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CHAPTER 1

INTRODUCTION

1.1 BACKGROUND OF THE STUDYIt is without doubt that Nigeria is experiencing an incessant

increase in demand for consumer product occasioned by the

growing application of the various promotional mixes, all of

which are rampant phenomenon in the Nigerian business

environment. In trying to understudy this research work, it is

paramount that the remote roles of the promotion in marketing

consumer product be summarily evaluated.

(wikipedia.com) Promotion is a form of corporate

communication that uses various methods to reach a targeted

audience with a certain message in order to achieve specific

organizational objectives. Nearly all organizations, whether for-

profit or not-for-profit, in all types of industries, must engage

in some form of promotion. Such efforts may range from

multinational firms spending large sums on securing high-

profile celebrities to serve as corporate spokespersons to the


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owner of a one-person enterprise passing out business cards at

a local businesspersons meeting.

Like most marketing decisions, an effective promotional

strategy requires the marketer to understand how promotion

can be used to improve market performance of consumer

product in Nigeria.

Consequently, promotion decisions should be made with an

appreciation for how it affects other areas of the company. For

instance, running a major advertising campaign for a new

product without first assuring there will be enough inventory to

meet potential demand generated by the advertising would

certainly not go over well with the companys production

department (not to mention other key company executives).

Thus, marketers should not work in a vacuum when making

promotion decisions. Rather, the overall success of a

promotional strategy requires input from others in impacted

functional areas.

In addition to coordinating general promotion decisions with

other business areas, individual promotions must also work

together.


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(wikipedia.com) the marketing environment is constantly

changing and to take advantage of the opportunities there

must be marketing strategy and strategic plans. The fast and

effective access of promotion has become an Indispensable

factor for the success of any business project. Thus, this

profound statement above amplifies the need for promotion in

marketing of consumer product.

The application of promotion mix has played a crucial role in

improving business efficiency in the marketing environment.

In our complex society today, promotion is an integral part in

our social and economic system. The fragmentation of mass

market, the explosion of new technologies that are giving

consumers a greater control over the communication process,

the rapid growth of the internet and electronic commerce or E-

commerce, the emergence of global market and economic

uncertainties are all evidence of the changing market

environment and its contribution to the way companies

approaches marketing as well as promotion.

Developing marketing communication programs that are

responsible to these changes is critical to the success of every

organization. In fulfilling and meeting up the market target, a


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well-planned and executable marketing communication

strategy is very important. Hence, this project work is aim at

showing the role of promotion in marketing of consumer

product.

Balaure, V. (2003), A Company marketing communication

programme, known as the promotional mix, is a specific blend

of advertising, promotion, public relations, trademark use and

sales force tools, employed to achieve marketing and

advertising goals.

For a fiercely competitive industry of consumers product each

element of the promotional mix is of utmost importance.

Companies in consumer product sector should not limit their

goal to merely providing quality goods they should seek to

inform the consumers of the advantages of their products, and

to implant such advantages in the consumers with surgeon

precision. To that end, it is mandatory that businesses properly

employ mass promotional tools.

This research work will attempt to dissect and identify

promotional mix that can be adopted by marketing managers

with particular reference to marketing of consumer goods. This


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research work will attempt to dissect and identify marketing

strategies that can be adopted by marketing managers with

particular reference to promotion in marketing of consumer

goods. Efforts shall be made to unravel the objective of

promotion, types of promotional mix shall be enunciated, and

recommendation shall be made to organisation based on

scientific method, so as to aid and improve their marketing

activities.

1.2 STATEMENT OF RESEARCH PROBLEM

The role of promotion as a significant marketing strategy

of a company has severally been questioned by many authors,

researchers and different schools of thought, especially of its

efficacy in marketing of consumer goods. It is argued in some

quarters that it is an expensive venture not worth its while,

since sale increases caused by promotion only last as long as

the promotion. Another school of thought believes it is an

effective tool in marketing strategy for consumer goods.

Howard Danto (1976), representing the later school of

thought is of the view that although sales increases caused by

promotion occasionally last only as long as the promotion, but


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emphasized that it is not always the case. Promotion can be

used to establish new product, to increase the long term

marketing objectives of product and penetration for existing

products.

From the consumer perspective, many consumer products are

very similar in quality, quantity and attributes. Besides, many

brands are aimed at satisfying the same basic or similar needs.

In order to maximize customer satisfaction which is the only

reliable avenue to repeat purchases, manufacturers should, as

a marketing policy, use promotion to provide the informational

cues that customers need to differentiate their brands from

others. It is only when a customer gets the right product at the

right place and at affordable prices that customers satisfaction

can be achieved. However, the satisfaction is further enhanced

if the consumer has been able to differentiate among the

various alternatives and is able to make the right choices that

meets his needs and wants.

Therefore, in the light of the above, this study desires to

find out the role of promotion in the marketing of consumer

goods, empirically test the authenticity of the claim of it


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effectiveness, and with the aid of scientific analysis, its

inevitable need in marketing of consumer goods.

1.3 PURPOSE OF THE STUDY

The stand point of this study is to analyze the significant

roles promotion plays in the marketing of consumer products.

This study is to add to existing scholarly works already done in

the role of promotion particularly in marketing of consumer

goods in Nigeria.

Furthermore, the objectives of this study are:

1.To examine how efficient promotion can be in marketingof consumer product in Nigeria.

2.To investigate the current promotional activities and mixof marketing firms.

3.Attempt to recommend appropriate avenues firms can

employ to own a successful promotional campaign in

marketing of consumer product.


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1.4 SIGNIFICANCE OF THE STUDY

Promotion is not a new concept in the lexicon of marketing

activities in Nigeria. Taking cognisance of our study, firms in

different ramifications that make up the fabric of the Nigerian

economy are consistently seeking ways of efficiently marketing

and keeping their business in perpetual continuity.

For a fiercely competitive industry of consumers product each

element of the promotional mix is of utmost importance.

Companies in consumer product sector should not limit their

goal to merely providing quality goods they should seek to

inform the consumers of the advantages of their products, and

to implant such advantages in the consumers with surgeon

precision. To that end, it is mandatory that businesses properly

employ mass promotional tools.

