Efficacy of Sales Promotion on Consumer Patronage Choices of Homogenous Product (A Study of Samsung and LG Products)
- Authors: Akpoviroro K.S.1, Oladimeji O.A.2, Olaleye O.K.3
-
Affiliations:
- Kwara State University
- Babcock University
- Federal Inland Revenue Service (FIRS)
- Issue: Vol 14, No 4 (2023)
- Pages: 7-21
- Section: ECONOMICS
- URL: https://journals.ssau.ru/eco/article/view/27158
- DOI: https://doi.org/10.18287/2542-0461-2023-14-4-7-21
- ID: 27158
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Full Text
Abstract
The study examined the effect of sales promotion on consumer patronage choices of homogenous product. Sales promotion has become an integral part of the promotion schemes of both manufacturers and retailers of durable and as well as non-durable consumer goods. The objective of the study was to determine the extent to which discount affects customer loyalty and also to Ascertain the rate at which free sample affects customer choice. This research adopted the use of survey research design. Primary method of data collection was employed for this study which includes interview and questionnaire tools to gather relevant data. It was conducted among the Samsung and LG products users in Ogun State, Nigeria. The customers were purposefully selected, in which 172 customers were selected for both products. The sample size was determined by simple computation method. The researcher adopted stratified sampling & purposive sampling to select the respondents of this study. Cronbach Alpha was employed to assess the reliability of the data. Multiple regression analysis was employed to test the two hypotheses. The responds gotten from the questionnaire was sorted, coded and the Statistical Packages for Social Sciences (SPSS) Version 17.0 was used for the analysis. The study found that customer loyalty = 10.617 + 0.396 discount. It shows that both tested variables are at a significance level of 0.01, which means that there exists a significance relationship between discount and customer loyalty. More so, the r value of 0.001 (in which P – value is lesser than 0.01) shows that there is a significant relationship between free sample and customer choice. The study recommends that organization must understand sales promotion as well as how to manage the difficulties relating to it because the study has proven that Sales promotion is very important in every running organization.
Full Text
Introduction
Promotion is one of the key factors in the marketing mix and has a key role in market success. Promotion is used to ensure that customers are aware of the products that the organization is offering [Essien 2001; Aderemi 2003]. The channels that can be used are: advertising, direct marketing, public relations, publicity, personal selling, sponsorship and sales promotion [Kotler & Keller 2006; Kabuoh et al. 2020a]. Formerly, sales promotion was sometimes considered as an activity of less importance; but today, companies increasingly make use of sales promotion to promote the marketability of their products. All business needs to communicate to the customer what they have to offer [Bolton et al. 2013]. Sales promotion can be defined as special offers [Koirala 2019; Akinbinu 2003]. More specifically, referring to the institute of sales promotion, it is a range of tactical marketing techniques designed within a strategic framework to add value in order to achieve specific sales and marketing objectives [Barbu et al. 2010]. According to [Ositimehin et al. 2012] sales promotion excludes all paid media advertising, but includes techniques like coupons, self-liquidating offers, bargain packages, gifts, sampling and points of purchase promotions and displays. Sales promotion works as short-term incentives to encourage purchase of a product or service [Ozioma & Marcus 2020; Chueng & Thandani 2012]. It essentially aims to stimulate demand during the period in which it is set [Ahrens 2013]. The potential benefits of using sales promotion could range from attracting new consumers from competitors to persuading consumer to switch to brands with higher profit margins or simply inducing existing customers to buy more. [Park 2009] Opined that Sales promotion has become an integral part of the promotion schemes of both manufacturers and retailers of durable as well as non-durable consumer goods. Sales promotion consists variety of incentives tools, mostly short-term that are used to stimulate consumers and or dealers to accelerate the purchasing process or to increase quantities of sales. Sales promotion is certainly one of the critical elements in marketing mix and toolkit for the marketers [Ibrahim et al. 2020; AMA 2008; Water 1991]. [Akinbunmi 2003] provide a revised definition for sales promotions as a range of marketing techniques designed within a strategic marketing framework in adding extra value to a product or service over and above the ‘normal’ offering in order to achieve specific sales and marketing objectives, this extra value may be a short term tactical nature or it may be part of a long term franchise building program. A sales promotion stimulates customer purchase and the efficiency of distributors through marketing activities excluding advertising, public relations and so on. In other words, a sales promotion provides incentives for consumer to purchase more [Banabo & Koroye 2011]. Specific products and this incentive are different from the incentive provided by advertising with respect to the purchase of those specific products. The purpose of a sales promotion is to attract new customers, maintain existing customers who are contemplating switching brand and give incentives to customers who are about to use competing products. Sales promotions vary depending on the situation and need and they have an immediate effect on product purchase [Richard et al. 2009; Gilmore et al. 2001].
