ST.

MARY’SUNIVERSITYCOLLAGEF

ACULTY OF BUSINESS

DEPARTEMENTOFMARKETINGMANAGEMENT

AN ASSESSMENT OF SALES PROMOTION PRACTICE IN THE

CASEOFAL-SAMPRIVATE LIMITED COMPANY

By

MERKEB TESFAMARIAM

JULY, 2013

SMUC

ADDISABEBA
AN ASSESSMENT OF SALES PROMOTION PRACTICE IN THE
CASEOFAL-SAMPRIVATE LIMITED COMPANY

A SENIOR ESSAY

SUBMITTEDTO THE

DEPARTEMENT

OFMARKETING

MANAGEMENT

BUSINESS

FACULTYST.MARY’SUNIVERSITYCOL

LAGE

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR

THEDEGREE OF BACHELOR OF ARTS IN

MARKETINGMANAGEMENT

BY:

MERKEB TESFAMARIAM

JULY, 2013

SMUC
ADDISABEBA
 ST.MARY’SUNIVERSITYCOLLAGE

AN ASSESSMENT OF SALES PROMOTION PRACTICE IN THE

CASEOFAL-SAMPRIVATE LIMITED COMPANY

BY:

MERKEB TESFAMARIAM

FACULTY OF

BUSINESSDEPARTEMENTOFMARKETINGMANA

GEMENT

APPROVEDBYTHECOMMITTEEOFEXAMINERS

DEPARTEMENTHEAD SIGNATURE

ADVISOR SIGNATURE

INTERNALEXAMINER SIGNATURE

EXTERNAL EXAMINER SIGNATURE

 ACKNOWKEDGEMENT

FirstandformostIwouldliketopraiseGODforeverythingthatIamnow.NextIwouldgreatlyliketothank

my advisor YalewGorfu for his tremendous guidanceforthisseniorpaper. I feel much

honored to have been his advisee through thesurveyof this study.

LastbutnotlistIwouldliketothankmybelovedfamilies for their unconstrainedsupport,financially

as wellas morally.
 TABLEOFCONTENT

CONTENTS
Acknowledgement.............................................................................................................I

Tableof Content................................................................................................................II

Listof table.........................................................................................................................III

CHAPTER

ONEINTRODUC

TION
1.1. Backgroundof the Study...........................................................................................1
1.2. Statementof the Problem..........................................................................................2
1.3. ResearchQuestions....................................................................................................3
1.4. Objectiveof the Study................................................................................................3
1.4.1. General Obj ective.........................................................................................3
1.4.2.Specific Objectives............................................................................................3

1.5.Significanceof the Study.............................................................................................3

1.6. Delimitationof the Study.........................................................................................4

1.7. ResearchDesignand Methodology............................................................................4

1.7.1. ResearchDesign......................................................................................................4

1.7.2. Populationand SamplingTechniques....................................................................4

1.7.3. Typesof Datato beCollected...................................................................................4

1.7.4. Methodof DataCollection.......................................................................................5

1.7.5. Methodof Dataanalysis..........................................................................................5

1.8Limitation of the study................................................................................................5

1.9.Organization of the Study..........................................................................................5

CHAPTERTWO
 REVIEWOFRELATEDLITRATURE
2.1. OverviewofSalesPromotion 6

2.1.1. Definitionofsalespromotion..........................................................................6

2.1.2. SalesPromotionObjective.............................................................................6

2.1.3. SalesPromotionalPushandPullstrategy.........................................................7
2.1.4. PlanningforSalesPromotion.........................................................................8

2.2. PromotionalMix................................................................................................8
2.2.1. Advertising...................................................................................................9
2.2.1.1. DefinitionofAdvertising.............................................9
2.2.2. PublicRelation...............................................................................................9
2.2.2.1. DefinitionofPublicRelation.......................................9
2.2.3. PersonalSelling.............................................................................................10

2.2.3.1. DefinitionofPersonalSelling........................................10
2.2.4. SalesPromotion.............................................................................................10
2.2.4.1. DefinitionofSalesPromotion.......................................10
2.2.4.2. ConsumerorientedSalesPromotion..............................................................11

2.2.4.2.TradeOrientedSalesPromotion.........................................................12
2.3. RoleofSalesPromotion......................................................................................13
2.3.1. BenefitsofSalespromotion....................................................13

2.3.2. BudgetAllocation...........................................................................................14
2.3.3. GrowthofSalesPromotion.......................................................15
2.3.4. SalesPromotionandConsumerbehavior..................................17
2.3.5. Culture and Consumer Behavior............................................18

CHAPTERTHREE

DATAPRESENTATION,ANALYSIS,ANDINTERPRETATION

3.1. CharacteristicsoftheStudyPopulation.................................................................19
3.2. AnalysisoftheFindingsoftheStudy......................................................................21
CHAPERFOUR
4.1. Summary..........................................................................................................35
4.2. Conclusion........................................................................................................36
4.3. Recommendation..............................................................................................37

APPENDIXES

Appendixes IEnglish

QuestionnaireAppendixes II Amharic

QuestionnaireAppendixes III

Interview ChecklistDeclaration
LIST OF TABLES PAGES

Table l.General characteristics of the Respondents.................................................21

Table 2.Knowing customers attitude.......................................................................22

Table 3.Sales promotion tool used by the company................................................23

Table4.Customer responsesdue to thecompany’s salespromotionpractice..............24

Table 5.Customers response towards the company’s rewarding effort...................26

Table 6.Collecting of feedback................................................................................27

Table7.Evaluation ofthe company’ssalespromotion practice..................................28

Table8.Suggestingcustomers...................................................................................29
 CHAPTER

ONEINTRODUC

TION

1.1. BackgroundoftheStudy

Promotion has been defined as the coordination of all sellers initiated efforts to setup channels
ofinformation and persuasion in order to sell goods and services or promote ideas. The basic
toolsusedtoaccomplishanOrganizationcommunicationobjectivesareoftenreferredtoaspromotional
mix.Promotionalmixincludesfourelements:-Advertising,Salespromotion,Publicity,Publicrelation
andPersonalselling.(Belch&Belch,2005).

According to Pride, (2008) sales promotion is an activity or material or both, that acts as a
directinducementofferingaddedvalueorincentivefortheproduct,toresellers,salespeopleorconsumers
. The incentives includes: demonstration, contests, price-offs, coupons, free
samples,moneyrefundoffers.Likewise,David.J,
(2004)pinpointedthatsalespromotionsareincentivetoconsumersorthetradethataredesignedtostimula
tepurchase,itincludestradediscounts,sales contests, trade allowance, training. Furthermore,
Kumar and Mittal,(2002) stated that salespromotion aims directly at inducing purchasers to buy a
product. It involves coupons, price
off,freesamples,specialpackage,demonstrationandmoneyrefundoffers.Salespromotionactivities
are designed to encourage consumers and traders to sell the product. It is different frompersonal
selling and advertising in the sense that sales promotion is non-recurrent in nature and isfora
shortperiod.

AL-SAM Private Limited Company, the mother company of LENA PLC, is a national
companyfounded by Mr. SabirArgaw, it was established in 1999 at a paid up capital of birr
2,000,000.00.The company is engaged in import, export, real state and domestic trade investment
followingthis objective, AL-SAM has succeed in forming a joint venture manufacturing facility
of itsleading brand B-29 soap in Ethiopia so as to create job opportunity and technological
knowhowtransfer. AL-SAM is known with its major brands Kiwi, Everedy and energizer dry cell
batteries,S-26infant formula, Colgate, Bic pen,Kannycream instant milk andmany more.
Sales promotion is intended to create an immediate response from the market, it consists of
allmarketing activities that attempt to stimulate quick buyer action or in other words attempt
topromoteimmediate salesofa product.( Hoffman.et.al,2005)

It’s through the effective implementation of sales promotion that the consumer will be
aware,persuaded and interested to buy the product so undertaking this research will help the
studentresearcher to assess the sales promotion practice of AL-SAM PLC and will help the
company tobemore successfulwithinitssalespromotion practice.

