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| Pages: 69
THE EFFECTS OF SALES PROMOTION ON CONSUMER BUYING DECISION
ABSTRACT
This study was carried out to examined the effects of sales promotion on consumer buying decision using coca-cola company Nigeria PLC as a case study. The study was specifically set to evaluated the success of sales promotion tools implemented on soft drink procedure, find out which of the sales promotion tools consumer react more favourable to consumer, and measure the effect of sales promotion on consumer buying decision. The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprise of customers and staff of the marketing department of the coca-cola company Nigeria PLC. In determining the sample size, the researcher conveniently selected 261 respondents and 259 were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables and mean scores. While the hypotheses were tested using Chi-square statistical tool. The result of the findings reveals that sales promotion tools that are implemented on soft drink procedure includes: coupons, price discount, sample, gifting, bonus pack, and Premium offers. The study also revealed that the sales of promotion tools consumer react more favourable to consumer is price discount. Therefore, it is recommended that it is essential for the company to pay more attention in increasing their sales promotional activities practice specifically should pay more attention to the activities and means of coupon, since the study results showed a weakness in this activities, in influencing the consumers purchasing decision toward these CBE products. To mention but a few.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Sales promotion is one to the promotional mix variable which forms the basic of all marketing and promotional activities. The ultimate objective of every business is to increase the sale of goods or services that it deals in (Kotler, 1998). Many of the purchase situations are so common and habitual that they involve very little cognitive activity of the consumers. In such situations, motivating the consumers to switch brands or purchase more items is very hard. One of the benefits of promotions is that they stimulate the consumers to compare different brands and evaluate the purchase possibilities in such cases (Wathieu & Murre, 2007).Sales promotion is one of the strategies to attract customers to buy more or try the product or service. Now a days people are conscious to look for the best one and that is why their fluctuating mind may switch on to new brands with a simple stimulus. In this case an extra incentive can be added to a product by different promotional activities (Kumar et al., 2007).
The rapid growth of sales promotion is due to the fact that product managers are faced with greater pressure to increase their current sales and sales promotion as viewer as an effective short-term sales tools. Again product manager faces more competition and competing brands are les differentiated increase, managers use sales promotion to differentiate their offer, more ever, sales promotion help to complement advertising efficiency which has been on decide as result of using cost media clutter and legal resents. It is used in combination with other promotional tools. In other words, it is viewed as paling a secondary role to the major tools of advertising and personal selling.
The term sales promotion is rather difficult for the presence of multiple relating techniques and tactics and that sales promotion is a tool to achieve company‟s marketing communication objectives and an essential element in planning marketing (Blattberg and Neslin, 1990). Sales promotion is one of the most important and bewildering promotional tools of modern marketing management. It is bewildering because of its typically tagged effects and also the difficulty of isolating its effect from other elements in the marketing mix. It could be referred to as a “catch all” for those short term marketing activities which act as an incentive to stimulate quick buyers action such as coupons, sweep take, context, premium, free samples, trading stamp (Bhandari, 2012). Consumer buying behavior however is the process by which the individual search for, selects, purchase, use and dispose of goods and services, in satisfaction of their needs and wants (Netemeyer et al., 2004). Melaet et al. (1997) argue that the consumers‟ behavior has a direct effect on the success of the firm and therefore must ensure that they create a marketing mix that satisfies consumers.
1.2 STATEMENT OF PROBLEM
Consumers go through a cycle of decision making processes before making a purchase decision which define their behavior in the consumption of the services they purchase from these companies. The consumer buying process is a complex matter as many internal and external factors impact on the buying decision of the consumer. The consumer makes a purchase decision by examining alternatives before making the purchase. Sometimes, the purchase may differ from the purchase decision reached earlier. There is always a post purchase evaluation by the consumers after purchasing and consumption of the service. The consumer determines whether he was satisfied or not with the services rendered. This actually will be an important information reference point to the consumer in determining their behaviour in the next purchase. Because services have experience properties, moods and emotions are critical factors that shape the behavioural process of consumers. The main concern of this study is to review the effect of a company sales promotions method on the sales of product in the market. Basically the main issue is to know the extent to which promotion efforts has led to increase in sales volume and profitability.
