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).

IMPACT OF SALES PROMOTION IN A MANUFACTURING INDUSTRY

IMPACT OF SALES PROMOTION IN A MANUFACTURING INDUSTRY

(A CASE STUDY OF THE NIGERIA BOTTLING COMPANY ABUJA)

ABSTRACT

This research work is on the impact of sales promotion in a manufacturing industry  (a case study of the Nigeria Bottling Company Abuja). It is aimed to provide the opportunity of determining the impact of sales promotion on sales volume in the affairs of Nigeria bottling company. Advertising and sales promotion are very important tools that the Nigeria manufacturing  industry can not do without because it is bedrock on which the industry operates. Advertising and sales promotion help to maintain market share, and build up preference within consumers thereby boosting consumers loyalty and patronage. It also helps firm to wax stronger in global competitive environment.  Advertising and sales promotion as a concept can be defined as the activities used by marketer to communicate to consumers in order to influence and induce them to buy.

CHAPTER ONE

1. Introduction                                                                        

Advertising and sales promotion are very important tools that the Nigeria beer industry cannot do without because it is the source of their existence and bedrock on which the industry operates. In a competitive marketing environment on which the industry operates, it is necessary to constantly tell the consumer on how one brand is different and b0etter than others. In a nutshell over the years a huge sum of money is allocated to advertising and sales promotion to enhance to volume of sales in the industry (Odunlami & Ogunsiji, 2011).

1. Background of the Study     

 Sales promotion has become an effective marketing tool that assists organizations to wax stronger in a global competitive environment. Oyedapo et al, (2012) identified sales promotion as a key ingredient in marketing campaigns which assist organization to achieve its objectives. The main aim of any organization is to maximize profit, have largest market shares and to become leader in a market competitive environment. Okoli (2011) confirmed that the essence of setting up a business organization is to make profit. Sales promotion simply exists to have a direct impact on the behavior of the firm’s customers (Blattberg and Neslin 1990). Aworemi (2008) in his research finding said that sales promotion plays a significant effect on sales volume which help in achieving the organizational objectives.

 The role of sales promotion in achieving organizational stated objectives cannot be underestimated. The purpose of sales promotion is to motivate the customers to immediately purchase a particular product thus enhancing its sales volume (Sadia & Syeda, 2012). According to Shimp (2003), sales promotion refers to any incentive used by a manufacturer to induce the trade (wholesalers, retailers, or other channel members) and/or consumers to buy a brand and to encourage the sales force to aggressively sell it. kotler (2003) sees Sales Promotion a key ingredient in marketing campaigns and consists of a diverse collection of incentive tools, mostly short term designed to stimulate quicker or greater purchase particular products or services by consumers. Sales promotions programmes are those activities other than stimulate consumer purchase. Sales promotion is an important component of an organizations overall marketing strategy along with advertising, public relations, and personal selling. Sale promotion acts as a competitive weapon by providing an extra incentive for the target audience to purchase or support one brand over another (Odunlami and Ogunsiji, 2011) It is on this premises that this research work wishes to examine the effect of sales promotion dimensions on sales volume with special reference to the selected manufacturing industry in Ibadan, south western, Nigeria.

1. Statement of the Problem     

Advertising and sales promotion is a business process that has economic and political problem, it also has social implication which tend, to limit the effect on sales volume of the company. The problems faced by the company through advertising and sales promotion cannot once be attributed to the company’s operation alone but also the government, customer and the general public, based on their behaviours towards the products been offered by the company.

Firstly the consumer create a lot of problems to the sales volume of the company, hence there is need to continue to research on customers behavior so as to have a measurable and realistic result. Because the most important aim is to maximize profit.

Also competitive is another problem that the company has to content with, because of the free entry into the market of drinks, many competitors have entered the market, but there is a call for setting up of strategies in order to increase sales and performance and this can be achieved through the use of promotional mix which is believe to be the blood of the business. Day to day business failure also limit the advertising and sale promotion result, so business failure has to be analyzed. However, failure resist examination because we tend to pre-occupied with success. The mix or marketing variable, the product, prices, package, the public relation and the distribution determine the sale of a product. No element in the mix taken can be unique determinant of sales but advertising and sales promotion, it go a long way to increase sales.

1. Aims and Objectives of the Study

The aim of this project is to examine the impact of sales promotion on manufacturing industry.

