(i)

RESEARCH PROJECT REPORT

On

“A STUDY ON PROMOTIONAL ACTIVITIES AND

BRAND LOYALTY OF COCA COLA COMPANY

Towards partial fulfillment of Bachelor of

Business Administration (BBA)
(School Of Management,BBD University, Lucknow)

Guided By: Submitted by:

DR. KIRAN SINGH SHASHWAT AGARWAL

ROLL.NO.-: 1200671373

SESSION:-2022-23

SCHOOL OF MANAGEMENT

BabuBanarasi Das University

Sector I, Dr. Akhilesh Das Nagar, Faizabad Road, Lucknow (U.P.) India
 (ii)

DECLARATION

I SHASHWAT AGARWAL declare that this research work is

my original work and has not been published or submitted for
the award of any discipline to any university or any higher
institution of learning before. Where it is indebted to the work
of others due acknowledgement has been made.

Signature……………………………………..
Date………………………

SHASHWAT AGARWAL
BBA3(5)
(STUDENT)
 (iii)
ACKNOWLEDGEMENT

I would want to convey my heartfelt gratitude to Dr. Kiran Singh, my mentor,

for his invaluable advice and assistance in completing my project. He was
there to assist me every step of the way, and his motivation is what enabled
me to accomplish my task effectively. I would also like to thank all of the
other supporting personnel who assisted me by supplying the equipment that
was essential and vital, without which I would not have been able to perform
efficiently on this project.

I would also want to thank the BBD University for accepting my project in
my desired field of expertise. I’d also like to thank my friends and parents for
their support and encouragement as I worked on this assignment.
 (iv)

TABLE OF CONTENTS
Page

INTRODUCTION………………………………………………………………………………………...i
DECLARATION…………………………………………………………………………………ii
ACKNOWELEGMENT………………………………………………………………………….iii
TABLE OF CONTENTS………………………………………………………………………...iv
LIST OF TABLES………………………………………………………………………………..v
LIST OF FIGURES………………………………………………………………………………vi

CHAPTER ONE ...................................................................................................................... 1

INTRODUCTION ...................................................................................................................... 1
: Background to the study ......................................................................................................2
: Statement of the problem .....................................................................................................5
: Purpose of the study: ........................................................................................................... 5
: Objectives of the study: ....................................................................................................... 5
: Research questions: ............................................................................................................. 6
: The scope of the study .........................................................................................................6
: Significance of the study .....................................................................................................7
: Figure 1. Conceptual frame work ........................................................................................ 8
CHAPTER TWO: LITERATURE REVIEW ...................................................................... 13
: Introduction....................................................................................................................... 13
: Promotional activities: ....................................................................................................... 13
: Relationship between promotional activities and brand loyalty ............................................ 21
: Other factors affecting brand loyalty .................................................................................. 24
CHAPTER THREE: METHODOLOGY ............................................................................. 30
: Introduction....................................................................................................................... 30
: Research designs and strategy ........................................................................................... 30
Survey population ............................................................................................................. 30
 v
Sample size: ......................................................................................................................... 30
: Sampling methods and techniques...................................................................................... 31
: Data collection sources: ..................................................................................................... 33
: Data collection methods and tools...................................................................................... 33
: Investigative procedure:..................................................................................................... 34
: Data processing and analysis ............................................................................................. 35
: Challenges encountered ..................................................................................................... 35
CHAPTER FOUR ................................................................................................................. 36
PRESENTATION, ANALYSIS AND DISCUSSION OF RESEARCH FINDINGS ................. 36
Introduction........................................................................................................................... 36
Background information ....................................................................................................... 36
: Century bottling company and promotional activities ......................................................... 41
: Management of loyalty programs ...................................................................................... 49
: Relationship between promotional activities and brand loyalty ........................................... 51
CHAPTER FIVE ................................................................................................................... 62
SUMMARY, CONCLUSION AND RECOMMENDATIONS................................................. 62
5.1: Introduction....................................................................................................................... 62
5.3: Conclusion ........................................................................................................................ 63
APPENDICES .......................................................................................................................... 68
MAKERERE UNIVERSITY ................................................................................................... 68
INTRODUCTORY LETTER ................................................................................................. 76
 v
LIST OF TABLES
Page
Table 1: Illustration of the sample size ................................................................................... 31
Table 2: Gender of respondents............................................................................................... 37
Table 3: Age bracket of respondents ....................................................................................... 37
Table 4: Level of education of respondents ............................................................................. 38
Table 5: marital status of the respondents ................................................................................ 39
Table 6: Income of the respondents per month .........................................................................40
Table 7: Use of coupons ..........................................................................................................41
Table 8: Use of Rebates ......................................................................................................... 42
Table 9: Use of free product trails........................................................................................... 42
Table 10: Use of sales contests: .............................................................................................. 43
Table 11: Use of fliers: ........................................................................................................... 44
Table 12: Use of Street advertising ......................................................................................... 45
Table 13: Use of event sponsorship..........................................................................................46
Table 14: Use of Television advertising .................................................................................. 47
Table 15: Use of radio advertising .......................................................................................... 48
Table 16: Loyalty programs and consumer rewards ..................................................................49
Table 17: Management of loyalty programs .............................................................................50
Table 18: Proportion of Coca-Cola consumption ..................................................................... 51
Table 19: Preference rate for the coca-cola brand .................................................................... 52
Table 20: Choice on consumption of Coca-Cola .......................................................................54
Table 21: Promotions and consumption behavior .................................................................... 55
Table 22: Promotions and consumption decision ..................................................................... 56
Table 23: Themes and consumption behaviors ........................................................................ 57
Table 24: Themes and level of consumption interests ...............................................................58
Table 25: Promotions and brand switching ...............................................................................59
Table 26: Promotional activities and brand loyalty .................................................................. 60

vi
LIST OF FIGURES.

1.8: Figure 1. Conceptual frame work .......................................................................................8

 CHAPTER ONE
INTRODUCTION

Since 1987, the Ugandan economy has continued to grow on a positive note thereby creating a

delicate and competitive marketing environment.

In this regard, buyers operate under various constraints and occasionally make choices that give

weight to their personal benefits than to the company benefits (Philip kotler 2003).In fact, its so

amazing to see a variety of commodities in the market place that it even becomes quite

challenging for a consumer to choose what type of commodities to purchase.

To day‘s consumers‘ are becoming harder to please, they are smarter, more price conscious, more

demanding, less forgiving and are usually approached by many competitors with equal or even

better offers (Philip Kotler 2003).These together with the growth of consumerism and the ever

burning flame of competition, have greatly affected the consumers relative attitude towards brand

portfolios (CCS news April 2005).

All over the world, Multinational companies have employed promotional activities such as

advertising, sales promotions, personal selling, publicity and public relations and direct

marketing for survival (Engel et al 1991).

And in Uganda, the situation is not different either. Soft drinks manufacturing companies for

example continuously seek for varying promotional tools basically to gain a competitive

advantage over and above their competitors and as such attain a higher degree of consumer

loyalty. They as such use promotions as away to differentiating their products since they provide

inducements or contributions that give additional value to consumers leading to a strong and

quick response (Shiffman and kanuk 1991).

1
: Background to the study:
Promotion comes from a Latin word meaning to move forward. The meaning has narrowed down
so that promotions refer to communication undertaken to persuade others to accept ideas,

concepts or things (F.James Engel et al 1994). Therefore promotions is one of the four elements

of the marketing mix i.e. product, price, promotions, and distribution.

It is the communication link between sellers and buyers for the purpose of influencing,

informing, or persuading a potential buyer‘s purchasing decision (Kurtz and Dave 2010). The

specification of five elements creates a promotional mix. These elements are personal selling,

advertising, sales promotions, direct marketing and publicity (Rajapogal 2007). A promotional

mix can have a wide range of objectives including: sales increases, new product acceptance,

creation of the brand equity, positioning, competitive retaliations or creation of a cooperate

image. Fundamentally; however there are three basic objectives of promotion. These are: to

present information to consumers as well as others, to increase demand and also to differentiate a

product. (Kurtz and Dave 2010)

There are different ways to promote a product in different areas of the media. Promoters use

internet advertisement, special events, endorsements and newspapers to advertise their products.

Many times with the purchase of the product there is an incentive like discounts, free items or a

contest. There is therefore an increasing need for brands to build a deep and meaningful connect

with consumers‘ so that brands rise above market clutter. Successful brands deliver on these

timeless values, build on them and resonate not just with the immediate needs of the consumer

but also their larger aspirations. In doing so, brands deliver on their immediate promise and also

build a long term relationship with customers. But this relationship must negotiate a

marketawash with growing brands and multiple messages, making it that much more difficult to

differentiate brands and sustain brand loyalty. (Dowling and Uncles).

2
Brand loyalty in marketing, consists of consumer‘s commitment to re-purchase or otherwise
continue using a brand and can be demonstrated by a repeated buying of a product or service or

other positive behaviors‘ such as word of mouth advocacy ( Dick et al 1994).

Brand loyalty is more than simple purchasing. Customers‘ may repurchase a brand due to

situational constraints such as vendor lock in (Jones, Micheal.A.et al). Such loyalty is referred to

as spurious loyalty. True loyalty exists when customers have a high relative attitude towards the

brand which is exhibited through re-purchase behavior (Dick et al 1994). This type of loyalty can

be a great asset to the firm: customers‘ are willing to pay higher prices, they may cost less to

serve, and can bring new customers‘ to the firm (Riechheld et al 1990).

Many multi-national companies in Uganda, for example soft drinks manufacturing companies

continuously seek for varying promotional tools basically to gain a competitive advantage and as

such attain a higher degree of customer loyalty thereby discouraging other firms from competing

directly. They therefore use promotions as a way of differentiating their products since it provides

inducements or contributions that give additional value to customers leading to stronger and

quick responses (Shiffman and Kanuk 1994).

In this regard, the coco-cola brand is not an exception. Coca-cola was invented in 1876 by Dr.

John Pembaton and was availed in only Atlanta-Georgia USA. It was first sold as energy drink in

form of syrup in Jacob‘s pharmacy. Its sales gained momentum during the First World War as it

was served whenever there was a monument service unit.

Pembaton had a partner known as Frank Robinson. Frank Robinson sold the plant to Asa Candler

at $250000 who later sold it to Robert Woodruff at $25million. It was Robert woodruff who

3
grew the business to this magnitude when he introduced the idea of bottling it as a soft drink.

