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ST. AUGUSTINE UNIVERSITY OF TANZANIA
Department of public relation and advertisement
The contribution of advertisement on increasing sales performance: A case study of
Nyanza Bottling Company Limited Mwanza
Research Paper on Partial Fulfillment of the Requirements for the Award of Bachelor
Degree of Art in Public Relations and Marketing Submitted in the Department of Public
Relations and Advertising
Leonidas Irene K
June, 2013
i
DECLARATION
I, Leonidas Irene K,declare that the material of this research study are my own original
work and have not been published nor submitted to any other University for the similar or
different award.
Signature……………………………..Date
Denis Mpagaze (Research Supervisor)
Signature……………………………Date………………………
ii
COPYRIGHT
This copyright material is protected under the Berne Convention, the Copyright act of
©1999 and other national enactments. All rights reserved. No part of this work may be
reprinted, copied, photocopied in any way without the prior permission of the owner.
The owner of this work is LEONIDAS Irene K however SAUT can give permission on
her behalf.
iii
DEDICATION
I dedicate this work to my parents Mr. Leonidas Mulogo and my late mother Christer
Leonidas.
iv
ACKNOWLEDGEMENT
Firstly I would like to thank the Almighty God and his Son Jesus for being with me till
today.
Secondly, I send my heart full gratitude to my ever loving family my Father Mr.
Leonidas Mulogo, My late mother Christer Leonidas, my young sister Lilian Leonidas,
my young brother Victor Leonidas and my sister Sylvia Leonidas for their prayers, moral
as well as financial support throughout my academic years at SAUT.
My heart full thanks go to my supervisor Mr. Denis Mpagaze, for his good guidance and
supervision of my research, with my own efforts I would not make it.
I want to express my thankful appreciation to Mr. Frank Katabi for devoting his time
helping me out during my studies. I appreciate his counseling, guidance and moral
support during my three years of study at SAUT.
I give my sincere thanks to my lovely friend Jackline Basmarck Patric for his support
throughout the three years at SAUT. May God bless Jackline.
I forward my thanks to my group members who assisted me in one way or another during
my studies especially my chair man Gidion Magana and many others.
This acknowledgement will be incomplete if I won’t take time to say thanks to my
respondents who gave me support and appropriate data for my research.
v
My appreciations also go to my friends, Mwema Kihengu, Luis Idda, Edward Paulus,
Mazigo Boaz, Mosha Monika, Ndaki Gisela, Mosha Prim for their support throughout
my stay at SAUT.I know there are a lot of people left out, but I would like to say that I
recognize their love and support in our friendship during my stay at SAUT. May the
Almighty God bless you all?
vi
ABSTRACT
The study is about contribution of advertisement on increasing sales performance of
Nyanza Bottling Company. The main objective was to find out the contribution of
advertisement in increasing sales of Nyanza Bottling products. Push theory was used as a
guideline for problem development and data collection. The theory argues that in order
for any organization to grow and get market for their products they need to advertise and
promote more their products.
The researcher used interviews and question to collect data from 50 respondents in
Ilemela district in Mwanza region Qualitative and quantitative methods were used to
analyze the data. The major Discovery was that advertisement plays great role promoting
products of NBCL to increase sales and create awareness of their products.
vii
TABLE OF CONTENTS
DECLARATION............................................................................................................. i
COPYRIGHT................................................................................................................. ii
DEDICATION .............................................................................................................. iii
ACKNOWLEDGEMENT ............................................................................................. iv
ABSTRACT.................................................................................................................. vi
CHAPTER ONE..............................................................................................................1
Problem Setting...............................................................................................................1
1.1 Introduction............................................................................................................1
1.2 Background of the study.........................................................................................1
1.2. 1 The background of Nyanza Bottling Company Limited (NBCL) ........................1
1.4 Research Objectives ...............................................................................................2
1.5 Research Questions ................................................................................................3
1.6 Significance of the study ........................................................................................3
1.7 Scope of the study..................................................................................................3
1.8 Definition of Key terms..........................................................................................3
CHAPTER TWO.............................................................................................................5
Literature Review ............................................................................................................5
2.1 Introduction............................................................................................................5
2.2 Theoretical argument..............................................................................................5
2.3 Theoretical Framework ..........................................................................................6
2.4 Empirical Literature Review...................................................................................7
2.5 Research gap..........................................................................................................8
CHAPTER THREE.........................................................................................................9
Methodology ...................................................................................................................9
3.1 Introduction............................................................................................................9
3.2 Research Design.....................................................................................................9
3.3 Population Sample .................................................................................................9
3.4 Sampling Technique.............................................................................................10
3.5 Sample Size .........................................................................................................10
3.6Area of study.........................................................................................................10
3.7 Data collection methods .......................................................................................10
viii
3.8 Validity and Reliability ........................................................................................11
3.9 Data Analysis.......................................................................................................11
CHAPTER FOUR .........................................................................................................12
Findings ........................................................................................................................12
CHAPTER FIVE...........................................................................................................15
Discussion.....................................................................................................................15
5.1 Introduction..........................................................................................................15
5:2 Discussions ..........................................................................................................15
5:3 Conclusions .........................................................................................................17
5:4 Recommendations................................................................................................17
REFERENCES..............................................................................................................19
APPENDEX 1...............................................................................................................20
Questions for NBCL Staff .............................................................................................20
DODOSO 1...................................................................................................................22
MASWALI KWA MENEJA WA BAA NA HOTEL.....................................................22
1
CHAPTER ONE
Problem Setting
1.1 Introduction
This chapter presents the background to the study, statement of the problem, research
objectives, research questions, scope of the study, definitions of the key terms and
abbreviations.
1.2 Background of the study
Today is the world of business with free market economy. Every company sells whatever
the product it wants at any price and quantity. Therefore, the world is so competitive and
every company fights to survive through increasing market share and for a company to
do well in the market place there should be some mechanism to attract more customers.
Scholars in advertising theories argue that advertisements and promotion remain to be the
major factors which facilitate the rapid growth of sales performance. The more
competitors’ brands increase, the more competitors need promotion and advertisements
to capture customers. Thus why advertisement has become international since producers
and companies try to sell their product on the globalize market in almost every corner of
the world (Kotler, 1991).
1.2. 1 The background of Nyanza Bottling Company Limited (NBCL)
NBL was established in December 1984 with the explicitly objectives of bottling the coca
cola range of products as authorized bottler of coca cola company. Coca cola is going
under license; this has been franchised from abroad. It is a 1986’s joint venture between
2
Sumaria Corporation and the Christopher Mwita Gachuma Group of Companies (CMG);
one of the East Africa’s most dynamic companies. Currently the company sells more than
one million bottles per day. NBCL is located at Igoma area, 8 Km from Mwanza city.
Apart from Coca cola, the company produces Fanta, Sprite, club soda such as spar letta;
Dasani water and sun fill juice. Sold over six regions; Tabora, Kigoma, Kagera, Mara,
Shinyanga and Mwanza.
1.3 Statement of the problem
Companies have been using advertising as part of their marketing strategies in order to
inform and persuade consumers of their products and services in a competitive world.
This testifies the important of advertisements for any company survival. NBCL being a
company is not far behind in using advertisements to persuade people consume it brands;
Coca cola, Fanta, Sprite, Club soda such as Spar letta, Dasani water and Sun fill juice.
Currently NBCL remains a leading soft drink company in lake zone but no study has
been conducted to establish whether such successes is a results of advertisements, this
study sought therefore to fill out this gap.
1.4 Research Objectives
1.4.1 General objectives of the research
To find out the contribution of advertisements in increasing NBCL’S sales performance
1.4.2 Specific objectives
i. To investigate the type of media used by NBCL when advertising its products.
3
ii. To find out the frequency at which NBCL advertises its products to consumers.
iii. To find out the consumers’’ perceptions of NBCL advertisements.
1.5 Research Questions
The research was guided by the following questions:-
i. What type of media does NBCL use when advertising its products?
ii. How frequent does NBCL advertise its products to consumers?
iii. What are the customers’ perceptions of NBCL advertisements?
1.6 Significance of the study
i. To the researcher
This study provides broad knowledge of the importance of advertising on increasing sales
performance in business industry.
1.7 Scope of the study
The research was conducted on the contribution of advertisement in increasing sales of
NBCL Mwanza plant. Therefore, findings obtained reflect responses from NBCL
customers and NBCL staff.
1.8 Definition of Key terms
Promotion: Promotion is a coordination of sellers initiated to set up channels of
information and persuasion to sell goods and services (Belch, 1998:14).
Advertising: Advertising is any paid form non personal communication about an
organization, product, services or idea by an identified sponsor (Belch, 1998:14).
4
Market: Market means to advertise something in a particular way in order to sell it
(Poliwoda, 1993:35).
5
CHAPTER TWO
Literature Review
2.1 Introduction
This chapter covers a number of literatures that the researcher reviewed concerning the
problem under the study. It includes theoretical argument, theoretical framework,
empirical literature and research gap.
2.2 Theoretical argument
2.2.1 Theoretical perspective on advertisement
Advertising performs essential functions in today’s society of business and completion. It
is through advertisements that consumers can be aware on the kinds of brands and
services available in the marketplaces. It is through advertisement that new markets are
created and mass production is stimulated by mass demand (Gillian, 1971).
Market maturity study asserts that a good competitor for product and service must inter in
marketing advertising because is more persuasive, and at this stage mass selling and sales
promotion blends of consumer product firms may require aggressive personal selling
perhaps to supplement more advertising and total budget allocated to advertising and
promotion may rise as a competition increasing (William, 1999).
Advertisement is intended to create immediate actions and it generally carries an
argument message such as an announcement of sale, contest, coupon, or some other offer.
The consumer benefit special offer, usually to financial nature. The major sale activities
are supported by advertising for specific objective and it is determined by the nature of
6
advertising being used. NBCL advertising is designed to describe the prize structure and
what consumer can do to identify the product through making the premium clearly
(Runyoni, 1984).
Advertising is integral part of our social and economic system. In our contemporary
society advertising has involved into a vital communication system for both consumer
and business. The ability of advertising method to deliver carefully prepared massages to
target audience (Belch, 2001).
Advertising in historical industrial market is there to save many geographical dispersed
customers, by making efforts and use full of advertising in industrial marketing through
performing his function (Runyoni, 1984).
Also if an organization advertises his products can influence direct or indirect purchase of
the product being sold simply advertisement play the role in creating awareness about the
product and leads the customer to be able to identify it. Also advertisement helps the
organization to build the reputation and prepare the way for personal selling and motivate
company to distribute their product. Therefore NBCL provide different advertisement so
as to change customer altitude towards their product.
2.3 Theoretical Framework
This research was guided by the following theories:-
The Push theory
The Push theory by Daniel Dick states that you can increase sales by creating incentives
to wholesalers or retailers to sell more of your products. In this method you would offer
7
discounts to whole sellers or retailers who buy your product to bulk, this leaves them with
more of your merchandise on hands and drives them to sell more of your products giving
them discounts, pushes them to buy more of your products at lower prices to increase the
amount of money they make in turn they must push your products to customers because
they will make a better return on them than a similar products supplied to them by your
competitors.
The activation theory of information exposure
The activation theory of information exposure by Lewis Donohue, Philip Palm Green and
J Duncan in 1980states that individual will seek to satisfy their needs for stimulation and
information when attending to a message before they seek to fulfill their needs for
information alone (Araka and Araka, 2010, p. 31). Activation theory helps to overcome
the criticism that uses gratification research does not stipulate why people use the media
by nothing that the media are part of the environment providing a variety in activities.
Information helps in understanding the world and self and activities of various intensities.
This theory explains how individuals seek messages that fulfill their cognitive need for
information as well as their needs to be entertained. When conducting Advertisement
NBCL points to a need to meet both the cognitive and emotional needs of their
consumers.
2.4 Empirical Literature Review
Eutropia (2008)’s study on “The impact of advertisement on sales performance” reports
that there is extremely challenging to establish advertisement budgets where by the
management lucks reliable standards for determining how much to spend on specific
8
activities and how much to spend altogether on advertising or personal selling. A serious
problem is that the management normally cannot assess the result of promotion
expenditure. Advertisement activities generally are budgeted as current operating
expenses, implying their benefits are used up current immediately. Luhanga’s study
recommends that before doing advertisement there should be a well framed budget which
will be used to guide them as they do advertisement throughout.
