Table of Contents

CHAPTER ONE: INTRODUCTION........................................................................................1

1.1 Background of the study...................................................................................................1
1.2 Background of the company.............................................................................................2
1.3 Statement of the Problem.................................................................................................3
1.4. Objectives of the study....................................................................................................4
1.4.1. General Objective.....................................................................................................4
1.4.2 Specific Objectives....................................................................................................4
1.5. Research Questions.........................................................................................................4
1.6. Significance of the research.............................................................................................4
1.7. Scope of the Study...........................................................................................................5
1.8. Limitations of the study...................................................................................................5
CHAPTER TWO: REVIEW OF RELATED LITERATURE...................................................6
2.1. Theoretical Frameworks..................................................................................................6
2.1.1 Elements of Marketing..............................................................................................6
2.1.2 Sales promotion.........................................................................................................8
2.1.3 Techniques of sales promotion..................................................................................8
2.1.4 Importance of sales promotion................................................................................10
2.1.5 Brand Image............................................................................................................10
2.2 Empirical Studies............................................................................................................10
3.1. Research Design............................................................................................................12
3.2. Research Approach........................................................................................................12
3.3 Source of Data................................................................................................................12
3.4. Sampling Design...........................................................................................................13
3.4.1. Target Population...................................................................................................13
3.4.2. Methods of Sampling.............................................................................................13
3.4.3. Sample Size............................................................................................................13
3.5. Data Collection and Analysis Methodology..................................................................14
3.5.1 Data Collection........................................................................................................14
3.5.2. Data Analysis.........................................................................................................14
3.6. Ethical Consideration....................................................................................................14

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CHAPTER ONE: INTRODUCTION

1.1 Background of the study

In the dynamic world of banking, sales promotion strategies employ immense power in
shaping consumer attitudes and behaviors. This powerful resource includes a variety of
interesting techniques such as discounts, exclusive deals, loyalty programs, and perception
marketing campaigns (Dann & Dann, 2011). These strategies play a crucial role in
captivating, retaining, and captivating customers in an intensely competitive market.
Furthermore, the reputation and image of a brand, which reflects the collective perceptions
and experiences of customers, exerts a significant influence on their decision-making (Keller,
1993).Within the banking context, establishing a positive brand image significantly
influences customer trust, loyalty, and the overall success of a financial institution.

The constant evolution of sales promotion strategies in banking is a direct reflection of the
ever-changing consumer landscape and market trends. What may have once been traditional
tactics, such as giving cash rewards to attract new account holders or offering free gifts, have
now transformed into cutting-edge digital campaigns and targeted promotions. Technological
advancements have played a significant role in driving this evolution, as banks utilize digital
channels, social media platforms, and data analysis to customize promotional offers and
connect with customers on a more individualized level.

The current body of empirical research on the effects of sales promotions in the banking
industry offers valuable insights. While certain studies have found a positive link between
sales promotions and brand image, others stress the importance of a well-rounded approach to
prevent any potential harm to brand equity (Sethuraman et al., 2011). Particularly in the
banking sector, evidence suggests that although sales promotions may attract new clients,
their lasting impact on shaping brand image demands a comprehensive understanding.

The decision to center this research on Awash International Bank is rooted in its prominent
standing in the banking market. This study will delve into the impact of sales promotions on
the bank's brand image, offering valuable insights into a key player in the industry. Exploring
how sales promotions shape customers' perceptions of the bank's brand image is not only
advantageous for the bank itself, but also holds significant implications for strategic
marketing tactics throughout the banking sector.

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1.2 Background of the company

After the socialist administration was overthrown, on November 10, 1994, Ethiopia's first
private bank, Awash Bank, was founded. With a paid-up capital of Birr 24.2 million, the
Bank was founded by 486 founding shareholders and began banking operations on February
13, 1995. Since opening for business, the Bank has had impressive growth. Among Ethiopia's
private banks, Awash Bank has demonstrated better operational and financial results despite
both local and international obstacles. Awash Bank is presently endeavoring to fortify its
capital foundation, technological prowess, human capital, and clientele.

