THE IMPACT OF ADVERTISING ON SALES PERFORMANCE


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THE IMPACT OF ADVERTISING ON SALES PERFORMANCE: A CASE OF MUKWANO INDUSTRY                                                                       ABSTRACT:     The study aimed at assessing the effect of advertising on the performance of an organization, case study being Mukwano industry in Kampala. The study was mainly looking at advertising and performance of Mukwano industry and if this was effective to the organizationThe researcher used a cross sectional research design with both qualitative and quantitative methods with a population study of 150people out of which a sample size of 40 employees was chosen .Stratified sampling design was used to divide the employees into strata which were departments under which the employees worked ,and they included marketing ,operational, production and supply departments .Using simple random sampling respondents were chosen from the different departments selected and questionnaires distributed to the selected respondents from the four departments in the industry. Both the primary and secondary data was used during collection of data. Data was collected by use of questioners and observation method s and analyzed in form of tables. Findings revealed that Mukwano advertises most of its products and it uses different forms of advertising and media, but the level of Mukwano’s sales was declining despite of their frequent advertisements. There was a strong relationship of(r= 0.9 0)between advertising and sales performance.The industry  should use most of the local languages commonly used in Uganda to win customers from all tribes, use of e marketing to be adopted by the industry to reach most of the people who can access the internet than listen to radios and televisions and also the use celebrities in advertising their products, and finally the researcher recommends the use of other forms of advertising for example sponsoring events and also the use of mobile phones to advertise.TABLE OF CONTENTSDECLARATION    iAPPROVAL    iiDEDICATION    iiiACKNOWLEDGEMENT    ivTABLE OF CONTENTS    vLIST OF TABLES    viiiABSTRACT    ixCHAPTER ONE    11.1 Background 11.2 Statement of the problem…………………………………………………………...…21.3 purpose of the study……………………………………………………………...……31.4 0bjectives of the study………………………………………………………………...31.5 Research questions…………………………………………………………………….31.6 Scope of the Study    31.7 Significance of the study………………………………………………………………3CHAPTER TWO: LITERATURE REVIEW    52.0 Introduction    52.1 Advertising    52.1.1 Advertising objectives    62.1.2 forms of advertising    62.1.3 Advertising media    62.1.4 Steps in choosing an advertising media    72.1.5 Steps taken in setting an advertising budget    82.2 Sales performance    102.2.1 Sales     112.2.2 Sales process    122.2.3 Effective sales process    132.2.4 Outcomes of sales processes    132.2.5 The outcome of the selling process    142.3 Relationship between Advertising and sales performance    152.4 Conclusion    17CHAPTER THREE: METHODOLOGY    183.0 Introduction    183.1 Research Design    183.2 Sampling Design    183.2.1  StudyPopulation     183.2.2 Sampling size    183.2.3 Sampling method    183.3 Data Collection    193.3.1 Data sources    193.3.2 Data collection instruments    193.4 Data processing, analysis and presentation    193.4.1 Data presentation    203.5 Limitation of the study    20CHAPTER FOUR:    PRESENTATION, ANALYSIS, AND INTERPRETATION OF THE FINDINGS    214.0 Introduction    214.1 Demographic characteristics    214.2 Findings on the forms of advertising used by Mukwano industry    244.3 Findings on the level of sales of Mukwano industry    304.4 Findings on the relationship between advertising and sales performance using Pearson correlation    32CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION    345.0 Introduction    345.1 Summary of major findings    345.1.1 Findings on the forms of advertising    345.1.2 Findings on the Level of Sales in Mukwano Industry    345.1.3 Findings on the Relationship between Advertising and Sales    345.2 Conclusions    355.2.1 forms of advertising    355.2.2 Establishing the Level of Sales from Mukwano Industry    355.2.3 Relationship between Advertising and Sales    355.3 Recommendations    355.3.1    Areas for further research…………………………………………………..……36REFERENCES    37Appendices:Research Questionaire    39LIST OF TABLESTable 1: Annual report 2009 to 2010    2Table 2: Number of respondents    21Table 3: Age of respondents    21Table 4:Gender………………………………………………………………..………..22Table 5: Level of education    22Table 6: Marital status    23Table 7: Department of respondents    23Table 8: Number of years worked for the organization    23Table 9: organization advertising all its products    24Table 10: Television as a means of advertising    24Table 11: Newspapers as a means of advertising    25Table 12: Brochures as a means of advertising    25Table 13: Radio as a means of advertising    26Table 14: magazines as a means of advertising    26Table 15: stickers as a means of advertising    27Table 16: workshops as a means of advertising    27Table 17: mobile advertising as a means of advertising    28Table 18: sponsoring events as a means of advertising    28Table 19: adverts reach the intended audience    29Table 20: Mukwano is allowed to advertise freely    29Table 21: media used are accessible by the target market    30Table 22: The level of sales has been increasing    30Table 23: increasing sales volume is every ones responsibility    31Table 24: the level of sales volume in