CHAPTER ONE

GENERAL INTRODUCTION

1.1. Back to Study

The companies are expanding at an increasing rate and is becoming intensely competitive. Today’s dynamic business environment is continuously changing because of globalization, regulatory changes, increasing intensity of competition, increasingly demanding customers, new information technology, and mergers and acquisitions. This has resulted in markets that can be characterized as increasingly turbulent and volatile and has caused many organizations to seek competitive capabilities that enable them to exceed customers‟ expectations and enhance market and financial performance. Firms are increasingly adopting advertising to reduce costs, increase market share and sales, and build solid customer relations. When competition is keen, and the consumers are faced with brand choice in the    market, it becomes imperative for the retailers to understand the major factors that can attract the attention of buyers to their outlets. These then form the basis for advertising to increase the sales and ultimately the performance of the outlet (Wing et al., 2006).

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).

The major objective of any organization is to make sufficient profit in order to satisfy stakeholders needs/shareholders’ wealth maximization (value added) as pointed out by (Pandey 2000). This is in addition to other sub-objectives such as employee satisfaction, being a market leader or being socially responsible. Whatever the objective might be, the higher the sales volume the better organization will be in terms of objective realization and sales performance. Today’s business scenario is characterized by high competition, dynamism and operational complexities. Competition has forced organizations to change and upgrade continuously due to rising customer expectations. Therefore, assessment of advertising effectiveness and adjusting its application in relation to the changing markets and customer expectations need to be a continuous process. In a changing and aggressive business situation, advertising plays an important role in communicating with customers, both current and potential (Bendixen, 1993). (Bennett 2006) describes advertising as non personal communication of marketing-related information in a target audience, usually paid for in order to reach the specific objectives of the sponsor, Borden (2007) defined advertising as a controlled identifiable information and persuasion by means of mass communication media. Advertising is any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor (Kotler and Armstrong, 2010).

Advertising may influence consumers in many different ways, but the primary goal of advertising is to increase the probability that consumers exposed to an advertisement will behave or believe as the advertiser wishes (Stafford and Stafford, 2003). Thus, the ultimate objective of advertising strategies is to sell things persuasively and creatively. Advertising is used by commercial firms trying to sell products and services; by politicians and political interest groups to sell ideas or persuade voters by not-for-profit organizations to raise funds, solicit volunteers, or influence the actions of viewers; and by governments seeking to encourage or discourage particular activities, such a wearing seatbelt, participating in the census, or ceasing to smoke. The forms that advertising takes and the media in which advertisements appear are as varied as the advertisers themselves and the messages that they wish to deliver (Schmidt and Spreng 2000).

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.

In Cameroon, competition in the mass distribution sector is about to get tougher as French giant, Carrefour, will enter the market within months. The firm would follow the steps of another major brand, Super U that recently came into this market where both local and foreign companies are battling to satisfy and win customers. Cameroon has thus become a major commercial playfield and a coveted market. The driver to this is mainly the nation’s dominant young population combined with an emerging middle-class which mass retail brands wish to tap into. The brands are aiming to firmly position themselves in the market and secure a pool of consumers. Carrefour, France’s mass distribution leader, in fact, plans to open six medium-size malls in Douala and Yaoundé. A development which should give rise to significant changes in the sector. More so given that in the framework

of establishing itself in Cameroon, the brand will partner with the CFAO group (Compagnie française de l’Afrique Occidentale), leader in specialized distribution and services in growing markets across Africa. Besides Carrefour’s, six other malls are expected in Douala and Yaoundé, three in each, by 2020, for a total of FCFA80 billion. These surely will pave the way for the arrival of multiple fashion brands.

Though many are concerned over Carrefour’s arrival, mainly due to its upmarket status in comparison to brands that are more oriented towards first price products, the French group should stimulate an already-competitive sector where are present Indian Mahima, Mercure.

International which is owned by Monegasque business man (of Lebanon-Senegal origin), Adnan Houdrouge, and Super U. Running against these are nationals Dovy, Santa Lucia, among others. Most of these businesses opt more and more for a customer-centered strategy, opening local supermarkets (24hours a day or late closing). Carrefour’s arrival in Carrefour highlights the importance of supply, logistics and a growing need for stores in the country. It should boost local business with an accent on agriculture, animal husbandry, and the cold chain given that mass distribution is closely related to processing and supply. Cameroonian SMEs and actors of the sector could leverage on this to thrive and it could create employment for the youth.

The advertising market in Cameroon is still developing in order to attain global standards. A large proportion of advertising share is accounted for by the few multinational companies operating in the country, such as Ocean Ogilvy and

Mather. However, there are also numerous locally-based advertising agencies in the main cities. The industry is not regulated and largely follows subjective standards, as well as suffering from problems with advertiser debt.