The name comes from the Awash River, which is widely used in Ethiopia for industrial
processes, hydroelectric power generation, and small-to large-scale irrigation projects. Thus,
it may be inferred from the slogan "nurturing like the river" that Awash Bank has made a
significant contribution to the socioeconomic advancement of the nation. In addition, it helps
the populace by promoting the practice of saving, offering credit options, and enabling quick
and easy payment methods.

Being approachable is one of the bank's guiding principles. Through a variety of service
delivery methods, AIB always aims to increase its accessibility. They have a wide network of
branches, making them the most accessible private bank in the nation right now. In addition
to branch networks, they provide customers the convenience of 24/7 service through ATMs,
point of sale terminals, internet, mobile and agency banking.

Since its founding, Awash Bank has made corporate social responsibility the core of its
operations. The goal of the Bank is to enhance education, health, and the social and
environmental well-being of the underprivileged classes by reinvested funds into the areas in
which it operates. A number of elementary schools constructed in partnership with non-
governmental organizations, upgraded healthcare facilities, trees planted across the nation,
and other similar initiatives amply demonstrate the positive effects of the Banks' operations.

Awash Bank's goal to rank among the top ten African banks by 2030 demonstrates its
aspirations and dedication to expansion. The bank is investing in the tools and resources
required for success, and it has a well-defined plan in place to realize this objective.
(https://awashbank.com/company-profile/)

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1.3 Statement of the Problem

The perplexing issue at hand for Awash International Bank is comprehending the complex
dynamics between their sales promotion tactics and the resulting effect on their established
brand reputation. This undertaking demands a thorough investigation into the direct impact of
these promotional efforts on customers' perceptions and attitudes towards the bank's brand.

AIB's marketing efforts heavily rely on the effectiveness of their sales promotion strategies.
Consequently, accurately assessing their success rates and Return on Investment (ROI)
(Hawkins et al., 2016) becomes a critical component. To truly understand the impact of these
initiatives within the banking industry, it is imperative to consider their reach, engagement,
conversion rates, and financial effects.

The effect of these sales promotion tactics on the overall perception of AIB's brand requires
careful analysis. It is crucial to consider whether these methods strengthen positive brand
associations or unintentionally undermine the bank's desired image of trustworthiness,
dependability, and superior service. Understanding how customers perceive AIB's brand and
how it may be impacted by these promotional efforts is essential to the investigation at hand.

Gaining a deep understanding of customer perceptions, attitudes, and behaviors resulting

from sales promotions is crucial. In line with AIB's customer-centric approach, it is essential
to delve into how these promotional efforts are perceived by customers and how they
influence their choices (Huang & Sarigöllü, 2012). By examining the connections between
these aspects and their congruence with the desired brand image, valuable insights on the
effectiveness of the bank's promotional tactics can be gleaned.

The impact of these sales promotions on AIB's brand equity must be carefully evaluated.
While they may lead to immediate profits or attract new customers, it is crucial to consider
how these activities align with the bank's long-term goal of sustaining and enhancing its
brand value (Keller, 1998). Thus, it is essential for AIB's strategic marketing efforts to ensure
that these short-term promotions do not jeopardize the bank's long-term brand equity.

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1.4. Objectives of the study

1.4.1. General Objective

To comprehensively investigate and analyze the impact of sales promotion strategies on the
brand image of Awash International Bank (AIB) within the context of the Ethiopian banking
industry.

1.4.2 Specific Objectives

1. To Evaluate the Effectiveness of Sales Promotion Strategies:

2. To Understand the Influence of Sales Promotions on Brand Image

3. To Investigate Customer Perceptions and Responses

4. To Examine the Long-Term Implications on Brand Equity

1.5. Research Questions

1. How effective are Awash International Bank's sales promotion strategies?

2. What influence do these sales promotion strategies exert on customer perceptions of

Awash International Bank's brand image?

3. How do customers interpret and respond to Awash International Bank's sales promotion
activities, and how does this impact their decisions and brand perceptions?

4. What are the potential long-term effects of Awash International Bank's sales promotions
on the bank's brand equity?

1.6. Significance of the research

This research is crucial for the banking industry as it sheds light on the influence of sales
promotion tactics on brand perception. It serves as a valuable resource for banks, like Awash
International Bank, to improve their promotional techniques to effectively connect with
customers. Additionally, it assists in elevating brand management techniques, guiding
important strategic decisions, and contributing to further academic research. Moreover, it
provides practical insights for marketing professionals and contributes to the long-term
development of sustainable brands.