Statement of Research Problems
A number of studies on the influence of sales promotion on consumer’s buyer behavior have been published during the past decade, such as the impact of in-store displays on product trial and the repurchase behavior of customers in Malaysia [Chung & Thandani 2012]; the influence of free samples on consumer trial and purchasing behavior in the United States [Ahrens 2013; Global & Ramn 2003; Micheal 2017]; the attitudes of consumers in the United States towards in-store promotional activities [Blattery & Scott 1990]; the impact of in-store events on consumers’ attitudes towards retail brands in Germany [Philip & Kelvin 2006; Aryal 2015]; and the effects of in-store promotional activities on consumers’ store decisions in Australia [Gilmore et al. 2001]. However, very little research on the influence of sales-promotion techniques on buying behavior has been conducted in emerging markets, such as Nigeria. Previous studies suggest that different market segments and consumer profiles react differently towards sales promotion. Several reasons for the variations in effectives were suggested, including demographic, cultural and ethnic differences, the values and timing of promotional offerings, as well as the type of product or service promoted [Bickart 2001; Akinbinu 2003; Serban et al. 2012; Mahajan 2001; Paswan 2016]. However, whether the effect of consumer loyalty and purchasing behavior could be moderated by sales promotions has not yet been examined extensively. Regardless of a widespread interest in the relationship between sales promotion and purchasing behavior, most studies of this kind focuses on the effect of sales promotion on choice at the time they are offered [Nijs, 2001;Chung & Lee, 2012; Agrawal, 2016]. Only a few studies have investigated the lag effect
of sales promotions on brand preference and the resultant buying behavior once the promotion campaign is rescinded. These contradictory findings suggest a need for more research on the effect of sales promotion on consumer loyalty. This study seeks to answer the following research questions (i) How does discount affect customer loyalty? (ii) To what extent does free sample affect customer choice?
The Concept of Sale Promotion
Sales promotion is the economical and informational incentives, which are offered by firms to buyers or distributors [Malik 2017; Oshotimehin et al. 2012]. It emerged as a reaction by manufacturer’s marketers, and marketing strategies alike to find a short term solution to the problems of excess stock of goods which are available in variables manufacturer’s warehouses but are not demanded by consumers and organization [Ahmed et al. 2020; Aaker1997]. [Clow & Baack 2016] expresses that sales promotion consist of adverse collection of incentive tools, mostly short-term, designed to stimulate quicker and greater purchase of particular brand, products, or service by consumers or the traders. In a similar fashion, [Katz & Kahn 1996] opined that sales promotion as always been of the variable strategies of making quick sales and help to establish brander names and ginger trail purchases. According to [Asaolu & Nasar 2007], sales promotion is an activity that acts as a direct inducement, offering added value or incentive for a product to resellers, salespersons or customers. [Akar & Mardikyan 2007] defined sales promotion as special offers which essentially aim to stimulate demand for the products.
Types of Sales Promotion
Essentially, sales promotions are categorized into three depending on the initiator and the target of the promotion. These include:
Consumer promotions: Consumer promotions are those efforts aimed at influencing the trial consumer [David et al. 1998]. They are promotions offered by manufacturers directly to consumer [Baumeister et al. 2001; Sinha & Verma 2017]. Such promotions are designed to motivate consumers to immediate (or nearly immediate) action [C.ya 2017; Balasubramanian & Mahajan 2001]. Consumer’s promotion techniques can be used to draw people into a particular store, to induce new product or to promote established products. To accomplish this task, markets have developed quite a variety of sales promotion techniques or tools.
