Effect Of Promotional Tools In Marketing New Products In Food And Beverages Industry

INTRDUCTION

1.1 Background to the study

Marketing activities are related to sales promotion that increase consumer purchases and improve intermediaries or retailer’s efficiency and co-operation. Direct purchase and consumer product trial are those specific objectives, which can be achieved through short-term efforts of sales promotion, introduction of consumers to stores, getting retail point of purchase display, encouraging stores to stock the product, and supporting the personal sales efforts. According to Wathieu & Murre (2007) many purchase situations are so typical that shoppers conduct a very slight cognitive activity. Actually, it is hard to motivate behavior such as brand switching or increases in the number of units purchased.

According to Srinivasan and Anderson (1998) in these days businesses are constantly looking for marketing tactics to increase effectiveness and efficiency of their tasks of business. For a business to advertise their brand and make it a dominant brand, marketing and sale promotion looks to be extremely effective (De Chernatony and McDonald, 2003). According to Peattie and Peattie (1995); Keon and Bayer (1986) and Shultz (1987), in the past marketing look to be great operational method for advertising businesses, but in these days’ businesses are getting far away from the advertising and moving their focus on the promotional techniques. There are certain reasons of getting away from the advertising (Dickson and Sawyer, 1990 and Quelch, 1983). The first one is rising cost of advertising, Second one is intangibility of advertising message and the third one is the reliability of advertisement message are the core factors. Sales promotion has direct effect on the consumers purchase buying behavior, which is an action focus-marketing event (Blattberg and Neslin, 1990). Totten and Block (1994) that stated the term sales promotion refers to several types of selling incentives and methods which aim to yield the immediate sales effects. Three kinds of methods could be used by marketers to increase sales, first one is the promotion which is used to target consumers is called consumer’s sales promotion (Price Deals, Price Pack Deals, Coupons, Samples, Sent of Deals and Loyalty reward programs). The sales promotion which is directed at the customer, distribution channel or sales staff members is called retail promotion (Three for two, Buy-one-get-one-free, free goods, displays and features advertising). The sales promotion that targets to retailers and wholesalers are called trade sales promotion (Trade contest, point of purchase, trade allowance, displays and trade discount and training programs).

Sales promotions consist of a large variety of temporary strategic promotion tools which aim is generating a  desired response from the consumer (Gilbert  and Jackaria, 2002). One  of sales promotion tools advantage is that can stimulate the consumers to think and assess brand and purchase opportunities when otherwise they may not have. Therefore, various types of promotion tools and promotion strategies are utilized by the marketers so that they can know consumer preference and increase their sales. This fact indicates that many consumers are easily temped when they understand the term Sale Promotion. According to Gilbert (1999), other than price reduction, coupons or rebate given by the retailers as well as other marketing tools such as free sample and buy-one-get-one-free were found to be inducing consumer buy more then they expect. Different kinds of promotion tactics are used by the sellers to attract the customers and increase their sales. The earlier studies has shows that framing of advertising messages and presentation of price information influence the consumer’s views about prices and their willingness to purchase (Das, 1992; Sinha and Smith, 2000 and Sinha et al., 1999). ). However, previous research generally has

not distinguished between consumers who have prior goals to buy the product relative to those who do not have such purchase goals. Moreover, there has been no research which is investigating consumer’s reactions to various advertising message framing and price presentation differ when people do or don’t have pre-purchase aims. Since the similar promotion information may lead to different perceptions as customer’s goals vary, understanding how customers with different purchase goals react to different promotion messages can help sellers design effective promotion programs (Shavitt et al., 1994)..

In economic theory terms, the essential purpose of promotion is to change the location and shape of the demand {revenue} curve for a company’s product. Through the use of promotion, a company hopes to increase a product’s sales volume at any given price. It also hopes that promotion will affect the demand elasticity for the product, making the demand inelastic in the face of a price increase and elastic when the price goes down. Basically, promotion is an exercise in information, persuasion, and influence. These three are related in that to inform is to persuade and conversely. If a person is being persuaded, he is probably also being informed Many years ago, Prof. Neil Borden, of Harvard University, recognized the pervasive nature of persuasion and influence in our socioeconomic system, he said that “the use of influence in commercial relations is one of the attributes of a free society. Just as persuasion and counter persuasion are exercised freely in many walks of life in our free society – in the home, in the press, in the classroom, in the pulpit, in the court rooms, in the political forum. Etc.

