The Impact Of Advertising On Sales Performance (A Case Study Of Gunnies Nigeria Plc)

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The Impact Of Advertising On Sales Performance (A Case Study Of Gunnies Nigeria Plc)


Abstract


The study aimed at assessing the effect of advertising on the performance of an organization, case study being Guinness Nigeria Plc. The study was mainly looking at advertising and performance of Guinness Nigeria Plc and if this was effective to the organization. The researcher used a cross sectional research design with both qualitative and quantitative methods with a population study of 150 people out of which a sample size of 40 employees was chosen .Stratified sampling design was used to divide the employees into strata which were departments under which the employees worked ,and they included marketing ,operational, production and supply departments .Using simple random sampling respondents were chosen from the different departments selected and questionnaires distributed to the selected respondents from the four departments in the industry. Both the primary and secondary data was used during collection of data. Data was collected by use of questioners and observation method s and analyzed in form of tables. Findings revealed that Guinness advertises most of its products and it uses different forms of advertising and media, but the level of Guinness’ sales was declining despite of their frequent advertisements. There was a strong relationship between advertising and sales performance. The organization should use most of the local languages commonly used in Nigeria to win customers from all tribes, use of marketing to be adopted by the industry to reach most of the people who can access the internet than listen to radios and televisions and also the use celebrities in advertising their products, and finally the researcher recommends the use of other forms of advertising for example sponsoring events and also the use of mobile phones to advertise.


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, 2010). 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 news papers ,magazines ,brochures ,Audio media for example Radio, and visual media which includes billboards, and television (Kotler and Armstrong 2010).

Sales performance describes the trend of collections in terms of revenue when comparing different periods (MC Cathy, 1994). 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, 2010).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.


1.2 Historical Profile of Guinness Nigeria Plc

The firm Guinness Nigeria Plc came into existence in year 1950 with the sole aim of importing and distributing Guinness stout from Dublin for eventual sales in Nigeria. Due to the success of the product in the country it gave rise to a decision to establish a small brewery in the year 1962. The foundation stone of Guinness was laid at Ikeja on the 31st January 1962, by Arthur Benjamin Francis Guinness now the Earl of Irish to which titles he succeeded on his grandfather’s death until 1967 in active services during the 2nd world war.

Guinness Nigeria is a subsidiary of the prestigious Diageo Plc of the United Kingdom. The brewery was the first outside of Ireland and Great Britain. Other breweries have been opened over time – Benin City brewery in 1974 and Ogba brewery in 1982.

Guinness Nigeria produces the following brands – Foreign Extra Stout (1962), Guinness Extra Smooth (2005) Malta Guinness (1990), Harp Lager Beer (1974), Gordon’s Spark (2001), Smirnoff Ice (2006), Satzenbrau (1995).

Guinness Nigeria Plc is a company that believes in enriching its communities. This it has achieved by embarking on laudable Corporate Social Responsibility projects in several communities in Nigeria. These projects are Water of Life initiative, which currently provides potable water to over 500,000 Nigerians spread across several rural communities, from Northern to Southern Nigeria; scholarship and Guinness Eye Hospitals in three cities in Nigeria.

Nigerian Guinness is said to be twice as strong as Irish Guinness. In the 1800s, the Irish brewed the Guinness twice as strong, due to a fear of evaporation on the long voyage to Nigeria. However, the alcohol did not evaporate, and to this day Nigerians brew their Guinness twice as strong.

Guinness Nigeria limited became a public company In 1965 and was one of the first companies to be quoted in Nigeria stock exchange with shares being offered to Nigerian shareholders, 1200 Nigerian held 20% of the equity.

In 1971, a decision was taken to build a new Brewery at Benin at a cost 12million to brewery larger beer, this was the biggest brewery ever built in Nigeria.

The company believes that investment in the training and development of its staff are wise investments. This has resulted in the establishment of training centers in Benin and Lagos (Ikeja).

Following the ban on importation of methods barely the company has conducted research into the use of maize and sorghum in place of malt in production of the different brands of beverages.

In the Nigerian market, Harp lager beer gained a remarkable success alongside Guinness stout, due to its good quality too hence received a wide patronage and now known as Guinness Nigeria PLC.

It was merely up to a decade of the brewery and marketing of harp that its brand loyalists started shifting their interest to the other hand. The complaint raised by Harp patronizes for gradually changing preference was as a result of the carelessness on the part of the brewers to eradicate particles discovered in the final product and these were major set-backs suffered by Guinness Harp.

In the year 1995 a new product line “satzenbrau” was in the market and it received attention in Lagos and west Ibadan to be precise for now.

In 1990 another product line “Malta Guinness”, was also in the market and it has received attention all over the country and outside the country.