(CBC sales reports 2003)

In Uganda, the official bottlers, Century bottling company ltd started in 1988 by the Bagaalaliwo

family in partnership with the coca-cola international whose head quarters are based in Atlanta

Georgia. However the first bottle came off the line on 5th may 1989. The plant started with the

production of three core brands namely; coca-cola, Fanta orange and Sprite. Over the years,

Century bottling company expanded its‘ product portfolios to include Krest, Stoney, Novida

Dasani water and the newly introduced Minute maid juice.

The performance of Century Bottling Company, has been growing at a double digit over the past

two decades with the highest contribution of 50% coming from the Coca-cola brand. However,

over the last two decades, the contribution of the coca-cola brand to the overall sales of the

company has been fluctuating up to the current 36%. (CBC sales report March 2011). As a way

of revamping the Coca-cola brand performance the company has launched such promotion

themes as life tastes good, Coca-cola real, Enjoy Coca-cola, Open happiness among others and

also conducted such promotional activities as: Brr on the Coke side of life, Bongasna Coke, Coke

with meals combos‘, Coca-cola music wave and the frequent Coca-cola free product samples

basically to attract customers and retain them. (CBC sales report Dec. 2010) Despite of all these

innovations, consumer‘s degree of pre-depositional commitment towards Coca-cola brand has

remained low. One therefore wonders if these promotional activities really result into creation of

loyal consumers. In this regard, the study focuses on the promotional activities of which

Advertising, direct marketing, personal selling, sales promotions and publicity and public

relations are an integral element basically to explore and establish the relationship between

promotion activities and brand loyalty.

 4
: Statement of the problem.
The contribution of brand Coca-cola to the total sales of Century bottling company has reduced

over the past two decades.( CBC Sales reports Nov. 2010).In this regard, Century bottling

company has launched such promotional activities as bonganaCoke,BRR on the coke side of life,

Coke and meals combos, and has also initiated such promotional themes as Coke real, Live on

the coke side of life, Life tastes good, Enjoy coca-cola, always coca-cola, Open happiness among

others basically to attract and retain consumers. (CBC Sales reports Dec 2010).Despite of all

these innovations, consumers‘ degree of pre-dispositional commitment towards the Coca-cola

brand has remained unsatisfactory to the management of Century bottling company and the

shareholders. One therefore wonders if these promotional activities really result into creation of

loyal consumers. This coupled with the heavy investment in consumer promotions by the

competitors‘ leaves a lot to be desired. The study therefore sought to explore and establish the

relationship between promotional activities and brand loyalty.

: Purpose of the study:

The purpose of the study was to establish the relationship between promotional activities and
brand loyalty in Century bottling company ltd.

: Objectives of the study:

To find out the extent to which Century bottling company conducts promotional activities.

To establish how Century bottling company manages loyalty programs. To

determine the relationship between promotional activities and brand loyalty.
 5
: Research questions:

To what extent does Century bottling company conduct promotions?

How are loyalty programs handled in Century bottling company?

What is the relationship between promotions and brand loyalty?

: The scope of the study:

: Geographical scope:
The study targeted consumers in and around Kampala District and the commercial team in

Century bottling company ltd located 28 km from Kampala city on plot 964,kyagwe block 111

Namanve industrial area.

The Researcher used Century bottling company ltd because it‘s the plant that manufactures,

distributes and sales Coca-Cola, a brand which is experiencing a fluctuating performance.

: Subject content:

The study focused on establishing the relationship between promotional activities as an

independent variable and brand loyalty as a dependent variable. It therefore covered promotional

tools such as sales promotions, advertising, public relations, personal selling, and direct

marketing.

: Time period:

The study covered a period ranging from 1990 to 2011.This was because it‘s the period over
which the performance of Coca-Cola brand started fluctuating.

6
: Significance of the study.
The study intends to benefit the following people:

Business community.

The research study will go a long way in enabling the business community in similar business

environment to make rational and informed business decisions in strategy implementation.

Researcher.

The research study will also help in equipping the researcher with the knowledge and the skills

of collecting, coding, editing, analyzing and interpreting data and presenting information. This

will enhance the researchers‘ competency and therefore the researchers ‗career development in

marketing and sales management.

Future research and academicians:

The findings of the research study will also go along way in producing empirically grounded data

from which students may form a foundation for further research on promotional activities and

brand loyalty.

Management of Century bottling company.

The research study will help management of century bottling company to identify the relevant

marketing mix elements that add value to the core business and therefore improve on its

operational excellence through reducing costs.

 7
: Figure 1. Conceptual frame work.
Independent variable Dependent variable.
variables price
Promotional activities
peer influence
Advertising Brand loyalty

sales promotions commitment

Publicity and public
perceived value
relations
brand trust

personal selling satisfaction

direct marketing

Extraneous
Source: Adopted from Philip Kotler (2003) ―Marketing Management ―,7th edition.

8
Advertising:

Is a form of communication intended to persuade an audience (viewers, readers of listeners) to

purchase or take some action upon products, ideas or services. It includes the name of the

product or service and how that product or service could benefit the consumer, to persuade a

target market to purchase or consume that particular brand. These messages are usually paid for

by sponsors and viewed via various Media.

Sales promotions:
Sales promotions is a set of paid marketing activity (other than advertising, and personal selling)

undertaken to stimulate buyer action. It includes such inducements as point of sale, displays, and

coupons. It assumes a much greater role with low priced mass products than specialty products

such as sports, watches.

Sales promotions therefore consist of short term incentives to encourage purchase or sale of a

product or service. Whereas advertising and personal selling offers reasons to buy a product or

service, sales promotions offers reasons to buy now.

Publicity and public relations:

From the Wikipedia, a free encyclopedia, publicity is a deliberate attempt to manage the public‘s

perceptions of a subject. According to Philip Kotler 2003, a public is any group that has an actual

of potential interest in or impact on a company‘s ability to achieve its objective. Public relations

involve a variety of programs designed to promote or protect company image or its individual‘s

products.

9
Personal selling:

Personal selling is the most effective tool at the later stages of the buying process particularly in

building up buyer preference, conviction and action. It‘s believed to be effective because: it

involves an immediate and interactive relationship between two or more persons. Here each party

is able to observe the others reactions, it also permits all kinds of relationships to spring up

ranging from a matter –of-fact selling relationship to a deep personal friendship and it makes the
buyer feel under some obligation for having listened to the sales person talk.

Direct marketing:

Direct marketing is a form of advertising that reaches its audience without using traditional

formal channels of advertising, such as TV, newspapers or radio. Businesses communicate

straight to the consumer with advertising techniques such as fliers, catalogue distribution,

promotional letters, and street advertising. A well-executed direct advertising campaign can offer

a positive return on investment as the message is not hidden with over complicated branding.

Instead, direct advertising is straight to the point; offers a product, service, or event; and explains

how to get the offered product, service, or event.

Commitment:

According to the psychological theories, commitment is the set of acts and cognitions that link a

person to his behavior. The organizational literature considers it as an affective attachment to an

organization values and purposes, or a relative intensity of the identification and the involvement

in a particular organization. The latter is characterized at least by three factors: a strong

10
conviction and acceptance of the organization‟goals and values, a will to produce great efforts for

the benefit of the organization and lastly, a strong desire to remain member in it. Brand trust

Brand trust is defined as the willingness of the average consumer to rely on the ability of the

brand to perform its stated function, as the confident expectations of the brand‟s reliability and

intentions and as the confidence a consumer develops in the brand‘s reliability and integrity
(Chatterjee and Chaudhuri, 2005).

Perceived value :

Perceived value is regarded as a strategic weapon in attracting and retaining customers and has

become one of the most significant factors in the success of both manufacturing businesses and

service providers.

The construct of perceived value has been identified as one of the most important ingredients for

gaining competitive edge and repurchase intentions.

Price:

It is postulated that buyers, generally, have a range of acceptable prices for considering

purchases. Thus, buyers may not purchase a product when price is perceived to be too high, nor

when price is perceived to be too low.

11
Peer influence:

Peer pressure is ‗a social instance of social influence, which typically produces conformity to a

specific way of acting or thinking.‘ Under peer pressure, adolescents may emerge desires for

conformity, which has been associated with the needs for acceptance, approval and harmonious

relationships with others. Adolescents usually seek the feelings of ―fitting inǁ and sense of
belonging in peer groups, as well as avoid negative emotions, such as feelings of isolation and

inadequacy by participating in behaviors with peers. Hence, it is logical that many brand name

marketers attempt to directly attract adolescent consumers or indirectly affect adolescent

consumption behaviors through peer pressure

Satisfaction:

It is viewed as an emotion or a consequence of both cognitive and affective process. Total or

cumulative satisfaction is an overall evaluation that is based on the purchase and the consumption

experience with a product or service through the time. Customer satisfaction that is inherent to a

specific transaction represents an immediate post-purchase evaluation. It can either indicate the

affective reaction toward the recent experience with the product or service.

Relationship:

Promotions are being used with increasing frequency by manufacturers facing highly competitive

markets, which are causing concern among some marketers who feel that frequent promotions

can hurt a brand. Allan Baldinger and Joel Rubiuson noted that if all brands in a product market

have high brand loyalty then, Price promotion will not be useful to any of the brands.

Nevertheless, there is little evidence to either confirm or dispel these fears.

12
CHAPTER TWO
LITERATURE REVIEW
: Introduction.
This chapter reviews the existing literature on the variables under study. I n this regard, it focuses
on the relationship between promotional activities and brand loyalty.
This chapter is as such divided into five sections. The first section (2.1) is an introduction to
chapter two, the second section (2.2) deals with promotional activities, the third section (2.3)

deals with brand loyalty, the fourth section (2.4) discuses the relationship between promotional

activities and brand loyalty and the fifth section (2.5) discuses the other factors that influence

brand loyalty.

: Promotional activities:
Sales promotions:

Sales promotions is a set of paid marketing activity (other than advertising, and personal selling)

undertaken to stimulate buyer action. It includes such inducements as point of sale, displays, and

coupons. It assumes a much greater role with low priced mass products than specialty products

such as sports, watches etc. (James .f. Engel et al 1991).

