EFFECT OF ADVERTISING ON CUSTOMERS PATRONAGE OF FIRMS (NIGERIA BOTTLING COMPANY AND 7UP NIG PLC IN ABA, ABIA STATE)

ABSTRACT

Advertising is a prominent feature of modern business operations. One could encounter advertising messages, while watching TV, reading magazines, listening to the radio, surfing the internet or even simply working down the street, as advertising has a stimulating influence on purchasing behavior of the consumers. Empirical evidence has proven that advertising increases customers’ patronage of firms’ product. Advertising provides a platform for firms to create awareness about their products or services and how consumers could make the best out of such products. This study evaluated the effect of advertising on customers’ patronage of firms (Nigeria bottling company and 7up nig plc).This study was based on primary data collected to know the effect of advertising on customers’ patronage of firms’ products. Among the objectives of the study is to determine the extent to which advertising effect customers patronage. t-test statistics of difference mean and Pearson correlation co- efficient of R designs were adopted for the study. The first hypothesis test is aimed at determining whether or not advertising has significant effect on the creation of product awareness in Nigeria bottling company plc compared to 7up Nigeria plc. Further, the second hypothesis test showed that there is significant difference between effect of advertising on awareness creation of Nigeria bottling company plc and 7up nig plc. This study concluded that advertising is one of the most important medium of communication influencing the companies‟ performance in more than one ways. But its influential strategic importance 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 important to increasing sales revenue and profitability such as sales promotion, personal selling, publicity etc which are crucial should be considered.

TABLE OF CONTENTS

Title Page i                                                                        

Declaration ii                                                                   

Certification iii                                                                  

Dedication iv                                                                         

Acknowledgements v                                                           

Abstract vi                                                                         

Table of Contents vii                                                            

CHAPTER ONE: INTRODUCTION                                                                                                 

1.1 Background to the Study 1                                                                                                                              

1.2 Statement of the Problem 3                                                  

1.3 Research Questions 4                                                     

1.4 Objectives of the Study 4                                                     

1.5 Statement of Hypotheses 4                                                 

1.6 Significance of the Study 5                                                  

1.7 Scope of the Study 5                                                         

1.8 Limitation of the study 5   

CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction 6                                                                  

2.2 The concept of Advertising 6                                               

2.3 Objective of Advertising 7                                                  

2.4 Criteria for Setting Advertising Objectives 9                           

2.5 Developing Advertising Message 11                                        

2.6 Factors that determine the choice of Media 12                        

2.7 Functions of Advertising 15                                                   

2.8 Types of Advertising 18                                                       

2.9 Testing of the Advertisement 20                                           

2.10 Theoretical Framework 22

 CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Research 25                                                                     

3.2 Area of study 25                                                                  

3.3 Sample Size 25

3.4 Population of the Study 25

3.5 Methods of Data Collection 25                    3.6 Source of Data Collection 26                                               

3.7 Validity of the Data 26                                      

3.8 Reliability of Instrument 26                                        

3.9 Data Analyses Procedure 26

CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION

4.1 Test of Hypotheses 28

4.2 Findings and Discussion 35

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Summary 37

5.2 Conclusion 38

5.3 Recommendation 39

REFERENCES

APPENDIX

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study   

Modern  marketing  calls  for  more  than  developing  a good product, pricing  it  appropriately  and  making  it  available. a  company  must  also  communicate  to  influence  the  behaviour  of  the  consumers  or   buyers. Marketers  communicate  by  every  activity that  can  be  detected  by  the  market. the marketing  communication  consists  of  four  major  modes  namely  advertising,  sales promotion,  personal  selling  and  public relations.

The role of sales promotion in the form of advertising in promoting product and service awareness among consumers cannot be overstressed. Advertisement provides a platform for firms to create awareness about their products or services and how consumers can make the best out of such products. Olusegun (2006) opined that all advertisement must be honest and follow ethical standards and must not be perceived by the target consumer as lie; otherwise it can batter the image of a company and hinder it from building successful brands. Thus, for advertising to be effective, it must have an appeal, attract attention, command interest, inspire conviction and must provoke interest (Frank, 2005). In the same vein, Okeji (2008) posited that a good advert message should not be boring but rather reflect the lifecycle of the product. He concluded that advertising must be exposed in the right medium as this will enable organization to reach the right people with the right message.

