IMPACT OF SALES PROMOTION ON BUYING DECISION
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IMPACT OF SALES PROMOTION ON BUYING DECISION
Chapter one
INTRODUCTION
1.1 Background of the Study
Following the start of the industrial revolution, machines were introduced into the production system to increase the output of goods and services, resulting in a vast quantity of items available for sale.
In this regard, consumers were exposed to a variety of items and were forced to choose the product that provided them with the highest level of pleasure based on their demands.
Companies, on the other hand, wanted to improve their image, increase sales, maximise profits, and acquire a competitive advantage over others. In light of the aforementioned, for a company to outperform its competitors, it must adopt certain marketing methods to capture the attention and interest of its customers.
When a consumer goes shopping, he or she must make four key judgements for each product category, whether implicitly or explicitly. Whether to purchase in the category, and if so, where (which store), which brand, and how much.
All four decisions may be influenced by consumer attributes (e.g., income, family size, buy frequency) as well as the marketing environment. Marketing mix elements can influence these four decisions in varying degrees.
In recent years, most industrialised and several emerging countries have spent much more on sales promotion than on advertising. This is hardly surprising given its unavoidable role in supplementing other forms of commercial promotion in order to attain short-term results.
Sales promotion entails increasing consumer loyalty, encouraging repeat purchases, and facilitating profit maximisation. Promotion campaigns are perhaps the most significant of the four marketing mix elements: product, price, place, and promotion, which can help a firm solve problems and achieve a competitive edge if properly applied.
The most significant disadvantage of sales promotion is its long-term ineffectiveness, despite accounting for more than 65 percent of a normal marketing spend. This is the result of Abraham and Lodish’s investigation in 1990.
However, Perreault and Mccarthy (2002) argue that sales promotion might cause a constant growth in sales in the long run if it has successfully resulted in brand loyalty, repeat purchases, and consumer pleasure in the short term.
Furthermore, maximising the value of each promotional naira has become increasingly vital. However, other managers’ studies show that 80 percent of promotion users are loyal customers who would have purchased the brand regardless of the promotion (Levine 1989).
Promotion is essentially an exercise that serves the functions of informing, persuading, and influencing people to buy specific things. Promotion also influences a product’s demand elasticity, making it inelastic when the price rises and elastic when the price falls.
The primary goal of promotion is to facilitate effective and efficient communication. Essentially, the marketing exercise is usually intended to achieve the following:
1. Achieving a large sales volume, which influences the contribution of profit ratio.
2. Directing and ensuring that items flow via the appropriate channels until they reach the ultimate customers so that wants can be met.
3. Identifying markets and buyer motivations that allow them to be met.
The aims of promotion are as follows.
1. To inform is making the market aware of a new product or service. Promotion informs the market about a pricing, how to use the product or service, and what services are accessible.
2. Increase the demand for goods and services.
3. Persuade consumers by increasing brand recognition and encouraging them to switch to a company’s brand.
4. To minimise client worries and anxiety while simultaneously promoting a positive company image.
5. It supports the personal selling programme.
6. Reminding clients where to acquire things that are needed right now as well as those that will be needed in the future, especially when they are off-season.
7. Announcing a special discount.
8. To introduce new businesses into the neighbourhood.
This study will highlight or analyse the impact of sales promotions in influencing customer purchasing decisions. This is critical because well-planned and executed advertising initiatives will result in rapid growth.
Finally, marketers should continually assess promotional efficiency in terms of its capacity to persuade customers or consumers to prefer the firm’s product over its competitors.
This is because it would provide information regarding the success of promotional efforts on management, employees, product sales, and competitive advantage, all of which are significant to most enterprises or companies that manufacture and market consumer items.
1.2 Statement of the Problem
Major external concerns such as socioeconomic, legislative, and technological issues have influenced the structure of communication services, as well as the type of competition within them.
The Nigerian telecommunications business cannot be separated from the list of industries in which product marketing and incentives are fully implemented.
The cause for this could be the industry’s oligopolistic structure. In other words, the main issue for Nigerian telecommunications firms is to become the preferred choice of the majority of the country’s roughly 140 million networked Nigerians.
However, many of the promotional and sales incentives used by businesses today are so inefficient, drab, and dismal that they tyre prospective customers.
However, given the level of economic resources committed to these promotional mix and programmes, a good business manager must weigh the cost of a promotion against the expected increase in sales that will result from the promotion rather than “buying sales” at the expense of reduced profit, i.e. carrying out a cost-benefit analysis of the promotion.
