MOHA Soft Drink Full (TEFERA TESHOME ABEBE)
MOHA Soft Drink Full (TEFERA TESHOME ABEBE)
MOHA Soft Drink Full (TEFERA TESHOME ABEBE)
RESERCH PAPER
FEB, 2018
ADDISS ABEBA, ETHIOPIA
Assessing the effect of promotion on sells in the case of
MOHA Soft Drink Company S.C
FEB, 2018
ADDISS ABEBA, ETHIOPIA
Abstract
Promotion presents the need for companies to expand its sells into existing &
new territories world-wide. An ethos of promotional knowledge transfer,
implementation and learning are needed for international business success.
The main objective of the study is to indicate the role of promotion on sales
volume and customer satisfaction. Indicate to the company, promotion influence
on the sales volume and incremental of customer satisfaction. Also data present
and analysis using figures too.
The area coverage of this study is limited to Addis Ababa city, especially
southern district. The type of product would be limited to only MOHA soft drink
Company.
Both the primary and secondary data collection could be used by researcher in
the methodology part. The researcher uses Judgment sampling technique,
Interview, tables, figures and charts.
MEDROC groups in general & MOHA soft drink Industry S.C. in particular are
new and significant phenomena, are newly internationalizing, and are culturally
working by advancing in promotional aspect. This study will huge important
which attach with research to identify if and how they reconcile this conundrum,
to advance understanding concerning the link between Promotion and
international business development.
I
Acknowledgment
Secondly I would also thank my parent and friends who helped me a lot in
finalizing this research within the limited time frame.
II
Table of Contents
Abstract...................................................................................................I
Acknowledgment.....................................................................................II
Table of Contents...................................................................................III
List of Tables .......................................................................................IV
List of Figures.........................................................................................V
Acronomy............................................................................................. VI
Chapter one............................................................................................1
1. Introduction........................................................................................1
1.1. Background of the Study....................................................................................1
1.2. Statement of the problem.................................................................4
1.3. Objectives of the study.....................................................................5
1.3.1.General objective.....................................................................5
1.3.2. Specific objects.......................................................................5
1.4. Significance of the study....................................................................................6
1.5. Scope of the study............................................................................6
Chapter Two...........................................................................................7
2. Literature Review................................................................................7
2.1. Developing and Managing an Advertising Program...................................7
2.1.3. Promotional Effectiveness.......................................................9
2.1.4. Deciding on the promotion Budget........................................10
2.1.5. Choosing the promotion message..........................................12
2.1.6. promotion Channels.............................................................13
Chapter Three.......................................................................................15
3. Methodology......................................................................................15
3.1. Sources of data..............................................................................16
3.2. Method of data collection.................................................................................16
3.3. Sampling technique and sampling size.......................................................17
3.4. Data processing and analysis.........................................................................17
3.5. Data presentation and interpretation..........................................................17
Chapter Four........................................................................................18
4. Data Presentation and Analysis.........................................................18
Chapter Five.........................................................................................28
5. Recommendation and Conclusion.....................................................28
5.1. Recommendation...........................................................................29
5.2. Conclusion.....................................................................................31
Organization of the paper......................................................................33
Appendix...............................................................................................34
III
List of Tables
Customer’s background........................................................................19
Attitude towards product of MOHA company........................................21
Customer’s preference to the product....................................................21
Customer source of information of MOHA company..............................22
Customer eveluation on price of MOHA product....................................24
Customer interest towards the company promotion.............................23
Attitude toward customer satisfaction...................................................25
Evaluation of MOHA soft drink company promotion..............................25
Effect of the company Promotion on its customers buying rate…………..26
IV
List of Figures and Images
v
Acronyms
DW - District Wholesaler
VI
Chapter 1 (Introduction)
This research intends to assess the promotional effect towards the MOHA soft
drink Industry S.C.
In marketing, Promotion is advertising a product or brand, general sales, and
creating brand loyalty. It is one of the basic elements of market mix. So in 21
centuries it’s unthinkable selling a product without a backlog of huge
promotion. (Michael R and Ilkka A, 1998)
Due to different reasons, the researcher tries to fill the gap by seeing different
researchers work. To fill this gap the researcher used the following ideas.
In what best way that the promotion can be able to address the expected
message?
Focus on out of promotional thought
page 1
“Ethiopia has a great consumer story. Its growing so quickly but there is still so
little that is manufactured locally. One of the industries that people are really
excited about is beverage.” (Brooks, 2014)
So this indicate there is an intense competion on the market and this company
must fully backed by promotional scenario to achieve high amount of sales.
In my point of view, “MOHA Soft drink industry S.C have face huge competion
in the market and have face decrement on sales rate in last year” (Company’s
brusher, 2017). So it’s obvious this company needs a well defined research and
researcher to indicate brief and clear promotional ways.
MOHA soft drinks industry S.C was established on may 15, 1996 acquiring
“Nifassilk” plant, “Teklhymanot” plant, “Gonder” plant and “Dessie” plant from
the Ethiopian privatization agency with the paid capital of Birr 108,654,000.
The company currently has seven operating units including “summitte” plant,
“Bure” plant, and the recently inaugurated “Hawasa” plant in the SNNPR.
Image 1 Product of MOHA Soft drink company S.C (From left to right – PEPSI, Miranda
Orange, 7Up, Miranda Tonic, Kool water and PEPSI Shresher)
page 2
The annual turnover of the company has reached to birr 556 million and sales
stands at an average annual growth rate of 12%. (company website, 2017).With
its leadership working hand in hand the business has seen significant growth
over the years .processed and functions have been improved, resulting in
considerable sales increases.
Ethiopia enjoy a range of beverage from MOHA soft drink Company including
those are: PEPSI Cola, Miranda Orange, 7Up, Miranda Tonic, Miranda Apple
(All Pepsi Brands) and “Kool” and “Tossa” bottled water products.)
Market
MOHA hold 52% of the market share in soft drink industry in the country with
an expansion and replacement of obsolete machinery. Production capacity of
the plant has invested birr 8 million for the expansion of new projects, birr 153
million for marketing, infrastructure, excluding promotion and sponsorship
expenses. Also a significance growth over the years of production, Sales and
profitability due to reorganization of operations has been achieved. But no
matter how the production is increasing tremendously the growth rate declined
throw time due to intense competion and lack of alternative source of
promotional ways.(Company website,2016)
The company has to date paid birr 656 million as excise and sales tax to the
government. It provided 2485 for citizens out of which 1095 are now
employment opportunities since acquisition. MOHA has been successfully
implementing its social obligation by way of sponsoring different events and
supporting initiatives. It has contributed Birr 2 million for victim of natural
disasters. It has also backed initiatives and supports HIV/AIDS victims in the
company. page 3
MOHA is well known for its multi fascinated participation in the community
activities of which is “Merkato Adarash” modern city bus terminal project
under the motto of “Beautifying the city together” is a recent paradigm.
Future plan
Addressing the promotion in short and brief way so that it can be able to
address the required information and it take into consideration to decrease the
cost incurred for the promotion and to give clear information to the customers.
Choosing the best suitable time for promotion and proper promotional agency
are the most important issues that the company should give due attention. The
company made a different attempt to looking a solution. But the way they use
such layout is outdated and backward (traditional way of advertising only).
With advertising, a company engages in a one-way communication to the
prospect or customer which is magazines, newspapers, and television,
websites, and city buses. So, this thesis indicate to look a new way of
promotional strategies to add a worth value to customer. The problems are
observed and obviously seen using interview of customers and all stakeholders.
page 4
Therefore, this study has the purpose of investigating whether the promotion
really influences the sales volume of the product. And reduce the information
gap of the subject and were contribute to work better understanding on
improved strategies for reorienting the promotion system for the benefit of the
company.
The evidence that I have stated is the 2017 sales growth rate would be
decreased unpredictably by 7% No matter how the sales amount is increased.
(Company brusher, 2017)
Specific Objectives
Second, the study will be helpful to perceptions towards the new Promotional
system.
The study focuses on the promotional activity of MOHA soft drink Industry S.C.
and its impact on the sales volume of the products and customer satisfaction.
The area coverage of this study was limited to Addis Ababa city, especially
South district. The type of product would be limited to only MOHA soft drink
Industry S.C.
Limitations
Might be the simple random sampling cause unpredictable result on the
research.
page 6
Chapter Two
Literature review
page 8
The choice of the promotion objectives should be based on a thorough
analysis of the current situation. For example, if the product class is mature,
the company is the market leader and brand usage is low. The proper objective
should be to stimulate more brand usage. (Kottler, 1998)
Promotional Effectiveness
The role of Promotion is to increase demand for the product or to increase sales
volume and customer satisfaction. The company wants to spend the amount
required to achieve the sales goal. But how does a company know if it is
spending the right amount? If the company spends too little, the effect will be
in significant. If the company spends too much on promotion, then some of the
money could have been put to better use. Although Promotion is treated as a
current expense, part of it is really an investment that builds up an intangible
value called good will or brand equity. (kottler, 1998).
There are five specific factors to consider when setting the Promotion budget:
1. Stage in the product life cycle: - new products typically receive large
Promotional budgets to build awareness and to gain consumer trial.
Established brands usually are supported with lower Promotional budgets
as a ratio to sales.
2. Market share and consumer base: - high market share brands usually
require less Promotional expenditure as a percentage of sales to maintain
their share. To build share by increasing market size (sales volume) requires
larger Promotion expenditure. Additionally on a cost-per impressive basis, it
is less expensive to reach consumers of a widely used brand than to reach
consumers of low-share brands.
3. Competitive and clutter: - in a market with a large number of competitors
and high Promotional spending, a brand must Promotion more heavily to be
heard above the noise in the market.
Even simple clutter from Promotion is not directly competitive to the
brand creates a need for heavier advertising.
page 11
4. Promotional frequency: the number of repetitions needed to put across the
brand’s message to consumers has an important impact on Promotional
budget.
5. Product substitutability: brands in a commodity class. Example, soft drink
requires heavy promotion to establish a differential image. Promotion is also
important when a brand can offer unique physical benefits or features
(Kottler, 1998; p. 640).
The creative people must have a clear idea of the characteristics of the
audience expected to be exposed to the message. In this sense, the principles of
creating effective advertising are the same as in the domestic market place. The
marketer must determine what the consumer is really buying, that is the
customer’s motivations these will vary depending on the following.
2. Advertising
Advertising is a form of non-personal promotion. It is when companies
pay to promote ideas, goods, or services in a variety of media outlets. It can be
found everywhere. With advertising, a company engages in a one-way
communication to the prospect or customer.
3. Direct Marketing
Direct marketing is a type of advertising directed to a targeted group of
prospects and customers rather than to a mass audience. Two forms of direct
marketing are printed by mail, or direct by e-mail. The goals of direct
marketing are to generate sales or leads for sales representatives to pursue.
Direct marketing allows a business to engage in one-way communication with
is customers about product announcements, special promotions, bulletins,
customer inquiries, and order confirmations.
Examples: direct mail, e-mail, and telemarketing
5. Public Relations
Public relations activities enable an organization to influence a target
audience. Most of the time, public relation campaigns try to create a favorable
image for a company, its products, or its policies. Companies give news
releases to announce newsworthy developments about a company's products
or services, distribution channels, facilities, operations, partners, revenues and
earnings, employees, and events. Publicity is one tactic that public relations
professionals use. This means bringing newsworthy information to the public.
Empirical research
page 14
This view was supported by Ananda & Murugaiah (2003) who carried out
similar study on financial industry and recognized the importance of
promotional strategy in influencing performance in the sector. In his finding,
Kristina (2006) recommended that promotional strategies should be designed
as per the nature of services to be promoted.
The impact of promotional strategy was further noted by Channon (1985) when
he opined that promotion attract deal oriented consumers who are likely to
switch banks rather than new long accounts. Mohd &Wannur (2012) in their
study noted that personal network promotional tool comprised of promotion
through family / friends (asking friends or relatives to advertise), sales
promotion (special sale price, purchase with purchase, giveaway with purchase
and free sample) and distributors (which moving around office, schools, clinics,
houses and any premises showing the products) have impact on performance.
In the study conducted among women in Kenya by Arvinlucy (2012) it was
found that most women groups use personal selling in promoting their
products. This was due to the fact that other promotional elements require a
lot of money and the groups do not have sufficient fund to carry out those
other promotional elements.
page 15
Chapter Three
3. Methodology
3.1.Sources of data
Both qualitative and quantitative data were collected, from primary and
secondary sources. This study used both primary and secondary sources of
data.
page 16
3.3. Sampling technique and sampling size
Judgment sampling technique, it was used to select the sample size from the
population. It enabled to select respondents or neutral peoples that provide
relevant information and it is low cost terms of money and save time.
After the relevant data was collected it was processed through edition, coding,
classify and also analyzed. The data analyzation process was based on
descriptive form of data analysis method. Closed ended questions were
analyzed by tables and percentages. Response that were collected by open-
ended questions and unstructured interview analyzed by coherent and easily
understandable manner.
