Small and Medium

For more project topics and materials visit: http://www.classgist.
com
Enquiries: http://www.classgist.com/contactus.aspx
NATIONAL OPEN UNIVERSITY OF NIGERIA

(NOUN)
NAME INYANG JOSEPH UBONG

MATRICULATION NUMBER NOU181001866
SEMINAR TOPIC THE EFFECT OF ADVERTISING ON
OGANISATION SALES
LEVEL 400
For more project topics and materials visit: http://www.classgist.com
Abstract
Considering the country's growing population, the growth of some small and medium
businesses in Nigeria has remained concerning, forcing marketing observers to wonder about
the root of the problem (s). The effect of advertising on oganisation sales in the AB Logistic
Limited country is investigated in this study. For this study, a survey research design
(combining both qualitative and quantitative methodologies) was used. The sample size was
100 Mofin Logistics Limited employees. To evaluate the relevant hypothesis for the research
activity, data gathered via questionnaire was processed and presented using Pearson
Product Moment Correlation (PPMC) statistical techniques. at a level of significance of 5%
The study's findings revealed that advertising had a considerable impact on small and
medium-sized business sales volume. Based on the findings, it was suggested that the
management of AB Nigeria Limited Lagos consider alternative advertising tactics that are
associated with product qualities in order to further encourage existing and potential
customers to buy their products.
CHAPTER ONE
1.0. INTRODUCTION
1.1. Background of the study
Advertising is a type of communication that is designed to both reassure and inform viewers
before they make a buying choice about a product or service. It is regarded as a crucial
component for the economic growth of marketers and organizations (Ryans, 1996).
Advertising is a sort of paid publicity or campaign carried out by some promoters through a
variety of old and modern media, including television, newspaper, commercial radio,
magazine mail, outdoor advertising, and blogs, websites, and text messages. (Ahmed &
Ashfaq, 2013). Marketers have always responded to changing company demands when it
comes to generating new commercials. The usage of ads increased dramatically in the
twentieth century as the supply of produced goods was stretched by industrialization.
Nonetheless, at the time, advertising was not frequently employed. Advertisements were
strictly limited to television, radio, billboards, and newspapers in the late 1980s. Businesses
are increasingly dependent on digital advertising in today's society. Companies are putting so
much emphasis on social media and mobile advertising that it may soon supersede traditional
television advertising. Although advertising's primary purpose is to influence purchasing
behavior, people's recollections regularly change or reinforce their brand perception.
Associations with the brand name help build brand memories in the minds of customers.
Hunjra and Khan Niazi (Khan Niazi & Hunjra, 2012). These labels have a long-term impact
on what people think about, judge, and buy (Romaniuk & Sharp, 2004). Consumer
purchasing behavior has been given a lot of weight and space in studies of the effects of
advertising on its efficacy (Ajzen, 2002). A consumer's purchasing choice is usually based on
whether or not they like or detest the advertised product (Smith, Medin & Smith, 2006).
Customers will be persuaded to buy a product if the advertisement is of great quality, whereas
a low-quality advertisement would have the reverse impact. Every product or service brand's
marketing mix must include advertising (Tapan, Tapas and Kamalesh, 2013Advertisement is
vital not just to the agencies that employ it, but also to suppliers, the media, and customers, as
it helps to shape positive consumer perceptions and create a company's image. It is a source
of revenue for media organizations, with advertisements accounting for two-thirds of a
newspaper's revenue, for example (Ugbor, 2013). Advertising provides sophistication,
elegance, and beauty to the media's entertainment value, in addition to ensuring the longevity
of radio, television, magazines, and other forms of mass communication (Athnia, 2006).
