CHAPTER ONE

INTRODUCTION

1.1BACKGROUND TO THE STUDY

In Nigeria of today, it has become the order of the day that effort is made by the
producer of soft drinks towards continues sales production programmer harder to
survive the over-saturated market that is characterized by competition.

There is need for communication in the process of which awareness is created,

desire of customers groused and prospect of satisfying. Their needs are high with a
resultant benefit of taking soft drinks and not considering the cost of purchase.

Philip kotler noted that parties on exchange relationship must be capable of

communication for marketing to take place. Recently increase in competition and
perhaps decling the sales volume due to increase in production of consumer
products in Nigeria have taken a new dimension.

Therefore, this has faces manufacturers particularly those in soft drink market to
effectively make use of promotion in marketing.

Promotion consist of adverse collection of tools mostly short term designed to

stimulate quicker and or greater purchase of particular products or service by
consumers sales promotion tools include free samples, price, packs, slows, cash
refund offers, coupons and so on.

1.2 BACKGROUND OF THE AREA OF THE STUDY

Nigeria bottling company (NBC) plc is one of the few multinational organizations
that had its beginning in Nigeria from a small family owned operation at inception.
 They are the predominant bottler of alcohol free beverages in nigeria, responsible
for the manufacture and sales coca cola brands.

The Nigerian bottling company (NBC) plc was founded and incorporated in
November 1951, as a subsidiary of the A.G Leventis Group with the franchise to
bottle and sell coca cola products in Nigeria.

Production began in 1953 at a bottling facility in iddo, ebate metta, Lagos which
also serves as its headquarters. Over the years production capacity has grown and
NBC operates thirteen (13) and eight (80) distribution warehouses (depots) located
across the country about 1.8 billion bottles sold per year, making it the second
largest market in Africa.

The products they bottle or manufacture and sell are coco-cola, fanta, sprite,
Schweppes, Eva water and five alive.

The company has achieved greatly in terms of pace setting and innovative
practices which includes:-

i. The first soft drink company to use standardized distribution bottles

ii. First to use special tracts decorated in companys logo and colour.
iii. First to use in-route system of distribution
iv. Established the first carbon dioxide plant in 1958

All these practice and innovation are still working till date.

The company was faced with problems such as the importance of carbon dioxide
for bottling from the United Kingdom. This could take not less than two week to a
month. At times; the country depended on this Lagos plant for its supplies of coca
cola. To cater for the northern area of the country, the second bottling plant was
established in 1956.
 The Nigeria bottling company second product, fanta orange; was introduced and
its third plant was established at ibadan. The problem encountered during this
period was the government introducing excise duty on soft drinks, which
considerable affected sales.

Another problem that affected the operation of the company was the outbreak of
the Nigeria civil war. In spite of this, the company saw the need of introducing
other brands such as sprite, ginger, club soda and fanta tonic water. It also
introduced sales outlets.

In the 1970s coca cola was the market leader with a rapid opening of bottling
plants in Benue, Jos, Enugu, Ikeja and Ilorin.

From the 1990s till date the Nigeria bottling company(NBC) has created new
innovations as regards their bottling packaging and introduction of new products
such as fanta pineapple, fanta lemon, different brands of five alive such as the
atoms burst and strawberry flavour.

The Nigeria bottling company has contributed to the environment by discharging

its social responsibility which includes:

i. The setting up of the leventis foundation of which Nigeria bottling company is

the main sponsor.
ii. Supporting the Nigeria conversation which was established to create awareness
among the people.

The company also does sales promotion activities every year such as:-

Coca-cola family refreshment promotion

Coca-cola instant win prize

1.3 STATEMENT OF THE PROBLEM

The Nigeria bottling company plc as well as its companies in the soft drink
industry spent a lot of money on sales promotion. Some marketers who have very
little budget for sales promotion have recorded fall in production, which have
resulted in entrenchment of their workers. There is always the problem of which
has the ultimate responsibility of formulating and implementing sales promotion
activities among the marketing manager, sales and production manager. This
always created inter- rivalry conflict among. These personalities which hinders the
operation of the department.

Furthermore, the consumer, distributor, sales people and eventual

Winner perceives the various promotion activities perspectives. It may be because

of the flamboyant offers or wordings been deceitful to the people owning to
mobility of plan not properly timed and carelessly executed.

Another problem is the choice of which sales promotion activities cost and the time
it takes. This tends to follow the ideas of the advance company. Nigeria
environment must be intensified by the marketers of soft drink towards a
continuous sales promotion for the survival of such a company.