A sales campaign is only effective and appropriate if it can prompt its intended audience and has a high level of inventiveness and adaptability. Obviously, because the aforementioned relates to the Nigerian telecommunications market, there is a need to fill by doing this study.
1.3 RESEARCH QUESTIONS.
The following research questions related to the study are raised:
1. How much influence does sales promotion have on sales growth?
2. What factors influence consumer loyalty to a certain package?
3. Does sales advertising have a short-term versus long-term impact on customer decisions?
4. What impact do sales promotions have on purchasers’ purchasing decisions?
1.4 Objectives of the Study
The primary goal of the study is to explore effective sales promotion plans in the Nigerian telecommunications industry and assess their impact on purchasing decisions using GLOBACOM Nigeria Limited as a case study. The study’s particular aims are:
1. Determine the impact of sales promotion on customer awareness of the company’s goods.
2. Determine whether sales promotions encourage buyers to make repeat purchases and develop product loyalty.
3. Identify flaws with the company’s sales marketing.
4. To investigate the effect of sales promotions or purchasing decisions on levels of satisfaction.
1.5 Significance of the Study
The study’s significance cannot be overstated as a result; it will benefit various parties, particularly the firm of concern (GLOBACOM NIG. LTD.). Drawing on the study’s objectives, it should assess the effectiveness of the company’s sales promotion in terms of fostering competitiveness and increasing profits.
Furthermore, the study will be beneficial to students, practitioners, marketers, consultants, and academicians that value research and are interested in the business and marketing fields.
1.6 Scope of the Study
Every research project is only effective and valuable in producing trustworthy results if it is focused on its goals. This study is only about GLOBACOM NIG. LTD’s sales promotion efforts, and the respondents are limited to Lagos State University and the surrounding area.
As a result, the researcher decided to conduct this investigation throughout the years 2009 and 2010.
1.7 Definition of Terms
The following terms are defined exactly as they are used in this study:
PROMOTION: Promotion keeps products in customers’ minds and helps to increase demand for them. Promotion includes ongoing advertising, sales promotion, and publicity.
MARKETING: This refers to the vast variety of actions involved in ensuring that the company continues to meet the needs of its customers while receiving value in return.
Marketing also entails analysing the competitive positioning of new packages, products, or services (identifying a market niche), pricing items or services, and promoting them through ongoing advertising, promotion, customer support, and sales.
SALES: There are many different types of sales activity. They involve promoting prospective customers (or leads) in a market segment, explaining the characteristics, advantages, and benefits of a product or service to the lead, and closing the sale (or reaching a payment and service agreement).
ADVERTISING: Bringing a product or service to the attention of new and existing clients. It is usually done by signage, pamphlets, advertising, direct mail or email messages, personal encounters, and so forth.
SALES PROMOTION: These are activities other than advertising, personal selling, and publicity that pique the curiosity, trial, and purchase of end users or others in the distribution chain.
BUYING BEHAVIOUR: This refers to the decision-making and actions of final household consumers when it comes to purchasing, using, and discarding things for personal use.
1.8 Brief Write-Up on Case Study: Globacom Nigeria Limited
GLOBACOM Nigeria was founded on August 29, 2003, by Dr. Mike Adenuga, the current chairman of the firm. GLOBACOM was introduced to the public through marketing efforts such as sales promotion and advertising.
The company has a reputation as one of the world’s fastest growing mobile service providers, and their goal is to be recognised as Africa’s leading mobile network.
The company’s headquarters are in Lagos, Nigeria. The corporation consolidated its dominance by opening new branches in nearly every state in the country. GLOBACOM also serves other West African countries, including Benin, Ghana, and Ivory Coast.
In its first year of operation, GLO MOBILE has around one million customers in over 87 locations. This corporation offers mobile networks and other telecommunication services. According to Cellular News, GLO MOBILE, which was sixth at the beginning of last year, has seemingly surpassed MTN NIGERIA as the market leader,
moving up to fourth place among the region’s top mobile network carriers. GLO MOBILE has gained over 25 million subscribers in the last seven years. throughout addition, this firm boasts the most extensive roaming coverage for voice and data throughout Africa.
Furthermore, the corporation has been a dominating participant in Nigeria’s telecommunications industry, constantly improving its products and services to attract customers.
The corporation has also implemented a number of promotional methods to increase the sale of its products. The most current sales promotional methods implemented by GLOBACOM NIGERIA include GLO talk points, GLO 100 crash rate, and GLO free night calls, among others.
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