THE IMPACT OF PROMOTIONAL
MIX ON SALES VOLUME (A CASE
OF ODA BULTUM BRANCH)
RESEARCH PROPOSAL SUBMITTED FOR THE
PARTIAL FULFILLMENT OF BA DEGREE IN
MANAGEMENT
Prepared By: kedir Abdella
Advisor:
DEPARTMENT OF MANAGEMENT
COLLEGE OF BUSINESS AND ECONOMICS
JIMMA UNIVERSITY
1
Abstract
The main objective of the study is to identify the impact of promotional
mix-elements on sales volume of Anbesa shoe share company. Then to
identify their effective utilization and to suggest what should to be done to
make promotion more attractive and effective to increase the amount of
sales volume and to pinpoint the associated problems. To collect primary
data self administered questionnaire and unstructured personal interview
will be uses. Judgmental non probability sampling will be used for
customers and simple random probability sampling will be used for
employee of the organization. A sample of 104 respondents will be
considered. From this 54 of the respondents will be from 215 employees
of the organization and 50 of them are customer of the company. Finally
after the data processed and analyzed the out come will be presented by
using tables, pie charts and percentages.
ACKNOWLEDGEMENT
First of all I would like to say thanks for my almighty allah for his support
in my life. I would like to express my deepest gratitude to my advisor Ato
Yohanes Tadese. For his unlimited advise and insight full commitment in
the preparation of this proposal.
I would like also to thanks w/rt Meskerem (secretary) for writing this
proposal. Finally my sincere gratitude goes to my families and J.U.M.J for
their unlimited financial and moral support.
i
TABLE OF CONTENT
Content page
Abstrat..............................................................................I
Acknowledgement..........................................................................................II
Table of content.............................................................................................III
CHAPTER ONE
1. Introduction ................................................................................................ 1
1.1. Background of the study ..........................................................................1
1.2. Statement of the problem .....................................................2
1.3 Objective of the study.................................................................................2
1.4. Significance of the study...........................................................................3
1.5. Scope of the study ....................................................................................3
CHAPTER TWO
2. Literature review............................................................................................4
2.1 Meaning of promotion ................................................................................4
2.2 Objective of promotion ..............................................................................5
2.3 Promotional budget ....................................................................................7
2.4. Developing promotional mix-element ......................................................9
2.5. Developing promotional message .........................................................10
2.6. Type of promotional mix-element ..........................................................13
CHAPTER THREE
3. Methodology...............................................................................................15
3.1. Source of data..........................................................................................15
3.2. Method of data collection.............................. .. .. . ............................15
3.3. Sampling technique ................................................................................15
3.4. Sample size .... ......................................................................................16
3.5. Data processing and analysis ..... ............. .......................................16
CHAPTER FOUR
4 .Work and cost budget plan ................................... .................................17
4.1. Work plan ..................................................................................... . ... .17
4.2. Cost budget plan ..................................................................................... 18
Reference.......... . .........................................................................19
ii
CHAPTER ONE
1. INTRODUCTION
1.1 Background of the study
Marketing strategies is a set of specific idea and action that out line and
guide decisions on the best chosen was to create, distribute, promote and
price of product or services within the given environment( Http://
en.wikipedia promotion marketing ).
Marketing strategy focuses on ways in which the one business activity
differentiate it self from the other business. From this point of view
promotion has vital role to announce the organizational product and service
to increases the volume of sales in to days competitive business world.
In the current time many local and international profitable organization are
using different type of promotional mix-elements such as advertising,
public relation, direct marketing, sponsorship, exhibition, packaging, post
merchandizing, sales promotion and personal selling to increase their sales
volume.
In Ethiopian context some of the above listed promotional mix-elements
are not used in practice effectively. The most common promotional mix-
elements which are implemented are: Advertising, sales promotion, public
relation, and personal selling to encourage in tire society and to increase the
companies sales volume.(rahel tadess,2007).
Anbesa shoe share companies is one of Ethiopian companies that uses
promotional mix-elements to increase its sales volume. So the researcher is
motivated to study regarding this topic and tray to show the effective
utilization of promotional mix-elements and their effect on the amount of
sales volume of the company.
1
1.2 Statement of the problem
Promotion is as the back bone of running the business in the current market
for many local and international organizations. Anbesa is one of profitable
organization which produces different kinds of shoe products. So as
profitable organization the company wish to increase its profit. To increase
the profit increasing sales volume has significant role. According to these
idea the study try to assess how promotion mix-elements employed in our
country and specifically in the case of Anbesa shoe share company.
So due to the above statement the study will try to answer the following
basic question.
