THE INFLUENCE OF SALES PROMOTION ON CONSUMERS BRAND LOYALTY IN THE SOFT DRINKS INDUSTRY

11

THE INFLUENCE OF SALES PROMOTION ON CONSUMERS BRAND LOYALTY IN THE SOFT DRINKS INDUSTRY (A Case Study of Nigerian Bottling Plc, Owerri)

ABSTRACT

This project is designed to give an insight on the influence of sales promotion on consumers brand loyalty with reference to Nigeria Bottling Company Plc (WBC) Owerri. Based on the above purpose, some literatures were reviewed to enlighten on the meaning of sales promotion, on the meaning of sales promotion, including the steps necessary for its initiation an adoption. More concise and comprehensive information were gathered through primary and secondary data which help to elaborate more on this project topic. On the area of population and determining of sample size, survey research methods were adopted 60 questionnaires were distribute to the management , employees and customers of the firm. Data collected were analyzed and the following findings were made, that there is significant relationship between sales promotion and consumers brand loyalty. The findings also indicates that, there is significant relationship between consumer complaints and the nature of such complaints. Finally, the findings were summarized and the following recommendations were made; that the firm should embark on sales promotion. They should also adhere to their customer’s complaints, they should ensure that they produce product of higher quality, they should also ensure that they handle sales promotional programmes as an appropriate and acceptable marketing strategies in pursuance of their targets.

TABLE OF CONTENT
Title page – – – – – – – – – i
Approval Page – – – – – – – – ii
Dedication – – – – – – – – iii
Acknowledgement – – – – – – – iv-v
Abstract – – – – – – – – – vi
Table of contents – – – – – – – vii-ix

CHAPTER ONE
1.0 Introduction – – – – – – – 1
1.1 Background of the Study – – – – – 2-5
1.2 Statement of the Problem – – – – 6
1.3 Objectives of the Study – – – – – 7
1.4 Research Question – – – – – – 8
1.5 Significance of the Study – – – – – 8
1.6 Scope of the Study – – – – – – 9
1.7 Limitation of Sales Promotion – – – – 10
1.8 Definition of the Terms – – – – – 11

CHAPTER TWO
2.0 Literature Review- – – – – – – 12
2.0 Introduction – – – – – – – – 12
2.1 The Definition of Sales Promotion – – – 13
2.2 Consumers Brand Loyalty – – – – 14-15
2.3 Schemes That reach Consumer Directly – – 16-18
2.4 Reasons for the Growth of Sales Promotion – 19-20
2.5 Problems SOLVED THROUGH Sales Promotion – 21
2.6 Planning and Develop Designing of the Sales
Promotion Programme – – – – – 22
2.6 Objectives of sales Promotion – – – – 23
References – – – – – – – 25

CHAPTER THREE
3.0 Research Design and Methodology – – – 26
3.1 Introduction – – – – – – – 26
3.2 Research Design – – – – – – 27
3.3 Source of Data – – – – – – – 27
3.4 Population And sample Size – – – – 28-29
3.5 Sample Techniques – – – – – – 30
3.6 Validity And reliability of Measuring Instrument 30-33

CHAPTER FOUR
4.0 Presentation and Analysis of Data – – – 33
4.1 Introduction – – – – – – – 34
4.2 Presentation of data – – – – – – 34
4.3 Analysis of Data – – – – – – 35-39
4.4 Interpretation of Results – – – – – 40-41
CHAPTER FIVE
5.0 Summary of Finding, Conclusion and – –
Recommendations – – – – – 42
5.1 Introduction – – – – – – – 43
5.2 Summary of Findings – – – – – 43
5.3 Conclusion – – – – – – – 44
5.4 Recommendation – – – – – – 45-45
References – – – – – – – 47-48
Appendix – – – – – – – – 49
Questionnaires – – – – – – – 50-54

CHAPTER ONE

INTRODUCTION

One of the major marketing strategies used by companies to build up, encourage and reinforce brand loyal behavior is “Sales promotion” Over the years, most companies spend huge amount of money on advertising and promotion for a number of reasons, most importantly to influence customers to buy, to increase and maintain brand preference and loyalty, and consequently to have high returns. The question that these study sought answers to are that, does the huge amount of money spent on sales promotion worth it, are the consumer affected by the various method of promotion, does sales promotion really influence consumer’s brand preference. Extensive literature review was conducted on the influence of sales promotion on consumer’s brand preference and related topics. Literatures were reviewed generally on the principles of marketing, marketing concept, sales promotion and principles of consumer’s behavior, advertising. The study is based on descriptive and inferential ( chi- square) analysis of 50 consumers and 35 dealers surveyed through structure of questionnaires. The results obtained were presented and managerial implications were discussed. It was found from this study that majority of the consumers agreed that advertising and sales promotion influenced them to buy, that it make difference if the product is advertised and that should continue. Larger part of the dealers also claimed that their sales increase when ever there is advertising or major promotional effort on the product. It was however found out from this study that as important as “advertising and sales promotion” is, it is not the only factors that make consumers to buy. Consumers would consider taste and price before taking the final decision to purchase the product.

1.1  BACKGROUND OF THE STUDY

In the previous years, sales promotion has not become popular. But in recent years it has grown so rapidly. It is this rapid increase that has promoted the attention to undertake this research and find out how sales promotion influence the consumer brand loyalty with special emphasis on Nigeria Bottling Company.

Sales promotion is an indirect form of intended to stimulate quick action. It is one of the variables in the promotional mix that organization uses to stimulate customers purchasing and dealer’s effectiveness such as displaying, shows, exhibition, demonstrations, coupons, contests, premiums, samples trade allowance and other routines selling effort are usually short term in nature.

