The role of sales

promotion force of a
firm at a period of
economic meltdown
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INTRODUCTION

1.1 BACKGROUND OF THE STUDY

It is without doubt that Nigeria is experiencing an economic

doldrums and downturn occasioned by the recent global economic
meltdown which is in a way compelling organisations to execute their
business activities under persistent high inflation, material and energy
shortages, high interest rate, sky rocketing exchange rate and aggressive
competition, all of which are rampant phenomenon in the Nigerian
business environment. In trying to understudy this research work, it is
paramount that the remote causes of the global economic meltdown
crises be summarily evaluated.

(www.wikipedia.com) For many months before September 2008,

many business journals published commentaries warning about the
financial stability of leading United States and European investment
banks, insurance firms and mortgage banks. Beginning with failures
caused by misapplication of risk controls for bad debts, collateralization of
debt insurance and fraud, causing large financial institution in the United
States and Europe to face a credit crisis and also slowdown economic
activities. The crisis rapidly developed and spread into global economic
shock, resulting in a number of European banks failures, declines in
various stock indexes, and large reductions in the market value of
equities and commodities.

Moreover, the de-leveraging of financial institutions further

accelerated the liquidity crisis and caused a decrease in international
trade. World political leaders, national ministers of finance and central
bank directors coordinated their efforts to reduce fears, but the crises was
becoming consolidated and spreading fast all over the world. At the end of
October a full blown currency crisis had already developed to an
uncontrollable colossus, with investors transferring vast capital resources
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into stronger currencies leading many emergent economies to seek aid

from the International Monetary Fund.

This has taken its toll on the developing countries of which Nigeria
is a part of and this crisis is eating deep into the stability of economic
indices that makes up the vertebra of the Nigerian financial framework,
the stock market being the worst hit, losing close to #8 trillion within a
period of six months (Business times).

Given this seeming unbearable scenario, one can only but wander
Nigerian how a company that has set goals, objectives, and marshalled
out action plans to achieve them do so when the prevailing economic
indices have suddenly become unpredictable, coupled with rising rate of
unemployment, job and pay cuts of the public and private sector
employees and the high cost of living, consequently reducing the circular
flow of income, propensity to consume and eventually reducing the
demand for products?

It therefore becomes an unavoidably imperative responsibility for

managers to develop a flexible and adaptable marketing structure and
sales promotional activities to sustain organisations and make them
survive in this hostile and turbulent socio-economic environment
bedevilled with high level of uncertainties in its recent wake.

This research work will attempt to dissect and identify marketing

strategies that can be adopted by marketing managers with particular
reference to sale promotion in the global financial meltdown so that they
can continue as a going concern and stay afloat in this troubled time.

Efforts shall be made to unravel the objectives of sales promotion,

types of sale promotional techniques shall be enunciated, and
recommendation shall be made to organizations based on scientific
methods, so as to aid and improve their marketing activities.
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1.2 STATEMENT OF RESEARCH PROBLEM

The role of sales promotion as a significant marketing strategy of a

company has severally been questioned by many authors, researchers
and different schools of thought, especially of its efficacy during a global
recession. It is argued in some quarters that it is an expensive venture
not worth its while, since sale increases caused by sales promotion only
last as long as the promotion. Another school of thought believes it is an
effective tool in marketing strategy of a company during global recession.

Howard Danto (1976) representing the later school of thought is

of the view that “although sales increases caused by sales promotion
occasionally last only as long as the promotion, but emphasized that it is
not always the case”. Sales promotion can be used to establish new
product, to increase the long term marketing objectives of product and
penetration for existing products.

Therefore, in the light of the above, this study desires to find out
the steps and processes involved in sales promotion during economic
meltdown, empirically test the authenticity of the claim of it effectiveness,
and with the aid of scientific analysis, it’s inevitable need during an
economic and financial meltdown as a way of solving the conflict of
opinion with respect to its use.

1.3 PURPOSE OF THE STUDY

The stand point of this study is to analyze the significant roles sales
promotion plays in the marketing efforts of managers and the sales force
of a firm at a period of economic meltdown. This study is to add to
existing scholarly works already done in the role of sales promotion
particularly in Nigeria, currently facing the impact of the global economic
meltdown.