1.2.Statement of the Problem

Unlike other promotional mix sales promotion is an effective sales tool. Internal and
externalfactors have assistedin theadoption ofsalespromotion successfully. The other
promotionmedias are costly and not very effective, sales promotion is both economical and
effective.Moreover, sales promotion is more personal than mass advertising so that it provides
moreopportunitiesfor the development of sales.(Mishra.M, 2004).

According to Frain, (2004), Sales promotion complements the other communication

elements,especially in the field of fast moving consumer goods. It includes those activities
designed toencourage user-purchase at point of sale, to increase dealer effectiveness and to
reward customerloyalty, include in store-displays, demonstrations, and exhibition. Moreover,
lamb.et.al
(2005)statedthatsalespromotionisamarketingactivitythatstimulatesconsumerpurchasinganddealer
productivity through contests, demonstrations, discounts, exhibitions or trade shows,
pointofsaledisplays, andmerchandising, specialoffers,and similaractivities.

AL-SAM PLC is one of major companies engaged in distributing consumer goods that
requirehigh sales promotion. The company use sales promotion because of many reasons like,
whenthereisoverstocksituation,tointroducenewproduct,bywatchingcompetitorsattitudes,producta
warenesscreating.Apreliminaryobservationmadebytheresearchershowsthatthereis low sales
promotion budget and due to complacent the company give less attention to pull itsproducts
through customers only they have an attention in pushing its products through traders.
ThestudywastakentoassesssalespromotionpracticeofAL-SAMPLC.

1.3. ResearchQuestions

Thefollowing arethe basic researchquestions thatthe studentresearchertried togive answers:

• Whatisthecompany’ssalespromotionstrategylooklike?
• Whatare the feedbacksof business customerstowards the salespromotion practice?
• Whatkind of salespromotion tools does thecompany use topush its products?
• How does the case company allocate budget to its sales promotion practice?
l.4.Objectiveofthe study

Theresearchpaperhasbothgeneralandspecificobjectivesasstatedbelow.

1.4.1. General Objective

ThegeneralobjectiveofthestudyistoassessthesalespromotionpracticeinthecaseofAL-SAMplc.

1.4.2. SpecificObjectives

Thefollowingarethespecificobjectivesthatthestudentresearchertried togiveanswer.

• Toindicatewhatthesalespromotionstrategyofthecompanylooklike.
• Toidentifyfeedback ofcustomers towardsthe salespromotion practice.
• Topointoutwhatsalespromotiontools usesthecompany.
• Topoint out howthe case companyallocate budget toits salespromotion practice.
1.5. SignificanceoftheStudy
Thestudentresearcherbelievesthatthestudyprovidesthefollowingsignificance:
• It will help the company to analyze the different factors that affects their sales
promotionpractice.
• Itwillhelpthestudentresearchertodevelopherskillaboutresearchundertakings.
• It will give a clue for those who will be interested to conduct on in depth study on
theissue.
1.6. Delimitationofthestudy
This research has been focusedon sales promotion specifically trade sales promotion practices
ofAL-SAM PLC. This study covered the period from September 2008- April 2013 because
thestudent researcher will get a relevant information during this period, the company sales
itsproductstotradersalloverEthiopiabutaddressingallisdifficultsothestudentresearcherrestricted
only on the retailers in Addis Ababa within four areaslocated in Mesalemiya,Piassa, Kasanchis
and Merkato because the student researcher believes these four areas are mainmarket places.

1.7. ResearchDesignandMethodology

1.7.1 ResearchDesign

In this research paper descriptive research design has been primarily used, because the
studentresearcher believes it helps to describe the main feature of sales promotion practice in
AL-SAMPlc.

1.7.2. PopulationandSamplingTechnique

In this study retailers and Marketing Manager of AL-SAM PLC were considered as
participantsof the study. Because of the fact that the exact number and list of the retailer is not
known thestudent researcher used non-probability sampling approach, based on the
recommendation givenby Malhotra (2006) and a total number of 200 respondents were taken as a
reliable sample size.The student researcher used convenience sampling technique or accidental
sampling because ithelpsto choose samplesbasedon the respondents conveniencesin terms of
timeand place.

1.7.3. TypesofDataCollected
The student researcher uses primary and secondary data source. The primary data was
collectedbyconductingpersonalinterviewwiththemarketingmanagerandquestionnairehasbeendistri
butedtotheretailerrespondents.Thesecondarydatawerecollectedfrombooksandcompany records.
1.7.4. MethodofDataCollection

Thestudentresearchercollectedprimaryandsecondarydata.Theprimarydataconsistsofqualitative and
quantitative data. The qualitative data was collected from marketing manager
byconductinganinterview.Toobtainquantitativedatathestudentresearcherdistributedquestionnairest
oretailerrespondents.Thesecondarydatawascollectedfrompublication,broachers, and company
records.

1.7.5. DataAnalysisMethods
To analyze data obtained through questionnaire the student researcher quantitative approach.
Tosummarizedata,percentageandtableswereused.Moreover,thestudentresearcherusedqualitativean
alysisforallqualitativedatathatwascollectedfromaninterviewthatwasconducted with the manager
and data that has been collected from an open ended question of thequestionnaire.

1.8. Limitationofthestudy
While conducting the study, the student researcher had experienced certain limitations,
amongothers, the following are the major limitations encountered by the student researcher:
somerespondents were not able to complete the questionnaire, the time schedule outlined to
collect
thequestionnairewasnotmatebecauseofrespondents,furthermore,therewasconstraintandavailability
of information from the corporation’s side.

1.9. OrganizationoftheStudy
Thispapercontainsfourchapters.Thefirstchapterdealswithintroductionwhichinclude:background of
the study, statement of the problem, research questions, objective of the study,significance of the
study, delimitation of the study, research design and methodology, method ofdata collection,
types of data to be collected, data analysis method and organization of the study.The second
chapter contains review of literature; the third chapter contains presentation,
analysisandinterpretationofdata.Thelastchaptercontainssummary,conclusionsandrecommendation
s.
 CHAPTERTWO
REVIEWOFTHERELATEDLITRATURE
Theimportanceofthissectionistoreviewliteraturerelatedtothestudy.Therefore,theresearcher tries to
see the work of different writers regarding sales promotion and
definition,objective,significance,formsof salespromotion andits strategies.

2.1. OverviewofSalesPromotion

2.1.1. DefinitionofSalesPromotion

According to Brassington and Pettitt,(2005), Sales promotion is a range of marketing

techniquesdesigned within a strategic marketing framework to add value to a product or service
over andabove the ‘normal’ offering in order to achieve specific sales and marketing objectives
this extravalue may be a short-term tactical nature or it may be part of a long-term franchise-
buildingprogram.Furthermore, Mullins, (2004) stated that designed to boost the sales of a product
orservice it may include advertising campaigns, increased public relations activity, setting
upcompetitions with attractive prizes, free-sample campaign, offering free gifts, temporary
pricereduction, demonstrations or exhibitions, door-to-door calling, and other. Likewise, Ensor
andDrummond, (2006) pin pointed that sales promotions are incentives, inducements and point
ofsalematerialdesignedtostimulatetradeand/orconsumerdemand,includesfreesamples,discountvou
chers, demonstrations and exhibition.Furthermore,

2.1.2. SalesPromotionObjectives

According to Jobber, (2004) the most basic objective of any sales promotion is to provide
extravaluethatencouragespurchase.WhentargetedatconsumerstheintentionistostimulateConsumer
Pull; when the trade is targeted Distribution Push is the objective. Specific salespromotion
objectives are:

i. Fast sales boast- promotions that gives large immediate benefits, such as money off
orbonus packs have bigger effects on sales volume than more distant promotions such
ascompetitionsor self-liquidations.
 ii. Encourage Trial- sales promotion can be source full by encouraging trial. If new
buyerslike the brand, the long-term effect of the promotion may be positive.
iii. Encourage repeat purchase- any offer that require the collection of packet tops or
labels( e.g. Free mail-ins and promotions such as bingo games) is attempting to raise
repeatpurchaseduringthepromotionalperiod.Loyaltycardsaredesignedtoofferconsumersani
ncentive to repeat purchase at a store.
iv. Gain distribution and shelf space- trade promotions are designed to gain
distributionand shelf-space. Discounts, free gifts and joint sales promotion are methods
used toencourage distributors to stock brands. Also, consumer promotions that provide
sizeableextravalue mayalso persuadedistributors to stockor giveextra shelfspace.