What type promotional mix-elements are being used?
Why the company prefer that method from the other?
What is the impact of promotional mix-element on the companies
sales volume?
What is the company strategy to analyze competitors promotional
effort?
1.3 Objective of the study
1.3.1 General objective
The general objective of the study will be to identify the effective
utilization of promotional mix-elements on the case of Anbesa shoe
share company.
1.3.2 Specific objective
To assess the promotional mix-element that are used in Anbesa
shoe share company
To know why the company prefer the currently used
promotional mix if any
To assess the impact of promotional mix-elements on sales
volume.
2
To know about what is the company strategy concerning
analyzation of competitors promotional mix-element.
To see the effectiveness of implemented promotional mix-
element.
1.4 significance of the study
The paper is significant because it enables one to know the
promotional mix-element and promotional strategy of ASSC to
word its effect on sales volume of the product that uses to create
awareness of its customer in relation to other related competitive
companies, depending up on this the paper will produce the
following significant.
It helps the company to enhance its effective usage of
promotional mix-element to increase sales volume in
relation to other competitive shoe company.
It enable to identify potential customers and to what extent
thy are interested to ward the product of ASSC.
It helps any business students who are interested to study
similar and related topics.
1.5. Scope of the study
The study will give much emphasis effective utilization of
promotion mix-elements in relation to its effect on sales volume in
case study of Anbesa shoe Share Company. Which is located in
Addis Ababa at 350 km apart from Jimma. In the time between
January and June. the whole out put and any recommendation of
the study is delimited to ASSC
3
CHAPTER 2
LITERATURE REVIEW
2.1 Meaning of promotion
Promotion is one of the four element of marketing mix i.e product, price,
promotion and place. It is a communication link between sellers and
buyers for the purpose of influencing, informing or persuading a potential
buyers purchasing decision. The promotion mix specify that how much
attention to pay to each of sub categories and how much money to budget
for each. A promotional plan can have wide range of objectives including:
sales increase, new product acceptance, creation of brand equity,
positioning competitive realization and creation of a corporate image.
( Http:// en.wikitedia. promotion marketing)
Persuade and remind the market of a product and/or the organization of saving it,
with the hope of influencing the recipients' feelings, beliefs behavior. Promotion
includes all those activities, which are aimed at creating of stimulating demand. It
has been defined as the coordination of all sever initiated efforts to set up channels
of information and promotion is the element in organizations mix that service of
acceptance of an idea. Thus promotion is marketing activity which is aimed at
informing, persuading and including the consumer to buy goods or services.
.( Http:// en.wikitedia. promotion marketing)
4
2.2 Objective of promotion
The different promotion method is different form of communication. But good
marketing managers aren't interested in just communicating. They want communication
that encourages customers to choose a specific product. They know that if they have a
better offering, informed customers are more likely to buy. There fore, they are
interested in:
1. Reinforcing present attitudes of relation ships that might lead to favorable behavior or
Actually changing the attitude and behavior of the firms target market.
2. Interims of demand curves, promotion may help the firm make its present demand curve
more inelastic, or shift the demand curve to the right or both.
The firms promotion objectives must be clearly defined because the right promotion
blend depends on what the firm. Wants to accomplish. It is help full to think of three
basic promotion objectives; informing, persuading and remanding target customers
about the company and its marketing mix. All try to affect buyer behavior by providing
more information.
Even more useful is amore specific set of promotion objectives that states exactly who
you want to inform, persuade or remained and why. This is unique to each company's
strategy and specific objectives vary by promotion method.
5
2.2.1 The three basic promotion objectives.
1. Informing- potential customers must know something abut a product if they at all.
A firm with a really new product may not have to do any thing but inform
customers about it and show that it meets consumer needs better than other
products.
2. Persuading- when competitors offer similar product, the firm must not
only inform customers that its product is available but also persuade
them to buy it, persuading objectives means the firm will try to
develop a favorable set of attitudes so customers will buy and keep
buying, it product. A persuading objective often focuses on reasons
why one brand is better than computing brands.
3. Reminding- if target customers all ready have appositive attitudes
about affirms market mix of a good relation ship with the firm a
remanding objective might be suitable. This objective can be
extremely important in some cases. Even though customers have been
attracted and sold once, they are still targets for competitor's appeals.
(P.KOTLER: 1997,P 662).
2.2.2 Promotion requires effective communication
Promotion is wasted if it doesn't communicate effectively there are many
reasons why a promotion message can be misunderstood of not heard at all.
To understand this, it's betters to think about a whole communication
process, which means a source trying to reach a receiver with a message.
1. Communication- they gain attention and usually provide information
that may lead the consumer to the product.
