CHAPTER ONE
1.1
BACKGROUND OF THE STUDY
Sales promotion is an initiative undertaken by organizations to promote increase in
sales, usage or trial of a product or services (i.e initiations that are not covered by
other elements of the marketing communication/promotional mix).
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. It is particularly
effective in spurring product trial and unplanned purchases (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). In determining the
relative importance to place sales promotion in the overall marketing mix, an
organization should consider its marketing budget, the stage of the product in the
life cycle, the nature of competition in the market, the target of the promotion, and
the nature of the product. For example, sales promotion is particularly attractive
alternative when the budget is limited.
In addition, sales promotion can be
effective tool in a highly competitive market, when the objective is to convince
retailers to carry a new product or influence consumers to select it over those of
competitors
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1.2
STATEMENT TO THE PROBLEM
Recent economic depression no doubt has had significant effects on most
organizations’ economic activities, among which decrease in sales (i.e. sales drop)
stands out. In some cases, there are no sales for a long period of time, which leads
to closure or liquidation of such companies, since customers are unaware of the
organization’s product offerings or home developed a strong habitual behavior on
the use of a particular product thereby leading to the death of close substitute in the
market place. The significance of sales promotion becomes unavailable.
In the face of all the strategies being used by an organization to achieve its goals
and objectives, problems confronting the companies, as they do not operate in a
vacuum, they operate in an environment which has its own effect on the
performance of these organizations.
1.3
OBJECTIVES OF THE STUDY
The main thrust of this study is to examine the feasible impact of sale promotions
on organisation performance. However, to achieve this objective, the following
shall therefore serve as the specific objectives of the study which include;
1.
To evaluate the influence of price discount on organizational organizational
performance.
2.
To examine the effect of bonus packs on organizational sales volume.
3.
To examine the effect of jingles on consumer purchase decision.
4.
To examine the perceived effect of low price on organizational performance.
1.4 RESEARCH QUESTIONS
1. Does price discount has any effect on organizational performance?
2. Does sales bonus packs affect the organizational sales volume?
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3. Can jingle influence consumer purchase decision?
4. Does perceived low price has any effect on organizational performance?
1.5
Ho:
RESEARCH HYPOTHESIS
There is no significant relationship between price discount and
organizational performance.
Hi:
There is significant relationship between price discount and organizational
performance.
H1:
There is no significant relationship between bonus packs and organizational
sales volume.
H1:
There is significant relationship between bonus packs and organizational
sales volume.
1.6
SCOPE OF THE STUDY
This study is not an attempt to claim that sales promotion is the only marketing
strategy that can be used by organization to increase their sales performance, rather
it is only geared toward the successful application of sales promotion by consumeroriented organization as a way forward to achieving their organizational goals and
objectives. The study for reasons of limited resources and time constraints will be
carried out using the staff in Lasusu Bottle Water.
The conclusion may however be reflective of the perception of the people on the
application of sales promotion as a marketing tool for higher sales performance.
1.7 SIGNIFICANCE OF THE STUDY
The business of consumer-oriented organization is the provision of goods and
services and thus existence. Therefore, it is the duty of this organization to
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determine how they are doing to motivate the consumers in the face of intense
competition of various brands or related brands. The significance of a study of this
nature is to find out if sales promotion can be an effective tool for a higher sales
level; to create awareness about a new product to increase sales performance to
stimulate demand and to convert potential buyer into actual buyers and if it can
perform all listed functions, it is recommended.
1.8 DEFINITION OF TERMS
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.
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.
Promotional Mix: This is the strategic combination of advertising personal
selling, sales promotion and publicity/public relations that can be diverse to reach
the goals of the sales programmes.
Marketing: Is a management process responsible for identifying, anticipating and
supplying customers and clients needs and want requirement beneficially.
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Promotional Strategy: This is the means by which markets communicate to their
target market by informing persuading or reminding them of the product in order to
facilitated the sales of the product (goods, services or acceptance of an ideal).
CHAPTER TWO
LITERATURE REVIEW
2.1
INTRODUCTION
Even though sales promotion gained real recognition as a tool of marketing in
Lagos state as far back as the early 1960‟s (Nwosu 2001).
Historically, it can safely be said that the use of sales promotion techniques in
modern marketing in Lagos state started with the multi-national trading companies
like the Leventis, Kingsway and U.T.C. stores. Their sales promotion activities
came mainly in the form of money-off-offers and offer of gift items like balloons
and Christmas trees. Nwosu (2001) equally stated that such offers were usually
backed up by intensive publicity and advertising to draw the attention of the public
or customers to them. It is on record that these sales promotion efforts which were
seasoned usually resulted in high customer traffic and greater patronage for the
products of these companies. Also among the early sales promotion efforts in
Lagos state was the inclusion of gift items like balloons, toys, pencils, ball-point
pens and erasers inside product packs like tooth pastes and detergents.
But how effective are these sales promotion campaigns? Can we justify the huge
amounts that are usually spent on them? How ethical are these sales promotion
campaigns/what type or sales promotion do they engage?” finding answers to these
questions are important because this is what will determine the survival and growth
of sales promotion as a veritable marketing tool in Lagos state, as well as ensure
that it is practiced professionally, responsible and with the required results.
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2.3 SALES PROMOTIONS ACTIVITY IN LAGOS STATE SINCE POST –
INDEPENDENCE TILL DATE
Since post independence, except in the late eighties, management of the marketing
promotional mix strategies of organization in Lagos state was still in the
rudimentary stage. This was due to limited supply or scarcity of virtually all goods
and services. Many marketing and management scholars in LASUSU Bottle Water
like Nnolim (1979), noted that as a result of scarcity of goods and services in
Lagos state, marketing institutions and firms were still in the developing stage.
This is certain because as many scholars have proved that marketing is usually
identified with an economy of abundance where a nation produces far beyond the
substance needs.
Also, Odia (1979), saw that the totality of the Lagos state economy was growing
rapidly as a result of the oil boom, while a number of sectors or activities were
known to lag behind. He identified marketing as one of such activities.
To further prove, that marketing activities were neglected in Lagos state since postindependent till date, the centre for management development in Lagos state
(1975), carried out survey on the management training needs in Lagos state” and
found that marketing was one of the problem areas were remedial management
development effort should be intensified.
This observation suggests that sales promotion, as a marketing promotional mix
strategy was not much emphasized in Lagos state from early sixties to early and
middle eighties. According to Nwokoye (1984), Lasusu bottle water was seen as a
seller‟s market where the producers instead of being customer oriented were only
interested in the size of their profits. Nwokoye went further and noted, that this
state of affair is as a result of scarcity of essential goods in LASUSU Bottle Water.
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Altatisa (1979), in his own contribution said that the problem of marketing in
Lasusu bottle water was the problem of managing prosperity caused by the sudden
upsurge in demand which cannot be immediately matched by increased production.
In line with the above views, Unamkpa (1978), saw the general image of retail
stores in Lagos state as lacking consistency. He further noted that Lasusu bottle
water owners have not explored the use of impute buying, nor made the selling
environment attractive and or displayed their marchandize in an appealing manner.
He further reported that most local stores in LASUSU Bottle Water were not
economically positioned to undertake expensive publicity campaign and
advertising programmes in the mass media, marketing as a function therefore was
neglected, and if ever used, at a minimum.
2.4 SALES PROMOTION
Although the overall level of commercial activities grew tremendously in the postindependence era in Lagos state, some impediments to the development of
marketing was inherent. Today these problems have given way to recent actions,
purposeful, responsible, risk taking action of a man as entrepreneurs,
manufacturers, dealers and managers alike.
As a depressed economy, there are bound to be problems of low consumer demand
of goods, which requires marketers, researching and finding out ways to stimulate
demand. There is also the proliferation of goods belonging to the same product
lines and class, and also enhanced goods substitution which geared up competition
among manufacturers, and subsequently stirred up consumer choice preference.
This observation attests to why the researcher claimed that sales promotion
activities in Lagos state are rapidly expanding.
Within 1978 and 1979 alone, almost all the companies embarked on one form of
sales promotions activities or the other. The Lasusu bottle water alone launched
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two competition, together with other product packages. Within the same year, the
seven up Bottling company, launched the “Naira Rain contest” and the Lagos
staten Breweries also launched the “Breen Sands Shandy cash plus offer”, to
mention but a few.
