1
THE NATURE AND PRACTICE OF SALES PROMOTION
IN NIGERIA
BY
IHEUKWUMERE OBI CHINONYEREM
PG/MBA/00/31435
MARKETING PROGRAMME
DEPARTMENT OF MARKETING
UNIVERSITY OF NIGERIA
ENUGU-CAMPUS, ENUGU
JULY, 2003.
2
TITLE PAGE
THE NATURE AND PRACTICE OF SALES PROMOTION IN NIGERIA
BY
IHEUKWUMERE OBI CHINONYEREM
PG/MBA/00/31435
SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR
THE AWARD OF A POSTGRADUATE MASTER OF BUSINESS
ADMINISTRATION (MBA) DEGREE IN MARKETING
FACULTY OF BUSINESS ADMINISTRATION
UNIVERSITY OF NIGERIA
ENUGU CAMPUS, ENUGU.
SUPERVISOR: NNOLIM D. A. MRS.
3
CERTIFICATION
Iheukwumere Obi Chinonyerem, a post-graduate student of the
department of marketing with registration number PG/MBA/00/31435,
has satisfactorily completed one of the requirements for the award of
a postgraduate Masters of Business Administration (MBA) degree in
Public Relations, Department of Marketing.
This project work/report is an embodiment of original work and
has not been submitted in part or full for any other Diploma or Degree
of this or any other university or polytechnic.
----------------------------Nnolim D.A. Mrs.
Supervisor
-----------------------------Dr. (Mrs) J.O. Nnabuko
Head of Department
4
DEDICATION
This work is dedicated to my mother lovely siblings and finally
to Almighty God for his Mercy and protection over me.
5
ACKNOWLEDGEMENT
I give thanks first of all to the Most High God for his guidance
and protection through the period of the course and project report. It
was his grace that saw me through.
Further, I thank my supervisor, Mrs. D. A. Nnolim, who more of
a Mummy and of course a source of inspiration to me, for her
constructive criticisms and corrections, which brought out the best in
me and made me realize the title I know each time I was corrected.
I also thank the lecturers the contributed in one way or the other
to see that I completed the MBA Programme and to my friend
Mgbodile “Obival”. Finally to the typist who did a commendable
secretarial work.
Iheukwumere Obi Chinonyerem
PG/MBA/00/31435
July, 2003.
6
ABSTRACT
This is a research project carried out to identify and determined
the nature and practice of sales promotion in Nigeria.
A sample of 466 respondents were selected from the consumer
and industrial managers. Both primary and secondary data were
collected and analyzed using chi-square test.
The researcher, based on the data collected and analyzed,
summarized, concluded and recommended as follows:
That sales promotion managers (users) should have mastery of
scheduling sales promotion campaign. The promotion should be
moderately entertaining and brief so that an induce audience
remained exposed to the promotion. They should know at what
point(s), in the product life cycle of any goods or services they are
marketing, sale promotion is most likely to be effective.
Government
should
take
additional
measures
at
intra-
professional and consumer levels to further ensure the maintenance
of ethical standards in sales promotion campaigns in Nigeria.
Finally management should establish the sales promotion
objective(s) select appropriate tool or technique(s), develop the
programme, pretest the ideas, implement and control the programme
and evaluate the consumers response or depth or impact.
7
LIST OF TABLES
Table 3.1 Possible
Demographic
variables
and
attributes
in
Measures instrument
Table 4.i
Age and Sex Distribution of respondents.
Table 4.ii
Education Qualification of respondents
Table 4.iii Income level of respondents
Table 4.iv Company‟s Age
Table 4.v
Genuineness of Sales Promotion
Table 4.vi Increase in Sales as a result of sales promotion
Table 4.vii Types of sales promotion techniques mostly used by
organizations in Nigeria.
Table 4.viii Increase in profit as a result of use of sales promotion
Table 4.ix Appraisal of participation in sales promotion activities
Table 4.x
Factors that contributes to increase in sales promotion
adoption in Nigeria.
Table 4.xi The acceptability of sales promotion as a marketing
strategy
Table 4.xii Code of ethics consideration in the practice of sales
promotion in Nigeria.
8
Table 4.xiii Increase in Consumers long term demand as a result of
sales promotion.
Table 4.xiv Chi-square test: Consumers accept sales promotion as
marketing strategy.
Table 4.xv Chi-square test: Companies who engage in sales
promotion does not always abide by its code of ethics.
Table 4.xvi Chi-square test: Sales promotion increases the demand
of products by consumers.
9
TABLE OF CONTENTS
Title page
ii
Certification
iii
Dedication
iv
Acknowledgement
v
Abstract
vi
List of table
vii
Table of Contents
ix
CHAPTER ONE
1.1
Introduction
1
1.2
State of Problems
4
1.3
Objectives of the study
5
1.4
Significance of Study
6
1.5
Research Hypothesis
7
1.6
Definition of Terms
7
1.7
Limitations of Study
7
CHAPTER TWO
2.0
Literature Review
9
2.1
Introduction
9
2.2
The Review
10
2.3
Sales Promotions activity in Nigeria since
post-independence till the late Eighties
12
2.4
Sales promotion in Nigeria in the Late Eighties
14
2.5
Sales promotion in Nigeria from the Ninties till date
17
10
2.6
Factors that contributes to increase in Sales Promotion
adoption in Nigeria
21
2.7
Prospects and Problems of sales promotion
24
2.8
Designing and Managing sales promotion
27
2.8.1 Establishing a Sales promotion objective(s)
29
2.8.2 Selecting the sales promotion tools
30
(i)
Premiums
31
(ii)
Contents
32
(iii)
Sampling
34
(iv)
Demonstration
35
(v)
Consumer Deals or Price incentives
35
(vi)
Point-of-purchase promotion or point of sale
promotion (POP)
36
2.8.3 Developing the sales promotions programmes
36
2.84 Presenting the programme
37
2.8.5 Implementing the sales promotion programme
37
2.8.6 Evaluating the sales promotion results/effectiveness
38
2.9
41
Ethical Considerations
CHAPTER THREE
3.0
Research Methodology
46
3.1
Introduction
46
3.2
Research Method
46
3.3
Research Design
48
3.4
Population and Sample
49
11
3.5
Measuring Instrument
50
3.6
Nature of Questionnaire
51
3.7
Data Collection
51
3.8
Method of Data Collection
52
3.9
Method of Data Analysis
52
3.10 Expected Results
53
3.11 Summary
53
CHAPTER FOUR
4.0
Data Analysis and Results
54
4.1
Result of Findings
54
4.2
Distribution Tables of Key Responses from respondents 59
4.3
Hypothesis Testing
68
4.4
Discussion and Findings
76
CHAPTER FIVE
5.1
Summary and Recommendation
80
5.2
Recommendation for Further Study
81
Bibliography
Appendix I -
Letter of Identification
Appendix II -
Questionnaire
Appendix III -
Hypothesis Working
12
1.1
INTRODUCTION
Sales promotion had been adopted by business firms and
marketing practitioners long before the coming of Europeans to
Nigeria in 18th/19th centuries. As a matter of fact, many business firms
had been using sales promotion in marketing their goods and
services to Nigerian consumers before the coming of the Europeans
to Nigeria, and before the sad Biafra – Nigeria war, of the sixties
(1967 – 70).
Multinational firms, mainly of European background or origin
had adopted sales promotion practices and strategies in selling
products and services to their Nigerian Customers and or consumers,
before and after 1914, (the year/period of the amalgamation of the
Northern and Southern protectorates of Nigeria) to the present day
civilized Nigerian society / consumer. (Nkem 1999).
Before the arrival of the Europeans in Nigeria, Nigerian
Entrepreneurs/business
organizations
had
several
unorthodox
methods of carrying out sales promotional activities, such as going
from hamlet to hamlet, village square to village square or from town
13
to town with their products, bargaining and negotiating prices for their
produce. Also during local market days, sales promotion was carried
out or done by ringing bells in market squares, and through this
means, consumers, were attracted to bargain for prices and will
invariably wind up, buying a commodity or product of their choice at a
reduced price, or bargained price, or price off.
In Nigeria today, sales promotion is still common. Sales
promotion is practiced during auction sales, Bazaar sales, Christmas
period, Easter period and during other special events.
Sales promotion is important for reaping immediate fruit
achieving immediate returns or achieving success at the market
place, as far as marketing of goods and services are concerned.
Among, the business firms that had adopted or had been
making use of sales promotion in the marketing of their goods and
services in Nigeria are all blue chip companies, quoted in Nigerian
Stock Exchange such as Nigerian Breweries PLC, Cadbury PLC,
Nestle PLC, Christleb PLC, Lever Brothers, U.A.C. Group of
14
Companies, Neimeth Pharmaceutical company, Guinness PLC, 7up
bottling company and all seasoning companies etc.
