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PROJECT TOPIC: THE ROLE OF SALES PROMOTION ON THE PROFITABILITY OF A FIRM’S PRODUCT IN A DEPRESSED ECONOMY

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CHAPTER ONE

INTRODUCTION

1.1BACKGROUND TO THE STUDY

Promotion is one of the basic elements in marketing strategy whose impact is underscored by the contemporary events within and outside the country. There is no gain saying the fact that the nation is passing through a period of economic crisis whose impact not only cuts across the rank and file of the citizens but her business organizations as well. Business success therefore becomes vital and bring on the ability of organizations to produce its goods and services profitability yet to obtain this success if just a mirage to an organization unless the consumers or users are head to buy its products as a result of effective sales promotional efforts.

According to Ezek (2008), sales promotion is one of the ways companies/cooperatives business owners rewards customers and in turn project the business to attract more customers. But most companies deviate from this, and curiously use sales promotion onto exploit and hurt customer. Moreover, a couple of organizations sometimes rather than reward regular customers, reward those who rushed to the company because of the promotion, those who have it in mind to go back to previous after the promotion. As a result, most companies after promotion, experience reduction in sales patronage.

Basically, promotion consists of those activities, aimed at bringing a company’s goods and services to the favourable attention of customers.

Divergent view as held by different writers on what constitute the elements of promotional mix.

Promotional mix in this regards refers to the basic combination of promotional method used by an organization for a particular product is consists of those marketing activities other than personal selling, advertising and public relation than stimulate purchasing and dealer effective. Example is displays, contests, demonstration, shows and expositions and various non-current selling efforts that are not in ordinary routine.

1.2STATEMENT OF THE PROBLEM

Sales promotion is one of the backbones of any successful organization effort in the contest of marketing. Therefore, companies spend a lot of money on sales promotion. Some companies with little budget for sales promotion have recorded drastic fall in profit which has resulted in retrenchment of workers.

Some organizations are not aware of the impact of sales promotion on alcoholic industry in Nigeria and the economy at large organizations to assist consumers attitude towards sales promotion can be seen as a catastrophic, since the organization cannot forecast the demand for product.

Other organization has not been able to discover the sales promotion strategy that can be utilized to increase profitability and sales volume growth in organizations during economic recessions.

There is also a minor strategy syndrome by organization who concentrates solely on type of advertising method while failing to realize the potentiality of sales promotion on turnover relative to other forms of advertisement.

There is also the problem of decoding which choice of sales promotion activity is cost effective for a specific situation.


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