The role of sales promotion force of a firm at a period of economic meltdown

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INTRODUCTION

1.1 BACKGROUND OF THE STUDY

It is without doubt that Nigeria is experiencing an economic doldrums and downturn occasioned by the recent global economic meltdown which is in a way compelling organisations to execute their business activities under persistent high inflation, material and energy shortages, high interest rate, sky rocketing exchange rate and aggressive competition, all of which are rampant phenomenon in the Nigerian business environment. In trying to understudy this research work, it is paramount that the remote causes of the global economic meltdown crises be summarily evaluated.

(www.wikipedia.com) For many months before September 2008, many business journals published commentaries warning about the financial stability of leading United States and European investment banks, insurance firms and mortgage banks. Beginning with failures caused by misapplication of risk controls for bad debts, collateralization of debt insurance and fraud, causing large financial institution in the United States and Europe to face a credit crisis and also slowdown economic activities. The crisis rapidly developed and spread into global economic shock, resulting in a number of European banks failures, declines in various stock indexes, and large reductions in the market value of equities and commodities.

Moreover, the de-leveraging of financial institutions further accelerated the liquidity crisis and caused a decrease in international trade. World political leaders, national ministers of finance and central bank directors coordinated their efforts to reduce fears, but the crises was becoming consolidated and spreading fast all over the world. At the end of October a full blown currency crisis had already developed to an uncontrollable colossus, with investors transferring vast capital resources into stronger currencies leading many emergent economies to seek aid

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from the International Monetary Fund.

This has taken its toll on the developing countries of which Nigeria is a part of and this crisis is eating deep into the stability of economic indices that makes up the vertebra of the Nigerian financial framework, the stock market being the worst hit, losing close to #8 trillion within a period of six months (Business times).

Given this seeming unbearable scenario, one can only but wander Nigerian how a company that has set goals, objectives, and marshalled out action plans to achieve them do so when the prevailing economic indices have suddenly become unpredictable, coupled with rising rate of unemployment, job and pay cuts of the public and private sector employees and the high cost of living, consequently reducing the circular flow of income, propensity to consume and eventually reducing the demand for products?

It therefore becomes an unavoidably imperative responsibility for managers to develop a flexible and adaptable marketing structure and sales promotional activities to sustain organisations and make them survive in this hostile and turbulent socio-economic environment bedevilled with high level of uncertainties in its recent wake.

This research work will attempt to dissect and identify marketing strategies that can be adopted by marketing managers with particular reference to sale promotion in the global financial meltdown so that they can continue as a going concern and stay afloat in this troubled time.

Efforts shall be made to unravel the objectives of sales promotion, types of sale promotional techniques shall be enunciated, and recommendation shall be made to organizations based on scientific methods, so as to aid and improve their marketing activities.

1.2 STATEMENT OF RESEARCH PROBLEM

The role of sales promotion as a significant marketing strategy of a

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company has severally been questioned by many authors, researchers and different schools of thought, especially of its efficacy during a global recession. It is argued in some quarters that it is an expensive venture not worth its while, since sale increases caused by sales promotion only last as long as the promotion. Another school of thought believes it is an effective tool in marketing strategy of a company during global recession.

Howard Danto (1976) representing the later school of thought is of the view that “although sales increases caused by sales promotion occasionally last only as long as the promotion, but emphasized that it is not always the case”. Sales promotion can be used to establish new product, to increase the long term marketing objectives of product and penetration for existing products.

Therefore, in the light of the above, this study desires to find out the steps and processes involved in sales promotion during economic meltdown, empirically test the authenticity of the claim of it effectiveness, and with the aid of scientific analysis, it’s inevitable need during an economic and financial meltdown as a way of solving the conflict of opinion with respect to its use.

1.3 PURPOSE OF THE STUDY

The stand point of this study is to analyze the significant roles sales promotion plays in the marketing efforts of managers and the sales force of a firm at a period of economic meltdown. This study is to add to existing scholarly works already done in the role of sales promotion particularly in Nigeria, currently facing the impact of the global economic meltdown.

Furthermore, the objectives of this study are:

To evaluate how efficient sale promotion can be in this period of economic meltdown.

To understudy the current promotional activities and mix of marketing firms during this meltdown.

To enumerate the appropriate promotion tools/mix at the disposal of

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firms. This research will also highlight the strength and weaknesses that

can be encountered when running a successful promotional campaign in a depressed economy.

