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Sales performance and outlet age

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CHAPTER ONE 1. 0 Introduction……………………………………………………………………13 1. 1 Background of the study……………………………………………………….. 13 1. 1. 1 Profile of the company……………………………………………………….. 14 1. 2 Statement of the problem…………………………………… …………………. 15 1. 3 Objective of the study……………………………………………………………15 1. 3. 1 General objective ………………………………………………………………16 1. 3. 2 Specific objective………………………………………………………………16 1. 4 Research Questions………………………………………………………………16 1. 5 Significance of the study…………………………………………………………17 1. 6 limitation of the study……………………………………………………………. 17 1. 7 Scope of the study……………………………………………………………….. 18 1. Theoretical Framework…………………………………………………………18 CHAPTER TWO 2. 0 Literature Review ………………………………………………………………20 2. 1 Introduction ……………………………………………………………………20 2. 2 Review of past studies………………………………………………………….. 20 2. 3 Critical Review………………………………………………………………….. 30 2. 4 Gaps in the study……………………………………………………………. 32 CHAPTER THREE 3. 0 Research design and methodology…………………………………………33 3. 1 introduction …………………………………………………………………33 3. 2 Design of the study ………………………………………………………….. 33 3. 3 Target population……………………………………………………………33 3. 4 Sampling design…………………………………………………………….. 34 3. 5 Data collection ………………………………………………………………. 4 3. 6 Data analysis …………………………………………………………………35 CHAPTER FOUR 4. 0 Data analysis and presentation………………………………………………36 4. 1 Introduction…………………………………………………………………36. 4. 2 Customer demographic characteristics………………………………………36 4.

3 Retailer characteristics………………………………………………………40 4. 4 product characteristics………………………………………………………42 4. 5 Sales performance and sales promotional tools…………………………….. 43 4. 6 Sales performance and outlet age……………………………………………44 4. 7 sales performance and price……………………………………………………46 CHAPTER FIVE 5. 0 Conclusions and recommendations……………………………………………47 5. 1 Conclusions ……………………………………………………………………47 . 2 Recommendations………………………………………………………………48 References Work plan Budget Questionnaires List of Tables Table 3. 1 Target population…………………………………………………. 33 Table 3. 2 sampling techniques…………………………………………………34 Table 4. 1 – Consumers preference by occupation………………………………37 Table 4. 2 – Results of the analysis of age as a factor in awareness, point of purchase and Coka Cola size………………………………………………………………38 Table 4. 3 – Retailers Participation in sales promotion …………………………41 Table4. 4 – Consumers’ responses………………………………………………43 Table 4. 5 Effects of sales promotion and sales Performance……………………45 List of Figures

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Figure 1. 1 Theoretical Framework…………………………………………19 Figure 2. 1 Kotler’s Model of communication (cim Study text, June 1999….. 24 Figure 2. 2 5ws model of communication (Belch& belch, 1993)……………25 Graph 4. 1: Awareness of Sales promotion…………………………………40 Graph4. 2 – Changes on sales and age outlet………………………………47 ABBREVIATIONS CCS………………………………………………………Current Coca Cola Sabco CIM…………………………………………………Chartered Institute of Marketing SSDs……………………………………Supermarkets and Strategic Sales Depots ABSTRACT Sales promotion refers to those marketing activities that stimulate the consumer purchasing and dealer effectiveness.

Sales promotion has been on the increase in the recent past as a mode of promoting products and services I Kenya. This is clearly evident in the number of advertisement in the media in the form of contests. Most companies are known to increase their sales promotion activities during the festive seasons. Amid all this the developments and effectiveness of sales promotion in most organization is yet to be ascertained. Undoubtedly, sales promotion is expensive in financial and time terms and it is critical to assess its effectiveness, in order to ascertain whether or not the organization should continue to using it.

This paper identifies how variables such as time, human resource, substitute products, income, taste, distribution etc affects sales promotion. The marketing strategy used in sales promotion of coke was looked into in order to determine their effectiveness. The study used the descriptive research design whereby the information was acquired from a population sample of 122 consumers and 45 retailers from within Nairobi through the use of structured questionnaires. Other modes of data collection include interviewing and observation. Additional data obtained from journals, books and magazines.

Statistical data analysis was used the results indicated that only consumer contests and point of sales display modes of sales promotion were effective. It was recommended that sales promotion should be used when competition was stiff and sales were slack CHAPTER 1 1. 0 INTRODUCTION 1. 1 Background Sales promotion is not6 a new phenomenon in Kenya today. More often sales promotion is directed at the distributors, consumers and the sales force. One of the challenges facing marketers today is the increase of sales promotion in order to make a short run increase in sales.

Many big organizations are opting for this mode of promotion towards the end of the year or during the festive seasons. Therefore, marketers have no choice but to compete aggressively. This, however, entails high expenses and if not well managed it could lead to heavy losses. The paper questions the effectiveness of sales promotion in communicating to the persons being targeted. Though the mode may affect sales levels, especially when contests are going on, the question is whether or not the message is effectively delivered to the consumers.

There is no need to establish whether the sales level are affected by the sales because the consumer are after the products or the competition in the hope they will win fabulous prizes. The paper looks into the sales promotion of coke, a soft drink produced by the coca cola company. Coke has been chosen due to fact that it has numerous sales promotions using mainly sale promotions. Among the modes that coke usually uses and which will be as a variable measure their effectiveness include: promotion allowance. saes contests, point of purchase display, consumer contests and free samples.

