The effect of advertising on the profitability of a manufacturing company (a case study of nigerian bottling company plc)

Project Abstract

Advertising is a crucial component of a company's marketing strategy, playing a significant role in influencing consumer behavior and brand perception. This research project aims to investigate the effect of advertising on the profitability of a manufacturing company, using Nigerian Bottling Company PLC as a case study. The study will explore the various advertising strategies employed by the company and evaluate their impact on its profitability over a specific period. The research will utilize both qualitative and quantitative methods to gather relevant data. Qualitative data will be collected through interviews and surveys with key stakeholders within the company, including marketing managers and advertising professionals. Quantitative data will be obtained from the company's financial reports, focusing on metrics such as revenue growth, profit margins, and return on investment in advertising. By analyzing the data collected, this research seeks to determine the correlation between advertising expenditure and the company's financial performance. It will also assess the effectiveness of different advertising channels and messages in driving consumer engagement and increasing sales. The study will further investigate the competitive landscape in the beverage industry and how advertising has influenced Nigerian Bottling Company's market share and brand positioning. Additionally, the research will consider external factors such as economic conditions, consumer trends, and regulatory influences that may impact the effectiveness of advertising initiatives. By gaining insights into these external variables, the study aims to provide a holistic view of the relationship between advertising and profitability in the manufacturing sector. The findings of this research will contribute to the existing body of knowledge on the role of advertising in enhancing corporate performance. The results will offer valuable insights for marketing practitioners and business leaders looking to optimize their advertising strategies for improved profitability. Furthermore, the study will provide recommendations for Nigerian Bottling Company PLC and other manufacturing firms on how to leverage advertising investments for sustainable growth and competitive advantage in the market.

