ABSTRACT
The study was designed to analyze advertising and marketing performance of confectionery enterprises in Abia State. Primary data were used for the study. Data collected were done by the use of a structured questionnaire. Four hypotheses were tested in the study. One hundred and twelve confectionery enterprises were sampled for the study. Descriptive statistics, ordinary least square (OLS) multiple regression analysis, and multinomial logistic regression technique were employed in analyzing the data obtained for the study. The findings of the study showed that confectionery enterprises in the study area were operated by actively age individuals who are educated, experienced with moderate household size. Advertisement of products is a major task to the confectionery enterprises in the study area and is done on a regular basis. All the studied confectionery enterprises in the study area advertised their products through the adoption of both electronic and print media. Television advertising, radio advertising, newspaper advertising, poster advertising, flyers advertising and magazine advertising influenced the market share, sales volume and profitability of confectionery enterprises in Abia State. Flexibility, speed of delivery, accuracy of delivery, targeted audience, stage in product life cycle, and size of advertising budget influenced the choice of advertising by the confectionery enterprises in Abia State. The study recommended that any effort to enhance the market share, sales volume and profitability of confectionery enterprises must pay attention to such factors as television advertising, radio advertising, newspaper advertising, poster advertising, flyers advertising and magazine advertising which influenced the market share, sales volume, and profitability of confectionery enterprises in Abia State as evident from the study.
TABLE OF CONTENTS
Title Page i
Declaration ii
Certification iii
Dedication iv
Acknowledgements vi
List of Tables ix
Abstract x
CHAPTER
1: INTRODUCTION
1.1 Background to the Study 1
1.2 Statement of the Problem 3
1.3 Objectives of the Study 5
1.4 Research Questions 5
1.5 Research Hypotheses 6
1.6 Significance of the Study 6
1.7 Scope of the Study 7
1.8 Limitations to the study 8
1.9 Operational Definition of Terms 8
CHAPTER
2: REVIEW OF RELATED LITERATURE
2.1 Conceptual Framework 10
2.1.1 Concept
of advertising 10
2.1.2 Concept of marketing 17
2.1.3 Concept of performance 21
2.1.4 Concept of profitability 22
2.1.5 Concept of market share 22
2.1.6 Other issues of advertising 23
2.1.6.1 Setting the advertising objectives 23
2.1.7 Developing advertising message 25
2.1.8 Functions of advertising 27
2.1.9 Major advertising decisions 28
2.1.10 Advertising media 31
2.1.11 Factors that influences the choice of
advertising media 32
2.1.12 Methods adopted for advertising budgets 34
2.1.13 Measuring advertising effectiveness 36
2.1.14 Testing
of the advertising 39
2.1.15 Criticism
of advertising 40
2.2 Theoretical
Review 41
2.2.1 Assimilation
theory 42
2.2.2 Contrast
theory 42
2.2.3 Assimilation-contrast
theory 43
2.2.4 The
Sales effect theory 43
2.2.5 The
Marshalian theory 44
2.2.6 Cognitive
dissonance theory 45
2.2.7 Gap
theory 45
2.2.8 The
Hierarchy of effect model 46
2.3 Review
of Empirical Review 48
2.4 Summary
of Literature Review 52
CHAPTER
3: METHODOLOGY
3.1 Research Design 53
3.2 Area of the Study 53
3.3 Population of the Study 54
3.4 Determination of Sample 55
3.5 Sampling Method 56
3.5 Determination of Sample Size 56
3.6 Method of Data Collection 56
3.7 Administration of the Instrument 57
3.8 Validity
of Instruments 57
3.9 Reliability
of Instrument 57
3.9.1 Result of reliability analysis 58
3.10 Method of Data Analysis 58
3.11 Model Specification 59
3.11.1 Regression
model for the effect of advertising media on the market share of
the
confectionery enterprises in Abia state 59
3.11.2 Regression
model for the effect of advertising media on the sales volume of the
confectionery
enterprises in Abia state 60
3.11.3 Regression
model for the effect of advertising media on the profitability of
the confectionery
enterprises in Abia state 60
3.11.4 Multinomial
logistic Regression model of the factors influencing the choice
of any of the
advertising media adopted by the firm 62
CHAPTER
4: DATA PRESENTATION, ANALYSIS AND INTERPRETATIONS
4.1 Socio-economic
Characteristics of the Confectionery Enterprises and its
Operators
in Abia State 64
4.2 Analyses
of effect of Advertising Media on the market share of Confectionery
enterprises
in Abia State. 75
4.3 Analyses
of Effect of Advertising Media on the Sales Volume of the Enterprises. 79
4.4 Analyses
of Effect of Advertising Media on the Profitability of the Enterprises. 83
4.5 Analyses
of the Factors Influencing the Choice of any of the Advertising
Media
Adopted by the Firm. 87
CHAPTER
5: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary 99
5.2 Conclusion 101
5.3 Recommendations 102
5.4 Contribution
to Knowledge 103
5.6 Area