Retailer promotions: Retailer promotions are promotions offered by retailers to consumers. These include allowances and discounts, factory-sponsored in-store demonstration, trade shows, sales contests, cooperative advertising [Lodish 1998].
Trade promotions: Trade promotions are promotions offered by manufacturers to retailers or other trade entities [George et al. 2009]. They are the aspect where the manufacturer is concerned not only with promoting the product to the consumers but also with whether the product is on the retailers ‘shelves when the customers go to the store to buy [Ibrahim, 2020; Akinmova, 2000]. Retailer promotion and Consumer promotion are directed toward the consumers by retailers and manufacturers, respectively. The manufacturers direct trade promotion to the retailers.
The three types of promotions are illustrated below.
Manufacturer
Trade promotion
Retailer Consumer promotion
Retailer promotion
Consumer
Source: Adapted from [Per-Goran P. 1995].
Figure 1 – Types of sales promotion
Consumer Promotion is the promotion offered by the manufacturers directly to the consumers. It includes sampling, price packs, rebates and refunds, financing incentive, bonus or value packs, special events, sweepstakes contest, premium, advertising specialties and tie in. [Gristein2008; Heiner et al. 2011]. [Agarwal & Rao 1996] summarizes the sales promotion into two forms; price promotion and non-price promotion (see in the figure 2). Price promotion usually involves price reductions such as coupons, loyalty discount and rebates while non-price promotion involves sampling, sweepstake contest, events and premiums.
[Krishna 2000] has divided sales promotion into three types these include retailer promotion, trade promotion and consumer promotion.
Promotion
Price Promotion “Supportive” non-price Non-Price Promotion
- TPR - Promotions - Premiums
- Promotion packs - Promotion communication - Sampling
- Loyalty discounts - Features - Sweepstakes content
- Coupon - POS advertising - Events
- Rebates - Advertising in other media - Others
- Others - Displays
- POS material
- packaging -Others
Source: Agarwal, M. K., & Rao, V. R. [1996].
Figure 2 – Instruments for Retailer Promotions
Consumer Purchasing Behaviour
The consumer is faced with various stimuli to respond to in the market; the stimuli include the marketing mix (4Ps) alongside other forces within the environment. However, the stimuli pass through decision making process of the consumer which led to the aspect of observable byer response in form of brand choice, dealer choice, product choice, time of purchase and amount to be expended on the products amongst others. It is expedient for the marketers to know what happens between the stimuli and consumer’s response behavior [Srestha 2019; Linn 2013; Han et al. 2010]. Concerning the marketing mix elements, the behavior of market has to be well comprehended in order to structure the market mix element in an optimal manner for better positioning within selected marketing segments. The problem facing sales promotions on consumer behavior in Nigeria are that, whether consumer’s purchase behavior towards sales promotional efforts yield positive or negative for the product concerned since manufacturing organizations operate under inflexible competitions and increasing harsh challenges that make it almost impossible for the organization to meet the profitability target and reasonable return on investment of shareholder funds. Most organizations now concentrate their efforts on promotions strategies and techniques to reach the dwindling profit problem. Promotion being a short-term incentive is to encourage purchases [Kabuoh et al. 2020b; Akinbinu 2003].
Consumer Loyalty
It is very usual to explain consumer loyalty in terms of repurchase intention of products and services that is the goal of every business. All the businesses in the world desire for the customer loyalty because they know that it’s very cheaper to retain a customer than to win the new one [Adeniran et al.2017; Vigneron & Johnson 1999]. According to [Lovelock 2011] customer loyalty can be categorized into three parts. First one of them is the re-buy intention, the second is the primary level behavior and the third is the secondary level behavior. Re-buy intention relates to the future purchase intention of the customer to re-purchase the desired product or the service. Secondary level means the customer himself physically visits the place to purchase the product. While in the third level customer deliberately recommends the product or the service to the people around him and thus exhibits the loyalty by human interaction. [Liozu & Hinterhuber 2013] pointed out customer loyalty through attitudes and behavior. The attitude includes the intention to repurchase the product, the intention to recommend and the immunity to competitors.
