ABSTRACT
This study evaluates the effectiveness of advertising expenses on the sales revenue and profitability of Unilever Nigeria Plc. This study is based on secondary data collected for advertising expenditure, sales revenue and profitability of Unilever Nigeria Plc over the period of 1996 to 2009 from the annual report and accounts of the company under study. Among the objectives of the study is to evaluate the extent of the effect of advertising on the sales revenue of the company. Correlational and regression analysis study designs were adopted for the study. The contribution of the first hypothesis has found that advertising expenses has depicted significant relationship between advertising and the sales revenue of the company. Furthermore, the second hypothesis result has shown that advertising has no significant effect on the profitability of the company. This study concluded that advertising is considered as one of the most important medium of communication influencing the company’s performance in more than one ways. But its influential strategic important could be suppressed by other factors which also try to receive equal attention at time of deciding any sales and profitability strategy. It is therefore recommended that not only advertising should be given adequate attention while formulating strategies relating to sales revenue and profitability promotion policy. Other factors which are crucial to increase sales revenue and profitability such as; sales promotion, personal selling, publicity etc which are crucial should be considered.
CHAPTER ONE
INTRODUCTION
1.1 Introduction
Modern marketing calls for more than developing a good product, pricing it attractively and making it accessible. Companies and individuals must also communicate with present and potential stakeholders, and the general public. For most companies and individuals, the question is not whether to communicate but rather what to say, how to say it, to whom and how often. But communication gets harder and harder as more and more companies clamour to grab the consumer’s increasingly divided attention. To reach target markets and build brand equity, holistic marketers are creatively employing multiple form of advertising.
In Nigeria over the years, companies and individual service providers have been trying to improve on the creativity in their adverts so as to meet world standard and again create the necessary awareness that a product needs.
1.2 Background of the Study
Advertising is a form of communication intended to persuade its viewers, readers or listeners to take some actions. It usually includes the name of a product or service and how that product or service could benefit the consumer, by persuading potential consumers and customers to purchase or to consume that particular brand. Modern advertising developed with the rise of mass production in the late 19th and early 20th centuries.
Advertising could also be seen as an element of a marketing communications program. It is usually not the only one-or even the most important one in terms of building brand equity. The marketing communication mix consists of six major modes of communication.
1. Advertising: Any paid form of non personal presentation and promotion of idea, goods or services by an identified sponsor.
2. Sales promotion: A variety of short term incentives to encourage trial or purchase of a product or service.
3. Events and Experiences: Company sponsored activities and programs designed to create daily or special brand-related interactions.
4. Public Relation and Publicity: A variety of programs designed to promote or protect a company’s image or its individual products.
5. Direct Marketing: Use of mail, telephone, fax, e-mail or internet to communicate directly with or solicit response or dialogue from specific customers and prospects.
6. Personal Selling: Face-to-face interaction with one or more prospective purchasers for the purpose of making presentations, answering questions and procuring orders.
The above listed are the elements of a marketing communication mix of which advertising is one. Therefore, the researcher wants to really find out the role that advertising plays in the mix hence, the topic “The Impact of Advertising on the Sales Performance of Consumer Goods”. A case study of Unilever Nigeria plc and proffer a solution applicable in this present time to ensure that advertising impacts positively on sales.
1.3 Statement of the Problem
The purpose of this research work is to thoroughly evaluate the impact of advertising in relation to performance in sales and create strategies that will commensurate with increased sales due to the use of advertising of products and services of consumers goods.
1.4 Objectives of the Study
The objectives of this research work are to:
1.5 Research Questions
The following research questions have been developed:
1.6 Statement of Hypothesis
Kerlinger F. (1976) defines hypothesis as a conjectural statement of a relationship between two or more variables. Hypotheses are usually gotten from research questions/problems and can be regarded as tentative solutions to research questions. Therefore, the researcher will test the following hypotheses
Hypothesis I
Null hypothesis (H0): Advert cost will not have a positive impact against sales revenue
Alternative Hypothesis (H1): Advert cost will have a positive impact against sales revenue
Hypothesis I1
Null hypothesis (H0): Effective advertisement will not have a positive impact on profit
Alternative Hypothesis (H1): Effective advertisement will have a positive impact on profit
1.7 Significance of the Research Study
This research work has much significance but some of them are:
1.8 Justification of the Study
The research work is rightly carried out because of the following reasons:
1.9 Scope of the Study
It is generally known that advertising covers a wide range area, but for the purpose of this research work, it will be limited to studying the impact of advertising on the sales performance of consumer goods in Unilever Nigeria plc.
Thus, effort will be made towards finding out if the advertising cost of Unilever Nigeria Plc is either positive or negative on revenues and profit of the organization. The researcher intends to find out by looking into a ten year period of performance by the organization.
1.10 Definition of Terms