An Evaluation Of Sales Promotion Strategy In The Case Of Innoson Motors

Project and Seminar Material for Marketing

An Evaluation Of Sales Promotion Strategy In The Case Of Innoson Motors


Abstract


This research work titled “an evaluation of sales promotion strategy in the case of Innoson motors. The objective of the study is identify the best promotional tools to use in carrying out sales promotion and drawing the  attention of the customer and the ignorance of sales promotion by the dealers. The objective of the study is to find out if customers respond positively to sales promotion and to find out if sales promotion activities influences the patronage of a company’s product the researcher used questionnaire for data collection for the study and sample size of 133 out of the total population. the findings of the study revealed that sales promotion activities influences the patronage of a company’s product and the promotional tools to use for creating awareness is the combination of different techniques. Lastly the study recommends that sales promotion activities should be carried out using different techniques and there is need for proper understanding of sales promotion


Table of Content


  • Title Page
  • Certification
  • Dedication
  • Acknowledgement
  • Table of Content
  • List of Tables
  • Abstract

Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objective of the Study
  • 1.4 Research Questions
  • 1.5 Research Hypothesis
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitation of the Study
  • 1.9 Definition of Terms
  • 1.10 Organisations of the Study

Chapter Two:

Review of Literature

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

Chapter Three:

Research Methodology

  • 3.1 Research Design
  • 3.2 Population of the Study
  • 3.3 Sample Size Determination
  • 3.4 Sample Size Selection Technique and Procedure
  • 3.5 Research Instrument and Administration
  • 3.6 Method of Data Collection
  • 3.7 Method of Data Analysis
  • 3.8 Validity of the Study
  • 3.9 Reliability of the Study
  • 3.10 Ethical Consideration

Chapter Four:

Data Presentation and Analysis

  • 4.1 Data Presentation
  • 4.2 Analysis of Data
  • 4.3 Answering Research Questions
  • 4.4 Test of Hypotheses

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • References
  • APPENDIX
  • QUESTIONNAIRE

Chapter One


Introduction

1.1 Background of the Study

Sales promotion involves the marketing activities other than advertising, publicity or personal selling, that stimulate consumers’ purchase and dealer effectiveness. The success of any organization largely depends on customers’ patronage.
Before any product or service can be sold, the use of promotional technique and communication is very necessary for achieving the target objectives of that organization. The customers are very important in this present era, this is because without the consumers there will be no marketing and promotional activities of products for effective sales promotion, the consumers have to be aware of that product before it can be patronized for rapid sales.

Sales promotion is any initiative undertaken by an organization to promote an increase in sales, usage or trial of a product (i.e initiative that are not covered by the other elements of the marketing communications or promotional mix). Sales promotion are varied often, they are original and creative and hence a comprehensive list of all available techniques is virtually impossible (since organizational sales promotion are launched daily). There are some of the examples of popular sales promotion activities for examples-: tasting of  food and drink at sampling points in supermarkets.

Discounted prices: the reduction in the price of a product within a short period of time. Competitions and prize draw, in Newspapers, Magazines, on the Television, Radio and Internet, sales promotion is growing rapidly in recent years because of the consumer behavior towards the patronizing of products and services. The impact of sales promotion on customers patronage can be examined among the consumers of kaduna  north local government which the survey would be focused on household product such as soup detergent, noodles, cosmetics and toothpaste which are produced by different manufactures and use different sales promotion techniques to market their products. Sales promotion is a promotional tool directed towards awareness creation of a product and to make more sales, the attitude of a consumers towards patronized of company’s product is less effective because of ignorance of sales promotion. The medium used to pass the information regarding the products also constitute for the product to be known to consumer which leads to less patronage by the consumers, product that the are displayed in that market, the sales force make use of a particular technique which may not draw the attention of the consumer towards purchase. Every firm aims to make profit. It is generally agreed that one of the keys to making profit is boosting sales. To boost sales, a substantial number of customers must choose one’s product over and above that of its competitors on a substantial number of occasions. One of the surest way of ensuring this happens is to cultivate brand loyalty to one’s product or service.

Brand loyal consumers are more likely to choose their preferred products and /or service over its competitors on a consistent basis. Considering the fact that consumers tend to be finicky with their choices, producers of rival brands tend to be uncompromising with product or service quality while being relentless with their marketing, wiggle room for product in a highly competitive environment is little or nonexistent and the margin of error is narrow. Brand loyal consumers tend to serve as a crucial even if sometimes unconscious support base for product and/or service is the fierce battle for patronage.

