The impact of Advertising on the Sales target of a Business firm.
ABSTRACT
The major aim of this thesis was to demonstrate the impact of advertising
on the sales and profit of a business organization taking Starcomms Plc as
a case. Longe (2001) defined advertising as any personal paid form of non personal communication which is directed to the consumers or target audiences through various media in order to present and promote a product, services and idea.
Good advertising requires competent personnel including a number of specialists to enable it thrive in the ever dynamic and competitive business environment.
It is therefore imperative that key personnel in departments that are directly involved to be carefully selected and positioned to ensure continuous success.
In recognizing the role advertising can play a growing number of companies and establishments have to embark on a nationwide advertising campaign. Advertising campaigns obviously informed by depressed consumer demand, thrive by persuading the consumer on the need for consumptions. At the completion of this thesis, the impact of advertising at Starcomms was clearly defined and it should have become a continuous practice for Starcomms.
CONTENTS
1 INTRODUCTION…………………………………………………………………………………………. 1
1.1 Background Information …………………………………………………………………………. 1
1.2 Objectives of study…………………………………………………………………………………. 1
1.3 Research hypotheses and limitations of the study……………………………………….. 3
1.4 Starcomms Nigeria Plc……………………………………………………………………………. 3
1.5 Definition of key terms …………………………………………………………………………… 5
2 ADVERTISING IN NIGERIA………………………………………………………………………… 7
2.1 Historical background of the study …………………………………………………………… 7
2.2 Theoretical framework ……………………………………………………………………………. 7
2.3 Importance of advertising………………………………………………………………………. 10
2.4 Purpose of advertising…………………………………………………………………………… 12
2.5 General impact of advertising on products and services of Starcomms plc…… 13
2.6 Advertising media used by Starcomms plc ………………………………………………. 15
3 RESEARCH METHOD ……………………………………………………………………………….. 18
3.1 Restatement of hypothesis……………………………………………………………………… 18
3.2 Determination of respondents and sample size…………………………………………. 18
3.3 Methods of data collection …………………………………………………………………….. 18
3.4 Limitations of the research method…………………………………………………………. 18
4 DATA PRESENTATION AND ANALYSIS………………………………………………….. 19
4.1 Table Analysis……………………………………………………………………………………… 19
4.1.1 Section 1 …………………………………………………………………………………… 19
4.1.2 Degree of response tables……………………………………………………………. 20
4.2 Testing for hypothesis…………………………………………………………………………… 24
5 SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION…….. 28
5.1 Summary of findings…………………………………………………………………………….. 28
5.2 Conclusion…………………………………………………………………………………………… 28
5.3 Recommendation………………………………………………………………………………….. 29
6 REFERENCES……………………………………………………………………………………………… 31
CHAPTER 1- INTRODUCTION
1.1 Background Information
Advertising is any paid form of non-personal communication about an
organization or its product to a target audience through a mass/broadcast
medium by an identified sponsor. It should be observed that for any promotional activity to be called advertisement it must be paid for. In the real sense, it is the method used by companies for creating awareness of their products, as well as making new products known to the new and potential consumers. This thesis however, centers on the impact of advertising on the sales volume of a product. 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 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 a access visual and/or video. (Busari 2002)
1.2 Objectives of study
In a growing economy such as Nigeria, it is often very difficult to have a
regular and consistent increase in the sales volume of a product because of
the political and socio-economic instability in the country which directly
affect the standard of living and the purchasing power of the consumers.
This thesis is based on the drive to know the effect of advertising on the
sales volume of a product in a company and how this sales volume can
keep the company going in business.In order not to deviate from the original intention and motive, the following will therefore outline the objectives which the thesis intends to achieve. They are as follows:
To access the extent to which an advertising programme reflects on the
sales volume of a product.
To identify the major merits and demerits of advertising.
To get to know the concepts of advertising and its various forms.
Marketing problems often have far reaching 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 1997)
In the light of the above statement, examining the impact of advertising on
the sales volume of a product, using Starcomms Plc as a case is therefore a
significant undertaking. The market is such that consumer tastes are
increasingly differentiated and maintenance of high service quality in the
face of rising cost of essential factors is needed.
The market is also characterized by a multiplicity of advertisements.