1.4 OBJECTIVE OF THE STUDY

The main objective of the study is to examine the impact of sales promotion on the
consumption of soft drink at nigeria bottling company plc. The specific objectives
include the following:

a. To combat or effect competitors

b. To identify and attract new customer
c. To increase the sales volume of the slow selling line
d. To stimulate more traffic from buyer
e. To know if by so doing the corporate objectives have been achieved.
f. To make appropriate recommendations based on the findings of the study.
This will give us a better opportunity of finding an answer to the proper
management of sales promotion in the soft drink market in Nigeria with particular
reference to the Nigeria bottling company plc.

1.5RESEARCH QUESTIONS
i. Is sales promotion relevant to the soft drink industry?
ii. Does technology affect the performance of sales promotion in the marketing
of soft drink?
iii. What effect has sales promotion of soft drink on the economy?
iv. How does sales promotion of soft drink influence consumer behaviour?
v. Does sales promotion influence purchase decision?
vi. What are the attitudes of students towards the consumption of soft drink?
1.6 RESEARCH HYPOTHESIS

The test of hypothesis is formulated below:

Ho: sales promotion has no effect in the marketing of soft drink company sales

H1: sales promotion has effect in the marketing of soft drink company sales

1.7 SIGNIFICANCE OF THE STUDY

It is a fact that consumption of soft drinks is high and without bras to religion,
ethnicity, sex and age.

The outcome of this study will be useful to the firms in the soft drink industry who
in the soft drink industry who intend to employ sales promotion activities in
stimulating and enhancing the sales of their products and to know whether sales
promotion is an effective marketing tool. They will also know when and how
frequent the promotional tools can be employed in their marketing program.

More importantly, the result of this study will go a long way in improving the
performance of firms in the industry, and help firms to explore ways of motoring
 their customers to purchase their products which will ultimately lead to increase in
the sales volumes and other benefits that will ensure the continued existence of the
product in the market.

1.8 SCOPE AND LIMITATION OF THE STUDY

Nigeria bottling company plc is the leader in the soft drink industry with 13
bottling plants spread all over the nation. This study will cover one of the firms,
idda village Abuja.

This study will distinguish the consumers while personal interview will be used for
the employers (managers) of the company with no bias to sex, tribe, religion and
nationality. The research shell expects to have some assistance from the ministry of
commerce and industry.

There are several constraints encountered in the process of carrying out this
research work and this includes:

i. Time Factor: The process of carrying out this research work is very exhaustive
and it needs special attention for concentration in collecting information. Data
and writing
ii. Finance: Carrying out a research work always involves huge financing for
gathering information such as the photocopying of materials, internet browsing,
transportation, typing etc
iii. Personal Limitations: Personal time available for recreation, resting and
washing are partly occupied by this study to meet up with the time for

submission.
iv. The method of gathering information was that of the questionnaire. In respect to
this research work, the problem of validity of answers given which could have
been personally done and not objectively can not be ruled out.
 v. The academic pursuit in terms of lecture that had to be attended to and which
compliments (fuller) findings such factors come to the fore because of root in
time as a constraint.
vi. Another limitation is the restrictive scope covered by the work, which is not
sufficiently a sample size of the whole population of Nigeria Bottling Company
plc. This again negates a fuller generalization of finding and recommendation
as lined in the research work.
1.9 DEFINITION OF TERMS

In order to make this study readable to all especially those academic band is not in
the area of investigation, this is marketing, all unfamiliar terms are aphetically
arranged and clearly defined as follow:-

ADDICTED: a habit that has become impossible to break.

ADVERTISING: this is any paid form of idea, goods or services by an identified

sponsor.

BACKWARD INTERGRATION: local sourcing of raw materials for production to

preserve foreign exchange and reduce importation.

CHANNEL: this is the route by which goods pass through from the producer to the
final consumers.

COUPONS: a voucher attached to good for sales indicating that payment will be
made.

DEPOT: this is a store where finished goods are kept.

EXHIBITION: displayed of items products e.g. trade fair.

FRANCHISE: this is the special right or freedom given by the produced by him.
GURU: a referred instrument for a highly respected instruction.

MARKETING MIX: terms used to describe combination of the four

elements/strategies that enhance the growth of a companys marketing system.

MASS PRODUCTION: production in great quantity of standing process.

PLANT: factory where products are manufactured.

PREMIUM: something that induces someone to buy our production.

PRODUCT SAMPLE: this is small size of the advertised product which is given
always free to prospective customers

ROUTING: this minimizing trained time for sales personnel.

MARKETING SEGMENTATION: this is a process sub-dividing a market into

distinct subset of customers, where any subset maybe selected as a focus market to
the reached with a distinct marketing system.

