EFFECTIVENESS OF ADVERTISEMENT ON SALES TURNOVER OF TOILET SOAP MANUFACTURING INDUSTRY

Transcription

1 VISTAS Vol. 5, No. 1, 2016, pp ISSN: , e-issn EFFECTIVENESS OF ADVERTISEMENT ON SALES TURNOVER OF TOILET SOAP MANUFACTURING INDUSTRY Siby Linson and Jitha Thomas Assistant Professors, Research Department of Commerce and Management Studies, St. Joseph s College, Irinjalakuda Abstract Advertisement is a prominent feature of modern business operations.one can encounter advertising messages, while watching T V, Reading magazines, listening to radio, surfing the internet or even simple while walking down the street, advertisement has a stimulating influence on purchasing behavior of the customer. Advertising is about selling goods and services more often to more people for more money. Advertisement is the most glamorous element of the promotion mix. It is the poetry of marketing. It covers all activities connected with the giving of publicity regarding goods and services offered by sales. Here the study is conducted to know the effectiveness of advertisement on sales turnover of soap manufacturing industries. Keywords: Advertisement, Sales, Customer Decision Making OBJECTIVE OF STUDY 1. Toassess the relation between advertisement and sales. 2. To study the trend of sales for specified period. 3. To know the effect of advertisement on customer s decision making. RESEARCH METHODOLOGY Data required for the study, was obtained through primary and secondary sources. Secondary data has been collected from the company reports published over the website. The Primary data has been collected from fifty samples using questionnaire. Judgment sampling techniques was used for sampling. The collected data was analyzed with statistical tools like correlation analysis and percentage comparison analysis which is constituted in the analysis part. Graphs, tables and charts have been used to present the analysis in a better way. LIMITATION 1. The analysis was done by taking lastfive years data. So a complete company analysis was not possible. 2. The analysis has been made purely on basis of sample response. 100% accuracy in response cannot be ensured. EMPIRICAL LITERATURE Ekclund and Gramm (1969) analyzed the relationship between advertising expenditure and aggregate consumption but could not establish any positive relationship between these two. Taylor and Weiserbs (1972) studied the relationship between advertising expenditure and aggregate consumption on the basis of Houstakker-Taylor model and showed that advertising affects aggregate consumption and the relationship between advertisement and consumption ii not found to be

2 104 ISSN: e-issn unidirectional but simultaneous. Elliot (2001) revealed that advertising has a significant positive effect on food industry sales and this relationship between advertising expenditure and sales appears to be stable. Kambar (2002) found a measurable relationship between advertising expenditure and sales, even after controlling other factors, such as company size and past sales growth rates etc. Sundarsan (2007) evaluated the effectiveness of advertisement on sales of small and large firms and for multinational corporations. The result showed that advertisement has influenced sales; through its relative effectiveness was not the same for all the categories of firms. Different studies have shown diverse results. However, in general, majority of the studies have directed positive relationship between advertisement and sales. Most of the studies have used time series data to capture the long term effect of adverting on sales. Moreover, the area that, to what extent advertising s persuasive character works to alter consumer s wants and consequently sales have received scant attention. Further the present contribution aimed to evaluate the effectiveness of advertisement expenses on sales revenue for selected companies at aggregate as well as disaggregate level. The present study will also try to analyze the behavior of share of advertisement expenses in total sales revenue. DATA ANALYSIS Table 1: Showing Influence of Advertisement on Buying Decision Yes No Source: primary data Above table shows that the advertisement influence on buying decision is more. Out of 50 respondents, 29 responded favourably to this question. Table 2: Showing Effectiveness of Advertisement Recall 7 14 Positive impression Interest Desire to purchase The above table shows that advertisement is effective in creating desire to purchase. The response of people to recall is very low. Advertisement creates desire to purchase and positive impression on most people. Table 3: Showing Media Preference to Watch Advertisement Radio 2 4 Television News paper Magazines 3 6 From the above table most of the respondents prefer television to see advertisement. Comparing to other media, the impact of radio is very low.

3 VISTAS Vol. 5, No Table 4: Showing Impact of Advertisement Lasting on Respondents Few hours One week More than a month One day 5 10 Above table shows that advertisement effect last for more than a month on 36 percentage of respondents and its impact is for just few hours 28 percentage of respondents. Table 5: Showing Shopping Dependency on Publicity of the Company Yes No From the table it is clear that shopping decision depend upon publicity of the companies. Table 6: Showing Most Preferred Soaps for Daily Bathing Vivel Santoor Lux Godrej No Nirma 6 12 Others 6 12 Above table states that Lux is the most preferred soap for daily bathing andthe least used is Godrej No.1. Table 7: Showing Reasons for Preferring the Soap Quality Smell Price 5 10 Quantity 5 10 Others 2 4 This table states that quality and smell are the major reasons behind the preference of toilet soap. Table 8: Showing the Purposes of Watching Advertisements Options Number of Responds Percentage Entertain 4 8 Purchase New varieties Others From the above table it is clear that the main purposes of seeing advertisement is to know new varieties of products.

