THE IMPACT OF SALES PROMOTIONAL STRATEGIES ON THE PERFORMANCE OF SOFT DRINK INDUSTRY

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ABSTRACT

This study is aimed at examining the impact of sales promotional strategies on the performance of soft drinks industries in Nigeria. To achieve this, related literatures were reviewed. In addition, descriptive and survey method of data collection were used in an attempt to empirically examine the impact of sales promotional strategies on the performance of soft drinks industries. In course of carrying out this research work, the population of the study was made of the entire staffs of Pabod Breweries, Nigeria Bottling Company and 7 up Bottling Company was unknown. Therefore the sample size of the study is judgmental sample of 100 respondents which comprise of both the senior and junior staffs of Pabod Breweries, Nigeria Bottling Company and 7 up Bottling Company all in Port Harcourt Metropolis. Data used in this study were obtained from primary and secondary sources. The primary source gave birth to primary data which were collected via questionnaire administration. The questionnaire was designed in a way that respondents could easily provide adequate answers for the study. The researcher in the course of this research work formulated one hypothesis which were stated to give bearing for the research work. “There is no significance relationship between sales promotion and performance of soft drinks industry in Nigeria” was stated as the null hypothesis. In order to test the validity of already stated hypothesis, the chi-square statistical test was employed; this test was used due to the nature of the questionnaire designed for the purpose of the hypothesis testing. From the analysis, since the calculated chi – square values of 45.64 is greater than the table value of chi-square given as 3.841, the null hypothesis is rejected and conclude on the alternative hypothesis that there is significance relationship between sales promotion and performance of soft drink industry in Nigeria. As such, the following recommendations were made: firstly, that marketing managers should derive the appropriate mix of strategies by examining their industry context and their firm’s organizational processes. Secondly, that since major determinants of marketing performance are trade contest and trade allowance firms should adopt a more effective and efficient trade contest and allowance to enhance performance. And finally, that since the aim of marketing performance is targeting sales turnover, market share and profitability, managers should substantially enhance them through trade allowances and trade contests.

 

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Some investments are helping to facilitate future carbonate expansions in the country (www.prosharen.com) accessed 20 June, 2011. This has led to competition between major industry actors like Nigerian Bottling and 7-Up Bottling Companies and other local players.

Therefore in such a competitive business environment, organizations need to constantly stimulate sales through adoption of incentive marketing techniques (Chevron, 1998); particularly those directed at channel members (Narasimhan, 1990). These include trade contests, Trade fairs and Trade allowances; which when properly applied can lead to marketing performance in terms of sales turnover, market share and profitability; and other marketing objectives (Jackson, et al., 1995; Narasimhan, 1989) however, to achieve this, firms must operate within the boundaries of core competences of its strategies (Prahad and Hamel, 1990); and within an understanding of the firm’s environment which can change over time (Uzor, 2011).

Therefore, rapid changes in technology, shortened product life cycles, increased competitions owing to reduced barriers to international trade and globalization (Ohmae, 1985) have all contributed to the need for a firm to have distinctive capabilities or core-competences; which when successfully applied to firms markets become competitive  advantages  (Kay,  1983).

In  this  study,  we  are  inclined  to  believe  that  “competent  and well-articulated trade promotion strategies” constitute a competitive advantage to soft drink industries in particular and firms in general. This is hinged on the premise that firms which have built up knowledge and expertise in different promotion strategies are likely to adapt to the dynamics of the marketing environment and exhibit superior marketing performance.

It becomes apparent that the effect of poor sales promotion is not limited to firms alone but also to the economy by extension.  This equally explains why several studies have been conducted in these areas (Bayode, 2011). In-spite of these and other works, fresh concerns regarding the efficacy of trade sales promotion strategies remain sparsely researched. And scholars and experts have been wondering whether sales promotion and indeed trade sales promotion still serves its purpose (Ikem, 2011). This is symptomatic of poor marketing performance and a threat that should attract enquiry. In view of this researcher propose to study the impact of sales promotional on the marketing of coca-cola brand of soft drink industry in Nigeria.

