Abstract

The purpose for this study is “The effect of Sales Promotion on Customers Buying Behavior: a case study of Guinness Cameroon S.A”. Its specific objectives are to examine the effect of price discounts on customers buying behavior of Guinness Cameroon S.A, to evaluate the effect of premiums on customers buying behavior of Guinness Cameroon S.A and to assess the impact of free samples on customers buying behavior of Guinness Cameroon S.A.

A causal research design research design was adopted as an appropriate study design were a sample of 50 Consumers of Guinness Cameroon, Buea were selected simple random sampling technique. It also combined quantitative as well as qualitative research approaches. The quantitative methods of data collection were used in this work were a self-administered questionnaire composed of closed ended, and likert scale questions was used to collect data from the respondents.

Data obtained through a structured questionnaire were analysed using analysed using descriptive statistics and the multiple regression analysis (Ordinary least square Regression technique) with the help of Statistical Package for Social Sciences (SPSS) software. The findings show that sales promotion has a significant impact on customers buying behavior of Guinness products Cameroon S.A.

Price Discounts has a negative and significant effect whereas premiums and free samples has a positive and significant effect on customers buying behavior of Guinness products Cameroon S.A. The study therefore recommends that Guinness marketers should use more sales promotion modes and alternate them to cover more extended periods to improve sales. It further recommends that Guinness marketers should evaluate sales promotion during and after it is over to ensure it is achieving the intended purpose, i.e., show immediate results and increase the sales capacity.

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Today, the environment in which businesses are operating is changing rapidly posing great challenges to decision makers in organizations. This has made the business environment very sophisticated with consumer preferences changing at a very fast pace mainly because of ease of switching from one brand to another.

Consumers have more demands hence organizations have to focus more of their resources in attracting and retaining its customers since there are the cores of every business. This has led organizations to prioritize the meeting of customers‟ wants and needs more effectively and efficiently than its competitors (Kotler, 1988). Marketers are therefore faced with the challenge of keeping up with the trends in the market hence the constantly formulating and implementing new strategies as occasioned by the market changes.

The strategies can either be long term or short term. However the short term strategies are aimed at increasing sales volume in the short run hence the use of sales promotion. In most fast moving consumer goods companies, sales promotion accounts for 65% to 75% of the total marketing budget and this has been rising for the last two decades (Kotler, 1997). For a company to penetrate into new markets it needs to arm itself with specific marketing strategies that will ensure growth in the target market. This becomes even more important if the target market is already filled up with competitors offering the same products or services (Kay, 2003).

According to Kotler (2016), promotion has the essential factors related to the required business result in an aggressive marketplace. It is an essential factor that is required to produce sustainability in a competitive market place. Consumer purchase decision helps markets to identify how consumers complete the journey from knowing about a product to making the purchase decision.

It is all about attracting the right customer, getting them to buy often and in higher quantities and to bring you even more customers (Anderson & Narus, 2017). Thai (2014) asserts that consumer purchase decisions can be seen as the mirror image of customer defection. It merely defines the ability of a company to keep its existing customers. It is the measure of the ability of a company to give sufficient value with its services or products for shoppers to keep them returning (Abishua, 2016). The sales promotional activities are time oriented and boost the sales of the company for a short period of time. There are pros and cons of sales promotion.

A positive gauging instigates to reuse business ideas plus, ultimately, builds commitment. A negative experience or stable opinions of unreliability increment the potential that the buyer will pick an item or administration whenever, or even look to give back an item for a discount where that is conceivable.

That being so, suitable and appropriate marketing strategies are influential at this stage. If appropriately applied, the post-purchase assessment will produce positive results which will intensify customer retaining (Piercy, 2016).

Resultantly, marketers nowadays look for more cost-effective methods to put their message forward to their target market and are steadily withdrawing from orthodox above the line media advertising, towards the various options of below the line sales promotion (Yang, 2015). Traditional methods of advertising have been known to hinder the measuring of their effectiveness (Yang, 2015). Manufacturers allocate around 75% of their marketing communication budget to sales promotion to influence consumer behavior (Familmaleki, 2015).

In today’s complex and undependable business environment, marketers are frequently encouraged by the persistent change in what customers want. Aggressive market competition, recent entrants in the market, convenience of alternative products, presents a challenge to liaise their marketing goals.

The power has shifted from marketers to consumers, forcing marketers to guarantee they put out products that have unique features and are of high quality, in order to give consumers a reason to buy from them and remain loyal to them (Rambitan, 2013). Moreover, the persistent adjustments in the society, the economy and environment, is directly related to customers’ preferences and tastes.

Also, the alteration of power from marketers to customers has stipulated marketers to ascertain that their goods are distinct and superior to give customers a cause to buy their products plus stay loyal to them (Rambitan, 2013). Moreover, the shift, in particular, economic environmental plus social factors, has affected how consumers change their preferences.

People’s needs and perceptions of provocation change according to their surroundings, and it’s attributed from the necessity of concreteness and short-term orientation that sets apart sales promotion rather than advertising.  This is the main reason why marketing plans of action have been modified to this recent tendency; looked away from advertising so as to approach sales promotion. Additionally, with limits in the marketing budget, marketers are facing great pressure and hindrance to communicate their goals of marketing to the consumers (Hawkes, 2019).