Advertising of various competing brands in the major telecommunication
segments is increasing very rapidly and consumers are now more
knowledgeable. Starcomms Plc is faced with both a competitive and dynamic market setting, though the company is doing many things to maintain its
leadership role in the industry. The company has also adopted intergrated
marketing concepts as the basis for its marketing operations. It has become
necessary for the company in order to continue informing and reminding
its customers on how its brand services are different from the others in the
market.
Every business organization that is determined to succeed has to adopt an
effective system for the promotion, distribution and sales of its services.
In order to fully understand the situation the problem has to be determined
if advertising has any impact on the volume of sales for the consumer
preference of a particular service. Advertising has already been defined as a paid form of non-personal communication which co-ordinates all seller initiated efforts to inform and persuade in order to facilitate the sales and acceptance of products and services or ideas. To this end this thesis would focuses on what kind of an
effect advertising activities of Starcomms Plc has on the sales volume of
the company’s products service. (Hawkins, 2001, 231-238)
Another issue is the management determines which advertising tool will
be the most effective. The advertising program of the company and a cost/
benefit analysis of the advertising tools employed by the company were
examined in the research.
1.3 Research question
Does advertising have an impact on the sales volume of a company’s
products and services?
1.4 Research hypotheses
For the purpose of this study, the hypotheses available are as follows;
That the advertising programmes of Starcomms Plc have no impact on the
sales volume of their products.
That there is no positive on significant relationship between advertising
and sales volume.
That there are no benefits in various advertising programmes employed by
the organization.
1.5 limitations of the study
This research study was constrained by inadequate data and information,
release of information, and the location of the company used as a case
study. These factors may have somehow limited the outcome of this
research work. This research work was designed to examine the impact of advertising on the sales volume of a company, but the data was restricted to information collected from the management and some consumers.
1.4 Starcomms Nigeria Plc.
Established in 1999, Starcomms is today the largest Fixed Wireless
Telecommunications provider in West Africa. With the company’s
deployment of the world class CDMA technology in 2002, the company
have exponentially broadened our subscriber base to over 3,200,000
customers all over Lagos, Ibadan, Portharcourt, Maiduguri, Kano, Aba,
Onitsha, Abuja, Asaba, Zaria, Benin, Kaduna, Abeokuta, Calabar, Warri,
Owerri, Uyo, Ilorin, Shagamu, Ijebu Ode, Calabar, Sapele, Umuahia,
Awka, Nnewi, Rano, Ogbomosho, Katsina, Jos, Bauchi, Enugu, Agbor,
Suleja, Jaji, Gwagwalada, Ikot ekpene, Oron and Eket – a subscriber base
that continues to grow in leaps.
(http://www.starcomms.com/about_us.aspx)
In 2006, Starcomms launched 3G EVDO mobile broadband Data service
that gives customers a smart, fast, convenient and mobile access to the
internet (a first in Nigeria, and in West Africa). This followed the launch
of the Value added services Fun Box; offering a variety of services that
enhance the lifestyle of our users. These services include: ‘Dash me credit’
(airtime transfer), ‘Talk Your Text’ (Voice SMS), Voice conferencing
Starcomms is the first operator to launch ‘Instant messenger’ on mobiles in
Nigeria, Location based service(star Track) to locate family and friends,
SMS2Email service for sending and receiving mail with the ease of SMS.
Still in 2006, Starcomms took yet another giant leap when the Nigerian
Communications Commission (NCC) granted it a Unified License. This
enabled Starcomms to operate as a mobile CDMA network nationwide.
Early in 2007, Starcomms redefined voice services, in 2 distinct
categories; Mobiles and Fixed. Our 07028 mobile number series,
introduced Freedom Roaming.
Tariffs for mobiles and the use of RUIM cards – offering subscribers full
mobility – subscribers can now roam from one Starcomms coverage city
to another on the same number and charging plan.
As the African leader in the commercialization of CDMA, Starcomms
continues to demonstrate its expertise in maximizing the performance of
new technologies across its infrastructure equipment and subscriber
products in order to meet customer expectations.
Today with our 0702-8, 0702-9, 08190, 08191 series, we remain the most
poised in providing our customer’s great experience of mobile and
fixed/wireless with a wide range of flexible and innovative services some;
the first of their kind in Nigeria.
Market Position: Starcomms is proud to be Nigeria’s largest CDMA 3G
Mobile Network A clear leader in the introduction of innovative products
and services to the Nigerian market, continuously enhancing and
simplifying the lifestyle of our customers.
