The Impact Of Promotional Strategy On Sales And Profit

Project and Seminar Material for Marketing

The Impact Of Promotional Strategy On Sales And Profit


The complexity posed by the present global business environment especially the tragic failure of meeting the corporate objectives experienced by some business organizations calls for a strategy which will enhance the achievement of sales and profit objectives and to curb the menace of liquidation that is so rampant in the business industries of today.

To this end, the topic “the impact of promotional strategy on sales and profit”had been chosen as the subject of study.

Meanwhile, this research report is carried out in order to widen the existing knowledge of promotion in the field of marketing by enumerating, analyzing and expatiating on the various elements of promotional strategy, method of its performance and its great impact on the organizational sales and profit.

Promotional strategy is one of the variables of marketing mix that is related to communication mix which marketers implement to stimulate demand and facilitate purchases which invariably helps the accomplishment of corporate objectives.

Chapter One

1.1 Brief Introduction

Having observed the inability or difficulty encountered by some business organizations in meeting their sales and profit targets especially in the face of today’s intensified global competition, it is therefore necessary to apply an effective marketing strategy which can make organisation’s dream a reality.

Following this, promotional strategy is one of the overall marketing strategies that can be used by marketers to communicate and inform the public about the existence of company’s product or services.

It generally entails all the activities required to co-ordinate all the seller’s initiated efforts to set up channels of information and persuasion in order to facilitate the sale and acceptance of goods and services. It comprises of advertising, personal selling, sales promotion and publicity, each providing the necessary and adequate information to the consumers about the organizational products or services, brand name, quality, price and the uses.

Consequentially, promotional strategy serves as a useful device for achieving sales and profit objectives.

1.2 Statement Of Problem

Due to the fact that, promotion is a sine-qua nor for any organization who wants to make an economic head way in today’s global and competitive world of business.

Therefore, this work will be prepared to critically examine promotion as one of the major strategies that can be used by business organizations, which invariably has a very great impact on sales and profit using Nigeria Bottling Company (NBC) as a case.

1.3 The Scope Of Study

This work will be limited to business organizations and these shall be represented by the Nigeria Bottling Company. This is due to the fact that, all other business organizations possess almost the same features with the case to be studied.

Apparently, all business organizations in Nigeria including the case of this study are governed by similar or same rules, regulations and policies of company and Allied Matter, Acts (CAMA), National Agency for Food and Drug Administrative Control (NAFDAC), Standard Organisation of Nigeria (SON) e.t.c.

1.4 Research Questions

Research questions to use consist of the following;

  1. What strategy really helps business organizations to achieve sales and profit objectives?
  2. Does promotional strategy has any effect on sales and profit?
  3. Can high sales and profit be attained without the application of promotional strategy?

1.4 Statement Of Hypotheses

Hi: Sales and profit are affected by the promotional activities

Ho: Promotional strategy has no any effect on sales and profit.

1.5 Purpose Of Study

The main purpose of this study among others is to fully discuss the demystification of promotional strategy, method and its great impact on sales and profit. The inevitable roles it plays in helping organizations to achieving corporate goals.

For instance, in learning from successful organization, this study will show how it has really helped Nigeria Bottling Company (NBC) in reaching and capturing wider market which invariably can serve as a path to tread for others.

Also, this work is aimed at creating more knowledge in addition to the researched works in the relevant field of study.