Sales promotion is an indirect form of marketing promotion
intended to stimulate quick action.
It is those marketing activities-other than personal selling,
advertising and publicity-that stimulate consumer purchasing and
dealer effectiveness, such as display, shows and exhibitions,
demonstration,
coupons,
sweeps-take
competition,
contests,
samples, premiums, trade allowance, point of purchase displays,
cent-off packs and dealer allowances, and other known routine selling
efforts that are usually of short term activities.
Sales promotion can also be seen as a form of “incentive
marketing” Incentive marketing, among other things, helps to ensure
repeat purchasing when well executed, and repeat purchasing is the
key to successful marketing or successful business (Schewe 1987).
More specifically, however, sales promotion can be defined as a set
of activities made up mainly of immediate or delayed „incentives to
purchases, expressed in cash or in kind over a short period and
15
whose main objective is to increase the sales volume for any product
or service.
Even though most sale promotion campaigns are aimed at
achieving short-term sales objectives, it must be noted that it can also
perform the function of helping to achieve long-term sales and other
marketing or business objectives. Sales promotion has for instance,
been increasingly shown to be a long-term image builder, awareness
creator and a veritable communication medium (Bantick, 1980).
Furthermore, sales promotion contributes to the utilitarian value of
advertising. For example, much of modern advertising is geared
towards publicizing the promotional effort. Also, sales promotion
facilitates the processes of product or service differentiation and
effective positioning in an increasingly competitive market as exists in
Nigeria. Sales promotion is, of course, a marketing tool that can be
gainfully employed in offensive and defensive marketing of any
product or services, (Nwosu 2001).
According to (Kinnear and Bernharelt, 1993), sales promotions
is intended to aid both consumer pull an dealer push. They thus
categorized common sales promotion techniques in terms of their
consumer and dealer focus.
16
Consumer pull promotion techniques are such activities like
sampling, price incentives or deals, coupons, cent-off-offer, returned
or rebate, contests, sweeps-take competition, premium like free-inthe mail, self liquidatory and reliable containers. While trade push
promotions techniques are such activities like training, inventory
controls, displays and financial assistance.
Before the sixties, sales promotions has not become popular,
but in recent years have grown so rapidly between 1969 and 1976,
and much more in the late eighties. It is this valid increase therefore,
and especially now that world economies like Nigerian are in down
turns, that has promoted this research “The Nature and Practice of
Sales Promotion in Nigeria.”
1.2
STATEMENT OF PROBLEMS
The use of sales promotion helps in promoting sales of a
particular product. But it has many problems which includes
(1)
The problem of assessing the growth / development of sales
promotion from post independence till date.
(2)
The problem of determining factors that contributes to increase
in sales promotion adoption in Nigeria.
17
(3)
The problem of knowing the prospects and problems of sales
promotion.
(4)
The problem choosing the best available sales promotion
tool(s), in other to achieve the set goal.
(5)
How ethical those companies are whether the various offers
projected during the sales promotion are genuine and fulfilled.
1.3
STATEMENT OF OBJECTIVE
A not-so-quiet revolution is currently taking place in Nigeria‟s
contemporary marketing scene. That revolution is the increased use
of sales promotional campaigns by many companies in the country to
facilitate the sale of their products in the depressed and de-regulated
economic system in which Nigeria now finds itself.
So considering the enormous cost, it has become necessary to
evaluate this action to determine the cost effectiveness of this
expensive programme and the response.
(i)
To determine the major type(s) of sales promotion
practiced in the country.
(ii)
To determine how sales promotions activities are
executed.
18
(iii)
To determine the prospects and problems of sales
promotion.
(iv)
To determine the effect
of
sales
promotions
on
consumers long term demand for products/services so
promoted.
(v)
To assess the acceptability of sales promotion as a
marketing strategy by consumers.
(vi)
To determine how to design and manage sales
promotion.
(vii)
To assess their ethical consideration while engaging in
sales promotion.
1.4
SIGNIFICANCE OF STUDY
That sales promotions activities have been rapidly on the
increase in recent times, indicates its importance in the marketing of
products.
The extent of company‟s sales that is attributed to the
effectiveness of sales promotion is not yet determined.
The determination of this will enable companies in relation to
the cost involved decide whether to continue or not.
19
The result of this research will enable sales promotion manager
or director to know how to position their product and carry out their
sales promotion strategies ethically.
Again, this equally will contribute to efforts at enhancing people
continuing understanding or the rationale of sales promotion
campaign.
1.5
DEFINITION OF TERMS
(1)
Nature – Type or kind.
(2)
Practice – To do something regularly as part of your normal
behaviour.
(3)
Sales – An act or the process of selling something.
(4)
Promotion – Activities done in order to increase the sales of a
product or service; a set of advertisements for a particular
product or service.
1.6
LIMITATIONS OF STUDY
Due to limited financial resources, this study is carried out only
in four major states of the federation. Abuja, Enugu, Lagos and Port
Harcourt because of its large population and position in the country
20
with a manageable sample size which the researcher can
conveniently cope with.
Again, the available time within which to complete the study is
short. As such, the researcher must of necessity use an easily
accessible population.
21
CHAPTER TWO
2.0
LITERATURE REVIEW
2.1
INTRODUCTION
The topic for research, “the Nature and practice of sales
promotion in Nigeria is relatively a new one. But studies have been in
the area of sales promotion.
The researcher here reviewed works done in the related area,
irrespective of background, of particular interest to the researcher is
the nature and practice of sales promotion in Nigeria.
Within the limited time available to the research, “He made
efforts to find and review literature on sales promotion without
prejudice thus include trips to the National library, UNN, ESUT library,
Nigeria bottling company PLC., 7up Bottling Company Plc, etc.
In this study, an attempt will be made to review related literature
which explain factors that lead to sales promotions increase and the
patterns of designing and managing sales promotion activities to
determine its sales and cost effectiveness and its effectiveness and
ethical implications in Nigeria.
22
The literature reviewed here include Journals, magazines,
unpublished articles, sales promotion books, advertising books,
marketing books and from workshops.
2.2
THE REVIEW
A not-so-quiet revolution is currently taking place in Nigeria‟s
contemporary marketing scene. That revolution is the increased use
of sales promotional campaigns by many companies in the country to
facilitate the sale of their products in the depressed and de-regulated
economic system, which Nigeria now finds itself.
Even though sales promotion gained real recognition as a tool
of marketing in Nigeria 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 Nigeria started with the multinational 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
23
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 Nigeria
was the inclusion of gift items like balloons, toys, pencils, ball-point
pens and erasers inside product packs like tooth pastes and
detergents.
It was not until the late 1980‟s that sales promotion witnessed a
dramatic change in the Nigerian Marketing Scene. This period
marked the beginning of what is now described by Nigerian marketing
experts as the High profile promotional era which is characterized by
fabulous cash and other material incentive to customers. In 1987, for
instance, the Nigerian Bottling Company Launched a promotional
Campaign tagged “Animal Kingdom Promotion”. Its main aim was to
create market for sprite, one of its mineral water brands. Nigeria‟s
second largest soft drink bottler, the 7up bottling company, also within
this period made an aggressive re-entry came with intensive
advertising and sale promotion efforts that ushered in the promotion
war between the 7up bottling company and the Nigerian Bottling
Company. The gifts offered in contemporary Nigeria Sales promotion
scene range from houses, cars, motor-cycles, scholarships, overseas
24
trips, refrigerators, deep freezers, colour televisions, video sets and
sewing machines.
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 Nigeria, as well as
ensure that it is practiced professionally, responsible and with the
required results.
2.3
SALES PROMOTIONS ACTIVITY IN NIGERIA SINCE POST –
INDEPENDENCE TILL THE LATE EIGHTIES
Since post independence, except in the late eighties,
management of the marketing promotional mix strategies of
organization in Nigeria 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 Nigeria like Nnolim
(1979), noted that as a result of scarcity of goods and services in
Nigeria, marketing institutions and firms were still in the developing
25
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 Nigerian 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
Nigeria since post-independence till the late eighties, the centre for
management development in Nigeria (1975), carried out survey on
the management training needs in Nigeria” 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 Nigeria from
early sixties to early and middle eighties. According to Nwokoye
(1984), Nigeria 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 Nigeria.
26
Altatisa (1979), in his own contribution said that the problem of
marketing in Nigeria 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 Nigeria as lacking consistency. He further
noted that Nigeria store 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 Nigeria 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 IN NIGERIA IN THE LATE EIGHTIES
Although the overall level of commercial activities grew
tremendously in the post-independence era in Nigeria, some
impediments to the development of marketing was inherent. Today
these problems have given way to recent actions, purposeful,
27
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 Nigeria are
rapidly expanding.
