Advertisement and Sales Volume: The Case of Food,
Beverage and Fiber Companies in Nigeria
Ogidi, Armstrong Emmanuel
Department of Agribusiness, University of Agriculture, P.M.B. 2373, Makurdi, Nigeria
Abstract: The purpose of this research is to examine the role of advertisement in enhancing consumer confidence in manufacturing companies. The study through, the use of Taro Yamane technique gave us a sample size of 114. A successful response rate of 71.9% was achieved as 82 of the questionnaires were considered acceptable. The role advertisement played in Nigerian manufacturing companies had a significant effect on consumers’ confidence. Advertisement had a positive impact on companies operations, which led to increased salves volume and enhanced the image and reputation of food and fiber manufacturing companies. Nigerian manufacturing companies must improve on the level of their customer sales calls and visits by spending and improving the use of the mobile media.
Key words: Advertisement, beverage, companies, fiber, food, sales volume
1. Introduction
The advertising tool has produced good results in case of consumer goods. To some extent, packaging has replaced the counter salesman. It is very important that the company’s advertisement is so devised that it achieves marketing objectives optimally. It is not an easy task. Developing nations like Nigeria, are gradually keying into advertisement and consumers are beginning to have a say in the products and services been churned into the market; especially now that competition is becoming fierce in the country among existing manufacturing companies and new entrants. Some organizations fail to be innovative and as such lag behind in the art and science of wooing customers from competitors, through the medium of advertisement. This type of practice is unacceptable in turbulent environments and almost suicidal. Failure to be proactive in this instance would eventually lead to the dearth of such manufacturing companies. Failure of manufacturing companies to give adequate attention to customers needs has installed mistrust in the hearts of the populace over the years.
Advertising is structured and composed non personal communication of information, usually paid for and usually persuasive in nature, about products (goods, services, and ideas) by identified sponsors through various media. Advertising is any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor. Ads can be a cost-effective way to disseminate messages, whether to build a brand preference or to educate people (Kotler, 2007). The race to acquire customers consists of two phases – 1) sales lead generation, and 2) subsequent lead follow-up (Chatterjee, 1996). During lead generation, the marketing function takes responsibility to increase the volume of qualified leads of prospective customers and oversee the tracking, qualification, and management of leads (Carroll, 2006:15).
The sales representatives help the marketers to identify customer needs and develop advertising strategies (Zoltners, Sinha, and Lorimer, 2009:421). Then in the lead follow-up stage, sales reps take the primary responsibility to contact the lead prospects and close sales (Chatterjee, 1996), and marketers help salesreps implement selling strategies (Zoltners, Sinha, and Lorimer, 2009:421).
1.1. Research Question
What is the effect of advertisement broadcast on sales volume? 1.2. Objectives of the Study
To analyze the effect of advertisement broadcasts on sales volume.
1.3. Research Hypothesis
H0: Advertisement has no significant influence in increasing sales volume.
2. Literature Review
2.1. Conceptualization 2.1.1. Advertisement Media
The vast proliferation of advertisement supported websites, online videos, blogs, and other offerings has created more supply than can be readily sold, helping to depress advertising rates in both online and in conventional media markets. The Internet hurt traditional media by not only increasing its share of consumer time spent, but also by further weakening the ad-pricing power of traditional media (Newton, 2009). According to Ogidi and Adekitan (2014) advertisement media tools are classified into the following:
(i) Internet Medium, (ii) Mobile Medium, (iii) Print Medium, (iv) Radio Medium and (v) TV Medium
2.1.2. Company sales increase through advertisement
In offering a product line, companies normally develop a basic platform and modules that can be added to meet customer requirements (Kotler and Keller, 2006). Sales increase can only be achieved if the advertised product is backed up by economies of scale – large production of goods and services. If the volume of products in the market does not meet the yarning demands of the consumers, lack-of-confidence in such companies is bound to occur. The reputation of the company will also be at stake, because consumers might decide to seek an alternative option in a substitute product from a competitor.
2.2. Theoretical Framework
2.2.1. Transaction Utility Theory
Transaction utility theory tells us that consumers will make overall satisfaction or dissatisfaction judgments about a price-based advertisement or promotion after the experience, driving their intention to repeat the process in the future. Overall judgments about price promotion are formed through consideration of the acquisition utility of the deal (satisfaction or dissatisfaction with the intrinsic utility of the item purchased less its price) and transaction utility – pleasure or displeasure associated with the deal (Tat and Schwepker, 1998).
3. Methodology
3.1. Respondents and Sample Size The subjects in this study consisted of functional senior staff from agribusiness companies listed in 6000 Nigeria Companies Profiles (www.6000profile.com) and Lists-of-Companies (www.list‐
of‐companies.org). One respondent each per food, beverage and fibre company was e-mailed the study’s questionnaire.
The study, through, the use of Yamane (1967) technique gave us a sample size of 114 from a population of 225. The method is indicated below.
