CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND TO THE STUDY

Sales promotion is one of the four aspects of promotional mix or marketing mix, (the other three parts of the promotional mix are advertising, personal selling, and publicity/public relations). Sales promotion includes the media and non-media marketing communication mix or tools employed for a predetermined, limited time to increase consumer demand, stimulate market demand or improve product availability (American Marketing Association). Some of the examples of sales promotion which are good in carrying out the above definition are contests, point of purchase displays, rebates, rebates, free travel such as free flights (American Marketing Association).

Sales promotions can be directed at either the customer, sales staff, or distribution channel members (such as wholesalers and retailers).

According to Bakanauskas, Aruyda, Pileliene, Lina (9/2007). Sales promotions targeted at the consumer are

18

called consumer sales promotion. Sales promotion targeted at the retailers and wholesalers are called trade sales promotions. Sales promotion can be Business to Business directed. Some sales promotions particularly, ones with unusual methods are considered gimmick by many. Sales promotion includes samples, coupons, sweepstakes, contests, in store displays, trade shows, price off deals, premiums and rebates. Bakanauskas, Aruydas, Pileliene, Lina, (20007, pg 13-19).

Sales promotion acts as a competitive weapon by providing an extra incentive for the target audience to purchase or support one brand over another it is particularly effective in spurring product trial and unplanned purchases. Most marketers believe that a given product or service has an established perceived price or value, and they use sales promotion to change this price-value relationship by increasing the value and/or lowering the price. Compared to the other components of the marketing mix (advertising, publicity, and personal selling), sales promotion usually operates on a shorter timeline, uses a more rational appeal, returns a tangible or real

19

value, fosters an immediate sale, and contributes highly to profitability. www.en.wikipedia.org/wiki/consumer goods.

Sales promotion is particularly an attractive alternative when the marketing budget is limited, as it is for many small businesses. In addition sales promotion can be an effective tool in a highly competitive market, when the objective is to convince retailers to carry a product or to influence consumer to select it over those of competitors. Similarly, sales promotion is often used in the growth and maturity stages of the product life circle to stimulate consumers and resellers to choose that product over the competition rather than in the introduction stage, when mass advertising to build awareness might be more important Tellis, Gerald J (1997:p. 7)

Finally, sales promotion tends to work best when it is applied to impulse items whose features can be judged at the point of purchase, rather than more complex, expensive items that might require hands on demonstration.

Sales promotion, on the other hand, can be said to be as old as marketing, for instance, during the trade by barter system, it is obvious that for a man who needs “yam” to enter

20

into a transaction with another who needs “cocoyam” but has “yam” the former will have to take either “kola nut” to the later persuading, attracting, inducing him into the Barter trade, in this case, the inducement is now sales promotion. Furthermore, for a man who has “Goat” but needs a “Pigeon”, he exchanges, and this is also sales promotion, because, he is given out a large value for a lesser value in order to stimulate the transaction. Also, in the olden days, we were told that the women sometimes use leaves to make their clothes which they also display during festive periods, this is also sales promotion because, they were promoting their culture by attracting the audience.

Sales promotion can be practiced by both profit oriented organizations and non profit oriented organizations. Business firms use different kinds of sales promotions examples – coupons, displays, discount, gift offers, contests, etc to induce the public into choosing or preferring their brand to other brands. Non-profit oriented organizations like churches have their own ways of applying sales promotion. Some churches now make it mandatory to take hot “tea” before commencing

21

Sunday services. Some use to share minerals and biscuits on Sundays (Gift offers). Some churches will announce that they don’t receive offerings in their church (Discount) or (Price – off-seals) some will furnish the church premises to look extremely attractive (Trade shows or displays). Sometimes, even the churches names are sales promotion.

Sales promotion does not necessarily mean that the organization is loosing, sometimes, the individual pays for the sales promotion indirectly and would not understand the game beyond the transaction.

Sales promotion has grown substantially in recent years. There are several reasons for this dramatic growth in sales promotion. First, consumers have accepted sales promotion as part of their buying decision criteria. It provides reluctant decision makers with an incentive to make choices by increasing the value offered by a particular brand. Secondly, the increasing tendency of businesses to focus on short-term results has helped spur growth in sales promotion, which can provide an immediate boost in sales (Tellis, Gerald J. 1997:89).

22

Purchases can be defined as an exchange transaction between the buyer and the seller. It means given out values, commodity, goods or services for an equivalent worth in return, either on monetary values. Tellis, Gerald J. (1997:123)

Consumer goods can be defined as goods that are ultimately consumed rather than used in the production of another good. These are goods that are intended for direct use or consumption. Consumer good are acquired by the household, not really for further production. E.g., food, clothing milk drinks, beverages, toiletries. As stated in www.en.wikipedia.org/wiki.

Sales promotion has been called a powerful marketing tool, for any business to succeed, especially in these times when competition has become tough; an effective and efficient sales promotion is highly needed. Sales promotion has really made some consumer goods more preferable to the others. Sales promotion has enhanced, improved the purchases of consumer goods that most consumers either prefer goods that have free gifts attached or discount introduced. It is obvious

23

that without sales promotion on the purchase of the consumer goods. It will not be so easy for the producers, but the extent of this impact of sales promotion is yet to be ascertained.

1.2  STATEMENT OF PROBLEM

Enugu state has been the capital of the former eastern region and has attracted infrastructures and business organizations. This has raised the income level of people of this state.

Nsukka is a town in Nsukka Local Government Area, Enugu North senatorial zone, Enugu state. Nsukka is a developing town to compare to other towns in Enugu central which has been the capital of the state. The town is not cluttered with government infrastructures, but is blessed with a highly populated school, the only and great “university of Nigeria, Nsukka”

It is obvious that the leading roads to Nsukka are not wonderful, but within the town, the local roads are fantastic. Due to the state and nature of the town “Nsukka” the cost of

24

living is not high; there are no producers, so many distribution channel members and numerous consumers as residents

Most times the marketers in this particular geographical area called “Nsukka” embark on the introduction of sales promotion to their products, without actually knowing if sales promotion really or truly has an impact on the purchase of these consumer goods.

The potential producers in Nsukka need to know the type of sales promotion to embark on, whether to embark on the consumer market directed, or traders market directed. He needs to know the right time, place to use sales promotion. They need to know when they are over spending in the name of sales promotion. They need to know if the consumers can truly be influenced with sales promotion.

The traders will appreciate if a comprehensive research is carried out to enable them know the extent of the impact of sales promotion on the consumer goods. On the part of the consumers, the consumers need to know when they are being tricked in the name of sales promotion. The competitors need to know the type of sales promotion to embark on to enable

25

them attract and induce the consumers into preferring their products to that of their rivals.

And these reasons give rise to the study.

1.3  RESEARCH QUESTIONS

(1)        Does sales promotion have an impact on the purchase of consumer goods, in Nsukka, Enugu State? If yes, to what extent?

(2)        Which of the classes of the people living in Nsukka, responds or is being influenced with sales promotion attached on the consumer goods (students or working class, the poor or rich, the educated or illiterates, the

(3)

civil servants or traders?

With  the  level  of   Exposure  among  the               Nsukka

Residents, can sales promotion         still boost the purchase

of consumer goods? Does Illiteracy have impact on sales promotion?

26

1.4                     PURPOSE OF THE STUDY

The purpose of this study remains to know if sales promotion actually has an impact, the kinds, and extent of its effect on the consumer goods in Nsukka, Enugu state .

1.5 OBJECTIVES OF THE STUDY The following are the objectives of the study: