IMPACT OF ADVERTISING ON CONSUMER PATRONAGE
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IMPACT OF ADVERTISING ON CONSUMER PATRONAGE
Chapter one
INTRODUCTION
1.1 Background of the Study.
Any company entity’s primary goal is to generate sales and profits. To remain in business, a company must produce enough revenues from its products to cover operational costs and make an acceptable profit.
For many businesses, the sales projection is the beginning point for budgeting or profit planning. It is thus because, in most circumstances, it must be determined before manufacturing units, which in turn influence material procurement.
Because of the dynamic nature of the environment in which businesses operate and the changing attitudes of consumers towards their products, most organisations must establish, adapt, or replace their advertising strategy to reflect current changes.
Companies must provide more than what consumers expect from their products; they must educate consumers and strategically position things in their minds.
Cadbury Nigeria Limited is a prominent manufacturing firm in Nigeria that produces a variety of home products such as Bournvita, Éclairs chocolate, sweet, choco-milo, and presto. Its presence in Nigeria dates back to 1956, when Cadbury Fry Export, a United Kingdom-based company, began selling Pronto at No 9, Orange Road, Apapa Lagos firm.
Mr. George Heywood, Cadbury’s export representative, was despatched to Nigeria from his base in the Gold Coast (Ghana) to report on the possibility for greatly increased sales. His extremely enthusiastic report was accepted. The Cadbury brothers then rented a warehouse at 10 Aerodrom Road, Apapa.
The success of Cadbury’s initial product (Pronto) in the Nigerian market prompted the development of Bournvita, a malt-based food drink that was likewise an immediate success.
In December 1963, the warehouse was enlarged to accommodate a small production equipment that packed bulk shipments of Pronto and Bournvita from the UK into tins. Cadbury Nigeria Limited was established on January 9, 1965, as an autonomous branch of the Cadbury Schweppes Group.
Cadbury Nigeria Limited has expanded into a variety of household manufacturing businesses, including Tom-Tom sweets, Parazone bleach, Buttermint Sweet, Goody Goody, and Tomapepe. Trust is an important aspect in the company’s long-term growth.
In 1964, the sales volume of Bournvita and Pronto increased to the point where a complete manufacturing strategy for Bournvita and Pronto was devised, and local production began in May 1965.
The corporation includes a marketing section, economic research and development, and has implemented computerization and an effective information management system.The modern facility was established in 1966. It was almost finished when the civil war in Nigeria broke out, which halted the project for a while.
During the period, Cadbury’s sales fell as the Eastern states were cut off, accounting for more than half of total sales. During this time, however, the government prohibited the import of finished goods/products. After establishing manufacturing facilities, Bournvita and Pronto gained complete control of the market.
Tom-Tom Sweets production began that same year, and over 2 million pounds were allowed for additional goods, including capacity increase for some brands. Cadbury Nigeria Limited became a public company in 1976.The decision to go public came before the 1977 Enterprise Promotion Decree.
The Jayes health and chemical arm was founded in 1976 to manufacture parazone bleach and other home chemicals. The following year, 1977, the first phase of a Malta extract facility was created to produce Malta extract from barley, replacing the import of Malta barley.
Further sales of shares in 1978, in accordance with the order, resulted in an equity holding of 40% foreign and 60% Nigeria. Cadbury Nigeria Limited is investing in the future, demonstrating its faith in the business.
Its workforce has expanded from a smattering of 250 individuals in January 1966 to over 2000, with approximately 350 in management and six Nigerians among the ten directors.
The company has sales offices in Lagos, Ibadan, Kaduna, Jos, Kano, Aba, Enugu, Asaba, Sokoto, Maiduguri, and Ilorin. Trading records have been very spectacular.
Growing from a turnover of one hundred and twenty thousand pounds to three hundred and thirty-seven million Naira in 1989, the company made significant investments in various manufacturing processes, plants, and equipment.
Any organization’s performance is determined by the acceptability of its products by consumers, as manufacturing or production is not complete until the product reaches the ultimate consumers/buyers. Many studies have been conducted, beginning with the origins of advertising and continuing to the contemporary trends.
For example, Holtje (1978), as described by Ewuola (2004), stated that contemporary advertising began during the American Colonial period, when colonial newspapers accepted advertisements directly from individuals and institutions in need of their services. Some local post offices were also helpful in this regard, functioning as agents for these newspapers.
1.2 Statement of the Problem
One fundamental fact is that we are constantly assaulted with advertising messages from all forms of media. Every day, the average consumer is exposed to a significant number of advertising, especially in urban and semi-urban areas.
Advertising has been viewed as a legitimate means for stimulating, inspiring, and influencing the purchase and other behavioural responses of prospective clients. How has advertising been able to achieve this and increase sales of Cadbury products?
Can it be argued that Cadbury’s advertising has been successful in terms of meeting customer demands? Is Cadbury using any specific advertising approach to promote its products?
Is there a relationship between Cadbury Nigeria Plc’s advertising strategies? Does Cadbury Nigeria Plc have an advertising strategy?
Is there an advertising plan that would develop brand loyalty among consumers?The research aims to address and resolve these and other challenges.
1.3 Objectives of the Study
The aims of this study are:
1. Determine the relationship between the various advertising methods used by Cadbury Nigeria Plc.
2. Evaluate the efficiency of Cadbury Nigeria Plc’s advertising strategies.
3. To determine the optimum advertising plan for increasing brand loyalty among customers.
4. Analyse the elements that will influence customer behaviour in terms of advertising techniques.
1.4 Research Questions.
Manufacturers should first endeavour to understand the barriers to selling their products and develop ways to overcome them. The following research question will be utilised to provide recommendations over the duration of this study.
1. What is the relationship between the various advertising methods used by Cadbury Nigeria Plc?
2. What is the efficiency of Cadbury Nigeria Plc’s advertising strategies?
3. What is the greatest advertising plan for Cadbury Nigeria Plc to promote brand loyalty among its consumers?
4. What elements influence customer behaviour regarding advertising strategy?
1.5 Scope and limitations of the study
This study focuses on Cadbury Nigeria Plc, a prominent player in the consumer products manufacturing sector. It is intended to address the actual and theoretical effects of advertising on consumer behaviour. Geographically, the study will focus on Lagos State.
1.6 Significance of the Study
The relevance of this finding cannot be overstated. The research findings would be extremely beneficial to marketing professionals, producers, and consumers of goods, particularly beverages.
1. The purpose of this research is to shed light on the reality of the premise on which advertising policies/strategies are founded in relation to consumer goods.
2. It would also be helpful to understand which advertising will be used for this plan.
3. It will assist marketers in adopting new advertising tactics, notably for consumer goods.
4. It will supply additional resources in the field of advertising strategy.
1.7 Definitions for Terms
1. Advertising: Any paid, non-personal presentation of goods, services, or ideas by a specific sponsor.
2. Consumer: A consumer is defined as any individual who purchases products just for personal consumption (i.e., the household buyer) and for no other purpose.
3. Consumer Behaviour: This is described as the behaviour that consumers exhibit when searching for, acquiring, consuming, and evaluating products, services, and ideas that they believe will meet their requirements.
4. Marketing: Marketing is the act of discovering what customers want while identifying the most profitable method to price, promote, and distribute goods or services.
5. Strategy: A set of decisions that establishes and reveals the aims, purposes, or goals, as well as the strategies to achieve them.
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