CHAPTER ONE

1. Executive Summary

Promotion is one of the core element of marketing mix, in order to stay and will grow with
the modern world business activities it need a well designed and organized promotional
strategy and communication. To communicate effectively companies should have a
promotional plan to introduce their products with the consumers. “Most useful product will
be failure if no one knows it available”. Stanton (I bid, P.459).

In addition to producing a quality product success in modern business activities requires

setting reliable price, establishing proper out let and establish active promotional strategy.

To addressing the taste and preference of consumer in a uniform manner and use the finding
as on input in the product process AMWF has planned to produce and promote demand
driven product allocated 1.5 million birr for promotion. So this study is concerned in
assessment of promotion effectiveness on AMWF. It examines the company promotion
activities and promotion strategy with the composition of the total promotional budget.

Secondary data gathered from the company, and primary data obtained through interview
and questioning analyzed and organized using tables, pie charts, graphs and by using
quantitative and descriptions.
The result of this study indicated that the promotion effort of AMWF is significant. Even if,
the company had budgeted enough budget the impacts on the sale volume, market share was
not as it expected.

General comments: the company needs, market research and market survey in order to
identify the need and want of the target audience and target customer before launching the
promotional plan and redesign the message accordingly.
The company should also segments its customer based on the segmentation variable, then
choice the right media based on the segmented customer rather than use a uniform media to
the whole customer. So, if the company applied this suggestion it will be success.

1
 2. Back ground of the Factory
Ambo Mineral Water Factory is situated 130 kms West of Addis Ababa and 5 kms for away
from the two of Ambo. The foundation in the modern time Ambo Mineral Water was
conceptualized in 1951 E.C by the imperial government of Ethiopia. The place suitable soil
for agriculture, but also due to the beautiful of the widely reputed. Thermo-mineral springs
which were used together with their saline soils for livestock watering and feed mix long
before their the rapeutic characteristics was publicized in the 1960’s E.C. Ambo Mineral
Water Factory has seventy three years of service on the beverage industry of Ethiopia.
Government owns this plant since 1963; it is the biggest mineral water bottling and
distributing company in the country.
The factory produces two kinds of products differing in their gas to (co2) content: these are
full and half carbonated water. The full carbonated one is which contains high gas the half
carbonated water contains less gas. Also the factory uses three different sizes of bottles for its
products (500ml, 330ml and 750ml). In addition to local markets, the factory produces for
overseas market and becomes successful in Saudi Arabian, Yemen and Djibouti and England
markets.
Source: Profile of Ambo Mineral Water Factory

3. Statements of the problems

In order to increase and market share, it is much expected to make the promotion more
effective, on the other hand successful promotion must include the four promotion mix at the
right place in the right condition.

3.1 Symptoms
After completing of the advertising campaign there may be some symptoms indicates the
failure of the promotion strategy. Those are:
 Decrease in sales volume or no change.
 Steel there is customer complain (if there is before).
 Decrease in marketing share or no change.
 Bad image of the company is continued or exist (it was before the promotion
strategy).

2
3.2 Causes
The possible causes for the above symptoms could be:
 The company does not identify clearly their target audience as well as their target
customers.
 They may not transmit the right message.
 They do not use the right (effective) media.
 They do not have sufficient budget for their promotional activities.

3.3 Suggested Courses of Action

The company can make an effective promotion if they apply the following actions.
 The company should set an enough amount of money to their promotional activity.
 Clearly identify the target audience and target customer.
 Identify the right message to be transmitted to their target audience and or target
customer.
 Use the media that is reachable and that can reach comparatively a high number of
their target audience.

4. Research Objective
This study is designed in order to achieve the following general and specific objectives.

4.1 General objectives

To assess the promotion effectiveness of Ambo Mineral Water.

4.2 Specific Objective

 To determine those factory that influence the promotion effectiveness
 To find out problems in relation to the promotion effectiveness and its ways of
implementation.
 To give possible suggestion and recommendation to the identified problems.
To have the company an effective promotion they should answer the following questions.
 Does the company select appropriate promotion mix?
 Does the company allocate enough budgets for promotion?

3
  Does the company set and implement promotion strategy properly?
 Does the company select the right target audience in its promotion?
 Does the company communication the right message?
 Does the company measures and evaluate the result of its promotion and take a
corrective action?

5. Scope of the Study

This study mainly focuses to measure the effectiveness of promotion on the success of
AMWF. It also concerned with the promotion mix that are used by the company. The study
will take a 3 year sales data and promotional expenditure to compare each other.

6. Limitation of the Study

 Research work is no requires available of sufficient time, money and other resources. In
addition, we could not get all secondary data as we have expected to our study and we
could not easily contact the company officials specially the General Manager and
distributors. Furthermore, customer’s reluctance to fill the questionnaire and also lack of
research prepared before that are related to our topic.

7. Important of the Study

The main purpose of this study is to investigate the factors affecting the effectiveness of the
promotion. It also attempts to find out the problem areas that the promotion program or mix
being practiced and aims at providing suggestion and recommendation.

