THE IMPACT OF ADVERTISING ON SALES PERFORMANCE (A CASE STUDY OF NIGERIA BREWERIES COMPANY PLC)

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Abstract

The main objective of this study was to examine the relationship between advertising and Sales performance of Nigeria breweries company Plc. The study was delimited to Port Harcourt, Rivers state with emphases on Nigeria breweries service centers in Port Harcourt. The population of this study constitutes all staff of Nigeria breweries service center which was unknown. The judgmental sampling technique which is a non-probability sampling technique was used for selecting the sample. The sample size of this study is judgmental sample of 70 respondents. The primary and secondary data were used. A self-designed questionnaire on advertising and Sales performance of products was used and administered for the collection of data. The data collected were processed electronically using Statistical Packages for Social Sciences (SPSS). The statistical test used in the analysis of the data collected was Pearson Product Moment Correlation Coefficient. This study found a significant relationship between institutional advertising, comparative advertising, product advertising, informative advertising and Sales performance. Based on the findings of the study, we recommended that management should invest in institutional advertising so as to compel, enhance customer patronage and Sales performance of products and comparative advertising should be done to help customers compare Product with competing product.

Table of Contents

Title Page    31

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Abstract      31

Table of Contents 31

CHAPTER ONE  1

INTRODUCTION         1

1.1 Background of the Study  1

1.3 Objectives of the Study     5

1.4 Research Questions 6

1.5 Research Hypotheses        6

1.6 Significance of the Study   6

1.7 Scope of the Study  7

1.8 Limitation of Study 7

1.9 Definition of Terms 8

CHAPTER TWO 10

REVIEW OF RELATED EMPIRICAL REVIEW         11

2.0 INTRODUCTION   11

2.1 CONCEPTUAL FRAMEWORK         12

2.1.1 CONCEPT OF ADVERTISING       12

2.1.2 Dimensions of Advertising      15

2.1.3 Institutional Advertising 16

2.1.4 Product Advertising       16

2.1.5 Comparative Advertising         16

2.1.6 Informative Advertising 17

2.1.7 Concept of Sales performance 17

2.1.8 Measures of Sales performance         18

2.1.5 Advertising and Sale Performance     21

2.2 Theoretical Framework     22

2.2.1 Cognitive dissonance theory    22

2.3 Review of Related Empirical Studies    22

2.4 SUMMARY OF LITERATURE REVIEW    24

CHAPTER 3        27

RESEARCH METHODOLOGY      27

3.1 Introduction   27

3.2 Research Design      27

3.3 Population of the Study    27

3.4 Sampling Techniques Used         27

3.5 Sample Size    28

3.6 Source of Data         28

3.6.1 Primary Source (s) of Data      28

3.6.2 Secondary Source of Data       29

3.7 Research Instrument for Data Collection       29

3.8 Validity and Reliability of Instrument  29

3.9 Techniques for Data Analysis     30

CHAPTER FOUR         31

DATA PRESENTATION AND ANALYSIS       31

4.1 DATA PRESENTATION AND ANALYSIS 31

4.2 DATA ANALYSIS  31

4.3 Hypotheses testing  31

4.4 Discussion of findings       31

CHAPTER FIVE 31

SUMMARY, CONCLUSION AND RECOMMENDATION  31

5.1 SUMMARY   31

5.2 Conclusion     31

5.3 Recommendation     31

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Appendix B         31

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Nowadays competition among firms has grown stiffer as every firm seeks to achieve their objectives, to enhance performance which can be translated through achieving greater sales and profit. As a result, majority of the companies in the current society are adopting advertising as an effort to boost their profits.

The basic goal of any organization is to increase its sales. Different method is used to achieve this purpose it may be direct or indirect. Advertising is one of them. Sales promotion is diverse collection of incentive tools, mostly, short term design to stimulate quicker and/or greater purchase of particular products or services by consumers (Kotler, 2002).

Sales performance describes the trend of collections in terms of revenue when comparing different periods. The sales may be in form of offering products or services to consumers. A service is any activity or benefit that one party can offer to another that is essentially intangible and does not .result in ownership of anything (Kotler and Armstrong, 2002).

Sales volume is the core interest of every organization and is based on sales and profit. When volume goes up profits rises and management in organizations is made easier

Advertising is a major component of integrated market communication and it considered to be the most visible and expensive marketing activity. It is also considered to be among great traditional promotional mix strategies which have been established by many companies nowadays.

