IMPACT OF ADVERTISING ON SALES PERFORMANCE OF A BREWERY COMPANY
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IMPACT OF ADVERTISING ON SALES PERFORMANCE OF A BREWERY COMPANY
Chapter two.
Literature Review
This chapter offers readers with an insight into the theoretical perspective of the topic under consideration. In line with the study’s purpose, the chapter discusses Informative, Persuasive Reminder, Advertising, and Sales Performance.
In addition, this chapter addresses several concerns about advertising and the conceptual framework; the study is offered at the end of this chapter.
2.1 Conceptual Review
2.1.1 The concept of advertising
The definition of advertising is ambiguous since it signifies different things to different individuals based on how they perceive it. Kotler (2019) defines advertising as any non-personal presentation and promotion of ideas, goods, or services by an identifiable sponsor.
Advertisers include not only businesses, but also museums, charitable organisations, and government bodies that send messages to their target audience. Advertising is also described as any sponsored non-personal communication about an organisation, products,
services, or ideas by a specific sponsor (Bennet, 2016). Advertising is defined as any sponsored message delivered by an identifiable source via various media such as television, radio, magazines, newspapers, or billboards.
Sandage and Rotzoll (2002) suggest that advertising is a cost-effective means to transmit messages, such as building brand preference for a product, educating people about government policies, or discouraging the use of hard drugs. Companies use advertising to not only sell and promote their products, but also to establish effective defence against competitors.
Frank (2015) saw advertising as an attempt to persuade people to buy. Modern advertising is a product of the twentieth century; yet, communication has been an element of the selling process since people first exchanged things (Kazimi, 2015).
Modern commercial advertising is a persuasive force that seeks to change client behaviours. This is significant because customer preferences and requirements evolve as their economic circumstances improve as they progress through several stages. Advertisers should periodically examine the impact of advertisements on product performance (Kotler, 2019).
Shimp (2017), citing Richards and Curran (2002), described advertising as a paid, mediated form of communication from an identifiable source intended to convince the receiver to take action, either now or in the future.
Convenience, economy, health, sensory benefits, quality, performance, comfort, reliability, durability, efficiency, efficacy, and other rational motives can all be used to persuade consumers to buy a product (Duncan, 2002).
According to Giles (1974), as mentioned in Adewale (2014), advertising is a non-personal communication directed at a specific audience using multiple media to offer and promote products, services, and ideas. According to Hancock and Holloway (2002), advertising refers to marketing activities other than personal selling, publicity,
and public relations that stimulate consumer purchasing and dealer effectiveness, such as displays, shows and exhibitions, demonstrations, and other non-recurring selling efforts that are not part of the ordinary routine. Wright (2019) defined advertising as a short-term incentive for traders or customers to purchase a thing.
According to Engel (2019), advertising informs clients about products while also selling them.
All of the aforementioned concepts make modest attempts to define advertising. However, one or two flaws can be found in some definitions.
The analysis found Bennet’s (2016) definition of advertising as any paid non-personal communication about an organisation, products, services, or ideas by an identified sponsor to be a superior one, thus it was adopted.
The definition appears to be suitable for the aim of the study, as it includes all of the main aspects of advertising, such as product, awareness, and sales, among others.
2.1.2 Goals of Advertising
Previously, many individuals believed that advertising could be carried out without any goals. According to research, this is a mistaken belief. For advertising to be considered as having aims and objectives, it must include some of the following characteristics:
Tellis (2019) believes that advertising serves to stimulate purchases by temporarily increasing the value of a brand. The primary goal of advertising is to convert positive attitudes into actual purchases, increase attitudes towards a company, and foster brand loyalty at all times.
Donald (2019) argued that regardless of the specific strategy used, advertising should strive to fulfil four basic tasks:
Advertising objectives should be relevant to overall marketing and clearly measurable. This necessitates that the promotional methods adequately articulate what the promotion hopes to accomplish.
The advertising strategy should be utilised to supplement sales and advertising activities.
Advertising, like other promotional mediums, should capture the attention of individuals they are intended to influence; and
Advertising should generally encourage the target audience to place an order,
i.e., to truly close the sale and possibly assume it has been completed. There must be a clear link between the marketing and the desire to acquire the specific goods.
According to Adeleye (2018), advertisements have three objectives:
Sales: Some businesses, particularly those that engage in direct response, might specify and measure their advertising objectives in terms of unit, Naira, or specific sales. According to Leads and Shultz (2020), using sales as the advertising target is the most acceptable technique to measure advertising.
Behavioural effect: When advertising cannot be characterised clearly in terms of final sales, some aspects of consumer behaviour can be utilised to assess the impact of the advertising campaign.
For example, some advertisers strive to convince their target audience to take a certain action other than making a purchase, such as asking additional information or visiting a store
Communication effect: Companies define and measure their advertising objectives in terms of consumer awareness, knowledge, preference, or some other mental effect. Adeleye (2018)’s finding had the same perspective with Kotler (2019),
who theorised that most advertisers strive to measure the communicative consequences of an advertisement, i.e. its possible effects on awareness, knowledge, or preference in addition to sales.
2.1.3 Advertising Efficacy
Advertising effectiveness can be defined as the extent to which advertising produces the desired result. Given the high cost of advertising, measuring its effectiveness is critical.
While it is impossible to acquire a worldwide assessment of advertising effectiveness, we should work to create and implement methodologies and measurements for partial verification of results. Regarding the difficulties of quantifying overall efficacy, it is considered that it is mostly related to the following factors:
Advertising interacts with other business variables (behaviour, marketing policies, financial decisions, etc.) and environmental variables (competition, economic conjuncture, etc.), which are difficult to isolate.
