Impact Of Sales Promotion And Brand Equity
(A Case Study Of Nigeria Brewing Companies)
Sales promotion and brand equity play pivotal roles in shaping the success of a business. Sales promotion encompasses various marketing activities designed to stimulate immediate customer action, such as discounts, coupons, or limited-time offers. These initiatives aim to boost short-term sales and create a sense of urgency among consumers. On the other hand, brand equity pertains to the overall value and perception that consumers associate with a brand. It involves elements like brand awareness, loyalty, and perceived quality. The impact of sales promotion on brand equity is intricate and interconnected. While sales promotions can provide immediate boosts in sales volume, their long-term influence on brand equity depends on how well they align with the brand’s positioning and values. When executed thoughtfully, sales promotions can enhance brand awareness and foster positive associations, contributing to the overall strength of a brand. However, an indiscriminate or inconsistent approach to sales promotion may dilute brand equity by commoditizing the brand or eroding its perceived value. Therefore, achieving a harmonious balance between sales promotion strategies and brand equity considerations is crucial for sustained business success.
This study investigated the Impact of Sales Promotion and Brand Equity on Nigeria Brewing Companies. The purpose of the study is to find out the Impact of Sales Promotion and Brand Equity on Nigeria Brewing Companies. The research design used in this study was Descriptive Survey. Population of the study comprises Sixteen (16) Brewing Companies. The population sample size of the study is the Sales and Marketing Department of Five (5) Brewing Companies. Four research questions was formulated through the use of questionnaires which were administered directly to the sampled Brewing Companies. The findings revealed that the impact of Sales Promotion and Brand Equity on Nigeria Brewing Companies are: It helps to generate new leads, Allows re-engaging with your existing audience, Skyrockets revenue and Increases brand awareness. In conclusion, if these impact of sales promotion and brand equity on Nigeria Brewing Companies are adopted and implemented, Brewing Companies will improve.
CHAPTER ONE:
INTRODUCTION
Background of the Study 1
Statement of the Problem 3
Purpose of the Study 4
Research Questions 5
Hypotheses 5
Significance of the Study 6
CHAPTER TWO:
REVIEW OF RELATED LITERATURE
History of Sales Promotion 7
Sales Promotion Growth 9
Concept of Sales Promotion 9
Sales Promotion Defined 11
Characteristics of Sales Promotion 12
Examples of Sales Promotion for Nigeria Brewing Industry 12
Factors to be considered when setting up a Sales Promotion
in Nigeria Brewing Industry 17
Sales Promotion Ideas Suitable for Nigeria Brewing Industry 18
Objectives of Sales Promotion 20
Types of Sales Promotions 22
Impact of Sales Promotion to Nigeria Brewing Industry 25
Brand Equity Defined 25
Components of Brand Equity 26
Impact of Brand Equity on Brewing Industry 29
Summary of Related Literature 31
CHAPTER THREE:
RESEARCH METHODOLOGY
Introduction 32
Research Design 32
Sources of Data Collection 32
Population Sample Size of the Study 33
Research Instrument 33
Validity and Reliability of the Research Instrument 34
Analytical Frame Work Model Specification 34
Method of Data Analysis 35
CHAPTER FOUR:
PRESENTATION AND ANALYSIS OF DATA
Research Questions and Analysis 37
CHAPTER FIVE:
DISCUSSION, CONCLUSION AND RECOMMENDATIONS
Discussion of Findings 41
Conclusion 44
Recommendations 44
Limitations 45
Suggestions for Further Studies 45
INTRODUCTION
Background of the Study
There is no doubt that Nigerians appreciates the Nigerian brewery products as one of the most attractive consumer markets in the world (Tong and Hawley, 2009). This has a positive impact on the brewing industry alongside with the growing interest and habit on drinks by its consumers and the increase in Nigeria population (means more patronage).
Promotion is a component of the marketing mix strategy that emphasizes the use of various communication tools to promote the value of a company’s products or services amongst other competitors in the brewing industry. While much promotion focuses on long-term communication objectives, sales promotions have a specific motive of attracting customers, create immediate sales, increase revenue and reduce inventory (Neil Kokemuller, 2020).