Mukwano is declining    31Table 25: increasing sales level is a challenge to all employees    32Table 26: The analysis of the relationship between advertising and sales volume (From Table 8 and Table 23)    33CHAPTER ONE1.1 BACKGROUNDAdvertising is any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor (Kotler and Armstrong, 2010). There are various forms of advertising like informative advertising, persuasive advertising, comparison advertising, and reminder advertising. Informative advertising is used to inform consumers about a new product, service or future or build primary demand. It describes available products and services, corrects false impressions and builds the image of the company, (Kotler, 2010).Advertising can be done through print media which includes news papers ,magazines ,brochures ,Audio media for example Radio, and visual media which includes billboards, and television (Kotler and Armstrong 2010).Sales performance describes the trend of collections in terms of revenue when comparing different periods (MC Cathy, 1994). The sales may be in form of offering products or services to consumers. A service is any activity or benefit that one party can offer to another that is essentially intangible and does not result in ownership of anything (Kotler and Armstrong, 2010).Sales volume is the core interest of every organization and is based on sales and profit .When volume goes up profits rises and management in organizations is made easier.Mukwano is a manufacturing industry located in Kampala city along Jinja road near industrial area. It was established in 1980 and it deals in the production of a variety of beauty products for example smearing jelly, soaps, body lotions and creams. It also deals with the other domestic products like cooking oils, beverages and plastic containers. Mukwano advertises using visual media for example the television and the Audio the radio, print media for example the news papers.   Mukwano has launched a new detergent powder to compete in East Africa common market through intensive advertising internationally Daily monitor April 2010, but there are some inefficiencies in the way these organization carries out its advertisements for example Mukwano advertisements in the visual media is done in local language i.e. (luganda) a language that can only be understood by a few people in the country, making the advertisement appealing only to a group of people. The advertisements lacks the unique selling proposition in the statements used to differentiate their products from competitors, they are   done in the same way as the competitors making it hard to differentiate its ads from others. Besides their advertisements don’t provide room for further information about their products for clarification (Daily Monitor April 2010)For the past four years expected sales in Mukwano have differed from their actual sales as shown in the table below whereby in the year 2007 there was a slight increment in ales volume and started declining from year 2008 to 2009Table 1: Annual report 2009 to 2010YEARS    EXPECTED SALES    ACTUAL SALES2007    200m    210m2008    250m    200m2009    230m    205m2010    210m    198mSOURCE; Annual report 2009 to 2010Mukwano expected 200m from sales in the year 2007 but the actual sales they had was 210m and in the year 2008 they expected 250m but they had 200m of sales, in the year 2009 the industry expected to sale goods worth 230m but only managed to sale goods worth 205m and lastly in the year 2010 they expected to get 210 out of the sales but they received only 198m1.2 STATEMENT OF THE PROBLEMMukwano carries out frequent advertising of their products to increase their sales volume, through taking part in charitable funds in Uganda and even sponsoring sports .It advertises using radio, television and newspapers.Despite its efforts in advertising regularly   the sales of Mukwano industry have not improved to the desired targets. The sales in Mukwano for the past four years have been declining.  1.3 PURPOSE OF THE STUDY     The purpose of the study was to establish the impacts of advertising on sales performance.1.4 OBJECTIVES OF THE STUDY1.    To examine the forms of advertising in Mukwano industry.2.    To establish the level  of sales performance in Mukwano industry3.    To establish  the relationship between advertising and sales in Mukwano industry1.5 RESEARCH QUESTIONS1.    What are the forms of advertising used by Mukwano industry?2.    What is the level of sales performance of Mukwano?3.    What is the relationship between advertising and sales performance in Mukwano industry?1.6 SCOPE OF THE STUDYContent scopeThe study covered advertising as the independent variable and sales performance as the dependant variable.Geographical scopeThe study was centered at the Mukwano industry in Kampala because it is the headquarter of the industry where marketing plan is carried out, and it has large sales volume Time scopeThe study looked at five financial years back that is 2006 to 20101.7 SIGNIFICANCE OF THE STUDYThe findings of the study were expected to benefit the following.The findings of the study were used as references for future research work.The results of the study are of surmountable information when drawing measures which would in turn lead to capture of substantial market share.The study can be the source of reference on how to revive and adopt and also follow the adverts according to the dynamic markets.

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THE IMPACT OF ADVERTISING ON SALES PERFORMANCE


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