However, as Emoekpere (1988), observed that strategic marketing has been the
order of the day. He confirmed that a lot of tactical maneuvers have become the
order of the day. According to him, the situation is very much in evidence with
respect to the breweries.
In line with Emoekpere‟s observations, the researcher also observes that sales
promotional techniques in Lasusu Bottle Water is increasing.
Emoekpere 1988, went further and made the following recommendations. He
observed that two distinct social economic groupings are emerging in Lagos state
the very rich and the poor. He showed satisfaction when he further noted that these
two distinct classes are being satisfied and appraised our detergent manufacturers
which have already shown creativity in this respect by offering packaged and nonpackaged detergent to the market. Cosmetics manufacturers Emoekpere further
noted were not left in the race.
Improvement in our economy has increased business activities. Nwokoye (1989),
identified that there has been an intensified activity in marketing as a managerial
function as well as increased professionalization in marketing. This situation he
further observed is due to our changed and continued growth in domestic demand
and increasing sophistication of consumers improved infrastructure facilities and
good government economic policies that made our private sectors to increase
investments in domestic products.
Judging from Nwokoye‟s views, we see that as a result of current changes in our
economy, and as a pre-condition for survival therefore, a business has to be in
harmony with the developments in its surroundings. To this effect some authors in
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business recognized the importance of coping with the “future stocks” that can
influence individuals, institution and society as a whole. Davidson (1972),
summarized this problem when he was looking at the strategic environmental
monitoring systems in economies, and found that environmental changes is a fact
of life in our increasing complex world. To cope with the “future shocks”, he said
that marketing has to play a major role in interpreting the environment for an
organization. He further noted that for marketing to perform this function, a broad
awareness and understanding of environmental changes is necessary for
professionals in this field at the top management level and at the middle
management level. If the marketing planning process is to be successful.
In line with the above recommendation, Emoekpere (1988), observed that the
behaviour of the average Lagos staten Consumer today corresponds to what Shama
Abraham observed for American consumers during the period of stagflation.
Emoekpere went further and noted that most Lasusu Bottle Water no longer
engage in conspicuous consumption. He said that Lasusu Bottle Water now Judge
product and services in a new way and have become more sensitive to price and
demand value for their money.
2.5 SALES PROMOTION IN LASUSU BOTTLE WATER
Nwosu (2001) labeled 1991 the most significant or outstanding sales promotion
year in Lasusu Bottle Water contemporary history. This is because of the volume,
reach and intensity of the sales promotion efforts that were undertaken in the
country that year, as well as the large amounts of money spent by the various
companies involved in the sales promotion campaigns. In that special sales
promotion year in Lagos state, there were many sales promotion efforts. While
several were national in scope, others were restricted to specific regions or
geographical locations.
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2.6 FACTORS THAT CONTRIBUTES TO INCREASE IN SALES
PROMOTION ADOPTION IN LASUSU BOTTLE WATER
Related literature reviewed showed a rapid increase in the adoption of sales
promotion as marketing strategy.
The advent of industrialization and mass production, brought about the need for
mass distribution or mass marketing. Business firms and marketers no longer
deemed it necessary to rely solely on personal selling effort to dispose their
products. Personal selling had its shortcomings. Personal selling required trained
staff, or personnel or human resources in the art of salesmanship. Salesmanship
itself was becoming more competitive and expensive, as expenses incurred to train
and maintain salesmen in the payroll of business, firms were on the increase. And
this being the case, Advertising became a new selling tool, catering to a mass
market. Advertising came and strenghthened selling or reinforced the selling effort.
Nkem (1999).
Nkem (1999) further noted that as time passed, many business firms realized that
as economic conditions changed, advertising cost soared higher and higher.
Business firms became uncomfortable with the high cost of advertisement. This
gave rise for consideration of a new selling tool. This of course implied that
business organizations needed another selling tool which can give products that
aggressive or extra push required, to bring about increased sales and profit.
Therefore, it became obvious that sales promotion provided the answer. Business
firms and marketers therefore had no choice, than to turn to sales promotion, and
sales promotion was integrated in the business firm‟s selling effort, and sales
promotion became the “in-thing”.
Sales promotion has witnessed a “Frog Leap” in Nigeria, from a humble beginning
in the 19th century, until today, catering for sophisticated Lasusu Bottle Water
consumers.
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He also state that many business firms have adopted sales promotion in their
marketing efforts and or marketing strategies, to satisfy Lagos state consumers.
The “Frog Leap” which sales promotion is enjoying in Nigeria business
environment, among business firms operating in Lagos state, both local business
firms and multinational corporations, came about as a result of the strong Nigerian
economy of the 1970‟s, fueled by the impressive returns from the oil exports
known as the “Oil Boom”.
With the oil of the 1970‟s Lagos state consumers had a lot of money at their
disposal and reach to buy all classes and types of goods and services.
Since the 1970‟s till today, sales promotion had been a major component of the
marketing strategy and had contributed immensely in the successful execution of
marketing strategies and campaigns, being an important ingredient of corporate
marketing plan, Nkem (1999).
Nkem (1999) identified “price consideration” as another major factor that
contributed and sustained the rapid increase of sales promotion by industry and
business organizations. In a currently depressed and inflation-torn Lagos state,
“price resistance” by consumers is a common occurrence at the market place in
today’s.
Since consumers are resisting price increase at the market place,
marketers and business firms have no alternative than to turn to sales promotion, as
a way out. Even if the product is a high quality or desirable product, business firms
must have to woo, induce and entice consumers with free gifts in order to draw
consumer patronage, ensure their loyalty and repeat purchases, for their products
and services.
Further review of literature indicates that other motives for carrying out sales
promotion activities includes to, introduce or launch a new product, attract new
customers, in a competitive market situation, increase sales and to increase the
inventories of business buyers, Schwartz (1973). Some other authors however
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noted that a firm may also use more subtle sales promotion strategies as part of it‟s
long-range plan to maximize consumer patronage. These strategies, which made up
the firm‟s public relations policy, have as their immediate objective the promotion
of good will and understanding between the business and the public. Schwartz
(1973), agreed that the image a business has affects all aspects of its operation. He
further stressed that good relationship with all the firm‟s “publics” are helpful in
winning greater acceptance in the market place. Based on Schwartz findings it
became evident that companies in trying to use sales promotion tools as a
marketing strategy and as part of it‟s long-range plan to maximize consumer
patronage, increase the rate of usage of sales promotion.
2.7 PROSPECTS AND PROBLEMS OF SALES PROMOTION
Sales promotion has bright prospects in the country‟s business and services. Sales
promotion is critically important for achieving success in the marketing of goods
and services. Marketers, business firms and governmental organizations e.t.c. must
go for sales promotion to give an “extra-boost” to their products and services.
Prospects abound in sales promotion and as such, organization and individuals are
encouraged to go for sale promotion. The gains of sales promotion are plenty,
made up of a basket-full of goodies, big returns on investment (profit) and plenty
reserve to be ploughed back into the operation of the firm, for purpose of survival,
growth, development, stability and diversification pursuits Nkem, (1999).
He (Nkem, 1999) further mention or gave ten (10) problems facing sales
promotion in Lasusu Bottle Water as follows:
(i) Shortages of goods and services:
This is a problem in sales promotion for instance Universities are going through
economic crucible now because of the downturn in 40
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Lasusu Bottle Water‟s economy, due to the erosion of the buying power of the
Naria, and bad management of Nigeria economy, occasioned by inept corrupt and
inefficient managers.
(ii) Unreliable Postal Services
Due to the unreliable postal (communication) services in this country, called Lagos
state, free gift items should be inserted in the package known as “package inserts‟
or “in-pack,” depending on the size or the gift items.
(iii) Activities of unscrupulous Nigeria Businessmen, compounded by the so called
Lagos state factor are limiting factors in successful sales promotional activities, as
free-items or give always meant for consumers or users of products and services do
not reach consumers, because the free give away items are taken, sold and in some
cases converted for personal use by agents, dealers, distributors and other classes
of middlemen – (Wholesalers and retailers). There are cases of stealing and dishonesty and of course are problems that militate against successful operation of
sales promotion.
(iv) Poor Quality Packages
In certain cases the packaging of made in Lagos state products are poor in quality
and as such cannot promote the sale of made-in-Lagos state products that are in
competition with imported or foreign products. In other to sustain the growth and
encourage rapid adoption of sales promotion in Lagos state, business firm
operating in Lagos state should improve the quality of the packages of their
products. Conscious of the fact that packaging being a component of promotion
also communicates silently to its target market or consumers, while protecting
product(s), increasing the shelf-life of products or serving as containers for
product(s).