2.1.3.Sales Promotional Push and Pull

StrategyPushstrategy

According to Kotler et.al, (2005), push strategy is a promotion strategy that calls for using

thesales force and trade promotion to push the product through channels. The producer promotes

theproducttowholesalers,thewholesalerspromotetoretailersandtheretailerspromotetoconsumers.

Furthermore, Boone and Kurtz, (2005)pointed that the objective of push strategy ispromoting the

product to the members of the marketing channel rather than to final users. Toachieve this,

marketers employ cooperative advertising allowances, trade discounts, personalsellingefforts by

salespeople and other dealersupports.

Pullstrategy

Is a promotion strategy that calls for spending a lot on advertising and consumer promotion
tobuild up consumer demand. If the strategy is successful consumers will ask their retailer for
theproduct, the retailers will ask the wholesalers, and the wholesalers will ask the producers
ormanufacturers.(Kotler.et.al , 2005)
2.1.4. PlanningforSalesPromotion

According to Palmer, (2004) effective sales promotion involves an ongoing process with
anumberof stages:

1. Establishingobjectives-
ifthetargetisthecustomer,objectivecouldincludetheencouragement of increased usage or
the building of trial among non-users or other brandusers. If the target is intermediaries,
objective could be to encourage off-season sales, oroff-selling competitive advantage.
2. Planning the sales promotion programme- this is related to the timing and how longthe
sales promotion tools are to be used. Also important are the size of the incentive, rulefor
entry and the overall budget for the promotion.
3. Selection the promotion tools- selecting the most appropriate tools require assessing
thecost and effectiveness of each tools.
4. Pre-testing- this should be undertaken in order to ensure that potentially
expensiveproblems are discovered before the full launch of a promotion.
5. Implementation- implementation includes two time factors. first, the ‘lead time’-
thetime necessary to bring the pragramme up to the point where the incentive is to be
madeavailable to the public. Second, the ‘sell-in time’, which is the period of time from
thedate of release to when approximately 90 percent of incentive material has been
receivesby potential customers.
6. Evaluation- at last, the performance of the promotion needs to be assessed against
theobjectiveset.

2.2. Thepromotionmix
Promotional mix is one of basic instruments of marketing that has a purpose to inform
aboutother instruments of marketing mix and to contribute to sales increase on the long term.
Thepromotion is always serving to specific goal. These goals can be public informing,
demandincreasing, product differentiation, and product value increasing or sales stabilizing.
Promotionmixiscombinationofpersonalselling,advertising,publicrelationandsalespromotiontoreac
ha target market. The proper promotional mix is the one that management believes will meet
theneeds of the target market and fulfill the organizations overall goals.(lamb.et.al ,2006)
Types of Promotional Mix

ThereareFivetypesofpromotion.

i. Advertising
ii. Public relation

iii. Personalselling

iv. Directmarketing

v. Salespromotion

2.2.1. Advertising

2.2.1.1. DefinitionofAdvertising
Advertising is any paid up form of non-personal presentation and promotion of ideas, goods,
orservices by identified sponsor. Advertising can be a cost-effective way to disseminate
messages,whetherto build a brand preferenceor to educate people. (Kotler.P.and Lane.K ,2006)

Advertising is a promotion via an advertisement in a chosen advertising medium,

guaranteeingexposure to a general or specific target audience, in return for an advertising rate
changed by themediaowner plusthe cost ofproducing the advertisement.(Kumar.N. and
Mittal.R,2002)

Advertising is any form of paid communication in which the sponsor or company is

identified.Traditional media such as, television, radio, magazines, books, direct mail and bill
boards aremostcommonly used to transmit advertisement to customers. (McDaniel. et.al ,2006)

2.2.2Public relation

2.2.1.2. DefinitionofPublicRelation

According to kotler.et.al, (2005) Public relation is building good relationship with the
company’svarious publics by obtaining favourable publicity, building up a good ‘corporate
image’ andhandling or heading off unfavourable rumors, stories and events. Major public
relation
toolsincludepressrelations,productpublicity,corporatecommunication,lobbying.Moreover,Pride,
(2006) described that public relation is a planned and sustained effort to establish andmaintain
goodwill and mutual understanding between an organization and its target publics.Also,
Jefkins,
(1983)givesareviseddefinition’publicrelationistheartandsocialscienceofanalyzingtrends,predicting
theirconsequences,counselingorganizationleaders,andimplementing planned programs of action
which will be serve both the organization and publicinterest. Correspondingly McDaniel.et.al,
(2006) indicated that public relation is the element
inthepromotionalmixthatevaluatespublicattitudes,identifiesissuesthatmayelicitpublicconcern,and
executes programs to gain public understanding and acceptance.

2.2.3. PersonalSelling

2.2.1.3. DefinitionofPersonalSelling

AccordingtoBelchandBelch,
(2003)personalsellingisaformofpersontopersoncommunicationinwhichasellerattemptstoassistand/
orpersuadeprospectivebuyerstopurchase the company’s product or service it involves direct
contact between buyers and sellers,either face to face or through some form of communication.
Personal selling is also involvedmore immediate and precise feedback because the impact of the
sales presentation can generallybe assessed from the customers reaction. Moreover,
Hoffman.et.al, (2005) indicated that personalselling is person to person communication in which
a seller informs and educates prospectivecustomers and attempts to influence their purchase
choice. Similarly, Ensor and Drummond pinpointed that personal selling is the process of
identifying customer needs and matching suchneeds with the benefits offered by a providers
products the process consists of direct person topersoninteraction and communication.

2.2.4. SalesPromotion

2.2.4.1. DefinitionofSalesPromotion

According to Brassington (2000) Sales promotion is one of four key marketing

communicationtools, along with advertising, public relations, and personal selling. It offers a set
of tacticaloptions that can be uses separately or in combination. Although these tactics are
constantlyevolving, they continue to fall into two broad categories: consumer and trade.
Moreover, Kotler(2006) stated that sales promotion is a key ingredient in marketing campaigns
and consists
ofincentivetools,mostlyshorttermdesignedtostimulatequickerorgreaterpurchaseparticular
products or services by consumers. Sales promotions programmes are those activities other
thanstimulate consumer purchase. Additionally, Jonathan.et.al (2004) indicated that sales
promotionis incentive-offering and interest-creating activities which are generally short-term
marketingevents by motivating, stimulating, and influencing the purchase and other desired
behavioralresponses of the firm’s customers other than advertising, personal selling, publicity
and directmarketing.

TypesOfSalesPromotion

2.2.4.2. ConsumerOrientedSalesPromotion

A sales promotion designed to stimulate consumer purchasing. It may offer samples,

rebates,gifts, high value trade-in credit, coupons etc.

AccordingtoKotler.et.al,(2005)consumerpromotionmaybeusedto:

1) Increaseshort-termsales
2) Helpbuildlong-termmarketshare
3) Entice consumers to try a new product
4) Lure consumers away from competitor’s products
5) Encourage consumers to ‘load up’ on a mature product
6) Holdandreward loyalcustomers

Consumerpromotiontools

Samples-Offersaconsumeroftrialamountofaproduct.

Coupons-certificatesthatgivesbuyersasavingwhentheypurchaseaproduct.

Cashrefundoffers(rebates)-
offerstorefundpartofthepurchasepriceoffaproducttoconsumerswhosend‘proof of purchase’ to the
manufacturers.

Pricepacks- reduced pricesthat are markedby the producerdirectly on the labelor package.

Premiums-goods offered either free or at lower cost as incentive to buy a product.

Advertisingspecialties-usefularticlesimprintedwithanadvertiser’sname,givenasgiftstoconsumers.

Pointofpurchasepromotion(pop)-
displaysanddemonstrationsthattakeplaceatthepointofpurchaseor sale.

Productwarranties-
explicitandimplicitpromisesbysellersthattheproductwillperformasspecifiedorthatsellerwillfix
itorrefundthecustomer’smoney duringaspecificperiod.

Competitors,sweepstakeslotteriesandgames-
promotionthatofferscustomersthechancetowinsomething-cash,goods or tripsby luck or extra
effort.

