EVALUTION OF ADVERTISING AS A DETERMINATION OF CUSTOMER PATRONAGE OF 7UP BOTTLING COMPANY ABA, ABIA STATE.

ABSTRACT

Today’s widespread markets make advertising an important part of business, and now businesses have realized the tremendous potential of this form of promotion. It was a result of this that this study was carried out to evaluate advertising as a determinant of customer patronage. The study was carried on 7up bottling company Aba, Abia State. Primary data was obtained by administration of close-ended questionnaire through a field survey. The primary data were analysed using descriptive statistics (cumulative frequency/percentages).One logistic econometric model and two regression models specified for the work were estimated using ordinary least square (OLS) regression technique. The empirical results indicated that: Advertising, compared to other promotion strategy, was revealed to be relatively inexpensive per contact because it has the advantage of reaching mass audience and even inaccessible buyers, It creates awareness by educating buyers on product quality and price, The log odds of a positive and significant in consumer patronage increase with one unit increasing in advertising. It was suggested that; 7up Bottling Company should invest a substantial amount of money on research and development of new advertising strategies for promoting their brands in the market in order to maintain or increase their market share. It is through research that the company can make a breakthrough in discovering new advertising strategies that would be more effective in creating product awareness that is fundamental to influencing customer patronage.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The American Marketing Association, an International professional association in market discipline tried to standardize marketing terminology by defining-marketing as “the performance of business activities that direct the flow of goods and services from producer to customer or-users, Boone and Kurtz (1989).

The marketing task of every firm therefore is to produce goods and service and to ensure that the products get to the uses at the right place, price and time for wants satisfaction and profit generations for the firm. But it a company or business firm produces goods and, or services and goes into business to market it, such company’s chances of success would be slim if it fails to inform and persuade potential customers of the usefulness or the offering, Boone and Kurtz (1989). In other to expand its chances of survival and success, the company would need to employ promotion strategy. Promotion, however, is the communication of information between-seller and potential buyers or others in the channel to influence attitudes, and behavior, oriko and Ujah (2006). All elements, techniques and communication to create awareness of a product and its utilities and to motivate target customers and the general public into patronage and use of such product make up promotional mix. Promotional mix therefore comprises advertising, personal selling, sales promotion, public relations and publicity.

In all elements of promotion, advertising represents the most important type of non personal selling. Belch and Belch (2001) defined advertising as any paid form of non personal communication about an organization, product service, or idea by an identified sponsor. Today’s widespread markets make advertising an important part of business, and now businesses have realized the tremendous potential of this form of promotion. Also, Boone and Kurtz (1989) is of the opinion that mass consumption and  geographically dispersed market make advertising particularly appropriate for products that rely on sending the same promotional message to large audience. Advertising is relatively inexpensive per contact it has the advantages of reaching mass audience and even inaccessible buyers at the same time. It educates the buyers on product features and prices  and also promotes  both products  and organizations.

Advertising creates goodwill for the companies and positions their images through institutional and public relations advertising. It provides brand recognition, enhances trial purchases, serves as a catalyst for change, enhances consumption behavior and increases usage of products. Advertising also offsets competitive advertisements by countering the competitors’ claims. Yet, it corrects negative reports about a company and its products (Anyanwu, 2003).

1.2 Statement of the Problem

It is impossible or at least very difficult for a firm to produce and distribute goods and services and at the same time make profit without effective communication with the buyers. Moreover, dealing will a large audience and customers who are geographically dispersed through person to person contact r by giving incentives in order to obtain favourable response may be too costly for a firm in terms of finance and other cost related areas and may eventually force it to close down.

Problems like not knowing the right promotional mix to use at the right person, place and at the right time; market characteristics that encourage the  use of advertising and as well as plant location problems at one time or the other such as where to site a plant, machines etc.

In this situation therefore, advertising becomes the best, the most effective and profitable promotion tool left for most firms especially those that deal with large and geographically dispersed audiences.

1.3 Objectivesof the Study

The broad objective is to examine the evaluation of advertising as a determinant of customer patronage with reference to 7up bottling company Aba, Abia State.

The specify objectives are:

1. To ascertain the impact of advertising on customer patronage

2. To ascertain the impact of advertising on market share

3. To determine the impact of advertising on profitability of the company.

4. To examine other factors affecting customer patronage

1.4 Research Questions

     1    what determine the impact of advertising on customer patronage?

     2    what are the impact of advertising on market share?

     3    What is the impact of advertising on profitability of the company?

     4    what are the other factors affecting customer patronage?

1.5Research Hypotheses

The following hypotheses was stated in null form,

H0₁: advertising has no significant impact on customer patronage

H0_2:advertising has no significant impact on market share

H03:advertising has no significant impact on profitability

1.6 Significance of the Study

The study is significant on the basis that every firm seeks to maximize sales and profit and to create a favourable image of the firm and its products to as many customers as possible at a minimum cost. In this situation advertising stands as the best communication tool and means of achieving these purposes. This is so because advertising is less expensive per contact as far as large audience is involved and is used to reach inaccessible buyers as far as dispersed geographical area is involved.

On the other hand, the same communication message can be used over and over again and for a long period of time advertising also significantly used to the company under study, research student who may be involved in further research on this topic and the general public who look forward to excel through marketing orientation etc.

1.7 Scope of the Study

The study focuses on the impact advertising in creating customers of a company and its product and maintain such customers so as not to lose their patronage and would be carried out in Aba metropolis.

1.8 Limitations of the Study

Due to financial and time constraints, the research was limited to some strategic locations in Abia State. Yet, it is assumed that whatever findings that come out of this study within the few places some where the samples are collected was the same if all the places were covered within the state and the country as a whole. Meanwhile, the sample shall be a representative of the entire population.

Another constraint is the fear of respondent bias. Some respondents deliberately decide to conceal certain information that would decide to conceal certain information that would be of help in the study.

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