(v) “Price-off-Promotions”
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Price off promotions are difficult to operate in Lagos state, with unstable market
prices and no fixed retail prices. The market place abounds with frequent price
fluctuations. This is a problem of sales promotion.
(vi) “Point of Sales Promotion”
We have witnessed all lands of points of sales promotion. These are laden with
problems.
(vii) The Seventh Problem is that Currently in Lagos state, no realistic effort is
being made to give the consumer what he actually needs, in terms of product
varieties, in various seizes, with utility and needs satisfying, goods and services
that can guarantee brand loyalty or hold in check consumers from brand switching.
(viii) The eight problem is that sales promotion suffers immensely during product
rationing. This situation convert6s to a seller‟s market and thus consumers lose
their sovereignty and this factor jeopardizes marketing concept or philosophy.
(ix) The ninth problem is in terms of achieving high sales volume, profit is usually
limited by the inability of the organization to meet target sales or high demand for
products/services because of obsolete and problem ridden product equipment,
machinery and facilities, that are responsible for low production output in
industries.
All these problems and more are the hindrances towards achieving effective sales
promotion in Lasusu Bottle Water.
2.8 DESIGNING AND MANAGING SALES PROMOTION
For sales promotion manager to make his function(s) more effective, he must be
forward-looking, imaginative, dynamic and rationalistic in his decision-making.
These attributes or characteristics will contribute immensely in making him
perform his duties efficiently, enabling him to move his department forward,
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thereby achieving target(s) and or accomplishing corporate goals and objectives,
by generating sales and profits for his organisation. Nkem (1999).
There is a wide spread acknowledgement from related literature reviewed, that
sales promotions are often mismanaged. Wills, Cheese, Kennedy and Rushton
(1984), agreed that the main reason for bad management of sales promotions is that
the overall expenditures are not properly recorded. According to them, the inability
and failure to manage sales promotion activities appropriately, arises with the
confusion marketing managers have about the exact nature and purpose of sales
promotion. These authors stated that some companies regard sales promotion as
part of advertising, some as part of sales force expense, others as a general
marketing expense. Wills and his group, further stated that the loss of unity sales
revenue from special price reductions is often not recorded at all by some
companies.
To assure more effective management of an organizations sales promotion
expenditure, Will‟s and his group 1984, advised that companies should, firstly, see
that current spending must be analyzed and categorized by the type of activity,
such as special packaging, and special point of sales.
The authors maintained that in conducting sales promotion, the objective(s) for
such promotion must be clearly stated, such as trails, repeat purchase, distribution,
display, a shift in buying peaks or combating competition in a specified manner.
After these two major steps above as Wills and his group noted, the following
procedures must always be followed.
- Select the appropriate technique
- Pre-test the ideas
- Mount the promotion and
- Evaluate its impact in depth.
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In the with the above recommendation, Kokler 1980, recommends that the major
decision steps that companies should follow in sales promotion should be to firstly,
establish the objectives, select the tools, develop the programme, and finally,
evaluate the consumer response. To make it clearer, we shall briefly discuss the
above steps to see how effective they appear, when applied to a sales promotion
programme.
(1) Establishing a Sales Promotion Objective(s)
Related literature reviewed shows that sales promotion objectives are derived from
basic marketing communication objectives developed for a product. This suggests
that organizations before establishing sales promotion objective(s) must make a
clear promotion plan fully integrated into their marketing plans, and establish
means of assessment. But the question is whether the specific objectives set for the
sales promotion agrees with the type of target market. Kotler (1980) observed the
above problem and noted that different sales promotions objectives are set for
different target markets. He thus categorized the objectives into consumer sales
promotion, retailer‟s sales promotion and sales force promotion objectives, Kotler
recommends that managers should bear in mind the objective(s) of launching the
programme.
For retailers, sales promotion objectives, Kotler stressed that the objectives should
be either, to induce the retailer to carry new items and higher levels of inventory,
encourage off-season buying from the retailers, encourage stocking of related
items, off-setting competitive promotions, building the retailers brand loyalty or
gaining entry into new retailer outlets.
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Finally, for sales promotion objectives Kotler stressed that the objective(s) should
either be to encourage support of a new product or model by sales force, and or
stimulating sales in off-season.
(2) Selecting The Sales Promotion Tools
As the researcher earlier mentioned in the introductory part of the study, there are
many tools available to accomplish the sales promotions objectives. Kinner and
Bernhardt (1983), identified and categorized them into consumer pull promotion
tools and push promotion techniques.
Before selecting these tools for the implementation of a sales promotion
programme, Kotler (1980) noted that the promotion planner should take into
account the type of market, sales promotion objective(s), competitive conditions
and cost effectiveness of each tools. Wills and his research team (1984), in the
same vein recognized that the sales promotional tools have their advantages and
disadvantage, and therefore should be critically evaluated before selection. This is
certain, because all literature reviewed states different tools for different
circumstances, and this characteristic feature differentiate them from the other. A
good comparison now will help in revealing those differences.
(i) Premiums
Related literature reviewed shows that premium is a reward that is offered to
encourage an exchange. It is a product offered free or at lest than the regular price
in order to induce the consumer to buy another product. According to Kinnear and
Bernhardt (1983) a premium is the offer of some article of merchanize, either free
or at a lower price than usual, as an inducement to purchase another product or
visit the location where the latter product is sold.
A premium may be either one of the following listed bellow Daza (1966).
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(a) The Coupon Type
Coupons are given for products bought. Each coupon stands for a given number of
points, and these may be exchanged by the consumer for either gift or cash.
(b) Container Premium
Reusable containers are used by a number of companies offering highly
competitive products to stimulate sales. Among the current users are beer and soft
drinks manufactures e.g. Lagos state Breweries PLC, Guinness PLC, Lagos state,
Limca etc.
(c) Enclosure Premiums
The bonus may consist of a ball pen place inside (Ovaltine), (OMO) or (Bournvita)
or playing card enclosed in the package or other give aways made directly
available to the person who buys the product.
(d) Gift Premiums
These refer to the direct give-aways that are made with every purchase. For
example, “supermarket give away perhaps a free calendar for every purchase
made.”
(e) Combination of sales and discount Premiums
In this techniques, two identical or similar products maybe offered for the price of
one, as in the case of a department store which sells two shoes or clothes on a “Buy
two for the price of one” basis, or Buy-two, take one free, promo strategy.
(ii) Contests
A contest offers prizes to consumers of a reward for doing some kind of thinking,
usually about a product. Sweep stakes and raffles which also offer prizes, usually
required the participant to enter or write his/her name in a material (paper),
provided by the contest organizers and when drawn, a winner emerges. Nkem
(1999).
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Another example is beer drinking contest and the fastest drinker who emerges as
winner is showered with gifts by the brewery.
Schewe and Smith (1980), identified contests as tools that offer prizes to
consumers as a reward for doing some task, they gave an example of contests as a
prize given to a consumer for showing creative thinking about a product.
Further research carried out on contest proved that it have some advantages and
disadvantages which managers evaluate before selecting them for programme
implementation. Kinnear and Bernhardt (1983), noted them and list accordingly.
They observed some of the advantages of contests as high consumer involvement,
plus added retailer support and added air excitement. In the same vein Schewe and
Smith (1980), stated that both contests and sweepstakes, complement and reinforce
point-of-purchase advertising. They further noted that contests serve, to encourage
retailers to give the product better floor space, and to help exploit the marketer‟s
promotional programme.
These authors also recognized that contests as they appear so useful above are not
without some demerits. Schewe and Smith (1980), noted that contests and
sweepstakes demand substantial advertising support and usually does not allow
trials of the product. Based on this Kinnear and Bernhardt (1983), observed that
responses to contests and sweepstakes never involve more than 20 percent of the
target audience, and that contest is prohibited in certain states. The above
observations may be right, but in the Lagos staten context, contests involve more
target audience than other sales promotional tools. But it is only evident with
reputable companies in Lagos state for example, the data the researcher gathered
from the manager of Lasusu Bottle Water.
