THE IMPACT OF ADVERTISING ON SALES PERFORMANCE

(A CASE STUDY OF GUINNESS NIGERIA PLC)

CHAPTER ONE

1.1 Background of the Study

Advertising is any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor (Kotler and Armstrong, 2010). There are various forms of advertising like informative advertising, persuasive advertising, comparison advertising, and reminder advertising. Informative advertising is used to inform consumers about a new product, service or future or build primary demand. It describes available products and services, corrects false impressions and builds the image of the company, (Kotler, 2010).Advertising can be done through print media which includes newspapers ,magazines ,brochures ,Audio media for example Radio, and visual media which includes billboards, and television (Kotler and Armstrong 2010).

Sales performance describes the trend of collections in terms of revenue when comparing different periods (MC Cathy, 1994). The sales may be in form of offering products or services to consumers. A service is any activity or benefit that one party can offer to another that is essentially intangible and does not result in ownership of anything (Kotler and Armstrong, 2010).Sales volume is the core interest of every organization and is based on sales and profit .When volume goes up profits rises and management in organizations is made easier.

1.2 Historical Profile of Guinness Nigeria Plc

The firm Guinness Nigeria Plc came into existence in year 1950 with the sole aim of importing and distributing Guinness stout from Dublin for eventual sales in Nigeria. Due to the success of the product in the country it gave rise to a decision to establish a small brewery in the year 1962. The foundation stone of Guinness was laid at Ikeja on the 31st January 1962, by Arthur Benjamin Francis Guinness now the Earl of Irish to which titles he succeeded on his grandfather’s death until 1967 in active services during the 2nd world war.

Guinness Nigeria is a subsidiary of the prestigious Diageo Plc of the United Kingdom. The brewery was the first outside of Ireland and Great Britain. Other breweries have been opened over time – Benin City brewery in 1974 and Ogba brewery in 1982.

Guinness Nigeria produces the following brands – Foreign Extra Stout (1962), Guinness Extra Smooth (2005) Malta Guinness (1990), Harp Lager Beer (1974), Gordon’s Spark (2001), Smirnoff Ice (2006), Satzenbrau (1995).

Guinness Nigeria Plc is a company that believes in enriching its communities. This it has achieved by embarking on laudable Corporate Social Responsibility projects in several communities in Nigeria. These projects are Water of Life initiative, which currently provides potable water to over 500,000 Nigerians spread across several rural communities, from Northern to Southern Nigeria; scholarship and Guinness Eye Hospitals in three cities in Nigeria.

Nigerian Guinness is said to be twice as strong as Irish Guinness. In the 1800s, the Irish brewed the Guinness twice as strong, due to a fear of evaporation on the long voyage to Nigeria. However, the alcohol did not evaporate, and to this day Nigerians brew their Guinness twice as strong.

Guinness Nigeria limited became a public company In 1965 and was one of the first companies to be quoted in Nigeria stock exchange with shares being offered to Nigerian shareholders, 1200 Nigerian held 20% of the equity.

In 1971, a decision was taken to build a new Brewery at Benin at a cost 12million to brewery larger beer, this was the biggest brewery ever built in Nigeria.

The company believes that investment in the training and development of its staff are wise investments. This has resulted in the establishment of training centers in Benin and Lagos (Ikeja).

Following the ban on importation of methods barely the company has conducted research into the use of maize and sorghum in place of malt in production of the different brands of beverages.

In the Nigerian market, Harp lager beer gained a remarkable success alongside Guinness  stout, due to its good quality too hence received a wide patronage and now known as Guinness Nigeria PLC.

It was merely up to a decade of the brewery and marketing of harp that its brand loyalists started shifting their interest to the other hand. The complaint raised by Harp patronizes for gradually changing preference was as a result of the carelessness on the part of the brewers to eradicate particles discovered in the final product and these were major set-backs suffered by Guinness Harp.

In the year 1995 a new product line “satzenbrau” was in the market and it received attention in Lagos and west Ibadan to be precise for now.

In 1990 another product line “Malta Guinness”, was also in the market and it has received attention all over the country and outside the country.

It indeed received acceptance and as such requires effective management system, to guide against the future of all lines of product carried out by Guinness Nigeria Plc. (www.Guinnessnigeria.com).

1.3 Statement of the Problem

Guinness Nigeria Plc carries out frequent advertising of their products to increase their sales volume, through taking part in charitable funds in Nigeria and even sponsoring sports .It advertises using radio, television and newspapers.

Despite its efforts in advertising regularly the sales of Guinness Nigeria Plc have not improved to the desired targets. The sales in Guinness Nigeria Plc for the past four years have been declining.

1.4 Objectives Of The Study

The purpose of the study was to establish the impacts of advertising on sales performance.

1. To examine the forms of advertising in Guinness Nigeria Plc.

2. To establish the level  of sales performance in Guinness Nigeria Plc

3.     To establish  the relationship between advertising and sales in Guinness Nigeria Plc

1.5 Research Questions

1. What are the forms of advertising used by Guinness Nigeria Plc?

2. What is the level of sales performance of Guinness Nigeria Plc?

3. What is the relationship between advertising and sales performance in Guinness Nigeria Plc?

1.6 Scope of the Study

Content scope

The study covered advertising as the independent variable and sales performance as the dependant variable.

Geographical scope

The study was centered at the Guinness Nigeria Plc because it is the headquarter of the industry where marketing plan is carried out, and it has large sales volume.

1.7  Significance Of The Study

The findings of the study were expected to benefit the following.

The findings of the study were used as references for future research work.

The results of the study are of surmountable information when drawing measures which would in turn lead to capture of substantial market share.

The study can be the source of reference on how to revive and adopt and also follow the adverts according to the dynamic markets.

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