The study aimed at identifies the circumstance under which sales promotion should be used and when it should not be undertaken. 2. 1. 1 Profile of Coca cola company According to the Daily Nation (1998), The Coca Cola Company was established on May 08, 1886 in Atlanta, Pharmacist John Pemberton stirred the secret formula and his bookkeeper Frank Robinson, a man with a fine ear for the alliteration named the resulting beverage as “Coca Cola”. Today it is the global soft drink industry leader, with the world headquarters in Atlanta, Georgia.

The company and its subsidiari3es employ nearly 30,000 people world wide. Marketing intelligence(2000) further stated that the Coca Cola has been declared the most popular soft drink in the world and the best known brand and indeed the second most recognized word( only “okay” is the most universal) . The company takes pride in being the worldwide business that’s always local. Bottling and distribution operations are the with some exceptions. Locally owned and operated by independent business people who are native to the nations in which they are located.

The company has been in existence in Kenya since 1950 and it was not until November, 1995 that current Coca Cola Sabco (CCS) emerged. This followed a merger between South Africa, Mozambique and the Coca Cola business in Namibia, Kenya, Uganda and Tanzania to form the joint venture company, CCS CCS is the franchised bottler of Coca Cola, Fanta, Sprite and Stoney and bottles the products on behalf of Coca Cola Company, in Atlanta, Georgia. In Nairobi the head office are located in the Chancery building. While the bottling plants are in industrial area and Embakasi Depots.

It has a total of eight bottling plants in the major towns like Mombasa, Kisumu, and Eldoret etc. 2. 1 Statement of the Problem For a long time Coke has been the market leader taking unto 95% of the market share of the soft drink industry in Kenya. In the advent of liberalization however, Coke is now facing intense competition fro the new entrants both locally and from foreign manufacturers. To face the challenges, there is need for companies such as Coca Cola to reexamine their competitive strategies to capture additional or regain their market share.

These will undoutbly require a consideration of the four P’s (namely Product, Price, Place and Promotion) each of which is important in ensuring the effectiveness of any given marketing strategy. The study will focus on assessing the effectiveness of sale promotion by Coca Cola Company for its products. More specifically, we will examine the effectiveness of the sales promotion as a promotional tool for Coke with a focus on the views of the consumers, distributors and sales force. 2. 2 Objectives of the study 2. 3. 2 General objectives The general objective are factors affecting the effectiveness of sales promotion .

A case study of Coca Cola Company 2. 3. 3 Specific objectives a. To examine the problems associated with sales promotion and ways in which they can be resolved b. To establish the various sales promotion strategies adopted by the Coca Cola company in the marketing of Coke. c. To identify circumstances under which sales promotion would be used more effectively d . To establishes appropriate changes required in sales promotion to enhance creation of loyalty for Coke. e. To analyze the effectiveness of sale promotion in influencing the purchasing and distribution decisions. 2. 3 Research questions a.

What are the problems related to sales promotions and what are their remedy? b. How does Coca Cola adopt its sales promotion strategies in the marketing of Coke as its product? c. What are the most conducive conditions for the effective utilization of sales promotion? d. What are the necessary sales promotion changes required in order to create loyalty of the brand? e. How to measure sales promotion effectiveness and its impact on purchasing and distribution decisions? 2. 4 Significance of the study This study is meant to be beneficial to many people and more so improve their way of doing business. 2. 5. 4 Marketing Companies

Marketing firms will benefit due to this study ,in such a way that they will know when its appropriate to use sales promotions and also challenges faced by this strategy and how best to solve this issues 2. 5. 5 Consumers Consumers will be best placed to know and control their purchasing tendency by the formation acquired from the said study. 2. 5 Limitation of the study The study is meant to incur certain challenges in the course of undertaking it . this hurdles include: 2. 6. 6 Geographical limitation The geographic dispersion of this study makes it hard to be able to collect information from all this sectors.

Thus the researcher will focus his attention in Nairobi which is much more nearer and has substantial data adequate for the study. 2. 6. 7 Response Difficulties The retailers targeted were quite busy as in the course of administering the study they were quite very busy serving customers thus the data was quite scanty and hurried. 2. 6 Scope of the study The study will be centrally focused in Nairobi area. Due to the many respondents available the researcher will focus on Coca Cola company’s retailers in Nairobi area. Since there is homogeneity of customers with egard to this product its wise to say that its results can be applied country wide. 2. 7 Conceptual Framework This basically is the relationship between the independent variables and how they affect the dependent variables. Independent Variable Dependent Variable Competition The economy Technology Product quality Effectiveness of sales promotion 2. 8. 8 Competition Competition affects the demand of a product in the market place thus this will affect the sales promotion strategy that the company will apply to alleviate this. 2. 8. The Economy The economy is a vital affect in the dynamics of the markets. The more robust the economy the more people is willing to purchase a certain commodity but if the economy is in recess the people buy less and definitely it affects the sales promotion. 2. 8. 10 Technology Technology is basically how people use knowledge to produce equipments that make their lives easier. Hence the more advanced the technology is the more people are aware of a certain product and the more the sales and the less advanced the technology the slow the awareness thus the less the demand for the products. . 8. 11 Product quality The higher the quality of a product the more the demand but the less the product quality the less the demand for the product. CHAPTER 2 2. 0 LITERATURE REVIEW 3. 8 Introduction This chapter will discuss past studies on sales promotion, starring with the principals of the marketing mix, how they are related and how they affect sales promotion. We will further look at how communication affects the consumers’ behaviors either positively or negatively. Sales promotion is also extensively defined and its evolution is looked into.