Furthermore, the objectives of this study are:

 To evaluate how efficient sale promotion can be in this period of

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economic meltdown.
 To understudy the current promotional activities and mix of
marketing firms during this meltdown.
 To enumerate the appropriate promotion tools/mix at the disposal
of firms.
 This research will also highlight the strength and weaknesses that
can be encountered when running a successful promotional
campaign in a depressed economy.
 Attempt to recommend appropriate avenues firms can employ to
own a successful promotional campaign.

1.4 RESEARCH QUESTIONS

In order to validate research efforts, the following research

questions will be addressed:

 Do companies need to increase budget for sales promotion despite

the global financial crisis?
 How do customers respond to sales promotion in this period of
economic depression?
 Is sales promotion cost effective during economic boom than when
an economy is facing recession?
 Why must companies embark on sales promotion despite its huge
cost when undertaken?
 What alternative efforts are put in place by organisations when
sales promotion efforts fail to achieve its objectives?

1.5 RESEARCH HYPOTHESIS

In conjunction with the objectives stated above, this research work

will strive to hypothetically test these premises so that valid conclusions
can be drawn from them to aid recommendations based on anticipated
responses from respondents.

Ho: Sale promotion does not increase sale volume in a period of global
 6

economic meltdown.

H1: Sale promotion increases sale volume in a period of global economic

meltdown.

1.6 SIGNIFICANCE OF THE STUDY

Sales promotion is not a new concept in the lexicon of marketing

activities in Nigeria. During this particular period under study, firms in
different ramifications that make up the fabric of the Nigerian economy
are consistently seeking ways of weathering the storm and keeping their
business in perpetual continuity.

In the light of the foregoing, this study will be of benefit to the

organization(s) which might in the time past doubted the need and
effectiveness of sales promotion or who are non-challant and unaware of
the sovereignty of consumers. It also seeks to beam a searchlight to the
imperative nature of sales promotion during this period of economic
depression. It will also encourage those already making use of the various
sales promotion tools/methods to explore other areas within which sales
promotion efforts could also be of great help.

1.7 SCOPE AND LIMITATION OF STUDY

The scope of this research study will basically be limited to an

empirical analysis of how an organization can effectively utilize sales
promotion as a veritable marketing tool in an economy engrossed with
economic depression. Alternative cost reduction method will be elucidated
to reduce the effects of high inflation rate, unabated increase in
production cost, and the poor standard of living that permeate the
Nigerian economy thereby, impeding the efficacy of marketing techniques
employed by a firm’s marketing team.

The survey of this study will only be restricted to Nigerian Bottling

Company Plc so as to draw valid conclusion from empirical analysis.
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LITERATURE REVIEW AND THEORETICAL FRAME WORK

2.1 LITERATURE REVIEW

This chapter examines the past works, empirical and theoretical, of

other authors on the subject matter of the research. Each author’s
contribution is viewed and analyzed with a relevant aspect of such work
to the present study.

2.2 DEVELOPMENT OF SALES PROMOTION

(www.google.com) the concept of sales promotion was developed

in the United States of America in the early 1920’s. Many of the
marketing activities which are now regarded as sales promotion were first
introduced by Benjamin Talbot Babbit, inventor and soap manufacturer in
America in the 19th century.

However, in Europe, the earliest recorded example of promotional

materials were in 1679 and belong to Jonathan Holder, a London shop
keeper who gave every purchaser who spent above a certain amount in
his shop a full list of items sold by him plus their relevant prices. His
pioneering decision to offer his customers ‘something extra’ was not
universally welcomed. The newspapers of the day condemned this sales
promotion as ‘a dangerous innovation’ and one which ‘would be
destructive to trade, if shopkeepers lavished so much of their capital on
printing useless bills’. Over 300 years later, trade still flourishes and so
do sales promotions, which now account for more ‘capital’ than any
element of marketing communications except selling. Sales promotional
activities have become increasingly important and have evolved over a
century ago when Benjamin Babbit first introduced those activities which
are now regarded as sales promotion.

Baker (1971) stated that in recent years the growth of below the line
expenditure on sale promotion has increased remarkably to the extent
that they now absorb more than 40% of advertising campaigns.
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Avraham Shama (1993) in his article “marketing strategies during

recession” stated amongst other things that the response of marketing
managers to recession depends on how they perceive it meaning and
impact on their businesses. It is now therefore the responsibilities of
marketing managers to take different tactical and strategic sales
promotional measures to adjust to or even exploit changes in the
economic environment.