(Achumba, 2000), Marketing promotion practise are essential

and especially under conditions of imperfect competition, non

rational behaviour of customers or client and incomplete

market information. Intensified competition among different

industries and firms may well inform the need for serious

attention to marketing promotions. The emphasis to be placed


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on promotions has relevance for both products and services

marketing. The marketer needs to understand the environment

in which he functions, and to look at the marketing promotion

mix elements, both those he uses and those he must adjust.

Major aspects that form the very vertebra of the role of

promotion with respect to marketing of consumer products are:

y To inform the potential customer about a product.y To persuade potential customer select the brand

promoted in preference to other various competing

brand.

y Promotion also reminds customers who have bought anduse the brand that they have made the right choice. In

this context, promotion is widely used to fight or

counteract cognitive dissonance, and enhance repeat

purchases thereby increasing profitability.

In the light of the foregoing, this study will be of benefit to

the organization(s) which might in the time past doubted the

need and effectiveness of promotion or who are in doubt and

unaware of the sovereignty of consumers. It also seeks to

beam a searchlight to the imperative nature of promotion in


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marketing of consumer product. It will also encourage those

already making use of the various promotion tools/methods to

explore other areas within which promotion efforts could also

be of great help.

1.5 RESEARCH QUESTIONSIn order to validate research efforts, the following

research questions will be addressed:

y What is the role of promotion in marketing strategies?y What is the role of the management with regards to

promotion to marketing strategies of your organization?

y What is the contribution of workers in promotion ofmarketing strategies?

y What impact does the company have on the promoters aswell as workers with regards to promotion?

y Do companies need to increase budget for promotion?y How do customers respond to the various promotional mix

adopted by firms engaged in consumer product?

y Is promotion cost effective in a developing economy likeours?

y Why must companies embark on promotion despite its


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REFERENCES

Kotler P. Marketing Management Planning,

Analysis Implementation and Control.

New Delhi

Prentice Hall Ltd. (2001)

Koontz H. and Donnel C.Principles of Management

New York McGraw-Hill

Publishers (2003)

Pade Ayoola launching a new product in a

deregulated economy marketing

Journal July 1999.

Danton H. Questions and Answers in Marketing.

New York Longman inc. 1985 pg.142

Sergiu Bogdan role of promotion in milling and

bakery product sales.

Academy of economic studies,

Bucharest. 2007.


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CHAPTER TWO

LITERATURE REVIEW AND THEORETICAL FRAME WORK

2.0 HISTORICALBACKGROUND

Nigerian Bottling Company Plc (NBC) is one of the few multinational

organisations that had its beginning in Nigeria. From a small family owned

operation at inception, they have grown to become the predominant

bottler of alcoholic-free beverages in Nigeria, responsible for the

manufacture and sale of over 33 different Coca-Cola brands.

NBC Plc was incorporated in November 1951, as a subsidiary of A.G.

Leventis Group with the franchise to bottle and sell Coca-Cola products in

Nigeria.

Production began in 1953 at a bottling facility in Ebute-Metta,

Lagos. Over the years production capacity has grown and it presently has

13 bottling facilities and over 80 distribution warehouses located across

the country.


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Since production started, NBC Plc has remained the largest bottler

of non-alcoholic beverages in the country in terms of sales volume, with

about 1.8 billion bottles sold per year, making it the second largest

market in Africa.

Today, NBC Plc is a part of the Coca-Cola Hallenic Bottling Company

(CCHBC) one of the Coca-Cola Companys largest anchor bottler

worldwide. CCHBC operates in 28 countries, serving 540 million

consumers and selling over 1.3 billion units cases of beverage annually.

The company is driven by over 6000 employees, a culture of

passion for excellence, sophisticated technology and the best distribution

network in the country. With 13 high performing bottling plants, over 80

depots and over 200,000 sales outlets nationwide, they also supply some

of the most ubiquitous and best known brands including: Coca-Cola,

Fanta, Sprite, Scheweppes, Eva Water and Five Alive.

Everyday, every Nigerian community is being touched and refreshed

by NBC.

2.1 LITERATURE REVIEW

This chapter examines the past works, empirical and theoretical, of

other authors on the subject matter of the research. Each authors

contribution is viewed and analyzed with a relevant aspect of such work

to the present study.


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2.2 DEVELOPMENT OF SALES PROMOTION

(www.google.com) the concept of sales promotion was developed

in the United States of America in the early 1920s. Many of the

marketing activities which are now regarded as sales promotion were first

introduced by Benjamin Talbot Babbit, inventor and soap manufacturer in

America in the 19th century.

However, in Europe, the earliest recorded example of promotional

materials were in 1679 and belong to Jonathan Holder, a London shop

keeper who gave every purchaser who spent above a certain amount in

his shop a full list of items sold by him plus their relevant prices. His

pioneering decision to offer his customers something extra was not

universally welcomed. The newspapers of the day condemned this sales

promotion as a dangerous innovation and one which would be

destructive to trade, if shopkeepers lavished so much of their capital on

printing useless bills. Over 300 years later, trade still flourishes and so

do sales promotions, which now account for more capital than any

element of marketing communications except selling. Sales promotional

activities have become increasingly important and have evolved over a

century ago when Benjamin Babbit first introduced those activities which

are now regarded as sales promotion.

Baker (1971) stated that in recent years the growth of below the line

expenditure on sale promotion has increased remarkably to the extent


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that they now absorb more than 40% of advertising campaigns.

Avraham Shama (1993) in his article marketing strategies during

recession stated amongst other things that the response of marketing

managers to recession depends on how they perceive it meaning and

impact on their businesses. It is now therefore the responsibilities of

marketing managers to take different tactical and strategic sales

promotional measures to adjust to or even exploit changes in the

economic environment.

Tom OLeary (1974) opined that the heart of marketing; sales

promotion has moved to a stage where companies recognize it as a

competitive and important force in an organizations marketing mix.

Chris Ogbechi (1997) is of the opinion that in reviewing a depressed

economic climate like that of Nigeria, one must evaluate its effect in the

marketing horizon and identify the challenges it poses to marketing

practitioners.

2.3 DEFINITIONS OF SALES PROMOTION

The term sale promotion can be better appreciated if one takes

critical look at it from a larger perspective of what marketing as a

discipline comprises itself.

The term promotion is derived from the Latin word promo verse

meaning to move forward. The fact that nothing happens until exchange


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through negotiations occur and a sale is made, depicts the importance of

promotion in todays dynamic competitive and recessionary economic

climate.