Different modes of sales promotion especially those that directly affect consumer and retailers are discussed. The advantages and disadvantages of sales promotion Looked into as well as well other promotional tools such as advertising, direct marketing and public relations. 3. 9 REVIEW OF PAST STUDIES 2. 2. 1Marketing mix Saleemi and Njoroge (August 1997) define marketing mix as “the apportionment of the effort, the combination, the design and integration of the elements of marketing into a programmed of mix which on the basis of an appraisal of the market force, will best achieve the objectives of the enterprise at a given time”.

The ACC Study text ( 1999) further explains it as “ the combination of detailed strategies,tactics,operational policies,programmes,techniques and activities to which resources may be allocated such that the company’s marketing objectives are achieved” Kotler (1994) states that “a business firm must determine a marketing mix in order to satisfy the needs of its customers. The marketing mix denotes a combination of various elements which in the totality constitute an organization’s marketing systems. These elements are referred to as the four ps namely, Price, Product, Place, and Promotion. ”

He further states that “the product element of the marketing mix is what is being sold. It involves planning, designing and developing the right type of products and service to satisfy customers’ needs. It involves decisions with the regard to the flowing: product size, quality ,range ,volume output, package, brand name and labels, warranties and after sales service and product testing etc” Kotler (1994) says price components of the marketing mix” involves decisions regarding base price, price policy, discount and credit. Pricing policies and decisions exercise direct influence on the sales volume and rofit margin. Cost, demand, competition, cycle stage of the product and government control should all be taken into consideration before vital decision are taken” The place element in the marketing mix deals with how the product is to be distributed and how it will reaches its customers. Russell et al (1999) states that some of the issues to be tackled here include: “channels – which relates to where the products are to be sold, e. g. in supermarkets, shops, kiosks etc. Logistics which relates to the location of warehouses and efficiency of the distribution systems is also important.

A customer might have to wait a ling time if the warehouse is far. A firm can distribute the product itself (direct distribution) or distribute it through intermediaries organizations such as retailers,brokers,etc” And lastly on promotion elements in the marketing mix, Arens (1996) states that it “is concerned with informing and persuading the customers about the products of the firm. It includes all marketing communication which informs the public on the products or the service being offered. Promotional tools include: Advertising, Sales promotion, Personal selling and Public relations”. 3. 10. 2 Communication According to Milner, (1995), when a company develops a new product, changes an old one, or simply wants to increase sales of an existing product, it must transmit its selling message to potential customers. According to Chartered Institute of Marketing (CIM) 1999, the processes of communication are generally divided into explicit and implicit communication. Explicit communication involves the use if language to establish common understanding among people, while implicit communication is an intensive interpretation of symbols and is basically a form of non verbal communication.

Shimp (1997) states that “selling is the heart of marketing, but in order to sell goods there is a need to create and maintain demand. Creation of demand can only be achieved through promotion. Therefore ,promotion is concerned with the establishment of contact with the members of the society through media of communication with the object of creating cuastomers”. it is then through this function that the members of a community are shown how the products offered by the firm will serve the needs and sales promotion is one of the modes used to achieve this

Engel et al (1994) states that without proper flow of information and effective communication from the producer to the consumer either along with the products or well in advance of the introduction of the product in the market, no sales is possible today. The prime aim of marketing communication is therefore to influence the consumers’ buying behavior. Due to this, marketers need to know how communication works, that’s how to use it effectively to reach their objectives. The simplest mode starts with the sender who creates the message and sends it to the receiver

Sender Encoding Message Decoding Receiver media Noise Feedback Response Diagram 2-Kotler’s Model of communication (cim Study text, June 1999) Another popular concept used by Belch & Belch (1993) of the communication process is the basic model developed by Lasswell(1948) , which is popularly referred to as the 5 –ws model of communication s. this model states that basic communication model must deal with atleast5b 5 basic elements or questions . Who? Source Says what? Message Channels To whom? Receivers With what feedback

Diagram 3 -5ws model of communication (Belch& belch, 1993) 3. 10. 13 Consumer Behavior Kotler (1994) defines consumer behavior as the decision processes and acts of individuals involved in buying and using products and services. He defines the general stages in the buying process as follows: a. Need recognition. This process begins when the buyer recognizes a need or a problem. This can be triggered by internal stimuli. The task of the marketer is to identify the circumstances and stimuli that trigger a particular need and use this knowledge to trigger consumers’ interest. . Information search. Once aroused, the customer will search for more information about the products that will satisfy the need. Consumer sources of information include: personal sources:e. g. family etc c. Alternative evaluation. After acquisition of information from as many sources as possible the consumer evaluates the finds and settles on the best alternative. The consumer does this by comparing the various brands or products and services that have been identified as being capable of solving the problem or need. d. Purchase Decision.

At some point, the consumer has to stop searching for and evaluating information about alternative brands and makes a purchase decisions. These decisions are generally based on matching of purchases motives with attributes or characteristics of brands under consideration. e. Post purchase evaluation. Having purchased the brand, the consumer will experience some level of satisfaction or dissatisfaction, depending on the closeness between the consumers’ products expectation and the product’s perceived performance. 3. 10 Sales promotion 2. 3. 1 Definitions

Many of the actual activities of the marketing department are related to promotion. Promotion is the element of the marketing mix over which the marketing department generally has most control. The aims of promotions are intended to include among other things: arouse attention, generate interests, inspire desire and initiate action Donaldson (1998) states that, “ sales promotion are especially short term sales techniques and an advertisers planning a campaign should not be tempted to sacrifice long term prospectuses Brand image built up through media advertising in order to spend too much on the short term promotions” .