For any organization therefore broadening and deepening the base of brand loyal consumers is a key objective in fashioning out any marketing strategy for the brand. Indeed, brand loyalty has been proclaimed by some as the ultimate goal of marketing (Reicheld and Sasser, 1990). Hence, this concern led to the study of sales promotion as it relates to customer loyalty. Sales promotion is inevitable for any type of organization that wants to stimulate sales. According to the American Marketing Association (AMA) defines sales promotion as “media and non media marketing pressure applied for a predetermined, limited period of time in order to stimulate trial, increase consumer demand, or improve product quality”. But this definition does not capture all the elements of modern sales promotion. Schoell and Guiltinan (1996) sees Sales promotion as any activity that offers an incentive for a limited period to induce a desired response for target customers, company sales people, or intermediaries.

Jobber (2004) simply captures sales promotion as a package of incentives to consumers or the trade that are designed to stimulate purchase. Sales promotion, a key ingredient in marketing campaigns, consists of a collection on incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers of the trade (Kotler and Keller, 2009). Sales promotion plays an important role in retaining old consumers and attracting new ones. It has being established in literature that only consumers with repeat purchases are profitable (Nagar, 2009). For any country to achieve national development, several aspects of the economy are expected to change positively.

Sales promotion stimulates trial, increase consumer demand or impure product availability, and the firm use it to stimulate consumer purchase or aid dealer effectiveness. Sales promotion when directed at consumers is used to obtain the trail of a product to introduce a new or improved product to encourage repeat or greater usage by current users.
When directed at sales people it innovates sales force, stabilize fluctuating sales pattern, it educates sales force about product improvement. And when directed at resellers, it increases resellers inventories, to improve product distribution to obtain display and other support for products.


1.2 Statement of the Problem

The purpose of this research work is to thoroughly evaluate the strategies and tools that companies employ to ensure promotion of their goods and services an possibly, how that will commensurate with increased sales due to the use of the different tools. Inspite of the tight definition of sales promotion as an essential means of creating awareness of the product’s existence and characteristics and also the positive, psychological associations that can enhance the buyer satisfaction which add to the real value of the company’s offering, little attention is being given to it by many business organizations in the country and they rarely promote their sales to the fullest.

Many firms pay little attention to sales promotion since they feel they can sell their product with little or no promotional activities. Likewise, despite the effects of sales promotion, there had been insufficient research and decision modeling devoted to it. In addition, there is an established negative perception of many firms as regards the cost of business promotion especially those whose benefits are not early and immediately reached.

Also, adequate records of sales and promotional cost are always neglected and some sales promotion programmes are introduced at the wrong time, which will therefore hinder the level of sales and profitability of the firm and thereby render sales promotions less important in the community and the country as a whole.


1.3 Objective of the Study

The objective of this research work was to have extra knowledge about sales promotion and how sales promotion activities can be used to improve sales, attract customers to a product and how it can also help to improve the profit margin of a company if successful. specifically, the study aims;

  1. To find out if customer respond positively to sales promotions
  2. To find the best promotional technique to use in  drawing attention of customers
  3. To find out if sales promotion activities influences the patronage of a company’s product
  4. To find out if sales promotion activities can be help meet up with competitors.

1.4 Research Questions

  1. How does customers respond positively to sales promotion?
  2. In what way can sales promotion technique be used to attract attention of consumers?
  3. How do sale promotion activities influence the patronage of a company’s product?
  4. How can sales promotion activities help to meet up with competitors?

1.5 Research Hypotheses

To aid the successful completion of the study, the following research hypotheses were formulated by the researcher;

  1. H0: premium sales promotion does not have any significant impact on consumer’s patronage
    H1: premium sales promotion does have a significant impact on consumer’s patronage
  2. H02: there is no significant relationship between sales promotion and customer’s loyalty to a particular brand
    H2: there is a significant relationship between sales promotion and customer’s loyalty to a particular brand

1.6 Significance of the Study

The significance of the study is to ensure that the problem that constituted to the acceptability of sales promotion by some consumers mostly in Anambra state are precisely customers of Innoson, the researcher wants to make sure that the way sales promotion is viewed in the negative aspect should be credited completely. The study is targeted on the impact of sales promotion on customers patronage. What really instigate consumer to purchase the product, could it be as a result of free gifts, discounts or content, it will serve as a reference material for students in future who many be interested to carryout a research on sale promotion. An organization would have the knowledge of  why consumers patronize the product and how to prove their technique in carrying  out sales promotion activities. (consumers will know the relevance of sales promotion and continue in the purchase of the product.