Benefits of Sales Promotion
There are numerous benefits of sales promotion to the customers [Ahmed et al. 2020; George et al. 2009] provide six major benefits to the customer mainly monetary savings, quality, convenience, value expression, exploration and entertainment. Firstly, most of the sales promotion results in the monetary savings for the customer as the products or service are offered at discounted price. As a result the unaffordable products suddenly become more affordable and it adds value to the customers. Sales promotion can be considered as a great tool for growing the sales in short period of time [Malik 2017; Morgan & Berthon 2008; Mahmood et al. 2018]. In addition sales promotion can enhance consumers’ self-perception of being good or astute customers resulting in value expression. The exploration benefit is often achieved by ever changing shopping environment that provides simulation for consumer’s information need. Finally, the benefit that customer might receive from sales promotion is entertainment. Most of the sales promotion frameworks are mostly fun to see and participate in [Lancioni 2005]. It is suggested that sales promotion can build brand awareness and motivate trial, provide more specific evaluation methods, as they are more immediate and operate in a specific time frame [Ozioma & Marcus 2020; Richard et al. 2009; Paswan 2016], influence sales, expand the target market and achieve competitive advantage [Greenley 1995]. According to their purpose, sales promotion are often successful in inducing action, as they encourage consumers to act on a promotion while it is still available. Also, the strength of sales promotion lies in its flexibility to quickly respond to competitor attacks contributed by [Ibrahim 2020; Langeard 2000]. Sales promotion in fast moving consumer goods industries is used to create a temporary stimulus on the sales of a brand by making consumers a special offer. This promotional stimulus is part of the marketing offer made up of factors such as product features and benefits, price, availability, customer service and quality. It is widely accepted that, in the short term, sales promotion can have a positive effect on trading by creating a short-term sales spike [Koirala 2019; Niestroj 2009; Agrawal 2016].
Adaptation Level Theory
This theory proposes that consumers carry with them an adaptation level price or ‘internal reference price’ for a given product [Monroe 1979]. 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. The existence of internal reference prices has been confirmed in several laboratory studies [Loveluck 2011]. Researchers have proposed that consumers respond to a price promotion based on the comparison between the internal reference price and the promotional price [Veblen 1899; Katz & Kahn 1996]. Frequent price promotions can lead consumers to lower the reference price for the promoted product. Consumers with lowered reference prices will be unwilling to pay the full price of a product once the promotion is over.
Assimilation Contrast Theory
Assimilation contrast theory examines how external references prices influence consumers’ internal reference price and subsequent promotion evaluations. An external reference price may be introduced through a price advertisement or in-store communication that features both the lower promotional price and the higher regular price and, thus, documents the savings associated with the lower promotional price. As per assimilation contrast theory, an external reference price that is moderately higher than a consumer’s internal reference price is perceived as plausible and assimilated. This assimilation effect results in a shift of the internal reference price toward the higher external reference price and a corresponding increase in favorability of promotion evaluations. However, if the external reference price vastly exceeds the highest expected regular price, it is likely to be perceived as unbelievable and hence contrasted with internal price standards. Studies based on adaptation level theory have shown that promotional advertisements that include the external reference price produce larger perception of savings than advertisements that include only the lower promotional price [Verhoef & Leeflang 2009; Gristein 2008 ; Krishna 2000]. Researchers have found that although very high external reference prices are somewhat discounted, they still manage to raise consumer perceptions about the value of a price promotion [Blattbery & Scott, 1990].
Attribution Theory
Attribution theory describes how consumers explain the causes of events [Lodish, 1986]. Different types of attribution can be distinguished based on the object about which the attribution is being made. Attributions made about self (the ‘why-did-I-buy’ question) come under self-perception theory while attributions made about an object/ brand (the ‘why-is-brand-X-on-promotion’) come under object perception theory. Each is analyzed in the context of promotions. Self-perception theory: Researchers who have applied self-perception theory to price promotions have stated that a purchase in the presence of a strong promotion is expected to lead the consumer to attribute purchase to an external cause (i.e. the promotion) rather than an internal cause (i.e. liking for the product). This will lead to discounting of a favorable brand attitude and repeat purchase probability will diminish. Basically, self-perception theory suggests a negative long-term effect of price promotions on consumer attitudes and behavior. Attribution to internal (liking for the brand) versus external (presence of a promotion) factors would determine the repeat purchase probability for the brand. The results of the study were in accordance with the hypotheses. Media distributed coupons undermined repeat purchasing to the greatest extent followed by cents off deals. Package coupons had the highest repeat purchase rate.
