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 organization The 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.

CHAPTER ONE

1.1 BACK GROUND

Advertising 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 2009

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