.3 OBJECTIVES
OF STUDY
The
main objectives of the study at hand – The effect of sales promotion on product
performance and market share of the organization: A case study of Nestle Foods
Nigeria Plc are:
i.
To examine the effect of sales promotion on a
people’s buying behaviour – with special reference to the food and beverage
industry.
ii.
To review the effect of Nestle Foods Nigeria
plc sales promotion strategies on its product performance in the market and
hence determine the areas of weaknesses.
iii.
To proffer suggestions on better ways to
influence buyers in the choice of goods they have not been attached to.
1.4 RELEVANCE
OF STUDY
In
any organization, it is important to examine the cost. It is important to do a “cost-benefit”
analysis before a decision is taken and after the outcome of the decision
taken. Nowadays, sales promotion
constitutes a major financial investment and an essential part overhead cost.
Therefore,
it is justified and relevant to review the benefit being derived from huge
amount of money spent on sales promotions by many producing companies. There is the need to see how much is gained
in terms of increased sales volume and profits from sales promotional efforts
of a company.
1.5 SCOPE
OF STUDY
The
scope (which is the same as delimitation of study), will be limited to the
company being used for Nestle Foods Nigeria Plc. Therefore, relevant data will be collected
from Nestle Foods Nigeria Plc. Moreso,
there are many sales promotions strategies that can be used by an
organization. These strategies can be
combined or directed at a particular functional area.
However,
this study is restricted to sales promotion strategy. Also, since Nestle Foods Nigeria Plc produces
many products, there may be specific sales promotion strategies in use. This research study is concerned with the
broad strategies and objectives of sales promotions in Nestle Foods Nigeria Plc
and not for specific products.
1.6 LIMITATION
OF STUDY
As
a result of short period before the researcher as well as constraint of
resources, the researcher is not able to cover all the aspects of sales
promotion in this study hence, he would limited himself only to the effect of
sales promotion on the performance of company product and market share of the
organization in Nigeria market.
1.7 RESEARCH
QUESTIONS
In
this research study, the following research questions were provided with
appropriate answers.
i.
How has sale promotions increased sales volume
and hence profit levels in the company?
ii.
How does a sales promotional strategy
influence consumer permanent acceptance of a product?
iii.
How does company business operations improve
through strategic sales promotion?
1.8 RESEARCH
HYPOTHESES
The
hypotheses used for this study is generated from the research questions above
and comprise the Null hypothesis (Ho) and Alternative hypothesis (Hi). A hypothesis is a conjecture or a quess about
the relationship between two or more variables.
They include:-
1. Ho: There
is no direct relationship between sales
promotion
and the sales volume of Nestle Foods Nigeria Plc.
Hi: There
is a direct relationship between sales promotion and the sales volume of Nestle
Foods Nigeria Plc.
2. Ho: Sales
promotion does not create permanent
consumer acceptance of a product.
Hi: Sales
promotion creates permanent consumer acceptance of a product.
3. Ho: Business
operations does not improve through
strategic sales promotion.
Hi: Business
operations improves through strategic sales promotion.
1.9 RESEARCH
METHODOLOGY
The
sales promotion efforts of Nestle Foods Nigeria plc is the basis on which the
research hypothesis is tested. Being the
case study for this research work, acceptance of hypothesis, interpretation and
conclusions is based on the extent of information gathered from the company.
1.10 MODE
OF DATA COLLECTION
Data
is collected through the use of questionnaire; other data may be obtained from
the records of the company. These may
include costs of sales promotion efforts, sales volume and profit levels for
corresponding number of years.
1.11 DATA
ANALYSIS
The
mode of analysis of data will be used on the quantity of information
collected. However, statistical methods
such as simple percentage and chi-square were used to analyse the questionnaire
and to test the hypotheses in this research work.
1.12 DEFINITION
OF TERMS
i.
SALES PROMOTION: Asika (2000 p 1) defined sales
promotion management as “a task of planning, organizing, coordinating and
controlling all activities aimed at passing current and relevant information to
customers and potential customers so as to facilitate increased and continuous
patronage”.
ii.
PUBLICITY: Is non-personal stimulation of demand for a
product, service, or business unit by planting commercially significant news
about it in published medium, or obtaining favourable presentation of it upon
radio, TV, or stage that is not paid for by the sponsor. (Alexander et al
1990 p 350).
iii.
PERSONAL SELLING: Is the process of making oral commercial
presentation during buyer/seller interview situation. It is colloquially referred to as
face-to-face selling, and sometimes known as buyer/seller interface. (Wilmshirtst
1998 p 143).
iv.
PUBLIC RELATIONS: Is a management function which helps to
establish and maintain mutual lines of communication, understanding, acceptance
and cooperation between an organization and its publics involving the
management to keep informed on and responsive to public opinion, defining and
emphasizing the responsibility of management to serve the public interest,
helping management to keep abreast of and effectively utilize change, serving
as a memory system to help anticipate trend, and using research and sound
ethical communication techniques as its principal tools. (Harlow 1996 p
263).
v.
ADVERTISING: Is one of the four major tools that companies
use to direct persuasive communications to target buyers and publics. It consists of non-personal or one-way forms
of communication conducted through paid media under sponsorship. (Kotler
1998 p 35).
vi.
PROMOTIONAL MIX: Is the strategic combination of advertising,
personal selling, sales promotion and public relations that can be devised to
reach the foods of the sales programme. (Asika
2000 p 79).
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