2.2.4.3. Trade Promotion

Trade promotion encourages buyers to buy a large quantity of the product. Also known as
buyingquantity. It is also known as buying allowance because it is an offer of some discounts on
item ofpurchase above a minimum quantity. (Mishra.M. 2004).

Accordingtokotler.p.et.al(2005)objectiveoftrade promotionincludes:

1) Motivatingretailerstocarrynewitemsandmorestock
2) Inducingthemtoadvertise theproductandgive itmoreshelfspace
3) Persuadingthemtobuyaheadand
4) Newproductlaunch

Trade Promotion Tools

Accordingtolamb.et.al,(2000)salespromotiontoolscanbe:

Trade Allowance- is a price reduction offered by manufacturers to intermediaries such as,

fordistributingsomethingspecific.E.g.allocatingspaceforanewproduct,buyingsomethingduringspec
ialperiods.

Push money- intermediaries receive push money as a bonus for purchasing the
manufacturer’sbrand through distribution channel.

Free merchandize- offers to retailers free merchandise in lieu of quantity discounts.

Tradeshowsandconventions-industryassociationsorganizeannualtradeshowsandconventions.
Firms selling products and services to the particular industry buy space and set upbooths and
displays to demonstrate their products.

Sales contents- aims at including the sales force or dealers to increase their sales results over
astatedperiod withprizes goingto those whosucceed.

Training- Train intermediary’s personnel if the product is rather complex.

2.3. RoleofSalesPromotion

The role of sales promotion is to provide an incentive to consumers and or/ trade buyers

topurchasethefirm’sproductrightaway.Especiallywhendirectedtoconsumers,itcanalsohelptoencour

agebrandswitching,thisisdifferentfromadvertising,whichisusedtobuildaproduct’svisibilityandenha

nceitsimagesovertime.Salespromotionisgenerallylessexpensive, effective and easier to track and

quantify.(belch and belch, 2005)

2.3.1. BenefitsofSalesPromotion

AccordingtoShultzandRobinson,(1998)salespromotionadvantagesincludes:

• A sales promotion increase sales in the short-term bringing in higher revenue to

thebusiness.
• The word ‘sale’ often attracts new segments of the market who are attracted to the idea
ofgetting bargain.
• Salescancreate abuzz aroundthe storethatcan increasefootfall andpurchase.
• Salespromotionsencouragewordofmouthmarketing.
• Sales promotion creates differentiation, when you launch new product or ask
customerstoengage withyour business inanew days, thissetsyou apartfrom your
competition.
• Creates new content and communication opportunities, one of the easy way to
createcontent for your customers is to create news.
 • Drives customers decisions, limited availability offers can create a sense of
urgencybuying.
• Createstrainingactivityforyourstaffs.
• Create testing opportunity
• Growth revenue, sales promotions are a great way to build year-over-year and month-
over-month revenue growth.

2.3.2. Budgetallocation

Budget allocation depends on number of factors, including the specific promotional objectives
ofthe campaign, the market and competitive situations, and the brand’s stage in its life cycle. In
theintroductory stage, a large amount of the budget may be allocated to sales promotion
techniquessuchassamplingandcouponingtoinducetrial.Inthegrowthstage,however,promotionalmo
neymay beusedprimarily foradvertising tostress branddifferences and keep the brandname in
customer’s mind. When a brand moves to the maturity stage, advertising is primarily areminder
to keep customers aware of the brand. Consumer-oriented sales promotion such ascoupons,price-
offs,premiums,andbonuspacksmaybeneededperiodicallytomaintainconsumerloyalty,attractnewus
ers,andprotectagainstcompetition.Tradeorientedsalespromotions are needed to maintain shelf
space and accommodate retailers demands for bettermarginsas wellas encourage them to promote
the brand.(Kotler, 2006).

According to Frank, (1983) there are five techniques that determine/allocate funds to
salespromotion:

1. Percentageofsalesmethod

The percentage of sales is used to determine the promotional budget of the company, so
thecompany more or less pull certain percentage of the sales made in a fixed period it can be for
saylastyear or for severalpast years.

2. Unitofsalesmethod

HerethebaseisUNITSofsalesthataremade.Thefiguresofinitsmultipliedbyfixedamountof money to
reach the budget amount.
 3. Competitive parity method

The logic attributed of this method is that the collective minds of the companies in the
industryprobablygeneratepromotionbudgetthatareclosetooptimalandanydeparturefromtheindustry
norms may lead to promotion war.

4. Allyou canafford method

In other words it means all you are left with, so all that is left after all other relevant
allocationshave been made, this approach is used by small companies with small budget or may
be by someotherfirms that are big whenthey are introducing the new product.

5. Objective endtask method

In this approach, first a thorough study will be done ( understanding the market, the product,
theofferings,themostcrucialcompetitionandconsumerbehaviorinorder toset the
ultimatepromotionobjectives.Theseobjectivesmayrelatedtoreachshorttermsalesobjectives,ultimate
ly drives sales, introducing new product, stimulate trial, etc. within a specific time. Nowyou
determine how much money would be required to fulfill each of these tasks in order toachieve
these promotion objectives.

2.3.3. GrowthofSalesPromotion

Salespromotiontoolsareusedinorganization,manufacturers,distributors,retailers,tradeassociationsa
ndnot-for-
profitinstitutions.Theyaretargetedtowardfinalbuyers(consumerpromotion),retailersandwholesaler
s(tradepromotions),businesscustomers(businesspromotion)and memberofthe sales force (sales
force promotions). Today, in the averageconsumer packaged-goods company, sales promotion
accounts for 76 percent of all marketingexpenditures.(Kotlerand Armstrong,2008).

AccordingtoJobber,(2006)reasontothegrowthofsalespromotionsare:

• Increasing competition

Duetoincreaseincompetitionsitisincreasinglydifficulttocompeteonquality,theyarethereforerestorin
g to more and innovation methods of salespromotion.
 Consumers acceptance

As competition intensifies and promotions proliferate, consumers have learnt to earn the
rewardsofbeing smartshoppers.

• Expectation of price decrease

With the entry of many different brands of consumer durable products in the same
productcategory, consumers anticipate that the price will come down. This encourages them to
postponetheir purchase. To speed up the purchase in this segment of consumers, sales
promotions are aneffective and attractive method. Consumer evaluate the incentives associated
with their purchasedecisionand are motivated to act now, rather thanwaitfor the anticipated
decrease in price.

• Advertisingismoreexpensiveandlesseffective

All the advertising media have become quite expensive. Sales promotion is a more cost-
effectivepromotionmethod to produce salesresults.

• Trade has become more power

Retailers and wholesalers have become andfindthemselvesinapositiontodemandmemb

powerfulextra facilities from the companies. The ers demand more incentives to get the
channeldesired result.

• EmphasisonSalesVolume

Compared to other promotional method, sales promotion is a more method to generate short-
termsalesvolume.

• SalesPromotionMaximizeProfit

Acompanycanmaximizeprofitsbyusingsalespromotion,suchpromotionscanpermitpricediscriminat
ionby allowingthe brand tocompete intwo or moredifferent marketsegments.
 Introducing an Element of Interest

Interestpromotiontechniquesaresamples,contests,andsweepstakes,freepremiumsandmail-in
premiums these promotions create an element of interest and excitement that customers enjoyit.

• ExcessStocks

Because of increasing number of brands, it is difficult for manufacturers and dealers to

anticipatefuture sales, This, at times, leads to excessive inventories, and quickest way to clear
that, is to goforsalespromotion.

2.3.4. SalesPromotionandConsumerbehavior

According to Blatteberg and Neslin (1990) sales promotions are action-focused marketing
eventswhose purpose is to have a direct on the behavior of the firm’s consumers. There are three
majortypesofsalespromotions;consumerpromotion,tradepromotionandretailpromotion.Moreover,
Brassington and Pettitt, (2000) provide a revised definition for sales promotion ‘ arange of
marketing techniques designed within a strategic marketing framework to add extravalue to a
product or service over and above the ‘normal’ offering in order to achieve
specificsalesandmarketingobjectives.Thisextravaluemaybeashort-termtacticalnatureoritmaypart
of a longer-term franchise-building program.

