The effect of advertising on the profitability of a manufacturing company (a case study of nigerian bottling company plc)

Thesis Overview

<p> <b></b></p><p><b><b>INTRODUCTION</b></b></p><p><b><b></b></b></p><b><b><p><b>1.1 BACKGROUND OF STUDY</b></p><p><b></b></p><b><p>Advertiser’s primary mission is to reach prospective customers<br>and influence their awareness, attitudes and buying behaviour. They spend a lot<br>of money to keep individuals (markets) interested in their products. To<br>succeed, they need to understand what makes potential customers behave the way<br>they do. The advertisers goals is to get enough relevant market data to develop<br>accurate profiles of buyers-to-find the common group (and symbols) for<br>communications this involves the study of consumers behaviour: the mental and<br>emotional processes and the physical activities of people who purchase and use<br>goods and services to satisfy particular needs and wants. Advertising<br>is any paid form of non personal presentation and promotion of ideas, goods, or<br>services by an identified sponsor (Kotler and Armstrong, 2010). There are<br>various forms of advertising like informative advertising, persuasive<br>advertising, comparison advertising, and reminder advertising. Informative<br>advertising is used to inform consumers about a new product, service or future<br>or build primary demand. It describes available products and services, corrects<br>false impressions and builds the image of the company, (Kotler,<br>2010).Advertising can be done through print media which includes news papers<br>,magazines ,brochures ,Audio media for example Radio, and visual media which<br>includes billboards, and television (Kotler and Armstrong 2010).</p><p>Sales<br>performance describes the trend of collections in terms of revenue when<br>comparing different periods (MC Cathy, 1994). The sales may be in form of<br>offering products or services to consumers. A service is any activity or<br>benefit that one party can offer to another that is essentially intangible and<br>does not result in ownership of anything (Kotler and Armstrong, 2010).Sales<br>volume is the core interest of every organization and is based on sales and<br>profit .When volume goes up profits rises and management in organizations is<br>made easier.</p><p><b>1.1.1 ORGANIZATIONAL PROFILE</b></p><p><b></b></p><b><p>The Nigerian Bottling Company Ltd<br>is one of the biggest companies in the non-alcoholic beverage industry in the<br>country and is the sole franchise bottler of The Coca-Cola Company in Nigeria.</p><p>The Nigerian Bottling Company<br>serves approximately 160 million people by producing and distributing a unique<br>portfolio of quality brands, bringing passion to marketplace implementation,<br>and demonstrating leadership in corporate social responsibility.</p><p>NBC Ltd started operations in Nigeria in 1951. Based in the city of Lagos, it<br>operates 13 bottling plants across the country. In addition, we channel<br>products through 59 warehouses and distribution centres. The company employ<br>about 4,800 people and indirectly support the jobs of up to more than a million<br>more in our value chain.</p><p>Nigerian Bottling Company aims to<br>be customers’ most preferred supplier, and conduct programmes to support more<br>than 450,000 customers who sell their products to consumers.</p><p>The company is part of the<br>Coca-Cola Hellenic Group , one of the largest bottlers of The Coca-Cola<br>Company’s products in the world, and the biggest in Europe. Coca-Cola Hellenic<br>operations span 28 countries , serving more than 570 million people. The<br>company is headquartered in Athens and listed on the Athens, New York, and London<br>stock exchanges.</p><p>· &nbsp; &nbsp; &nbsp; <b>Products</b></p><p>· &nbsp; &nbsp; &nbsp; NBC<br>produce, sell and distribute a wide range of beverages, most of which are<br>trademark products of The Coca-Cola Company. Our product portfolio consists of:</p><ul><li>leading brands Coca-Cola, Coca-Cola light,<br>Fanta and Sprite</li><li>local brands such as Schweppes, Five Alive,<br>Limca and Eva</li></ul><p>The Nigerian Bottling Company<br>continuously review opportunities to expand its product portfolio in order to<br>offer consumers in Nigeria an increasing range of choices. Every measure is<br>taken to ensure that its products are of the highest quality.