CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Advertising is one of the four promotional tools companies use to direct persuasive communications to consumers or buyers and the general public. Advertising policy constitutes such an important strategy in the marketing programme of companies and its negligence could spell doom for companies. Generally speaking, companies exist to produce and market products. This objectives cannot be actualized if the manufactured products are not brought to the knowledge of the consuming public. If the consumers and the general public are not informed and educated on the needs and wants some products could satisfy, they will definitely stay clear of the products. Against this background, product advertising focuses on projecting the image and marketability of products in such manner that will make them acceptable to the consumers and buyers. Odunsi (1998: 19) noted the importance of product advertising when he stressed that the growth being recorded in the advertising field is connected with its potentiality to enhance the acceptability marketability of companies products. Product advertising has helped so many companies to revive and reposition some of their products which have almost reached the decline stage in their life cycle.
Furthermore, the continuous existing survival and growth of companies to some extent depend on the performance of their products and the level of their sales volume. The fact still remains that for a company to decline profit and possibly grow, its sales volume must be high. For its sales volume to be high, its products must be acceptable to the consumers, hence giving rise to their high demand. These can only be achieved when these products are made known to the buyers through advertising. Product advertising as stressed by Ebue (2000.75), is an effective promotional tool that will not only inform and educate buyers or consumers about a company’s products but highly significant in achieving the targeted sales volume of the company. For over fifty (50) years of existence, Nigerian breweries Plc is one of the leading breweries operating in Nigeria today. The company has a wide range of products that includes alcoholic, malt and soft drinks. The notable products in the company’s product mix includes; Golder, star, Amstel malt, maltina, Legend and schepps. The company has a large factory at Agbara, Lagos and a brewery plant at 9th Mile Corner, Ngwo, Enugu. the Company again commissioned its new Ultra – modern brewery in Ama Enugu State in October 27th 2003, by his excellence president OlusegunObasanjo.(formal President).
The Nigerian breweries Plc has depot in most state capitals of the federation to facilitate the distribution of its products. The products of the company are seen and known in every nook and cranny of the southern parts of this country as well as some Northern States.
According to the Saturday Champion paper May 1st (2004); Nigeria Brewery is totally committed to Nigeria course in areas of Entertainment through a vigorous music sponsorship programme which has brought International Stars like Naught by Nature, Usher, Shaggy and Awilo that have thrilled Nigerians live in recent times courtesy of Nigerian Breweries Star Mega Jam and Legend fun Rampnage. Nigeria Breweries is also involve in discovering and promoting local and budding artists through the star Quest and Star Trek (Star sponsored music programmes. Foreign Investment; Nigeria Breweries has through their performance attracted some foreign companies like Heineken which invested over 500 million Euros (70 million). The company have supported in Institution of higher learning. For example; Education tax funds in which IMT is one of the beneficiaries. Nigeria Breweries are the major facilitators in the building of a sickle cell foundation. Again they also support various health Institutions through the donations of blood Bank equipment, child incubators. They have also sponsored sports like football, chess, Golf, cycling, Athletics, table tennis, Lawn tennis. They are also committed in the areas of tax and social responsibility, environment, employment generation and so on. All these are done to promote their products and educate, inform the public about their products and finally to achieve the sales volume target.
1.2 Statement of the Problem.
The objective of every company is to achieve its sales volume target, because if achieved, other performance indicators like growth and increase in profitability index would be assured. This could be possible if the company’s products are acceptable to the target market. Product advertising therefore plays the invaluable role of informing and educating buyers or consumers about some products, what these products do and how they can satisfy their needs and wants.
In addition, product advertising enhances the response of potential buyers to an organization and its offering. This it does by providing information, channeling desires, and by supplying reasons for preferring the products being projected.
In spite of the invaluable role of product advertising in achieving the sales volume target of companies, it still have some problems that need to be addressed. It is said to observe that most companies operating in Nigeria are still inflexible and reluctant to be during or encourages in their advertising policy. They are so scared of contracting advertising agency to handle their adverts that at the end of the day they fail to achieve their sales volume target.
Besides, most companies are inconsistent with their advertising policy. They contract more than one advertising agency at any given point in time.
This makes difficult to spend some reasonable money on advertising. This is now becoming a common feature in the brewery Industry. For instance, one hardly hears of advert concerning old beautiful products like Maltex and Vita Malt. This should be affecting their sales volume target.
Finally, the product advertising policy of some companies are not so effective as to enable us have some impact on their sales volume. Some companies do choose some wrong and ineffective media to execute their advertising policy, hence achieving nothing at the end of the day.
All the above discussed problems deserve to be addressed through the provision of appropriate information, because it is only when effective information concerning a problem is provided will its solution be sought.
1.3 Objective of the Study.
The broad objective of this study is to examine the major effects and the role of product advertising on sales volume. Other operational objectives of the study includes the following;
i. To identify the common form of advertising being used in the brewery industry.
ii. To identify the common media of advertising being used in the brewery industry.
iii. To identify how committed breweries are towards advertising their products.
iv. To examine the impact of product advertising on the buying attitude of buyers.
1.4 Research Hypotheses.
The following hypotheses formulated by the research will be tested in this study.
Ho; Product advertising has no significant role to play in the sales volume determination.
Hi; Product advertising has a significant role to play in sales volume determination.
Ho; Effective product advertising cannot lead to significant increase in profitability level of a company.
Hi; Effective product advertising can lead to significant increase in profitability level of a company.
1.5 Significance of the Study.
As stated earlier in this study, product advertising is one of the vital tools used by companies to promote the sale of their products. Its importance in creating immediate impact on the attitude of the consumers, as well as in generating demand cannot be over emphasized.
THE EFFECT OF PRODUCT ADVERTISEMENT ON SALES VOLUME OF COMPANIES A CASE STUDY OF NIGERIAN BREWERIES PLC THE MILE CORNER,ENUGU
