THE IMPACT OF SALES PROMOTION ON THE SALES OF SOFT DRINKS IN NIGERIA

(Marketing)

THE IMPACT OF SALES PROMOTION ON THE SALES OF SOFT DRINKS IN NIGERIA

(A CASE STUDY OF 7UP BOTTLING COMPANY PLC, ABA)

ABSTRACT

This study is on the impact of sales promotion on sales of soft drinks in Nigeria. A case study of 7up Bottling Company Plc Aba Depot.

One of the major problems addressed was due to the low amount of money invested by the company on sales promotion activity result to low sales turnover was addressed which result to the increase in sales turnover.

The total population used is two hundred (200) made up of production department, marketing/production and Administration department and sample of 133 employees was randomly drawn from 7up bottling Company Plc Aba depot.

The personal interview and questionnaire are as well analyses accordingly.

The researcher used chi-square (X2) statistics for testing hypotheses formulated. Findings show that inadequate capital base is a major problem responsible for the low company’s sales turnover.

The researcher recommended that the marketing manager of 7up Bottling Company Plc, Aba Depot should know that the use of sales promotion activities is the only way to ensure consumers patronage and as such they should maintain its product quality and price.

TABLE OF CONTENT

Introduction

1.1         Background of the study                                                               

1.1.1             PROFILE OF 7UP BOTTLING COMPANY Plc,

Aba.                                                                                                   

1.2         Statement of the problem                                                  

1.3         Objectives of the study                                                       

1.4         Research Questions                                                                      

1.5         Research Hypotheses                                                       

1.6         Significance of the study                                                  

1.7         Scope and Limitations of the study                                             

1.8         Definition of terms.                                                             

Chapter two

Literature Review

2.1         Introduction                                                                          

2.2         The concept of marketing                                                  

2.3         Promotional activity in Nigeria                                                      

2.4         Elements of promotional Mix                                                        

2.5         What is sales promotion                                                    

2.6         Types of sales promotion                                                  

2.7         Objective of sales promotion program                             

2.8         Sale promotion techniques                                                           

2.9         Developing  the sales promotion program                     

2.10      Evaluating sales promotion effectiveness                     

2.11      Comparison of promotional Element                              

2.12      The benefits of Sales promotion                          

2.13      Problems of sales promotion.                               

2.14      Liability and limits of sales promotion                             

2.15      What  to consider in adopting sales promotion 

2.16      Summary.                                                                 

Chapter three

Research methodology

3.1         Design of the study                                                

3.2         Area of the study                                                     

3.3         Population of the study                                         

3.4         Sample and sampling techniques                                   

3.5         Method of data collection                                      

3.6         Method of data Analysis.                                       

Chapter four

Presentation and analysis of  data

4.1         Question by question analysis of the investigation research questions      

4.2         Testing of hypotheses                                                       

4.3         Discussion of findings                                                                   

Chapter five

Summary, conclusions and recommendations

5.1         Restatement of findings                                                    

5.2         Summary                                                                              

5.3         Conclusions                                                                        

5.4         Recommendations                                                             

5.5         Suggesting for further studies                                                      

References

Appendixes

 

CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND OF THE STUDY

Marketing generally is aimed at profitable sales by offering want satisfy goods and services to the market.

Every Business  Organization be it manufacturing distributive or service firm has the goal  of its marketing  efforts.

But purchase in sales and profitability of a firm cannot be enhanced without promotion .

Advertising, personal selling, publicity and sales promotion are the salient from a promotion available  to most tools are suitable for both industrial products and consumer items.

            Most soft drinks  companies usually employ advertising personal selling and to some extent publicity  and perhaps sales promotion in promoting their products.

But  the extent to which sales promotion  impact  the consumption of soft drinks is yet  to be ascertained.

            It is in the light of the above that the research thought  it is wise to study the impact of sales  promotion on the consumption of soft drinks ie (7UP products) in a segment of Abia State Nigeria using 7  Up Bottling Company ,Aba as a case study.

            Sales  promotion is one of the important promotion tools that have gained a lot of popularity in recent time, perhaps because of  increase  in competition in a  depressed economy where disposable  income kept  on decreasing over a period of time. The American marketing Association (AMA) define sales promotion as activities other than personal selling.

Advertising and Publicity designed to stimulate sales and dealers effectiveness, which may take  the form of display demonstrations shows and exhibition and various non-recurrent  effort not in the ordinary routine.

