THE IMPACT OF SALES PROMOTION IN A BUSINESS ORGANISATION 

CHAPTER ONE

INTRODUCTION

1.0 BACKGROUND OF THE STUDY

The economic situation of the country in both the past and present year has affected the financial and commercial activities of business organization as a whole, which has resulted in decline level of sales and profitability. In view of this facts, many business organization are therefore involved in different type of measure such as sales promotion in order to increase their sales and also to remain in business since there is doubt that without adequate sales promotion, most of the business objective will not be reached.

During the past decades or thereafter, business organizations know their environment customers and market first hand. Reason being that the environment and the business organization were small with the increasing complexity of the business environment, and systematic approach to studying the increase problems of management, it becomes all the more important that the environment need be studied.

It is obvious that the principal function of management is to make decision and without doubt marketing decision seems to be the most difficult and therefore, its effect is felt throughout the business.

With growing needs supply, individuals and organization needs and inevitably bridge the gap between the producers and the customers or users of the product, organizations equally need to research into the growing needs of these groups. Also, since there is the greatest need for the organization to maintain market share, there is the need to create awareness so as to increase their level of sales and productivity. Due to this reason, there is the greatest need to understand the impact of sales promotion in business organizations.

Due to the increase acceptance of sales promotion by firms as a very important element of the promotional mix and its expenditure also being on the rise, it has become very import to examine whether sales promotion is actually making any impact on the volume of sales. This paper specifically evaluates the effect of sales promotion on the volume of sales of products with special reference to Chi Group Limited.

1.2      STATEMENT OF THE PROBLEM

Inspite of the tight definition of sales promotion as an essential means of creating awareness of the product existence and characteristics and also the positive, psychological associations that can enhance the buyer satisfaction which add to the real value of the company's offering, little attention is being given to it by many business organisations in the country and they rarely promote their sales to the fullest.

Many firm pay little attention to sales promotion since they feel they can sell their product with little or no promotional activities. Likewise, many firm which could not afford the huge cost of the promotional programmes, would entail and despite the effects of sales promotion, there had been insufficient research and decision modeling devoted to it. In addition, there is an established negative perception of many firms as regards the cost of business promotion especially those whose benefits are not early and immediately reached.

Also, adequate records of sales and promotional cost are always neglected and some sales promotion programmes are introduced at the wrong time, which will therefore hinder the level of sales and profitability of the firm and thereby render sales promotions less important in the community and the country as a whole.

1.3      AIM AND OBJECTIVES OF STUDY

The aim of this research work is to examine the impact of sales promotion in business organizations with special reference to Nigerian Bottling Company Plc. The objectives of the research work include:

·        To identify the combination of promotional tools that should be adopted to enhance promotion.

·        To determine the usefulness of sales promotion.

·        To explore rationale behind sales promotion by examining consumer behaviour

·        To pose challenges ahead sales promotion

·        Identify conditions under which sales promotions influence purchase behavior

·        To determine how long the company has been carrying out sales promotion.

·        To find out the media used by the company in conveying sales promotion programmes.

1.4      RESEARCH QUESTION

This study tends to investigate and provide answers to the following questions.

·        Does Sales Promotion have significant effect on organizational performance?

·        Does sales promotion influence consumer purchase behaviour?

·        Do consumers really benefit in sales promotion?

·        What are the implications of defective sales promotion in an

organization?

·        What are the main factors that affect sales promotion?

1.5      STATEMENT OF HYPOTHESIS

To provide answer to the research questions arising from this study, the following hypotheses are postulated.

HYPOTHESIS ONE

H₀:      There is no significant relationship between sales promotion and organizational performance.

H₁:      There is a significant relationship between sales promotion and organizational performance.

HYPOTHESIS TWO

H₀:      Sales promotion does not influences consumer purchase behavour.

H₁:      Sales promotion influences consumer purchase behavour

1.6      RESEARCH METHODOLOGY

Research methodology deals with the procedure used by the researcher to conduct the study. It contains the different activities performed and methods employed by the researcher in the study. For the purpose of collecting necessary data for this research work, primary and secondary data collection method will be used. The primary data collection method will be through the following:

1.        Structured questionnaire

2.        Personal unstructured interview

3.        Observation

The secondary data will be collected from reports and documents from the company. Also, reports outside the company and from library and desk research literatures will be used.

