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Effects of Marketing Mix On Sales Performance (BSM 340 Assignment)

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SCHOOL OF BUSINESS, ECONOMICS AND MANAGEMENT

MARKETING RESEARCH AND INFORMATION


MANAGEMENT

TOPIC: THE EFFECTS OF MARKETING MIX ON SALES PERFORMANCE OF


TRADE KING’S TRADITONAL BEVERAGE PRODUCTS. A CASE OF CHIBWANTU
TRADITIONAL BEVERAGE

STUDENT NAME: KAPEMBWA NANYANGWE

STUDENT NUMBER: BBA 19114903

MODE OF STUDY: PART TIME

PROGRAMME REGISTERED: BACHELOR OF BUSINESS ADMINISTRATION

COURSE CODE: BSM 340

LECTURER: MRS ABBY MUMBA

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TABLE OF CONTENTS
1.0 INTRODUCTION.........................................................................................................3
1.1 Background of the study...........................................................................................3
1.2 Problem statement...................................................................................................5
1.3 Research objectives.................................................................................................5
1.4 Research hypotheses...............................................................................................6
1.5 Significance of the study..........................................................................................6
1.4 Scope.......................................................................................................................7
1.5 Definition of key terms..............................................................................................7
2.0 LITERATURE REVIEW...............................................................................................7
2.1 Studies on the relationship between product and sales performance.....................8
2.2 Studies on the relationship between price and sales performance.........................9
2.3 Studies on the relationship between place and sales performance......................10
2.4 Studies on the relationship between promotion and sales performance...............11
2.5 Theoretical framework- The 4P theory of marketing..............................................12
2.6 Conceptual framework...........................................................................................13
3.0 METHODOLOGY......................................................................................................13
3.1 Research Design....................................................................................................13
3.2 Research population..............................................................................................14
3.3 Sample size............................................................................................................14
3.4 Sampling technique................................................................................................14
3.5 Data collection techniques.....................................................................................14
3.6 Data analysis..........................................................................................................15
3.7 Ethical considerations............................................................................................15
WORKPLAN....................................................................................................................16
REFERENCES................................................................................................................17

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1.0 INTRODUCTION
A research proposal's background section explains the study's purpose, the research
objectives, the research hypotheses, the study's scope, the study's importance, and the
definition of key terminology, as well as other important information.

1.1 Background of the study


Among other things, marketers are responsible for designing marketing activities and
assembling all marketing programs that are integrated to produce communication and
transmit value to clients, as well as other tasks. It is a mixture of marketing strategies
(product/price/place/promotion) used by a firm to obtain the desired response from its
target market, say Kotler and Armstrong (2012). Marketers use a collection of
techniques known as the marketing mix, or the four Ps (The Four Ps of the Marketing
Mix).

Firms use marketing to promote their products and services (Fuerderer, Herrmann and
Wuebker, 2013). Marketers utilize the marketing mix to advertise their products and
services. It's no secret that financial services are becoming increasingly important. The
importance of marketing strategies in an organization's long-term performance is
highlighted by Green, Whitten, and Inman (2014). This means that the marketing goals
should be defined as well as measurable.

It has the following benefits according to Mullins, Walker and Boyd (2012). Both
methods are employed. First and foremost, it helps employees understand where the
organization is headed and what they are expected to accomplish. If you want to know
how successful your business is, you can use this information to do that too! In addition,
it will assist encourage the personnel, both leaders and their teams, and reward them at
the end of the project when it is finished (Fuerderer et al, 2013).

A significant portion of an organization's budget must be devoted to marketing in order


for the company's sales to increase. There's no denying that poor marketing has

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hampered the growth of many companies (Rodriguez, Peterson and Vijaykumar, 2012).
So has it been with Trade King's newly launched product 'Chibwantu'.