of further studies 103
References 105
LIST
OF TABLES
3.1: Reliability analysis of the responses
of the respondents 58
4.1: Socio-economic characteristics of the confectionery
enterprise operators
In Abia State 64
4.2: Socio-economic characteristics of confectionery
enterprises in Abia State 69
4.3: Ordinary
least squares multiple regression result of the effect of advertising media
on the market share of confectionery enterprises in
Abia State. 75
4.4: Ordinary
least squares multiple regression result of the effect of advertising
media
onthe sales volume of confectionery enterprises in Abia state. 79
4.5: Ordinary
least squares multiple regression result of the effect of advertising
media
on the profitability of confectionery enterprises in Abia state. 83
4.6: Multinomial logit regression result of the
factors influencing the choice of any
of the advertising media adopted by confectionery
industries 87
4.7:
Marginal effect of the factors influencing the choice of any of the advertising
media
adopted by confectionery enterprises 93
CHAPTER 1
INTRODUCTION
1.1
BACKGROUND TO THE STUDY
It is not enough for a business to have good products sold at attractive
prices. To generate sales and profits, the benefits of the products have to be
communicated to customers (Kotler, 2003). Since competition among firms is
growing, the main goal of firms is to define their strategies in order to
achieve maximum performance resulting in greater profits. There is need for an
organization to properly coordinate its marketing communication strategies in
order to deliver a clear, consistent, credible, and competitive message about
itself and its products (Lovelock & Wirtz, 2004). Firms have access to
numerous forms of communication referred to as the marketing communication mix.
These elements include advertising, sales promotions, personal selling,
publicity, public relations, instrumental materials and corporate design
(Lovelock & Wirtz, 2004). For most companies, the question is not whether
to communicate but rather what to say, how to say it, to whom and how often.
But communications get harder and harder as more and more companies clamour to
grab the consumers’ increasingly divided attention. “Knowledge is power” and a
customer is therefore empowered once he is knowledgeable about a product
offered to him (Kamber, 2002). Sales are made much easier and sales volumes can
increase when consumers are informed, knowledgeable and possess much more
interest in a product due prior advertising (Lancaster & Reynolds, 2005).
Advertising is a source of product differentiation and therefore a
source of competitive advantage. Successful advertising contributes to a
company’s sales in two ways – by expanding the demand for its products and by
reducing the size of product elasticity. Advertising, as a form of mass
communication, is aimed at changing the behaviour of the audience (the receiver
of the message) to enable them prefer the advertised product or service.
Nwokoye (2011) defines advertising as any form of non-personal communication
through the mass media that is paid for by an identified sponsor. Ambler (2000)
said that advertising creates awareness, communicates attributes and benefits,
reminds and refreshes to the ensure awareness. The role played by advertising
in the sales growth of an organization cannot be over emphasized. It provides a
platform for firms to create awareness about their products and services and
how consumers can make the best out of such products.
Olusegun (2006) asserted that
all advertising must be honest and follow ethical standards and must not be
perceived as lie, by the consumers, otherwise, it can batter the image of the
company and equally hinder it from building successful brands or enhancing its
marketing performance. Therefore, for advertisement to be effective, it must
have an appeal, attract attention, command interest, inspire conviction and
must provoke interest. A number of studies, such as Nigel (1994), Gladson and
Chinedu (2005) and Meshach (2007), have shown that advertising is a major
competitive tool in establishing market position in the market place.
Advertising plays a major role in the marketing of confectionery
products as it designs a global link to educate and raise consumers’ awareness
of the role of the treats in a balanced diet and active lifestyle. Food
production is of strategic interest to every country, to this note, confectionery
enterprise in developing and developed world are regarded as engine of economic
growth, though few studies have been carried out in that regard (Kotler, 2013).
Given the different confectionery product category and their
potential to provide food and job for the unemployed in the face of today’s population
explosion and high food demand, Nigeria as a nation cannot down play the need
to better the welfare of the enterprise. It is important that confectionery
enterprises be promoted responsibly as it has a positive impact on foreign
trade.