To achieve the above aim, the researcher pursues the following specific objectives:

• To examine the effect of advertising and sales promotion on the sales volume.
• To ascertain the role of marketing tools (advertising, publicity, sales promotion, personal selling) on organizational performance.
• To determine the extent to which sales promotion affect the sales revenue of manufacturing companies in Nigeria.
• To examine the problems associated with sales promotion in an organization.

1. Research Questions

The following research question are set to guide the researcher in the course of this research:

1. What are the effects of advertising and sales promotion on the sales volume?
2. What are the roles of marketing tools (advertising, publicity, sales promotion, personal selling) on organizational performance.
3. To what extent have sales promotion affect the sales volume and revenue of manufacturing companies in Nigeria.
4. What are the problems associated with sales promotion in an organization?

1. Statement of Hypothesis

The hypotheses to be tested by the study; is as follows:

H0: Sales promotion has no significant impact on the sales volume of manufacturing industry.

H1: Sales promotion has significant impact on the sales volume of manufacturing industry.

1. Significance of the study  

The study expects to yield a number of desirable benefits, the most essential of which is contribution to existing knowledge. Specifically, the findings of the study would provide direction as to the impact of sales promotion on the sale volume of manufacturing companies, especially those in the food and beverages sector. Thus, the study is expected to contribute to the not-so-well-developed body of knowledge regarding the association between advertising expenditures and the sales and profitability of manufacturing companies in Nigeria by empirically ascertaining the effect of such costs on the sales revenue and the net profit of selected food and beverages firms.

The importance of the findings of the study to the managers of manufacturing firms in Nigeria, especially those in the Nigeria Bottling Company Abuja could not be quantified in that it would provide evidence with respect to the justification of manager’s increased resource commitment to advertising in Nigeria over the years. The findings would equip managers with better insights on how to juxtapose the benefits of increase in advertising expenditure vis-à-vis sales revenue and net profit.

The outcome of the study might also be of benefit to government and its agencies in the process of making decisions. For instance, the findings of the study could guide the Advertising Council of Nigeria to understand the burden that advertising / sales promotion might constitute to the long-run growth and survival of firms in Nigeria, its benefit notwithstanding.

1. Scope of the study                                                          

This study is concerned with the impact of sales promotion on the sale volume of manufacturing industry in Nigeria. The study restricted to the food and beverages firms in Nigeria with a particular interest in Nigeria Bottling Company Abuja.

1. Limitations of the Study

In the course of carrying out this research work, there are various limitation encounter, some of them are listed below:

1. Inadequate Information: It is not every information needed that were given by the respondents. The companies do not give some vital information to the researcher which are more important to the research project. Hence the project lack detail information on the activities of Nigeria Breweries Plc.  
2. Time: Time serves as a constraint to this research work because the time frame is very short and the researcher have to combine normal academic work with the research.
3. Inadequate fund: Inadequate fund is another constraint to this research work because of the economic hardship and cannot make this research work to be effective.

1. Definition Of Terms    

The following terms were in view of their technical meanings:

Sales Promotion: Sales promotion covers those sales activities that supplement personal selling and advertising co-ordinate them, and help to make them more effective. It also include the content between the company and its contact between the company and consumer of it product for the purpose of maintaining consumer satisfaction.

Marketing Mix: According to Kotler P. (2003) marketing mix is the combination of the controllable marketing element, including product, price, promotion and place that a firm used to get the desired level of sales in the target market.

Outdoor Advertising: These are mainly poster and triangle advertising but includes illuminated.

Personal Selling: This is the process of making oral commercial presentation during buyer, seller inter-view as face to face in the buses.

Point Of Purchase: This usually referred to as retail sales outlet, that is the place which sales is made together with publicity material used there.

Seller Market: This indicate excess demand over supply, there by creating market in balance and marketing shows effort less obligatory on the part supplier.

Advertising: It is any paid message presented through various media, such as television, radio, magazine, newspapers or billboards by an identified source.

Brand equity: It is the marketing effects and outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have brand name.

Brand loyalty: It is referred to the strength of buyers preference for particular goods or services usually resulting in repeat purchases.

Expenses: Expenses are the costs of resources used up or consumed by the activities of the business.

Strategy: It means marketing actions by management to off-set actual or potential actions of competitors

Profitability: It is defined as either accounting profits or economic profits. Accounting profits mean net income, while economic profits mean net worth.