THE MANAGEMENT OF SALES PROMOTION AS A TOOL IN BUSINESS ORGANIZATIONS

THE MANAGEMENT OF SALES PROMOTION AS A TOOL IN BUSINESS ORGANIZATIONS

(A case study of Coca Cola Plc. Abuja)

ABSTRACT

This research has the objective of providing and heightening into the management of sales promotion as a tool in a business organization (a case study of Coca Cola Abuja.). As a matter of fact, the goal is to provide suitable answers to questions which management often asks “why sales promotion”. This study is of paramount because of the unique tools of sales promotion in a business organization to perform better. Finally the study is to identify some of the basic problems which are likely to be associated with sales promotion. Chapter one of this study express introduction into the stud, the historical background of the exercise, its significance and objective of the study. Chapter two comprises of the various conceptual definitions of sales promotion, their types and forms and the legal framework backing the exercise. Chapter three reveals the research methodology being adopted. This includes sources of data, research instrument, sampling size and distribution. Chapter four express the analysis and presentation of data which comprises of all data being collected from the various sources, also the interpretation of data collected were given. Chapter five which is the final chapter looks into the summary of the finding with conclusion and recommendation.

CHAPTER ONE: INTRODUCTION

1.0     BACKGROUND OF THE STUDY

Sales promotion has been recorded in the scripture. Apple was given to Eve and to Adam. Since they have various types of promotion arising due to the industrial revolution, which led to expansion of manufacturing more and this altered the relationship between marketers and user goods. Sales promotion therefore became important. The term “promotion” derives its name from the Latin word called promovere which means “To move forward”. The importance and purpose of promotion is to change the location and shape of a demand curve. That is the revenue of the product and moves it from the market to the demand goal.

The Nigerian Bottling Company has for some time been engaged in series of sales promotion i.e. the Coca Cola Company. Other marketing organization has used sales promotion to advance the sales of their products. The product includes Lex, Omo, Star Lager Beer, The Seven-up, Pears Baby, Contest, Close-up, Tooth paste, etc.

Coca Cola soft drink is manufactured by the Nigerian Bottling Company an affiliate of Coca Cola International with head-quarters in the United State of America. It is a multinational Corporation. It believes a lot in corporate identity program. Sales promotion is only a promotional tool involved, but personal selling, sales promotion, publicity and advertising.  Then promotion entails persuasive communication. Communication is controlled in any sales promotions techniques. Consumer must understand (decode) the product message, and offers being made (encode).

This research will enhance its study on the 2002 Tunisia nations’ cup which was sponsored by Nokia and Coca Cola etc. sales promotion can be for either industrial product or consumer product. Coke is a mass market consumer product; therefore, four basic consumer promotion techniques are as follows:

• Contest of games
• Addition or other product at or no reduced cost
• Price reductions and cash refunds
• Other items gifts premium service at no or reduced cost

The type of techniques to be used depends on a large extend on the types of products, the geographical spread of the market or its diversity. The budget Pr. Money available to the organization for the promotion etc. these decisions are often taken at the most senior marketing level.  But in the case of Coca Cola decision pertaining to the company of the company through its cycle rests on the agency and sales force of the company.

Sales promotion is fast becoming a tool function for most organization. More so, when advertising agencies act as sales agents, they are specializing in the skill.

The historical development of Coca Cola came into existence in the 1930’s when Mr. A.G Levintis after a long career in Nigeria and then the Gold Coast present Ghana, decided to set up his own company, A.G Levintis and Company Limited. His brother Mr. C.P Levintis established the business in Nigeria in 1943. Since this company carried on this trading activities which later developed into Levintis Motors Limited, the company went public in 1970 and 60% of its shares are now in Nigerian hands. In most recent years, Nigerian Bottling Company Plc was one of the companies that make up the Levintis group Nigerian Plc. It was incorporated in 1951. This company is the largest producer of soft drinks in Africa.

The public quoted company in the Nigerian stock exchange and 8% of its shares are owned by some 96,000 Nigerians shareholders. The bottling company created employment opportunities for the youth. Over 8,000 youths are employed and operate sixteen (16) soft drinks bottling factories or plant at Apapa, Ikeja, Kano, Owerri, Onitsha, Ibadan, Abuja, Ase, Jiro, Enugu, Benin city, Jos, Ilorin, Kaduna, Benue, Port Harcourt, and Maiduguri, and an affiliated company at Sokoto Bottling Company.  The company has many brands of products like coke, Fanta, sprite, krest, Fanta lemon, black currant, Fanta tonic, Fanta ginger and pineapple drinks under franchise by the Coca Cola International Company.

The company also has canning plant at Otta near Lagos State, Which produces can drinks and Eva water. Based on this, the company also produces a range of squashed and cordials on the brand name of “Hit time” at the premises of an affiliate company at Abeokuta Iblaize Industry Company Limited. The Nigerian Bottling Company Plc has set up or promoted establishments, factories in Nigeria to manufacture most of all the requirements of bottling industry including bottles, crown corks, carbon dioxide and plastic cases.

It has now introduced or engaged in a plan to set up two Agricultural training Institutes designed to give practical training to young farmers in up-to date method and technology appropriated to small and medium size farm in different climate zones. The Coca Cola Company carries out lottery games every year to increase the company’s sales and promote the image of the organization and they are also proud sponsors of many sporting activities in Nigeria.