Identify the most prominent factors, pointing out the exiting problems with adequate
emphasis and providing all the possible suggestion and recommendation that will enable the
promotion mix designers and implementers of Ambo Mineral Water Factory to be aware of
the problem area and to make the possible modifications, improvements and up dating the
promotion mix it self.

4
On the other hand, it will also give the opportunity for the company to distinguish the right
assumptions from the wrong one’s that are suggested about the promotion. And this enables
to have great success on their promotion.

Hence among other things, the result of this study contributes for successful implementation
of the promotion mix; the study will also serve as a spring board for similar studies.

8. Research Design/Methodology
Our research use exploratory research, descriptive as well as casual research design
 To define the research problem, collect information, on company background and to
gather other secondary data we will use exploratory research.
 In order to know the customer intention to the promotion we use descriptive research
design.
 And also casual research design uses to identify the cause and effective of promotional
expenditure and its result.

9. Sample Selection
We have stated on the proposed to collect information from the General Manager, marketing
manager, promotion export and distributor of AMWF through interview and questionnaire
and also from the customer through questionnaire. But in the reality due to different reason
we couldn’t conduct the General Manager and distributors. So, to finalize the study the
sample frame was narrow down to the Marketing Managers promotion expert and customers
of AMWF.

10. Data Collection Instrument and Procedure

Gathering both quantitative and qualitative data from primary and secondary sources
involves administering a well structured questionnaires and personal interview. In order to
collect relevant information for the study, the following data collection procedures will be
utilized.
a. Orientation on how to collect data will be provided to 5 data collectors or members

5
 b. The self administered questionnaires will be distributed to selected respondents in
face to face situation in order to avoid refusals and to give explanations when ever
needed.
c. The questionnaires will be collected from respondents
d. Interviewing customers of Ambo Mineral Water
e. Information will be recorded
f. The gathered data will be analyzed
g. The data we collected will be evaluated based on the literature review
h. Finally we will give conclusion and recommendations.

11. Ethical Consideration

This questionnaire and the data that we will gather from the company and customers are part
of our survey that we are under taking to assess information for research we are intended to
produce under the title “Assessment of promotion effectiveness: the case of Ambo Mineral
Water” .

 Information you provide is used only for research purpose.

 This study is entirely devoted to add certain value to the company’s promotional effort, it
is not interested to abuse or exposed the company’s secret.

6
 CHAPTER TWO
Literature Review
2.1 Definition of Promotion
Promotion is concerned with effectively communicating the result of marketing strategy to
target audience. But is a real sense every thing the company does has promotional potential.
Promotion is an active explicit form of marketing communication. Promotion highlights the
marketing elements in order to increase the reason that consumers will buy and become
committed to a product.
Promotion as a marketing function concerned with persuasively communicating to target
audience the component of marketing program in order to facilitate exchange between the
marketer and the consumer to help satisfy the objective of both. (Burnett 2002, P.6).

“Promotion is primarily concerned with persuasive communication to the target audience.

Finally, promotion is goal directed. For all marketers the objective of promotion is to create
brand awareness, to deliver information, to educate, and to advance a positive image. The
ultimate goal is to sell the products or service”. (Burnett, 2002, P.7)
According to Stanton, (1994, P.456) “ Promotion is the element of an organization’s
marketing mix that serves to inform, persuade and remained the market of a product and/.or
the organization selling it, in hopes of influencing the recipients’ feelings, beliefs, or
behavior”.
Therefore, promotion is essential for several reasons. There is a great distance between the
consumer and producers and so a product may pass through many hands or agents in order to
reach to the ultimate consumers. Therefore, producers must inform to the middle men,
ultimate consumer and business users about the product. Wholesalers, in turn, must promote
the product to retailers, and retailers also communicate with consumers. As the number of
potential consumer’s growth and the geographical dimensions of a market will also expand,

7
so the problem of marketing communication also increase. According to Stantan (I bid, P.
459), “the most useful product will be a failure if no one knows it is available”.
Another function of Promotion is Persuasion. The intense competition among different
industries as well as among different firms, in the same industry they puts numerous pressure
on the promotional programs of sellers. The basic objective of product design is to satisfy a
basic physiological need requires strong persuasive promotion. Since consumers have many
brands to choose, then the company or firm must have transmitted a unique message to
differentiate its product by the consumer easily. To convince consumers that the products
benefits are exceeded than its competitor, persuasion is even more important. Producers
should be reminded to the consumer about the products availability and potential satisfaction.
The producers in hope of attracting new consumers and establishing new market area for
products must transfer many messages every day. Given the intense competition for
consumer’s attention, even an established firm must constantly remind customers about its
products in order to retain a place in their minds. Therefore, much promotion is intended
simple to affect competitors’ active marketing activate by keeping the firm’s products in
front of a market.

According to sak onkvist and John J.shaw (1997 P,534), the purpose of promotion is both to
communicate with buyers and to influence them. Effective promotion requires an
understanding of the process of persuasion and how this process is affected by environmental
factors. The potential buyer must not only receive the desired information but should also be
able to comprehend that information. Furthermore, the information must be sufficiently
potent to motivate this buyer to react positively.

2.2 Promotion Mix Strategy

In their communication program organizations use one or more of the four basic types of
promotion mix. Each promotion tool has unique characteristics and cost marketers
understand these characteristics in selecting their mix of tools (Evans 1997, P.503).