(http://www.starcomms.com/about_us.aspx)
OUR VISION
To be among the 3 largest mobile operators and the premier provider of
world-class, fixed and wireless communications solutions.
OUR VALUES
PRIDE
PURSUIT OF PERFECTION
Attract and retain the best talent in the industry
Focus on growing profits and increasing returns
RESPECT
Our unity is in our diversity
Collaborate and integrate with customers, partners and ourselves
INNOVATION
Develop services and technical solutions driven by customer needs
Focus on providing complete solutions instead of selling hardware
DEDICATION
Demonstrate ownership and drive at every level
Focus and execution from inception to deployment
EXCELLENCE
Listen to our customers and partner with them
Continued refinement and re-engineering
Definition of key terms
Advertising: This is any paid form of non-personal presentation of idea,
goods or services by an identified sponsor.
Advertising Agencies: These are usually independent business
organizations comprised of creative and business personnel, who develop,
prepare and place adverts for organizations so as to attract and influence
consumers’ behaviour towards a product or service.
Consumer: This is the person(s) to which the advertisement and
products/services are directed. Here they are also known as buyers of a
company’s product.
Outdoor Media: These cover the use of billboards, sign posts, posters,
handbills, etc. in communicating the advertising message to the
consumers.
Electronic Media: These include radio, television, the internet, etc and can
be either local or international.
Market: This is usually the strategic location or place where the
company’s consumer/buyers are situated or where they go to buy the
products/services of their choice. The market place offers different
products/services to different consumers.
Producer: This is the organization or firm that provides a product or that
delivers services for consumer consumption.
Sales Volume: This is used to measure the amount, usually in
cartoons/crates, etc, of the product being sold at a given point in time. This
is commonly used as well with products but it could be as used within a
service company.
Transit Advertisement: A relatively minor volume of the advertisement
Product: This can represent anything a consumer acquires or might acquire
to meet a perceived need. The need not necessarily need to be satisfactory.
Some product might not satisfy their needs.
Sales: This is a process of selling something such as a product, ideas or
services. It also covers the number of goods or services sold at a given
point in time. (Arowomole, 2001, 17-25)
placed in or on public buses, taxis, cars and other commercial vehicles.
involving up to 30 users at a time.
The major aim of this thesis was to demonstrate the impact of advertising
on the sales and profit of a business organization taking Starcomms Plc as
a case. Longe (2001) defined advertising as any personal paid form of non personal communication which is directed to the consumers or target audiences through various media in order to present and promote a product, services and idea.
Good advertising requires competent personnel including a number of specialists to enable it thrive in the ever dynamic and competitive business environment.
It is therefore imperative that key personnel in departments that are directly involved to be carefully selected and positioned to ensure continuous success.
In recognizing the role advertising can play a growing number of companies and establishments have to embark on a nationwide advertising campaign. Advertising campaigns obviously informed by depressed consumer demand, thrive by persuading the consumer on the need for consumptions. At the completion of this thesis, the impact of advertising at Starcomms was clearly defined and it should have become a continuous practice for Starcomms.
CONTENTS
1 INTRODUCTION…………………………………………………………………………………………. 1
1.1 Background Information …………………………………………………………………………. 1
1.2 Objectives of study…………………………………………………………………………………. 1
1.3 Research hypotheses and limitations of the study……………………………………….. 3
1.4 Starcomms Nigeria Plc……………………………………………………………………………. 3
1.5 Definition of key terms …………………………………………………………………………… 5
2 ADVERTISING IN NIGERIA………………………………………………………………………… 7
2.1 Historical background of the study …………………………………………………………… 7
2.2 Theoretical framework ……………………………………………………………………………. 7
2.3 Importance of advertising………………………………………………………………………. 10
2.4 Purpose of advertising…………………………………………………………………………… 12
2.5 General impact of advertising on products and services of Starcomms plc…… 13
2.6 Advertising media used by Starcomms plc ………………………………………………. 15
3 RESEARCH METHOD ……………………………………………………………………………….. 18
3.1 Restatement of hypothesis……………………………………………………………………… 18
3.2 Determination of respondents and sample size…………………………………………. 18
3.3 Methods of data collection …………………………………………………………………….. 18
3.4 Limitations of the research method…………………………………………………………. 18
4 DATA PRESENTATION AND ANALYSIS………………………………………………….. 19
4.1 Table Analysis……………………………………………………………………………………… 19
4.1.1 Section 1 …………………………………………………………………………………… 19
4.1.2 Degree of response tables……………………………………………………………. 20
4.2 Testing for hypothesis…………………………………………………………………………… 24
5 SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION…….. 28
5.1 Summary of findings…………………………………………………………………………….. 28
5.2 Conclusion…………………………………………………………………………………………… 28
5.3 Recommendation………………………………………………………………………………….. 29
6 REFERENCES……………………………………………………………………………………………… 31
CHAPTER 1- INTRODUCTION
1.1 Background Information
Advertising is any paid form of non-personal communication about an
organization or its product to a target audience through a mass/broadcast
medium by an identified sponsor. It should be observed that for any promotional activity to be called advertisement it must be paid for. In the real sense, it is the method used by companies for creating awareness of their products, as well as making new products known to the new and potential consumers. This thesis however, centers on the impact of advertising on the sales volume of a product. 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 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 a access visual and/or video. (Busari 2002)
1.2 Objectives of study
In a growing economy such as Nigeria, it is often very difficult to have a
regular and consistent increase in the sales volume of a product because of
the political and socio-economic instability in the country which directly
affect the standard of living and the purchasing power of the consumers.
