Project Topic:
THE SIGNIFICANCE OF SALES PROMOTION IN THE SUCCESS OF SMALL AND MEDIUM ENTERPRISES IN NIGERIA
TABLE OF CONTENTS
CERTIFICATION ii
ACKNOWLEDGEMENT iv
ABSTRACT v
TABLE OF CONTENTS vi
CHAPTER ONE 1
INTRODUCTION 1
1.1 BACKGROUND OF THE STUDY 1
1.2 STATEMENT OF THE PROBLEM 2
1.3 OBJECTIVE OF THE STUDY 5
1.4 RESEARCH QUESTIONS 5
1.5 RESEARCH HYPOTHESIS 6
1.6 SIGNIFICANCE OF THE STUDY 7
1.7 SCOPE OF THE STUDY 8
1.8 LIMITATION OF THE STUDY 8
1.9 DEFINITION OF TERMS 9
REFERENCES 11
CHAPTER TWO 12
REVIEW OF RELATED LITERATURE 12
2.0 BRIEF INTRODUCTION 12
2.1 CONCEPTUAL REVIEW 12
2.2 REVIEW OF EMPIRICAL STUDIES 25
2.3 THEORETICAL FRAMEWORK 28
2.4 SUMMARY OF LITERATURE 31
REFERENCES 33
CHAPTER THREE 35
RESEARCH METHODOLOGY 35
3.1 RESEARCH DESIGN 35
3.2 AREA FOR THE STUDY 35
3.3 POPULATION OF THE STUDY 35
3.4 SAMPLE/SAMPLING TECHNIQUES 36
3.5 SOURCES OF DATA 36
3.6 INSTRUMENTS 36
3.7 DATA ANALYSIS TECHNIQUES/TEST STATISTICS 37
REFERENCES 38
CHAPTER FOUR 39
DATA PRESENTATION, ANALYSIS AND INTERPRETATION 39
4.1 QUESTIONNAIRE DISTRIBUTED AND RETURNED 39
Table 4.2: GENDER OF THE RESPONDENTS 40
CHAPTER FIVE 50
DISCUSSION OF FINDINGS 50
SUMMARY, CONCLUSION AND RECOMMENDATION 50
5.1 SUMMARY OF FINDINGS 50
5.2 CONCLUSION 52
5.3 RECOMMENDATIONS 53
5.4 SUGGESTION FOR FURTHER STUDY 54
BIBLIOGRAPHY 55
APPENDIX “I” 58
APPENDIX “II” 59
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Business organizations promote their products and services by using advertising, sales promotion, publicity, public relations and personal selling. Advertising, sales promotion and public relation are described as mass promotion and tools. However, Cole (1993) reports that the most widely used are advertising and personal selling.
Kotler and Armstrong (1994) define sales promotion to consist of short-term incentives to encourage purchase or sales of a product or service. Whereas advertising offers reasons to buy a product or service, sales promotion offers reasons to buy now. Anything that can be offered to a market to satisfy a need or a want is known as a product. It usually suggests a tangible or physical object such as a car, a fan, video cassette recorder or a television. A service on the other hand is used to refer to intangible products such as providing a means of transportation or communication. Sales Promotion includes a wide variety of tools: consumer promotion tools, samples, coupons, rebates, price pack, premiums, contests, patronage awards, advertising specialties and points of purchase promotions, trade promotion tools-buying allowance, free goods, merchandise allowance, push money, dealer sales contest, sales force promotion tool-bonuses, contest, sales rallies.
Small and medium scale enterprises may use consumer promotions to increase short-term market. The objective may be to entice consumer to try new products, lure consumers form a competitor’s product or reward loyal customers.
In Nigeria, small and medium scale enterprise practice sales promotion by influencing the price of their commodities on wares, for the success of their business.
1.2 STATEMENT OF THE PROBLEM
It is true that consumers of goods exhibits various attitudes and behaviour towards the products and service offered and rendered to them. This is basically because presently, consumer’s income is very low due to the economic predicament coupled with other environmental factors that influence their buying habit many consumers preferred to spend their hard earned resources on essential goods like food stuff, cloths, shelter and other immediate requirement.
In a developing economy like Nigeria, it is not enough for manufacturers to just produce and expect consumers will buy their product or services without considering what they will benefit or deprive from it. Hence, sales promotion becomes inevitable. Manufacturers are faced with the problem of products substance and competition so for that reason, many manufactures now attempt to stimulate and get consumer’s attention with consumer loyalty, increase market share by using sales promotion tools on goods and services.
Organizations especially small and medium scale enterprises usually encounter problems such as lack of management knowhow, not appointing the right and experienced marketer or sales promotion expert. More sales promotions carried out by organizations are usually badly organized and implemented which leads to the aim being defeated, thereby having a direct effect on sales volume and profit. This problem of low sales and low demand have promoted producers to use sales promotion to complement the use of other promotional mixes like advertising, personal selling, publicity and public relations.