4 106 ISSN: e-issn Table 9: Showing Sales, Advertisement Expenditure and Operating Profit of Vivel (ITC) (Amounts in Billions) Year Sales Advertisement Expenses Operating Profit Above table it is clear that sales, advertisement expenditure and operating profit are increasing. Table 10: Showing Sales, Advertisement Expenditure and Operating Profit of Lux Year Sales Advertisement Expenses Operating Profit Above table states that sales, advertisement expenditure and operating profit shows an increasing trend. Table 11: Showing Sales, Advertisement Expenditure and Operating Profit of Santoor Year Sales Advertisement Expenditure Operating Profit Above table states that sales, advertisement expenses and operating profit show a growing trend. Table 12: Showing Sales, Advertisement Expenditure and Operating Profit of Godrej No.1 Year Sales Advertisement Expenditure Operating Profit From the table shows that sales, advertisement expenditure and operating profit shows rising trend. Table 13: Showing Sales, Advertisement Expenditure and Operating Profit of Nirma Year Sales Advertisement Expenditure Operating Profit

5 VISTAS Vol. 5, No Above table shows that sales is decreasing from to Advertisement expenditure and operating profit shows a fluctuating trend. Table 14: Showing Sales of Five Companies over Five Years Company Vivel Lux Santoor GodrejNo Nirma From the above table it is clear that sales of Vivel, Lux, Santoor are increasing at an increasing rate. Sales of Godrej No. 1 is steady, but it is very lower compared to Vivel, Lux and Santoor. Sales of Nirma shows a declining trend. Table 15: Showing Advertisement Expenditure of Five Companies over Five Years Company Vivel Lux Santoor GodrejNo Nirma From the table it is clear that advertisement expenses of Lux and Santoor are increasing.and it shows slight fluctuations in Vivel, Godrej No.1, Nirma. Table 16: Showing Operating Profit of 5 Companies over 5 Years Company Vivel Lux Santoor GodrejNo Nirma Correlation Test Table 17: Correlation of Godrej-No r=.. = 0.662

6 108 ISSN: e-issn Table 18: Correlation of Lux r=... = Table 19: Correlation of Nirma LTD r=.. = Table 20: Correlation of Santoor Advertisement(y) r=.. = Table 21: Correlation of Vivel r=.. = 0.84

7 VISTAS Vol. 5, No FINDINGS 1. The correlation between sales and advertisement expenditure of all Companies shows positive relation. 2. Advertisement influences the buying decision of customers. 3. Survey prove that advertisement make desire to purchase soap rather than entertainment. 4. Television is the best media to see ads. 5. Customers prefer the ads with words and visuals. 6. Most of the customers respond that advertisement is not fully reliable. 7. Sales and profit depend up on the publicity of the company. 8. Most of the people prefer soap on the basis of quality. 9. Variety advertisements seek attention of customers. CONCLUSION Advertising is the process of creating demand for the product. The basic objective of advertisement is to inform to persuade and to remind targeted audience. Advertising brings to the greatest number of people actual knowledge concerning useful things. The man who stops advertising to save money is like the man who stops the clock to save time. Advertisement informs the consumers about qualities and price of products and this make purchasing easy for them. The objective of the study is to study the advertisement effectiveness on sales turnover. There is positive correlation exists between advertisement and sales turnover. So from this brief and precise study it is concluded that the effectiveness of advertisement has a direct, positive and proportional relationship with the overall sales turn-over of the soap manufacturing company. In short, advertising is like planting the seed and nurturing them and sales are like harvesting the crop. If the seeds selected for planting are not good enough then the harvest will definitely suffers. In this vibrant nova tech world it s up on the ad, the company s future fevicoled with. REFERENCES Ekclund, Robert B. and Gramm, William P. (1969), A Reconsideration of Advertising Expenditures, Aggregate Demand Stabilization, Quarterly Review of Economic and Business. Elliot, C. (2001), A Co-integration Analysis of Advertisement and Sales Date, Review of Industrial Organization, Vol. 18. Kambar, T. (2002), The Brand Mangers Dilemma; Understanding How Advertising Expenditure Affect Sales Growth during the Recession, The Journal of Brand Management, Vol. 10(2). Sundarsan, P.K. (2007), Evaluating Effectiveness of Advertising on Sales a Study using Firm Level Data, IFCAI Journal of Managerial Economic, Vol. V(1). Lester, Taylor D. and Weiserbs, Daniel (1972), Advertising and Aggregate Consumption Function, American Economic Review, Vol. lx