Effects of Sales Promotion on Brand Loyalty, a Case Study of Globacom Nigeria Limited
CHAPTER ONE
INTRODUCTION
1.0 Background to the Study Every firm aims to make profit. It is generally agreed that one of the keys to making profit is boosting sales. To boost sales, a substantial number of consumers must choose one’s product over and above that of its competitors on a substantial number of occasions. One of the surest way of ensuring this happens is to cultivate brand loyalty to one’s product or service. Brand loyal consumers are more likely to choose their preferred products and/or service over its competition on a consistent basis. Considering the fact that consumers tend to be finicky with their choices, producers of rival brands tend to be uncompromising with product quality while being relentless with their marketing, wiggle room for products in a highly competitive environment is little or non existent and the margin for error is narrow. Brand loyal consumers tend to serve as a crucial even if sometimes unconscious support base for products and/or services in the fierce battle for patronage. For any organization therefore broadening and deepening the base of brand loyal consumers is a key objective in fashioning out any marketing strategy for the brand. Indeed brand loyalty has been proclaimed by some as the ultimate goal of marketing (Reicheld &Sasser 1990)
To underscore the importance of brand loyalty a study in the United States showed that
The average United States Company loses half its customers every five years equating to
13% annual loss of customers. This statistic illustrates the challenges companies face when trying to grow in competitive environments. Achieving even 1% annual growth requires increasing sales to customers both new and old by 14%. Reducing customer loss can dramatically improve business growth, and brand loyalty which leads to consistent and even greater sales since the same brand is purchased repeatedly.
The import of this is that with brand loyal consumers there is the benefit of higher sales volume. As Larry
INTRODUCTION
1.0 Background to the Study Every firm aims to make profit. It is generally agreed that one of the keys to making profit is boosting sales. To boost sales, a substantial number of consumers must choose one’s product over and above that of its competitors on a substantial number of occasions. One of the surest way of ensuring this happens is to cultivate brand loyalty to one’s product or service. Brand loyal consumers are more likely to choose their preferred products and/or service over its competition on a consistent basis. Considering the fact that consumers tend to be finicky with their choices, producers of rival brands tend to be uncompromising with product quality while being relentless with their marketing, wiggle room for products in a highly competitive environment is little or non existent and the margin for error is narrow. Brand loyal consumers tend to serve as a crucial even if sometimes unconscious support base for products and/or services in the fierce battle for patronage. For any organization therefore broadening and deepening the base of brand loyal consumers is a key objective in fashioning out any marketing strategy for the brand. Indeed brand loyalty has been proclaimed by some as the ultimate goal of marketing (Reicheld &Sasser 1990)
To underscore the importance of brand loyalty a study in the United States showed that
The average United States Company loses half its customers every five years equating to
13% annual loss of customers. This statistic illustrates the challenges companies face when trying to grow in competitive environments. Achieving even 1% annual growth requires increasing sales to customers both new and old by 14%. Reducing customer loss can dramatically improve business growth, and brand loyalty which leads to consistent and even greater sales since the same brand is purchased repeatedly.
The import of this is that with brand loyal consumers there is the benefit of higher sales volume. As Larry