ABSTRACT
This is a research work carried out to evaluate the effect of sales promotion with particular reference to Kilimanjaro fast food outlet. The objectives of the study was to determine the effect of sales promotion on customer traffic, profit and to determine the extent to which sales promotion influences sales volume. The researcher employed a descriptive research design, data for the research were collected through primary and secondary sources. The sample population consisted of 120 customers. Data collection technique includes questionnaire, participatory observation. The data was organized, presented, analyzed and interpreted using descriptive method of data analysis. The collected data were analyzed in tables, using chi-square technique and Karl Pearson correlation. In the final analysis, attempts were made to bring to summary the tested hypotheses, which proved that sales promotion of Kilimanjaro fast food outlet has helped in customer traffic, profit and in sales volume. It is recommended that free sampling promotional tools should occasionally be introduced as this facilitates profit. Kilimanjaro should frequently execute favourable price promotional tool to ensure it does not have a negative impact on sales. Finally, Kilimanjaro fast food outlet should encourage sales promotion as this would mean that the firm gather more customers which will eventually lead to more patronage.
TABLE OF CONTENTS
Title Page – – – – – – – – i
Declaration – – – – – – – – ii
Certification – – – – – – – – iii
Dedication – – – – – – – – iv
Acknowledgement – – – – – – – v
Abstract – – – – – – – – vi
Table of Contents – – – – – – – vii
List of Figure – – – – – – – – xi
List of table – – – – – – – – xii
CHAPTER ONE: INTRODUCTION
1.1 Background to the Study – – – – – 1
1.2 Statement of the Problem – – – – – 2
1.3 Objectives of the Study – – – – – 3
1.4 Research Questions – – – – – – 3
1.5 Research Hypotheses – – – – – – 3
1.6 Significance of the Study – – – – – 4
1.7 Scope of the Study – – – – – – 4
1.8 Limitations of the Study – – – – – 4
1.9 Definition of Terms – – – – – – 5
CHAPTER TWO: LITERATURE REVIEW
2.1. Introduction – – – – – – – 6
2.2. Conceptual Framework — – – – – 6
2.2.1. Sales Promotion – – – – – – 7
2.2.2. Nature of Sales Promotion – – – – – 10
2.2.2.1. Dimensions of Sales Promotion – – – – 1
Sales Promotion Strategy – – – – – 13
Importance of Sales Promotion – – – – 14
Sales Promotion Regarding Consumers – – – 15
2.2.4. Business Objectives and Sales Promotions – – – 18
2.2.5. Sales Promotion and Advertising – – – – 21
2.2.6. Sales Promotion and Purchases – – – – 22
2.2.7. Influences of Sales Promotional Tools – – – 23
2.2.8. Consumer Patronage – – – – – – 26
Customer Satisfaction and Customer Patronage – – 27
2.2.10 Establishing Brand Loyalty – – – – – 28
Review of Previous Studies – – – – – 30
Theoretical Framework – – – – – 33
The Extended Model – – – – – – 33
2.4.2 Assimilation contrast theory and Operant Conditioning – 34
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction – – – – – – – 36
3.2 Research Design – – – – – – 36
3.3 Study Population – – – – – – 36
3.4 Sample and Sampling Techniques – – – – 36
3.5 Sources of Data – – – – – – 36
3.5.1 Primary Sources of Data – – – – – 37
3.5.2 Secondary Sources of Data – – – – – 37
3.6 Method of Data Collection – – – – – 37
3.7 Method of Data Analysis – – – – – 37
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Introduction – – – – – – – 40
4.2 Brief History of Kilimanjaro – – – – – 40
4.3 Presentation and Analysis of Data – – – – 41
4.4 Test of Hypotheses – – – – – – 48
4.5 Discussion of Findings – – – – – – 57
CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATION
5.1 Summary – – – – – – – 60
5.2 Conclusions – – – – – – – 61
5.3 Recommendations – – – – – – 61
5.4 Suggestions for Further Research – – – – 62
References
Questionnaire
LIST OF FIGURES
Figure 2.1: Conceptual Framework – – – – 6
Fig. 2.2: Sale Promotion Dimensions – – – 12
Fig: 2.3 Attitude, Habit, Loyalty and Brand Equity Model – 29
Fig. 2.4: Customer Loyalty – – – – – 30
LIST OF TABLE
Table 4.1 Analysis of Questionnaire Administered – – – – 41
Table 4.2 Gender of Respondents – – – – – 41
Table 4.3 Martial Status of Respondents – – – – 42
Table 4.4: Effect of sales promotion on customer traffic – – 42
Table 4.5: Influence of free samples on customer traffic – – 43
Table 4.6: Influence of sales promotion on provision of information- 43
Table 4.7: Influence of point of purchase display on customer traffic- 44
Table 4.8: Effect of sales promotion on profit – – – 44
Table 4.9: Influence of price promotion tool on profitability – – 45
Table 4.10: Effect of premium promotional tools on firm’s profit- – 45
Table 4.11: Effect of sales promotion on sales volume – – 46
Table 4:12: Effect of Coupons on Sales Volume – – – 46
Table 4.13: Influence of sampling on sales volume – – – 47
Table 4.14: Relevance of bonus promotional tool on sales volume – 47
Table 4.4.2 – – – – – – – – 57
Table 4.4.3 – – – – – – – – 57
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Sales promotion became an essential motivating factor in the area of marketing in an organization. Modern marketing is more than just producing goods, products, suitable pricing and easy access to them. Today, attracting new customers has become so important in modern marketing. All business need to communicate to the customer what they have to offer. Promotion refers to the motivational methods of getting the customers to purchase the product. According to Schultz et al (2012), promotion is referred to as “any communication used to inform, persuade and/or remind people about an organization” or individual’s goods service, image, ideas. Sales promotion consist of a variety of incentive tools, mostly short term, that are used to stimulate customer patronage. Schultz et al (2012) says that sales promotion generally works on a direct behavioural basis rather than affecting awareness or attitude. A sales promotion stimulates customer purchase. In order words, a sales promotion provide incentive or customers to purchase some specific products of Kilimanjaro. The purpose of a sales promotion is to attract new customers, maintain existing customer who are contemplating switching brands sales promotion vary, depending in the situation and need, and they have an immediate effect on product purchases.