Sales promotions therefore consist of short term incentives to encourage purchase or sale of a

product or service. Whereas advertising and personal selling offers reasons to buy a product or

service, sales promotions offers reasons to buy now.(P.Kotler and G. Armstrong 2001). According

to Phillip Kotler (2003), consumer promotional tools include; Samples:These are offers of a free

amount of a product or service delivered from door to door or sent in mail, picked up in a store,

attached to another product that featured in an advertising offer, Cash refund offers (Rebates):

These provide a price reduction after purchase rather than at the retail shops. Here consumers

send a specified proof of purchase to the manufacturer, who refunds part of the

13
purchase price by mail, Coupons: These are certificates entitling the bearer to a stated saving on

the purchase of a specific product either mailed, enclosed in other products or attached to or

inserted in magazine and newspapers adverts, Price packs (Cents off deals):These are offers to

consumers of savings off the regular price of the product, flagged on the label or package .A
reduced price pack is a single package sold at a reduced price (such as two for the price of one), a

bonded pack is two related products bonded together (such as a tooth brush and

toothpaste),Premium (gift):This is merchandise offered at a relatively low cost or free as an

incentive to purchase a particular product. A pack premium accompanies the product inside the

package. A free in the mail premium is mailed to consumers who send in a proof of purchase

such as a box top is sold below its normal retail price to consumers who request it. Frequency

programs: These are programs providing rewards related to the consumers frequency and

intensity in purchasing the company products or services, Prizes (contests sweep stakes, games):

Prizes are offers of the chance to win cash, trips or merchandise as a result of purchasing

something. A contest calls for consumers to submit an entry to be examined by a panel of Judges

who will select the best entries. A sweep stake, asks consumers to submit their names in a

drawing. A game presents consumers with something every time they buy bingo numbers,

missing letter which might help them win a prizes, Patronage awards: These are values in cash or

in other forms that are proportional to patronage of a certain vendor or group of vendors, free

trials: These invite prospective purchases to try the product without a cost with the hope that they

will buy, Product warranties: These are explicit or implicit promises by sellers that the product

will perform as specified or that the seller will fix it or refund the customer‘s money during a

specified period. Point ofpurchase (pop): These are displays and demonstrations that take place at

the point of purchase or sale, Price offs (off-invoice off list): Is a straight discount off the list

14
price on each case purchased during a stated time period. Allowance: Is on amount offered in

return for the retailers agreeing to feature the manufacturer‘s products in some way. An

advertising allowance compensates retailers for advertising the manufacturer‘s products. A

display allowance compensates them for carrying a special product display, free goods: These are

offers of extra cases of merchandise to intermediaries who buy a certain quality who feature a

certain flavor or size, and lastly sales contests: These aims at inducing the sales force or dealers

to increase their sales results over a stated period with prizes (money, trips, gift or points) going

to those who succeed.

Advertising:

Is a form of communication intended to persuade an audience (viewers, readers of listeners) to

purchase or take some action upon products, ideas or services. It includes the name of the

product or service and how that product or service could benefit the consumer, to persuade a

target market to purchase or consume that particular brand. These messages are usually paid for

by sponsors and viewed via various Media Bhatia (2000).Advertising permits the seller to repeat

a message many times. It also allows a buyer to receive and compare the messages of various

competitors. Large scale advertising says something positive about the seller‘s size, power and

success (Phillip kotler 2003).

The purpose of advertising is to get consumers to think about or react to the product or company

in a certain way (Phillip Kotler and Garry Armstrong 2001).

There are many forms of advertising and these include; Digital advertising: This is further

classified into the following sub categories i.e. Television advertising/Music in advertising: The

TV commercials is generally considered the most effective mass market advertising format as is

15
reflected by high price. TV network charge for commercial airtime during popular T.V events.

The majorities of television commercials feature a song or jingle that listeners soon relate to the
product. Virtual advertisements may be inserted into regular television programming through

computer graphic (Mscarthy, Micheal 2002) or used to replace local bill board that are not

relevant to remote broad cast audience (Keith Mcarther 2009).Others include: RadioAdvertising,

On line advertising, Product placements, Press advertising, Bill board advertising, Mobile

billboard advertising, In -store advertising, street advertising, Celebrity branding to mention but a

few

Publicity and public relations:

From the Wikipedia, the free encyclopedia, publicity is a deliberate attempt to manage the

public‘s perceptions of a subject. According to Philip Kotler 2003, a public is any group that has

an actual of potential interest in or impact on a company‘s ability to achieve its objective. Public

relations involve a variety of programs designed to promote or protect company image or its

individual‘s products. He furthers notes that, clearly, creative public relations can affect public

awareness at a fraction of the cost of advertising. That the company does not pay for the space if

time obtained in the media. It only circulates the messages stories and manages on certain events.

Public relation and publicity can be managed via art exhibitions event sponsorship, arrange a

speech of talk, make an analysis or prediction conduct a poll or survey, issue a report, take a

stand on a controversial subject, arrange for a testimonial announce an appointment, invent then

present an award, stage a debate, organize a tour of your business or projects, issue a

commendation.

16
Direct marketing:
Direct marketing is a form of advertising that reaches its audience without using traditional

formal channels of advertising, such as TV, newspapers or radio. Businesses communicate

straight to the consumer with advertising techniques such as fliers, catalogue distribution,

promotional letters, and street advertising. Direct marketing is predominantly used by small to

medium-size enterprises with limited advertising budgets that do not have a well-recognized

brandmessage. A well-executed direct advertising campaign can offer a positive return on

investment as the message is not hidden with over complicated branding. Instead, direct

advertising is straight to the point; offers a product, service, or event; and explains how to get the

offered product, service, or event. Direct marketing can be conducted through the following

forms; Direct mail: Direct mail includes advertising circulars, catalogs, free trial CDs, pre

approved credit card applications, and other unsolicited merchandising invitations delivered by

mail or to homes and businesses, or delivered to consumers' mailboxes by delivery services other

than the Post Office. Bulk mailings are a particularly popular method of promotion for businesses

operating in the financial services, home computer, and travel and tourism industries,

Telemarketing: This is another common form of direct marketing in which marketers contact

consumers on phone, Door-to-Door Leaflet Marketing: Here leaflet distribution services are used

extensively by the fast food industries, and much other business focusing on a local catchment.

Business to consumer business model, similar to direct mail marketing, this method is targeted

purely by area, and costs a fraction of the amount of a mail shot due to not having to purchase

stamps, envelopes or having to buy address lists and the names of home occupants, Voicemail

Marketing: This is another type of direct marketing which emerged out of the market prevalence

of personal voice mailboxes, and business voicemail systems. Due to the ubiquity of email

17
marketing, and the expense of direct mail and telemarketing, voicemail marketing presented a

cost effective means by which to reach people directly, Direct-response television marketing:

Direct marketing on TV (commonly referred to as DRTV) has two basic forms: long form

(usually half-hour or hour-long segments that explain a product in detail and are commonly

referred to as infomercials) and short form, which refers to typical 30-second or 60-second

commercials that ask viewers for an immediate response (typically to call a phone number on

screen or go to a Web site),Direct selling: This refers to selling products by face-to-face contact

with the customer, either by having salespeople approach potential customers in person, or

through indirect means such as Tupperware parties.

: Personal selling:

Personal selling is the most effective tool at the later stages of the buying process particularly in

building up buyer preference, conviction and action. It‘s believed to be effective because: it

involves an immediate and interactive relationship between two or more persons. Here each party

is able to observe the others reactions, it also permits all kinds of relationships to spring up

ranging from a matter –of-fact selling relationship to a deep personal friendship and it makes the

buyer feel under some obligation for having listened to the sales person talk.

: Brand loyalty:

The History of loyalty marketing dates way back in 1929 when Betty Crocker issued coupons

that could be used to redeem for items like flatware. (Reichheld ,1996 ).Therefore the discipline

of customer loyalty marketing has been around for many years, but expansions from it merely

being a model for conducting business to becoming a vehicle for marketing and advertising have

made it Omni present in consumer marketing organizations since the mid to late 1990s (Fred

Reichheld,1996).
 18
There are several definitions and measures of brand loyalty; some focus on the attitudinal

dimension and others focus on the behavioral aspect of brand loyalty (Gee et al., 2008; Oliver,

1997).In this approach, brand loyalty ―is a deeply held commitment to rebuy or repatronize a

preferred brand consistently in the future, despite situational influences and marketing efforts

having the potential to cause switching behavior (Oliver, 1997).

In a related development, Brand loyalty in marketing consists of a consumer‘s commitment to

repurchase or otherwise continue using the brand and can be demonstrated by repeated buying of

the product or service or other possible behavior such as word of mouth advocacy (Dick et al,

1994 ). Therefore Brand loyalty is an important consideration when estimating the value of a

brand as loyalty can translate into profit (Aaker, 1991).Besides, Brand loyalty is a barrier for new

competitors and forms the basis for a price premium (Aaker, 1996b). Brand loyalty also

encourages repeated purchase behavior from consumers, and discourages them froms witching to

competitor brands (Yoo, Donthu and Lee, 2000). Brand loyalty is as such a valuable asset for

every brand. Research has indicated that the cost of recruiting new customers is very high due to

advertising, personal selling, establishing new accounts, and customer training (Mittal and

Lassar, 1998). More importantly, profits generated increase significantly over time (Reichheld

and Sasser, 1990).

From the point of view of many marketers, loyalty to the brand in terms of consumer usage is a

key factor. Most important of all, in this contest , is usually the rate of usage to which the par-to

80-20 rule applies. Philip Kotler also contends that heavy users are likely to be disproportionately

important to the brand. As a result, suppliers often segment their customers into heavy, medium

and light users.

 19
Past research on segmentation has also proposed various approaches to classify consumers into

different segments. Typically, most of them rely on the assumption that there exist two groups of

consumers—loyal and non-loyal in the market (Jacoby and Chestnut 1978; Lattin 1987; Bawa

1990) or inertia land variety-seeking (Jeuland 1979; Givon 1984; Seetharaman and Chintagunta

1998).

Specifically, past research in this stream, assumes that consumers who have shown high loyalty

level in the past will repeat purchase the same brand (i.e., repurchase exclusivity; Banasiewicz

2005); as a result, the impact of past purchases on current purchase decision and loyalty is not

accounted for.

In practice, consumers ‗preferences are changing over time. For instance, Heilman, Bowman,

and Wright (2000) demonstrate that consumers‘ preferences may either strengthen or weaken.

That when loyal consumers repeat purchase the same brand, their decision is driven by their

brand preference – as a result of the unique value of this brand (Ailawadi, Neslin, and Gedenk

2001).

In contrast, when switching to a different brand, they may be motivated by the attractiveness of

new brand‘s promotional incentives (such as price-cut).