Tom O’Leary (1974) opined that the heart of marketing; sales

promotion has moved to a stage where companies recognize it as a
competitive and important force in an organization’s marketing mix.

Chris Ogbechi (1997) is of the opinion that in reviewing a depressed

economic climate like that of Nigeria, one must evaluate its effect in the
marketing horizon and identify the challenges it poses to marketing
practitioners.

2.3 PURPOSE AND OBJECTIVE OF SALES PROMOTION

Kotler (2009) stated that sales promotion tools vary in their

specific objectives. Sellers use incentive type promotion to attract new
triers, to reward loyal customers, and to increase the repurchase rates of
occasional users. Sales promotion often attracts brand switchers, who are
primarily looking for low price, good value, or premiums.

The basic goals and objectives of sales promotion are either

identical or very similar to the objectives of advertising and personal
selling.

According to Stanton (1964) the three specific purposes of sales

promotion are:

(a) To communicate: This involves the dissemination of ideas and

information especially through advertising and to create clear
communication channels as well as to create effective messages to
be transmitted. Sales promotion should attract the attention of
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target audience. If the prices, discounts, off-season facilities and so

on are not adequately and effectively communicated, the efforts of
sales promotion will be wasted. A point to be noted here is that the
audience evaluate not only the message but also the source of the
message in terms of credibility.

(b) To convince: It is not enough to merely communicate ideas. The

ideas must be convincing to compel the consumer to take the
demand action. It is the purpose to sales promotion to enter into
the consumer decision process by providing information or
stimulating to convince the consumer that he should reach a
decision favourable to the advertiser. Sales promotion may adopt
different methods for approaching people.

(b) To compete: A company’s promotional effort is the cutting edge

of its entire competition programme.

2.4 FORMS OF SALES PROMOTION

There are different forms of sales promotion. Each of them is

appropriate for different circumstance and each has it merits and
demerits.

Kotler (2009) classified sale promotion into three action based

groups that are mutually exclusive.

Consumer/Selling Trade Promotion

Trade/Dealer Promotion
Sales Force Promotion
2.4.1 Consumer/Selling Trade Promotion: Consumer promotion is
usually used to ensure on or more of the following:
(1) Increasing sale volume.
(2) Ensuring trial of the product.
(3) To create awareness to the target market segment.
(4) Enhancing brand switching.
Consumer promotions are usually targeted directly at the
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consumers to elicit immediate demand and increase sales. The

types of consumer offers are:

(a) Samples: Samples are offers of a free products or trial of a product

to consumers. The sample might be delivered door to door, sent in
mail; pick up in a store, found attached to another product or
featured in an advertising offer.
(b) Coupons: Coupons are certificates entitling the bearer to a stated
saving on the purchase of a specific product. Coupons can be mailed,
enclosed in or on other products or inserted in magazines and news
paper advertisements.
(c) Cash refunds offers or rebates: These are like coupons except
that the price reduction occurs after the purchase rather than at the
retail shop. The consumer sends a specified “proof of purchase” to
the manufacturers, who in turn “refunds” part of the purchase price
by mails.
(d) Price packs: These are offers to consumers in form of saving off
the regular price of a product on the label or package. They make
the product in form of a reduced-price pack, which is in single
packages sold at a reduced price (such as two for the price of one)
or a banded pack, which is two related products banded together
(such as tooth brush and tooth paste). Price packs are very
effective in stimulating short term sales, even more than coupons.
Price packs can come in these forms:
i. Premiums or gifts: These are merchandise offered at a
relatively low cost or free as an incentive to purchase a
particular product. Sometimes the package itself is a
reusable container which may serve as a premium
ii. Prizes: These are offers of the chance to win cash, trips or
merchandise as a result of purchasing something.
iii. Patronage awards: These are values in cash or in other
forms that are proportional to one’s patronage of a certain
vendor or group of vendors.
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iv. Free trials: Free trials consist of inviting prospective

purchasers to try the product without cost in the hope that
they will buy the product.
v. Point of sales displays: These take place at the point of
purchase or sales. Display of visible mark or product at the
entrance of the store is an example.
vi. Product demonstrations: These promotion tools show
the product in action. Consumers can visit the store and
see the usages of the product in live action so that doubts
of the consumers can be clarified in the store itself.

