MULTIPLE CONSUMER BENEFIT OF SALES PROMOTION

ABSTRACT

The purpose of this study was to explore the “Multiple benefits of consumers sales promotion”, using a sample of employee’s / staff and students of university of Benin as sample. The vital contribution of the production or marketing sector or rather consumers sector of the Nigeria economy means it is crucial for companies to focus on consumers benefits of sale promotion so as to highlight it benefits to the final consumers. One means of doing this is to ensure product quality, price strategy, effectiveness of promotion, and ensuring availability of products that fits different income of individual customers.

In this research work the researcher investigates “multiple benefits of consumer’s sales promotion”, so as to highlight it benefits and relevance to the consumers and general public.

The data used were collected using question and short personal interviews and the data collected were analyzed using simple percentage and frequency and also t-test to test the hypothesis raised by the researcher, while analysis of variance was used to determine the effect of demographic / personal variables.

To encourage better participation of consumers in sales promotion among consumers, management should seek to adopt policies that focus not only on promotion but also provide adequate information, and promotional opportunities available to consumers.

Keywords: Multiple benefits, Products, Consumers, Sales promotion.

CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND TO THE STUDY

Marketers and academics often view the reliance on sales promotions, especially monetary promotions, as a suboptimal consequence of price competition caused by myopic management (Buzzell, Quelch, and Salmon, 1990). These critics argue that, in the short run, the proliferation of monetary promotions erodes their capacity to rent market share, which explains why so many are unprofitable (Abraham and Lodish, 1990; Kahn and McAlister,

1997). In the long run, it is feared that sales promotions increase price sensitivity and destroy brand equity—both with retailers and consumers (Mela, Gupta, and Lehmann, 1997). As a result, many industry experts are calling for more effective and cost-efficient promotions that rely less on price (Promotion Marketing Association of America Inc.,1994), and some go so far as to recommend eliminating most promotions by switching to an everyday-low-price policy (Kahn and McAlister, 1997; Lal and Rao, 1997).

The central premise of this research is that the value that sales promotions have for brands is related to the value, or benefits, that sales promotion have for consumers. Adopting this consumer perspective leads to the fundamental question of why consumers respond to sales promotions. Most econometric or game-theoretic studies assume that monetary savings are the only benefit that sales promotions have for the consumer. If this is true, an everyday low price may indeed represent an efficient solution for providing consumers with these savings while minimizing search costs for the consumer and logistical costs for the firm. Conversely, if, as this research argues, sales promotions provide consumers with an array of hedonic and utilitarian benefits beyond monetary savings, everyday low prices cannot fully replace sales promotions without the risk of alienating consumers who value the nonmonetary benefits of sales promotions.

1.2       STATEMENT OF THE PROBLEM

From a research perspective, the existence of multiple consumer benefits may also help explain some puzzling consumer responses to sales promotions that cannot be fully explained by the search for savings (e.g., Dhar and Hoch, 1996; Hoch, Drèze, and Purk, 1994; Inman, McAlister, and Hoyer, 1990; Schindler, 1992; Soman, 1998). Beyond its intended contribution to the general debate on the value of sales promotions or on the antecedents of consumer response to them, studying the consumer benefits of sales promotions has practical implications for improving their effectiveness. The existence of multiple types of consumer benefits provides a stepping stone for a benefit congruency framework, which argues that a sales promotion’s effectiveness is determined by the congruency between its benefits and those of the promoted product. In particular, the benefit congruency framework argues that because monetary and nonmonetary sales promotions offer different benefits, they should be more effective for different types of products.

Are monetary savings the only explanation for consumer response to a sales promotion? If not, how do the different consumer benefits of a sales promotion influence its effectiveness? To address the first question, this research builds a framework of the multiple consumer benefits of a sales promotion. Through a series of measurement studies (Pierre Chandon, Brian Wansink, and Gilles Laurent, 2000) found that monetary and nonmonetary promotions provide consumers with different levels of three hedonic benefits (opportunities for value expression, entertainment, and exploration) and three utilitarian benefits (savings, higher product quality, and improved shopping convenience). To address the second question, Pierre Chandon , Brian Wansink, and Gilles Laurent (2000) develop a benefit congruency framework, which argues that a sales promotion’s effectiveness is determined by the utilitarian or hedonic nature of the benefits it delivers and the congruence these benefits have with the promoted product. Among other results, two choice experiments show that, as predicted for high-equity brands, monetary promotions are more effective for utilitarian products than for hedonic products. Pierre Chandon, Brian Wansink, and Gilles Laurent (2000) then discuss the implications of the multi-benefit and the benefit congruency frameworks for understanding consumer responses to sales promotions, reexamining the value of everyday-low-price policies, and designing more effective sales promotions.

Therefore, the study looks at the following research questions:

1. What is the level of effectiveness of sales promotion?
2. How does consumers income affects sales promotion?

• How is the quality of various products determined?

1. What are the strategies used in setting price of various product?

1.3       OBJECTIVES OF THE STUDY

The purpose of the study of any research is the declaration of what the study seeks to achieve. They are usually the mirror image of the statement of the research problem.

The purpose of this study aims to examine multi-consumer benefits of sales promotion. The specific objectives are to:

1. To examine the effectiveness of sales promotion.
2. To determine consumers income.
3. To determine the quality of the various products.
4. To examine the strategy use in setting price of various product.

• 4 RESEARCH HYPOTHESES

The researcher tested the following null hypotheses;

1. There’s no significant relationship between income and effectiveness of sales promotion.
2. There is no significant relationship between income and product quality.
3. There is no significant relationship between income and pricing strategy.
4. There is no significant relationship between effectiveness of sales promotion and product quality.
5. There is no significant relationship between effectiveness of sales promotion and pricing strategy.
6. There is no significant relationship between product quality and pricing strategy

1.5       SCOPE OF THE STUDY

The scope of this research study would cover Benin City and environs, university of Benin The respondent are  students and staffs of the university of  non academic staff, academic staffs within and around university of  Benin city, Edo state, Nigeria.

1.6       SIGNIFICANCE OF THE STUDY

This research study would be relevant in the following ways; and also it will be relevant to the following individual, institution and group;

1. It will add to the existing or Bank of knowledge on this field of study .
2. It will be useful to the general public.

• It will be useful manufacturers

2. It will be useful to suppliers.
3. Higher institution.

• Print and electronic media
• Research institutions.

1.7      LIMITATIONS OF THE STUDY

There are several limitations to this very research study, which includes the following;

1. The study only covers Benin City and environs but ignores other states within the federation.
2. The sample size is not a true representation of the total population.

• Insufficient time.

1. Difficulty in getting views from renowned scholars in the department of Business Administration.