Assessment of Advertising on the Sales Revenue and Profitability of Nigerian Bottling Company Plc

Abstract

This study evaluates the effectiveness of advertising expenses on the sales revenue and profitability of Nigerian Bottling Company Plc. This study is based on secondary data collected for advertising expenditure, sales revenue and profitability of Nigerian Bottling Company Plc over the period of 1996 to 2009 from the annual report and accounts of the company under study. Among the objectives of the study is to evaluate the extent of the effect of   advertising on the sales revenue of the company. Correlational and regression analysis study designs were adopted for the study. The contribution of the first hypothesis has found that advertising expenses has depicted significant relationship between advertising and the sales revenue of the company. Furthermore, the second hypothesis result has shown that advertising has no significant effect on the profitability of the company. This study concluded that advertising is considered as one of the most important medium of communication influencing the company’s performance in more than one ways. But its influential strategic important could be suppressed by other factors which also try to receive equal attention at time of deciding any sales and profitability strategy. It is therefore recommended that not only advertising should be given adequate attention while formulating strategies relating to sales revenue and profitability promotion policy. Other factors which are crucial to increase sales revenue and profitability such as; sales promotion, personal selling, publicity etc which are crucial should be considered.

Keywords: Advertising, Expenditure, Profitability, Revenue, and Promotion Policy.