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1.7. Scope of the Study

The focal point of this study revolves around the prominent Awash International Bank (AIB)
operating within the Ethiopian banking industry. It delves into the effectiveness of different
sales promotion tactics employed by AIB in shaping the bank's brand reputation. Through a
thorough investigation of promotional methods like discounts, offers, and loyalty programs,
we delve into the impact they have on various elements of brand image, such as trust,
dependability, service excellence, and customer perspectives.

Moreover, the study will consider customer perspectives, aiming to understand how AIB's
sales promotion initiatives shape customer decisions, behaviours, and overall perceptions of
the bank. While the insights garnered may have wider implications, the specific findings and
recommendations will be tailored to suit AIB's practices and its position within the Ethiopian
banking landscape.

1.8. Limitations of the study

This study acknowledges several limitations that could potentially impact the scope and
relevance of its findings. One important consideration is the constraints imposed by a specific
timeframe, which may limit a thorough examination of the long-term effects of sales
promotion on brand image. Furthermore, the reliability and accuracy of data from AIB - upon
which the study heavily relies - could influence the depth of the analysis. Methodologically,
while utilizing both qualitative and quantitative approaches, it's worth noting that inherent
biases and limitations within each method may restrict a complete understanding of the
dynamics of sales promotion.

Moreover, limitations in sample size and representation might restrict the generalizability of
results, potentially overlooking the diversity within AIB's customer base. Lastly, the
subjectivity inherent in customer perceptions adds complexity, as individual factors
influencing responses to promotions may not be fully captured.

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CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1. Theoretical Frameworks

Numerous theoretical frameworks are frequently used to understand the connection between
brand image and sales promotions. The Stimulus-Organism-Response (SOR) framework is
one paradigm that is used to understand how consumers react to environmental stimuli. It was
first suggested by Mehrabian and Russell in 1974. According to this theory, promotional
stimuli serve as triggers (stimulus) that affect customers' internal states (organism) in the
context of sales promotions. This, in turn, causes responses like changed perceptions of the
brand and purchase behaviors.

Furthermore, Keller's (1993) introduction of the Brand Equity model emphasizes the
significance of customer experiences and perceptions in forming brand image. Keller defines
brand image as a consumer's attitudes, associations, and perceptions of a brand. This model
posits that effective marketing activities, including sales promotions, contribute to reinforcing
positive brand associations, ultimately enhancing brand equity (Keller, 1993).

2.1.1 Elements of Marketing

Exchange of Information: The banking industry places a high value on communication

strategies because they foster strong brand perceptions and an air of legitimacy, assurance,
and confidence. Thus, it is crucial to assess each component of the communication mix that is
applied in the banking services industry:

Promotional activities: In order to widely communicate and promote a bank's goods and
services, advertising is essential. However, due to the intangible nature of services, creating
advertising campaigns is a challenging task. During the marketing process, bank employees
who work directly with consumers should be included in the design of the advertising
campaign. With the aid of advertising, a bank can enhance its brand equity and image. It also
helps the bank in differentiating and positioning its services from those of competitors.

Sales Promotion: - Sales promotion is often used by the companies to improve the sales of a
product or service either by encouraging the existing customers to use the service more
frequently or by attracting new customers to use their service. Banks also aim to pull
customers to use their services by attracting them with free offers, coupons, cash discounts,
warranties; prizes etc.

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Personal Selling: Most banks choose to use personal selling as a means of increasing sales
and utilization of their services because of the features of banking services. There are two
ways that it happens. At the branch office, face-to-face interactions between customers and
bankers take place first. Staff members, bank workers, the chief, and office managers all
participate in the selling process. The second is how bank representatives visit customers'
homes. Bank representatives shape the relationship between the bank and the consumer and
are experts in the services the bank offers. They also possess up-to-date knowledge about the
services the bank will give.

Publicity and Public Relations (PR):- Banks use publicity campaigns to bring in awareness
about their offers among the existing and potential customers .It involves using the
information in a way that induces interest towards a company, event or person. Public
Relations in banking help in the following aspects such as:

1) Establishing most effective communication system.

2) Creating sympathy about relationship between bank and customer.

