Full Project – EFFECT OF SALES PROMOTION ON BRAND LOYALTY FOR COCA-COLA SOFT DRINK

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CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

The Nigerian coco-cola bottling company first came to Nigeria in 1953 and established its first bottling plant in Lagos. This was to be the beginning of growth and development in 1956, two other plants were established in Kano and Jos respectively. The opening of the Ibadan plant followed in 1961, the next as that of Benin in 1970. Sources: Wikipedia com/Nigeria body company http/Google /2F%/cocoa-cola.

The Enugu plant at 9the Mile corner Ngwo was established in 1975, in all, there are about 21 coca-cola bottling plants in several parts of the country. In some states where coca-cola bottling plants are non existents, large depots are always maintained to serve the growing demand for the brand by consumers in those areas.

The Nigerian coca-cola company are sole makers of several brands of self soft drinks in Nigeria. The brands include: Coca-cola, fanta orange, fanta tonic water, fanta ginger Ale, fanta Chapman, Fanta lemon, Fanta Soda water, spirits and Krest bitter lemon.

Coca-cola brought with it the development of number of allied establishments all contributing to the growth of the nation. Some of the establishment are the Delta Glass company at Ugheli, Delta state supplies the Nigeria coca-cola company with the millions of bottles they used, the crown products factory at Ijebu-Ode, Ogun and Kano respectively, which manufacture the plastic company which make the creates for carrying the product.

The coca-cola bottling company as the leads in soft drink production in Nigeria employs more than 60,000 Nigerians in all fields of its operation. The company has immensely helped in the development of sport and sporting activities mainly through sponsorships.

Sales promotion is that something extra that can arouse interest, create a buying desire spark an immediate reaction from customers, middle men or company’s sales force. It is the name that is applied to special kinds of sales accelerating activities not necessarily classed as a    personal selling effort. It consists of short term incentives designed to stimulate buying action. Sales promotional activities are directed to consumers, middlemen or the firm’s own sales force.

Sales promotional incentives are usually of short term operation and the aims is to move sales of a particular brand above the existing level. Sales would increase if more customers are attracted to the shop, if non-brand users are attracted and if brand users are encouraged to buy more , customer promotions essentially attract the more price conscious or premium conscious buyers. The impact varies with the types of promotion the size of the incentives the case of getting the offer and the amount of awareness created for the offer. It is generally considered that the sales promotional activities are designed to break down brand loyalty while advertising is designed to build up brand loyalty. This because sales promotion has an element of immediately, the benefits are immediate, but it also does not buld any long term consumer franchise in contrast to advertising. They attract mainly the deal prone consumer who are always willing to switch brands as incentives become available. Sales promotional device are usually the only promotional material available at the points of purchase. This contributes to its impact in stimulating the prospect. The prospects are often in a buying frame of mind or they would not be there at the point of sale.

A brand is a name, logo, slogan and design scheme associate with a particular product or service. Brand recognition and other reactions are created by the use of product or services and through the influence of advertising design, and media commentary. A brand is a symbolic embodiment of all the information connected to the product and serves to create association and expectation around it. A brand often includes a logo, fonts, color scheme, symbols and sound which may be developed to represent implicit values, ideas, and even personality.

Brand loyalty has been proclaimed by some to be ultimate goal of marketing. In marketing brand loyalty consist of a consumer commitment to repurchase the brand and can be demonstrated by repeated buying of a product or services or other positive behaviors such as word of mouth advocacy. True brand loyalty implies that the consumer is wiling at least on occasion, to put aside their own desires in the interest of the brand. Brand loyalty is more than simple repurchasing, however, customers may repurchase a brand due to situational constraints, a lack of viable alternatives or out of convenience.

Brand seek to develop or align the expectations behind the brand experience, creating the impression that a brand associated with a product or service has certain qualities that make it special or unique. A brand image may be developed by attributing a personality to or associated on image with a product or services, whereby the personality or image is branded into the consciousness of consumers. A brand is therefore, one of the most valuable elements in an advertising coca-cola soft drinks.

A brand which is widely known in the market place acquires brand recognition. When brand recognition builds up a point where a brand enjoys a critical mass of positive sentiment in the market places, it is said to have achieved brand franchise. One goal in brand recognition is the identification of a brand without the name of the company present.

For example, coca-cola soft drinks has been successful at branding with their particular script font, originally created for coca-cola bottling company in Nigeria Logo, which it used in the logo for go .com

Brand energy is a concept that links together the ideas that the brand is experimental, that it is not just about the experiences of customer/ potential customers but all stakeholders and that business are essentially more about creating value through creating meaningful experience than generating profits. Economic value comes from business transaction between suppliers or other stakeholders. For such value to be created people first have to have positive associations with the business and or its products and services and be energized to behave positively towards them-hence brand energy. It has been defined as “the energy that flows throughout the system that links business and all their stakeholders think, feel and behave towards the business and its products or services. (Kotler and Keller 2005).