Sales promotion is an important component of an organizations overall marketing strategy along with advertising, public relations, and personal selling. Sale promotion acts as a competitive weapon by providing an extra incentive for the target audience to purchase or support one brand over another (Odunlami and Ogunsiji, 2011). It is on this premises that this research work wishes to examine the effect of sales promotion on sales volume with special reference to the selected distribution industry Guiness Cameroon SA in Buea,

Guinness Cameroon is a Cameroon based company in the brewery industry. Guinness Cameroon began because of merchants taking bottles of Guinness in their ships from Europe to Africa. Cameroonians liked the product. Guinness Ltd London began officially exporting Drinks to Cameroon. This led to the creation of Guinness Cameroon SA in 1967 with the first Guinness depot being opened in Limbe, Cameroon.

A brewery was built in Douala Cameroon two years later and production took off firmly in 1970. Guinness Cameroon is the world’s fifth largest Guinness market with respect to volume and the second largest in Africa. It employs more than 440 dedicated employees and has 29 distributors across the national territory.  It has branches in major cities all around the national territory.

It currently has an 18.2% market share of beer in Cameroon and it is the number one Guinness foreign extra stout brand in Cameroon. Guinness Cameroon has the ambition to become the best performing, most trusted and respected consumer Product Company in the country. (Diageo Guinness Cameroon 2020.) Guinness Cameroon is constantly innovating which sustains its success. It is in a constant search of ways create new experiences each year for the millions of Cameroonians who enjoy its brand. This can be seen in its introduction of new blends such as Guinness Chocolate Stout-Special edition and Guinness Triple Black. (Diageo Guinness Cameroon 2020.)

Guinness Cameroon produces stout drinks in big and small bottles alongside other brands. Its products include Malta Guinness Cameroon’s no. 1 malted soft drink, Smirnoff ice Cameroon’s no. 3 RTD brand, Black and White Cameroon’s biggest mainstream spirit brand, Black Label, Guinness Triple Black, Satzenbrau, Gold Harp, Orijin, Guinness Smooth and Malta Quench. Guinness Cameroon is the first Diageo market to bottle Scottish whisky (Black and White). It is also the first market to launch Guinness triple black.

Guinness has been the strongest beer brand since 2015. Its quality and distinctiveness are major reasons why its customers love it. Guinness Cameroon has branches all over the national territory. However, this project considers the Buea branch for this research.

In developing countries, customers have become quite price-conscious and fast-moving consumer goods have slowly become quite competitive. Leading fast-moving consumer goods firms in third world countries more often use price discounts in as well as sales promotional campaigns, for instance: store renovations, marketing events, and lengthening of opening hours. To accomplish development and targeting a proper sales promotional plan, a firm must first begin by identifying their target market and investigate what stimulus they answer to (Schultz and Robinson, 2018).

So, it is crucial and important to understand the characteristics of consumers and the way their characteristics influence how they answer to products under sales promotion, at product classification as well as the independent brand levels. Therefore, this study assesses the effect of sales promotion on customers buying behavior.

1.2 Statement of the Problem

Sales promotion is a sure way of increasing brand loyalty and sales. Given that sales promotion is expensive, it is only sensible if it achieves the goal that it was intended for. This may call for an understanding of the purchase decision and determine the extent to which it has been influenced by the promotions.

Sales might increase but not necessarily attributed to the promotions. Hence not all sales should be attributed to the promotional activities. The management should therefore understand that the consumer purchase decisions are influenced by a number of factors. Customers’ lifestyle and preference has dramatically changed over the past decade or so (Cummins, 2018). Awareness of offerings in the market by customers has increased and what they expect from the products being offered.

Access to information has been heightened by virtue of internet tec hnology and has led to the increase of customer bargaining power on any purchase decision. As a consequence, present day marketers have been faced with a great challenge of meeting the ever-growing expectation of customers (James, 2017).

Customers’ lifestyle and preference has dramatically changed over the past decade or so (Cummins, 2018). Awareness of offerings in the market by customers has increased and what they expect from the products being offered. Access to information has been heightened by virtue of internet technology and has led to the increase of customer bargaining power on any purchase decision.

As a consequence, present day marketers have been faced with a great challenge of meeting the ever-growing expectation of customers (James, 2017). Marketers have relied upon promotion to fulfill the changing demand of customers and the market as a whole.

Consumer promotions are offered to consumers by producers and are designed to stimulate the buyer to form a procurement right after being exposed to the consumer promotion (Taylor, Cameron & Pilarcik, 2010). Marketing campaigns that include various incentives are favored most by the market.

This is because of their short-term nature to stimulate quick purchase of goods or services in great quantity. Sales promotion is an incentive that has proved influential, pushing customers into forming instant buying decisions without pause (Kotler, 2016).

However, promotion is included in the foremost important elements of marketing mix designed to stimulate consumers to react immediately i.e. to make an incentive that encourages consumers to get a product as fast as possible, more routinely and/or in large amounts than when promotion is absent (Hawkes, 2019).

The advantage of promotion is to charm new pools of consumers away from competitors steering them towards switching brands or just prompt customers you already have to shop for more (Mittal & Sethi, 2016). There are two types of promotion; value promotion and price promotion. Under value promotion there is prize draws, container promotions, competition and premiums. Price promotion by contrast, includes pence off flashes, discount coupons; buy one get one free and further filled packs (Cummins, 2018).

One issue in relation to promotion is the efficacy of each sales promotion, i.e. which is more efficient than the other, enough to influence a consumer’s purchasing decision. Not much research has been done that integrates all the types of promotion and their element, some studies done prior mostly specialized in either non-price or price promotion. Therefore, how each type of promotion plays a part in the purchase decision of consumers is still unknown.

As a result, this study aims to fill the breach created by the restricted span of valuable research by addressing the results of sales promotion and the effect it has on customers buying behavior of Guinness Cameroon S.A.

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