CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF THE STUDY

Advertising is one of the four promotional tools companies use to direct persuasive communications to consumers or buyers and the general public.  Advertising policy constitutes such an important strategy in the marketing programme of companies that, its negligence could spell  down  for companies.

Generally speaking, companies exist to produce and market products. This objectives cannot be actualized if the manufactured products are not brought to the  knowledge of the consuming public. If the consumers and the general public are not informed and educated on the needs and wants some products could satisfy, they will definitely stay clear of the products.

Against this background, product advertising focuses on projecting the image and maketability of products in such manner that will make them acceptable to the consumers and buyers.

Odunsi (1998: 19)  noted the importance of product advertising when he stressed that the growth being  recorded in the advertising field is connected with its potentiality to enhance the acceptability marketability of companies products.

Product advertising has helped so many companies to revive and reposition some of their products which have almost reached the decline  stage in their life cycle.

            Furthermore, the continuous existing survival and growth of companies to some extent depend on the performance of  their products and the level of their sales volume. The fact still remains that for a company to decline profit and possibly grow, its sales volume must be high. For its sales volume to be high, its products must be acceptable to the consumers, hence giving rise to their high demand. These can only be achieved when these products are made known to the buyers through advertising.

Product advertising as stressed by Ebue (2000.75) is an effective promotional tool that will not only inform and educate buyers or consumers about a company’s products but highly significant in achieving the targeted sales volume of the company.

For over fifty (50) years of existence, Nigerian breweries Plc is one of the leading breweries operating in Nigeria today. The company has a wide range of products that includes alcoholic, malt and soft drinks. The notable products in the company’s product mix includes; Golder, star, Amstel malt, maltina, Legend and schepps. The company has a large factory at Agbara, Lagos and a brewery plant at 9th Mile Corner, Ngwo, Enugu. the Company again commissioned its new Ultra – modern brewery in Ama Enugu State in  October 27th 2003, by his excellence president Olusegun Obasanjo.

The Nigerian breweries Plc has depot in most state capitals of the federal to facilitate the distribution of its products. The products of the company are seen and known in every nook and cranny of the southern parts of this country as well as some Northern States.

According to the Saturday Champion paper May 1st (2004); Nigerian brewing is totally committed to Nigeria cause in areas of Entertainment through a vigorous music sponsorship programme which has brought International Stars like Naught by Nature, Usher, Shaggy  and Awilo that have thrilled Nigerians live in recent times courtesy of Nigerian Breweries Star Mega Jam and Legend fun Rampnage. Nigeria Breweries is also involve in discovering and promoting local and budding artists through the star Quest and Star Trek (Star sponsored music programmes.

Foreign Investment;  Nigeria Breweries has through their performance attracted some foreign companies like Heineken which invested over 500 millions Euros (70 million).

The company have supported in Institution of higher learning. For example; Education tax funds in  which IMT is one of the beneficiaries.

Nigeria Breweries are the major facilitators in the building of a sickle cell foundation. Again they also support various health Institutions through the donations of blood Bank equipment, child incubators.

They have also sponsored sports like football, chess, Golf, cycling, Athletics, table tennis, Lawn tennis. They are also committed in the areas of tax and social responsibility, environment, employment generation and so on. All these are done to promote their products and educate, inform the  public about their products and finally to achieve the sales volume target.

1.2  STATEMENT OF THE PROBLEM

The objective of every company is to achieve its sales volume target, because if achieved, other performance indicators like growth and increase in profitability index would be assured. This could be possible if the company’s products are acceptable to the target market. Product advertising therefore plays the invaluable role of informing and educating buyers or consumers about some products, what these products do and how they can satisfy their needs and wants.

In addition, product advertising enhances the response of potential buyers to an organization and its offering. This it does by providing information, channeling desires, and by supplying reasons for preferring the products being projected.

Inspite of the invaluable role of product advertising in achieving the sales volume target of companies, it still have some problems that need to be addressed.

