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CHAPTER ONE
INTRODUCTION
Background Of The Study
Due to the growth of brands in many categories, fast-moving consumer goods (FMCG) in Nigeria are in a condition of hyper-competition. Utilizing consumer sales promotion to distinguish one’s offer has become the norm. The budget allocated to consumer sales promotion to attract consumers is growing. Due of the little financial risk involved, consumers do not mind switching brands in response to a sales promotion offer. Consequently, the growing usage of consumer sales promotions has prompted significant interest and controversy about their effectiveness. Consumer sales promotions are unproductive because they make consumers more susceptible to promotions, resulting in long-term market share losses (Ehrenberg, Hammond, and Goodhardt, 2014; Totten and Block, 2017). Other researchers, however, have shown that sales promotions result in genuine gains in sales and profitability (Dhar and Hoch, 2016; Hoch, Dreze, and Purk, 2014). This disparity indicates that there are situations and variables that may affect the effectiveness of sales promotions. It has been shown, for instance, that consumer sales promotions are more successful when they provide advantages aligned with those of the offered product (Chandon, Wan-sink, and Laurent, 2010).
Unfortunately, very little is known about Nigerian consumers and their purchasing patterns, particularly in terms of how they react to the numerous sales promotion strategies used by marketers. Since the majority of the existing literature on these interactions stays from a Western or Asian viewpoint, there is a need for study on Nigerian consumers and Nigeria’s unfamiliar environment. Understanding the behavioral reactions of Nigerian consumers to sales promotion strategies (especially with regard to environmentally friendly consumer sales promotion strategies) is essential for customer management and the creation of successful sales promotion strategies, establishing the necessity for this study.
Thus, it is vital to examine how consumers make decisions in the FMCG or low-involvement goods (LIP) categories, in which a consumer’s consideration set includes many brands. This research seems to concentrate on fast-moving consumer goods or low-involvement items, which are often thought to be more sensitive to promotional techniques than high-involvement products. LIP or FMCG products are ones that are purchased often and with no effort since they are neither of crucial importance nor have a significant influence on the consumer’s lifestyle (Ndubisi, 2005; Ndubisi & Chew, 2005).
Statement Of Problem
In the marketing process, it is essential for businesses to connect with their current and potential customers, as well as their internal sales team. Many organizations are focusing their efforts on promotional techniques and strategies to address the issue of declining profits (Harmon, 2014). As a kind of advertising, sales promotion is regarded to be a temporary incentive aimed primarily at attracting customers in general. However, in the Nigerian context, relatively little is known about Nigerian consumers and their buying behavior, particularly how they react to the numerous sales promotional strategies used by marketers (Lancaster, 2006). Since the majority of the existing literature on these interactions is written from a Western or Asian viewpoint, there is a need for study concentrating on Nigerian consumers and the Nigerian market.
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Objectives Of The Study
The overall aim of this study is to critically assess the sales promotion technique preferences of Nigerian consumers in Uyo, Akwa Ibom State. Hence, the study will be channeled to the following specific objectives;
1. Ascertain the effectiveness of sales promotions in influencing consumers’ brand preferences.
2. Determine whether coupons are strong predictor of product preferences/consumer promotion effectiveness in Nigeria.
3. Determine whether price-off is a significant technique in influencing consumers brand preferences/promotion effectiveness in Nigeria.
4. Find out whether environmental sustainability content in a consumer sales promotion tool can stimulate product trial.
Research Hypotheses
The following hypothetical statements will be validated in the course of this study.
H01: The effectiveness of sales promotions in influencing consumers’ brand preferences is low.
H02: Coupons are not strong predictors of product preferences/consumer promotion effectiveness in Nigeria.
H03: Price-off is not a significant technique in influencing consumers brand preferences/promotion effectiveness in Nigeria.
H04: Environmental sustainability content in a consumer sales promotion tool is not a strong predictor of product trial among Nigerian consumers.
Significance Of The Study
This study will be relevant to various key players in an organization. It will help marketers to learn about consumer preferences with respect to sales promotion offers; what consumers’ sales promotion schemes do Nigerian consumers prefer or which consumer sales promotional tools is more effective in the Nigeria context. Similarly, it will help to prompt a manager to consider the effectiveness of the scheme while designing a scheme.
Additionally, subsequent researchers will use it as literature review. This means that, other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regards to the sales promotion technique preferences of Nigerian consumers in Uyo, Akwa Ibom States.
Scope Of The Study
This study is structured to generally examine the effectiveness of and preference of sales promotion technique among Nigerian consumers. However, the study will further ascertain the effectiveness of sales promotions in influencing consumers’ brand preferences, determine whether coupons are strong predictor of product preferences/consumer promotion effectiveness in Nigeria, determine whether price-off is a significant technique in influencing consumers brand preferences/promotion effectiveness in Nigeria, and find out whether environmental sustainability content in a consumer sales promotion tool can stimulate product trial. The respondents for this study will be obtained from consumers in Uyo, Akwa Ibom States.
Limitation Of The Study
In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. However, the researcher were able to manage these just to ensure the success of this study.
Definition Of Terms
Sales Promotion: the marketing activities that add value to the value to the product for a limited time period to stimulate consumer purchasing and dealer effectiveness.
Consumer: an individual who is brand loyal to a products or service of a particular producer or manufacturer.
Product: anything that is offered for attention, used and consumption.
Consumer preference: This is defined as a set of assumptions that focus on consumer choices that result in different alternatives such as happiness, satisfaction, or utility.
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