James (2010)’s study on the ‘impacts of advertisement on organizational performance”
reports that advertisement should be included in a company’s plan along and personal
selling. It means that advertisement budget selects appropriate sales promotion technique
and evaluates performance of sales activities. One problem the management faces is that
many promotions techniques are short run tactical actions which are designed to produce
immediate response as a result they tend to be used as stop gap measure to reverse
unexpected sales decline rather than as integrated part of marketing program .
2.5 Research gap
Most researchers have tried to explain how advertisement has some impacts on
organization sales performance and the importance of advertisement on promoting
customer relationship within an organization. Despite that the studies which have been
done are very few. Therefore the researcher aimed at investigating the contribution of
advertisement on increasing sales of NBCL product.
9
CHAPTER THREE
Methodology
3.1 Introduction
This chapter presents various steps adopted by the researcher in studying problem along
with logic behind. Therefore this chapter is categorized into research design, population,
sampling technique and sample size, tools for data collection, validity and invalidity and
data analysis.
3.2 Research Design
Research design is the conceptual framework within which the research is conducted
whereby researchers are to provide the clear statement of the problem, data collection
techniques, population to be studied and methods for data collection and analysis
(Kothari, 1990). This study involved a survey research design whereby Nyanza Bottling
Company Limited was selected as a social setting in which data were collected from the
NBCL employees and NBCL customers. In addition to that, the researcher used both
qualitative and quantitative designs because data were shown clearly due to the use of
tables and explanation (Orodha, 2003).
3.3 Population Sample
Population of the study includes individuals with common observable characteristics; it is
the targeted group of the study from which the desired information can be drawn
(Mugenda and Mugenda, 2003). The target population of the study was customers of
NBCL and workers of NBCL who provided information to the study.
10
3.4 Sampling Technique
The researcher used purposive sampling technique where the only members who met the
objectives of the study were to give their opinions and arguments on the research
questions. The researcher used purposive sampling because it was relevant to the research
topic, also in that it was possible to select and choose the purpose respondent as well as
specific targeted people (Tromp, 2006).
3.5 Sample Size
Sample size is the optimum number of the individuals to be selected from the entire
population (Kothari, 1990). In this study, the researcher had a sample size of 50
respondents where15 NBCL staff members, 25 NBCL customers, and 10 managers of bar
and hotel the total was 50.
3.6Area of study
The study was conducted in Mwanza region where by Nyanza Bottling Company Limited
was used as a unit of study. The researcher chose Mwanza region because of limited time
and cost constraints.
3.7 Data collection methods
3.7.1. Primary data collection
The primary data was collected through questionnaires and interview
(i) Interview
Interview is a systematic conversation between the researcher and the respondent
(Kothari, 2004:150). The researcher interviewed customers and workers of NBCL.
Customers were grouped into retail and whole sales interviews were conducted with
11
individual respondents. Questions directed were too technical to secure more realistic
information to supplement the data likewise to the customers of NBCL who were also
grouped.
(ii) Questionnaires
The researcher used questionnaires collect information from scattered respondents
3.7.2. Secondary Data collection
The researcher collected secondary data through sales evaluation forms, brand
performance, evaluation forms, and booklets on sales development programs, annual
reports and relevant materials.
3.8 Validity and Reliability
Extreme efforts were made to ensure that the data were reliable by being careful during
the analysis of the relevant literatures.
3.9 Data Analysis
Data analysis is the process of cleaning up the raw data collected from the field; it
simplifies interpretation process (Kothari, 2004). In this study, findings were analyzed
both qualitatively and quantitatively. Tables and percentages were used to analyze
quantitative data and words (explanations) were used for interpretation of both numerical
and qualitative data.
12
CHAPTER FOUR
Findings
3.1 Introduction
As noted earlier, this study intended to find out the contribution of advertisements in
increasing the sales of products. This chapter, therefore, presents and analyses data
collected by a researcher through interview and questionnaire.
3.2 Findings
(i) The importance of advertisements to NBCL
Table 1: The importance of advertisements to NBCL
Departments
Responses
Administration Sales Production Total %
Increasing sales 1 1 2 4 26%
Creating awareness 4 3 2 9 60%
Making comparison 0 1 1 2 13%
Total 100%
Source: Research findings 2013
13
The table indicates that four respondents one from administration, one from sales
department and two from production department which make a total of 26% said that
advertisement is very important to their organization because it help the organization to
increase sales through reminding the public about their product and decide to purchase.
Also nine respondents four from administration, three from sales department and two
from production department which is 60% said advertisement helps organization to create
awareness of their products, and two respondents one from sales department and one
from production department which is 13% said that advertisement help customers to
differentiate their product from other companies’ products. Therefore advertisement is
important to NBCL because of being a tool for creating awareness as nine respondents
said.
(ii) Customers’ perception about NBCL advertisements
Table 2: Customers perception towards NBCL advertisements
Responses Number of respondents Percentage
Very good 20 40%
Good 28 56%
Bad 2 4%
Very bad 0 0%
Total 50 100%
Source: Research findings 2013
14
The table indicates that 40% of customers said that advertisements done by NBCL are
very good, 56% of customers said that NBCL advertisements are good while 4% said that
NBCL advertisements are bad. This indicates that the majority of customers perceptions
about NBCL products is good that’s why they are motivated and influenced by the
advertisements hence they purchase NBCL products.
(iii) Type of media used by NBCL in advertising its products
Respondents from NBCL staff said that the type of media they used in advertising their
products were magazine, billboards and television whereby NBCL staff members said
that they mostly prefer using the three types of media because of the fact that television
isn’t reliable to all people especially rural areas whereby in rural areas because there is no
excess to television they use magazine and billboards to advertise different products. Due
to this NBCL use magazine, television and billboards to advertise their products.
(iv) The frequency at which NBCL advertises its products
The researcher wanted to know how frequent NBCL does its advertisement and came to
discover that NBCL does its advertisement as per campaign because when they want to
launch a new product whereby they believe it’s the right time to advertise their products.
15
CHAPTER FIVE
Discussion
5.1 Introduction
This chapter discusses objectives of the study which was obtained through findings and
theoretical literature review of the study.
5:2 Discussions
5:2:1 The role played by advertisement in increasing sales
The role of advertisement in historical market is to serve many geographical dispersed
customers, by making effort and useful of it in industrial marketing through performing
this function. Also when an organization advertises and promotes its product can
influence direct or indirect purchase influence of the customer. Advertisement plays great
role in creating awareness about the product and leads the customers to be able to identify
it.