Sales promotion generally works on a direct behavioral basis rather than effecting awareness
orattitude. Business consumers are larger than individual consumers, meaning that each
businessconsumersismoreimportanttotheeconomicsituationofthebusinessmarketerscompany.Ther
e are also few business, so each business consumers is also more important to the
economicsituations of the company; unhappy consumers can affect the business marketers
business in anoteworthyway.(Palmer.A,2004)
2.3.5.Cultureandconsumerbehavior

Culture has significant effect on the behavior of individuals; the culture may have
possibleimpact: perception, motivation, learning and memory, age, self-concept, group
influence, socialclass, sex roles, attitude change, decision making, purchase and post-purchase
behavior. Brandloyaltymight beinfluenced bycultural values.(Schiffman.G andKanuk.L,2004).

Perception- is the process by which a person selects, organizes and interprets information.
Whenconsumers collect information about a high-involvement service such as a cruise, they
follow aseriesof stepsora hierarchy ofefforts.(Kotler and Armstrong,2005).

AccordingtoMooji,(2004)socialcharacteristicsofconsumersare:

Culture- is the set of values, norms, attitudes and other meaningful symbols that shape
humanbehavior, as well as the artifacts, or products, of that behavior as they are transmitted from
onegeneration to the next.

Subgroup- isa homogenousgroup ofpeople whoshareelementsunique totheir owngroup.

Sub culture-is a distinct cultural group that exists as an identifiable segment within a large,
morecomplexsociety.

Reference groups-is one that influences a person’s thoughts or actions. For many goods
andservices references groups have an important impact on purchase behavior. A reference
groupmay be aspiration, membership or disactive. An aspiration group is one to which a person
doesnot belong but wishes to belong such as fraternity, professional society or a social club.
Amembership group i.e. one to which the person does not want to belong such as an
unpopularsocialgroup, schooldropouts or a low achievementgroup.

Opinion leaders- these are people to whom other consumers turn for advice and information
viaface to face communication. Opinion leaders turn to be spent about a product category,
socialaccepted, long standing members of the community, gregarious, active, and trusted and
tend toseek approval from others. Opinion leaders normally have an impact over a narrow range
ofproducts,theyareperceivedasmore crediblethancompanysponsoredsourcesof information.
Family- family is an orderly series of stages through which consumer’s attitudes and
behavioraltendenciesevolve, through maturity, experience andchanging income and status.

i. Social class- is a group of people who are considered nearly equal in status or
communityesteem, whoregularly socializes among themselves bothformally and
informally andwhosharebehavioral norms.
ii. Upperclass-consistsoftheveryrichandwell-to-do.
iii. Middleclass- middle class consumers have a much different perspective on life.
iv. The working class- the working class depends heavily on relatives and community
foreconomicand emotional support.
v. Thelower class- fall at or below the poverty level.
 CHAPTERTHREE

DATAPRESENTATION,ANALYSIS,ANDINTERPRETATION
This chapter deals with data presentation, analysis and interpretation of data gathered
fromquestionnairesandinterviews.Inordertocollectresponsesrelatedwiththesubjectunderconsiderati
on, 200 questionnaires were distributed to be filled by retailers who directly relatedwith the
study. However, among the sample questionnaires distributed only 175 questionnaireswere
collected that being filled out by retailers who were willing and able to cooperate, 25 ofthem
were not able to fill because of unknown inconvenience. Finally, interviews was made
withthemanager of AL-SAMand willbe dealt accordingly as part ofthis chapter.
Table1:GeneralCharacteristicsoftheRespondents

Item Question DemographicDistribution

Frequency Percent (%)

Gender
Male 102 58%
1.
Female 73 42%
Total 175 100%
Age
18-25 30 17%
2. 26-30 36 21%
31-36 56 33%
37-42 32 19%
Above42 19 11%
Total 175 100%

Education Background
Grade12complete 91 52%
3. Below 12 8 5%
Certificate 39 22%
Diplomalevel 14 8%
Degreeandabove 23 13%
Total 175 100%
Experienceinthefieldofthebusiness
1-2 years 46 26%
4. 3-5 years 83 47%
6-8 years 38 22%
9-above 8 5%
Total 175 100%
According to item 1 of table 1 in the previous page, which indicates gender of
respondents,102(58%) of the respondents indicated that they are male, while the remaining
73(42%) of therespondents were female. Based on the data, most of the questionnaires were
filled by malerespondents.

Accordingtoitem2oftable1inthepreviouspage,whichdesignatesagecategoryofrespondents,
30(17%) of the respondents specified that they are between 18-25years, 36(21%) ofthem said
they are between 26-30years, 56(33%) of them point out that they are between 31-36years,
32(19%) of the respondents stated that they are between 37-42years, whereas the restsaid they
are above 42. Based on the data indicated above the student researcher understands thatmajority
of respondents age category found between 33-36 years.

Asindicatedinitem3oftable1ofthepreviouspage,whichindicateseducationalqualificationof
respondents, 91(52%) of the respondents indicated that they are below 12, 8(5%) of them
saidthey are grade 12, 39(22%) of them pointed out that they have certificate, 14 (8%) of them
saidthey are diploma holders, while the rest 23(13%) of the respondents pin pointed that they
aredegree and above holders. From the above data the student researcher can infer that majority
ofthe respondents are below grade 12.

According to item 4 of table 1 of the previous page, which indicates respondent’s experience
inthefieldofthebusiness,8(5%)oftherespondentsindicatedthatfrom1-2years,83(47%)ofthem said
from 3-5 years, 38(22%) of the respondents point out from 6-8 years, whereas
theremaining46(26%) of the respondents said9 and above.
Table 2.Knowing customers attitude.

Item Question Number Percent(%)

1. ForwhatreasondoyoupurchasefromAL-
SAMplc.?
• Qualityoftheproduct 40 23%
• Reasonablesellingprice 51 29%
• Because of the reward 84 48%

Total 175 100%

According to item 1 of table 2, respondents were asked their reason for buying a product
fromAL-SAM.Tothisend,40(23%)saidbecauseofthequalityoftheproduct,51(29%)indicatedthat the
reasonable selling price, while the remaining 84(48%) of the respondents indicated
thatthereasonforbuyingtheproductfromthecompanyisthereward.Thisimpliesthattherespondentswe
reattracted by the company’s promotion practice to buy a product.

Table3.Salespromotiontoolusedbythecompany.

Item Question Number Percent(%)

1. Whatkindofincentivesdoesthecompanyoffers
you?
Trade allowance 31 18%
Pricediscount 47 27%
BOGOF 77 44%
Salescontest 11 6%
Training 9 5%
Total 175 100%
According to item 1 of table 3, in the previous page, 31(18%) of the respondents
customersindicated that they receive trade allowance from the company, 47(27%) of the
respondentscustomerssaidtheyreceivepricediscount77(44%)ofthempointedthattheyreceiveBOGO
F(buy one get one free), 11(6%) of the respondents said that they receive sales contestwhile the
remaining 9(5%) of the respondents pin pointed that they receive training. Based on thedata
indicated above the student researcher can infer that the majority of the business customersof the
receive BOGOF (buy one get one free) method, this implies that the company
rewardsintermediariesbut mainly focused on this method.

Tabel4.Customerresponsesduetothecompany’ssalespromotionpractice.

Item Question
Verygood Good Medium Low Verylow Total
Trade allowance
1. • Noof respondents 77 48 50 175
• Percentage(%) 44% 27% 29% 100%
Pricediscount
2. • Noof respondents 77 59 39 175
• Percentage(%) 44% 34% 22% 100%
BOGOF(buy one get one free)
3. • Noof respondents 153 22 175
• Percentage(%) 87% 13% 100%

Salescontest
4. • Noof respondents 53 45 47 30 175
• Percentage(%) 30% 26% 27% 17% 100%
5. Training
• Noof respondents 59 73 43 175
• Percentage 34% 41% 25% 100%
According to item 1 of table 4, respondents were asked how much they are attracted to
tradeallowance 77(44%) of respondents responses replied very good, 48(27%) of respondents
repliedgood and 50(29%) of respondents said medium, none of respondents responses neither
low norverylow. This implies most of respondents wereattracted.

