ANALYSIS OF THE EFFECT OF PROMOTION ON SALES

Abstract

This thesis aims to study the impacts of the sale promotional campaigns on the sales volume, and to compare the sales volume in the months following those months when sales promotional campaigns are launched. As the focus company has never studied the impacts of its sales promotion programs, while continuing to launch the promotion, the firm has had to bear a great deal of sales promotion burden. The studied company imports consumer goods from abroad and distributes the products to its local customers. The study is limited to the data about those sales carried out through various channels from January 2012 to December 2016. This thesis studies coffee products distributed through the modern trade channel. This product group is chosen because it is the group for which the firm regularly launches its sales promotions, with offered discounts divided into three levels. The author has used the Autoregressive Integrated Moving Average Model (ARIMA) and the SPSS statistic program as the means for the analysis

Although the study results show that the promotions at all levels of intensity increase sales volumes, some promotion programs result in lower net revenue after taking into account the discounted prices and additional expenses associated with promotion activities. Care should be exercised in launching promotion programs.