Project Overview

<p> <b></b></p><p><b><b>INTRODUCTION</b></b></p><p><b><b></b></b></p><b><b><p><b>1.1 BACKGROUND OF STUDY</b></p><p><b></b></p><b><p>Advertiser’s primary mission is to reach prospective customers<br>and influence their awareness, attitudes and buying behaviour. They spend a lot<br>of money to keep individuals (markets) interested in their products. To<br>succeed, they need to understand what makes potential customers behave the way<br>they do. The advertisers goals is to get enough relevant market data to develop<br>accurate profiles of buyers-to-find the common group (and symbols) for<br>communications this involves the study of consumers behaviour: the mental and<br>emotional processes and the physical activities of people who purchase and use<br>goods and services to satisfy particular needs and wants. Advertising<br>is any paid form of non personal presentation and promotion of ideas, goods, or<br>services by an identified sponsor (Kotler and Armstrong, 2010). There are<br>various forms of advertising like informative advertising, persuasive<br>advertising, comparison advertising, and reminder advertising. Informative<br>advertising is used to inform consumers about a new product, service or future<br>or build primary demand. It describes available products and services, corrects<br>false impressions and builds the image of the company, (Kotler,<br>2010).Advertising can be done through print media which includes news papers<br>,magazines ,brochures ,Audio media for example Radio, and visual media which<br>includes billboards, and television (Kotler and Armstrong 2010).</p><p>Sales<br>performance describes the trend of collections in terms of revenue when<br>comparing different periods (MC Cathy, 1994). The sales may be in form of<br>offering products or services to consumers. A service is any activity or<br>benefit that one party can offer to another that is essentially intangible and<br>does not result in ownership of anything (Kotler and Armstrong, 2010).Sales<br>volume is the core interest of every organization and is based on sales and<br>profit .When volume goes up profits rises and management in organizations is<br>made easier.</p><p><b>1.1.1 ORGANIZATIONAL PROFILE</b></p><p><b></b></p><b><p>The Nigerian Bottling Company Ltd<br>is one of the biggest companies in the non-alcoholic beverage industry in the<br>country and is the sole franchise bottler of The Coca-Cola Company in Nigeria.</p><p>The Nigerian Bottling Company<br>serves approximately 160 million people by producing and distributing a unique<br>portfolio of quality brands, bringing passion to marketplace implementation,<br>and demonstrating leadership in corporate social responsibility.</p><p>NBC Ltd started operations in Nigeria in 1951. Based in the city of Lagos, it<br>operates 13 bottling plants across the country. In addition, we channel<br>products through 59 warehouses and distribution centres. The company employ<br>about 4,800 people and indirectly support the jobs of up to more than a million<br>more in our value chain.</p><p>Nigerian Bottling Company aims to<br>be customers’ most preferred supplier, and conduct programmes to support more<br>than 450,000 customers who sell their products to consumers.</p><p>The company is part of the<br>Coca-Cola Hellenic Group , one of the largest bottlers of The Coca-Cola<br>Company’s products in the world, and the biggest in Europe. Coca-Cola Hellenic<br>operations span 28 countries , serving more than 570 million people. The<br>company is headquartered in Athens and listed on the Athens, New York, and London<br>stock exchanges.</p><p>· &nbsp; &nbsp; &nbsp; <b>Products</b></p><p>· &nbsp; &nbsp; &nbsp; NBC<br>produce, sell and distribute a wide range of beverages, most of which are<br>trademark products of The Coca-Cola Company. Our product portfolio consists of:</p><ul><li>leading brands Coca-Cola, Coca-Cola light,<br>Fanta and Sprite</li><li>local brands such as Schweppes, Five Alive,<br>Limca and Eva</li></ul><p>The Nigerian Bottling Company<br>continuously review opportunities to expand its product portfolio in order to<br>offer consumers in Nigeria an increasing range of choices. Every measure is<br>taken to ensure that its products are of the highest quality.</p><p><b>1.2 </b>STATEMENT OF THE PROBLEM</p><p>The<br>Nigerian Bottling Company carries out frequent advertising of their products to<br>increase their sales volume, through taking part in charitable funds in Nigeria<br>and even sponsoring sports .It advertises using radio, television and<br>newspapers.</p><p>Despite<br>its efforts in advertising regularly &nbsp;<br>the sales of Nigerian Bottling Company industry have not improved to the<br>desired targets. The sales in Nigerian Bottling Company for the past four years<br>have not been steady.</p><p><b>&nbsp;1.3 </b>PURPOSE OF<br>THE STUDY<b>&nbsp; &nbsp; </b></p><p><b></b></p><b><p>The<br>purpose of the study was to establish the impacts of advertising on sales<br>volume of an organization.</p><p><b>1.4<br></b>OBJECTIVES<br>OF THE STUDY<b></b></p><b><p><b></b></p><b><p>1. &nbsp; &nbsp; To<br>examine the forms of advertising used by The Nigerian Bottling Company.</p><p>2. &nbsp; &nbsp; To<br>establish the level of sales performance in Nigerian Bottling Company.</p><p>3. &nbsp; &nbsp; To<br>establish the relationship between<br>advertising and sales in Nigerian Bottling Company industry</p><p><b>1.5<br></b>RESEARCH<br>QUESTIONS<b></b></p><b><p><b></b></p><b><p>1. &nbsp; &nbsp; What<br>are the forms of advertising used by Nigerian Bottling Company?</p><p>2. &nbsp; &nbsp; What<br>is the level of sales performance of Nigerian Bottling Company?</p><p>3. &nbsp; &nbsp; What<br>is the relationship between advertising and sales performance in Nigerian<br>Bottling Company industry?</p><p><b>Content scope</b></p><p><b></b></p><b><p>The<br>study covered advertising as the independent variable and sales performance as<br>the dependant variable.</p><p><b>Geographical scope</b></p><p><b></b></p><b><p>The<br>study was cantered at the Nigerian Bottling Company industry in Lagos because<br>it is the headquarter of the industry where marketing plan is carried out, and<br>it has large sales volume</p><p><b>Time scope</b></p><p><b></b></p><b><p>The<br>study looked at five financial years back that is 2006 to 2010</p><p><b>1.7</b><br>SIGNIFICANCE OF THE STUDY<b></b></p><b><p><b></b></p><b><p>The study will help firms<br>understand the importance of advertising. It will also enable them structure<br>their adverts and brands to make them more appealing in order to improve sales<br>and lead to better performance. As this study gives a clear insight into how<br>advertisement can influence consumer behaviour, many firms will be encouraged<br>into using adverts to market their products. When firms start making more sales<br>and profits as a result of advertising, the economy of Ghana will be boosted,<br>as more income from tax will be accrued to the government of Ghana. The<br>findings and recommendations of this study will go a long way in helping firms<br>to adopt good advertising strategies, and appealing brand designs to help get<br>more consumers for their products and services.</p><p><b>&nbsp;</b></p><p><b></b></p><b><p><b>1.8 PLAN OF STUDY</b></p><p><b></b></p><b><p>Chapter<br>one of this study includes the general introduction, background information<br>about the study, statement of the problem, objectives of the study, research<br>questions, scope of the study, significance of the study, and the limitation of<br>the study.</p><p>Chapter<br>two reviews all relevant literatures relating to the study as well as the<br>researcher’s views concerning previous studies on the challenges of income<br>taxation.</p><p>Chapter<br>three includes the methodology applied in collecting and analysing data,<br>population definition, study site, and limitations.</p><p>Chapter<br>four presents the results of the study as well as data analysed, and the<br>interpretation of the analysed data.</p><p>Chapter<br>five includes a summary of the study, conclusion and recommendations based on<br>the findings from the study.</p><p><b>1.9 STUDY LIMITATION</b></p><p><b></b></p><b><p>The<br>only limitation faced by the researcher in the course of carrying out this<br>study was the delay in getting data from the various respondents. Most<br>respondents were reluctant in filling questionnaires administered to them due<br>to their busy schedules and nature of their work. The researcher found it<br>difficult to collect responses from the various respondents, and this almost<br>hampered the success of this study.</p></b></b></b></b></b></b></b></b></b></b></b></b></b></b></b></b></b> <br><p></p>