Analogously, non-loyal consumers may repeat purchase the same brand in response to the

aggressive economic incentives provided by that specific brand (Brown 1974; Schneider and

Currim 1990; Currim and Schneider 1991) or switch to another brand due to their desire for

variety (McAlister and Pessemier 1982; Givon 1984; Seetharaman and Chintagunta 1998). This

suggests that both loyal and non-loyal consumers may exhibit different levels of sensitivity to
various marketing variables – especially to prices – when making repeat purchases and switching

20
Brands. Recently, Yoon (2008) and Yoon and Kwak (2009) demonstrate that consumers are

morelikely to use the habit tactics when making repeat purchases.

: Relationship between promotional activities and brand loyalty:

In the long term, brand loyalty is perceived to be the key to sustainable competitive advantage.

Just as people are more likely now than ever to change jobs, homes, even spouses brand choice is

also in question. (Aaker David .A 1996.).New products, more media communication choices,

wider variety of distribution channels and greater choice in financing lead to difficulty in

maintaining loyalty.

Shari Caldron attributes this decline in brand loyalty to rising consumer price sensitivity, a

decrease in advertising effectiveness, and an increase in new brands..

In an analysis of price – related promotions, across 13 different product categories, Andrew S.C,

Ehrenberg, Kathy Hammond and G.J Goodhardt found at that price promotion often reward the

brand existing customers. That those consumers‘ rarely responds to a price promotion if the

brand has not previously been tried. They assert that when these one off

purchase do occur, it is the result of a selective consumer reaction which is not likely to result in

additional brand loyal customers. According to them, at best there are temporary brand

switchers. Brand loyalty may seem strong, yet still be short lived leaving brands venerable.

Therefore, brand loyalty of moderate loyals who may or may not buy the brand on any given

occasion, can be enhanced through promotional programs.

Price promotion such as rebates , cash discounts, other promotional offer can serve as a

mechanism to say thank you making the promotion a reward rather than an enticement at least

for the long term conserve as a positive reinforcement for loyal purchasers of the brand.

21
They further explain that price promotion strategies have been linked directly to customer brand

loyalty and that another potential goal for sales promotion is to address the moderate loyal or

systems beaters who are not yet loyal users of the brand but have the greatest potential for

becoming long term brand loyal consumers. Sales promotions therefore reinforce the brand for

this group and some people may even be convert into highly loyal product purchases.

In a related development, Huff et al ( 1999) , asserts that sales promotions comprises of a wide

variety of promotional tools designed to achieve short term objectives. For instance monetary

promotions, such as price discounts and coupons, are the most common form of sales promotions

used by organizations. However, non-monetary promotions, such as free gifts, free samples,

sweepstakes and contests, are gaining popularity given the negative effects of frequent discounts.

Recent studies to date have shown that non-monetary promotions may help to reinforce brand

equity (Palazo´n and Delgado, 2005; Montaner and Pina, 2008). Unlike monetary promotions,

with non-monetary promotions the incentive is not directly experienced through a lower purchase

price making it more difficult that these types of promotion influence consumers‘ internal

reference prices (Campbell and Diamond, 1990).

Consequently, when consumers are exposed to non-monetary promotions, it is less likely that

those promotions will negatively influence perceived quality and brand associations. Similarly,

non-monetary promotions can differentiate brand and help communicate distinctive brand

attributes, contributing to the improved brand equity (Papatla and Krishnamurthi, 1996; Mela et
al., 1998; Chu and Keh, 2006).

Of the non-monetary promotional tools, gifts or premiums are becoming increasingly important

in promotional strategies (Raghubir, 2005; Banerjee, 2009; Palazo´n and Delgado, 2009a).

22
A gift or premium is a product or service offered free, or at a relatively low price, in return for

the purchase of one or many products or services (d‘Astous and Landreville, 2003).Surprisingly,

while gift promotions are widely used in marketing, academic research into this subject is limited

(D‘Astous and Landreville, 2003; Bodur and Grohmann, 2005; Prendergast et al., 2008).

As such, manufacturers tend to make decisions about gift promotions on the basis of experience

and intuition (Hiam, 2000; d‘Astous and Landreville, 2003).

Consequently, gift promotions do not always achieve their objectives, such as significantly

increasing sales (Gedenk et al., 2004). Gifts are used to influence attitudes and purchase

intentions of potential consumers, maintain or increase purchases by existing consumers, along

with other short term objectives (Bodur and Grohmann, 2005).

However, as the findings of previous studies suggest, the effects from a free gift offer may be

limited by different factors (Drake and Chung, 2005; Chang, 2009). For instance, Simonson et al.

(1994) found that sales promotions, such as premiums, can reduce purchase intentions when

consumers perceive the gift as providing little or no value.

d‘Astous and Jacob‘s (2002) study was one of the first to delve into the impact of several factors

on consumer reactions to gift promotions. Specifically, these authors studied the impact of three

categories of variables on gift promotions success: objective characteristics of the offer (whether

the value of the gift was mentioned), attitudinal variables (the interest in the product, interest in
the gift or the attitude toward the brand), and consumer characteristics (deal proneness or

compulsive buying tendencies). Extending this work, d‘Astous and Landreville (2003) showed

that complex dynamics appear to underpin the relationships between the characteristics of gift

promotions (e.g. gift attractiveness, the fit with the product category, etc.) and consumer

reactions. Bodur and Grohmann (2005) found that a stronger relationship between the consumer

23
and the business and an implicit request for reciprocation positively affect consumer responses to

gifts. In another development, Chandon also contends that sales promotions can be used across

various product types. Two general categories of products have been studied in sales promotions

research: utilitarian and hedonic products. Utilitarian products are viewed as more functional and

instrumental. Consequently they are judged in terms of how well they function. On the other

hand, hedonic products are typically linked to more experiential consumption. Therefore, they

are judged in terms of how much pleasure they provide.

The benefit congruence framework proposed by Chandon et al. (2000) points that sales

promotions should be more effective if there is congruence between the benefits the promoted

product provides and the benefits the promotion generates. These authors showed that monetary

promotions provide stronger utilitarian benefits (i.e. monetary savings, product quality and

shopping convenience) while non-monetary promotions provide stronger hedonic benefits (i.e.

value expression, entertainment and exploration). Therefore, the use of monetary promotions

should be more successful forutilitarian products, whereas non-monetary promotions should be

more effective for hedonic products. According to these authors, non-monetary promotions can

also be useful with utilitarian products because they provide consumers with experiential benefits

that are not generate from the product itself. In this sense, gift promotions could offer consumers
experiences such as fun, amusement and diversion, and provide a symbolic meaning that

supplements the characteristics of the utilitarian products thereby encouraging them to make a

repeat purchase (Palazo´n and Delgado, 2005).

: Other factors affecting brand loyalty:

Brand loyalty is perceived as multidimensional construct. It is determined by several distinct

psychological processes:

24
: Peer influence:

Previous literature has indicated that the presence of peer pressure also facilitates the generation

of wider-ranging, synergistic alternatives (Peel and Dansereau, 1998). For example, wearing a

certain brand name of apparel or a pair of branded athlete shoes is an effective way of ―fitting

inǁ in peers for adolescents (Forney & Forney, 1995). Elliott and Leonard‘s (2004) study

supported this argument and contended that peer pressure fulfills a critical role in determining

adolescent attitudes and behaviors.

As literature demonstrated, peer pressure is a critical determinant in confirming adolescent

perceptions and consumption behaviors (Evans, 2004). That is, adolescents tend to learn about

their peers' product favorites and take them into account while evaluating products on their own

(Gunter and Furnham, 1998). Furthermore, adolescents are much more likely than adults to have

positive attitudes toward brand name products under peer pressure (Miller, 2002).

Pilgrim and Lawrence (2001) also asserted that peer pressure is probably the strongest influence

on adolescent brand choices, and this influence is even evident on such symbolic goods as

clothes and fashion items (Brittain, 1963).

 : Perceived value:

It has been long acknowledged that creating and delivering superior customers‟ perceived value

is regarded as a strategic weapon in attracting and retaining customers and has become one of the

most significant factors in the success of both manufacturing businesses and service providers

(Wang et al., 2004).

The construct of perceived value has been identified as one of the most important ingredients for

gaining competitive edge (Spiteri and Dion, 2004; Mizik and Jacobson, 2003; Baker,

25
Parasuraman, Grewal and Voss, 2002) and repurchase intentions (Parasuraman and Grewal,

2000). In general, perceived value is the result or benefits customers receive in relation to total

costs (Woodruff, 1997). Consistently, Sirdeshmukh et al. (2002) and Hellier et al. (2003) defined

value in the service context as the consumer‘s perception of the benefits minus the costs of

maintaining an ongoing relationship with a service provider. Thus, customers are more likely to

stay in a relationship when they perceive the sum of benefits (e.g. satisfaction with core service

attributes, supplementary services and relationship benefits) exceeds the cost. Traditionally,

perceived value is most commonly conceptualized as a unidimensional measure (Gale, 1994).

However, research scholars argued that this unidimensional measure lacks validity (Woodruff and

Gardial. 1996) and fails to give specific direction on how to improve value with a view to retain

customers (Petrick, 2002).

Earlier empirical evidence indicated that perceived value on repurchase intention was completely

mediated via customer satisfaction (Patterson and Spreng, 1997). Based on equity theory (Oliver

and DeSarbo, 1988), customers are inclined to feel equitably treated if they perceive that the ratio
of their outcome to inputs is comparable to the ratio of outcome of inputs experience by the

company. As a consequence, they are more likely to develop affect and satisfaction with the

service (Bolton and Drew, 1991).

: Brand trust

Brand trust is defined as the willingness of the average consumer to rely on the ability of the

brand to perform its stated function (Chaudhuri and Holbrook, 2002), as the confident

expectations of the brands reliability and intentions (Delgado, Munuera et al., 2003) and as the

confidence a consumer develops in the brands reliability and integrity (Chatterjee and Chaudhuri,

2005). In consonance with previous studies, brand trust was further conceptualized to

26
feature two dimensions: brand reliability and brand intentions (Delgado-Ballester , 2004;

Delgado-Ballester and Munuera-Alemán , 2005). Brand reliability has a competence or technical

nature and is based on the consumer‘s belief that the brand accomplishes its value promise. This

reflects a sense of predictability that the brand satisfies the individual‘s needs in consistently

positive ways. Brand intentions are based on the consumer‘s belief that the brand would hold the

consumer‘s interest when unexpected problems with the consumption of the product arise.