Sales promotions can, however, supplement media advertising. The Chartered Institute of Marketing (CIM) 1999 States that sales promotion activities may b directed at: people who do not currently use the product or service; existing customers (so that they will use the product cum service more frequently, or in large quantities) and people who currently use rival products(to weaken their current brand loyalty) . Sales promotion activities include: consumer promotions . uch like free sample. Coupons and competitions. Sales force promotion-include bonuses, contests between salesmen (based on volume of sales) and sales motivators such as gifts and finally industrial promotions which comprise sales literature and catalogues Moutinho et al (1998) further states that, promotion is an exercise in information, persuasion and influence. According, promotion has come to mean the overall coordination of advertising selling publicity and public relation.

Hence promotion is helping functions designed to make all other marketing activities more effective and efficient Christopher (1997) defines it as activities which stimulate consumer purchasing and dealer effectiveness such as display. Jefkins(1976) further adds that sales promotion also comprises that range of technique used to attain sales or marketing objectives in a cost effective manner by adding value to a product or service either to intermediaries or end user, normally but not excluselively within a definite time period.

In Kenya ,the Marketing Society of Kenya(MSK 1999) , has identified a code which is based on a through analysis of the interests of all parties likely to be affected by any sales promotion and it is in interest of all involved in the marketing processed producers, distributor and consumers. Sales promotion plays a very important and vital role in this process as a means of stimulating sales. The code is designed primarily as an instrument of self discipline but it also intended for the use by the courts as reference document within the frame work of law. Sales promotion was once thought of slow moving item.

Today, it is recognized that it can have a longer term strategic value. According to Kibera et al, (1998) sales promotions costs are almost equally to those advertising. The ability to tie sales promotion in with other activities such as sponsorship has played a part. The development of sales promotion techniques secure long term goals such as building customer loyalty, deseasoning the demand for the seasonal products and increasing market share is now well recognized. 2. 3. 2 Evolution Kibera et al (1998) states that the term “promotion” originates from the Latin term “promovere” meaning to move forward.

In this sense promotion is used to move forward a product in a channel of distribution. He further states that in the early day’s promotions was a “short run push to gain a short run good”. It meant basically to put some extra pressure behind slow moving products. It’s totally sporadic and unplanned. Importance of sales promotion in today’s modern marketing has increased mainly on account of its ability in promoting sales ad preparing the ground for future expansion. The main objective of sales promotion is to attract the prospective buyer towards the product and induce them to buy.

For a salesman its objective is to increase sales. At consumer level is to buy more and introduce new use for the product. Hence it’s called a “catch all” method and it’s used as an effective tool of marketing. Cummins (1993) says that at the core of any promotional activity are benefits or reasons why customers should buy a product. Can be categorized into three types: Functional –that’s what the product actually does; image-the image style, prestige and emotional value of a product or service: and Extra- the additional benefits that is not essential but is available in it.

A sales promotion offer is normally for a specific period and it’s easy to measure the volume and profits consequence of doing so. 2. 3. 3 Retailer focus Manufacturers need some help from the retailers in promoting their products. Stocking the products is okay, but the producers need a little more of that. This help isn’t easy due to the fact that the retailers have their own problem and not concerned by the manufacturers problem. The concern of the retailers is having products that can be bought. On the contrary the manufacturer does not care about the shops that the customers patronize but hat the products are bought. Hence this is a conflict that must be bridged for the mutual benefit of both. In solving this, Haas (1992) states that the manufacturer needs to understand that the retailer can be expected to promote products unless he too benefits. The success of the use of the sales promotion devices is actualized by the retailers support with respect to the perceived benefits. Common sales promotion identified by Kibera and Waruingi (1988) include: Promotion Allowance. Offered to a retailer for actively promoting the sales of the manufacture’s products for a period.

Useful in introduction of new products and involves the reduction of the invoice price. Preferred especially when retailer resist losses associated with new products. Point of Purchase Displays. Include things such as signs and window display and posters. Used to attract interest of the customers and to encourage retailer to carry particular products. Important in Kenya due to the concept of self serving retailing Spiffs (Push Money). This is a monetary award paid to a retailer salesman by a manufacturer for the selling of his products. The amount is in addition paid as salary by the retailer.

It normally requires the consent of the retailer. Sales Contest. Participating in a contest in universal human characteristic. It aims at stimulating the retailer activity in pushing the manufacturer’s product. Trade Exhibition. Participation in Agricultural Society of Kenya (ASK) shows all over the country is very effective in creating interest and expensive sales promotion device a manufacturer can use. During the shows information is disseminated about the product and samples are given. 2. 3. 4 Consumer Focus The most visible sales promotion is those aimed at the buyer of the products.

Important to the manufacture is introducing a new product. A simple prod can overcome the consumer’s initial hesitation to try a new product. Can be used to increase usage. Reserve supply of a product inclines consumer to buy it unlike if thee is no other option available. Some common techniques aimed at benefiting the consumer include: Free Sample: used to stimulate trial of a product, increase sales volume especially at early stage of a product. The results for a promotion are normally instant due to the evidence of use. Coupons. A certificate with a stated value presented to the retail shop for a price reduction in a specific item.

Can be distributed in newspaper, magazine and door to door. Its purpose is to bring customers to a given shop and increase usage of a given product Premiums. This is an item that’s offered free or at substantially reduced price of product being promoted. Meant to increase sales. It doesn’t need to be associated to item being promoted. It can be attached or put inside the product. E. g. is a service station when one buys gas for a given amount they are given a bar of soap or something related. 2. 3. 5 Advantages Some advantages of sales promotion highlight by Saleemi and Njoroge (1998) include: Low unit cost.

Large scale production itself is meant for low cost. This could be achieved only with appropriate methods large scale selling. Hence that sales promotion assures low cost. Effective Sales Support. Sales promotion policies supplement the efforts of personal and non personal salesmanship. Good sales promotion materials make salesmanship efforts more productive. These activities reduce their time spent in prospecting and reduce the turndowns. Better Control. The management has effective control over the various method used (and their effectiveness).

