SOLD BY: THE ROLES OF SALES PROMOTION IN THE MARKETING OF ORGANIZATIONAL GOODS AND SERVICES
(A CASE STUDY OF CADBURY NIGERIA PLC LAGOS)
ABSTRACT
The research work was carried to
study the roles of sales promotion in the marketing of organizational
goods and services. With Cadbury Nigeria Plc Lagos as the case study,
the data collections were collected through the use of questionnaire,
personal interview and personal observation relevant to the topic. The
datas collected were analyzed using tabular distributed Chi-Square and
decisions were reached, that there is an effective and efficient sales
promotion in the marketing of organizational products. Some factors
trended to influence the work of the research such as, finance, clutter,
customers perception, inadequate information, and poor timing of
responses by the respondents (managements) of the subject matter.
Nevertheless, the research work has revealed that the roles of sales
promotion in the marketing of organizational products leads to the
organizational survival and growth.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The word promotion originates from the
Latin word “which means to move forward, to push forward or to advance
in idea. Sales promotion is an important component of the marketing
communication, it is essentially a direct and inducement, it adds extra
value to the product and hence promote, and encourages dealers or
consumers to buy product. Thus, its methods and aim is to capture the
markets and increase sales volume. It is an important instrument in
marketing because it lubricates the marketing effort. Nowadays, sales
promotion is a necessary tool to boost sales, in a broader sense, it is
not expenditure rather, it is an investment as it pays rich returns and
creates demand.
In today’s competitive business world,
customers are considered to kings. They (customers) have several choices
to make among alte3rnative products and they exercise a high level of
influence in the market with respect to product size, quality and price.
Hence, it is important for producers to meet the needs of customers in
order to stay competitive. One of the marketing communication tools that
is used in attracting the attention of the customers and build their
loyalty is sales promotion.
Sales promotion implemented to attract
new customers, to hold present customers, to counteract competition and
take advantage of opportunities that are revealed by market research. It
is made up of activities, both outside sales promotion activities.
Sales promotion is an increasingly
important tool within the overall armory of marketing communication
because recent years have seen recognition of the role that sales
promotion can play in achieving variety of marketing objectives.
Promotion aims at ensuring that customers develop some taste for the
product over a given period of time and become loyal to the product.
Through communication to the people
about a product, more buyers are sought and firmly rooted in brand
loyalty. In order to achieve these promotional objectives, various
aspects of promotion has been developed into the AIDA concept which
stands for: Attention-Interest-Desire-Action.
Sales promotion is one among the pillar
of promotional mix, it consist of those promotional activities other
than advertising, personal selling and publicity. As such, any
promotional activities that do not fall under the other three activities
of promotional mix are considered as sales promotion. The techniques of
sales promotion are varied and numerous, the common ones used are
coupons, drawing, games, contests, discount, demonstration, premium,
free samples money refund offers and trading stamps. A combination of
these can be and often is used in the same campaign, for example, when a
breakfast cereal company expanded its business abroad they had to
enlighten consumers about dry cereal and cold breakfasts. To encourage
this new eating habit, the company used free samples and demonstration
in conjunction with a heavy advertising campaign to regain slumps.
Furthermore, sales promotion could be
referred to as “catch them all” for those short-term marketing
activities that act as incentives to stimulate quick buyers action, some
items such as sweepstake, calendar, pen, book, key holders etc may
serve as a dual purpose for stimulating sales as well as creating
goodwill among companies or organizations. Therefore, the use of sales
promotion is not limited to consumer product alone; it can be used with
industrial selling too. For instance, many drug manufacturers attract
their drug distribution companies by sponsoring cocktail parties, trips
and other events. All this shows that sales promotion is an important
factors in marketing organizations as well as other organizations,
because where other strategies gives reason to buyer, sales promotion
gives reasons to buy now.
1.1.1 HISTORICAL BACKGROUND OF CADBURY NIGERIA PLC
Cadbury Nigeria Plc is a member of
Cadbury schweppes PLC, a major player in the global confectionary and
beverages market with 4000 employees and business in 20th countries. Kraft foods acquired Cadbury Plc on February 2nd
2010 making the company part of the largest food company in the world.
Kraft foods proudly markets delicious biscuits, confectionary, beverages
cheese, grocery products convenient meals in approximately 170
countries.
In Nigeria, Cadbury Nigeria Plc engages
in the manufacture and sale of fast moving consumer goods in Nigeria. It
produces and sells confectionery products and food drinks under
Bournvita, TomTom, Akomka, Ginger, Hacks and butter mint brand and cocoa
powder, cocoa butter, cocoa liquor and cocoa cake. Cadbury Nigeria Plc
offers its products through a network of distributions, key accounts
institutional customers, wholesalers and retailers in Nigeria, as well
as exports its products to various countries in Africa and Europe. The
company was incorporated in 1965 and it headquarter is in Lagos,
Nigeria.