Advertisement is simple and easy to adopt and apply in the market and enhance the volume of the sales (Hanssens, Parsons and Schultz, 2001). The budget portion of the organization relating to the marketing department increases constantly (Mollahoseyni, 2012)

 Advertisement has direct impact on the minds of the consumer to consume greater portion of the product and quick consumption. Advertisement also increases the profitability of the organization (Ailawadi and Neslin, 1998). Advertisement is beneficial in both short run and long run businesses although in long run it is most valuable, it increase the value of the product and organization (Pwaels, Silva-Risso & Hanssens, 2003).

Consumer promotion is a type of advertisement which consists of free samples, prizes for contest’s winners, different packages and price plans. Advertisement is used to enhance the consumption of the consumers (Kotler and Armstrong, 2002).

Advertisement consists of some kinds of advantages while some are communicative according to their nature. Brand loyalty is major requirement of the advertisement. With the advertisement we can easily enhance the loyalty of our customer.

In Latin, advertising means “to turn toward. The purpose of advertising may also be to reassure employees or shareholders that a company is viable or successful”. Advertising messages are usually paid for by sponsors and viewed via various traditional media; including mass media such as newspaper, magazines, television commercial, radio advertisement, outdoor advertising or direct mail; or new media such as blogs, websites or text messages. Modern advertising was created with the innovative techniques introduced with tobacco advertising in the year 1920, most significantly with the campaigns of Edward Bernays, which is often considered the founder of modern marketing (Kazmi, 2005).

Advertising is a tool of marketing for communicating ideas and information about goods and services to an identified group, which employs paid space or time in the media or uses another communication vehicle to carry its message. It openly identifies the advertiser and his relationship to the sales effort (Wanoff, 1997)

Advertising is also any paid form of non-personal communication about an organization product, or ideas by an identified sponsor (George and Michael2007), There are various forms of advertising like informative advertising, persuasive advertising, comparison advertising, and reminder advertising. Informative advertising is used to inform consumers about a new product, service or future or build primary demand. It describes available products and services, corrects false impressions and builds the image of the company, (Kotler, 2010).Advertising can be done through print media which includes newspapers ,magazines ,brochures ,Audio media for example Radio, and visual media which includes billboards, and television (Kotler and Armstrong 2010).

According to Clow and Blaack (2006), advertising represents an important mean by which organizations communicate with their customers, both current and potential. Thus, having clear objectives for advertising will aid operational decision making for advertising programs in effectively convey the intended message to the audience. The objectives of an advertising campaign may adopt many forms such as the following, increasing brand awareness of existing brand or create awareness of new brand, building brand image, increases customer traffic, increasing retailer or wholesaler orders, responding to inquiries from end users and channel members, providing quality information.

Advertising plays a significant role in developing an international presence for well-known brands around the world. If we were to make a list of some of the internationally well-known brands, household brands such as Sony, Marlboro, McDonalds, Nike, Disney, Kodak, and Coca-Cola are likely to come up (Hackley, 2005). These are the companies that, as matter of fact, have invested heavily and regularly in advertising to become the internationally renowned brand that they currently are. It is quite impossible to conceive these brands in the same way had they not relied on advertising mode of communication.

Advertisement in such a media as print (newspaper, magazines, billboards, flyers) or broadcast (radio, television) typically consist of pictures, headlines, information about the product and occasionally a response coupon. Broadcast advertisement on the other hand consists of an audio or video narrative that can range from 15seconds spots to longer segments known as infomercials, which generally last 30 to 60 minutes. (Busari, 2002).

Advertisements can also be seen on the seats of grocery carts, on the wall of airport walkways, on the sides of buses, airplane and train. Advertisements are usually placed anywhere an audience can easily and/or frequently an access visual and/or video. (Busari 2002).

The advertisements lacks the unique selling proposition in the statements used to differentiate their products from competitors, they are   done in the same way as the competitors making it hard to differentiate its ads from others.

1.2 Statement of Problem

The use of advertising is effective to boost firm’s performance. This is evidenced from the usage of advertising and the expenditure on advertising which has been increasing in the 21st century. In Nigeria, most companies are spending money in advertising their company products or services’ brands and expect that consumers or those who read the advertisement will react positively towards their products or service brand and hence increase their profitability , however there is no measurement or evaluation of the effectiveness of advertising, whether it is able to boost the sales of the products, or just simply to build brand awareness, to put it in simpler term, with the amount of resources poured in for advertising. Does it actually boost up a sales performance is questionable, the sales performance of The Nations News Paper, Port Harcourt has been going down despite the enormous advertising being done by the marketing department of the company. The management of the company should adopt extensive advertising of its products using various channels available to increase their sales volume, such channels include, through institutional advertising, informative advertising, comparative advertising, product advertising, sponsoring sports, advertising using radio, television and newspapers. Despite all efforts advanced by the Nation Newspaper through advertising regularly, the sales of the company have not improved to the desired targets. It is upon this that the researcher seeks to examine the relationship between advertisement and sales performance of the Nation Newspaper in Port Harcourt.