            Sales promotion is define by the author as that marketing function that seeks to achieve a given marketing objective by adding something  of extrinsic value  for the purpose of stimulating  consumer and dealer effective within a given period  of time, usually 3-4 months.

            Sales  promotion objective  could  be spelt out as follows  to induce trial purchase, to induce repeat/multiple purchase, to increase our market share, to attract  competitors market share,  to smother season or demand for the product, and attract brand switcher to the product who will generalize after the promotion.

            All those three main segments of s ales promoted simultaneously.

Otherwise one of those  participants may frustrate the other by not passing down incentive to the final consumer.

1.1.1               PROFILE OF 7 UP BOTTLING COMPANY PLC

Seven Up is an International name is soft drinks business and was developed under modest circumstance in the United states of America in early 1920’s by C/L GRIGG, who also suggested the name “Seven Up”.

There is over 900 factories spread over 176 countries of the world.

SEVEN  UP IN NIGERIA

A Lebanese name MOHAMMED EL-KHALI settled in Nigeria in 1926, and in 1956, he established a bottling company. Consequently in October 1, 1960 the first bottle of seven Up green and white on 7 up  bottle thus rolled it of Ijora plant  in Lagos. The colour green and white on 7up thus  signifies the independent Day of Nigeria.

            It second plant was opened in 1980 (twenty years after the first plant was opened)  following by numerous depots opened all around  the southern part of the country.

By setting up a plant  at Kano 1983 seven-up company  bought over Pepsi cola International and re-launched  Pepsi in Nigeria in 1988 by so doing ,seven up became  the number one brand in the Southern parts of Nigeria and it won the international Bottler of soft drinks award for the year 1989.

With this success, seven up  opened Aba bottling plant and at the same  year acquired the assets of soft drink division of John Kolt company.

There  are currently 7 plants  in various parts of the country-Nigeria-Aba, Benin,  ILorin, Ikeja, Ibadan, kano and Kaduna, More  are  yet to come.

Pepsi cola is the best seller among  them in East other products, 7up, Mirinda, orange Team, Cemonade, Mirinda Soda Water,  Mirinda Tonic, Mirinda Ginger, Mirinda pineapples, Pepsi spice etc.

            Seven up has made a remarkable impact  on the economy of Nigeria, they create   employment to unemployed Nigerian, render saturated amenities  to communities and contributed to the nations economic growth way of generating fund, which is circulating in the economy.

They have engaged in a backward vertical integration with sun-glass Kaduna as the sources of some of their raw material.

            Seven –Up gives people the right of choice and was able to force competitors drawn I price.

It is also gathered that the company has not suffered any shut down since in business and this is a credit to the company.

 

PROMOTION HISTORY OF 7-UP

This company has also made great  impact in the sales  promotion, advertising etc. The company is noted for its tremendous engagement sales  promotion.

Thus 1991- There was  “EXPRESS” sale promotion.

January 1993 – 7up spell and Win

June 1993 – Wain mania

January 1994 – 7 Up spell and  win

June 1996 high life

August 1995 – 7 up spell and win

September 1996 – 7 up high life

October 1998  till year 2001 January – winning was based on 7up high life, T-shirt Bonanza etc

There are slogans that create lasting impression such as:

  1. 7 up difference is clear
  2. Pepsi  the choice of the generation

 

The sales promotion techniques adopted 7up  bottling company to beat the drawn about  its product include:

  1. Contents
  2. Dealer leader
  3. Sponsorship
  4. Dealer listing
  5. Demonstration through road signs
  6. Sweepstakes
  7. Exhibitions

 

 These techniques are designed to reach a diversity of target audience   and to achieve a wide range of objective such as

  1. Increase sales
  2. Increase per capital consumption.
  3. Market expansion
  4. To maintain brand loyalty
  5. Create awareness  of grass root level among others.

 

To this end all things being equal, seven up products really have prospect in the country and the marketing mix should and for better marketing  strategies.

1.2         STATEMENT OF THE PROBLEM.

The major problem addressed was the low amount of money invested by the company sales promotion that always result to low sales, turnover was addressed due to the that fact huge amount of money was  invested and their sales turnover becomes high which  gave them the edge to become market leader in the soft drinks industry in Nigeria.