(iii) Sampling
Sampling is the actual giving away of a product to the consumer for free, or at a
nominal cost. It is based on the concept that the product sales itself. Kotler (1980),
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identified this, and recommends that sampling is very useful in getting product
trial, especial new products. Marketers also hope that sample usage will lead to
future purchase of the item. Baker (1979), asserts that, of all the promotions,
sampling method offers the greatest chance of getting consumers to actually try the
product. Nkem (1999) states that product is a frequently purchased convenience
good such as candles, toothpaste, biscuits, soft drinks, malt drinks, bear, beverages,
soaps, pomade, shampoo, hair relaxer, cream etc. Kinnear and Bernhardt (1983),
also noted that sampling seems inappropriate for perishable items, very personal
care products, or items with slow turnover.
(iv) Demonstration
Nkem (1999) states that demonstration is a technique often employed by
manufacturing and equipment or machinery trading firms and even some service
firms employ demonstration technique(s) in the sale of their product(s).
The firms involved will have to employ demonstrators who will teach
consumers/users how to operate the product involved. Manufacturers of seasoning
product, e.g. magi cubes, Ajino-motto, etc. employ this technique. Once in every
year (yearly event) magi cube manufacturers will organize a nation-wide cooking
competition, demonstrating to consumers/users on how to cook with magi cubes.
They also give cooking lessons as well to consumer/users. All these efforts are
geared towards stimulating sales.
(v) Consumer Deals or Price Incentives
A consumer deal is a short-term temporary reduction or discount in the price of a
product or service.
According to Kotler (1980), price incentives or deals is covering prices in the
short-run to encourage new product trial or more consumption of an established
brand, and is done through coupons. Schewe and Smith (1980), in their own
contribution, noted that a coupon is a certificate that consumers can bring to a retail
20
store, receiving in return some indicated saving or cash refund. They also observed
that coupons work best with a target market consisting of older, married, welleducated, high income and women consumers.
(vi) Point-Of-Purchase Promotion or Point of Sale Promotion (POP)
Point-of-Purchase displays are those promotional methods used at the retail level
and are very effective at gaining consumers attention. Kotler (1980), identified this
and classified point-of-purchase displays as displays, signs, racks lights and other
attention getting devices located at the actual place of purchase at the check out
counter or the cash register, to support the sale of a brand. Also Nkem (1999) noted
that sales promotional displays such as floor display, stands, bins, end-of-counter
displays, interior over head signs, outside signs, posters, mobiles and wall signs,
are often the most important promotional material at the point-of-purchase.
Further literature reviewed proved that point of purchase displays has become
more important with the increasing importance of self-services. Schewe and Smith
1980, recognized this fact, and noted that the importance of displays are being
magnified by the increase in self-service and by discount retailing, in which
personal service is not provided.
(3) Developing the Sales Promotions Programmes
After selecting the sales promotion tool(s), the next step will be to develop the
sales promotion programme.
Kotler (1980) observed and advised marketers to make some additional decisions
to define the full promotion programme. In line with this, the researcher made the
following recommendations. Marketers must decide on how to advertise the sales
promotion, how long it should last, when it should start and how much to budget.
21
(4) Presenting the Programme
After selecting appropriate sales promotions tools and developing the programmes,
managers go along presenting the programme. Reviewed related literature showed
that fewer companies test or pretest their sales promotion programme. Kotler
(1980) identified this, and noted that about 42 percent of premium offers used by
different companies were never tested. In line with this, Kotler advised that
companies should try as much as possible to pretest sales promotions tools, as this
will help determine if the tool(s) is appropriate.
(5) Implementing the sales promotion Programme
Review of related literature proved that establishment of the implementation
plan(s) for sales promotions programme is crucial. Kotler (1980), identified this
and recommends that companies should establish plans for each promotion which
most be over a time. Lead time according to Kotler, is the time necessary to
prepare the programme prior to launching it. While self-off time begins with the
launching and when the deal closes.
(6) Evaluating the sales promotion results/effectiveness
According to some marketing and management authors, evaluation of the sales
promotion result is a crucial requirement. But most of the companies in the country
(Lagos state) neglect. This, Kotler (1980) noted this fact and stated that evaluation
of sales promotion programmes received little or not attention by companies. He
observed that even where an attempt is made to evaluate a programme, it becomes
a superficial one. This suggests that companies should as much as possible try to
continually evaluate their promotions results, which is hopeful in determining sales
effectiveness.
But with the clearly increased popularity of sales promotion in Lagos state and the
increased budgetary allocation, it has been getting in recent years, the critical
question, about its effectiveness is also increasingly being asked by managers,
22
analysts, businessmen and even the general public and number of studies insights.
For instance cotton and Balds (1978) measured the responses of consumers to
coupons, multiple item discounts and free gifts to determine the extent to which
consumption of various dairy products is influenced by sales promotion campaign
that made these offers. This study revealed that during the effective period of the
campaign, there was a “substantial” increase in purchase, that the carry over effect
in later period (post-promotion period) was relatively much lower; and that as in
several past studies; new market entrants had a greater impact on overall sales
increase than did households already in the market. However, the study also
showed that the post promotion period effect of the sales promotion efforts was the
same for both the new entrant and the existing customers or consumers. In a
similar vein Dwyer and Rudelius (1978) examined the use of direct premiums by
banks as a sales promotion strategy aimed at attracting new customers. Their study
did not only demonstrate the effectiveness of this sales promotion effort but
reported in addition, that even though new time deposits opened by new customers
during the premium campaign period showed significantly lower retention rates,
and there was no premium offered accounts, when evaluated in terms of changes in
six months balances.
Kahn and Raju (1991) in their own study of the effectiveness of sales promotions
focused specifically on the use of the strategy of price discounts and its effort on
variety-seeking and reinforcement consumers. They reported that long term effect
of price discounts on market share varies, depending on the type of consumers and
on whether the product or brand promoted is a major or minor brand. According to
Raju and Rahn, for a minor brand, price discounts have relatively larger effect for
the reinforcement consumers than for the variety – seeking consumer. Conversely
they noted, for a major brand, price discounts have relatively larger effect for the
23
variety-seeking consumer than for the reinforcement consumers. Also, the different
in effects among both types of consumers studied, is stronger for the minor brand.
These studies reviewed above have no doubt gone a long way to answer most of
the crucial sales promotion effectiveness questions we raised earlier in this work.
Most essentially they have demonstrated to large extent that sales promotion is an
effective and reliable marketing success. No wonder then manufacturers and
marketers the world over, including Lagos state, continue to spend heavily on sales
promotions. This trend is likely to continue for a long time.
One other point that must be noted is that we should know at what point(s), in the
product-life-cycle of any good or service we are marketing, sales promotion is
most likely to be effective. Researchers on the question seem to agree that sales
promotion is must effective at the introductory stage of a product‟s life cycle and
can also be used to halt the decline of a product and maintain its sales peak or even
push it higher by encouraging new consumers to try it. Christopher and Cowell
(1970).
From the above pieces of evidence, we can state that in Lagos state and elsewhere
the huge sum or money we spend on sales promotion campaigns seem to be quite
justified or justifiable. But that is as far as profit maximization or the achievement
of the selling objectives is concerned. Modern marketing, however, goes beyond
the profit maximization or mere selling motives. The new marketing concept and
the social or corporate responsibility theory of modern business require that in
addition to profit considerations, business organizations have to give adequate
consideration to the protection of social or consumer interests or goals, Kotler
(1980, and 1972).
24
2.9 Ethical Considerations
The ethical dimensions of sales promotion campaigns in Lagos state can be
examined from two silent perspectives – the consumer perspective and the
manufacturers or seller‟s perspective. In the Lagos staten context, it is clear from
these two perspectives that all is not well with the ethical considerations or
dimensions of sales promotion campaigns. We say this because, from the facts
available, the euphoric and “loving” relationship between sales promotions and
consumers in Lagos state has been replaced by a love hate relationship. The trust
and confidence the consumers had for the companies that use sales promotions as a
marketing tool have been replaced by cynicism, mistrust and suspicion. What we
have now, therefore, is more or less a situation in which Lagos state consumers are
increasingly coming up with many criticisms, accusations or attacks against sales
promotions campaigners and consequent defense by these companies Nwosu
(2001).
