Promotion As A Strategic Instrument In The Sales Of Malt Drinks

Project and Seminar Material for Marketing

Abstract

Modern business relies by and large to a great extent on sales promotion. In introducing and retaining a product or service, proponents of the product and service depend on sales and marketing promotions. It is against this backdrop that this study is borne to investigate the use of sales promotion as promotional strategy in the malt market in Nigeria using Guinness as samples. The study investigated the effectiveness of sales promotion in the main market unit in the beverages industry in Nigeria. With 200 respondents and two Field managers in the major malt producers in Nigeria, the study used survey method of data gathering using questionnaire and interview guide as instruments. It found out that sales promotion is an effective promotional tool for the introduction and retaining customers’ loyalty and awareness.

Chapter One

Introduction

1.1 Background of the Study

As never before, the business world is facing a critical time. The 21st century appears to be unfriendly to businesses especially the Fast Moving-Consumers-Goods Industry. The economic recession facing the world as a whole brought along more hostile factors that militates against the business world. It is more critical to do and run enterprises in this age as investments in different sectors are taking more nose diving than appreciating. Compounding the problem more is the tremendous demands made by the consumers taste, feelings, interests and lifestyles. With an intense drive, organizations must be attuned to the incessant changes confronting the market. These realities in the market place thrust a burden of tough responsibilities on organizations to keep understudying the fluidity of consumer behaviour and other dynamics of the market. This makes the business environment more competitive for brands, than ever before. As many brands storm the market place, a large percentage of the brands also fade out of the market and even into oblivion. Therefore, to survive in the turbulent market environment, it is more of evolving and deploying strategic marketing tools that could enable the brand to perform in the market place. To marketers and their organizations, this idea of brand performance in the market is all about market share. That is, brands must command larger sale in the market. In the Nigerian market environment, driving performance has made sales promotion one of the most consistently and widely used marketing tool.

In Nigeria today, sales promotion is still common. Sales promotion is practiced during auction sales, Bazaar sales, Christmas period, Easter period and during other special events. Sales promotion is important for reaping immediate fruit achieving immediate returns or achieving success at the market place, as far as marketing of goods and services are concerned. Among, the business firms that had adopted or had been making use of sales promotion in the marketing of their goods and services in Nigeria are all blue chip companies, quoted in Nigerian Stock Exchange such as Nigerian Breweries PLC, Cadbury PLC, Nestle PLC, Christleb PLC, Lever Brothers, U.A.C. Group of 14 Companies, Neimeth Pharmaceutical company, Guinness PLC, 7up bottling company and all seasoning companies etc. Sales promotion is an indirect form of marketing promotion intended to stimulate quick action. It is those marketing activities-other than personal selling, advertising and publicity-that stimulate consumer purchasing and dealer effectiveness, such as display, shows and exhibitions, demonstration, coupons, sweeps-take competition, contests, samples, premiums, trade allowance, point of purchase displays, cent-off packs and dealer allowances, and other known routine selling efforts that are usually of short term activities. Sales promotion can also be seen as a form of “incentive marketing” Incentive marketing, among other things, helps to ensure repeat purchasing when well executed, and repeat purchasing is the key to successful marketing or successful business (Schewe 1987). More specifically, however, sales promotion can be defined as a set of activities made up mainly of immediate or delayed „incentives to purchases, expressed in cash or in kind over a short period and 15 whose main objective is to increase the sales volume for any product or service. Even though most sale promotion campaigns are aimed at achieving short-term sales objectives, it must be noted that it can also perform the function of helping to achieve long-term sales and other marketing or business objectives. Sales promotion has for instance, been increasingly shown to be a long-term image builder, awareness creator and a veritable communication medium (Bantick, 1980).

Furthermore, sales promotion contributes to the utilitarian value of advertising. For example, much of modern advertising is geared towards publicizing the promotional effort. Also, sales promotion facilitates the processes of product or service differentiation and effective positioning in an increasingly competitive market as exists in Nigeria. Sales promotion is, of course, a marketing tool that can be gainfully employed in offensive and defensive marketing of any product or services, (Nwosu 2001).

1.2 Statement of the Problem

Sales promotion contributes to the utilitarian value of advertising. For example, much of modern advertising is geared towards publicizing the promotional effort. Also, sales promotion facilitates the processes of product or service differentiation and effective positioning in an increasingly competitive market as exists in Nigeria. Sales promotion is, of course, a marketing tool that can be gainfully employed in offensive and defensive marketing of any product or services. It is on this note that the researcher intends to investigate the effect of promotion as a strategic instrument in the sales of malt drink.