"Advertising is a marketing tactic whose main objective is to establish expectations for

advertised companies or services," according to Doghuje (1985). Advertising, according to
Jetkins (2000), is a practical affair that differs from marketing in that marketing gets goods
and services to clients, whereas advertising takes customers to the product or services. It also
increases demand, enhances other components of the marketing mix, strengthens brand
loyalty, decreases pricing, and provides a competitive advantage to marketers (Kazmi, and
Batra, 2004). Television advertising remains the most common and successful mass market
advertising to which average customers are exposed, or as a primary platform for raising
awareness of a company's goods and services, among all the many forms of marketing (Hyun
and Richard, 2013). This style of marketing is ideal for raising early awareness of a product
or service, building a brand image, and reinforcing current customer perceptions of a
company. The average amount of commercials on television in the United States is 28 per
hour. For a long time, television commercials have been a significant business. For example,
Philip Morris spent $2 billion on advertising in 1989. (Endicott, 2009). The emphasis that the
advertising industry places on its involvement in the marketing process is reflected in the
amount of this annual advertising commitment. Another component of television ads is the
need of effective branding. Low levels of correct-branding in television advertising,
according to Jenni (2012), are shockingly widespread. The bulk of research on successful
branding in television advertisements report a 50% success rate. That means that only one in
every two persons who recall seeing an advertising accurately can identify the advertised
brand. A closer examination of television ads found that various shows appeal to different
audiences and compete in different ways. According to Srinivasan and Robert (2013), they
display distinct tune-away patterns that are independent of genre influence (Schweidel and
Kent, 2010). While advertisers can acquire an estimate of how many people watch the
average advertising in a program, precise ratings data on each ad unit is rare (Atkinson,
2008). A good advertisement demands a fall for the marketed merchandise, which can only
be accomplished via familiarity with the products and the people who sell them. Advertising
is critical to the growth of corporate success because it encourages competition among
business firms, which increases the production of high-quality goods and services.
1.2. Statement of the Problem
Many consumers appear to be dissatisfied with how manufacturers sell their products,
particularly the lack of understanding about the products being promoted. Some customers
believe advertising will introduce a services package for all types of clients. Over time,
several firms have questioned the significance of advertising in driving consumer behavior
and brand preference. Some companies spend a lot of money advertising their products and
then claim that their sales volume is unaffected. Advertising, according to Ambler (2000), has
a major impact on both consumer consumption and sales volume. Advertisements may not
result in a significant number of sales in the short term, but if done effectively, they will
almost certainly enhance sales and profits in the long run. It is arguable if advertising keeps
potential users and consumers informed about the presence of a product. It is also uncertain
whether advertising enables the company to engage with potential customers in order to
inform them about its products or services and urge them to purchase and utilize them. It is
uncertain whether using print media to assist small businesses develop benefits the
corporation. Advertising may be important to the growth of small businesses because it
fosters competition among enterprises, which increases the production of high-quality goods
and services. This study is now being conducted to assess the impact of advertising on the
growth of small scale businesses in AB Logistics limited.
1.3. Objective of the Study
The objective of the study is to know if advertising plays a significant impact on the growth
of small scale business in AB Logistics limited.
The specific objective is:
1. To ascertain the effect of advertising activities on the sales volume of small scale business.
1.4. Research Questions
1. Does advertising play a productive impact on sales volume of small scale business?
1.5. Statement of Hypothesis
Ho: Advertising activities does not significantly affect the sales volume of small scale business
1.6. Significance of the Study
In terms of efficacy, advertising is an integral part of a company's entire promotional strategy
for gaining a competitive advantage. As a result, if resource men, money, and material are not
wasted, direction is critical and crucial in achieving this goal. This text tries to portray and
offer in terms of suggestion and application to the company in relation to these tools,
advertising management, and its effectiveness on the growth of small scale business as long
as the company believes it is necessary to advertise its goods.
1.7. Scope of the Study
Despite the fact that advertising is a large issue in and of itself, the scope of this study is
limited to an understanding of the impact of advertising on small business growth, with an
emphasis on the impact of advertising on small business growth. AB Logistics is a logistics

firm that specializes in freight transportation. Employees of AB Logistics are also excluded
from the study, which begins with high management and ends with junior clerical personnel.
Finally, the research was to be presented to a variety of related books, journals, and
newspaper publications for review purposes.
1.8. Limitation of the Study
This study is constrained to some extent due to time and financial constraints, as well as other
factors such as the distance between the example company and the research station.
