SALES PROMOTION AS AN EFFECTIVE MEANS OF INCREASING A FIRMS MARKET SHARE

(AN APPRAISAL OF THE 7UP 2004 NAIRA MAINIAâ€Â� IN ENUGU STATE)

By

Author

Presented To

Department of Marketing

TABLE OF CONTENTS

Title page

Approval page

Dedication

Acknowledgement

Table of contents

List of Table

CHAPTER ONE

1.0 Introduction

1.1 What is sales promotion

1.2 Sales promotion in contemporary Nig

1.3 The objectives of sales promotion

1.4 The 7up sales promotional objective and strategy

CHAPTER TWO

2.0 Problems and prospects of sales promotion

2.1 General problems in the use of sales promotion

2.2 Constructive use of sales promotion

2.3 Advantages comparies drive from using sales promotion in comparison to other promo tools.

CHAPTER THREE

3.0 Appraisal of the 7up Naria Mania

CHAPTER FOUR

4.0 Conclusion and Recommendation

4.1 How we should understand sales promotion

4.2 Summary

4.3 Recommendation for the use of sale promotion

Bibliography

CHAPTER ONE

1.0 INTRODUCTION

1.1 WHAT IS SALES PROMOTION?

Sales promotion is a special campaign aimed at moving a particular plan, most frequently sales increase. It is most often used to increase sales above the existing level. For example a company recording 2,000 cartoons of drinks sold weekly may decide to increase its sales to 3,000 that is by fifty percent (50%) within the same period.

To achieve this more customer are attracted to visit and/or by the company’s products, while existing customers are encouraged to buy more. Sales promoting are staged by both manufacturers and distributors (wholesalers/retailers).

Sales promotion is an ingredient of promotion which is a componant of marketing mix used to inform and persuade customers about the company’s products or services.

Promotion itself consist of coordinated seller initiated efforts to establish channels of information and persuasion to faster the sale of goods and services, or the acceptance of ideas or points of view; and is persuasive in that it attempts to more people from a stage of unawareness to one of awareness from liking to preference or from conviction to purchase.

It is a consensus opinion of most writers (A.N. Ifezue, M.J. Baker, Joanna Kinsey, P. Koller and E.J. Mc Carthy) that sales promotion constitutes a good proportion of advertising, personal selling and publicity, which are the other ingredients of promotion. As a result most of the budget earmarked for promotion go into sales promotion unknowingly.

According to M.J. Baker sales promotion can be employed successfully in both urban developed market and the opening of the interior undeveloped market by opening up distribution channels so that products flows in freely to be tried by new customers or consumers.

Sales promotion, like other ingredients in the promotional mix (promotools), is directed at the consumer or business buyers; but unlike advertising, personal selling and publicity, it involves non-repetitive, one-time communication effort. The problem that arises is that there is no clear dividing line between sales promotion and the other promotools. What becomes imperative here is to consider some definitions of sales promotion to have a clear idea for what it stands for.

The American marketing Association defined sales promotion as “activities other than personal selling, advertising and publicity that stimulate consumer purchasing and dealer effectiveness, such as displays, shows and exhibitions, demonstrations and various non recurrent selling efforts not in ordinary routine.

In otherwords, it is a temporary offer of material reward aimed at increasing customer interest.

Likewise, the institute of sales promotion (ISP) defining sales promotion as – “a facet of marketing which is adding value, usually of a temporary nature, to a product or service in order to persuade the end user to purchase that particular brand.

And Joana Kinsey sees it as …”below the line’ short term effort directed at the consumer and for retailer to achieve the objective of an increase in sales”. Dr. A.N. Ifezue says “Broadly speaking, sales promotion includes advertising and personal selling. But strictly speaking sales promotion is defined as consisting of those seller initiation activities that supplement both advertising and personal selling and render them into a more effective persuasive force. In order words sales promotion excludes advertising and personal selling”. E.J. McCarthy cannot hide his feelings and noted that “sales promotion tells the customer, show him, sell him, and complements the efforts of salesman and advertising men. It is specific activities (such as point-of- purchase displays, booklets and leaflets, direct mailings etc, which can make both personal and mass selling more effective, by co-ordination and supplementing both efforts.

What is obvious in the above definitions is that it is a temporary communication, with an objective to effect sales increase within a short possible time. And as with all communication, it must get the attention of the target audience or it is a wasted effort. However, this does not always happen as much sales promotion do not evaluate only the message but also the source of the message in terms of trustworthiness and credibility.

Sales promotion has been effectively carried out through the means of sampling, free coupon, premium, exhibitions, price offs, brand name/packing, displays and trade marks.

1.2 SALES PROMOTION IN CONTEMPORRAY NIGERIA

In the Nigerian Marketing scene sales promotion has gained much acceptance, as a promotools, in communicating products by producers to their audience (consumer). This is most wide spread in consumer non-durable goods.

Consumers are faced with the difficulty of making authentic decisions on their choices as the promise of material gain to be derived from the purchase of and consumption of competing brand keep them in bewilderment, whether they had made good decisions or not.