Kotler (2009) defines sales promotion as a key ingredient in

marketing campaign which consists of a collection of incentives tools,

mostly short term, designed to stimulate quicker purchase particularly

product or service by consumers or the trade.

David Jobber (2006) defines sale promotion as a technique use

by organisations as a part of their marketing tool.

Strang (1976) in his comprehensive research on sale promotion

defined sale promotion as all other forms of sponsored communication,

apart from activities associated with personal selling. It thus includes

trade shows and exhibitions, trade allowances, sales incentives, consumer

education and demonstrations activities, rebates, points of sales and

direct mails.

Cundit and Still (1972) contended that sales promotion is a

communication process that is to say, a process of delivering messages

about the product or service from the market to the potential buyers. it

was stressed that most useful or want satisfying product will turn out to

be a market failure if no one knows it is available, hence one of the vital

purpose of sales promotion is to disseminate information to the

consumers.

Feree (1974) opined that the inducement to actions has continued


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to be important characteristics of sales promotion. It consists of

immediate or delayed incentives to purchase, expressed in cash or kind.

Its role is to achieve a specific number of new or additional purchases on

a limited period.

However, the very probable authentic definition came in the 1960s

from the American Marketing Association (AMA), they defined sale

promotion as comprising all the marketing activities except personal

selling, advertising and publicity, that stimulate the consumer and

increases the business getting activities of retailers displays,

demonstrations and various incidental sales promotional measures that

fall outside the normal routine.

The three key elements of these definitions are that sales

promotions are:

(a) Non-standard: Promotions are usually temporary, and may be

limited to certain customer groups (such as airline frequent flier

schemes) or specific to a particular distribution channel (as in

tailor-made promotions involving a producer and a single retailer).

(b) Response orientated: Promotions seek a direct response from

customers, or those who deal with customers on the producers

behalf. The direct response sought is not necessarily a sale.

Promotions may encourage consumers to send for a brochure, visit

a dealer or consume a sample. The ultimate aim is always sales, but

this is true of marketing generally.


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(c) Benefit orientated: Promotions offer their targets additional

benefits, beyond the standard marketing mix. The enhanced mix

could include extra product, a reduced price or an added item,

service or opportunity.

2.4 REASONS FOR THE DEVELOPMENT OF SALES PROMOTION

Various reasons have been adduced to the growth of sales

promotion. Reasons given include the fact that sales promotion is

becoming increasingly important in marketing based on the following:

(a) Boosting sale of a particular geographical area.

(b) Appealing to a special segment of the market.

(c) As a way of increasing the demand for new products.

(d) As a substitute for price competition.

(e) As a way of differentiating products.

(f) It is also used to penetrate new market for a product.

(g) Stimulating new use of a product.

(h) It also helps in assisting sale force presentation.

The changes in the marketing environment are exactly upwards,

pressure on the demand for sales promotion, also dissatisfaction of

customers with retail selling could be reduced wi th the effect of a good


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sales promotional programme.

Chukwuma (1987) states that the Nigerian Market has ceased

to be a sellers market which came about through scarcity of supply and a

build up demand not fully met, the economy now witnesses a buyers

market characterized by goods purchased with costly raw material and

thereby high price. The most useful product or brand will be a failure if no

one knows it is available. Distribution channels are often long; a product

may pass through many hands between a producer and consumers.

Therefore, a producer must inform middlemen as well as the ultimate

consumers or business users about the product. Wholesalers, in turn must

inform the retailers and the retailers must inform the consumers. As a

number of potential customers grow and the geographical dimensions of a

market expand, the problems of cost of informing the market also

increases.

The intense competition among different industries puts tremendous

pressure on the promotional programmes of sellers. Even a product

designed to satisfy a basic need requires strong persuasive promotion,

because consumers have many alternatives to choose from. Consumers

also must be reminded about the products availability and its potential to

satisfy. Sellers bombard the market place with hundreds of messages

everyday in the hope of attracting new customers and establishing

markets for new product. Given the intense competition for consumers

attention, even an established firm must constantly remind people about

its brand to retain a place in their minds. Much of a firms sales promotion


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may be intended simply to offset competitors marketing activity by

keeping its brand in front of the market.

Halloway and Hancos (1977) see sales promotion as those

marketing activities other than selling advertising and purchasing that

stimulate consumer purchasing and dealer effectiveness, such as displays,

shows and exhibitions, demonstration and various non - recurrent efforts

in marketing.

2.5 PURPOSE AND OBJECTIVE OF SALES PROMOTIONKotler (2009) stated that sales promotion tools vary in their

specific objectives. Sellers use incentive type promotion to attract new

triers, to reward loyal customers, and to increase the repurchase rates of

occasional users. Sales promotion often attracts brand switchers, who are

primarily looking for low price, good value, or premiums.

The basic goals and objectives of sales promotion are either

identical or very similar to the objectives of advertising and personal

selling.

According to Stanton (1964) the three specific purposes of sales

promotion are:

(a) To communicate: This involves the dissemination of ideas and

information especially through advertising and to create clear

communication channels as well as to create effective messages to


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be transmitted. Sales promotion should attract the attention of

target audience. If the prices, discounts, off-season facilities and so

on are not adequately and effectively communicated, the efforts of

sales promotion will be wasted. A point to be noted here is that the

audience evaluate not only the message but also the source of the

message in terms of credibility. The purpose of communication is to

persuade potential customers to purchase the product. The sale

manager determines the message to be aimed at the target market

to gain product acceptance. The overall marketing objectives define

the role of communication in sales promotion. Identifying the target

audience is the main task of a sales promotion communication. The

audiences response to the message source helps the effectiveness

of the response.

The sales promotion strategy is an important element in the

overall marketing strategy. Sales promotion strategy involves

identification of objectives, effective communication for attracting

attention, allocation of budget, determining the correct promotional

mix, introduction of strategic approach and finally evaluation.

The marketer should determine his sales promotion

objectives. He should determine what is to be accomplished and

what kind of buyer responses are desired. Sales promotion tasks

should be objective oriented. These tasks are informing, persuading

and reminding the customers about the products. The sales

manager should inform consumers about his product and should


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highlight its special features. He has not only to inform the

customers but persuade them to buy.