It is said to observe that most companies operating in Nigeria are still inflexible and reluctant to be during or encourages in their advertising policy. They are so scared of contracting advertising agency to handle their adverts that at the end of the day they fail to achieve their sales volume target.

Besides, most companies are inconsistent with their advertising policy. They contract more than one advertising  agency at any given point in time.

This makes difficult to spend some reasonable money on advertising. This is  now becoming a common feature in the brewery Industry. For instance, one hardly hears of advert concerning  old beautiful products like Maltex and Vita Malt. This  should be affecting their sales volume target.

            Finally, the product advertising policy of some companies are not so effective as to enable us have some impact on their sales volume. Some companies do choose some wrong and ineffective media to execute their advertising policy, hence achieving nothing at the end of the day.

All these above discussed problems deserve to be addressed through the provision of appropriate information, because it is only when effective information concerning a problem is provided will its solution be sought.

1.3  OBJECTIVE OF THE STUDY

The broad objective of this study is to examine the major effects and the role of product advertising on sales volume. Other operational objectives of the study includes the following;

i.                    To identify the common form of advertising being used in the brewery industry.

ii.                  To identify the common media of advertising being used in the brewery industry.

iii.                To identify how committed breweries are towards advertising their products.

iv.                To examine the impact of product advertising on the buying attitude of buyers.

v.                  To examine the effect of product advertising on growth and profitability of brewing companies.

vi.                To examine the relevance if product advertising in product survival and performance.

vii.              To identify some problems militating against the effective implementation of product advertising in brewing companies and

viii.            To make some recommendations based on the findings of the study.

1.4    RESEARCH HYPOTHESIS

The following hypothesis formulated by the research will be tested in this study;

i.                    Ho;  Product advertising has no significant role to play in the sales volume determination.

Hi;  Product advertising has a significant role to play in sales volume determination.

ii.                   Ho;  Effective product advertising cannot lead to significant increase in profitability level of a company.

Hi;  Effective product advertising can lead to significant increase in profitability level of a company.

1.5   SIGNIFICANCE OF THE STUDY

As stated earlier in this study, product advertising is one of the vital tools used by companies to promote the sale of their products. Its importance in creating immediate impact on the attitude of the consumers, as well as in generating demand cannot be over emphasized.

Again this background, therefore, this study will be of some immense significance to companies, especially breweries, advertising agents, consumers and academicians.

The information contained in this study will disclose some intrinsic functions of advertising to companies. It will further unveil some unique qualities of advertising, its  types and objectives to companies. These vital issues on advertising  will help companies design or articulate an effective product advertising policy which can achieve their target sales volume. To companies with chequered advertising policy, the information contained in this study will help them restructure and reformulate it with a view  to achieve their objective of increasing demand for their products,  actualizing their sales volume target. Moreso, brewing companies will appreciate the information content of this study because it will help them to choose appropriate form of advertising and media to use in implementing their advertising policy.

Further, advertising agents will equally benefits from the information contained in this study. If not for any other thing, it will help them to fashion out more effective. Ways  or means of laising with  companies in order to  formulate and implement effective product advertising policy for them.

In addition, consumers will find information contained in this study good enough to enable them gain insight in the concept of product advertising, since  they are the main focus of companies advertising policy. besides, they will realise the need to always listen and or pay attention to adverts in the media because these may reshape and redefine their  buying attitude and decision.

Finally, other researchers and academicians will derive some gains from the information content of this study. This will help them carry out further research on the subject of this study.

1.6  SCOPE OF THE STUDY

This focuses on the role of product advertising on sales volume of breweries. It is carried out using the Nigerian Breweries Plc as its case brewing company. In other words, the study focuses on the advertising policy of the company as it affects its sales volume. Other issues discussed in the study include the types of advertisement and media used by the Nigerian Breweries Plc in carrying out its product advertising policy, the level of  commitment of the company towards advertising its products, the impact of the company’s advertising policy on its growth and profitability, and the problems militating against the company’s efforts to implement its advertising policy. the study equally will discloses the recommendations made  by the researcher.

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