The Effect Of Promotion On Consumer Purchase Decision

Project and Seminar Material for Marketing

The Effect Of Promotion On Consumer Purchase Decision


Abstract


Sales promotion is among the important communications medium that has powerful effect on consumers’ purchase decision.Marketing is the link between a societies need and it’s pattern of industrial response. This implies that the success and future growth of any organization will depend largely upon the acceptability of its products or services by it potential customers. The recent difficult economic times, however house led companies to use promotional tools such as sales promotion, public relation, advertising and publicity more aggressively. The researcher employed the quantitative approaches to data collection and analysis. According to Ary et al (2002), a study allows for an in-depth analysis of a single unit such as one individual, one group, one organization, one programme. In this study the study population constitute of all the staffs at the Guinness Plc estimated at around 200 staffs. A totalof 100 questionnaires was distributed for the study.The analysis was done with the help of Statistical Package for Social Science (SPSS) and Microsoft Excel. The closed ended questions were given numerical codes which were done in a varying scale depending on the responses. Data was analyzed in the form of descriptive statistics and multiple regression analysis. The results of data analysed are presented in the form of tables and charts.
Conclusions and recommendations were made at the end of the study.


Chapter One


Introduction

1.1 Background of the Study

Marketing is the link between a societies need and it’s porttern of industrial response. This implies that the success and future growth of any organization will depend largely upon the acceptability of its products or services by it potential customers. The recent difficult economic times, however house led companies to use promotional tools such as sales promotion, public relation, advertising and publicity more aggressively.

Promotion is a communication process, this had it’s way as devised tool of educating potential customers about their company’s activities products/services availability and the benefits devisable in using products.

The dynamic and complete business world (environment) makes it pertinent for marketing organizations to device strategies in delivering satisfaction to that target market and their potential customers.

These strategies are to influence the customers purchase decision which is the curt of the topic under study. Hence the study is aimed at assessing the effect of promotion on consume purchase decision (A study of Beverage Industry)

The effectiveness of this promotional mix mentioned above and the decision shall be examined in this research work.


1.2 Statement of the Problem

Many marketing practitioners (companies) have not developed and understood an effective promotional strategy that will create the required awareness about their product and to ascertain the effect it has on consumers purchase decision in accepting their product is a problem. There are too many companies that are involved in the product of similar in the minds of consumers on how to differentiate these products. It is a problem.

The problem of indiscriminate introduction of new products into the marketing by some firm without the knowledge of the loss of customer’s and lack of product acceptability by these customers in the market.

There are criticism that promotional activities in organization be discontinued due to its addition to extra cost to products and its negative contribution to the socioeconomic well being of our society that it mislead people into buying what they don’t need and cannot afford.


1.3 Objectives of the Study

In using the various promotional mix a country must establish the objectives, select the tools, develop the programme, protest the programme implement and control it, and evaluate the result all these helps to sharpen the consumers purchasing decision properly.

However the purpose of this study is to investigate among other things.

  1. The effect of promotion on the purchase decision of Beverage industry.
  2. To know if the decision of consumers as regards their purchase of the product at the market place is hinged on the effectiveness of the promotional strategy adopted by the firm.
  3. To ascertain the promotional mix required at these different stages of the product life vis – a vis the product adoption process.
  4. To analyses the contribution of total promotional programmes towards the achievement of a company’s objectives in trying to please their final consumer and the most widely used promotional mix.

1.4 Research Questions

Marketing research is undertaken to understand a marketing problem better. In order to achieve the purpose of this study, the following questions will enable us solve the research problems.

  1. Do organizations have the promotional strategy of the promotional plans?
  2. What type of promotional plans are practice and accepted by consumers?
  3. Which type of promotional strategy s likely to lead to the accomplishment of organizational objectives?
  4. Which promotional strategy is most effective in the beverage industry?

1.5 Research Hypotheses

  1. Ho: There is no relationship between the effects of promotional and consumer decision.
  2. Ho: Promotional strategy does not help organizations to differentiate then products and the effect on consumer purchase decision
  3. Ho: Lack of promotional activities in organizations do not lead to consumers not buying the product in the market
  4. Ho: Effective promotional activities in organization do not lead to consumers buying the products in the market.

1.6 Scope of the Study

The aim of this study is to conduct a comprehend research on the purchase decision of Beverage consumers of Guinness product and how the promotional activities of the industry (Guinness Plc) influence them one way or other.


1.7 Significance of the Study

This study is to highlight the effect of promotion on the purchase decision of the consumers towards some products in the beverage market and also to identify other factor that one responsible for this purchase decision of consumers.

The study will be of immense benefit to marketing firms in trying to determine the base promotional mix that is suitable for a particular market to be able to satisfy their find consumers and also to ascertain if the huze financial expenditure on promotional justifiable.

It will also help to expose firms to the services of human behavior and buying decision making. Understanding and predict the consumer to analyse their mental and psychological behavior. Also how and why people buy products and services.

The findings of this study would be great relevance to most marketing firms since it will serve as information and base for subsequent research work on promotional strategy and how it can influence purchase decision.