(b) To convince: It is not enough to merely communicate ideas. The

ideas must be convincing to compel the consumer to take the

demand action. It is the purpose to sales promotion to enter into

the consumer decision process by providing information or

stimulating to convince the consumer that he should reach a

decision favourable to the advertiser. Sales promotion may adopt

different methods for approaching people. Strategic values are

taken into account while deciding a particular method of sales

promotion. Consumer promotion have been considered a very

effective mode of sales promotion; potential consumers are offered

samples, coupons etc, to promote sales. The point of purchase

display is a silent strategy to trigger off buying decisions. Retailers

rely on in-store displays to familiarize customers with their product.

A showroom display makes it easy for prospective buyers to

familiarize themselves with different features of the product.

(b) To compete: A companys promotional effort is the cutting edgeof its entire competition programme.

Schwartz (1973) has identified the following objectives of sale

promotion:

(1) To introduce new products or to induce buyer to accept it for resale.


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Sampling or giving away of free samples is a sales promotion

techniques frequently used to introduce products to consumers.

(2) Sales promotion is also used to increase sales by informing and

inducing them to take the demand action. Individual buyers and

retailers respond to inducement such as price reduction, increased

quantity for same price or competing in an event t o obtain a free

price.

(3) Sale promotion is also a good technique used by many

organizations to increase the stock of customers that demand for

their products. A key objective of such sale promotion activity is to

increase the size of their distributorship and the demand for their

products. The one of all important objectives of sales promotion is

usually to complement personal selling and advertising.

(4) Sales promotion can be used to induce present customers to buy

more by knowing more about a product, its features and uses.

(5) It is a veritable tool used by firms to meet competition from similar

firms.

(6) Buyers may be encouraged to use the product in off seasons by

showing them the variety of uses of the product.

2.6 FORMS OF SALES PROMOTION

There are different forms of sales promotion. Each of them is


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appropriate for different circumstance and each has it merits and

demerits.

Kotler (2009) classified sale promotion into three action based

groups that are mutually exclusive.

Consumer/Selling Trade Promotion

Trade/Dealer Promotion

Sales Force Promotion

2.6.1 Consumer/Selling Trade Promotion: Consumer promotion is

usually used to ensure on or more of the following:

(1) Increasing sale volume.

(2) Ensuring trial of the product.

(3) To create awareness to the target market segment.

(4) Enhancing brand switching.

Consumer promotions are usually targeted directly at the

consumers to elicit immediate demand and increase sales. The

types of consumer offers are:

(a) Samples: Samples are offers of a free products or trial of aproduct to consumers. The sample might be delivered door to

door, sent in mail; pick up in a store, found attached to another

product or featured in an advertising offer. Sampling is the most

effective and most expensive way to introduce a new product.

(b) Coupons: Coupons are certificates entitling the bearer to astated saving on the purchase of a specific product. Coupons can

be mailed, enclosed in or on other products or inserted in


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magazines and news paper advertisements. Coupons can be

effective in stimulating sale of mature brand and inducing early

trial of a new brand.

(c) Cashrefunds offers orrebates: These are like coupons exceptthat the price reduction occurs after the purchase rather than at

the retail shop. The consumer sends a specified proof o f

purchase to the manufacturers, who in turn refunds part of

the purchase price by mails.

(d) Pricepacks: These are offers to consumers in form of saving offthe regular price of a product on the label or package. They

make the product in form of a reduced-price pack, which is in

single packages sold at a reduced price (such as two for the price

of one) or a banded pack, which is two related products banded

together (such as tooth brush and tooth paste). Price packs are

very effective in stimulating short term sales, even more than

coupons. Price packs can come in these forms:

i. Premiums or gifts: These are merchandise offered at arelatively low cost or free as an incentive to purchase a

particular product. Sometimes the package itself is a

reusable container which may serve as a premium. A self

liquidating premium is an item sold below its normal retail

price to consumers who request for it.

ii. Prizes: These are offers of the chance to win cash, trips ormerchandise as a result of purchasing something.


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iii. Patronageawards: These are values in cash or in otherforms that are proportional to ones patronage of a certain

vendor or group of vendors.

iv. Free trials: Free trials consist of inviting prospectivepurchasers to try the product without cost in the hope that

they will buy the product. Thus, often we see, auto dealers

encourage free test drives to stimulate purchase interest.

v. Point ofsalesdisplays:These take place at the point ofpurchase or sales. Display of visible mark or product at the

entrance of the store is an example.

vi. Product demonstrations: These promotion tools showthe product in action. Consumers can visit the store and

see the usages of the product in live action so that doubts

of the consumers can be clarified in the store itself.

2.6.2 Trade/Dealer Promotion: This promotion is usually focused at

the wholesalers, distributors and retailers, with the main aim of

encouraging the middlemen to stock up more of the product

variety of the organization. Trade promotion through buying

allowance, free goods, merchandise allowances, and push money

etc help to enhance sales by retailers and traders. Packaging is

another important form of promotion, particularly for consumer

goods. It may carry selling messages and information about the

product. A good package design attracts the shoppers; attention


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away from other products. It is a proper blend of colour, design

and shape.

Manufacturers seek the following objectives in awarding money

on the trade:

I. Trade promotion can persuade the retailer or wholesaler tocarry the brand.

II. Trade promotion can persuade the retailer or wholesaler tocarry more than it normally carries.

III. Trade promotion can induce the retailer to promote thebrand through featuring displays and price reduction.

IV. Trade promotion can stimulate the retailers and their clerksto push the product.

Manufacturers use several promotional tools. Some of which are:

(a) Price off: This is a straight discount off the list price on

each case purchased during a stated period of time. The offer

encourages dealers to buy a quantity or carry a new item that

they might not ordinarily buy. The dealers can use the buying

allowance for immediate profit or price reduction.

(b) Allowance: Manufacturers may offer an allowance in return

for the retailers agreeing to feature the manufacturers


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product in some way. An advertising allowance compensates

retailers for advertising the manufacturers product. A display

allowance compensates them for carrying a special display of

the product.

(c) Free goods: Manufacturers may offer free goods, which are

extra cases of merchandise to middlemen who buy a certain

quantity of items.

(d) Push money: Manufacturers offer push money which is cash

or gifts to dealers to push their goods out into the market.