2.4.2 Trade/Dealer Promotion: This promotion is usually focused at

the wholesalers, distributors and retailers, with the main aim of
encouraging the middlemen to stock up more of the product
variety of the organization. Trade promotion through buying
allowance, free goods, merchandise allowances, and push money
etc help to enhance sales by retailers and traders. Packaging is
another important form of promotion, particularly for consumer
goods.

Manufacturers seek the following objectives in awarding money

on the trade:

I. Trade promotion can persuade the retailer or wholesaler to

carry the brand.

II. Trade promotion can persuade the retailer or wholesaler to

carry more than it normally carries.

III. Trade promotion can induce the retailer to promote the

brand through featuring displays and price reduction.

IV. Trade promotion can stimulate the retailers and their clerks
to push the product.
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Manufacturers use several promotional tools. Some of which are:

(a) Price – off: This is a straight discount off the list price on
each case purchased during a stated period of time. The offer
encourages dealers to buy a quantity or carry a new item that
they might not ordinarily buy

(b) Allowance: Manufacturers may offer an allowance in return

for the retailer’s agreeing to feature the manufacturer’s
product in some way. An advertising allowance compensates
retailers for advertising the manufacturer’s product.

(c) Free goods: Manufacturers may offer free goods, which are
extra cases of merchandise to middlemen who buy a certain
quantity of items.

(d) Push money: Manufacturers offer push money which is cash

or gifts to dealers to push their goods out into the market.

(e) Specialty advertising items: Manufacturers may offer

specialty advertising to the retailers that carry the company’s
name such as pens, pencils, calendars, paper weights and
memo pads.

2.4.3 Sale force promotion: This sales promotion is focused on the

marketing department and sale force of the organisation so that
they strive for mastery and invariably increase the quantity of the
organization product that is sold. Tools that can be used for sale
force promotions are: Trade show and sales contest. As a number of
sale promotions have increased, frictions have been created
between company’s sales force and its brand mangers.
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2.5 MAJOR DECISIONS IN SALE PROMOTION

Kotler (2009) states that before a company can effectively use

sales promotion, it must establish its objectives, select the tools, develop
the program, sales promotion budget, pre-test the program, implement
and control, and evaluate the results.

2.5.1 Establishing the Objectives

Sales promotion objectives derived from broader promotion

objectives include encouraging purchase of larger-sized units,
building trial among nonusers, and attracting switchers away form
competitors’ brands. Ideally, promotions with consumers would
have a short-run sales impact as well as long run band equity
effect. For retailers, objectives include persuading retailers to carry
new items and higher levels of inventory, encouraging off-season
buying, encouraging stocking of related items, building brand
loyalty and gaining entry into new retails outlets.

2.5.2 Selecting Consumer Promotion Tools

The promotion planner should take into account the type of market,
sales promotion objectives, competition conditions, and each tool cost
effectiveness. Some of these forms have been earlier enumerated.
Manufacturers’ promotion in the auto industry for instance includes
rebates, gifts to motivate test drives and purchases, and high value trader
in credit. Retailers’ promotion includes price cuts, feature advertising,
retailer coupons, and retailers’ contests or premiums.

2.5.3 Selecting Trade Promotion Tools

Manufacturers use a number of trade promotion tools to improve on

their sales promotion activities especially, when sale seems to dwindle
like in depressed economy. They award money to trade to do the
following:

1. Persuade the retailer or wholesaler to carry the brand.

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2. Persuade the retailers or wholesales to carry more units than the

normal amount.

3. To induce the retailers to promote the brand by featuring, displays,

and price reductions.

4. To stimulate retailers and their sales clerks to push the product.

2.5.4 Selecting Sales – Force Promotion Tools

Companies have continually increased budget on business and sales

force promotion tools to gather business leads, impress and reward
customers, and motivate the sales for a greater effort. They typically
develop budget for tools that remain fairly constant from year to year. For
businesses who want to get the attention of the target audience, trade
shows are an important tool.

2.5.5 Developing the Program

In planning sales promotion programs, marketers are increasingly

blending several media into a total campaign concept. In deciding to use
a particular incentive, marketers must first determine the size of the
incentive, marketing managers must also establish condition for
participation, the duration of the promotion must be decided upon, the
channel of distribution must also be chosen, the timing of the promotion
must be established and the total sales promotion budget must be
determined.