To stabilize operation and profitability in the enterprise, there is
need for improved promotional activities via advertising, improved production
processes, packaging technologies and curtailing the rising cost in raw
materials to enhance its performance. To this end, companies use advertising
not only to market and promote their products, but to, among other things,
wade-off competitors, improve their brands and create a vintage point for their
products in the presence of anticipated buyers as persons, organizations,
groups, government agencies and different sectors of many economies employ
advertising to relay messages to their target public.
Consequently, the researcher decided to conduct this study to
determine the effect of advertising in stimulating the marketing performance of
confectionery enterprises in Abia state, Nigeria.
1.2
STATEMENT OF THE PROBLEM
Advertising is a business concept largely accepted all over the
world as an effective marketing communication tools used in effectively
communicating the benefits of the product to its target consumers. Though in recent times, more firms are coming
up day by day especially in confectionery enterprise, and the market becoming
more and more competitive and dynamic. However, being exposed to unprecedented
changes and rapid transformation of knowledge has changed the rules of
traditional business game (Faiser, 2009). These have intensified the level of
competition in the industry and this led firms to intensify their advertising
campaign, there by using different advertising strategies in order to still
remain relevant in the market. In doing this, each firm must discover the
appropriate advertising media that best suits its operations, without which an
enterprise cannot survive in today’s competitive environment and will be faced
with the problem of determining the nature and demands of its offerings in a
given market segment and factors responsible for the variation in demand as
carelessness to this has led to winding up of many firms.
According to Onwumere, Nwuosu and Nmesirionye (2012), majority of
the confectionery firms which bumped into the market in the time past fizzled
out of it due to business road bumps associated with the enterprise
development. There has been the recurrent loss of market share and drop in the
sales volume which has equally reduced the profitability and inhibited the
firm’s marketing performance as well. So given that the confectionery
enterprise occupy a serious position in the food chain process there is need to
beef up its capacity and this calls for increase in productivity,
profitability, innovativeness, sales volume, market share and the product
quality delivery which can all be promoted with advertising media available to
the firm.
Moving on, the confectionery enterprise has fared no better because
even the magnitude of the capital facility need of the enterprise has not been
fully met and thus the economic welfare and profitability is jeopardized
(Onwumere, et al, 2012). The
confectionery enterprise which are managed by their owners and most often close
relation, fail to realize the importance of external source of capital which
could enable expansion in the business, lack of short, medium and long-term
credit facilities affects to a great extent the performance of the enterprise,
thereby posing a major setback to the realization of many brilliant business
idea that could enhance the firms’ profitability. Even when the finance house
agrees to provide capital, conditions are always dreadful. About 80% of small
and medium enterprises are pushed out of business because of poor financing
(Olajide, 2008). Although, it is common for people to relate performance of the
company with the priority it gives to advertising, people tend to forget that
advertising budget are huge source of cost for the organization. The amount of
resources committed by firms to advertising has steadily grown over the years
because of the increased awareness and sophistication of consumers taste and
preferences, and even their needs and wants as well. Companies in Nigeria,
particularly those in the confectionery enterprises, consider advertising as an
inevitable tool for survival in highly competitive market. This implies that
companies would have to rely heavily on advertising to create a brand and
distinguish it from other product in the mind of the consumers as this will
enhance their performance, though the cost of running the advert is a big
challenge to such adoption.
1.3
OBJECTIVES OF THE STUDY
The major objective of this study was to examine the effect advertising
media and on the marketing performance of confectionery enterprises in Abia
state, Nigeria. The specific objectives are to:
i.
examine the joint effect of
advertising media (television, radio, newspaper, poster, flyers and magazine)
on the market share of the confectionery enterprises in Abia state;
ii.
determine the joint effect of
advertising media (television, radio, newspaper, poster, flyers and magazine)
on the sales volume of the enterprises;
iii.
analyze the joint effect of
advertising media (television, radio, newspaper, poster, flyers and magazine)
on the profitability of the enterprises;
iv.
ascertain the factors
influencing the choice of any of the advertising media adopted by the firm.
1.4
RESEARCH QUESTIONS
The researcher deemed it fit to develop the following research
questions for this study.
i.
To what extent does advertising
media (television, radio, newspaper, poster, flyers and magazine) affect the market
share of confectionery enterprises?
ii.
To what extent can advertising media
(television, radio, newspaper, poster, flyers and magazine) influence the sales
volume of the confectionery enterprises?
iii.
What is the influence of
advertising media (television, radio, newspaper, poster, flyers and magazine)
on the profitability of the enterprises?
iv.
What factors influencing the
choice of any of the advertising media adopted by the firm?
1.5
RESEARCH HYPOTHESES
This study was guided by the following research hypotheses:
HO1: Advertising media (television, radio,
newspaper, poster, flyers and magazine) do not have any significant influence
on confectionery firms’ market share in Abia state.
