Effect Of Personal Selling On Sales Of Industrial Products (A Case Study Of Dangota Nigeria Plc)

Project and Seminar Material for Marketing

Effect Of Personal Selling On Sales Of Industrial Products (A Case Study Of Dangota Nigeria Plc)


Abstract


This study focused on the effect of personal selling on sales of industrial products using Dangota Nigeria Plc Enugu branch as case study. The study specifically was aimed at knowing the effectiveness of personal selling in the creation of awareness; study how Dangota Nigeria Plc product demonstration awakens the customers interest; know if the customers patronage is high a low relation to personal selling activities Dangota Nigeria Plc; know if the ratio of the company’s sales expenses to sales volume is high or low; and study the performance of Dangota Nigeria Plc sales persons and how their performance affects the company’ profit.

The study adopted the survey research design and purposively enrolled participants in the study. A total of 50 responses were validated from the enrolled participants where all respondent are active staff of Dangota Nigeria Plc Enugu State. These data were carefully analyzed and interpreted using tables which chi-square statistics were used to test the four hypotheses formulated.Based on the analysis, the following findings were made;Dangota Nigeria Plc sales persons are performing well in creating awareness for their products; the sales person are also not lagging behind in getting the interest of the prospects; the company is operating at a good profit margin but has not actually measured up to the expected level; the customers patronage level needs to be improved and inadequate motivation of sales force. Based these findings, it was recommended that the company should map out the following strategies to improve customers patronage such as; provision of additional product information and suggestions for product care and maintenance though brochures or advertising; Ensure good services and immediate follow up on complaints to provide post-punch have support; Follow up after the purchase with direct contacts to make the customers understand how to use the products and to ensure satisfaction; Increase the level of customer involvement with their brand by increasing the importance of a product attribute; It is strongly believed that if the above measures are taken, the company will be placed on the track of efficiency.


Table of Contents


  • Title page
  • Cover page
  • Certification
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of contents

Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problems
  • 1.3 Objective of the Study
  • 1.4 Research Question
  • 1.5 Research Hypothesis
  • 1.6 Significant of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitation of the Study
  • 1.9 Definition of Terms
  • 1.10 Organization of the study

Chapter Two:

Literature Review

  • 2.1 Conceptual Framework
  • 2.2 Theoretical Framework
  • 2.3 Empirical Framework

Chapter Three:

Research Methodology

  • 3.1 Introduction
  • 3.2 Design of the Study
  • 3.3 Population of the Study
  • 3.4 Sample and sampling techniques
  • 3.5 Instrument for Data Collection
  • 3.6 Validation of the Instrument
  • 3.7 Administration of the instrument
  • 3.9 Method of Data Analysis

Chapter Four:

Data Presentation, Analysis and Interpretation

  • 4.0 Introduction
  • 4.1 Data Presentation
  • 4.2 Analysis of the Data

Chapter Five:

Summary, Conclusion and Recommendations

  • 5.0 Introduction
  • 5.1 Summary of Findings
  • 5.2 Conclusion
  • 5.3 Recommendations
  • REFERENCES
  • APPENDIX 

Chapter One


Introduction

1.1 Background of the Study

In contrast to advertising and publicity, which use impersonal methods of communication, personal selling makes use of direct personal communications to influence the target customer or organizational buyers. Personal selling is a highly distinctive method of promotion, and makes use of oral presentation in conversation with existing and potential organizational buyers, for the purpose of making a sale. It is one of the oldest methods of business promotion. Marketing’s early development in regards to Personal Selling started from Town economy, Agricultural Middlemen, Bagman, Yankee Peddler, Wagon Peddler, Greeters, Drummers, and Credit Investigators. Falvey, (1945) says that things were different in the 1890’s, but people still bought from people (not from companies) and the salesmen’s ability to produce now business, develop new markets, introduce new products and find new organizational buyers was as necessary then as it is today. The contributions made by personal selling in making the promotion function more effective have earned it the distinction of being the most reliable promotion method. (Greening, 1993)

Though, it is the most expensive method of promotion, yet we see an increasing number of firms making use of it, and a good number of them realize that they cannot, perhaps, live without it. Increasing competition, and the growing sophistication of the buyer and his/her buying process, is making personal selling more or less indispensable. (Sanyaolu, 1999) Thus personal selling has been noted to be the most suitable for the sales of industrial goods which are mostly bought by organizational buyers. Sales promotion is the only method that makes use of incentives to complete the push-pull promotional strategy of motivating the sales force, the dealer and the consumer in transacting a sale. Personal selling is defined as ‘Oral presentation in a conversation with or more prospective purchasers for the purpose of making sales’. Personal selling, as the name implies, is an individual selling. It, therefore, carries the distinctive advantage of flexibility in terms of tailoring the sales presentation to the needs of the buyer. Another unique advantage comes from its two-way communication and human interaction, thereby providing instant feedback. These two unique advantages make personal selling the most result-oriented promotion method.

