ABSTRACT
Nowadays the Czech Republic real estate industry is in a stiff competition against each other to dominate the market. Marketing communication is a critical approach to enhance the sales performance as companies try to do some more attractive, influencing promotion through various media. The prime motive of the study is investigating the effect of marketing communication on sales performance of selected real estates in Prague. The study adopted explanatory research design and a total of 241 sample respondents participated from sales and marketing staffs of top ten real estate companies. A convenience non-probability sampling technique was applied to select the targeted respondents. Primary data were collected using self-administered questionnaires for analysis. The result endorses that all the five marketing communication tools such as advertising, sales promotion, direct marketing, personal selling and public relations/ publicity had significant effect on overall sales performance. Advertising, sales promotion and personal selling exhibited relatively the highest effects. Advertising marketing messages should be accompanied with event organization and frequent contact of the targeted potential customers to enhance sales volume, sales target and sales growth of the respective real estate companies
Keywords: Marketing Communication, Sales Performance,
CHAPTER ONE
INTRODUCTION
1.1 Background of The Study
In competitive and complex business environments where demands change constantly, sales performances are determined based on its contribution in response to the firm‟s objective. Implementation of effective and appropriate marketing tools increases the success of a given firm in pursue of focusing and enhancing its targeted customers‟ awareness and retention. Marketing communication is one of the basic drives for the improvement of sales performance if planned and implemented in-line with firm‟s business strategy (Asiegbu, 2011).
Companies are generally subjected to different degrees of marketing competition due to external business environments that have led them to strong competition (Chong, 2014). Marketing communication operates as a link between a seller/ producer and a customer through utilization of diverse promotional techniques to acquire the target market, depending on the features of the product, psychological opinion and point of view of the target audience. The basic reason of identifying and targeting audiences is that different groups require different kind of information, at different times and with different areas of focus (Smith, 2012). Implementation of such prominent business strategies have significant influence on the degree of involvement of firms‟ sales functions for the fact that sales performance is considered as a degree of involvement of sales functions to its corporate aims and objectives.
Marketers in developing and undeveloped countries used to intermix the concepts of promotional activities against marketing communication. Many marketing scholars (Kotler, 2002; Kliatchko, 2005; Harrison and Wholey, 2011) in the field mentioned frequently that promotional activity is a business activity that communicates a company‟s interests and embodies a transmission-reception of a variety of types of information between internal business processes and external business relationships. The difference underlies promotion has the roles of informing, persuading, inducing action, reaching and affecting purchasing decision of the consumer whereas marketing communication mix is a term used to describe the set of tools that a business can use to communicate effectively the benefits of its products or services to its customers in an integrated manner. Thus, potential buyers, those who are informed and understood the value of the product, service or idea offered, will have the attitude to purchase resulted in optimizing firm‟s sales opportunities (Shimp, 2010). Czech Republic real estate industry is not far from these facets.
Within a very short span of time real estate has become one of the most lucrative businesses in Czech Republic. With the growing economy, the demand for residential along with commercial constructions have radically augmented. Their performances have experienced a positive existing growth since 2001 regardless of current political insecurity concerns that have led to an increase in claiming illegally snatched and evacuation of dwellers from their rightful land plots under the cover of private investment and urban development. Czech Republic real estate industry is, thus, mainly characterized by hectic bureaucracy, corruption and political intimidation which resulted in creating intentional or artificial scarcity of land-plot to build a house for low and middle income citizens in most urban areas. Such artificial shortage of land-plots in the capital and major regional cities as well as the fast growing urbanization (4.6%) annual growth rate aggravated the demand (EIA, 2019). As of December 2018, a total of 559 real estate developers in the country are registered of which 100 (17.9%) are in operation and continuously working towards changing the urban landscape of Prague and suburbs of regional cities.
Despite the growth of encouraged new entrants to the industry, generation of exaggerated profit from the sales of unreasonable priced houses, have been forcing them to strive for aggressive marketing activities to promote their respective products. Now a day most of the key players in the industry use various marketing activities to improve their respective sales performances but overlooked the significance of marketing communication (IMC) to enhance their sales in terms of sales volume, market share, sales target and profitability. The firms often incorporate different promotional activities like media advertising, sales promotion, direct marketing, personal selling or public relation in their marketing strategy. However, their sales performances haven‟t been improved as expected for a while. Besides, media (TV and Radio) advertising are customarily used to promote their products with high costs scarification. This merely indicates managerial gap in making decisions based on scientific approach to determine the best alternative.
