Leseprobe
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ABSTRACT
The study sought to assess the effect of sales promotion activities on consumer buying behaviour
by using Watanmal Group as a case study. The study used both quantitative and qualitative
research techniques. In achieving the research objectives both primary and secondary data was
used. The primary data was collected through questionnaires. Using a simple random technique
20 employees and 80 customers of Watanmal Group were interviewed. The findings of the study
showed that all respondents (100%) are aware of the sales promotion strategy of Watanmal Group.
Majority of respondents (48%) are more aware of Buy-one-get-one free promotional strategy and
24% are also aware of free sample promotional strategy.
Results from the study showed that, the most effective promotional strategy is the use of Buy-one-
get-one free strategy (58%), followed by free sample (22%) and price discounts (15%). Using a 5
point likert scale technique anchored on 1 Strongly Disagree, 2- Disagree, 3- Uncertain, 4- Agree,
and 5- Strongly Agree, the study found that, sales promotion strategy influence consumer
behaviour. The study recommend strongly that Watanmal Group should increase their sales
promotion strategies in order to increase their sales and market share since it was found that sales
promotion influence the purchase pattern of consumers.
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CHAPTER ONE
INTRODUCTION
1.0BackgroundoftheStudy
The intense competition among companies in the 21
st
century has prompted them to adopt different
marketing strategies in order to survive and enjoy a higher market share within the industry. In
such an intense industry, competitors entice consumers with a number of sales promotion
activities. This is because of all the promotional tools advertising, public relations, personal
selling, direct marketing, it is sales promotion that normally presents additional benefit to the
consumer (Kotler, 2002).
Since 1980s, researchers have constantly proposed a variety of concepts to illustrate how sales
promotion might affect consumer purchase behavior via overcoming "consumer entropy" (Beem
& Shaffer, 1981), inviting consumers to engage in transactions (Kotler 1988), heightening the
psychological value associated with the transactions (Thaler, 1983), or by providing consumers
with a script of purchase behavior (Gardner & Strang, 1984). No matter what effects of sales
promotion would be, all the convictions alleged by the preceding studies indicate that sales
promotion may activate or facilitate certain consumer psychological mechanism based on the
notion that sales promotion "affects consumer by acting on basic mental processes common to all
decisions" (Schindler & Rothaus, 1985). Although sales promotion has become a ubiquitous
element of consumer marketing, large portions of ineffective promotional activities indicate a great
need of refining and redirecting the focus of the impact sources.
In recent times the concept of sales promotion has received the attention of both manufacturers
and retail organisations and also from players in services industries from all over the world been
it local or multi-national. Numerous studies have focused on consumer attitudinal and behavioral
responses to price promotion and its utilitarian benefits (see Dobson et al. 1978, Gupta 1988).
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Haugh (1983) defines Sales promotion as `a direct inducement that offers an extra value or
incentive for the product to the sales force, distributors, or the final consumer with the primary
objective of creating an immediate sale' (Haugh, 1983). Belch and Belch (2003) have proposed a
similar definition. The many definitions of sales promotion have a common viewpoint: they all
involve a temporary and tangible modification of supply, for the ultimate goal of direct impact on
the behaviour of the consumer, retailer or sales force. Within the marketing mix, sales promotion
has one of the strongest impacts on short-term consumption behaviour (Laroche Et al., 2003). It is
an `action-focused' marketing event (Blattberg & Neslin, 1990). Kotler and Gary (2010) indicated
that Sales promotion consist of short term incentives to encourage purchase or sales of a product
or service.
The immense role sales promotion plays in the selling of products could be one of the most
important reasons why businesses continue to use this tool to promote their products. The use of
sales promotion techniques has been on the increase by most Ghanaian businesses in recent years.
Following the economic recovery programme, structural adjustment programme and the
subsequent trade liberalization, many companies in Ghana have had to face competition from
overseas companies that are aggressive in promoting their products. This situation has led to the
need for adoption of sales promotion by local companies. Watanmal Group is one of the companies
in Ghana that uses sales promotion. Watanmal, is a leading Fast Moving Consumer Goods
(FMCG) group in West and Central Africa. The company that is over 100 years old, first started
as a general merchandise trading company at the turn of the 20th century and is today one of the
pre-eminent branded packaged foods businesses in these markets. Watanmal Group has reputed
brands like Gino, Pomo, Jago, Palmo and Forte.
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Generally, companies adopt sales promotions in order to increase the level of sales but whether
Watanmal Group's sales promotion really induces consumers and increases the level of the
company's sales still remain unanswered. The sales promotion situation of Watanmal Group (e.g.
discounts) especially, its reputed brands like Gino and Pomo are still on the increase. However,
the question is does these aggressive sales promotion influence buyer behaviour? This research
therefore seeks to assess the effect of sales promotion activities on consumer behaviour.