 

Sales promotion is essential in every company or business organization that want to achieve it stated or set objectives. The researcher identifies the following problems.  The improper research carried out on sales promotional activity on how it influence consumer purchases  has result  to low increase sales of 7up product. The  difficulty in convincing consumers to believe  in the fantastic star prices of sales promotion has affected the sales volume of 7up product. The improper use of different sales promotional tools to promote their products has resulted to low profitability.

            This research work therefore aim at addressing the problem of sales promotion for effective performance

    1. Lack of training and development in the soft drink industry.
    2. Lack of facilities in the sales of soft drink industry that will help the company to increase profitability.
    3. Low level of awareness in manufacturing of soft drink Industry.
    4. Poor sales turnover and low mentality,, also hinder  the profitability in the soft drink Industry.

1.3         OBJECTIVE OF THE STUDY

The objectives of the study were:

    1. To find out the effect of how persuasive sales promotion on consumer purchase.
    2. To determine the extent to which sales promotion affects sales of soft drinks in Nigeria.
    3. To find out the problem associated with the marketing of  sift drinks using  the various  promotional tools.
    4. To suggest and recommend appropriate techniques and innovation in enhancing efficiency and effectiveness using sales promotion as  one of the promotional tools.

1.4         RESEARCH QUESTIONS

The following major research  questions were considered  in the study.

    1. Do consumers  believe  in the fantastic star  prizes offer in the soft drinks industry?
    2. Do sales promotional activities influence  consumer purchases.
    3. Do sales promotional activities create awareness and brand loyalty among  consumers?
    4. Do soft drink companies make more sales turnover during promotion?

1.5         RESEARCH HYPOTHESES.

The following hypotheses  were  posited and  tested in the study.

Ho1: Improper research carried out on sales promotional activity on             how it influence consumer             purchasing  does not result to       low increase is sales of soft drinks.

Hi1:      Improper research carried out on sales promotional activities             on how it affect consumers              purchasing has result to low         increase is sales of soft drinks.

Ho2:    Difficulty in convincing consumer  fantastic star prizes of       sales promotion does not  affect purchasing    of soft drinks.

H12:    Difficulty in convincing consumer to believe in the fantastic start prizes of sales  promotion has             impact on the            purchasing    of soft drinks.

Ho3:    Improper use of difficulty sales promotional tools to promote             their product does not affect their    profitability.

Hi3:      Improper use of different sales promotional tools to promote              their product does not affect their    profitability.

Ho4:    The low amount of money invested by the company on sales           promotional activity has resulted          to low sales turnover.

Hi4: the low amount of money invested by the company on sales     promotion activity does not bring             about low sales turnover.

1.6         SIGNIFICANCE OF THE STUDY

Some management decisions to carry out promotional activities in many large organization are not guided by clear cut strategies.

However, luck may bring success for sharply defined purpose, improper initialization of resources may set in.

Against, this background and also with the back  of empirical data on the relationship between  promotional expenditure and sales,  the success of those in this study would be of  tremendous importance to  those in these areas.

            These  studies would be tremendous helpful to both present and potential sales promotion manager  to know the impact of promoting and using the right promotional tools.

The study will also necessitate a more impact coordination of the different  promotional techniques of enhancing product patronage.

b. This study will help to fetch out the promotional problems facing 7up Bottling Company Plc Aba.

c. It will give the researcher and other users of the study an insight in to the promotional activities used by the business or large companies.

d. It would enable the 7up Bottling Company Plc  Aba to give prominence attention some of the sales promotion tools

e. This study would enable the company achieve its objectives with the firms in applying some of sales promotional tools.

F. The  suggestion of the elimination of the problem would be addressed .

g.  The company through this research material would know the type of persuading in information attracting  confidence and trust in consumers.

H. Finally the study would help the researcher who might want  to use  it for further study as source of reference.

1.8       DEFINITION OF TERMS

The following  terms used in the study  are defined as below:

ADVERTISING : Any  paid form  of non-personal presentation and promotion of ideas, goods or service by an identified sponsor, Includes the uses of such media as  television set, Radio, Newspaper and Magazine etc (Mccarthy and Parauth 1987).

ADVERTISEMENT AGENCY:  It is an independent company s et up to render specialized service  of advertising  in particular and of marketing in general  (,Stanton 1985).

CONSUMER: A consumer is one whose goods/product in an exchange process  (Scheme 1987)

CONSUMER GOODS: Are those goods and services destined for the ultimate consumers (McCarthy 1975).