3) Giving broadest information about activities of bank.

Direct marketing: Direct marketing is reaching out to current and future clients directly,
without the need of middlemen, including telemarketing, direct mail, and online marketing
(e-mail and official websites). Customers of financial services require tailored changes to the
bank's offerings or certain information.

Word-of-mouth promotion: Word-of-mouth information, sometimes referred to as word-of-

mouth promotion, is a common means of spreading information about financial services. The
banking industry uses a variety of promotional strategies, with word-of-mouth referrals
serving as one of the primary sources. A satisfied group of customers is considered to be the
most successful hidden promoters and if the bank keeps on moving the process of satisfying
the customers, the circle of word of mouth promotion would keep on moving.

This component of promotions is found significant to the banking organizations and therefore
bank professionals are required to seek the cooperation of opinion leaders for the promotion.

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2.1.2 Sales promotion

It is the application of incentives that generate a targeted, transient response from a home
buyer, trade buyer, or company buyer. In the consumer market, some of the main techniques
for promoting sales are free samples, coupons, premiums, sweepstakes and contests, rebates,
and price breaks. The business market uses more trade exhibits, dealer or sales force
competitions, premiums, price or merchandise allowances, and demonstrations as sales
promotion strategies. In order to increase dealer effectiveness in marketing a company's
brand and encourage short-term purchasing in a specified market, sales promotion is used.

Marketers benefit from this promotional choice since it gives them a means of persuading a
customer who is currently using a competitor's brand to switch to their own. It is also a means
of generating the necessary cash flows and moving stagnant inventories. Among the
promotional mix, sales promotion is the main option for marketers. Sales promotions can
draw interest and breathe fresh life into a marketing campaign. "Sales promotion is the use of
incentive techniques that create a perception of greater brand value among consumers, the
trade, and business buyers," according to Richard Sernnik. By encouraging trial use and
larger or recurring purchases, the goal is to generate a temporary rise in sales.

According to George, E., Belch and Michel, A., Belch, sales promotion is "a direct
inducement that offers an extra value or incentive for the product to the sales force,
distributors, or the ultimate consumer with the primary objective of creating an immediate
sale.

2.1.3 Techniques of sales promotion

Only the organization providing the campaign's inventiveness can restrict the range of sales
promotion techniques that can be used (Ferrell & Hartline, 2008). Well-known strategies
include free samples, coupons, rebates, discounts (price-off deals), premiums, bonus packs,
loyalty programs, contests, sweepstakes, and the like. Numerous strategies exist for
promoting sales, including:

Samples: Often referred to as consumer samples, free samples are provided to customers in
order to launch a new product or broaden the market. Customers are able to sample the
product. Explanations or examples: These guidelines are provided to customers to help them
learn how to use the product. Products like vacuum cleaners may use this technique.

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Coupon: It is a certificate that reduces the price. When a buyer gives a coupon to the dealer
or retailer he gets the product at lower price.

Money-refund orders: The technique indicates refund of full purchase price if the buyer so
wants. It is helpful in the introduction of a new product. Refund offer creates additional
interest and increases sales considerably. It is a good device for creating new user and to
strengthen the brand loyalty.

Premium (gift) offers: These are temporary price reductions, which appeal to bargain instinct.
Price-off: The price off label is printed on the package.

Contests or quizzes: These are held to stimulate consumer’s interest in the product. In these
contests, and quizzers, participants compete for prizes on the basis of their skill or creative
ideas. In Sweepstakes, they submit their names to be included in a draw of prize winners.
This type of sales promotion is not a lottery because there is chance or luck, prizes are offered
and a payment to participant is there.

Trading stamps: Trading or Bonus stamps are issued by retailers to customers who buy goods
from there. The number of stamp given to a buyer depends upon the amount of purchases
made by him.

Exhibitions and trade shows: These events, together with fashion displays and parades, are
crucial methods and resources for promoting sales. They offer a venue for product
demonstrations or displays. Distributing free literature to the public can serve as an
introduction to the company and its offerings. Large corporations or trade associations
typically arrange fairs and exhibits. Business companies are given stalls at these fairs and
exhibitions to showcase their goods. Exhibitions and fairs are popular because many people
go there. Gifts, exclusive discounts, and cost-free product demonstrations for technical and
specialized items can all be used to draw in customers.