2.2.1 Advertising: is defined as any paid form of non-personal communication regarding

goods, ideas, services, organizations, peoples and place that is transmitted through
various mass media by business firm, government and other non-profit organizations

8
 and individuals who are identified in advertising messages as sponsor. The sponsors
are generally controls the message.
Advertising can reach message of geographically dispersed buyers at a lower cost per
exposure and it enables the sellers to repeat a message many times. Beyond its reach, a large
scale advertising says something positive about the seller’s size popularity and success.
Because of advertising’s public nature, consumers tend to view advertising products as more
legitimate, advertising is also very expressive; it allows the company to dramatize its
products through the artful use of usual, print, sound and color. On the one hand, advertising
can be used to build up a long term image for a product on the other hand advertising can
trigger quick sales.

Possible advertising objectives

Informative Advertising

 Telling the market about a new product  Describing available services

 Suggestion new uses for a product

 Informative the market of a price change  Correcting false impressions

 Explaining how the product works  Reducing consumers fears

 Building a company image

Persuasive Advertising

 Building brand preference  Persuading customers to purchase

new
 Encouraging switching to your brand  Persuading customer’s receive a
 Changing customers’ perception of sales call.
product attributes

Reminder Advertising
 Reminding customers that the product  Keeping it in customers mind
may be needed in the near future during off-seasons

9
  Reminding consumer where to buy it  Maintaining its top of mind
awareness

2.2.2 Personal Selling: is personal presentation by the firm sales forces for the purpose
of marketing sale building customer relationship. Personal selling involves oral
communication with one or more prospective buyer by paid representatives.
Although, personal is the most effective tool at a certain stage of the buying process
particularly in building up buyer’s preference, continuous and actors it involves
personal interaction between two or more people. So, each person can observe the
others need and characteristics and make quick adjustments at heart in order to build
along term relationship.
Finally, with personal selling, the buyers usually feel a greater need to listen and
respond, even if the response is a polite “No thank you”.

2.2.3 Sales Promotion: it’s a short term incentive to encourage purchase or sale of
products or services. It involves paid marketing communication activities (other than
advertising, personal selling or public relation) that are intended to stimulate customer
purchase and dealer effectiveness. It include trade shows, premiums, incentives, give
away, demonstrations, coupons, trade allowance point of purchase, rebates, trials
offers and sample,
“The effectiveness of sales promotion be tempered by psychological barriers and this fact is
applicable to middlemen as well as consumers. Sales promotion is effective when a product
is first introduced to a market”, (Sak antivist and John J.show, 1997).

2.2.4 Public Relation: public relation is very believable news stores, features to
readers than add do. Public relation can also reach many prospects who avoid sales
people and advertisements the message gets to the buyers as “news” rather than as a
sales directed communication. And, as with advertising, public relations can
dramatize a company or product. Marketers tend to under use public relation or to use
it as an offer through get a well through out public relation campaign used with other
promotion mix element can be very effective and economical.

10
 Public relation build goal relations with the company various public by obtaining
favorable publicity build up a good “corporate image” and handling on heading off an
favorable humors stories and events. It include any communication to faster a favorable
image for good, services, organizations, people, place, and ideas among their publics
such as consumers, investors, governments, channel members, employees and the general
public it may be non personal or personal paid or unpaid, and sponsor controlled or not
controlled. Publicity is the form of public relations that entails non-personal
communication passed on via various media but not paid for by an identified sponsor.

2.3 Promotional Strategies

In designing promotional mix, producers aim their efforts at both middlemen and end user.
The promotion aimed at middlemen and end users. The promotion aimed at middlemen is
called a Push strategy while that directed at end users in called a pull strategy. The pulling
and pushing strategies are described by Boon (1995, P.581-583) as follows:

2.3.1 Pulling Strategy

Is a promotional effort by a seller to stimulate the final-user demand, which then exert
pressure on the distribution channel when marketing intermediaries stock many competing
products and show little interest in any one of them, a pulling strategy may be necessary to
motivate them to handle a product. In such instances, this strategy implemented with the
objective of building consumer demand so that consumers will request the product when they
go to retail stores.
The most commonly used elements of promotion in the pulling strategy are advertising and
various forms of sales promotion such as premiums, samples or in-store demonstrations.

2.3.2 Pushing Strategy

Is a promotional effort by sellers to a number of the distribution channel to stimulate personal
selling of good or service, thereby pushing it through the marketing channel. It relies more
heavily on personal selling. Here, the objective is to promote the product to the member of
the distribution channel rather than to the final user. This can be done through cooperative
advertising allowances trade discounts, personal selling efforts by the firm’s sales force, and
other dealer supports. Such a strategy is designed to gain marketing success for the firm’s

11
product by motivating representative at wholesalers and/or retailers to spend extra time and
effort promoting the product to their customers.

2.4 Steps in Developing Effective Communication

According to kotter and Armstrong (2006, P. 432-440), steps in developing an effective
integrated communications and promotion program. The marketing communicators must do
the following.

