Consumer Sales Promotion Effectiveness: An Examination Of Sales Promotion Technique Preferences Of Nigerian Consumers

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Consumer Sales Promotion Effectiveness: An Examination Of Sales Promotion Technique Preferences Of Nigerian Consumers


Abstract


This study was carried out on consumer sales promotion effectiveness: an examination of sales promotion technique preferences of Nigerian consumers using consumers in Sokoto and Kebbi metropolis as a case study. To carry out the study, 4 research objectives were posed. The study adopted a descriptive survey design. The study was carried out in Sokoto and Kebbi metropolis. The population of the study comprised of consumers in Sokoto and Kebbi metropolis. The population size of the study was 112 participants. The instrument for data collection in this study was structured questionnaire. Data collected were analyzed using frequency Table and the hypothesis were tested using Chi-square statistical tool. The major findings of the study disclosed that; the effectiveness of sales promotions in influencing consumers’ brand preferences is not low; oupons are strong predictors of product preferences/consumer promotion effectiveness in Nigeria. sales promotion creates permanent consumer acceptance of a product; and price-off is a significant technique in influencing consumers brand preferences/promotion effectiveness in Nigeria. Based on the findings; the research proffered the following recommendation; firms can increase sales by offering the right promotional tools to attract trial customers. Therefore organisations should carefully plan their promotional strategies, and allocate promotional budget over the different promotion tools, giving preference to the more effective tools.


Chapter One


Introduction

1.1 Background of the Study

Fast moving consumer goods (FMCG) in Nigeria is in the state of hyper competition due to proliferation of brands in various categories. Using consumer sales promotion to differentiate one’s offer has become the order of the day. Budget allocation to consumer sales promotion in order to woo consumers is on the increase. The financial risk being low, consumers do not mind switching from one brand to another due to sales promotion offer. Thus, the widespread use of consumer sales promotions has sparked considerable interest and debate over their effectiveness. Critics argue that consumer sales promotions are ineffective as they make consumers more promotion prone, resulting in market share losses in the long run (Ehrenberg, Hammond and Goodhardt, 2014; Totten and Block, 2017). However, other researchers have shown that sales promotions lead to real increases in sales and profits(Dhar and Hoch, 2016; Hoch, Dreze and Purk, 2014). This discrepancy suggests that there are conditions and factors that can influence the effectiveness of sales promotions. For instance, it has been shown that consumer sales promotions are more effective when they provide benefits that are congruent with those of the promoted product (Chandon, Wansink and Laurent, 2010).

Unfortunately, very little is understood about the Nigerian consumers and their purchase behaviour, especially with regard to how they respond to the various sales promotional strategies used by marketers. Since the bulk of the extant literature on these relationships remains the Western or Asian perspective; there is need for research focusing on the Nigerian consumers and the Nigerian environment, which is unfamiliar to most readers. Since understanding the behavioural responses of Nigerian consumers to sales promotion strategies (particularly with respect to environmentally sustainable consumer sales promotion strategies) is salient in customer management and in designing effective sales promotion strategies, therefore the, need for this research is established.

Thus, it is essential to study how consumers make their choices in FMCG category or in the low involvement products (LIP), a category where there are several brands in the consideration set of a consumer. Apparently, this study focuses on fast moving consumer goods or low involvement products, which are generally believed to be more responsive to promotional tools than high involvement products. LIP or FMCG are those that are bought frequently and with a minimum of thoughts and effort because they are not of vital concern nor have any great impact on the consumer’s lifestyle (Ndubisi, 2005; Ndubisi & Chew, 2005).


1.2 Statement of Problem

In the marketing process, it is important that companies must communicate with their present and potential customers, as well as their sales force internally. Many organisations efforts are now concentrated on promotional techniques and strategies to resolve problem of dwindling profit(Harmon, 2014). Sales promotion as a promotional technique is believed to be a a short-term incentive mainly targeted at encouraging customers’ generally. However, in the Nigerian context, very little is understood about the Nigerian consumers and their purchase behaviour, especially with regard to how they respond to the various sales promotional strategies used by marketers(Lancaster, 2006). Since the bulk of the extant literature on these relationships remains the Western or Asian perspective; there is need for research focusing on the Nigerian consumers and the Nigerian environment, which is unfamiliar to most readers. Since understanding the behavioural responses of Nigerian consumers to sales promotion strategies (particularly with respect to environmentally sustainable consumer sales promotion strategies) is salient in customer management and in designing effective sales promotion strategies, therefore the, need for this research is established (Verghese, 2013). In the light of the above, this study is focused on examining the effectiveness of and preference of sales promotion technique among Nigerian consumers.