1.3 RESEARCH QUESTION
1) Which sales promotion tools are implemented on soft drink procedure?
2) Which of the sales promotion tools consumer react more favourable to consumer?
3) What effect does sales promotion has on consumer buying decision?
1.4 OBJECTIVE OF THE STUDY
The aim of the study of sales promotion effectiveness and the care of sales promotion demand, the study are:
1. To evaluate the success of sales promotion tools implemented on soft drink procedure
2. To find out which of the sales promotion tools consumer react more favourable to consumer
3. To measure the effect of sales promotion on consumer buying decision
1.5 RESEARCH HYPOTHESIS
For the purpose of this study the following hypothesis are hereby proposed.
Hypothesis I
Ho: Sales promotion programme does not enhance consumer buying decision
Hi: Sales promotion programme enhances consumer buying decision
HYPOTHESIS II
Ho: The price of the product does not determine consumer level of participation in sales promotion programme
Hi: The price of the product determine consumer level of participation in sales promotion programme
HYPOTHESIS III
Ho: Sales promotion has no positive effect on the profit level of the organization
Hi: Sales promotion has positive effect on the profit level of the organization
HYPOTHESIS IV
Ho: The timing of sales promotion has no effect on the level of sales
Hi: The timing of sales promotion has effect on the level of sales.
1.6 SIGNIFICANCE OF THE STUDY
This research work shall be beneficial to all organization in Nigeria and to the coca-cola company Nigeria PLC in particular it is desired that the finding of this study will help to throw more light on the need for or effect of sale promotional on consumer buying decision.
The purpose of the study is also to stimulate increase in the use of sales promotion as an effective instrument for influencing consumer buying decision event if they do not win the promotion.
It will also help the top management of the coca-cola company and their executive in acquiring good understanding of sales promotion instrument that will be of great important in achieving their marketing goals and also to increase its markets share without necessary investing million of naira on dales promotion and advertising.
This study shall forward help to serve the dual purpose highlighting where is having problem or not doing well.
1.7 SCOPE OF THE STUDY
This research study shall cover sales promotional tools and how those tools can be used to influence consumer buying decision various consumer sales promotional tools shall be looked into sample, coupon, price package naira off, premium, and contest e.t.c more over, the study will be confined to the case study which is coca-cola company Nigeria PLC.
In conducting this research study, information will be collected from the state in the marketing department of the coca-cola company Nigeria PLC and consumers that use the company product.
1.8 LIMITATION OF THE STUDY
In the course of writing this project work, the researcher encounter some problem which militates, one of which was the time constraint the time allocated to this work was taken over by the demand to meet other academic activities.
Another problem was the financial requirement of the research work couple with the limited financial serves as a limiting factors.
Furthermore top management of coca-coal company Nigeria PLC were not ready to part with confidential data they have on the research topic.
1.9 OPERATION DEFINITION OF TERMS
Consumer: one who buy and use goods or services to satisfy personal or household need or want. And also may be for the use of business, institution or industrial operation.
Consumer good: goods defined for use by ultimate customer or household in such form or way that they can be used without commercial processing
Sale promotion: may be described as a short term wide variety of promotional tools designed to stimulate stronger market respond se and ti usually accompanied with an incentive.
Promotional tools: these are in various techniques or strategies used to include customers purchasing and demand effectiveness.
Pull strategy: these are marketing advertising and also promotional activities aimed at trial purchase and repurchase by customer.
Push strategy: Marketing advertising and sales promotion activities aimed at getting product into the dealers.
Pipe line and increase sales by offering inducement of dealer, reetailt3r and sales promotion inducement might included introductory, price allowance, distribution allowance and advertising allowance stock the product and set up display.
Marketing: marketing is total system of business activities designed to plan, price , promote and distribution want satisfying product and services to potential customers.
Advertising: Is a non personal form of presentation of idea goods and services paid for by an identified sponsor.
Respondents: Person who gives out answers to a question in survey when liner by personal interviews questionnaire or telephone interview.
Substitutes: these are product that can be used in essence of the other because they serve the same purchase.
