THE ROLES OF SALES PROMOTION IN THE MARKETING OF ORGANIZATIONAL GOODS AND SERVICES

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 tastefor 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 20^th countries. Kraft foods acquired Cadbury Plc on February 2^nd 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 26^th 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;

1. To determine how financial constraint affects the organizational productivity.
2. To examine the clutter of the market due to new approaches promptly cloned by the competitors.
3. To analyze customers perception on the basis of the organizational products.
4. To also determine the inadequate information about the organizational new brands or products.
5. To examine and assess the poor timing of the organizational activities.

1.4 RESEARCH QUESTIONS

The following are some relevant research questions asked by a researcher:

1. What achievement does financial constraint hindered in your organization by using sales promotional tools?
2. How effective performance the organization is, by using sales promotion in a clutter market?
3. What does your organization do when it discovered the negative perception of customers?
4. How would you rate the outcome of effective information disseminated about sales promotion in your company?
5. How often does your organization embark on sales promotion?

1.5 STATEMENT OF HYPOTHESES

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.

H_i: Financial constraint is significant to the organizational sales promotion.

 H₀: Sales promotion does not perform effectively and efficiently in the marketing of organizational products.

H_i: 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.

H_i: 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.

H_i: 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.

H_i: 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.

REQUEST FOR PROJECT MATERIAL

For the complete research material visit our CHECKOUT PAGE or fill the request form below:

Thanks for your interest in the research topic we will reach out to you as soon as possible.