The final aspects also could be brought under control of the management. For example, the cost of sales promotion could be compared with the profit per unit of the product sold. 2. 3. 6 Disadvantages Sales promotion devices are only supplementary to advertising and not a substitute. This is because the main impact of sales promotion is felt only during the limited periods of the actual promotion and the frequent repetition of offers on the same products will have a diminishing effect. Furthermore, simultaneous competitive promotion will also have disadvantage.

Example, when products are launched they have the greatest influence and subsequent offers have to be carefully planned with respect to competitive activity. Sales promotion involves additional expenditure on the part of the manufacturer. Therefore, the effect of such promotions should be clearly weighed in terms of expected additional sales. In other words sales promotion should be capable of increasing sales volume. Timing is another factor to be considered in planning sales promotion. Certain demand fluctuation at particular times is predictable on the basis on accumulated historical information.

Such fluctuations can sometimes be countered even without special promotion. For the remaining unpredictable fluctuations, sales promotional activities must be undertaken with maximum care and proper planning. Another problem is due to similar methods adopted by competitors. It has been seen that many manufacturers’ simultaneously adopt sales promotion methods during the same times. Thus sales promotion is best suited for commodities where no regular brand preference is. 2. 3 Critical Review Various writers have pointed to the business choosing the best marketing mix in order to satisfy the needs of its customer.

This mix denotes a combination of various elements which in totality constitute an organization’s marketing system. The idea is to utilize this mixture of strategies to the best possible way. Which in the end is meant to create interest among customers and eventually stimulate purchase which is significance for the growth and development of an organization? In the course of introducing new products the aspect of communication is essential and actually the, more effective the communication process with respect to the customers the more aware and essentially more purchase.

Communication has two ways to go implicit and explicit. Explicit involves use of language to communicate to customers while implicit communication is as intensive interpretation of symbol and is basically a form of non verbal communication. Demand can be created through promotion. Engel et al (1994) states that without proper flow of information and effective communication from the producers to the consumers either along the product or well in advance of the introduction of the product into the market, no sales is possible today.

In the course of promotion it is good to identify the consumer behavior and Kotler (1994) defines this as the decision processes and acts of the individuals involved in buying and using products or services. Many marketing department engage in promotion in one way or the other. Promotion is the element of the marketing mix which the marketing departments general has most control. Donaldson (1998) states that, “sales promotion is essentially short term technique and advertisers planning a campaign should be tempted to sacrifice a long term prospects, e. g. brand image building” Moutinho et al (1998) further states that “promotion xercises in information persuasion and influence”. Accordingly, promotion has come to mean the overall coordination of advertising, selling, publicity and public relations. Therefore, promotion is helping functions designed to make all other marketing activities more effective and efficient. In promotion it is important to focus on the retailer, this because the retailer is more in touch with the customers and he s best placed to stimulate demand if well motivated ,hence manufacturer’s should remember that retailers can be a key ingredient to the success of the organization .

The retailer is focused on goods that will sell so that he can make profits thus he is not concerned with manufactures products thus unless he sees an incentive to promoting producers goods he will not be interested. Hence to bridge this gap they act in mutual benefit. Also customer focus is essential for the fast awareness of the existing products. Hence manufactures should focus their energies to stimulating the demand for the good though sample, coupons and premiums etc. 2. 4 Gap in the studies. Sales promotion should not be a substitute to advertising but a supplementary but most organizations make the mistake of mixing the two.

In as much as promotion is good it needs to be carefully planned otherwise it may lead to numerous losses or may lose sight of its initial goals. Sales also are a technique that most manufacturers use during the same times hence its best for items that do not have brand loyalty preference. CHAPTER 3 3. 0 RESEARCH METHODOLOGIES AND DESIGN 4. 11 Introduction This chapter will present the methodology to be used to attain the study objectives. We will discuss the approach used of the study. After we look at the target population, sampling size, data collection methods and conclude with the methods of data analysis 4. 2 Design of the study This study will use a descriptive research design with the objective of establishing the effectiveness of sales promotion on the behavior of consumers of coke. 4. 13 Target Population Table 3. 1 Population CATEGORY| TARGET POPULATION| PERCENTAGE| Consumers| 130| 72. 2%| Retailers| 50| 27. 8%| TOTAL| 180| 100%| | Source: Author (2008 The study will target two types of population for the survey: One, direct consumers of coke within Nairobi; and two, the point of purchase outlets of coke such as Kiosksshops, Supermarket and Strategic Sales Depots (SSD).

Considering the numerous Consumers of coke, the survey will adopt random selection criteria that will capture about 122 consumers and 45 outlets of coke. Table 3. 2 Sampling size CATEGORY | TARGET POPULATION | SAMPLE SIZE | PERCENTAGE | consumers| 130| 122| 73%| Retailers| 50| 45| 27%| TOTALS| 180| 165| 100%| Source: Author (2008) 4. 14 Sampling Design The researcher will use random sampling method. Specifically the stratified random sampling method. From the method the researcher is meant to get a population comprising all the respectful age level and brackets for more depth in data .

Also simple random sampling method will be used to get the actual percentage of respondents from the group chosen. 4. 15 Data Collection Method To execute the project, both primary and secondary data will be used as described overleaf: 4. 16. 14 Secondary Data The researcher will relay on the secondary data obtained from the files of Coca Cola Company. Also information from various studies carried out before. As a rejoinder information will include sales trends, nature and types of point of purchase outlets and stock level. 4. 16. 15 Primary Data.