Among the documented accusations against sales promotion in Lagos state by
consumers is that companies who use them to boost or play on the gullibility of
Lagos statens, especially children and the larger percentage of the Lagos staten
population that are still uncritical, undiciphering, or functionally illiterate. Sales
promotion campaigns have also been accused of being less than true and generally
unfair Okumuyide (1980). Companies that engage in sales promotions have further
been accused of not honouring faithfully all the offers they made in their sales
promotion campaign efforts Dike (1992). Marketers or companies that engage in
sales in Lagos state promotions have also been accused of offering much but
giving out or redeeming little Nnona (1993). Some consumers even believe that the
winnings and the winners in most sales promotion campaigns in Lagos state are
fixed in advance or manipulated Nwosu (2001).
25
These skepticisms, criticisms and abject attacks of sales promotion campaign
efforts in Lasusu Bottle Water seem to have been lent credence by some actual
reported or alleges cases of fraudulent activities among some companies that use
sales promotions in the country as part of their marketing efforts.
26
CHAPTER THREE
METHODOLOGY
3.1
INTRODUCTION
This chapter describe all the necessary stages taken in carrying out the research
project successfully. This include: the instruments of data collection and types of
data collected. Also indicates the research population limitation of study, the
sample sketch, the sampling method and sample size, the nature and description of
the questionnaire, what the question seek to achieve as well as the mode of data
analysis.
3.2
RESEARCH DESIGNS
For the purpose of this study, the survey research design was used, questionnaire
were distributed to the respondent. Each respondent completed the questionnaire
interview and the total number of 70 questions were administered.
Research design is a blue-print or guide for data collection and analysis among
others which enable the research test hypothesis and / or answer major and
subsidiary research questions. Therefore it serve as a bridge between what has been
established (the research objectives) and what is to be done in the conduct of the
study to realize those objectives.
3.3
POPULATION OF STUDY
The population of the study comprised the entire top middle and lower
management personnel of the Lasusu Bottle Water in the department that
27
deal with the marketing and sales promotion function in the companies. The
samples population is drawn from the Lagos Plants.
3.4
SAMPLE SIZE
A total number of seventy (70) questionnaires were administered under
study so as to represent the sample for this study.
3.5
SAMPLING PROCEDURE
The techniques to be used is stratified sampling method through stratified sampling
techniques. This method was used because it makes possible the collection to data
from the key that constitutes the policy-making body of the company and who are
thus very conversant with the company sales promotion policies and objectives.
3.6
DATA COLLECTION METHOD
This research work sought both primary and secondary data answers to the
aforementioned research questions the data collected help in reaching reasonably
conclusion on the subject of research.
Asika (2001) posit that primary data comes mainly from direct observation of the
event (107 the researcher), manipulation of variables, responses to questionnaire
among other things the primary data used for this research comes from the
responses of the structured questionnaire as well as secondary data from other
people work i.e. published sources including text books and internet.
28
3.9
ADMINISTRATION INSTRUMENT
The instrument employed in conducting of this study is a well structured
questionnaire. This was used to collect primarily data from the sample for the
purpose of analyzing and processing the result and findings of the research study.
A questionnaire is one of the basic method of collecting data in research involved
asking question from people in custody of desired data and information which
could be asked in person or in writing (Asika, 1991) the questionnaire for the study
is in two part section A and Section B. The section A collect data on the
background of the respondent mainly demographic data’s (Age, gender,
occupation, academic and technical professional experiences etc) section B of the
instrument (questionnaire contains the major research question.
3.10 METHOD OF DATA ANALYSIS
The data collected were presented in tabular forms and expressed in simple
percentages while the hypothesis formulated for this study were tested by
regression techniques. The formula for regression analysis are expressed
thus:
b
=
ηΣxy – ΣxΣy
ηΣx2 – (Σx)2
a
=
Σy
bΣx
n
n
The data collected were presented in tabular forms and expressed in simple
percentages while the hypothesis formulated for this study were tested by
regression techniques. The formula for regression analysis are expressed
thus:
29
b
=
ηΣxy – ΣxΣy
ηΣx2 – (Σx)2
a
r
=
Σy
bΣx
n
n
ηΣxy – ΣxΣy
=
(ηΣx2 – (Σx)2 (ηΣy2 – (Σy)2
Score =
r2
n–2
1–r
30
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.1
INTRODUCTION
This chapter contains the presentation of acquired data on the research work and
subsequent analysis of the data collected for the study. It analyzed the
characteristic of the respondents and also analyzed the questionnaires responses
and statistically tested the research hypotheses.
It was mentioned in chapter two that the objective of this project is to examine the
impact of sales promotion on organizational performance in LASU industry.
4.2
PRESENTATION AND ANALYSIS OF THE DATA
The questionnaires administered have two questions;
i)
Section A seeks for the personal data of the respondents.
ii)
Section B seeks for the impact of sales promotion on Lasusu Bottle
Water.
The various response of the respondent to the two sections summarized to:
SECTION A:
Table 1: Marital Status of Respondents
Marital
Status
Valid
Single
Married
Total
Frequency
Percentage
Valid
Percentage
Cumulative
%
45
25
70
64.3
35.7
100.0
64.3
35.7
100.0
64.3
100.0
Source: Field Survey, 2019.
31
Findings: in the above question 64.3% are single while 35.7% are married.
Table 2: Age
Age
Frequency
Percentage
20-29
30 – 39
40 – 49
50 Above
Total
20
25
15
10
70
28.6
35.7
21.4
14.3
100.0
Valid
Percentage
28.6
35.7
21.4
14.3
100.0
Cumulative %
28.6
64.3
85.7
100.0
Source: Field Survey, 2019.
Findings: This shows that the work force is made up of relatively young and agile
personnel staff between the age of 20 – 30, which is 28.6% and 35.7%
respectively.
Table 3: Gender
Sex
Frequency
Percentage
Male
Female
Total
40
30
70
57.1
42.9
100.0
Valid
Percentage
57.1
42.9
100.0
Cumulative %
57.1
100.0
Source: Field Survey, 2019.
Findings: In the above table question 57.1% is male while 42.9% are female which
means that male is more than female.
Table 4: Educational Qualification
Educational
Qualification
O’Level
OND/NCE
BSC/HND
PHD
Total
Frequency
Percentage
5
10
40
15
70
7.3
14.2
57.1
21.4
100.0
32
Valid
Percentage
7.3
14.2
57.1
21.4
100.0
Cumulative
%
7.3
21.5
78.6
100.0
Source: Field Survey, 2019.
Findings: The information contained in above table shows that O’Level holder are
7.3%, OND/HND are 14.2% while B.Sc Holder are 57.1% while professional are
15% which implies that the organization employed more of the B.Sc.
Table 5: Organization Status
Status
of
Org.
Director
Manager
Accounting
Officer
Cashier
Total
Frequency
Percentage
Cumulative %
42.8
21.4
21.4
Valid
Percentage
42.8
21.4
21.4
30
15
15
10
70
14.4
100.0
14.4
100.0
100.0
42.8
64.2
85.6
Source: Field Survey, 2019.
Findings: From the questionnaires distributed to the respondent 42.8% are
Directors, Managers 21.4%, Accounting Officer is 21.4% while the Cashier is
14.4% it implies that Directors workers are more in the industry.
Table 6: Question 6: Sales promotion is a special service designed to provide
consumers with adequate information to enable them a choice for product
against other available alternative.
Option
Code
Frequency
Percentage
Strongly Agree
Agree
Undecided
Disagree
Strongly
Disagree
Total
5
4
3
2
1
30
30
0
4.5
5
42.8
42.8
0
7.2
7.2
Valid
Percent
42.8
42.8
0
7.2
7.2
70
100.0
100.0
Source: Field Survey, 2019.
33
Cumulative
%
42.8
85.6
85.6
92.8
100.0
Interpretation: In the above question 42.8% of the respondents strongly agree that
sales promotion is a special service designed to provide consumers with adequate
information to enable them make a choice for product against other available
alternative while 7.2% strongly disagree with the above statement.
Table 7, Question 7: Lasusu Bottle Water views issues of sales promotion as
necessary and strategies for improving business operation and gives adequate
attention.
Option
Code
Frequency
Percentage
Strongly Agree
Agree
Undecided
Disagree
Strongly
Disagree
Total
5
4
3
2
1
40
10
10
5
5
57.0
14.3
14.3
7.2
7.2
Valid
Percent
57.0
14.3
14.3
7.2
7.2
70
100.0
100.0
Cumulative
%
57.0
71.3
85.6
92.8
100.0
Source: Field Survey, 2019.