Because the researcher was unable to get all of the essential resources for review, such as
journals, newspapers, and other publications, due to financial constraints, the researcher went
to the AB Logistics Limited cause study.
The researcher must employ both primary and secondary data from on-line research to tackle
these problems.
CHAPTER TWO
LITERATURE REVIEW
2.1 Concept of Advertising
Advertising is a type of communicative activation. It can be informational as well as
persuasive, depending on both traditional and new media to persuade clients to purchase
goods and services. Advertising can be used to promote a new product or one that is already
on the market. According to the British Institute of Practitioners in Advertising (IPA),
advertising provides the most persuasive message to the right prospects for the product or
service at the lowest feasible cost (Jefkins, 2002). "Any kind of non-personal presentation
and promotion of ideas, goods, and services that is usually supported by a stated sponsor,"
according to the definition (Dominic, 2013). According to Benson-Eluwa, the Advertising
Practitioners of Nigeria (APCON) defines advertising as "persuasive and instructive
information regarding paid goods and services, or a collection of ideas established by
advertisers through the use of media" (Benson-Eluwa, 2004). According to the dictionary,
advertisement is a type of advertising that meaning "providing public notice" or "announcing
publicly" (Tyagi and Kumar, 2004). When it comes to business and marketing, advertising is
the deliberate promotion of goods or services to the general public with the goal of attracting
attention and increasing sales of those goods and services (Petley, 2003). Adevertising has
become greatly popular and even common place in today’s world. Consumers control the
market, according to Trehan and Trehan (2011), so businesses must persuade and attract
customers to sell their goods and services. As a result, advertising plays a critical role in
communication. Advertising appears to be in everything people do and everywhere they go,
from surfing the internet to taking the bus. Advertisements can be found on a variety of
websites and in a variety of unusual places, such as can drinks and concert tickets.
Advertising is becoming increasingly popular as more individuals and businesses turn to it as
a means of making their products or services known to the general public. Advertising has
three basic characteristics: it raises consumer awareness, provides information, and has the
ability to persuade consumers. There are expenses associated with advertising. A total
message that takes up time and space on the media is included in the cost of advertising.
Advertising is not a direct form of communication with a person. It is accessible to the
general public. As previously stated, advertising provides information to consumers, and it is
claimed that advertising educates consumers about a product or service. It also includes a
variety of creative strategies and tactics, but the goal of advertising is to persuade consumers
to make a purchase. Advertising, according to businesses, aids in the sale of goods and
services. It is an important marketing tool for businesses. Advertising allows consumers to
learn every detail about a product. Advertising is essential for business competition. It has an
impact on both the price and the quality of the product. Furthermore, advertising aids in the
introduction of new inventions, the industrialization process, and the expansion of businesses.
It also aids in increasing company productivity and, in general, raises society's standard of
living.
Consumers, on the other hand, defined products and services in their minds based on
advertisements for goods and services. Advertising should not be devoid of quality.
Consumers consider both production and advertising skills when evaluating quality.
2.2 The Importance of Advertising to Businesses
Consumers' desires change and increase, prompting the development of new products and
services. They are competitive tools that organizations might use to outsmart their rivals.
Businesses engaged in the commercial production of goods and services require advertising
for a variety of reasons. The first is that advertising helps companies publicize and promote
their products, which leads to increased sales. Depending on the nature of the goods,
advertising uses the right media to convey the message to consumers. In the case of consumer
goods such as food, soap, and soft drinks, for example, broadcast media is frequently chosen.
Second, advertising aids in the reduction of distribution expenses. The cost of personal
selling and distribution is greatly reduced because advertising reaches a large audience
(Dominick, 2013). Advertising messages can travel beyond regional and national boundaries
using various media.