According to Kotler (2001) sales promotion is one of the promotional activity or material that act as a direct inducement to reseller, sales persons or consumer. It offers added value or incentive to buy or sell the procedure. A range of technique used to engage the purchaser.

Nigerian Bottling Company is a multinational Company and has Parents Company in the United States of America (Atlanta). The production of Nigeria bottling company product in Nigeria is purely through franchising, Nigerian Bottling Company operates a globalize marketing, that is selling its product as it is in all the consumer countries, and thereis no change in marketing, advertising, taste and promotional activities. The company sources their coke from Ijebu-Ode, their bottle from Nigerian Bottling company glass industry at Ughele plant Delta state.

Here, plants of Nigerian bottling company are established in nearly all the state federation with under head office in Lagos. In Owerri, a plant of the multinational company is located at Owerri-Onitsha road after NNPC filling station.

In Enugu, it is located at 9th mile corner facing Enugu road heading to Nsukka. A part of the main plant at Enugu, precisely at 9th mile corner. The company has staff strength of about two thousand, seven hundred (2,700) workers employed from all over the country.

When coca-cola international entered into the Nigerian soft drink market, Nigerian bottling Company has monopoly on the market and as such there was no need for the application of sales promotional techniques as a means of wining and retaining consumer’s patronage.

The product of this company includes coke (35cl and 25cl), Fanta, soda water. (35cl and 25cl), Sprait, lemon Fanta and Eva table water.

Also, the study of sales promotion as an element of promotional mix has been sadly inflicted both in the academic study of marketing and in Nigerian bottling company. But incidentally, a major factor in the success of marketing of consumer goods it is not encouraging; therefore it is an unavoidable responsibility of this study to address these problems to the notice and comprehension of Nigeria bottling company.

The study therefore emanated from the desire to final out which is the correct position of the effect and influence of sales promotion on consumer brand loyalty using Nigerian bottling company as a study.

1.2  STATEMENT OF THE PROBLEM

Business organizations generally and the Nigerian bottling company in particular are supposed to carryout sales promotion to enhance the sale of their products.

Sales promotion is an important tool that enables organizations to achieve meaningful success. Under normal circumstances, sales promotion when conducted is supposed to influence positively, the consumer brand loyalty for the product concern. It is doubtful whether Nigerian bottling company plc embarks on sales promotion. Also of concern to the researcher is the nature and extent of sales promotion carried out by the firm.

Whether or not sales promotional activities influence consumers brand loyalty is another matter of concern. The researcher is equally in doubt as to which of the promo-tools brings out the desired result in terms of consumer brand loyalty.

It is also doubtful the nature of complaints any consumers make regarding the sales promotion they are exposed to and how the firm addressed such complaints.

OBJECTIVES OF THE STUDY

  1. To know whether Nigerian bottling company plc embarked on sales promotion.
  2. To know the nature and extent of sales promotion carried out by firm.
  3. To know if sales promotion activities influence consumer brand loyalty.
  4. To know which promo-tools bring out the desired result in terms of consumer brand loyalty.
  5. To know if consumers complain about the sales promotion and the nature of such complaint.
  6. To know how the firm addressed consumers complaint if any.

RESEARCH QUESTIONS

The following questions will be addressed:

  1. Does Nigerian bottling company plc embark on sales promotion?
  2. What is the nature and extent of sales promotion research is been carried out by the firm?
  3. Does sales promotion activities influence consumer brand loyalty?
  4. Does promo-tools bring out the desire that result in terms of consumer brand loyalty?
  5. What are the nature of consumer-complaints about sales promotional strategies of the firm?
  6. How does the firm address consumer’s complaints? 

SIGNIFICANCE OF THE STUDY

A research work of this type is important because it helps in drawing out careful analysis and evaluation on the influence of sales promotion on consumers brand loyalty adopted by Nigerian bottling company plc and also be of importance to up-coming organization that may like to carryout sales promotion activities, it will help them to actualize their set objectives.

This research also aims at finding out the appropriate sales promotional tools that appear to be most effective in mobilizing and securing customers active participation.

Finally, this research work will be of benefits to the followings

  1. Manufactures
  2. Marketing managers
  3. Research scholars

1.6  SCOPE OF THE STUDY

This research is drawn from various organizations and it shows how sales promotional activities are applied in various organizations but the study is limited to the influence of sales promotion on consumers brand loyalty.

It focused on the types of sales promotional activities that appear to be most effective in mobilizing and securing customers participation brand or not. No attempt was made to look into the activities of other soft drinks in the area of coverage in Nigeria as a whole.

Meanwhile, the study investigates the general practice of sales promotion in manufacturing companys and the control system adopted by the Nigerian bottling company plc owerri.

1.7  LIMITATIONS OF THE STUDY

The following problems were encountered by the researcher. This research is constrained by lack of time as the researcher carried out the work side by side with other academic work, like assignment, lectures and working for final examination.

Again, materials relating to the work were not enough in the available library. Therefore; the researcher encountered some financial problem in carrying out the research.

However, the research was able to be conducted due to to adaptation.

DEFINITION OF TERMS

According to kotler (2001) sales promotion is one of the promotional activity or materials that act as a direct inducement to reseller, sales persons or consumers. It offers added value or incentives to buy or sell the procedure.

Consumer: This is the person who derives the satisfaction or benefits offered.

Personal selling: this involves interpersonal communication of ideas or information’s to the prospects for one purpose of facilitating and actualizing sales.

Consumer brand loyalty: According to Busch and Huston (1985:3.6.) defined a brand as a name, term, sign, symbol, design or combination of them that identifies the goods or service of one seller or group of seller and differentiate them from those of competitors.

Advertising: this is a paid form of non-personal communication of idea, product or services that transmitted to the audience through mass media such as television, newspaper, radio and magazine.