Advertising As A ‘’Power Tool’’ For Business Growth (A Case Study Of Nigerian Bottling Company Plc)

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Advertising As A ‘’Power Tool’’ For Business Growth (A Case Study Of Nigerian Bottling Company Plc)


Abstract


The study was on Advertising as a Power Tool for Business Growth. Advertising refers to any form of non-personal presentation or promotion of ideas, goods and services by an identified sponsor. The raison d’ taire of advertising is to create awareness of a product and to further stimulate brand preference. Therefore, its role in the pursuant of a company’s profit making objective cannot be over emphasized. The study used the Nigerian Bottling Company (NBC) Plc, Benin City branch as its case study. One would be tempted to think that a company as renowned as NBC would be laid back in its advertising practices. But that is not the case. The Company is a fervent advertiser of its products through almost all the advertising media of television, radio, print, out-door (bill boards) to mention but a few. The objectives of the study therefore are to find out if indeed advertising builds primary demand, the extent to which it fosters consumer loyalty & its relationship with sales volume. Finally, the study concludes on the note that even “big” names have no choice, but to keep on advertising …. and advertising, for business sustenance and growth.


Chapter One


Introduction

1.1 Background of the Study

Almost all economic activities are geared towards ensuring that the right goods and services are produced and find their way to customer. This involves a process called marketing.

Marketing decisions focus on consumer needs, hence it seeks to guide or accomplish organisations objective of consumer satisfaction and company profitability.

In a bid to direct the flow of products and services to satisfy customer needs, and at a profit, the marketing mix is developed.

The marketing mix observes that the marketing manager has a limited number of ingredients (marketing elements) at his disposal, but like a master chef, he can combine these into an almost limitless number of recipes to achieve the organisation’s objective of maximizing profit and staying in business.

The four ‘P’s make up the marketing mix. These are:

  1. Product
  2. Price
  3. Place
  4. Promotion

Product means the need – satisfying offering of a firm, which could be a physical good, a service or a blend of both. For example, nails (physical good), advice from a lawyer (service), getting a birthday cake from Tantalizers by home delivery (a blend of both).

Price is what is charged for the product produced or the service rendered. Pricing decisions are especially important because they affect both the number of sales a firm makes and how much money it earns.

Place ensures that good and services are available in the right quantities and locations, and when customers want them. It would be of little use producing a product or service if it is not available to customers.

Promotion is communicating information between seller and potential buyer or others in the channel to influence attitudes and behaviour.

Now, promotional activities as one of the major communication strategy mix, are heard and seen around us virtually everyday. Organisations, especially the ones that are engaged in distribution and merchandising of consumer goods and other personal products whose purchase frequency is high, use different promotional tactics.

Promotional activities are primarily geared towards:

  1. Gaining competitive advantage and,
  2. Consequently, increasing sales volume and business growth.

It does this by informing target customers that the right product is available at the right place, and at the right price.

The five promotional methods are:

  1. Personal selling
  2. Sales promotion
  3. Publicity
  4. Public relation
  5. Advertising

Personal selling involves direct spoken communication (face-to-face) between sellers and potential customers. It provides immediate feedback, but can be very expensive.

Sales promotions are activities other than advertising, publicity and personal selling, that stimulates interest, trial or purchase by final consumers or others in the channel. Relative to other promotion methods, they can be implemented quickly and get results sooner.

Publicity is any unpaid form of non-personal presentation of ideas, goods or services. Publicity people are paid to attract attention to the firm and its offerings, without having to pay media costs. This is what distinguishes it from advertising.

Public relations efforts of the marketer aim at building and maintaining good relations with special publics such as customers, and the public at large.

Advertising is any paid form of non-personal presentation of ideas, goods or services by an identified sponsor.

The thrust of this research is on advertising – as a power tool for business growth.

There is power, so much power in information, and when this information is repeated, it leaves an impression. It is generally believed that individual consumers lack either the time, interest or capabilities to actively search for and evaluate relevant information for purchasing decisions. Advertising conveniently solves this problem because, it is the primary method of informing the public about the availability of a product.

Advertising is concerned with motivating people, thus it is able to tap into the human desire and resolve the issue of what to buy – and keep buying.


1.2 Statement of the Problems

The tremendous advertising creativity everywhere amazes and fascinates us. Blinking lights in different commercial centres at night, giant outdoor posters, television and radio commercials, magazines and newspapers full of colourful adverts, has made it plausible to concede that advertising has become a necessary part of the marketing economy.