Advertising is utilized as a means of gaining a competitive advantage. In order to compete
with others, companies utilize imaginative and enticing commercials to entice people to
patronize their businesses. Some corporations would go so far as to flood the media with
adverts to ensure that consumers' attention is captivated. Phillip and Raspberry, on the other
hand, contend that what matters is what people think about a company, not what it says about
itself, because organizations that tout their merits have a track record of being just above
average (Phillip and Raspberry, 2008). Advertising benefits manufacturers in several ways: it
promotes products by making people aware of the existence of products and services, which
leads to them making a purchase, resulting in increased sales; it promotes products by making
people aware of the existence of products and services, which leads to them making a
purchase, resulting in increased sales; and it promotes Increased sales indicate higher
demand, which means more production; companies communicate new products to consumers
in an effective and cost-effective manner through advertising. Advertising makes the
salesperson's job easier and allows customers to learn about new products (Chowdhury,
2011). Furthermore, a company can compete with others by showcasing competitive prices or
the benefits of its products and services through advertising. Manufacturers can also clear up
misconceptions about their products by using effective advertising (Akrani, 2010). Aside
from the benefits to manufacturers and consumers, there are numerous benefits to society,
such as the advertising industry providing thousands of jobs for those involved in advertising
or marketing communication. Because of the highly competitive marketing environment,
companies are constantly trying to come up with new products with creative designs and
improved benefits or functions, advertising also creates more jobs in businesses. Many
media companies, particularly private ones, rely entirely or nearly entirely on advertising
revenue to survive. Many print houses are able to reduce their production costs as a result of
advertising revenue, lowering the prices of newspapers and magazines; advertising also
stimulates academic and marketing research. Scholars and marketers are becoming
increasingly interested in understanding how advertising affects consumers and how they
react to it.
On the other hand, advertising has flaws, such as the fact that it frequently leads to an
increase in the price of goods as businesses attempt to recoup large amounts of money spent
on media advertising. People are frequently led to purchase products they do not require due
to the persuasive nature of advertisements. As they try to imitate the lives of the actors in
advertisements, many people have been drawn into dangerous habits such as smoking and
excessive alcohol consumption. If consumers' tastes and preferences shift to other brands,
companies that rely solely on advertising as a medium for marketing their products may
suffer. Furthermore, many advertisements are deceptive or exaggerated. Consumers
frequently discover too late that products are of lower quality than advertised. The
widespread use of deception in many advertisements contributes to public perceptions of
advertising as a manipulative process.
2.3 Types of Advertising
According to Wells, Burnett, and Moriarty (2000), advertising can be classified as follows:
2.3.1 Direct Advertising
This is about marketing products to people who actually need them. A certain type of product
appeals to a specific group of people. It would be more cost-effective and convenient to
identify the target audience and advertise directly to them when such goods are to be
advertised. If a new drug is introduced to the market, for example, it is preferable to advertise
it in medical journals, with medical practitioners then recommending or prescribing the drug
to patients. Direct marketing to potential customers is recommended.
2.3.2 Indirect Advertising
Goods advertised through indirect advertising are goods that are needed and used by
everyone, regardless of their demographic or category. One example is toothpaste, which, no
matter how it is advertised, manages to capture the attention of consumers.
2.3.3 Competitive Advertising
This is a type of advertisement that is used to promote competing products. It is used to gain
more customers at the expense of competitors, as the name implies. Attractive pictures, bright
colors, and beautiful scenarios are used to present the commodity in a desirable form that will
appeal to customers. In competitive advertising, words are carefully chosen so as not to
detract from the image of competitors' products, such as Flourmill (Semovita) and Honeywell
(Semolina).
2.3.4 Informative Advertising
This is the type of advertising that informs customers about a company's product or service.
This type of advertising is used to raise consumer awareness of a product and its benefits.
2.3.5 Mass Advertising
To eliminate waste, mass advertising is used. It happens when the manufacturers of the
advertised products work together. Instead of each company advertising its own brand of
product, the produce is advertised as a whole.