Also advertisement helps the organization to build the reputation and the way for
personal selling and motivate company to distribute their product.
Advertisement play important role in many organizations through helping the
organization to generate revenue and profit by stimulating sales. Advertising rises market
awareness of an organization product and services and generate to lead sales force to
follow up by building a brand image for the product advertising, differentiate the product
from competitors and help to generate a corporate image and build market confidence
and trust an organization.
16
Also in successful business, advertising play an essential and important role especially in
promoting sales of many organization through increasing sales and creating awareness in
people. This generates public to become conscious to the goods and services under the
brand they pursue and make people to buy better.
According to the data a researcher have shown that the role of advertising in promoting
sales of NBCL product is to create awareness, increase sales and help customers to
differentiate their product from other companies product for example nine respondents
from administration, sales department and production department agreed that advertising
play important role in their organization through increasing sales.
5:2:2 The influence of advertisement on increasing sales
Push theory utilizes the concept of market segmentation, consumer reach, idea
configuration, communication facilitation in centers in order to maximize the target
audience response. The theory looks at marketing philosophy that people will adopt new
idea or behavior if they feel that there is something of value and if there is certain
discounts in the product they want to purchase something which will make a customer go
for affordable goods with affordable prize. Push theory relies on four basic principles
such as product, price, promotion and place. These techniques are used in targeting
market and show factors like funds for the product and campaigns.
Push theory influences and increase sales of NBCL product through the involvement of
marketing mix which enable public to make effort in changing their behavior, thinking
and altitudes and hence start to purchase the product segmented. For instant NBCL report
show that sales in Gedeli lodge before advertisement were eight but soon after
17
advertisement increased up to 8.4. Therefore push theory through focusing that customers
need to be boosted or pushed behind to go for a certain product influence sales of NBCL
products.
5:2:3 The type media used in advertisement
Media plays a very great role in one way or the other to create awareness among people
where by the report shows that NBCL uses television, billboards and magazine as a
means in which customers get information concerning their products and services. This is
also another thing of great help to NBCL.
5:3 Conclusions
Advertising has contributed much in increasing sales performance of NBCL brads and
since Tanzania is heading to f East African Community and trade liberalization there is
no doubt that through advertising, NBCL will survive.
5:4 Recommendations
5:4:1 To the company
There is a need for NBCL Company to employ more advertising staff who are competent
and well qualified with at least the specialization in advertising and public relations and
marketing so that they can be able to produce attractive advertisements
Apart from that NBCL should have a tendency of evaluating sales after advertising so as
to get feedback about the activities they have done and be able to compare sales before
and after advertising instead of evaluating annually.
18
5:4:2 Sponsorship
NBCL should not rely on sponsoring only football because not all customers like it,
others like basketball, netball, and car racing.
5:4:3 Motivations Workers
NBCL should motivate their marketing people to work hard in order to increase sales
19
REFERENCES
Runyoni, K. E. (1984). Advertising. (2nd
Ed). London: Charles E. & Merrill publishing
Company.
Kothari, C. R. (2004). Research Methodology: Methods & Techniques. (2nd
Ed). New
York: New Age International (P) Ltd.
Kleppner, O. & Greyser, S. A. (1973). Advertising Management Consultation. (6th
Ed).
New York: Havard University.
Kotler, P. & Zaltman, G. (1971). Social Marketing Theory: An approach to planned
social change. Journal of Marketing.
Gillian, P. (1971). Advertising. Great Britain: Bats ford.
Mugenda, O. M. & Mugenda, A. G. (2003). Research Methods: Quantitative and
Qualitative Approaches. Nairobi: Acts Press.
20
APENDICES
APPENDEX 1
Questions for NBCL Staff
My name is Leonidas Irene K, pursuing Public Relations and Marketing at St. Augustine
University of Tanzania (SAUT), undertaking research on the contribution of
advertisement on promoting sales towards NBCL. Kindly I am requesting you to fill the
questionnaire below prepared to get information about the topic studied. Please put a ( )
where appropriate.
Your cooperation to this exercise is highly appreciated
Thanks in advance.
1. Are you familiar with the advertisement done by NBCL
a. Yes ( )
b. No ( )
c. Somehow ( )
2. If yes what media does NBCL use for its advert?
a) Radio advert ( )
b) TV advert ( )
c) Magazine ( )
d) Any other…………………………………………………………………………
3. How often does NBCL advertise its products?
a) Once a month ( )
b) Twice a month ( )
c) Once a week ( )
d) Any
other…………………………………………………………………………
4. Does the advertising play any role at NBCL?
a)Yes ( )
b) No ( )
c)Not sure ( )
5. I f yes in question 4 above what role does it play?
a. …………………………………………………………………………
21
b. …………………………………………………………………………
c. …………………………………………………………………………
6. Does advertisement lead to any increase of customer base at NBCL?
a) Yes ( )
b) No ( )
c) To some extent ( )
7. If yes in question 8 above explain why.
a) ……………………………………………………………………………
b) ……………………………………………………………………………
c) ……………………………………………………………………………
9. Are there any challenges facing NBCL Adverts?
a) Yes ( )
b) No ( )
c) Not sure ( )
10. If yes what are those challenges?
a) ……………………………………………………………………………
b) ……………………………………………………………………………
22
DODOSO 1
MASWALI KWA MENEJA WA BAA NA HOTEL
Kwa jina naitwa Leonidas Irene K, ni mwanafunzi wa mwaka wa tatu katika chuo cha
mtakatifu Augustino Tanzania kilichopo Mwanza nasoma shahada ya sanaa na
mawasiliano na uhusiano kwa umma, ninafanya utafiti kuhusu mchango unaotokana na
matangazo pamoja na promosheni katika kukuza biashara za NBCL. Hivyo naomba
ushirikiano wako katika kujaza maswali yafuatayo ili niweze kufanikiwa kupata shahada
yangu ya sanaa na mahusiano kwa umma. Tafadhari naomba uweke ( ) sehemu sahii, na
jaza sehemu zilizo wazi.