Within 1978 and 1979 alone, almost all the companies in
Nigeria embarked on one form of sales promotions activities or the
other. The Nigeria Bottling Company (NBC) alone launched two
competition, together with other product packages. Within the same
year, the seven up Bottling company, launched the “Naira Rain
contest” and the Nigerian 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
28
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 Nigeria is increasing.
Few years ago, the Nigerian Bottling Companying introduced the big
convenient size 1.5 litre plastic bottle design for its products. Lever
Brothers Nigeria PLC designed and introduced a new blue brand
margarine brandy sachets at low price. Emoekpere 1988, went
further and made the following recommendations. He observed that
two distinct social economic groupings are emerging in Nigeria 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 non-packaged 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
29
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 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
30
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 Nigerian Consumer today
corresponds to what Shama Abraham observed for American
consumers during the period of stagflation. Emoekpere went further
and noted that most Nigerians no longer engage in conspicuous
consumption. He said that Nigerians 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 NIGERIA FROM THE NINTIES TILL
DATE
Nwosu (2001) labeled 1991 the most significant or outstanding
sales promotion year in Nigeria‟s contemporary history. This is
because of the volume, reach and intensity of the sales promotion
efforts that were understaken 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 Nigeria, there were many sales promotion efforts. While several
31
were national in scope, others were restricted to specific regions or
geographical locations. Prominent among these national sales
promotion campaigns were the magi Dream House Dash, the Duntop
Elite safety-on-wheels Bonanza, the Bournvita Dream Bonanza and
the Coca Cola family Bonanza.
The Coca-Cola family Bonanza is reported to be the first
promotion campaign in Nigeria to offer five Jetta Executive cars, 64 x
20 inches television sets, 20 refrigerators, 4 cane furniture sets, 64
video sets. 64 gas cookers, 64 stereo sets, 168 cassette players, 100
Ice Coolers, 86 bicycles, 140 blenders, 208 Walkmans, 1000 wall
clocks, 36 toasters, 4 food processors and 1000 T-shirts. If number of
entries was to be the only indicator of any sales promotion efforts
then we would be right to conclude that the Coca Cola family
bonanza Campaign was a huge success. It was reported for instance,
that in the first draw alone in the competition or promotion, more than
two million entries were received (business Times, 1991). But we
have to go beyond the entries figures to determine the effectiveness
of the sales promotions campaign. It will for instance, be necessary to
measure the other promotions effect of the campaign on sales.
Nwosu (2001).
32
One inescapable point that can be made about the 1991 Coca
Cola family blast, however, is that it seemed to have lent support to
the popular marketing or promotional maxim that an increase in the
promotional budget of a company will lead to a more than
proportionate increase in the promotional budget of its competitors
Nwosu (2001). This is because two weeks after this Coca Cola
campaign the archrival of the company and its number one
competitor, the 7up bottling company launched its own promotion
campaign tagged 7up express promotion. And in this campaign as
many as 13 Tetta executive cars, 120 Suzuki motorcycles, 50 17inches colour television sets, electric generators, video sets,
refrigerators, tape record/players, T-shirt and one million free drinks
were offered by 7up company to prospective buyers.
The “promo-war” did not end there. Three months after the
above described 7 up campaign, the Nigeria Bottling company,
manufacturers of Coca Cola and sprite etc launched what could be
described as the biggest sales promotion campaign in Nigeria. Aptly
tagged the “money bag blast” by the company but popularly known as
the instant millionaire promotion, a staggering sum of N20 million was
offered to consumers as incentives for purchasing their brands. Other
33
prizes include N1 million each for eight star winners and many
assorted gift items Nwosu (2001).
Nwosu (2001) equally stated that beyond the Nigerian Bottling
Company and the 7up bottling company, many other companies in
Nigeria have now joined the sales promotion train, thereby increasing
significantly the popularity of sales promotion in Nigeria. In fact, it can
safely be said that since the sales promotion fever started spreading
like wild fire in Nigeria in 1991, no month passes now without the
consumers being bombared with at least one promotional campaign
or the other. Among the popular sales campaigns in contemporary
Nigeria, some of which are still going on, are the Bergedoff Instant
fortune Bonanza, the Limca Gold Spot Pearle – A – Gift – Promotion,
Cadbury Sweets Monthly Bonanza Promotion, Nasco Biscuit
Fantastic promotion, Close-up tooth paste promotions, universal
Trust Bank Savings Accounts Bonanza, General Motors promotion,
Jelee Super Gifts Splash, Coca – Cola 1-2-3 World Cup promotion,
Guinness World Cup promotion.
According to Nwosu (2001), all these have not only increased
the popularity of sales promotion as marketing strategy in Nigeria but
have significantly increased the annual promotional budgets of the
34
companies that use sales promotions. What is not yet so clear is what
shares of such promotional budgets are allotted to each component
of the promotional mix (advertising, sales promotion, public relations
etc) and which one now gets the lion share. The front line competitors
for the promotional budget in Nigeria have, however, remained clearly
advertising and sale promotion. The sales promotion budgetary
allocation in many companies now seems however, to be titled in
favour of sales promotion. The Nigerian Bottling Company money
Bag Blast we discussed earlier is estimated to have cost about N40
million before it ended. The point must be made, however, that part of
this total amount was spent on such other promotional effort like
advertising itself above the line and outdoors) posters printing and
distribution, national televised draws, general logistics and other such
supportive activities. This makes it rather difficult to draw a
categorical conclusion that Nigerian companies now spend more
money on sales promotion than on the other elements of the
promotional mix.
In conclusion, he stated that with the clearly increased
popularity of sales promotion in Nigeria and the increased budgetary
allocation, it has been getting in recent years, the critical question,
35
about its effectiveness is also increasingly being asked by managers,
analysis, businessmen and even the general public. This and other
questions shall be examined later under the sub-heading evaluating
sales promotions effectiveness and results.
2.6
FACTORS THAT CONTRIBUTES TO INCREASE IN SALES
PROMOTION ADOPTION IN NIGERIA
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
36
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 “inthing”.
Sales promotion has witnessed a “Frog Leap” in Nigeria, from a
humble beginning in the 19th century, until today, catering for
sophisticated Nigerian consumers.
He also state that many business firms have adopted sales
promotion in their marketing efforts and or marketing strategies, to
satisfy Nigerian consumers. The “Frog Leap” which sales promotion
37
is enjoying in Nigeria‟s business environment, among business firms
operating in Nigeria, 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 Nigerian 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 Nigeria, “price resistance” by consumers
is a common occurrence at the market place in today‟s Nigeria. Since
consumers are resisting price increase at the market place,
marketers and business firms have no alternative than to turn to sales
38
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 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
39
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 Nigeria as follows:
(i)
Shortages of goods and services:
This is a problem in sales promotion for instance Nigerians are
going through economic crucible now because of the downturn in
40
Nigeria‟s economy, due to the erosion of the buying power of the
Naria, and bad management of Nigeria‟s economy, occasioned by
inept corrupt and inefficient managers.
(ii)
Unreliable Postal Services
Due to the unreliable postal (communication) services in this
country, called Nigeria, 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 Nigerian Businessmen, compounded
by the so called Nigerian 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 dis-honesty and of course
are problems that militate against successful operation of sales
promotion.
(iv)
Poor Quality Packages
41
In certain cases the packaging of made in Nigeria products are
poor in quality and as such cannot promote the sale of made-inNigeria products that are in competition with imported or foreign
products. In other to sustain the growth and encourage rapid adoption
of sales promotion in Nigeria, business firm operating in Nigeria
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”
Price off promotions are difficult to operate in Nigeria, 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. For instance, Cadbury PLC
producers of Bournvita had carried out sales promotional activities
using “free Cup” in their Bournvita promotions and due to this so
42
called Nigerian factor and unscrupulous Nigerians that lack
conscience, the “free cup” never got to the ultimate consumer(s). This
is a problem of sales promotions.
(vii) The Seventh Problem is that Currently in Nigeria, 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 Nigeria.
43
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, 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
44
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.
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,
45
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.
2.8
(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.
46
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.
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.
2.8
(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
47
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).
(a)
The Coupon Type
48
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. Nigerian
Breweries PLC, Guinness PLC, Nigerian Bottling Company (NBC),
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
49
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).
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
50
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
Nigerian context, contests involve more target audience than other
sales promotional tools. But it is only evident with reputable
companies in Nigeria for example, the data the researcher gathered
from the manager of Nigerian Bottling Company, showed that the two
contests-animal kingdom competitions on “sprite and the olympic
51
game competitions on “Coke” attracted more consumer response
than any other technique, even the on going Coca-Cola 1,2,3, world
cup competition.
(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), 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.
52
(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.
53
Schewe and Smith (1980), in their own contribution, noted that a
coupon is a certificate that consumers can bring to a retail 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, well-educated, 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-ofpurchase 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
54
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.
