Impact Of Promotional Activities On Fast Moving Consumer Goods

Project and Seminar Material for Marketing

Impact Of Promotional Activities On Fast Moving Consumer Goods


Abstract


The study examined the impact of promotional activities on fast moving consumer goods (FMCG), a study of Unilever Nigeria Plc.

The sample frame of the study was made up of consumers of fast moving consumer goods resident in Ikeja, and the research was limited to age of 20 and above,

The simple random sampling technique method was use to pick the respondents and 400 consumers in Ikeja were selected, and a well- developed questionnaire was designed to elicit information from the respondents.

The data collected were analyzed using the descriptive statistics technique and the linear regression analysis was adopted to test the stated hypotheses at .05 significance level.

Result from the study indicated that there is strong relationship between promotional activities and FMCGs, there is strong relationship between improvement in promotion strategies on FMCGs and consumer referrals, and there is strong relationship between health labelling and consumers’ patronage.

Base on this, the study advised that FMCGs producing companies especially Unilever Nigeria Plc should ensure that they meticulously input expiry date on every product they are producing., secondly, it should be very careful of misleading advertisement which can take the interest of consumers away from the product., lastly, it should make sure the labeling of their products is healthy, along with expiration date, and NAFDAC registration number for authenticity should also be attached.


Chapter One


Introduction

1.1 Introduction

Modern marketing calls for more than developing a good product, pricing it attractively and making it accessible. Companies and individuals must also communicate with present and potential stakeholders, and the general public. For most companies and individuals, the question is not whether to communicate but rather what to say, how to say it, to whom and how often. But communication gets harder and harder as more and more companies clamour to grab the consumer’s increasingly divided attention. To reach target markets and build brand equity, holistic marketers are creatively employing multiple forms of promotions.

Sales promotion is an indirect form of marketing promotion intended to stimulate quick action. It is those promotional activities other than personal selling, advertising and publicity that stimulate consumer purchasing and dealers effectiveness such as displays, shows and exhibitions, demonstration, coupons, contests, samples, premiums, trade allowance, point of purchasing displays, price cent-off pack and dealer allowance and other known routine selling efforts that are usually of short term activities since the aim is to move sales of a particular product or brand above the existing level. Sales would increase if more customers are attracted to the shop, if non-brand users are attracted and if brand users are encouraged to buy more.

According to Ebue (2000) “sales promotion is that something extra that can arouse interest, creating a buying desire, sparks an immediate reaction from customers, middlemen or company sales force.

According to Nnolim (1979) sales promotions is intended to aid both consumers pull and dealer push. They thus categorized sales promotions techniques in term of their consumer and dealer focus.

According to Kotler (2003) sales promotion, a key ingredient in marketing campaigns consists of a diverse collection of incentive tools, mostly short term design to stimulate quicker or greater purchase of particular products or services by consumers on the trade. Based on the sales promotion impact, the researcher used product life cycled theory.

Sales promotion holds a middle ground between advertising and personal selling. It is usually not directed as advertising but it is directed at much large groups than a typical personal selling effort.

Before the sixties, sales promotions had not become popular, but in recent years they had grown so rapidly between 1967 and 1976, and much more in the late eighties, nineties and beyond. In Nigeria over the years, companies and individual service providers have been trying to improve on the creativity in their promotion so as to meet world standards, and again, create the necessary awareness that a product needs.


1.2 Background Of The Study

Promotion is a form of communication intended to persuade its viewers, readers or listeners to take some action. It usually includes the name of a product or service and how that product or service could benefit the consumer, by persuading potential consumers and customers to purchase or to consume that particular brand. Modern promotion developed with the rise of mass production and increased competition in the late 19th and early 20th centuries.

Promotion could also be seen as an element of a marketing communications program. It is usually not the only one, or even the most important one, in terms of building brand equity. The promotion communication mix consists of six major modes of communication.

1. Advertising:

Any paid form of non personal presentation and promotion of idea, goods or services by an identified sponsor.

2. Sales promotion:

A variety of short term incentives to encourage trial or purchase of a product or service.

3. Events and Experiences:

Company sponsored activities and programs designed to create daily or special brand-related interactions.

4. Public Relation and Publicity:

A variety of programs designed to promote or protect a company’s image or its individual products.

