CHAPTER ONE INTRODUCTION

1.0 BACKGROUND OF THE STUDY

An organization can be viewed as successful if it can achieve its planned objectives and set goals. In order to realize these set goals and objectives, organizations need to develop marketing strategies that will help them achieve their objective and position them for the future (Bamigbola, 2006). In an ever competitive business environment, in a time when customers are exposed daily to a myriad of promotional messages and with today’s rapid technological advancement, many marketers have come to discover that advertising alone is not enough to move members of a target market to take action, such as getting them to try a new product. Rather, marketers have learned that to meet their goals, they must use additional promotional methods. Certain characteristics of the target market (e. g. small but geographically dispersed) or characteristic of the product (e.g. highly complex) make advertising a less attractive option. For marketers better results may be obtained using other promotional approaches. Therefore, this dissertation will focus on “The Use of Sales Promotion in the Distribution of Drugs: A Case Study of Rhokyn Pharmacy and Stores”. Sales Promotion is an important component of a business overall marketing strategy. The American Marketing Association (AMA) defines Sales Promotion as “media and non – media marketing pressures applied for a pre – determined limited period of time in order to stimulate demand, or improve product quality.

Companies use Sales Promotion tools to draw a stronger and quicker response (Kotler, 2000). Sales Promotion acts as a competitive weapon by providing an extra incentive for the target audience to purchase or support a brand over another. It consists of tools for consumer promotion, trade promotion and sales force promotion. There are three primary parties relevant to sales promotion: Manufacturers, Retailers and Consumers. (van Heerde, 1999). These three groups have become increasingly involved with sales promotion. To move their products through the distribution channel from the point of manufacture to the point of consumption, marketers employ three types of sales promotion strategies thus: Push, Pull or a combination of the two. Theories relating to sales promotion include adaptation level theory, assimilation contrast theory, and economic theories of promotion etc. However, for the purpose of this study, focus shall be 3on the Economic Theories of Promotions. Although, sales promotion is an important strategy for producing quick, short – term positive results, it has its limitations. It is not a cure for a bad product, poor advertising or an inferior sales team. Consumers may wait to buy certain items knowing that prices will eventually be reduced. Another draw back of sales promotion is its high cost.

A key step in sales promotion management is deciding which devices will help the organization reach its promotional goals. The following factors influence the choice of promotional devices: Nature of the target audience Nature of the product. Cost of the device. Current economic conditions etc. There are several sales promotion techniques used by marketers. They include: coupons, cash rebates, premiums, free samples, cash contests, and trade shows. Others are exhibitions, point of purchase displays and sales training manuals etc. In the practice of sales promotion, a company must establish its objectives, select the tools, develop the programmes, pretest the programmes, implement and control it, and evaluate the results (Kotler, 2000).

RESEARCH PROBLEMS: As stated above, sales promotion is an important component of a business overall marketing strategy. It directly stimulates consumer purchasing, selling effectiveness or the effort of the sales force. It increases the value of a product basically for a limited time. The question therefore, is how acquainted is Rhokyn Pharmacy and Stores with the use of sales promotion in the distribution of drugs? What are the effects of the efficient and effective use of sales promotion on sales volume, profitability and the overall success of the company in achieving its sales targets? These problems are what informed the researcher’s effort in determining the use of sales promotion in the distribution of drugs

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