2.4.1 Identifying the Target Audience

A marketing communicator starts with a clear target audience in mind. The audience may be
potential buyers or current users, those who make the buying decision or those who influence
it. The audience may be individual, group, special publics, or the general public. The target
audience will heavily affect the communicator’s decisions on what will be said, how it will
be said, where it will be said, and who will say it.

2.4.2 Determining the Communication Objectives

Once the target audience has been defined, the marketing communicator must decide what
response is sought. Of course, in many cases, the final response is purchase. But purchase
communicator needs to know where the target audience how stands and to what stage it
needs to be moved. The target audience may be in any of six buyer-readiness stages, the
stage consumer normally pass through on their way to marking a purchase. These stages
include awareness, knowledge, linking, preference, conviction, and purchase.

The marketing communicators target market may be totally un aware of the product, know
only its name, or know only a few thing about it. The communicator must first build
awareness and knowledge.

Awareness Knowledge Linking

Preference Conviction Purchase

12
2.4.3 Designing a Message
Having defined the desired audience response, the communicator turns to developing an
effective message. Ideally, the message should get attention, hold interest, arouse desire,
and obtain Action (a frame work as the AIDA model). In practice, few messages take the
consumer all the way from awareness to purchase, but the AIDA frame work suggests the
desirable qualities of a good message.
In putting the message together, the marketing communicator for must decide what to say
(message content) and how to say it (message structure and format).

2.4.3.1 Message Content

The communicator has to figure out an appeal or theme that will produce the desired
response. There are three types of appeals, rational, emotional and moral.
Rational appeals: relate to the audience’s self interest. They show that the product will
produce the desired benefits.
Emotional appeals: attempt to stir up either negative or positive emotions that can
motivate purchase. Communicators may use positive motional appeals such as love,
pride, joy, and humor. Communicators can also use negative emotional appeal, such as
fear, guilt, and shame that get people to do thing they should (brush their teeth, buy new
tires) or to stop doing things they shouldn’t (smoke, drink too much, eat unhealthy
foods).
Moral appeals: are directed to the audience’s sense of what is “height” and “proper”.
They are often used to urge people to support social causes such as cleaner environments.

2.4.3.2 Message Structures

The communicator must also decide how to handle three message structure issues.
The first is whether to draw a conclusion or leave it to the audience. The second message
structure issue is whether to present the strongest arguments first or last. The third
message structure issue is whether to present a one sided argument (mentioning only the
product’s strengths) or a two sided argument (touting the product’s strengths while also
admitting its shortcomings).

13
 2.4.3.3 Message format
The marketing communicator also needs a strong format for the message. In print
advertising, the communicator has to decide on the headline, copy, illustration, and color.
If the message is to be carried over the radio, the communicator has to choose words,
sounds, and voices. If the message is to be carried on television or in persons then all
these elements plus body language have to be planned. Presenters plan their facial
expressions, gestures, dress, posture, and her styles. If the message is carried on the
product or its package, the communicator ha to watch texture, scent, color, size and
shape.

2.4.4 Choosing Media

The communicator now selects channels of communication. There are two broad types of
communication channels personal and non personal.
Personal communication channels: two or more people communicate directly with each
other. They might communicate face to face, over the telephone, through the mail, or
even though internets “chat”. Personal communication channel are effective because they
allow for personal addressing and feedback.
Some personal communicator channels are controlled directly by the company. But other
personal communications about the product may research buyers through channel not
directly controlled by the company. These might include independent experts consumer
advocates, consumer buying guides, and other moving statements to target buyers or they
might be neighbors, friends, family members, and associates talking to target buyers. This
last channel known as Word of mouth influence, has considerable effect in many product
areas.
Other companies create opinion leaders people whose opinion are sought by others by
supplying influence with the product ion attractive terms or buy educating them so that
they can inform other. Buzz marketing involves cultivating opinion leaders and getting
them to spread information about a product or services to others in their communities.
Non personal communication channels: are media that carry message without personal
contact or feed back. They include major media, atmosphere, and events. Major media
include print media (newspapers, signs, posters) and online media (E-mail web sites).

14
 Atmospheres are designed environments that create or reinforce the buyer’s learning’s
toward buying a product. Events are staged occurrence that communicates messages to
target audiences.
Non personal communication affects buyers directly in addition, using mass media often
affects buyers indirectly by causing more personal communication leaders and then from
these opinion leaders to others. Thus, opinion leaders step between the mass media and
their audience and carry messages to people who are les exposed to media. This suggests
that mass communicators should aim their messages directly at opinion leaders, letting
them carry the messages to others.

2.4.5 Selecting the Message Source

In either personal or non personal communication, the message’s impact on the target
audience is also affected by how the audience views the communicator. Messages
delivered by highly credible source are more persuasive. Thus, many food companies
promote to doctors, dentists and other health cares provides to motivate these
professionals to recommend their products to patients. And marketers hire celerity
endorsers well know athletes, actors, and even cartoon characters to deliver their
message.