(e) Specialty advertising items: Manufacturers may offer

specialty advertising to the retailers that carry the companys

name such as pens, pencils, calendars, paper weights and

memo pads.

2.6.3 Sale force promotion: This sales promotion is focused on the

marketing department and sale force of the organisation so that

they strive for mastery and invariably increase the quantity of the

organization product that is sold. Tools that can be use d for sale

force promotions are: Trade show and sales contest. As a number of

sale promotions have increased, frictions have been created

between companys sales force and its brand mangers. The sales

force say that retails will no keep products on the shelf unless they

receive more trade promotion money, while brand mangers want to


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spend the funds on consumer promotion and advertising. But,

managers utilize the sales force promotion method to combat

excessive trade promotion money by dealers, wholesalers and

retailers.

2.7 MAJOR DECISIONS IN SALE PROMOTION

Kotler (2009) states that before a company can effectively use

sales promotion, it must establish its objectives, select the tools, develop

the program, sales promotion budget, pre-test the program, implement

and control, and evaluate the results.

2.7.1 Establishing the Objectives

Sales promotion objectives derived from broader promotion

objectives include encouraging purchase of larger-sized units,

building trial among nonusers, and attracting switchers away form

competitors brands. Ideally, promotions with consumers would

have a short-run sales impact as well as long run band equity

effect. For retailers, objectives include persuading retailers to carry

new items and higher levels of inventory, encouraging off -season

buying, encouraging stocking of related items, bui lding brand

loyalty and gaining entry into new retails outlets. It is therefore


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very vital and important that the marketers should determine his

sale promotion objectives, what is to be accomplished and what

kind of buyer responses are desired. The tasks are informing,

persuading and reminding the customers about the product. These

are keys to the survival of sales promotion activity. The sales

manager should inform consumers about his product and should

highlight its special features.

2.7.2 Selecting Consumer Promotion Tools

The promotion planner should take into account the type of market,

sales promotion objectives, competition conditions, and each tool cost

effectiveness. Some of these forms have been earlier enumerated.

Manufacturers promotion in the auto industry for instance includes

rebates, gifts to motivate test drives and purchases, and high value trader

in credit. Retailers promotion includes price cuts, feature advertising,

retailer coupons, and retailers contests or premiums.

2.7.3 Selecting Trade Promotion Tools

Manufacturers use a number of trade promotion tools to improve on

their sales promotion activities especially, when sale seems to dwindle

like in depressed economy. They award money to trade to do the

following:

1. Persuade the retailer or wholesaler to carry the brand.


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2. Persuade the retailers or wholesales to carry more units than the

normal amount.

3. To induce the retailers to promote the brand by featuring, displays,

and price reductions.

4. To stimulate retailers and their sales clerks to push the product.

2.7.4 Selecting Sales Force Promotion Tools

Companies have continually increased budget on business and sales

force promotion tools to gather business leads, impress and reward

customers, and motivate the sales for a greater effort. They typically

develop budget for tools that remain fairly constant from year to year. For

businesses who want to get the attention of the target audience, trade

shows are an important tool.

2.7.5 Developing the Program

In planning sales promotion programs, marketers are increasingly

blending several media into a total campaign concept. In deciding to use

a particular incentive, marketers must first determine the size of the

incentive, marketing managers must also establish condition for

participation, the duration of the promotion must be decided upon, the

channel of distribution must also be chosen, the timing of the promotion

must be established and the total sales promotion budget must be


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determined.

2.7.6 Sales PromotionBudget

One of the most difficult marketing decisions facing companies is

how much to spend on promotion. It is not surprising that industries and

companies vary considerably in how much they spend on promotion. It is

important to determine the sales promotion budget, before resorting to

sales promotion activities. The resources and sales potentials are

estimated before the formulation of the budget. Sales promotion budget

should be adequate so that they achieve the promotion objectives. The

following are some of the budgeting method of sales promotion:

2.7.6.1 Affordable method:

Many companies set the promotion budget at what they think

the company can afford. This method of setting budgets completely

ignores the role of promotion as an investment and the immediate

impact of promotion on sales volume. It leads to an uncertain

annual promotion budget, which makes long range market planning

difficult.

2.7.6.2 Percentage ofsales method:


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Many companies set their promotion expenditures at a specific

percentage of sales or of the sales price. For instance, automobiles

companies typically budget a fixed percentage for promotion based

on the planned price. A number of advantages are claimed for this

method.

I. Percentage of sales method means that promotionexpenditure are likely to vary with what the company can

afford which satisfies the financial manager who feels that

expenses should bear a close relation to the movement of

corporate sales over the business cycle.

II. This method encourages management to think in terms of therelationship between promotion cost, selling price and profit

per unit.

III. The major drawback of this method is that it does not providelogical basis for choosing the specific percentage except what

has been done in the past or what competitors are doing. It

also does not encourage building up promotion budget by

determining what each products and territories deserve.

2.7.6.3 Competitiveparity method:

Some companies set their promotion budget to achieve share

of price parity with their competitors. Two arguments are advanced


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for this method. One is that the competitors expenditure represents

the collective wisdom of the industry. The other is that maintaining

a competitive parity helps prevent promotion wars.

There are no grounds for believing that the competitors know

better than the company itself what it should be spending on

promotion. Company reputations, resources, opportunities and

objectives differ so much that their promotion budgets are hardly a

guide. Further more, there is no evidence that budgets based on

competitive parity discourage promotional wars from breaking out.

2.7.6.4 Objectiveandtask method:

The objective and task method call upon markets to develop

their promotion budgets by defining their specific objectives,

determining the tasks that must be performed to achieve these

objectives and estimating the costs of performing these tasks. This

method has the advantage of requiring management to spell out its

assumptions about the relationship between the amount spent,

exposure levels, trial rates and regular usage.

2.7.7 Promotion Mix

Companies face the task of distributing the total promotion budget

over the four promotion tools of advertising, sales promotion, publicity


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promotional strategy, developmental promotional strategy or promotional

appropriation.

2.7.8.1 Pushandpullstrategies:The push and pull promotional strategies may be used to

enhance sales. The push strategy concentrates on retailers and

middlemen who push the sales of the product to the final

consumers. This strategy covers cooperative advertising, attractive

terms of sales, coupons and discount facilities.

