Impact Of Rapid Increasing Sales Promotion Activities On The Sale Of Consumer Goods
(A Case Study Of Nigeria Bottling Company Plc Enugu)
The surge in sales promotion activities has significantly reshaped consumer behavior and the sales landscape within the consumer goods market. As promotional strategies intensify, leveraging techniques such as discounts, coupons, and special offers, they generate heightened consumer interest and drive immediate purchasing decisions. This uptick in promotional endeavors has propelled a notable spike in sales volumes across various consumer goods categories, fostering brand awareness, and fostering brand loyalty among customers. However, this rapid escalation of sales promotion activities also poses challenges, such as margin erosion and potential brand dilution, as competitors engage in aggressive promotional tactics to vie for market share. Amidst this dynamic environment, companies must strike a delicate balance between maximizing short-term sales gains and sustaining long-term profitability and brand equity, navigating the intricate interplay between promotional intensity, consumer perception, and competitive dynamics to optimize their sales performance in the consumer goods arena.
This research on the impact of increasing sales promotion activities of consumer goods in Nigeria, using Nigerian bottling company as a case study is aimed at knowing exactly what impact sales promotion activities have on their profit, sales of consumer goods in Nigeria.
In the study, an attempt was made to review related literature which explains factors that used to sales promotions increase and the patterns of designing and managing sales promotion activities to determine its sales and cost effectiveness. In these factors, it was pointed out that it has internal and external factors.
Internal, in that, top management uses it as effective mean to stimulate sales and external in that the number of brands have increased with more competitors becoming promotion minded.
Questionnaires were administered to customers, distributors and staff of N.B.C Plc testing of how sales promotion has a positive effect on the profit and sales of industries, test the tentative assertion and those who disclosed the effect of sales promotion were analyzed. Also, the extent of sales promotions on consumer goods was analyzed. This gave way to recommendations by the researcher.
Title Page
Certification Page
Dedication
Acknowledgement
Abstract
Table Of Contents
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background And History Of The Study
1.2 Definition Of The Problem
1.3 Statement Of Objectives
1.4 Statement Of Hypothesis
1.5 Significance Of The Study
1.6 Limitation Of The Study
CHAPTER TWO
2.0 REVIEW OF RELATED LITERATURE
2.1 Nature Of Promotion
2.2 Concepts Of Sales Promotions
2.3 The Need For The Promotion
2.4 Types Of Sales Promotion
2.5 Sales Promotion In Nigeria
2.6 Designing And Managing Sales Promotion
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Design Of The Study
3.2 Sources Of Data
3.3 Method Of Investigation
3.4 Determination Of Sample Size
3.5 Method Of Questionnaire Distribution
CHAPTER FOUR
4.0 PRESENTATION AND ANALYSIS OF DATA
4.1 Distribution And Collection Of Questionnaire
4.2 Observation Survey
4.3 Analysis Of Questionnaire To Management Of N.B.C / Discussion Of Findings
4.4 Analysis Of Questionnaire To Distributor Of N.B.C / Discussion Of Findings
4.5 Analysis Of Questionnaire To Customers / Discussion Of Findings
4.6 Testing Of Hypothesis
CHAPTER FIVE
5.0 SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
5.1 Summary Of Findings
5.2 Recommendations
5.3 Conclusion
Bibliography
Appendix
Questionnaire Tables
1.1 BACKGROUND OF THE STUDY
The success of any marketing depends largely on the understanding of the consumer and the way he consumers a particular product. In the past, when goods were scarce and economic activities were low. There were usually little or no need to promote products or services since consumers were willing to make efforts to seek for the products that they need.
Today, all these urge changed by increased economic activities and production technology has made it possible to produce goods on a large scale and availability of so many businesses in almost every aspect of modern commerce.
Marketing philosophy has unfolded the secrets of consumer goodwill and patronage as the satisfaction of their needs and wants with the right product, a reasonable price, effective promotion and a good distribution system, for the consumers to be well informed and stimulated to patronize a product or service, they have to be aware of its existence quality, price and availability.
When little or no competition exist, advertising and personal felling is usually relied upon to bring in the buyers, but with the existence of many sellers in the market, other innovation promotion are called for and sales promotion is resorted to.
The efforts made in sales promotion are directed toward encouraging prompt buying activities by giving attractive and appealing incentives to the prospective buyers.
The study will evaluate customers’ satisfaction, repeat purchase, favorable sales promotion, increase sales volume, market share as well as organization profitability and goodwill.
Nigerian Bottling Company plc started its operation in Nigeria in 1953 by holding franchise for coco-cola international. This means that the formula of the concentrate and recipe of the products have not been released to the Nigeria bottling company but the formula and syrup of the mixture is given to them to help them bottle the products. The Nigerian bottling company started with one flavor “coke” as a major product, now has May flavors. A journal interview with the company chairman Mr. H.S Adedeji (1975) showed that the company is the largest produces of soft drinks. Nigerian bottling company has branches. It has about 36 or more products plants chart. It spreads its products all over the country like Owerri, Aba, Afikpo, Onitsha, Kaduna, Benin, Lagos, Uyo and Port-Harcourt. The company makes about 70 percent of soft drinks consumed in Nigeria and has branched out to non-soft drink businesses mostly agriculture.
