The Impact Of Rapid Increase Sales Promotion Activities On The Sales Of Soft Drinks In Nigeria

Project and Seminar Material for Marketing

The Impact Of Rapid Increase Sales Promotion Activities On The Sales Of Soft Drinks In Nigeria


Abstract


This study was carried out to examine the impact of rapid increase sales promotion activities on the sales of soft drinks in Nigeria using Nigeria Bottling company Lagos State. The study was specifically carried out to determine whether there is a significant relationship between sale promotion and consumer patronage of soft drinks, find out the sales promotion activities which promotes the sales of soft drinks in Nigeria, determine the extent the sale promotion strategy is adopted for the sales of soft drinks in Nigeria, and determine whether rapid sales promotion will enhance consumer patronage of soft drinks. The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprise of marketers of Nigeria Bottling company Lagos State. In determining the sample size, the researcher conveniently selected 57 respondents and 50 were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables, and mean scores. While the hypotheses were tested using Pearson correlation statistical tool, SPSS v23. The result of the findings reveals that there is a significant relationship between sale promotion and consumer patronage of soft drinks. The study also revealed that Rapid sales promotion enhances consumer patronage of soft drinks. Therefore, it is recommended that organizations should also consider promotions that emphasize in-store display, free sample, price discount, and bonus pack since they likely to be more effective than coupon and promotions that seek to encourage environmental friendly behaviour. To mention but a few.


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

The world of business is going to complex day to day. Competition in every sector is increasing high. In this situation, especially companies find the situation cry though to sell their product in the market smoothly. So, the businessmen are using various tools and techniques to sell their products. Few decades back situation was not like this; market was limited to few products. Market was growing means that a plentiful of supply of new costumers and company could attract those new costumers without worrying of losing old ones. But now competitions are though and market is sophisticated and companies are facing some marketing realities.

“Sales promotions consist of a diverse collection of incentive tools, mostly short-term, designed to stimulate quicker and/or greater purchase of particular products/services by consumers or the trade” (Kotler, 1997). In fact, sales promotion works as a quick stimulator, which stimulates the consumer on the trade to buy the particular products. Sales promotion can promote organization effectiveness through increase in profitability from higher sales. Okoli (2011) explains that the “essence of setting up a business organization is to make profit. Without profit, a business is bound to fail”. Loudon and Bitta (2002) said that sales promotion plays a significant effect on decisions which help in achieving the organizational objectives. Organization effectiveness is a totality of organization goodness, a sum of such elements as production, cost performance, turnover, quality of output, profitability, efficiency and the like (Katz and Kahn, 1966). It is the ability of an organization to achieve its objectives and meet the needs of its various stakeholders (Khandwalla, 1995). In real increase sales promotion have a method of making communication other than rebates and personnel selling. Although in marketing communication mix, the entire element like rebates, personal selling, publicity and sales promotion come together. Sales promotion has effects on various aspects of consumer‟s purchase decisions such as brand choice, purchase time, quantity, and brand switching (Nijs, et al., 2001). Bamiduro (2001) established the positive relationship between sales promotion and consumption rate of soft drink products as well as the sales volume of the beverage industry in Nigeria. Oyedapo, et al. (2012) found that organization promotion strategies enhance consumer buying pattern. Syeda, et al. (2012) explore the short term and long term impact of sales promotion in Nigeria companies from two diverse industries, i.e. Nigeria bottling company by regressing mean of brand loyalty on mean perception about promotion obtained through financial analysis and consumer survey respectively. Aham (2008) is of the opinion that sales promotion emerged as a reaction by manufacturers marketers, and marketing strategies alike to find a short term solution to the problems of excess stock of goods which are available in variables manufacturer‟s warehouses but are not demanded by consumers and organization. Pauwels, et al. (2002) are of the opinion that when a consumer is exposed to a sales promotion offer majority of the time, the consumer has already purchased and practiced a particular brand so the impact of learning form the that purchase is minimal and is easily balanced by a simultaneous and similar competitive offering.

