THE IMPACT OF SALES PROMOTION IN A BUSINESS ORGANIZATION (A CASE STUDY OF NIGERIAN BOTTLING COMPANY PLC)

THE IMPACT OF SALES PROMOTION IN A BUSINESS ORGANIZATION (A CASE STUDY OF NIGERIAN BOTTLING COMPANY PLC)

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CHAPTER ONE

INTRODUCTION

1.1       Background to Study

Sales promotion had been adopted by business firms and marketing practitioners long before the coming of Europeans to Nigeria in 18th/19th centuries. As a matter of fact, many business firms had been using sales promotion in marketing their goods and services to Nigerian consumers before the coming of the Europeans to Nigeria, and before the sad Biafra – Nigeria war, of the sixties (1967 – 70).

Multinational firms, mainly of European background or origin had adopted sales promotion practices and strategies in selling products and services to their Nigerian Customers and or consumers, before and after 1914, (the year/period of the amalgamation of the Northern and Southern protectorates of Nigeria) to the present day civilized Nigerian society / consumer. (Nkem 1999).

Before the arrival of the Europeans in Nigeria, Nigerian Entrepreneurs/business organizations had several unorthodox methods of carrying out sales promotional activities, such as going from hamlet to hamlet, village square to village square or from town to town with their products, bargaining and negotiating prices for their produce. Also during local market days, sales promotion was carried out or done by ringing bells in market squares, and through this means, consumers, were attracted to bargain for prices and will invariably wind up, buying a commodity or product of their choice at a reduced price, or bargained price, or price off.

In Nigeria today, sales promotion is still common. Sales promotion is practiced during auction sales, Bazaar sales, Christmas period, Easter period and during other special events.

Sales promotion is important for reaping immediate fruit achieving immediate returns or achieving success at the market place, as far as marketing of goods and services are concerned.

Among, the business firms that had adopted or had been making use of sales promotion in the marketing of their goods and services in Nigeria are all blue chip companies, quoted in Nigerian Stock Exchange such as Nigerian Breweries PLC, Cadbury PLC, Nestle PLC, Christleb PLC, Lever Brothers, U.A.C. Group of Companies, Neimeth Pharmaceutical company, Guinness PLC, 7up bottling company and all seasoning companies etc.

Sales promotion is an indirect form of marketing promotion intended to stimulate quick action.

It is those marketing activities-other than personal selling, advertising and publicity-that stimulate consumer purchasing and dealer effectiveness, such as display, shows and exhibitions, demonstration, coupons, sweeps-take competition, contests, samples, premiums, trade allowance, point of purchase displays, cent-off packs and dealer allowances, and other known routine selling efforts that are usually of short term activities.

Sales promotion can also be seen as a form of “incentive marketing” Incentive marketing, among other things, helps to ensure repeat purchasing when well executed, and repeat purchasing is the key to successful marketing or successful business (Schewe 1987). More specifically, however, sales promotion can be defined as a set of activities made up mainly of immediate or delayed ‘incentives to purchases, expressed in cash or in kind over a short period and whose main objective is to increase the sales volume for any product or service.

Even though most sale promotion campaigns are aimed at achieving short-term sales objectives, it must be noted that it can also perform the function of helping to achieve long-term sales and other marketing or business objectives. Sales promotion has for instance, been increasingly shown to be a long-term image builder, awareness creator and a veritable communication medium (Bantick, 1980). Furthermore, sales promotion contributes to the utilitarian value of advertising. For example, much of modern advertising is geared towards publicizing the promotional effort. Also, sales promotion facilitates the processes of product or service differentiation and effective positioning in an increasingly competitive market as exists in Nigeria. Sales promotion is, of course, a marketing tool that can be gainfully employed in offensive and defensive marketing of any product or services, (Nwosu 2001).

According to (Kinnear and Bernharelt, 1993), sales promotions is intended to aid both consumer pull an dealer push. They thus categorized common sales promotion techniques in terms of their consumer and dealer focus.

Consumer pull promotion techniques are such activities like sampling, price incentives or deals, coupons, cent-off-offer, returned or rebate, contests, sweeps-take competition, premium like free-in-the mail, self liquidatory and reliable containers. While trade push promotions techniques are such activities like training, inventory controls, displays and financial assistance.

Before the sixties, sales promotions has not become popular, but in recent years have grown so rapidly between 1969 and 1976, and much more in the late eighties. It is this valid increase therefore, and especially now that world economies like Nigerian are in down turns, that has promoted this research on the impact of sales promotion in a business organisation, case study of Nigerian Bottling Company Plc.

1.2       STATEMENT OF PROBLEM

The use of sales promotion helps in promoting sales of a particular product. But it has many problems which includes

(1)        The problem of assessing the growth / development of sales promotion from post-independence till date.

(2)        The problem of determining factors that contributes to increase in sales promotion adoption in Nigeria.

(3)        The problem of knowing the prospects and problems of sales promotion.

(4)        The problem choosing the best available sales promotion tool(s), in other to achieve the set goal.

(5)        How ethical those companies are whether the various offers projected during the sales promotion are genuine and fulfilled.

Hence this research work which seeks to address the impact of sales promotion in a business organisation, case study of Nigerian Bottling Company Plc.

1.3       RESEARCH OBJECTIVES

So considering the enormous cost, it has become necessary to evaluate this action to determine the cost effectiveness of this expensive programme and the response.

(i)         To determine the major type(s) of sales promotion practiced in Nigerian Bottling Company Plc..

(ii)        To determine how sales promotions activities are executed.

(iii)       To determine the prospects and problems of sales promotion.

(iv)       To determine the effect of sales promotions on consumers long term demand for products/services so promoted.

(v)        To assess the acceptability of sales promotion as a marketing strategy by consumers.

(vi)       To determine how to design and manage sales promotion.

(vii)      To assess their ethical consideration while engaging in sales promotion.

1.4       SIGNIFICANCE OF STUDY

That sales promotions activities have been rapidly on the increase in recent times, indicates its importance in the marketing of products.

The extent of company’s sales that is attributed to the effectiveness of sales promotion is not yet determined. The determination of this will enable companies in relation to the cost involved decide whether to continue or not. The result of this research will enable sales promotion manager or director to know how to position their product and carry out their sales promotion strategies ethically.

Again, this equally will contribute to efforts at enhancing people continuing understanding or the rationale of sales promotion campaign.

1.5       DEFINITION OF TERMS

Sales – An act or the process of selling something.

Promotion – Activities done in order to increase the sales of a product or service; a set of advertisements for a particular product or service.

1.6       LIMITATIONS OF STUDY

Due to limited financial resources, this study is carried out only in Nigerian Bottling Company Plc Enugu state, because of its large population and position in the country with a manageable sample size which the researcher can conveniently cope with. Again, the available time within which to complete the study is short. As such, the researcher must of necessity use an easily accessible population.


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