Empirical review
[Heiner et al. 2011] investigated the nature of reference price effects on brand choice through a linear probability model whereby the probability of purchase for a brand was a function of the observed price and the difference between the observed price and the reference price. He found that the model predicted probability of purchase better than the standard demand models that incorporated only observed brand prices. In another laboratory experiment, Linn [Linn 2013] demonstrated that customer choice and judgments were mediated through customer’s price expectations for a brand. They showed that consumer’s price expectations were formed based on past prices of the brand, customer characteristics and situational factors. The authors found that a brand choice model that included consumers’ price expectations predicted choice better than a model which included only observed prices. [Adrian 2004] examined the relative impact of internal reference price (prices stored in memory) and external reference price (prices provided by stimuli in the purchase environment) on consumer brand choice. They estimated choice models with variables representing the two types of reference price and found that both types of variables had a significant impact on purchase probabilities. In a study on the reference effects of price and promotion on consumer choice behavior [Bolton et al. 2013], 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 found 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. [Banaba & Karoye 2011] examined the effect of varying brand labels (e.g. national, private, generic), the absence or presence of coupon and the inclusion of external reference prices on consumer reactions to retail newspaper advertisements. Results showed that more positive attitudes and greater intention to purchase was present for national brands as compared to private label and generic brands irrespective of the price presentation format. No difference was found between advertisements with/ without coupons with respect to consumer price perceptions, attitudes towards purchase and intentions to purchase. Inclusion of reference prices led to more positive consumer price perceptions, attitudes towards purchase and intention to purchase. [Han et al. 2010] found that consumers’ perceptions of price discounts were typically lesser than the advertised price discounts i.e. consume ‘discounted price discounts.’ The ‘discounting of price discounts’ was moderated by the discount level such that it increased with increases in the advertised discount. The author revealed that consumers did not change their intentions to buy unless the promotional discount was above a threshold level of 15 % of purchase price. They also observed a discount saturation point located at 40 % of the purchase price, above which the effect of discounts on consumer’s purchase intention was minimal. The results of the study suggested an S-shaped response of consumer response to price discounts.
Research Method
This research adopted the use of survey research design. The purpose is to allow the researcher to fully describe and explain the conditions of the present by using many subjects and questionnaires to fully describe phenomenon [Michal 2011]. Primary method of data collection was used for this study which includes interview and questionnaire tools to gather relevant data. It was conducted among the SAMSUNG and LG products users in Ogun State. The reason for the choice of this area is that, it is informed by the high level correspondent in it. Ogun State is chosen because of its improvement in the economic in the industry within the country. The consumers was purposefully selected, in which 172 customers was selected for both products. This gave the entire consumers to have an equal opportunity of being selected and all data and information was collected over the suggested matter accordingly. This is because the actual population of the consumers cannot determine. Since it is usually not possible to study the entire larger population of companies in Nigeria, the research will be choosing consumers of SAMSUNG and LG products. The sample was determined from various users of the organization product. To this extent the sample size was determined by simple computation method with formula [Kumar 2010]
n =
Where, n = sample size
N = population
e = 5 % level of significance
Given; N = 172, e = 0.05 at 5 % level of significance
n =
n =
n =
n =
n = 120.27 respondents
Therefore, an approximate sample size of 120 respondents was employed to conduct the research. The sample frame that was adopted are the customers of the selected Firms. The research instrument is the questionnaire. Options (answers) in the questionnaire from which the respondent had to choose were all numbered using 5 Likert, ranging from 1 to 5, that is – Strongly Agree (5), Agreed (4), Undecided (3), Disagree (2), Strongly Disagree (1). The researcher used Stratified sampling & Purposive sampling to select the respondents of this study. In Stratified sampling; the population was divided into groups, each group was selected randomly, and the researcher first divides the population into groups based on a relevant characteristics and then selects participants within those groups. Stratified random sampling is especially used by the researcher to ensure that specific subgroups of people are adequately represented within the sample [Kumar 2010]. The cronbach Alpha was employed to assess the reliability of the dataThe researcher made use of both descriptive and influential statistics to present and analyze the data collected in this study. Multiple regression analysis which is inferential statistics is used to test the two hypotheses. The responds gotten from the questionnaire was sorted, coded and the Statistical Packages for Social Sciences (SPSS) Version 17.0 was used for the analysis [Cooper 2006].