Since its quick expansion, Trade Kings has become a group of companies that are
managed and supervised by a singular organization, the Trade Kings Group of
Companies. In addition to Trade Kings-South Africa and Original Trade Kings Limited,
the current list of firms includes Yoyol Foods Limited, Universal Mining & Chemical
Industries Limited (UMCIL), Swiss Bake, and Trade Kings-South Africa (Chuungu,
2015). Before, Trade Kings Limited was responsible for these companies as a collective
whole. Since its inception, Trade Kings Limited has extended its product line from a
single product, Boom detergent paste, to several. Over time, the group's product line
has grown to encompass more than 300 items. African lollipops are made by Trade
Kings Group, the continent's largest lollipops maker. About 6,000 individuals currently
work for the company that was founded with just 20 employees (Chuungu, 2015). With
the acquisition of significant control in big tree and dairy gold, the group has expanded
its portfolio. Dairy Gold's Ama Sip Sip Chibwantu and Vatra, a water brand launched in
July 2020, are both produced by these subsidiaries.

Trade kings has been enjoying a comfortable market share dominance for quite some
time now in Zambia’s domestic market due to limited competition. The company’s
marketing strategy has positioned it firmly to withstand any competition from foreign
multinational corporations. The strategy that is used focuses mainly on strong
advertising and extensive distribution network from the plants to wholesale customers
as well as export markets. However, this strategy may not be effective for all products in
trade kings’ group. This is evident in the loss of sales for the new product (Chibwantu)
that was recently launched. Whereas one can speculate that the fall in sales can be
attributed to the effects of the Covid 19 pandemic, it would be prudent to request for
empirical evidence on which an informed decision can be made as to what is the major
contributing factor to the unprecedented downfall in sales turnover. On this background,
this study seeks to analyze the factors causing low sales turnover of the Chibwantu
product by adopting the 4Ps of marketing as the study variables.

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1.2 Problem statement
An effective marketing strategy is critical to achieving corporate targets. Due to
increased rivalry in the marketplace, many organizations fail to fulfill their objectives
while others change their marketing approach as a result (Renart, 2007). Several
businesses have begun to examine how they can improve their retail services in order
to achieve their unit and company-wide goals. In order to differentiate and add value to
their products, they are working on developing coherent strategies.

Globally, various research projects have been carried out on newly launched products
and the results have shown that at least one attribute in the marketing mix has an
impact on sales. If you look at the research done by Keramati, Ardalan and Ashtiani
(2012), they identified a link between marketing mix and sales success in the context of
Iranian steel private enterprises. Similarly, Bintu's (2017) research on the influence of
marketing mix strategy on the performance of small-scale firms in Maiduguri
Metropolitan, Borno State, Nigeria came to this conclusion. According to a study by
Saguti (2015), marketing mix has an impact on sales promotion because product
features, such as perceived quality and packaging, influence product consumption.
Dwelling on the findings of these few studies, it becomes apparent that the performance
of new product sales may be a result of variations in the marketing mix, not the product
itself.

In Zambia, literature bordering on marketing mix and sales performance is scanty


indicating a huge knowledge gap. This study attempts to fill this gap by studying the
effects of marketing mix on sales performance of Trade king’s newly launched
Chibwantu product whose sales revenue has decresed in recent periods as seen by low
demand and an increase in the trade receivables days by over a month outside the
allowable period for credit sales (www.tradekings.co.zm).

1.3 Research objectives


1.

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2. To evaluate the relationship between product and sales performance of
Chibwantu
3. To evaluate the relationship between price and sales performance of Chibwantu
4. To evaluate the relationship between place and sales performance of Chibwantu
5. To evaluate the relationship between promotion and sales performance of
Chibwantu

1.4 Research hypotheses


Ho: There is a positive relationship between product and sales performance of
Chibwantu

Ha: There is a negative relationship between product and sales performance of


Chibwantu

Ho: There is a positive relationship between price and sales performance of Chibwantu

Ha: There is a negative relationship between price and sales performance of Chibwantu

Ho: There is a positive relationship between promotions and sales performance of


Chibwantu

Ha: There is a negative relationship between promotion and sales performance of


Chibwantu

Ho: There is a positive relationship between place and sales performance of Chibwantu

Ha: There is a negative relationship between place and sales performance of


Chibwantu

1.5 Significance of the study


This study is imperative in the bid to explain the continued decline in the sales of the
newly launched product. The decline in sales without a comprehensive analysis may
point to non-critical issues that may need to be attended to disregarding the critical
ones. By conducting this study, the findings will bring to light the crucial elements about
the product be it price, quality, packaging, distribution system or promotion strategies

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that is causing the sales to fall. Further, the study will act as a feedback tool that will
provide management with the first hand customer feedback about the product and what
can be done to enhance customer satisfaction. It will also inform management whether
the investment in the product is commercially feasible in the long term so that other
necessary remedies such as value engineering could be made.