1. Je NBCL wanafanya matangazo katika baa yako?
a) Ndiyo ( )
b) Hapana ( )
2. Je unaweza kuelezea biashara ilivyokuwa kabla ya matangazo kutoka NBCL?
………………………………………………………………………………………
3. Je biashara ilikuwaje baada ya matangazo kutoka NBCL? Toa sababu
………………………………………………………………………………………
4. Unawashauri nini NBCL juu ya matangazo wanayotoa?
……………………………………………………………………………………

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Leonidas Irene's on "Final draft pdfThe contribution of advertisement on increasing sales performance: A case study of Nyanza Bottling Company Limited Mwanza"

  • 1. ST. AUGUSTINE UNIVERSITY OF TANZANIA Department of public relation and advertisement The contribution of advertisement on increasing sales performance: A case study of Nyanza Bottling Company Limited Mwanza Research Paper on Partial Fulfillment of the Requirements for the Award of Bachelor Degree of Art in Public Relations and Marketing Submitted in the Department of Public Relations and Advertising Leonidas Irene K June, 2013
  • 2. i DECLARATION I, Leonidas Irene K,declare that the material of this research study are my own original work and have not been published nor submitted to any other University for the similar or different award. Signature……………………………..Date Denis Mpagaze (Research Supervisor) Signature……………………………Date………………………
  • 3. ii COPYRIGHT This copyright material is protected under the Berne Convention, the Copyright act of ©1999 and other national enactments. All rights reserved. No part of this work may be reprinted, copied, photocopied in any way without the prior permission of the owner. The owner of this work is LEONIDAS Irene K however SAUT can give permission on her behalf.
  • 4. iii DEDICATION I dedicate this work to my parents Mr. Leonidas Mulogo and my late mother Christer Leonidas.
  • 5. iv ACKNOWLEDGEMENT Firstly I would like to thank the Almighty God and his Son Jesus for being with me till today. Secondly, I send my heart full gratitude to my ever loving family my Father Mr. Leonidas Mulogo, My late mother Christer Leonidas, my young sister Lilian Leonidas, my young brother Victor Leonidas and my sister Sylvia Leonidas for their prayers, moral as well as financial support throughout my academic years at SAUT. My heart full thanks go to my supervisor Mr. Denis Mpagaze, for his good guidance and supervision of my research, with my own efforts I would not make it. I want to express my thankful appreciation to Mr. Frank Katabi for devoting his time helping me out during my studies. I appreciate his counseling, guidance and moral support during my three years of study at SAUT. I give my sincere thanks to my lovely friend Jackline Basmarck Patric for his support throughout the three years at SAUT. May God bless Jackline. I forward my thanks to my group members who assisted me in one way or another during my studies especially my chair man Gidion Magana and many others. This acknowledgement will be incomplete if I won’t take time to say thanks to my respondents who gave me support and appropriate data for my research.
  • 6. v My appreciations also go to my friends, Mwema Kihengu, Luis Idda, Edward Paulus, Mazigo Boaz, Mosha Monika, Ndaki Gisela, Mosha Prim for their support throughout my stay at SAUT.I know there are a lot of people left out, but I would like to say that I recognize their love and support in our friendship during my stay at SAUT. May the Almighty God bless you all?
  • 7. vi ABSTRACT The study is about contribution of advertisement on increasing sales performance of Nyanza Bottling Company. The main objective was to find out the contribution of advertisement in increasing sales of Nyanza Bottling products. Push theory was used as a guideline for problem development and data collection. The theory argues that in order for any organization to grow and get market for their products they need to advertise and promote more their products. The researcher used interviews and question to collect data from 50 respondents in Ilemela district in Mwanza region Qualitative and quantitative methods were used to analyze the data. The major Discovery was that advertisement plays great role promoting products of NBCL to increase sales and create awareness of their products.
  • 8. vii TABLE OF CONTENTS DECLARATION............................................................................................................. i COPYRIGHT................................................................................................................. ii DEDICATION .............................................................................................................. iii ACKNOWLEDGEMENT ............................................................................................. iv ABSTRACT.................................................................................................................. vi CHAPTER ONE..............................................................................................................1 Problem Setting...............................................................................................................1 1.1 Introduction............................................................................................................1 1.2 Background of the study.........................................................................................1 1.2. 1 The background of Nyanza Bottling Company Limited (NBCL) ........................1 1.4 Research Objectives ...............................................................................................2 1.5 Research Questions ................................................................................................3 1.6 Significance of the study ........................................................................................3 1.7 Scope of the study..................................................................................................3 1.8 Definition of Key terms..........................................................................................3 CHAPTER TWO.............................................................................................................5 Literature Review ............................................................................................................5 2.1 Introduction............................................................................................................5 2.2 Theoretical argument..............................................................................................5 2.3 Theoretical Framework ..........................................................................................6 2.4 Empirical Literature Review...................................................................................7 2.5 Research gap..........................................................................................................8 CHAPTER THREE.........................................................................................................9 Methodology ...................................................................................................................9 3.1 Introduction............................................................................................................9 3.2 Research Design.....................................................................................................9 3.3 Population Sample .................................................................................................9 3.4 Sampling Technique.............................................................................................10 3.5 Sample Size .........................................................................................................10 3.6Area of study.........................................................................................................10 3.7 Data collection methods .......................................................................................10
  • 9. viii 3.8 Validity and Reliability ........................................................................................11 3.9 Data Analysis.......................................................................................................11 CHAPTER FOUR .........................................................................................................12 Findings ........................................................................................................................12 CHAPTER FIVE...........................................................................................................15 Discussion.....................................................................................................................15 5.1 Introduction..........................................................................................................15 5:2 Discussions ..........................................................................................................15 5:3 Conclusions .........................................................................................................17 5:4 Recommendations................................................................................................17 REFERENCES..............................................................................................................19 APPENDEX 1...............................................................................................................20 Questions for NBCL Staff .............................................................................................20 DODOSO 1...................................................................................................................22 MASWALI KWA MENEJA WA BAA NA HOTEL.....................................................22
  • 10. 1 CHAPTER ONE Problem Setting 1.1 Introduction This chapter presents the background to the study, statement of the problem, research objectives, research questions, scope of the study, definitions of the key terms and abbreviations. 1.2 Background of the study Today is the world of business with free market economy. Every company sells whatever the product it wants at any price and quantity. Therefore, the world is so competitive and every company fights to survive through increasing market share and for a company to do well in the market place there should be some mechanism to attract more customers. Scholars in advertising theories argue that advertisements and promotion remain to be the major factors which facilitate the rapid growth of sales performance. The more competitors’ brands increase, the more competitors need promotion and advertisements to capture customers. Thus why advertisement has become international since producers and companies try to sell their product on the globalize market in almost every corner of the world (Kotler, 1991). 1.2. 1 The background of Nyanza Bottling Company Limited (NBCL) NBL was established in December 1984 with the explicitly objectives of bottling the coca cola range of products as authorized bottler of coca cola company. Coca cola is going under license; this has been franchised from abroad. It is a 1986’s joint venture between
  • 11. 2 Sumaria Corporation and the Christopher Mwita Gachuma Group of Companies (CMG); one of the East Africa’s most dynamic companies. Currently the company sells more than one million bottles per day. NBCL is located at Igoma area, 8 Km from Mwanza city. Apart from Coca cola, the company produces Fanta, Sprite, club soda such as spar letta; Dasani water and sun fill juice. Sold over six regions; Tabora, Kigoma, Kagera, Mara, Shinyanga and Mwanza. 1.3 Statement of the problem Companies have been using advertising as part of their marketing strategies in order to inform and persuade consumers of their products and services in a competitive world. This testifies the important of advertisements for any company survival. NBCL being a company is not far behind in using advertisements to persuade people consume it brands; Coca cola, Fanta, Sprite, Club soda such as Spar letta, Dasani water and Sun fill juice. Currently NBCL remains a leading soft drink company in lake zone but no study has been conducted to establish whether such successes is a results of advertisements, this study sought therefore to fill out this gap. 1.4 Research Objectives 1.4.1 General objectives of the research To find out the contribution of advertisements in increasing NBCL’S sales performance 1.4.2 Specific objectives i. To investigate the type of media used by NBCL when advertising its products.
