THE IMPACT OF SALES PROMOTION ON SALES VOLUME IN A BUSINESS

ORGANISATION; A CASE OF TANZANIA POULTRY FARM- ARUSHA

IRENE RAYMOND SWAI

ID NO: 2016100406

SUPERVISED BY: DR. MSAFIRI ALLEN PhD

A Research project submitted to the Department of Business in Partial Fulfillment for the
Award of Bachelor Degree in Business Administration in Accounting with education at the
University of Arusha.

2019
Table of Contents

ABSTRACT....................................................................................................................................3
CHAPTER ONE..............................................................................................................................5
INTRODUCTION...........................................................................................................................5
1.0 Introduction............................................................................................................................5
1.1 Background of the study........................................................................................................5
1.2 Statement of the problem.......................................................................................................6
1.4 Research objectives................................................................................................................7
1.5 Research question..................................................................................................................7
1.6 Scope of the study..................................................................................................................7
1.7 Significance of the study........................................................................................................8
1.8 Theoretical framework...........................................................................................................8
1.9 Organization of the study.......................................................................................................9
CHAPTER TWO...........................................................................................................................10
LITERATURE REVIEW..............................................................................................................10
2.1 Introduction..........................................................................................................................10
2.2 Theoretical literature review................................................................................................10
2.2.1 Concept of Sales Promotion..........................................................................................10
2.2.2 Theories of Sales Promotions........................................................................................12
2.2.3 Types of Sales Promotion techniques...........................................................................13
2.2.4   Reason for Sales Promotion........................................................................................16
2.2.5 Importance of Sales Promotion.....................................................................................17
2.3 Empirical literature review...................................................................................................18
CHAPTER THREE.......................................................................................................................20
RESEARCH METHODOLOGY..................................................................................................20
3.1 Introduction..........................................................................................................................20
3.2 Research Design...................................................................................................................20
3.3 Population............................................................................................................................22
3.4 Sample and Sampling technique..........................................................................................22
3.5 Sources of Data....................................................................................................................23
3.6 Data Collection Instrument..................................................................................................23
 3.7 Data Analyses methods........................................................................................................24
3.9 Reliability and Validity Tests..............................................................................................24
3.10 Ethical considerations........................................................................................................24
CHAPTER FOUR.........................................................................................................................26
4.0 RESULTS AND DISCUSSION..............................................................................................26
4.1 Introduction..........................................................................................................................26
4.2 Research Response Rate......................................................................................................26
4.3 General and Demographic Information of Customers and staff of TPF..............................27
4.3.1 Customers’ and staff’ age..............................................................................................27
4.3.2 Customers’ and staffs’ Sex............................................................................................28
4.3.3 Experience of staff members...................................................................................28
4.3.4 Level of Awareness on the Sales Promotion Strategies................................................30
4.4 The effect of Sales Promotions on sales volume.................................................................30
4.5 How sales promotion influence consumer purchase behavior.............................................32
4.6 Whether consumers benefit in sales promotion...................................................................33
4.7 Main factors that affect sales promotion..............................................................................34
4.8 Challenges affecting sales promotion activities undertaken by TPF...................................35
CHAPTER FIVE...........................................................................................................................36
CONCLUSION AND RECOMMENDATIONS..........................................................................36
5.1 Introduction..........................................................................................................................36
5.2 Conclusion...........................................................................................................................36
5.3 Recommendation.................................................................................................................36
References......................................................................................................................................38
APPENDIX....................................................................................................................................40
ABSTRACT

The study is about the impacts of sales promotion in a business organization. The study was

conducted in an organization dealing with poultry products (Tanzania Poultry Farm) located in

Meru district.

The study was guided by the following set objectives: to examine if Sales Promotions have

significant effect on organizational performance, to know how Sales promotion influence

consumer purchase behavior, knowing if consumers really benefit in sales promotion, to examine

the implications of defective sales promotion in an organization and to know the main factors

that affect sales promotion.

Both primary and secondary methods were used to collect data for this study. For the primary

data self administered questions were employed and secondary data journals articles, news

reports, and books were among the secondary resources. Descriptive data analysis was used to

analyze data obtained from the field, the methods used in obtaining primary data included: self-

administered questionnaire, secondary data was also used and obtained through secondary

data sources; Reports, Education journal, Text books among others.

The research findings will help firms and organization in knowing the importance of sales

promotion so as to improve the effectiveness and efficiency of the business. Also it will be useful

to other scholars in improving and increasing their field of knowledge especially in promoting

sales in the organization.

The study recommends that management of TPF involves key distributors and supply chain

members in sales promotional activities and to integrate all promotional tools to ensure that all

promotional goals are achieved.

CHAPTER ONE

INTRODUCTION

1.0 Introduction

This chapter presents the introduction, background of the study, statement of the problem,

objectives of the study, questions of the study, significance of the study, delimitation of the

study, and limitation of the study.

1.1 Background of the study

During all these years, there has been considerable and growing interest on the impacts brought

by sales promotion. For more than decades, sales promotions have grown in importance, chiefly

to increase the sales temporarily to increase sales volume or market share. Sales promotion have

grown importance and worked as marketing kit for the business world. (Wathieu & Murre, 2007)

Many purchase situations are so habitual that customers conduct very little cognitive activity”.