Page 17
Chapter Four
This study was conducted to assess effect of promotion on sales volume and
customer satisfaction of MOHA soft drink company products. As it was
proposed previously structured questionnaires were prepared to be filled by
selected 8 distributors all of them are responded. From the proposed figure; 93
of the customers were responded. The results obtained are analyzed in this
chapter.
Before going to the main part of the study it could be appropriate to present
the characteristics or background information of the study participants.
40%
Key
FEMALE
53% MALE
page 18
As indicated on the above figure, out of the total respondents 54(57%) of them
were Female whereas 40(43%) males. This shows that the proportion of Female
was higher than Male. So, Most of the females were not prefer to drink
alcoholic beverage because of social, cultural and religious influences.
Therefore, in order to satisfy there need they prefer to drink soft drink
products, as indicated on the above data most of the females were highly
correlated with MOHA Soft drink company products.
Respondent in
N Item Response No %
o
1. Age 18-30 36 37.7
31-45 35 37.6
46-60 14 15
>60 8 8.7
Total 93 100
Source: own survey
As we know MOHA franchise all PEPSI brand soft drink product. So the
promotion of MOHA was made by foreign mass media like super sports on
internet web and other related media, this media is now a day’s dominated by
adult (18-30) age. This shows that they are more aware of MOHA product than
other age groups.
page 19
40
35
30
25
20
15
10
5
0
Monthly income Key
Birr <1000 Birr 1000 - 2000 Birr 2001 - 3000 Birr >4000
level of cus-
tomersSource: own
survey, primary data
From this we can conclude that the larger proportion of the respondents had
earned greater than 4000 and least of them had earned less than 1000 birr.
This shows the more income they generate, the more MOHA product they use.
Therefore, the amount of money used can determine purchasing ability of the
product.
page 20
Table 4.3 attitude towards a product of MOHA Company
page 21
As indicated on the above table, concerning customers preference to the
company products most of 71(76.3%) preferred Miranda Orange followed by
14(15.06%) 7Up, 6(6.5%) PEPSI Cola 2(2.14) KOOL water and none of drink
Miranda Tonic & Miranda Apple. From the above data we can simply say that
Miranda Orange has highly preferred by the customers due to its taste and its
refreshing power to motivate people.
Thus, the company had taken a great concern to its advertisement. In this way
advertisement can be addressed in different ways like TV, Radio and Printed
media, therefore; it can addressed to the customers easily.
page 22
90
80
70
60
50
40
30
20
10
0
Advertising Personal Selling Direct Marketing Public Relations Sales Promotion
Figure 3 Promotional media for which customers get information about the
company products
No 49 52.68%
Total 93 100%
page 23
Since price is the sum of values that consumers exchange for the benefits of
having or using the product or service, it is the major factor or variable
affecting buyer’s choice. According to the data observed on table most 39(42%)
of customers indicated the price of Miranda Orange followed by 36(38.7%) high,
whereas 67(72.1%) stated low price for 7Up. Since, consumer perceive price of
the product effective, if quality of the product fits its ability to satisfy. This
implies that the price of the product needs to consider satisfying the customer.
page 24
page 25
From the above table we can see that 90(96.77%) of the study population see
the company no use Personal selling, Public relation, Direct marketing and
sells promotion. This shows that the company lack alternative source of
promotional strategies’. Therefore, MOHA tries to address all of its products to
all over the country. By addressing the product to the country it can gain
acceptance and attract more customers.
Table 5.1. Effect of the company Promotion on its customers buying rate
page 26
Little effect No effect Major effect
6% 2% 8%
Medium
effect
84%
On this way most of the peoples need lower price but form day to day the
prices of coca-cola soft drink company products become high and high. In this
way the company has to consider to and make some kind of change.
Promotion is found to be the major tool which the factory uses to introduce the
different products available to build a permanent image in the mind of
customers.
page 27
The company’s update the promotion by getting top line direction from division
office and the local team work on making its locally relevant.
The company believes that as promotion affects the sales of the company
product.
The promotion affects the sales in two ways; long-term and short-term. Where
specific promotions give a short term sales boost, the thematic campaigns
(which are not related to a specific promotion) will help drive brand association
and affinity which is a long term benefit.
page 28
Chapter Five
5.1. Conclusion
The main purpose of this study was to investigate the effect of promotion on
sales volume and customer satisfaction in case of MOHA soft drink Company.
It is concluded as follow,
The result of the analysis shows that among 93 respondents 53(57%) of them
are females and remaining 40(43%) of them are males and most of the
respondents 36(37.7) were under the group of (18-30) years.