Will be obtained chiefly from questionnaires and casual probing of the consumers and the company’s major outlets and managerial staff. The. These respondents will be well recorded. The questionnaires will be assigned in a pre arranged order to allow respondents to choose from the predetermined answers. The survey will also administer personal interview to a selected senior executives of the company. The questionnaires will be edited and pre tested before use. 4. 16 Data Analysis Method. Out of the 130 questionnaires sent out for the consumers and 50for retailers, 122 and 45 will received from each respective group.

The researcher will edit and correct any ambiguities, error and inconsistencies, the responses will be coded and into a computer for analysis. The analysis will use the following analytical tools: Descriptive statistics namely range, mean, standard deviation and variance to determine central tendencies. Secondly frequencies were used to determine the commonness mentioned by the two groups. Lastly, cross tabulation will be used to check the differences between respondents groups and between central tendencies. The data will be analyzed and interpreted in diagrams and table using Microsoft Word 2003.

CHAPTER 4 4. 0 DATA ANALYSIS AND PRESENTATION. 4. 1 introductions The identification and analysis of the critical factors affecting effective implementation of the sales promotion function at Coca Cola was the function of the study. In this chapter the findings of the analysis of these factors: customer’s characteristics, retailer profile, product characteristics, promotion, price and distribution as they relate to the sales promotion functions are presented. 4. 2 Customer demographic characteristics From a male to female population ratio or 4:5, 64 % were single and the rest were married.

The majority of these were within the 15-20 year bracket. A small proportion of these populations were jobless. Indicating that a large majority had some source of livelihood by only 40. 3 % earning less than Kshs 40,000. Further, the major consumers of coke earned between Kshs 20,000 and 40,000 per month. When point of purchase (kiosks) ,favorite mode of package (bottle) and size(300 ml) were analyzed by source of livelihood, the results indicated that 57. 4 % of the respondents purchased Coke from Kiosks , 53% prefer 300 ml and 67. 7 % p[refer the bottle. Table 2 – Consumers preference by occupation ccupation| Points of purchaseKiosks %| Favorite mode of package- Bottle (%)| Favorite size 300 ml(%)| Employed | 32. 0| 45. 9| 30. 3| unemployed| 7. 4| 8. 2| 5. 7| students| 18. 0| 12. 3| 17. 2| Totals| 57. 4| 66. 4| 53. 3| 4. 2. 1 Sales promotion and consumers Demographic Characteristics Analysis of the effect of consumers age on the one hand and awareness of sales promotion, point of purchase of the drink and the product size on the other hand, indicated that about 72. 6 % of the respondents of all ages were aware of the issues related to sales promotion.

Further, the results showed that awareness among consumers increased with age, notwithstanding the fact that5 the proportion of the respondents who purchased Coke decreased with the increasing in size. This was confirmed by the 89 % indicating preference to 300 ml, the rest shared between 500 ml and 1000 ml Table 3 – Results of the analysis of age as a factor in awareness, point of purchase and Coka Cola size AGE| AWARE | PLACE| SIZE| | YES (%)| Kiosks (%)| Supermarkets(%) | Hotels(%)| Others(%)| 300 ml(%)| 500 ml(%)| 1000 ml(%)| 15-20| 26. 6| 18. 9| 3. 3| 3. 3| 5. | 18. 0| 9. 8| 3. 3| 21-25| 16. 4| 16. 4| 1. 6| 1. 6| 0. 8| 12. 3| 7. 4| 0. 8| 26-30| 12. 3| 5. 7| 6. 6| 2. 5| 2. 5| 8. 2| 7. 4| 1. 6| 31-35| 6. 6| 7. 4| 1. 6| 4. 1| 0. 0| 7. 4| 4. 1| 1. 6| * 36| 10. 7| 9. 0| 1. 6| 7. 4| 0. 0| 7. 4| 6. 6| 4. 1| TOTALS| 72. 6| 57. 4| 14. 7| 18. 9| 9| 53. 3| 35. 3| 11. 4| It was noted that the highest level of awareness in sales promotion was recorded within the age bracket of 15-20 years, attributed to the claim of high participation of this age group and the fact that product advertisement are undertaken by those in this bracket.

Over 55 % of those aware of sales promotion were below 30 years of age However, the results indicated that there is a negligible relationship between age and the level of awareness of sales promotion. Graph 1: Awareness of Sales promotion Level of awareness 4. 3 Retailer characteristics The retail outlet for Coke was categorized into three: kiosks (46. 7%), Supermarkets and Strategic Sales Depots (SSDs) each with 26. 7 %. In relation to the length of time each retail has been in operation, it was found out that, only 6 % of these had been in operation for between 6-10 years.

The study area was divided into 5 regions; Nairobi west recorded the highest respondents at 26. 7 % while Nairobi central was the lowest with 8. 9 %. It was established that the largest sales are derived from kiosks despite the fact that they carry the least of stock compared with the others. There was no evident that source of product such as kiosks and supermarkets to mention just a few was a function of age group. Whatever the age group a greater proportion of the respondents (57. 4 %) sourced coke from kiosks, 14. % from supermarkets while the rest from SSDs. Interestingly, the proportion of respondents sourcing the product from kiosks deceased with the increase in age while those sourcing from hotels increased with the increasing age. There was no pattern discerned with respect to supermarkets (4. 2. 1) Analysis of possible relationships between age and Coke size purchased indicated that a greater proportion of respondents consuming 300, 500 and 1000 ml were in the age bracket of 15-20 years. Table 4 – Retailers Participation in sales promotion

Nature of Business| Type of sales promotion directed at retailer| | Promotional Allowance (%)| Point of Purchase (%)| Retailer sales contest (%)| Kiosks | 6. 7| 40. 0| 0. 0| Supermarket | 4. 4| 20. 0| 2. 0| SSD| 4. 4| 17. 8| 4. 4| TOTAL | 15. 6| 77. 8| 6. 6| 4. 4 Product characteristics Literature review results indicated that Coke, manufactured by Coca Cola Company, has been in the market since 1950. Its character if not content having seen a marked improvement over the years. Critical among these has been the size and packaging of the product. The study undertook to determine the marketable potentials intrinsic in these developments.