1.2 Statement Of Problem

The earlier studies has shows that framing of advertising messages and presentation of price information influence the consumer’s views about prices and their willingness to purchase (Das, 1992; Sinha and Smith, 2000 and Sinha et al., 1999). ). However, previous research generally has not distinguished between consumers who have prior goals to buy the product relative to those who do not have such purchase goals. Moreover, there has been no research which is investigating consumer’s reactions to various advertising message framing and price presentation differ when people do or don’t have pre-purchase aims. Since the similar promotion information may lead to different perceptions as customer’s goals vary, understanding how customers with different purchase goals react to different promotion messages can help sellers design effective promotion programs (Shavitt et al., 1994).

Until recently the food and beverages industry was, and probably is still be-labored with disturbing distress some of the depositors who were customers of these banks only had their faith to blame while others today view banks with skeptical attitudes. The wake of distress however, has today more than ever before, created a serious problem for the industry leading to the need for the application of promotional tools as not only survival strategy, but also one to give the industry the success it may presently require. Thus the identification of the application of the promotional tools and its roles in the Nigeria food and beverages industry is necessary.

1.3 Purpose Of The Study

Having identified the problem necessitating this research, the researcher seeks to accomplish the following:

1. To explore the use of promotional tools in the industry.
2. To investigate the impact of promotional tools in food and beverages industry, on the customers of the food and beverages industry.
3. To examine the extent to which promotional tools can assist the growth of the industry in Nigeria.
4. The challenges faced by the industry on the application of promotional tools in Nigeria.
5. To recommend a more useful way of promotional tools in the industry.

It is hoped that the study would go a long way in exposing the possibilities of applying promotional tools or concept in the food and beverages industry. In turn, it will ensure the successful accomplishment of customers oriented services that would result in more returns and at lower cost of running while the society is kept satisfied with the services rendered by the food and beverages industry.

1.4 Research Questions

1. What type of promotional tools does your industry uses to approach its target audience?
2. What type of advert does your industry use to approach its customers on a new product?
3. Do you agree that promotional tools are essential in achieving organizational objectives of creating awareness of the needs and wants of customers?
4. Do you agree that promotional tools give directions to other activities within the industry?
5. Do you agree that customers are always satisfied with the activities and services being rendered to them by the industry?
6. In introducing a new product, what language does the industry use to communicate with its target audience?
7. Do you agree that media are very effective in creating customer patronage in the food and beverages industry?

1.5 Significance Of the Study

This research work would offer immense benefits to co – students, banking industries and other organizations. Fellow students will find the content of this research very useful in their research work in marketing and in enhancing their wealth of knowledge on the subject. Researcher interested in carrying out research work in a similar or related area will also find the fact made available in this project useful as a source of information and as a challenge to them in their research mission.

Bankers would utilize the facts in and suggestions offered here in smoothing and using in better marketing promotional tools in business performances in the economy and enhancing their operational activities as well. More so, customers and entrepreneurs would be encouraged and made to realize the significance and, or important of employing marketing promotional tools in their business operations.

Lastly, the impact of promotional tools in the food and beverages industry is way of stimulating business growth vital for the enhancement of the country’s economic state, and would as well be appreciated through the fact noted in this project.

1.6 Scope Of The Study

The application and roles of promotional tools in the food and beverages industry has gained prominence in recent times. This is evident in the manner that food and beverages industry now invites consumer-oriented services being offered to the public. The researcher therefore sees the topic interesting and challenging. However, due to the food and beverages industry being too large for the researcher to cover, the researcher limits herself to the study of food and beverages industry, Gboko Branch.

Specifically, the researcher further made studies on the application of promotional tools in the operations of food and beverages industry.

1.7 Limitation Of Study

However, there were constraint imposed on the researcher this includes the following.

1. Time: a study of this nature, needs a relatively long time during which information for accurate or at least near accurate inferences could be drawn. The period of the study was short, hence time posed as a constraint to the researcher.
2. Cost: The researcher would have extent the survey to areas. But limitations here included cost of transportation to source for materials and cost of typesetting the already completed work.
3. Dearth (Scarcity) of statistical data: Commercial banks adhere strictly to the rule of secret; in banking thus they refused to release information.

1.8 Definition of terms

PROMOTION: A promotion is the advancement of an employee or customer’s rank or position in an organizational hierarchy system in regard to his or her patronage.

1.9 Organization Of The Study

This research work is organized in five chapters, for easy understanding, as follows. Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study.