2.4 Advertising Media
According to Featherstone (1991), there are a variety of media that can be used effectively for
advertising, including the following:
i. Print Ads ii. Outdoor Ads iii. Broadcast Ads iv. Covert Ads v. Surrogate Ads vi. Public
Service Ads vii. Celebrity Ads
2.4.1 Print Advertising
Print has always been a popular medium for advertising. It is common to advertise products
in newspapers or magazines. In addition, the print media provides options for advertising
such as promotional brochures and fliers. Newspapers and magazines frequently sell
advertising space based on the amount of space occupied by the advertisement, the position
of the advertisement (front page/middle page), and the number of people who read the
publicationsNewspapers and magazines frequently sell advertising space based on the amount
of space occupied by the advertisement, the position of the advertisement (front page/middle
page), and the number of people who read the publications. Print advertisements vary in price
depending on the supplement in which they appear; for example, an advertisement in a glossy
supplement costs significantly more than one in a newspaper supplement printed on low-
quality paper. Newspapers, magazines, fliers, and brochures are examples of print advertising
media.
2.4.2 Outdoor Advertising
Outdoor advertising is another popular form of marketing that employs a variety of tools and
techniques to attract customers outside. Billboards, kiosks, and the company's various events
and tradeshows are the most common examples of outdoor advertising. Billboard advertising
is very popular, but it must be very succinct and catchy in order to capture the attention of
passers-by. The kiosk not only serves as a convenient outlet for the company's products, but it
also serves as an effective marketing tool. Organizing or sponsoring a number of events is a
great way to get your name out there. For product promotion, the company can organize trade
shows or even exhibitions. If this is not possible, the company can organize a number of
events that are closely related to their field. A company that makes sports utilities, for
example, could sponsor a sporting event to promote its products. Billboards, tradeshows or
events, kiosks, and other forms of outdoor advertising are examples.
2.4.3 Broadcast Advertising
Broadcast advertising consists of several branches, such as television, radio, and the internet,
and is a very popular advertising medium. Since their inception, television commercials have
been extremely popular. The cost of television advertising is frequently determined by the
length of the commercial, the time of broadcast (prime time/peak time), and, of course, the
popularity of the television channel on which the commercial will be broadcast. The radio
may have lost its allure as a result of new age media, but it continues to be the preferred
medium for small-scale advertisers. Radio jingles have long been a popular advertising
medium, and they have had a significant impact on audiences, as evidenced by the fact that
many people remember and enjoy popular radio jingles. Radio, according to Klepper (2001),
is the ubiquitous media that appears to be everywhere. Radio advertising has the advantage of
being able to deliver product information to both urban and rural areas where electricity may
not be available.
2.4.4 Covert Advertising
Covert advertising is a sole kind of advertising in which a product or a particular brand is

unified in some entertainment and media channels like movies, television shows or even
sports and cinema. Although there are no commercials in the entertainment, the brand or
product is subtly (or sometimes overtly) promoted in the show. The appearance of the Nokia
brand on Tom Cruise's phone in the film "Minority Report" and the use of Cadillac cars in the
film "Matrix Reloaded" are two well-known examples of this type of advertising.
2.4.5 Surrogate Advertising
Surrogate advertising is common in situations where advertising a specific product is
prohibited by law. In several countries, advertisements for products that are harmful to one's
health, such as cigarettes or alcohol, are prohibited. As a result, these companies must come
up with a number of other products that may bear the same brand name and, thus, indirectly
remind people of the same brand's cigarettes or beer bottles. Fosters and Kingfisher (2002),
for example, are well-known beer brands that frequently use surrogate advertising to promote
their brands.
2.4.6 Public Service Advertising
Public service advertising is a technique that employs advertising as a means of
communicating socially relevant messages about important issues and social welfare causes
such as AIDS, energy conservation, political integrity, deforestation, illiteracy, and poverty,
among others. David Ogilvy, regarded as one of the forefathers of advertising and marketing
concepts, is said to have advocated for the use of advertising for social causes. “Advertising
justifies its existence when used in the public interest,” said Ogilvy, “because it is far too
powerful a tool to use solely for commercial purposes.” Today, non-commercial public
service advertising is increasingly being used in several countries around the world to
promote various social causes.
2.4.7 Celebrity Advertising
Although the modern consumer is becoming immune to the exaggerated claims made in the
majority of advertisements, the audience is becoming smarter and smarter. There is still a
segment of the advertising industry that relies on celebrities and their celebrity to promote
their products. Using celebrities for advertising entails signing celebrities up for advertising
campaigns, which can include anything from television commercials to print advertisements.