1.4 Scope
The study borders on one specific product from the Trade Kings Group namely
Chibwantu. This beverage is produced by a subsidiary named Dairy gold and is sold
under the umbrella of the trade kings’ group. Only data relating to this particular product
will be considered in this study. Further, data will collect from Lusaka district.

1.5 Definition of key terms


Marketing Mix: A company's marketing mix, as defined by Kotler and Amstrong (2010),
is the set of marketing tools it employs in order to achieve its marketing objectives in a
particular market segment

Sales Promotion: As a direct encouragement to make a quick sale, sales performance


provides an added value to the sales force, distributors, or customer (Zhang and Tang,
2010).

Product: Product is anything that is supplied to the market as a result of satisfying the
wants or needs of customers (Kotler and Armstrong, 2013).

Price: According to Kotler and Armstrong, cost is the sum of all values that buyers give
up in return for a product or a service (2008).

Place: A company's location and number of stores are determined by the convenience
of the customers (Kanoga, 2016).

2.0 LITERATURE REVIEW


On the basis of parts of the marketing mix, this section examines empirical research
conducted around the world on the causes that produce poor sales turnover among
newly released products in various industries. Further, the theoretical framework on

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which the study will be anchored is also briefly discussed from which a conceptual
model to show the interactions of the theoretical variables of the study is developed.

2.1 Studies on the relationship between product and sales performance


Considerations such as perceived product quality, package design, and product
branding are crucial when it comes to influencing a product's sales. Perceived product
quality affects firm performance metrics according to Feng, Terziovski, and Samson
(2007) An Arab Company’s performance was studied by Mahmood & Fatimah Hajjat
(2014) in order to highlight the steps of product creation from conception to distribution.
Products' exterior performance is influenced by their intrinsic worth according to the
findings of the study. When it comes to perceived product quality, Nirusa's survey
(2017) of 105 enterprises showed comparable results. Perceptions of product quality
were positively associated with organizational competency in the study.

Consumers' reactions to innovative packaging designs in the product business were


examined by Holmes and Paswan (2012) in their study. Product quality and price
together influence client purchase intention, say the authors of a new study. According
to them, less attention is paid to low-priced packaged goods compared to those that are
more expensive to purchase. Determining whether to buy low-cost products is also
influenced by the customer's attitude toward product packaging and quality (Holmes and
Paswan, 2012).

Based on the findings of Rizwan-Vishnu-Ahmed-(2014) Muhammad's study, product


packaging influences consumer purchasing decisions. Consumers' purchase decisions
are influenced by product packaging, according to the study's findings. Package factors
such as color, design, and material play a role in the purchasing decision. Researchers
from Sahiwal in Pakistan looked at the impact of labeling on customer buying behavior
in a study conducted by Saeed, Lodhi, Muktar, Hussain, Mahmood, and Ahm (2013).
Product labeling affects customer purchase behavior according to the study, and
consumers are initially attracted by the package color.

For her final study on branding and organizational performance in retailing


pharmaceutical products, Deborah (2016) looked at customers as a mediating factor.

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An organization's performance improved significantly as a result of branding. According
to research It was observed that brand loyalty, awareness, and image have a large
positive impact on profitability; however brand quality has a negative impact on
profitability (Kim, Kim, and Jeong, 2003).

2.2 Studies on the relationship between price and sales performance


Pricing strategies include value-based, penetration, and price discounts. Deonir Gabriel
Evandro and Fabia (2017) found that value-based pricing increases profitability.
According to a Liozu survey of 1,812 professionals, the pricing technique has a
significant impact upon firm performance. Findings showed a positive association
between the value-based pricing strategy and the firm's financial success By examining
consumer value-based pricing strategies and the reasons why corporations oppose
them, Andreas (2008) conducted a two-stage empirical technique Lack of value
assessment, communication of value, market segmentation, sales force management,
and senior management support impede the implementation of a value-based pricing
plan.