Results show that the majority (53. 3 %) preferred the 300 ml with the most (66%) popular package model being the bottle. These were mostly consumed from kiosks (57. 4%) SSDs were the major stockists of the drink while the least stocks were held by kiosk owners. Analyzed by the month of the year, evidence indicated highest consumption in January and December with the number of cases sold in the outlets dependent on among other factors, its physical location, ease of accessibility and security There was a strong relationship between age and mode of package preferred (0. 0054) and preference for cold drinks (0. 02011).

However, the study showed that no relationship between age and the favorite size of coke. Analyzed by gender, there was no significant difference in preference by males or female 66 % of both sexes preferred the bottle. The majority (31 %) of male consumed the drink from kiosks while most supermarkets purchases of the drink were females (10&) overall all sexes at 66. 4 % preferred it packaged in a bottle (Table 5) Table 5- Consumers’ responses Gender | Awareness| Point of purchase| Cup as packagePreferred (%)| Psp(%)| | | Supermarkets(%)| Kiosks(%)| | | female| 37. 7| 9. 8| 26. 2| 6. 6| 16. 4| male| 32. 8| 4. | 31. 1| 5. 7| 25. 4| Total | 70. 5| 14. 06| 57. 3| 12. 3| 14. 8| 4. 5 Sales performance and sales promotion tools Evidence from the study indicate that 86 % of the consumers agreed they were aware of sales promotion ,even then 64 % of these people had learnt of it through advertising while 7. 4 % was through observation. Observation is only possible when sampling (which is a sales promotional tool) is incorporated into promotional process. Our study revealed that 45. 9 % of the respondents had not participated in any sales promotion contest while only 4. 1 % has participated in both sampling and sales contest.

The majority (64. 6 %) of these respondents participated in sales contests due to possibility of winning. On reception of sales promotion, male respondents were the majority (25 %) As a regards retailers, analysis indicated that 77. 8% were involved in point of purchase displays, results further indicate3d that. 9. 1 % of the retailers considered that the current promotional allowance was poor. Of value to the retailers were the consumers contests since it was indicated that during the periods of sales contest sales level increased. Also for the outlet, the points of purchase display were considered appropriate.

Both the consumers (80. 3 %) and retailers (88. 9) asserted that a sustainable consumption and stocking of coke was not purely a function of sales. 4. 6 sales performance and outlets age Analysis of the length of business operation and effect of sales promotion on sales indicated a marked improvement on new business (< 2 years) possibly since such business invest more in sales improvement programs, 51 % of outlets which had been in operation for less than 2 years indicated sales promotion had a positive effect on sales, compared to 21 % of 3-5 years and 6-10 years of business.

Table 6 and graph 2 depict this more clearly Table 6 – Effects of sales promotion and sales Performance Effectiveness of SP on sales| No of respondents%| Length of business existence| | | | Less 2 yrs%| 3-5 yrs %| 6-10 yrs%| * 10 yrs * %| Sales doubled| 55. 6| 33. 3| 8. 9| 4. 4| 8. 9| Slight increase| 35. 6| 17. 8| 13. 3| 0. 0| 4. 4| No effect| 8. 8| 2. 2| 2. 2| 4. 4| 0. 0| TOTAL| 100| 53. 3| 24. 4| 8. 8| 13. 3| Graph 2 – changes on sales and age outlet Effectiveness of sales promotion on sales Length of business existence 4. 7 Sales performance and price

Results indicate the stocking and consumption by retailer and consumers respectively regardless of the change of price, proving that price is not the major determinate. However, the two sets of users cautioned on the unlimited increase beyond the price threshold. This was confirmed by the respondents (22 %) stating that increase in sales would be realized if the prices were decrease by a big margin. The current distribution strategy of coca cola was considered appropriate by a majority of respondents (66%) except for diet coke whose distribution and availability was considered poor.

Although the out of stock situation was considered rare, availability of cold drinks was indicated as being a major problem (65%) ,hence the provision of fridge by the producer. CHAPTER 5 5. 0 CONCLUSIONS AND RECOMMENDATION 5. 1 Conclusions It is evident from the study that competition in the soft drink industry has been very stiff, especially with the entry of Schweppes and Softa drink by Kuguru foods into the market. Coke is also experiencing competition from substitutes like milk, mineral water and non alcoholic drinks like Alvaro and Red bull.

In order to retain their market share, Coca Cola Company has engaged in an aggressive sales promotion. However, Coke currently uses sales contests and sampling for consumers and point of purchase for outlets. 5. 1. 1 Effectivenesss of sales promotion The study set out to investigate among other issues the effectiveness of sales promotion. The results of the study indicate that only consumers contest and point of purchase display were effective while, the other modes were not.

