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EFFECT OF PROMOTIONAL MIX ON SALES VOLUME IN A CONFECTIONARY INDUSTRY (A CASE STUDY OF ENERGY FOOD COMPANY)
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Aims: The study sought to evaluate the influence of promotional mix on sales volume in a confectionary industry. The study was guided by the following specific objectives: to evaluate the extent to which sales promotion affect sales volume in ENERGY FOOD COMPANY; to assess the extent to which personal selling affect sales volume of ENERGY FOOD COMPANY; to investigate the extent to which direct marketing affect sales volume in a confectionary industry. The promotional mix comprises of advertising, sales promotion; personal selling, direct marketing and public relations. However, for purposes of this study, advertising, sales promotion; personal selling and direct marketing were considered. Design: The study adopted a descriptive research design. The collected data from the questionnaire and secondary sources was systematically organized in a manner to facilitate analysis. Analysis: Qualitative data was analyzed using content analysis while quantitative data was analyzed using descriptive statistics, which include frequencies, percentages and percentage. In order to establish the relationship between the independent and dependent variables, inferential statistics will be used. In order to determine the relationship between independent and dependent variables. Results: The findings indicate that promotional elements usually are used by various organizations to elicit responses from target markets to increase the market share. The findings have been summarized systematically answer the research questions and objectives. Findings of the study reveal that sales promotion was the highest ranked promotional mix with regards to its effect on sales volume, personal selling was ranked second, advertising was ranked third, and public relations was ranked fourth while direct marketing was the least ranked.
1.1 Background of the Study
Promotional elements usually are used by various organizations. Marketers use numerous tools to elicit responses from target markets. These tools are known as the marketing mix that is defined as the set of tools that a firm uses to pursue its marketing objectives in the target market (Kotler, 2000). Promotion is one of the elements of marketing mix (Mc Carthy, 1996) among other elements like Product, Price, and Place, which are the 4ps of marketing. Marketing mix decision must be made with the objective of influencing the trade channels as well as the final consumer and in return the sales. Promotion brings an interactive dialogue between an organization and its customers and it takes place during the pre- selling, selling, consuming and post- consuming stage. Such promotional elements include: sales promotion, advertising, sales force, public relation and direct selling.
Promotion is vital element of marketing mix. Brand equity is one of the most important concepts in business practice as well as in academic research. This is because success full brands can allow marketers to gain completive advantage (Lesser 1995), including the opportunity for success full extensions, resilience against competitors, promotional presorts and the ability to create barriers to competitive entry (Farquhar, 1989) High level of brand equality increases consumer satisfaction, repurchasing intent, and degree of loyalty Brand equity has been defined as ?the differential effect of brand knowledge on consumer response to the marketing of the brand? (Keller 1998) Brand equity is set of assets and liabilities linked to a brand, its name and symbol that add to or subtract form the value provided by a prouder or service so a firm and or that firm?s customers? Brand equity consists of four dimensions like brand loyalty, barns awareness, perceived Quality and brand image (Asker 1991,1996). In selecting appropriate promotional mix, the confectionary industry must consider the target audience, the stage of the products, life cycle, characteristics of the products, and decision stages of the products and the channel of distribution (Kotler, 2000). This study therefore seeks to evaluate the effects of promotional mix on sales volumes confectionary industry in Nigeria.
Kotler (1995) noted that in the past, the promotional elements were regarded as separate functions handled by experts in separate departments. The sales force designed and managed its activities independently of the advertising departments and sales promotion and public relation were often the responsibility of outside agencies or specialists. Today the concept of designing market communications program co-ordinate all promotional activities to provide a consistent message across all audiences. Many people have also carried out researches to find out if promotional elements have influence on sales. For instance, Ndambuki (2000) did a research and found out that indeed promotional mix have effect on sales which turned out to be different from the findings of Ondiri (1998) who found out that there is no significant difference effect on sales. However, the difference may have been caused by geographical difference as Ndamuki (2000) did his research in rural setting while Ondiri carried out research in town setting. Ndambuki?s finding was also the same as (Kivuva, 2003) that, those products which are on promotion tend to have more demand than those which do not. Due to different findings which may have been caused by use of different organizations and geographical differences, the researcher needs to find out if promotional elements can have influence on sales among women group products.