Production: Is anything which can b e ideal goods services event that can be offered to the market for attention acquisition for use or consumption
ABSTRACT
This study was carried out to examined the effects of sales promotion on consumer buying decision using coca-cola company Nigeria PLC as a case study. The study was specifically set to evaluated the success of sales promotion tools implemented on soft drink procedure, find out which of the sales promotion tools consumer react more favourable to consumer, and measure the effect of sales promotion on consumer buying decision. The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprise of customers and staff of the marketing department of the coca-cola company Nigeria PLC. In determining the sample size, the researcher conveniently selected 261 respondents and 259 were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables and mean scores. While the hypotheses were tested using Chi-square statistical tool. The result of the findings reveals that sales promotion tools that are implemented on soft drink procedure includes: coupons, price discount, sample, gifting, bonus pack, and Premium offers. The study also revealed that the sales of promotion tools consumer react more favourable to consumer is price discount. Therefore, it is recommended that it is essential for the company to pay more attention in increasing their sales promotional activities practice specifically should pay more attention to the activities and means of coupon, since the study results showed a weakness in this activities, in influencing the consumers purchasing decision toward these CBE products. To mention but a few.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Sales promotion is one to the promotional mix variable which forms the basic of all marketing and promotional activities. The ultimate objective of every business is to increase the sale of goods or services that it deals in (Kotler, 1998). Many of the purchase situations are so common and habitual that they involve very little cognitive activity of the consumers. In such situations, motivating the consumers to switch brands or purchase more items is very hard. One of the benefits of promotions is that they stimulate the consumers to compare different brands and evaluate the purchase possibilities in such cases (Wathieu & Murre, 2007).Sales promotion is one of the strategies to attract customers to buy more or try the product or service. Now a days people are conscious to look for the best one and that is why their fluctuating mind may switch on to new brands with a simple stimulus. In this case an extra incentive can be added to a product by different promotional activities (Kumar et al., 2007).
The rapid growth of sales promotion is due to the fact that product managers are faced with greater pressure to increase their current sales and sales promotion as viewer as an effective short-term sales tools. Again product manager faces more competition and competing brands are les differentiated increase, managers use sales promotion to differentiate their offer, more ever, sales promotion help to complement advertising efficiency which has been on decide as result of using cost media clutter and legal resents. It is used in combination with other promotional tools. In other words, it is viewed as paling a secondary role to the major tools of advertising and personal selling.
The term sales promotion is rather difficult for the presence of multiple relating techniques and tactics and that sales promotion is a tool to achieve company‟s marketing communication objectives and an essential element in planning marketing (Blattberg and Neslin, 1990). Sales promotion is one of the most important and bewildering promotional tools of modern marketing management. It is bewildering because of its typically tagged effects and also the difficulty of isolating its effect from other elements in the marketing mix. It could be referred to as a “catch all” for those short term marketing activities which act as an incentive to stimulate quick buyers action such as coupons, sweep take, context, premium, free samples, trading stamp (Bhandari, 2012). Consumer buying behavior however is the process by which the individual search for, selects, purchase, use and dispose of goods and services, in satisfaction of their needs and wants (Netemeyer et al., 2004). Melaet et al. (1997) argue that the consumers‟ behavior has a direct effect on the success of the firm and therefore must ensure that they create a marketing mix that satisfies consumers.
1.2 STATEMENT OF PROBLEM
Consumers go through a cycle of decision making processes before making a purchase decision which define their behavior in the consumption of the services they purchase from these companies. The consumer buying process is a complex matter as many internal and external factors impact on the buying decision of the consumer. The consumer makes a purchase decision by examining alternatives before making the purchase. Sometimes, the purchase may differ from the purchase decision reached earlier. There is always a post purchase evaluation by the consumers after purchasing and consumption of the service. The consumer determines whether he was satisfied or not with the services rendered. This actually will be an important information reference point to the consumer in determining their behaviour in the next purchase. Because services have experience properties, moods and emotions are critical factors that shape the behavioural process of consumers. The main concern of this study is to review the effect of a company sales promotions method on the sales of product in the market. Basically the main issue is to know the extent to which promotion efforts has led to increase in sales volume and profitability.
