Effect of Sales Promotion on Organizational Performance in Unilever Nigeria Limited
Chapter One
OBJECTIVE OF THE STUDY
The main objective of this study is to highlight the prospects and importance of sales promotion in Unilever Nigeria Limited Uyo, Akwa Ibom State.
The specific objectives of the study are:
- To find out if there is a relationship between sales promotion and sales volume in Unilever Nigeria Limited. Uyo Akwa Ibom State.
- To find out if there is a relationship between sales promotion and customers brand loyalty in Unilever Nigeria Limited. Uyo Akwa Ibom State
CHAPTER TWO
LITERATURE REVIEW AND THEORETICAL FRAMEWORK
Introduction
This chapter contains conceptualization of the impact of sales promotional strategies on organizational performance of Nigerian Breweries, a short description of promotional strategies followed by a review of theoretical framework, a review of empirical literature on promotional strategies and organizational performance and also the exiting gap of the study.
Conceptual Concepts
Promotional Strategies
Marketing according to Peter Drucker (1993) is the whole business seen from the point of view of its final result, customer satisfaction. Philip Kotler (1992) defined marketing as a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging product and value with others. American Marketing Association (AMA) (1935) defined marketing as the performance of business activities that directs the flow of goods and services from the producer to the consumer or user.
Promotion is the use of communication mix or elements to inform and persuade individuals, groups or organizations to purchase a company’s product or service (Michael R. Solomon, Greg W. Marshall & Elnora W. Stuart, 1997). Promotional mix is the combination of five key communication tools: advertising, personal selling, sales promotion, public relation and direct marketing (Chris Fill, 2006). A strategy is a comprehensive plan of actions that has to do with the application of skill and knowledge to achieve organizational vision and mission statements which normally leads to the attainment of organizational goals and objectives (Nzelibe, Moruku and Joseph, 2011).
Promotional strategy enables brand managers to identify gaps and opportunities in the market and allows organizations to monitor the effect of past marketing communications. Promotional objectives are a derivative of both marketing and corporate strategies (Chris Fill, 2006).However, promotional strategy is a marketing concept that has to do with the choice of a target market and formulation of the most appropriate promotional mix to influence and persuade the customer’s consumption pattern in order to improve the organizational performance (Nzelibe, Moruku & Joseph, 2011).Organizational performance is improved if there is common understanding about the tasks the promotional strategies have to accomplish (Michael, Grey & Elnora, 2006).
Promotional effort is seen as communication tasks such as creation of awareness or positive attitudes towards the organization or product (s)(Michael, Grey & Elnora, 2000). Organizational performance comprises the actual output or results of an organization as measured against its intended outputs (or goals and objectives). According to Richard et al. (2009) organizational performance encompasses three specific areas of firm outcomes: (a) financial performance (profits, return on assets, return on investment, etc.); (b) product market performance (sales, market share, etc.); and (c) shareholder return (total shareholder return, economic value added, etc.). The term Organizational effectiveness according to Upadhaya, Munir, & Blount (2014) is broader. Specialists in many fields are concerned with organizational performance including strategic planners, operations, finance, legal, and organizational development.
In recent years, many organizations have attempted to manage organizational performance using the balanced scorecard methodology where performance is tracked and measured in multiple dimensions such as; financial performance (e.g. shareholder return), customer service, social responsibility (e.g. corporate citizenship, community outreach), employee stewardship, Organizational performance, Performance measurement systems, Performance improvement and Organizational engineering.
Organizations have an important role in our daily lives and therefore, successful organizations represent a key ingredient for developing nations. Thus, many economists consider organizations and institutions similar to an engine in determining the economic, social and political progress. Over the years, some notable authors such as Michael Porter (2002), Ayuba (2005), Chris Fill (2006), have regarded the promotional mix (advertising, personal selling, sale promotion, public relation and direct marketing) as having such roles as stimulating demand, boosting sales in a particular geographical area, improving profit, increasing market shares, countering competitors strategies and retaining customer loyalty or patronage in the organization. On the other hand, promotional policy is a set of rules and guidelines set forth by a company or organization that outline how employees are to interact with potential customers in the promotion of a good or service. The promotion policy helps the company keep control of the message it is sending about the good or service, as well as to determine appropriate actions that employees can take when dealing with outside personnel. For example Nigerian Breweries Plc. could have a promotion policy that it feels representative must adhere to when they meet with customers to promote a product or service. Promotional strategy was to target the heads of the household as they had the final say on where the disposable income will be spent. Marketing department is saddled with the responsibility to determine the best promotional strategy to employ in a given customer demographic environment.
