The study was conducted do determine the Effects of promotion strategies on performance of small and medium size enterprises It was conducted between September and November 2009 at Prime Chic Inn in Eldoret town. The objectives were; to identify promotion strategies being used in Prime Chic, to assess the impact of promotion strategies on sales volume at Prime Chic Inn, to find out how the promotional strategies enhance stability at prime chic and to identify challenges facing Prime Chic In using promotion strategy advertising. The study was done because in most cases small and medium enterprises uses some promotional strategies but the effects of these promotional strategies on sales performance has not been unveiled. The study adopted a case study as a research design. The researcher used questionnaires and interview schedule to collect data from 50 respondents, which were taken from a target population of 70 respondents. The researcher used census on the employees and used convenience sampling to sample the customers. Data was analyzed and presented using descriptive statistics including frequency tables, and percentages.
The findings indicated that the organization uses personal selling as a major promotional strategy. Others are sales promotion, publicity and advertisements. The study also revealed that increase in customer’s leading to high sales is a way that the promotional strategies can enhance organization’s stability. It was also realized that increase in sales is a major impact of promotional strategies in the organization; the other impacts realized are expansion of sales territory, increase in organizational profit is and improvement of the organizational image. The study also noted the following from the findings as the major challenges facing the organization in sales promotion, they are sometimes expensive, and government regulates promotions, misinterpretation of the promotion, organization structure and policy. The possible solution revealed by the study are, doing research before rolling out any promotional strategy, drawing a good budget , hiring as consultant to run the promotion on your behalf, following the government regulation on product promotion
The study recommended that sales promotion in the organization should be outsourced so as to curb the problem which comes out when the organization conducts. Finally the researcher suggested that further research be done on other variables that cause variation in sales level.