The pull strategy is directed towards the final buyers. It

persuades the buyers to go to the sellers to buy. Sales promotion,

and particularly customer promotion, is an important form of the

pull strategy. Customer promotion may call for the offer of samples,

money refund offers and price offs premiums and so on.

The push strategy asks the sellers or retailers to attract

buyers. Trade promotion is thus the main form of push strategy.

Trade promotion refers to buying allowances, free goods,

cooperative advertising, push money, sales contests and so on. The

marketing manager has to adopt both these strategies to promote

sales.

Push strategies depend upon mass communication. Products

are literally pulled by buyers through the channels on the basis of


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mass promotional efforts. In pull strategy, the product is pulled

through the channel by creating end user demand. Customers

force retail shops to stock those mass promoted products. In turn,

retailers demand the high advertised product from wholesalers. The

firms having well known brands can exercise control over channels

through pull promotion strategies. Personal salesmanship plays a

secondary role in pull promotion. Marketers rely on intensive

distribution. Dealer margins are also lower in pull promotion.

Industrial marketing strategies are mostly the push type

strategies relying primarily on personal selling. For instance, in the

sale of medical products and in life insurance, marketers have to

employ a lot of salesmen to call on prospects for a life insurance. In

push type promotion, personal selling expenses are considerable

and dealer margin is also higher. In this, after-sales service is also

important and marketers rely on selective distribution. Push

strategy can be successfully used when:

i. There is a high quality product with unique selling points .ii. Where we have a high priced product.

iii.

Adequate financial incentives can be offered to middlemen

and their salesmen.

2.7.9 Pre-testing, Implementing and Controlling


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Although most sales promotion programmes are designed on the

basis of experience, pre-tests can determine whether the tools are

appropriate, the incentive size optimal, and the presentation method

efficient. Consumer can be asked to rate or rank different possible deals,

or trial tests can be run in limited geographical areas. Marketing manager

must prepare implementation and control plans that cover lead time and

sell-in time for each individual promotion. Lead time is the time necessary

to prepare the programme prior to launching it. Sell-in time begins with

the promotional launch and ends when approximately 95% of the deal

merchandise is in the hands of the consumers.

2.7.10 Sustaining Promotional Campaigns

The main reason why marketing managers should sustain a

promotional campaign is to stabilize the market share. Sales promotion

becomes necessary to sustain a market share if the competitors are

seriously competing to be the market leader. Unless appropriate steps are

taken by the marketer to curb this scenario he may find out that the

market may be slipping away from his products. But this sustenance

strategy can be adopted only after employing the penetrating strategy.

That is, the market share should not decline after a higher level of sales

has been attained. The sustaining promotional strategy stabilizes the

market share. Sales force promotion by the way of bonus and other

incentives may contain the market from slipping away and sustaining the

market share. Steps must also be taken to prevent the sales force from


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going across to the competitors. Brand loyalty of custo mers is fostered

and reinforced when efforts made to sustain promotional efforts. The

introduction of new products may require expansion of the market.

Innovators need to have a developmental strategy. New products or

brands are popularized by offering trade discounts, cash rebates,

premiums, money refunds etc. The promotional mix for a brand not yet

popular may require emphasis on both personal selling and sales

promotion.

Promotional objectives determine promotional appropriation. The

forms of promotion, the cost of each component of promotion, the

activities to be performed and appropriation on personal selling, sales

promotion, advertising and publicity are determine under this strategic

approach of sustaining promotional campaign. The marketing manager

has to arrive at the optimum promotional mix of the given objective, and

this requires planning and programme evaluation.

2.7.11 Evaluating Sales Promotion

The evaluation of sales promotion cannot be overemphasized. This

is due to the increasing expenditure and budget set aside to actuate the

objectives of sales promotion. Inspite of the crucial nature of evaluation

of sales promotion to management, many marketers still neglect the

positive result attached to the marketing activity of sales promotion in

terms of profit.


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Sales promotion strategies have two points of evaluation. First, at

the stages of implementation and secondly after the final performance

because implementation control will suggest improvements during the

application of the promotional strategy, while performance control will

guide the sale promotion activity in the future. Implementation control is

very important because it covers initial planning, objectives, promotional

packages, and printing of special premiums and packaging materials,

distribution to retailers etc.

Hantand Common (1978) stated that sales promotion can easily

be evaluated when compare with other marketing techniques, and the

commonest reason for this evaluation is to see how effective it has been

in achieving the firms objectives of increased sale and profitability

amongst other things, and how well it can perform when placed

analogously with other marketing techniques particularly in a depressed

economy.

Iyanda (1988) in his view stated that sales promotion unlike

advertising and publicity often calls for specific action on the part of the

audience. They may be required to fill a coupon or send specified

evidence of recent purchase. It is usually relatively easy to measure the

effect of sales promotion efforts on sales. He further suggested four

methods companies can use to measure consumer promotion which are:

(1) Salesperformance movement: This is the most common method

of evaluating consumer promotion activities. Sales or market share

before, during and after a promotion is compared to identify


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differences in sales records.

(2) Customersampling: This is when a sample of customers within a

target market are selected as sample to learn how many consumers

recall the promotion, what they thought of the promotional activity,

how many of the customers took advantage of the sales promotion

and how it affected their subsequent brand choices. This technique

is usually used to research the effect of a pa rticular type of sales

promotion on consumers.

(3) Consumer panel data analysis: This is used to evaluate the

consumer responses to sales promotion. This has showed severally

that sales promotion generally enhances brand switching.

(4) Experimentstudy: This evaluation technique experiments on sales

promotion using incentive values, deals duration and deals

distribution media that are varied so as to see their different level of

response.

Experiments needs some follow up, consumer study to understand

the reasons why the deals produced different level of responses.

But, it must be noted that extraneous factors have to be controlled

in conducting experiment which are not totally possible in social

surveys.

Expenditures on sales promotion are increasing from year to

year and moreover the use of sales promotion alongside the promotion

mix is more rapidly experienced. Therefore, there is need to evaluate


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sales promotion programme so as to know whether companies are getting

adequate returns for their effort and venture into sales promotion

particularly in a distressed economy.

2.8 LIMITATION AND RATIONALE OF SALES PROMOTION

Having seen the various functions performed by sales promotion

and the important roles it places in business, one cannot but identify

some of its limitation when compared with other marketing tools and how

efficiently it can perform in the present global economic financial crises.