6
2. Incentive- they incorporate some concession
inducement and contribution deigned to represent value to
the receiver.
3. Invitation- most includes distinct invitation to engage in the
transaction mow. (G.Lilicn kotler and moorthy; "1992
P.326)
2.3 The promotional budget.
Decision about the allocation. of effort above and below the line
can not be made of course, until it has been established how much
many is available to be spent on media buying, the distribution of
mews releases, tale marketing costs sponsor ship, the designing
and production of packaging, point of sale and sale:-3 promotion
material and so on.
This amount formally defined as the promotional appropriation
reflecting the fact that it is appropriated from the total funds
allocated to the marketing effort.
In fact budget is not an amount of many as in colloquial usage, but
a plan for spending it as in the chancellor's annual budget speech.
It describes sources and uses of funds over a given future period,
normally a year. By demanding for word planning providing an
integrated frame work for operational decisions and establishing
quantifiable standards of cost effective performance, it formularize
control over expenditure. If the statement of the promotion
appropriation is not accompanied by such a plan for spending it.
There is far too much scope for profligate waste of scarce funds in
a business that is not odiously image-conscious and fashion-lead
as noted author from with in the business remarks in a book
significantly titled accountable advertising.
7
It is no longer enough for the marketing director to determine
how much it is right to spend an advertising he/ she still has make
this decision but must now do more justify it.
The most crucial control mechanism in a promotional budget will
be
the cost effectiveness criteria it specifies. The tedious straight for
ward process of recording all them any costs attributable to a
campaign presents of recording all them any costs attributable to a
campaign presents no practical difficulties however reliable measures
of the effectiveness of a campaign are rarely encountered in practice
beyond the direct marketing and advertising disciplines. Even in those
two cases, criteria are severally limited. The success of failure of
direct marketing imitative is normally reported in terms of coupon
returns enquires of the page order its communicative efficiency is
seldom tested in any way advertising effectiveness is typically
measured by criteria such as awareness, recall, attitude change and
sales movements. Yet there has never been convincing proof that the
first three actually increases the probability that the audios will
subsequently take appropriate action, while the fourth makes dubious
assumption about short-term causes and effect. We have to conclude
promotional expenditure may be scrutinized and contained, but it is
not controlled in any meaning full sense of the world.
(KOTLER: 2008, P 412)
8
2.4 Developing the promotional mix –element
Practicing managers faced by the choice of nine brood means to
achieve promotional objectives with in the budget need a formal from
work for deciding which to use and which not in a particular strategic
situation, and how much weight to give to one chosen. An overall
constraint on choice will of course be imposed by the funds
appropriated for the purpose, the subject of the previous section, and
an influence inevitably exerted by the industry. Wide trends reported
in the one before.
Decision makers will further more monitor the tactics of their
competitors. Debating the relative merits of head-to head assaults
versus out flanking maneuvers. ( J, Baker: 2000,p. 388).
Promotional mix-check list
Target- can this option reach the right audience?
Message- can it deliver this kind of message?
Price- what will be charged to use it?
Cost- what will it cost as product the material?
Receptivity- will the audience accept the
message?
Modulation- will the affect their reading
of it?
Measurability- can we reliably asses' effectiveness?
(J. Baker; 2000 P. 388).
9
2.5 Developing the promotional message
Originators of promotional messages normally delicate the task of
converting a abstract strategy in the concrete words and images.
The recipient of that responsibility will be either a specialist's
intermediary with expertise in the particular promotional technique
concerned, or full particular promotional technique concerned, or a
full-service advertising agency. It is likely to describe itself as and
agency,
Creative planning starts with a client brief from which the agency
distils an internal creative brier. Specialists in turn convert that in to
the creative exec unions winch in due course became finished
messages in the form of advertisements, mail shots, promotion of
the process which produce these transformations is surprisingly
elusive text books and professional monographs focus instead on
other evectional techniques and out come
Creative planning is a team operational the agency. It involves
account managers, who keep the client involves through the process
account planners, who bring a research based understanding of the
forget audience to the task, copy writers, who produce the words to
convey the message and art directors, who devise the images to
reinforce it Their collective aims to meet the objectives in the client
brief and out flank the opposition in doing so
The process begins with the isolation of specifically creative
objectives
from guidelines in the brief, including a clear statement of the key
10
message and target audiences. The next stage is likely to be a think,
tank session at which the remits is to apply lateral, disruptive
thinking to the problem, in the worlds of a 'prominent creative
directive director.