2.4.6 Collecting Feed Back

After sending the message, the communicators must research its effect on the target
audience. This involve asking the target audience members whether they remember the
message, how many times they saw it, what points they recall how they pelt about the
message, and their past and present attitudes toward the product and company. The
communicator should also would like to measure behavior resulting from the message
how many people bought a product, talked to other about it, or visited the store.
The promotion program or the product offer might be changed based on feed back in
marketing communications. For example the research shows 90 percent of all consumer
in an area recall seeing consumer electronic products ads aware of what the company
offers. 70 percent of those aware of it have bought the product and 80 percent of those
who bought were satisfied. One can conclude from this result that the promotion program
created awareness and the product gave the satisfaction expected.

15
 2.5 Setting the Total promotion budget.
Promotional budgets may differ not only in amount, but also in composition. Industrial
firms generally invest large proportions of either budgets in personal selling than in
advertising. While the reverse is usually true of most producers of consumer goods.
According to Kotter and Armstrong (2005, P.440-441), four common methods used to
set the total budget for promotion

Summary
Method Description Advantage Disadvantage
Affordable - Setting the promotion budget at the level - Easy to use it use for a - Ignore the effective of
management thinks the company can small business promotion on sales
afford - It use for short term - It leads to uncertain annual
promotion budget promotion budget
- Difficult to apply in long
range market planning
Percentage - Setting the promotion budget at a certain - Simple to use and - If the percentage of
of sales percentage of current or forecasted sales helps management to forecasting wrong budget
or as a percentage pf the unit sales price know the relationship will be also wrong
between promotion - Long range plan is difficult
spending, selling price with year to year to year
and profit - It does not provide any
based for choosing a specific
percentage
Objective - Setting the promotion budget to match - Monitor the - There is no evidence that
parity competitors out lays competitors adverting budgets based on
competitive parity prevent
promotion war.
- There is no ground for
believing that the competitor
has a better idea of watch a
company should be
spending on promotion
Objective - Developing the promotion budget by - It forms management Difficult to use, often it is

16
and task 1. defining specific objectives to spell out its hard to figure out which
2. Determining the tasks that must be assumption about the specific tasks will achieve
performed to achieve these objectives and relation ship between stated objective
3. Estimating the cost of performing this dollars spent and
task. The sum of these cost is the promotion results
proposed promotion budget
2.6 Measuring of Promotion effectiveness

“There tasks must be completed in order to measure the result of promotion.

1st – standards for promotional effectiveness must be established. This means that market
planner must have a clear understanding of exactly what the promotion is intended to
accomplish. For measurements purpose, the standard should be identified in specific and, if
possible quantitative terms.

2nd - Actual promotional performance must be monitored. It is usually necessary to conduct

experiments in which the effects of other variables are either excluded or controlled.

3rd – Measuring promotional efficiency to compare performance against the standards”.

(Burnett, 2002, P.30).

2.7 Standards to measure promotion effectiveness

A) Sales volume: sales volume analysis is the simplest type of sales performance
measurement and probably the most often used. Volume analysis can be appraised in
terms of both effectiveness and efficiency, but for our study we select only the
effectiveness, in terms of effectiveness actual sale change after some period of a
promotion activity must compare to the previous of before a given period of promotion

B) Customer Altitude: a better measure is the change in product awareness,

comprehension, or attitude resulting from the promotion campaign (after allowing for
the impact of other promotional tools). Here the main thing that should give an
emphasis is customer attitude to wards the product changes in the buyer redness stage
and the product life cycle.

17
 C) Market share: maintain the current market share and increase future market share must
be supported promotion effort.

2.8 Effectiveness of Promotion Tools in the product life cycle stage

According to Kotler and Armstrong (2004 P -483), promotion objective should vary with
Stage of product life cycle. When product stages shifts frame one stage to another stage, the
objective promotion also shift accordingly.

Types of Product life-cycle promotion objective

promotion Introduction Growth Maturity Decline
Advertisin - Build product Build awareness and Stress brand Reduce to level
g awareness among early interest in the mass difference and needed to retain
adopters and dealers mark et benefits hard core loyal
- primarily advertising
Sales - Use heavy sales - Reduce to take Increase to Reduce to
Promotion promotion to entice trial advantage of heavy encourage brand minimal level
consumer demand switching

Source (Kotler and Armstrong 2003, P.340)

Objectives of promotion are Promotional tools

A. Create awareness ……………Advertising, Public relation and personal selling
B. Create understanding ………. Advertising public sales promotion personal selling
C. Change attitude ……………. Advertising public sales promotion personal selling
D. Pce enforcement …….……..Advertising public sales promotion personal selling

Source: promotion hand out prepared by Ato Abnet Agegnhu

18
  Promotional Emphasis
Introduction Growth Maturity Decline
- Advertising - Personal selling - Advertising - Sales promotion
- Public relations - Sales promotion - Sales
- Sales promotion promotion

Promotion spending level

Sales volume
Dollar

Profit Margin

Time
Source: (Burnett 2002, P.85)

19
 CHAPTER THREE
Data Analysis and Interpretation

In chapter two we have discussed about the communication process of promotion strategy
and overall promotional planning and strategy. As we have been focused that success in
marketing and the cooperating objective could be depend on the promotional planning and
strategy.