1.1BriefReviewofLiterature
Several literatures reviewed indicate that, there is no common or single definition of sales
promotion. Sales promotion has been defined by the Advertising Standard Authority's (ASA) as
those marketing techniques which are used, usually on a temporary basis to make goods and
services more attractive to the consumers by providing some additional benefit whether in cash or
in kind, Mercer (2002). Kotler (2001) describes sales promotion as adverse collection of incentive
tools, mostly short-term, designed to stimulate quicker and/or greater purchase of particular brand,
products, or service by consumers or the traders. He added that sales promotion had more impact
at mature stage of a product and that product managers might try to stimulate sales by modifying
one or more marketing mix elements.
Blackwell et al. (2001) on the other hand defines consumer behaviour as those acts of individuals
directly involved in obtaining, using, and disposing of economic goods and services, including the
decision processes that precede and determine these acts.
A number of studies on the effect of sales promotion on consumer buying behaviour have been
conducted throughout the world.
Yin and Sok (2011) conducted a study in Malaysia to examine the influence of sales promotion on
buying behaviour among university students. They used University Putra Malaysia as their case
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study. A systematic random sampling technique was used to sample 150 respondents for the study.
The data for their study was collected through questionnaires. In their study, they found that there
was no significant difference between gender and buying behaviour. On the other hand, a there is
a significant differences family monthly income and buying. There was significant relationship
between attitude towards price discounts, coupons, free samples and "buy-one-get-one-free" with
buying behaviour. Results of Hierarchical Multiple Regression found that free samples and buy-
one-get-one-free explained 28.7% variance in buying behaviour of the respondents.
1.2StatementofProblem
Intense competition among Fast Moving Consumer Goods (FMCG) companies such as Watanmal
Group has led to the application of various marketing strategies in order to win a good market
share. Sales promotion has been widely used by these companies in attempt to outsmart their
competitors. The effect of sales promotion on consumer buying behaviour has long been argued
by researchers. The widely held view is that sales promotion influence consumers to behave
positively towards the company's product and services. Critics argue that sales promotions are
ineffective as they make consumers more promotion prone, resulting in market share losses in the
long run (Ehrenberg et al., 1994). However, researchers such as (Dodson et al. (2001), Bawa&
Shoemaker 1987; in Peattie&Peattie, 1993) found that promotion is considered to be an external
stimulus and when it is gone consumers are less likely to re-purchase. Customers might also
become comfortable with the lower price and demotivated to buy with the normal price anymore.
Sales promotions might also encourage low-probability purchasers to try. However they are
customers who are not likely to make repeat purchases and thus the promotions have a negative
impact on long-term sales. Price is used as a measure of quality for many service consumers. In
that sense, decrease in the price devalues the brand in the eyes of the customers. Some studies have
also shown that sales promotions increase the likelihood for repeat purchases. If consumers are
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satisfied with the brand that is being promoted, it is more likely that they will also buy it later after
the promotion is over (Peattie&Peattie, 1993). The uncertainty surrounding the exact influence
sales promotion has on the behaviour of consumers has necessitated the study into the area.
1.3ObjectivesoftheStudy
The primary objective of the study was to assess the effect of sales promotion activities on
consumer buying behaviour. The following specific objectives were formulated to help achieve
the main objective;
1. Identify the promotional strategies used by Watanmal Group.
2. Examine the effectiveness of sales promotion strategy at Watanmal Group.
3. Examine customer's perception towards sales promotion.
1.4ResearchQuestions
To be able to achieve the objectives stated above, the research questions below were formulated
to serve as a guide.
1. What are the promotional strategies used by Watanmal Group?
2. How effective is sales promotion strategy at Watanmal Group?
3. What is the perception of customer's towards sales promotion?
1.5 Significance of the Study
According to Kotler (2002), Sales Promotion is a key ingredient in marketing campaigns and
consists of a diverse collection of incentive tools, mostly short term designed to stimulate quicker
or greater purchase of particular products or services by consumers. Sales promotion and its
importance to businesses have never been in doubt. It has also been well researched into by various
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researchers and on different dimensions (Bawa& Shoemaker 1987; in Peattie&Peattie 1993). The
researchers' conviction for undertaking this study is the dimension it brings to bear on the topic.
That is: how consumer buying behaviour is affected by sales promotion. This research is
significant in the following sense:
This study would be relevant to companies in the FGCG sector to determine the various
factors that influence the consumer's purchase decisions to enable them adjust their
strategies.
The research work will also provide valuable data on dynamics of consumer buying
behaviour for various managerial decisions in the FMCG sector.
This study would be significant in the promotion of products and services by the FMCG
operators in Ghana.