1.2 Statement of the Problem
Foskett (1999) stresses that today?s customers seek value from companies that provide leading-edge products, hassle-free transactions at competitive prices and customer intimacy. Promotion practices have changed dramatically to improve transactions and increase customer intimacy by emphasizing long-term relationships and increasing self-regulation. There is a lot of competition created by liberalization of the financial services sector, technological changes, and globalization. Financial institutions spend large sums of money to compete for outwit their competitors through various promotional means. However, there is scarcity of literature on the influence of the relative influence of each of the promotional tools on the sales volumes of the financial institutions. This study has therefore attempted to bridge the gap by seeking answers to the following research questions:
? To what extent does advertising affect sales volume of confectionary Industry in Nigeria?
? To what extent does sales promotion affect sale volume of confectionary Industry in Nigeria?
? To what extent does personal selling affect sales volume of confectionary Industry in Nigeria?
? To what extent does direct marketing affect sales volume of confectionary Industry in Nigeria?
1.3 Objectives of the Study
The general objective of this research is to assess the effect of promotion mix on sales volume in a confectionary industry in Nigeria.
Therefore, this research seeks specifically:
1. To find out the practice of sales promotion mix in ENERGY FOOD COMPANY.
2. To find out the factors that promotes or impairs the effectiveness of the practice.
3. To assess the impact of sales promotion on consumer behaviour in the ENERGY FOOD COMPANY.
4. To recommend suggestions on measures for improvement.
1.4 Research Question
The study will investigate the following questions:
? What are the sales promotions strategies practiced in the confectionary industry?
? What are the factors that promote or impair the effectiveness of the practice?
? What impact does sales promotion have on consumer behaviour in the confectionary industry?
? What are the suggested measures for improvement of sales promotion?
1.5 Scope of the Study
The study focused on the staff of finance department, marketing department and sales representatives and operation department of ENERGY FOOD DRINK, IBADAN. The promotional mix comprise of advertising, sales promotion; personal selling, direct marketing and public relations. However, for purposes of this study, only advertising, sales promotion; personal selling and direct marketing will be considered.
1.6 Significance of the Study
This study would be significant in the promotion mix of products and services by the ENERGY FOOD COMPANY in Nigeria. This study would also be relevant to companies in the service industry to determine the various factors that influence the consumer?s purchase decisions to enable them adjust their strategies. It will also help the firms to properly utilize their resources, increase their profitability and growth. Again, this study would inform researchers and firms why consumers do not follow through the whole consumer decision process before making a purchase decision and the implications of consumer behaviour on sales.
1.7 Limitations of Study
In any study, the success of failure of the study depend largely in methods or ways of collecting data and how intelligently one is able to present and analyzed these data collected. The exercise also consumes much money and time. Another problem encountered is lack of adequate literature especially on the subject matter.
1.8 Operational Definition of Terms
? EFFECTS: According to the Oxford Advanced Learner?s Dictionary effect mean a change that somebody or something causes into something or somebody
? PROMOTION: This involves the various efforts the company renders to seek the growth and to create awareness and eventually enhance repeat purchases by customers.
? STRATEGY: A system or tactics used by the companies to entice customers to purchase their company?s product. It describes the direction of organization within it chosen environment and guides the allocation of the resources.
? SALES: According to the Oxford Advanced Learner?s Dictionary sales mean the act or process of selling something i.e. goods or services
? ORGANIZATION: A group of people identified by a shared interest or purpose. It is also the coordinating of separate components into a unit or structure.
? PROMOTIONAL STRATEGY: This is the marketing tools designed to persuade consumers to buy or use the company?s products by offering and incentive not provided by the regular package, brand, or even the original of products.