(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
55
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 (Nigeria) 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
56
their promotions results, which is hopeful in determining sales
effectiveness.
But with the clearly increased popularity of sales promotion in
Nigeria 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, 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
57
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 varietyseeking consumer than for the reinforcement consumers. Also, the
different in effects among both types of consumers studied, is
stronger for the minor brand.
58
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 Nigeria, 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 Nigeria
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
59
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).
2.9
Ethical Considerations
The ethical dimensions of sales promotion campaigns in
Nigeria can be examined from two silent perspectives – the consumer
perspective and the manufacturers or seller‟s perspective. In the
Nigerian 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 Nigeria 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 Nigeria consumers are increasingly
coming up with many criticisms, accusations or attacks against sales
60
promotions
campaigners
and
consequent
defense
by
these
companies Nwosu (2001).
Among the documented accusations against sales promotion in
Nigeria by consumers is that companies who use them to boost or
play on the gullibility of Nigerians, especially children and the larger
percentage of the Nigerian 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 Nigeria 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 Nigeria are
fixed in advance or manipulated Nwosu (2001).
These skepticisms, criticisms and abject attacks of sales
promotion campaign efforts in Nigeria 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
61
country as part of their marketing efforts. One of such cases is the
alleged case of fraud leveled against the 7up express promotion
campaign which was really scandalous. The 7up Bottling Company
was alleged to have failed to give away some of the 13 Jetta
executives cars set offered as star prizes to the consumers during its
campaign. Some Nigerian newspapers in reporting this scandalous
allegation of fraud even supported their reports with the point that the
Nigeria Stock Exchange on account of this suspected fraud queried
the company and even threatened to black list it or penalize it in other
ways. The scandal or alleged fraud forced the 7up Bottling Company
to put up an advertisement in an attempt to clear itself. The
advertisement carried the names and address of winners, as well as
the registration and chassis numbers of the cars won by them.
National Concord, (1992).
A further indication that some sales promotion campaigns in
Nigeria have not been quite ethical is the on-going practice or trend in
which the companies involved now have in-built defensive actions
and policies in their campaigns that will help to portray them as
ethical. While this may be seen just as a response to the barrage of
attacks they have been facing with respect to their sales promotion
62
efforts, an African adage says there can be no smoke without fire.
Defensive marketing like defensive driving is after all embarked upon
to avoid existing potholes or dangers that may lead to disaster or
failure. Nwosu (2001).
Binitie (1992) states that the defensive activities and policies
adopted by companies that use sales promotion in Nigeria include
using top government officials, traditional rulers and other celebrities
to select winners and award prizes as a way of gaining consumers
trust and building credibility. Some of these companies have also
gone further to debar their staff and relations from participating in sale
promotion competitions for prizes. In sales promotion competitions for
prizes. In addition, the companies are devising and adopting relatively
cheat-proof techniques or strategies to combat the attacks of wanton
cheating in their sales promotion campaigns. They are also
increasingly using the mass media as further proof of their sincerity
and ethical procedures. Frank Olize‟s “Newshine” on the Nigerian
Television Authority (NTA) has for instance, been used to televise the
7up prize draws and the winners. Names of winners have also been
published in some national dailies as further proof that the offered or
promised prizes were actually given out.
63
While the above measure may help to increase the ethical tone
of sale promotion efforts in Nigeria, it seems necessary that further
measures be taken to protect consumers in Nigeria from unethical
practices in sales promotion. Nwosu (2001) states some of these
measures which could come in form of effective consumer protection
legislations, sales promotion codes of ethics and consumer protection
associations. He also noted that some of these measures have
already been instituted in many developed countries. For example,
Germany promulgated its free gift decree as far back as 1932 to
check sales promotion excesses and unethical practices in that
country; France and Netherlands instituted similar legislations in 1951
and 1955 respectively. Other EEC countries like Belgium, Denmark,
Ireland and Italy also have legislations that are aimed at ensuring
discipline and control in sales promotion campaigns.
With regard to codes of ethics, while the adoption of a sales
promotion code of ethics should be the ultimate goal in Nigeria,
attempts should be made in the interim to ensure that all companies
that use sales promotion as part of their marketing efforts in Nigeria,
subscribe to and observe the tenets of the international code or sales
promotion practice adopted in 1973 at Rio de Janeiro by the
64
international chamber of commerce. Nwosu (2001). This code or
ethics among other things prescribed that the low knowledge or
experience of the consumers (especially children) should not be
exploited by sales promoters, that sales promotion campaign should
not exploit the natural credulity of children or young people and
should not harm them mentally, morally and physically. Piper (1980).
65
CHAPTER THREE
RESEARCH METHODOLOGY
3.1
INTRODUCTION
This chapter explains in details the step by step procedure
employed in carrying out this study, which include method(s) of data
collection, sampling procedure, as well as their analysis.
It is hoped that through the description of steps being taken. It
would help the researcher to understand and synthesize the result as
contained in the next chapter (chapter four).
The linking effect provided by this chapter has earned it one of
the most vital chapters in this study. This is because, the method
used in the process of any study lend credibility and validity to such
work. This is the same as saying that the method gives the study
scientific authority.
The method of data collection must be given proper attention
because of its importance.
3.2
RESEARCH METHOD
The researcher will use survey research method for the
execution of this study, as defined by Black and Champion (1976).
66
“Survey is the specification of procedures for gathering information
about a large number of people, by collecting information from few of
them.
However, for the purpose of the study, the researcher will use
questionnaires which have been found to be more effective than any
other known formats because of its high rate of response.
The good attributes of questionnaires interview will help the
researcher to obtain valid data for this study from across the sectors
of the intended population of study.
The questions are designed to be answered in a manner that is
not biased. Researchers are always advised not to expose the
intentions of the study to the sampled population so that respondents
do not deliberately frustrate the result.
3.3
RESEARCH DESIGN
The population of study in this research includes both
companies and residents in Abuja, Enugu, Lagos and Port Harcourt
who uses and or exposed to sales promotion campaigns.
This study shall not be restricted to any person in respect of
educational qualification. This is in realization of the fact that sales
67
promotion cuts across all people who provide a vital model necessary
for critical appraisal of sales promotion in Nigeria.
In respect of the above view, the researcher will closely
examine the following variables as indicated below.
Table 1:
Possible Demographic Variables and Attributes in
Measuring Instrument.
Variables
Levels
Age
17 years and above
Sex
Male, Female
Occupation
Student, Applicant, Farming,
Trading, Civil Servant, Professional.
3.4
POPULATION AND SAMPLE
The general of inhabitants of Abuja, Enugu, Lagos and Port
Harcourt metropolis, irrespective of age, gender, social economic
status, education, constitute the population of the study. The reasons
for studying these areas are as follows:
(1)
The towns are thickly populated
(2)
Proximity in relation to the researcher i.e. he deems it
appropriate to choose areas which he is familiar with.
68
(3)
Lack of time and resources to go beyond the designated areas
and finally.
(4)
The appropriateness of the population in respect of the study
being carried out.
However, the researcher deems it worthwhile to select a
manageable representative sample in the total population since it is
not possible to observe all the elements in the sample frame. Again,
the inadequacy of time frame in which the study must be carried out
justify the selection of sample size.
The following states in Nigeria, were arbitrary selected they
include Abuja, Enugu, Lagos and Rivers States.
Also a total of 500 respondents will be observed in the states
enlisted with each state yielding a maximum of 125 respondents.
The researcher again adopted convenient random sampling in
deciding
the
observational
unit.
They
will
ensure
accurate
assessment of the characteristics of the whole understudy since any
company/person irrespective of size, background are qualified to be
enlisted into the sample size.
69
3.5
MEASURING INSTRUMENT
The researcher will use well structured questionnaire as test
instrument for the study. The choice of this is informed by its
advantage over other methods of measuring instruments and its
relevance to the nature of our study.
3.6
NATURE OF QUESTIONNAIRE
The constructed test instrument will comprise two sections:
The first part shall concentrate on questions relating to the
subject matter of inquiry.
The second section will be the classification section, which will
require respondent‟s curricula vitae as sex, age, income and
occupation.
The study will elaborately use close ended questions with fewopen ended questions. This is necessitated by the fact that close
ended questions are less expensive, reduce ambiguity, less tedious
to process the data collected and above all, channel the minds of the
respondents towards the direction of the study.
For the purpose of reliability and validity of the study, the
researcher will pain-stakingly structure the questionnaire in such a
70
manner that they will tackle the researcher problem and hypothesis of
study effectively.
Finally, it will be accompanied by an introductory letter broadly
explaining the purpose of the study.
3.7
DATA COLLECTION
Questionnaire which is the chief measuring instrument for this
study will be administered to the respondents personally by the
researcher.