According to the above findings of item 2 table 4, respondents were asked how much they
areattracted to price discount ,77(44%) of respondents responses very high, 59(34%) of
respondentsresponsesgoodand39(22%)ofrespondentsaretheremainingandnoneofrespondentsrespo
nses neither low or very low.

From item 3 of table 4, respondents were asked how much they are attracted to BOGOF (buy
oneget one free), 153(87%) of respondents responses very high and the remaining 22(13%)
ofrespondents responses good, the student researcher understands that majority of responds
veryhigh this implies that the company’s business customers are highly attracted by BOGOF(buy
onegetone free) salespromotion tool.

Regardingtheabovetable4item4,respondentswereaskedhowmuchtheyareattractedbysales contest,
53(30%) of respondents responses very high, 45(26%) of respondents responseshigh, 47(27%) of
respondents responses medium and the remaining 30(17%) responses low.

According to item 5 of table 4 in the previous page, respondents were asked how much they
areattracted by training, 59(34%) of respondents responses very high, 73(41%) of
respondentsresponses high, and the remaining 43(25%) responses low.

Ingeneral,thestudentresearchercaninferthatthemajorityofthebusinesscustomerrespondents of AL-
SAM plc. are highly attracted by BOGOF (buy one get one free) although
thecompanyisusingthismethodwidely,thisimpliesthatthecompanyishighlyattractingcustomers by
offering an extra good.
Table 5.Customers response towards the company’s rewarding effort

Item Question Noof respondents Percent(%)

1. Doesthe reward initiateyou to buy moreof the product?

Yes 153 87%
No 22 13%
Total 175 100%

2. Ifyes, whatdothink your feedbackof the reward?

Icarry newitems andi stockmore 57 37%
Igiveitmoreshelfspace 43 28%
I persuade the buyers to buy the product 53 35%
Other 0 0
Total 175 100%

3 IfAL-SAMstopsgivingthereward?
Iwillnot purchaseanymore 85 60%
Iwillstillbuytheproduct 57 27%
Idon’t know whatI am goingto do 33 13%

Total 175 100%

Accordingtotheabovetable 5 of item 1, Respondentswere asked whether thecompany’sreward

initiated them to buy more of the company’s product or not, 153(87%) of respondentsindicated
that they are initiated, while and the remaining 22(13%) of the respondents pin pointedthat they
are not initiated. Based on the above data the student researcher understands that
themajorityofthecompany’sbusinesscustomersareinitiatedbythecompany’smethodofrewarding.
Regardingto theabove table 5ofitem 2,respondents wereasked theirfeedback about thereward, 57
(37%) of respondents said they carry new items and stock more, 43(28%) respondentssaid they
give it more shelf space, the remaining 53(35%) respondents said they persuade buyersto buy the
product. This indicates that majority of respondents responses due to the reward carrynewitems
andstockmore. Thishave apositive implication forthe company’ssuccess.

Accordingtoitem3oftable5,respondentswereaskedwhethertheycontinueorstopspurchasing if the
company stops offering the reward, 85(60%) of respondents said they will
notpurchaseanymore,57(27%)ofrespondentsrepliedtheywillstillbytheproduct,therest33(13%) of
respondents replied that they don’t know what they will do. The student researcherunderstands
that majority of the respondents responses that they will not buy the product if
thecompanystopsoffering the reward.

Table6.Collectingoffeedback

Item Question Noof respondents Percentage(%)

1. Howdo you ratethe company’s

method of collecting feedback
after offering the reward?
Veryhigh 7 4%
High 21 12%
Medium 68 39%
Low 79 45%
Verylow

Total 175 100%

As shown in the above table 6 of item 1, respondents were asked the company’s method
ofcollecting feedback after offering a reward, 7(4%) of respondents replied very high, 21(12%)
ofrespondents responseshigh, 68(39%)ofrespondents responsesmedium while the remainingother
79(45%) of the respondents responses very low for the company’s method of collecting
feedback .The student researcher understands that majority of the respondents responses low,
thishave a negative implication for the company.

Table7.Evaluationofthecompany’ssalespromotionpractice.

CustomersEvaluation

Item Question Number Percent (%)

1. How do you evaluate the value that

youreceivefromthecompany’ssalespromo
tion?
Verygood
Good 89
51%
Medium 67
38%
Low 19
11%
Verylow
Total 175 100%

2. Howdo you evaluate the company’s

salespromotionpracticecomparedtoitscom
petitors?
Verygood 33 19%
Good 23 13%
Medium 56 32%
Low 63 36%
Verylow
Total 175 100%

Respondents were asked to evaluate the value that they receive from the company’s
salespromotion,tothisend89(51%)ofthemrepliedverygood,67(38%)ofrespondentsresponses
medium,andtheremaining19(11%)ofrespondentsresponseslow.Thestudentresearcherunderstands
that majority of business customers of the company are satisfied by the value thatthey receive
from the company. This implies that the company have implemented the
salespromotionsuccessfully.

Accordingtoitem2oftable7,respondentswereaskedtoevaluatethecompany’ssalespromotionpractice
comparedtoitscompetitorstothisend,33(19%)oftherespondentsresponses very good, 23(13%) of
respondents responses good, 56(32%) of respondents responsesmedium while the remaining
63(36%) of the respondents responses low. This indicates that therespondents were less attracted
by the company’s sales promotion practice compared to it’scompetitors.

Table8.Suggestingcustomers

Item Item Noof respondents Percentage(%)

1. Howoftendoyousuggestthe
company’sproductwhenyour
customer’s ask for a product in
your outlet?
Veryoften 67 38%
Often 78 45%
Average 0 0
Sometimes 30 17%
Rarely
Total 175 100%

Regarding the table 8 item 1, customers were asked how often they suggest the
company’sproduct when their customers ask for a product in their out let, 67(38%) of
respondents responsesvery often, 78(45%) of the respondents responses often, 30(17%) of the
respondents
responsessometimes,noneofthecustomersresponsesaverageandrarely.Thestudentresearcherunderst
andsthatmostofrespondentsresponsesoften,thisimpliesbusinesscustomersofthe
company often recall a product when their customers asks, this implies that the company
alreadymadea strongrelationship withits business customers.

Analysisofresponsesgatheredfromopenendedquestions

Q.What is your reason to buy a product from AL-SAM PLC after the sales
promotionover?

Sometimes sales promotions are good public-relations vehicles, and can generate interest
andreturn customers. They maybe ableto addto customer brand awareness at a lower cost
thanother promotional means. In this case the goal is not additional profits but rather additional
salesover the long term, as more customers become familiar with the advantages of the
particularbrand.Customerssurveystodeterminebrandfamiliaritybeforeandafterthesalespromotiongi
vean accurate evaluation of the immediate successofthe promotion.

In the longer term through, the measure of success must be continued higher sales. Such
salesincreases should already appear following the sales promotion, and a continued evaluation
of thelevel of sales will give a good indication of the success of the promotion as far as a
brandawareness is concerned, the respondents replied that the main reason to buy a product from
thecompany after the sales promotion over is that of the company’s high brand awareness
andpreference.

Q.Whatkindofproductdoyoupurchasefromthecompany?

Generally,retailersofthecompanyuseproductswithingivecategory

1) Fooditems
2) SanitaryProducts-
3) Household.
4) StationaryGoods
5) LocalProducts
Q.What do you think is your main reason that affects your perception about the
company’ssalespromotion?

As respondents responses that they think the product may be nearly expired products or
expired,the other ispricesensitivitythismeans thatwhen thesales promotionover,and the
retailersstarts to buy the product within the actual price at this time it feels like for them buying
withexpensive price.

Q.Ifyouhaveanycommenttowardsthecompanysalespromotionpractice?

Customer’srespondent’s responses that the sales promotion by itself needs care and the time
isadjusted because sales promotion gave incentives and additional product this is good but not
allcustomersacceptthisone.Maybedoubtthisproductisdefectorexpiredsothecompanyperform for
the effectiveness of sales promotion first will show the quality of the product andannounce
widely the main aim of this for retain customers the products not detect or expired
soeverybodypurchase it like this sentenceannounce andretain customers.

Analysis of Responses Gathered From the

ManagerQ.WhatkindofSalesPromotionstrategydoesyourcompan

yuse?