1.3 Objectives of the Study

The purpose of the study is to examine the relationship between advertising and sales performance of the Nation Newspaper in Port Harcourt. The specific objectives are as follows:

1.       To examine the extent to which institutional advertising associate with sales performance of the Nation Newspaper in Port Harcourt.

2.       To examine the extent to which product advertising associate with sales performance of the Nation Newspaper in Port Harcourt. 

3.       To examine the extent to which comparative advertising associate with sales performance of the Nation Newspaper in Port Harcourt. 

4.       To examine the extent to which informative advertising associate with sales performance of the Nation Newspaper in Port Harcourt. 

1.4 Research Questions

The following research questions were proposed to guide the study.

1.       To what extent does institutional advertising associate with sales performance of the Nation Newspaper in Port Harcourt?

2.       To what extent does product advertising associate with sales performance of the Nation Newspaper in Port Harcourt?

3.       To what extent does comparative advertising associate with sales performance of the Nation Newspaper in Port Harcourt?

4.       To what extent does informative advertising associate with sales performance of the Nation Newspaper in Port Harcourt?

1.5 Research Hypotheses

The following hypotheses were formulated to guide the study:

H01: There is no significant relationship between institutional advertising and sales performance of the Nation Newspaper in Port Harcourt. 

H02: There is no significant relationship between product advertising and sales performance of the Nation Newspaper in Port Harcourt. 

H03: There is no significant relationship between comparative advertising and sales performance of the Nation Newspaper in Port Harcourt. 

H04: There is no significant relationship between informative advertising and sales performance of the Nation Newspaper in Port Harcourt. 

1.6 Significance of the Study

This research is designed to be of great benefit to both business organizations, governments and the general consuming publics.

It will remind them that advertising helps to promote their product and services to win their sales performance and help gain competitive edge. It will equally be of use to organizations, as it will enable them to know where, when and how consumers appreciate the product and services. To the government, it will help them to understand the role of advertising medium which is very essential in consumer products.

Again, it will make them check advert that are not to the good of the society and inform the public on how dangerous a product can be to their health.

It will also help in regulating and checking business organization on when a low quality product is being produced and distributed into the market. To the general public, it will help them to know that they have the right to accept or reject an advertisement.

1.7 Scope of the Study

The study is delimited under the following heading: content scope, geographical scope and unit of analysis.

Content Scope: The content scope of this study involves an investigation to ascertain the relationship between advertisement and sales performance of the Nation Newspaper in Port Harcourt. The dependent variable is sales performance, measured by sales volume, market share, sales growth and sales turnover. While independent variable is Advertising measure by institutional advertising product advertising, comparative advertising, informative advertising.

Geographical Scope: This study is delimited in Port Harcourt, Rivers State with references to the Nation Newspaper mile 1 Port Harcourt.

Unit of Analysis: The unit of analysis in this research involves both senior and junior staffs of the Nation Newspaper in Port Harcourt at the time of carrying out the study.

1.8 Limitation of Study

The study was limited by the following:

The level of frankness in response to questions by the respondents is quite doubtful.

Finance: Accessing fund for the research work was difficult and this limited the quality of research activity.

Time: The time allocated to the research work was not sufficient to give room for further intensive work on the field of study.

Organization Policy: Policies of the organization limited the level of information received. The personnel of the firms were not willing to give information, stating that it was against the organization’s policy.

1.9 Definition of Terms

Definition of some of the key words in this work should be briefly discussed below to enable the research to fully digest the media message in the research.

Marketing: Is the activity, set of institutions and processes for creating, communicating, delivery and exchanging offerings that have value for customers, clients, partners and society at large.

Advertising: Is any paid form of non-personal communication which is directed to the consumers or target audiences through various media to prevent and promote product, services and idea.

Advert: Advert is an attempt to gain the public’s attention for a number of reasons whether it’s to sell a product or to address a particular issue.

Product: Is anything tangible or intangible, physical or spiritual that is presented to the market for attention, acquisition that is capable of satisfying human needs and wants.

Promotion: Activity that supports or provides active encouragement for the furtherance of a cause, venture, or aim.

Trust: It is a very little information about products attribute and the intent of the marketer to become a fair transaction that can give the positive impact about what customers need and they will absolutely trust the marketers.

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