It was inspiration by such means that redefined lakeside as an energy
drink for teenagers and the Automobile Association as' the forth
emergency service. Row ideas of that kind age next subjected to the
disciplines of secreting against research based analysis of probable
audience responses, and the survivors refined in to more precise
communication concept. (J.baker:2000,p 390).
2.5.1 Delivering the promotional message
The promotional' mix offers a very diverse set of message delivery
channels. For example, the gap b/n between originate and audience
might be bridged by team chosen for a sports sponsor ship linkage by
telemarketing operators, by the media in which back ages there are
displayed or most obviously by the idea in which publicity and
advertising appear. Little has been written formally on the process of
selecting specific options with in the first four ge1?-eral choices, but a
whole sub- industry is devoted to the lost. This section will there fore
restrict it self to advertisers and their approach to media planning.
The complex task of allocating available funds appropriately among
proliferating media options is almost invariably delegated to and
advertising agency of media independent. This section will use agency
to stand for both. Developing the plan for delivering the message is a
team operation, involving account managers, who keep the client
involved through the process media planners, information
technologists with access to a vast of media owners. Their collective
aim is to find the right targets, out flank the competition, and soon cost
effectively.
11
Planning the correct strategy for delivering of he message starts with
client beret, from which all internal media brief destined, specialists
apply that to the twin tasks of media selection, choosing the vehicles to
deliver the creative strategy to the target audience, and media
scheduling, fixing the target accidence and media scheduling, fixing
the timing of individual exposures over the duration of the campaign.
The process beings with the isolation of objectives in the client brief
relevant to such media related factors as the ‘mood or tone of voice
of the advertising and the description of the target audience. The latter
must include a clear psycho graphic profile for the sophisticated and
comprehensive database built up by industry, wide media research
over
12
many years can tell planners great deal about associated media consumption
habits.
An essential second step is to establish the media allocation with in advertising
appropriation, for it places a limit on what is practically possibly. The team wills
next monitor competitor's media usage, in order to find unoccupied ground and
scope.(J.baker:2000, p 392).
2.6 Type of promotional mix-element.
There are many promotional mix elements such as advertising,
Exhibition, packaging, publicity, direct marketing, sponsor ship
merchandising, sales promotion and personal selling. (J. Baker: 2000 P. 279)
1. Advertising- is any paid form of non-personal presentation and
promotion of ideas, goods and services by identified sponsor,
(Armstrong: 2004 P. 494)
2. Publicity- is major mass promotional tools building good relations
with the companies various publics by obtaining favorable
publicity, building up a good corporate image and handling and of
unfavorable rumors, stores and events. (Armstrong: 2004 P. 515)
3. Direct marketing- is promotion Via, direct mail, e-mail or
telemarketing initiative, guarantying exposure to identifiable
individuals in a chosen target audience in return for the price of
postage, computer time or telephone calls plus a cost of producing
the mail short e-mail message or telesales operator's script (J.
Baker: 2000 P. 379)
1
4. Sponsor ship- is promotional via association with an entity, event or
activity typically. Delivering exposure to a primary target audience
by means of the sponsor's logo and to a secondary one by means of
reference to the sponsor in associated media coverage in return for
the price of a negotiated sponsor ship contract plus the cost of
producing visual identification material
5. Exhibition- are promotional via display and the presence of sales
representatives on an exhibitioners stand, delivering exposures to
visiting potential customers, in return for rate changed for the
Space by the exhibition promoter plus the cost of building,
installing and stocking the stand.
6. Packaging- is a promotion via display garneting exposure to customers at
the point of sale in return for the cost of designing
and producing the package.
7. Point of sales merchandizing is promotion via various forms of display,
acting as a remainder to customers of previously noticed promotional
messages, in return for the cost of producing the material used. (J. Baker:
2000 P. 380)
8. Sales promotion- this is consists of short term incentives to encourage
purchase or sales of products and services
9. Personal selling- this is two people communication in an attempt to
influence each other. (Armstrong:2004, p. 509).
2
CHAPTER TREE
Methodology
3.1. Source of data
Building needs different material for successful construction. So the only possible
way of achieving the objective of the study is through gathering relevant data to
do this researcher uses both primary and secondary data. The primary data will
be collected from customers and employees of the organizations. Secondary data
will be collected from both published and unpublished materials such as memos,
manuals, books, and research papers as much as possible.
3.2 Methods of data collection
To obtain relevant information the researcher will be used self administered
questionnaire and unstructured personal interview. Self administered
questionnaire is designed to give freedom for respondent and unstructured
personal interview is selected to get plenty information.
3.3 Sampling techniques
Judgmental (purposive ) non probability sampling techniques will be used for
customers and simple random probability sampling will be used for employee of
the organizations all management bodies will be interviewed.