HO2: There is no significant influence of
advertising media (television, radio, newspaper, poster, flyers and magazine)
on the firms’ sales volume.
HO3: There is no significant influence of advertising
media (television, radio, newspaper, poster, flyers and magazine) on the firms’
profitability.
HO4: Affordability, flexibility, speed of
delivery, accuracy of delivery, targeted audience, stage in product life cycle,
size of advertising budget, and business experience does not significantly
influence the choice of any of the advertising media adopted by the firms in
Abia State.
1.6
SIGNIFICANCE OF THE
STUDY
This study has yielded number of desirable benefits, the most
essential of which is its contribution to existing knowledge. The findings of
this study have provided direction to the effect of advertising in stimulating
the marketing performance of confectionery enterprises in Abia State.
Similarly, the study also has helped to expand the frontiers of knowledge in
the area of conducting its analysis through the use of techniques that have
been hitherto overlooked by previous researchers on the effect of advertising
media on firms’ market share, sales volume and profitability. The study was
able to establish the factors that influence the choice of advertising media in
confectionery enterprises in Abia State through the use of the multinomial
logistic regression approach. The study also outlined the advertising media
that should be adopted by confectionery enterprises in Abia State using the
marginal effect analysis.
This study has also complimented
the work of other researchers on the influence of advertising on the marketing performance of
firms especially confectionery enterprises as well as provided a lead way to
on-coming researchers on the effect of advertising on firms’ marketing
performance. The study equally provided meaningful and detailed information to confectionery
operators, educating them on the most and less appropriate advertising media to
adopt based of the factors of affordability, flexibility, speed of delivery,
accuracy of delivery, targeted audience, age, perception, level of education,
size of advertising budget, and experience; as understanding of this would help
them to maximize their profit, increase their market share and sales volume,
even in a highly competitive environment.
1.7
SCOPE OF THE STUDY
This research is concerned with examining the effect of advertising
in stimulating the marketing performance of confectionery enterprises in Abia State,
Nigeria. Due to the size and spread of these enterprises, the scope of this
study was limited to sampling confectionery enterprises located in Abia State.
Content scope: This study was domiciled in advertising with specific interest in
studying its effect in stimulating the marketing performance of confectionery
enterprises in the state. Though there are so many parameters to measure the
marketing performance of an enterprise, but for this study, the researcher
employed the following parameters; sales volume, market share and profitability
as requisite to achieve the objectives of the study. The study also analyzed
the factors that determine the choice of advertising media adopted by the
firms.
Geographical Scope: The study was conducted in Abia State which comprised of Aba,
Umuahia, and Ohafia zones of the confectionery enterprise in the state. But
from the data generated from the unions it stated that the Ohafia zone had few
confectioneries which by recommendation the researcher had to merge them with
Umuahia zone for proper assessment. It was on this note that the research was
centered on the two zones which were Aba and Umuahia zones respectively.
Unit of analysis: The unit analysis for this study includes the confectionery
enterprise with specific reference to the managers and supervisors which were
selected as core respondents for the study due to the managerial skills and
experiences gained in the running of the enterprise as this will enable them
respond effectively to the questions in the questionnaire.
1.8 LIMITATIONS TO THE STUDY
The study was carried out in Abia State, Nigeria due to the nature
of confectionery business the sample was quite very small, other limitations
faced by the researcher in the course of carrying out the work include poor
respondents’ attitudes to the filling of the questionnaire, inadequate finance
to conveniently carry out the study and time constraint. But the researcher was
able to overcome these limitations through commitment and careful handling of
statistical tools. Therefore, the limitation did not discourage the researcher;
neither did it adversely affect the outcome of the study.
1.9 OPERATIONAL
DEFINITION OF TERMS
The following terms were in used in view of their technical meanings
for better understanding of the concepts of the study.
Confectionery: This is the act of making confections, they include food items that
are rich in sugar and carbohydrates which are subdivided into bakers’ confections
and sugar confections.
Enterprise: These are business activities
developed and managed by individuals rather than the state, which could be
either large, medium or small scale with the sole aim of making profit
Marketing performance: This is an efficient and good performing marketing system, capable
of moving goods from producers to consumers at the lowest costs consistent with
the provision of services that consumers demand for.
Market Share: This is the company’s
sales expressed as a percentage of the total market sales.
Sales Volume: This is the percentage of
a company’s total product line sales, it includes the quantity or number of
goods sold in the normal operation of a company in a given period.
Profitability: The ability of a business
entity to make profits or returns from its investment.
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