CHAPTER ONE

INTRODUCTION

• Background of the Study

Marketers in today’s complex and volatile business environment often fueled by the constant change in the taste of customers, intense market competition, influx of new entrants in the market, availability of substitute products face immense challenge to communicate their marketing objectives. The shift in power of marketers to consumers has forced marketers to ensure that their products are unique and of high quality to give customer a reason to purchase their products and remain loyal to them.

The growing managerial importance of sales promotion has generated a great deal of research on how sales promotion affects profitability (Loudon and Bitta, 2002; Perreault and McCarty, 2002; Schiffman and Kanuk, 2004). There is no doubt sales promotions have become a vital tool for marketers and its importance has increased significantly over the past 2 decades.

The ultimate objective of every business is to increase the sale of goods or services that it deals in (Kotler, 1998). Many of the purchase situations are so common and habitual that they involve very little cognitive activity of the consumers. In such situations, motivating the consumers to switch brands or purchase more items is very hard. One of the benefits of promotions is that they stimulate the consumers to compare different brands and evaluate the purchase possibilities in such cases (Wathieu & Murre, 2007).Sales promotion is one of the strategies to attract customers to buy more or try the product or service. Now a days people are conscious to look for the best one and that is why their fluctuating mind may switch on to new brands with a simple stimulus. In this case an extra incentive can be added to a product by different promotional activities (Kumar et al., 2007).

Sales promotion is an initiative undertaken by organizations to promote sales, usage or trial of a product or service (i.e initiations that are not covered by other elements of the marketing communication/promotional mix). It is an important component of an organization’s overall marketing strategy along with advertising, public relations, and personal selling (Schiffman and Kanuk, 2004). Sale promotion acts as a competitive weapon by providing an extra incentive for the target audience to purchase or support one brand over another. It is particularly effective in spurring product trial and unplanned purchases (Aderemi, 2003).

Consumer buying behavior however is the process by which the individual search for, selects, purchase, use and dispose of goods and services, in satisfaction of their needs and wants (Netemeyer et al., 2004). Melaet et al. (1997) argue that the consumers‟ behavior has a direct effect on the success of the firm and therefore must ensure that they create a marketing mix that satisfies consumers.

The change in certain social, economic and environmental factors has influenced the way customers change their needs and preference. People change their needs and their perception of stimuli according to the context that surrounds them and it comes directly from here the evident necessity of concreteness and shortterm orientation that characterize sales promotion rather than advertising. This is why marketing strategies have been adapted to this new trend and switched from advertising towards sales promotion In addition, with limited marketing budget, the marketer today often faces immense pressure and challenge to communicate their marketing objectives to their customers. Despite the widespread employment of sales promotions in practice, there has been little attempt to integrate research to determine the relationship between the use of sales promotion, customer buying behavior and Organisational performance.

• Statement of the Problem

Sales promotion is one of the key factors that marketers have used in the past to meet the changing needs of the customer and the market. Markets also depend heavily on marketing campaigns that consist of various incentives, mostly short term designed to stimulate quicker or greater purchase of particular goods of services. Sales promotion is one those incentives which has influenced customer to make instant buying decision than to wait later (Kotler, 2003).

Service providers like the commercial banks needs to provide offerings or services that satisfy consumer needs and expectations to ensure the company‟s economic survival. In order to achieve this feat, they need to understand consumer buying behavior to help them evaluate their service offerings. Consumers of Tele communication service go through a cycle of decision making processes before making a purchase decision which define their behavior in the consumption of the services they purchase from these companies. The consumer buying process is a complex matter as many internal and external factors impact on the buying decision of the consumer. Over the past decade or half customers have significantly changed their way of buying and have become more demanding than ever before (Cummins, 2008). Customers today are more aware about the product offerings, they are responding more proactively to their expectation about product offering.

With the advent of Internet technology customers today have access to more information and have significant bargaining power before making any purchasing decision. As a result, marketers today face immense challenge in meeting the ever rising expectation of the customers. Unfortunately, the seemingly uncontrollable effort for organizational performance by MTN Cameroon competitors such as Orange Cameroon and Nexttel Cameroon in modern day business has sometimes resulted in a strong downward pressure on prices and fearsome competition. As a result, their performance and consumer perception is being influenced.  This has led to the study: The effects of Sales Promotion on Consumer buying behavior and organizational performance.

• Research Questions
  • Main Research Question

In view of the problems, the central question of this study was: What is the effect of sales promotion on consumer buying behavior and Organisational performance in MTN Cameroon? Specifically, the following sub-questions are raised:

• Specific Research Questions

What sales promotional tools are used by MTN Cameroon, Bamenda main branch?

To what extent does point of sale display affect consumer buying decision and the performance of MTN Cameroon, Bamneda main branch?

How does premium affect consumer buying decision and organizational performance of MTN Cameroon, Bamenda main branch?

How does Coupon affect consumer buying decion and the performance of MTN Cameroon, Bamenda main branch?

• Research Objectives
  • Main Objective

The general objective of this research is to determine the effect of sales promotion on consumer buying behavior and organizational performance: the Case of MTN Cameroon, Bamenda Main Branch.

• Specific Objectives

The specific objectives of the study were to:

Investigate the sales promotional tools used by MTN Cameroon, Bamenda main branch

Examine how Coupons affects consumer buying decision of MTN Cameroon, Bamenda main branch

Investigate the extent to which premium affect consumer buying decision of MTN Cameroon, Bamnenda main branch

Determine how point of sale  affect consumer buying decision of MTN Cameroon, Bamenda main branch