2.5.6 Sales Promotion Budget

One of the most difficult marketing decisions facing companies is

how much to spend on promotion. It is not surprising that industries and
companies vary considerably in how much they spend on promotion. It is
important to determine the sales promotion budget, before resorting to
sales promotion activities. The resources and sales potentials are
estimated before the formulation of the budget. Sales promotion budget
should be adequate so that they achieve the promotion objectives. The
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following are some of the budgeting method of sales promotion:

2.5.6.1 Affordable method:

Many companies set the promotion budget at what they think

the company can afford. This method of setting budgets completely
ignores the role of promotion as an investment and the immediate
impact of promotion on sales volume. It leads to an uncertain
annual promotion budget, which makes long range market planning
difficult.

2.5.6.2 Percentage of sales method:

Many companies set their promotion expenditures at a specific

percentage of sales or of the sales price. For instance, automobiles
companies typically budget a fixed percentage for promotion based
on the planned price. A number of advantages are claimed for this
method.

I. Percentage of sales method means that promotion

expenditure are likely to vary with what the company can
afford which satisfies the financial manager who feels that
expenses should bear a close relation to the movement of
corporate sales over the business cycle.

II. This method encourages management to think in terms of the

relationship between promotion cost, selling price and profit
per unit.

III. The major drawback of this method is that it does not provide
logical basis for choosing the specific percentage except what
has been done in the past or what competitors are doing. It
also does not encourage building up promotion budget by
determining what each products and territories deserve.
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2.5.6.3 Competitive parity method:

Some companies set their promotion budget to achieve share

of price parity with their competitors. Two arguments are advanced
for this method. One is that the competitor’s expenditure represents
the collective wisdom of the industry. The other is that maintaining
a competitive parity helps prevent promotion wars.

There are no grounds for believing that the competitors know

better than the company itself what it should be spending on
promotion. Company reputations, resources, opportunities and
objectives differ so much that their promotion budgets are hardly a
guide.

2.5.6.4 Objective and task method:

The objective and task method call upon markets to develop

their promotion budgets by defining their specific objectives,
determining the tasks that must be performed to achieve these
objectives and estimating the costs of performing these tasks.

2.5.7 Promotion Mix

Companies face the task of distributing the total promotion budget

over the four promotion tools of advertising, sales promotion, publicity
and sales force. Within the same industry, companies can differ
considerably in how they allocate their promotional budget.

The trial and error method, past performance and corporate policies
may influence the appropriate promotional mix. Many firms have
increased their sales with the application of appropriate combinations of
promotion media; sales promotion and personal selling are supported with
publicity. The promotion mix is available in marketing strategy. It should
be clearly decided how far a particular element should be used in
combination with other promotional methods.
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2.5.8 Strategic Approach

The kind of promotional mix employed determines the promotional

strategy. Generally speaking a particular combination, type or amount of
sale promotion, personal selling, publicity and advertising are brought into
the promotional mix, which becomes the promotional strategy in the
course of implementation. The marketing strategy as much guides the
determination of the promotional strategy, personal selling strategy,
publicity strategy and advertising strategy, and thus sustaining
promotional strategy, developmental promotional strategy or promotional
appropriation.

2.5.8.1 Push and pull strategies:

The push and pull promotional strategies may be used to

enhance sales. The push strategy concentrates on retailers and
middlemen who push the sales of the product to the final
consumers. This strategy covers cooperative advertising, attractive
terms of sales, coupons and discount facilities.

The pull strategy is directed towards the final buyers. It

persuades the buyers to go to the sellers to buy. Sales promotion,
and particularly customer promotion, is an important form of the
pull strategy. Customer promotion may call for the offer of samples,
money refund offers and price offs premiums and so on.

The push strategy asks the sellers or retailers to attract

buyers. Trade promotion is thus the main form of push strategy.
Trade promotion refers to buying allowances, free goods,
cooperative advertising, push money, sales contests and so on. The
marketing manager has to adopt both these strategies to promote
sales.
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Industrial marketing strategies are mostly the push type

strategies relying primarily on personal selling. For instance, in the
sale of medical products and in life insurance, marketers have to
employ a lot of salesmen to call on prospects for a life insurance. In
push type promotion, personal selling expenses are considerable
and dealer margin is also higher. In this, after-sales service is also
important and marketers rely on selective distribution. Push
strategy can be successfully used when:

i. There is a high quality product with unique selling points.

ii. Where we have a high priced product.

iii. Adequate financial incentives can be offered to middlemen

and their salesmen.