As per the interview held with the manager of AL-SAM PLC in Addis Ababa, first he said
thatsales promotion aims directly at inducing purchasers to buy a product. It involves coupons,
priceoff, free samples, special package, demonstration and money refund offers. Sales
promotionactivitiesare designed to encourage consumers and traders to sellthe product.

The manager responses for the question that the company uses both pull and push strategies,
thecompany uses push strategy by using the sales force and trade promotion to push the
productthrough channels. The producer promotes the product to wholesalers, the wholesalers
promote toretailers and the retailers promote to consumer.

The second one is pull strategy, this strategy is a promotion strategy that calls for spending a
lotonadvertisingandconsumerpromotiontobuildupconsumerdemand.Ifthestrategyissuccessfulcons
umerswillasktheirretailerfortheproduct,the retailerswill askthe wholesalers,
andthewholesalerswillasktheproducersormanufacturers.Becauseofconfrontation thecompany
only focuses on traders.

Q. What kind of Sales Promotion tools does your company use to push its products
throughintermediaries?

As the manager response the company rewards intermediaries to build high brand awareness
thecompanyusestradepromotion,likeBOGOF(buyonegetonefree),tradeallowance,salescontests,tra
ining,coupons,rebatesbutmostlythecompanyissuccessfulbyimplementingBOGOF tool.

Q.How doyou measurethe effectsof SalesPromotion?

The marketing manager replied that measuring the effect of a sales promotion is relatively
easybut requires careful analysis of sales data before and after the promotion, he said there is
alsoneed to keep track of what of that other marketing and communication efforts and funds the
firmis undertaking at the same time as the sales promotion, because sales promotion deal in
tangiblethings such as, cash refunds, rebates. To know the effects, count those and see how many
saleswere results of those promotions, next compare those sales figures to those the company
hadbefore the promotion to see if the promotion resulted in increased sales. To understand the
trueeffect of the promotion keep other media expenditures and types the same during the
promotionas before.

Q.Whatisyoursalespromotionobjective?

He replied that the proliferation of brands in the consumer market, there is fierce competitive
forshelfspace,salespromotioncanhelpafirmgaininitialdistributionandshelfspacetradersneeda
reason to ‘choose’ one brand over the other when it comes to allocating shelf space, the
otherobjective is encourage wholesaler and retailer to order in large quantities, thus shifting
theinventory burden to the channel and giving them benefits of economics of scale, at least
retailersincrease traffic through sales promotion or events. A promotion that generates a lot of
interestwithina target audience can drive consumers to retail outlets.
Q.Howdoyousetthesalespromotionbudget?

Herepliedthat,settingsalespromotionbudgetrequiresfornewproductstheysethighbudgetandfor
maturebrandslower budget, they implementobjective-and-task method the companysets its
promotion budget based on what it wants to accomplish with promotion, he underlinedthat this
budgeting method entails i) defining specific promotion objectives, ii) determining thetasks
needed to achieve these objectives and iii) estimating the costs of performing these tasks.He said
the sum of these costs is proposed promotion budget. But he said the company have
lowsalespromotion budget.
 CHAPTERFOUR

SUMMARY,CONCLUSIONANDRECOMMENDATION

This chapter is the last part of the study , the aim of this study is to assess the sales
promotionpractice of AL-SAM Private limited company. To accomplish this study some basic
questionswere raised, related literature were reviewed, relevant interview areas conducted, and
more over150 questionnaires were distributed to business customers as well. The data were
presented andanalyzed qualitatively and quantitatively. Based on the analysis and findings, the
followingsummarieswereprepared,conclusionsaredrawnandrecommendationswerewarmlyforwar
ded.

4.1. Summaryofthemajorfindings:
• AL-
SAMprivatelimitedcompany’smajoritycustomersweremale102(58%)andtherestrespondent
s73(42%)werefemale.Theparticipationofmalerespondentswerehigherthanthefemalerespon
dents.Duetotheagecategory,56(33%)majorityofrespondentswerefrom 31-36.
• Along with educational status, majority of respondents 91(52%) were below 12, while
8(5%) of the customers are 12 grade completed. This indicates that majority customers
ofthecompany werebelow 12.
• According to the experience in the field of the business, majority of respondents
83(47%)were from 3-5 whereas,8(5%) were from 9 years and above it. So this indicates
most ofretailers of the company’s experienced in the business for 3 and 5 years.
• Majority of the customer’s 153(87%) select BOGOF(buy one get one free) as the
mostattractive method, whereas, minority of customers 53(45%) select sales contest.
Thisindicates that most of the customers are highly interested in BOGOF(buy one get
onefree) method.
• Majority of respondents 153(87%), responses that the reward initiated them to buy
moreof the company’s products, whereas, 22(13%) of respondents responses that the
rewarddid not initiated them to buy the product this implies that the company’s customers
arehighly initiated by the reward.
• 53(35%) of respondents responses, because of the reward i persuade the buyers to
buytheproductwhereas,43(28%)ofrespondentsresponsestheygive itmoreshelfspace.
 This implies that majority of the business customers are initiated by the
company’sofferingmethodandpersuadebuyerstobuytheproduct,atthispointwecanseethatsal
espromotion have a an influential power in business customersmind.
• Regarding the question if AL-SAM stops giving the reward, 85(60%) of
respondentsresponses that they will still buy the product while 33(13%) of respondents
responses thattheywillnot buy anymore.
• Regardingthequestion,howdoyouevaluatethevaluethatyoureceivefromthecompany’s sales
promotion? Majority of respondents 89(51%) responses good whereas,19(11%) low.
• Majority of customers’ 63(36%) responses low with regard to the question howdo
youevaluate the company’s sales promotion practice compared to its competitors?
While23(13%) responses low.
• According to the rate of the company’s method of collecting feedback after offering
therewardmajorityofrespondents79(45%)low,whileminorityrespondents7(4%)saidvery
low.
• Based on the question that how often they suggest the company’s product when
theircustomer’s ask for a product in their outlet? Majority of them 67(38%) said very
often,whereas30(17%) responses sometimes.
4.2. CONCLUSIONS

Based on the analysis of the data collected from different respondents and the
aforementionedmajor finding of research the following conclusions are drawn:

• From the above findings we can say that BOGOF is the most attractive sales
promotionmethod for the business customers the company is also offering this tool
widely, due tothis it is obvious that the company is highly attracting customers.
• Based on majority of respondents respond, they are highly initiated by the
company’smethodofrewardingthem,thisindicatesthatsuccessfulimplementationofsalespro
motion makes the company more profit able and also helps its customers to choose
theproduct.
• Fromthereportitsunderstandablethatthecompanyusessalespromotiontoolstopushits
products through intermediaries.
• Regarding the reason why customers buy a product from AL-SAM Plc after the
salespromotion over majority of themreplied that the company’s is not only offering them
butalso helps them to have a high brand awareness and preference in their mind.
• Dueto themanager’s answercompany hasless ofsalespromotionbudget.
• Thecompanymainlyfocusesonpushstrategy.
• According to the survey the company’s method of collecting feedback after the
rewardoffered is low.
• Due to the report, factors affecting the customers perception about the company’s
salespromotion practice is that they think it will be expired or nearly expired, and
pricesensitivity.
4.3. RECCOMENDATION
• Becauseofthecompanyisactingcomplacentwithinitsproductsmainlyfocustopushits products
through intermediaries but only rewarding them is not enough for a companyto be
successful, so the company must not sit down and watch till other company’s
getoverthem by attracting customers buy usingpull strategy.
•
Thecompanyshouldimplementappropriatesalespromotionalbudgetbecauseitisthroughapro
per salespromotionbudget thatthecompany willgetan attractivesales.
• The company should often make a survey or a marketing research to know the
businesscustomersfeedbackoftheirrewardafterofferingthem,becausethishelpsthemtoanalyz
etheir weaknessand strength.
• The company should check whether the expected reward is directly given to the
retailcustomers.
• The company should implement an attractive sales promotion method to have a
highcompetitiveadvantagefromthecompetitors,byofferingcustomersattractivesalespromoti
on tools that the competitors don’t have.
• Finally, the company should create high awareness to the customers that the products
arenot nearly expired.
 REFERENCES

