Full Project – The effect of sales promotion on purchasing decision of customers

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CHAPTER ONE

INTRODUCTION

1.1     Background of the Study

In the business world today, attracting new customer has become so important in modern retailing. Whereas, all businesses need to communicate to the consumer what they have to offer (Jobber &Lancaster, 2016). Firms are expected to communicate with their present and potential customers and make it an important aspect in the marketing process. Hence, marketers today search for more cost effective method to communicate with their target audience and are gradually shifting away from conventional above the line media advertising to a variety of below the line sales promotion (Yang, 2010). One of the reasons for switching from the traditional method of advertising is because of its difficulty to measure its effectiveness . Many methods are adopted for the achievement of getting in touch with customers and increase market shares. Sales promotion is one of them.

Promotion refers to as any communication used to inform, persuade and remind people about an organization or individual goods, service, image, ideas, community involvement or impact of society (Evans & Berman,2018). Silva-Risso & Hanssens, (2019) indicate that sales promotion have effect on the firms sales volume, purchasing decision of customer and revenue of firm. Sales promotion has become a valuable tool for marketers and the importance of it has been increasing rapidly over the past few years. Sales promotions are useful tools which act as demand booster that do not sustain the risk associated with the new products. Sales promotion is unique in that it offers an extra incentive for actions (Adrian, 2014).

In addition, purchasing decision refers to consumers deciding what to buy, why to buy, where to buy, and how often they buy, how frequently they use it, how they evaluate it after the purchase and the impact of such evaluations on future purchase and how they dispose it off. Sale promotion generally works on a direct behavioral basis rather than effecting awareness or attitude. Interestingly, some researchers (Peattie & Peattie, 2019) have shown that sales promotion is likely to repeat purchases if consumers are satisfied with the brand that is being promoted; it is more likely that they will also buy it later after promotion is over. Sales promotion simply exists to have a direct impact on the behavior of firms’ customers. Studies such as Sadia and Syeda (2018); Odunlami and Ogunsiji (2017) and Aderemi (2016) disclosed that the purpose of sales promotion is to motivate the customers to immediately purchase a particular product thus enhancing its sales volume.

In addition, sales promotion can be an effective tool in a highly competitive market environment, when the objective is to convince retailers to carry new product or influence consumers to select it over those of competitors.  Thus, the fundamental nature of this study is to examine the effect of sales promotion on purchase decision of customers.

1.2     Statement of the Research Problem

Sales Promotion also presents risk to the marketing strategy and the business as a whole. Most companies worldwide rely heavily on sales promotion as an important marketing tool. This over extensive reliance can lead to potential problems.

• Many sales promotions are not effective brand-building tools.
• The overuse of sales promotion activities have the potential of resulting in less positive attitudes toward the product.
• Even though many sales promotion programs result in a much larger volume of product sold, but profitability will be relatively low.
• Sales promotion programs often require substantial implementation costs.
• Sales promotions tend to orient marketing managers toward the short term.
  • Objectives of the Study        

1. To examine whether sales promotion influences customers purchase    decision.
2. To determine whether sales promotion enhance organization sales and profit.
3. To find out if there is significant relationship between sales promotion and Customers purchasing decision.

1.4     Research Hypotheses

Hypothesis is a tentative answer to the research problem. The parameter to be used in the research is represented as Ho and Hi.  The Ho shall be referred to as the null hypotheses while Hi is the alternative hypothesis.

The null hypothesis is the hypotheses under test or being challenged with regards to the alternate hypotheses.

The hypotheses of the study are as follows:

Hypothesis One

Ho:    Sales promotion does not influence customers purchase decision.

Hi:     Sales promotion influences customers purchase decision.

Hypothesis Two

Ho:    Sales promotion does not enhance organization sales and profit.

Hi:      Sales promotion enhances organization sales and profit.

Hypothesis Three

Ho:    There is no significant relationship between sales promotion and customers purchasing decision.

Hi: There is a significant relationship between sales promotion and customers purchasing decision.

1.5     Significance of the Study

In this area of marketing “concept” where the customers are recognized as Kings and queens in the palace of marketing, firms, activities must be aimed at retaining customers on a long term basis in order to make more profit and remain in business. This research work will help Production Company to know various type of sales promotion that can enhance their sales even the general public at large. This study will provide information on how to improve and maintain customer’s responses to sales promotion in Production Company

To the government, the study would provide greater insight into the relationship between sales promotion and performance of retail firms including Dangote companies. This may aid in formation of policies and regulation that can help improve profitability and market shares in the retail sector and by extension increase job creation.

This research will also be beneficial to others researchers who will want to do further work on the topic and would serve as a source of information to such researchers. It will be in particular be useful to Department of Business Administration and Management Studies where it would be kept for reference for other students of the department.

1.6     Scope of the Study

This study focus on the effect of sales promotion on purchasing decision of customers with particular reference to Dangote Cement Company, Obajana Kogi State.

1.6     Limitations and Constraints of the Study

In the process of carrying out the findings on this work, a lot of problems were encountered out of which are:

1. Time factor: There is no sufficient time to carry out this project work.
2. Inadequate Finance: This is constitute major constraint in the process of this write up because there was no enough find to carry out the project due to the increase in the cost of vehicle and reading material.
3. Inadequate Information: The inability to access the essential facts and information that would have been good material for this research work, due to marketing managers unwilling attitude to release all the needed data. The researcher was unable to arrive at all fact needed.
4. Respondent Attitude: This attitude of respondent is another challenge because the researcher will have to spend much time convincing the respondent on the need to provide an objective answer to the research hypothesis.
5. Inaccessibility to Vital Document: The top management of the organization find it difficult to give the vital document pertaining to the business enterprises about their product, price which is intended to boost the success of the work.

1.8     Definition of key Terms

Advertising: A communication that is paid for by an identified sponsorship with the objective of promoting ideals, goods or services. It is intended to persuade and sometimes to inform advertisement create awareness in the product and goals. Advertising create a desire to buy a product.

Consumer Product:  When companies identifies the need of it’s customer, these needs must be satisfied in an attempt to satisfy them the idea of new product come in therefore, every company must carry out new product development.

Consumer Purchase Decisions :  can be explained as the cerebration process that causes a consumer to recognize a need, evaluate all the options, and make the choice to buy a specific product and brand

Marketing: The activity of presenting, advertising and selling a company’s products in the best possible way.

Personal Selling: This is a person interaction between a buyer and a seller in which the seller’s purpose is to persuade the buyer of the merit of the products to convince the buyer of his or her need for it and to develop the buyer on the on-going customer’s relationship.

Productivity: The rate at which a worker, company or a country produces goods and the amount produced, compared with how much time, work and money is needed to produce them.

Public Relation: Influencing the public so that they regard an individual from charity etc. in a favourable light on comparison to their competition.

Response: In the reaction of feeling of the consumers towards an offer with interest. It also refers to feeling or interest for a company’s product which is measured by a customer’s share of purchase.

Sale Promotion: Is an activity designed to boost the sales of a product or service. It may include an advertising campaign, offering free gifts or trading stamps arranging demonstration or exhibition setting up competitions with attractive price reduction door to door selling etc.

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Full Project – The effect of sales promotion on purchasing decision of customers