2.5.9 Pre-testing, Implementing and Controlling

Although most sales promotion programmes are designed on the

basis of experience, pre-tests can determine whether the tools are
appropriate, the incentive size optimal, and the presentation method
efficient. Consumer can be asked to rate or rank different possible deals,
or trial tests can be run in limited geographical areas. Marketing manager
must prepare implementation and control plans that cover lead time and
sell-in time for each individual promotion. Lead time is the time necessary
to prepare the programme prior to launching it. Sell-in time begins with
the promotional launch and ends when approximately 95% of the deal
merchandise is in the hands of the consumers.

2.5.10 Sustaining Promotional Campaigns

The main reason why marketing managers should sustain a

promotional campaign is to stabilize the market share. Sales promotion
 19

becomes necessary to sustain a market share if the competitors are

seriously competing to be the market leader. Unless appropriate steps are
taken by the marketer to curb this scenario he may find out that the
market may be slipping away from his products. But this sustenance
strategy can be adopted only after employing the penetrating strategy.
That is, the market share should not decline after a higher level of sales
has been attained. The sustaining promotional strategy stabilizes the
market share. Sales force promotion by the way of bonus and other
incentives may contain the market from slipping away and sustaining the
market share. Steps must also be taken to prevent the sales force from
going across to the competitors. Brand loyalty of customers is fostered
and reinforced when efforts made to sustain promotional efforts. The
introduction of new products may require expansion of the market.
Innovators need to have a developmental strategy. New products or
brands are popularized by offering trade discounts, cash rebates,
premiums, money refunds etc. The promotional mix for a brand not yet
popular may require emphasis on both personal selling and sales
promotion.

Promotional objectives determine promotional appropriation. The

forms of promotion, the cost of each component of promotion, the
activities to be performed and appropriation on personal selling, sales
promotion, advertising and publicity are determine under this strategic
approach of sustaining promotional campaign. The marketing manager
has to arrive at the optimum promotional mix of the given objective, and
this requires planning and programme evaluation.

2.5.11 Evaluating Sales Promotion

The evaluation of sales promotion cannot be overemphasized. This

is due to the increasing expenditure and budget set aside to actuate the
objectives of sales promotion. Inspite of the crucial nature of evaluation of
sales promotion to management, many marketers still neglect the positive
 20

result attached to the marketing activity of sales promotion in terms of

profit.

Sales promotion strategies have two points of evaluation. First, at

the stages of implementation and secondly after the final performance
because implementation control will suggest improvements during the
application of the promotional strategy, while performance control will
guide the sale promotion activity in the future. Implementation control is
very important because it covers initial planning, objectives, promotional
packages, and printing of special premiums and packaging materials,
distribution to retailers etc.

Hant and Common (1978) stated that sales promotion can easily
be evaluated when compare with other marketing techniques, and the
commonest reason for this evaluation is to see how effective it has been
in achieving the firm’s objectives of increased sale and profitability
amongst other things, and how well it can perform when placed
analogously with other marketing techniques particularly in a depressed
economy.

Iyanda (1988) in his view stated that sales promotion unlike

advertising and publicity often calls for specific action on the part of the
audience. They may be required to fill a coupon or send specified
evidence of recent purchase. It is usually relatively easy to measure the
effect of sales promotion efforts on sales. He further suggested four
methods companies can use to measure consumer promotion which are:

(1) Sales performance movement: This is the most common method

of evaluating consumer promotion activities. Sales or market share
before, during and after a promotion is compared to identify
differences in sales records.

(2) Customer sampling: This is when a sample of customers within a

target market are selected as sample to learn how many consumers
recall the promotion, what they thought of the promotional activity,
 21

how many of the customers took advantage of the sales promotion

and how it affected their subsequent brand choices. This technique
is usually used to research the effect of a particular type of sales
promotion on consumers.

(3) Consumer panel data analysis: This is used to evaluate the

consumer responses to sales promotion. This has showed severally
that sales promotion generally enhances brand switching.

(4) Experiment study: This evaluation technique experiments on sales

promotion using incentive values, deals duration and deals
distribution media that are varied so as to see their different level of
response.

Experiments needs some follow up, consumer study to understand

the reasons why the deals produced different level of responses.
But, it must be noted that extraneous factors have to be controlled
in conducting experiment which are not totally possible in social
surveys.