Interpretation: From the table above 57.0% of the respondents strongly agree and
14.3% also agree that Lasusu Bottle Water views issues of sales promotion as
necessary and strategies for improving business operation and gives adequate
attention, while 7.2% disagree and strongly disagree with the statement and 14.3%
undecided.
34
Table 8; Question 8: More Attention has been given to the sales Promotion
Process in Lasusu Bottle Water as a mean of attaining business objective.
Option
Code
Frequency
Percentage
Strongly Agree
Agree
Undecided
Disagree
Strongly
Disagree
Total
5
4
3
2
1
20
30
10
5
5
28.6
42.8
14.3
7.2
7.2
Valid
Percent
28.6
42.8
14.3
7.2
7.2
70
100.0
100.0
Cumulative
%
28.6
71.4
85.7
92.8
100.0
Source: Field Survey, 2019.
Interpretation: In the above question, 28.6% strongly agree 42% agree that more
attention has been given to the sales promotion process in Lasusu Bottle Water as a
mean of attaining business objective while 7.2% strongly disagree / disagree,
14.3% were undecided.
Table 9; Question 9: Lasusu Bottle Water Embank on Sales Promotion to
withstand Completion Expand Market Shares and Becomes Market Leaders.
Option
Code
Frequency
Percentage
Strongly Agree
Agree
Undecided
Disagree
Strongly
Disagree
Total
5
4
3
2
1
10
40
10
5
5
14.3
57.0
14.3
7.2
7.2
Valid
Percent
14.3
57.0
14.3
7.2
7.2
70
100.0
100.0
Cumulative
%
14.3
71.3
85.6
92.8
100.0
Source: Field Survey, 2019.
Interpretation: In the above question, 14.3% strongly agree, 57.0% also agree that
Lasusu Bottle Water should embark on sales promotion to withstand completion
35
expand market shares and becomes market leaders while 7.2% strongly disagree /
disagree and 14.3% were undecided.
Question 10: Sales Promotion is Largely Responsive for the Awareness and
Widespread Acceptance of Your University’s Product.
Option
Code
Frequency
Percentage
Strongly Agree
Agree
Undecided
Disagree
Strongly
Disagree
Total
5
4
3
2
1
0
50
20
-
0
71.4
28.6
-
Valid
Percent
71.4
28.6
-
70
100.0
100.0
Cumulative
%
71.4
100.0
Source: Field Survey, 2019.
Interpretation: 71.4% of the respondents agree and 28.6% disagree to the statement
which says that sales promotion is largely responsive for the awareness and
widespread acceptance of your University’s product
Table 11; Question 11: Sales Promotion Creates Permanent Consumer
Acceptance for a Product
Option
Code
Frequency
Percentage
Strongly Agree
Agree
Undecided
Disagree
Strongly
Disagree
Total
5
4
3
2
1
40
30
-
57.0
42.9
-
Valid
Percent
57.0
42.9
-
70
100.0
100.0
Source: Field Survey, 2019.
36
Cumulative
%
57.0
100.0
Interpretation: From the table above, 57.0% agree while 42.9% disagree that sales
promotion creates permanent consumer acceptance for a product.
Table 12; Question 12: Sales Promotion has no Positives and Significance
Impact on the Sales Volume of your Product.
Option
Code
Frequency
Percentage
Strongly Agree
Agree
Undecided
Disagree
Strongly
Disagree
Total
5
4
3
2
1
5
5
30
20
10
7.2
7.2
42.8
28.6
14.3
Valid
Percent
7.2
7.2
42.8
28.6
14.3
70
100.0
100.0
Cumulative
%
7.2
14.4
57.2
85.5
100.0
Source: Field Survey, 2019.
Interpretation: 42.8% of the respondents were indifference while 28.6% disagree
14.3% strongly disagree, 7.2% strongly agree / agree that sales promotion has no
positive and significant impact on the sales volume of Lasusu Bottle Water
product.
Table 13; Question 13: By increase its level of sales promotion expenditure,
Lasusu Bottle Water can corresponding increase the sales volume and profit
margin.
Option
Code
Frequency
Percentage
Strongly Agree
Agree
Undecided
Disagree
Strongly
Disagree
Total
5
4
3
2
1
30
30
0
5
5
42.9
42.8
0
7.2
7.2
Valid
Percent
42.9
42.8
0
7.2
7.2
70
100.0
100.0
37
Cumulative
%
42.9
85.7
85.7
92.8
100.0
Source: Field Survey, 2019.
Interpretation: From the above table 42.8% of the respondents strongly agree /
agree that by increase its level of sales promotion expenditure, LASUSU BOTTLE
WATER can corresponding increase its sales volume and profit margin while 7.2%
strongly disagree/disagree with this statement.
Table 14; Question 14: Increase in Sales Promotion Expenditure Required
Bringing about Such as increase in sales and profiting a necessary business
expenses.
Option
Code
Frequency
Percentage
Strongly Agree
Agree
Undecided
Disagree
Strongly
Disagree
Total
5
4
3
2
1
30
20
10
5
5
42.8
28.6
14.3
7.2
7.2
Valid
Percent
42.8
28.6
14.3
7.2
7.2
70
100.0
100.0
Cumulative
%
42.8
71.4
85.6
92.8
100.0
Source: Field Survey, 2019.
Interpretation: From the above table 42.8% of the respondents agree, 28.6%
strongly agree, 14.3% were undecided while 7.2% strongly agree / agree of the
statement that increase in sales promotion expenditure required bringing about
such an increase in sales and profiting a necessary business expenses.
38
Table 15; Question 15: Sales Promotion Programme Justify the Objective of
Lasusu Bottle Water
Option
Code
Frequency
Percentage
Strongly Agree
Agree
Undecided
Disagree
Strongly
Disagree
Total
5
4
3
2
1
30
15
5
5
5
42.8
21.0
7.2
7.2
7.2
Valid
Percent
42.8
21.0
7.2
7.2
7.2
70
100.0
100.0
Cumulative
%
42.8
71.4
85.7
92.8
100.0
Source: Field Survey, 2019.
Interpretation: it can be clearly seen from the above table that 42.8% have the
highest percentage which the respondent strongly agree to this statement 21.0%
agree while 7.2% of the respondents disagree, strongly disagree and were
undecided that sales promotion programme justify the objective of the University.
Table 16; Question 16: Do you agree that the objective of the LASUSU Bottle
Water in encouraging sales promotion is been achieved.
Option
Code
Frequency
Percentage
Strongly Agree
Agree
Undecided
Disagree
Strongly
Disagree
Total
5
4
3
2
1
30
20
10
5
5
42.8
28.6
14.3
7.2
7.2
Valid
Percent
42.8
28.6
14.3
7.2
7.2
70
100.0
100.0
Source: Field Survey, 2019.
39
Cumulative
%
42.8
71.4
85.7
92.8
100.0
Interpretation: 7.2% of the respondents disbelieve that the objective of the LASU
in encouraging sales promotion is been achieved while 42.8% strongly agree,
28.6% agree while 14.3% were undecided with the statement.
Table 17; Question 17: Do you agree that management decision economy price
and profit influence the sales promotion practice in Lasusu Bottle Water.
Option
Code
Frequency
Percentage
Strongly Agree
Agree
Undecided
Disagree
Strongly
Disagree
Total
5
4
3
2
1
10
30
20
5
5
14.3
42.8
28.6
7.2
7.2
Valid
Percent
14.3
42.8
28.6
7.2
7.2
70
100.0
100.0
Cumulative
%
14.3
57.1
85.6
92.8
100.0
Source: Field Survey, 2019.
Interpretation: From the table above, agree has highest percentage with 42.8%,
14.3% strongly agree that management decision, economy, price and profit
influence the sales promotion practice in Lasusu Bottle Water, while 28.6%
undecided and 7.2% has the lowest percentage with respondents agree/strongly
disagree with the statement.
4.3
HYPOTHESIS TESTING
In testing the hypothesis stated in chapter two the correlation co-efficient analysis
was used. There are three possible relationship that can result from the
computation of r are:
i)
Perfect direct relationship r = +1
ii)
Perfect inverse relationship r = -1
40
iii)
No relationship at all r = 0
The formula for the correlation co-efficient (r) is:
r
ηΣxy – ΣxΣy
=
(ηΣx2 – (Σx)2 (ηΣy2 – (Σy)2
Where:
r
=
Correlation Coefficient
x
=
Represent the Code
y
=
Responses from the respondent
Σx
=
Sum of the Code
Σy
=
Sum of the response of the respondents
n
=
Number of Question
To determine the strength of the relationship between x and y variable there is need
to convert the correlation co-efficient statistics to t statistics using the formula:
t
=
r
n–2
1 – r2
The test was carried out at 5% level of significance. This means that the researcher
was 95% confidence of choosing the correct alternative hypothesis or that there
was 5% error of choosing the wrong alternatives. The conclusion was premised on
the result of the correlation coefficient statistics.