(1) No amount of sales promotion will induce buying a product if the

need for the product does not exist

(2) Despite its inducing ability, it cannot force people to but what they

firmly do not want to buy. Most loyal brand buyers may decide

firmly not to change their buying pattern as a result of sales

promotion by a competitor of their product brand.

(3) Sales promotion cannot be used as a cover up for defect in product

style, design, quality, or value.

The rational of sales promotion may be analyzed under the

following points:

(a) Shortterm results: Sales promotion such as coupons and tradeallowances produce quicker, more measurable sales results.

However, critics of this strategy argued that these immediate


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benefits come at the expense of building brand equity. They

believe that an over emphasis on sales promotion may

undermine a brands future.

(b) Competitive pressure: If competitors offer buyers pricereductions, contest or other incentives, a firm may feel forced to

retaliate with its own sales promotion.

(c) Buyers expectations: Once they are offered purchaseincentives, consumers and channel members get used to them

and soon begin expecting them.

(d) Low quality ofretailselling: Many retailers use inadequatelytrained sales clerks or have switched to self service. For these

outlets, sale promotion devices such as product displays and

samples often are the only effective promotional tools avail able

at the point of purchase.


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CHAPTER THREE

RESEARCH METHODOLOGY

This chapter focuses on the methods of data collection and techniques

used in analyzing the data. The concise description of the method of

enquiry employed for this study is also explained. It begins with the basic

restatement of research questions which is sine qua non to the work

being understudied. The description will further entail the design,

research instrument, research design and procedure for data analysis.

3.1 RESTATEMENT OF RESEARCH QUESTIONS

The following are the basic and fundamental aspects of the research

questions addressed by this study:

(1)

Do companies need to increase budget for sales promotion

despite the global financial crisis?

(2) How do customers respond to sales promotion in this period ofeconomic depression?

(3) Is sales promotion cost effective during economic boom than


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when an economy is facing recession?

(4) Why must companies embark on sales promotion despite itshuge cost when undertaken?

(5) What alternative efforts are put in place by organisations whensales promotion efforts fail to achieve its objectives?

3.2 RESEARCH DESIGN

A simple analytical tool was used for the study of the research

results. They were also analyzed using tabular forms, simple averages

and arithmetic simple percentage to aid influence and decision making .

3.3 POPULATION DESCRIPTION

It is often said that the best sample is a complete census of the

population itself because every element of the population is represented

in the population itself. Representativeness then is the hallmark of a

good sample.

The target population for this study is primarily large (private)

organizations, particularly a manufacturing organization. However, due

to the large size of the population it was impossible to draw information

from it. Thus a sample frame of NBC Plc located at Agindingbi, Ikeja,

Lagos was taken as a case study.


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3.4 SAMPLE AND SAMPLING TECHNIQUE

The sampling design to be used for this research shall be excised

over the marketing department of Nigerian Bottling Company Plc. Due to

the complex nature of NBC and the cost of using the entire company; a

sample 100 respondents were used as a representation of the total

population and was used for the analysis of the questionnaire.

3.5 RESEARCH INSTRUMENT

The questionnaire will form the major instrument for gathering the

requisite data needed for analysis. It shall also be complemented with the

use of personal interview.

3.6METHOD OF DATA COLLECTIONThis research will use both primary and secondary research method;

it will also use personal interview and direct observation.

3.7 DATA ANALYSIS

The method to be used in analyzing the data collected from

respondents for the purpose of this research are the chi -square and also

percentage statistical method will be used.


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3.8 LIMITATION OF THE METHODOLOGY

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS OF RESULT

4.1 DATA PRESENTATION

An introduction of the study was given in chapter one, highlighting

the research question, purpose/objective of the study and the significance

of the study.

In this chapter, attempts are made at reducing the large volume of

statistical information (gathered from respondents) to manageable

amount as a means of preparing them for other stages of analysis.

Achumba (1994), A primary purpose of the data analysis in this study

is to reduce the data to intelligible and interpretable form so that the

result can be studied and tested.

TABLE 4.1

AGE AND SEX DISTRIBUTION/LITERACY LEVEL

SEX LITERACY LEVEL


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promotional device can still maintain and increase volumes of sales and

motivate consumers in Nigeria.

Nigerian firms should therefore ensure that they employ a dynamic

sale promotional and professional marketing strategies to achieve the

goals set to be achieved by sales promotion.

In spite of the above, the following recommendations are made on the

findings:

5.3.1 MARKET RESEARCH

A market research should be undertaken to determine the problems

and needs of consumers before embarking on sales promotion.

When a product is exposed to stranger and stiff competition from

other substitute, product efforts should be made to improve upon such a

product.

Sales promotion may induce a lot of consumer to make purchases and

discover improvements in such products and if the consumers are

satisfied, then there might be repeat purchase or post purchase feeling.

5.3.2 TARGET MARKET


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The target market for which sales promotion effort are meant for must

be specified. This is in following the pattern specified by the marketing

concepts; a marketing plan must have a targeted objective.

Markets are made up of people who are concentrated according to

geographic segmentation, demographic segmentation, categories and

industrial buyers.

Once the targets for the marketing efforts have been defined, the

appropriate sales promotion schemes should be employed accordingly.

5.3.3 SHORT TERM AND LONG TERM GOALS

The short term and long term goals of sales promotion should be

defined. If the objective of a company is to increase sales in the short

run, the company would employ the short term strategies such as

organising contest, awarding scholarship, presentation of gifts etc.

While a long term goal would include long term strategies like,

repackaging and development of product.

5.3.4 SALES PROMOTION

Sales promotion should be employed in such a manner that would

complement the other elements of promotional mix. In other words, sales

promotion is just a unit of promotional mix. As such it works best when


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combined with other units in good proportion. For instance, advertising

during sales promotion.

No sales promotion efforts will achieve maximum success unless it fits

well with the other elements of the promotional mix.

5.4 LIMITATIONS OF STUDY

5.5 SUGGESTED FURTHER RESEARCH

In other to carry out further research on this area of study, the

following suggestions are made:

1.The sample size could be enlarged.