Recent studies have suggested a positive association between loyalty and trust, defined as

containing elements such as honesty, competence, benevolence, reliability, and customer

orientation (Chow and Holden 1997; Doney and Cannon 1997; Morgan and Hunt 1994;

Moorman, Zaltman and Deshpande 1992). In general, trust is viewed as the determinant of

relationship commitment and future purchase intentions in the context of buyer-seller

relationships and business-to-business relationships (Morgan and Hunt 1994; Moorman et al.

1992; Crosby et al. 1990). In addition, trust has been found to be predictive of both purchase and
attitudinal loyalty in the consumer market context (Chaudhuri and Holbrook 2001). Consistently,

Urban, Sultan et al. (2000) proposed customer trust as an essential element in building strong

customer relationships and sustainable market share. Reichheld and Scheffer (2000) also inform

that ―to gain the loyalty of customers, you must first gain their trustǁ. With regard to developing

brand loyalty, it has been suggested that brand trust is necessary to create brand loyalty, apart

from brand affect (Ringberg and Gupta, 2003; Urban and Sultan. 2000).

: Customer satisfaction.

Customer satisfaction is the expression of a judgment that a product or service has provided or is

providing a pleasurable level of consumption-related fulfillment (Oliver 1997). An extensive

literature has verified the role of satisfaction in determining post purchase attitudes and

27
intentions and has demonstrated that satisfied customers engage in repurchase behavior (e.g.,

Anderson and Sullivan 1993; Fornell et al. 1996). Moreover, several authors have shown that

satisfaction affects the customer attitude toward the brand or firm (e.g., Bloemer and Kasper

1995; LaBarbera and Mazursky 1983). Therefore, we expect to find positive effects of

satisfaction on attitudinal and behavioral loyalty.

: Commitment:

According to the psychological theories, the commitment is the set of acts and cognitions that

link a person to his behavior (Crosby &Tylor 1983)

In the marketing context, Cunningham (1956) considers that commitment results from the

confrontation of the consumer to changes. In marketing services, commitment is viewed as a

consumer‘s will to continue in a relationship with an operator (Morgan & Hunt 1994). It makes
possible to differentiate the loyal from the inert consumers. The commitment could be associated

to a brand, a brand retailing or a person (Terrasse 2003).

The commitment refers to an implicit or an explicit promise of relational continuity between the

exchanges‟ actors (Dwyer et al. 1987). It is the most advanced phase of interdependence between

the seller and the purchaser. The latter can reach a level of satisfaction that might dissuade him to

seek another partner providing a similar advantage (Dwyer et al. 1987). The durability of the

relationship can be guided by the habit or the constraints of the market. Customer‘s commitment

corresponds to a strong desire to preserve the relationship with the seller with agreeing to provide

the efforts that might be essential (Morgan & Hunt 1994).

28
: Price:

It is postulated that buyers, generally, have a range of acceptable prices for considering

purchases. Thus, buyers may not purchase a product when price is perceived to be too high, or

when price is perceived to be too low (Monroe, 1984).

Some evidence that endpoints of the evoked range of prices may impact price judgments. Biswas

and Blair (1991) in Janiszewski and Lichtenstein (1999) have shown that consumer purchase

intention are sensitive to their perception of the lowest and highest prices in the market place.

The consumer reactions are irrational in the sense that consumers are maximizing something

other than a utility function that depends only on their own material payoffs. Rather, they also

wish to harm (or at least not to help) firms that they see as having given them a bad deal.

Understandably, this leads firms to be careful not to induce these emotional reactions
(Rotemberg,2003).

. When considering buying a store-branded garment, price may be a key element in the decision

process. Baltas (1997) has shown that price is an informational cue that increases consumer

sensitivity to private brands.

29
CHAPTER THREE

METHODOLOGY
: Introduction:
This chapter defines the methodological aspects which the researcher used to collect, analyze and

interpret data. This chapter includes the research design and strategy, the survey population,

sample size, sampling methods and techniques, data collection sources and methods and tools,

data processing and analysis and the associated problems and their solutions.

: Research designs and strategy

A correlation research design was used. This was because the researcher wanted to establish the

degree and direction of the relationship between promotion activities and brand loyalty. This
study specifically focused on a casual form of correlation research.

Survey population:
The survey population comprised of a total of 50 respondents randomly selected from the

commercial team from Century bottling company ltd, located 28km from Kampala city on plot

964, block 111 kyagwe road Namanve industrial area and consumers mainly the young adults in

and around Kampala district.

Sample size:
The research comprised of 44 respondents. That‘s to say: Five Top officials from Century

bottling company ltd. This was because they design, implement, and evaluate the performance of

promotions, five middle- line- managers from Century bottling company ltd. This was because

they frequently interface with the consumers and are often involved in decision making, nine

30
randomly selected sales representatives. This was because they are always in close contact with

the consumers and are also directly involved in customer service delivery and twenty five

randomly selected consumers especially the young adults in and around Kampala. This was

because they are the people who consume these soft drinks and have got the desire to explore

based on logic.

Table 1: Illustration of the sample size

Area of Selection Description of Number of

respondents respondents

Century bottling company commercial team Top officials 5

Century bottling company commercial team Middle line mangers 5

Century bottling company commercial team Sales representatives 9

 Kampala District Consumers 25

Totals 44

Source: primary data

: Sampling methods and techniques:

Purposive, simple random and stratified random sampling research designs were used basically

to ensure that the sample is a true representative of the survey population.

Purposive sampling technique:

This is a sampling technique where the elements in the sample are selected from the population

because they conform to a certain characteristic that the researcher is looking for. This is based

on the researcher‘s judgment in as far as the purpose for which the information is sought. The

researcher used purposive research design because it‘s a more representative sampling technique

31
of typical conditions in the survey. The researcher employed purposive sampling technique when

selecting the participants from a variety of participants.

Stratified random sampling:

This is a sampling method where the population is classified into homogenous groups called

strata. The researcher used stratified random sampling when identifying and defining a sample of

study from which the participants were selected .The researcher therefore identified and defined

the population ,determined the sample size of the participants, identified the participants for

which the researcher guaranteed appropriate representation, classified them as members

belonging to any of the identified stratum, used a table of random numbers to randomly select an

appropriate number of participants from each of the stratum and a total from these strata was

assembled to form a sample of study. The researcher used stratified random sampling because: it

improves on the generalizability of the different categories of the respondents.

The respondents were then categorized into homogenous groups comprising of; Top commercial

team, Middle line managers and Sales representatives from century bottling company and the

Consumers especially the young adults in and around Kampala.

Simple random sampling:

This is a sampling technique where each member of the population has a known and an equal

chance of being selected. The researcher used simple random sampling technique when choosing

the representatives to participate in the survey. The researcher therefore identified and defined a

sample of study obtained purposively and classified into a strata, determined the number of

participants in each and every stratum, made a list of all the participants in each and every

stratum, assigned consecutive numbers ranging from zero onwards to the last participants in each

32
and every stratum and then selected an arbitrary number in the table of the random numbers from

each and every stratum.

: Data collection sources:

The researcher visited Century bottling company ltd and used both primary and secondary
sources of data.

Primary sources of data:

These refer to sources of data where raw facts are collected for the first time. There as such
original in nature. The researcher used primary sources of data because they are accurate.

Secondary sources of data:

These refer to sources of data that has been prepared and developed for some other purpose but

not to solve the problem at hand. Such sources can either be internal or external to the

organization under study. In this source of data the researcher looked at various documents such

as sales reports, marketing research sources, and also looked at the literature from published

books, journals, company internal reports, in house magazines, information on consumer

research and the internet. The researcher used secondary research sources of data because they

are cheap, time saving, always available and dependable.

: Data collection methods and tools:

Both qualitative and quantitative data collection methods were used to collect and gather data
through the questionnaires.

33
Quantitative research methods:

These are research methods that are used to gather data which are numerical in nature and form

such as age, length and years.

3.7.2. Qualitative research methods:

These are data research methods that are used to gather data that is descriptive in nature and

form. They are often used to collect abstract variables where opinions, feelings, perceptions and
attitudes are studied. Data collection instruments such as the structured questionnaires were

employed.

3.7.3 Questionnaire:

Is a set of formalized questions used in a survey to collect information which is later analyzed to

provide results necessary for solving a given research problem. Like any good test,

questionnaires ask for information that respondents have.

The researcher used the questionnaire as a data collection instrument because it‘s cheap, time

saving, easy to administer, effective and it‘s the best form of obtaining information from the top

executives. In this instrument, the researcher used both closed and open questions.

: Investigative procedure:
The researcher presented a letter of introduction from Makerere university-Kampala. This was

intended to introduce the researcher to the concerned authorities at the area of study basically to

seek for permission to conduct the survey and reduce on the non-response rate.

34
: Data processing and analysis:
Data was electronically captured and coded. To obtain descriptive and inferential statistics, a

regression analysis was employed basically to establish the relationship between promotional

activities and brand loyalty. Pearson‘s correlation coefficiency was used to determine the degree

and the direction of the relationship between promotional activities and brand loyalty.

: Challenges encountered.
While conducting research, the researcher faced the following challenges as; High costs in

terms of transport, purchasing stationary, typing and photocopying. This was solved by working

within the budget sparingly.

Uncooperative respondents to help in providing the necessary information. This was solved

by availing them with a letter of introduction from Makerere University and also assured

them that the information provided was confidential.

Time constraint in data collection, capturing, coding, editing analyzing and the final

presentation of the report. This was solved by ensuring that the time element was put into

consideration and honoring each and every appointment as agreed upon with the

respondents in the survey population.

35
CHAPTER FOUR

PRESENTATION, ANALYSIS AND DISCUSSION OF RESEARCH FINDINGS.

Introduction
This chapter deals with the presentation and interpretation of the findings of the study which

were done in relation to the reviewed literature and in regard to specific objectives of the study
outlined below:

To find out the extent to which Century bottling company conducts promotional activities.

To establish how Century bottling company manages loyalty programs. To determine

the relationship between promotional activities and brand loyalty. The findings are presented

with the help of tables for purposes of easier understanding, clarity and interpretation.

