The Impact Of Sales Promotion On Customers Patronage

Project and Seminar Material for Marketing

The Impact Of Sales Promotion On Customers Patronage


Abstract


This research work titled “the impact of sales promotion on customers patronage (A survey of customers in Kaduna North local government).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 50 out of the total population of 100. 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.


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.

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 problem faced in the marketing is lack of awareness of the product by the consumers. The consumer purchases product that are displayed in the market but there is no proper communication between the sellers and consumers. The dealers in that market buys products from sales men but lack knowledge of the product in the market the problem faced are:

lack of awareness of the products by the consumers placement of the products in the shops without carrying out sales promotion and not minding if the products would be bought by the consumers on time or not.

The attitude of consumers toward sales promotion is less effective

Lack of setting place for promotional activities is also a problem because for sales promotion activities to be properly executed the place of the sales promotion should be along the central market Kawo market or place there such consumers are found in mass in other to patronize that product. Sale promotion is a promotional tool aimed at making more sales in a short time. An attempt has been made to find out the cause of why sales promotion activities are not properly executed in some particular area and why consumers perceive sales promotion negatively.


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.

  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 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 kaduna north are precisely in Kawo market 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. It will also serve as a pre-requisite for the award of HND in Business Administration in kaduna polytechnic.


1.5 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?

1.6 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

1.7 Scope of the Study

The research was centered on the pact of sales promotion on consumers patronage. The research work is conducted in the area of sale promotion activities. The research will be carried out within kaduna metropolis, around central market, Kawo market Kaduna north region. 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 in kaduna north local government, precisely around Kawo and central market. To asses what constituted to the impact of sales promotion on consumers patronage in kaduna North local government. 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.


1.9 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 to ascertain the impact of sales promotion on customer’s patronage.

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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