1.1     STATEMENT OF THE PROBLEM

In this research work, I want to find out whether sales promotion increase sales value or not, Individual element of marketing mix are faced with more pronounced, in the Coca Cola Company. These problems are operational, structural and governmental. Some of these problems are:

1. Gross shortage of sales promotion tool.
2. Most products fail and eventually are forced out of the market as a result of inadequate or lack of sales promotion.
3. Majority of consumer need adequate and powerful sales promotion for the patronage.
   1.      OBJECTIVES OF THE STUDY

The objective of this study is to find out whether or not the Coca Cola Company has been able to make any impact on their customers and consumer and the general public here in Abuja as a result of its sales promotion efforts. What these products are and how much effort can be made or intensified for more yielding results. Another objective of this study is to know whether the execution of the sales promotion campaign can reveal the effectiveness or other wise of the sales force.

This project is also undertaken to throw more light on sales promotion so that students of advertising can gain insight into the mechanics of consumer’s promotion of more marketed and consumed products. Other research can also benefit the study because of the exposition of the techniques and management promotional mix for the promotion campaign. Business must endeavor to plan and co-ordinate their sales promotion operations and tend it into the various marketing policies especially in an environment as used presently in the case study.

The work is also meant to contribute to the study body of knowledge already existing in the field of promotion.

1.3     RESEARCH QUESTIONS

The aim of this is to provide answer to the following research questions asked below:

1. How effective is sales promotion in Coca Cola?
2. How important is sales promotion in Coca Cola?
3. What are the problems facing sales promotion in Coca Cola?

1.4    STATEMENT OF THE HYPOTHESIS

The working hypothesis for this research work is as follows; hypothesis is a conjectural statement of relationship between one or more variables. The hypothesis of this project is stated in null and alternative form.

HO: Sales promotion is not a tool in enhancing business organizations activities.

HI: Sales promotion enhances business organization activities.

1.5    SIGNIFICANCE OF THE STUDY

After going through the work, I discovered that the work will useful to management of Coca Cola Company and other organizational management that wants to undertake effective sales promotion. Student of marketing and business administrationwill benefit from this product. The government official authorities concerned in the formulation of government policies besides it stands to provide for reference in the future, for student will or intend writing on the same or similar topic. Moreover, this time am doing my National Diploma (ND) in Marketing.

1.6     SCOPE OF THE STUDY

This study would have cut across a wide range of organization, but it has been restricted to Coca Cola Company Plc. Abuja. This is the one covered by the research study.

1. LIMITATIONS OF THE STUDY

Apart from the general financial limitation which every researcher has to contend with, the main problem encountered during the course of this research work was to be ignored and deserves to receive primary data relating to the marketing policy and strategies of the Coca Cola Company in general. During any interview discussion with staff of the Coca Cola in Abuja, it was not quite easy or possible to gain access to certain information which has shed more light on the subject. These are issues concerning budget and laid down policies regarding sales promotion operation of the firm.

Such information is guided jealously by the company executives and would amount to letting competitors know some of their secrets. The company might find it difficult to release some information. The access to the company premises was difficult as one goes through series of questioning from the security.

1. OPERATIONAL DEFINITON OF TERMS

Although many work which will be used in the content of this research, they are not precise definition. I feel it is good for the reader to know my own view regarding the definition of such terms and concept which are likely to appear frequently.

1. MARKETING: According to Philip Kotler “Marketing can be defined as consumer satisfaction”, that is all marketing activities should be directed towards consumers satisfaction. Reference William J. Stanton.

2.  MARKETING MIX: This is the combination of activities involving products, price, promotion and place that a firm undertakes in other to provide satisfaction to consumer in a given market. Philip Kotler in the book titled International Marketing.

3. PRODUCT: Can be defined as any commodity that has a monetary or commercial value. However, Philip Kotler in his book International Marketing defined product as anything that can satisfy the needs and want of the consumer.

4. ADVERTISING: any paid form of non-personal presentation of products, services and ideas by an identified sponsor (reference; Marketing Management International Edition by Marvin A. Johnson).

5. PROMOTIONAL MIX: The promotional mix can be defined as the most strategic combination of advertising personal selling, sales promotion that can be devised to reach the goals of the sales program. (Reference, International Marketing by Philip Kotler).

6. PROMOTION: Encompasses all the tools in the marketing mix whose major role is persuasive communication.

7. PUBLIC RELATION: A promotional activity aimed to communicate favorable product or its marketer and to promote good will. (American Marketing Association. Glossy Marketing Term, 1960 P394).

8. PUBLICITY: Non-personal stimulation of demand to a product, service or business unit by planting commercial significance, new about it in a published medium or obtaining favorable presentation of it upon radio, television on stage that is not paid by sponsor.

9. SALES PROMOTION: Is a non-personal incentive of motivation aimed at demand creation. It is therefore solely with the objective of persuasive prospective customers. (Marketing Management International.Edition by Marvin A. Johnson).

10. MARKETING CONCEPT: The management philosophy that consists of the consumer should be the focus point of all activities in an organization (customer’s satisfaction by Philip Kotler).