Where: n = required responses/sample size, e2 = error limit, N = population size
Placing information in the formula at 95% confidence level and an error limit of 5% resulted in: 225
1 225 0.05 144
3.2. Method of Data Collection Survey methodology was used to obtain general overall information on the use of various
advertising media by companies to achieve company’s objectives. The main instrument for data generation and analysis is structured research questionnaire. In-Depth Interview (IDI) method and observation were also used to generate relevant qualitative data which revealed more information to compliment the questionnaires. Care was taken in the wording used, sequence of items, expert opinion and the questions being respondent friendly. Effort was also made to minimize the problem of developing a weak research instrument. All items were measured using a five-point Likert-like scale ranging from one (lowest score) to five (highest score).
3.3. Validity and Reliability of Instrument A prerequisite in designing a good questionnaire is to decide what to measure. This step seems
simple and self-evident but if overlooked may result in producing low quality questionnaires. A good question can produce reliable and valid answers for the variable being measured. In most cases, the cheapest alternative in a survey process is to improve questionnaire quality compared to significantly increasing the sample size.
3.4. Data Analysis
The extrapolated data from questionnaires were analyzed using computer-based Statistical Package for Social Sciences (SPSS) version 16. All items were measured using a five-point Likert-like scale ranging from one (lowest score) to five (highest score). Multiple regression analysis was used to test the degree and nature of association between exogenous and endogenous variables.
3.5. Model Specification
Multiple regression analysis was employed to determine the outcome of the relationship between the role of advertisement media and sales volume. Model for the study is represented below:
SALVOL = 0+ 1RADIO+ 2 TV+ 3INTERNET + 4PRINT+ 5MOBILE + e ….…..…. Model Where: 0 = Y intercept value of the dependent variable, e = the random error, 1,2,3 ,4,5= the regression
coefficients of the independent variables: RADIO advertising medium, TV advertising medium, INTERNET advertising medium, PRINTnewspapers, magazines advertising medium, MOBILEdevices advertising medium, SALVOL= increased sales volume
4. Findings and Discussion
4.1. Test of Hypothesis
Only the t calculated values: 5.041, 3.475 and 9.919 for RADIO, TV and PRINT showed significant values, because they are greater than the t-tabulated value (2.000) (see Table 1 below). The F calculated value is 48.258, which is greater than the F tabulated value indicating significance between advertisement and increased sales volume. The null hypothesis is rejected while the alternative hypothesis (H1) is accepted, which states that, “advertisement has significant influence in increasing sales volume”.
Table 1: Impact of Advertisement on Increased Sales Volumes
Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta (Constant) 2.539 0.331 7.674 0.000 RADIO 0.604 0.120 0.442 5.041* 0.000 TV 0.499 0.144 0.358 3.475* 0.001 PRINT 0.960 0.082 0.919 9.919* 0.000 INTERNET 0.005 0.193 0.003 0.026 0.979 MOBILE 0.064 0.231 0.044 0.279 0.781
Source: research instrument – SPSS Version 18
Note: Dependent Variable: INSALVOL, *Correlation is significant at the 0.05 level, F Calculated value =
48.258 at 0.05, R = 0.790, R2 = 0.624.
4.2. Implications of the Regression Results
The coefficient of correlation (R) is 0.790; meaning that there is a strong relationship between the variables of the study’s Model (see Table 1). The coefficient of determination (R2) on the other hand is 0.624 indicating that 62% of sales volume was caused by variation of RADIO, TV, PRINT, INTERNET and MOBILE. Thus we conclude that advertisement media activities in Nigerian manufacturing companies would therefore, influence increase in sales volume.
into the fit of the regression models, but it also helps in assessing the strength of individual predictor variables in estimating the dependent variable. The result of the Research Models indicates that regression coefficients or slopes of advertisement variables have significant impacts on sales volume variables. These findings further support the alternate hypotheses that these regression coefficients or slopes are significantly different from zeros and have predictive powers in estimating sales volume.
5. Conclusion and Recommendations
The result of this study shows that the role advertisement plays in significant role among food and fiber manufacturing enterprises in Nigerian. The positive relationship between advertisement and sales volume agree with the study’s hypothesis and theoretical framework. The study shows that advertisement has a positive impact on sales volume, which will lead to increased salves volume. This also proves that advertisement refers to long-term and mutually beneficial arrangement between buyer and seller, to ascertain more satisfying exchange. Involving employees, empowering them, and bringing them into the decision-making process provide the opportunity for continuous process improvement. This study also found that increased investment in advertising especially in radio, television and print media would lead to increased sales volume.
From our conclusion, the study came to the following recommendations for stakeholders: i) In order for manufacturing companies to increase their market share and increase their
sales volumes respectively, they must first of all increase successful execution of quality advertisements.
ii) Agribusiness firms in the food, fiber and beverage industry must increase spending on internet and mobile media form of advertisements.
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