Business Admin. and Management | THE IMPACT OF ADVERTISING IN THE SALE OF A NEW PRODUCT

THE IMPACT OF ADVERTISING IN THE SALE OF A NEW PRODUCT

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CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

        Advertising has not only become an integral part of our society and economic system, but has also grown over the years to assume tremendous proportions both as a business activity and as a social phenomenon.

        It has affected not only the business sector, but also the whole society. Advertising is a powerful marketing communication tool used by companies to fulfill the promotional task. It is an impersonal form of communication or presentation of goods, ideas, or services conducted through paid media under open of identified sponsorship. All about advertising is a sponsor sending a message called advertisement through one or more mass media (radio, television, newspaper, and magazines) to reach large member of potential users or buyers of a product. by it  self, advertizing is  a vital  marketing  tool  that  helps to  sell goods,  services,  images  and  ideas  through     information  and  persuasion,  many   consider  advertising  a superior promotion tool to personal selling, sales promotion or publicity.

        Advertising as a tool of marketing was defined by the American marketing association as any paid form of non-personal presentation and promotion of ideas, goods and services by an identified sponsor”.

        According to Offiongodon A.M (1991). Said advertising is a way of projecting values, ideas, expectation and so on to consumers. It is most effective as a reinforce of favourable attitudes, values and disposition already held by consumers. Advertising has a high pubic mode of communication; its public nature confers a kind of legitimacy to the product and also suggests a standardized offering.

        Besides, it is a persuasive medium that permits seller to repeat a message of various competitors. It provides opportunities for dramatizing the company and its products.

        Advertising in small organization is handled by a specialist in the sales department who from time to time consult the advertising agencies. Over past 15 years in the Nigerian market, Dufil Group has had a remarkable impact on the Nigerian culinary landscape. The company’s product, Indomie Instant Noddles which appeals to several demographic group has grown to become a household name across the country.

        The group, which is joint venture between Tolaram Group of Singapore and Salim Group of Indonesia, currently has 2 factories. The first; De United foods industries limited which was commissioned in 1995 in Ota Ogun state, is the first Instant Noddles Manufacturing plant in Nigeria and the largest in Africa. The second factory followed the incorporation of Dufil Prima in December 2001 as a private limited liability company. The company commenced operation in January 2004, manufacturing Instant Noodles under the Indomie brand name at its factory located in choba, Port-Harcourt, River state.

        Upon completion of a restructuring exercise approved by its shareholders, Dufil Prima became the holding company of the Dufil Group, which comprises two wholly owned subsidiaries-De United Foods Industries limited (De-United) and insignia print technology LFTZ Enterprise (Insignia). The Dufil family is guided by a clear and simple vision statement. The company believes in making the wellbeing and satisfaction of their decision. The quality of their products and the loyalty of their customer are a testimony to the above statement. The head office is located at 44, Eric Moore Road, Surulere, Lagos, Nigeria. Advertising helps the Indomie Instant Noodles to make a large market share of their product and to be more effective than similar competitors product.

1.2 STATEMENT OF THE PROBLEM

        The problem to be solved by this research work is broken down into the following statement.

1.          Lack of awareness on the part of customer about the existence of the product.

2.          Low sales volumes on the company’s market share.

3.          Negative effect of the company towards the profit maximization.

4.          Inadequate or poor maintenance of company’s image.

5.          Inadequate dissemination of information to the prospective customer.

6.          Lack of regular purchase by the customers.

1.3 PURPOSE OF THE STUDY

1.          To determine the level of awareness of new product in the market as a result of the firms advertising of the new product.

2.          To ascertain the level of advertisement in increasing the sale’s volume of the company’s product.

3.          To show if advertising have a positive effect on the profit of indomie instant noodles.

4.          To determine if advertising help in establishing and maintaining the company’s image.

5.          To determine whether advertising is an efficient source of information to prospective consumer of indomie instant noodles in Enugu metropolis.

6.          To show how advertising encourage regular purchase of the indomie instant noodles.

1.4   SIFNIFICANCE OF THE STUDY

    The following are the significance of advertising on a new product;

1.  It will help the management of indomie instant noodles to discover failure in their advertising techniques and steps on how to make improvement on them.

2.  The study will help the management to know how best or the best way through which improvement in advertising could be achieved.

3.  The study will unveil the failure and problem that industries do encounter from its competitors.

4.  The study will reveal measures which the industry will embark on, so as to ascertain the competitors industry and also to know how it satisfies consumers.

5.  It will create awareness on the part of choice of the product in line with the consumers needs.

1.5 RESEARCH OF QUESTIONS

    i.        Does advertising have significance impact on customer awareness of new product?

  ii.        To what extent has advertising increase the sales volume of the company’s product?

iii.        Does advertising has a positive effect on the profit of indomie instant noodles?

 iv.        Does advertising help in establishing and maintaining company’s image?

   v.        Is advertising an efficient source of information to prospective consumer of indomie instant noodles in Enugu metropolis?

vi.                Does advertising encourage regular purchase on the indomie instant noodles?

1.6 FORMULATION OF HYPOTHESIS

        The basis of hypothesis is as follows:

1. Ho: The level of awareness of new product is not as a result of advertising.

     Hi: The level of awareness of new product is as a result of advertising.

2.   Ho: Advertising does not have impact on the marketing of goods and services in indomie instant noodles.

      Hi: Advertising have impact on the marketing of goods and services in indomie instant noodles.

1.7 SCOPE OF THE STUDY

        The focus of this research work is to examine the impact of advertising in marketing of new product a case study of Indomie Instant Noodles.

        The work therefore did not consider other variables under promotion mix. However, in view of limited resources time and other constraints, emphasis was placed on advertising by Enugu metropolis within the state.

1.8 DEFINITION OF TERMS

        Some of the terms used by the researcher in the case of this research work are defined as follows:

1.  ADVERTISING: This is defined by the American marketing Association (AMA) as any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor.

2.  ADVERTISMENT: This is the message itself.

3.  MESSAGE: This is defined as the set of meaning being sent and/or received by the audience.

4.  PRODUCT: According to Kotler Philip, a product can be defined “as any thing offered to a market for attention, acquisition or consumption”. It includes physical object, services, personalities, place, idea etc.

5.  TARGET MARKET: This is the segment a firm choose to pursue.

6.  COMPETITION: This is a situation in which people or organization compete with each other for something that is not everyone can have.

7.  MARKETING: This is a social process by which individual and groups obtain what they need and want through creating, offering and freely exchanging product and service by value with others.

8.  CUSTOMER: This is a person that used a product being either or given to someone for use.

9.  MANAGEMENT: This is the preparing, directing, planning, organizing people and material in order to attain business objectives.

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