It is not uncommon for mini-presents to be sound in packets given free as premium for the purchase of other items. Numerous advertisements are run everyday in both point and electronic media announcing one form of sales promotion or the other.

Some of the sales promotion strategies being employed in Nigeria are: -

(a) PREMIUM: Premiums are products offered are relatively too cost or free for purchasing the same or other products. This type of promotion had been staged by Mobil oil Nigeria Ltd when it offered free drinking glasses for each salad four liter container of 40 oil in April and May 1993.

(b) SAMPLING: Sampling allow the consumer to get the product free or allow to use it freely for a specified time. The target is to get the consumer to test the product and make comparism and comments. This type of promotion was recently used by the Nigerian Breweries Plc to introduce the legend extra shout )its new product) in 1992.

(c) BRAND NAME AND PACKAGING: Brand name implies the choosing of names associated with feelings of distinction (like promise – a tooth paste) while packaging is the stylistic and good looking design on packet or containers of products. These are becoming more competitive strategy adopted by the toothpaste industry. Thus close up and Malclean tooth pastes have more than one design for their containers, with the aim of appealing to different consumer’s sights and tastes.

(d) EXHIBITIONS: This is staging shows in which the producers of goods demonstrate them directly to the consumers without the use of middlemen. The exhibition can either be industrial or consumer, or both, and a captive audience of potential consumers is provided. This type of promotion is gaining acceptance and had been stayed in various cities in Nigeria like Lagos, Enugu, Kaduna, Benin, Onitsha, Port-Harcourt, Ibadan etc, and it has since become a yearly affair in most of the cities in firm of trade-fair as in Enugu, where a permanent site (Trade fair complex) have been built for it.

(e) FREE COUPON/COUPON OFFERS: This type of promotion is the most widely spread and used mostly by consumer non-durable products producers. In this category is found the 7up Naira Mania and other forms of promotion like spell and win, the 13 jotter cars and Daewoo competitions staged by it before the Naira mania. The Nigerian bottling company (coca-cola) has also used this form of promotion to create 20 millionaires across the nation in 1992, and their musical galore in early 1993. Others that have used this strategy are the Guiness Nigeria Plc which do led out same sums of money ranging from N3,000.00 to N100,000.00 to lucky drinkers during their 30^th anniversary celebration in 1992.

There are other forms of sales promotion like price offs, which is a strategy used mostly by detergents industry and discount offers used by distributors to encourage truck purchase; point of purchase display attract customers to visit stores and supper markets consumers satisfaction of a choice well made and guarantees quality.

OBJECTIVES OF SALES PROMOTION

The major objectives of sales promotion are three. The first is to shop and buy. The aim is to create the desire to purchase. This is most effectively achieved through exhibitions and sampling.

The second objective is buying bigger, sales promotion makes consumer buy more as a result of material gain or other benefits derived from buying and consuming it. Discount stores and users of coupon offers has been enjoying the advantages of their objective.

When consumers buy and use the products purchased, it is expected that their satisfaction in terms of consumption will make them always wish to buy again. This repeat purchase becomes the third objective and this is being used by foods and drinks (soft and alcoholic beverage) industry. The 7up Naira Mania falls into this objective category.

Sales promotion is used tactically, often with a short term objective to increase sales above the existing level. To achieve this, dealers are encouraged to stock products, consumers are encouraged to sample and lout products most particularly consumer non-durables. These will increase sales distribution channels and combat competition. It adds excitement to products that have reached rectification stage in the product life cycle.

1.5 THE 7UP SALES PROMOTIONAL OBJECTIVE AND STRATEGY:

Observably, increasing sales volume and combating increasing into its market share are the major objective of 7up in its Naria Mania. But increase in sales volume cannot just be realized magically without consumption of its product. It therefore created the desire in the consumer to purchase and use (consumer) the products by promising his benefits outside the enjoyment of the contents.

Every work of each of its products was a free coupon with an identification number (winning number) and certain amount printed into it ranging from N25.00 to N200,000.00.

Some others carry material gains like caps, T-shirts etc. The material benefits were redeemable immediately without delay while the monetary was more complicated in its redemption.

The promotion ran for nine (9) weeks and every week day (Monday to Friday) had a winning number for the first seven (7) weeks and the last two (2) weeks had no winning numbers, but the earlier winning number were still redeemable till the Saturday of the last week when the Naira Mania was celebrated.

Daily winning numbers of 7up Naira Mania.

Thus the announcement in both print and electronic media of ally winning numbers and subsequent it, some lucky drinkers emerge wryness create the desire to become one of the lucky ones among soft (mineral) drinks consumers. It is then expected that preference will change. More 7up will be consumed to the disadvantage of other competing brands.

As a firms market share increase with more purchase of its product (if it continues for a considerable length of time) it is expected that the 7up market share would truly increase as the sales volume increase. The rate of increase in sales volume represents the effect on market share, and it can be little, much or no increase at all. This is dependent on the product quality and the company staging the Naira Mania.

One cannot just conclude whether the effect is positive, negative or neutral without, at least, a formal investigation (research) on the subject matter.