A total of 500 questionnaires will be distributed and analyzed
and return by respondents, the respondents are expected to
complete and return the questionnaire few days after distribution.
Data collection will be coded in the coding sheets to enhance
data analysis. Percentage of judgments will be used to ascertain in
the inter-coder reliability of the coded response after which, the
coding will be harmonized. A copy of the questionnaire will be
attached to this text as an appendix.
71
3.8
METHOD OF DATA COLLECTION
The data used for this study were from two major sources.
Primary and secondary sources. The primary sources of information
were from businessmen, civil servants, managers/company staff,
students, farmers etc.
The primary sources of data were supplemented with
secondary sources of data which are Journals, magazines,
newspapers, periodicals and unpublished materials.
3.9
METHOD OF DATA ANALYSIS
Analysis of the data will be done sequentially according to the
research questions and hypothesis. This will be done using simple
percentage to draw conclusions on research questions. Chi-square
techniques will be employed in testing the hypothesis.
In this connection, therefore, simple percentage will be used to
determine the extent to which one variable effects others.
Equally the chi-square will be used to test the statistical
significance of the results obtained. The outcome will enable us reject
or accept any particular hypothesis.
72
3.10 EXPECTED RESULTS
The researcher expected that the results will reveal the nature
and practice of sales promotion in Nigeria.
Results are equally expected on educational levels, and level of
influence of sales promotion activities on consumers.
3.11 SUMMARY
Chapter three has dealt with a very important aspect of this
study, stating the methodology of the research. There are four
research questions and hypothesis that will be answered and tested.
Principal areas were selected from major and thickly populated states
in the country; they include Abuja, Enugu, Lagos and Port Harcourt. A
copy of the test instrument to be used is attached to the text (SS
Appendix 1).
73
CHAPTER FOUR
4.0
DATA ANALYSIS AND RESULTS
In this section, the researcher analyses and interprets the data
collected from the sample population. A total of five Hundred (500)
questionnaires were carefully produced, each wit 28 carefully,
selected questions which were randomly distributed by the
researcher in four chosen states, namely Abuja, Enugu, Lagos and
Port Harcourt. Of this 500,465 questionnaires were duly completed
and returned. This showed a response rate of 93%.
The situation in the field was such that the researcher who
personally administered the test instruments, with respondents that
could not read. This is because the research covered all strata of the
population.
Besides,
the
researcher
had
to
contend
with
disappointment out right shun from some respondents, and with the
rigors and risk of shutting to and fro of these states. All the same, it
was quite an interesting experience.
74
4.1
RESULT OF FINDINGS
The analysis and interpretation of the results of respondents
answers begin with demographic characteristics of respondents,
some of the respondents are students, business workers, companies‟
executives/workers and civil servants.
TABLE 1
AGE AND SEX OF RESPONDENTS
STATE
AGE
SEX
11 - 16
17 -30
31 -45
46 &Above
Male
Female
Abuja
16
30
39
33
67
51
Enugu
11
31
48
30
72
48
Lagos
10
40
36
31
65
52
P -H
13
28
30
39
49
61
Total
50
129
153
133
253
212
From table 1 above, it can be seen that respondent between the ages
of 11 – 16 were 50 (10.75%), 129 or (27.74%) were between 17-30,
153 or 32.90% were between 31-45, 133 or 28. 39% were 46 and
above. The table also shows that 253 or 54.42% of the respondents
were male while 212 or 45. 59% were female.
75
TABLE 11
EDUCATION QUALIFICATION OF RESPONDENTS
Educational
Tertiary
Secondary primary
No Formal
Total
qualification
Education
Education
Education
Education
No of
272
98
70
25
465
21.08
15.05
5.38
100
Respondent
Percentage
of 58.49
Respondents
Similarly, the research findings ascertained the level of
education of respondents; this could be seen on table 11 above, it
shows that many of them had completed tertiary education, which is
about 272 or 58.49% of
the respondents. However, 98 or 21.08%
had completed secondary education, 70 or 15.05% had their primary
education, while 25 or 5.38% did not go to school at all.
In addition, this study is interested in determining the income
level of the respondents. This is shown in table 111 below.
76
TABLE 111: INCOME LEVEL OF REPONDENTS
Income level
No
N
N
N
N
5000-
11,000-
21,000-
41,000 & Can‟t
10,000
20,000
40,000
above
say
30
96
278
50
11
6.45
20.65
59.78
10.75
2.37
of
Respondents
percentage of
Respondents
30 or 6.45 of the respondents indicated income levels per
annum ranging from N5,00-N10,000,96 or 20.65% respondents had
N 1,000 to N20,000, 278 or 59. 78% respondents had N21,000 to
N40,000, 50 or 10.75% of respondents had income of 41,000 and
above, and 11 or 2.37% respondents could not indicate any income
level.
Besides, the study considers the age of these organizations.
77
Table iv
Company’s Age
Company‟s Age
1month
-1 2years- 4 5years -9 10years & Can‟t
year
years
years
above
say
7
10
90
313
45
1.51
2.15
19.35
67.31
9.68
No of
respondents
percentage of
Respondents
Table IV show that 7 or 1.51% of the respondents indicated that their
companies/ organization are between 1 month to 1 years. 10 or
2.15% between 2 years to 4years, 90 or 19.35% between 5 years to
9 years, 313 or 67.41% between 10 years and above, 45 or 9.68%
respondents cannot say.
On question of awareness of sales promotions activities carried
on various brand of goods, a total of 465 or 100% agreed that they
are aware of various sales promotion activities carried out on various
brand of goods.
78
Table V
Genuineness of sales promotion
Response
No
yes
No
No Response
of
respondents
Percentage
respondents
242
63
157
52.69
13.55
33.76
of
On the issue regarding the genuineness of sales promotion,
table V above shows, that more respondents agreed, that sales
promotion is genuine, that‟s 245 or 52.69%, 63 or 13.55% indicated
no, while 157 or 33.76% cannot say if its genuine or not.
4.2
DISTRIBUTION TABLES OF KEY RESPONSES FROM
RESPONDENTS
Tabular presentation has been used to aid understanding of the
data analysis and interpretation.
79
TABLE VI
DISTRIBUTION OF RESPONSES ON INCREASE IN SALES AS A
RESULT OF SALES PROMOTION
RESPONSE
YES
NO
CAN’T SAY
426
10
29
91.61
2.15
6.24
No of
respondents
Percentage
respondents
of
The result shows that more respondents agreed that sales
promotion increases sales, that‟s 426 or 91.61% of the respondents,
10 or 2.15% indicated no, while 29 or 6.24 of respondents could not
say if sales promotion increase sales.
TABLE VII: DISTRIBUTION OF RESPONSES ON TYPE (S) OF
SALES
PROMOTION
TECHNIQES
MOSTLY
USED
BY
ORGANIZATIONS IN NIGERIA
Response
Sampling Premium
Contests Demon
striation
Consumer Point of Total
Deal
purchas
e
No of
respondents 53
101
164
36
70
41
465
21.72
35.27
7.74
15.05
8.82
100
Percentage
of
respondents
11.40
80
Table vii shows that more respondents favours contest that is 164 or
35.27% of the respondents, followed by premium with 101 or 21.72%
of the respondents, consumer deal 70 or 15.05% of the respondents,
sampling 53 or 11.40% of the respondents, 41 or 8.82% indicated
point of purchase and 36 or 7.74% of the respondents indicated
demonstration.
This investigation therefore shows that contests are mostly
used by organizations in Nigeria, followed by premium.
TABLE VIII
APPRAISAL
OF
PARTICIPATION
IN
SALES
PROMOTION
ACTIVITIES
Response
Regularly
Occasionally
Seldom
Zero
Row Total of
respondents
Once a year
175
87
20
14
296
%
(38)
(19.)
(4.)
(3.)
(64.)
years
68
60
16
10
154
%
(15.)
(13.)
(3.)
(2.)
(33.)
Once in 5 year 2
6
4
3
15
%
(1.3)
(0.9)
(0.6)
(3.2)
-
-
Once every 2
Have not used
(0.4)
-
Column Total 245
153
40
27
465
81
Table ix above presents the distribution of respondents in the
participation of sales promotion activities. A good number of
respondents report regular use of sales promotion once a year, that‟s
175 or 38%, occasionally 87 or 19%, 20 or 4% indicated seldom,
while 14 or 3% indicated zero, making it a total of 296 or 64%
respondents, on once every two years 68 or 15% of the respondents
indicated regular, 60 or 13 percent occasionally, 16 or 3% seldom,
while 10 or 2 respondents indicated 0, making a total of 154 or 33%
respondents. On once every 5 years, 2 or 0.4% of the respondents
indicated regular, 6 or 1.3% indicated occasionally, 4 or 0.9% seldom
and 3 or 0.6% respondents indicated zero, given a total of 15 or 3.2%
respondents. None of the respondents indicated that they have not
used it before.
