ADVERTISING AS A ‘’POWER TOOL’’ FOR BUSINESS GROWTH

A CASE STUDY OF NIGERIAN BOTTLING COMPANY PLC

CHAPTER ONE

INTRODUCTION

Background Of The Study

Almost all economic activities are geared towards ensuring that the right goods and services are produced and find their way to customer. This involves a process called marketing.

Marketing decisions focus on consumer needs, hence it seeks to guide or accomplish organisations objective of consumer satisfaction and company profitability.

In a bid to direct the flow of products and services to satisfy customer needs, and at a profit, the marketing mix is developed.

The marketing mix observes that the marketing manager has a limited number of ingredients (marketing elements) at his disposal, but like a master chef, he can combine these into an almost limitless number of recipes to achieve the organisation’s objective of maximizing profit and staying in business.

The four ‘P’s make up the marketing mix.  These are:

(i) Product

(ii)  Price

(iii)  Place

(iv)  Promotion

Product means the need – satisfying offering of a firm, which could be a physical good, a service or a blend of both.  For example, nails (physical good), advice from a lawyer (service), getting a birthday cake from Tantalizers by home delivery (a blend of both).

Price is what is charged for the product produced or the service rendered. Pricing decisions are especially important because they affect both the number of sales a firm makes and how much money it earns.

Place ensures that good and services are available in the right quantities and locations, and when customers want them.  It would be of little use producing a product or service if it is not available to customers.

Promotion is communicating information between seller and potential buyer or others in the channel to influence attitudes and behaviour.

Now, promotional activities as one of the major communication strategy mix, are heard and seen around us virtually everyday.  Organisations, especially the ones that are engaged in distribution and merchandising of consumer goods and other personal products whose purchase frequency is high, use different promotional tactics.

Promotional activities are primarily geared towards:

(i) gaining competitive advantage and,

(ii)  consequently, increasing sales volume and business growth.

It does this by informing target customers that the right product is available at the right place, and at the right price.

The five promotional methods are:

(i)  Personal selling

(ii)  Sales promotion

(iii) Publicity

(iv) Public relation

(v) Advertising

Personal selling involves direct spoken communication (face-to-face) between sellers and potential customers.  It provides immediate feedback, but can be very expensive.

Sales promotions are activities other than advertising, publicity and personal selling, that stimulates interest, trial or purchase by final consumers or others in the channel. Relative to other promotion methods, they can be implemented quickly and get results sooner.

Publicity is any unpaid form of non-personal presentation of ideas, goods or services.  Publicity people are paid to attract attention to the firm and its offerings, without having to pay media costs.  This is what distinguishes it from advertising.

Public relations efforts of the marketer aim at building and maintaining good relations with special publics such as customers, and the public at large.

Advertising is any paid form of non-personal presentation of ideas, goods or services by an identified sponsor.

The thrust of this research is on advertising – as a power tool for business growth.

There is power, so much power in information, and when this information is repeated, it leaves an impression.  It is generally believed that individual consumers lack either the time, interest or capabilities to actively search for and evaluate relevant information for purchasing decisions.  Advertising conveniently solves this problem because, it is the primary method of informing the public about the availability of a product.

Advertising is concerned with motivating people, thus it is able to tap into the human desire and resolve the issue of what to buy – and keep buying.

Statement Of The Problems

The tremendous advertising creativity everywhere amazes and fascinates us. Blinking lights in different commercial centres at night, giant outdoor posters, television and radio commercials, magazines and newspapers full of colourful adverts, has made it plausible to concede that advertising has become a necessary part of the marketing economy.

For most big companies, advertising is a major part of their activities with surprisingly multi million budgets. As regards this study, the Nigerian Bottling Company PLC, a soft drink manufacturing and distributing organisation, employs a great deal of advertisements as a promotional tool, even when its brand is a household name. How come? It certainly is not because they have a lot of money to throw about.

So the questions this research raises are:

(i)  Do adverts stimulate demand?

(ii) Do adverts counter the moves of competitors?

(iii) Do adverts affect sales volume?

(iv) Can the expenditure on advertising be justifiably applied to achieve a more than usual contribution to business growth?

Purpose Of The Study

The objective of this study is to give the rationale for advertising efforts, and in so doing, answer the questions posed by the research problem.

These are:

(i) To justify that adverts build primary demand

(ii) To determine the extent to which advertisements build insistence or preference.

(iii) To determine that advertising efforts have a positive relationship with sales volume.

(iv) To establish the fact that even “big” names advertise in the face of competition to achieve short and long term goals of the organisation.

Significance Of The Study

The significance of any study is measured by the contribution it makes to past, immediate and present efforts at offering solutions to a problem.

Businessmen and business scholars from developing countries are slowly recognizing that people must buy and consume constantly, increasing quantities of goods if the economy of these countries is to continue to grow.         

However, in the push for greater sales, businessmen face increasing competition. Competition should not be tolerated, hence, a competitive market means a competitive advertisement campaign.

The significance of this study is to show how the expenditure on advertising can be justifiably applied to achieve a more than usual contribution to business growth of both new and well established organisation.

The Research Questions

1) How do other factors apart from advertising influence consumer patronage of seven-up?

2) How does advertisement determine consumer patronage of seven-up?

3) Does brand switching actually results from advertisement?

4) To what degree if any, does consumer believe in advertising claims in respect of seven-up?

Scope Of The Study

This study is limited to the effectiveness of advertisement on the business growth of the Nigerian Bottling Company Plc, with special reference to the Benin Plant because of the constraints involved in gathering relevant information for the entire NBC group.

Research Methodology

The research methodology refers to the methods and procedures used to analyse the relevant data to achieve a stated result.

This research is designed to investigate the role of advertisement in the business growth of the Nigerian Bottling Company Plc – Benin Plant.

Primary data, which will be relevant to this study will be obtained through personal interviews and administration of questionnaires.

Secondary data will also be used and it would involve the use of library research, compiling relevant data from official documents and the internet as well.

In the sampling design, the target population will consist of consumers and distributors of Coca-cola in Benin City.

Definition Of Terms

ADVERTISING: To make goods and services known to the public through the information media.

DEMANDS: The acquisition of goods and services by payment of money or its equivalent consumer goods

PATRONAGE: This is the habitual purchase by a consumer of a specific product brand.

CONSUMER: Those who make use of goods and services

BRAND-NAME: The name used to identify a specific product type e.g.  Seven-up bottling company

ADVERTISING CHAINS:  They are attributes or specific to their advertised product or what advertisement say consumer will benefit from the product

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