Generally speaking, the nature of goods marketed, as well as the distribution system adopted; determine the role of personal selling in a firm. Personal selling is used extensively in the case of industrial goods, where the salesperson performs functions such as assisting the customer in designing the product specifications, product installation, product commissioning, solving technical problems through providing service after sales and helping the customer to have optimal utilization of the product. (Davies, 1995)

In the case of consumer goods, on the other hand, the role of personal selling gets usually restricted to the dealer level. The scope of the tasks performed include obtaining periodic orders, ensuring supplies, offering tips to dealers on product display and attaining desired levels of stock movement. Similarly, the role played by personal selling is more in a firm, which uses the door-to-door selling method through its sale force than in the firm, which sells through large stockiest, distributors or sole-selling agents.

The economic realities of Nigeria over the years have exposed the marketers to serious problems. It is an open fact that industrial products represent the source of other products, most especially the consumer products. It is also indisputable that although advertising, sales promotions and publicity play an important role in the industrial promotional mix, but personal selling serves as the main selling instrument. It is no gainsaying therefore, that the level of success of an industrial market depends largely on how effective the selling efforts are. This prominent position occupied by personal selling can be easily understood since while the other marketing communication elements such as advertising, sales promotion, and publicity create awareness and knowledge for a company’s product, the onus is on personal selling to convince the potential consumer through person to person interaction to develop a lone for its product in preference to other competing ones and see to it that the consumer parts with his money for the company’s product. (Martins, 1996) This research work examines the impact of personal selling on the sales performance of industrial goods selecting Flourmill Plc among other manufacturers of industrial products as a case study.


1.2 Statement of the Problems

Personal selling is the interpersonal arm of the promotion mix. Sales people represent the company to the organizational buyer and act as an intermediary linking the organizational buyer to the company. The bulk of the selling activities of any industrial products rest comparatively on the company’s sales force much more than is the case with consumer products. This is so because with the latter the consumer has already realized the need for such a product and all the needs for the product may not have been known to him. It may therefore require skilled sales personnel as well as sophisticated equipment for visual displays and practical demonstration to convince the potential organizational buyers the need for the product.

Due to the fact that manufacturers of industrial goods are not efficiently practicing the elements of personal selling and following the selling process affected the level of sales, sales objectives and the sales forecast of manufacturers. This study investigates the effects of personal selling on sales performance of industrial goods.


1.3 Objectives of the Study

Whatever the nature and structure of an organization, its personal selling activities needs to be inculcated. Personal selling has over he years been seen as the bedrock of a company’s success which helps to generate more funds for company’s operation. It is therefore one aim of the researcher in this study, which was conducted in effect of personal selling on sales of industrial products (a Case Study Of Dangota Nigeria Plc)
to focus on the finding on the following activities.

  1. To know the effectiveness of persona selling in the creation of awareness
  2. To study how Dangota Nigeria Plc product demonstration awakens the customers interest.
  3. To know if the customers patronage is high a low relation to personal selling activities Dangota Nigeria Plc
  4. To know if the ratio of the company’s sales expenses to sales volume is high or low.
  5. To study the performance of Dangota Nigeria Plc sales persons and how their performance affects the company’ profit.

1.4 Research Question

  1. Is the ratio of sales expenses to sales volumes high or low?
  2. Is the ration of sales to sales calls high on low?
  3. Does the company not budget enough for sales reps, these and other issues will form the task of this research work.

1.5 Formulation of Hypotheses

The following hypotheses are therefore formed for this study

Ho1: Personal selling activities of Dangota Nigeria Plc do not create awareness of their product.

Ho2: Personal selling activities also in the marketing of Dangota Nigeria Plc products do not awaken the customers interests.

Ho3: Personal selling activities of Dangota Nigeria Plc does not head to increased customers patronage of their goods.