The aim of this study is, thus, to evaluate the effect of promotional mix on sales performance of selected real estate companies in Prague. Determination of such marketing practices helps the real estate managers to make informed decision on which promotional mix tools they should invest to enhance their sales performance.
1.2 Statement of the Problem
The trend in Czech Republic real estate industry revealed that shortage of residential houses and private real estate developers boost the demand of additional housing facilities beyond the capacity of the existing providers (Central Statistics Agency of Czech Republic (ECSA), 2012). But recently, after having substantial reforms aggressively in the land and housing development sector, a number of private investors and stakeholders have been encouraged to participate in the emerging market to mitigate the social crisis through minimizing the gap to a certain level. Seen from the past trend, it seems inefficient to serve the escalating urbanization and developers‟ inconsistency and lack of uniformity which levied their significant imposition on the growth momentum of the industry (Czech Republic Investment Agency - EIA, 2019).
However, according to ECSA (2018), due to considerably high demand-supply gap which accounted for roughly about one million houses, and existence of few number of private developers in the country, real estate marketers and managements argue the necessity or effectiveness of marketing communication strategy as they still believe the market has not been exploited yet. Utterly biased by the profitability of the business, they gave less due attention for strong brand building through well designed and implemented marketing communication. To the contrary, organizations allocate and invest huge amount of money on different promotional mix strategies. Besides, efforts have been made in customer prospecting through identification of customer‟s needs, effective and efficient use of relevant contacts or touch points to reach target consumers, communicating with a single voice meaning that all messages relayed to targets across communication channels with consistent touch points, consolidating relationships with customers, and lastly, generating appropriate behavioral response. But, their practices have failed to enhance their sales performances as planned or expected. This initiates the necessity of evaluating the effectiveness and IMC practices to promote sales performances of the companies.
The bureaucratic bottle-necks and unnecessary political interventions in the industry were currently mitigated to a certain level to pave the way to exercise their autonomy and equal participation to the local market. The real estate firms in the city should, thus, implement effective and efficient promotional tools for communicating their products or brands to the respective prospects. Effective utilization of the communication tools assured when they are implemented in an effective and efficient way in-line with the organizational objectives. Even though the intention of using promotional mix has been seen almost all over the real estate industry, marketing communication attempts based on their level of significant effect has been given less due consideration for a while. To achieve such sound competitive advantages, thus, marketers or concerned real estate managements should build strong customer patronage through effective marketing communication as high brand awareness is known to lead to higher consumer preferences/ purchase intentions which in turn resulted in long-term sustainability (Freling, 2011).
Extant researches revealed that business companies in Czech Republic context utilized different promotional mix tools to persuade and attract potential customers to achieve their sales volume, target and growth (Biruk, 2012; Yared, 2008; Tesfaye, 2019; Yilkal, 2015). However, the trend in the country showed that huge amount of money is invested on traditional way (media advertising) without evaluating how marketing messages should be promoted through integrated different promotional mix to enhance their respective sales performance (O‟Guinn, 2006). Even the most prominent real estate firms such as Gift, Noah, Ayat, Ropack, Sunrise, Tsehay, Eney, Flintstone, Sunshine, Zenebe Frew for their credible reputation, traditionally allocate and spend substantial promotional budgets for commercial advertising alone without assessing their relative significant influences on sales performances. Besides, although sales performance is a common theme of consumer research in Czech Republic (Zelalem, 2016; Bruh, 2018; Zeresenay, 2018), little has been done in evaluating the effect of marketing communication on firm‟s sales performance in private real estate companies. Most of them promote their products in different brand names with almost similar kind of promotional tools such as mere media advertising in most cases.