SWEEP-TAKER: process awarded according to the decisive of an even.

ULTIMATE USER: this is a term used for final consumers.

VISUAL MERCHANDIZING: this is used to urge the prospective customers to

buy a product.

CHAPTER TWO

LITERATURE REWIEW

2.0INTRODUCTION
Today, a good sales promotion programme alleviates consumers dissatisfaction
with respect to retail selling. The trend of money towards self services against the
use of sales people is prominent to the need for sales.

Sales have to be upgraded as technology charges. Consequently, sales promotion of

soft drinks becomes more important to the individual firm and society in general.

To survive declining sales and profit margin experienced by firms in the beverage
industry to heavy use of sallies promotion as survive tool to remain in business.
The end result of this is the mis-use of the promotional tool because the objectives
and timing of its use are wrong.

Rothchild and Gardes(1981) said behavioural thereby is relevant to marketing and

promotion. Sales promotion increases as the members of brands increase. Also the
competitive pressure for display space in store has increased resulting from the
demand of soft drinks and efforts from the suppliers.

2.1MODELS AND THEORIES RELEVANT TO STUDY

A popular slogan in marketing says that Nothing happens until sales are made.
Sales promotion is defined by the American Marketing Association as those
marketing activities other than personal selling, advertisement and public relation
that stimulate consumers purchasing power effective.

A lot is invested by the producer of soft drinks because profit is the underling
targets so as plant are made to stimulate buyers. They must also pass the breakeven
point, which is, making an effective rewarding profit.

Sales promotion in achieving its set objectives incorporate a lot of mechanism such
as will structured plan, programme, massive awareness, etc. this is done through
television and radio advert, pasting of posters erecting all billboards, newspapers,
placement and most importantly, easily understood themis and slogans e.g. Drink
coca cola, Always coca cola, 123 win promotion, coca cola family
bonanza.

Sales promotion as a free sampler stimulate consumers trail. Also free management
advisory service brings a long-term relationship with consumers.

2.2 DELIMITATION OF SALES PROMOTON

Rothchild and Guards (1981) supported this idea stipulating that sales promotion
managers have to guard against a tendency to every use the promotional device, as
it will cause an unwanted change in buying habit if long-term allegiance towards a
product delivered the promotional tool should not overshadow the profit they are
supporting. Profit is said to be the motive behind every business and for any
business to succeed, customers should be regarded as treated as ever important
actors.

Schew and Smith (1964) defined sales promotion as all those activities which we
typically can advertise but which do not use the mass media.

American association of advertising agencies (1979) defined sales promotion as

any activity which offers an incentive to buy a product beyond its interest benefit.

Philip Kotler (1987) was sales promotion as compressing a wide range of tactical
promotional tools of a short-term incentive nature designed to stimulate stronger
and longer market.

Manda (1995) defined sales promotion as generally non-repetitive activities

designed to promote sales.
 From the above de-functions one would see that different independent experts have
expressed the same thing in diverse approaches without any prejudice to one
another.

Sales promotion on soft drink market can be considered inevitably as it help to

increase sales volume, whichever definition one prefers, the objective of sales
promotion can be seen, which include the following:

I. To increase sales by generating extra interest

II. To encourage competition
III. To stimulate more traffic for buyer
IV. To supplement advertising
V. To introduce new users to exist sing products
VI. To act as an incentive to attract new customers
VII. To maintain market share
VIII. To increase the trail of products

However, budgeting allocation on sales promotion vary from industry to industry,

depending on the type of product, nature of the market, competition i.e. various
companies use different amount of sales promotion.

2.3 SYSTEMATIC APPROACH TO SALES PROMOTION

The marketing department organized a research on the implementation of the sales

promotion selected before it is being carried out to give an excellent result. The
processes are as follow:

I. Identification of problems
II. Examination of secondary data
III. Generation of primary data
IV. Data analysis
V. Evaluation
VI. Implementation of findings
 After these processes might have been adequately carried out, sales promotion
approach is being planned in phases.

A well planned sloes promotion should pass through the following phases:

I. Programme design phase

II. Selection/implementation phase
III. Evaluation phase
2.3.1 PROGRAMME DESIGN PHASE

Here, we are concerned with making decision on what methods should be used,
who and where to conduct the activities, the kind of sales promotion activities
we need and how to structure it. The environment of a place serves as an
important aspect for considering the types of sales promotion to be used.

2.3.2 SELECTION/IMPLEMENTATION PHASE

These deal with selection and implementation of the relevant sales promotion
activity. This is a crucial stage as factors for effective implementation should be
considered.