Sales promotion has effects on various aspects of consumer‟s purchase decisions such as brand choice, purchase time, quantity and brand switching (Nijs, Dekimpe, Steenkamps and Hanssens, 2001). However, whether the effect of consumer loyalty and purchasing behavior could be moderated by sales promotions has not yet been examined extensively. Regardless of a widespread interest in the relationship between sales promotion and purchasing behavior, most studies of this kind focus on the effect of sales promotions on choice at the time they are offered (DelVecchio, Henard, Freling, 2006). Sales promotions could be in form of monetary and non-monetary ones. These types provide both utilitarian and hedonic benefits to the consumers. Utilitarian benefits refer to such benefits such as quality, convenience in shopping, saving in time efforts and cost (Luk and Yip, 2008). Hedonic benefits on the other hand refer to value expression, exploration, entertainment, intrinsic stimulation and self esteem (Chandon, Wansink and Laurent. 2000). According to Luk and Yip (2008) monetary promotions are incentive-based and transactional in nature and provide immediate rewards and utilitarian benefits to the customers. However, non-monetary promotions provide hedonic benefits but weaker utilitarian benefits (Kwok and Uncles, 2005). Monetary promotion have been reported to be preferred over non-monetary promotion across all consumer goods in terms of their ability to elicit purchase intentions (Luk and Yip, 2008; Kwok and Uncles, 2005). Several other studies had reported different impact of sales promotion on consumer behavior. For example, Blatterger and Wisniewski (2019) reported that consumer gain more from price cut when buying an established up-market brand than a mass market brand. However, by keeping the view of this reality, this paper tries to examine the the impact of rapid increase sales promotion activities on the sales of soft drinks in Nigeria.


1.2 Statement of Problem

Now-a-days people are conscious to look for the best products and that’s why their fluctuating mind may switch on to new brands with a simple stimulus. In this scenario different promotional activities might be used to offer an extra incentive to a product. Again it is remarkable that a product lack of any significant advantage can make it difficult to create a rebates campaign which can be used to entice people to try the product. The introduction of advanced machines into the manufacturing sector as a result of the Industrial Revolution has boosted the output of goods and services. This revolution resulted in a great number of goods and services becoming accessible for purchase. In this regard, consumers are exposed to a variety of items and must choose which of the products, from whose company, would provide them with the highest level of satisfaction, (Blattberg, Briesch and Fox, 1995).

However, the current economic crisis reduced sales, promotion, and public relations activities, affecting the company’s efforts in reaching out to its many consumers and competing favorably in the market, resulting in brand switching and poor patronage. In light of the aforementioned, a company must enhance and perform a specific degree of marketing competency in order to get the attention and interest of consumers in a highly competitive market, (Kotler and Armstrong, 1990). Consequently, effective promotion usually yields positive results that impact on profit ratio; hence the product that gets to the final consumer must satisfy his or her want (Kotler and Armstrong, 1990). In recent years, Nigerian Bottling Company Plc has used a variety of promotional methods to boost sales. Under The Crown, Premium, Scratch and Win, and Free Gift are just a few of them. Cash, T-Shirts, Face-Caps, Bags, Openers, Biros, Free beverages, Television, Radio, and other incentives are also used to encourage increased sales, (NBC Plc, 2012). Despites all these efforts placed by Nigerian Bottling Company Plc on its promotional activities which costs the organization millions of naira in recent times, the company’s profit Prospects continue to deteriorate, (NBC Plc 2020). In this context, the researcher is doing this study to examine the impact of rapid increase sales promotion activities on the sales of soft drinks in Nigeria.


1.3 Objectives of the Study

The general objective of this study is to examine the impact of rapid increase sales promotion activities on the sales of soft drinks in Nigeria.

However, the specific objectives are to:

  1. Determine whether there is a significant relationship between sale promotion and consumer patronage of soft drinks
  2. Find out the sales promotion activities which promotes the sales of soft drinks in Nigeria.
  3. Determine the extent the sale promotion strategy is adopted for the sales of soft drinks in Nigeria
  4. Determine whether rapid sales promotion will enhance consumer patronage of soft drinks.

1.4 Research Questions

This study shall attempt to provide answers to the following questions.

  1. Is there any significant relationship between sale promotion and consumer patronage of soft drinks?
  2. What are the sales promotion activities which promotes the sales of soft drinks in Nigeria?
  3. What is the extent the sale promotion strategy is adopted for the sales of soft drinks in Nigeria?
  4. Does rapid sales promotion will enhance consumer patronage of soft drinks?

1.5 Research Hypotheses

  • Ha: There is no significant relationship between sale promotion and consumer patronage of soft drinks.
  • Ho: There is a significant relationship between sale promotion and consumer patronage of soft drinks.

