ABSTRACT
The aim of this study is to evaluate the impact of
sales promotion on the profitability of a firm’s product in a depressed
economy. The challenges that propelled this study revolved around the fact that
some organizations are not worry of the impact of sales promotion on alcoholic
drink industry in Nigeria and a downward economic trend. Failure on the part of
the organization to assess consumers attitude towards sales promotion can be
seen as catastrophic, since it is difficult to forecast the demand for the
products, other organizations have not been able to unearth the sales
promotional strategy that can be utilized to increase profitability and sales
volume in the organizations during economic recession. There is also a
mono-strategy syndrome by organizations who concentrate solely on one type of
advertising method while failing to realize the potentiality of sales promotion
on turnover relative to other forms of advertising. The study population
consisted of all the employees and customer. The Nigeria Brewery Company Plc,
Edo State, from which a sample of 150 cutting across all levels and department
within the organization were selected for the purpose of investigation.
Questionnaire formed the major instrument of collecting the data from the
staff, it was structured using 5 – point likert scale, 200 respondents were
served with questionnaire representing 100%. The data were than tested using
the chi-square test statistics. From the analysis it was revealed that sales
promotion have helped to increase the market share, of the organization sales
during recession. The product must be right in terms of acceptability,
availability and affordability. The publicity of the sales promotion must also
be adequate, more so the size of the incentive must be attractive but not two
attractive.
TABLE OF
CONTENTS
Title Page i
Certification ii
Dedication iii
Acknowledgements iv
Abstract vi
Table of Contents vii
CHAPTER ONE:
INTRODUCTION 1
1.1 Background to the Study 1
1.2 Statement of Problem 3
1.3 Research Questions 4
1.4 Statement of Hypotheses 5
1.5 Purpose of Study
5
1.6 Scope of the Study 6
1.7 Significance of the Study 6
1.8 Limitation of the Study 7
1.9 Operational Definition of Terms 7
CHAPTER TWO:
LITERATURE REVIEW 10
2.1 Introduction to the Study 10
2.2 Current Literature Review 10
2.3 Relevant Theories of the Review 31
2.4 Summary of the Chapter 34
CHAPTER THREE:
RESEARCH METHODOLOGY 35
3.1 Introduction 35
3.2 Research Design 35
3.3 Population of the Study 35
3.4 Sample and Sampling Techniques 35
3.5 Data Collection 36
3.6 Method of Data Analysis 37
CHAPTER
FOUR: DATA ANALYSIS, INTERPRETATION
AND DISCUSSION 39
4.1 Presentation of Data 39
4.2 Data Analysis 43
4.3 Test of Hypotheses 52
4.4 Discussion of Findings 55
CHAPTER FIVE:
SUMMARY, CONCLUSION AND
RECOMMENDATIONS 57
5.1 Summary of Findings 57
5.2 Conclusion 58
5.3 Recommendations 59
References 60
Appendices 62
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND TO THE STUDY
Promotion is one of the
basic elements in marketing strategy whose impact is underscored by the
contemporary events within and outside the country. There is no gain saying the
fact that the nation is passing through a period of economic crisis whose impact
not only cuts across the rank and file of the citizens but her business
organizations as well. Business success therefore becomes vital and bring on
the ability of organizations to produce its goods and services profitability
yet to obtain this success if just a mirage to an organization unless the
consumers or users are head to buy its products as a result of effective sales
promotional efforts.
According to Ezek
(2008), sales promotion is one of the ways companies/cooperatives business
owners rewards customers and in turn project the business to attract more
customers. But most companies deviate from this, and curiously use sales
promotion onto exploit and hurt customer. Moreover, a couple of organizations
sometimes rather than reward regular customers, reward those who rushed to the
company because of the promotion, those who have it in mind to go back to
previous after the promotion. As a result, most companies after promotion,
experience reduction in sales patronage.
Basically, promotion
consists of those activities, aimed at bringing a company’s goods and services
to the favourable attention of customers.
Divergent view as held
by different writers on what constitute the elements of promotional mix.
Promotional mix in this
regards refers to the basic combination of promotional method used by an
organization for a particular product is consists of those marketing activities
other than personal selling, advertising and public relation than stimulate
purchasing and dealer effective. Example is displays, contests, demonstration,
shows and expositions and various non-current selling efforts that are not in
ordinary routine.
1.2
STATEMENT OF THE PROBLEM
Sales promotion is one
of the backbones of any successful organization effort in the contest of
marketing. Therefore, companies spend a lot of money on sales promotion. Some
companies with little budget for sales promotion have recorded drastic fall in
profit which has resulted in retrenchment of workers.