5. Direct Marketing:

Use of mail, telephone, fax, e-mail or internet to communicate directly with or solicit response or dialogue from specific customers and prospects.

6. Personal Selling:

Face-to-face interaction with one or more prospective purchasers for the purpose of making presentations, answering questions and procuring orders.

The above listed are the elements of a promotion communication mix. A case study of Unilever Nigeria Plc was used to find out how the strategies employed help the company achieve its promotional goals.


1.3 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 and, possibly, find out 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 organisations 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.


1.4 Objectives of the Study

The objectives of this research work are to:

  1. To find out the impact of promotional activities on fast moving consumer goods (FMCGs) of Unilever Nigeria plc products.
  2. To know the impact improvement of promotional strategies have on FMCG of Unilever Nigeria Plc products as a means of referral on various brand.
  3. To know the impact health Labeling of fast moving consumer goods (FMCGs) of Unilever Nigeria Plc products have on consumer patronage.
  4. To know how knowledge of expiration date on fast moving consumer goods (FMCGs) of Unilever Nigeria Plc products can improve consumer satisfaction.

1.5 Research Questions

The following research questions have been developed

  1. What are the impact of promotional activities on fast moving consumer goods (FMCGs) of Unilever Nigeria plc products?
  2. What improvement will promotional strategies have on FMCG of Unilever Nigeria Plc products as a means of referral on various brand?
  3. Can health Labeling on fast moving consumer goods (FMCGs) of Unilever Nigeria Plc products Impact consumer patronage?
  4. How can the knowledge of expiration date on fast moving consumer goods (FMCGs) of Unilever Nigeria Plc products improve consumer satisfaction?

1.6 Statement of Hypothesis

Hypothesis One
  • H0: There is no significant impact of promotional activities on FCMG of Unilever Nigeria Plc products.
  • H1: There is significant impact of promotional activities on FMCGs of Unilever Nigeria Plc products.
Hypothesis Two
  • H0: There is no significant impact on the improvement on promotional strategies process as a means of referral from consumer in their various brands of FMCGs of Unilever Nigeria Plc products.
  • H1: There is significant impact on the improvement on promotional strategies as a means of referral from consumer in their various brands of FMCGs of Unilever Nigeria Plc products.
Hypothesis Three
  • H0: Health Labeling has no significant impact on consumers’ patronage of FMCGs of Unilever Nigeria Plc products.
  • H1: Health Labeling has significant impact on consumers’ patronage of FMCGs of Unilever Nigeria Plc products.
Hypothesis Four
  • H0: Knowledge of expiration date of FMCGs of Unilever Nigeria Plc products has no significant impact on consumers’ patronage.
  • H1: Knowledge of expiration date of FMCGs of Unilever Nigeria Plc products has significant impact on consumers’ patronage.

1.7 Significance of the Study

This research work has much significance but some of them are:

  1. This research work will improve and expand the knowledge and understanding of the researcher on issues surrounding or pertaining to promotion with regards to fcmg.
  2. It will provide relevant information for management of any organization in making decision related to promotion.
  3. It will help in seeking solution to all problems that arise from poor promotions of fcmg.
  4. It will educate, especially advert personnel on how adverts are really impacting to company’s goods and services, sales revenues.
  5. It will serve as reference material to any scholar/student who is willing to know or to add to his/her knowledge and insight of what the real impact of promotion is.

1.8 Scope of the Study

It is generally known that promotion covers a wide range area, but for the purpose of this research work, it will be limited to studying the strategies employed by Unilever Nigeria Plc in promoting its fcmg.


1.9 Definition of Terms

Sales Promotion:

Sales promotion can be defined as a broad label that applies special kinds of sales accelerating activity not necessarily classed as advertising and direct selling.

Business:

Business can simply be defined as the totality of all economic activities that are undertaken in the process of producing and distributing goods and services for the purpose of making profit.

Organization:

Robine (1987) said an organization is a consciously coordinated social entity with a relatively identifiable boundary, that functions on a relatively continuous basis to achieve a common goal or set of goals.

Marketing:

This is the task of creating, promoting, and delivery of goods and services to consumers and businesses.

