IMPACT OF SALES PROMOTION ON PRODUCT COMPETITIVENESS OF FAST MOVING CONSUMER GOODS
Need help with a related project topic or New topic? Send Us Your Topic
DOWNLOAD THE COMPLETE PROJECT MATERIAL
IMPACT OF SALES PROMOTION ON PRODUCT COMPETITIVENESS OF FAST MOVING CONSUMER GOODS
ABSTRACT
This study focused on the “Impact of Sales Promotion on Product Competitiveness of Fast Moving Consumer Goods (FMCG).”
The goal is to look at how Sales Promotional activities affect a product’s competitiveness in the marketplace. In the first chapter, two hypotheses were established as measurement and guidance variables.
The first chapter also outlines the challenges that will be addressed, the scope and goal of the study, and the operational definitions of words utilised.
The second chapter surveyed existing work on the subject. This chapter studied the two basic forms of sales promotion, as well as a comprehensive list of various sales promotional activities.
Other themes covered include market offering, competitiveness, rapid moving consumer goods, and an insight into Dansa Foods Ltd, which served as the case study for this research project.
Chapter three will introduce the research approach employed for this project, as well as the data analysis technique. The population size for this research study, as well as the sampling method employed, will be explained.
In Chapter 4, the data from the questionnaire(s) were examined and explained. Questions with hypotheses were evaluated, and responses were analysed using a chi-square (X²) test with a significance level of 0.05.
Chapter five finishes this study project and includes a summary of the findings and recommendations. The main findings include:
– Sales promotions encourage customers to purchase more of the product on sale.
– It also stimulates brand switching; it provides adequate reasons for a sizable proportion of consumers to move to another brand.
Chapter five includes proposed guidelines for those considering a similar undertaking.Chapter one
1.0 Introduction
Sales promotion, a crucial component of marketing campaigns, is a set of incentive measures, most of which are short-term in nature, meant to encourage consumers or businesses to buy specific items or services sooner or more frequently. It is a frequent tool for increasing sales in the Fast Moving Consumer Goods (FMCG) Industry.
Sales PromotionAccording to Belch and Belch (2001), comprises of a wide collection of incentive techniques, most of which are short-term in nature and are intended to encourage consumers to purchase a specific product sooner or more frequently.
It can also be defined as all promotional actions, other than personal selling, advertising, and publicity, that provide short-term incentives to bend the demand curve in favour of a product by influencing client habits.
Sales promotion offers incentives to buy, whereas advertising provides reasons to buy. Manufacturers utilise it as a promotional tool to reach their target market. Sales promotion is a crucial activity, particularly in a competitive market. It is not unexpected that sales promotion is regarded as an important promotional tactic in the marketing sector.
Sales promotion is frequently used by businesses to encourage increased sales, usage, or trial of a product or service. Sales promotions are various. Because original sales campaigns are introduced on a daily basis, it is nearly difficult to compile an exhaustive list of all accessible strategies.
According to Idris (2008), sales promotion is one of the eight parts of the promotional mix. The remaining seven promotools are:
• Advertising
· Personal sales
• Public relations
· Direct Marketing.
• Packaging
· Sponsorship.
· Point of Sale Display
According to Robin (2000), sales promotion tools provide three unique benefits:
a. Communication: They attract attention and may direct the buyer to the product.
b. Incentive: They include a concession, enticement, or contribution that provides value to the consumer.
c. Invitation: They feature a clear invitation to participate in the transaction immediately.
Sales promotion tools differ in their specific purposes. A free sample encourages consumer testing, whereas a free management-advisory service seeks to establish a long-term partnership with a business. Sellers utilise incentive-based promotions to entice new customers, reward loyal customers, and raise the purchase rates of occasional users.
Sales promotions frequently attract brand switchers looking for reduced prices, good value, or premiums. Sales promotions are unlikely to convert them into devoted customers, although they may be convinced to make additional purchases.
In markets with significant brand dissimilarity, sales promotions may be able to permanently modify market shares, but in markets with high brand similarity, sales promotions may yield a large sales reaction in the near run but minimal permanent increase in market share.
In addition to brand switching, buyers may engage in stockpiling, which involves purchasing earlier than normal (purchase acceleration) or in excess quantities.
Sales promotions can be targeted at customers, salespeople, or distribution channel members (such as retailers). Consumer sales promotions refer to sales promotions that target consumers. Trade sales promotions are those that target merchants and wholesalers.
