THE EFFECT OF SALES PROMOTION ON CUSTOMERS LOYALTY: THE CASE OF EAST AFRICA BOTTLING S.C

Abstract

This study is aimed to assess the effect of sales promotion on loyalty of customers in East Africa Bottling Company in Addis Ababa. The study focuses on how tools of sales promotion, frequency of sales promotion and quality of sales promotion influence the loyalty of consumers. Sales promotion is an important component of any organization’s overall marketing strategy. The study is significant because, it contributes to new knowledge by filling and reducing the gap that exist in the understanding of sales promotion by management and other stakeholders of East Africa Bottling. A descriptive research design was applied to describe the sales promotion activities of the organization. The sample size employed 310 respondents from East Africa Bottling Company customers. Questionnaires were self-administered and close ended type. The study used simple random sampling techniques to collect primary data sources. The result of the study indicated that respondents are disagree with discount related issues, they have neutral attitude toward company’s coupons related issues, and agreed with free samples related issues of East Africa Bottling Company. Moreover, the majority of the respondents are strongly agreed with the frequency and quality of sales promotion of the company. The customers are agree and satisfied with the sales promotion of the company and they will be loyal and continue consuming the products of East Africa Bottling company products like Coca Cola, Sprite and Fanta. The correlation matrix result revealed that loyalty of customer significantly correlated with tools of sales promotion, frequency of sales promotion and quality of sales promotion of the company. The regression analysis result shows 74.9% variance in loyalty of customers is due to tools of sales promotion, frequency of sales promotion and quality of sales promotion of the company. Based on the study recommended to the company to continue and intensify the sales promotion elements to maintain the existing customers and attract new customers. It was also concluded that management should continue modifying or updating its sales promotion activities according to the taste and preferences of its customers and the public at large.