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THE IMPACT OF ADVERTISING ON SALES PERFORMANCE IN THE SOFT DRINK INDUSTRY (A CASE STUDY OF NIGERIA BOTTLING COMPANY PLC)

ABSTRACT

This project critically discusses and evaluates the impact of advertising on sales performance. It gives insight to what sales performance is and also shows the relationship between the two variables that is, advertising and sales performance. The project is exhaustive on what advertising, sales performance and target market entails. It also x-rays the market to enable the reader appreciate the concept of advertising on sales. The historical background of Nigerian Bottling Company is in chapter one and chapter two contains the literature review, which further gives insight to what advertising entails. Research study was carried out, the method used in collecting data/information were spelt out in chapter three. The result which is data analysis is found in chapter four. Lastly, five contain clearly the conclusions and recommendation and further studies suggestions.

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

The actual existence of a product does not translate to consumer satisfaction when there is lack of awareness. The awareness is filled by advertising. In marketing, the basic fact is that a product does not sell itself. A product that is designed to meet buyers’ needs cannot be successful even at an affordable price without adequate information which can only be provided by advertising.

The word “Advertising” can be defined as any paid form of non personal presentation of ideas, goods or services by an identified sponsor or sponsors (Philip Kotler, 2001). Advertising might have been used by different people in different thing. To a marketer, according to Telser L.G. (2003), it is used to sell products. The advertising technicians see it as aid to communication, this was why Ogivy (1963) referred to as father of advertising said “I do not regard advertising as an entertainment or any art form but a medium of information”.

General terms, advertising were used as a term to describe an important part of promotion mix. When the right product as the optimum price is available in all the right places through the most effective distribution channel, there tends to be a problem still.

The people who want to buy the product have to be informed about it prospective buyers must learn about the products distinctive want satisfying characters and availability. May authors have defined advertising in various forms, each presently his/her own understanding of the subject. However, all are saying same things in different ways. Advertising is very important in a soft drinks industry because the market is very large and highly competitive in nature.

An effective advertising creates awareness, generate favourable attitude and performance in the midst of consumers towards a product and the purchase an advert must be sent, received and interpreted before it can be acted upon by the target market. Critics are of the opinion that advertising deceive people especially with the use of adjectives such as better and best. Critics also argue that check dico for correctness are dishonest in that their advertisement carries are false claims. It becomes imperative to ask at this point what the impact of advertising is on an organization sales turnover.

Advertising has become a vital tool in creating brand equity, increasing the sales volume of an organization. It should be noted that authorities in the likes of Kotler J.P. (2006) and Cole A.A (1997) described and sees marketing as the identification of human needs and wants and subsequently how needs could be efficiently meets.

Dr. Doghuje (1988), formal managing director Linitas as (Nigerian’s pioneer Perspective) said “advertising is a marketing tool whose sales aim is to build preferences for advantage brands or services. Jefkins (1982) in his book defined advertising as “the means of marketing known in order to buy, sell goods or services”. It is important to stress one part of this definition i.e. “in order to sell”. Some people try to distinguish between informative and persuasive advertising but in fact, there are simply two facts of this advertising functions.

From the advertiser’s point of view, there is little to be gained by informing if he cannot persuade and try to persuade without informing, this is epitome of bad advertising. The Advertising Practioneers Council of Nigeria (APCON) established by decree 55 of 1995, which determines who the advertising practioners in Nigeria are and what standards of knowledge and skill are to be attained by person, seeking to become registered as members of the advertising profession in Nigeria among its numerous objectives defined advertising to be a form of communication through media about products, service or ideas paid for by an identified sponsor.

Welbacher says “It is consist of media messages paid for and signed by a firm or institution that wishes to increase the probability that those reached by these messages will behave, satisfied or provided”.

The marketing concept is a business philosophy which states that the customer, want satisfaction is the economic and social justification of the company’s existence.

The popular slogan that “if you do say you are here, nobody will know you are there” must be strictly in all form adhere to the soft drinks industries because today have choices and they are better informed and organized as to company taste, quality, quantity. Therefore, any soft drink industry that is business conscious must give advertising a serious attention as a way to increase the sales volume of the organization.

1.2   STATEMENT OF PROBLEMS

The study attempts to expose the following problems as stated in the term of questions:

(a)         Whether or not advertising plays an important role in achieving the sales turnover in quantity and money?

(b)        Do customers actually patronize the company base on their advertisement?

(c)         To what extent will be the turnovers vary with different levels of advertising her expenditure?

(d)        Whether or not the media used by the company in carrying out its advertising are ineffective?