Public relations activities: These include greetings or thanks in newspapers, donating space
for noble causes, offer of Privileged Citizen Card, etc. Their purpose is not to create
immediate demand or to increase sales. They are designed to create a good image of the firm
in the society

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2.1.4 Importance of sales promotion

Sales promotion is an important component of a promotion campaigning program. It can be

specific tool of the marketing strategy of an enterprise. Because of increasing level of
competition and costs of advertisement, producers largely use this technique as a promotional
tool.

2.1.5 Brand Image

According to Keller (1993)., brand image may be defined as the perceptions surrounding a
brand as represented by the brand association stored in the consumer's memory. It can also be
defined as the opinions and feelings of the customer about the brand. Therefore, brand image
is defined as a synopsis of the interaction between a brand and its consumers' minds, leading
to brand identification and association as well as brand benefits and attributes.

2.1.5.1. Brand Association

Brand association refers to certain things that are rightfully or consistently associated with a
brand. These things can include a distinctive product offering, regular and consistent actions
such as sponsorship or social responsibility initiatives, issues strongly associated with a
brand, a person or owner, and particular symbols and meanings that are strongly associated
with a brand.

2.1.5.2 Brand imagery

The extrinsic aspects of the good or service, such as the ways the brand tries to satisfy the
social or psychological demands of its clients, are covered by brand imagery. Brand imaging
is not what consumers believe a brand actually does, but rather how they conceptualize a
brand. Hence, imagery alludes to a brand's more ethereal elements. One can create
associations using imagery.

2.2 Empirical Studies

Numerous empirical investigations conducted in the banking sector have examined the
influence of sales promotions on how consumers view a brand. The study conducted by
Sethuraman et al. (2011) examined the efficacy of sales promotions within the banking
industry.

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According to their research, there is a direct link between short-term consumer acquisition
and specific promotional tactics like discounts and special offers. On the other hand, if
promotions did not correspond with the bank's basic principles, it issued a warning about the
possible dilution of brand image.

In order to better understand the complex interaction between sales promotions and brand
image in the highly competitive banking business, Smith et al. (2019) conducted a thorough
examination. The objective of the study was to examine the subtle effects of different
marketing tactics used by different banks and how their clientele perceived their brands as a
result of these endeavors.

Smith et al. used a carefully planned mixed-methods strategy that combined qualitative and
quantitative tools to uncover these processes. The research comprised a comprehensive
survey aimed at consumers from various banks, exploring their opinions about sales
incentives and how they relate to the reputation of the business.

The study's conclusions provided complex insights that clarified important facets of banking
promotion tactics. The differing effects of short-term promotions on brand image were one
noteworthy finding. The study emphasized the many long-term consequences on customers'
impression of the company, even though such campaigns might have an immediate favorable
impact on client acquisition. Promotions that were directly in line with the bank's
fundamental principles and brand identity were found to generate more positive perceptions,
which over time improved the brand image of the bank.

The need of communicating consistency was shown to be crucial to these findings. The study
emphasized how crucial it is to keep promotional efforts consistent with the intended brand
image. Banks that meticulously ensured consistency between their promotional endeavors
and the established brand identity witnessed stronger customer perceptions and higher levels
of brand loyalty.

The study emphasized the value of openness and conformity to consumer expectations in
comprehending customer viewpoints. Consumers appreciated marketing that were open,
truthful, and consistent with how they saw the caliber and dependability of the bank's
services. One of the most important factors in creating a positive perception of a brand is to
match promotional efforts with these customer-centric ideals.

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CHAPTER THREE: RESEARCH METHODOLOGIES

3.1. Research Design

In order to fully understand the dynamics of sales promotion methods and their effect on the
brand image of Awash International Bank (AIB), this study used a descriptive research
design. In this situation, descriptive research is used to collect data that clearly illustrates the
events surrounding sales promotion methods, allowing for the examination of certain
organizational practices. This technique employs data collecting, organization, tabulation,
and visualization to reveal the obstacles faced by AIB throughout the implementation of sales
promotions. It also intends to shed light on the effectiveness of these initiatives and their
impact on the bank's brand image within the Ethiopian banking environment.