2.5 Small scale business
Although the definition of a small scale enterprise varies by country, the underlying concept
remains the same. Annual sales, asset valuation, net profit, balance sheet totals, and the size
of the business, including the number of employees available, can all be used to define a
small scale business enterprise. Different authors, scholars, and schools have different ideas
about how capital expenditure, employee numbers, sales turnover, fixed capital investment,
available plant and machinery, market share, and development levels differ from one country
to the next. In Nigeria, a small scale business is defined as a manufacturing establishment
with fewer than ten employees or an investment in machinery and equipment of less than
600,000 naira, according to the Third National Development Plan. In its credit guidelines, the
Central Bank of Nigeria classified small scale businesses as those with an annual income or
asset of less than half a million naira (N500, 000). A small scale business enterprise in
Nigeria is defined by the Federal Government Small Scale Industry Development Plan of
1980 as any manufacturing process or service industry with a capital of less than N150, 000
in manufacturing and equipment alone. Small scale businesses, according to the Nigerian
Small Scale Industries Association (1973), are those with a capital, land, building, and
equipment investment of up to N60, 000 pre-SAP value and fewer than fifty employees. The
Federal Ministry of Industries (1973) defined it as those enterprises that cost no more than
N500, 000 (pre-SAP Value) including working capital to set up. Small scale enterprises for
the purpose of commercial loan were defined by the Federal Government of Nigeria in the
1990 budget as those with annual turnover not exceeding N500, 000 for merchant loan and
those with capital investment not exceeding N2 million for commercial loan (excluding cost
of land or a maximum of N5 million). According to Umar (2007), the concept of a small
business is relative, and it is based on both geographical location and the type of economic
activity performed. A small scale enterprise is a privately owned and operated business with a
low employee turnover and a small number of employees. A small business usually only
serves a small portion of the market it serves. Small scale enterprises (also known as small
businesses) are critical to the economy's industrial diversification and growth. Various
countries have different requirements for the number of employees a small business should
have based on its size. In non-manufacturing industries, small-scale enterprises have fewer
than 500 employees in a 12-month period, according to the US Small Business
Administration. Any person on a company's payroll must be treated as an employeeA small-
scale enterprise in Australia, on the other hand, is defined as one with fewer than 15
employees on payroll, as defined by the Fair Work Act. Small businesses are defined as those
with fewer than 250 employees, according to the European Small Business Act. Small scale
enterprises in Asian countries typically employ 100 or fewer people, whereas small scale
enterprises in Africa typically employ 50 or fewer people. To define a small scale business
enterprise, financial measures such as net profits, balance sheet totals, asset value, and annual
sales are used. A non-manufacturing small scale enterprise in the United States, for example,
is defined as one that earns less than $7 million per year. Financial measures differ by
industry, with annual receipts being higher in industries with higher operating costs. Small
businesses, in general, are those that do not have a dominant position in their industry
(MOPFED Report, 2010).
2.6 Types of Small Scale Business Enterprises
According to Asaolu (2005) and Oyelara (2012), some types of small scale business
enterprises are identified. These include:
I Sole proprietorship: Various scholars have identified a number of small scale businesses,
including: The sole proprietorship is the simplest form of business to operate. A sole
proprietorship is not a legal entity in and of itself. It simply refers to the owner of a company
who is personally liable for its debts. A sole proprietorship can do business under its owner's
name or under a fictitious name, such as Ayoade's beauty Salon. The fictitious name is
merely a trade name; it does not create a separate legal entity from the sole proprietor. A sole
proprietorship is a business that is owned, operated, and managed by a single individual. The
benefit of a sole proprietorship is that it is relatively simple and inexpensive to start and run a
business. One disadvantage of owning and operating a sole proprietorship is that the
company's liability is always unlimited. In this case, the owner's personal property and the
business's property are usually the same, so when the business's liability is settled, the
owner's personal property will be used up. When the owner of a sole proprietorship dies, the
business loses its continuity.
(ii) Partnership: Section 3(1) of the partnership act defines a partnership as "the relationship
that exists between persons carrying on a business in common with a view to profit." A
partnership is "an association of two or more persons to carry on as coowners of a business
for profit," according to the legal definition (Revised Uniform Partnership Act 101 [1994]).