Reject the null hypothesis (H0) if the test statistic (t-stat) is greater than the critical
value (t-tab) that is stat > t-tab and the alternative hypothesis (H1) is accepted.
Hypothesis 1
H0:
That sales promotion does not necessary vital and strategic means of
improving an organization business operation.
41
H0:
That sales promotion is a necessary vital and strategic means of improving
an organization business operation.
From Question 7
N
1
2
3
4
5
n=5
n=5
r
X
5
4
3
2
1
15
Σx = 15
=
Y
40
10
10
5
5
70
Σy = 70
X2
25
16
9
4
1
55
Σxy = 285
Y2
1600
100
100
25
25
1850
Σx2 = 55
XY
200
40
30
10
5
285
Σy2 = 1850
5(285) – (15 x 70)
5 (55) – (15)2] 5 (1850 – (70) 2
r
=
1425 – 1050
275 – 225 x 9250 - 4900
r
=
375
50 x 4350
r
=
375
217500
r
=
375
466.4
=
0.80
Decision
Since the Pearson product moment correlation coefficient computed for data x and
y yielded 0.80 which signifies high degree of correlation between x and y data.
Measure of relationship strength.
42
t
=
t
= 0.80
t
= 0.80
r
n–2
1 – r2
5–2
1 – (0.80)2
3
1 – 0.64
t
= 0.80
3
0.36
t
= 0.80
3
8.333333333
0.80 x 8.3
t
=
0.80 / 2.304
Table of Inference
Correlation
Test
Critical
T-Test
Co-efficient
Statistics
Value
Y
t.test
t.table
t.tab
2.304
2.35
t.stab
0.80
Reject
Interpretation
Based on the calculated value of t (2.304) that is test statistic, at 5% level of
significance and 3 degree freedom, it is revealed that a test statistic lesser than the
tabular critical value 2.35.
Decision
43
From the above analysis in the table of influence it is observed that there is 0.80
correlations which show that there is a positive relationship between sales
promotion and improving an organization business operation. Hence, the null
hypothesis should be rejected.
Hypothesis II
H0:
Sales promotion technique does not create wide spread and permanent
consumer acceptance of a product.
H0:
Sales promotion technique create wide spread and permanent consumer
acceptance of a product.
From Question 7
N
1
2
3
4
5
n=5
n=5
r
X
5
4
3
2
1
15
Σx = 15
=
Y
30
20
10
5
5
70
Σy = 70
X2
25
16
9
4
1
55
Σxy = 55
5(275) – (15 x 70)
5 (55) – (15)2] x 5 (1450 – (70) 2
r
=
1375 – 1050
275 – 225 x 7250 - 4900
r
=
325
50 x 2350
r
=
325
44
Y2
900
400
100
25
25
1450
Σx2 = 1450
XY
150
80
30
10
5
275
Σy2 = 275
117500
r
=
325
342.8
=
0.94
To measure the relationship strength
t
=
r
n–2
1 – r2
t
5–2
=
1 – (0.92)2
t
=
3
1 – 0.8836
t
=
3
0.1164
t
= 0.94
t
=
25.774 = 0.94 x 5.0768
4.772
45
Table of Inference
Correlation
Test
Critical
T-Test
Co-efficient
Statistics
Value
Y
t.test
t.table
T.tab
4.772
2.35
t.sta>
0.94
Accept
Interpretation
Based on the calculated value of t 4.772, that is test statistic at 5% level of
significance and 3 degree freedom, it is revealed that a test statistic 4.772 is greater
than 2.35 the tabular critical value we accept the alternative.
Decision
From the above analysis in the table of influence it is observed that there is 0.94
correlation which show that there is a positive relationship between sales
promotion and acceptance of product. Hence the null hypothesis should be
rejected.
Hypothesis III
H0:
Sales promotion technique does not create wide spread and permanent
consumer acceptance of a product.
H0:
Sales promotion technique create wide spread and permanent consumer
acceptance of a product.
From Question 7
N
X
Y
X2
Y2
XY
1
5
40
25
1600
200
2
4
20
16
400
80
46
3
3
5
9
25
15
4
2
5
4
25
10
5
1
0
1
n=5
15
70
55
2050
305
n=5
Σx = 15
Σy = 70
Σxy = 55
Σx2 = 2050
Σy2 = 305
r
0
5(305) – (15 x 70)
=
5 (55) – (15)2 x [5(2050 – (70) 2
r
1525 – 1050
=
(275 – 225) x 10250 - 4900
r
=
475
50 x 5350
r
=
475
267500
r
=
475
517.2
=
0.918
Decision
Since the Pearson product moment correlation co-efficient compiled for data x and
y yielded 0.918 which signifies high degree of correlation between x and y data.
t
=
r
n–2
1 – r2
47
t
= 0.918
5–2
1 – (0.918)2
t
= 0.918
3
1 – 0.842724
t
= 0.918
3
0.157276
t = 0.918 x 4.36747
t = 4.01
Table of Inference
Correlation
Test
Critical
T-Test
Co-efficient
Statistics
Value
Y
t.test
t.table
t.tab
4.01
2.35
t.sta>
0.918
Accept
Interpretation
Based on the calculated value of t 4.01, that is test statistic at 5% level of
significance and 3 degree freedom. It is revealed that a test statistic 4.01 is greater
than 2.35 the tabular critical value we accept the alternative.
Decision
From the above analysis in the table of inference it is observed that there is 0.918
correlations which show that there is a positive relationship between sales
promotion and organizational performance.
48
Hence the null hypothesis should be rejected and the alternative accepted. t-test is
4.01 is greater than 2.35 critical value accept alternative and reject the null
hypothesis.
49
CHAPTER FIVE
SUMMARY AND CONCLUSION OF FINDINGS, RECOMMENDATION
AND SUGGESTIONS
5.1
SUMMARY OF FINDINGS
Based on the data analysis carried out in chapter four, some critical results were
obtained in table seven of the respondents (54.3% agree that sales promotion has
positive and significant impact on the sales volume of LASUSU BOTTLE
WATER product.
It can also be from table six that sales promotion creates permanent consumer
acceptance for a product here 65.7% of the respondent agrees to this statement.
The analysis and hypothesis testing came out earlier and shows that the overall
objectives and mission of a business organization could be achieve through
intensive sales promotion efforts. This will make it possible to expand an
organization’s business operation through increased sales volume and profit level
greater market share, improved market performance as well as influence consumer
behaviour positively towards a product through effective product promotion
strategy.
It also shows that constant and consistent promotional methods create and lead to
permanent consumer acceptance of a product. Finally, it has been shown that any
business enterprises that intend to achieve the above stated objectives most regards
sales promotion as a strategic tool and therefore attach special importance to it.
This can be reflected in the level of budgetary allocation of Lasusu Bottle Water
can make for the sales promotion process.
50
5.2
CONCLUSION
This study is set out to determine the impact of sales promotion on product
performance in beverage industry segment of the economy. In this regards the
study intends to determine whether sales promotion is a critical and strategic
element of an organization business activities. Specially, information was sought in
order to determine:

How sales promotion could positively cause increase in sales volume and
profit margin?

The manner in which sales promotion influences the way consumer perceive
Lasusu Bottle Water and its product.

The Lasusu Bottle Water’s ability to perform better than its competitor with
the overall Lagos state business environment in general and the soft drinks industry
in particular.

How sales promotion can create widespread and permanent consumer
acceptance of a product.
The finding shows that the sales promotion is a necessary and vital part of an
organization’s business activities which aids in increasing sales volume and
maximizing profit. It also found that sales promotion positively influence the way
consumer view of Lasusu Bottle Water and its product by enhancing its corporate
image. The finding also indicate that sales promotion offer business organization
and their product that external edge over other firms and alternative products in the
same industry that do not practice in the Lasusu Bottle Water
51
5.3
RECOMMENDATIONS
This study will be incomplete without suggesting some policy recommendations
for improving sales promotion practice in the Lasusu Bottle Water.