This section deal and give more emphasized on assessment and analyzed the promotional
activity of AMWF with compare to the promotional budget.
To assess the promotional activity of the company, the study was made in the ways of data
connection method. Those are, one secondary data collection process, we have collected a
three years sales data with promotion expenditure in order to see the cause and effect of each
other, and we have also gather the promotional activity of the company.
The second one was surveying the promotion expert and the marketing official of the
company through interview and questionnaires.

3.1 Communication activities of the Company

To design communication objectives of the company it was made concerning to the
communication process in promotional activities. Claims of the question raised to determine
the effort made in this activities show that the activity targeted to assessment of message and
media. But has the promotion expert of the company told as they didn’t have any record data
about complained and feedback of the potential audience. Because of this reason the
communication cannot be support to the promotional program. In the selection of message
media vehicle and objective of the communication, this is because the customer of the
company was not clearly segmented geographically demographically and social class as we
know customers of the A.M.W.F includes all the society as a whole.

20
 3.2 Promotional planning in the Company
In addition to providing quality product success in modern business requires setting reliable
price, establishing proper outlets and active promotion.
A.M.W.F planned to produce and promote its product based on demand driven.
3.3 Objective Analysis of Company Marketing and Promotion

- To maintain the current market share of 96% and increase the sales
Company
objective volume
- To attain a minimum of 34% of ROA
- To reduce container break age from the current level down
- To work to words attaining the fill production sales capacity
- To increase the export market share to 2% of total sales
- To expand the capacity and diversity the product to meet the demand
of domestic and foreign marked

Marketing - To increase sales volume, to retain customer and also to achieve

objective
minimum sales target
- To introduce our product for the export

- To achieve sales target and to introduce the product with the newly

Promotion growth population

objective - To maintain the market share of the product
- To balance sales objectives
- To increase customer awareness both local and abroad
- To attract new customers

Since the company objective is the over all (corporate objective) the remaining two
objectives, these are marketing and promotion objectives are derived from it. As presented in
the above what the three objectives share is that they need to increase sales of the both the

21
domestic and foreign market and mainly, to maintain their market share specially in local
market share.

3.4 Setting Promotional Budget

In assessment of promotional budget of the company, questions where raised and
answered;
⇒ Does the company allocate enough budgets for promotion?
⇒ Does the company use strategic method to set the budget?
A.M.W.F sets 1.5 million birr for every budget year for promotion. In amount of absolute
value the budget setting for promotion is much enough, but the method of setting budget
decision is not follow scientific method. In setting promotional budget for large company
lists advisable to follow based on the tasks and objective method, but A.M.W.F set its budget
based on affordable method.
These types of setting promotional budget are suitable for small companies. Three year
budget analysis of A.M.W.F where represented as follows.

Table 3.1 Comparison of Budget and Actual expenditure for promotion

Year Total budget Actual use
1996 E.C 1, 500.000 380560.80
1997 E.C 1, 500.000 1, 120, 880.67
1998 E.C 1500.000 1089,216.18

3.5 Promotional Campaign

To assess the promotional effectiveness and activity of the company, we have gather three
years data and analyzed them as follow.

Table 3.2 Promotional Campaign by the Promotional mix and their Expenditure in the
last three year.
Promotional mix Amount of Expenditure in each year
and their tools 1996 E.C 1997 E.C 1998 E.C

22
Advertising
Bulletin 74000 98, 350.00 106, 455.00
Poster, broacher 70061.80 138 451.67 143, 430.00
and calendar
TV and radio 145872 435, 195.47 390 606.00
Sales promotion
Trade show 42, 595.00 122 930.00 142, 846.02
Public relation
Sponsorship 86, 865.00 325 955.00 305, 579.16
Total 380560. 80 1120 880.67 1089, 216.18

The above data on table 3.2 show the company gives more emphasis on advertising among
the promotion mix those are bulletin, posture, broacher, TV an radio.

It is also use public relation and sales promotion by participate in different trade shows
government and non-government association we have understand that from the interview we
conducted as well as from the documents the company we gathered the factory do not have a
budget for personal saving.

In summary we have put in the pie chart the total expenditure for the different promotion mix
of the last three year in percentage with the corresponding promotion mix.

prom
Advertising

Public Relation

Sales
Promotion

Pie Chart 3.1 Expenditure for Promotion Mix’s

3.6 Sales Analysis

23
 Sales data in Quantity (three years)

Table 3.3 the comparison of expected planned to sale end actual sales

Year Description Planned Actual Implement Comparison

To sale Sale (in liter) (In %) With the
(in liter) Previous
Year (in %)
1996 E.C Local sale 41, 027, 000 31, 586, 464 77 85
Foreign sale 533, 000 141, 163 25.5 234

Total 41, 580, 000 31, 727, 627 76.3 85

1997 E.C Local sale 42, 004, 000 31, 126, 938.14 74.1 1.45

Foreign sale 566, 000 108, 651.6 19.2 2.33

Total 42, 570, 000 31, 235, 589.74 73.4 1.56
1998 E.C Local sale 37, 733, 800 31, 861, 810 84.44 2.36
Foreign sale 381, 220 33, 000.6 8.66 (66.63)
Total 38, 115, 0001 31, 894, 810.6 83.68 2.11

From the above table 3.3 we could observed that are planned sales and actual sale of in the
last three budget year of the company was performed as follow.
The actual sale use 77%, 76.3% and 83.68% respectively for the budget year of 1996 E.C,
1997 E.C, and 1998 E.C.