Product:

Anything that can be offered to a market to satisfy a want or need.

Price/Pricing:

This is the amount of money for which goods or services is brought or sold, as selected by the company as final price from its range of prices.

Communication:

This is the act of delivering and receiving messages from people. This includes newspaper, magazine, radio, Television e.t.c.

Advertising:

A form of Communication intended to persuade its viewers, readers, or listeners to take some actions on a product or service.

Strategy:

These are plans designed to achieve a long term aim and objectives.

Sales Turnover:

This is the rate at which goods are sold.

Consumer:

Is a person who buys goods or services that is, the final person who uses a product.

Satisfaction:

It is a feeling of fulfillment that is gotten from the use of a product.

Company:

This is referred to as a firm. That is, commercial business.

Management:

An act of managing (i.e planning, staffing, controlling etc) all resources available to the business for the achievement of goal and objective of a company.


Chapter Five


Conclusion and Recommendations

5.1 Conclusion

The findings indicate that Unilever PLC strive to adopt at least most of the promotional strategies in their endeavor to achieve some competitive advantage over their competitors in such a stormy environment despite the stiff competitions and costs of operation. It is concluded that the level of adoption of the promotional strategies amongst Unilever PLC still remains an uphill task despite the importance of strategic marketing practices in any business; these practices have not yet been embraced amongst the Unilever PLC due to high costs associated with promotions.

Many are the factors that have led to such a low levels of adoption of the promotional strategies were inadequate financial backup that is deemed as a major source of drawback to adoption of promotion strategies by Unilever PLC. Technological challenges serve as a drawback to Unilever PLC in effective adoption of promotion strategies. Due to fewer efforts of the Government policies to support E-business, Unilever PLC have been performing poorly.

It is concluded that if a proper mechanism is put in place in regard to capital advancement and in reasonable terms, good business operating environment and good infrastructure will go a long way in enhancing the adoption promotion strategies among Unilever PLC. It is concluded that Unilever PLC to be competitive in terms of product/service quality, they should adopt modern technology in communication to promote their services cost effectively to the target market.


5.2 Recommendations and Policies

It was established that due to good image of some organization, most customers were loyal to Unilever PLC even though they needed to put more effort in promoting their services. It is recommended that print media advertisements to be used by to promote their products and services to the target customers.

It was evident that majority of of Unilever PLC did not advertise using newspapers, television, journals, magazines and billboards due to high costs associated with the media. Therefore, the study recommends Government intervention initiatives through the Ministry of Communication to endorse Fast Moving Consumer Good firms in Kenya through the implementation of the fibre optic cable to enable small and large firms to promote their products through online.

The study established that the healthcare industry was extremely competitive due to competition from well establishes firms in the global market. Therefore, this study recommended that the Government of Kenya to intervene and support Fast Moving Consumer Good firms through stimulating declining firms in order to promote social – economic development.

It was witnessed that public relations was enhanced through collecting market information on consumer needs, low costs of operation, entering new markets, opening new branches, having good and attractive premises, strategic location, having bargaining power on prices, investment in new products and services, coping with competition and by having clear vision and goals. It was witnessed that telemarketing, email and personal contact were the common practices used by Unilever PLC to promote their products.

This study recommends that Unilever PLC should embrace the importance of promoting their products and services in their businesses in order to survive in the dynamic business environment. It is recommended that the government recognizes the importance of this sub-sector and initiates legislation that promote their marketing programs. It is important that the government also puts in place legislation that enables FMCG firms to promote their services. The Government should come up with policies to enhance Communication technology especially in the advent of recent interconnectivity through the undersea cables which has enabled faster internet services through fiber optic cable among major towns in Kenya and is perceived to be faster and could be of great benefit if connected with rural towns and markets for job creation like in Cyber cafes and consequently alleviate unemployment.

The study also established that advertising free samples and personal selling were used at a minimal extent due to costs that were associated with the medium. Therefore, this study recommends that management of Unilever PLC to form strategic partnerships that will enhance their marketing practices in the industry.

The study established that the purpose of public relations activities to their firms in the industry was to market products and services that were produced by their firms and introduce new products in new markets. Therefore, this study recommends that Unilever PLC to forms a joint marketing board that will market their products and sevices in the global market.


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