PROJECT TOPIC: Sales Promotion Strategies and Customer's Patronage of Petroleum Products of Petrol stations in Nigeria, Yenagoa.
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Marketers in today’s complex and volatile business environment often fueled by the constant change in the taste of customers, intense market competition, influx of new entrants in the market, availability of substitute products face immense challenge to communicate their marketing objectives. The shift in power of marketers to consumers has forced marketers to ensure that their products are unique and of high quality to give customer a reason to purchase their products and remain loyal to them.
As a result, marketers today search for more cost effective methods to communicate with their target audience and are gradually shifting away from conventional above the line media advertising to a variety of below the line sales promotion (Yang, 2010). One of the reasons for switching from the traditional method of advertising is because of its difficulty to the measure its effectiveness (Yang, 2010).
Customers have become more anxious about the economic situation over the past five years, and have been looking for value (Soni and Verghese, 2013). The number and depth of sales promotions and offers have increased across the market, but customers aren’t just looking for low prices, they are also looking to balance quality and the price they pay for things to make their budgets go further (Yang, 2010). As promotions become ever more prevalent, product loyalty is becoming a thing of the past, so marketers need to get smart about the deals they offer.
According to Kotler and Armstrong (2008) promotion entails all the kinds of tools in the marketing mix that aim to persuade buyers for certain products or services. Hardesty and Bearden (2003) contend that the high level of transparency on promotion among the major grocers and the fact consumers can easily compare prices which has led to more price-matching has had a major effect on the sales landscape.
Research of Bain and Kantar’s (2012) which was conducted ahead of the Government’s announcement says: “Everyone is a little too scared to pull back. People are trying to quantify the risk by conducting promotion of their products; marketers always asked ‘If I promote what it does for my product in the long-term?’ But now it’s more about how much profit and how much a promotion can deliver in the short-term. It’s more tactical in nature rather than a strategic long-term view.”
Manufacturers should also consider whether they discount their ‘hero’ brand – the one that performs best regardless of promotion – or support a weaker performing brand in the hope of increasing sales. The research finds that during one week-long promotion it was possible for the hero product to perform more than three times better than the smaller brand.
Furthermore, the change in certain social, economic and environmental factors has influenced the way customers change their needs and preference. People change their needs and their perception of stimuli according to the context that surrounds them and it comes directly from here the evident necessity of concreteness and short-term orientation that characterize sales promotion rather than advertising. This is why marketing strategies have been adapted to this new trend and switched from advertising towards sales promotion in addition, with limited marketing budget, the marketer today often faces immense pressure and challenge to communicate their marketing objectives to their customers.
Firms conduct sales promotion that requires consumers to become more involved with their products and offer a way of presenting the products’ essence in an engaging way. Many firms are recognizing that well designed and executed sales promotion strategies can be very effective way to engage consumers and to differentiate their products. Sales promotion strategies help in building a brand’s equity consists of developing a favorable, memorable and consistent image.
While many firms in Nigeria have seriously and continue to embrace the concept of sales promotion in a way of being successful, business has to be taken into consideration for the business people. For instance, a strong product is an essential element of your business behind its slogans and logo. Customers patronage strategies are crucial in developing a long term standing in the market (Keller, 1990).
Customers patronage is a key factor in developing product equity. The more people know about your product, the more they will associate with it, the higher your reputation will be and the greater your overall brand value will be. Businesses develop social impact through creating awareness about their product in the market. This social impact helps people to spread positive word of mouth about the brand and perceive the brand’s importance in their lives. In this way, the product begins symbolizing their lifestyle choices, taste, or habits (Pappu, 2000).
Moreover, even studies outside Nigeria already show that few of previous researchers (Kimm and Sullivan, 2007), marketers should also pay close attention to the types of deal they offer because a higher level of discount in sales promotion does not mean a higher return on investment. The implication is that you can do sales promotion to the people to spend more on the interested products with lower discounts. You don’t need to necessarily drive people with very high discounts and when you do, it’s very difficult to get sufficient volume offset that discount.” It is for this reason that researcher is conducting this study in order to examine the impacts of sales promotion strategies on customer’s patronage with reference to petroleum products in yenagoa, Bayelsa state as case study.
The objectives of the study are divided into the general and specific as follows;
The general objective of the study is to examine the impacts of sales promotion strategies on customer’s patronage with reference to petroleum products in Yenagoa, Bayelsa state.
The study is premised on the following specific objectives:
- To examine whether discounted prices lead to customer’s patronage
- To analyze whether product giveaways bring about customer’s patronage
- To determine if loyalty points create customer’s patronage
- To establish whether demos and sampling lead to customer’s patronage
- To assess if causes and charity activities create customer’s patronage
The research questions as derived from the research objectives are as follows:
- Do discounted prices lead to customer’s patronage?
- Do product giveaways bring about customer’s patronage?
- Do loyalty points create customer’s patronage?
- To what extent do demos and product samples lead to customer’s patronage?
- Do causes and charity activities create customer’s patronage?
Five hypotheses have been constructed in this research to determine the relationship between sales promotion (independent variable) and customer’s patronage (dependent variable). The hypotheses are listed as below:
H1: discounted prices lead customer’s patronage.
H2: product giveaways bring about customer’s patronage
H3: loyalty points create customer’s patronage.
H4: demos and product samples leads consumer customer’s patronage.
H5: charity activities create consumer customer’s patronage.
Promotion is the fourth element in marketing mix that is often divided into 5 parts mainly, advertising, sales promotion, publicity, personal selling and direct marketing (Cummins, 2008). All of these elements contribute to the achievement of the marketing objective (Cummins, 2008). The scope of this research is based on studying only one aspect of the promotion mix i.e. sales promotion.
It is not the interest of this study to discuss the extensive subject of sales promotion strategies, because it is a very wide concept, the focus was only limited to the impact of sales promotion strategies on customer’s patronage in petroleum products in Yenagoa, Bayelsa State.
The topic looks interesting and quite relevant at a time when Nigeria is looking for more effective way to boost petrol products usage and sales. However, the big problem has been to ensure that most of petrol are ab stations are able to sustain their customers patronage. Despite the importance of this study, the time and scope has not been enough to consider a wider sample so as to get more views about what they think. Moreover, owing limited time, not much literature has been discussed especially from other developed countries to lean from best practices.
Owing to limited sample the findings of this study should be generalized with caution, largely owing to the nature of convenience and purposive sampling procedure which was adopted. Moreover, the sample used is quite small and cannot generally be used to project a wider picture on a wider scale. However, this method of sampling seemed pragmatic for the situation due to time and availability of resources. Therefore, it would be imperative to have this study scaled up on a wider scale, such as by using a scientifically representative sample that covers the whole country. This kind of study would be interesting as it would offer us new insights about the real situation in other parts of the country, especially with regard to how the oil and gas sector can effectively utilize various promotional activities for customer’s patronage.
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myProject.ng, . "Sales promotion strategies and customer's patronage of petroleum products of petrol stations in nigeria, yenagoa." (2022). Accessed 30, September, 2022. https://myproject.ng/marketing/sales-promotion-strategies-and-customers-patronage-of-petroleum-products-of-petrol-stations-in-nigeria-yenagoa/index.html .;
myProject.ng (2022), . Sales promotion strategies and customer's patronage of petroleum products of petrol stations in nigeria, yenagoa. [Online] myProject.ng (2021). Available at: https://myproject.ng/marketing/sales-promotion-strategies-and-customers-patronage-of-petroleum-products-of-petrol-stations-in-nigeria-yenagoa/index.html . ( Accessed 30, September, 2022 ).