82
TABLE IX:
DISTRIBUTION
OF
RESPONSES
CONTRIBUTES
TO
INCREASE
ON
IN
FACTORS
SALES
THAT
PROMOTION
ADOPTION IN NIGERIA.
Response
Regularly
occasionally seldom
Zero Row Total of
respondents
When there is set
back
in
business
activity
105
89
4
0
198
%
22.58
19.14
0.86
-
42.58
8
0
0
105
Introduction of a new
product
97
%
20.86
1.72
product
100
25
5
0
130
%
21.51
5.38
1.08
-
27.96
1
20
10
1
32
%
0.22
4.30
2.15
0.22
6.88
Column Total
303
142
19
1
465
%
65.16
30.54
4.09
0.22
100
-
-
22.58
Creating awareness
of an improved old
To beat competitors
83
A total of 465 respondents only completed the items under
review. A good number of respondents indicated „‟when there is set
back in business activity‟‟ as the reason why they engage in sales
promotion that‟s a total of 198 or 42.58% of the respondents. A total
of 105 or 22.58% of the respondents indicated introduction of a new
product, a total of 130 or 27.96% indicated creating awareness of
improved old products, while a total of 32 or 6.88% of the
respondents reported to beat comparators.
TABLE X:
DISTRIBUTION OF RESPONSES ON THE ACCEPTABILITY OF
SALES PROMOTION AS A MARKETING STRATAGY
Response
Regularly Occasionally
Seldom Zero
YES
220
65
35
-
Row Total of
Respondents.
321
%
47.31
13.98
7.74
0
69.03
No
-
100
20
0
120
%
0
21.15
4.30
0
25.81
Cant‟s say 24
0
0
0
24
%
5.16
0
0
0
5.16
Column
244
165
56
0
465
52.47
35.48
12.04
0
100
Total
%
84
Table xi above shows that the total of 321 or 69.03%
respondents accepts sales promotion as a marketing strategy. A total
or 120 or 25.81% disagreed, while a total of 24 or 5.16% of the
respondents cannot say whether sales promotion could be
acceptable as marketing strategy. That is the acceptability of the
ethics of the exercise.
TABLE XI
RESPONDENTS
OPINION
ON
CODE
OF
ETHICS
CONSIDERATION IN THE PRACTICE OF SALE PROMOTION IN
NIGERIA
Response
Regularly Occasionally
Seldom Zero Row Total of
respondents
Favourable 91
150
19
0
260
%
19.57
32.26
4.09
-
55.91
Negative
40
49
10
2
101
%
8.62
9.25
2.15
0.43
21.72
Neutral
43
54
6
1
104
%
9.25
11.61
1.29
0.22
22.37
Column
174
253
35
3
465
37.42
54.41
7.53
0.65
100
Total
%
85
Table xii above shows that more respondents have favourable
opinion on the code of ethics consideration in the practice of sales
promotion in Nigeria that is a total of 260 or 55.91%. A total of 101 or
21.72% of the respondents have a negative opinion, while a total of
104 or 22.37% have a neural opinion.
TABLE XII: DISTRIBUTION OF RESPONSES ON INCREASE IN
CONSUMERS LONG TERM DEMAND AS A RESULT OF SALES
PROMOTION
Response
Regularly
Occasionally
Seldom
Zero
Row Total of
respondents
Yes
176
98
4
0
278
%
(37.85)
(21.08)
(0.86)
-
(59.78)
No
14
82
2
0
98
%
(3.01)
(17.63)
(0.43)
-
(21.08)
Can‟t say
30
40
16
3
89
%
(6.45)
(8.60)
(3.44)
(0.65) (19.14)
220
220
22
3
Column
Total
465
86
From the above table a total of 278 or 59.78% agreed that
consumer long term demand increase after sales promotion, 176 or
37.85% indicated regularly, 98 or 21.08% indicated occasionally and
4 or 0.86% of the respondents indicated seldom, on the other hand a
total of 98 or 21.08 of the respondents indicated no, i.e. disagree.
While a total of 89 or 19.14% cannot indicate whether sales
promotion increases consumer long term demand or not.
4.3
Hypothesis Testing
STATEMENT OF HYPOTHESIS ONE
Ho:
Consumers do not accept the ethics of sales promotion
as a marketing strategy.
Hi:
consumers accept the ethics of sales promotion as a
marketing strategy.
Data on table xi is used in testing hypothesis one. From the table a
contingency table of 4x3 was constructed. See table below.
87
TABLE
X:
DISTRIBUTION
OF
RESPONSES
ON
THE
ACCEPTABILITY OF THE ETHICS OF SALES PROMOTION AS A
MARKETING STRATEGY
Response
Regularly
Occasionally
Seldom
Zero
Row Total of
respondents
Yes
220
65
36
-
%
(168.44)
(113.90)
(38.66)
(0)
No
-
100
20
%
(62.87)
(42.58)
(14.45)
Can‟t say
24
%
(12.59)
(8.52)
(2.89)
Column
244
165
56
-
Total
Degree of freedom = 6
∴
Critical value (0.05,6) = 12.592
Table value = 12.592
Chi-square =
(oi – ei)2
ei
∑
Where oi
=
observed frequencies
ei
=
Expected frequencies
See Appendix 11 for ei calculation
321
-
-
120
(0)
-
24
(0)
-
465
88
TABLE CHI-SQUARE
oi
ei
oi - ei
(oi – ei)2
(oi – ei)2/ei
220
169.44
55.56
2658.43
15.78
65
113.90
-48.90
2391.21
20.99
36
38.66
-2.66
7.08
0.18
0
0
0
0
0
0
62.97
-62.97
3965.22
62.97
100
42.58
57.55
3312.00
77.78
20
14.45
5.55
30.30
2.13
0
0
0
0
0
24
12.59
11.41
130.19
10.34
0
8.52
-8.52
72.59
8.52
0
2.89
-2.89
8.35
2.89
0
0
0
0
0
201.58
TESTING RULE: Reject the null hypothesis (Ho) and accept
the alternative hypothesis (Hi). If the calculated chi-square value is
greater than or equal to table value, otherwise do not reject the null
hypothesis (Ho).
Calculated chi – square value = 201.58
89
Table chi – square value = 12.592
Decision and Conclusion
Since the calculated chi-square value (201.58) is greater is greater
than table value (12.592), we therefore reject the null hypothesis null
accept the research or alternative hypothesis.
We hence conclude that consumers accept the ethics of sales
promotion as marketing strategy.
STATEMENT OF HYPOTHESIS TWO
Ho:
Companies who engages in sales promotion do not always
abide by its codes of ethics.
Hi:
Companies who engages in sales promotion always abides by
its codes of ethics.
Data on table xii is used in testing hypothesis two. From the table a
contingency table of 4x3 was constructed. See table below.
90
TABLE XI: RESPONDNENT OPINIONS ON CODE OF ETHICS
CONSIDERATION
IN
THE
PRACTICE
OF
SALES
PROMOTION IN NIGERIA.
Response
Regularly
Occasionally
Seldom
Zero
Favourable
91
150
19
0
%
(97.29)
(141.46)
(19.57)
(1.68)
Negative
40
49
10
2
%
(37.79)
(54.59)
(7.60)
(0.65)
Neutral
43
54
6
1
%
(38.92)
(56.58)
(7.83)
(0.67)
174
253
35
3
Row Total of
respondents
260
101
104
Column
Total
Degree of freedom = 6
∴
Critical value (0.05,6) = 12.592
Table value = 12.592
Chi-square =
∑
(oi – ei)2
ei
where oi
=
observed frequency
ei
=
expected frequency
465
91
TABLE CHI – SQUARE
oi
ei
oi - ei
(oi – ei)2
(oi – ei)2/ei
91
97.29
-6.29
39.56
0.41
150
141.46
8.54
72.93
0.52
19
19.57
-0.57
0.325
0.02
0
1.68
-1.68
2.82
1.68
40
37.79
2.21
4.88
0.13
49
54.95
-5.95
35.40
0.64
10
7.60
2.40
5.76
0.76
2
0.65
1.35
1.823
2.80
43
38.92
4.08
16.65
0.43
54
56.58
-2.58
6.66
0.12
6
7.83
-1.83
3.35
0.43
1
0.67
0.33
0.11
0.16
Testing Rule: Reject the null hypothesis (Ho) and accept the research
hypothesis (Hi) if the calculated chi-square value is greater than or
equal to table value, otherwise do not reject the null hypothesis (Ho).
Calculated chi-square value = 8.1
Table chi-square value = 12.592
92
Decision and Conclusion
Since the table value (12.592) is greater than the calculated
chi-square value (8.1), we therefore reject the alternative hypothesis
and accept the null hypothesis.