Background information
Findings on background characteristics of respondents were considered in order to establish the

bio data of the respondents and findings were as in the tables below;

Gender of the respondents

Respondents were asked to state their gender and the following data was obtained;

36
Table 2: Gender of respondents
Gender Frequency Percent Valid Percent Cumulative percent

Male 28 63.6 64 64

Female 16 36.4 36 100

Total 44 100. 100

Source: primary data

From table 2 above, majority of the respondents at 64 percent were males and 36 percent were

females. This finding indicates that the researcher took gender balance into consideration though

there was a difference of 28 percent. This implies that the purchase decisions are generally

dominated by Males.

Age bracket of the respondents.

Respondents were asked to indicate their age bracket and below were the findings;

Table 3: Age bracket of respondents.

Age bracket Frequency Percent Valid percent Cumulative percent

16-20 years 2 4.5 5 5

21-25 years 22 50.0 50 55

26-30 years 11 25.0 25 80

31-35 years 4 9.1 9 89

36-above years 5 11.4 11 100

Total 44 100.0 100

37
Source: primary data

From table 3 above, it is clearly seen that the majority of respondents, 55% were aged between

21- 25 years. Followed by those in the age group ranging from 26-30 years at 25%, then 36+

years at 11%, then 31-35 years at 9%, and lastly those below the age of 20 years at 5%. This

finding implied that the young adults in the age bracket ranging from 21-25 years are the ones

who are impressed by promotions and thus are attracted and taken up by the promotional
activities. This explains why most promotions by century bottling company are geared towards

the youth. This is also the age at which people are yearning for adventure.

Level of education of the respondents.

Respondents were asked to identify their educational levels and below are the responses. The

educational level of the respondents was considered in the study so as to establish the skills and

knowledge of the respondents in relation to answering the questionnaires. The table below

presents the findings;

Table 4: Level of education of respondents.

Education level Frequency Percent Valid percent Cumulative percent

secondary level 2 4.5 5 5

tertiary level 7 15.9 16 21

University 35 79.5 79 100

Total 44 100.0 100

Source: primary data.

According to table 4 above, it is seen that 79 percent of the respondents were educated up to the

level of university, followed by those from tertiary level at 16 percent and lastly from the

38
secondary level at 5 percent. This means that the researcher considered the level of education

when selecting respondents to participate in the survey. This was a key factor given the fact that

the survey was to be administered through the questionnaires besides obtaining quality data. This

finding was a representative of the sample size from which 43 percent were employees of century
bottling company and 56 percent were the consumers selected from within and around Kampala

District. In relation to the study, this finding indicated that respondents were knowledgeable and

therefore had the capacity to provide reliable and meaningful information.

Marital status of the respondents.

The respondents were asked to state their marital status and below are the responses;

Table 5: marital status.

Marital status Frequency Percent Valid percent Cumulative percent

Single 27 61.4 61 61

Married 17 38.6 39 100

Widowed 0 0 0 100

Divorced 0 0 0 100

Totals 44 100 100

Source: primary data

Table 5 above clearly indicates that majority of the consumers of the coca-cola brand at 61

percent are single, followed by the married at 39 percent, the widows and divorced contributing

zero percent each. This implies that single people are most attracted to the promotional activities

and are thus loyal to the brand coca-cola. Therefore management should design promotional

39
activities geared towards attracting many singles since such a category‘s consumption decisions

are greatly influenced by promotional activities.

 : Income of the respondents per month.

The respondents were asked to state their levels of income and below were the responses;

Table 6: Income of the respondents.

Level of Frequency Percent Valid percent Cumulative percent

incomes

0-140000 0 0% 0% 0%

150000-350000 4 9.09% 9% 9%

360000-560000 23 52.27% 52% 61%

570000-770000 10 22.7% 23% 84%

780000 + 7 15.9% 16% 100

Totals 44 100% 100

Source: primary data

Table 6 above clearly indicates that majority of the consumers of the Coca-Cola brand at 52

percent have monthly earnings ranging between 360000 shillings and 560000 shillings, followed

by those earning between 570000 and 770000 at 23 percent, then those earning between from

780000 and above at 16 percent, then those earning between 150000 and 350000 at 9 percent and

lastly those earning between zero and 140000 shillings at zero percent. This implies that the

research study focused on the target population who have the need, will and authority to make a

purchase.

40
 : Century bottling company and promotional activities.
Respondents were asked to state the extent to which century bottling company conducts

promotional activities. The findings were as in the tables below;

: Use of coupons:

Respondents were asked to state the extent to which century bottling company uses coupons as

sales promotion activity and the responses were as in the table below;

Table 7: Use of coupons.

Response Frequency Percent Valid percent Cumulative percent

Greater extent 3 6.81 7 7

Average 7 15.9 16 23

Lesser extent 34 77.27 77 100

Total 44 100 100

Source: primary data

From table 7 above, the study shows that century bottling company uses coupons as a sales

promotion activity to a lesser extent .This is indicated by a majority response rate of 77 percent,

while 16 percent registered a moderate use and only 7 percent reported a greater use of coupons

as a sales promotion activity. It was therefore concluded that century bottling company does not

use coupons in its promotion techniques.

: Use of Rebates.

Respondents were asked to state the extent to which century bottling company uses Rebates in

sales promotion and below were the responses;

 41
Table 8: Use of Rebates.
Response Frequency Percent Valid percent Cumulative percent

Greater extent 26 59.09 59 59

Average 15 34.09 34 93

Lesser extent 3 6.81 7 100

Total 44 100 100

Source: primary data

From table 8 above, the study shows that century bottling company uses Rebates as a sales

promotion activity to a greater extent .This is indicated by a majority response rate of 59 percent,

while 34 percent registered a moderate use and only 7 percent reported a lesser use of coupons as

a sales promotion activity. It was therefore concluded that century bottling company uses Rebates

in its promotion techniques to drive loyalty.

: Use of free product trails.

Respondents were asked to state the extent to which century bottling company uses free product

trails as sales promotion activity and the responses were as in the table below;

Table 9: Free product trails.

Response Frequency Percent Valid percent Cumulative percent

Greater extent 36 81.81 82 82

Average 8 18.18 18 100

 Lesser extent 0 0 0 0

Total 44 100 100

42
Source: primary data

From table 9 above, the study shows that century bottling company uses free product trails as a

sales promotion activity to a greater extent .This is revealed by a majority response rate of 82

percent, while 18 percent registered a moderate use. It was therefore concluded that Century

bottling company to a greater extent uses free product trails in its promotion techniques.

Management should therefore design a promotion program with the intention of giving free

product trails to consumers and customers most especially on slow moving brands. These

activities should be carried out preferably from a Manual distribution center level on a quarterly

basis. Preference should be given to manual distribution level because at this level product trails

can reach each and every corner of the intended market segment. This will attract many

consumers to taste and may in the long run remain loyal to the promoted brand.

: Use of sales contests.

Respondents were asked to state the extent to which century bottling company uses sales contest

as promotion activity and the responses were as in the table below;

Table 10: Use of sales contests.

Response Frequency Percent Valid percent Cumulative percent

Greater extent 3 6.81 7 7

Average 14 31.81 32 39

Lesser extent 27 61.36 61 100

 Total 44 100 100

Source: primary data

43
From table 10 above, the study shows that century bottling company uses sales contests as a

personal sales activity to a lesser extent .This is revealed by a majority response rate of 61

percent, while 32 percent registered a moderate use and 7 percent recorded a greater use of sales

contents. This means that Century bottling company uses sales contests to a lesser extent.

Management should take note that Human resource is part and parcel of the finished product; in

fact it‘s the heart of the organization and is as such the most valued asset of any business

organization since they act as a mirror in the face of the customer. No amount of clever work or

modern technology and application of theories or principles can achieve anything unless people

decide willingly to work. In this regard,management should come up with performance

recognition and rewarding scheme either on a monthly or quarterly basis in order to ensure that

its sales force is motivated enough to think for the organization they work for instead of acting.

: Use of flayers’.

Respondents were asked to state the extent to which century bottling company uses flyers as

publicity activity and the responses were as in the table below;

Table 11: Use of flayers.

Response Frequency Percent Valid percent Cumulative percent

Greater extent 26 59.09 59 59

 Average 12 27.27 27 86

Lesser extent 6 13.63 14 100

Total 44 100 100

Source: primary data

44
From table 11 above, the study shows that century bottling company to greater extent uses flayers

as a publicity activity. This is revealed by a majority response rate of 59 percent, while 27

percent registered a moderate use and 14 percent reported that Century bottling company uses

flayers to a lesser extent. This shows that Century bottling company uses flayers to greater extent.

Management should therefore continue to use flayers as a means of reaching out to its customers

since it‘s cheap and can be consulted in case of misunderstanding for clarification unlike

Television and radio advertising.

: Use of Street advertising:

Respondents were asked to state the extent to which century bottling company uses street

advertising as a promotion activity and the responses were as in the table below; Table 12:

Street advertising.

Response Frequency Percent Valid percent Cumulative percent

Greater extent 41 93.18 93 93

Average 3 6.81 7 100

Lesser extent 0 0 0 100

Total 44 100 100

Source: primary data

From table 12 above, the study indicated that Century bottling company to greater extent uses

street advertising. This is revealed by a majority response rate of 93 percent, while 7 percent

registered a moderate use. This means that Century bottling company uses street advertising to

greater extent in its publicity campaigns. Management at Century bottling company should

therefore work towards continuous improvement of street advertising in urban markets and also

45
extend the same efforts in rural markets so as to create awareness of its products for market share

reasons.

: Use of event sponsorship:

Respondents were asked to state the extent to which Century bottling company uses event

sponsorship as a promotion activity and the responses were as in the table below;

Table 13: Event sponsorship.

Response Frequency Percent Valid percent Cumulative percent

Greater extent 12 27.27 27 27

Average 25 56.8 57 84

Lesser extent 7 15.9 16 100

Total 44 100 100

Source: primary data

From table 13 above, respondents showed use of event sponsorship on average at majority score

of 57 percent, followed by those who said that Century bottling company uses event sponsorships

to a greater extent at 27 percent and lastly by those who said that Century bottling company uses

event sponsorship as a promotional activity to a lesser extent at 16 percent. This implies that

Century bottling company on average uses event sponsorship in its promotional campaigns.

Amidist the financial constraints facing global businesses, management at Century bottling

company should allow a flexible budget and strategically invest in community based programs

which directly supports its business strategy. This, if well implemented will

46
significantly give the brand the necessary competitive impetus it so requires toenhance

competitive advantage and consolidate it‘s hard earned reputation.