In a societal sense, marketing is any exchange activity intended to satisfy human wants. In a business sense, marketing is a system of business activity designed to plan, price, promote and distribute want satisfying goods and services to markets (Osuagwu, L. 1999). Marketing is the vehicle through which a company can achieve its short task, goals, and strategic aims in terms of long-term survival in the face of change (Stoelhorst & Van, 2004). In view of the above assertions, one can conclude that Marketing is the strategic process of identifying prevailing and potential needs, and the creation of goods and services to satisfy the target consumers or users effectively and efficiently.
CHAPTER THREE
RESEARCH METHODOLOGY
Introduction
This chapter describes the general method of investigation adopted for the study and also provides detailed information on research design, determination of population, sample size, sample and sampling procedure, instrumentation as well as the validity and reliability of the instrument used.
Research Design
According to Stangor (2004), survey designs are appropriate for measuring such complexities of the pattern of relationships that exist among measured variables. Regression research design was preferred in this study because it is capable of looking at the relationship between or among two or more variables. Ogwokhademhe (2010) explained further that survey studies are relevant where there are many variables that are needed to be studied simultaneously.
This study therefore employed a descriptive research design using survey techniques. The justification is that the survey method allows the collection of significant amount of data in an economical and efficient manner. A survey is a fact-finding study and it is a method of research which involves the gathering of data directly from a population or a sample thereof at a particular time. The survey method also provides a means of measuring a population’s characteristics, self-reported and observed behavior, awareness of programmes, attitudes or opinions and needs and its appropriateness in describing the current situation of phenomenon.
Furthermore, the study combines the use of both qualitative and quantitative data. The qualitative data were used to measure promotional strategies variables namely: advertising, personal selling and sales promotion while the quantitative data such as profit, sales volume, and market share and customer loyalty were used to measure company performance indices
This research is also designed around acquiring data that could help solve problems of promotional strategies used in Nigerian Breweries Plc. Personal interview; questionnaire and the use of secondary data were employed. Apart from information gathered through the questionnaire and interview, which is to be presented in tabular form along with the test of multiple regressions, correlation coefficient and to be run through a computational device (statistical package for social science (SPSS) software programme).
Population of the Study
The population of this study was purposively made to be the strategist, tactical and operational management staff of Nigerian Breweries Plc. Uyo. The population of the study therefore was classified into three groups as follows: Group A: strategist, Group B: tactical and Group C: Operational management.
Promotional strategies are strategic management issues that have to do with the strategist, tactical and operational management, not involving all staffs of the organization. The population of this study is Five hundred and seventy three (573) respondents drawn randomly from strategist, tactical and operational management which consists of marketing, production and human resource department.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
Introduction
This chapter presents the data for the designated population of the study. In analyzing the data presented in this chapter, attempts are made in discovering and establishing relationship between the study variables (dependent and independent). The chapter consists of respondents’ characteristics, response rate, analyses of responses, correlation coefficient of independent variables and dependent variables, test of hypotheses (multiple regression), major findings and discussion of findings.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
Summary of Findings
Advertising, personal selling and sales promotion strategies are vital elements in the ever evolving manufacturing sector in Nigeria. The market continues to decline under the twin forces of a biting liquidity crunch and dropping disposable income, the scramble for local market has become so aggressive that companies need to embrace promotion strategies and rebutting the rival’s payoff line, all in a desperate attempt to retain market share, increase sales volume, increase profit and fend-off competition.