It indeed received acceptance and as such requires effective management system, to guide against the future of all lines of product carried out by Guinness Nigeria Plc. (www.Guinnessnigeria.com).


1.3 Statement of the Problem

Guinness Nigeria Plc carries out frequent advertising of their products to increase their sales volume, through taking part in charitable funds in Nigeria and even sponsoring sports .It advertises using radio, television and newspapers.

Despite its efforts in advertising regularly the sales of Guinness Nigeria Plc have not improved to the desired targets. The sales in Guinness Nigeria Plc for the past four years have been declining.


1.4 Objectives of the Study

The purpose of the study was to establish the impacts of advertising on sales performance.

  1. To examine the forms of advertising in Guinness Nigeria Plc.
  2. To establish the level of sales performance in Guinness Nigeria Plc
  3. To establish the relationship between advertising and sales in Guinness Nigeria Plc

1.5 Research Questions

  1. What are the forms of advertising used by Guinness Nigeria Plc?
  2. What is the level of sales performance of Guinness Nigeria Plc?
  3. What is the relationship between advertising and sales performance in Guinness Nigeria Plc?

1.6 Scope of the Study

Content scope

The study covered advertising as the independent variable and sales performance as the dependant variable.

Geographical scope

The study was centered at the Guinness Nigeria Plc because it is the headquarter of the industry where marketing plan is carried out, and it has large sales volume.


1.7 Significance of the Study

The findings of the study were expected to benefit the following.

The findings of the study were used as references for future research work.

The results of the study are of surmountable information when drawing measures which would in turn lead to capture of substantial market share.

The study can be the source of reference on how to revive and adopt and also follow the adverts according to the dynamic markets.


Chapter Five


Summary of Findings Conclusion and Recommendations

This chapter summaries the field discoveries, draws completion and recommendations and ends with areas of further research. The objective of the research were examining the forms of advertising used by Guinness Nigeria Plc , establishing the level of sales of Guinness Nigeria Plc and finding the relationship between advertising and sales performance.


5.1 Summary of Findings

5.1.1 Findings on the Forms of Advertising

The forms of advertising used by the industry are television, radios, magazines, brochures, newspapers, stickers and posters. Most of these forms are interrelated although some like radios and televisions are more used than the others. The findings revealed that the industry uses television in advertising than other forms. It was also found out that Guinness Nigeria Plc advertises through all media types which included visual, audio and print media .

5.1.2 Findings on the Level of Sales of Guinness Nigeria Plc

From the findings it was established that the level of sales is declining by the decline sales revenue. This was due to failure to involve the public and use of advertising media that is not accessible by most Ugandans. Failure of the industry’s adverts reaching the intended audience was also seen to be major cause of decline in the sales volume.

5.1.3 Findings on the Relationship Between Advertising and Sales

From chapter four, it was established that there is a strong relationship between advertising and sales. This is supported by a positive relationship established by Pearson correlation (0.9) together with the positive responses from the questionnaires.


5.2 Conclusions

5.2.1 Forms of Advertising

From the finding of the study, it is evident that there are various forms of advertisements used by the organization. But according to the responses there are some forms which are mostly used than others, this includes radios and televisions. These have helped the organization to raise awareness about the existence of various types of products produced by the company.

5.2.2 Establishing the Level of Sales From Guinness Nigeria Plc

The level of sales in Guinness Nigeria Plc is declining as indicated in table number 23 where by 37.7% of the respondents agreed that the sales level in Guinness Nigeria Plc is declining. In the year 2007 the industry recorded one of the highest sales volume but as the years went on the sales started declining.

5.2.3 Relationship Between Advertising and Sales

The relationship between advertising and sales is very strong. This is shown by person correlation analysis(r=0.9) supported by the responses from the questionnaires.

Where most of the respondents agreed that the media used reach the intended audience.


5.3 Recommendations

Guinness Nigeria Plc should use other forms of adverting like sponsoring events and use of mobile phone advertising. This will increase awareness about the various products produced by the industry.

The industry should choose the most effective media for advertising. A media that is affordable by many people for example radios.

The industry should use different common local languages used in the country so that every individual can get the messages from the adverts.

E-marketing should also be used to reach most the people who spend time on the internet and have no timer to listen to radios or watch televisions.

The industry should also use celebrities in the country to help them advertise their products for this can attract big crowds from which potential customers can be found.

5.3.2 Suggested Areas for Further Research.

Due to limited time, this research is not conclusive as such. It is therefore important that further research be carried out on he following.

  1. Employees motivation and sales performance
  2. Effects of e-marketing on sales volume
  3. Impacts of employees training on sales

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