The Role of Investment Customer Promotion in Increasing Sales of Nestle Products on CV. Sunjaya Mandiri

Figure Ilustration AI

FORMOSA NEWS -Riau - Strategic Promotional Investments Drive Sales Growth for FMCG Distributors, Research Shows. Optimizing customer-oriented trade promotions directly boosts revenue performance for Fast-Moving Consumer Goods (FMCG) distributors, according to a recent study published in July 2026 by business researchers Zulianto, Syafrinadina, and Yaswar Aprilian from Universitas Islam Indragiri. The study addresses a crucial operational challenge in the regional consumer goods sector: despite allocating significant budgets toward trade incentives, display allowances, and retailer loyalty programs, distribution companies often face sales stagnation. By identifying how targeted trade promotions influence purchasing behaviors, the findings offer a practical roadmap for regional distributors seeking to maximize their marketing returns and strengthen retail partnerships in competitive market environments.

Background and Context
The consumer goods industry in Indonesia operates in a rapidly evolving, high-stakes market where efficiency in distribution and product visibility determine long-term survival. Distributors serve as a pivotal bridge between multinational manufacturers such as Nestlé Indonesia and local retail networks. To encourage higher order volumes (sell-in) and improve shelf placement, companies regularly deploy Investment Customer Promotion strategies, which include trade discounts, store merchandising support, and outlet loyalty incentives. Despite year-over-year increases in promotional spending, many distribution firms struggle to convert these outlays into proportional sales growth. For instance, regional performance metrics often highlight a common discrepancy: while budget allocations for retail promotions steadily climb, actual revenue realization can remain capped below target thresholds. Understanding the precise statistical relationship between business-to-business promotional investments and real sales growth is essential for corporate financial planning and regional economic stability.

Methodology
The researchers conducted a quantitative empirical investigation centered on distribution networks in Indragiri Hulu Regency, Riau Province, Indonesia, tracking operational activities from November 2025 to March 2026. The research evaluated a target population across approximately 1,500 retail outlets. Using a purposive sampling method based on standard structural equation guidelines, data was gathered from 70 verified respondents, including retail outlet owners, sales professionals, and distribution logistics personnel. Data collection involved structured Likert-scale questionnaires alongside actual historical sales performance records and field observations. To analyze the direct impact of promotional variables on sales increases, the authors utilized Structural Equation Modeling–Partial Least Squares (SEM-PLS) version 3. This statistical approach allowed the research team to rigorously test convergent validity, internal consistency, and structural path coefficients between latent business constructs.

Key Findings
The empirical analysis confirmed that structured promotional investments in retail customers yield a direct, measurable increase in overall sales volume.

• Positive Structural Direct Impact: The path coefficient analysis revealed a direct positive value of 0.514 between Investment Customer Promotion and Sales Increase. This indicates that every unit increase in structured promotional efforts yields a proportional 0.514 unit increase in sales performance metrics.
  
• Statistical Significance: The structural relationship registered a T-statistic of 5.242 (well exceeding the standard 1.96 threshold) and a P-value of 0.000, establishing that the statistical effect is highly significant and not the result of chance.
  
• Robust Construct Indicators: Four specific promotional dimensions proved crucial for driving retail orders: trade allowances given (loading factor 0.814), display and merchandising compliance (0.783), increased sell-in volume per outlet (0.812), and the clarity of customer loyalty program benefits (0.837).
  
• Variance Explanation: The structural model accounted for key variances in sales gains, supported by strong construct reliability indicators, including a Composite Reliability of 0.828 for promotional investments and 0.807 for sales performance gains.
  

Implications and Real-World Impact
The study provides valuable insights for commercial decision-makers, supply chain managers, and regional policy advisors in the FMCG landscape. Rather than treating promotional budgets as generic operational expenses, FMCG distributors must structure trade incentives around tailored retail needs and consistent monitoring. For local businesses and retail outlets, transparent loyalty schemes and trade allowances directly enhance profit margins, encouraging retail partners to prioritize specific brands over competitors. For corporate strategists, the research proves that sales growth is optimized when trade discounts are directly tied to point-of-sale display compliance and seasonal stock absorption. Implementing systematic evaluations ensures that marketing expenditures create sustainable value, prevent budget waste, and reinforce long-term commercial relationships across regional distribution networks.

Author Profile
Zulianto, S.E., M.M. holds a Master's degree in Management and is a researcher affiliated with the Faculty of Economics and Business at Universitas Islam Indragiri, specializing in marketing management and consumer goods distribution strategies.
Syafrinadina, S.E., M.M. holds a Master's degree in Management and is a lecturer and researcher at the Faculty of Economics and Business, Universitas Islam Indragiri, focusing on strategic management and business economics.
Yaswar Aprilian, S.E., M.M. holds a Master's degree in Management and serves as an academic researcher at Universitas Islam Indragiri with expertise in sales management and structural equation modeling applications in commerce.

Source
Zulianto, Syafrinadina, Yaswar Aprilian. The Role of Investment Customer Promotion in Increasing Sales of Nestle Products on CV. Sunjaya Mandiri. Formosa Journal of Sustainable Research (FJSR), Vol. 5, No. 7, Tahun 2026, Halaman 509–552
DOI: https://doi.org/10.55927/fjsr.v5i7.53
URL: https://journalfjsr.my.id/index.php/fjsr