Finally we have summarized that the actual sale perform of the budget year of 1997 E.C was
less effective as compared to its planned expect to sale;

Like table 3.3 reveals the trend of the sales volume is not stable means do not have a
uniform increasing or decreasing, it fluctuates differently.
Comparison sale with the promotional expenditure

24
 year w ith corspon din g bu dget
66.6
70 60.283
60
sales&promotion
expenditure in

50 S eries1
birr(000,000)

39.348
40
30
20
Sales in birr
S eries2
10 3.81 1.121 1.192
0
1 2 3
Promotion
ye ar
expenditure birr

Graph 3.1 Promotion Budget of the last three years

The above bar graph shows that, the comparison of promotional expenditure with the sales
volume of the company for the last three year from this graph we understand that the
increment of promotional expenditure did not have any impact on the sale volume. Especial
in the year 1997, we observed that even if the company increases its expenditure on
promotion by three times of the previous year, but the actual sales is still below that of the
previous year.

3.7Assessment of the promotion objectives of the company compare to

product life cycle
The company promotion objective of the last three years was almost the same that was:
⇒To achieve sales target
⇒To maintain current market share
⇒Balance sales objective
⇒To increase customer awareness both locally and abroad
⇒To attract new customers, but the 1997 objectives
Was some what different, it was because there is declining sales volume. The reason for the
declining was the intensive selling promotion of soft drink companies for retrieves their
declining sales. As a result the reaction of AMWF was to make a continuous promotion

25
activity in order to maintain its market share and to return its customer who is shift to soft
drink.

3.2.1 Characteristics of Respondents

We have designed 12 questionnaires and distribute it to the total sample size 40, who are
found at different age and education level and we were collected, all of them what we
distributed. But we have got 2 questionnaires returned not correctly filled, but 38
questionnaires were returned correctly filled.

Table 3.5
Age

Characteristics Sex Total Percentage

< 18 - 2 2 5.26
18 – 25 1 3 4 10.52
26 – 35 3 3 2 15.8
36 – 45 6 10 16 42.1
>46 - 10 10 26.32
Total 10 28 38 100
Education

Below 10th grade - 7 7 18.42

10th and 12th complete 1 6 7 18.42
Certificate 3 2 5 13.16
Diploma 2 4 6 15.79
1st Degree 2 4 6 15.79
1st Degree and above 2 5 7 18.42
Total 10 28 38 100

In order to identify the customer of the factory we have taken the three characteristics
those are: Age, Sex and Education level. As we get from the questionnaire we represent in
the above table.
a) Age: from our total sample ≤ 18 age are 5.26%, between 18 and 25 are 10.52%,
between 26 – 35 are 15.8, between 36 and 45 are 42.1 finally above 46 are 26.32.
b) Sex: from the total 38 respondent 28 are males about 74% and females are 10 that
cover 26% of the total sample.
Education: like presented in the table almost all sample are crose in number that is 18, 42,
18.42, 13.16, 15.79, 18.42 for below 10th grade, 10th and 12th complete, certificate, diploma,
1st degree and 1st degree and above respectively.

26
3.2.2 Analysis of the impact Promotion on the Consumers
We got that all the respondents who are drinking Ambo Mineral Water are not be care on the
promotion of the company but most of them drink it because of “word of mouth” of the near
by peoples or the society, but since they have seen the promotion they have give some
response for it, it is presented net.

Table 3.4 the reaction of Customers for the Advertising (%)

Questions Responds in percentage

Yes No
Was the advertising attract
and control your attention 90% 10%
Did you understand the
message of the advertising 40% 55%
Is that Ambo Mineral Water
is your only choices 70% 30%

Table 3.5 reveals that almost all the respondent that is 90% of them have attracted and give
their attention to the advertising but they were attracted because of its drama or music but
more that of them (55%) do not understand the message that the promoter need to transmit.
In addition the table shows that 70% of the respondents drink Ambo because it is their choice
but 30% of them drink because they do not have another alternative.

c) From the questionnaire we have distributed we got that all of the respondents
exposed to the company advertising, but the media they exposed was different as
presented in the following bar graph.

3 .2 c u s to m e r c o v e r a g e b y m id e a
1. TV
150%
2. Radio
100%
coverage in
persentage

50% The bargraph reveals that

0% almost all the3. Print Media
customers
1 2 3 4 5
m id e a have coverage by TV and
4. Sponsor relationship
5. Other
27
 radio mass media but the remaining print media cover only 30% of the
population.

Graph 3.2 Advertising Media of A.M.W.F and there exposure (%)

By sponsorship the company can achieve only 20% of the population. There fore, most of
the respondent are attended the advertising of AMWF on TV and Radio. So it is good to
promote the product of A.M.W.F by TV and Radio in order to reach the message on many
exposures at a time.

CHAPTER FOUR
Conclusion and Recommendation

4.1 Conclusion
Promotion Mix

28
Selecting the right promotion strategy from the promotion mix. Which is compatible with the
product stage and company objective is the character of effective promotion.
But AMWF spends its to full promotional budget 62%, 25.27% and 11.73% for advertising,
public relation, sales promotion respectively. So, as we have been the factor does not use
personal selling and given less expenditure for sales promotion.