3.4 Sample size
The researcher will design to conduct the study by using 104 samples. 54 is 25%
of 215 employees of the organization and 50 are customers of the organization.
3
3.5 Data processing and analyzing
After all relevant data collects the data will paces through different process such
as editing, coding, classification and tabulation. Then processing and analyzation
will be conducted by using pie charts, tables and percentage
4
CHAPTER FOUR
4. WORK PLAN AND COST BUDGET
4.1 work plan
s.No Activities SeP Oct No Dec Jan Feb Mar Apr may
v
1. Problem identification * *
2. Topic selection *
3. Literature review * *
4. Proposal writing * *
5. Proposal summation *
6. Proposal paper defense *
7. Data collection and * *
process
8. Data analysis and * *
interpretation
9. First draft report *
writing
10.Final report writing *
11.Paper presentation *
5
4.2 cost budget plan
s.No description of Unit Quantity Unit Unit total
items cost in cost
birr
1 Secretary page 45 4 180.00
2 Papers Pack 2 95 190.00
3 Pen Piece 6 3 18.00
4 Pencil Piece 2 2 4.00
5 Ruler Piece 1 2 4.00
6 Binding cost Piece 2 5 10.00
7 Transportation Trip 2 trip 100 200.00
sub total 606.00
Contingency 60.60
10%
Grand total 666.60
6
REFERENCE
The researcher used the following possible reference bookss
1. Micael, Jbaker (1995),marketing strategy and management,
3nd edition ,MACMILAN PRESS LTD.
2. philiph kotler, 1997), marketing management, 9th edition, prentice Hall,
new delh .
3. William D,perteaw Jr.E.Jerome and McXarthy (2000), marketing model,
Englewood Cliffs, nj prentice hall.
4. Gary LIlilien, D,Sridhar moorthly(1992), an introductory text ,
5. Kitler Armstorong (2004), principle of marketing 10th edition, forth worth, the
Dryden press co.
6. Boon and Kurtz(2003), contemporary marketing, 11th edition
7
Jimma University
College of business and economics
Department of management
Questionnaire
Dear respondent the purpose of this questionnaire is to identify effective utilization of
promotion mix-elements on sales volume of Anbesa shoe share company (ASSC)
You are kindly requested to fill out the questionnaire accurately and frankly.
Instruction: put (x) mark in the box for cloze ended questionnaires.
I would like to thank you in advance for your cooperation.
1. Sex male female
2. Age 15-30 30-45 above 45
3. Educational levels
Literate Certificate Diploma Degree
Masters Above MA
Illiterate
4. For how long have you been customer of ASSC?
1-5 year 5-10 year above 10 year
5. Do you heard or listen any promotion regarding to ASSC product?
Yes No
6. If your answer is yes for Q. 5 in which media?
Radio Television News paper
Promotion board Booklet
If any other please specify
7. Does the company promotion strategy create any motivation to buy its products?
Yes No
8. If your answer is No for question 7 do you have any suggestion to improve its
strategy
9. Is the type of promotion have been used by ASSC is enough to attract customers?
Yes No
8
10. If your answer is No for question 9 please specify why not attractive
11. What make you to become the customer of ASSC?
Quality
Price condition
Promotion strategy
If any other pleas specify
12. What kind of promotion mix-element does the company uses?
Personal selling Advertising
Public relation
Sales promotion
If any others please specify
13. Is promotional mix-element uses by ASSC is attractive enough in relation to other
competitive companies ?
Yes No
14. If your answer is No for Q 13 please give your suggestion to make attractive ?
15. Do you observe any improvement in regarding promotion of ASSC during your
customer hood?
Yes No
16. Do you think the promotional mix-element have any effect in relation to sales
volume?
Yes No
17. Did the promotions method used by ASSC increase your frequency of buying their
product?
Yes No
18. How do you compare the promotion and the quality of company product?
Related no related
Promotion is greater than quality
Quality is greater than promotion
9
If others please specify
10
Jimma University
College of business and economics
Department of management
Interview Question for management bodies
1) Does the company has any strategies to analyze to words its customer?
2) Why the company prefer currently used promotional mix-elements?
3) How do you see the companies price charging in relation to other company?
4). Is the product is available on time and required place?
5) What is your suggestion for effectiveness of companies promotions strategy?
6) How many sales does the company hove per year?
7) What kind of activities are performed toward the promotional system against the
competitors?
8) How do you explain the relation ship between promotion and sales volume of the
company?
11
Year 1999 2000 2001 2002 2003
Sale
volume
Promotional
budget
12