1.8 Limitation of the Study

The aim of this study is to conduct a comprehensive research on the purchase decision of beverage consumers of Guinness products and how the promotional activities of this industry (Guinness Plc) influence their one way or the other. The study will also investigate the promotional mix applicable to the different stages of the product (Beverage Industry of Guinness life cycle that will enable it influence the consumer purchase decision constraints were experienced from consumer especially those concerned will Guinness Products. The result of this study will be useful to other companies different industries especially those concerned with drinks production.


Chapter Five


Summary of Findings, Conclusions and Recommendations

5.1 Summary of Findings

Below are the findings of the research as gleaned from the analyses; Sales promotion practice is a very prominent feature in the Beverage industry and consumers are very much aware of the various sales promotional strategies practiced by these Beverage industry providers. The various strategies identified in the Beverage industry by consumers‟ supports the most frequently used sales promotions in the world as identified by Berkowitz and Hartley (1994). The notable sales promotional strategies practiced included bonus for talk time, premiums, frees samples, price offs, branded souvenirs, contests and sweepstakes, and free talk time to family and friends.

The sales promotion strategy that consumers were mostly aware was the contest and sweepstakes. The consumers‟ awareness of the sales promotional strategies in the Beverage industry gives them access to enough information that guides their decision making.

The sales promotion practice in the industry draw these consumers to the product and make them do impulse purchase. This confirms the assertion by Ngolanya, et al, (2006) that sales promotion engenders impulse buying.
Factors such as appearance of sales persons, displays of products, free gifts accompanied with the purchase of airtime, free samples offered for customer trial and short term reduction of prices on certain occasion could enhance or impair the effectiveness of sales promotion. The findings confirmed that, amidst the factors that could enhance the effectiveness of sales promotion practice, the factor that has the greatest effect was the attachment services such as double bonus for all day. This supports the study done by Adcock (2001), who asserts that when a purchase decision is made, the actual purchase can be affected by unanticipated situational factors. Some of these situational factors according to them could be directly associated with the purchase, for example the outlet where the purchase is to be made, the quality to be bought, and payment procedure among others. The consumers also had similar views that these attachment services enhance the effectiveness of sales promotion.

There was a significant influence of sales promotion on consumer behaviour. Implying an improvement in the sales promotion strategies will lead to a corresponding improvement in consumer buying behaviour towards purchasing Beverage industrys at least in the short term. This supports the study by Sam and Buabeng (2011), which states that, the essence of sales promotion is to provide a direct inducement to act by providing extra worth over and above what is built into the product at its normal price. Sales promotion plays a significant role in influencing the consumer decision process by shortening the decision process during purchase.

In the case of post-purchase actions of consumers, the findings showed that, consumers to a larger extent grumble and complain about their dissatisfaction of the service to their friends and persuade them not to purchase that particular service or product. It was realised that, the consumer compare the actual experience with their expectations to determine their satisfaction. If it meets their expectations, the likelihood of purchasing the same brand becomes very high and the vice versa. This confirms the study by Gabboth and Hogg (1994) who affirmed that, consumers have a predetermined standard against which they compare the outcome.


5.2 Conclusion

Beverage industry providers have a lot of services and products that they make available to consumers through their various communication tools. One of the key promotional tools used in marketing these services and products is sales promotion.

The study revealed that sales promotion has an influence in the purchase decision of consumers. It was realised that the consumer may not go through the entire decision making process anytime they want to purchase a Beverage industry or product. This may be so because the evoked sets which present the consumer with established alternatives may inform the consumer’s judgements in deciding which service or product to buy. This may eventually prevent the consumer from going through all the stages of decision making because of experience and available information to him. It was also observed that the consumer would mostly consider which Beverage industry operator is offering the best discount and the kind of service that satisfies their need. Sales promotion therefore is an inevitable promotional tool for telecom firms if they really want to maintain or increase their market share.

Some of the challenges this study encountered was accessibility of information from Guinness PlcNigeria. This actually hampered the research because the researcher couldn’t get information from the Management of Guinness Plc to confirm the influence sales promotion has on their sales, customer attraction and customer retention. The study also failed to assess the impact sales promotion has on customer retention after the sales promotion is over.

In conclusion, this study has demonstrated that, the consumer is aware of the information around him and are always looking forward to take advantage of the sales promotions being run by these Beverage industry providers. Hence, in order to attract and influence the purchase decisions of the telecom consumers in today’s competitive market, sales promotion should be a prominent feature in Beverage industry providers‟ budget, year in, year out.


5.3 Recommendations

Recommendations have been made about measures that could be taken to improve the practice of sales promotion in the Beverage industry in order to influence the consumer buying behaviour effectively. The following may be noted:

The operators must intensify the use of sales promotion as consumers have shown great interest and are highly influenced by sales promotion activities.

Double bonus-all-day should be carefully applied as it can reduce profitability. Therefore it may be used in conjunction with other promotional tools such as coupons and free talk time. Greater emphasis may be placed on attachment services to gain maximum advantage.

Sales promotion has short term effect, as a result services providers need to do a continuous follow up to establish long term relationship with new customers acquired during sales promotion period.

Beverage industry providers should engage in continuous research to correctly approximate consumer expectations and plan to meet them to reduce consumer complaints.

Guinness Plc and other Beverage products should enhance the situational factors such as display of items, appearance of sales persons, location of showrooms as well as payment processes. These factors and other situational factors will enhance the effectiveness of their sales promotions to influence their consumers.


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