Relevance of Sales Promotion in Business Organizations
Chapter One
Objectives of the study
General Objective
The general objective of this study was to assess the effect of sales promotion on consumer buying behaviour.
Specific objectives
- To establish the sales promotional tools Oriflamme uses.
- To identify sales promotion strategies practised by Oriflamme.
- To find out the factors that promote or impair the effectiveness of sales promotion.
CHAPTER TWO
LITERATURE REVIEW
Introduction
This chapter provides a review of the existing literatures on the effect of sales promotion on consumer buying behavior. The main sections included therein are: theoretical framework, conceptual framework, critique of existing literature relevant to the study, summary and research gaps.
Theoretical Review
Sales Promotion Theory
Sales promotion is giving the customer something extra, rewarding them for their behavior on this particular purchasing occasion. There are several theories which support the concept of reward as a motivator. The conditions of sales promotion are classical and operant conditioning. Whereas classical conditioning is largely associated with advertising, operant conditioning is seen as an explanation for consumer behavior in relation to sales promotion. Operant conditioning suggests the response of the individual is likely to be affected by positive reinforcement (reward).
Negative reinforcement (punishment) the affect is likely to cease when the reinforcements are taken away. Edward Thorndike suggested that the ‘law of effect’, which had to do with positive and negative consequences of actions, is also relevant to sales promotion. The law states that the consequences of behavior now will govern the consequences of that behavior in the future. In other words once a buying pattern is achieved it will continue into the future. John Watson, US psychologist and founding father of American behaviouralism, introduced the concept of shaping, chaining, and priming.
Shaping: John Watson states shaping suggests that a final response can be explained as ‘appearing after preceding acts which; taken together, constitute a chain of successive approximations’. Shaping breaks the desired behaviors in a series of stages and the parts are learnt in sequence.
Chaining: Chaining suggests behavior emerges from sequences of actions in which the preceding action becomes the discriminative stimulus for the final response (inducement > purchase).
Priming: De Pelsmacker (2001) states, priming suggests that a short exposure to a particular stimulus can evoke an increased drive to consume more of a product. So this all theories offer reasons why we can motivate people to buy more by offering incentives although the continuation of these behaviors is open to doubt.
Pull Theory
The Pull Theory is about trying to market directly to customers to increase their demand for your product. Advertising and tie-ins with other products or services is the key to this strategy. The theory goes that if you increase the demand for your product by consumers, they will in turn demand the product from retailers, retailers will demand more of your product from wholesalers and wholesalers will demand more products from you. This is a way to increase your sales without decreasing the sale value of your merchandise. Most of the costs are in advertising, so using a tie-in with a related product or service can disperse this cost across both companies.
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
Research design
The study involved descriptive research design. The purpose of descriptive research design is to describe the state of affairs as it exists. The research technique is the most appropriate when the purpose of the study is to explore and create a detail description of a phenomenon .Thus making it suitable for this study because the researcher was fairly knowledgeable about the aspects of the phenomenon, but little was known regarding their nature. The descriptive research design formulates the problem for more precise investigation and in this case was to explore the effects of sales promotion on consumer buying behavior (Kothari, 2008).
Population
The target population is the area of the study that the researcher studied. The target population for this study comprised of 20 employees from Oriflamme Swedish Natural Cosmetics Product Ltd in Mombasa.
CHAPTER FOUR
RESEARCH FINDINGS AND DISCUSSION
Introduction
This chapter presents data findings collected from Oriflame company in Mombasa county and the analysis of that data to ascertain the effects of sales promotion on consumer buying behaviour. The findings are presented in both qualitative and quantitative techniques by use of figures and tables.
CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
INTRODUCTION
This chapter gleans on the outcome of the analysis from the statistics gathered in chapter four. The researcher made summary, conclusions and recommendations from the findings of the research study.
SUMMARY
Below are the findings of the research as gleaned from the analyses; Sales promotion practice is a very prominent feature in the every industry and consumers are very much aware of the various sales promotional strategies practiced by these industries. The sales promotion practice in the industry draw these consumers to the product and make them do impulse purchase. This confirms the assertion by Ngolanya, et al, (2006) that sales promotion engenders impulse buying.
Factors such as appearance of sales persons, displays of products, free gifts accompanied with the purchase of products, free samples offered for customer trial and short term reduction of prices on certain occasion could enhance or impair the effectiveness of sales promotion. The findings confirmed that, amidst the factors that could enhance the effectiveness of sales promotion practice, the factor that has the greatest effect was the free samples offered. This supports the study done by Adcock (2001), who asserts that when a purchase decision is made, the actual purchase can be affected by unanticipated situational factors. Some of these situational factors according to them could be directly associated with the purchase, for example the outlet where the purchase is to be made, the quality to be bought, and payment procedure among others. The employers also had similar views that these free samples offered enhance the effectiveness of sales promotion.
There was a significant influence of sales promotion on consumer behaviour. Implying an improvement in the sales promotion strategies will lead to a corresponding improvement in consumer buying behaviour towards purchasing Oriflame products. This supports the study by Sam and Buabeng (2011), which states that, the essence of sales promotion is to provide a direct inducement to act by providing extra worth over and above what is built into the product at its normal price. Sales promotion plays a significant role in influencing the consumer decision process by shortening the decision process during purchase.
The results also indicate that majority of respondents found Oriflame to have good customer relationship due to its sales promotion strategies.
Above fifty-five percent (55%) of the respondents are satisfied with the promotion and distribution decisions as a factor which enhances effective sales promotion. This is followed by evaluation of overall sales programs which greatly influences consumer buying behavior.
CONCLUSION
Cosmetic dealers have a lot of services and products that they make available to consumers through their various communication tools. One of the key promotional tools used in marketing these services and products is sales promotion.
In conclusion, Oriflame employees are generally satisfied with the company’s sales promotion strategies which in turn influences consumer buying behavior as this research sought to establish. However this satisfaction seems to have an effect on the number of clients who are willing to repurchase Oriflame products. In effect, the more sales promotion strategies are customer friendly, the more it is capable of influencing those customers buying behavior.
The study revealed that sales promotion has an influence in the purchase decision of consumers. It was realised that the consumer may not go through the entire decision making process anytime they want to purchase a service or product. This may be so because the evoked sets which present the consumer with established alternatives may inform the consumer’s judgements in deciding which service or product to buy. This may eventually prevent the consumer from going through all the stages of decision making because of experience and available information to him. Sales promotion therefore is an inevitable promotional tool for firms if they really want to maintain or increase their market share.
RECOMMENDATIONS
Recommendations have been made about measures that could be taken to improve the practice of sales promotion at Oriflame and beyond in order to influence the consumer buying behaviour effectively. The following may be noted:
The firm must intensify the use of sales promotion as respondents have shown great interest and are highly influenced by sales promotion activities.
Appearance of sales person should be greatly enhanced. Therefore it may be used in conjunction with other promotional tools such as coupons and free talk time. Greater emphasis may be placed on attachment services to gain maximum advantage.
Sales promotion has short term effect, as a result services providers need to do a continuous follow up to establish long term relationship with new customers acquired during sales promotion period.
Firms should engage in continuous research to correctly approximate consumer expectations and plan to meet them to reduce consumer complaints.
Oriflame should enhance the situational factors such as display of items, appearance of sales persons, location of showrooms as well as payment processes. These factors and other situational factors will enhance the effectiveness of their sales promotions to influence their consumers.
Oriflame should periodically evaluate all its sales promotion programs so as to remain a trend changing consumer expectations. In this contemporary world no strategy is static and to maintain the dynamism, the existing sales programs needs to evaluated over time.
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