How to carry out the chose activity, the amount to spend, and how to implement it
are considered. It is a stage which a sales promotion activity should minimize
deficiency.

2.3.3 EVALUATION

Under the evaluation phase, a question is normally asked which is why sales
promotion. This simply means the reason for sales promotion, which are listed
below:

i. It encourages support of new models that is the introduction of new product.

ii. It stimulates sales in off season.
iii. It yields faster responses on sales than advertising.
iv. It attracts new brand user to try product newly introduced.

The activities of sales promotion should be a cost benefit analysis to the money
and other resources used on the type of sales promotion selected. That is the type
of sales promotion to be used should increase sales and be able to introduce new
product also to maintain market share.

The sales promotion activities must be well organized and polished in order to
attract customer so as not to allow the money spent on the sales promotional
activities go down the drain without achieving its objectives.

The manner in which various sales promotions is used or utilized will determine
the achievement of the organization. It is therefore not supporting that companies
are willing to put so much time, money and effort into sales promotion.

2.4 TYPES OF PROMOTION

Markets are faced with the problem of choice, that is, which sales promotion
activity is most appropriate for a particular situation.

Sampling is the given away of product to consumers. It is used to introduce new

product or to inform consumers about some features of the product which cannot
be conveyed through advertising.

It is the most expensive way to induce trials, that is, giving free samples offer
greatest change of motivating consumers to actually try the product.

Coupon is a certificate that consumers can bring to retail stores receiving in return,
some indicated savings or cash refund.

It is used to encourage product trial. It is more economical than sampling. It works

best with a target market consisting of older, Married, well-educated consumers.
Premium is a product offered free or at least than regular price in order to induce
the customers to buy another product. It induces customer to switch brands for
larger sizes of the product and to buy in the off-season premium is effective in
countering the distribution channel.

Sweepstakes are prizes awarded according to decision of an event. One of the

nigerian bottling company plcs sales promotion is sweepstakes of cash reward
corresponding to amount seen under the crown by the consumers (coca cola,
money, bags,flasks).

Point of purchase is used at the retail and is very effective at gaining consumers
attention. This includes displays, signs and other devices to attract attention which
are locate at the actual place of purchase.

This is helpful in introducing new product e.g. refrigerators, picnic boxes, kiosk,
etc.

2.5 FORMS OF SALES PROMOTION

There are many forms of promotion but the following would be identified:

I. Free samples
II. Premium
III. Price off and special sales
IV. Sales content
V. Free goods

FREE SAMPLES

This is an offer to a free sample on trial of a product to the consumer. The offer is
usually a miniture size of the profits and is expected to last much shorter than the
regular package. Sampling is the most effective and most expensive to introduce a
new product.

PREMIUM

This is low value items of merchandise that is offered as a bonus to purchasing of a

particular product. It may not be separated from the product package. Examples of
these as part of the products packages are:

I. A whistle inserted in a general box

II. A reusable container such a plastic container of 2.5 liters of coca cola.

PRICE OFF AND SPECIAL SALES

Price off promotion refers to various ways of reducing the price of a product
regular such as by straightening the price reduction in the package itself or by
selling three package at the price of two special sales on the other hand are
conducting by retail establishment at specific in the year and future attractive price
reductin on various items of merchandise. The offer last for a few weeks only.

SALES CONTENT

This type of promotion is arranged for distributors, retailers and their salesmen,
and designed to stimulate and motivate them greater performance. Price is awarded
may be cash or non-cash but be attractive enough to include participation by all
sellers.

FREE GOODS
It is an offer of a certain amount of product to wholesalers and retailers at no cost
to them but conditional on the purchases of a stated amount of the same or another
product.

II.6 OBJECTIVES OF SALES PROMOTION

Marketer utilizes sales promotion for a variety of reasons. A single sales promotion
activity may be employed to achieve one or several objects on the other hand,
several sales promotion activities may be required to accomplish a single goal and
set of goals.

Materials to the following objectives

I. Identify and attract new customer

II. To reduce a new product
III. To stimulate more traffic from buyers
IV. To combat or effect competitors
V. To increase the sales volume of the slow selling line
II.7 SALES PROMOTION PLAN

Mc Donald (1985) said that there must be a detailed promotional instruction that
must be followed as the marketing unfolds.

For the sales promotion plan, the objectives strategy anf brief details of timing and
cost should be included. It is important that too mush details should not appear on
the sales promotion plan. Detailed promotion instruction will follow as the
marketing plan unfolds. For example, the following checklist overtaking be
circulated. However, only an outline of this should appear in the promotional plan
itself.