This thesis is based on the drive to know the effect of advertising on the
sales volume of a product in a company and how this sales volume can
keep the company going in business.In order not to deviate from the original intention and motive, the following will therefore outline the objectives which the thesis intends to achieve. They are as follows:
To access the extent to which an advertising programme reflects on the
sales volume of a product.
To identify the major merits and demerits of advertising.
To get to know the concepts of advertising and its various forms.
Marketing problems often have far reaching 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 1997)
In the light of the above statement, examining the impact of advertising on
the sales volume of a product, using Starcomms Plc as a case is therefore a
significant undertaking. The market is such that consumer tastes are
increasingly differentiated and maintenance of high service quality in the
face of rising cost of essential factors is needed.
The market is also characterized by a multiplicity of advertisements.
Advertising of various competing brands in the major telecommunication
segments is increasing very rapidly and consumers are now more
knowledgeable. Starcomms Plc is faced with both a competitive and dynamic market setting, though the company is doing many things to maintain its
leadership role in the industry. The company has also adopted intergrated
marketing concepts as the basis for its marketing operations. It has become
necessary for the company in order to continue informing and reminding
its customers on how its brand services are different from the others in the
market.
Every business organization that is determined to succeed has to adopt an
effective system for the promotion, distribution and sales of its services.
In order to fully understand the situation the problem has to be determined
if advertising has any impact on the volume of sales for the consumer
preference of a particular service. Advertising has already been defined as a paid form of non-personal communication which co-ordinates all seller initiated efforts to inform and persuade in order to facilitate the sales and acceptance of products and services or ideas. To this end this thesis would focuses on what kind of an
effect advertising activities of Starcomms Plc has on the sales volume of
the company’s products service. (Hawkins, 2001, 231-238)
Another issue is the management determines which advertising tool will
be the most effective. The advertising program of the company and a cost/
benefit analysis of the advertising tools employed by the company were
examined in the research.
1.3 Research question
Does advertising have an impact on the sales volume of a company’s
products and services?
1.4 Research hypotheses
For the purpose of this study, the hypotheses available are as follows;
That the advertising programmes of Starcomms Plc have no impact on the
sales volume of their products.
That there is no positive on significant relationship between advertising
and sales volume.
That there are no benefits in various advertising programmes employed by
the organization.
1.5 limitations of the study
This research study was constrained by inadequate data and information,
release of information, and the location of the company used as a case
study. These factors may have somehow limited the outcome of this
research work. This research work was designed to examine the impact of advertising on the sales volume of a company, but the data was restricted to information collected from the management and some consumers.
1.4 Starcomms Nigeria Plc.
Established in 1999, Starcomms is today the largest Fixed Wireless
Telecommunications provider in West Africa. With the company’s
deployment of the world class CDMA technology in 2002, the company
have exponentially broadened our subscriber base to over 3,200,000
customers all over Lagos, Ibadan, Portharcourt, Maiduguri, Kano, Aba,
Onitsha, Abuja, Asaba, Zaria, Benin, Kaduna, Abeokuta, Calabar, Warri,
Owerri, Uyo, Ilorin, Shagamu, Ijebu Ode, Calabar, Sapele, Umuahia,
Awka, Nnewi, Rano, Ogbomosho, Katsina, Jos, Bauchi, Enugu, Agbor,
Suleja, Jaji, Gwagwalada, Ikot ekpene, Oron and Eket – a subscriber base
that continues to grow in leaps.