1.6 Significance of the Study

The purpose of this research is to gain a better knowledge of the the impact of rapid increase sales promotion activities on the sales of soft drinks in Nigeria. The research is important because it aims to determine the role of sales promotion as a marketing strategy as well as the achievement of organizational goals and objectives.The conclusions of this study will act as a guide for Nigerian bottling companies, providing insight into how to properly design and execute sales promotion efforts in order to achieve better results. The research will assist the Nigerian Bottling Company’s management in understanding not just the effect of sales promotion on product sales, but also how to apply it in marketing. This research will be used as a guide for other organizations who want to conduct sales promotions in order to motivate and acquire channel support as well as consumer patronage. The outcomes of this study will contribute to the current body of knowledge in the marketing field and will also aid other researchers interested in venturing into the field of sales promotion.


1.7 Scope of the Study

This study is structured to generally examine the impact of rapid increase sales promotion activities on the sales of soft drinks in Nigeria. However the study will be delimited to Nigeria Bottling company Lagos State.


1.8 Limitation of the Study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. However, the researcher were able to manage these just to ensure the success of this study.

Moreover, the case study method utilized in the study posed some challenges to the investigator including the possibility of biases and poor judgment of issues. However, the investigator relied on respect for the general principles of procedures, justice, fairness, objectivity in observation and recording, and weighing of evidence to overcome the challenges.


1.9 Definitions of Terms

Sales Promotion:

Premium, discount, and other non-current selling efforts are examples of marketing tactics other than advertising, personal selling, and publicity that are aimed to encourage consumer purchase and dealer effectiveness.

Customers / Buyer:

A person, a group of people, or an organization that buys goods and services is referred to as a customer or a buyer.

Product:

A product is anything real or intangible that is offered to the market for consideration, acquisition, usage, or consumption in order to fulfil a want or need.


1.10 Organization of the Studies

The study is categorized into five chapters. The first chapter presents the background of the study, statement of the problem, objective of the study, research questions and hypothesis, the significance of the study, scope/limitations of the study, and definition of terms. The chapter two covers the review of literature with emphasis on conceptual framework, theoretical framework, and empirical review. Likewise, the chapter three which is the research methodology, specifically covers the research design, population of the study, sample size determination, sample size, and selection technique and procedure, research instrument and administration, method of data collection, method of data analysis, validity and reliability of the study, and ethical consideration. The second to last chapter being the chapter four presents the data presentation and analysis, while the last chapter(chapter five) contains the summary, conclusion and recommendation.


Chapter Five


Summary, Conclusions and Recommendations:

5.1 Introduction

This chapter summarizes the findings on the impact of rapid increase sales promotion activities on the sales of soft drinks in Nigeria using Nigeria Bottling company Lagos State. The chapter consists of summary of the study, conclusions, and recommendations.


5.2 Summary of the Study

In this study, our focus was to examine the impact of rapid increase sales promotion activities on the sales of soft drinks in Nigeria using Nigeria Bottling company Lagos State. The study was specifically carried out to determine whether there is a significant relationship between sale promotion and consumer patronage of soft drinks, find out the sales promotion activities which promotes the sales of soft drinks in Nigeria, determine the extent the sale promotion strategy is adopted for the sales of soft drinks in Nigeria, and determine whether rapid sales promotion will enhance consumer patronage of soft drinks.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 50 responses were validated from the enrolled participants where all respondent were marketers of Nigeria Bottling company Lagos State.


5.3 Conclusions

Based on the findings of this study, the researcher concluded that;

  1. There is a significant relationship between sale promotion and consumer patronage of soft drinks.
  2. The sales promotion activities which promotes the sales of soft drinks in Nigeria includes: coupons, bonuses, premiums, gift etc.
  3. The extent the sale promotion strategy is adopted for the sales of soft drinks in Nigeria is high.
  4. Rapid sales promotion enhances consumer patronage of soft drinks.

5.3 Recommendation

With respect to the findings and the aim of this study, the researchers therefore recommend that;

  1. Firms can increase sales by offering the right promotional tools to attract trial customers. Therefore organisations should carefully plan their promotional strategies, and allocate promotional budget over the different promotion tools, giving preference to the more effective tools.
  2. Organizations should also consider promotions that emphasize in-store display, free sample, price discount, and bonus pack since they likely to be more effective than coupon and promotions that seek to encourage environmental friendly behaviour.
  3. Marketers should adopt the integrated sales promotion approach wherein both monetary and non-monetary promotions tools are combined to address the various consumer segments.
  4. The company should research and involve in sales promotion activities and get themselves more acquainted with the importance and benefits accrued to it.

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