Ho4: Personal selling activities of Dangota Nigeria Plc impacts negatively on the profit of the organization


1.6 Significance of the Study

It is expressed that at the completion of this study, it will be of significance and will prove to be of immense benefit to sales managers, production managers of the industrial products in general and especially the industrial flour, which normally should be interested in the suggestions towards improved efficiency of its sale force and consequently greater sales results. Since that industrial goods are the major items needed to produce any other type of product or service then a research of this sort is relevant towards examining the success of the sales performance of industrial goods.

The finding and recommendations of this research work will emerge from our study on the effect of personal selling on the sales performance of industrial products.


1.7 Scope of the Study

These study aught to have taken a wider dimension to make it more elaborate. However, because the researcher of this study is a student and do not have enough time and resources, to study the whole Dangota Nigeria Plc branches and customers in the country, the scope was restricted to the findings in Enugu metropolis.


1.8 Limitation of the Study

The researcher encountered problems during the course of carrying out this research; such problems were as a result of selected respondents who refused to accept and participate and also encountered difficulty in acquiring relevant materials and items. The attitude of selected subjects to fill the questionnaire to time so as not to delay the result of the research also posed a problem. However, the researcher appealed to the participants through persuasive means.


1.9 Definition of Terms

Capital/ Industrial Goods

Goods/Products intended to be used for further production (Odoh 2003:2)

Promotools

All short term devices utilized in boosting sales (Adirika, Ebue, Nnolin 1996: 143)

Sales Force Size

Number of sales representative in a company (Adirika, Ebue, Nnolin 1996:143)

Trade Ins

Allowances given for a used item. When a customer purchases a new item. (Boone & Kuntz 1995:721)

Cognition Dissonance

Post – purchase anxiety that results when an in balance exists among an individuals cognitions (knowledge beliefs, and attitudes). (Boone & Kurtz 1995: 272)

Push Strategy

Promotional effort by a seller to members of the distribution channel goods and service, thereby pushing it through the marketing channel (Boone & Kurtz 1995:582)

Sales Quota

Level expected sales on profits for a territory, product, customer or sales person against which actual results are compared (Boone & Kurtz 1995:663).


1.10 Organizations of the Study

The chapter one consist of the introductory part of the study which includes the study background, the statement of the research problem, the study objective and scope of the study.

The second chapter is a critical review of other literatures relevant to the study and its objectives including the theoretical framework for the study. While the third chapter is methods of data collection, sampling and data analysis used in conducting the study. The fourth chapter centres around the research findings including an analysis of how it relates to previous findings. The fifth chapter consists of the summary of findings, conclusion and recommendations base on the study objectives.


Chapter Five


Summary, Conclusions and Recommendations:

5.1 Introduction

This chapter summarizes the findings into the effect of personal selling on sales of industrial products using Dangota Nigeria Plc Enugu branch as case study. The chapter consists of summary of the study, conclusions, and recommendations.


5.2 Summary of the Study

In this study, our focus was on the effect of personal selling on sales of industrial products using Dangota Nigeria Plc Enugu branch as case study. The study specifically was aimed at knowing the effectiveness of personal selling in the creation of awareness; study how Dangota Nigeria Plc product demonstration awakens the customers interest; know if the customers patronage is high a low relation to personal selling activities Dangota Nigeria Plc; know if the ratio of the company’s sales expenses to sales volume is high or low; and study the performance of Dangota Nigeria Plc sales persons and how their performance affects the company’ profit.

The study adopted the survey research design and purposively enrolled participants in the study. A total of 50 responses were validated from the enrolled participants where all respondent are active staff of Dangota Nigeria Plc Enugu State.


5.3 Conclusions

Based on the findings of this study, the researcher made the following conclusion.

  1. Personal selling activities of Dangota Nigeria Plc creates awareness of its product.
  2. Personal selling activities also in the marketing of Dangota Nigeria Plc products do awakes the customers interests.
  3. Personal selling activities of Dangota Nigeria Plc does lead to increased customers patronage of their goods.
  4. Personal selling activities of Dangota Nigeria Plc does not impacts negatively on its profit

5.4 Recommendations

Based on the findings of this study, the researcher recommended that the company should map out such strategies mentioned below to improve customers patronage such as; provision of additional product information and suggestions for product care and maintenance though brochures or advertising; Ensure good services and immediate follow up on complaints to provide post-punch have support; Follow up after the purchase with direct contacts to make the customers understand how to use the products and to ensure satisfaction; Increase the level of customer involvement with their brand by increasing the importance of a product attribute; It is strongly believed that if the above measures are taken, the company will be placed on the track of efficiency.


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