SALES PROMOTION STRATEGIES AND SALES PERFORMANCE OF TELECOMMUNICATION FIRMS
ABSTRACT
The growing managerial importance of sales promotion has generated a great deal of research on how sales promotion affects profitability. In Nigeria, sales promotions expenditures by various companies is estimated to be in thousands of NigeriaNairaand the emphasis on sales promotion activities by the various industry players continue to increase year on year. Although several sales promotions are conducted each year by Telecommunication companies, promotion managers are frequently confronted with the challenge of defending the question of the impact of sales promotions activities on the profitability of the firm. This study generally sought to examine the effect of sales promotion on the performance of Globacom Nigeria Ltd. The specific objectives include to; examine sales promotional activities used by Telecommunication Firms (GLO), examine the relationship between sales promotion and sales performance of GLO, examine the effect of sales promotion on non-sales performance of GLO and finally, identify challenges facing sales promotion activities undertaken by GLO. The study adopted a descriptive research design. The population of the study was estimated at 865 (management, staff and key distributors) out of which a sample of 160 was used (primary data). The main sources of data were secondary and primary. Questionnaires were used to collect primary data whilst secondary data was taken from financial statements of GLO from 1985 to 2014. STATA 13 was used for the analyses. The study found a positive and significant relationship between sales promotion and profitability. Thus, 1 percent increase in sales promotion was associated with 0.44 percent increase in sales turnover. There was however no significant relationship between sales promotion and non-sales performance. The study recommends that management of GLO involves key distributors and supply chain members in sales promotional activities. Management of GLO also needs to integrate all promotional tools to ensure that all promotional goals are achieved.
CHAPTER ONE
Background of the Study
In any organization whether profit or nonprofit oriented the main purpose of the organization is to achieve its objective. The objectives cannot be achieved in a vacuum there must be a clearly set strategy that management should use in order to meet these objectives. Sales promotion became an essential motivating factor in the area of marketing in any organization whether in the Telecommunication firms or any other company.
Sales promotion is an initiative undertaken by organizations to promote and increase sales, usage or trial of a product or services (Aderemi, 2003). Sales promotion refers to the provision of incentives to customers or to the distribution channel to stimulate demand for a product. It is an important component of an organizations overall marketing strategy along with advertising, public relations and personal selling. Sales promotion acts as a competitive weapon by providing an extra incentive for the target audience to purchase or support one brand over the other. It is particularly effective in spurring product trials and unplanned purchases (Aderemi, 2003). Many businesses fail to realize that they cannot stay in business without any marketing strategies. This is because they were operating in a market that was monopolistic in nature. This means that there was no intense competition from other organization. But these days due to dynamic nature of the market, and consumer taste changes every day it has become imperative on the part of the business to look into their strategies and review them if at all they want to remain in business.
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