A number of studies such as Herbert (2010), Nigel (2009), Gladson and Chinedu (2005) and Meshach (2007) have shown that advertising is a major competitive tool in establishing position in the market place. 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 users, buyers or clientele. Persons, organizations, groups, government agencies and different sectors of many economies employ advertising to marshal messages to target public. This is because a well-crafted advertisement program can be a cost –effective way to disseminate messages and build brand preferences. As the trend globally, companies in Nigeria also rely on sales promotion to get their existing and prospective consumers informed about their products and services as is the trend globally, companies in Nigeria also rely on sales promotion to get their existing and prospective consumers informed about their products and services. Among all the tools of sales promotion in Nigeria, advertising has grown over the years to become the most prominent and easily understandable to firms and the general public (Haruna, 2005). It is therefore not surprising that resources committed to advertisement by firms in Nigeria have grown astronomically over the years. Studies by Akanbi and Adeyeye (2011) have posited that in Nigeria, advertising is more prominent among manufacturing firms, especially those in the food and beverages sector as awareness regarding their products can reach the consumers more rapidly through this channel.This can be substantiated by the revelations made by Kingsley (2012) who explained that euro monitor international in its recent findings showed that the Nigerian bottling company and 7upnig plc sector was ranked one of the best-performing segments of Nigeria’s manufacturing industry. The findings further revealed that operating capacity was generally at a higher level in the sector than within the Nigerian manufacturing sector as a whole, and the sector have shown good returns in the stock exchange. Analysts such as Kingsley and Paul (2009) have argued that even though the use of advertisement as a promotional tool is common among manufacturing firms in Nigeria like Nigerian bottling company and 7up nig plc firms committing huge sums of money into advertising companies do not automatically translate to better performance indices for Organizations. It has been argued that advertising, even when very extensive, does not lead automatically to purchase because it is the culmination of a whole sequence of events (Abiodun, 2011).

The foregoing has shown clearly that advertising does not take place without the organization incurring some costs to that effect. Hence, many are of the belief that the desirability or otherwise of advertisement by firms in Nigeria could also be established when it is related in the context of sales and the profits that advertising companies realize at the end. Against this backdrop of controversy, it became very pertinent to investigate the extent to which the advertising costs of manufacturing firms in Nigeria affect customers’ patronage. Consequently, this study was conducted with the intent of establishing the extent to which the advertising has an effect on customers’ patronage. 

In  the  opinion  of  Walter(2010), advertising  is  one  of  the  marketing  mix  elements  that  influence  customers  patronage and  it  is  the  most  persuasive  influence  in  consumer  buying  behaviour.  Nwokoye (1996)  refers  to  advertising as  the  words,  pictures  or  illustration  that  makeup  the  advertisement  and  the  way  they  are  laid  out  to  create    a  total  impression.  For  consumers  of  a  product  to  be  positively  influenced  by  advertising  message,  such  a  message  must  be  designed  in  such  a  way that the consumers are directly touched .                                                                                                             

The  interest  of  the  researcher  in   this  area  is  aroused  by  the  changing  nature  of  marketing  and  its  environment.  Through  advertising  before  now,  has  been  criticized  by  many  organized  bodies  and  agencies,  attention  is  going  to  be  focused  on  the  effect  of advertising  on the  sales  growth  of  firms  with  the  Nigerian  bottling  company plc  and  7up  Nigeria  plc  as  study  firms.     

According  to  Adama and  Adu (2012)  the  reason  for  advertising  a  product  include:  making  the  consumers  familiar  with the  product,   when  the  consumer  keep  on  seeing  the  product  on   regular  basis,  their  interest  for  the  product  will  be  aroused.  Advertising  also  tend  to  familiarize  the  customers  with  the  mode  of  operation  technological  know- how, capacity, product   usage etc.  It is  therefore  imperative  that  producers  of  these    products( coke  etc  Nigeria  bottling companies  products) understand  the  importance  of  advertising  and  the  degree  to  which  it  influences  the  sales  of  their  products.  Thus  to  understand  the  real  effect  of  advertising  from  peoples  buying  attitude  towards  Nigeria  bottling  company   products,  i.e. coke,  Fanta etc.  Assessment of advertising and its activities on consumer is necessary                                                                                                                                         