1.3 Objectives of the Study

The overall aim of this study is to critically examine the effectiveness of and preference of sales promotion technique among Nigerian consumers. Hence, the study will be channeled to the following specific objectives;

  1. Ascertain the effectiveness of sales promotions in influencing consumers’ brand preferences.
  2. Determine whether coupons are strong predictor of product preferences/consumer promotion effectiveness in Nigeria.
  3. Determine whether price-off is a significant technique in influencing consumers brand preferences/promotion effectiveness in Nigeria.
  4. Find out whether environmental sustainability content in a consumer sales promotion tool can stimulate product trial.

1.4 Research Hypotheses

The following hypothetical statements will be validated in the course of this study.

  • H01: The effectiveness of sales promotions in influencing consumers’ brand preferences is low.
  • H02: Coupons are not strong predictors of product preferences/consumer promotion effectiveness in Nigeria.
  • H03: Price-off is not a significant technique in influencing consumers brand preferences/promotion effectiveness in Nigeria.
  • H04: Environmental sustainability content in a consumer sales promotion tool is not a strong predictor of product trial among Nigerian consumers.

1.5 Significance of the Study

This study will be relevant to various key players in an organization. It will help marketers to learn about consumer preferences with respect to sales promotion offers; what consumers’ sales promotion schemes do Nigerian consumers prefer or which consumer sales promotional tools is more effective in the Nigeria context. Similarly, it will help to prompta manager to consider the effectiveness of the scheme while designing a scheme.
Additionally, subsequent researchers will use it as literature review. This means that, other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regards to the effectiveness of and preference of sales promotion technique among Nigerian consumers.


1.6 Scope of the Study

This study is structured to generally examine the effectiveness of and preference of sales promotion technique among Nigerian consumers. However, the study will further ascertain the effectiveness of sales promotions in influencing consumers’ brand preferences, determine whether coupons are strong predictor of product preferences/consumer promotion effectiveness in Nigeria, determine whether price-off is a significant technique in influencing consumers brand preferences/promotion effectiveness in Nigeria, and find out whether environmental sustainability content in a consumer sales promotion tool can stimulate product trial. The respondents for this study will be obtained from consumers in Sokoto and Kebbi metropolis.


1.7 Limitation of the Study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. However, the researcher were able to manage these just to ensure the success of this study.


1.8 Definition of Terms

Sales Promotion:

The marketing activities that add value to the value to the product for a limited time period to stimulate consumer purchasing and dealer effectiveness.

Consumer:

An individual who is brand loyal to a products or service of a particular producer or manufacturer.

Product:

Anything that is offered for attention, used and consumption.

Consumer Preference:

This is defined as a set of assumptions that focus on consumer choices that result in different alternatives such as happiness, satisfaction, or utility.


Chapter Five


Summary, Conclusion and Recommendation

5.1 Summary

In this study, our focus was on consumer sales promotion effectiveness: an examination of sales promotion technique preferences of Nigerian consumers using consumers in Sokoto and Kebbi metropolis as a case study. The study is was specifically carried out to ascertain the effectiveness of sales promotions in influencing consumers’ brand preferences, determine whether coupons are strong predictor of product preferences/consumer promotion effectiveness in Nigeria, determine whether price-off is a significant technique in influencing consumers brand preferences/promotion effectiveness in Nigeria, and find out whether environmental sustainability content in a consumer sales promotion tool can stimulate product trial.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 100 responses were validated from the enrolled participants where all respondent were consumers in Sokoto and Kebbi metropolis.


5.2 Conclusion

Based on the findings of this study, the researcher concluded that;

  1. The effectiveness of sales promotions in influencing consumers’ brand preferences is not low.
  2. Coupons are strong predictors of product preferences/consumer promotion effectiveness in Nigeria.
  3. Price-off is a significant technique in influencing consumers brand preferences/promotion effectiveness in Nigeria.
  4. Environmental sustainability content in a consumer sales promotion tool is a strong predictor of product trial among Nigerian consumers.

5.3 Recommendation

With respect to the findings and the aim of this study, the researchers therefore recommend that;

  1. Firms can increase sales by offering the right promotional tools to attract trial customers. Therefore organisations should carefully plan their promotional strategies, and allocate promotional budget over the different promotion tools, giving preference to the more effective tools.
  2. Organizations should also consider promotions that emphasize in-store display, free sample, price discount, and bonus pack sicne they likely to be more effective than coupon and promotions that seek to encourage environmental friendly behaviour.
  3. Marketers should adopt the integrated sales promotion approach wherein both monetary and non-monetary promotions tools are combined to address the various consumer segments.

Consumer Sales Promotion Effectiveness: An Examination Of Sales Promotion Technique Preferences Of Nigerian Consumers


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