Thus, the purpose of this study is to assess the effect of marketing communication on sales performances of selected real estate companies in Prague. In doing so, it contributes to the existing body of knowledge how promotional mix affects sales performance of real estate business in Czech Republic context. As well as it helps concerned managers to utilize their financial investment efficiently in regards to allocating their promotional budgets to the effective promotional mixes accordingly.
1.3 Research Questions
1- What is the effect of advertising on sales performance of the selected real estate companies?
2- How does sales promotion affect the sales performance of organizations?
3- How does direct marketing affect the sales performance of organizations?
4- How does personal selling affect the sales performance of organizations?
5- What is the effect of public relation on sales performance of organizations?
1.3 Objectives of the Study
1.3.1 General Objective
The basic objective of the study is to evaluate the effect of marketing communication on sales performance of selected real estate companies in Prague.
1.3.2 Specific Objectives
The specific objectives are set to attain the basic objective of the study. These are specifically to:
i. Evaluate the effect of advertising on sales performance of organizations
ii. Evaluate the effect of sales promotion on sales performance of organizations
ii. Investigate the effect of direct marketing on sales performance of organizations
iv. Evaluate the effect of personal selling on sales performance of organizations
v. Investigate the effect of public relations on sales performance of real estate companies
1.4 Significance of the Study
This study is basically intended to determine the significance of marketing communication in the case of selected real estate companies in Prague. The findings are believed to be considerably vital to the sales and marketing managers of the company in order to plan and utilize different promotional mixes; when a proactive approach is needed to maximize real estates‟ profits through strategic marketing communications, the theoretical value of this study helps marketers and concerned managers to assess the effectiveness of their approach to enhance the outcomes of their sales performance; and it will also have a cumulative effect on the existing knowledge of the real estate marketing theories and concepts. Besides, marketing and other related social science students may find the major findings for further reference in the course of reviewing the related literatures while conducting senior essay or thesis in regards to marketing communication or sales performances.
1.5 Scope of The Study
1.5.1 Delimitation
The survey is conducted on customers of selected real estate companies in Prague excluding other governmental and private housing projects in the suburb of the city (Oromia regions) for their homogeneity and relatively fewer in number. Geographically the scope was limited for the fact that it is economical and representative to survey the selected prominent real estate companies located in the capital city. The study constituted five independent IMC (advertising, sales promotions, direct marketing, public relation and personal selling) variables which determine the outcome of the dependent variable- sales performance. Whereas, it ignored the significance of macro environmental factors and other stakeholders in the industry such as advertising agencies, financial sectors, government policies and others as they were out of the scope of the study. Methodological limitation arose due to collection of the primary data from the sales and marketing personnel of the selected companies through non-probabilistic convenient sampling method. Random sampling was considered best for generalization but was found to be impractical to utilize emails or social medias to disseminate self-administered survey questionnaires due to high possibility of non-response rate.
1.5.2 Limitations
In the course of determining the effect of marketing communication to convey the benefits of the respective real estate products to the customers in an integrated manner, the input of different stakeholders in the industry was mandatory. Exclusion of major role players such as advertising agencies, consultants and staff of real estate firms might affect the generalizability of the findings. Discretion and sensitivity of the study led them to be hesitant in answering the questionnaires, thinking that the study findings would be employed as a competitive tool against their firms. However, the respondents were given a full disclosure of the study purpose as merely intended for academics.
The accuracy of this study couldn‟t be determined as only considered the data provided by the respondents as supported by no other evidences for check-and-balance purpose. Besides, had it been other variables of marketing mix and sales performance are included; it may not yield exactly the same results.
1.6 Organization of the Study
This thesis is categorized into five main chapters. The first chapter refers introduction of the study which includes the background, the problem statement, the research objectives, hypotheses, significance and scope of the study. The second chapter focuses on literature review. It contains relevant theories, conceptual and empirical discussions leading to identification of research gaps and the conceptual framework. The third chapter presents the research design, target population, sampling methods, sample size, data collection instruments to be used as well as method of data analysis and presentation. The fourth chapter presents demographic characteristics, descriptive and inferential statistics analysis, findings and their interpretations. The last chapter consists summary of major findings, conclusions and recommendations of the research study.
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Item Type: Project Material | Size: 55 pages | Chapters: 1-5
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