Nigerian Breweries Plc. continued to drop in profitability, sales volume, market share and the competition posed by the competitors , for the Nigerian Breweries Plc. to remain relevant in the manufacturing sector (brewery sector) adopted promotional strategies (advertising, personal selling and sales promotion) as a strategy in a bid to rebuild dropping profit, sales volume, market share and customer loyalty. The company’s turnaround strategies dwell much on promoting its product portfolio (advertising, personal selling and sales promotion) has a long run implication that the Nigerian Breweries Plc. benefit from the strategies.
Nigerian Breweries Plc. have been performing dismally before the introduction of promotional strategies, Nigerian Breweries Plc. is an outstanding performance among the other breweries. This is evident of an achievement and market orientated company. Nigerian Breweries Plc. continued success story is hinged on a number of promotional strategies the company adopted in the last Fifteen (15) years. This is the period under study and the results generated are based on the findings of this research.
It is evident in this research that Nigerian Breweries Plc. invested resources to revamp its position in the brewery sector. This research analyzed the impact of sales promotional strategies on organizational performance: A study of Nigerian breweries Plc. Uyo.
The advertising strategy persuades, stimulates and informs consumers about the Nigerian Breweries products.
Sales promotion introduces an incentive that will encourage customers to buy more quantity of Nigerian Breweries products.
Personal selling on the other hand establishes relationship and feedback about the Nigerian Breweries products with customers.
Generally, promotional strategies tend to enhance customer loyalty, increase in profit, increase in sales volume, increase in market share, increase in investment, increase in return on investment and so on.
Conclusions
This study revealed that promotional strategies (advertising, personal selling and sales promotion) has an important role and impact in marketing management of the brewery sector in Nigeria, empirical studies are in line with findings of this research. In essence, promotional strategies (advertising, personal selling and sales promotion) is a useful tools for survival, sustenance and expansion of companies in the Nigerian breweries Plc. Promotional strategies should be developed aligned to customers’ needs and satisfaction. The focal point of the promotional strategies must be hinged explicitly on the firm long run competitive advantage and long term reciprocal relationship between a firm, clients, competitors and other stakeholders. Furthermore, the Nigerian Breweries Plc. should appreciate and take advantage of the promotional strategies opportunities and continue to blend the right strategies to be on equal footing with the ever changing business environment. After scrutinizing the data in chapter 4 gathered from Nigerian Breweries Plc. management, employees and secondary data the research makes the following conclusions:
Profitability
An analysis in the previous chapter is evident that advertising, personal selling and sales promotion contributed positively towards the increase in profitability. The responses from management and employees and the secondary data from the company’s sales journal indicated that there is a positive relationship between advertising and profit, a positive relationship also exit between personal settling and profit and sales promotion has a positive significant relationship with profit.
Sales volume
However, based on the findings in chapter 4, promotional strategies contributed significantly towards the sales volume generated by the company. There is a significant positive relationship between advertising and sales volume. There is a significant positive relationship between personal selling and sales volume. Sales promotion has a significant positive relationship with sales volume.
Market Share
On the other hand, promotional strategies contribute significantly on the market share of the Nigerian Breweries plc. Advertising and personal selling have a significant positive relationship with market share. Though, sales promotion has a positive relationship with Market share.
Customer Loyalty
On a holistic understanding to the study, promotional strategies enhances customer loyalty, building confidence and stimulating demand in order to increase organizational performance of Nigerian Breweries Plc.
Recommendations
In line with the findings, the following recommendations are necessary:
- It is evident based on the findings of the study that Nigerian Breweries Plc. should emphasize more resources towards personal selling in order to improve the company’s profit level because advertising and sales promotion are relatively utilized.
- Nigerian Breweries Plc. should utilize the sales promotion strategy in order to determine the degree to which sales promotion improves sales volume of Nigerian Breweries Plc. because advertising and personal selling are relatively utilized.
- Nigerian Breweries Plc. should use the right blend of sales promotion strategy in order to investigate the extent to which sales promotion improves market share. This is because advertising and personal selling relatively improve market share of the organization.
- In order to remain relevant in marketing, Nigerian Breweries Plc. is recommended to use the promotional strategies in order to build customer confidence, trust and above all to determine the extent to which promotional strategies enhances customer loyalty. Nigeria Breweries Plc. Uyo should use its resources to organize aggressive advertising in order to gain customer loyalty.
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