1.2 STATEMENT OF PROBLEMS

However, many a time, most organizations do not achieve the level of marketing performance that will yield rents for them, hence some organizations experience sub-optimal or even out-right poor marketing performance. As a result, firms get worried about the contributions of their sales promotional strategies to marketing performance not with-standing the large budgets used to maintain it sometimes. Thus with the notion that sales promotion positively correlates with marketing performance, organizations view incompetent sales promotion strategies with serious concerns. Besides, the aggregate business performance of a country’s economic units made by the industries shapes its entire economy since a nation’s wealth is measured mostly in terms of its GDP. Therefore, if the society depends on the performance of business organizations for its living standards as defined by GDP, and these organizations, in turn, depend on the competence of its sales promotion strategies to achieve competitive advantage, it stands to reason then that incompetent or sub-standard sales promotion strategies will affect the organization’s marketing performance of their brand in particular and the human society’s economic well being in general.

1.3 OBJECTIVE OF THE STUDY

The main objective of this study is to find out the impact of sale promotional strategies on the performance of soft drinks industries in Nigeria.

  1. Evaluate the extent to which trade contest affects marketing performance of soft drinks industries.
  2. Ascertain the extent to which participation in trade fair affects marketing performance.
  3. Determine the extent to which offering a trade allowance affects marketing performance.
  4. Examine the extent to which the size of the firm affects the influence promotion strategies on marketing performance.
  5. Assess the extent to which the age of the firm affects the influence of trade sales promotion strategies on marketing performance.

1.4 SIGNIFICANCE OF THE STUDY

The study is expected to make recommendations to marketing organization managers on the roles of sales promotion on the marketing of coca-cola brand of soft drinks industry in Nigeria.

The study will help employers to ascertain the need for carrying out effective sales promotion strategies in their respective organization.

The opinions of this study will also open up future vents for young practicing marketers to enhance sales promotion as a strategic marketing tool for organizational performance especially in the sale of soft drinks in Nigeria and continue process for business survival most importantly, this study will also provide useful information to other scholars in the academic field in topical area under investigation and finally, this study will also be a useful guide and information to other students that will carry out their studies in the future.

1.5 RESEARCH QUESTION

  1. To what extent does the way soft drink industry in Nigeria, carry out trade contest effect the marketing their brands?
  2. To what extent  does  the  way  these  firms  organize/participate  in  trade  fair  effect  marketing performance?
  3. To what extent does the way they offer a trade allowance affect marketing performance?
  4. To what extent does the size of the firm affect the influence of sales promotional strategies on marketing of soft drinks?
  5. To what extent does the age of the firm affect of trade sales promotion strategies in the marketing of soft drink?

1.6 HYPOTHESES

The following hypotheses will be uses to guide the study:

HO: There is no significance relationship between sales promotion and performance of soft drinks industry in Nigeria.

HI: There is significance relationship between sales promotion and performance of soft drinks industry in Nigeria.

1.7 SCOPE OF THE STUDY

The study limit scope to coca-cola brand of soft drink manufacturing industries in Port Harcourt Metropolis including pabod breweries, bottling company and 7 – up all in Port Harcourt.

1.8 LIMITATION OF THE STUDY

In carrying out an investigation of this nature the researcher must of necessity be faced the following constraint.

Time: The time frame provision for this study was too short.

Financial constraints: Usually, a study of this nature involved some level of expenditure therefore; finance was also a limiting factor.

Poor response: The poor response from the respondent and inability to access the entire population also was another constrain to the study.

Organizational policy: The policies of the organizations also were another factor that limited the study.

1.9  DEFINITION OF TERMS

Promotion: Activity that supports or provides active encouragement for the furtherance of a cause, venture, or aim.

Marketing: The action or business of promoting and selling products or services, including market research and advertising.

Strategy: A plan of action or policy designed to achieve a major or overall aim.

Sales: The exchange of a commodity for money; the action of selling something.

Industry: Economic activity concerned with the processing of raw materials and manufacture of goods in factories.

Soft drinks: A nonalcoholic drink, especially one that is carbonated.

Marketing mix: A combination of factors that can be controlled by a company to influence consumers to purchase its products.

Promotional Mix: Is one of the 4 Ps of the marketing mix. It consists of public relations, advertising, sales promotion and personal selling. In this lesson, you’ll learn how a marketing team uses the promotional mix to reach company objects and goals.

 

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