2.6 LIMITATION AND RATIONALE OF SALES PROMOTION

Having seen the various functions performed by sales promotion

and the important roles it places in business, one cannot but identify
some of its limitation when compared with other marketing tools and how
efficiently it can perform in the present global economic financial crises.

(1) No amount of sales promotion will induce buying a product if the

need for the product does not exist

(2) Despite its inducing ability, it cannot force people to but what they
firmly do not want to buy. Most loyal brand buyers may decide
firmly not to change their buying pattern as a result of sales
promotion by a competitor of their product brand.
 22

(3) Sales promotion cannot be used as a cover up for defect in product

style, design, quality, or value.

The rational of sales promotion may be analyzed under the following

points:

(a) Short term results: Sales promotion such as coupons and trade
allowances produce quicker, more measurable sales results.
However, critics of this strategy argued that these immediate
benefits come at the expense of building brand equity. They
believe that an over emphasis on sales promotion may
undermine a brand’s future.
(b) Competitive pressure: If competitors offer buyers price
reductions, contest or other incentives, a firm may feel forced to
retaliate with its own sales promotion.
(c) Buyers’ expectations: Once they are offered purchase
incentives, consumers and channel members get used to them
and soon begin expecting them.
(d) Low quality of retail selling: Many retailers use inadequately
trained sales clerks or have switched to self service. For these
outlets, sale promotion devices such as product displays and
samples often are the only effective promotional tools available
at the point of purchase.
 23

RESEARCH METHODOLOGY

This chapter focuses on the methods of data collection and techniques

used in analyzing the data. The concise description of the method of
enquiry employed for this study is also explained. The description will
further entail the design, research instrument, research design and
procedure for data analysis.

3.1 RESEARCH DESIGN

A simple analytical tool was used for the study of the research
results. They were also analyzed using tabular forms, simple averages
and arithmetic simple percentage to aid influence and decision making.

3.2 POPULATION DESCRIPTION

It is often said that the best sample is a complete census of the

population itself because every element of the population is represented
in the population itself.

The target population for this study is primarily large (private)

organizations, particularly a manufacturing organization. However, due
to the large size of the population it was impossible to draw information
from it. Thus a sample frame of NBC Plc located at Agindingbi, Ikeja,
Lagos was taken as a case study.

3.3 SAMPLE AND SAMPLING TECHNIQUE

The sampling design to be used for this research shall be excised

over the marketing department of Nigerian Bottling Company Plc. Due to
the complex nature of NBC and the cost of using the entire company; a
sample 100 respondents is intended to be used as a representation of
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the total population and was used for the analysis of the questionnaire.

3.4 RESEARCH INSTRUMENT

The questionnaire will form the major instrument for gathering the
requisite data needed for analysis. It shall also be complemented with the
use of personal interview.

3.5 METHOD OF DATA COLLECTION

This research will use both primary and secondary research method;
it will also use personal interview and direct observation.

3.6 DATA ANALYSIS

The method to be used in analyzing the data collected from

respondents for the purpose of this research is the chi –square test.
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DATA PRESENTATION AND ANALYSIS OF RESULT

4.1 DATA PRESENTATION

An introduction of the study was given in chapter one, highlighting

the research question, purpose/objective of the study and the significance
of the study.

In this chapter, attempts will be made at reducing the large volume of

statistical information (gathered from respondents) to manageable
amount as a means of preparing them for other stages of analysis.

Subject to the categorical nature of the data, the chi square test will be
used to test the hypothesis stated in part 1.
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SUMMARY, CONCLUSION AND

RECOMMENDATIONS

5.1 SUMMARY

This research work when examined will show the relevance of sales
promotional efforts, campaigns and activities in a depressed economy
with a study of Nigerian Bottling Company Plc, a key player in the Non-
alcoholic Beverages Industry in Nigeria. A summary based on the data
collected and analysed will be presented in this chapter. Based on these
findings conclusions will be drawn and subsequent recommendations will
be made. The analysis of the data presented in chapter four will reveal
some findings from the hypothesis that will be tested.

5.2 CONCLUSION

From the findings of the data analyses conclusions will be drawn.

5.3 RECOMMENDATIONS

This study will show the impact sales in a period of global financial
meltdown that is generally affecting the Nigerian economy.
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