IMPACT OF SALES PROMOTIONAL ACTIVITIES ON THE CONSUMPTION OF SOFT DRINK IN PORT HARCOURT
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IMPACT OF SALES PROMOTIONAL ACTIVITIES ON THE CONSUMPTION OF SOFT DRINK IN PORT HARCOURT
Chapter one
INTRODUCTION
1.1 Background of the Study
Sales promotion is an indirect form of marketing promotion that aims to elicit prompt action. Other than personal selling, advertising, and publicity, promotional activities that stimulate consumer purchasing and dealer effectiveness include displays,
shows and exhibitions, demonstrations, coupons, contests, samples, premiums, trade allowance, point-of-purchase displays, price cent-off packs, dealer allowance, and other well-known routine selling efforts that are typically short-term in nature.
According to Ebue (2000: 240), “sales promotion is something extra that can arouse interest, create a buying desire, and elicit an immediate reaction from customers, middlemen, or the company sales force.”
Sales promotion incentives are often short-term in nature, with the goal of increasing sales of a specific product or brand above its current level. Sales would increase if more customers were drawn to the store, non-brand users were drawn in, and brand users were urged to spend more.
According to Nnolim (1979: 142), sales promotions are designed to help both buyers pull and dealers push. They categorised sales marketing tactics based on their consumer and dealer focus.
Consumer-pull promotion techniques include sampling, price incentives, refunds or rebates, contests, premiums such as free in-mail packs of non-pack, and self-liquidators,
whereas trade push promotion techniques include merchandise allowance, money bonuses and gifts, management assistance such as training, inventory control displays, and financial assistance.
According to Kotler (2003: 453-54), sales promotion is a significant component in marketing campaigns that consists of a broad collection of incentive techniques, most of which are short-term in nature and are designed to encourage customers to purchase specific products or services on the market sooner or more frequently. The researcher applied product life cycle theory to assess the impact of sales promotions.
Sales promotion bridges the gap between advertising and personal selling. It is usually not intended as advertising, although it is targeted to far larger populations than a traditional personal selling effort.
Sales promotions were not common prior to the 1960s, but they increased dramatically between 1967 and 1976, and even more in the late 1980s, 1990s, and beyond. Their rapid growth, particularly now that global economies such as Nigeria are in decline,
has prompted or drawn the researcher’s attention to research and determine its “impact on soft drinks in Nigeria,” with a focus on the Nigeria Bottling Company Plc and products such as coke, spirit, and fanta soft drinks, as well as malta.
Coca-Cola was founded in 1886 and is headquartered in Atlanta, Georgia, United States of America. Nigeria Bottling Company began operations in Nigeria in 1953 by holding a franchise for Coca-Cola International,
which means that the formulation of the concentrate and recipe of the product were not released to the Nigeria Bottling Company, but the formula and syrup of the mixture were given to them to assist them in bottling the product in Nigeria.
Coca-Cola is, nonetheless, one of the world’s major bottlers of its beverage. They operate in 28 countries, 16 of which are members of the European Union, and service over a million customers. Coca-Cola manufactures, distributes, and markets non-alcoholic beverage concentrates and syrups around the world.
The company markets its non-alcoholic beverages under various brand names such as coke, diet coke, fanta, and Sprite, and it also sells finished beverage products primarily to distributors.
The company sells its beverage concentrates and syrups to bottling and canning operations. Distributors include fountain wholesalers and retailers.
The company is organised into the following departments: marketing, plant production, administration, catering clinics, workshop, storage, and security.
The accounting area falls under the administrative department, while staff work in the production or plant department, which is divided into two sections: carbon dioxide and product.
The carbon dioxide section is solely responsible for the creation of carbon dioxide for beverage manufacture. The product division is in charge of combining the syrup to produce the finished product. Every department is led by a manager who reports to the plant manager.
In a 1975 journal interview, company Chairman Adedeji stated that Nigeria Bottling Plc is the country’s largest producer of soft drinks. According to one estimate, this corporation produces over 60% of the drinks consumed in Nigeria.
According to Adedeji (1985), Nigeria Bottling Company has expanded into non-soft drinks branches, primarily agriculture, in order to diversify.