Brand equity is one of the most important concepts in marketing science, and it is well-recognized as one of the most valuable intangible assets by most firms in the brewing industry (Erenkol and Duygun, 2010). Brand equity is incremental utility and value endowed to a product or service by its brand name (Keller, 2003; Park and Srinivasan 1994; Marinova, Cui, Marinov&Shiu., 2011).
Brand equity refers to a value premium that a company generates from a product with a recognizable name when compared to a generic equivalent. A brewing firm can create brand equity for their products by making them memorable, easily recognizable, and superior in quality and reliability (Adam Hayes). High brand equity can lead customers into a positive or strong brand association; gain or increase their cash flow to the business, as well as make product differentiation in order to lead to competitive advantage (Keller, 1993; Marinova et al., 2011).
If a brewing firm could better understand the importance of brand equity, then it will better gain competitive advantage, loyal their customers.
In the present era of increasing globalization, competition is an important issue among policy makers of different levels (country, industry and company) in different parts of the world (Sayed, Javadin and Shams 2011). In the current situation of competitive market, obtaining a proper position in the mind of consumers in which the consumers becomes loyal to the company’s product is very important. Perhaps the most prominent skill of a brewery firm is providing a brand, protecting it, reinforcing it and makes loyal customers to it (Khadang 2011). The brand loyalty is the ultimate goal of a brewing firm that has a product with a special trademark (brand). When customers are proud about the company, say positive things about it and recommend the company to their friends and relatives, it will increase their volume of buying (Sobhani, 2011).
Research on customer loyalty has been concentrated on the product or brand loyalty. The brand loyalty is the ultimate goal of a brewing firm that has a product with a special trademark (brand); prioritizing or preferring purchasing a specific brand on a shelf of product by customer is called brand loyalty. Customer, first purchases a product with specific brand to test it, and then, after consent and satisfaction, is willing to repeat and continue the purchase of the same trademark or brand because they now know that product and trust it (Sobhani, 2011).
Studies indicate that the cost of retaining current customer, in practice, is much less than the cost of attracting new customers (Keller, 1993; Marinovaet al., 2011&Sobhani, 2011). Therefor, companies should believe that any attempt to retain customers through sales promotion and brand equity is a useful activity.Due to the foregoing, the researcher has deemed it necessary to pinpoint “The Impact of Sales Promotion and Brand Equity on Brewing Industry in Nigeria”
Statement of the Problem
Despite the increased relevance of sales promotion in the brewing industry, most firms still believe it is a form of deception. The planning of sales promotion can be problematic if the question to know its impact is raised? However, it is not always true that we cannot determine the impact of sales promotion. Internet usage in Nigeria is very low compared to Europe, South East Asia and the United States. However, many of the internet users are not taking advantage of the opportunities afforded by the internet, to purchase what they need, simply because they considered the products and services to be expensive and alien to their culture. However, poor sales promotion to the final consumers could give competitors an edge in terms of loyalty to brands, sales volume and high market share. Consequence of this has been the major setbacks for most firms in the brewing industry. Given the increasing competition in the marketing environment, most firms are yet to recognize the roles and relevance of sales promotion on product demand.There is also an increasing challenge on how organizations can use sales promotion and brand equity as a tool for marketing new products and obtaining the required results. Therefore, the body of knowledge cannot be complete without discussing “The Impact of Sales Promotion and Brand Equity on Brewing Industry in Nigeria”
Purpose of the Study
The main purpose of the study is to examine the impact of sales promotion and brand equity on brewing industry in Nigeria.