For the marketers it is difficult to motivate the behavior of customers for brand switching or

increase the numbers of unit purchase. The promotional activity stimulates the customer for

rethink and evaluates the brand and the quantity that they may not have been realized. So, the

sales promotion has grown as the important tools for the marketers and retailers used with

different promotional tools and strategies in order to understand the customers’ preferences and

boost the sales of their business. (Nakarmi, 2018)

Due to the increase acceptance of sales promotion by firms as a very important element of the

promotional mix and its expenditure also being on the rise, it has become very import to examine

whether sales promotion is actually making any impact on the volume of sales. This paper will
evaluates the effect of sales promotion on the volume of sales of products in a business

organization

1.2 Statement of the problem

Sales promotions consist of a large variety of temporary strategic promotion tools which aim is

generating a desired response from the consumer (Gilbert, 2002). One of sales promotion tools

advantage is that can stimulate the consumers to think and assess brand and purchase

opportunities when otherwise they may not have. Therefore, various types of promotion tools

and promotion strategies are utilized by the marketers so that they can know consumer

preference and increase their sales. (Rizwan, Javed, Khan, Aslam, & Anwar, 2018)

In spite that researchers have shown the influence of sales promotion on customer behavior,

however, the researcher did not find the impact of sales promotion on organization performance.

(Kopalle, Carl, & Marsh, 1999)

Many firms pay little attention to sales promotion since they feel they can sell their product with

little or no promotional activities (Lembeck, 1999). Likewise, many firms which could not afford

the huge cost of the promotional programs would entail and despite the effects of sales

promotion, there had been insufficient research and decision modeling devoted to it (Syeda,

2012). In addition, there is an established negative perception of many firms as regards the cost

of business promotion especially those whose benefits are not early and immediately reached.

(Blanchard, 2009)

Also, adequate records of sales and promotional cost are always neglected and some sales

promotion programs are introduced at the wrong time, which will therefore hinder the level of
sales and profitability of the firm and thereby render sales promotions less important in the

community and the country as a whole.

1.4 Research objectives

1. To examine if Sales Promotions have significant effect on sales volume

2. To know how Sales promotion influence consumer purchase behavior

3. Knowing if consumers really benefit in sales promotion

4. To know the main factors that affect sales promotion

5. To know the challenges facing an organization in sales promotion.

1.5 Research question

This study tends to investigate and provide answers to the following questions.

1. Does Sales Promotion have significant effect on sales volume?

2. Does sales promotion influence consumer purchase behavior?

3. Do consumers really benefit in sales promotion?

4. What are the main factors that affect sales promotion?

5. What are the challenges facing an organization in sales promotion

1.6 Scope of the study

This study will cover investigation on the impacts of the sales promotional tools in Tanzania

Poultry Farm Company in Arusha. . This paper will evaluates the effect of sales promotion on

the volume of sales of products in a business organization

1.7 Significance of the study

1. This research would be significant to understand the influence of the promotions on

the performance of business organization.

2. The study would determine the relevant short-term marketing strategy that would have

greater impact on increase in sales volume and market share.

3. The outcome this study would be relevant to different companies to determine the

various factors that influence the consumer’s purchase decisions and adjust their sale

promotion strategies accordingly.

4. It would also help the firms to utilize their resources in optimum way and increase

profitability and the market share.

5. Also it will be useful for further research and studies.

1.8 Theoretical framework

Most of the theoretical research on promotions has concentrated on aspects of price and its

impact on consumer judgments. This is probably due to the fact that the bulk of the research has

focused on price promotions. Studies have examined the impact of price promotions on

consumers’ internal reference price and the impact of comparative price advertising1 on

consumer perception of savings obtained from a price promotion. Apart from these, other

theoretical approaches used to study consumer response to price promotions include attribution

theory, transaction utility theory, the attitude model and the elaboration likelihood model. Each

of these theoretical approaches is discussed in detail below. ƒ Adaptation Level Theory This

theory proposes that consumers carry with them an adaptation level price or ‘internal reference

price’ for a given product. The internal reference price is represents the price a consumer expects

to pay for a product and is formed on the basis of past prices paid/observed either for the same
product or similar products. The internal reference price is a standard against which market

prices are compared and judged as high, low or medium.

In a study on the reference effects of price and promotion on consumer choice behavior, Lattin

and Bucklin (1989) found that consumers form reference points for both price and promotional

activity. These reference points are based on consumer’s previous exposure to prices and

promotions and affect subsequent patterns of brand choice. The authors stated that too much

price discounting would blur the distinction between the promotional price and the regular price

of the product thus lowering consumer reference price for the product

1.9 Organization of the study

This study is organized in five chapters. Chapter one describes the introductory part of the study;

includes background of the study, aim of the study, research questions and significance of the

study. Chapter two includes the literature review on sales promotion, types of sales promotion,

consumer decision process, effect of sales promotions, and consumer gain on sales promotions,

chapter three is research methodology that is used for the research which comprises of research

methods, research strategy, validity and reliability of the research findings, limitations and data

analysis. The chapter four comprises of the result and discussion of the research and the chapter

five presents the summary and the conclusion of findings and recommendations of the study.
CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

 This chapter presents the review of various literature related to the study based on the impact of

sales promotion in a business organization. The aim of this chapter is to provide relevant

information on the whole process of sales promotion in a business organization. This chapter

deals with review of empirical work on sales promotion and organizational performance.

 2.2 Theoretical literature review

This section consists of the literature, which provides theoretical background for this study. The

following review of literature provides conceptual clarity in the field of sales promotion research.

2.2.1 Concept of Sales Promotion

(Ghose, 2008) The word promotion, originates from the Latin word ‘Promovere.’ The meaning is

“to move forward” or to push forward or to advance an idea. The aim of production is sales.

Sales and promotion are two different words and Sales Promotion is the combination of these

two words. Sales promotion increases the sales. Despite being widely used in the management

sphere (Wierenga, 2010), sales promotion has scarcely been explored in the academic field

(Alvarez, 2008).The widespread use of consumer sales promotions in product management has

sparked considerable debate over their effectiveness. Critics argue that sales promotions are

ineffective as they make consumers more promotion prone, resulting in market share losses in

the long run (Ehrenberg, 2014)

Meanwhile, the term “promotion” means different things to many people depending on the

context and discipline being used. That is, the concept is used ordinarily here to mean an element
of a “marketing mix”. In one sense, it denotes any technique designed to sell a product (Ricky,

2015) . To others, it refers to any attempt by a seller to influence a buying decision (Blanchard,

2009). Like promotion, the marketing concept of “sales promotion’ has also been numerously

conceived by many scholars. Equally, (Blanchard, 2009) also opines that sales promotion as “the

array of short-term promotional techniques that marketers use to stimulate an immediate

purchase”. Likewise, sales promotion can be described as materials that act as a direct

inducement, offering added value, or incentive for the product, to resellers’ sales persons or

consumers.

The International Chamber of Commerce (ICC) defines sales promotion as: "Marketing devices

and techniques which are used to make goods and services more attractive by providing some

additional benefit, whether in cash or in kind, or the expectation of such a benefit ". (Boddewyn,

2009).

The American Marketing Association as cited in (Zekeri, 2014) defines sales promotion as those

marketing activities other than personal selling, advertising and publicity that stimulate consumer

purchases and dealer effectiveness. They are important because they increase the likelihood that

buyers will try products, they also enhance product recognition and can increase purchase size

and amount. Sales promotion includes displays, exhibitions and administrations. There is often a

direct link between sales promotion and short term sales volume. It is different from advertising

in that it offers the consumers an incentive to buy, whereas advertising merely offers a reason to

buy, as such sales promotion can be particularly useful in inducing trials by consumers of rival

products
2.2.2 Theories of Sales Promotions

Sales Promotion Theory is the study of increasing short-term sales revenue. This study can be

conducted readily and effectively as the results can be measured quickly and, because of the

narrow focus of the promotion, other factors can be tightly controlled for. Sales promotions are a

source of some debate, as some argue that increasing short-term sales does not lead to long-term

profitability. Others argue that the benefits of creating more income for the company in the short

term allows that company to more rapidly grow to gain a larger market share. While promotions

come in many different forms, most fall into three categories: Push, Pull, and Combination

(Dick, 2017)

1. Push Promotions

Using the Push Theory, you can increase sales by creating incentives to wholesalers or retailers

to sell more of your product. In this method you would offer discounts to wholesalers or retailers

who buy your product in bulk. This leaves them with more of your merchandise on hand and

drives them to sell more of your product. Giving them the discount “pushes” them to buy more

of your product at a lower price to increase the amount of money they make. In turn they must

“push” your products to customers because they will make a better return on them than on

similar products supplied to them by your competitors. (Dick, 2017)

2. Pull Theory

The Pull Theory is about trying to market directly to customers to increase their demand for your

product. Advertising and tie-ins with other products or services is the key to this strategy. The

theory goes that if you increase the demand for your product by consumers, they will in turn

demand the product from retailers, retailers will demand more of your product from wholesalers
and wholesalers will demand more products from you. This is a way to increase your sales

without decreasing the sale value of your merchandise. Most of the costs are in advertising, so

using a tie-in with a related product or service can disperse this cost across both companies.

(Dick, 2017)

3. Combination Theory

This theory requires both of the above theories working together. The "push" is used to get more

products into the hands of retailers and wholesalers while advertising and product tie-ins with

other products are used as a "pull" to get more people to want to buy the product. Grocery stores

often use this tactic. They fill stores with products they have a high profit margin on (the push)

and run commercials that advertise the store rather than a specific product (the pull). (Dick,

2017). The car industry provides an excellent example of combination sales promotion theory.

Manufacturers advertise and tie-in with television shows to market directly to customers (pull)

and offer deals to dealerships to move more products (push). This leads to "dealer overstocks"

and special "factory deals" while the commercials generate more interest in the car brand.

2.2.3 Types of Sales Promotion techniques

Both manufacturers and retailers make extensive use of sales promotions. Retailer-sponsored

sales promotions are directed at consumers. Manufacturers use two techniques of sales

promotion, namely; consumer sales promotions and trade promotions (Ailawadi, updated;2008)
2.2.3.1 Consumer sales promotions techniques

They are short term techniques designed to achieve short term objectives, such as to stimulate a

purchase, encourage store traffic or simply to build excitement for a product or brand. Sales

promotions are targeted at consumers or end-users and designed to stimulate the actual purchase.

It includes

1. Price deal: A temporary reduction in the price, such as 50% off.

2. Cents-off deal: Offers a brand at a lower price. Price reduction may be a percentage

marked on the package.

3. Price-pack/Bonus packs deal: The packaging offers a consumer a certain percentage

more of the product for the same price (for example, 25 percent extra). This is another

type of deal “in which customers are offered more of the product for the same price”.

(Yin & Jin-Song, 2014) For example, a sales company may offer their consumers a

bonus pack in which they can receive two products for the price of one. In these

scenarios, this bonus pack is framed as a gain because buyers believe that they are

obtaining a free product. (Yin & Jin-Song, 2014) The purchase of a bonus pack,

however, is not always beneficial for the consumer. Sometimes consumers will end up

spending money on an item they would not normally buy had it not been in a bonus

pack. As a result, items bought in a bonus pack are often wasted and is viewed as a

“loss” for the consumer.

4. Coupons: coupons have become a standard mechanism for sales promotions.

5. Loss leader: the price of a popular product is temporarily reduced below cost in order

to stimulate other profitable sales

 6. Mobile couponing: Coupons are available on a mobile phone. Consumers show the

offer on a mobile phone to a salesperson for redemption.

7. Online interactive promotion game: Consumers play an interactive game associated

with the promoted product.

8. Rebates: Consumers are offered money back if the receipt and barcode are mailed to

the producer.

9. Contests/sweepstakes/games: The consumer is automatically entered into the event by

purchasing the product.

10. Point-of-sale displays

2.2.3.2 Trade sales promotion techniques

Sales promotions targeted at trade, especially retailers, designed to increase sales to retailers, to

carry the product or brand or to support the retailer in consumer-oriented promotions

1. Trade allowances: short term incentive offered to induce a retailer to stock up on a

product.

2. Dealer loader: An incentive given to induce a retailer to purchase and display a

product.

3. Trade contest: A contest to reward retailers that sell the most products.

4. Point-of-purchase displays: Used to create the urge of "impulse" buying and selling

your product on the spot.

5. Training programs: dealer employees are trained in selling the product.

6. Push money: also known as "spiffs". An extra commission paid to retail employees to

push products
2.2.4   Reason for Sales Promotion

(Ghose, 2008) Customers are more selective in; their buying choices and a good promotional

program is needed to reach them. The main purpose of sales promotion is to boost sales of a

product by creating demand, that is, both consumer demand as well as trade demand. It improves

the performance of middlemen and acts as a supplement to advertising and personal selling. It

helps in achieving the following purposes:

1. The basic purpose of promotion is to disseminate information to the potential

customers.

2. Sellers use incentive-type promotions to attract new customers, to reward loyal

customers and to increase the repurchase rates of occasional users.

3. To encourage the customers to try a new product. An interesting example: the Brooke

Bond Tea of India used to distribute free tea to every household during 1930’s, in

order to promote tea drinking habits among the people of Chennai.

4. Sales promotions yield faster responses in sales than advertising.

5. Sales promotion is considered as a special selling effort to accelerate sales.

6. Brand switchers are primarily looking for low price, good value and premiums. Sales

promotions are likely to turn them into loyal brand users.

7. It helps to defeat competitors’ promotional activities.

2.2.5 Importance of Sales Promotion

In recent years, the importance of sales promotion has increased. The amount spent on sales

promotion now equals the amount spent on advertising. The sales promotion increase is due to

the changes in the marketing environment. The importance of sales promotion increase is due to

the thinking of new ideas for creating a favorable condition of selling, promoting sales and future

expansion of sales.

It is a part of marketing strategy. It is essential for the survival of a manufacturer. For the birth of

new product or new brand, sales promotion is very important. Advertising reaches the customers

at their homes, or at the place of business or in their travels, whereas sales promotional devices

inform, remind or stimulate the buyers at the point of purchase.

Hence it is the only device which is available to the consumers at the point of purchase. A good

sales promotional program will remove the consumer’s dissatisfaction with respect to retail

selling. Sales promotion increases as a result of the growing use of self-service and other sales

methods.
2.3 Empirical literature review

Empirical review on Sales promotion and Performance Studies relating to the impact of

consumer sales promotion organization performance are included in this section.

This part addresses various issues such as the appropriate tools that may be used for achieving a

specific marketing objective; improve their sales promotion effectiveness and so on.

The results of a study which examined the effect of sales promotion on brand preference through

meta-analysis reported results of 51 studies had been integrated. The study found that sales

promotions do not affect post promotion brand preferences in general.

But depending upon characteristics of sales promotion and the promoted product, promotion can

either increase or decrease preference for a brand. (Vecchio, 2015)

Also, (Nbudisi, 2015) in their study evaluated the impact of sales promotional tools, namely

coupon, price discount, free sample, bonus pack, and in -store display, on product trial and

repurchase behavior of consumers. The moderation role of fear of losing face on the relationship

between the sales promotional tools and product trial was also examined. The results of study

show that price discounts, free samples, bonus packs, and in-store display are associated with

product trial. Coupon however does not have any significant effect on product trial.

The study also revealed that trial determines repurchase behavior and also mediates in the

relationship between sales promotions and repurchase.

(Kumar, Swaminathan, & Srinivasan, 2012) Also studied the impact of coupons on brand sale and

how that impact decays over the life of the coupon. The authors use an econometric model to

demonstrate the coupon effect in terms of equivalent price reduction, account for coupon effect

over time, allow inference of coupon effects when retailers decide to double or triple the coupon

value and provide both self-coupon and cross-coupon elasticity at different levels of aggregation.
Results indicate that the effect of doubling the face value of coupon result in more than a

proportionate increase in elasticity and both self and cross-coupon elasticity are much smaller in

magnitude than the average self-cross price elasticity

(Syeda, 2012) explore the short term and long term impact of sales promotion in Pakistani

companies from two diverse industries, i.e. Beverage Industry (Shezan International Ltd) and

Foam Manufacturing Industry (Diamond Supreme Foam) by regressing mean of brand loyalty on

mean perception about promotion obtained through financial analysis and consumer survey

respectively, using a sample of 200 consumers. The authors used time series models and OLS

estimation. Their results reveal the presence of various extraneous factors impacting the

effectiveness of promotions.
CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction

The first chapter addressed issues regarding background of the study, problem statement,

research objectives and scope of the study. In the second chapter, the attention was on reviewing

empirical work on the effect of Sales Promotion and Performance. The current chapter provides

information on the methodology used for the study. This includes the research design,

population, sample and sampling techniques, data collection methods and analysis, validity and

reliability tests as well as profile of the case study area.

3.2 Research Design

A research design influences the choice of analysis and sampling technique to use. It refers to the

overall strategy chosen to integrate the different components of the study in a coherent and

logical manner (Kothari, 2004). Three main types of research designs identified by Saunders et

al. (2007) include exploratory, descriptive and explanatory studies.

Exploratory research, as the name suggests, intends merely to explore the research questions and

does not intend to offer final and conclusive solutions to existing problems. It is conducted in

order to determine the nature of the problem, exploratory research is not intended to provide

conclusive evidence, but helps to have a better understanding of the problem (Kothari, 2004).

Saunders et al. (2007, p.134) warn that when conducting exploratory research, the researcher

ought to be willing to change his/her direction as a result of revelation of new data and new

insights.
Exploratory research design does not aim to provide the final and conclusive answers to the

research questions, but merely explores the research topic with varying levels of depth.

“Exploratory research tends to tackle new problems on which little or no previous research has

been done” (Brown, 2006, p.43). Moreover, it has to be noted that “exploratory research is the

initial research, which forms the basis of more conclusive research. It can even help in

determining the research design, sampling methodology and data collection method. (Creswell,

2012)

Explanatory research sometimes referred to as analytical study seeks to identify any causal links

between the factors or variables that pertain to the research problem (Holst, 1969). Such research

is also very structured in nature.

Descriptive research on the other hand can either be quantitative or qualitative. It can involve

collections of quantitative information that can be tabulated along a continuum in numerical

form, such as scores on a test or the number of times a person chooses to use a-certain feature of

a multimedia program, or it can describe categories of information such as gender or patterns of

interaction when using technology in a group situation (Shaughnessy, 2003) . Descriptive

research involves gathering data that describe events and then organizes, tabulates, depicts, and

describes the data collection (Holst, 1969) . It often uses visual aids such as graphs and charts to

aid the reader in understanding the data distribution. Because the human mind cannot extract the

full import of a large mass of raw data, descriptive statistics are very important in reducing the

data to manageable form. When in-depth, narrative descriptions of small numbers of cases are

involved, the research uses description as a tool to organize data into patterns that emerge during

analysis. Description emerges following creative exploration, and serves to organize the findings
in order to fit them with explanations, and then test or validate those explanations (Shaughnessy,

2003)

This study will adopt a descriptive design because it allows for both quantitative and qualitative

methods. The use of descriptive design yields rich data that leads to appropriate analysis. This

method also helps to address questions like “what is the effect of sales promotion on

performance”.

3.3 Population

A population is a complete set of items that share at least one property in common that is the

subject of statistical analysis (Omary, 2011). In line with the current study, the population

comprised of customer and management and staff of Tanzania Poultry Farm

3.4 Sample and Sampling technique

A sample is a subset containing the characteristics of a larger population. Samples are used in

statistical testing when population sizes are too large for the study to include all possible

members. In this study the sample size will be 20 staff from TPF and 30 customers of TPF

products.

The non-probability method of sampling is a process where probabilities cannot be assigned to

the units objectively, and hence it becomes difficult to determine the reliability of the sample

results in terms of probability. Examples of non-probability sampling include; convenience

sampling, purposive sampling, quota and snowball sampling. Staff or management will be

selected randomly to participate in the study. Finally, a random sample of customers will be

selected from all over the region under study.

This work combines both purposive and convenience sampling techniques. Purposive technique

was used in selecting officers with the right knowledge of the company’s promotional activities

whilst other staff members selected using convenience sampling.

3.5 Sources of Data

Two main data sources will be explored for this research; primary and secondary. The essence is

to allow for new information that is likely to enrich the current research. Again, secondary data

will also be used to ensure that where information available already addressed some objectives,

they were adequately harnessed. For instance, sale promotion expenditure from 1985 to 2014

was used as against profits over the same period.

Primary data refers to data obtained from first-hand experience whilst secondary data refers to

data collected by third parties. One advantage of using primary data is the fact that it allows the

researcher to gather specific information that addresses the objectives of the research. It is also

more reliable compared to secondary since the researcher has the opportunity to test the validity

and reliability of the data gathered. The study will use primary data to examine the non-financial

benefits of undertaking sales promotional activities and challenges surrounding sales promotion

activities.

3.6 Data Collection Instrument

The main instrument to use will be questionnaires. Questionnaires will be used to gather

information on Sales promotion activities. The questionnaires will be administered to selected

staff and management members. The questionnaires will basically be closed-ended questions

with few open-ended questions. The advantage of using questionnaire includes the fact that it

allows for quantitative analysis and also ensures that all respondents are asked the same set of
questions. Questionnaires are also characterized with high confidence interval and high response

rate. (Best & Khan, 2005),

3.7 Data Analyses methods

Analysis of data is a process of inspecting, cleaning, transforming, and modeling data with the

goal of discovering useful information, suggesting conclusions, and supporting decision making.

Data analysis has multiple facets and approaches, encompassing diverse techniques. To ensure

data is processed into meaningful information, factors analysis, correlation and regression

analysis would be performed to examine the relationship between sales promotion and

performance.

3.9 Reliability and Validity Tests

Very simply, validity is the extent to which a test measures what it is supposed to measure. The

question of validity is raised in the context of the three points, the form of the test, the purpose of

the test and the population for whom it is intended (Mugenda & Mugenda, 2002). . Reliability is

the degree to which a test consistently measures whatever it measures. Errors of measurement

that affect reliability are random errors and errors of measurement that affect validity are

systematic or constant errors. The study will involve testing of the data collected for it to be

reliable and testing.

3.10 Ethical considerations

Ethical Issues in research touches on all stakeholders of research, the respondents, the researcher,

the funding agencies and the users (Kombo & Tromp, 2006).. Ethical consideration is very

important in the research, especially the research whose subjects is people or animals (Kombo,

2010). As researchers anticipate data collection, they need to consider and respect the
participants and the site of research. Therefore, the researcher’s responsibility is to make sure

that, participants physically and psychologically are protected from any discomfort or dangers,

which may arise due to the research procedures (Wallen, 2006)

In this study, the respondents’ rights will protection as the names of individual subjects will not

included in data collection forms and never be used in any publications that describe any part of

this research. Another measure that will be taken in the conduction of this study was to ensure

the confidentiality of research data as (Wallen, 2006) argue that, once the data in the study have

been collected, a researcher should make sure that they are reserved and that the data that they

provided were treated with extreme confidentiality by limiting access to identifiable information

and assigning security codes to computerized records.

CHAPTER FOUR

4.0 RESULTS AND DISCUSSION

4.1 Introduction

This chapter shows the findings of the study as generated from respondents who are customers

and workers of TPF Ltd. The researcher sought to find data according to the objective of the

study which are;

1. To examine if Sales Promotions have significant effect on sales volume

2. To know how Sales promotion influence consumer purchase behavior

3. Knowing if consumers really benefit in sales promotion?

4. To know the main factors that affect sales promotion?

It is also important to note that the discussions are embedded within each of the presented

objectives of the study in order to make the study read more coherently. The results are mingled

with discussions from relevant literature review in order to make a compelling authority case for

this study.

4.2 Research Response Rate

The study was composed of two set of respondents from TPF. These were administered with one

set of questionnaire. In total, 50 respondents were administered with one type of structured

questionnaire.

At first, the researcher had underestimated the aspect of resources especially time and only but

only to be overwhelmed with a huge number of willing respondents. However, the researcher
could not go beyond the initially set sample of 50, even when there was the possibility of

reaching more than that. This means that the researcher was able to reach the response rate of

100% without any hindrances like had had been anticipated.

The reasons for this big turnout were facilitated by the researcher’s own experience in the

marketing and sale of poultry products not only within Meru district but also throughout the

region.

4.3 General and Demographic Information of Customers and staff of TPF

This section presents information on customers and management of TPF age and gender.

4.3.1 Customers’ and staff’ age

Customers’ and staff’ were asked to indicate their age. The findings of the study are presented in
Figure 01.

Number of respondents
30

25

20

Number of respondents
15

10

0
below 18 18-25 26-35 36-45 46 and
above

Source; Field Data (2019)

In establishing the ages of the respondents, the study found that 5 of the respondents were below
18 years old, 28 were 18-25 years old, 15 were 26-35 years old, 02 were 36-45 years old, and
there were no respondents with 46 and above years old. The results showed that majority of
customers were 18 years old and above. It also revealed that there the management and staff of
TPF were 26 years and above.

4.3.2 Customers’ and staffs’ Sex

To find out about Customers’ and business staffs’ sex, they were asked to indicate their sex. The
findings are presented in the following pie chart
Figure 02

percentage

male
female

Source; Field Data (2019)

The study findings indicated that 70% of the respondents were male while 30% were female. The
results showed that majority of the customers and staffs were males.

The demographic characteristics of the respondents are worth mentioning for they give the

underlying issues related to the impacts of sales promotion on sales volume. Key issues in the

demographic profile under consideration include the business experience of the respondents,

especially the staff of TPF Ltd

4.3.3 Experience of staff members

Business experience of the staff were found to be pertinent, and hence deserving of being

mentioned here owing to the fact that longer experience in the field donates more expertise in
being able to know various tactics pertaining to sales promotion and how those sales promotion

strategies eventually lead to the promotion of poultry products such as eggs and meat. Since

these staff has been in business for any given period of time, they actually know the ups and

downs of the business, and moreover, the longer the experience the more knowledgeable they are

likely to be in sales promotional strategies. They are likely to know what works and what

doesn’t. The table 4.1 gives more elucidation.

Table 4.1: Experience of the Respondents

Experience Frequency (N) Percentage (%)

Less than 1 year 02 10%

1 year 03 15%

2-4 years 06 30%

More than 5 years 09 45%

Total 20 100%

Source: Field Data, 2019

Majority of the respondents indicate that they had at least more than 5 years of experience in the

business, something that gives them more ability and capacity to comment on issues of the

impact of sales promotion on product awareness. Thirty-five (45%) of the respondents showed

that they had been in business for more than five years, while 30% indicated they were in

business were in business of poultry product for two-four years, and 15% stated that they had

been in business for one year. And 10% had been in business for less than one year. The fact

that majority of the respondents had more than five years in business gives them more authority
over issues related to sales promotion strategies and its impacts on sales volume.

4.3.4 Level of Awareness on the Sales Promotion Strategies

The aim of this objective was to ascertain the extent to which awareness of the sales promotion

strategies can be instrumental in ensuring sales promotion of a certain product such as eggs as

sold by TPF. Table 4.2 shows the level of awareness of the sales promotion among the

customers.

Table 4.2: Level of Awareness of the Sales Promotion

Variable Frequency (N) Percentage (%)

High 33 55%

Moderate 18 30%

Low 9 15%

 Total 60 100%

Source: Field Data, 2019

Majority of the respondents (55%) have indicated that they are indeed conversant with a number

of sales promotion strategies that are used in the promotion of poultry product such as eggs.

Thirty (30%) said their level of awareness was moderate, where 15% showed it was low.

4.4 The effect of Sales Promotions on sales volume

This was the first objective of the study. Sales promotion technique such as Discounted price are

being discussed here owing to their central role in ensuring that a product is promoted at a very

high speed. Moreover, sales promotions are not only important in sales volume but also vital at

ensuing high sales turnover of whatever product. It is for this reason that it has been conducted as

one of the key variables that determines sales promotion.

Table 4.3: sales promotion and Product sales volume

Variables Frequency (N) Percentage (%)

Disagree 7 14%

Neither agree nor disagree 13 26%

Agree 30 60%

Total 50 100%

Source: Field Data, 2019

Majority of the respondents (60%) indeed indicated that when it comes to the impact of sales

promotions on sales volume, promotions do lead to increase in product sales volume . This was

followed by 26% of the respondents that neither agreed nor disagreed, where 14% of the

respondents totally disagreed.

The fact that sale promotions do lead to increase in product sales volume is indeed, well

understood in a number of studies that have shown that whenever the prices of a product goes

down, there is a high likelihood that many people will get to know about that product.

The issue of discounted prices as a product sales promotion strategy is always bound to be

effective since it is always a common thing for people to like products whose prices have been

reduced. People are willing to walk even more miles but to ensure that they buy those products

whose prices have been reduced. The costs involved in reaching to such destinations might

hovewer not even matter. What matters to such people is that they are able to buy such a product

at discounted prices or when offered any promotion. This is why the sitaution is no different
when it comes to the issues of sales promotion and increase in ales volume

4.5 How sales promotion influence consumer purchase behavior

This was the second objective of the study whose main essence was to look at the extent to

which product promotions contribute to consumer purchase behavior. Table 4.4 that follows

illustrates how this leads to consumer purchase behavior

Table 4.4: sales promotion and consumer purchase behavior

Variables Frequency (N) Percentage (%)

Not much 3 6%

Little 9 18%

Somewhat 5 10%

Much 23 46%

A great deal 10 20%

Total 50 100%

Source: Field Data, 2019

Majority of the respondents (46%) indeed show that promotions increase buying behaviour. This

was followed by 20% who agreed that promotions contributes to a great deal, where 18%

showed that promotions such as product giveaways to a little extent contribute to consumer

purchase behavior. The fact that free products lead toincrease in purchasing behavior is in

tandem or agreement with a study that was once conducted by the British Promotional

Merchandise Association (BPMA) in 2012 (Larson, 2014). Some of the major conclusions that
directly tie with this study was that sixty six (66) percent of the respondents showed that they

could easily rememebr the brand for its promotional activities which included giving free

samples to the prospective clients as a way of enticing them within the past 12 months.

Moreover, the rate of return on promotional products was seen to justfiy a better return on

investment than other types of promotions and advertising which included activities like radio

and outdoor advertising. The BPMA study went further to demontrate that 79% were much more

likely to buy product from the company again. Moreover, to cap it all, 87% of the respondents

seemed to keep most of those promotiobnal products in terms of free products for more than one

year. In addition, almost half of the BPMA study, an equivalent of 56% stated impression of

the company improved after receiving a branded promotional gift.

4.6 Whether consumers benefit in sales promotion

This was the third objective of the study that focused on the benefits of sales promotion to

customers. Table 4.5 gives the details of how customers are benefited from the organizational

sales promotion such as gifts, reduced price, free sample and coupons

Table 4.5: Customers benefits from sales promotion such as gifts, reduced price, free sample and
coupons

Variables Frequency (N) Percentage (%)

Yes 25 85%

No 03 9%

Don’t Know 02 6%

Total 30 100%

Source: Field Data, 2019

Majority of the respondents (85%) indicated that they benefit from sales promotion from TPF

products. This was followed by 9% of the respondents who disagreed, while 6% didn’t know.

4.7 Main factors that affect sales promotion

This was the fourth objective of the study. The essence of this was to examine the main factors

of sales promotion. The answer is contained in table 4.6 that follows:

Table 4.6: factors affecting sales promotion

Variables Frequency (N) Percentage (%)

Price 20 40%

Gifts 10 20%

Coupon 10 20%

Free sample 10 20%

Total 50 100%

Source: Field Data, 2019

Majority of the respondents from both customers and organization (40%) agreed that price

affects sales promotion, followed by 20% of the respondents who also said that gifts, also 20%

said that coupon and 20% said free sample of products affect sales promotion
4.8 Challenges affecting sales promotion activities undertaken by TPF
Tanzania poultry farm Ltd as any other organization is faced with challenges when promoting

their sales. From the staff of TPF Ltd the challenges were as follows,

1. Increase in costs of sales

2. Customers do not like samples since they are of low quality

3. Adaptation of new and current promotional tools is hard since customers prefer price

reducing.

4. Insufficient funds to offer promotions to a wide range of customers.

CHAPTER FIVE

CONCLUSION AND RECOMMENDATIONS

5.1 Introduction

This chapter presents conclusion and recommendations for the study. Specifically, the study

sought to examine sales promotional activities used by Tanzania Poultry Farm (TPF), the

relationship between sales promotion and sales volume of TPF, examine the effect of sales

promotion on sales volume of TPF and identify challenges affecting sales promotion activities

undertaken by TPF

5.2 Conclusion

For this study, I found a positive and significant relationship between sales promotion, sales

volume and profitability. The study concluded that there is a positive relationship between sales

promotion and sales volume of an organization. The use of sales promotional tools was

associated with an increase in sales turnover. In other words, a 100 increase in sales promotion

was associated with a 44 percent increase in sales turnover. However, when it comes to non-

financial performance, the study found that sales promotion did not significantly affect new

product development. Finally, the relationship between sales promotion and customer acquisition

was positive and significant.

5.3 Recommendation

Based on the above findings, the researcher recommends the following.

Management of TPF should ensure effective integration of communication tools to ensure that

the intended objectives for all promotional tools are achieved.

It is equally important for management to fully utilize technology to attract consumers to the

product brand. Social media tools have become more appealing to the youth hence TPF must

explore its full benefits.

To deal with the question of whether sales promotion affects financial performance, the study

supported the position that sales promotion has a positive and significant effect on profitability.

However, it is recommended that management periodically evaluates the contribution of sales

promotion relative to other promotional tools such as advertisement

Also TPF should minimize the costs of production so as to meet in increase due to sales

promotion.

Finally, the study recommends that management of TPF involves key distributors and supply

chain members in sales promotional activities if they need to meet the goals stipulated for such

campaigns. This is because distributors and retails deal directly with consumers hence they can

give adequate feedback on promotional activities used.

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APPENDIX

RESEARCH QUESTIONNAIRE

This study seeks to examine the effect of sales promotion on the performance of TANZANIA

POULTRY FARM LTD. The study forms part of the requirement for the award of a Bachelor

degree in Business Administration in Accounting with education. Respondents are assured that

no information provided would be used at the detriment of the organizations. I shall be grateful if

you could spend few minutes of your time to complete this questionnaire. The questionnaire is

expected to take approximately 10 minutes maximum to complete.

Thank you.

PART A: BACKGROUND INFORMATION

1. Category of respondent: [ ] Distributor [ ] Staff

2. Department: ………………………………………………….

3. Working tenure (years): [ ] less than 1yr, [ ] 2-5yrs 6-9yrs, [ ] 10yrs and above

4. Respondent’s job position: ……………………………………………………………

PART B: SALES PROMOTION ACTIVITIES

Which of the following sales promotion activities are undertaken by your organization? The

linker scale to use is: SD=strongly disagree D=Disagree N=Neutral A=Agree SA= Strongly

agree

STATEMENT

SD D N SA A
1 Before new products are launched, we provide

free samples to consumers for pre-testing

(sampling)

2 We sometimes reduce prices to boost sales

during off-seasons (Price-off offer)

3 We provide gifts to our distributors and retailers

to maintain a good relationship (Dealer gift)

4 We provide attractive materials at sales point

(i.e fridges, openers etc) to reinforce purchase

5 We use display contest to encourage dealers to

buy a minimum quantity to display in shops

6 We use draws and scratch cards to reward

customers who emerge winners

7 We encourage consumers to buy more a save

some cash

8 We use coupons to reward loyal customers

9 We use road shows to promote consumption of

our brand

10 New products are promoted with point of sales

displays

PART C: SALES PROMOTION CHALLENGES

1. What are the main promotional challenges facing TANZANIA POULTRY FARM (TPF)

LTD?

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2. How has management of TPF LTD addressed the challenges enumerated above?

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THANK YOU FOR YOUR COOPERATION.