CHAPTER ONE

INTRODUCTION

• Background of the study

Marketing is a key aspect in business since it contributes greatly to the success of the organization. Production and distribution depend largely on marketing. Many people think that sales and marketing are basically the same. These two concepts are different in many aspects. Marketing covers advertising, promotions, public relations, and sales. It is the process of introducing and promoting the product or service into the market and encourages sales from the buying public. Sales refer to the act buying or the actual transaction of customers purchasing the product or service. Since the goal of marketing is to make the product or service widely known and recognized to the market, marketers must be creative in their marketing activities.

At the heart of business, nowadays, is the competition to attract consumers’ attention towards products or services. Consequently, each producer needs to build a more attractive strategy and action plan than its competitors. One prominent tool of attracting consumers’ attention towards products is promotion. According to Chaharsoughi and Yasory (2012) Promotion is one of the key factors in the marketing mix and has a key role in market success. Promotion is used to ensure that consumers are aware of the products that organization is offering. It is the process of establishing communication relationship between a marketer and its publics. Marketing promotions is quite different from mass communication, in which an organization addresses largely undifferentiated mass audience for non-commercial purpose by such means as press editorials, radio news, and television. Under marketing promotions, an organization would be aiming at a deliberately differentiated audience for a commercial purpose and would employ such means as advertising, personal selling, sales’ promotion, publicity and public relations.

Promotion involves disseminating information about a product, product line, brand or company. It is one of the four key aspects of the marketing mix. Adetayo (2006) opined that promotion seeks to inform, remind and persuade target consumers about the organization and its products. He further argued that promotion is often used to help an organization differentiate its products from rivals. A promotion campaign is an inter-related series of promotion activities designed to accomplish a specific objective. The obvious goal of promotion management is to ensure that all the individual elements of promotion mix work together to accomplish the organization’s overall promotion activities.

An Organization adopts different processes or strategies to disseminate information about its product, product line, brand or company. These various processes are described as the promotion strategy.

A Promotion strategy can be considered as a process whereby information about the organization’s products or services is encoded into a promotional message for delivery to the customer. In effect, firms have a variety of alternative information delivery system available to them, which can be used to construct an appropriate promotional mix strategy. This portfolio of alternative delivery mechanism includes majorly; advertising, personal selling, public relations, publicity, direct marketing and sales’ promotions.

Marketing decision makers are increasingly aware of the importance of the shareholder’s value maximization, which calls for an evaluation of the long term effects of their actions on product-market response. (Amit and Dominique, 2010). The quest of the decision makers to determine the influence of their strategic relations with their environment together with having sustained competitive edge in the market has called for the evaluation of the influence of promotional strategy on market share and profitability. Marketing literature to date has focused on the sales results of marketing actions. (Amit and Dominique, 2010). The relative importance of marketing strategy on market share and profitability of companies have not been focused. It is therefore the objective of this paper to examine the impact of marketing strategy on market share and profitability of the selected companies.

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