For most big companies, advertising is a major part of their activities with surprisingly multi million budgets. As regards this study, the Nigerian Bottling Company PLC, a soft drink manufacturing and distributing organisation, employs a great deal of advertisements as a promotional tool, even when its brand is a household name. How come? It certainly is not because they have a lot of money to throw about.

So the questions this research raises are:

  1. Do adverts stimulate demand?
  2. Do adverts counter the moves of competitors?
  3. Do adverts affect sales volume?
  4. Can the expenditure on advertising be justifiably applied to achieve a more than usual contribution to business growth?

1.3 Purpose of the Study

The objective of this study is to give the rationale for advertising efforts, and in so doing, answer the questions posed by the research problem.

These are:

  1. To justify that adverts build primary demand
  2. To determine the extent to which advertisements build insistence or preference.
  3. To determine that advertising efforts have a positive relationship with sales volume.
  4. To establish the fact that even “big” names advertise in the face of competition to achieve short and long term goals of the organisation.

1.4 Significance of the Study

The significance of any study is measured by the contribution it makes to past, immediate and present efforts at offering solutions to a problem.

Businessmen and business scholars from developing countries are slowly recognizing that people must buy and consume constantly, increasing quantities of goods if the economy of these countries is to continue to grow.

However, in the push for greater sales, businessmen face increasing competition. Competition should not be tolerated, hence, a competitive market means a competitive advertisement campaign.

The significance of this study is to show how the expenditure on advertising can be justifiably applied to achieve a more than usual contribution to business growth of both new and well established organisation.


1.5 The Research Questions

  1. How do other factors apart from advertising influence consumer patronage of seven-up?
  2. How does advertisement determine consumer patronage of seven-up?
  3. Does brand switching actually results from advertisement?
  4. To what degree if any, does consumer believe in advertising claims in respect of seven-up?

1.6 Scope of the Study

This study is limited to the effectiveness of advertisement on the business growth of the Nigerian Bottling Company Plc, with special reference to the Benin Plant because of the constraints involved in gathering relevant information for the entire NBC group.


1.7 Research Methodology

The research methodology refers to the methods and procedures used to analyse the relevant data to achieve a stated result.

This research is designed to investigate the role of advertisement in the business growth of the Nigerian Bottling Company Plc – Benin Plant.

Primary data, which will be relevant to this study will be obtained through personal interviews and administration of questionnaires.

Secondary data will also be used and it would involve the use of library research, compiling relevant data from official documents and the internet as well.

In the sampling design, the target population will consist of consumers and distributors of Coca-cola in Benin City.


1.8 Definition of Terms

Advertising:

To make goods and services known to the public through the information media.

Demands:

The acquisition of goods and services by payment of money or its equivalent consumer goods

Patronage:

This is the habitual purchase by a consumer of a specific product brand.

Consumer:

Those who make use of goods and services

Brand-Name:

The name used to identify a specific product type e.g. Seven-up bottling company

Advertising Chains:

They are attributes or specific to their advertised product or what advertisement say consumer will benefit from the product


Chapter Five


Summary, Conclusions and Recommendations

5.1 Summary

This research work is on Advertising As a ‘’Power Tool’’ For Business Growth.

Chapter one introduces the background information about the research work and the statement of research problem gives the various problems that necessitated the research work. The objectives of the study were enumerated showing the objectives to be achieved at the end of the study. In the significance of the study, we would know how important the study will be to management of companies, government and students of higher learning or any interested persons or agencies. The horizon of the study was explained in the scope and limitations of the study. Finally, under chapter scheme, all the chapters were summarized in a nutshell for easy understanding.

Chapter two is on literature review and it deals with the existing literature on the effects of advertisement on consumerbuying behaviour. It includes the definition of advertisement where advertising is defined as any paid form of non-personal presentation and promotion of ideas, goods and services by an identified sponsor.
Nwokoye (2000) explained that advertising has become a major form of selling, if not only supports form of selling but also serve as the only selling tool used to inform target audience about producer product. He said in the ancient times, the most common form of advertisement was by the word of mouth, however commercial messages were found in the runs of Pompeli. In setting advertising objectives, it should be based on past decisions about the target market, positioning and marketing mix. The following are the classification of advertising objectives namely: informative, persuasive, reminder and reinforcement advertising. When setting advertising budget Nwokoye (2000) gave five (5) specific factors to be considered i.e. stage in the product life cycle, market share and consumer base, competition and clutter, advertising frequency and product substitutability.