  • 12. 3 ii. To find out the frequency at which NBCL advertises its products to consumers. iii. To find out the consumers’’ perceptions of NBCL advertisements. 1.5 Research Questions The research was guided by the following questions:- i. What type of media does NBCL use when advertising its products? ii. How frequent does NBCL advertise its products to consumers? iii. What are the customers’ perceptions of NBCL advertisements? 1.6 Significance of the study i. To the researcher This study provides broad knowledge of the importance of advertising on increasing sales performance in business industry. 1.7 Scope of the study The research was conducted on the contribution of advertisement in increasing sales of NBCL Mwanza plant. Therefore, findings obtained reflect responses from NBCL customers and NBCL staff. 1.8 Definition of Key terms Promotion: Promotion is a coordination of sellers initiated to set up channels of information and persuasion to sell goods and services (Belch, 1998:14). Advertising: Advertising is any paid form non personal communication about an organization, product, services or idea by an identified sponsor (Belch, 1998:14).
  • 13. 4 Market: Market means to advertise something in a particular way in order to sell it (Poliwoda, 1993:35).
  • 14. 5 CHAPTER TWO Literature Review 2.1 Introduction This chapter covers a number of literatures that the researcher reviewed concerning the problem under the study. It includes theoretical argument, theoretical framework, empirical literature and research gap. 2.2 Theoretical argument 2.2.1 Theoretical perspective on advertisement Advertising performs essential functions in today’s society of business and completion. It is through advertisements that consumers can be aware on the kinds of brands and services available in the marketplaces. It is through advertisement that new markets are created and mass production is stimulated by mass demand (Gillian, 1971). Market maturity study asserts that a good competitor for product and service must inter in marketing advertising because is more persuasive, and at this stage mass selling and sales promotion blends of consumer product firms may require aggressive personal selling perhaps to supplement more advertising and total budget allocated to advertising and promotion may rise as a competition increasing (William, 1999). Advertisement is intended to create immediate actions and it generally carries an argument message such as an announcement of sale, contest, coupon, or some other offer. The consumer benefit special offer, usually to financial nature. The major sale activities are supported by advertising for specific objective and it is determined by the nature of
  • 15. 6 advertising being used. NBCL advertising is designed to describe the prize structure and what consumer can do to identify the product through making the premium clearly (Runyoni, 1984). Advertising is integral part of our social and economic system. In our contemporary society advertising has involved into a vital communication system for both consumer and business. The ability of advertising method to deliver carefully prepared massages to target audience (Belch, 2001). Advertising in historical industrial market is there to save many geographical dispersed customers, by making efforts and use full of advertising in industrial marketing through performing his function (Runyoni, 1984). Also if an organization advertises his products can influence direct or indirect purchase of the product being sold simply advertisement play the role in creating awareness about the product and leads the customer to be able to identify it. Also advertisement helps the organization to build the reputation and prepare the way for personal selling and motivate company to distribute their product. Therefore NBCL provide different advertisement so as to change customer altitude towards their product. 2.3 Theoretical Framework This research was guided by the following theories:- The Push theory The Push theory by Daniel Dick states that you can increase sales by creating incentives to wholesalers or retailers to sell more of your products. In this method you would offer
  • 16. 7 discounts to whole sellers or retailers who buy your product to bulk, this leaves them with more of your merchandise on hands and drives them to sell more of your products giving them discounts, pushes them to buy more of your products at lower prices to increase the amount of money they make in turn they must push your products to customers because they will make a better return on them than a similar products supplied to them by your competitors. The activation theory of information exposure The activation theory of information exposure by Lewis Donohue, Philip Palm Green and J Duncan in 1980states that individual will seek to satisfy their needs for stimulation and information when attending to a message before they seek to fulfill their needs for information alone (Araka and Araka, 2010, p. 31). Activation theory helps to overcome the criticism that uses gratification research does not stipulate why people use the media by nothing that the media are part of the environment providing a variety in activities. Information helps in understanding the world and self and activities of various intensities. This theory explains how individuals seek messages that fulfill their cognitive need for information as well as their needs to be entertained. When conducting Advertisement NBCL points to a need to meet both the cognitive and emotional needs of their consumers. 2.4 Empirical Literature Review Eutropia (2008)’s study on “The impact of advertisement on sales performance” reports that there is extremely challenging to establish advertisement budgets where by the management lucks reliable standards for determining how much to spend on specific
  • 17. 8 activities and how much to spend altogether on advertising or personal selling. A serious problem is that the management normally cannot assess the result of promotion expenditure. Advertisement activities generally are budgeted as current operating expenses, implying their benefits are used up current immediately. Luhanga’s study recommends that before doing advertisement there should be a well framed budget which will be used to guide them as they do advertisement throughout. James (2010)’s study on the ‘impacts of advertisement on organizational performance” reports that advertisement should be included in a company’s plan along and personal selling. It means that advertisement budget selects appropriate sales promotion technique and evaluates performance of sales activities. One problem the management faces is that many promotions techniques are short run tactical actions which are designed to produce immediate response as a result they tend to be used as stop gap measure to reverse unexpected sales decline rather than as integrated part of marketing program . 2.5 Research gap Most researchers have tried to explain how advertisement has some impacts on organization sales performance and the importance of advertisement on promoting customer relationship within an organization. Despite that the studies which have been done are very few. Therefore the researcher aimed at investigating the contribution of advertisement on increasing sales of NBCL product.