4.1.1 Identification of target Audience and Customer

It is the first and the most thing identify the target audience and target customer before
starting any promotion activity. We found that they did not clearly identify their audience
and they do not also have any record about the customer’s complain and feed back. There
fore we conclude that the company is doing its promotion with out having a clear
understanding about the target audiences that would limit to do not collect feedback as well
as to do not measure the effectiveness of their promotion campaign.

4.1.2 Designing of message

After identifying the target audience the next step will be designing the message that wills
feet with the customers. In our study we get that the company always design the message to
transmitted their customer but since that do not have enough knowledge about their
customers it make their effort in significant. It is clearly presented in chapter three that more
than half of the respondents do not understand the message.

4.1.3 Identification of Media

It is also decisive the identification of the right media to be used in transmitting the right
message to the right target audience, to make the promotion campaign more effective. The
company continuously identity the media to be used, but most of them are chosen with out
any plan, programs like sponsorship for TV, radio, magazines, exhibitions etc...

4.1.4 Setting promotion Objectives

29
Because the company objectives is the overall guide for preparing the other department
objectives, the marketing and the promotion objectives must feet with it. We found that the
promotion objectives and also the marketing objectives are also derived from company
objectives. Finally, we conclude that the promotion objectives are derived (fit) with the
corporate objectives. But in practical the marketing couldn’t achieve its objective through
promotion, because most of the time the company participates in promotion activity mostly
in sponsor is for social welfare.

4.1.5 Setting Promotional Budget

In order to achieve that objective of the promotion, the marketing, and the over all corporate
objective allocate enough budget with specific task must be accomplish. So, us we have
discoursed in chapter three, A.M.W.F allocate too much budget for promotion that is 1.5
million per year. But the method of setting budget is not much with the company promotional
activity. Because it did not identify the task and objective of the expenditure simply they set
their budget by what the company can afford. For this reason, the management couldn’t
identify the relationship between the expenditure and its result.

4.1.6 Standard to Measure Promotion Effectiveness

To measure promotion effectiveness the first think is established standard. And we have
stated earlier three main standards of these are:
a) Sales volume
b) Customer attitude and
c) Market share
a) Sales Volume: we have found from our analysis of the secondary data of the factory.
The promotion expenditure has insignificant impact on the sales volume. Especially,
when we see the total expenditure of 1997 E.C and its sales volume from the bar
graph 3.1 in chapter three, the expenditure was to much greater the expenditure of
1996 E.C but its sales is below the year of 1996 E.C in fact there are money reason
why the sale response is insignificant, like lack of production, but the problem that
are related to our topic are:-
⇒ The promotion activity was mainly focused on domestic aspect

30
 ⇒ Less amount of commission payment for distributor, and they would not
happy to work hard.
b) Customer Attitude: the attitude of customer must be investigate before and after,
a promotion activity and we have investigate that the AMWF didn’t conduct any
survey to know the customer attitude on the company and product.

c) Market Share: analysis of market share helps to know where the company is found.
We have gathered information from the company secondary data and from the
customer by questionnaire, AMWF a market hare of 96%. But it is not because of
promotion effort. It is:-
1. There is no strong competitor ion the country
2. Good image of the company
3. Because of quality products

4.2 Recommendation

After completed the study we will motivate to suggest the following recommendation.

4.2.1 Promotion Mix

Promotion campaign with out selecting the right promotion element which is compatible
with the product stage made the efforts less result: so since the product stage of the

31
company is found more of at maturity stage, it is better to used advertising and sales
promotion rather than public relation.

4.2.2 Identify the target audience

Communication process with out identifying the right audience made the result
insignificant. For this reason the company must be identify the target audience and target
customers before launching the promotion and it is good collected feed back after
completing the promotion collected.

4.2.3 Setting the total promotion budget

Effectiveness of promotion can be measured based on the budget appropriated for the
purpose, we would provide the following suggestion concerning to budget.

⇒ Before setting promotional budget it is adveioble to identify specific objective

and task that can be performed and estimate their cost finally set the budget
rather than simply provide the money that the company can afford.
⇒ It is better to reduce promotional budget and assigned to the other marketing
activity. Especially, on marketing research and markets survey in order to know
the need and wants of customer and to redesign the promotional plan and
products.
⇒ Spend the expenditure to the right promotion mix and promotion element.
Designing promotion objective should be much with the product stage, that it is
better to use, to remind customer, to re-inforce, to buy more and to change
customer. Attitude,
⇒ As we have investigate from the customers respond AMWF did not need to
much advertising and promotion, because 96% of the market share is controlled.
⇒ It is advisable to focused its promotional activity at foreign rather than focus
locally.
⇒ We have examined the company spends more expenditure on bulletin
advertising. But since the customers are geographically social were not

32
 segmented. So it is advisable to TV, radio and other mass media in order to get
large number of exposure at a time.
⇒ It is advised to segments the customer using the segmentation variable and
redesign its message to each segment customer and select the appropriate media
for them.

33