We therefore, conclude that companies who engage in sales
promotion do not always abide by its code of ethics.
STATEMENT OF HYPOTHESIS THREE
Ho:
Sales promotion does not increase consumer‟s long term
demand for products/services
Hi:
Sales promotion increase consumer‟s long term demand for
products/services.
Data on table xii is used in testing hypothesis four. From the table a
contingency table of 4 x 3 was constructed. See table below.
93
TABLE XII: DISTRIBUTION OF RESPONSE ON INCREASE IN
CONSUMER LONG TERM DEMAND AS A RESULT OF
SALES PROMOTION
Response
Regularly
Occasionally
Seldom
Zero
Row Total of
respondents
Yes
176
98
4
0
%
(131.53)
(131.53)
(13.15)
1.79
No
14
82
2
0
%
(46.37)
(46.37)
(4.64)
(0.63)
Can‟t say
30
40
16
3
%
(42.11)
(42.11)
(4.21)
(0.57)
Column
220
220
22
3
Total
Degree of freedom = 6
∴
Critical value (0.05,6) = 12.592
Table value = 12.592
Chi-square =
∑
(oi – ei)2
ei
Where oi
=
Observed frequency
ei
=
Expected frequency
278
98
89
465
94
TABLE CHI-SQUARE
oi
ei
oi - ei
(oi – ei)2
(oi – ei)2/ei
176
131.53
44.47
1977.58
15.04
98
131.53
-33.53
1124.26
8.55
4
13.15
-9.15
83.72
6.37
0
1.79
-1.79
3.20
1.79
14
46.37
-32.37
1047.82
22.60
82
46.37
-35.63
1269.50
27.38
2
4.64
-2.64
6.97
1.50
0
0.63
-0.63
0.40
0.63
30
42.11
-12.11
146.65
3.48
40
42.11
-2.11
4.45
0.11
16
4.21
11.79
139.00
33.02
3
0.57
2.43
5.90
10.35
Testing Rule: Reject the null hypothesis (Ho) and accept the research
hypothesis (Hi). If the calculated chi-square value is greater than or
equal to table value, otherwise do not reject the null hypothesis (Ho).
Calculated chi-square value = 130.82
Table chi-square value = 12.592
95
DECISION AND CONCLUSIONS
Since the calculated chi-square value (130.82) is greater than
table value (12.592), we therefore reject the null hypothesis and
accept the research or alternative hypothesis.
We hence conclude that sales promotion increase the demand
of products by consumers.
4.4
DISCUSSION AND FINDINGS
From the analysis of data presented on the acceptability of
sales promotion as a marketing strategy.
This goes to support NWOSU (2001) finding what sales promotion
facilitates the processes of product or service differentiation and
effective positioning in an increasingly competitive market as exists in
Nigerian. A total of 120 or 25.81% refused to accept, while a total of
24 or 5.16% of the respondents cannot say whether or not sales
promotion could be accepted as a marketing strategy from the above
finding it could be seen that consumers accepts sales promotions as
a marketing strategy sales promotion is, of course, a marketing tool
that can be gainfully employed in offensive and defensive marketing
96
or any product or service. NWOSU (2001) equally stated that since
the sales promotion fever started spreading like wild fire in Nigeria in
1991, no month passes now without the consumer being bombarded
with at least one promotional campaign or the other.
The ethical dimensions or sales promotion campaigns in
Nigeria can be examined from two salient perspectives:- the
consumer perspective and the manufactures or sellers perspective. In
the Nigerian context it is clear from these two perspectives that all is
not well with the ethical considerations or dimensions of sales
promotion campaigns. I say this because from the facts available the
euphoric and „„loving‟‟ relationship between sales promoters and
consumers in Nigeria has been replaced by a love hate relationship.
NWOSU (2001) stated that 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. He
continued that what we have now, therefore, is more less a situation
in which Nigerian consumers are increasingly coming up with many
criticisms,
accusations
or
attacks
against
sales
promotions
97
campaigners and consequent defense by these companies, although
table
xii shows a total of
260 or 55.91 respondents indicated
favourable opinion on code of ethics consideration in the practice of
sales promotion in Nigerian;
total of 101 or 21.72% of the
respondents indicated a Negative opinion, while a total of 104 or
22.37% of the respondents have a negative opinion, while a total of
104 or 22.37% of the respondents have a neutral opinion.
Further more, the research findings have found that sales
promotion increase consumers long term demand. From table xiii
more respondents indicated regular long term demand as a result of
sales promotion activities that is 176 or 37.85% and also 98 or
21.08% of the respondents indicated occasional long term demand, 4
indicated seldom, in all a total of 278 or 59.78 respondents agreed
that sales promotion increases consumers long term demand.
Schewe (1987) agreed that incentive marketing, among other things,
helps to ensure repeat purchasing when well executed, and repeat
purchasing is the key to successful marketing and successful
business NWOSU (2001) equally agreed to this when he stated that
98
even though most sales promotion campaigns are aimed at achieving
short-term sales objectives, it must be noted that it can also perform
the function of helping to achieve long-term sales and other
marketing or business objective. This goes to support Bantick 1980
when he stated that sales promotion has for instance, been
increasingly shown to be a long-term image builder, awareness
creator and a veritable communications medium.
Based on the findings or this study it can be inferred that sales
promotion is an effective and reliable marketing tool or promotional
strategy that can be depended upon for marketing successes. No
wonder manufactures and markers the world over, including in
Nigeria, continue to spend heavily on sales promotions.
99
CHAPTER FIVE
5.1
SUMMARY AND RECOMMENDATION
Primarily, this study paid particular attention to the nature and
practice of sales promotion in Nigeria. The study x-rayed the
acceptability of the ethics of sales promotion as a marketing strategy.
The study analyzed the code of ethics consideration in the
practice of sales promotion in Nigeria.
The research had also established empirically that sales
promotion increases long term demand of products/service by
consumers.
Ro realize this, the researcher distributed 125 questionnaires
each to residents of Abuja, Enugu, Lagos and River States.
Consequently, a total of 500 questionnaires were distributed out of
which 465 questionnaires were duly completed and returned, simple
random sampling techniques was used in selecting sampled
population. It was the researchers considered view that this sampling
method offered all elements in the sample frame, equal chances of
being sampled or selected.
100
In the data analysis, the distribution showed more men than
female respondents, and more of the respondents were within the
age bracket of 31 and 45.
More so, many of the respondents have
completed their tertiary and secondary education. Besides, more
industries are now using sales promotion to increase their sales,
thereby making huge profits and consumers have been lured to
increase their purchases.
In effect, the result of this study indicates that the nature and
practice of sales promotion in Nigeria have improved greatly in recent
time.
The result further shows that the use of sales promotion by
industries have increased and it has served as a
source of
increasing long term demand of product/service by consumers.
5.2
RECOMMENDATION FOR FURTHER STUDY
It is obvious that this study, due to the systematic way it‟s been
handled have made dependable, veritable and interesting revelations.
But it is equally vital to note that the result obtained here cannot be
101
subsisted for all sales promotion campaign in Nigeria. Therefore, it is
not without limitations, hence we make recommendation here for
future sales promotion researchers.
However, the researcher deems it wise to pin-point few vital
lessons. Sales promotion managers must draw from the result of this
study for an enhance strategy and tactics.
First, the sales promotion managers (users) should have
mastery of scheduling sales promotion campaign. This is necessary
in other to reach the market. Suffice to say that the sales promotion
managers/users should do well to define their target market so that
their consumer‟s discretionary should always go for the promoted
products or services. Again the promoter should be reminded in case
„„he‟‟ still wonders, that every firm is jockeying for attention. Therefore,
the main attraction in your product (s) or services should be well
positioned and promoted.
Above all, the promotions should be moderately entertaining
and brief so that an induce audience remained exposed to the
promotion. The seemingly lack of sophistication in the promotion
102
campaign not only vitiated the crystallization of viable promotion but
also leads to target market declining and make then see the idea of
the products as trivial
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 seen to agree that sales promotion is
most 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 is higher by encouraging new consumers to
try it (Christopher and Cowell, 19970)
One of the facts we must draw from this research is that sales
promotion is definitely an effective and reliable tool of marketing in
Nigeria. We also state that when properly planned and executed,
sales promotion efforts can always justify whatever amounts of
money invested in them by contributing significantly towards the
achievements of stated marketing or sales objectives which usually
includes profit maximization. Unfortunately from the facts available to
103
us, sales promotion campaigns in Nigeria have not passed the ethical
test and so cannot be said to be quite ethical. Happily, the fact
uncovered in this research also show that companies that engage in
sales promotion are aware of this unfortunate trend and are already
taking measure to rectify the situation.
The researcher therefore, recommends management should
establish the sales promotion objective (s), select appropriate tool or
techniques (s), develop the programme, pretest the ideas, implement
and control the programme and evaluate the consumer response or
depth or impact.