The largest advertisers in the country are the Ministry of Finance, Orange

Cameroun, South African mobile telephone provider MTN, local telecommunications company PMUC and the South African Broadcasting Corporation.

The growing public relations industry, developing in both the private and public sector, is represented by the Cameroon Public Relations Association, whilst marketers in the country are represented by the Cameroon Marketing Association.

The World Economic Forum’s Global Competitiveness Report (2012-13) placed

Cameroon in 104th out of 144 countries in terms of the extent of marketing, with a score of 3.6 out of 7. Coming below the mean of 4.1, this indicates that companies in the country are less likely than average to extensively utilize sophisticated marketing tools and techniques. In relation to buyer sophistication the country ranked 99th with a score of 3.1, below the mean of 3.5. This suggests that buyers are more likely to make a purchasing decision based on the lowest price rather than on a sophisticated analysis of performance attributes.

1.2. Statement of the Problem

An advertising message attract the attention or interest of customers and or influence their feelings toward the advertised goods, service, or cause”. In real sense, it is the method used by companies for creating awareness of their products, as well as making new products known to the new and potential consumers. Advertising as a promotional tool also tends to remind, reassure, and influence the decisions of the consumers because an advertisement itself enlightens, and persuades consumers on their acceptability of the product offering. For any promotional activity to be called advertisement, it must be paid for (Abiodium, 2011).

Advertising is an indicator of the growth, betterment and perfection of the business environment. Not only does advertising mirror the business environment, it also affects and gets affected by our style of life. It is not at all surprising that advertising is one of the most closely scrutinized of all business institutions. In today‟s environment, advertisers are closely examined by the target audience for whom the advertisement is meant for in the society. Advertising as a marketing tool is used by business organization to inform consumer that the right product is available at the right place, right price and to convince the consumer to purchase them. Advertising comprises all messages that are paid for in the media owned and controlled by people other than the company making the advertisement. Therefore, advertising must be tailored towards consumer’s satisfaction and organizational performance (Osogbo, 2014. Advertising as a promotional tool also tends to remind, reassure, and influence the decisions of the consumers because an advertisement itself enlightens, and persuades consumers on their acceptability of the product offering. For any promotional activity to be called advertisement, it must be paid for (Abiodium, 2011).

The brief background above, unequivocally identifies the status and importance of advertisement as inevitable tool for survival of business in highly competitive market. Despite this importance however, Bakeries meet challenges in trying to realize their objectives. The problem is that, despite spending huge amount of money on buying groceries, sales have not improved to the desired targets(Abiodium, 2011). The Annual Report (2017) on sales revenues denotes that, for the past 3 years, expected sales in  grocery markets have differed from their actual sales. The report states the volume of sale decrease by the day.

There are a number of factors that have been attributed to the losses above. One of them is inefficiencies in which super markets and bakeries carried out on advertising. The other concern is that, the company advertisements lacks the unique selling proposition in the statements used to differentiate their products from competitors.

The magnitude of the problem is quite high, ranging from financial losses to wrong public perception about the goods and services. Clients continue to defect due to inefficiencies in providing  product known to clients. Based on the background of the problem like customers not aware of the bakery products, intensive competition in the bakery industry, costumers not being aware of the new bakery products, this study contends for effective approaches to advertisement for the bakery markets to remain competitive and improved performance in business arena . It is in the line of the above argument that this study assessed the effects of advertising on sales performance in  bakeries with a case study of  Mezam in the North West.

1.3. Research Questions.

1.3.1. Main Research Question

What effect of advertising, has on the sale of grocery products in bakeries in Mezam

1.3.2. Specific Research Question

1. What effect does informative advertising, has on the sale of grocery products in bakeries in Mezam?
2. What is the effect of Persuasive advertising on the sale of grocery products in bakeries in Mezam.
3. What is the effect of Reminder advertising on sale of grocery products in bakeries in the Mezam?

1.4. General objective of the study

The general purpose of this study is to assess the effect of advertising  on sale of bakery products.

1.5. Research Objectives

1.5.1. Main Research Objectives

Advertising, has an effect on the sale of grocery products in bakeries in Mezam

1.5.2. Specific objectives

The specific objectives of this study are:

1. To examine the effect of informative advertising on the sale of grocery products in bakeries in Mezam
2. To determine the effect of Persuasive advertising on the sale of grocery products in bakeries in Mezam.
3. To determine the effect of Reminder advertising, on the sales e of grocery products in bakeries in the Mezam.