ABSTRACT
The
Purpose of this research study is to examine the role of sales promotion on
consumer behavior in the beverage industry using Nigerian Bottling Company
Pic., as a case study.
The
researcher made use of both primary and secondary sources of data collection
which include the use of questionnaires to elicit information, and review of
textbooks, journals, internet sources etc. Statistical tools such as frequency
distribution, simple percentage tables and the Chi-Square (x2) were used to analyze the
data received and test of hypotheses.
The
findings in the hypotheses tested showed that; that inadequate knowledge of
consumers' taste, behavior, and poor need identification affects sales
promotion strategies, and that sales level will continue to increase as the
level of promotional activities increases in the organization. Also, findings
show that the level of resources available for executing sales promotional
activities can eventually affect the success or otherwise of the sales
promotion.
The
researcher also made the following recommendations based on the findings; that
Organizations should appreciate the importance of promotion on sales of their
products; hence, they should have a well structured promotional strategy. The
best combinations of promotional mix strategies that a company may use to
achieve optimum sales were not identified. In fact, the research revealed that
the combination of these strategies does not lead to low sales or otherwise.
What matters most is the efficiency of resources needed for the promotion and
the timing of the promotional activities.
Also,
adequate knowledge of consumers taste, behaviour, and poor need identification
which affects sales promotion strategies must be ensured before embarking on
the sales promotion activities.
TABLE
OF CONTENT
Title Page i
Certification ii
Dedication iii
Acknowledgement v
Abstract v
Table of Content vii
CHAPTER
ONE: INTRODUCTION
1.1 Background
of the Study 1
1.2 Statement
of the Problem 3
1.3 Objectives
of the Study 4
1.4 Research
Questions
1.5 Research
Hypotheses 5
1.6 Significance
of the Study 6
1.7 Scope
of the Study 7
1.8 Limitations
of the Study 7
1.9 Definitions
of Term 8
CHAPTER
TWO: LITERATURE REVIEW
2.1 Conceptual
Definition of Sales Promotion 10
2.2 Sales
promotion Objectives 12
2.3 The
Importance of Sales Promotion 14
2.4 Sales
Promotion Tools 15
2.5 Major
Sales Promotion Decisions 20
2.6 Factors
Affecting Sales Promotion Effectiveness 22
2.7 Sales
Promotion and Consumer Behavior 23
2.8 Factors
influencing Use and Form of Sales Promotion 25
CHAPTER
THREE: RESEARCH METHODOLOGY
3.1 Population
and Sample Size 28
3.2 Research
Design 28
3.3 Data
Collection Instrument 29
3.4 Administration
of Instrument 30
3.5 Method
of Data Analysis and Procedure 30
3.6 Restatement
of Hypotheses 31
3.7 Validity
of Research Instrument 32
CHAPTER
FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Introduction 33
4.2 Analysis
of Personal Data of Respondents 34
4.3 Analysis
of Data form Questionnaire 37
4.4 Test of
Hypotheses 46
CHAPTER
FIVE: SUMMARY, CONCLUSION AND
RECOMMENDATIONS
5.1 Summary 56
5.2 Conclusion 58
5.3 Recommendation 58
5.4 Suggestions
for Further Study 59
Bibliography 61
Questionnaire 63
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE
STUDY
Promotion
is an important element of the marketing mix known as the four p's of
marketing. The promotional mix consists of Advertising, Personal selling, Sales
promotion, Publicity, and Public relations. As marketers communicate to
encourage and influence consumers to accept and adopt their goods and services,
the company that can establish a reputation for trustworthiness,
progressiveness and social responsibility stands an advantage over other firms
in the mind of both actual and potential consumers.
In
recent times, the promotional strategy used to propel sales growth has witnessed
tremendous increase in volume, complexity, competitiveness, customer
sophistication and globalization of customer service. Therefore, is becomes
imperative to evaluate the effect of promotional strategies on the sales growth
of an organization with reference to Nigerian Bottling Company, makers of
ranges of cosmetic products.
A
strategic planner should determine the blend of activities that will achieve the
company's promotional goals. These promotional goals are set to positively
affect the sales growth of the company. In order to accomplish these promotional
objectives, a marketer must take decisions in five key areas namely:
Ø Who
are the target audience?
Ø What
are the desired responses from the audience?
Ø What
message should be developed?
Ø What
media should be used?
Ø What
source attributes should accompany the message?
The
fundamental question arising from this scenario is how the company determines
what mix of promotion tools it will use. Each promotion tool has unique
characteristics and costs, and marketers must understand these characteristics
in selecting their mix of tools.
According
to Kotler (2006), "marketers can choose from two basic promotional mix
strategies - push promotion or pull promotion". The combination of the
promotion tools to form a promotion strategy, given the fad that, each of the
promotion tool vary with stages of the product life cycle, situation, and for
products.
In
the face of stiff competition in the dynamic market, the marketer has no choice
if he still wants to remain in business, to strategies means of positioning his
products favorably in the minds of consumers than competitors’ products. Hence,
the importance of the promotion tools.
1.2 STATEMENT OF PROBLEM
Promotion
essentially is meant to stimulate demand, communicate effectively to the
consumers the product benefits, and inform consumers about what they ought to
know. However, problems have arisen as a result of combining the different
promotional tools to increase sales growth are as follows:
Ø Consumers
in some cases see promotional strategies as means whereby marketers
unnecessarily force them to buy what they do not want to buy.