The government should take additional measures at intraprofessional and consumer levels to further ensure the maintenance
of ethical standards in sales promotion campaigns in Nigeria,
unfortunately from the facts available, sales promotion campaigns in
Nigeria have not passed the ethical test and so can be said to be
quite ethical happily, the engage in sales promotions are aware of
this unfortunate trend and are already taking measures of rectify the
situation. Companies that use it as part or their marketing strategies
104
must adopt the integrated marketing communications approach. In
the spirit of integrated marketing managers in Nigeria must be guided
by the fact that sales promotion is usually used along with other
traditional marketing tools like personal selling, media advertising, out
door
advertising,
publicity,
public
relations
and
other
such
promotools. This will help them not to wrongly calculate the effect of
other marketing or promotional activities and lump all of them into
their sales promotion effectiveness a rather difficult exercise.
105
BIBLIOGRAPHY
Bantick, Keth (1980), „„Sales Promotion in the Marketing Mix‟‟, in Julia
Piperced)
Managing
Sales
Promotion,
London:
Gower
Publishers Company LTD.
Dike, Isodi (1992), Repeat Buying: Theory and Application, London:
North Holland Publishing Company.
Ehrenberg, H.S.C. (1992), Repeat Buying: Theory and Application,
London: North Holland Publishing Company.
Nkem (1999): „„The Practice of sales promotion.‟‟
Nwosu I.E. (2001) Marketing Communications Management and
Media (principles, practices, and Strategies) an Integrated
Approach. Dominican Publishers, Lagos.
Onah, J.O., „„Marketing in Nigeria-Experience in A Developing
Economy,‟‟ Cassel London, (1979).
Piper Julia (ed.) (1980) „„Managing Sales Promotion, London:
Gower Publishing Company Ltd.
Strang, Rogers (1975), „„Sales promotion: Fast Growth, Faulty
Management,‟‟ Harvard Business Review, July 1 August.
106
APPENDIX 1
Department of Marketing
Faculty of Bus. Amin.
University of Nigeria
Enugu-Campus
Enugu.
March, 2003
PROF/DR.MR.MRS./MISS,
Please enclosed a questionnaire for your completion and return to the
above address.
The questionnaire is in connection with the award of
postgraduate master of Business Administration (MBA) Degree in
marketing, Department of marketing, University of Nigeria, Enugu
Campus (UNEC). Any information supplied here, will be treated with
the utmost confidentiality, please feel free to select any question of
your choice and complete the box provided by ticking (
accordingly.
Thanks.
)
107
APPENDIX 11
A QUESTIONNIARE GUIDE DIRECTED TO CONSUMER AND
MANUFACTURES
Please tick good ( ) for any chosen option, or comment as need be.
QUESTIONS
Section A:
(1)
Sex: (a)
(2)
Please indicate your age bracket
(3)
male
(a)
11 – 16
(b)
17 – 30
(c)
31 – 45
(d)
46 and above
(b)
Educational qualification
(a)
Primary school
(b)
Secondary school
(c)
Tertiary Education
(d)
No formal Education
female
108
(4)
Which part of the country (Nigeria) do you live
(a)
Abuja
(b)
Enugu
(c)
Lagos
(d)
port-Harcourt
(5)
What is your occupation?
(6)
What is the name of your organization?
(7)
How old is this company?
(8)
(9)
(a)
One Month – 1 year
(b)
2 years – 4 years
(c)
5 years – 9 years
(d)
10 years and above
Indicate the area (s) where your organization is located
(a)
Abuja
(b)
Enugu
(c)
Lagos
(d)
Port-Harcourt
(e)
All of the above
What is the nature of organization?
(a)
Sole Enterprise
(b)
Partnership
(c)
Private Limited Company
109
(d)
Public Limited Company
(e)
Public Corporation
(10) What‟s your position in the organization?
(11) Indicate your level of income per-annum?
(a)
N5,000 – N10,000
(b)
N11,000 – N20,000
(c)
N21,000 – N40,000
(d)
N41,000 – and above
Section B:
(12) Are you aware of the sales promotions activities carried out on
various brand of goods.
(a)
Yes
(b)
No
(13) Do you think these sales promotions are genuine
(a)
Yes
b)
No
(c) Can‟t say
(14) Have you ever participated in any sales promotion activities?
(a)
Yes
(b)
No
(15) If „„yes‟‟ did you increase your purchases within the period.
(a)
Yes
(b)
No
(c) Can‟t say
(16) How did you make your purchase after the promotion?
(a)
Increase than before
(b)
Reduces than before
(c)
Normal as before
(d)
No purchases anymore
110
(17) Have you ever won a prize in any sales promotion contest?
(a)
Yes
(b)
No
(18) If „„yes‟‟, how many times?
(19) Have your organization ever engage in any sales promotion
activity?
(a)
Yes
(b)
No
(20) If „„No‟‟ why?
(a)
It expensive
(b)
We have not considered it
(c)
We will use it in future
(21) If „„Yes‟‟ to question 19 was it successful?
(a)
Yes
(b)
No
(22) If „„Yes in the above question, did sales increase.
(a)
Yes
(b) No
(c) Can‟t say
(23) What of profit, did it increase?
(a)
Yes
(b)No
(c)Can‟t say
(24) How often does your organization engage in sales promotion
activities?
(a)
Regularly (i.e. at least once a year)
(b)
Occasionally (i.e. at least once every 2 year)
(c)
Seldom (i.e. at least once in five years)
(d)
Zero (has not used it at all)
111
(25) When does your organization normally engage in sales
promotion?
26.
(a)
When there is set back in business activity
(b)
Introduction of a new product
(c)
Creating awareness of an improved old product.
(d)
As deem fit.
What type (s) of sales promotion techniques is mostly used by
organizations in Nigeria?
27.
(a)
Premium
(b)
Contest
(c) Sampling
(d)
Demonstration
(e)
Consumer deal
(f)
Point of purchase
Do you think the use of sales promotion has increased in recent
time?
(a)
28.
Yes (b)
(c) Can‟t say
No
What is your opinion on code of ethics consideration in the
practice of sales promotion in Nigeria?
29.
(a)
Introductory stage
(c)
Decline Stage
(b)
Mature Stage
What are your opinions on code of ethics consideration
in the practice of sales promotion in Nigeria.
(a) Favourable
30.
(b)
Negative
(c) Neutral
Do you accept sales promotion as a marketing strategy?
(a)
Yes
(b) No
(c) Can‟t say
112
APPENDIX III
Hypothesis One:
Degree of freedom = 0.05
Critical Value = (0.05,6) = 12.592
Table value= 12.592
Chi-square = (oi – ei)2
Ei
Where oi
=
observed frequency
Ei =
Expected frequency
ei 1 321 x244
= 168.44
465
ei2
321 x 165
= 113.90
465
ei3 321 x 56
= 38.66
465
ei4 321 x 0
=0
465
ei12 120 x 244
465
ei22 120 x 165
= 62.97
= 42.58
465
ei23 120 x 56
465
= 14.45
113
Ei24 120 x 0
=0
465
Ei13 24 x 244
= 12.59
465
ei23 24 x 165
= 8.52
465
ei43 24 x 56
= 2.89
465
ei43 24 x 0
=0
465
Hypothesis Two:
Degree of freedom = 0.05
Critical Value = (0.05,6) = 12.592
Table value = 12.592
Chi- square = (oi – ei)2
ei
where oi = observed frequency
ei = expected frequency
ei1 260 x 174 = 97.29
465
ei2 260 x 253
465
= 141.46
114
ei32 260 x 35
465
= 19.57
ei4 260 x 3
465
= 1.68
ei2 101 x174
465
= 37.79
ei22 101 x 253 = 54.95
465
ei32 101 x 35
465
ei42 101 x 3
465
= 7.60
= 0.65
ei13 104 x 174 = 38.92
465
Ei23 104 x 253 = 56.58
465
Ei33 104 x 35 = 7.83
465
Ei43 104 x 3
465
= 0.67
Hypothesis Three:
Degree of freedom = 0.05
Critical value = (0.05,6) = 12.592
115
Table value = 12.592
Chi-sqare = (oi – ei)2
Ei
Where oi = observed frequency
Ei = expected frequency
ei
278 x 220 = 131.53
465
ei2
278 x 220 = 131.53
465
ei3
278 x 22 = 13.15
465
ei4
278 x 3
465
= 1.79
ei12 98 x 220 = 46.37
465
ei22 98 x 220 = 46.37
465
ei32 98 x 22 = 4.64
465
ei42 98 x 3
465
= 0.63
116
ei13 89 x 220 = 42.11
465
ei23 89 x 22
465
= 4.21
ei33 89 x 22
465
= 4.21
ei43 89 x 3
465
= 0.57