2. To obtain a more objective study, more time and resources shouldbe provided.


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REFERENCES

1. Achumba I.C. and Osuagwu L. (1994) Marketing Fundamentals and Practice.Al-marks Educational research Inc. Rock Hills U.S.A.

2. Asika N. (1991) Research Methodology in Behavioural Scienc e. Nigeria.Longman Nigeria Plc.

3. Asika N. And Osuagwu H. (1997) Research Method for Marketing Decisions.Nigeria. Malthouse Press Limited.

4. Baker M.J. (1971) Marketing: An Introductory Text. London Macmillian Presslimited.

5. C. B. Gupta, Vijay Gupta (2006) An Introduction to Statistical methods. VikasPublishing House PVT. Ltd.

6. Dayo Odukoya and Oladunjoye Oludotun (2007) Research Methodologyguidelines for undergraduate Students. Awo ye Art Publicity.

7. Dixon-Ogbechie Bolajoko N. (2002) Research Methods & Elementary Statisticsin Practise. Philglad Nigeria Limited.


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8. Dunton H. (1985) Questions and Answers in Marketing. New York. LongmanInc.

9. E. O. Esan and R. O. Okafor (1995) Basic Statistical Methods. University Press.10.Evans K.M (1978) Planning small scale Research. Oxford NFER Publishing

Company.

11.Harris R. et al (1962) Advertising and The Public. London. Andre Dentsch Ltd. 12.Kaufman W.A (1979). The Theory of Buyer Behaviour. Weily Fredrick . Fell

Publisher.

13.Kelly T. Williams (1971) Handbook on Modern Marketing. Macmillian Inc.14.Kerlinger F.N. (1983) Foundation of Behavioural Research. New Delhi.Subject

Publication.

15.Koontz and ODonnel (1977) Principle of Marketing. New York, Macg raw Hill.16.OLearry Tom. (1974) Handbook ofConsumer Sales Promotion. London Kluvier

Harrap Books.

17.Ologbuseye R. I. (1986) A Guide to Research Work for study. Gbak PublishingCompany, Kaduna, Nigeria.

18.P. O. Olaiwola (2007)Simplified Research Writing and Defence. Nigeria B Print.19.Pade Ayoola (July 1992 December 1993) Launching a new product in a

deregulated economy . Marketing Journal.

20.Quelch, J. A. Cannon (1983) Better Marketing at the Point of Purchase.Harvard Business Review.

21.R. K. Ojikutu (1992)Statistic Problems and Solutions. Nigeria. Malthouse PressLimited.


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22.Salvatore D. (1982) Theory and Problems of Statistic and Econometrics.Schaumen Outlines. Macgraw Hill Inc. U.S.A.

23.Shapiro, P. Benson (1977) Sales Program, Management Formulation andImplementation. McGraw Hill Book Company.

24.Schwatz D. (1973) Marketing Today: A basic Approach. New York. HarcourtBrace.Jovanovich Inc.

25.Starng A. R. (1983) Sales Promotion Fast growth, Faulty Management.Harvard business Review.

26.Uche Aligbe (June 16 22, 1997) Adverts slots are down. Policy pg 18.27.Yoshiro M.Y. (1971). The Japanese Marketing System Adaptation and

Innovation, Massachuesettes. The MIT press. Pg 109.

28.Igbage A. (Oct.1995)Strategic Marketing Practices ofCooperative Institutionsin a Depressed Economy. Case study of Selected Co-operative in the Lagos

Metropolis. An unpublished MSc Thesis, Department of Business

Administration.


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QUESTIONNAIRE

Kindly indicate your answers by ticking () in the box opposite each option

SECTION A

PERSONAL DATA

(1) SEX MALE ( ) FEMALE ( )

(2) AGE

A. 20 - 29 yrs ( )B. 30 - 39 yrs ( )C. 40 - 49 yrs ( ) D.50yrs and above ( )

(3) MARITAL STATUS

A. Single ( ) B. Married ( ) C. Divorced ( )

(4) EDUCATIONAL QUALIFICATIONS

A. Primary Education ( )

B. Secondary Education ( )

C. OND/NCE ( )

D. HND/BSC ( )

(5) How long have you been in the employment of this company?

A. Less Than 3 Yrs ( )

B. 3 Yrs - 10 Yrs ( )

C. Above 10 Yrs ( )

SECTION B


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c. Undecided ( )

9. How do you consider sales promotion expenses in your company?a. Reasonable ( )b. Expensive ( )c. Cheap (

)

d. Unreasonable ( )10.What alternative marketing strategy would you suggest in place of sales promotion

that will be cost effective and achieve the corporate goal at the same time?

a. Personal selling ( )b. Advertising ( )c. Public relations ( )d. Publicity ( )

11. Are you aware of sales promotional strategy employed by competing firm?a. Yes

( )

b. No( )

12. If your answer is Yes above, please specify briefly............................................................................................................................. ............

...................................................................................... .............................

13.How often does your company engage in sales promotion campaign?a. Severally ( )

b. When necessary ( )c. Continuously ( )

d. Response to competitors ( )

14.Do you consider sales promotion worthwhile in a distressed economy?a. Yes ( )b. No ( )

15.What sales promotional budget does your company employ?a. Affordable method ( )

b. Percentage of sales ( )

c. Competitive parity method ( )d. Objective and task method ( )

16.Do you consider sales promotional activity a relevant marketing tool in this period offinancial meltdown as a means of achieving the sales communication process?

a. Yes ( )b. No ( )


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17.If your answer above is No above, comment briefly on the marketing tool youwould have preferred

............................................................................................................................. ............

.................................................................................................... ...............

18.How would you qualify the responses of customers/consumers of your companysproduct as a result of sales promotion?

a. Favourable ( )b. Unfavourable ( )c. Indifferent ( )

19.Comparing your companys promotional activities with that of your competitors,which would you candidly, qualify as effective?

a. My companys ( )b. The competitors ( )c. Equally effective. ( )

20.What duration and frequency is sales promotion employed by your company?a. Short term and infrequent. ( )

b. Short term and frequent ( )

c. Long term and infrequent ( )

d. Long term and frequent ( )

21.Would you emphatically agree that sales promotion activity definitely increases salesvolume of your companys product?

a. Strongly agree ( )b. Agree (

)

c. Undecided ( )d. Disagree ( )e. Strongly disagree

( )

chapter 1 adjusted

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