Kilimanjaro’s restaurant is one of the leading restaurants in Uyo. It has many customers within the city of Uyo and visitors who use its products (food). Apart from the food service, it also offers conference rooms for meetings, meeting joints to watch DSTV channels, especially football and recreation for customers’ children, especially during public holidays. Sales promotion is used in a way that it matches those of the competitors (other fast food restaurants) or better still, a little bit higher than that of the competitors. Sales promotion is one of the most important ingredients of the marketing mix that any fast food organization should concentrate on to ensure it attracts more customers. Promotion activities plays a major role in determining the consumption of the product of Kilimanjaro since it determines customer patronage.
This study therefore seeks to evaluate the effects of sales promotion of Kilimanjaro fast food restaurant, a broad company of De-United Ltd on consumer behaviour. The brand with its varieties of products such as chicken, suya, beef, has become a household name since the late 90s that even a child of 2 years of age could pronounce it so fluent amidst other competing brands like Mr. Biggs, Apples, Food Affairs and now the latest of them all, the Tantalizer. With these range of competing restaurants, massive advertising budget comes necessary for the brand, which the researcher tends to evaluate its effects on the behaviour and/or perception of the consumers.
1.2 Statement of the Problem
It is true that consumers exhibit various attitudes and behaviour towards the patronage of product and services offered to them. Most fast food outlets are faced with the problem of customer patronage and competition. Consequently, many fast food outlets now attempt to stimulate customer’s patronage (sales, profit and customer traffic) by using sales promotional tools.
According to Ansari (2011), organizations usually encounter problems such as low sales, low profit and low customer traffic. This has been attributed to the poor organization of sales promotional activities by Kilimanjaro fast food. This problem of low sales, low profit and low customer traffic has prompted most fast food outlets to use sales promotion. However, it has been observed over the years that Kilimanjaro does not employ the use of appropriate sales promotional tools and methods. To this end, there is need to investigate the effect of sales promotion on customer patronage.
1.3 Objectives of the Study
The main objective of the study is to determine the effect of sales promotion on customer patronage of fast food outlets. Specifically, the study is designed to:
Determine the effect of sales promotion on customer traffic.
Determine the effect of sales promotion on profit.
Determine the extent to which sales promotion influences sales volume.
1.4 Research Questions
To what extent does sales promotion affect customer traffic?
To what extent does sales promotion affect profit?
To what extent does sales promotion influence sales volume?
1.5 Research Hypotheses
H01: There is no significant relationship between sales promotion and customer traffic of fast food outlets.
H02: Sales promotion does not significantly affect profit of fast food outlets.
H03: Sales promotion does not significantly affect sales volume of fast food outlets.
1.6 Significance of the Study
In this era of marketing concept where the consumers are recognized as kings and queens in the palace of marketing, firm’s activities must be aimed at retaining customers on a long term basis in order to make more profit and remain in business (Kotler, 2016).
This study will be of great significance to Kilimanjaro fast food. Through the study, findings and recommendations shall be made, and useful information provided on how to improve and maintain consumers responses to sales promotion in fast food firms. This research will also be beneficial to other researchers who will want to do further work on the topic and would serve as a source of information to such researchers. It will be particularly useful to Department of Marketing where it would be kept for reference for other students of the department.
1.7 Scope of the Study
The scope of this study was to examine the effect of sales promotion on customer patronage of fast food outlets, using Kilimanjaro as a case study.
1.8 Limitations of the Study
This study is limited to fast food firms. In the process of carrying out the study, a lot of problems were encountered out of which are:
Some vital information were not readily available. The manager considered them as confidential and not meant for the public, hence, those information could not be reached.
The attitude of some of the workers was part of the barriers, while some do not even attend to the researcher because they felt that the research is irrelevant to them and has no impact on their work.
Finally, time factor was another problem encountered as most of their staffs were complaining that they were very busy to attend to me as a result of the waiting customers.
1.9 Definition of Terms
It is necessary to define some terms used in the course of this research study so as to adequately capture their meanings within the context of the study. Terms to be defined are as follows:
Sales Promotion: It may be described or defined as the use of short term incentives periodically to stimulate or encourage consumers to buy product.
Patronage: It is the support, encouragement, privilege or financial aid that an organization or individual bestows to another.
Sales: It is the activity related to selling or the amount of goods or services sold in a given time period.
EFFECTS OF SALES PROMOTION ON CUSTOMER PATRONAGE OF FAST FOOD OUTLET A CASE STUDY OF KILIMANJARO FAST FOOD OUTLET, UYO