(http://www.starcomms.com/about_us.aspx)
In 2006, Starcomms launched 3G EVDO mobile broadband Data service
that gives customers a smart, fast, convenient and mobile access to the
internet (a first in Nigeria, and in West Africa). This followed the launch
of the Value added services Fun Box; offering a variety of services that
enhance the lifestyle of our users. These services include: ‘Dash me credit’
(airtime transfer), ‘Talk Your Text’ (Voice SMS), Voice conferencing
Starcomms is the first operator to launch ‘Instant messenger’ on mobiles in
Nigeria, Location based service(star Track) to locate family and friends,
SMS2Email service for sending and receiving mail with the ease of SMS.
Still in 2006, Starcomms took yet another giant leap when the Nigerian
Communications Commission (NCC) granted it a Unified License. This
enabled Starcomms to operate as a mobile CDMA network nationwide.
Early in 2007, Starcomms redefined voice services, in 2 distinct
categories; Mobiles and Fixed. Our 07028 mobile number series,
introduced Freedom Roaming.
Tariffs for mobiles and the use of RUIM cards – offering subscribers full
mobility – subscribers can now roam from one Starcomms coverage city
to another on the same number and charging plan.
As the African leader in the commercialization of CDMA, Starcomms
continues to demonstrate its expertise in maximizing the performance of
new technologies across its infrastructure equipment and subscriber
products in order to meet customer expectations.
Today with our 0702-8, 0702-9, 08190, 08191 series, we remain the most
poised in providing our customer’s great experience of mobile and
fixed/wireless with a wide range of flexible and innovative services some;
the first of their kind in Nigeria.
Market Position: Starcomms is proud to be Nigeria’s largest CDMA 3G
Mobile Network A clear leader in the introduction of innovative products
and services to the Nigerian market, continuously enhancing and
simplifying the lifestyle of our customers.
(http://www.starcomms.com/about_us.aspx)
OUR VISION
To be among the 3 largest mobile operators and the premier provider of
world-class, fixed and wireless communications solutions.
OUR VALUES
PRIDE
PURSUIT OF PERFECTION
Attract and retain the best talent in the industry
Focus on growing profits and increasing returns
RESPECT
Our unity is in our diversity
Collaborate and integrate with customers, partners and ourselves
INNOVATION
Develop services and technical solutions driven by customer needs
Focus on providing complete solutions instead of selling hardware
DEDICATION
Demonstrate ownership and drive at every level
Focus and execution from inception to deployment
EXCELLENCE
Listen to our customers and partner with them
Continued refinement and re-engineering
Definition of key terms
Advertising: This is any paid form of non-personal presentation of idea,
goods or services by an identified sponsor.
Advertising Agencies: These are usually independent business
organizations comprised of creative and business personnel, who develop,
prepare and place adverts for organizations so as to attract and influence
consumers’ behaviour towards a product or service.
Consumer: This is the person(s) to which the advertisement and
products/services are directed. Here they are also known as buyers of a
company’s product.
Outdoor Media: These cover the use of billboards, sign posts, posters,
handbills, etc. in communicating the advertising message to the
consumers.
Electronic Media: These include radio, television, the internet, etc and can
be either local or international.
Market: This is usually the strategic location or place where the
company’s consumer/buyers are situated or where they go to buy the
products/services of their choice. The market place offers different
products/services to different consumers.
Producer: This is the organization or firm that provides a product or that
delivers services for consumer consumption.
Sales Volume: This is used to measure the amount, usually in
cartoons/crates, etc, of the product being sold at a given point in time. This
is commonly used as well with products but it could be as used within a
service company.
Transit Advertisement: A relatively minor volume of the advertisement
Product: This can represent anything a consumer acquires or might acquire
to meet a perceived need. The need not necessarily need to be satisfactory.
Some product might not satisfy their needs.
Sales: This is a process of selling something such as a product, ideas or
services. It also covers the number of goods or services sold at a given
point in time. (Arowomole, 2001, 17-25)
placed in or on public buses, taxis, cars and other commercial vehicles.
involving up to 30 users at a time.