Customers who are repeat and enthusiastic purchasers of a particular brand are likely to become brand loyal. Cultivating brand loyalty among customers is the ultimate reward for successful marketers since these customers are far less likely to be enticed to witch to other brands compared to non-loyal customers. Well development and prompted brands make product positioning efforts more effective. The result is that upon exposure to a brand e.g hearing it seeing it customers conjure up mental images or feelings of the benefits they receive from using that brand. Firms that establish a successful brand can extend the brand by editing new products under the same family brand. Such branding may allow companies to introduce new products more easily since the brand is already recognized within the market.

OPPORTUNITIES FOR SALES PROMOTION

The technologies described above can be expected to affect retailer promotion in several ways, the most important ones of which are related to:

–      Better control

–      Targeting consumers outside the state.

–      Targeting customers in the store

–      Cross selling

Better control: A first effect of the new technologies is increased flexibility with respect to price changes. In particular, electronic shelf labels and electronic displays allow the retailer to adjust prices very quickly. Thus, it becomes possible to run promotion for very short time spans.

Also, promotion is n traditional retail environment often run into problems without of stocks. Since it is hard to forecast sales bumps caused by a promoted product in the shelf or display and thus not be able to satisfy  consumers demand. Technology may help discover out-of-stocks very quickly, so that extra products can be moved to the point of sale.

Targeting consumers outside the store discrimination. Typically the price discrimination works through self selection of the consumers. The promotion is offered to all customers, who the decide whether to use it or not. However, promotion can be an even stronger mechanism for price discrimination if retailers do not offer them to all customers, but target certain consumers.

This type of targeting can be an effective way of encouraging profitability store switching purchase acceleration, category switching, and brand switching. Targeting promotion can be easily used on the internet, where customers, specific information is available. Loyalty programs such as payback can also provide an important database for targeting promotions. Customers can be selected on the basis of demographics and past purchase behavior and addressed individually through direct mail. Targeting can also occur at the category level. Loyalty card data can b used to find out which product or brand category a household does not yet buy in a given retail chain, but might buy there if offered a promotion. Retailers may consider using customers lifeline value for targeting certain customers with promotion. As in the case of coupon, proneness, it is important to note that retailers should not necessarily target the customers with the highest customer lifeline value. Rather, they should try to identify those consumers for whom promotion will lead to an increase in customers lifetime value. Targeting consumers outside the store offers potential for more effective price discrimination. However, more research is needed on which consumers to target. Whether retailers use of targeted promotion will increase in the future will depend on whether attractive target groups can be identified and whether targeting will lead to a high or low price in coca-cola soft drinks.

TARGETING CONSUMERS IN THE STORE.

Thus far, targeted promotions have mostly been used on the internet and via direct mailing, but new technologies also offer the opportunity to target consumers at the point of sale in bricks and mortar stores. Customized information on promotion can be presented to the consumer by beaming it on the floor or by displaying it on the PSA or on electronic advertising displays.

Cross selling may be induced by promotions directly at the point of ale. If individual products have RFID tags, in store promotion may be based on the products a consumer has already put into his/her shopping cart.

1.2 STATEMENT OF THE PROBLEM.

A company may have good innovations well equipped plant and office facilities strategically located and good promotion activities but if it has no place for effective sales promotion on brand loyalty which will bring about customers satisfaction, then the whole effort used in putting the other factors in places has been wasted. Some of these areas, the study will look unto for improvement of this study are.

1.   The need to improve the product quality offered to the customers.

2.   Effect of production and supply crises.

3.   Low sales of coca-cola soft drinks.

4.   Lack of interest in the customers satisfaction.

1.3 OBJECTIVES OF THE STUDY

The purpose of this project work includes the following:

1.    To identify the extent to which sales promotion by various soft drinks companies has achieved to desired consumer exposure to various brands for coca-cola soft drinks.

2.    To investigate consumer brand switching behavioral in terms of exposure sales promotional campaigns.

3.    To determine the relationship between sales promotions effect and consumer patronage of the various brands.

4.    To determine whether sales recorded on various brands of coca-cola soft drinks justifies investment in its sales promotion by the various companies.

1.4 RESEARCH QUESTIONS/HYPOTHESIS

To guide this project work, four research questions were formulated to ensure charity.

1.   To what extent has sales promotion achieved to desire consumer exposure to various brands.

2.   To what extent has sales promotion investigated consumer brands switching behavioral in terms  of campaign.

3.   To what extent has sales promotion affected the relationship and patronage of the various brands.

4.   To what extent has sales promotions affected sales recorded in various brand that justified investment by the various companies.

1.4 FORMULATION OF HYPOTHESIS

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Full Project – EFFECT OF SALES PROMOTION ON BRAND LOYALTY FOR COCA-COLA SOFT DRINK