1.2 Statement of the Problem                                                                                                                                            

What  led  the  researcher  into  this  work  is  to  provide  answers  to  questions  which  are  often  asked  of  advertising  products.  These questions which are often asked                                                                                                                                                                          why  producers  spend  so  much  money  on  advertising  and  whether advertising  really   has  a  major  influence  on  consumers behaviour  towards  organisations’  offer,  and  will  these  influence  and  also  cause  increase  in  sales  volume  relative  of  firms  that  do  not  advertise.  It  also  establishes  relationship  with  variables  such as awareness  creation,  interest   arousing,  trial  of  offer,  evaluation  and  adoption  of  product as stimuli of advertising  as  exerted through the media.    

1.3 Objectives of the Study                                                                                                                                                                                                                                                                                                                                           

This  study  is  designed  to  assess  the   effect  of  advertising  on  customers patronage  of  firms with  Nigeria  bottling  company  plc. and 7-up Nigeria plc. as study units. The specific objectives of this study include the following:

(i)  to evaluate  the  effect  of messages  sent, based on advertisers on  creating  positive  influence  based  on  awareness  creation.

(ii)  to examine and assess  the  influence of  advertising  on  buying  behaviour  particularly  based  on  arousing  consumers  interest.

(iii)   to  determine  the  degree  to  which  advertising  causes  consumers  to  try  products  of  firms.

(iv)   to  assess  the  response  of  consumers  to  advertisement, based  on  trying  the  product  for  adoption.                                                                                                                                                           

1.4 Research Question                                                                                                     

(1)   To  what  extent  does  advertising  influence  buying  behaviour  towards  products  based  on  its  ability  to  create  awareness.                                                                                                                                

(2)  To  what  extent  does  advertising message create  positive  influence  on  consumers  based  on arousing their interest.                                                                                                                                                                                                                                                                                                

(3)  What degree of impact does advertising have in causing consumers to try products.                        

(4)    To what  extent  does  advertising  aid  the  consumers  to  evaluate  corporate  market  offer  For  adoption.                                                                                                                                                                    

1.5 Research Hypotheses                                                                                                                                                

For  the  purpose  of  this  research  the  following  hypothesis  will  be  tested.                                                                                                                       

H01: Advertising  has  no  significant  influence  on  awareness  creation  among  consumers  of firms  offer.                                                                                                                                                        

H02: Advertising  message  has  no  significant  influence  on  customers patronage  based  on  arousing the interest of consumers.                                                                                                       H03: Advertising  does  not  contribute  significantly to  causing  consumers  to  try  firms  market  offer  as  index  of  the  advertisement.                                                                                                            

H04: Advertising  does  not  significantly  influence  consumers  to  evaluating  corporate  offer  for  adoption.                                                                                                                                     

1.6 Significance of the Study                                                                                                      

Consumers  are  becoming  aware  of  the  products  they  buy  and  use.  The  consumers  market  is  equally  large  and  their  money  is  spent in  the  market,  thus  any  information  provided  by  this  research  will  help  in  educating  both  manufacturers  and  consumers  of  these  bottling  company’s  products.  such  information  will  guide  and  direct  both  the  sellers  and  users  on  how  to  operate  effectively  in  the  market.  This  will  no  doubt  contribute  economically  and  socially  to  the  consumption  of  the  products.    A  comprehensive  assessment  of  advertising  influence  on  consumers  buying  attitude  will  also  provide  a  guide line  to  marketers  of  other  consumers  products  in  implementing  their  marketing  strategies  and  programmes.

1.7 Scope of Study

The study which is the effect of advertising on customer’s patronage of Nigeria bottling company and 7up bottling plc will be restricted to these products (coke and pepsi). Reference will be made to cover Aba, Abia state.

1.8 Limitations of the Study

Time was a limiting factor in this research since it is restricted to the end of second semester. The researcher being a student, the study was also limited by financial constraints. Finally, how to reach the respondents and extract realistic information from them was also a limiting factor.

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