(e)         How does advertisement influence the belief and attitude of the people?

1.3   THE PURPOSE OF STUDY

The purpose of this study therefore is to be specific and how it carries out its advertising activities. That is, evaluate the company in such a way as to:

(i)          To determine the advertising elements that are commonly used in soft drink industry.

(ii)        To highlight the correlation between the amounts expended on advertising activities and profits.

(iii)      To identify more effective advertising tools.

(iv)       To appraise the extent of the influence of advertising on the consumer’s buying behaviours.

(v)         To also know the impact of advertising on the company’s turnover at a specific point in time.

(vi)       To also help management to know the best form of advertising for the company’s product.

1.4   SIGNIFICANCE OF THE STUDY

The significance of the study is generally to identity the impact of advertising on organization turnover. The study will be of immense benefits to the management of the Nigeria Bottling Company and any individual or group of persons who might like to carry out research on the same topic or related topic in future. It will also help the consumer in marketing their purchase decision readers will be more enlightened on why consumers are loyal to their preference.

1.5   RESEARCH QUESTION

The question below where provided with answers by the researcher from the responses from the company (Nigeria Bottling Company Plc) and the customers:

(i)          What are the significance of advertising to turnover?

(ii)        What is the relationship between advertising and the company’s sales turnover?

(iii)      To what extent will advertising influence the company turnover?

(iv)       Has advertising achieved its goals on company’s turnover for the past five (5) years?

(v)         What are the constraints inhabiting the level of advertising expenditure in your firm?

(vi)       Does the company adopt the right media in carrying out its advertising campaign?

(vii)     Are the advertising strategies adopted by the company having a positive effect on the company’s turnover?

1.6   RESEARCH HYPOTHESIS

HYPOTHESIS I

HO:   Advertising does not have impact on company’s turnover.

H1:   Advertising has impact on company’s turnover.

HYPOTHESIS II

HO:   Turnover does not vary under different levels of advertising.

H1:   Turnover varies under different levels of advertising.

HYPOTHESIS III

HO:   The choice of the right the media does not determine the company’s turnover.

H1:   The choice of the right the media determines the company’s turnover.

HYPOTHESIS IV

HO:   The choice of advertising media does not name effect on the overall sucers.

HO:   The choice of advertising media name effect on the overall sucers.

1.7   SCOPE OF THE STUDY

This study covers:

(i)          The promotional activities of marketing department of Nigeria Bottling Company Plc.

(ii)        The advertising media used by the company.

(iii)      The impact of advertising of Nigeria Bottling Company and sales volume.

(iv)       The type of advertising method use by the company.

(v)         The targeted audience of the advertising made by the company.

1.8   LIMITATION OF THE STUDY

The research study is directed and narrowed to the impact of advertising on sales turnover in the soft drink industry and also advertising can be related to building of company’s image and the introduction of company’s product. However, the study will why cover Nigeria Bottling Company because of the following reasons:

(i)          The cost of conducting the research and the time constraints in contacting the respondents.

(ii)        Inaccessibility of some executive concern or where you find their inability to provide adequate answers.

(iii)      Uncooperative of one respondent by not filling the questionnaires as required.

1.9   DEFINITION OF TERMS

              (i)        TARGET MARKET: The target market refers to individuals or a particular segment of people, organizations who are in need of particular product.

            (ii)        SALES VOLUME: This refers to sales  realized by an individual or organization expressed quantitative physical or volume terms over a specified period of time, usually one fiscal year.

          (iii)        ADVERTISING MEDIA: This is the channel or medium through which information about a product is passes to the target market. E.g. includes television and radio (electronic media), newspapers, magazines and journals (print media).

           (iv)        ADVERTISERS: This refers to the identified sponsor i.e. individuals or organizations who effect the payment of advertising.

             (v)        ADVERTISING: It is define as any form of non personal presentation of goods, services or ideas by an identified sponsor.

           (vi)        ELECTRONIC MEDIA: Electronic media consists of both radio and television, they are basically electronized to pass out information i.e. advertisement.

         (vii)        PRINT MEDIA: The print media consists of newspapers, magazines and journals on printing of achievements in the dailies.

       (viii)        TURNOVER: Turnover also means sales revenue. The amount of money taken by a business in a particular period of time.

           (ix)        PRODUCT: Product can be defined as a good, idea, method, information, object or service that is the end result of a process and serves to be offered to the market place to satisfy wants.

             (x)        MARKETING: Marketing is defined as the management process which identifies, anticipates and supplies customer requirements efficiently and effectively.

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