Checklist promotion instruction:

HEADING CONTENTS
1. Introduction Briefly summarized content what,where and

when.

2. Objective Marketing/promotional for new launch.

3. Background Marketing date, justification for

technique other related matters.

4. Promotion offer Detail for offer, special pricing structure

describe premium, be brief ironies.

5. Eligibility Who and where?

6. Timing When is the offer available?
7. Date plan Assign dates irresponsibility for all aspects
of man prior to start date.
8. Support Special advertising, point of sales,
pressure, loafer, public relations etc.
9. Advertising Invoiing activity, free good invioce line,

depot stocks, premium.

10.Sales plan Target, incentive effect on routine, briefing,

Meeting telephone sales.
11.Sales presentation Point to be covered in call.
12.Sales reporting Procedure for collecting of requiredb data
not otherwise available.
13.Assessment How will the promotion be evaluated?
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 INTRODUTION

This chapter focuses on the practical efforts made to obtain meaningful

information of the purpose of this research work, the effects of sales promotion on
the soft drink industry (Nigeria Bottling Company plc). Our attention would be
based on the methods used in collecting data for this research work.

3.2 RESEARCH DESIGN

Nachmias and Nachmias (1982) said research design is described as a blueprint

that allows researcher to provide solution to the problems of where to study, what
to study and how to generate data in a research situation.

For the purpose of this research work, the researcher adopted the survey research
through the use of questionnaire and oral interview, research instrument, the
questionnaire gave the highest priority in this research work e.g. from library and
newspapers.

3.3 SOURCE OF DATA COLLECTION

 Data collection as defined by Gasly and Lurry (1984) is that which or it involves a
range of activities from the individual in library extracting information from
volumes of activities of statistics to learn. Data can be described as facts,
observation or information relating to the subject of a study. Data is information
about a thing, person or individual.

This information is normally obtained from published material or verbal

confirmation. There are many sources of collecting data but most prominent one is
through surely, which was mail, questionnaire, personnel interview, official
statistics, and administration of data. The first two sources were used to get the
primary data while the other ones provide the secondary data for the researcher.

In this research both primary source of data and secondary source of data were
used by the researcher in gathering material for the project work.

Primary Sources: it was gathered through structural questionnaire and

interviews couple with observation.

Secondary Source: Data were gathered from textbooks, journal, articles

reference, company magazines, bank annual report and this is already prepared by
others in the past.

3.4 DESCRIPTION OF THE STUDY POPULATION

The population of this study comprises of staff, distributors, customers and the
public in idda village Abuja bearing in mind that the entire Nigerian population is
likely to be influenced by similar environmental force.

III.5 SAMPLING PROCEDURE AND SAMPLE SIZE

DETERMINATION
A sample size of hundred (100) employees was chosen as the case study.

Sample size will be derive through the following method.

N
n= 1+ N ( e)
2

where n= Sample size

N= population size

e= margin of error (5%)

2
1+100(0.05 )
n= 100/

80

There was no discrimination in sampling the population

male and female, married and single throughout the

organization.

Total of Hundred (100) questionnaires were distributed and

eighty were return.

III.6 RESEARCH INSTRUMENT

The instrument used in the research is questionnaire that is research instrument
consisting of carefully prepared questions for gathering information from
respondents.

The questionnaire is the most commonly used method of gathering data for any
research. The result derived in answering the research question and in testing of
hypothesis.

This questionnaire contains the close-ended question, yes or no. the close-ended
questions used have answers which were drawn to facilitate simplicity and
features.

The questionnaire is divided into two sections I and II. Section I contains questions
relating to Bio-data of the respondents while section II contains questions that will
answer the research questions and validate the hypothesis.

III.7 TECHNIQUES OF DATA ANALYSIS

The data analysis was achieved through the statistical method of hypothesis testing
and usual presentation of data. The chi-square distribution was used for hypothesis
testing and usual presentation of data respectively.

Chi-Square is an important extension of hypothesis testing. It is used to

compare an actual observed distribution which is often referred to as
goodness of fit test.

The formula for the calculation of Chi- Square is:

(fofe)2
X2 =
fe
Where = summation

f 0 = Actual frequency

fe = Expected frequency

Expected frequency ( fe ) = Row Total X Column Total

Total number of Observation

The calculation value of X2 is compared with the degree of freedom

which is:
df = (r-1) (c-1)
X2 = Chi- Square
r = Number of Rows
c= Number of Columns
d= level of significance
If after the calculation, the value of X 2 is greater than the value of df,
the null hypothesis should be rejected and the alternative will be
accepted and vice versa.
 CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION