CHAPTER ONE

INTRODUCTION

1.1. Background

The global brewery industry is a multi- million-dollar market. Although a relatively market, there are always opportunities for ambitions in this sector. Supply chain management have contributed to the brewery firm’s by helping them boost customer satisfaction, transportation of products to the right location through effective supply chain, reduction in Operation, avoid delays and managing logistics of products development, marketing, customer service and business operation.

The brewery industry has also been at the forefront of development of African economies.  The report by Oxford Economics on the economic impact of beer industries around the world also showed that the beer industry contributed $2.294 billion to Nigeria’s GDP, generated 309,200 jobs and contributed $526.2 million into Nigeria’s government revenue in 2019. It also ranked Nigeria 30th out of 70 top beer markets in the world that were covered by the report.  A breakdown of the economic impact of beer market on Nigerian economy, according to the report, further revealed the beer industry made $897.5 million indirect impact on the Nigeria’s GDP while its induced and direct impacts were estimated at $466.5 million and $875.4 million respectively. Furthermore, the report showed that of the 209,200 jobs generated by the beer industry in Nigerian economy in 2019 is made up of 148,423 indirect jobs, 87,508 induced jobs and 73,233 direct jobs. The South African Breweries (SAB). CEO Richard Rivett-Carnac said that the industry already contributes 1.3% to the national GDP. he beer industry continues to be a key contributor to the local economy, citing a recent Oxford Economics Research paper which showed that the beer industry contributed approximately R74 billion to the country’s GDP in 2019 – equivalent to 1.3% of national GDP. The sector sustained over 248,000 jobs in 2019, equivalent to 1.5% of national employment, while the tax impact was approximately R45 billion in 2019, this was the equivalent of 3.3% of government revenue (BUSINESSTECH, 2022).

The sales promotion industry has evolved tremendously within the past 30 years. “Traditional pull marketing involving advertising directly to consumers has given way to more targeted consumer promotions” (Messinger & Narasimhan, 1995). The 5th Annual State of the Promotion Industry, presented by the Promotion Marketing Association (PMA) on June 2003, confirmed the new trend: The year 2001 and 2002 changed the pace of marketing history, including promotion. In 2001 advertising experienced its greatest decline (-6.5%) since the 1930’s. Estimated promotion expenditures for 2001, while still in the “plus column” reflect the slowest rate of growth (+2%) since this report was developed in 1975. Historically, there may be a tendency to blame 2001 declines on the tragedies of “9/11”, but in fact advertising was already down approximately 6% in the first half of 2001, and cut backs in promotion also had become apparent by mid-year. The advertising and promotion industry reversed their status in 2002, though promotion growth (+5%) was approximately twice that of advertising (+2.3%).

Luk and Yip (2008) conducted an empirical study that tested the effect of brand trust dimensions, brand reliability, and brand intentions through the moderation effects of monetary sales promotions. They concluded, “Ideally, nonmonetary sale promotions should be considered. This approach enables the researchers to investigate whether monetary or nonmonetary promotions will have greater moderation impact on the following antecedents of brand loyalty: brand trust and brand buying behavior” (Luk & Yip, 2008). It was not until the late.

1990s that studies on promotion marketing started to pay attention to nonmonetary sales promotions (Hardesty & Bearden, 2003; Liao, 2006; Palazón-Vidal & Delgado-Ballester, 2005; Teunter, 2002).

In addition to the scarce research on nonmonetary sales promotions, many studies share other limitations. For example, Diamond and Johnson (1990) discussed a tendency for sales promotions research to be hindered by the absence of a theoretical approach. They criticized what they termed “the very narrow categorization” of promotions that only dealt with a single type of promotion, such as couponing, and went on to say that “behavioral theorists have tended to either confine empirical work in this area to one type of promotion at a time or select promotions theoretically” (Diamond & Johnson, 1990).