Attempt to recommend appropriate avenues firms can employ to own a successful promotional campaign.

1.4 RESEARCH QUESTIONS

In order to validate research efforts, the following research questions will be addressed:

Do companies need to increase budget for sales promotion despite the global financial crisis?

How do customers respond to sales promotion in this period of economic depression?

Is sales promotion cost effective during economic boom than when an economy is facing recession?

Why must companies embark on sales promotion despite its huge cost when undertaken?

What alternative efforts are put in place by organisations when sales promotion efforts fail to achieve its objectives?

1.5 RESEARCH HYPOTHESIS

In conjunction with the objectives stated above, this research work will strive to hypothetically test these premises so that valid conclusions can be drawn from them to aid recommendations based on anticipated responses from respondents.

Ho: Sale promotion does not increase sale volume in a period of global economic meltdown.

H1: Sale promotion increases sale volume in a period of global economic meltdown.

1.6 SIGNIFICANCE OF THE STUDY

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Sales promotion is not a new concept in the lexicon of marketing activities in Nigeria. During this particular period under study, firms in different ramifications that make up the fabric of the Nigerian economy are consistently seeking ways of weathering the storm and keeping their business in perpetual continuity.

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 sales promotion or who are non-challant and unaware of the sovereignty of consumers. It also seeks to beam a searchlight to the imperative nature of sales promotion during this period of economic depression. It will also encourage those already making use of the various sales promotion tools/methods to explore other areas within which sales promotion efforts could also be of great help.

1.7 SCOPE AND LIMITATION OF STUDY

The scope of this research study will basically be limited to an empirical analysis of how an organization can effectively utilize sales promotion as a veritable marketing tool in an economy engrossed with economic depression. Alternative cost reduction method will be elucidated to reduce the effects of high inflation rate, unabated increase in production cost, and the poor standard of living that permeate the Nigerian economy thereby, impeding the efficacy of marketing techniques employed by a firm’s marketing team.

The survey of this study will only be restricted to Nigerian Bottling Company Plc so as to draw valid conclusion from empirical analysis.

LITERATURE REVIEW AND THEORETICAL FRAME WORK

2.1 LITERATURE REVIEW

This chapter examines the past works, empirical and theoretical, of other authors on the subject matter of the research. Each author’s contribution is viewed and analyzed with a relevant aspect of such work to

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the present study.

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 1920’s. 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 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.

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Tom O’Leary (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 organization’s 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 PURPOSE AND OBJECTIVE OF SALES PROMOTION

Kotler (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 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.

(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

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to convince the consumer that he should reach a decision favourable to the advertiser. Sales promotion may adopt different methods for approaching people.

(b) To compete: A company’s promotional effort is the cutting edge of its entire competition programme.

2.4 FORMS OF SALES PROMOTION

There are different forms of sales promotion. Each of them is 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 PromotionTrade/Dealer PromotionSales Force Promotion

2.4.1 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 a product 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.

(b) Coupons: Coupons are certificates entitling the bearer to a stated saving on the purchase of a specific product. Coupons can be mailed, enclosed in or on other products or inserted in magazines and news paper advertisements.

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(c) Cash refunds offers or rebates: These are like coupons except that the price reduction occurs after the purchase rather than at the retail shop. The consumer sends a specified “proof of purchase” to the manufacturers, who in turn “refunds” part of the purchase price by mails.

(d) Price packs: These are offers to consumers in form of saving off the 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 a relatively 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

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

iii. Patronage awards: These are values in cash or in other forms that are proportional to one’s patronage of a certain vendor or group of vendors.

iv. Free trials: Free trials consist of inviting prospective purchasers to try the product without cost in the hope that they will buy the product.

v. Point of sales displays: These take place at the point of purchase or sales. Display of visible mark or product at the entrance of the store is an example.

vi. Product demonstrations: These promotion tools show the 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.

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

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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.

Manufacturers seek the following objectives in awarding money on the trade:

I. Trade promotion can persuade the retailer or wholesaler to carry the brand.

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

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

IV. Trade promotion can stimulate the retailers and their clerks to 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

(b) Allowance: Manufacturers may offer an allowance in return for the retailer’s agreeing to feature the manufacturer’s product in some way. An advertising allowance compensates retailers for advertising the manufacturer’s product.

(c) Free goods: Manufacturers may offer free goods, which are extra cases of merchandise to middlemen who buy a certain

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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 company’s name such as pens, pencils, calendars, paper weights and memo pads.

