This study evaluates the effectiveness
of advertising expenses on the sales revenue and profitability of Unilever
Nigeria Plc. This study is based on secondary data collected for advertising
expenditure, sales revenue and profitability of Unilever Nigeria Plc over the
period of 1996 to 2009 from the annual report and accounts of the company under
study. Among the objectives of the study is to evaluate the extent of the
effect of advertising on the sales revenue of the company. Correlational and
regression analysis study designs were adopted for the study. The contribution
of the first hypothesis has found that advertising expenses has depicted
significant relationship between advertising and the sales revenue of the
company. Furthermore, the second hypothesis result has shown that advertising
has no significant effect on the profitability of the company. This study
concluded that advertising is considered as one of the most important medium of
communication influencing the company’s performance in more than one ways. But
its influential strategic important 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
crucial to increase sales revenue and profitability such as; sales promotion,
personal selling, publicity etc which are crucial should be considered.
Modern marketing calls for more
than developing a good product, pricing it attractively and making it
accessible. Companies and individuals must also communicate with present and
potential stakeholders, and the general public. For most companies and individuals,
the question is not whether to communicate but rather what to say, how to say
it, to whom and how often. But communication gets harder and harder as more and
more companies clamour to grab the consumer’s increasingly divided attention.
To reach target markets and build brand equity, holistic marketers are
creatively employing multiple form of advertising.
In Nigeria over the years,
companies and individual service providers have been trying to improve on the
creativity in their adverts so as to meet world standard and again create the
necessary awareness that a product needs.
1.2 Background of the Study
Advertising is a form of
communication intended to persuade its viewers, readers or listeners to take
some actions. It usually includes the name of a product or service and how that
product or service could benefit the consumer, by persuading potential
consumers and customers to purchase or to consume that particular brand. Modern
advertising developed with the rise of mass production in the late 19th and
early 20th centuries.
Advertising could also be
seen as an element of a marketing communications program. It is usually not the
only one-or even the most important one in terms of building brand equity. The
marketing communication mix consists of six major modes of communication.
Advertising: Any paid form of non
personal presentation and promotion of idea, goods or services by an identified
2. Sales promotion:
A variety of short term incentives to encourage trial or purchase of a
product or service.
3. Events and Experiences:
Company sponsored activities and programs designed to create daily or
special brand-related interactions.
4. Public Relation and Publicity: A variety of programs designed to promote or
protect a company’s image or its individual products.
5. Direct Marketing:
Use of mail, telephone, fax, e-mail or internet to communicate directly
with or solicit response or dialogue from specific customers and prospects.
6. Personal Selling:
Face-to-face interaction with one or more prospective purchasers for the
purpose of making presentations, answering questions and procuring orders.
The above listed are the
elements of a marketing communication mix of which advertising is one.
Therefore, the researcher wants to really find out the role that advertising
plays in the mix hence, the topic “The Impact of Advertising on the Sales
Performance of Consumer Goods”. A case study of Unilever Nigeria plc and
proffer a solution applicable in this present time to ensure that advertising
impacts positively on sales.
1.3 Statement of
The purpose of this research
work is to thoroughly evaluate the impact of advertising in relation to
performance in sales and create strategies that will commensurate with
increased sales due to the use of advertising of products and services of
of the major problems today in many companies is how to strike balance between
advertising and profitability.
problem facing some firms is how to design an advert strategy that will yield
increase in sales.
organizations are also confronted with how and when to draw up and effect the
strategies that concern advertising of their products.
problem of effective management of adverts in a way that will bring economic
value to the organization is also involved1.4 Objectives of the StudyThe objectives
of this research work are to:
various advertising strategies that will be useful for the management in
the advertising strategy that will increase sales turnover.
out whether advertising is impacting positively or negatively to sales.
out how the company that is Unilever Nigeria Plc determines its advertising
QuestionsThe following research questions have been developed:
can an organization use advertising to stimulate consumers?
effective advertising lead to increase in sales performance positively?
III. Does your
advertising commensurate with product satisfaction?
advertising strategy does your company use to control its market value?1.6 Statement
of HypothesisKerlinger F. (1976) defines hypothesis as a conjectural
statement of a relationship between two or more variables. Hypotheses are
usually gotten from research questions/problems and can be regarded as
tentative solutions to research questions. Therefore, the researcher will test
the following hypotheses
Null hypothesis (H0): Advert cost will not have a positive impact
against sales revenue
Alternative Hypothesis (H1): Advert cost will have a positive impact
against sales revenue
Null hypothesis (H0): Effective advertisement will not have a
positive impact on profit
(H1): Effective advertisement will have
a positive impact on profit
of the Research Study
This research work has much
significance but some of them are:
research work will improve and expand the knowledge and understanding of the
researcher on issues surrounding or pertaining to advertising
will provide relevant information for management of any organization in making
decision related to advertising.
will help in seeking solution to all problems that arise from poor advertising.1.8 Justification
of the StudyThe research work is rightly carried out because of the
will educate, especially advert personnel on how adverts are really impacting
to company’s goods and services, sales revenues.
will serve as reference material to any scholar/student who is willing to know
or to add to his/her knowledge and insight of what the real impact of
advertising is.1.9 Scope of the StudyIt is
generally known that advertising covers a wide range area, but for the purpose
of this research work, it will be limited to studying the impact of advertising
on the sales performance of consumer goods in Unilever Nigeria plc.
Thus, effort will be made
towards finding out if the advertising cost of Unilever Nigeria Plc is either
positive or negative on revenues and profit of the organization. The researcher
intends to find out by looking into a ten year period of performance by the
This is the task of creating, promoting, and delivery of goods and service to
consumers and businesses.
2. PRODUCT: Anything that can be offered to a market to
satisfy a want or need.
3. PRICE/PRICING: This is the amount of money for which goods
or services is brought or sold, as selected by the company as final price from
its range of prices.
4. COMMUNICATION: this is the act of delivering and receiving
messages from people. This includes newspaper, magazine, radio, Television
5. ADVERTISING: A form of Communication intended to persuade
its viewers, readers, or listeners to take some actions on a product or
6. STRATEGY: These are plans designed to achieve a long
term aim and objectives.
TURNOVER: This is the rate at which
goods are sold.
8. CONSUMER: Is a person who buys goods or services that
is, the final person who uses a product.
9. SATISFACTION: It is a feeling of fulfillment that is gotten
from the use of a product.
10. COMPANY: This is referred to as a firm. That is,
11. MANAGEMENT: An act of managing (i.e planning, staffing,
controlling etc) all resources available to the business for the achievement of
goal and objective of a company.
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