Finally there are conflicting results over the long-term effects of consumer sales promotions (Teunter, 2002; Tietje, 1999). This, in part, can be attributed to the fact that most research is on monetary promotions. For example, Palazón-Vidal and Delgado- Ballester (2005) stated that monetary promotions are less effective in building brand knowledge because of their emphasis on only one brand association price. Luk and Yip (2008) concluded, “the buying behavior of less committed consumers is mainly promotion driven” and are mostly driven by economic incentives.

Still, there is new empirical research that shows promotion activities have indirect effects on brand loyalty through customer satisfaction, which in turn has direct effects on brand loyalty (Li-xin & Shou-Lian, 2010). Nevertheless, most researchers claim that sales promotions yield negative effects, including price sensitivity (Chandon et al., 2000; Neslin, 2002), brand switching, and lower repeat purchase rates (Gupta, 1998). The limitations of previous research and inconsistent findings reveal there is a need for new empirical research that includes both nonmonetary and monetary promotions and their impact on long-term effects, such as brand loyalty.

Sales promotions, such as coupons, rebates, premiums, and samples, typically are viewed as temporary incentives that stimulate the sales of a product or service. There are different ways to classify sales promotions; the most basic is to classify them between trade promotions and consumer promotions. Consumer promotions are directed at the consumer and are designed to induce  them to  purchase  the  marketer’s  brand.  Trade promotions are designed  to  motivate distributors and retailers to carry a product and make an extra effort to push it to their customers (Belch & Belch, 2008). Most marketing programs include both trade and consumer promotions. The difference between one and the other relies primarily on who is targeted in the marketing channel: the consumer or the retailer.

1.2. Problem Statement

Cameroon’s brewery firms is perhaps one of the fastest growing sectors of the economy and there is fierce competition within the sector made up of giants such as Les Brasseries du Cameroon, Guinness Cameroon, Kadji, Sofavinc, Nigerian Breweries Plc  just to name a few. Competition is supposed to bring about efficiency in in an economy (Boohene R. and Agyapong Q., 2011). Despite the high number of brewery firms in Cameroon, the industry has been facing challenges in terms of sales volume resulting in fall of sales due to the poor implementation of sales promotion practices by most distributors in the sector.

As such there is still a rather limited understanding of sales promotion practices and sales volume  in the Cameroonian brewery distribution sector. This has affected wholesalers of Brewery products in the country in that sales are falling  and no particular wholesaler can craps a fair share of the market.

To solve this, most wholesalers have taken various measures such as promotion, giving coupons, reduce transport to help them stay in business. This study therefore seeks to investigate the effects of  sales promotion on sales volume of  the wholesalers of brewery products in Bamenda. This study will to an extend go through more light on the contradictory thoughts of sales promotions effects on sales volume. Hence, the researcher believed that this paper added value in terms of narrowing the gap in stated sector by showing the effects.

The study also aimed to find out to what extent the selected sales promotional tools such as price discount, premiums, and coupons practiced by  the wholesalers of Brewery products  in Bamenda effects  their sales volume and the channel distributors/resellers in Bamenda.

We seek to know if sales promotion brings more customers which increase the sales volume! profitability and market share of the organisation thus leading to the growth of the organisation.

1.3. Research Questions

To address the above problem, the following questions were asked

1.3.1. Main Research Question

What are the effects of sales promotion (premium, free sample, coupon, price discount) on sales volume of the wholesalers of brewery products in bamenda?

1.3.2. Specific Research Questions

The study poised to explore the following specific research questions;

• What is the effect of premium on sales volume of the wholesalers of brewery products in bamenda?
• What is the effect of coupons on sales volume of the wholesalers of brewery products in bamenda?
• What is the effect of price discount on sales volume of the wholesalers of brewery products in bamenda?

1.4. Research Objectives

1.4.1. General Objective

The general objective of this research is to access the effect of sales promotion on sales volume of the wholesalers of brewery products in bamenda.1.4.2. Specific Objectives

• To access the effect of premium on sales volume of the wholesalers of brewery products in Bamenda.
• To access the effect of coupons on sales volume of the wholesalers of brewery products in Bamenda.
• To access the effect of under the price discount on sales volume of the wholesalers of brewery products in Bamenda.