Data Analysis and Discussion
Table 1 – Distribution of respondents and response rate
Respondents Customers | Questionnaire administered (sampled) | Percentage of total response ( %) |
Ogun Central constituency | 53 | 53.0 |
Ogun East Constituency | 20 | 20.0 |
Ogun West Constituency | 27 | 27.0 |
Total | 100 | 100.0 |
Gender/Category | Questionnaire administered (sampled) | Percentage of total response ( %) |
Male | 46 | 46.0 |
Female | 54 | 54.0 |
No of Returned | 100 | 83.3 |
No of Not Returned | 20 | 16.7 |
Total no of Questionnaires | 120 | 100 |
Source: Field Survey 2022.
Table 2 – The Descriptive Statistics of Sales Promotion and Consumer Patronage Choices
of Homogenous Product (A Study of Samsung and LG Products)
Responses |
Total (N) |
Mean |
Discounts and Customer loyalty.
| ||
Discounts are usually given to customers that purchase in large quantity | 100 | 4.81 |
Discount helps to motivate buyers to purchase in large quantity | 100 | 3.98 |
Discount will help to increase the level of sales of the product. |
100 | 3.69 |
Customer loyalty helps to relate to the future purchase intention of the customer to repurchase the desired product. |
100 | 3.79 |
Customer loyalty makes customer to believe in the company's integrity towards the product. |
100 | 3.77 |
Free sample and customer choice. | Total | Mean |
Free sample helps customer to differentiate the product from other product in the same industry. | 100 | 3.89 |
Free samples will generate new ideas for the company | 100 | 3.89 |
Free sample helps to make awareness of a product in the market. | 100 | 3.88 |
There are varieties of product for customer to make their choices | 100 | 3.87 |
Customers are left to choose the product of their choice. | 100 | 3.72 |
Well package product attracts customers choice on product | 100 | 3.79 |
Source: Field Survey 2022.
Hypothesis One
Ho: There is no significant relationship between discounts and customer loyalty.
Hi: There is significant relationship between discounts and customer loyalty.
Table 3 – Model Summaryb |
| |||||||||||
Model | R | R Square | Adjusted R Square | Std. Error of the Estimate | Durbin-Watson |
| ||||||
1 | 1.349a | 1.122 | 1.116 | 1.703 | 1.997 |
| ||||||
a. Predictors: (Constant), Discount |
| |||||||||||
b. Dependent Variable: Customer loyalty |
| |||||||||||
Source: Field Survey 2022
|
| |||||||||||
Table 4 – ANOVAa | ||||||||||||
Model | Sum of Squares | Df | Mean Square | F | Sig. | |||||||
1 | Regression | 63.476 | 1 | 63.476 | 21.897 | .000b | ||||||
Residual | 458.024 | 158 | 2.899 |
|
| |||||||
Total | 521.500 | 159 |
|
|
| |||||||
a. Dependent Variable: Customer loyalty | ||||||||||||
b. Predictors: (Constant), Discount | ||||||||||||
Source: Field Survey 2022.
Interpretation of Results
The result from the model summary table revealed that the extent to which the variance in customer loyalty can be explained by discount is 12.2 % I .e. (R square = 0.122). The ANOVA table shows the Fcal 21.897 at a significance level. The table shows that both variables are significant at a significance level of 0.01.
