IMPACT OF PROMOTIONAL STRATEGY ON SALE AND PROFIT OF PRODUCTS (A CASE STUDY OF 7UP BOTTLING COMPANY, NIGERIA PLC)

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CHAPTER ONE

1.0      INTRODUCTION

            Marketing is a much matured process that requires the understanding of some basic principle and concepts. Some would want to ask why.

            We need to study marketing and some students seem to waste their time and money in some universities and polytechnics studying marketing. When we have people at various market in the cities that sell better and make their profit without having undergone any formal training some eve n say that business concerns have thrived successfully before the advent of “marketing” as a managerial concept. The point these two schools of thought have consistently overlooked, is that business activities in the times they referred to were not as demanding and complex as it is today. It has become necessary that we analyse, educate, enlighten and stress what marketing entails. For many people, selling suggest only the transfer of the title and only the activities of sales and when not include advertising or other method of stimulating demand.

            The question is this, what is promotion? Promotion or promotional strategy, there is one of the marketing mix that has been the coordination of all sellers initiated efforts to set-up demands of information and persuasion to facilitate the sales and acceptance of goods and services or idea.

            It is usually necessitated to its customs and to project a good image of his product, services or idea to the targeted market. Promotion plays a very crucial role in Nigeria Business Environment.

            This is because the Nigeria Business Environment predominantly is a buyer’s market where supply exceeds demands.

            In addition, Nigeria is a country of over 150 million people with such a large potential market manufacturers and producers of goods and services cannot afford to underutilize promotion as a good source of effective marketing.

            The wonders and beauty of promotion is the ability to use the instruments to persuade and create a favourable psychological environment in which the demand curve for a product is on the upward slope.

            Finally, it should be emphasized at this juncture that promotion is one of the four demand or pillars of marketing and it related to the overall marketing strategy of the organisation.

1.2      HISTORICAL BACKGROUND OF THE STUDY

            Seven-up Bottling Company started business in Nigeria in 1960 as a limited liability company while Ilorin plant started operation is 1978.

            It is independent manufacturer and distributor of soft drink like Pepsi, 7up, Mirinda, Teem and Mountain dew among others.

In the early 1990, when pepsi international took over seven-up international the company introduced the pepsi brand in Nigeria.

            Seven-up Bottling Company was incorporated in Nigeria in 1959 as a private limited liability company under the name seven-up limited, is name was later changed to Seven-up Bottling Company plc in 1989 to compile with the company and allied matters Act 1990.

            The majority of the company’s shares 72% are held by the EL-khali family which has moved the business from distributorship to the sole manufacturer and market called pepsi-cola brand in Nigeria in 2009, 7up introduced a new product to the Nigeria market called pepsi light the company also created a website from the product.

            The product is targeted at health conscious individual, especially young adult women between the ages of 16-30 years with a purchased income, who are very conscious of keeping their figure, people who might prefer drinks with low calories because of their health status.

            Financial information between 2004 and 2008, 7up has grown sales by at a charge of 15.4% from N1.5billion to N30.5billion. While profit after tax has grown annually on compounded basis by 7% and the number of employee is 3,458 employees.

            Seven-up has the second largest market shares in terms of volumes in the packages drinks sub-sectors following closely behind Nigeria Bottling Company (NBC) which occupies the first position however relative to NBC, 7up is more stable in terms of earning sustainability pricing and cost management.

1.3      AIMS AND OBJECTIVES

1.        To examine the effectiveness of marketing which is one of the variable for effective promotional strategy.

2.        To ascertain the effectiveness of product promotion to profit oriented and even non-profit organisations.

3.        Aims at analyzing various promotional strategies as well as marketing techniques being adopted by Nigeria Business Organisation.

4.        To show that impact of promotion cannot be over emphasized as it creates awareness about the existence of the product in the organisation.

1.4      STATEMENT OF THE PROBLEM 

            The major challenge that 7up Bottling Company faces is maintaining a consistent flow of production materials. There are factors that inhabit the accuracy of inventory which results in production shortages premium freight and often adjustment.

            According to the journal of Business Logistics (2009) voll22 part 2. The major issues that all material managerial face are incorrect bills of materials, in accurate cycle counts, unreported scrap errors and production reporting errors material managers have strived to determine how to manage these issues in the Business sectors manufacturing since the beginning of the industrial revolution. Although there are no known methods that eliminate aforementioned inventory accuracy. Inhibitor there, are best method available to eliminate the impact on maintain an interrupted flow of material for production. Reluctance can be reduced and effectiveness when service point are clustered to reduce the amount of reluctance. An effective material management programmed can also resolve island approaches to receiving and vehicle movement solution can include creating a new central loading as well consolidating services areas and docks from separate building into one. Developing better circulation infrastructure also means re-evaluating strong delivery and services vehicle routes.

1.5      RESEARCH QUESTIONS

            The questions that will guide study include

1.        What role did promotional strategies on sales and profit play in marketing?

2.        Does marketing strategies influence Business Performance?

3.        Is marketing relevant to Business?

1.6      RESEARCH HYPOTHESIS/ASSUMPTION

            The null and alternative hypothesis that guides the study is as follow;

i.          Ho: there is no significant relationship between promotional strategies on sales and profit and organisation profit.

            Hi: there is significance relationship between promotional strategies on sales and profit and organisation profit.

ii.         Ho: there is no significant relationship between Business and promotional strategies.

            Hi: there is significance relationship between Business and promotional strategies.

1.7      SIGNIFICANCE OF THE STUDY

            The research work is predictive in nature. The study will reduce the worries and anxiety of the marketing managers in choosing appropriate and efficient promotional strategy for its organisation to achieved its turnover target and profit maximization objectives.

            The customer will also benefit from the study in the sense that, they would have appropriate, unambiguous information with respect to the product they are to consume.

            Also, the research work is of utmost benefit to the student as it will boost their knowledge more on the topic and it is also part of the stepping stone to the accomplishment of their career.

            After conclusion on the research topic, it will also assist the case study toward improvement in their promotional strategies with relevance to their weakness.

1.8      SCOPE OF THE STUDY

            The research work focuses on the effectiveness of promotional strategy on sales and profit on Nigeria industries especially soft drink producing company using 7up Bottling Company Plc. as a case study.

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