IMPACT OF SALES PROMOTION IN A MANUFACTURING INDUSTRY

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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.

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