: Use of Television advertising:

Respondents were asked to state the extent to which century bottling company uses T.V

advertising and the responses were as in the table below;

Table 14: Television advertising.

Response Frequency Percent Valid percent Cumulative percent

Greater extent 8 18.18 18 18

Average 28 63.63 64 82

Lesser extent 8 18.18 18 100

Total 44 100 100

Source: primary data

From table 14 above, the majority of the respondents showed use of T.V advertising on average

with majority score of 64 percent, followed by those who said that century bottling company uses

T.V advertising to a greater extent and to a lesser extent at 18 percent respectively. This implies

that Century bottling company on average uses TV. Advertising in its promotional campaigns.

Advertising is good especially when it comes to creating awareness. Management should

however note that these television slots are too expensive and a choice to whether or not to invest

intelevision advertising must be critically analyzed because the greater percentage of the

audience watching these television adverts, including the sales force its self ,do not

47
understand them besides getting the time to watch television. Therefore management should only

invest in advertising if it‘s contented that the message communicated will enhance brand

awareness and stimulate curiosity. The messages should be eye catching enough to attract the

viewer and entice them to long for more commercial airtime.

: Use of radio advertising

Respondents were asked to state the extent to which Century bottling company uses Radio

advertising and the responses were as in the table below;

Table 15: Radio advertising.

Response Frequency Percent Valid percent Cumulative percent
 Greater extent 16 36.36 36 36

Average 21 47.72 48 84

Lesser extent 7 15.9 16 100

Total 44 100 100

Source: primary data

From table 15 above majority of the respondents at 48 percent showed use of radio advertising

on average, followed by those who said that Century bottling company uses radio advertising to a

greater extent at 36 percent and lastly those who said century bottling company uses Radio

advertising to a lesser extent at 16 percent. This implies that Century bottling company on

average uses radio advertising in its promotional campaigns. Century bottling company should

therefore increase on its radio campaigns so as to connect its brands with the consumer. Radio is

a widely used media whether in urban or rural setting and can as such be used to associate the

48
brand with the consumer since its cheaper compared to T.V adertising.The only evil around it, is

that so often organizations formulate fancy ideas and push the media to hastily develop the

already done communications and at the end, they fail to deliver on their promise. In order to

avert this risk, management at Century bottling company should from the word go involve its

advertising agency, distributors, sales force and the media because they know the market and will

guide the communication to cater for various audiences.

: Management of loyalty programs.

Objective number two of the study was to establish how century bottling company manages
loyalty programs the findings were as below;

Loyalty programs and consumer rewards.

Respondents were asked to state whether century bottling company has devised loyalty programs

that reward consumers. This section intended to establish whether century bottling company had

loyalty programs that reward customer. The responses were as in the table below;

Table 16: Loyalty programs and consumer rewards.

Responses Frequency Percent Valid percent Cumulative percent

Strongly agree 20 45.45 45 45

Agree 10 22.7 23 68

not sure 12 27.27 27 95

Disagree 2 4.5 5 100

Total 44 100.0 100

Source: primary data

49
Table 16 above , clearly shows that majority of respondents at 45 percent strongly agreed that

Century bottling company has devised loyalty programs that directly rewards customers,

followed by those who were not sure at 27 percent, then followed by those who agreed with the

preposition at 23 percent and lastly those who disagreed with the preposition at 5 percent. This

implies that much as Century bottling company has devised loyalty programs, consumers‘ are not

informedbesides, they are sophisticated and concentrated in urban settings. This could be a waste

of funds. Management at Century bottling company should therefore design ways to sensitize the
consumers about the loyalty rewards in place so that at least every consumer can participate.

Management as such needs to design better communication systems and try as much as possible

to involve its sales force in passing on the communication even as low as retail outlet level. This

will help in boasting sales and therefore the financial goal of the organization.

Management of loyalty programs.

Here respondents were asked to state if Century bottling company has devised mechanisms to

manage loyalty programs and the responses were as in the table below;

Table 17: Management of loyalty programs.

Responses Frequency Percent Valid percent Cumulative percent

Yes 24 54.5 55 55

not sure 19 43.2 43 98

No 1 2.3 2 100

Total 44 100.0 100

Source: primary data

50
Table 17 above, clearly indicates that majority of the respondents 55 percent agreed that Century

bottling company has put in place mechanism to manage loyalty programs, this was followed by

those who were not sure at 43 percent and lastly those who disagreed that Century bottling

company has devised mechanisms to manage loyalty programs. When asked to mention the

mechanisms in place, the following were listed: Third party distribution program, free
refrigeration to its customers, corporate nights, exclusive programs, credit programs to key

accounts and sponsorship of football in secondary schools. This means that Century bottling

company has set up mechanisms to manage its loyalty programs. However, there is need

innovation and also more flexible controls need to be designed for purposes of simplicity and

effective management of these loyalty programs without compromising on the internal controls

and procedures.

: Relationship between promotional activities and brand loyalty.

4.5.1: Proportion of Coca-Cola consumption.

Respondents were asked to state whether they consume Coca-Cola or not and the responses were

as in the table below;

Table 18: Proportion of Coca-Cola consumption.

Responses Frequency Percent Valid percent Cumulative percent

Yes 39 88.6 89 89

No 5 11.4 11 100

Total 44 100.0 100

Source: primary data.

51
From table 18 above, 89 percent of the respondents consume Coca-Cola brand. This implies that

majority of respondents were loyal to Coca-Cola as a brand of Century bottling company. This

finding is in agreement with (Dick et al 1994) who asserted that brand loyalty consist of a

customer‘s commitment to repurchase or otherwise continue using the brand and can be
demonstrated by repeated buying of the product or service. Management at Century bottling

company should therefore devise specific brand promotional activities tocontinuously remind and

give support to its core brands. It can also look at expanding on the brand portfolios‘ through

introducing new different flavors like it‘s the case with fanta.In fact what is happening is that

consumers for the coca-cola brand are simply switching to the frequent new fantaflovours.Some

change permanently and stay loyal to fanta thereby affecting the coca-cola market share.

: Preference rate for the coca-cola brand.

Here Respondents were asked to rate their preference for the coca-cola brand and the findings

were as illustrated in the table below;

Table 19: Preference rate for the coca-cola brand.

Response Frequency Percent Valid percent Cumulative percent

High 32 72.7 73 73

Medium 7 15.9 16 89

Low 5 11.4 11 100

Total 44 100.0 100

Source: primary data

52
From table 19,above, most respondents at 73 percent had high preference for coca-cola brand,

while 16 percent had a moderate preference and lastly 11 percent had a low preference for the
brand coca-cola. This concurs with Philip Kotler who contends that suppliers segment their

customers into heavy, medium and light users. In practice consumers preferences are changing

over time. For instance Heilman, Bowman and Wright (2000) demonstrate that consumers‘

preferences may either strengthen or weaken. That when loyal consumers repeat purchase the

same brand, their decision is driven by their brand preference as a result of this unique value of

the brand( Ailawadi, Neslin and Gedenk 2001).This findings also measures the level of trust

respondents have on coca-cola brand. This conforms to Reichheld and Scheffer 2000,who argues

out that to gain the loyalty of customers, you must first gain their trust with regard to developing

brand loyalty and so is Ring berg and Gupta 2003,who suggested that brand trust is necessary to

create brand loyalty apart from brand affect. There is therefore a need to revise promotion

strategy so as to convert the 27 percent into loyal consumers. Promotions should be designed in

such a way that drives a strong conviction so as to encourage acceptance for brand coca-cola.

: Choice on consumption of Coca-Cola.

Respondents were asked to state why they consume Coca-Cola and the responses were as in the

table below;

53
Table 20: Consumption of Coca-Cola.
Responses Frequency Percent Valid percent Cumulative percent
 Taste 24 54.54 54 54

Satisfying 13 29.5 30 84

others 7 15.9 16 100

Total 44 100.0 100

Source: primary data

From table 20 above, 54 percent of the respondents consume Coca-Cola brand due to the taste,

followed by those who consume Coca-Cola because it satisfies their desires at 30 percent and

lastly by those who stated other reasons like price,availability,image convenience and other

reasons at 16 percent. This implies that creating and delivering superior consumer perceived

value is a strategic weapon in attracting and retaining consumers. Management at Century

bottling company shouldnote that future business environment requires mass production but

tailor made to consumer specifications and tastes focusing on size, packaging and delivering

consumer needs, when they need it. Therefore Century bottling company through its quality

assurance competency must continuously review the quality of its core brands specifically Coca

cola as this will help the company to deliver a brand that can fulfill the needs and wants of the

consumers besides creation of a continuous demand.

54
: Promotions and consumption behavior.
Respondents were asked to state whether promotional activities influence their decision to

consume Coca-Cola and the responses were as in the table below;

Table 21: Promotions and consumption behavior.

Responses Frequency Percent Valid percent Cumulative percent

Yes 37 84.1 84 84

No 7 15.9 16 100

Total 44 100.0 100

Source: primary data

Table 21 ,above, clearly shows that 84 percent of the respondents acknowledged the fact that

their loyalty to brand Coca-Cola was driven by promotional activities while 16 percent of the

respondents said that their loyalty to brand Coca-Cola was as a result of other factors other than

promotional activities.

Therefore it was concluded that the different promotional activities by Century bottling company

helped to build Coca-Cola brand loyalty. This is in agreement with Andrew S.C., Ehrenberg et al

who asserted that there exists temporal brand switchers and that in such situations, brand loyalty

may seem strong yet still be short lived leaving brands vulnerable. And that brand loyalty of

moderate loyals who may or may not buy a brand on any given occasion can be enhanced

through promotional activities. These promotional activities shouldfocus onperiodical free

product sampling, basically to re-energize product repeat purchases.

 55
: Promotions and consumption decision:

Here respondents were asked to state the promotion that influenced their decision to consume

Coca-Cola and the responses were illustrated as in the table below;

Table 22: Promotions and consumption.