1.7 Scope of the Study

The research was centered on the evaluation of sales promotion strategy in the case of Innoson motors. The research work is conducted in the area of sale promotion activities. The research will be carried out within Innoson motors. The project is conducted using survey method to source for information that will ass it the proper success of this project.


1.8 Limitation of the Study

This research is focused on how sales promotion activities influences customers patronage. The researcher makes use of the survey method to gather information that will help to achieve success of this work.

The research is limited to customers of Innoson motors to asses what constituted to the impact of sales promotion on consumers patronage. Time available for the completion of this project will be managed towards achieving the purpose of conducting the research work.


1.9 Definition of Terms

The definition of terms used in the project are clearly stated and properly defined.

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.

Advertising:

Is any paid form of non- personal presentation and promotion of idea, goods, and or service by an identified sponsor”.

Publicity:

Non- personal stimulation of demand for a product service or business unit by planning commercially significant news about it at a published medium either Radio or televisions that is not paid for by sponsor.

Personal Selling:

It is the face to face interaction between the seller and the buyer.

Promotional Mix:

These are tools used by companies in marketing their products to customers/consumers. Which are sales promotion, personal selling, advertising and publicity.

Consumer:

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

Marketing:

It is the identification of needs creating means of providing the product and service toward satisfying the consumer at profit.

Communication:

The process of passing information, ideas signals, to an individual that is understood as a result of receiving a feedback

Product:

Anything that is offered for attention, used and consumption.

Service:

It is intangible products that is offered to consumers without being felt but enjoy the service rendered


1.10 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

  • Chapter one is concern with the introduction, which consist of the (overview, of the study), statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  • Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  • Chapter three deals on the research design and methodology adopted in the study.
  • Chapter four concentrate on the data collection and analysis and presentation of finding.
  • Chapter five gives summary, conclusion, and recommendations made of the study.

Chapter Five


Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was an evaluation of sales promotion strategy in the case of innoson motors. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of sales promotion and customers patronage.


5.2 Summary

It was discovered that the overwhelming majority of the respondents were motivated by the prizes to be won during the sales promotion; thereby confirming the opinion that the promotional messages influence consumers’ purchase decision. When the field managers were interviewed, they both itemized a number of benefits of sales promotions that acted as undermining factors for the use of sales promotions which was actually in line with what Shimp mentioned.

They also affirmed that the above mentioned strategies are often used to make sales promotion effective. The responses from the respondents revealed that sales promotion actually increases market share of these products and consequently, increase the brand’s competitive advantage. The attempts by these organizations in building competitive advantage through sales promotions were successful. Though respondents were motivated by promotional messages to participate in the sales promotions, they are also willing to stay true to their brand. This motivation or incentive is what Egan says sales promotion is all about “Sales promotion is the offering of an incentive to make people act”.


5.3 Conclusion

Whilst some researchers found a positive relation between sales promotion and customers patronage (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 customers patronage. 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-financial performance, the study found that sales promotion did not significantly affect new product development.


5.4 Recommendations

Haven completed the study, the researcher recommends that

  1. Since it has empirically investigated there is a significant connection between media advertising and consumers‟ patronage of insurance business.
  2. Personal selling is a significant determine of customers‟ patronage of insurance business; that is insurance firm must now go out of their offices to meet good clients, and even present such prospective customers with gifts and other incentives in order to attract their deposits and patronage.
  3. Sales promotion significantly affects consumer‟s patronage of insurance business; the sales promotion objectives of the industry or firms should determine its promotional strategy. The researcher suggest further that in order to achieve the objectives of developing favourable association as well as to impress customers‟, a suitable strategy should be designed to promote the image of the particular industry or firm.
  4. Direct marketing significantly influence consumers‟ patronage of insurance business; direct marketing as a tool of communication should be explore and properly entrenched in all areas of operation of the insurance industry to increase the patronage.

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