Effect Of Sales Promotion On The Marketing Of Coca Cola Brand Of Soft Drinks

Project and Seminar Material for Marketing

Effect Of Sales Promotion On The Marketing Of Coca Cola Brand Of Soft Drinks


Abstract


This study examined those factors that influence brand preference among consumers in Enugu urban.

The coca-cola soft drinks that are available in retail outlets in Enugu urban, was used on this study.

Two sources of data were used in the study, they are primary and secondary data. Again questionnaires were used as research instruments to supplement the information got through other sources.

The hypothesis in this study were tested using chi-square (x2).

On the finings, it was observed that:

  1. Coca-coloa emerged as the leader among consumers in Enugu urban. Taste and flavour appeared to be a powerful determinant in consumers brand preference of soft drinks and its purchase in Enugu urban.
  2. It was also revealed that sales promotion is a very important factor that influences consumer’s purchase of coca-cola brand of soft drinks.
  3. It was found out that consumers level of income does not have an influence on their choice of a particular brand of soft drinks.
  4. It revealed that most soft drink consumers in the sample, were brand loyal.
  5. It also revealed that most of the soft drinks consumers in Enugu urban are mainly males and females.

Based on the findings, the following recommendations were made:

  1. Soft drinks manufacturers and marketers should give more attention to consumers point of view towards these brands and were closely confirmed to consumers taste and preference.
  2. Manufacturers should reduce the sugar content of soft drinks in such a way that it would not affect consumers health without attesting the stable flavour of soft drinks.
  3. They should as well avoid adulteration and production of sub-standard quality soft drinks and improve the cocks of their soft drinks. They should do more product research especially in the area of preference. The analysis of such research should be kept current in order to keep them abreast with consumers trends and desires.
  4. From the findings also, one can conclude that both manufacturers of soft drinks and its marketers can use sales promotion to enable the marketer know the most suitable groups of consumers to direct their brands so as to achieve maximum effectiveness.
  5. Finally, local manufacturers of soft drinks should purposely produce some of their products to enable them compete favourably with foreign competitors.

Chapter One


Introduction

1.1 Background to the Study

Promotion is an important arm of the total marketing system. The need to promote a product, service or idea can not be over emphasized. This is infirmed by the fact that a successful marketing outfit can not be put in place without making mention of promotional methods and the tools used in achieving the objectives. The understanding of promotion is closely tired to the understanding of the basic concept of marketing.

The process of matching product or services or idea with consumer need as the main focus of the marketing activity. A marketer should be quick at capitalizing on newly identified needs. The marketing activity does not however end with the matching of product, services or ideas. Consumer should be persuaded that the match is a good one. As Kincaid (1985:20 – 30) has it “of course the marketing process does not end with the initial marketing of the product with consumer need somehow the product must be made available to consumers and appear more desirable than competiting alternative or substitutes”. This is what the marketing function is all about.

Getting to know of the existence of a product, services or idea is not automatic. No matter how good the product, how reliable the service or how sensible the conceived idea, its existence will be unknown unless there is a concerted effort to make the needed information available. The information should be communicated in a manner persuasive enough to induce the kind of acceptance, reaction or response desired. The effectiveness of any promotional message depends upon the skill, versatility and talent of the designee.

Promotion is an art of informing, persuading and educating. These three elements are related in the sense that to persuade is to inform and for these two to be effective, they have to be properly communicated. Promoting is in a way persuasive in nature more so to our socio economic system.

Neil (1982: 10 – 15) of Harvard University puts in this way “the use of influence in commercial relation is one of the attributes of a free society, first as persuasion and counter persuasion are exercised freely in many walks of life in our force, society, in the home, in the press, in the class room, in the pulpit, in the courts, in the political forum, for information. Going by the system approach, a company should handle all the promotional efforts as a sub-system, which includes – the product, the price the place and the promotion. The sub-systems of the promotional activity include, Advertising, Personal Selling, Sales promotion, publicity and relation.

For the purpose of this research work, sales promotion, which is the main focus of this research work, is technique for stimulating consumer buying and any augmenting middlemen effectiveness.

