IMPACT OF ADVERTISING ON SALES PERFORMANCE OF A BREWERY COMPANY

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

Advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor (Kotler and Armstrong, 2020). 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, 2020). 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 2020).

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, 2017)

Advertising is also any paid form of non-personal communication about an organisation, product, or ideas by an identified sponsor (George and Michael, 2017), 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, 2020).

Sales performance describes the trend of collections in terms of revenue when comparing different periods (MC Cathy, 2012). 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, 2020). 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.

This research work however, centers on the impact of advertising on the sales performance of a manufacturing company. This work will shed light on how advertising can really affect a consumer’s buying decisions in a growing economy like that of Nigeria and how successful advertising can keep businesses going even in the midst a tough competition.

More so, advertising as a promotional tool also tends to remind, reassure and influence the decisions of the consumers because an advertisement itself enlightens, educates, and persuades consumers on their acceptability of the product offering. 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 15 seconds spots to longer segments known as infomercials, which generally last 30 to 60 minutes. (Busari 2012).

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 2012)

Advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor (Kotler and Armstrong, 2020). 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, 2020). 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 2020).

1.2 Statement of the problem

Marketing problems often have far reached effects on any company and if neglected can cause a great threat to the continued existence of the company, especially in the area of advertising as an aspect of corporate communication (Giles 2015).

Nigeria breweries plc carries frequent advertising of its products with the objective of increasing its sales performance through taking part in the charitable funds in Nigeria and sponsoring sports. The company also advertises using, Radio, Television, and Newspapers. Despite its effort of advertising regularly, according to the preliminary interview with the marketing staff of Nigeria breweries plc had no formal assessment of the effect of advertising on sales performance. In addition sales of the company was not as targeted, there are some questions whether advertising affects sales performance. Furthermore, the marketing environment is becoming very competitive, many companies in the brewery industry also advertise to attract customers, today’s customers are more Knowledgeable, and this is more challenging for Nigeria breweries plc. This work deals with informative, persuasive and reminder as the knowledge gap on effective application of advertising to a products or services offered by the company. Withal, most of these researchers carried their works out outside Enugu State, thus there is location gap in relation with this work.

Another problem facing some firms is how to design an advert strategy that will yield increase in sales.

1.3 Objectives of the study

The main objective of this research is to assess the impact of advertising on sales performance of Nigeria Breweries plc, Enugu state.

Specifically, the study had the following objectives:

1. To find out the extent to which informative advertising affects sales.

2. To examine the relationship between reminder advertising and sales Performance.

3. To determine how persuasive advertising influences sales performance on Nigeria breweries plc.

1.4 Research Questions

The study was guided by the following questions:

1. To what extent does informative advertising affect sales?

2. What is the relationship between reminder advertising and sales Performance?

3. How does persuasive advertising influence sales Performance in Nigeria breweries plc, Enugu?

1.5 Significance of the Study

The study expects to yield a number of desirable benefits, the most essential of which is contribution to existing knowledge.

Significance to the Government

The outcome of the study might also be of benefit to government and its agencies in the process of making decisions. For instance, the findings of the study could guide the Advertising Council of Nigeria to understand the burden that advertising might constitute to the long-run growth and survival of firms in Nigeria, its benefit notwithstanding.

Additionally, policy makers like the government and other stakeholders around the world have been developing strategies to improve the performance and sustainability of small and medium enterprises. Therefore, this study will highlight the effect of advertising strategies on small and medium enterprises performance. The findings may be used to generate new policies and revision of the existing policies. Further, the study will provide additional knowledge and literature on advertising strategies and performance of small and medium enterprises.

Manufacturing companies

Specifically, the findings of the study would provide direction as to the effect of advertising costs or expenditures on the sales revenue and profit of manufacturing companies, especially those in the food and beverages sector. Thus, the study is expected to contribute to the not-so-well-developed body of knowledge regarding the association between advertising expenditures and the sales and profitability of manufacturing companies in Nigeria by empirically ascertaining the effect of such costs on the sales revenue and the net profit of selected food and beverages firms. Similarly, the study also hopes to expand the frontiers of knowledge in the area of conducting its analysis through the use of techniques that have been hitherto overlooked by previous researchers on the effect of advertising on the sales of companies in Nigeria.

Significance to Academicians and future researchers

To the academicians the study will contribute to the body of knowledge which will benefit scholars and researchers and simulate further research in this field of strategy implementation. Researchers could also be able to borrow from the findings of this study and may even further the study by varying the various variables used to get more precise results. This study will add to the existing body of knowledge on this very important topic of market strategies. To this extent it will be beneficial to future academic researchers who may wish to understand how different institutions carry out this process. Future researcher and scholars may use the research findings to carry out their own studies.

1.6 Scope of the study

This study aims to understand advertising objectives that determine the sales performance of the particular company Nigeria breweries plc. To achieve this, aim the scope of the study is to identify the different factors i.e., Informative, Persuasive, and Reminder advertising that affects the sales performance of Nigeria breweries plc in Enugu State. More specifically data were collected from the marketing and sales department staffs of Nigeria breweries plc and from the marketing managers of the five main distributors of the products of the company in Enugu State area.

1.7 Limitations of the study

One of the major limitations for this study is the transportation cost incurred by the researcher. The data for this study which were extracted from the annual reports and accounts of the companies under study were got at the Abuja and Kaduna stock Exchange libraries respectively. This entailed huge sum of money to execute and had delayed the completion of this research beyond the time frame set by the researcher.

Further, many number of firms under the food and beverages sector would have been studied, but unavailability of necessary data had been a source of stumbling block. The researcher had no any other available option to him than to restrict the scope of this study to the companies under study.

Finally, the findings from this study could not be generalized across other firms since the data collected for this study were limited to food and beverages firms in Nigeria.

1.8 Definition of Terms

Some of the terms used by the researcher in the case of this research work are defined as follows:

(1) ADVERTISING: Advertising is the no personal communication of information usually paid for and usually persuasive in nature about products, services or ideas by identified sponsors through the various media."(Bovee, 2012, p.7)

(2) ADVERTISMENT: any public notice, as a printed display in a newspaper, short film on television, announcement on radio, etc., designed to sell goods, publicize an event, etc (Collins English Dictionary(2012).

(3) MESSAGE: This is defined as the set of meaning being sent and/or received by the audience.

(4) PRODUCT: According to Philip Kotler, a product can be defined “as anything offered to a market for attention, acquisition or consumption”. It includes physical object, services, personalities, place, idea etc.

(5) ADVERTISING MEDIUM: This is defined as the channel through which the advertising messages are delivered to the target audience

(6) FLAT SODA=tastes awful, it is almost as bad as drinking a room temperature