In this study, descriptive method will be used to analyze data and also in testing hypothesis, chi-square (X²) will be employed. Findings from this research study will be discussed in the light of the research problem hypothesis, purpose research questions, literatures of the research and other relevant issues conclusions will be drawn and recommendations and suggestions also will be made.

1.7      SCOPE AND LIMITATION OF THE STUDY

This study covers investigating the efficacy of the sales promotional tools adopted by Nigerian Bottling Company, Alausa, Lagos.

In the course of conducting this research work it is expected that the following will constitute impediments to the effective conduct of the study

a)       Time constraint within which the study must be completed.

b)      Financial constraint

c)       Inaccessible and inadequate data

d)      Also, combining project work with several other activities is another stressful task that may not allow me to cover research materials extensively.

Nevertheless, I believe the above limitations will in no way affect the reliability and validity of the research study.

1.8      SIGNIFICANCE OF THE STUDY

It is a fact that sales promotion has a great impact in business organization. This study therefore intends to determine to a great extent the impact of sales promotion in business organization.Because of the important role of sales promotion, this study will therefore make a useful improvement upon the performance of business and how their level of sales and profitability can be improved.

This project will be of immense value to future researcher who might intend to carry out a research on this particular topic. It will also help to highlight how individual who may set up their own business in future to carry out their business in an effective way.

1.9      HISTORICAL BACKGROUND TO THE STUDY

Nigerian Bottling Company Plc is a marketing company engaging in the brewing of soft drinks of which Coca-cola takes a paramount position among its product line.

Nigerian Bottling Company was incorporated in Nigeria in the year 1951 by the reverend Chief A.G. Leventis. From humble beginning in 1951 and under high inspired leadership, the company has grown to become the largest soft drinks bottler in Nigeria and one of the largest employers in the country, operating about 20 production plants as well as 65 sales depot throughout the Federation of' Nigeria with its Administrative head office at Oyingbo, Lagos State, formerly at Iddo, Lagos State.

The Nigerian Bottling Company is a noticeable giant among first class Bottling Companies and is also reputed as having the same status in all the state of the country. Because of its excellent performance over years, there is no doubt that its features of operation will provide good presentative information in other similar organizations.

Suffice is to say that the company provides range of employment opportunities to school leavers and professional in the field of commerce and marketing. In view of the fact that sales promotion programmes are just being newly developed in Nigeria and its view are only being embraced by larger scale ventures, Nigerian Bottling Company- Coca-cola to be specific has been noted for their involvement in promotional activities, which has been increasing their level of sales and profitability.

There is no doubt, however, that the company tinder consideration with its distinct features and give a good highlight of. the impact of sales promotion in business organization both in the short and long run.

1.10   ORGANIZATION OF THE STUDY          

This product will be divided into four chapters.

Chapter one will take cognizance of introduction, background of the study, problem, purpose & objectives, scope and limitation of the study, significance of the study, research question hypothesis and as well organization of the study.

Chapter two will cover the literature review. Subheading in areas to be reviewed, appraisal, or related literature and research questions.

Chapter three deals with details of the methodology used in carrying out the research work.

Chapter four critically examines the result of the findings, while chapter five deals with the discussion on the finding, summary, conclusion, recommendation finally the bibliography and appendixes

1.11   DEFINITION OF THE BASIC TERMS

The terms to be given operational definitions to are:

SALES PROMOTION: Sales promotion can be defined as a broad label that applies special kinds of sales accelerating activity not necessarily classed as advertising and direct selling.

BUSINESS: Business can simply be defined as the totality of all economic activities that are undertaken in the process of producing and distributing goods and services for the purpose of making profit.

ORGANIZATION: Organization is defined by Robine (1987) said an organization is a consciously coordinated social entity with a relatively identifiable boundary, that function on a relatively continuous basis to achieve a common goal or set of goals.

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