Specifically, the study sought to:
1. Determine the nature of relationship between sales promotion and brand equity.
2. Ascertain the extent to which celebrity endorsement impact on Brand Equity.
3. Find out the extent to which Word of Mouth can impact on Brand Equity.
4. Determine if sales promotion and brand equity has any influence on Nigeria Brewing Industry.
Research Questions
The study was guided by the following research questions:
1. What is the nature of relationship between sales promotion and brand equity?
2. To what extent does celebrity endorsement impact on Brand Equity?
3. To what extent does Word of Mouth impact on Brand Equity?
4. What impact does sales promotion and brand equity has on Nigeria Brewing Industry?
Hypotheses
The following research hypothesis will guide this study:
1. H0: There is no relationship between sales promotion and brand equity.
H1: There is relationship between sales promotion and brand equity.
2. H0: There is no celebrity endorsement impact on Brand Equity.
H1: There is celebrity endorsement impact on Brand Equity.
3. H0: There is no Word of Mouth impact on Brand Equity.
H1: There is Word of Mouth impact on Brand Equity.
4. H0: There is no impact of sales promotion and brand equity on Nigeria Brewery Industry.
H1: There is impact of sales promotion and brand equity on Nigeria Brewery Industry.
Significance of the Study
Competition is the most fundamental factor that directly affects the brand emergence and growth. Today, the competition is fiercely in Nigeria market due to the threat of new entrances and rivals. Breweries with their brands always try to outperform their competitors to grab a greater share of market. Thus, an appropriate sales promotion and brand equity is necessary. Hence, this study seeks to examine the impact ofsales promotion and brand equity in Nigeria Brewing Industry. The finding of this study will help brewing firms or companies to create positive brand equity and sales promotion in order to increase their future business growth and profit.
SHARE PROJECT MATERIALS ON:
Impact Of Sales Promotion And Brand Equity:
Sales promotion and brand equity are two important elements in marketing that can significantly impact a company’s success. Let’s explore how these two aspects are related and the effects of sales promotion on brand equity:
- Definition:
- Sales Promotion: Sales promotion refers to the various marketing tactics and techniques used to stimulate sales and attract customers. It includes activities such as discounts, coupons, contests, free samples, and other short-term incentives designed to encourage immediate purchases.
- Brand Equity: Brand equity represents the value and perception that consumers associate with a brand. It includes brand awareness, brand loyalty, brand associations, and perceived quality. A strong brand equity can lead to higher customer preference and willingness to pay premium prices.
- Impact of Sales Promotion on Brand Equity:a. Positive Impact:
- Increased Awareness: Sales promotions can increase brand visibility as consumers are exposed to the brand more often during promotional activities.
- Trial and Adoption: Promotions can encourage new customers to try a product or service, potentially leading to long-term customers if they are satisfied with their purchase.
- Word of Mouth: Positive experiences resulting from promotions can lead to positive word-of-mouth marketing, which can enhance brand reputation.
- Customer Loyalty: Well-executed promotions can strengthen the bond between a brand and its existing customers, increasing brand loyalty.
b. Negative Impact:
- Perceived Quality: Overuse of promotions or excessive discounts may lead consumers to perceive the brand as of lower quality.
- Brand Erosion: Frequent promotions can erode brand value if customers come to expect discounts all the time.
- Cannibalization: Offering promotions on one product may cannibalize sales of another product within the same brand portfolio.
- Short-term Focus: Relying too heavily on promotions can make a brand seem focused on short-term gains rather than building long-term brand equity.
- Balancing Sales Promotion and Brand Equity:
- Companies must strike a balance between using sales promotions to drive short-term sales and maintaining a strong brand equity for long-term success.
- Using promotions strategically, such as during product launches or to clear excess inventory, can minimize the risk of brand devaluation.
- It’s essential to ensure that promotions align with the brand’s positioning and do not compromise the perceived value and quality associated with the brand.
- Combining promotions with other brand-building activities, such as advertising and content marketing, can help reinforce a positive brand image.
In conclusion, sales promotion can have both positive and negative effects on brand equity. When used judiciously and strategically, promotions can enhance brand awareness, loyalty, and overall equity. However, overreliance on promotions or poorly executed campaigns can erode brand value. Therefore, it’s crucial for marketers to carefully plan and execute promotions in a way that supports and reinforces the brand’s long-term objectives.