THE IMPACT OF SALES PROMOTION AS A TOOLS OF PROMOTIONAL MIX IN BEVERAGES INDUSTRY (A CASE STUDY OF CADBURY NIGERIA PLC)

THE IMPACT OF SALES PROMOTION AS A TOOLS OF PROMOTIONAL MIX IN BEVERAGES INDUSTRY (A CASE STUDY OF CADBURY NIGERIA PLC)

 

ABSTRACT

As many organization on several sales promotion strategies and advertising agencies, their bid to capture as much sale volume they could. Therefore, the decision that are made there must be consistently with the decision about the product, price and the distribution of the same product. The research work conducted is expected to show the response of consumers towards the sales promotion adopted by the company. That to show up if the sales promotion will motivate prospective customer in buying the product. Mostly, to show if the sales promotion adoption by Cadbury Nig. Plc. really contributed to its sales volume profit and or its market share. For the method of data used in the research is basically on the questionnaire therefore, some will be given to the staff Cadbury Nigeria Plc and also to their customers. Hence the study of this research work is not restricted to level area or staff or even the customer.

 

CHAPTER ONE

Background to the Study

          According to Stan Kossen and Nerrith (1977) promotion a fuzzy concept. Virtually everything a firm uses to foster the sales of its products. Therefore, it is the most important of all the products. Therefore the reason for many industries embezzling on sales promotion is to help he consumer to be able to identify their products from that of the competitor when distribution system are similar.

Sales promotion as defined by several authors. According to (Asia Development Bank, 2003) sales promotion is one of the seven aspects of the promotional mix (the other size parts of the promotional mix are advertising, personal selling, direct marketing, publicity/public relations, corporate image and exhibitions). Media and non-media marketing communication are for a pre-determined, limited time to increase consumer demand, stimulate, market demand or improve product availability. Examples include contests, freebies, loss leaders, point of purchase displays, coupons, premiums, prizes, product sample sand rebates.

Sales promotions can be directed at either the customer sales staff or distribution channel members (such as retailers). Sales promotion targeted at the consumer are called consumer sales promotion (Bajah 2000).

Sales promotion includes several communication activities that attempt to provide added value or incentives to consumers, wholesalers, retailers or other organizational customers to stimulate immediate sales. These efforts can attempt to stimulate product interest, trial or purchase (Greenidge 2003).

Ige (2000), sales promotion is the process of persuading a potential consumer to buy the product. It is designed to be used as a short term factor to boost sales. It is not really designed to build long-term customer loyalty.

Some marketers and advertising agencies have chosen several sales promotion strategies in order to have high or greater returns in their sales volume, the main objective of sales promoters is mainly on demand creation couple with the method of undertaken demand creation through advertising and personal selling. Hence the purpose of sales promotion is to boost on the spot buying by prospect.

American marketing association described sales promotion as those marketing activities other than personal selling, advertising and publicity, that stimulate consumer purchasing and dealer effectiveness; such as display shows and expositions demonstrations and various non-recurrent selling efforts not in the industry routine

Philip Kowez (1960) refers to sales promotion as a short-term invention to encourage purchase of sales of a product of service.  It is the catchall for various promo-tools that are not finally classifiable as advertising personal selling or publicity.

Several factors have contributed to the rapid growth of sales promotion, particularly in consumer markets, first, inside company, product manager face greater pressures to increase the current sales, and promotion now is accepted more by top manager as an effective sales tools.  Secondly, externally the company pays more competition, and competing brands are loss differentiated.  Competitions are using more promotions, and consumers have built more deal oriented.

Therefore, this activity should not be articulated to other departments that are concerned primarily with advertising or the personal sales force.

Statement of the Problem

          The problems are as follows:

  1. Some firms adopt sales promotion in order to create large customers thereby meeting up with their target profit.
  2. Some people believe within themselves that sales promotion performed by any organization is used to cajole people so as to increase their sales.
  3. Inadequate of sales promoters in the industries brought about poor development of raw materials in Cadbury Industry.
  4. Some organization does not really know what sales promotion is and they practice it because their competitors does so.
  5. Some people fall in love with a product because of the sales promotion attached to it, immediately the sales promotion is removed, the demand to such product will fall drastically.
  6. If what is expected as sales/profit is not realized after sales promotion have been adopted, then it will show a defect on the organization.

Purpose of the Study

     The reasons for carrying out this research are as follows:

  1. This project sought to investigate the role of sales promotion as a tool of promotional mix in beverages industries.
  2. To know how customers react towards sales promotion.
  3. To know if consumers will continue to demand for the product even after the sales promotion programmers evade.
  4. To know whether sales promoter help to contribute more to the sales volume of the organizations.
  5. To know if sales promotion will bring customers in buying the product.
  6. To know the effectiveness of sales promotion among other promotion tools.

Research Questions

The research questions are as follows:

  1. Will there be any significant role of sales promotion as a tool of promotional mix in beverages industries?
  2. Is there any change in consumer behaviour when sales promotion stops?
  3. Does sales promotion create any impact or effect on the profit of the organization?
  4. Do the organization bear the burden more than the consumer if such product is not purchased as expected?
  5. During sales promotion programs, will consumer buy more of the product than when there is no sales promotion?

Delimitation of the Study

     The study is delimited to two industries which were randomly selected in Ojo Local Government Area of Lagos State.

Limitation of the Study

     The study was limited to some selected industries in local government of Lagos State due to the time and financial factor  .

Definition of Terms

Pricing:- This is the process of deterring what a company will receive in exchange for its products.

Product Marketing: Deals with the first of the 7P’s of marketing which are  product, pricing, place, and promotion, packaging, positioning and people.

Brand Management: This is the application of marketing techniques to a specific product, product line or brand.

Account Based Marketing:- this is also know as key account marketing.  This is a strategic approach to business marketing in which an organization considers and communicates with individual prospect or customer account as markets of one.

Segmentation:– Is a classification of potential private or corporate customers by one or more characteristics

Marketing Strategy:- This is a process that can allow an organization to concern/rate its limited resources on the greatest opportunities to increase the sales and achieves.

Publicity: This is the deliberate attempt to manage the public’s perception of a subject.  The subjects of publicity include people (for example, politicians and performing artist) goods and services, organizations of all kinds and work of art or entertainment.

Product Placement:- this is a form of advertisement where branded goods or services are placed in a curtest usually devoid of aids such as movies, music, videos, the story line of the television shows or news programs, the product placement is not disclosed at the time that the goods or services is featured.