However, it has been observed over the years that some producers do not employ the use of appropriate sales promotional tools and methods, to enhance the achievement of stated goals, and have neglected the importance of marketing concept which is people oriented philosophy that regarded the customers as a king and sole aim of the business existence. There is also a problem of pricing, which affects the success of small and medium scale enterprises. Price setting and strategies affect small scale industries in the sense that many of them does not know how to price their products and the strategy to use in order to influence the market, increase sales volume and market share language barrier is also a problem that affect the success of small and medium enterprises in Nigeria during sales promotion because of varieties of languages in Nigeria, which some people do not, even the general accepted English language at promotion stage.
1.3 OBJECTIVE OF THE STUDY
The aim of this study is to evaluate the significance of sales promotion in the success of small and medium enterprises in Nigeria. The following are the objectives:
To help small and medium scale enterprises in Nigeria appoint the right and experience marketer or sales promotion expert in order increase sales volume and achieve the overall goal.
To help small and medium scale industries chose the best sales promotional tools to enhance sales of the firm’s products.
iii. To inform small and medium scale enterprises in Nigeria that does not know the significance of marketing concept to adopt the concept and practice it for the achievement of a set goal as well as increasing sales volume.
To enable (SME) select the best pricing strategy in order to increase sales volume and market share.
1.4 RESEARCH QUESTIONS
Does the appointment of the right and experienced marketer or sales promotion experts enhance sales in small and medium scale enterprises (SME) in Nigeria?
What type of sales promotional tool is the best for the sales of (SME) products?
iii. Can the adoption of marketing concept in (SME) boost the sales of its products?
Does price setting and pricing strategy affect the success of sales value and market share of (SME) in Nigeria?
1.5 RESEARCH HYPOTHESIS
H1: The appointment of the right and experience marketer or sales promotion experts affect the success of small and medium scale enterprises in Nigeria.
HO: The appointment of the right and experience marketer or sales promotion expert does not affect the success of small and medium scale enterprises.
H2: The selection of the best sales promotion tools enhance the success of small and medium scale enterprises’ profit and market share.
Ho2: The selection of the best sales promotion tools does not enhance the success of small and medium scale enterprises’ profit and market share.
1.6 SIGNIFICANCE OF THE STUDY
This study is not a mere academic exercise. It will be of great benefit to the following: Firstly, small and medium scale enterprises in Nigeria will benefit immensely from this study. This is because it will help (SME) in Nigeria to know the actual sales promotion tools to be used for each of their customers.
Secondly, it will help (SME) in Nigeria to ascertain the effect of sales promotion in (SME) on customer purchase of their products.
Thirdly, the study will be immense benefit to customer as adequate measures that will be recommended which will go a long way to boost the satisfaction and value delivery ability of (SME) in Nigeria.
Furthermore, this research study is significant because it will provide a basis on which further research study could be undertaken in future.
Above all the study will be of great benefit to the reader as adequate knowledge and understanding will be gained from the information contained in the study.
1.7 SCOPE OF THE STUDY
This study is limited to three (3) small and medium scale enterprises in three scales. They include park “n” shop, Port Harcourt, Rivers State, Emy Electrical Nigeria Limited Aba, Abia state and K.C Electronics Owerri, Imo state.
The scope of the study focused primarily on the significance of sales promotion in the success of small and medium scale enterprises in Nigeria, and the philosophies behind the company’s decision to use sales promotion incentives.
1.8 LIMITATION OF THE STUDY
It is important to note that these were limitations imposed by constraint variables, which includes.
FINANCE: Finance was a major constraint that hindered the study. This was due to the fact that the researcher had no source of finance support, besides his parents and relatives. To views end the researcher had difficulty in coping with the financial demands of the study.
TIME: This is another very big constraint that limits the study. This was carried due to the fact that the study was carried out at the peak of lecturers and other academic activities consequently; the researcher had difficulties in meeting up appointments with respondents.
UNCO-OPERATIVE ATTITUDE OF RESPONDENTS: This was another constraining variable that limited the study. Most of the respondents, more importantly employees of the case organization were not easily convinced to co-operate and release valuable data that could help the researcher carry out the study.
1.9 DEFINITION OF TERMS
SIGNIFICANCE: The importance of something, especially when this has an effect on what happen in the future.
SALES PROMOTION: NKEM (1990) defines sales promotion as marketing communication effort articulated by business, carefully planned, organized stated, directed, monitored, controlled and carried out by marketing men and organization with end view or objective of increasing sales volume or generating sales.
SUCCESS: The facts that you have achieved something that you want have been trying to do or get.
SMALL AND MEDIUM SCALE ENTERPRISES: According to Anyanwu (2001): A small and medium scale enterprises are business that is privately owned and operated, with a small number of employees and relatively low volume of sales.
SMALL: Something that is not large in size, number, degree, amount etc.
MEDIUM: In the middle between two sizes, amounting, lengths temperature etc.
SCALE: The size or extent of something, especially, when compare with something else.
ENTERPRISE: A company or business.
PUBLIC RELATIONS: Conscious effort to improve and mention a good corporate image and relationship with public and employee and customers, shareholders, local communities, trade union etc.
PERSONAL SELLING: The process of making oral commercial representation during a buying/sellers interview situation. This is collegially referred to as face to face selling or known as buyer/seller interface.
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