The company is involved in marketing
manufacturing, distributing and promoting their products. While Cadbury
Nigeria and its brands are part of the Kraft food family, a portion of
their business in (25.01%) is held by indigenous shareholder and
publicly traded on the Nigeria stock Exchange (NSE). The company began
as an effort to source cocoa beans while looking for opportunities to
serve the local consumer markets with the famous Cadbury product. In the
early 1960’s they began packing imported bulk consumer product, but the
company grew quickly in a full-fledged manufacturing outfit. The
company was incorporated as a limited liability company’s in January
1965, when the company current 42 hectare factory was opened. It shares
were listed on the exchange on 26th November, 1976.
The core business of the company is in
two categories, namely confectionery and food drink, which are
manufactured in a dedicated facility within the factory site in Lagos.
The company has grown to become one of the leader in confectionery and
food drinks markets within Nigeria, with a portfolio of branded offer
that re targeted to meet real needs of consumers. The company’s quality
brands are enjoyed throughout Nigeria as well as in the company’s export
markets in West Africa. This rich heritage has been carefully nurtured
over the years.
Cadbury Nigeria has 93% shareholding in
stanmark cocoa processing company Limited (SCPC) products attract the
highest premiums for their unraveled quality and Cadbury Nigeria entire
cocoa powder requirement is sourced from SCPC.
Following a major strategies review in
2008, the company has commenced an extensive restructuring exercise to
restore it’s path to profitable growth. The company has also identified
significant growth potentials from its core brands Bournvita and TomTom,
as they appeal to a very wide spectrum of Nigeria consumers having been
available in the market place for almost 40 years. A review of the
company’s route to market commenced in2008, with a through re-appraisal
of its existing distributor partnerships and operational procedures.
This has resulted in a strong distribution channel to make goods
available with the help of promotion.
The company is committed to a program of
continuous improvement and modernization that has already seen a number
of popular innovations and renovation will also be maintained in the
future. The strategy review focused on opportunities to improve
efficiency and quality of product, through a disciplined approach to
international benchmarking and investing in manufacture projects. This
approach is expected to yield both productivity benefits as well as
provide opportunities to streamline production processes and align the
factory future growth.
1.2 STATEMENT OF THE PROBLEM
Every organization is faced with one
problem or the other irrespective of the effectiveness and capabilities
of \its management teams. The aim of Cadbury Nigeria plc is to boost up
its sales in order to gain high market share, high profit margin and
high sales volume in the market.
These aims cannot be effectively
achieved due to some problems that may hinder the actualization and such
problems are identified below;
Financial constraint, which really
hinder the achievement of the organizational aims and objectives to a
certain level such as the cost of travelling, cost of browsing the
internet for information needed and also the cost of strategizing the
sales promotional techniques to be used by the company.
Clutter is another constraint due to the
number of competitive promotions. New approaches are promptly cloned by
competitors as each marketer tries to be more creative, more attention
getting or more effective in attracting the attention of consumers and
the trade. In other words, it is almost next to impossible achieve
sustainable competitive advantage through this promotion.
Customersperception of sales promotion
is also a problem encountered or faced by the organization which
triggers their reaction in whether to buy a certain product or not due
to the way they have perceived it.
Inadequate information about new brands
or products also constraint sales promotion if consumers are not
informed or aware of the products that are on board, they may not know
how they works and will continually using the products they are used to.
Poor timing is another constraint that
influence sales promotion because sales promotion is typically to last
for a specific period of time. If the promotion did not attain the
desired objectives, it will not increase sales and the result from the
promotion will be waste of money. Also, it will deviate customers
attention from the products to be promoted.
Consequently, if necessary action is not
taken immediately by the company to act effectively and efficiently the
organization will loose its customers which will lead to low profit
margin, low market share and also low sales volume.
1.3 OBJECTIVES OF THE STUDY
For any marketing organization to
succeed, its objectives must be stated. Therefore, the objectives of
this study is to examine and assess how sales promotion can be used in
solving organizational problems such as low sales, low patronage, low
profit and how it can be used to create both short-term and long-term
customers relationship of the organization. And also, to know how to
effectively apply sales promotional tools in order to achieve or
actualize organizational goals and objectives.
Specifically, to plan a successful sales
promotion, a firm or company need to understand its major objectives.
This will enable them create marketing materials to make the event a
success. It also enables them to monitor the success of various
marketing materials and determine if they want to use those methods in
the future. The major objectives of sales promotion are as follows;
- To determine how financial constraint affects the organizational productivity.
- To examine the clutter of the market due to new approaches promptly cloned by the competitors.
- To analyze customers perception on the basis of the organizational products.
- To also determine the inadequate information about the organizational new brands or products.
- To examine and assess the poor timing of the organizational activities.