1.6 Definition Of Terms

i) Promotion:

This is one of the marketing mix which is the co-ordination of all sellers initiated efforts to set up channels of information and persuasion to facilitate the sales and acceptance of goods or services.

ii) Advertising:

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

iii) Personal Selling:

This is the use of speech and personal conviction to persuade potential customers to buy one’s product or service.

iv) Publicity:

This is the non-personal stimulation of demand for product or service by planting commercially significant news about published medium or obtaining favourable presentation of it over the radio, television or stage (theatre) that is not paid for.

v) Sales Promotion:

This is any promotional activity other than advertising, publicity and personal selling that stimulates consumers’ purchase and dealers’ effectiveness such as displays, shows, exhibition e.t.c.

vi) Promotional Mix:

This is made up of four elements of promotion viz; advertising, sales promotion, personal selling and publicity.

vii) Promotional Strategy:

This is a marketing plan designed for the purpose of informing and persuading present and potential consumers.

viii) Outdoor Media:

These are bill boards, sign post, posters, hand bills e.t.c. used in communicating advertising messages to the consumers.

ix) Transit Advertisement:

This is a relatively minor volume of advertisement placed on public buses, taxes and other commercial vehicles.

x) Missionary:

It’s an indirect sales of company’s goodwill by the sales person that leads to repeat sales of a product.

xi) Samples:

This is the process of giving away or dashing out a product to a potential customers.

xii) Information:

This is the full product awareness created by the promotional programme.

xiii) Trade Fair:

This is an exhibition of commercial and industrial goods usually on a large piece of open ground.

xiv) Follow-Up On Sales:

This is the post sales activities that aimed at enticing customers to make a repeat purchase.

xv) Exhibition:

This is the act of displaying set of goods or services publicly for sale.

xvi) PUblic Relations:

This is the company’s or firm’s relationship and communication with its public aiming at creating familiarity.

1.7 Limitation Of The Study

Quite a number of constraints serve as limitations to this study. It is envisaged that much finances, time, dedication and energy will be required.

At times, this work will have to be done even at the expense of other because it requires great attention and sacrifice.

Besides, considering the efforts in preparing and administering the questionnaires, the reluctance on the part of the respondents and the inadequacy of all other resources needed may constitute a limiting factor to this project.

Meanwhile, the performance of the promotional activities in question is not such an easy task.

1.8 Historical Background Of The Case

The Nigerian Bottling Company Plc (NBC), which is part of Coca-Cola HBC (an anchor bottling group operating in 26 countries), was incorporated in November 1951 to bottle and sell carbonated non-alcoholic beverages. The company has the sole franchise to bottle Coca-Cola products in Nigeria. Production of Coca-Cola began in 1953 at a bottling facility in Lagos and new plants at Kano, Port Harcourt and Ibadan were opened shortly afterwards (Ikeja plant was commissioned in 1978). NBC became a public company in 1972 with its shares listed on the Nigerian Stock Exchange.

The company generates its own power and is self – sufficient in CO2 and water production. It has 16 bottling facilities located around the country, and it uses over 80 distribution warehouses and 200,000 distribution outlets. NBC’s head office is located in the Lagos mainland at Ebute-Metta.

NBC Products and Marketing

The range of Coca-Cola beverages in Nigeria includes:

  1. Coca-Cola (Classic, Diet Coke and Vanilla Coke)
  2. Fanta: Orange, Lemon, Pineapple and Blackcurrant Flavours
  3. Sprite
  4. Schweppes: Bitter Lemon, Club Soda, Tonic Water (these “Mixers” were previously bottled under the Krest brand. NBC re-acquired the Schweppes Franchise in August 2001) and Pineapple.

All of the above products are bottled in returnable glass manufactured locally, while Coca-Cola (classic), Fanta Orange and Sprite are also bottled in 50cl PET bottles and the 1.25 litres PET bottles.

  1. Eva Table water in PET bottles
  2. Five Alive Fruit Juice (Citrus Burst, Berry Blast and Tropicla Hit flavours)

Promotional Strategy and broad community support has helped to make NBC, the largest employer of labour in the non-oil private sector in Nigeria, one of the country’s most admired companies.

1.9 Project Budget

The fund budged for this project is N10,000 because it is anticipated that the project will cost nothing less than that.

Meanwhile, the actual budget is N8,000 while contingent and unforeseen occurrence is expected to be N2,000 totaling N10,000.

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