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THE EFFECT OF SALES PROMOTION AS A SURVIVAL STRATEGY IN THE MARKETING OF A COMPANY’S PRODUCTS

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Nigerian Bottling Company (NBC) Plc, the largest soft drinks producer in the country, started its operation in Nigeria in 1953 with a plant in Lagos. They are the greatest soft drinks producers backed up with good and effective sales promotion that helps the company not only to get the hearts of potential consumers but also to get their pockets.

Nigerian Bottling Company started its first product coca-cola with aggressive marketing promotion mix by applying all medium of advertising available such as bill boards, sign post etc. But the niche of their success in sales promotion is not just the uniqueness of their logo but along with sales theme which serves to reference their position as the greatest soft drinks producers and also assuring the consumers that the quality improves to meet their tastes. The sales promotion theme include “Drink Coca-cola” “Always Coca-cola”, “Can’t Beat the Feeling”, “Coca-cola Believe” “Coca-Cola it taste good” and likewise for fanta as “My Favorite Drink”, “Fanta Share the Fun”.

However, from 1980 to date there was a shift from the generally accepted norm of advertising to special sales of promotion that at inception were targeted as specified seasons or events like Christmas, Easter, Sala, Independence day and other Festive periods.

These sales promotions were supported with huge amount of money that makes it irresistible for their consumers. With these special sales promotions, the consumers stand a chance of wining some cash or souvenirs from the company.

The sales promotion as a free sample stimulates consumers continuous trial while a free advice to  the management from the consumers cement a long term relationship with the consumers.

Sales promotion techniques make three contributions to the soft drink market:

i.      Communication: They gain and usually provide information that may lead the consumer to the product

ii.     Incentives: They incorporate some inducements designed to represent value to the consumers.

iii.    Invitation: They include a distinct invitation to engage in the transaction now.

There is need for communication in the process of which awareness is created, desire, aroused and prospects to satisfy their consumption, needs and the benefits of taking it out weights the lost of purchasing it.

Philip Kotler has noted that parties in exchange relationship must be capable of communicating for marketing to take place?

Recently increase in competition and perhaps declining sales volume due to increase in the production of consumer products in Nigeria have taken a new dimension and therefore forced manufacturers particularly those in soft drinks market to effectively make use of sales promotion  in marketing their products as the market has already become saturated (Udel G.I. (1968 pg 34)

1.2PURPOSE OF THE STUDY

I intend to give a review of sales promotion in the soft drink market in Nigeria and this study will afford me the opportunity of finding an answer to the critical need for proper management of sales promotion in the soft drink market in Nigeria with particular reference to Nigerian Bottling Company Plc.

Sales promotion articles include the followings:

Coupon

Consumer’s deals

Premium and Advertisement specialties

Point of purchase Advertising

Contests and Sweepstakes

Corporate Advertising

Trade deals

Sales meeting and period deals meeting

Trade shows and exhibitions.

Each year marketers of soft drinks spend millions of naira on sales promotion and this represents more than 50% of their budget on promotion.

Because of the huge investment therefore it is necessary to look into the management process of planning, organizing, staffing, coordinating and controlling recognizing the fact that the greater the care of all the above the greater the likelihood that sales promotion will succeed. It is therefore necessary to measure its effect on productivity, profit, sales, turn-over and the economy as a whole.

Consumers are the main target of any sales promotion because it aims at including them to make initial and continued purchase of the products.

To the sales people and distributors, sales promotion activities aim at motivating them to extend extra effort (usually on short term basis) in the pursuit of company’s sales goals.

The effect of sales promote activities on this three major groups will also be measured. Efforts will be made to measure the level of truth and sincerity or otherwise of sales promotion activities in Nigeria, identify if any of the negative effect is likely to generate among firms in the industry and the control measures that could be employed or put in place by government.

1.3   STATEMENT OF THE PROBLEMS

The Nigerian Bottling Company Plc as well as other companies in the soft drink market spends a lot of money on sales promotion. Some marketers who have very little budget for sales promotion have recorded fall in their sales leading to a fall in profit which have resulted in retrenchment of their workers.

This is always the problem of who has the ultimate responsibility of formulating and implementing sales promotion activities among the marketing managers (sales manager or promotion manager). The ambiguity always cause inter-rivaling between their personalities and this hinders the operations of the department.

Some sales promotion activities because of its flamboyant offers and wordings, often work deceitfully to the people because they are not well planned, not properly timed and carelessly executed.  The  choice of which sales promotion activities is coat appropriate for a particular situation  is very difficult to make.

Sales promotion in Nigeria tends to follow the trends in the advanced countries of Europe and America without giving consideration to our people’s life-styles as in the Nigerian environment, efforts must be intensified by marketers of soft drinks towards a continuous sale in order to survive. (Adewale W. (1998 pg, 15-21).

1.4   SIGNIFICANCE OF THE STUDY

Sales promotion is another communication means through which a firm communicates to customers or consumers of their products, ideas, or service like samples point-of-purchase displays, coupons, demonstrations and sweep-stakes among others and its significance is as follows:

1.     It is used to introduce a new product into the market.

2.     It encourages heavy usage of a product.

3.     It gives the product a good image.

4.     It makes potential customers to buy a product they have not used before.

5.     It generates extra interest for the company.

1.5   RESEARCH QUESTION

1.     Is sales promotion relevant to soft drinks?

2.     Does technology affect the performance of sales promotion in soft drinks market?

3.     What impact has sales promotion of soft drink in the macro economy?

1.6   WORKING HYPOTHESIS

H0     –      Sales promotion is not needed in soft drinks Market.

H1         -     Sales promotion is needed in soft drinks Market

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