</p><p><b>1.2 </b>STATEMENT OF THE PROBLEM</p><p>The<br>Nigerian Bottling Company carries out frequent advertising of their products to<br>increase their sales volume, through taking part in charitable funds in Nigeria<br>and even sponsoring sports .It advertises using radio, television and<br>newspapers.</p><p>Despite<br>its efforts in advertising regularly &nbsp;<br>the sales of Nigerian Bottling Company industry have not improved to the<br>desired targets. The sales in Nigerian Bottling Company for the past four years<br>have not been steady.</p><p><b>&nbsp;1.3 </b>PURPOSE OF<br>THE STUDY<b>&nbsp; &nbsp; </b></p><p><b></b></p><b><p>The<br>purpose of the study was to establish the impacts of advertising on sales<br>volume of an organization.</p><p><b>1.4<br></b>OBJECTIVES<br>OF THE STUDY<b></b></p><b><p><b></b></p><b><p>1. &nbsp; &nbsp; To<br>examine the forms of advertising used by The Nigerian Bottling Company.</p><p>2. &nbsp; &nbsp; To<br>establish the level of sales performance in Nigerian Bottling Company.</p><p>3. &nbsp; &nbsp; To<br>establish the relationship between<br>advertising and sales in Nigerian Bottling Company industry</p><p><b>1.5<br></b>RESEARCH<br>QUESTIONS<b></b></p><b><p><b></b></p><b><p>1. &nbsp; &nbsp; What<br>are the forms of advertising used by Nigerian Bottling Company?</p><p>2. &nbsp; &nbsp; What<br>is the level of sales performance of Nigerian Bottling Company?</p><p>3. &nbsp; &nbsp; What<br>is the relationship between advertising and sales performance in Nigerian<br>Bottling Company industry?</p><p><b>Content scope</b></p><p><b></b></p><b><p>The<br>study covered advertising as the independent variable and sales performance as<br>the dependant variable.</p><p><b>Geographical scope</b></p><p><b></b></p><b><p>The<br>study was cantered at the Nigerian Bottling Company industry in Lagos because<br>it is the headquarter of the industry where marketing plan is carried out, and<br>it has large sales volume</p><p><b>Time scope</b></p><p><b></b></p><b><p>The<br>study looked at five financial years back that is 2006 to 2010</p><p><b>1.7</b><br>SIGNIFICANCE OF THE STUDY<b></b></p><b><p><b></b></p><b><p>The study will help firms<br>understand the importance of advertising. It will also enable them structure<br>their adverts and brands to make them more appealing in order to improve sales<br>and lead to better performance. As this study gives a clear insight into how<br>advertisement can influence consumer behaviour, many firms will be encouraged<br>into using adverts to market their products. When firms start making more sales<br>and profits as a result of advertising, the economy of Ghana will be boosted,<br>as more income from tax will be accrued to the government of Ghana. The<br>findings and recommendations of this study will go a long way in helping firms<br>to adopt good advertising strategies, and appealing brand designs to help get<br>more consumers for their products and services.</p><p><b>&nbsp;</b></p><p><b></b></p><b><p><b>1.8 PLAN OF STUDY</b></p><p><b></b></p><b><p>Chapter<br>one of this study includes the general introduction, background information<br>about the study, statement of the problem, objectives of the study, research<br>questions, scope of the study, significance of the study, and the limitation of<br>the study.</p><p>Chapter<br>two reviews all relevant literatures relating to the study as well as the<br>researcher’s views concerning previous studies on the challenges of income<br>taxation.</p><p>Chapter<br>three includes the methodology applied in collecting and analysing data,<br>population definition, study site, and limitations.</p><p>Chapter<br>four presents the results of the study as well as data analysed, and the<br>interpretation of the analysed data.</p><p>Chapter<br>five includes a summary of the study, conclusion and recommendations based on<br>the findings from the study.</p><p><b>1.9 STUDY LIMITATION</b></p><p><b></b></p><b><p>The<br>only limitation faced by the researcher in the course of carrying out this<br>study was the delay in getting data from the various respondents. Most<br>respondents were reluctant in filling questionnaires administered to them due<br>to their busy schedules and nature of their work. The researcher found it<br>difficult to collect responses from the various respondents, and this almost<br>hampered the success of this study.</p></b></b></b></b></b></b></b></b></b></b></b></b></b></b></b></b></b> <br><p></p>