  • 18. 9 CHAPTER THREE Methodology 3.1 Introduction This chapter presents various steps adopted by the researcher in studying problem along with logic behind. Therefore this chapter is categorized into research design, population, sampling technique and sample size, tools for data collection, validity and invalidity and data analysis. 3.2 Research Design Research design is the conceptual framework within which the research is conducted whereby researchers are to provide the clear statement of the problem, data collection techniques, population to be studied and methods for data collection and analysis (Kothari, 1990). This study involved a survey research design whereby Nyanza Bottling Company Limited was selected as a social setting in which data were collected from the NBCL employees and NBCL customers. In addition to that, the researcher used both qualitative and quantitative designs because data were shown clearly due to the use of tables and explanation (Orodha, 2003). 3.3 Population Sample Population of the study includes individuals with common observable characteristics; it is the targeted group of the study from which the desired information can be drawn (Mugenda and Mugenda, 2003). The target population of the study was customers of NBCL and workers of NBCL who provided information to the study.
  • 19. 10 3.4 Sampling Technique The researcher used purposive sampling technique where the only members who met the objectives of the study were to give their opinions and arguments on the research questions. The researcher used purposive sampling because it was relevant to the research topic, also in that it was possible to select and choose the purpose respondent as well as specific targeted people (Tromp, 2006). 3.5 Sample Size Sample size is the optimum number of the individuals to be selected from the entire population (Kothari, 1990). In this study, the researcher had a sample size of 50 respondents where15 NBCL staff members, 25 NBCL customers, and 10 managers of bar and hotel the total was 50. 3.6Area of study The study was conducted in Mwanza region where by Nyanza Bottling Company Limited was used as a unit of study. The researcher chose Mwanza region because of limited time and cost constraints. 3.7 Data collection methods 3.7.1. Primary data collection The primary data was collected through questionnaires and interview (i) Interview Interview is a systematic conversation between the researcher and the respondent (Kothari, 2004:150). The researcher interviewed customers and workers of NBCL. Customers were grouped into retail and whole sales interviews were conducted with
  • 20. 11 individual respondents. Questions directed were too technical to secure more realistic information to supplement the data likewise to the customers of NBCL who were also grouped. (ii) Questionnaires The researcher used questionnaires collect information from scattered respondents 3.7.2. Secondary Data collection The researcher collected secondary data through sales evaluation forms, brand performance, evaluation forms, and booklets on sales development programs, annual reports and relevant materials. 3.8 Validity and Reliability Extreme efforts were made to ensure that the data were reliable by being careful during the analysis of the relevant literatures. 3.9 Data Analysis Data analysis is the process of cleaning up the raw data collected from the field; it simplifies interpretation process (Kothari, 2004). In this study, findings were analyzed both qualitatively and quantitatively. Tables and percentages were used to analyze quantitative data and words (explanations) were used for interpretation of both numerical and qualitative data.
  • 21. 12 CHAPTER FOUR Findings 3.1 Introduction As noted earlier, this study intended to find out the contribution of advertisements in increasing the sales of products. This chapter, therefore, presents and analyses data collected by a researcher through interview and questionnaire. 3.2 Findings (i) The importance of advertisements to NBCL Table 1: The importance of advertisements to NBCL Departments Responses Administration Sales Production Total % Increasing sales 1 1 2 4 26% Creating awareness 4 3 2 9 60% Making comparison 0 1 1 2 13% Total 100% Source: Research findings 2013
  • 22. 13 The table indicates that four respondents one from administration, one from sales department and two from production department which make a total of 26% said that advertisement is very important to their organization because it help the organization to increase sales through reminding the public about their product and decide to purchase. Also nine respondents four from administration, three from sales department and two from production department which is 60% said advertisement helps organization to create awareness of their products, and two respondents one from sales department and one from production department which is 13% said that advertisement help customers to differentiate their product from other companies’ products. Therefore advertisement is important to NBCL because of being a tool for creating awareness as nine respondents said. (ii) Customers’ perception about NBCL advertisements Table 2: Customers perception towards NBCL advertisements Responses Number of respondents Percentage Very good 20 40% Good 28 56% Bad 2 4% Very bad 0 0% Total 50 100% Source: Research findings 2013
  • 23. 14 The table indicates that 40% of customers said that advertisements done by NBCL are very good, 56% of customers said that NBCL advertisements are good while 4% said that NBCL advertisements are bad. This indicates that the majority of customers perceptions about NBCL products is good that’s why they are motivated and influenced by the advertisements hence they purchase NBCL products. (iii) Type of media used by NBCL in advertising its products Respondents from NBCL staff said that the type of media they used in advertising their products were magazine, billboards and television whereby NBCL staff members said that they mostly prefer using the three types of media because of the fact that television isn’t reliable to all people especially rural areas whereby in rural areas because there is no excess to television they use magazine and billboards to advertise different products. Due to this NBCL use magazine, television and billboards to advertise their products. (iv) The frequency at which NBCL advertises its products The researcher wanted to know how frequent NBCL does its advertisement and came to discover that NBCL does its advertisement as per campaign because when they want to launch a new product whereby they believe it’s the right time to advertise their products.
  • 24. 15 CHAPTER FIVE Discussion 5.1 Introduction This chapter discusses objectives of the study which was obtained through findings and theoretical literature review of the study. 5:2 Discussions 5:2:1 The role played by advertisement in increasing sales The role of advertisement in historical market is to serve many geographical dispersed customers, by making effort and useful of it in industrial marketing through performing this function. Also when an organization advertises and promotes its product can influence direct or indirect purchase influence of the customer. Advertisement plays great role in creating awareness about the product and leads the customers to be able to identify it. Also advertisement helps the organization to build the reputation and the way for personal selling and motivate company to distribute their product. Advertisement play important role in many organizations through helping the organization to generate revenue and profit by stimulating sales. Advertising rises market awareness of an organization product and services and generate to lead sales force to follow up by building a brand image for the product advertising, differentiate the product from competitors and help to generate a corporate image and build market confidence and trust an organization.