Sales promotion is an important and effective tool to enhance sales level in the short run. It adds value to a brand on a temporary basis, while advertising adds more permanent value like in the case of point of purchase display which falls under sales promotion as well as advertising. Therefore, it becomes a marketer’s weapon to solve instant problems and achieve short term results. Sampling which is one of the modes of Coca Cola Company uses is used on a lower scale probably because it’s expensive to offer free drinks. 5. 1. 2 Problems with sales promotion

The study established that only three modes were used by the company, namely: points of purchase display, contests, sampling and promotional allowance (which was not effective at all). Most of the consumers complained that sales contests concentrated only in urban centers especially Nairobi. Sampling on thaw other hand was rarely done and when done people were not well informed about it in advance. The retailers complained that they were not involved in retailer contests and could also do with promotional allowance. 5. 2 Recommendations

The sales levels of the product increase when there is a sales promotion taking place because consumers increase their consumptions in order to participate in the contest thereafter they go back to their usual drinks. We suggest that, sales promotion should be undertaken when sales level are affected by competition as established by the research where 95. 6 % concurred that this would be the best time to undertake this. When sales are down or there is a slump in sales such during cold seasons, sales promotion can compensate for dull seasons.

Special events and occasions like Ester and holidays are especially a great period to exercise sales promotion because people are engaged. Also sales promotions should cover a longer period and should be vary in variety to avoid monotony and to gauge effectiveness. Further studies should be undertaken if the conclusions made in this study are to be validated and thus not generalized. The suggestions are to expand the sample size to cover diverse geographical distribution in order to capture national mode regarding the same instead of generalizing findings.

RETAILERS QUESTIONNAIRE 1) Nature of business? I) kiosks/ shops ii) Supermarket iii) SSD 2) Location in Nairobi I) North ….. ii) South …… iii) west ….. iv) East …… 3) How long has the business been in existence: i) < 2 years ii) 3-5 years iii) 6-10 years iv) > 11 years 4) Which is the most favorite size of Coke for consumer: i) 300 ml ii) 500 ml iii) 1 liter 5) How many cases of above did you sell in December 2007 i) 300 ml………. ii) 500 ml……… iii) 1 liter……………. 6) Again how many of the above mentioned were sold in January 2007 i) 300 ml…………… i) 500ml……………. iii) 1 liter ……………. 7) How many cases of each of the following do you have in stock? Bottles (cases) I) 300ml ……….. ii) 500 ml …………. Iii) 1 liter ………… 8) Which of the following sales promotion are you involved in? i) Promotional allowance ii) Point of purchase display iii) Sales contests iv) None v) Others (please specify) …………………………….. 9) On a scale of 1-5 could you please rank each method with respect to effectiveness on sales Very Effective not at all effective ………… ……………… …………………. ……………… …………… 543 2 1 i) Promotional allowance ………………… ii) Point of purchase display ……………. iii) Sales contest ………………… 10) When coca cola uses sales promotion for consumers e. g. competitions, what has been the effect on sales and by what %( Tick one) I) Sales has doubled II) Slight increase of sales III) No effect IV) Slight decease of sales V) Decease of sales by more than half 11) Please pick on a scale of 1-5 | StronglyStrongdisagreeAgree| 5| 4| 3| 2| 1| I would stock coke regardless of whether there is a sales promotion or not | | | | | | | If the price of coke is increased I will still continue stoking it| | | | | | | I also stock soft drinks not manufactured by coca cola| | | | | | | I sell coke more than any other soft drink| | | | | | | Coke is the easiest brand to sell among the coca cola products. | | | | | | | Sales promotion on coke is well organized. | | | | | | | The discounted rates on coke encourage me to stock more coke. | | | | | | | The displays on coke encourages more consumers to purchase coke| | | | | | i) | Distribution of coke is good. | | | | | | 2) Have you ever tried selling other soft drink not produced by coke because of their attractive sales promotion? Yes……………………. No …………………. If yes, from which companies i) Kuguru foods (Softa) ……………….. ii) Schweppes ………………. iii) Other…………………… iv) Not applicable……………….. 13) In your opinion under which of the following circumstance should Coka Cola Company use sales promotion? i)When sale are down ii) When introducing a new product iii) When clearing dead stock iv) When competition is most stiff v) Other (please specify) …………………… 14) Please identify any aspect of sales promotion methods carried out on Coke that you would like improved? ) Promotion allowances: …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………. ii) Point of purchase display: ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… iii) Sales contest: ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

Are there any aspects of coke you would like improved?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

Reference ACCA study Text, (1998), “professesional paper 12- Management and Strategy”BPP publishing Ltd, London Arens, W. F. (1996), “Contemporary Advertising”, 6th Ed. , Irwin / McGraw-Hill, USA Coca Cola, (1999), “news” Vol 27 No 3 June Daily Nation, Monday, December 21, 1998-Areticle on “Coke in Kenya” Daily Nation, Friday, March 31, 2000-Article on “Coca-Cola enjoy” Donaldson, B (1998), “sales Management”-theory & practice”, 2nd Edition, Macmillan press Ltd, UK KOTLER, p. (1994), “Marketing Management-Analysis, planning, implementation and control”, 8th Edition.

Prentice, ND, India Marketing Intelligence- The Business and finance Journal –March 2000 Issue Fig. 3. 1 Work Plan Nov 2008 __________________________May 2009 Nov – 08| Dec | Jan| Feb| March| April| May | | Questionnaire Drafting | | | | | | | | Issuing of Questionnaire | | | | | | | | Data Collection| | | | | | | | Data Analysis Chapter 4| | | | | | | | Compiling Findings Chapter 5| | | | | | | | Project Report Writing| | | | | | | | Making Final Copy| | | | | | | | Source: Author (2008) Fig 3. 2 Budget Data Collection | 8,000| Typing and Printing | 7,000| Final Copy and Binding | 3,000| Total | 18,000| Source: Author (2008)

Cite this Sales performance and outlet age

Sales performance and outlet age. (2018, Jun 01). Retrieved from https://graduateway.com/coca-cola-2-essay/

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