1.3 Objective of the Study

The main objective of this study is to access the promotion strategy as an instrument in the sales of malt drinks. But for the successful completion of the study, the researcher intends to achieve the following objectives;

To ascertain the effect of promotion on the sales volume of malt drinks
To investigate the relationship between sales promotion and profitability of on the sales of malta Guinness
To investigate the role of sales promotion in improving the sales volume of malt drinks.
Ascertain the impact of promotion on the brand of malt drink in Nigeria

1.4 Research Hypotheses

For the purpose of the study; the following research hypotheses are formulated;

H0: sales promotion has no significant effect on the sales volume of malt drinks
H1: sales promotion has a significant effect on the sales volume of malt drinks
H02: there is no significant relationship between sales promotion and profitability of Guinness Nigeria plc.
H2: there is a significant relationship between sales promotion and profitability of Guinness Nigeria plc

1.5 Significance of the Study

The outcome of this study will be useful to Guinness Nigeria Plc and other Malt drinks in using promotion strategy as a yard stick to enhance the sales of their product in the country. The study is also aimed at determining the best promotion method/ strategy to be adopted in sales of malt drinks. it will try to solve the problems encountered by the management in its product promotion policy the study will also be of great important to the management of all bottling company as the findings tends to enumerate the benefit of advertizing on the sales volume and profitability of the company. The study will also be beneficial to researchers who intend to embark on study in similar topic as the study will serve as a guide to their study. Finally the study will be beneficial to academia’s students and the general public.

1.6 Scope and Limitation of the Study

In order to make this work a perfect the scope of the study covers promotion as strategic instruments in the sales of malts drinks. In the cause of the study, the researcher encounters some constrain which limited the scope of the study;

(a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study.

(b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

(c) Finance:

The finance available for the research work does not allow for wider coverage as resources are very limited as the researcher has other academic bills to cover.

1.7 Definition of Terms

Promotion

Mean activities that communicates the merits of the products and persuade target customer to buy it.

Market share

The proportion usually in percentage

Promotional mix

This is the effective combination of the components of the promotional tools to achieve the promotional objectives.

Optimal promotion strategy

The combination of different promotion tool such that maximum benefits or returns is achieved.

Product life cycle

This is different stay a product pass through during it’s life time.

Consumer

The end or actual user of a product or service

Metropolis

This is the chief or capital city of a state or country or zone.

1.8 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 question, significance or the study, research methodology, definition of terms and historical background of the study.
Chapter two highlight the theoretical framework on which the study its 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 also 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 role of promotion as strategic instruments in the sales of malt drinks.

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 as a strategic instrument in the sale of malt drink

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”. The willingness on the part of the respondents to stay true to their brands has negated the opinion of Corfman and Ragubir cited in Kazim and Batra that “offering sales promotion programs to support products penetration into the market on constant basis is more likely to lower a brand evaluation of value Mixed strategies were used by Guinness manufacturers of malt.

5.3 Conclusion

Based on the above, it can be inferred that sales promotion is an effective strategy used in promotion of the malt products Malta Guinness. By default, it can also be inferred that since it worked in the case of malt products, in Nigeria, it will work elsewhere in the world and in the marketing and sales of any other product(s) and/or service(s).
sales promotion is an effective and reliable marketing tool or promotional strategy that can be depended upon for marketing successes. No wonder manufactures and marketers all over the world, including Nigeria, continue to spend heavily on sales promotions.

5.4 Recommendations

It is obvious that this study, due to the systematic way it‟s been handled have made dependable, veritable and interesting revelations. But it is equally vital to note that the result obtained here cannot be subsisted for all sales promotion campaign in Nigeria. Therefore, it is not without limitations, hence we make recommendation here for future sales promotion researchers. However, the researcher deems it wise to pin-point few vital lessons. Sales promotion managers must draw from the result of this study for an enhance strategy and tactics. First, the sales promotion managers (users) should have mastery of scheduling sales promotion campaign. This is necessary in other to reach the market. Suffice to say that the sales promotion managers/users should do well to define their target market so that their consumer‟s discretionary should always go for the promoted products or services. Again the promoter should be reminded in case „„he‟‟ still wonders, that every firm is jockeying for attention. Therefore, the main attraction in your product (s) or services should be well positioned and promoted. Above all, the promotions should be moderately entertaining and brief so that an induce audience remained exposed to the promotion. The seemingly lack of sophistication in the promotion campaign not only vitiated the crystallization of viable promotion but also leads to target market declining and make then see the idea of the products.

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