Sales Promotion as a Panacea for Improved Sales the Nigeria Bottling Company

Sales Promotion as a Panacea for Improved Sales the Nigeria Bottling Company

This chapter of the study reviewed literature on the main topic and sub-theories. These areas of review are grouped under these sub-headings

• The meaning of sales promotion
• The objective of sales promotion
• Sales promotional tools and its implications
• Advertising as a form of sales promotion
• Summary of related literature review.

THE MEANING OF SALES PROMOTION.

According to Ebue (1995), sales promotion is that something extra than can arouse interest create, buying desire, spark an immediate reaction from customers, middlemen or company’s sales force.

It is the name that is applied to special kinds of sales accelerating activities not necessarily cleared as advertising, personal, selling or publicity. It is generally considered as a special selling effort. It consists of short term intensive designed to stimulate buying action from the public customers as well.

Sales promotional activities are directed to customers, middlemen.

The firms own sales promotional tools could be grouped into

1. Customer promotion: This is made up of coupons premium, price off, contest, demonstration.
2. Dealer promotion: It involves free goods merchandize allowances, corporate advertising, buying allowances and dealer sales contest.
3. Sales force promotion: It includes sales contest especially bonus, sales meetings. Sales promotion incentives are usually on short terms basis and the aim is to increase the profit position of companies and as well to make sales of a particular product or brand above the existing level. Sales would increase if more customers are attracted to the shop, if non-brand users are attracted and if brand are encouraged to buy more. Consumer promotions essentially attract the more price conscious buyers. The impact varies with the type of promotion. The size of the incentives and the case of getting the offer and the amount of awareness created for the offer.

It is generally considered that the sales promotion activities are designed to break down brand loyalty. This is because sales promotion has an element of immediacy, but it does not build any long-term consumer franchise in contrast to advertising. Ebue further stated that promotional activities attract mainly the ideal prone consumers who are always willing to switch brand as incentives become available. Sales promotion devices are usually the only promotional material available at the point of purchase.

This contributes its impact in stimulating the companies investment portfolio.

THE OBJECTIVE OF SALES PROMOTION

The objective of sales promotion varies with the type of target market. For consumers, the objective include increase buying response by encouraging.

1. “Shop and buy”. This is to build rail among non-users and to create in the consumer the desire the purchase.
2. “Buy bigger”. Inducing more usage and purchase of large quality.
3. “Repeat purchase. Persuading customers to buy and return again and again. For retailers, objectives include increasing selling effort and intensity by encouraging.
4. More allocation of shelf space and large stocking of the firms merchandise in the hands of the sellers-retailers and wholesalers.
5. Special selling events in store displays and a commitment to a firm sales undertaking by retailers.
6. Promotion by reseller to offset competitive promotions
7. Entry into new retail outfits. For sales force, objectives in]clued increase selling efforts by encouraging.
8. Call more accounts or prospects
9. Stimulation of sales in off seasons summarily the objective of sales promotion is to attract new buyers, penetrate new markets, increase profitability ratio. Generate new customers and provide better values and increase buying incentive for the present customers.

However, Mc Curry (1971:33) summed these up and suggest the following economic importance and reasons for undertaking sales promotional efforts by firms.

1. To increase the profit position of the firm
2. Calling attention to product improvement.
3. Informing buyers of new brand
4. Improving market share
5. Improving customer relation and good will.
6. Accelerating usage rate by present users
7. Obtaining dealer outlets
8. Maintaining customers patronage and brand loyalty
9. Selling additional shelf space and added display
10. Creating taking point for sales force
11. Aiding in product positioning
12. Increase dealer incentives in line of completion (trade loading)

SALES PROMOTIONAL TOOLS AND IMPLICATIONS

There are many sales promotion tools. The job of selecting sales promotional tool reflects on the decision makers knowledge about the strength and weakness of the various tools which is determined by the type of market, sales promotion objectives, level of competition and cost of each tool. Brief examinations of the main tool are as follows

CONSUMERS PROMOTION

Consumer sales promotions are targeted as the ultimate users of the product.

The consumer purchasing incentives are

PRODUCT SAMPLING AND DEMONSTRATIONS

This is a situation where the customers either gets the product free or is allowed to use it free of charge for a period of time. Sampling is useful for reaching new users particularly when a product is introduced or improved or at the entering of new markets. Sampling is generally most effective when important aspect of product features or benefits cannot fully be convey in advertising or personal selling. Sampling however is expensive and include the cost of the sampling and the cost of the distributing. Where sampling is too expensive, demonstration may be affect.

Demonstrations are very important when the decision to buy is influenced by seeing the product in use, frequently purchased and not too expensive products such as detergent, toiletries, tobacco, confectionary etc. are suitable for give away sampling promotion.

COUPONING

Coupons are legal certificated offers by manufactures and retailers that specified saving of selected product when presented for redemption at the point of purchase. Manufactures bear the lost of advertising and distributing their coupons, redeeming the face values and paying retailer a handling.

Burnet (1998) the consumer is given a coupon or voucher, which enables him or her to buy a product at a cheaper price. Coupons are used to purchase trails, convert price to regular users and to attract many prospect to the product. It is some many prospect to the product. It is some times used to increase usage by present users and to ensure respect purchase especially in the face of competition and where the coupon is redeemable against the firm product.

