SALES PROMOTION ON BRAND PERFORMANCES IN THE MANUFACTURING SECTOR- A STUDY OF SELECTED BRANDS OF SOFT DRINK IN LAGOS

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CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Promotional elements are used by various organizations to influence consumer decision. Marketers use numerous tools to elicit responses from target markets. These tools are known as the marketing mix that is defined as the set of tools that a firm uses to pursue its marketing objectives in the target market. Promotion is one of the elements of marketing among other elements like Product, Price, and Place of marketing (Kotler, 2000).

Keller (2003) expressed that familiarity with brand plays an important role in the consumers’ decision for purchasing and comes with the advantage of learning, attention and selection. According to Macdonald and Sharp (2003) awareness of brand is one of the major parts in the well-known techniques for advertisement influence hierarchy and one significant objective of communicative activities of marketing managers in such a way that they use this concept as an instrument to measure the effectiveness of marketing and advertising activities (Burmann et al., 2009). When a customer knows a large number of brands, which accord with his/her criteria, it seems unlikely that he/she strives to determine information about other unfamiliar brands and one of its important functions is increasing the perceived quality of the product or services by the consumer.

Aker believed that brand awareness was closely associated with brand association. He defined brand association as a relationship in the memory with a brand. In his idea brand association may influence on brand equity in five ways: 1) helping information processing, 2) placement distinction, 3) a reason for purchasing a brand, 4) creating motivation and positive feeling and 5) development (Aaker, 1991).

According to kotler (2003), Sales Promotion is 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.

American Marketing Association (2011) defined sales promotion as those marketing activities, other than personal selling, advertising and publicity that stimulate consumer purchasing and dealer effectiveness, such as displays, shows and expositions, demonstration etc. Sales promotion has been defined as a direct inducement that offers an extra value or incentive for the product to the sales force, distributors or the ultimate consumer with the primary objective of creating an immediate sale (George, 1998).

Consumer decision focuses on how consumers choose what to buy, why to buy, when 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 purchases, and how they dispose it off” (Schiffman and Kanuk, 2004). There are various factors such as social and economic factors which influence the consumer decision but culture is the “fundamental determinant” of consumer decision (Kotler, 2003).

Oyedapo (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 brand objectives. The role of sales promotion in achieving brand 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 (Aderemi, 2003).

Most marketers believe that a given product or service has an established perceived price or value, and they use sales promotion to change this price value relationship by increasing the value and/or lowering the price compared with other components of the marketing mix (advertising, publicity, personal selling).

More so, sales promotion tends to work best when it is applied to impulse items whose features can be judged at the point of purchase, rather than more complex, expensive items that might require hands on demonstration. Sales promotion includes communication activities that provide extra value or incentives to ultimate consumers, wholesalers, retailers or other brand customers. It also stimulate sales, product trial (Kotler and Kelvin, 2006).

1.2  Statement of the Problems

Most promotional organizations use price as a tool for sales, this may apply only if the target population are aware of the existence of these products. Others use quality products and the accessibility of these products will directly reflect in the consumer decision. A delay in sales promotion might result in a delay in consumer decision to purchase the product of their choice. Other challenges encountered in sales promotion are stated below:

Temporary Incentive:  Sales promotion gives a short-term inducement of value offered to arouse interest in buying a good or service. It is offered to intermediaries as well as consumers inform of coupons, rebates samples and sweepstakes’.

Short-term again: Most sales promotions are oriented toward short-term gain rather than long-term reputation, which is a problem in and of itself as most standard organizations are geared toward the long-term health of a product. Foskett (1999) argues that sales promotions cannot be the sole basis for campaign because gains are often temporary and sales drop off when the deal ends so that advertisement is often used to convert the customer who tried the product because of sales promotion into a long-term buyer.

Psychological Effect: Kotler (1994) noted that if sales promotion is conducted continuously, they lose their effect. Customers begin to delay until a coupon is offered or they question the product’s value.

1.3 Aims and Objectives of the Study

The main purpose of this research is to examine sales promotion on brand performances in the manufacturing sector. The objectives include the following:

1. To evaluate the influence of price discount on brand performance.
2. To examine the effect of bonus packs on brand sales volume.
3. To examine the effect of jingles on consumer purchase decision.
4. To examine the perceived effect of low price on brand performance.

1.4    Relevant Research Questions

In assessing the purpose of the study, this research project will answer the following questions:

1. Will price discount have affect on brand performance?
2. How can sales bonus packs affect the brand sales volume?
3. Can jingle influence consumer purchase decision?
4. How will perceive low price has any effect on brand performance?

1.5   Relevant Research Hypotheses

In carrying out this research work the following theoretical statements are buttressed to serve as a direction on which the work will be premised:

1. H_o: There is no significant relationship between Bonus Pack and consumer decision.
2. H_o: There is no significant relationship between price discount and consumer decision.

 3.  H_o: There is no significant relationship between Jingles and consumer decision.

4.   H_o: There is no significant relationship between perceived low price and consumer decision.

1.6    Significance of the Study

It is hoped that the findings and recommendations of the study will be of great benefit through the following ways:

The study will broaden students understanding about the importance of sales promotion in any business environment and it effects on sales volume.

The study will be of great benefit to the public by bringing to their awareness about the existence of a product and its value in the society plus it effect on brand performance.

The study will also help sales manager to monitor the trend of the market and the consumption pattern in order to establish an interactive dialogue between an organization and its customers. It will also help the sales personnel to reposition their branding and marketing strategy in the society in order to attract and retain their target market.

1.7    Scope of the Study

This research work examines sales promotion on brand performances in the manufacturing sector with a view to understudy selected brands of soft drink in Lagos. The study as perceived might face some logistic challenges in term of the time and the costs involved in carrying out the research, but nevertheless, it would endeavor to accomplish its aims and objectives.

1.8    Definition of Terms

Brand: A brand is an overall experience of a customer that distinguishes an organization or product from its rivals in the eyes of the customer.

Consumer: A consumer is a person or group of people that are the final users of products and or services generated within a social system. A consumer may be a person or group, such as a household.

Decision: Decision can be regarded as the mental processes (cognitive process) resulting in the selection of a course of action among several alternative scenarios. Every decision making process produces a final choice.

 Environment: Environment (systems), the surroundings of a physical system that may interact with the system by exchanging mass, energy, or other properties.

Purchase: This refers to a business or organization attempting for acquiring goods or services to accomplish the goals of the enterprise.

Promotion: something devised to publicize or advertise a product, cause, institution, etc., as a brochure, free sample, poster, television or radio commercials, or personal appearance.

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