  • 25. 16 Also in successful business, advertising play an essential and important role especially in promoting sales of many organization through increasing sales and creating awareness in people. This generates public to become conscious to the goods and services under the brand they pursue and make people to buy better. According to the data a researcher have shown that the role of advertising in promoting sales of NBCL product is to create awareness, increase sales and help customers to differentiate their product from other companies product for example nine respondents from administration, sales department and production department agreed that advertising play important role in their organization through increasing sales. 5:2:2 The influence of advertisement on increasing sales Push theory utilizes the concept of market segmentation, consumer reach, idea configuration, communication facilitation in centers in order to maximize the target audience response. The theory looks at marketing philosophy that people will adopt new idea or behavior if they feel that there is something of value and if there is certain discounts in the product they want to purchase something which will make a customer go for affordable goods with affordable prize. Push theory relies on four basic principles such as product, price, promotion and place. These techniques are used in targeting market and show factors like funds for the product and campaigns. Push theory influences and increase sales of NBCL product through the involvement of marketing mix which enable public to make effort in changing their behavior, thinking and altitudes and hence start to purchase the product segmented. For instant NBCL report show that sales in Gedeli lodge before advertisement were eight but soon after
  • 26. 17 advertisement increased up to 8.4. Therefore push theory through focusing that customers need to be boosted or pushed behind to go for a certain product influence sales of NBCL products. 5:2:3 The type media used in advertisement Media plays a very great role in one way or the other to create awareness among people where by the report shows that NBCL uses television, billboards and magazine as a means in which customers get information concerning their products and services. This is also another thing of great help to NBCL. 5:3 Conclusions Advertising has contributed much in increasing sales performance of NBCL brads and since Tanzania is heading to f East African Community and trade liberalization there is no doubt that through advertising, NBCL will survive. 5:4 Recommendations 5:4:1 To the company There is a need for NBCL Company to employ more advertising staff who are competent and well qualified with at least the specialization in advertising and public relations and marketing so that they can be able to produce attractive advertisements Apart from that NBCL should have a tendency of evaluating sales after advertising so as to get feedback about the activities they have done and be able to compare sales before and after advertising instead of evaluating annually.
  • 27. 18 5:4:2 Sponsorship NBCL should not rely on sponsoring only football because not all customers like it, others like basketball, netball, and car racing. 5:4:3 Motivations Workers NBCL should motivate their marketing people to work hard in order to increase sales
  • 28. 19 REFERENCES Runyoni, K. E. (1984). Advertising. (2nd Ed). London: Charles E. & Merrill publishing Company. Kothari, C. R. (2004). Research Methodology: Methods & Techniques. (2nd Ed). New York: New Age International (P) Ltd. Kleppner, O. & Greyser, S. A. (1973). Advertising Management Consultation. (6th Ed). New York: Havard University. Kotler, P. & Zaltman, G. (1971). Social Marketing Theory: An approach to planned social change. Journal of Marketing. Gillian, P. (1971). Advertising. Great Britain: Bats ford. Mugenda, O. M. & Mugenda, A. G. (2003). Research Methods: Quantitative and Qualitative Approaches. Nairobi: Acts Press.
  • 29. 20 APENDICES APPENDEX 1 Questions for NBCL Staff My name is Leonidas Irene K, pursuing Public Relations and Marketing at St. Augustine University of Tanzania (SAUT), undertaking research on the contribution of advertisement on promoting sales towards NBCL. Kindly I am requesting you to fill the questionnaire below prepared to get information about the topic studied. Please put a ( ) where appropriate. Your cooperation to this exercise is highly appreciated Thanks in advance. 1. Are you familiar with the advertisement done by NBCL a. Yes ( ) b. No ( ) c. Somehow ( ) 2. If yes what media does NBCL use for its advert? a) Radio advert ( ) b) TV advert ( ) c) Magazine ( ) d) Any other………………………………………………………………………… 3. How often does NBCL advertise its products? a) Once a month ( ) b) Twice a month ( ) c) Once a week ( ) d) Any other………………………………………………………………………… 4. Does the advertising play any role at NBCL? a)Yes ( ) b) No ( ) c)Not sure ( ) 5. I f yes in question 4 above what role does it play? a. …………………………………………………………………………
  • 30. 21 b. ………………………………………………………………………… c. ………………………………………………………………………… 6. Does advertisement lead to any increase of customer base at NBCL? a) Yes ( ) b) No ( ) c) To some extent ( ) 7. If yes in question 8 above explain why. a) …………………………………………………………………………… b) …………………………………………………………………………… c) …………………………………………………………………………… 9. Are there any challenges facing NBCL Adverts? a) Yes ( ) b) No ( ) c) Not sure ( ) 10. If yes what are those challenges? a) …………………………………………………………………………… b) ……………………………………………………………………………
  • 31. 22 DODOSO 1 MASWALI KWA MENEJA WA BAA NA HOTEL Kwa jina naitwa Leonidas Irene K, ni mwanafunzi wa mwaka wa tatu katika chuo cha mtakatifu Augustino Tanzania kilichopo Mwanza nasoma shahada ya sanaa na mawasiliano na uhusiano kwa umma, ninafanya utafiti kuhusu mchango unaotokana na matangazo pamoja na promosheni katika kukuza biashara za NBCL. Hivyo naomba ushirikiano wako katika kujaza maswali yafuatayo ili niweze kufanikiwa kupata shahada yangu ya sanaa na mahusiano kwa umma. Tafadhari naomba uweke ( ) sehemu sahii, na jaza sehemu zilizo wazi. 1. Je NBCL wanafanya matangazo katika baa yako? a) Ndiyo ( ) b) Hapana ( ) 2. Je unaweza kuelezea biashara ilivyokuwa kabla ya matangazo kutoka NBCL? ……………………………………………………………………………………… 3. Je biashara ilikuwaje baada ya matangazo kutoka NBCL? Toa sababu ……………………………………………………………………………………… 4. Unawashauri nini NBCL juu ya matangazo wanayotoa? ……………………………………………………………………………………