CASH REFUND OFFERS (REBATES):  Officer to refund part of the purchase price of a product to consumer who send a proof of purchase to the manufactures or it provide a price reduction after purchase rather than at the retail shop consumer send a specified proof of purchase” to the manufacturers who refund’ part of the purchase price by mail (Baker 1999 601)

COUPONS: Is the certificates that gives buyers a savings when they purchase a specified product of mailed, endorsed in other products or them, or inserted in magazine and newspapers. It is effective in stimulating sales of a mature brand and inducing early trail of anew brand  (Michael Baker 1999 611).

DEALER LOADER:  A dealer loader is a gift that is given to retailer who purchase a specified quantity of merchandize often dealer loader are use in an attempt to obtain special display part of premium (Ferred 1985).

DEALER LISTING:  A dealer listing is a gift that is an advertisement that promotes a products and identifies the name of the participating dealers  (Ibid).

Exhibitions: Are used as a form of sales promotion in both consumer and industrial goods market modern (1989-467) list five advantages of exhibitions as creations of awareness and recalled.

FREE MERCHANDIZE:  It is sometimes offered to resellers who purchase a stated quantity of the same or different products.

Occasionally, free merchandise is used  a payment  for allowance provided through  others sales promotion. It is usually accomplished by reducing the invoice to avoid handling and book keeping problems (IBID)

FREE CONRAIL:  Inviting prospective  purchasers to try the product without cost in the hope that will buy the products (Philip Kotler 1999).

FREQUENCY: this is the number of time an a advertisement is show/placed in a particular period of time (smith PR 1994-129

MARKET: Is  a group of potential customers with similar needs who are willing to exchange something of value with sellers offering, various goods and/or services that is ways of satisfying those needs  (William.MC Carthy 1996).

MARKETING:   Is a societal process by which individuals and groups obtained what they wants and needs through creating offering and freely exchanging products and services of values  other (Philip  Kotler Pg 8200)

MARKETING MIX:  Is the controllable variables that the company puts together to satisfy a target group (William  1967)

PERSONAL SELLING: According to Philip Kotler 1987, 461 say it is a personal presentation by the firm sales force for the purpose of marketing sales and building customers.

PRICES: price  is what the buyer gives up in exchange for something  that provides satisfaction (Scheme 1987 vii).

PROMOTION:  It involves communicating information between sellers and potential buyers or others in the changed to influence attitudes and behaviour  (Willaims/McCarthy,1996:10)

PATRONAGE REWARD:  Cash or other awards for the regular use of a certain company’s products, or company services (Philip Kotler 1998).

PRICE PACKS  (CENT- OF DEALS):  It is offers   to consumer of savings off  the regular price  of a products, flagged on the label or package  (Michael Barker 1999).

POINT OF PURCHASE  (POP) DISPLAY AND DEMONSTRATIONS:   It  take place  at the point of purchase or sales many retailers do not like to handle hundreds of display sign and posters  their receive form manufactories.  Manufacturers are creating better Pop material trying them in with television of print message and offering to set them up (Philip Kotler 200p 602).

Publicity: is an activities to promote a company or its product by planting news about it in media not paid  for by the sponsor (Philip  Kkotler 1997 518).

PROMOTIONAL MIX:  It is a specific mix of advertising personal selling promotional and public relations a company  uses  to pursue  its advertising and marketing  objective (Philip  Kotler 1997, 461).

PRODUCT: Product is anything that can be offer to a market for attention, acquisition, use or need. It include physical objective services, places organization,   ideas and people  (Philip  Kotler 2000.394).

PREMIUMS:  A premium  is a reward that offer free or at encourage an exchange. it is a products offered  free or at less than the regular price in order to induce  the consumer to buy on the  product (Druker 1978).

Sales promotion:  Consist of a diverse  collection of incentive tools  mostly, stout them, designed  to stimulate quicker of greater purchase  of particular products or services by  consumer or the trade (Philip  Kotler 2000 597).

SALES POTENTIAL: Share of a market that a company believe is achievable when its plans and strategies have been fully implemented (closing of marketing  terms RBC  1983).

SAMPLING: Mea giving away of  a product  to consumer s about features of the product that cannot be conveyed adequately through advertising.

It put the products directly into the hand of  the  consumer (scheme  1990)

SALES CONTESTS:    Aim  at inducing the sales  fore or dealer  to increase their sales that  sales results over  stated period with prices going to those who succeed (Philip Kotler 2000 630).

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