1.3 RESEARCH QUESTION
1) Which sales promotion tools are implemented on soft drink procedure?
2) Which of the sales promotion tools consumer react more favourable to consumer?
3) What effect does sales promotion has on consumer buying decision?
1.4 OBJECTIVE OF THE STUDY
The aim of the study of sales promotion effectiveness and the care of sales promotion demand, the study are:
1. To evaluate the success of sales promotion tools implemented on soft drink procedure
2. To find out which of the sales promotion tools consumer react more favourable to consumer
3. To measure the effect of sales promotion on consumer buying decision
1.5 RESEARCH HYPOTHESIS
For the purpose of this study the following hypothesis are hereby proposed.
Hypothesis I
Ho: Sales promotion programme does not enhance consumer buying decision
Hi: Sales promotion programme enhances consumer buying decision
HYPOTHESIS II
Ho: The price of the product does not determine consumer level of participation in sales promotion programme
Hi: The price of the product determine consumer level of participation in sales promotion programme
HYPOTHESIS III
Ho: Sales promotion has no positive effect on the profit level of the organization
Hi: Sales promotion has positive effect on the profit level of the organization
HYPOTHESIS IV
Ho: The timing of sales promotion has no effect on the level of sales
Hi: The timing of sales promotion has effect on the level of sales.
1.6 SIGNIFICANCE OF THE STUDY
This research work shall be beneficial to all organization in Nigeria and to the coca-cola company Nigeria PLC in particular it is desired that the finding of this study will help to throw more light on the need for or effect of sale promotional on consumer buying decision.
The purpose of the study is also to stimulate increase in the use of sales promotion as an effective instrument for influencing consumer buying decision event if they do not win the promotion.
It will also help the top management of the coca-cola company and their executive in acquiring good understanding of sales promotion instrument that will be of great important in achieving their marketing goals and also to increase its markets share without necessary investing million of naira on dales promotion and advertising.
This study shall forward help to serve the dual purpose highlighting where is having problem or not doing well.
1.7 SCOPE OF THE STUDY
This research study shall cover sales promotional tools and how those tools can be used to influence consumer buying decision various consumer sales promotional tools shall be looked into sample, coupon, price package naira off, premium, and contest e.t.c more over, the study will be confined to the case study which is coca-cola company Nigeria PLC.
In conducting this research study, information will be collected from the state in the marketing department of the coca-cola company Nigeria PLC and consumers that use the company product.
1.8 LIMITATION OF THE STUDY
In the course of writing this project work, the researcher encounter some problem which militates, one of which was the time constraint the time allocated to this work was taken over by the demand to meet other academic activities.
Another problem was the financial requirement of the research work couple with the limited financial serves as a limiting factors.
Furthermore top management of coca-coal company Nigeria PLC were not ready to part with confidential data they have on the research topic.
1.9 OPERATION DEFINITION OF TERMS
Consumer: one who buy and use goods or services to satisfy personal or household need or want. And also may be for the use of business, institution or industrial operation.
Consumer good: goods defined for use by ultimate customer or household in such form or way that they can be used without commercial processing
Sale promotion: may be described as a short term wide variety of promotional tools designed to stimulate stronger market respond se and ti usually accompanied with an incentive.
Promotional tools: these are in various techniques or strategies used to include customers purchasing and demand effectiveness.
Pull strategy: these are marketing advertising and also promotional activities aimed at trial purchase and repurchase by customer.
Push strategy: Marketing advertising and sales promotion activities aimed at getting product into the dealers.
Pipe line and increase sales by offering inducement of dealer, reetailt3r and sales promotion inducement might included introductory, price allowance, distribution allowance and advertising allowance stock the product and set up display.
Marketing: marketing is total system of business activities designed to plan, price , promote and distribution want satisfying product and services to potential customers.
Advertising: Is a non personal form of presentation of idea goods and services paid for by an identified sponsor.
Respondents: Person who gives out answers to a question in survey when liner by personal interviews questionnaire or telephone interview.
Substitutes: these are product that can be used in essence of the other because they serve the same purchase.
Production: Is anything which can b e ideal goods services event that can be offered to the market for attention acquisition for use or consumption
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