3.2. Research Approach

With the use of a mixed-methods approach, this study combines quantitative and qualitative
techniques to provide a comprehensive understanding of the dynamics of sales promotion and
how they affect AIB's brand image. Before anything else, a thorough literature analysis will
examine what is already known about the banking sector, with a particular emphasis on how
well sales promotions influence consumer behavior and brand perceptions.

Key stakeholders at AIB, such as staff members and management staff, will be interviewed in
semi-structured, qualitative manner. These interviews are meant to explore the subtle
difficulties the bank has in carrying out its sales promotion plans and how those difficulties
affect the bank's reputation.

AIB staff members and a representative subset of its clientele will be subjected to a
quantitative, well-designed survey. The purpose of the survey is to gather quantitative data on
current sales promotion strategies, obstacles faced, underlying causes, and the effects these
strategies have on consumer attitudes and behaviour.

3.3 Source of Data

This study will examine the effects of sales promotions on AIB's brand image in detail using
primary and secondary data sources. Primary Data: Surveys and semi-structured interviews
will be used to collect primary data. Employees of AIB who are directly involved in sales
promotion techniques will be interviewed in order to get insight and expertise on how these
methods are implemented.

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In addition, questionnaires will be distributed to customers and marketing and sales staff
members to get their opinions and experiences about AIB's sales promotion campaigns and
how they affect customer engagement and brand image.

Secondary Data: A thorough literature review covering studies, papers, and articles relevant
to sales promotions in the banking sector will be conducted in order to gather secondary data.
The review will focus on the impact of these promotions on brand image.

3.4. Sampling Design

3.4.1. Target Population

The study's target group consists of key management individuals and workers of Awash
International Bank (AIB) who are positioned strategically in different departments that are
closely related to sales promotion methods. This comprises those working in customer care,
marketing, sales, and senior management who are in charge of managing promotions at the
bank.

3.4.2. Methods of Sampling

It might not be possible to implement an inclusive strategy akin to a census given the
dynamic nature and size of AIB. To assure representative insights, a stratified sample
technique will be employed instead. Using this method, samples are chosen from each
stratum after the workforce is divided into departments or hierarchical levels that are
involved in sales promotions.

3.4.3. Sample Size

Given the scale of AIB's personnel, it might not be practical to use a census technique. In
order to pick a subset of staff members and managers from each department or level of the
hierarchy involved in sales promotion techniques, a proportionate representation will be used.
In order to ensure thorough coverage and preserve representativeness across various
segments engaging in promotional activities, the sample size will be calculated appropriately.

This stratified sampling technique will allow for a nuanced understanding of sales promotion
dynamics within AIB by capturing diverse perspectives from various departments and
hierarchical levels. It aims to strike a balance between inclusivity and practicality, ensuring
the representation of key stakeholders without overwhelming the research process.

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3.5. Data Collection and Analysis Methodology

3.5.1 Data Collection

This study will use semi-structured interviews to gather data from Awash International Bank
(AIB) staff members who are directly involved in sales promotion activities as well as from
senior management personnel who have experience with marketing and brand management.

The interview will follow an open-ended approach with the main goal of clarifying the
particular difficulties faced when executing sales promotions, their root causes, and the
consequent effects on the bank's reputation.

Additionally, a targeted sample of AIB personnel involved in marketing and sales promotion
activities will get closed-ended surveys. These surveys focus on causes, effects, and the
perceived influence on the bank's brand image in an effort to quantitatively capture the
difficulties encountered when implementing sales promotion methods.

3.5.2. Data Analysis

The collected data, sourced from both literature reviews and primary research methods, will
undergo comprehensive analysis employing a mixed-methods approach. Qualitative data
from interviews will be thematically analyzed to extract underlying patterns and key themes.
Quantitative data from surveys will be subjected to statistical analysis, utilizing tools like
SPSS, to identify trends, correlations, and statistical significance in responses.

3.6. Ethical Consideration

This study guarantees the voluntary participation of all respondents who are involved in the
research procedure, in accordance with ethical principles. The contributions made by
participants will be voluntary and free from unethical or coercive tactics. Strict adherence to
ethical rules by the researcher guarantees aggregate data analysis without tampering with
individual responses. Furthermore, appropriate reference and recognition will be given to
earlier research and publications that served as the foundation for this investigation.

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