It will also help the firms to properly utilize their resources, increase their profitability and
growth.
Again, this study would inform researchers and firms why consumers do not follow
through the whole consumer decision process before making a purchase decision and the
implications of consumer behaviour on sales.
Finally, the study will add knowledge to academia and also form basis for further research
endeavours into the topic or other related topics.
1.6 Overview of Research Methodology
The researcher employed both quantitative and qualitative research technique. The main sources
of material for this study were primary and secondary data. Primary data was gathered from
Watanmal Group employees and customers through a well structured questionnaire. The
questionnaires were structured into four sections; the first section captured respondent's
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demographic characteristics and the other three sections will help achieve the research objectives.
The secondary data on the other hand was extracted from relevant articles/reports, journals,
textbooks, newspapers, documents and reports presented by scholars, policy makers and
government agencies. The targeted population for this study was employees and customers of
Watanmal Group. A simple random technique was used to select respondents for this study. The
data collected from the field was first be screened to detect any errors and then later coded and
analyzed with the help of SPSS and Microsoft Office Excel. The findings of the research was
presented in Tables, hectograph and pie chart.
1.7ScopeofResearch
The study is mainly conducted to assess the effect of sales promotion activities on consumer
buying behavior. This study will be limited to the employees and customers Watanmal Group. A
limited number of 100 respondents will be selected for the study.
1.8LimitationoftheResearch
As a final year student the main constraints to this study was time. This is because I had to combine
regular academic work to this research work. The other limitations of the study was finance and
getting all respondents to respond to the questionnaires.
1.9OrganizationoftheResearch
The research so far has defined the problem and set the objectives of the study. The project work
was organized into five chapters as follows;
Chapter One
Chapter one looks at the general introduction of the study. It covers the studies background,
problem statement, the research objectives and questions, justification of the study, its scope,
limitation and how the entire project work was organized.
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Chapter Two
Chapter two reveals relevant literature on effect of sales promotion activities on consumer
behaviour. Several concepts used in the study was also defined and explained in this chapter.
Empirical studies on sales promotion and consumer behaviour is also captured in this chapter.
Chapter Three
This chapter discusses in detail the methodology that was employed for data collection in the study.
The chapter also gives a brief overview of the study area; Watanmal Group.
Chapter Four
Chapter four discusses and analyzes research data collection against the backdrop of the research
objectives and also seeks to provide interpretations of the findings that would emanate from the
data analysis.
Chapter Five
This chapter concludes the study and presents summaries of recommendations and conclusions
and its implications for further research work.
CHAPTER TWO
LITERATUREREVIEW
2.0Introduction
This chapter explains the concepts of the study. Related literature concerning the research topic is
also reviewed in this chapter. It focuses primarily on concepts of sales promotion, concepts of
consumer behaviour and the effects of sales promotion on consumer buying behaviour.
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2.1ConceptofSalesPromotion
Several literatures reviewed indicate that, there is no common or single definition of sales
promotion. Various definitions of sales promotion have been given by many researchers and
authorities in marketing communications. Sales promotion has been used to represent at least three
different concepts: i) Marketing Communication (Anderson, 1982), ii) The entire marketing mix,
iii) a catch-all for all communication instrument that do not fit in the advertising; personal selling
or public relation subcategories (Van Waterschoot and Van den Bulte, 1992).
2.1.1DefinitionofSalesPromotion
According to Zallocco & Kincaid (2008), promotion is the deliberate attempt on the part of the
individual business or other institution to communicate the appropriate information in a manner
persuasive enough to include the kind of acceptable response desired.
Sales promotion has been defined by the Advertising Standard Authority's (ASA) as those
marketing techniques which are used, usually on a temporary basis to make goods and services
more attractive to the consumers by providing some additional benefit whether in cash or in kind,
Mercer (2002).
Brussel (1991) defined sales promotion in relevance to the other forms of marketing
communication. He indicated that sale promotion consists of those marketing activities other than
advertising publicity and personal selling that stimulate customer purchasing.
William & Ferrell (1987) also defines sales promotion as an activity that act as a direct inducement,
offering added value or incentive for a product to resellers, salesperson or customers.
In addition to the above, Sales promotion has been defined as `a direct inducement that offers an
extra value or incentive for the product to the sales force, distributors, or the final consumer with
the primary objective of creating an immediate sale' (Haugh 1983). Belch and Belch (2003) and
George (1998) have proposed a similar definition.
Ende der Leseprobe aus 50 Seiten
- Arbeit zitieren
- Anthony Abaidoo (Autor:in), 2015, Effect of Sales Promotion Activities on Consumer Buying Behaviour. A Case Study of Watanmal Group, München, GRIN Verlag, https://www.grin.com/document/373127
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