This technique however is most widely used to complement personal selling and advertising to produce a synergistic effect. It is one way of providing additional incentives to consumer to pick ‘our” brand of soft drink from and often wide range of soft drink product on display. Sales promotion should not be confused with the umbrella term “promotion” of which sale promotion is first a part. Immediate purchase action or attitude notification is the main goal of sales promotion. Sales promotion can be in form of shop display, product sampling, premium offers, trade shows, sweep stake contests and games, give away demonstration or point of purchase display.

Shop display is one of the tactics of sales promotion used by the soft drinks manufacturers. The manner and aesthetic nature of soft drink display in fridge with glass doors and the layout in the stop could be strong driving force for a purchase decision. Many soft drink manufacturers use product sampling as one of the most effective means of persuading and encouraging consumer to try a new brand of soft drink when it is introduced. At times, the consumer is given a free trial sample of the soft drink being introduced.

Premium offer is also used by soft drink manufacturers. This is the offer of a merchandise item free or at a substantially reduced rate to stimulate the purchase of soft drink. Items like crates, bottles, coolers and fridge. It is mostly used to persuade their customer to switch brands and not necessarily to introduce a new soft drink.

Sweep stakes contest and games is also used by soft drink manufacturers. This is a random drawing which may or may not require a consideration such as buying a ticket or purchasing a product. Sweep stake contest and games generally require the contestants to participate in the promotion by sending in an entry in a special stipulated format determined by the promoters. It may involve giving a customer number or letters to complete a sequence or printing of letters on crown corks, customer who qualify send in entries with the winning cork. This stimulate the purchase of soft dirnk.

Give aways is also used by soft drinks manufacturers. These are special gift item to customers which are usually printed on crown corks. The purpose is to remind and reinforce a product or company message. Give away items are usually frequently used and relatively cheap items such as a wall clock, diary, T-shirt, pen, pencil, bottle opener etc. Most give away are imprinted with the brand or company name. It could be related to the company’s product. Soft drink manufacturers participate in trade show, seminars and demonstration. The importance of these can not be over emphasized.

There are essentially specialized temporal market places at which buyers and sellers meet some of these soft drink manufacturers. Market place like the international trade fair individual company exhibitions, seminars and demonstration are also used. In this case, there is greater selectivity of audience. It can be mobile and readily moved form one location to the other by a special vehicle. It is estimated (Kotler 1976 : 45 – 50) that trade shows, conversions and demonstration are held each year in America. Daniel (1979:10 – 18) is of the view that “these gives manufacturers and whole sellers an opportunity to display their wares to a large audience or potential buyers at a relatively low cost.


1.2 Statement of the Problem

Sales promotion is an important arm of the total marketing system as in stimulating consumer buying and augmenting sales people’s effectiveness, all geared towards ensuring customer patronage.

Base on this therefore, there is need for a good sales promotion techniques for a successful operation of soft drink industry. However for soft drink manufacturers to be at least near perfection. It must rate nightly in its core activities such as advertising, personal selling, publicity and public relations and have the ability to organize these mixes of activities properly and implement them effectively. But the question is “Is thus so?”

A negative response to this question will indicate that there is deviation from what should be normally obtained.

The desire to find out if such problem exist, their cause effect and what may be done to resolve such problem are the purpose for undertaking this research work.

There are many brands in the market, both foreign and local. But what effect has sales promotion in the marketing of coca-cola brand of soft drink in Enugu urban.


1.3 Objectives of the Study

In consonance with the macro objective to determine the effect of sales promotion on soft drink product in Enugu urban, this research has some objectives and they are

  1. To study the sales promotion objectives of soft drink in Enugu urban and try to find out if their activities were performed as expected.
  2. Analyze the present sales promotion tactics with the aim of assessing its level of efficiency.
  3. To determine the extent to which the sales promotion of coca-cola dates with the sales being made.
  4. To find out the factor that influence sales promotion in the marketing of coca-cola in Enugu urban.

1.4 Research Hypotheses

This work is based on the following hypothesis as a guide.