The technique of penetration pricing is used by companies to price their products and
services cheaper than the typical price of those items and services, according to Matan
(2016). Using this kind of marketing, a company can achieve market acceptance, grow
its market share, or deter new competitors from entering the market. It is difficult for
corporations to raise a product's price if they are using a very low pricing, say Marn,
Roegner, and Zawada, because they are missing out on possible revenues and giving
the impression that the product is of low quality (2003). Cheap products and services
make it harder for new products to achieve market share because of their low price
point (Golder and Tellis, 2004).

It was shown that temporary retail price reductions improve sales in another study by
Martnez et al. Nelson and Chiew looked into the influence of the fear of losing face in
customers' behavioral responses to sales promotions as well in 2005. There is a
correlation between product testing and price reductions as well as free samples, bonus
packs, and in-store displays according to the study's results. Students at a university
were studied by Osman, Chan, and Foon (2011) to see how sales promotions affected

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their buying behavior. A total of 150 people took part in the study. There was a
systematic random sampling that was employed. In order to collect data, self-
administered questionnaires were utilized. As a result of the study, there was a
significant correlation between attitudes toward coupons for price discounts and buying
behavior.

2.3 Studies on the relationship between place and sales performance


Marketers take into account the distribution route, the geographic location, and the
physical look of a product. They discovered that innovations in assortment, information
sharing, and transportation coordination had positive and substantial effects on firm
performance in their study on the influence of distribution channel innovation on the
performance of SME's (Ferri et al., 2018). According to Laswai's (2013) research, a
company's sales performance is affected by the effectiveness of various channels of
distribution models. A total of ninety persons participated in the study. In addition to
interviews and questionnaires, a documentary review was conducted to gather
information. According to the data, the distribution channel has a beneficial effect on
sales success.

Businesses based in urban regions earn larger returns than those located in rural areas,
according to Heck, Rowe, and Owen (1995). Bradley (2000) reminds out that geography
has a critical impact in the survival of an organization. Small and Medium-Sized
Technology Enterprises (SMEsTE) in Europe have been investigated by Edidiju (2015)
for their innovation and performance. A positive correlation was observed between a
company's performance and its geographic proximity. The relationship between
business location and client loyalty was examined in a study by Eze, Benedic and Juliet
(2015). Based on a survey, this study was carried out. One hundred people were
surveyed. To obtain the data, structured questionnaires were used. However, the
results showed that the business's location had an impact on its success in a major way
Customer loyalty is influenced by a company's proximity to its customers, according to
the study's conclusion.

As part of their investigation, Egle and Maciejewska (2012) focused on the physical look
of the service cape. An emotionally pleasing supermarket environment has an impact

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on customer purchasing decisions according to Ballantine, Jack, and Parsons (2010)
who studied the effects of atmosphere cues on shopping experiences. According to
research, customers' interest is increased when music is played at a moderate volume
with well-spaced sound sources.

2.4 Studies on the relationship between promotion and sales performance


Among the marketing mix's constituents is sales promotion, public relations, and direct
marketing. When researching the impact of sales promotion on organizational
performance, Festus (2016) incorporated a case study of Guinness Ghana Breweries
Limited as part of his research. Tandoh and Sarpong (2015) evaluated the influence of
sales promotions on the performance of Ghana's Auto-Mobile Industries and concluded
that sales promotions have a beneficial effect on organizational performance. The
usage of sales promotion methods such as bonuses, discounts, and contest
sweepstakes has a beneficial impact on firm performance, according to a study done in
Ghana by Dangaiso (2014).

Jebungei conducted a study in 2014 on the impact of advertising on the performance of


Kenyan cosmetic manufacturing firms. Advertising, according to the report, can assist a
company boost its profile and appeal to the general population. A product's performance
is also affected by advertising. Enlarging the consumer base allows a firm to improve
sales and profits. After studying the impact of advertising on sales in Somalia's
telecommunications firms, Liban (2015) concluded there was an impact.

A Zimbabwean seed potato cooperative's sales performance was researched by


Mukorombindo (2014), who found that direct marketing had a positive impact on sales
performance. Direct marketing had a weak relationship with sales performance,
according to the study. Because there is no formal marketing plan, there is no data on
customers, there is no budget for marketing, and there is no communication. The
company was advised to use a variety of direct marketing techniques. Afande (2015)
also conducted a study at Kenya Post Office Savings Bank on the effect of promotional
mix elements on sales volume of financial institutions in Kenya where he arrived at
similar findings as the latter. Results showed that sales promotion and personal selling

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had the biggest impact on sales volume. Direct marketing had the smallest impact on
sales volume.