The study made on sales volume and customer satisfaction by using different
promotion media like advertising, personal selling, Direct marketing, sells
promotion and public relation.
Customers need promotion strategy to prepare locally by give for the people
awareness and satisfaction by making promotion locally relevant.
MOHA representative office uses its capacity to make customers satisfied and
to increase sales volume. This indicates the company gives special
consideration to the issue because without customer satisfaction the company
cannot increase its volume of sales and cannot become profitable.
page 29
According to the findings, Advertisement is never enough, our world is
changing very fast and so do the behaviors of the target consumers. It needs to
be on top of the game and continue to connect with consumers more than ever
before by tapping their passion points. Therefore, in order to keep customers
satisfied the MOHA representative office must utilize different kinds of
Promotional thoughts such as advertising, personal selling, Direct marketing,
sells promotion and public relation.
page 30
7.2. Recommendation
One of the causes for customers not interested about the company
promotion is that, most of the time the promotion is not prepared locally.
Therefore, in order to keep the customers interested and satisfied the
promotional department should maintain a strategy to do more locally , the
action give awareness and satisfaction for the people that need to prepare
locally and not only for this people it makes interested but for all the people
who are aware by the company promotional strategy.
The MOHA Company was done much in 2016 by using advertising only. Rather
the company used the other media. Therefore, in order to gain a full image the
company needs to work more on alternative source of promotional way.
As the manager of the company stated promotion affects the volume of sales in
two ways; short-term and long-term ways, where specific promotions give a
short-term sales boost, the thematic campaign (which are not related to a
specific promotion) were help drive brand association and affinity which is a
long-term benefit.
The PEPSI representative office should give a due attention about sales volume
and customer satisfaction. Therefore, Top-management must support sales
volume and customer satisfaction by prepared an adequate budget and the
manager must give their personal support by make clear communication with
the department and it can keep customers satisfied and increase the volume of
sales.
page 31
According to the findings, advertisement is never enough, our world is
changing very fast and so do the behaviors of the target consumers. It needs to
be on the top of the game and continue to connect with consumers more than
ever before by tapping their passion point. Therefore, in order to keep
customers satisfied the MOHA representative office must utilize different kinds
of media like advertising, personal selling, Direct marketing, sells promotion
and public relation.
page 32
Organization of the paper
Department of Management
Dear respondent,
This questionnaire is designed to collect vivid data for the research conducted
on the Assessing the promotional way (case study in MOHA soft drink S.C).The
research is to be done by graduating class Management student for the
purpose of partial fulfillment of successful completion of BA degree in
Management. The success of the study depends on the quality and amount of
data you will provide. Therefore, you can provide the information you think
relevant without fear because it will only be used for the purpose of the study
and will kept confidential. Thank you in advance to take your incredible time to
fill this questionnaire.
Notice
No need of writing your name
Put √ mark in the box Provide for your response
1. Sex
Male Female
2. Age
18-25 26-30
35-40 31-35 Above 40
3. Marital status
Married Unmarried Divorced other
4. Level of education
Grade 1-8 Grade 9-12 Diploma Degree MA
Other________________________________ I
5. Income level
Under 1000 1000-2000 2001-3000
3001-4000 Above 4000
Section 2:
3. Do you think that MOHA Soft Drink Company have stronger competitor, if yes,
which company?
A) Soft drink companies
B) Mineral Water Products
C) Juice products
D) Others
4. How do you get information about MOHA soft drink Industry products?
While it makes advertisement
Others, specify
Direct Marketing
Other, specify II
6. If you inform by promotion, do you find interesting?
Yes No
8. when you consider prices of MOHA soft drink products in relation to their
quality, their price is
Very high High Average Low Very low
Pepsi cola
Miranda Apple
Miranda Tonic
Miranda Orange
7up
KOOL water
10.Have you ever seen the MOHA soft drink company pamphlet or banners?
Yes No
11.If yes, where is that? ________________________________________
III
12.How do you find the effects of promotion on your rate of buying the products?
Major effect Medium effect
14.Do you think MOHA soft drink company promotions are effective in promoting
its products?
Yes No
15.What do you recommend about MOHA soft drink products promotion to make
more awareness to consumers
As wholesaler & retailer which Soft drink product consumed more? Why?
How do you measure the impact of promotion on your sales Volume and
customer satisfaction?
Do you think the current promotion associated with society?