Ø Another
issue arising is that organizations do use some other marketing mix elements to
increase sales, especially, price mix and product.mix, therefore consumers do
not respond to promotion tools alone.
Ø Many
organizations do not appreciate the importance of promotion on sales of their
products; hence, they hardly have a well structured promotional strategy.
Ø The
best combinations of promotional mix strategies that a company may use to
achieve optimum sales growth have continued to
be a nightmare. The ineffective combination of these promotional mixes has often
times led to low sales and loss of customers.
1.3 OBJECTIVES OF THE STUDY
One of the objectives of this study is to examine the
consumer's perception about promotional activities carried out by an
organization.
Also this research work is aimed at examining the various
promotional tools used by the case study, and find out if only such promotional
strategies are necessary for improving sales growth.
The research work shall also look at the importance of the
promotional strategies to sales growth and eventually examine the various
combinations of promotional mix used by Nigerian Bottling Company.
1.4 RESEARCH QUESTIONS
This research work will seek to answer questions related to
problems that have been stated earlier on in this chapter. The questions are as
follows:
RQ 1 \what are the consumer's perceptions about
promotion in their buying decision process?
RQ 2 Are promotional tools the only strategy for
improving safes growth in an organization?
RQ
3
What is the importance of promotional
strategy to sales growth in the manufacturing industry?
RQ
4
What are the best combinations of promotional
mix strategies that a company may use to achieve optimum sales growth?
1.5 RESEARCH
HYPOTHESIS
Hypotheses
are tentative statements about the relationship between two or more variables.
For the purpose of this study, the following hypotheses will be tested:
The
Null Hypothesis (Ho) and the Alternate Hypothesis (Hi)
HYPOTHESIS 1
Ho:
Inefficient combination of promotional
strategies will not bring about low sales growth.
Hi: Inefficient combination
of promotional strategies will bring about low sales growth.
HYPOTHESIS 2
Ho: Increase in sales is not affected by the
level of sales promotional activities
Hi: Increase in sales is affected by the level of
sales promotional activities
HYPOTHESIS 3
Ho:
Adequate resources needed for executing
sales promotional strategies to increase sales volume has no effect on the
company's ability to engage in it.
Hi:
Adequate resources needed for
executing sales promotional strategies to increase sales volume has no effect
on the company's ability to engage in it.
1.6 SIGNIFICANCE
OF THE STUDY
The
major significant of this research work is to the researcher. This is because
the research work is required in partial fulfillment of the requirement for the
award of the Bachelor of Science (Bsc) in Marketing.
The
research work is also of great Significance to the case study as a source of
eliciting information for the best combination of the promotional mix
strategies.
Also,
the research work is of great significance to the manufacturing sector or firms
in order to realize the importance of promotion in the present complex and
dynamic business world. This is the ideology behind the slogan, "To sell,
you have got to tell".
Lastly, the research work will ultimately criticize the
past work of different scholars in order to validate their assertions on the
subject matter. Findings shall determine if such assertions shall be accepted
or refuted.
1.7 SCOPE OF THE STUDY
This research project is mainly concerned with the study of
the effect of sales promotional strategies on the sales of an organization,
with Nigerian Bottling Company as the case study. The study will cover the
sales promotional tools used by the company on one of its products -Coca Cola.
Questionnaires shall be distributed to the staff of the company in their
various departments and top personnel. The scope of the study will also be
limited to the company's head office at Ikeja, Lagos State.
1.8 LIMITATION OF THE STUDY
These are the major factors that inhibit the research work.
Among other things are the following:
The inability to accurately complete the questionnaire, and
the difficulty in comprehending what is actually required stands as hindrances
to the research work.
The lack of financial aid also stands as a bottleneck to
the progress of this research work. In as much as virtually all companies
engaged in one form of advertising or the other are unevenly
dispersed around the town, it becomes a tedious task if not impossible for the
researcher to go round all the companies in the country to make enquiry.
Accurate
data is basic to any research work, so to say, but it is quite unfortunate that
accurate data is not obtainable in Nigeria. Data required are not available and
where available, they are mere estimates and not obtained through rigorous
research work. Inadequate texts in the library are also a constraint here.
Other
factors that stood as constraint to this research are time factors, secrecy on
the part of the respondents to give vital information.
1.9 DEFINITION OF TERM.
ADVERTISING:
This is defined as ant paid form of non - personal presentation and promotion
of ideas, goods or services by an identified sponsor.
PERSONAL SELLING:
Personal presentation by the firm's sales force for the purpose of making sales
and building customer relationship.
SALES PROMOTION:
Short - term incentives that encourages the purchase or sale of a product or
service.
PUBLIC RELATIONS:
Building god relations with the company's various publics by obtaining
favorable publicity, building up a good "corporate image," and
handling or heading off unfavorable rumors, stories, and events.
DIRECT MARKETING:
Direct communications with carefully targeted individual consumers - the use of
telephone, mail, fax, e-mail, the internet, and other tools to communicate
directly with specific consumers.
STRATEGY:
It is a game plan for getting or achieving goals or objectives.
SALES VOLUME: The term is used to describe
the sales realized by an organization and it is expressed in quantitative
physical and volume terms.
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