2.4.3Sale 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 used for sale force promotions are: Trade show and sales contest. As a number of sale promotions have increased, frictions have been created between company’s sales force and its brand mangers.

2.5 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.

2.5.1Establishing 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

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items and higher levels of inventory, encouraging off-season buying, encouraging stocking of related items, building brand loyalty and gaining entry into new retails outlets.

2.5.2 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.

2.5.3 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.

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.

2.5.4Selecting 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.

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2.5.5Developing 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 determined.

2.5.6Sales Promotion Budget

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:

2.5.6.1 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.

2.5.6.2 Percentage of sales method:

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.

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I. Percentage of sales method means that promotion expenditure 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 the relationship between promotion cost, selling price and profit per unit.

III. The major drawback of this method is that it does not provide logical 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.

2.5.6.3 Competitive parity method:

Some companies set their promotion budget to achieve share of price parity with their competitors. Two arguments are advanced for this method. One is that the competitor’s 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.

2.5.6.4 Objective and task 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

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objectives and estimating the costs of performing these tasks.

2.5.7Promotion Mix

Companies face the task of distributing the total promotion budget over the four promotion tools of advertising, sales promotion, publicity and sales force. Within the same industry, companies can differ considerably in how they allocate their promotional budget.

The trial and error method, past performance and corporate policies may influence the appropriate promotional mix. Many firms have increased their sales with the application of appropriate combinations of promotion media; sales promotion and personal selling are supported with publicity. The promotion mix is available in marketing strategy. It should be clearly decided how far a particular element should be used in combination with other promotional methods.

2.5.8Strategic Approach

The kind of promotional mix employed determines the promotional strategy. Generally speaking a particular combination, type or amount of sale promotion, personal selling, publicity and advertising are brought into the promotional mix, which becomes the promotional strategy in the course of implementation. The marketing strategy as much guides the determination of the promotional strategy, personal selling strategy, publicity strategy and advertising strategy, and thus sustaining promotional strategy, developmental promotional strategy or promotional appropriation.

2.5.8.1 Push and pull strategies:

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

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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.

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.

2.5.9Pre-testing, Implementing and Controlling

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,

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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.

2.5.10 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 going across to the competitors. Brand loyalty of customers 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

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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.

2.5.11 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.

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.

Hant and 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 firm’s 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

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methods companies can use to measure consumer promotion which are:

(1) Sales performance 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 differences in sales records.

(2) Customer sampling: 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 particular 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) Experiment study: 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.

2.6 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.

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(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) Short term results: Sales promotion such as coupons and trade allowances produce quicker, more measurable sales results. However, critics of this strategy argued that these immediate benefits come at the expense of building brand equity. They believe that an over emphasis on sales promotion may undermine a brand’s future.

(b) Competitive pressure: If competitors offer buyers price reductions, contest or other incentives, a firm may feel forced to retaliate with its own sales promotion.

(c) Buyers’ expectations: Once they are offered purchase incentives, consumers and channel members get used to them and soon begin expecting them.

(d) Low quality of retail selling: Many retailers use inadequately trained 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 available at the point of purchase.

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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. The description will further entail the design, research instrument, research design and procedure for data analysis.

3.1 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.

3.2 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.

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.

3.3 SAMPLE AND SAMPLING TECHNIQUE

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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 is intended to be used as a representation of the total population and was used for the analysis of the questionnaire.

3.4 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.

3.5 METHOD OF DATA COLLECTION

This research will use both primary and secondary research method; it will also use personal interview and direct observation.

3.6 DATA ANALYSIS

The method to be used in analyzing the data collected from respondents for the purpose of this research is the chi –square test.

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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 will be 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.

Subject to the categorical nature of the data, the chi square test will be used to test the hypothesis stated in part 1.

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SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 SUMMARY

This research work when examined will show the relevance of sales promotional efforts, campaigns and activities in a depressed economy with a study of Nigerian Bottling Company Plc, a key player in the Non-alcoholic Beverages Industry in Nigeria. A summary based on the data collected and analysed will be presented in this chapter. Based on these findings conclusions will be drawn and subsequent recommendations will be made. The analysis of the data presented in chapter four will reveal some findings from the hypothesis that will be tested.

5.2 CONCLUSION

From the findings of the data analyses conclusions will be drawn.

5.3 RECOMMENDATIONS

This study will show the impact sales in a period of global financial meltdown that is generally affecting the Nigerian economy.

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