  1. Ho: Coca-cola does not have very wide demand within Enugu urban.
    HI: Coca-cola has very wide demand within Enugu urban
  2. HO: Most consumers are not induced by sales promotion on coca-cola products.
    HI: Most consumers are induced by sales promotion on coca-cola product.
  3. HO: Sales promotion does not stimulate sales of coca-cola brand of soft drink in Enugu urban.
    HI: Sales promotion stimulates immediate sales of coca-cola brand of soft drink in Enugu urban.
  4. HO: Most consumers do not prefer coca-cola brands of soft drink in Enugu urban.
    HI: Most consumers do prefer coca-cola brands of soft drink in Enugu urban.

1.5 Significance of the Study

The significance of the study is to provide a reliable avenue through which the marketers, especially marketers of coca-cola in Enugu urban should embark on the effect of sales promotion on the above mentioned brands aimed at alleviating sales promotion problems.

Again the project will be very important to the researcher, academics, consumers and student that are involved in effect of sales promotion project, it serves as a guide for future sales techniques of coca-cola brands of soft drink product.

Further more, it will be of help, guiding marketers and checking upon such issues as Advertising, Personal Selling, Publicity, Sales Promotion and Public Relation and Consumers of Coca-cola brands of soft drink products.

Also the marketers will be of benefit from the project for it is their responsibility to embark or protect any development efforts in educating, informing and sensitizing, than of sales promotion policies. Hence the project serves as a guide to the marketers on the choice of available sales promotion technique that will enhance the effect of sales promotion.


1.6 Scope and Limitation of the Study

The research work covered the entire area of Enugu urban, they are Asata, Obiagu, New Haven, Abakpa Nike, Independence Layout, Coal Camp, Achara Layout, Uwani, GRA, Ogui, Emene and Trans Ekulu.

The study is focused on one particular brands of soft dirnk commonly available in Enugu urban. This is coca-cola brands of soft drinks. This is as a result of time and financial constraints of the researcher to carry out an in depth study of all the sales promotional tools in other branch.


1.7 Definition of Terms

Attitude

Defined as a learned predisposition to respond consistently in a favourable or unfavourable manner with respect to a given alternative.

Sales Promotion

It is a technique for stimulating consumer buying and augmenting middlemen’s effectiveness.

Brand

A brand is a name, a term, sign, symbol or design or a combination of item, the purpose of which is the identification of goods and service of a particular company and their differentiation from their competition.


Chapter Five


Summary of Findings, Conclusion and Recommendations

5.1 Introduction

This chapter presents summary of findings, conclusion and recommendations for the study.

Specifically, the study sought to examine sales promotional activities used by Coca-colain enugu urban , the relationship between sales promotion and sales performance of coca-cola, examine the effect of sales promotion on non-sales performance of coca-cola and identify challenges affecting sales promotion activities undertaken by coca-cola.


5.2 Summary of Findings

Summary of findings from the previous chapter are presented as follows.


5.3 Conclusion

Whilst some researchers found a positive relation between sales promotion and sales performance (Anderson et al (1999; Kumar et al (2005), others found otherwise (Vecchio et al. 2006). For this study, the researcher found a positive and significant relationship between sales promotion and profitability. The study concluded that 1 percent increase in sales promotion was associated with 0.44 percent increase in sales turnover. In other words, a 100 increase in sales promotion was associated with a 44 percent increase in sales turnover. However, when it comes to non-sales performance, the study found that sales promotion did not significantly affect new product development.

Finally, the relationship between sales promotion and customer acquisition was positive and significant. The coefficient is elastic and implied that, 1 percent increase in sales promotion expenditure is associated with 0.09 percent increase in customer acquisition.


5.4 Recommendation

Based on the above findings, the researcher recommends the following.

  1. Management of coca-cola should ensure effective integration of communication tools to ensure that the intended objectives for all promotional tools are achieved.
  2. It is equally important for management to fully utilize technology to attract consumers to the Globacom Nigeria brand. Social media tools have become more appealing to the youth hence coca-cola must explore its full benefits.
  3. To deal with the question of whether sales promotion affects sales performance, the study supported the position that sales promotion has a positive and significant effect on profitability. However, it is recommended that management periodically evaluates the contribution of sales promotion relative to other promotional tools.
  4. Finally, the study recommends that management of coca-cola involves key distributors and supply chain members in sales promotional activities if they need to meet the goals stipulated for such campaigns. This is because distributors and retails deal directly with consumers hence they can give adequate feedback on promotional activities used.

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