2.5 Theoretical framework- The 4P theory of marketing


Using 4p theory of marketing mix as a guide, the researcher analyzes the study's
findings Companies use this strategy to build and improve their promotional activities,
says Saguti (2015) Organizational aims and customer needs are met by combining a
variety of elements.

A positive impact on sales performance is expected if the marketing mix is properly


utilized. Prices can also be used to increase sales volume and influence customer
perception of product quality through price promotion. Urban distribution networks, on
top of that, could be more lucrative Store design and the employment of appealing
stimuli, such as music, can also impact consumer purchases. A favorable influence of e-
marketing has been shown, as well as direct marketing's ability to boost profitability
Customer loyalty and brand recognition are also promoted through sales promotions.

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2.6 Conceptual framework

Product

Price

Sales
Target customer
Performance
Place

Promotion

Figure 2.1: Conceptual Framework

3.0 METHODOLOGY
This section discusses the study's research methodology. It provides an overview of the
study design, population and sample size, sampling strategies, data collection and data
analysis that were employed in the research.

3.1 Research Design


The study will employ a mixed method research design. Mixed method entails the use
of both qualitative and quantitative research instruments in the same study to promote,
for instance the consolidation of the research findings. The study's mixed-methods
design has several advantages, including the ability to understand inconsistencies
between quantitative data and qualitative discoveries, as well as the ability to reflect
participants' viewpoints. A study's conclusions are anchored in the participants'
experiences when using mixed methods, which encourages interaction (Asenahabi,
2019).

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3.2 Research population
"Population" refers to the total set of relevant units or elements studied by researchers,
according to Mugenda & Mugenda (2003). The study's intended audience includes the
customers that consume Chibwantu and middle level managers at trade kings. There
are currently 20 employees serving in various middle management portfolios from
production supervisor, sales assistant, finance assistant and marketing assistant
(www.tradekings.co.zm). The population of consumers however will be premised on
Zambia’s adult financially inclusive population which is in formal employment as this will
represent consumers who have financial capacity to consume. According to the 2020
FinScope report, the formal financial inclusion rate increased to 61.3% in 2020
compared to 38.2% in 2015 of the adult population. Further, the report found that the
adult population in Zambia is 9.5 million. Of this population, 5.8235 million is financially
inclusive and this is the target population of the study.

3.3 Sample size


The sample size is computed using solving formula as follows:

N 5,823,500
n= = =399.99 400 respondents
[ 1+ N ( e ) ] [ 1+5,823,500 ( 0.05 )2 ]
2

3.4 Sampling technique


Specifically, the study will use a non-probability sampling technique known as purposive
sampling, which allows the researcher to take into account how convenient it is for the
respondents to be contacted. In addition to this, the study is based on a single product
therefore it is imperative that the participants in the study have the same feature of
having consumed the product at some point in time after it was launched on the market.
Further, the researcher will have the opportunity to interact with respondents in their
natural setting while adhering to research ethics.

3.5 Data collection techniques


The study will employ two data collection instruments namely a questionnaire for
quantitative data and telephone interviews for qualitative data. The questionnaire will be

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distributed to consumers while interviews will be conducted with the middle
management staff from various departments of the company.

3.6 Data analysis


Data will be analyzed using a software package for social scientists (SPSS). These
hypotheses will be tested using the regression tool included in this package. We will
also segment and evaluate qualitative data by pulling themes from participant
responses. Excel charts and frequency tables will be used to present the study's
findings.

3.7 Ethical considerations


The study will ensure that prior to its commencement; it adheres to the ethical
requirements for social research involving human subjects crucial among them being
informed consent, privacy, anonymity and confidentiality. The researchers will ensure
that proper procedure is followed by seeking consent from management of the company
as this study will be undertaken as one of the functions the marketing team of the
company is expected to discharge from time to time.

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WORKPLAN

Nov- Dec-
Activity/Time frame Sep-21 Oct-21 21 21
Proposal presentation  
Company consent  
Development of research instruments  
Recruitment of respondents  
Distribution of research instruments  
Retrieval of research instruments  
Data coding and analysis  
Compilation of research findings  
Presentation of research findings to
management  

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