THE IMPACT OF ADVERTISING AND SALES PROMOTION ON THE PROFITABILITY OF SCALE BUSINESS A CASE STUDY OF ROJALIN COMPANY LTD, OGWASHI-UKU DELTA STATE CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF THE STUDY Advertising and sales promotion has not only become an integral part of our society and economic system but has also grow over the year to assume tremendous proportions both as a business activity and social phenomenon. It has affected not only the business sector but also the whole society (Oghudge, 1993) Advertising and sales promotion have been seen as life wire of an organization which help in the creation of awareness educating and informing consumers/customers about a particular product, which will help in increasing a company sales turnover and more profit to the organization sine all business organization or firms that are being with the aim of making profit, it will be advantageous that companies adopt those marketing mix in its operation to keep it going. Since consumers need to be aware or informed about a particular product advertizing can also be made known to the society so as to avoid mix up in certain information being passed out to them (the society).after this have been done, companies also apply their sales promotion which help in retaining the customers patronage and make them loyalists to the product, and this result in sustaining high sales volume and more profit to organizations. In fact, advertising and sales promotion are very significant throughout the life of a product because of the roles they play, which bring about more sales and profit to an organization or firm(Robert,2001).Consequent upon the above the researcher is interested in finding out the role those marketing mix plays in the business sector. 1.2 STATEMENT OF THE PROBLEM Advertising and sales promotion are marketing tools whose sole aim is to build preference for advertised brand or services (Robert,2001).they create awareness good image for new and old products and generate the desired action. In as much as advertising and sales promotion aid in the marketing of goods and services which leads to increase in sales and more profit in some area it has not been carried out systematically. Some of the areas that have posed problems to those marketing tools i.e. advertising and sales promotion includes nonchalant attitude of management and staff, and in recent times most of the paint producers have been finding it difficult to cope with advertising and sales promotion either because of the capital involved or because they felt it is of no use making adverts or sales promotion due to environment they operate in. The owners and management of some companies might at times be ignorant and do not know the value of advertising and sales promotion to their business. Even where the value is known they might not use if effectively and efficiently, also those receiving the message as expected. The management feels that there is no need for advertising and sales promotion since customers in the view purchase what they want to buy regardless whether there was an advertisement of such product or not, or whether sales promotion was employed or not. The question then is, can these organizations be convinced that their investment in advertising and sales promotion is not necessary cost and change their perception, that advertising neither habits nor enhance the sale of their product. Which act to increase profitability? 1.3 OBJECTIVES OF THE STUDY A lot of problems have been identified as militating against advertising and sales promotion. The main purpose of this study is to investigate the impact of advertising and sales promotion on the profitability of small and medium scale business (Smes). Especially the researcher is required to:- 1 Examine the influence of advertising and sales promotion on customers patronage. 2 Find out the impact of such influence if any on sales of Rojalex paint in and outside Ogwashi-uku. 3 To stress the benefit of advertising and sales to an organization. 4 To know that advertising and sales promotion pulls customers to a product. 5 To ascertain if advertising and sales promotion can be used to correct product deficiency. 6 Reveal of advertising and sales promotion can be used to protect good corporate. Image of a firm. 7 To make appropriate recommendation on how sales promotion and advertising can be used to increase the profit of a firm. 1.4 RESEARCH QUESTIONS To effectively and efficiently carry out the study the following research question are formulated to guide the study. 1. Do advertising and sales promotion serve as communication medium between the company and the customers. 2. Do advertising and sales promotion brings on increase in a company’s profitability? 3. Can advertising and sales promotion be used to correct product deficiency? 4. Can advertising and sales promotion be used to increase customer loyalty. 5. Do advertising and sales promotion have significant impact on pulling the customers to a product? 6. Do advertising and sales promotions have negative impact on the customers? 7 Do advertising and sales promotion increase the level of patronage of an organization product? 8. Do advertising and sales promotion increase the level of patronage of an organization product? 9. Can advertising and sales promotion be used to increase sales turnover? 1.5 SIGNIFICANCE OF THE STUDY This study seek to identify the rule making mix i.e. advertising and sales promotion play the achievement of Rojalin Company objective (profit ). This study would basically serve as a guide to the company (Rojalin) and individual (consumers) by educating them on ways advertising and sales promotion can be used to yield a positive impact on creating awareness and more profit in an organization of firm. This work will also be of great relevance to student it will educate student generally on the topic. Advertising and sales promotion and the impact they have on the profitability of firms. And also aid student want to carry out further research on advertising and sales promotion. 1.6 SCOPE/DELIMITATION OF THE STUDY The research cover the impact of advertising and sales promotion on the profitability of small/medium scales business using “Rojalin Company” as point of contact and the product to be considered is Rojalex point. In the course of carrying out this research numerous problems were encountered. They include finance time and inability of the staff of the company understudied to provide the researchers with some required information. The cost of materials and transportation were very high. Also most of the company management and staff were not able to respond to the researchers due to their engagement with the company’s activities. Hence the researchers wasted a lot of time writing for their response and at the end some copies for their response and at the end some copies of the questionnaires were not returned. Finally while carrying out this study, the researcher were subjected to a time limit within which the findings must be reported. And a study of this magnitude requires more time than that which was given to the researchers. 1.7 LIMITATIONS OF THE STUDY In the course of carry out this research numerous problem were encountered. They include finance time and in ability of the staff of the company under studied to provide the researcher with some required information. The cost of materials and transportation were very high. Also most of the company’s management and staff were not able to respond to the researchers due to their engagement with the company’s activities. Hence the researchers wasted a lot of time waiting for their response and at the end some copies of the questionnaires were not returned. Finally, whole carrying out this study the researcher were subjected to a time limit within which the finding must be reported and as study of this magnitude requires time than which was given to the researchers. 1.8 PROFILE OF THE COMPANY Rojalin Limited, incorporated on March 21 1998 under the Nigeria corporate Affairs commission (C.A.C) is located at No 41 Isah Road Ogwashi-uku, Delta State. Rojalin limited is singularly owned by Chief R.A Obah, who jinbles as the (C.E.O) Chief Executive officers of the Company. Rojalin limited the manufacturer of Rojalex paint. (Emulsion and oil paint). Rojalex paint are sold in various sizes to suit the customers need. The Company operates on two facets manufacturing and distributing. The manufacturing unit is responsible for the day to day production of Rojalin paint, while the distribution unit is responsible for distribution and dealing with customers. While the production department operates from Monday-Friday 8am-4pm, the distribution department operates from Monday – Saturday 8am- 6pm, with tuck and drivers available for product delivery to customers. The company has a total of twenty nine distribution outlet (dealers) operating within the South-South and South-east Geopolitical zone of the nation has a man power strength of forty one persons (Management staff inclusive). 1.9 OPERATIONAL DEFINITION OF TERMS The terms that are considered necessary to be defined in this work are advertising marketing. Sales promotion profit Small Scale business and medium scale business. Advertising: This is defined as a social and managerial process through which groups and individuals obtain what they want and need through creating and exchanging of product (goods and services) are values with other (kolter 1990) Sales Promotion: This is defined as those marketing activities other than personal selling and publicity that stimulate consumer purchasing and dealers effectiveness such as display and explosion demonstration and various non recurrent effort not in the ordinary routine (Edogo. 1995). Profit: This is defined as the amount of money left after total expenses are deducted from total revenue (Ighudge 1993). It is the reward which a firm receivers from its investment. It assets in marketing by giving product identification and differentiation at point of purchase thereby serving as a silent sales person. Industry: Producer uses a demographic variable to identify customers. 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