PREMIUM

A premium is a tangible reward for performing a particular act, usually purchasing a product, a company usually choose premium that tie in with their most obvious customer. They are used to boot sales by creating product awareness and trial.

Premiums are of two types.

1. Free in mail offer a product free for the purchase of another product. For example, a free OMO, T- shirt or towel for any carton of omo detergent purchased.
2. Self – Liquidating premium is offered to customer pays the cost of the good plus other expense, but the price is less than the retailed price of the product. For example, “Buy a video CD player and get an electronic fan for just half the price. It is always better to offer incentives that are related to the product concerned.
3. PRICE OFF (PRICE REDUCTION)

Consumers price off is a “Mark down” in the retail price of the product. This is to enable consumers to buy more and also to enable more consumers by buy the product. Price reduction rate is usually printed on the pocket of the product. Cut may be desirable than other forms: cut has to be big enough to be attractive to consumers.

A price deal may also take the form of a bonus pack, when a bonus pack is offered, an additional quality of the product is purchased at the regular price.

REFUND OFFER AND DISCOUNT

This is an offer made by a market to give back a certain amount of money when the product is purchased alone or in combination with other products. Refund is seen as a reward for purchase to a consumer and to increase the quality of frequency of customers to buy and to reinforce brand loyalty. Refund creates interest and provide good sales atmosphere and induce multiple purchasing.

COMBINATION OFFERS

There are sometimes refers to as a branded pack. Tow or more product are offered together at a price less that they would attract if the items were purchased separately. The purchaser will pay slightly more for the combination than the last item alone. The items for combination should be inter related in use.

SWEEPSTAKE, CONTEST AND GAMES

According to Burnet (1998) a sweepstakes is a random drawing, which may or may not require consideration such as a ticket and purchasing a product. Sweepstakes are sometimes called chance contest. A contest requires a judging process but a sweepstake does not.

Sweepstakes, contest and games are generally require contestants to participate in the promotion by sending in an entry in a special stipulated format determined by the promoters. However people get bored with the promotion if they don’t win.

Richard Essaie, a director of the Kae development market research company, according to him “Promotions that do not have intimate connection with the product do not tend to last” other critics are of the opinion that companies should be more involved in loyalty promotion where everyone gets a chance of increasing.

POINT OF PURCHASE PROMOTION

Point of sales promotion is sometimes referred to as merchandizing.

There are incentives that are displayed at the point of purchase

Manufacturers provide advertising allowances and display allowance to the middlemen to enable them display to their merchandise attractively and encourage them to carry the manufactures products. Point of purchase advertising include, window display, tell tags self takers, banners and signs counters display, clock that carry the product or manufacturers name and logo that advertises the manufacture’s products.

GIVE A WAYS

These are special gift items to customers. The purpose is to remind and reinforce a product. A give a way most times is selectively given to only special friends and customers. It is a promotion meant to improve the corporation good will of a firm.

DEALER PROMOTIONS

Manufacturers are basically worried about the corporation of middlemen in handling and pushing their products. Wholesalers and retailers required some incentives to carry the manufacturers products. About 59% sales promotional money is spent on dealers promotions, against 41% on consumer promotions (Lemout 1981). The objectives of trade promotion includes

Develop in – store merchandising support

Control inventory

Expand or improve distribution

Motivate channel members

Dealer purchasing incentive are

TRADE DEAL

These are buying allowances introduced to stimulate middlemen to carry merchandising or to increase sales effort for example, price discount or reduction for the introduction of a new product or free goods, given to wholesaler and retailers if they purchase a stated amount of the firm product. Financial help in promoting the goods may come in form of advertising allowances corporate advertising. Etc.

TRADE SHOWS AND EXHIBITIONS

The motivational aspect of trade shows cannot be examined. Manufacturers sales person meet with top executive of various middlemen to introduce products, demonstrate it, find questions, gather information and established future contacts. Many industries, professionals and manufacturers participate in National or International Trade fair of exhibitions. In Nigeria, the chamber of commerce, industries and mines and agriculture (NACIMA) organize three National Trade Exhibition every year in Enugu, Kaduna, and Lagos states. Trade exhibitions are a form of promotional device that enables companies to show and demonstrate their product to both the middlemen and ultimate consumers. Barton macus et al (1975) further stated that although orders can be taken, exhibitions are primary designed to lay the ground work for further sales promotion public relations, provides feedback for the advertising and marketing research, and offer a chance to improve dealer relations.

SALES PROMOTION

The sales promotion activities are intended to motivate sales people to increase overall sales. These activities in general build enthusiasm for task at hand. They are aimed at raising the moral of the sales force. Sales promotion activities directed at the sales force are classified in two categories. Direct incentives and sales aids or supportive programmes.

DIRECT INCENTIVES

Direct stimulation of the sales is undertaken by manufactures to spur them to higher sales performance. Sales person working for distributions are also offered direct incentives to even list brand support especially in situations where these sales persons handle a large number of different brands. Sales bonus, contest, gift, honors and awards or even valuation are the major direct devices for sale promotion.

This article was extracted from a Project Research Work Topic

“SALES PROMOTION AS A PANACEA FOR IMPROVED SALES THE NIGERIA BOTTLING COMPANY EXPERIENCE

(A CASE STUDY OF NIGERIA BOTTLING COMPANY PLC 9^TH MILE CORNER)”