Advertising has a wide range of consequences that cannot always be quantified.
iii) Advertising has long-term effects; thus, the results may not always occur within the same time period as the costs. In research and practice, advertising effectiveness has been evaluated using two main models: the dichotomous model and the three-dimensional model.
The dichotomous model is primarily used in product and brand promotion, tending to isolate and analyse the following: i. Sales effect; ii. Communication effect.
The sales impact is an assessment of advertising’s ability to affect sales volume and/or market share, regardless of the potential influence of other variables. According to (Batraet al.2015), the efficacy of advertising should be evaluated in terms of its short-term impact on sales.
advertising effectiveness metric is based on the marginal theory (Chamberlin, 1948). Advertising is thus considered as an independent variable that, when joined with other marketing variables, has a particular effect on the dependent variable, i.e. sales. The goal is to find the best mix of the variables of sales increase.
The effect of communication refers to the ability to reach a larger portion of the audience with relevant messaging. This impact is investigated in literature using various approaches:
sociological;
Semiotic; C. psychological;
Socio-psychological.
Sociological study focuses on the community as a system defined by rules and social norms, as well as social behaviour (Moingeon 2012), and the role of advertising and consumption in societal development is an extremely rich issue. Sociology has investigated how advertising influences the beliefs, attitudes, and behaviours of individuals and social groups.
There are two opposing sociological theories on the advertising role in contemporary society. The first takes a constructive approach to advertising.
Advertising is said to play a role in improving economic and social ties, harmonising social behaviours, encouraging people to adhere to common values, and assisting them in living together more peacefully.
The second technique, in contrast, is more critical, as advertising tends to create mass consumption. In order to reach a larger audience, new, poorly differentiated symbolic values are introduced (Friedman, 1979).
Semiotic analysis initially focuses on symbols. These are defined as everything that expresses meaning, including words, gestures, visuals, and dance. Semiotics investigates the subject of encoding, and more broadly, the code used.
The message itself is the subject of inquiry, as it contains several indicators that can be interpreted according to a pre-established intention, without regard for the customer, and the influence on consumer behaviour.
This strategy is particularly effective in the context of advertising development. Authors evaluate the success of advertising based on either the message’s language (Barthes, 1964; Durand, 1964) or its graphic picture (Eco, 1979; Mick, 1986; Scott, 2012).
However, they assess message quality in terms of its creation, presentation, and location in the communication process. The influence of the message on the recipient is only a small issue in the message evaluation process. This is a significant shortcoming of the semiotic approach in terms of marketing.
Psychologists approached communication in general, and advertising in particular, from the perspective of recipients’ motivations, which are fundamental to the investigation. This is because they alter the recipient’s impression (Mittelstaedt, 2020). They believe that motivations influence customer behaviour.
As a result, the advertising creator’s goal is to uncover the causes of customer behaviour in order to determine the most successful advertisement message or to remove communication barriers.
Other sorts of research and investigation have emerged as a result of neuroscience’s contribution to the psychological approach. The evidence (obtained through scientific experimentation) has become an essential component in verifying the assumptions.
The psychological technique provides the advantage of measuring advertising performance based on the message’s recipient, specifically the qualities of the consumers.
On the other hand, the technique does not provide exhaustive answers, since it does not delve into the specific circumstances that lead the recipient of the message publicity to actively expose themselves to the message, decode it, save it, and, eventually, purchase it.
As a result, the complete communication process is not considered, including external elements, particularly those connected to the environment, which may play an important influence in shaping the recipient’s behaviour.
The socio-psychological approach takes into account both the message and the recipient of the communication. This strategy seeks to investigate the persuasiveness of advertising (Ray, 1982), as well as the consequences on the formation of attention, memory, attitude, and behaviour (Kapferer, 2020).
The main complaints levelled at the dichotomous model are its incomplete evaluation and failure to offer meaningful breakdowns of the effects of advertising and other company politics (marketing and communication).
For these reasons, three-dimensional models (such as the AIDA and Dagmar models) are occasionally preferred. These models are used to plan advertising campaigns and evaluate their success. They suggest a hierarchy of communication effects: cognitive, emotive, and behavioural (Brasini et al. 2012; Marbach and Fabi 2019).
Specifically, the cognitive dimension analysis concerns the understanding and storing of messages and must take into account different types of memory: spontaneous recall, without any added indication;
stimulated recall, facilitated by the presentation of certain evidence; related memory, when respondents are able to describe at least one specific element of the communication; recognition, or identification of the advertising; brand allocation, the memory not only of the advertisement
The emotive dimension is related to attitudes towards and perceptions of communication. The affective responses and emotional acceptability of that style of marketing are explored. The emotive attitude towards the proposed visuals, as well as the diffusion of consumer opinion, are identified.
The behavioural component covers changes in purchasing behaviour that can be detected through intents and acts, as evaluated by sales and market share.
Previously described models prioritise three aspects of communication: recipients (audience, memory, and storage), media (impact, coverage, frequency), and feedback (attitudes, behaviours, opinions, etc.). They remove any other elements (source, code, context), assuming that the communication process was carried out optimally or without distortion.
Furthermore, using the same code by both the source and the destination is a critical component of a good communication process. Otherwise, the recipient will misinterpret the message or provide a different meaning, resulting in what Eco (1979) refers to as “aberrant decoding”.
However, because the message is what we grasp rather than what it was intended to comprehend, it is critical to evaluate not only what the firms wanted to say, but also what was actually transmitted.
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