Through the findings of this study substantially confirm the basic research question
of this management of the Lasusu Bottle Water. The impression that all is well
with sales promotion conceptualization and practice for, there is more room for
improvement.
Given that competition is keen and purchasing power is on the decline, it is
imperative that sales promotion strategy remain a critical factor open to
management to use in improving overall Lasusu Bottle Water market performance
is relevant and contribution should be assed vis-à-vis its relationship with other
management and marketing promotion mix strategies. As we have noted earlier,
contemporary marketing calls for more than developing a good product, pricing it
appropriately and making available to the target consumers. Lasusu Bottle Water
should promote their product to present the potential consumers. Sales promotion
is an important factor of promotional strategies leading to success.
Specifically, the findings of this research work reveal that the following
recommendation will be useful to the Lasusu Bottle Water in respect of its sales
promotion programme.
i)
The management of Lasusu Bottle Water should intensify efforts at
maximizing sales and profit through the maximization of production and
distribution cost. Increase in its products price is often a veritable means of
allowing competition to encroach on its market share.
52
The management should thus embarks on research studies on how to source a
greater percentage of its raw material locally so as to reduce cost. This is the only
way it can remain competitive in pricing.
ii)
The management of the Lasusu Bottle Water should also be flexible in
setting the objectives of its sale promotion programme so that at each point in time,
the available material and human resources in the University can be used to
achieve these objectives.
iii)
The Lasusu Bottle Water should endeavour to improve and expand its sales
promotion techniques and strategies go as to retain old consumer and attract new
ones.
iv)
It was reveal during the course of this study that sales promotion contribute
largely to the effectiveness of the Lasusu Bottle Water marketing management
activities this increase adequate attention should be paid to the sales process.
v)
Given that that the marketing environment remains volatize and dynamic. It
is important to state that the Lasusu Bottle Water should continue to provide
adequate for sales promotion campaigns as potentials. Marketing tools leading to
success. However, its success depends on the proper control and management of
both human and material resources is required for implementing the programme
successfully.
In conclusion, we hold that since increase in sales volume often translate to greater
market share and profit level, the management of the University should in order
top ensure continuous arises in sales volume, continually improve on products
quality. This will ensure that the objectives of promotion in improving
organizational performance and market share are achieved.
53
Above all, the Lasusu Bottle Water should intensify its sponsorship of sporting
activities. This is because sporting programems are useful tools in targeting the
middle class group, which is not easy to reach through other means. Above all, the
University should intensify its intention of targeting this elusive but important
prospect is not only to influence their buying habit but also to score some points on
social responsibility, especially as thus is usually the most vocal group in associate.
Close to the social responsibility function of sports sponsorship is the positioning
strategy which is the heart of the matter. By sponsoring certain sports, events, the
Lasusu Bottle Water can project a certain image about itself in addiction to being
seen as a good corporate organization. Indeed sport sponsorship offers a subject
mix of benefit it is usually efficient in reaching specific target audience as well as
providing fun for example they can dabble into boxing promotion and sponsorship
to make it more attractive to youths who could take such sports into international
heights considering the fact that boxing is an internationally acclaimed sport. This
and other sport such as wrestling and funds are sports which the Lasusu Bottle
Water could use as an aggressive sponsorship to bring to the fore intentionally and
make a good name for itself.
5.4
SUGGESTION FOR FURTHER STUDIES
The study considered only the states promotion of the Lasusu Bottle Water. These
are other element of the marketing mix such as personal selling, advertisement,
publicity and public relations. It is being suggested, therefore that students or
researcher who intend to carryout further studies should investigate other aspect of
marketing mix and the relationship between specific promotional strategy or
method and its acted effect on a Lasusu Bottle Water sales volume also research
could be carried out to determined what specific method is the best for a particular
product line.
54
REFERENCES
Adeleke, A. Ogundele, O.J.K, Oyenuga, O.O. (2003): Business Policy and
Strategy, Lagos, concept publications.
America Marketing Association (2008): Annual Journal Media Conference.
Asika, N. (1991): Research Methodology in the Behavioural Science, Ibadan
Longman Lagos state Plc.
Baker (2002): Marketing Principles and Management.
Belch, G. E. and Blech, M. A. (2004): Advertising and Promotion: An Integrated
Marketing Communication Perspective; 6th Edition, New York McGraw Hill /
Irwin.
Cravens, D. W. and Piercy (2003): Strategic Marketing 7th Edition New York;
McGraw Hill Companies.
Donnels, E. (2008): Organizational Antecedents of Second Order Competences,
Strategic Management Journal; 29: 519/543.
Guitan, P. J. and Paul (2007): Marketing Management Strategies and Programmes;
New York.
Kola Afolabi (2006): Essentials in Marketing Management Practice 1st Edition
Lagos Punmark Lagos state Limited Old Ipaja Road, Iyana, Orile B/Stop.
Kotler, P. and Keler (2006): Marketing Management; 12th Edition. Place and
Published.
Osuagwu, L (2006): Business Research Method Principles and Practices, 2nd
Edition, Grey Resources Limited.
55
Squaire Claire (2009): Marketing Literature the Marketing of Contemporary,
Writing in Britain Towhered Review.
Stanton William, J. (2005): Fundamental of Marketing Tokyo: McGraw Hill Koga
Kush Ltd.
56
QUESTIONNAIRE
Department of Marketing,
Faculty of Management Sciences,
Lasusu Bottle Water,
Ojo, Lagos Lagos state.
Dear Sir/Ma,
I am a final year student of marketing in the Faculty of Management Sciences. In
the above named institution; I am conducting a research on the “The Impacts of
Sales Promotions on Organizational Performance. A Study of Lasusu Bottle
Water”.
I would be most obliged if you could spare your time to answer the questions that
have been listed below, please note that all information provided is purely for the
purpose of research work and would be treated as confidential and shall be used for
the purpose of this research only.
Thanks.
Yours faithfully,
Sangobowale Adetemitayo Jesuferanmi
57
SECTION A
Please mark ‘x” in the appropriate space provided that corresponds to your correct
answer in each of the following questions:
1)
Sex:
a)
Male
[
]
b)
Female
[
]
2)
Age:
a)
16 – 25 years
[
]
b)
26 – 35 years
[
]
c)
36 – 45 years
[
]
d)
46 – 55 years
[
]
e)
56 and above
[
]
3)
Marital Status:
a)
Married
[
]
b)
Single
[
]
c)
Divorced
[
]
d)
Widowed
[
]
e)
Widower
[
]
4)
Length of Work Experience:
a)
1 – 5 years
[
]
b)
5 – 10 years
[
]
c)
11 – 15 years
[
]
d)
Above 15 years
[
]
5)
Educational background:
a)
GCE (O and A) Levels
[
]
b)
OND/NCE
[
]
c)
Post Graduate
[
]
58
d)
Professional
[
]
SECTION B
Key:
SA
=
Strongly Agree
A
=
Agree
U
=
Undecided
D
=
Disagree
SD
=
Strongly Disagree
S/N
QUESTIONS
6.
Sales promotion is a special service designed to
SA A
provide consumers with adequate information to
enable them make choice for a product against
other available alternatives?
7
Lasusu Bottle Water views issues of sales
promotion
as
necessary
and
strategic
for
improving business operations and give adequate
attention?
8
More attention has been given to the sales
promotion
9
Lasusu Bottle Water embark on sales promotion
to withstand competition expand market share
and become market leader.
10
Sales promotion is largely responsive for the
awareness
and
widespread
acceptance
of
LASUSU Bottle Water products?
11
Sales promotion creates permanent consumer
59
U
D
SD
acceptance for a product?
12
Sales promotion has no positive and significant
impact on the sales volume of LASUSU Bottle
Water products.
13
By increasing its level of sales promotion
expenditure,
LASUSU
Bottle
Water
can
correspondingly increase its sales volume/profit
margin?
14
Increase in sales promotion expenditure required
bringing about such an increase in sales and
profiting a necessary business expenses.
15
Sales promotion that the objective of the Lasusu
Bottle Water.
16
Do you agree that the objective of the Lasusu
Bottle Water in encouraging sales promotion is
being achieved?
17
Do you agree that management decision,
economy,
price/profit
influence
the
sales
promotion practices in Lasusu Bottle Water?
60