• Adrianpalmer,(2004)IntroductiontoMarketing.NewYork:oxforduniversitypress.
• Belch George E. and Michael A. Belch, (2004)An Integrated
MarketingCommunicationProspective.NewDelhi:TataMcGrawHillPvt.
ltd
• Blattberg.R&Scott.N,(1909)Salespromotion,Methods,ConceptsandStrategies.
NewJercy:PrenticeHall.
• DavidJobber,(2004)PrincipleandPracticeofMarketing.Uk:McGraw-Hillltd.
• Frances Brassington and Stephen Pettitt, (2000) Principle of Marketing. New
Delhi:PrecticeHall.
• Frank Jefinks, (1983) Public Relation for Marketing Management.
London:MacmillanPublishingcompany.
• Hoffman .et.al, (2005) Marketing Principle and Best Practice. Amsterdam:
ThomsonEducation Ltd.
• JohnEnsor&GraemeDrummond,
(2005)IntroductiontoMarketingConcept.NewDelhi:JordanHillLtd.
• JohnFrain,(2004)IntroductiontoMarketing.London:Thomsonbusinesspress.
• Jonathan.et.al,(2004)Marketing.London:BellandBainGlasgowLtd.
• Kotler.et.al,(2005)PrincipleofMarketing.PrenticeHallLtd.
• Kumar.NandMittal.R,
(2002)AdvertisingManagement.NewDelhi:PearsonEducation Ltd.
• Lamb.et.al,(2005)IntroductiontoMarketing.Australia:Thomsonbusinesspress.
• LouisE.Boone&David.Kurtz,(2005)ContemporaryMarketing.Drydenpress.
• Mishra.M.
(2004),SalespromotionandAdvertisingManagement.MUMBAI:HIMALIYAP
UBLISHINGHOUSE.
• Mullins.W,(2005)MarketingManagement.Boston:McGraw-Hill.
• Mooji,(2004)ConsumerBehaviorandCulture.Newdelhi:sagapublications.
• Philipkotler,(2006)Marketing.NewDelhi:PearsonEducationLtd.
• PhilipKotler&GrayArmstrong,
(2008)PrincipleofMarketing.NewDelhi:PearsonEducation Ltd.
• PhilipKotler&KevinLane,
(2006)MarketingManagement.Newdelhi:PearsonEducation ltd.
• Shiffman.G&Kanuk.L,(2004)ConsumerBehavior.NewDelhi:PearsonEducation.
• ShultzDE&RobinsonWA,(1998) salespromotionmanagement.Chicago:Crain books.
 Appendix-A

ST.MARY’SUNIVERSITYCOLLEGEB

USINESS FACULTY
DEPARTEMENTOFMARKETINGMANAGEMENT

Questionnairestobefilledbythe Trader(Retailer) ofAL-SAMPrivate

LimitedCompany

This questionnaire is prepared by St.Mary’s University College undergraduate degree student

inMarketingManagement.It’saimedtounderstandthecustomer’sresponseregardingthecompany’s
sales promotional practice. The purpose of this questionnaire is to collect data whichis relevant
and important to get complete result of the research paper.

Thank you in advance for your consideration and spending your valuable time to fill out
thisquestionnaire.

Notice:
• Youarenotrequested towriteyourname.
• Pleasetick(U)foryourchoiceinthe spaceprovided.

PartI:GeneralCharacteristics

1. Gender

a. MaleD b.FemaleD

2. Age
a.18-25Dc.31-36De.Above42□

b.26-30D d. 37- 42 D
3. Education background

a.Complete 12 Dc.CertificateD

b. Below 12 Dd,diploma level De.DegreeandaboveD

 4. Experience in the field of your business

a.1-2 years □ b. 3-5 years □ c. 6-8 years □d. 9-above □

PartII:ThefollowingquestionsarerelatedtotheSalespromotionalpractice
5. What is your reason for purchasing a product from the company?

a.Qualityoftheproduct□ c. because of the reward □

b. Reasonablesellingprice□

6. What kind of incentives does the company use to push its products?

a. Trade allowance □ d.salescontest□

b. Pricediscount □ e. BOGOF □

c.Training □

7. Amongthequestion below, pointoutthe mostattractive salespromotiontool.

Description Verygood Good Medium Low Verylow

Trade allowance

Pricediscount

BOGOF

Salescontest

Training

8. Doesthe reward initiate youto buy more ofthe company’s product?

a.Yes□ b. No□

9. Ifyes, whatdoyou think your feedbackof the reward?

a. Icarry newitems andi stockmore □

b. Igiveitmoreshelfspace □
 c. I persuade the buyers to buy the product D

10. Howdo youevaluate thevalue that youreceive fromthe company’ssalespromotion?

a. VerygoodD c.NeutralDe.VerylowD

b. Good Dd.LowD

11. How do you evaluate the company’s sales promotion practice compared to
itscompetitors?

a.VerygoodDc.MediumDe.VerylowD

b. GoodDd. Low D

12. Doyoubuyaproduct whenthesalespromotion over?

a.YesD b. NoD

13. Ifyes, whatis yourreason?

14. IfAL-SAMPLCstopsgivingthereward:

a. Iwillnotpurchase anymoreD

b. IwillstillbuytheproductD

c. Idon’t know whati am goingto do D

15. What do you think the main factors that affect your perception about the company’s
salespromotion ?

16. How do you rate the company’s method of collecting of feedback after offering
thereward?

a. VeryhighD c. Low D
b. High Dd.VerylowD
17. What kind of product do you purchase from the company?

18. Do you recall the company’s product whenever your customers ask for a product in
youroutlet?

a.YesDb.NoD
19. Ifyou have anycomment towards thesalespromotion practice ofthe company?
 Appendix-3

ST.MARY’SUNIVERSITYCOLLEGEB

USINESS FACULTY

DEPARTEMENTOFMARKETINGMANAGEMENT

Interview held with interview checklist of the Marketing Manager of

ALSAMPrivateLimited Company
Iam astudent inthe Business Faculty at St.Mary’s University College. I am carrying
outresearchof salespromotion in the case of your company.

Yourgenuineandcurrentviewsareveryimportantforthesuccessoftheresearch.Therefore,you are
politely asked to express your opinions and experience as openly as possible.
Thisinformationthatyouprovidewillbetreatedfortheresearchpurposeonlyandwithfullconfidence.

The outcome of this interview is intended to support a research report to the partial fulfillment
oftheDegreeofArtin thefield of MarketingManagement,

Thank you, in advance for giving me your valued time and energy to answer the interview
withme.

1. WhatkindofSalesPromotionstrategydoesyourcompanyuse?
2. WhatkindofSalesPromotiontoolsdoesyourcompanyuse?
3. HowdoyoumeasuretheeffectsofSalesPromotioninyourcompany?
4. What is the reaction/feedback/response of the business customers towards the
company’sSalesPromotionpractice?
5. Howdo you motivate and reward your intermediariesand how often you do this?
6. ForhowlongtimedoesyourcompanygivesSalesPromotion?
7. WhatisyourSalesPromotionobjective?
8. HowdoyouevaluatetheeffectivenessofyourSalesPromotionpractice?
9. HowdoyousettheSalesPromotionbudget?
 DECLARATION

Advisee’sdeclaration

I,theundersigned,declarethatthissenioressayismyoriginalwork,preparedundertheguidance of Ato.
YalewGorfu. All sources of materials used for the manuscript have been dulyacknowledged.

Name:MerkebTesfamariam

Signature:

Placeofsubmission:St.Mary’sUniversityCollegeDateof

Submission:June28,2013

Advisor’sdeclaration

ThissenioressayhasbeensubmittedforexaminationwithmyapprovalasaUniversityCollegeadvisor.

Name: Ato. Yalew

GorfuSignature:

Date:June28,2013
ThisworkislicensedunderaCre
ativeCommons
Attribution-Noncommercial-NoDerivs4.0License.

To view a copy of the license please

see:http://creativecommons.org/licenses/by-nc-
nd/4.0/

Thisisadownloadfromthe BLDSDigitalLibraryonOpenDocs
http://opendocs.ids.ac.uk/opendocs/

Institute
ofDevelopmentStudi
es