THE IMPACT OF PERSONAL SELLING IN THE MARKETING OF BEVERAGES
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Personal selling which is one of the functions of marketing is very important in the business and marketing life of an organisation, it involves the face to face communication of information from a seller to a prospective buyer, it involves the interaction of both the seller and the buyer for the purposes of facilitating exchange for the mutual satisfaction of both parties. It has long been recognized as the oldest and probably the most important component of the promotional mix, its age can be ascertained by the fact that word of mouth and recommendation by others long in existence as a method of winning somebody over to some idea. A curious objective of Nigerian society and habits will reveal that selling is a major and ubiquitous economic activity, it would probably not be wrong to describe Nigeria as a nation of salesman and women.
Virtually every house in Nigeria has a room that serve as a shop, this is addition to numerous Kiosk dotted all around the towns and villages and the hundreds of thousands of Hawkers that are virtually part of the Nigeria landscape. Selling is thus a job which the Nigerian takes very seriously, but paradoxically, the professional salesman whom the seller looked down upon, various reason can be adduced for this, firstly, the generally how educational qualification of most of the salesmen. Secondly, there is the fact that the outward appearance of these salesmen is at best scruffy and finally there is general feeling of insecurity which makes the average Nigerian suspicious of any unvisited visitor who is often assumed to be a potential armed robber.
Insipite of all this, there is little doubts as to the critical role which personal selling, if properly applied could play in the fortunes of a company, particularly, a company operating in the industrial market. The importance of personal selling is inherent in its nature which involves the use of salesman who would usually be quite flexible in pitting across their message to ensure that it confirms to the peculiar needs and idiosyncrasies of their audience. Another aspect of personal selling which demonstrates its special nature is its lack of impersonality. This quality means that there is the possibility that the commercial in a largely friendly and relaxed atmosphere is focused on general marketing strategies with an emphasis on when marketing and promotional strategies should be personal selling driven or adverting driven. Most firms, however employ both promotional mixes when this is the case, it is important to determine the most effective way to integrate personal selling and advertising efforts.
On typical approach pointed out by Eisenhart (1998: 92 – 97) is to use advertising to generate company’s and product awareness and to identify potential customers. These sales leads are then turned over to the sales force for personal selling attention. The basic objective is to use low cost percontact advertising to identify prospects while more expensive personal selling efforts are used to turn prospects into customers. The effectiveness of the type of promotional strategy was documented by a study of 2,500 sales people that found mode then 85% of the salespeople and received leads from advertising during the past year. A specific example of effective use of advertising and personal selling is the promotional strategy of Nestle to introduce Milo beverages into the market.
The promotional strategy had four objectives:-
1. To increase brand awareness by 60%
2. To generate high quality leads for the sales force
3. To increase sales by 10% in six months and
4. To improve sales force morale.
Although a typical approach would be to advertise in trade publications to increase basis and spend considerable time arraying shelves setting up displays, accepting returned merchandise or addressing other problems. This unique promotional mix has produced strong relationship with retailers end has allowed the company to compete against larger firms, although an emphasis on personal selling in the beverage market is type at this time changes in technology indicate that personal selling may become more important in non – traditional business during the next few years as commented in sales technology increased importance of personal selling.
1.2 STATEMENT OF THE PROBLEM
Personal selling which is one of promotional tool that any firm or company can adopt in the marketing of its product whether in the consumer market or industrial market, is a vental promotional to instrument in the marketing of beverages particularly in the marketing of Milo by Nestle Plc. This as resulted into various selling positions taking by salesperson at different retail out lets for the product. These potions are either as order takers (counter salespersons) or order (missionary salespersons). The market for this product Milo attracted the combinations of the marketing promotional mix which include advertising, sales promotion, personal selling, publicity and pubic relations. Of these promotional mix, personal selling strategy seems to be the most vital promotion tool that is being used taking cognizance of the products position within the product life cycle. Thus, in every retail outlets where the product brand is salespersons are seen performing various selling function either in order takers, order getters etc. Some striking questions one needs to ask taking congisance of other factors that may bear on the performance of a product, what impact does personal selling bear on the marketing of Milo, does it have any positive impact on the sales volume and profitability of the product brand? In other to provide candid answers to these and many more. This study will critically evaluate the impact of personal selling in the marketing of Milo product by Nestle company.
1.3 OBJECTIVES OF THE STUDY
The objectives of the study among other things include the following:-
1. To determine the impact of personal selling on the marketing of Milo
2. To evaluate the personal selling strategy adopted in the marketing of Milo.
3. To find out whether personal selling strategy adopted in the marketing of Milo creates awareness for the product.
4. To determine whether personal selling strategy adopted in the marketing of Milo has any significant impact on the sales volume of the product.
5. To determine whether the personal selling strategy adopted in the marketing of Milo has any significant impact on the profitability of the product.
6. To determine whether the selling strategy adopted in the marketing of Milo is in adequate or not.
7. To recommend possible ways of improving on the personal selling strategy adopted in the marketing of Milo.
1.4 FORMLUATION OF HYPOTHESIS
Ho1: Personal selling strategies used in the marketing of Milo do not have any significant impact on the sales volume of the product.
Hi1: Personal selling strategies used in the marketing of Milo have any significant impact on the sales volume of the product.
Ho2: Personal selling strategies used in the marketing of Milo do not have any positive impact on the profitability of the product.
Hi2: Personal selling strategies used in the marketing of Milo have any positive impact on the profitability of the product.
Ho3: Personal selling strategies used in the marketing of Milo impact negativity on consumer patronage of the product brand.
Hi3: Personal selling strategies used in the marketing of Milo impact positively on consumer patronage of the product brand.
Ho4: Personal selling strategies used in the marketing of Milo do not have significant impact in creating consumers satisfaction for the product.
Hi4: Personal selling strategies used in the marketing of Milo have significant impact in creating consumers satisfaction for the product.
1.5 SIGNIFICANCE OF THE STUDY
No research work is a mere pre-exercise, therefore the study will be of great benefit to the following: First and foremost, this study will be of benefit to the company (Nestle Nigeria Plc) and marketers of Milo as it will indicate the effects and defects of using personal selling as a promotional strategy. Again, the study will be of significance to the consumer of Milo as it reveals positive ways of building and cementing salesperson –customer relationship which will invariably increase customer satisfaction. Besides, both the researcher and the readers will gain an indepth understanding and knowledge from the information contained in the study which will stir up further studies.
1.6 SCOPE OF THE STUDY
The scope of the study defines the limits of the investigation to be carried out. In view of this, the study will critically investigate the impact of personal selling in the marketing of Beverages particularly the effect or the customer patronage sales volume and profitability. Due to time and resources, constraints, they will be limited to Enugu metropolis.
1.7 DEFINITION OF TERMS
Personal selling: A face to face sales representation by a person called the
seller to another called the buyer.
Strategy: It is a work plan aimed at achieving a defined objectives or selling target.
Brand: This is a name or symbol that differentiates a product
from another.
Product: Anything that is of value or useful and can be offered for sale.