Gary (1992) observed that when developing advertising strategies four (4) steps are followed to develop a creative strategy: message generation, message evaluation and selection, message execution and social responsibility review. According to Irwing (1997) the major steps in media selection are: decoding on reach, frequency and impact, choosing among major media types, selecting specific media vehicles and deerding on media timing.

Kotler (2004) said the advertising programme should evaluate both the communication effects and the sales effects of advertising regularly. The sales effect of advertising are often harder to measure than communication effects and sales are affected by many factors besides advertising such as products features, price and availability.

Kotler and Keller (2012) said one of the common views in understanding consumer behaviour is it has become a factor that has a direct impact on the overall performance of businesses. Thompson (1990) identified four (4) theories of consumer behaviour namely: rational actor’s theory, new institutional economics, process theory and the bullwhip effect.

Five stages model of consumer decision making has been studied by a number of other researchers, but Blackwell (2006) identified the five (5) stages of consumer decision making process as: problem/need recognition, information search, evaluation of alternatives, purchase decision made and post- purchase evaluation. Furthermore, a number of researchers have been carried out by scholars on the factors affecting the consumer buying behaviour. Wiedermann (2007) classified them into internal and external factor, while Wiver (2009) divided them into social, personal and psychological factors.

Chapter three which is on research methodology includes the introduction to the chapter. In the research design, we would know that it’s a survey research which purpose is to examine the effect of advertisement on consumer buying behaviour with a study of Honeywell Mill Nigeria Plc. Under sources of data collection, the researcher collected both primary and secondary data. For the population and sample, the population of the study covers all the workers of Nigerian Bottling Company Plc, where a selected sample of twenty (20) employees working in the marketing department were taken from the entire population. For the data collection methods, the researcher used both the questionnaire schedule and personal interview in collecting information from the respondents.

In the method of data analysis, the researcher presented data in tabular presentation based on percentages in analyzing responses. In testing of hypotheses, the statistical technique employed is the chi-square (X2) method, which is used to test the relationship between the variables concerned.

Chapter four involves data presentation and analysis, it is where data collected were tabulated using percentages to analyse each table. The research hypotheses raised in the opening chapter were tested and all two (2) hypothesis formulated were accepted as true.

Chapter five is on summary, findings and conclusions and recommendations of the whole research work. For the summary, all the chapters were summarized chapter by chapter, while the findings and conclusions consist of the findings observed by the researcher during the study. The recommendations were based on the findings observed before useful suggestions will be given as recommendations to management of blue chips companies, government and students of higher learning or any interested persons.


5.2 Conclusions

With respect to the analysis and the findings of this study, the following conclusions emerged;

Generally, businesses say that advertising provides a public service because it gives them information about their products and in its broadest sense; it is the vital conduct for information between producers and consumers. Of course, we all know that advertising does more than merely inform, its job is to sell. It is not objective or neutral and successful adverts skillfully engagethe mind of the consumer and motivate them to buy the product advertised.

Furthermore, communication does not only enhance mutual understanding and social integration of communities. It foster harmonious relationship that contributes immensely to the overall-social economic, political and well as the cultural development of the human society.

Finally, advertisement campaign worldwide influence the behaviours and attitude formation of consumers not only in Nigeria but also worldwide. The consumers of products have their motivational sources which are advertisement and it’s motivating them to materialize the purchase of durables. The consumers are induced significantly by advertisements when the target is on quality and price. Purchase attitude and behaviour is influenced by variety of advertisements which cover product evaluation and brand recognition.


5.3 Recommendations

Based on the findings and conclusion, the following recommendations are made:

  1. The management of the organisation should evolve a strategy that would fully embrace advertisement as a promotional mix in the marketing of their products.
  2. The efficiency in carryout advertisement in the company depends on the experience and mental alertness of the personnel involved in the advertising campaign for the organisation.
  3. The organisation should intensively monitored customers satisfaction through client complaints and suggestions, because their customers are very vital to the growth and survival of the company.
  4. The company should conduct quarterly marketing research, so as to gather information as regard the ways to meet projected sales and profit level set by them.
  5. There is need for a constant meeting between the management and its customers, so as to establish a good relationship in order to find answers to most of the customers complains.
  6. The management of the organisation should try its possible best to use the promotional mix i.e. advertising, sales promotion, personal selling to pursue its objectives in the target market.
  7. The staff employed in the sales and marketing department should be given adequate training on consumer behaviour, which will help to boost their effectiveness when dealing with customers.

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