Promotion activities Frequency Percent Valid percent Cumulative percent

Bongana coke 22 50.0 50 50

Win school fees 16 36.36 36 86

Brr on the coke side of life 9.09 9 95

Bongana billions 2 4.5 5 100

Total 44 100.0 100

Source: primary data

From table 22 above, 50 percent of the respondents pointed out that bongana coke influenced

their decision to consume coca-cola, this was followed by win school fees at 36 percent, then Brr

on the coke side of coke and lastly bongana billions at 5 percent. Given the finding on the age

bracket, most respondents could have consumed coca-cola with the hope of winning school fees

which was offered. Sales promotion comprises of a wide range of promotional tools designed to

achieve short term objectives, for instance monetary promotions are the most common form of
sales promotion used by organizations (Huff et at 1999), therefore such monetary and non

monetary offer of school fees could have played a major role in luring respondents to consume

Coca-Cola. Therefore management at Century bottling company should design a fresh annual

monetary and non monetary country wide promotion program that instantly rewards consumers

especially in periods were the consumption of soft drinks ranks low or holds no ranking on the

56
budget pie.Management should also carefully think about promotional activities in terms of their

execution, mechanism and how to associate the consumer with the promotional activity taking

into consideration the target market.

: Themes and consumption behaviors.

Respondents were asked to state the theme that aroused their interests to consume Coca-Cola and

the responses were illustrated in the table below;

Table 23: Themes and consumption behaviors.

Theme Frequency Valid percent Cumulative percent

Enjoy coca-cola 23 52.3 52 52

Llife tastes good 14 31.8 32 84

Coca-cola music wave 1 2.3 2 86

Open happiness with coke 6 13.6 14 100

Total 44 100.0 100

Source: primary data

From table 23 above, majority respondents 52 percent mentioned Enjoy Coca-Cola as the major

theme that aroused them. While those who mentioned life tastes good were at 32 percent, then

those who mentioned open happiness with coke were at 14 percent and lastly those who

mentioned Coca-Cola music wave were at 2 percent. This means that the design of a promotional

theme can greatly affect brand loyalty. This is because today‘s consumers are becoming harder to

please, they are smarter, more price conscious, more demanding, less forgiving and are usually

approached by many competitors with equal or even better offers.Therefore in order to win them,

57
Management at Century bottling company should design well and convincing promotional

themes and must note that advertising communicates not only attributes and the functional

benefits but also provides emotional and self-expressive benefits that have got a personality and

provides a platform for differentiation.

: Themes and level of consumption interests.

Here Respondents were asked to state the extent to which promotional themes aroused their

consumption interests and the responses were as in the table below;

Table 24: Themes and consumption interests.

Response Frequency Percent Valid percent Cumulative percent

Greater extent 30 68.2 68 68

Average 11 25.0 25 93

Lesser extent 3 6.8 7 100

 Total 44 100.0 100

Source: primary data

From table 24 above, the promotional themes, to a greater extent aroused the majority of the

respondents at 68 percent, while 25 percent were moderately influenced by the promotional

themes and only 7 percent of the respondents reported that their interest were to a lesser extent

affected by the promotional themes. This implies that promotional themes play a big role in

positively arousing consumer interests and intentions to consume a brand. In this regard,

management at Century bottling company should carefully think through the message content,

58
structure and format such that the theme formulated can predict brand performance in the

consumer‘s mind and therefore elicit effective responses from the consumer.

4.4.8: Promotions and brand switching.

Respondents were asked to give reasons as to why they would not change to a particular

substitute as they were being promoted and the responses were as in the table below;

Table 25: Promotions and brand switching.

Reasons Frequency Valid percent Cumulative percent

Used to the brand 5 11.4 11 11

Prefers the brand 26 59.1 59 70

No new brand can meet the desire 13 29.6 30 100

 Total 44 100 100

Source: primary data

In table 25 above, most respondents at 59 percent said that they prefer the brand, followed by

those who said that there are no new brands that can satisfy their desire and lastly those who said

they are used to the brand at 11 percent. This is in agreement with past research in this stream

which assumes that consumers who have shown high prefernce levels in the past will repeat

purchase the same brand (Banaseiwiez 2005).This is also in total agreement with Yoo,Donthu

and lee 2000,who argue that brand loyalty encourages repeated purchase behavior from

consumers and discourages them from switching to competitor brands. Brand loyalty is such a

valuable asset for every brand and therefore management at Century bottling company should

59
design promotional activities that reward consumers so as to remind them about their preferred

brands.

4.5.9: Promotional activities and brand loyalty:

Respondents were asked whether promotional activities influence brand loyalty and the

responses were illustrated as shown in the table below;

Table 26: Promotional activities and brand loyalty:

PROMOTIONAL ACTIVITIES BRAND LOYALTY
 Promotional 1 .964(**)
Pearson

activities
Correlation . .000

Sig. (2-
44 44
tailed)

Brand loyalty Pearson .964(**) 1

Correlati

on .000 .

Sig. (2-
44 44
tailed)

** Correlation is significant at the 0.01 level (2-tailed).

The Pearson correlation coefficient above reveals that there is a strong positive relationship

between promotional activities and brand loyalty. This is represented by Pearson correlation

coefficient of r=0.964** tested at 0.01 level of significance. Also the correlation shows a gap of

60
0.036 that need to be closed by the management of Century bottling company. This means that

promotional activities affect brand loyalty by 96.4% and 3.6% by other factors. Given the fact

that the correlation is significant, it was concluded that promotional activities affect brand loyalty.

The positive sign of this correlation implied that if century bottling company increased its

promotional activities, brand loyalty to a particular brand would increase.

 61
CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS.

: Introduction.
This chapter presents a summary of the findings of the study and then goes ahead to present the
conclusion and recommendations from both the respondents and researchers perspective in

relation to the existing literature.

: Summary of findings;

5.2.1: Promotional activities.

Findings revealed that Century bottling company had a number of promotional activities put in

place to promote particularly Coca-Cola brand. It was further realized that most customers were

aware of these promotional activities through various mechanism put in place such as

advertisements, sales promotions and direct selling. Customers were highly aroused by the

promotional activities hence it was concluded that Century bottling company‘s promotional

activities have been successful in linking the brand Coca-Cola to customers which is the major

aim of promotion as noted by (Kurtz and Dave 2010).

: Brand loyalty.

Findings revealed that there is a strong loyalty for brand Coca-Cola. This conclusion was reached

because majority of respondents agreed that;they consume the brand, had high preference for the

brand and that they would continue to consume the brand even if a promotion was run on a

competitive brand.

62
Relationship between promotional activities and brand loyalty.

Findings showed that there was a strong positive relationship between promotional activities and

brand loyalty at Pearson‘s correlation coefficiency r = 0.964**. This implied that promotional
activities affect brand loyalty and therefore management should pay attention to the design of

promotional activities so as to close a gap of r = 0.036**.

: Conclusion.

The strong positive relationship between promotional activities and brand loyalty at Pearson‘s

correlation coefficiency of r= 0.964** is attributed to well-designed promotional activities that

helped to build brand loyalty for its products. These promotional activities designed to promote

Coca-Cola to a greater extent achieved the intended promise of building the brand‘s loyalty

among the consumers and this has been achieved through well-managed loyalty programs.

: Recommendations.

The study is not only intended to servethe academic purpose of the researcher because of the

analytical nature and the depth of the issues raised herein but also to help in guiding

organizations in formulating and implementing their business strategy. It‘s therefore

recommended that:

Century bottling company should continue putting more efforts in designing and carrying

out promotional activities aiming at building brand loyalty particularly for Coca-Cola, a

brand whose performance is fluctuatingand also carefully think about promotional

activities in terms of their execution, mechanism and how to associate the consumer with

the promotional activity taking into consideration the target market.

63
The future business environment requires mass production but tailor made to consumer

specifications and tastes focusing on size, packaging and delivering consumer needs,
 when they need it. Therefore Century bottling company through its quality assurance

competency must continuously review the quality of its core brands and most especially

coca-cola as this will help the company to deliver a brand that can fulfill the needs and

wants of the consumers besides creation of a continuous demand. This calls for flexibility

on the internal controls so that they do not override the effectiveness of customer service

delivery. This however should be achieved without compromising company processes

and procedures.

Century bottling company should manage its loyalty programs in such a way that

customers are directly rewarded by the promotional activity in order to counter

competitors‘ undertakings.

Areas for further research.

Having conducted a research on the influence of promotional activities on brand loyalty, future

researchers should carry out further research on the following areas such as; the effect of price on

brand loyalty and the influence of peer pressure on brand loyalty.

64
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67
APPENDICES

MAKERERE UNIVERSITY

QUESTIONAIRE
 Topic: Promotional Activities and Brand Loyalty

(To be filled by Employees of Century Bottling company and consumers of the Coca-Cola)

Dear sir/madam.

Am Wubo Gerald, a student of Makerere University with registration number 06/U/9282/Ext and

student number 206009683 carrying out research on promotional activities and brand loyalty in

partial fulfillment of the requirement for the award of a Bechelors‘degree in commerce. Your

response herein is highly treasured, important and it‘s required strictly for academic purposes

and therefore be assured of utmost confidentiality. Please spare some time and answer the

following questions. Thank you for your time and co-operation.

SECTION A: GENERAL INFORMATION.(Please tick the most suitable

option). Qn 1. What is your Gender?

( a) Male.

( b) Female

Qn 2. What is your Age bracket?

(a) 16 to 20 years

(b) 21 to 25 years

( c) 26 to 30 years

(d) 31 to 35 years

(e) 36 and above

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Qn 3. What is your Level of Education?

(a) Secondary level

(b) Tertiary level

( c) University level

Qn 4: What is your marital status?

(a) Single

(b) Married

(c ) widowed

(d) divorced

Qn 5: What is your level of income?

(a) 0 – 140000

(b) 150000 – 350000

(c) 360000 – 560000

(d) 570000 – 770000

(e) 780000 and above

SECTION B: Century bottling company and promotional activities.

(Pleases tick the most appropriate option and explain where necessary)

Qn 5: Do you consume coca-cola brand?

(a) Yes.

(b) No

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Qn 6: If your answer in question (5) above is yes, what could be the main reason you consider to
consume coca-cola?

……………………………………………………………………………………………………

… Qn 7: Do promotional activities influence you to consume coca-cola brand? (a) Yes

(b) No

Qn 8: which of the following promotions influenced your decision to consume a coca-cola?

(a) Bongana coke

(b) BRR on the coke side of life

( c) Coca-cola music wave

(d) Win school fees

(e) Juzzae‘kikapu

Qn 9: From the following list, please tick the themes that you have ever heard about?

(a) Enjoy coca-cola.

(b) Life tastes good

(c) Coca-Cola music wave

(d) Open happiness with coke.

Qn 10: Which of the above themes aroused you most to consume coca-cola….................... ?

Qn 11: To what extent were you aroused?

(a) Greater extent

(b) Average

(c)Lesser extent

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