Manufacturers and consumers both profit from various sales promotions. Sales promotions allow producers to respond to short-term changes in supply and demand. They allow producers to determine how high a list price they may charge because it is always discounted.
They encourage customers to try new products rather than sticking with the ones they already own. For retailers, promotions may enhance sales of adjacent categories (cake mix promotions may help to raise frosting sales) while also inducing some consumer store switching.
They increase customer awareness of prices. They allow manufacturers to sell more than they would ordinarily do at the list price. When consumers take advantage of pricing promotions, they feel good about being clever shoppers.
1.1 Statement of the Research Problem
In this era of fierce competition among manufacturers, William (1999) stated that sales promotion must be used not only to emphasise each company’s advantages, but also to increase the number of sales and customers.
He also noted that manufacturers have long contended that sales promotions provide no real or physical value. They stated that it is a waste of time and resources and that “sales don’t get actually promoted”
This research aims to investigate the issue that sales promotion is viewed as a waste of money rather than a tool for increasing product competitiveness.
1.2 Relevant Research Questions
To achieve the goal of this study, major research questions were created, including the following:
1. How do sales promotions affect consumer brand preferences?
2. How does sales promotion affect a product’s competitiveness?
3. Do customers purchase more of a product during a sales promotion?
4. What are the most typical sorts of sales promotions known to consumers?
1.3 Statement of Hypotheses
1. Sales promotion influences a consumer’s brand choice and hence increases a product’s competitiveness.
2. People purchase more of a product during sales campaigns.
1.4 The Study’s Purpose and Objectives
Following the discussion in the background section of this project, it is evident that the goal of this research is to examine the effectiveness of sales promotion and its impact on product competitiveness.
We will study the impact of sales promotion on the sales of fast moving consumer goods (FMCG), with a focus on Dansa Foods Limited.
The FMCG industry is becoming more competitive by the day, with new companies making dramatic entrances and cutting into each other’s target markets. Different companies have had to come up with “better products,” “better offers,” and “better pricing,” all in order to sway customers and enhance their bottom line.
The study’s goal is to determine the impact of sales promotion on product competitiveness in the fast moving consumer goods (FMCG) subsector. In doing so, the study will achieve the following specific objectives:
1) To separate Sales Promotional activities from other promotional activities (or promotools).
2) To briefly review the various sales promotional strategies.
3) Examine the necessity for sales promotion as an effective promotional strategy.
4) To investigate the effect of sales promotions on the competitiveness of fast-moving consumer goods.
1.5 SCOPE OF THE STUDY
In this era of fierce competition, each organisation has its own distinct strategy for combat. Of course, there are different strategies for capturing the target audience’s attention and sustaining their loyalty; nevertheless, this study will focus on the options available in sales promotional activities.
This study will thoroughly examine the impact of well-planned, customer-inspired, well-researched, corporate goal-motivated activities that are all tailored to meet the needs of diverse consumers.
The scope of this research will be limited to Dansa Foods Limited’s sales promotional activities, namely those geared at the Juice category.
1.6 Limitations of the Study
Most research projects have limits when it comes to gathering all required data; this exercise is no exception due to its scale and character.
The first limiting issue is time; there was insufficient time to conduct extensive research, thus this study focused on promotional efforts over a specific period of time. It analysed the six-month period from December 1st, 2008 to May 30th, 2009.
As previously stated, there are different manifestations of consumer sales promotion; it will be laborious to evaluate all of these forms, thus this research concentrated on two common varieties, namely
1. Free gift.
2. Buy One, Get One Free (BOGOF).
It would also be difficult to collect opinions from all Dansa Fruit Juices customers, thus we limited the investigation to Lagos residents.
1.7 Operational Definition of Terms
Throughout the course of this research, several terminologies were employed as accurately as feasible. Below is a dictionary of some of these terms: · Marketing refers to the real or potential purchasers of a product. · Promotion/Promotools: All organisational activities related to making a product or service available for use.
According to Fred (2003), it is everything done to help sell a product or service at every stage of the sales process, from the presentation materials used by a salesperson during a sales call to the television commercial that seeks to persuade the buyer to think positively about what is being given.
According to Duncan (2002), Sales Promotion is a marketing communication function that adds tangible value to a brand offering to stimulate and accelerate reaction. It is often short-term in nature. · Impact refers to the powerful effect something has on someone or something.
Need help with a related project topic or New topic? Send Us Your Topic