He further stated that the company currently owns 60% of “Agricultural Seeds Limited” situated in Zaria and 40% of “Kupa Farms Limited based in Kwara State”.
During the final trading sessions of 1985, it chose to increase its stake in Delta Glass Company and obtain a 51% controlling position.
The Nigeria Bottling Company’s turnover increased from 14.3 billion in 2004, 14.9 billion in 2005, and 15.9 billion in 2006. Similarly, the investment on sales marketing climbed from 48 million in 2004 to 65 million in 2006. It is assumed that this rise in turnover was caused in part by increased promotional activity.
1.2 Statement of Problem
During the course of this study, it was discovered that corporations (particularly consumer products producing/marketing companies, such as Coca-Cola) invest a significant amount of time, energy,
and money in creating and implementing promotions. However, it appears that the influence on the company’s sales volume and profit is still not proportional to the amount spent.
Given the high expense, it was vital to examine this activity to establish its cost effectiveness. Despite spending so much money on sales marketing, the company may not achieve the expected sales volume and profit margin.
1.3 Purpose of the Study
As sales promotion activities for soft drinks in Nigeria have grown rapidly in recent years, the researcher intends to conduct a study on Nigeria Bottling Company Plc to determine the impact of sales promotion activities on their sales volume and, as a result, profit before promotions. During and after marketing. The aims of this investigation are as follows:
1. Identify the impact of sales promotions on industrial sales volume and profit, with a focus on Nigeria Bottling Company Plc.
2. Determine the effect of sales promotions on consumer demand.
3. The consumer accepts sales promotion as a marketing approach.
1.4 Significance of the Study
The findings of this study will be important to;
a) Managers
b) Academics.
C) Business
Managers: It will help them make decisions.
Academics: Helps to bring favourable statistical data to academics, contributing to the current body of knowledge.
Business: It will assist the company in determining the appropriate balance of spending versus market share growth.
1.5 Research questions and hypothesis formulation
The research study aims to provide answers to the following:
1. How does sales promotion affect a company’s sales volume and profit?
2. How do sales promotions affect consumer demand?
3. Is sales marketing a viable method of product promotion?
4. Does sales promotion grow during a corporate downturn?
In light of the challenges indicated above and the aims of the study enumerated, the researcher proposed the following:
Hypothesis 1.
Ho: Sales promotion has no positive effect on an industry’s sales volume or profit.
Ho: Sales promotion increases sales volume and profit in industries.
1.6 Theoretical Foundation of the Study
The theories that underpin this study endeavour were developed to explain the real facts and data presented in a careful analysis of the problem under discussion.
The recognised notion of sales promotion as an indirect form of marketing promotion designed to elicit speedy action is submitted to scholarly reasoning by key authors such as Ebue (2000:240).
In his book “Marketing Communication”. The topic matter was described as something additional that might raise curiosity and create a purchasing desire in terms of consumer behaviour.
This postulation will endure the test of time because it laid the groundwork for new entrants, existing ones, and researchers to this established logic.
Furthermore, “Nnolim (1979: 144) in principles and practice of marketing 11” addresses the subject as designed to help both customers pull and dealers focus.
This basic thought, which is dependable for its logical stance, clears the way for all shades of view on this topic to base their concerns on the importance of this theory.
To summarise, in order to adapt through correct data and historical balancing, these academicians’ theories had received extensive exposure in the sharing of the issue.
As a result, the theory underpinning this study coincides with their hypothesis that there is a relationship between sales promotion and an industry’s sales volume/profit.
1.7 Scope of the Study
This study is limited to the Port Harcourt metropolitan, which includes the Port Harcourt local government of Rivers State and the Obio-Akpo Local Government.
It is a survey study that only includes consumers, wholesalers (SSD & HVS), conventional outlets, managers, workers, and the case study Nigeria Bottling Company Plc in Port Harcourt.
1.9 Definition of Terms
1. Sales Promotion: This is an indirect type of marketing initiative.
meant to encourage speedy response.
2. Consumer promotion: This sort of promotion is focused on the
The end users of the product.
3. Trade Promotion: These are the purchasing allowances introduced to
Encourage middlemen to enhance their sales efforts.
4. Sales Force Promotion: These actions are
Intended to incentivize salespeople to enhance overall sales.
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