1.2 DEFINITION O THE PROBLEM
The Nigerian bottling company is influenced by seasonal fluctuation and climate change coupled with depression in the economy. This phenomenon influences the consumption pattern of coca-cola drinks. Markets often lead to sales decline, erosion of market square, low capacity utilization, reduction in overall industrial output and colossal loss of profit
Despite the magnitude and relative importance of sales promotion, critics of sales promotion activities do not capture new long-term buyers, instead leads to attract customers. Many view it as money consuming and wasteful venture. So the question is could sales promotion it adopted as one of the problem solving behaviour help organization to achieve their sales objective?
It is in the light of this question that the researcher was motivated to conduct a study on sales promotion with reference to the Nigeria Bottling Company Plc.
1.3 A STATEMENT OF OBJECTIVES
As sales promotion activities of consumer goods in Nigeria have expanded rapidly in recent times, a research is carried out on the Nigeria Bottling Company Plc with view to finding out what impact sales promotion activities have on the sale of consumer goods.
The objectives of the study are as followed:
a. To determine the role sales promotion play on the sale of consumer goods
b. To find out the effects sales promotion have on the demand of consumers
c. To find out how sales promotion can increase the sales of products (mineral soft drinks) especially those period when normal sales are sluggish.
1.4 STATEMENT OF HYPOTHESIS
The following hypothesis is to be tested
1. Hypothesis I
Ho: Sales promotion has a negative impact in organization.
H1: Sales promotion has a positive impact in organization
Hypothesis 2
H1: Sales promotion does not encourage customers
Ho: Sales promotion encourages customers.
Hypothesis 3
Ho: Sales promotion reduces the profit of the distributors of N.B. C Plc
H1: Sales promotion improves the profit of the distributors of N.B.C Plc
1.5 SIGNIFICANCE OF THE STUDY
The study seeks to identify the role sales promotion plays in marketing strategies and achievement of organization goals. It signifies to provide a basis for Nigeria bottling company on the type of sales promotion activities to adopt. The study is relevant in the sense that it will serve as reference connected with the present research problems. It will also benefit the investors in their area of business. Scholars, government etc will equally benefit from this study. It will furnish information which serves as reference point for organization that carries out sales promotion in motivating and gathering channel supports and consumer patronage.
1.6 LIMITATIONS OF THE STUDY
The problem encountered in this study includes, insufficient fund, inadequate contact with some respondents, illiteracy level and prejudice etc.
Marketing research generally involves cost in terms of survey, administration production and collection of concluded research work. As a student with limited financial resources, those costs become more glaring and difficult to settle and therefore stretched the financial position of the researcher.
Some respondents never completed the questionnaire as they continue to postpone attention to them and even when completed, misplace them.
With high rate of illiteracy in this part of the world, some respondents never understood what was required of them and why the research was being carried out. They therefore never answered any of the questions.
Another limitation of the study is time. In the collection of questionnaire, several repeal calls were made and sometimes the respondents never actually answered the questions.
Impact Of Rapid Increasing Sales Promotion Activities On The Sale Of Consumer Goods:
Rapidly increasing sales promotion activities can have both positive and negative impacts on the sale of consumer goods. These impacts can vary depending on the specific strategies employed and the context in which they are implemented. Here are some of the key ways in which increasing sales promotion activities can affect the sale of consumer goods:
Positive Impacts:
- Increased Sales Volume: One of the primary goals of sales promotions is to boost sales, and when executed effectively, they can lead to a significant increase in the volume of goods sold. Consumers are often enticed by discounts, special offers, and promotions, which can result in higher sales.
- Clearing Excess Inventory: Sales promotions are often used to clear out excess or seasonal inventory quickly. This can be especially beneficial for consumer goods companies as it frees up valuable storage space and reduces carrying costs.
- Attracting New Customers: Promotions can attract new customers who may not have otherwise tried the product. Sampling, in particular, can be an effective strategy to introduce new consumers to a brand or product.
- Competitive Advantage: In markets where competitors are also engaged in aggressive sales promotion activities, a company that effectively uses promotions can gain a competitive advantage by offering better deals and attracting more customers.
- Brand Loyalty and Repeat Purchases: If customers have a positive experience with a product during a promotion, they may become loyal to the brand and continue to purchase even after the promotion ends.
Negative Impacts:
- Erosion of Profit Margins: Heavy reliance on sales promotions can lead to reduced profit margins because discounts and special offers often mean lower prices. Companies need to carefully balance the increased sales with the potential decrease in profitability.
- Brand Image and Perceived Value: Frequent and aggressive promotions can lead consumers to perceive a product as lower in value or quality. This can harm a brand’s long-term reputation.
- Cannibalization: In some cases, sales promotions may cannibalize sales of regular-priced items. Customers may wait for promotions to buy, which can lead to inconsistent revenue streams.
- Customer Expectations: Continuous promotions can condition customers to expect discounts, making it challenging to sell products at regular prices. This can lead to a “discount mentality” among consumers.
- Short-Term Focus: Overreliance on promotions can lead to a short-term focus, with companies constantly seeking quick sales boosts rather than investing in long-term brand-building and product development.
- Financial Strain: Implementing extensive sales promotions can put financial strain on a company, especially if the promotions are not generating enough additional revenue to cover the costs.
In conclusion, rapidly increasing sales promotion activities can have both positive and negative effects on the sale of consumer goods. It is essential for companies to carefully plan and execute their promotion strategies to strike a balance between increasing sales and maintaining a strong brand image, profitability, and long-term customer loyalty. A well-thought-out promotion strategy should consider the specific goals, target audience, and competitive landscape of the consumer goods market.