Table 5 – Coefficientsa
Model | Unstandardized Coefficients | Standardized Coefficients | T | Sig. | ||
B | Std. Error | Beta | ||||
1 | (Constant) | 10.617 | 1.504 |
| 7.061 | .000 |
Discount | .396 | .085 | .349 | 4.679 | .000 |
- Dependent Variable: Customer loyalty.
Source: Field Survey 2022.
The coefficient table above shows that the simple model that expresses the relationship between customer loyalty and discount. The model is shown mathematically as follows:
y = a + bx, where y is customer loyalty and x is discount, a is a constant factor and b is the value of coefficient. From this table therefore, customer loyalty = 10.617 + 0.396 discount. It shows that both tested variables are at a significance level of 0.01, which means that there exists a significance relationship between discount and customer loyalty. Therefore, for every 100 % increase in customer loyalty, discount offer contributed 39.6 %. The significance level below 0.01 implies that a statistical confidence of above 99 %. This implies that there is a positive significant relationship between discount and customer loyalty. Thus, the decision would be to reject the null hypothesis (Ho), and accept the alternative hypothesis (H1)
Hypothesis Two
Ho: There is no significant relationship between free sample and customer choice.
Hi: There is significant relationship between free sample and customer choice.
Table 6 – Correlations | |||
Name | Free sample | Customer choice | |
Free sample | Pearson Correlation | 1 | .355** |
Sig. (2-tailed) |
| .000 | |
N | 100 | 100 | |
Customer choice | Pearson Correlation | .355** | 1 |
Sig. (2-tailed) | .000 |
| |
N | 100 | 100 | |
** Correlation is significant at the 0.01 level (2-tailed). |
Source: Field Survey 2022.
Result: Pearson Correlation Value of the hypothesis is 0.355 having the r value of 0.001 (in which P – value is lesser than 0.01) it shows that the correlation result is considered to be significant. This shows a correlation between the dependent and independent variables with the value of 0.355 at a significance level. Hence, it is concluded that there is a significant relationship between free sample and customer choice. Therefore, the decision would be to reject the null hypothesis (Ho), and accept the alternative hypothesis (H1)
Conclusion
The findings have proved that product quality and consumer perspective about the product are essential for success. Special offer help to increase the sales volume of the particular product. Most organization uses special offer as their promotional tool kit to attract more customers. It also helps to increase the level of productivity. An organization that does not have such a plan is perhaps perceived as neglecting or not recognizing the value of sales promotional tools. This will ultimately boosts the performance of consumer patronage in such organization or for such product. These findings from this study help consumer patronage that there is need to adopt proactive approach to promotional tool kit (sales promotional tools) since it is clear from customer or consumer perspective that they value it implementing sales promotion tools in setting without exposure to consume choice which may face challenges but it is the definition commitment of the organization that brings success in the long run.
Recommendations
It is necessary for companies to understand sales promotion as well as how to manage the difficulties relating to it because the study has proven that sales promotion is very important in every running organization. As well as having more promotional tool test like advertisement, public relation and publicity.
Limitation of Studies
It is important to note that this research engaged a very small sample population thus foreclosing the possibility of generalization. Furthermore, this study relied on self-report measures which can potentially lead to subjective bias among the respondents.
Suggested for further studies
This research work actually concentrated in consumer patronage, but it is believed it is not enough regarding current economic scenario. Since there are many companies competing in the same industry producing similar product, the necessity of promotion tools will be growing. Therefore, it is becoming very important to the organization to handle the sales promotional kit to get better outcome from consumers. Future research direction should concentrate on the way to manage the sales promotional tools efficiently & effectively in other to achieve organizational goal.
About the authors
Kowo S. Akpoviroro
Kwara State University
Author for correspondence.
Email: kowosolomon@gmail.com
PhD
Nigeria, 1530, P.M.B., Malete, 241103, NigeriaOdumesi A. Oladimeji
Babcock University
Email: kowosolomon@gmail.com
PhD
Nigeria, PMB 4003, Ilishan Remo, Ogun State, Nigeria.Odunsi K. Olaleye
Federal Inland Revenue Service (FIRS)
Email: kowosolomon@gmail.com
PhD
Nigeria, 15 Sokode Crescent, Wuse Zone 5, Abuja, 904101, NigeriaReferences
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