The following are some relevant research questions asked by a researcher:
- What achievement does financial constraint hindered in your organization by using sales promotional tools?
- How effective performance the organization is, by using sales promotion in a clutter market?
- What does your organization do when it discovered the negative perception of customers?
- How would you rate the outcome of effective information disseminated about sales promotion in your company?
- How often does your organization embark on sales promotion?
This research work is aimed at examining
the roles sales promotion have been playing in organizations and
Cadbury Nigeria Plc as well as determine that attributable causes of
sales promotion failures if any and the proffering of suggestions on
remedial actions.
Hypothesis as a tentative of assumptions
among variables will be tested in this course of this work and
alternative hypothesis would be employed to allow for smoother
elaboration as shown below:
H0: Financial constraint is not significant to the organizational sales promotion.
Hi: Financial constraint is significant to the organizational sales promotion.
H0: Sales promotion does not perform effectively and efficiently in the marketing of organizational products.
Hi: Sales promotion perform effectively and efficiently in the marketing of organizational products.
H0: Customers perceive the organizational products not considerable when sales promotion is been used.
Hi: Customers perceive the organizational products considerably when sales promotion is been used.
H0: The outcome of information disseminated about sales promotion is not effective in the marketing of organizational products.
Hi: The outcome of information disseminated about sales promotion is effective in the marketing of organizational products.
H0: The limited period of time given by the company for sales promotion to enhance sales volume is not adequate.
Hi: The limited period of time given by the company for sales promotion to enhance sales volume is adequate.
1.6 SIGNIFICANCE OF THE STUDY
Cadbury Nigeria Plc has been facing a
number of problems from different angles in their bits to technological
proficiency; the problems may be largely attributed to inadequate
planning and unrealistic sales promotional system. Therefore, the
significance of sales promotion in Cadbury Nigeria Plc is to develop
trust between all employees and managers including supervisors with a
view to reduce the number of mistakes, minimize misunderstanding and
encourage team work and to install in each employees favorable impulse
for motivation purpose.
The structure of this study is to
improve the mechanics of sales promotion in an organization such as
sales volume, increase patronage and to generate more profit which will
help the organization to run smoothly. It is also aimed at enlightening
organization on the importance of sales promotion to the growth of
marketing organization as a whole and determines the effectiveness and
efficiency of sales promotion as implied in the typical business
organization.
To achieve this goal, they need
information within and outside the organization. This will stimulate the
organization to pay more attention and get more knowledge about sales
promotion as well as appreciate its significance roles in profit making
and organizational growth.
1.7 SCOPE OF THE STUDY
Sales promotion as a field of study may
not be possible to be covered entirely in this research work or project.
Therefore, the project is intended to examine the roles of sales
promotion in the marketing of organizational goods and services in
Cadbury Nigeria Plc. Its functions, objectives and pattern of sales
promotion to the organization.
1.8 LIMITATIONS OF THE STUDY
As it is with every situation, anything
that shows some advantages only comprises and clear the way to absolute
adoption. This study has some limitations, and the paramount limitation
to this research work relates to the inability of the researcher to lay
hands on some vital information which are often referred to as “secret”
that was not available during the research findings.
Time frame is another constraint
limiting the research work, since the time set to carry-out this
research work is not enough for the researcher to combine his writings
due to his academic endeavor; the researcher could not handle all issues
of the study thoroughly. Research of this nature required a reasonable
long period of time for the in-depth findings, but only a few months are
allowed for the completion of the study.
Furthermore, the research study has been
constrained by gross financial handicap, since there is no enough fund
for the researcher to carryout thorough research on the project. Some
information were not relied on due to non-availability of materials on
this topic, the researcher has to make use of the little data given by
the management books and other sources.
1.9 DEFINITION OF KEY TERMS
PROMOTION MIX: Promotion
mix as marketing communication mix which consists of the specific blend
of advertising, sales promotion, public relations, personal selling and
direct-marketing tools that the company uses to persuasively
communicate customer value and build customer relationships.
SALES PROMOTION: Sales
promotion as any incentive used by a manufacturer to induce the trade
(wholesalers, retailers, or other channel members) or consumers to buy a
brand and to encourage the sales force to aggressively sell it.
PRODUCT: Product as
anything that can be offered to a market for attention, acquisition, use
or consumption that might satisfy a want or need.
MARKETING: Marketing is
the process by which companies create value for customers and build
strong customer relationships in order to capture value from customers
in return.
PROMOTION: Promotion as
communicating information between the seller and potential buyer or
others in the channel to influence attitudes and behaviour.
MARKETING STRATEGY: Marketing strategy as a target market and a related marketing mix. “it is a big picture of what a firm will do in some market”.
MARKETING MIX: Marketing mix as the controllable the company puts together to satisfy this target group.
SERVICE: Service is an intangible product that cannot be seen, tasted, felt, heard, or smelled before they are bought.
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