Some organizations are
not aware of the impact of sales promotion on alcoholic industry in Nigeria and
the economy at large organizations to assist consumers attitude towards sales
promotion can be seen as a catastrophic, since the organization cannot forecast
the demand for product.
Other organization has
not been able to discover the sales promotion strategy that can be utilized to
increase profitability and sales volume growth in organizations during economic
recessions.
There is also a minor
strategy syndrome by organization who concentrates solely on type of
advertising method while failing to realize the potentiality of sales promotion
on turnover relative to other forms of advertisement.
There is also the
problem of decoding which choice of sales promotion activity is cost effective
for a specific situation.
1.3
RESEARCH QUESTIONS
Data analysis is used
to answer the following for appraising how sales promotion effectively
increases profitability in a depressed economy.
1.
Does sales
promotion affect organizations sales during a depressed economy?
2.
Does sales
promotion affect an organizational profitability during economy recession?
3.
What is the
effect of sales promotion on the economy at large during hold-rums?
4.
What are the
challenges militating against the effective use of sales promotion during
economy recession?
1.4
STATEMENT OF HYPOTHESES
Ho: Sales promotion does not affect organizational
profitability during economy depression.
Hi: Sales promotion affects organizational profitability
during economy depression.
Ho: Sales promotion does not increase organizational
sales during economy recession.
Hi: Sales promotion increases organizational sales
during economy recession.
1.5
PURPOSE OF THE STUDY
The fundamental of the
objective of this study is to examine the extent to which sales promotion can
affect company profitability, particularly during a depressed economy.
However, the specific
objectives are to:
1.
Bring about a
change in the demand pattern of products and services.
2.
To increase
consumer demand, stimulate market demand and improve product availability.
3.
Serve as link
between advertisement and personal selling, thereby to provide extra value that
encourages purchase, when it is targeted at consumers.
1.6
SCOPE OF STUDY
This research project
is concerned with the validity that exist between sales promotion and
profitability.
Its also intended to
look at the sales promotion as a strategic tool for expanding sales volume by
marketing organization in Nigeria with Nigeria Brewery Plc as a case study. The
research examines how companies use sales promotion tools not only as a
strategy for competition but also influencing growth, consumer buying habits
and to increase turnover.
1.7
SIGNIFICANCE OF THE STUDY
This study have shown that marketing
techniques have great influence on the profitability of any company, thus this
study seek to examine the function of sales promotion programmes and to
consider the effectiveness of sales promotion in the market. The finding and
recommendation of this study produces greater awareness on the part of the
organization particularly in the area of sales promotion. Management, students
and academics can utilize the conclusions and recommendations based on this
research work as a vendible tool in varying specialized field of study of some
of information a reference point and a guide from further researcher in this
field of study.
1.8
LIMITATION OF THE STUDY
This research work will
be limited to the effects of Edo State Brewery Plc, Benin City on the role of
sales promotion and profitability in a depressed economy.
The research work does
not go beyond into the sales promotion of other Brewery companies like
alcoholic industry because they are included in any research work.
1.9
OPERATIONAL DEFINITION OF TERMS
For better understanding
of this research work some of the terminologies used in this work are explained
below.
MARKETING
American Marketing Association (AMA) 2011),
defined marketing as the activity, set of institutions, and processes for
creating, communication, delivering and exchanging offerings that have value
for customers, clients, partners, and society at large.
Kotler (2011), defines
marketing as the science and art of exploring, creating and delivering value to
satisfying the needs of a target market at a profit.
Marketing is the
process by which a firm profitably translates customers need into revenue
(Burgess, 2011).
COUPON
Olajide (2002), states that a coupon is a
voucher attached to goods for sales indicating that payment is to be made.
It as a reduce of a
product is precise and are used to promote customers to try new and established
products (Idogho and Agbaiza, 2010).
Kotler (1984) sees it
as a reward presents product users, win back former users, and encourage
purchases in large quantities.
MARKETING MIX
Kotler (2013) opines
that marketing mix are terms used to describe the contribution of the four
elements, strategies that are constant for they are of a company’s marketing
system.
Kotler (2006), define
marketing mix as the set of marketing tools the firm uses to pursue its element
of the marketing mix must blend and fit together in harmony with the other
elements.
Marketing mix according
to Stanton is the term used to describe the combination of the four inputs
which constitute the core of a company’s marketing system. The product, the
price structure and the promotional activities, and the distribution system.
SWEEPSTAKES
Howard (2006) defined sweepstakes as prices
awarded according to decision of event.
It is an inclusion in a
drawing for prices. It is often used to stimulate sales and are sometimes
teamed with other sales promotion methods (Amodu, 2006).
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