CHAPTER ONE
1.0 INTRODUCTION
The need to study this topic, the effectiveness of advertising in the marketing of consumer oriented product in Nigeria is very vital to identify the impact advertising has on sales volume, especially the sales volume of 7up bottling company Plc,a company in Nigeria which has a competitive market environment.
In the early 1960s the economy of Nigeria was dominated by few well-known companies and competitive economy then was more or less perfect. Advertising was therefore focused on top management and in effect different kind of products were advertised including beverages. The consumers had more money at their disposal for goods and services. However, it was indeed and economy of surplus, lower process, subsidized goods and higher disposable income. The economic recession of the 1980, had changed all these and oil price dropped to a certain level and different kind of trade restriction were introduced to restrict the economy. Firms as well as individuals started feeling the impact of the recession, price of goods and services skyrocketed, different fees and taxes were instantly imposed. Consumers’ disposable income dropped and large amount of consumer oriented goods were not sold(e.g.) soft drinks. Producers and manufacturers of soft drinks such as 7up bottling company experienced low sales, profits and turnover. This gave rise to the importance of advertising which objective is to create awareness of a particular product and in this context consumer oriented goods like soft drinks of 7up bottling company and impact more ledge and desire to persuade consumers to patronize their product that will satisfy the need of which it is bought.
1.1 BACKGROUND OF THE STUDY
7up bottling company is a company in Nigeria that has the sole right to bottled and distributes 7up products. One of the most perspective multi-national companies, 7up is fully known as one of the best soft drink producers in Nigeria.
In order that 7up is made, the first is to select the bottles (both new and returned) and dispose of these with defects. The bottles are closely scrutinized to ensure that they are hygienically clean and not clopped. In order section of the plant, purifies sugar is added to pure drinkable water to produce a solution called single syrup. In the next stage, the syrup is passed through a filter bed to ensure its purity. This then flow to a point where it is mixed with the undiluted 7up solution called concentrate carbon (iv) oxide. A gas known as (Ho2) is added to give a refreshing 7up soft drink.
Facts gathered suggest that Nigeria drink about 9,000,000 (nine million) bottles of 7up soft drinks every day. 7up products dominated the market share in early 1970s. Few soft drinks companies were in existence then and competition among them were not keen and perfect.
Advertising played an important role in the increase of sales volume of this company in question. It is through advertising and other marketing activities that people get to know about 7up. The advertising was done in over 20 (twenty) different languages in Nigeria. It was as a result of this that there is an increase in sales volume of 7up bottling company products.
The company devoted much importance on advertising of their product and this recorded much profit yield for the company. The company generated and annual turnover of about N 1.8 billion last year. This turnover is limited to Lagos state which is my case study. The company had also made some impact in the sponsorship to qualified candidate in primary secondary and also institution of higher learning. The relevance of this section relates to the fact that as early as the foundation of the company, 7up has attended and created a reputable image for itself through advertising.
1.2 STATEMENT OF THE PROBLEM
ADVERTISING: This is a form of communication said for by and identified sponsor and it is relayed by mass media. It is also a sort of paid non-personal communication about a company and its product which is passed to the general public through the mass media. A contains and good definition of advertising must contain these features:
- It is paid form of communication
- There is identified sponsors
- It influence consumer to do something
- It is transmitted through the media
- It must be non-personal
Advertising helps in the creating of awareness to the public and the consumer on the arrival of a new product and how such product is being used. Manufacturer produces a new product, but the consumer will not know how to use it, then advertising help in telling them how to use the product and create in them the knowledge of the new product. Advertising leads to and induces repeat purchases and greater sales volume. It therefore inducting greater output and cheaper cost per unit, apart from giving information about the existence of a product, it also afford the company the opportunity of explaining the differential advantage of the product to the target market over the competitors own.
CONSUMER: This is the individual who pays or obtains and uses such good for his own final consumption. Industrial users however, are those persons or institutions that purchase individual product or machine for the purpose of further production. Without advertising, these consumers of different group will not know the available product but when this information is relayed to them through advertising, the producers will sell and the consumers will as well buy.
7up bottling company unlike other companies, is facing some problems in advertising, but the research work is specifically on the advertising problem of 7up bottling company.
For instance the best advertising medium to be used, some have argued that there is no best medium to use in advertising of their product to the specific target market while others said that not every prospect or consumer have the capability to purchase a television set and that is now a problem that need to be tackled. Another problem according to research is the ability of the advertising manager to determine the best advertising budget to be used. Whether to use affordable method, competitors expenditure, or percentage of sale method.
Another problem facing 7up bottling company is what kind of advertising to use.
Finally the best advertising agency will service their account well.
1.3 PURPOSE OF THE STUDY
The purpose of this study is to find out the effect of advertising in marketing of consumer oriented product. It is an obvious fact that this study is promoted to identify the different advertising media employed by 7up bottling company in promoting the 7up products they manage, making radical effort to make sure the message gets to the respective target market. Another objective of this study is to find out among all the existing advertising media which one does 7up bottling company sees as the best. By this selection it enable 7up bottling company to determine which of these advertising media make the most impact on the company’s sales volume.
This study is also interested to know how 7up bottling company is making use of advertising to improve their old market, capture new and create new ones and winning new customers. Also among these objectives of the study is to determine the level at which 7up bottling company carries out advertising or is making use of it to correct bad image and to create an image that would appeal to the consumer or the target market to create goodwill. It is also set out to find out whether promotional mix strategies are making impact or are more efficient ways to promotion of 7up product than advertising.
1.4 RESEARCH QUESTION
The following research questions brought answers for obtaining information for advertising observed events to this study:
- Which department is involved in taking charge over the sales officers and the cadre?
- How can the product of advertising on sales be improved?
- What reaction do the consumers take on the advertising of a product?
- How does the advertising of a product get to the consumer?
- How effective is advertising on the sales volume of 7up bottling company?
- Does advertising increase the cost of a plant?
- Is advertising better than other promo tools?
1.5 SIGNIFICANCE OF THE STUDY
This study signifies or entails that advertising helps to increase sales volume of a product. In other words advertising encourages repeat purchase.
Advertising also serves as an employment opportunity to make it clear when you want to advertise your product you must employ one or more people in one way or the other. This research therefore will be meaningful to all consumer oriented marketing companies. This study will be beneficial to them since it will expose both favourable factors towards the effectiveness of advertising in marketing of consumer oriented product especially 7up bottling company.
1.6 SCOPE OF THE STUDY
The researcher is restricted to 7up bottling company Ikeja and its products like 7up, pepsi and mirinda.
1.7 DEFINITION OF THE TERMS
Advertising: It is defined as any form of non-personal presentation and promotion of ideas, goods and or services by an identified sponsor through a medium or media.
Marketing: It is a social process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others.
Disposable Income: Money that is available for use and free to spend after paying taxes.
Consumers: They are individuals and households buying for personal use, i.e. they buy in order to enjoy the satisfaction the product offers.
Producers: They are individuals and organizations buying for the purpose of producing i.e. for furthering production.
Marketing Environment: Is a set of diverse, dynamic and uncontrollable forces that impinge on an organization’s marketing operations and opportunities.
Promotional/Mix: Consist of four (4) main tools viz; personal selling, advertising, sales promotion and publicity.
Sales Volume: This is used to measure the amount, usually in cartoons/crates, etc, of the product being sold at a given point in time.
