CHAPTER ONE

INTRODUCTION

1.1 Background Of The Study

Modern-day Marketing calls for more than just developing a good product, pricing it attractively, distributing it to targeted customers, and making it readily accessible to target markets.

The company must design and disseminate information about the product’s existence, features, terms, and how it will benefit the target markets. Every company inevitably finds itself falling into the process of trying to communicate and promote its products or service at a point in time.

Companies have responded by hiring a sales force (advertising agencies to develop breath-captivating adverts; sales promotion specialist(s) to develop sales campaigns to get the attention of the public and public relation firms to enhance the company’s image) to carry out persuasive messages.

They all continue to spend huge and ever-growing sums of money for promotion and advertising campaigns. For most companies, the question is not whether to advertise or promote but it is how much is to spend, in what ways are we to spend, and how much returns will be gotten from it in other to cover up the cost of advertising.

The company’s communication responsibility goes beyond dissimulating information to targeted consumers. The company must communicate effectively with other parties in this task, be it internally or externally, particularly its dealers and suppliers.

They must communicate externally such as to the public, stakeholders, financial community, media houses and various government units. It must also effectively communicate internally too, such as to directors, managers, middle management, sales personnel, financial department, board of directors, and employees.

This means that companies must know how to effectively market themselves to various groups be it internally or externally so as to gain their confidence, trust, recognition, and goodwill. Its products, services offered, adverts, employees, and actions will communicate specific messages to public figures and what it communicates would not be taken lightly as the company’s life span and progress will be judged from that.

A company can establish a reputation for trustworthiness, progressiveness, and social responsibility which will give it a competitive advantage over other competing firms in the mind of the actual and potential consumers.

This research will look at the impact of advertising on the sales of Brasseries products. The major tools in the marketing communication mix deal in particular with advertising while public relations and sales promotion follow afterward.

Advertising is one of the most highly used communication mix tools and it is still referred to as “above the line” expenditure, a term which was derived from the historical way advertising expenditure was treated in marketing budgets.

Advertising expenditure was named “above the line” because it represented actual expenditure as opposed to sales promotion which also inherited the name “below the line” because much of its cost came as a result of a reduction in revenue, for example, price cuts.

In recent years most advertisements are run on behalf of commercial organizations, which are placed under the care of an advertising agency which will then be asked for a commission by the media owners and the agency will charge the full cost of the advert to the advertisers. It is not placing a classified advertisement in a local newspaper where you will pay by yourself.

A way of reconciling the apparently conflicting result is by distinguishing different types of advertising based upon its content using PIMS (Profit Impact of Marketing Strategy) data (Peter – Popkwoski – Leszczyck and Rao 1989, Boulding1994).

The first kind of advertisement, sometimes referred to as “mood advertising” was primarily geared towards brand positioning and the communication of unique brand characteristics. We refer to this kind of advertising as non-price advertising.

Advertising has a wide scope, like when someone places a card in a local news agent’s window with an item for sale, it is an advertisement. This can be contrasted with that of a company being shown on television.

This takes us back down memory lane where the first kind of advertisement may have been a sign (drawing) painted on the wall of a building as it was the case in 1806 China “advertising of a Chinese traditional medicine called Kinsertan during the Edo period” (Origin of Advertisement, www.wikipedia.com).

The early outdoor advertising agents were “town criers”, employed by merchants to praise their goods. It was John Guttenberg’s invention of the movable printing press in 1450 that resulted in the mass production of posters for advert and their circulation.

The first-ever printed advert in English was a handbill printed in 1472; it was simply the announcement of a prayer book for sale. In June 1836, French newspaper La Presse was the first to include paid advertising in its pages, allowing it to lower its price, extend its readership and increase its profitability. And the formula was soon copied by all titles.

Around 1840, Volney B. Palmer established the roots of the modern day advertising agency in Philadelphia. In 1842 Palmer bought large amounts of space in various newspapers at a discounted rate of 25% then resold the space at higher rates to advertisers.

The actual ad, the copy; layout and artwork, were still prepared by the company wishing to advertise. In effect, Palmer was a space broker. The situation changed in the late 19th century when the advertising agency N.W. Ayer & Son was founded.

Ayer and Son offered to plan, create, and execute complete advertising campaigns for its customers. By 1900 the advertising agency had become the focal point of creative planning, and advertising was firmly established as a profession.

Around the same time in France, Charles-Louis Havas extended the services of his news agency – Havas, to include advertisement brokerage, making it the first French group to organize. At first, agencies were brokers for advertisement space in newspapers. N. W. Ayer & Son was the first full-service agency to assume responsibility for advertising content. N.W. Ayer opened in 1869 and was located in Philadelphia.

One of the earliest and most successful advertising campaigns was launched by Pears Soap. In the late 19th century, Thomas Barrat who is considered the father of modern advertising launched a series of advertisements featuring children, animals, flowers, and beautiful women to promote the company’s products.

With the advent of mass media communication, cinema, television, and internet advertising in the 20th and 21st centuries, the essence was to make sure that the objectives of the company were achieved namely, moving potential consumer interest and targeting ones closer to the point of purchase for a particular product or service.

Advertising is probably one of the first things that come into people’s minds when they think about marketing. It usually comes at the end of every marketing process after a great deal of effort to ensure that the marketing budget is undertaken by major consumer goods and services companies in Cameroon such as Les Brasseries, MTN Group, Orange, and Guinness.

In such large cities in Cameroon such as Douala and Yaoundé, successful companies spend huge sums of money for publicity, as they use public banners, decorations and telephone messages as it is the case with Brasseries du Cameroun, MTN and Orange; during holidays, public events and promotions.

The question that we ask ourselves now is that;

1. Are consumers paying more in consequence for their consumption than they would have if the company did not advertise their products?
2. Does the advertisement of products properly act as an attracting force for the consumption of that product by people?
3. Does advertising increase the consumption level of products by people?
4. Marketing activities (tools) have mainly one primary purpose, which is to increase sales for the company through an increase in consumption.

1.2 Statement Of Problem

Many business institutions and advertising agencies argue that persuasive advertising is a legal strategy. Bans of some products like alcohol advertising would have adverse effects on the alcohol market in Cameroon and on some media practitioners.

Such bans are not justified, as advertising is concerned with the promotion of individual brand sales and there is no evidence of a causal link between advertising and the overall level of alcohol consumption.

The Alcohol industry in Cameroon has been spending huge chunks of money on advertising due to the competitive nature of the industry. Advertising is done through various Media, such as television, the internet, radio, the press, posters, and telephone messages.

The main argument is that promoting the brand and advertising is concerned with recruiting new drinkers, maintaining the former consumers and increasing sales among existing consumers, especially heavy consumers.

In this regard, this research is structured to answer the following questions;

What are the advertising strategies used by Brasseries?

To what extent does advertising expense impact the consumption and sales level of Brasseries products?

1.3 Objectives Of The Study

The main objective of this research is to;

Examine the Impact of advertisement on the sales of Brasseries du Cameroun products.

The specific objectives are to;

1. Identify the various advertising strategies of Brasseries.
2. Determine the effects of advertising expenses on sales of Brasseries products.
3. Make necessary recommendations.

1.4 Research Hypothesis

The following hypotheses will be used to guide this research;

The null hypothesis, Ho: Advertising has no significant impact on the sales of Brasseries products.

The alternate hypothesis, H1: Advertising has a significant impact on the sales of Brasseries products.