There are two types of partnerships: general partnerships and limited partnerships. In a
general partnership, the partners manage the business and are responsible for the debts and
other obligations of the partnership.
Limited partners act as investors, but they have no control over the business and are not liable
in the same way that general partners are. A written or oral agreement can form a
partnership, and a partnership agreement often governs the partners' relationships with one
another and with the partnership. A partnership business is a type of business in which two or
more people pool their money, skills, and other resources and share profit and loss according
to the terms of a partnership agreement. The disadvantage of a partnership business is that
profits must be shared; you must decide how you value each other's time and skills, as well as
what happens if one partner is unable to put in as much time due to personal circumstances.
Disagreements can also arise because decisions are made jointly. A relationship is for the
long haul, and expectations and circumstances can shift, resulting in dramatic and traumatic
breakups. Another significant disadvantage of a partnership is that it carries unlimited
liability. General partners are fully liable for all debts incurred and errors committed by the
partnership (Oluba, 2009).
(iii) Cooperative enterprise: A cooperative enterprise is an association or corporation that was
formed with the goal of providing services to its shareholders or members on a non-profit
basis. It was formed for their mutual benefit and to sell their products at the highest possible
price. It is a self-governing group of people who work together for their mutual social,
economic, and cultural benefit. Non-profit community organizations and businesses that are
owned and managed by the people who use their services are referred to as cooperatives. A
co-operative enterprise is a voluntary association of individuals who come together to meet
their common economic, social, and cultural needs and aspirations through a jointly owned
and democratically controlled business. In comparison to the formation of any other type of
business organization, the formation of a cooperative society is very simple. Any group of ten
adults can form a cooperative society.
2.7 Problems of small scale business enterprise:
Small scale businesses have certain advantages over large scale businesses such as the ability
in many cases to form close relationships with customers and clients, but small scale business
also face several notable problems. Small businesses often focus on a niche or specialty that
differentiates their goods or services from larger competitors. Some of the problems facing
small scale business enterprise are:
Inability to produce under economy of scale: Economies of scale is a concept in economics
that describes a situation where the marginal cost of making a certain product falls as a
company makes more of the product. In other words, when economies of scale exist, the cost
of producing a certain product is lower per unit if the product is produced in large quantities.
A small scale business production is usually limited because they produce for a limited
market. For example, the cost per unit of making cars might be lower for a manufacturer that
produces 100 cars a day than a manufacturer that produces one or two cars a day. Large scale
businesses allow manufacturers to employ systems such as assembly lines that can increase
productivity and reduce costs. Small businesses may have difficulty competing with large
scale businesses that are able to mass produce products inexpensively (Harris and Sauzor,
2006).
Difficulty in attracting customers: Small scale business enterprise typically has a more
difficult time attracting customers than larger business enterprise. They have smaller
marketing and advertising budgets. Also, some potential customers are reluctant to do
business with small businesses especially new businesses without loyal followers, since they
believe that these businesses may not be around for a long time or that they will not be able to
provide the appropriate level of service. A challenge for small scale businesses is to make
sure that they provide excellent customer service and instill confidence in their customers
(Oyelaran, 2012). Competition from large scale business enterprise: Possibly one of the
biggest problems facing small scale businesses is that they have to compete with much larger
companies. Larger companies have bigger budgets and can usually provide products and
services at much lower costs. A small business must be able to either match the prices
charged by larger businesses or provide extra benefits to the customer such as better customer
service. It is unarguable that some small scale businesses are good innovators. Most of the
products available in the market today were developed by small businesses. However, these
new product idea or processes are always high jacked by large scale companies which
subsequently make it difficult for small businesses to profit from their innovations. In cases
where the small scale innovators takes up patent, the larger business skirt such patent thus
destroying the continued existence of the small scale niches (MOPFED Report, 2010).
Changing government policies and regulations: Government policies seem to have
constituted a serious problem area for small scale business enterprise. The beginning of harsh
government policies toward small scale business can be traced back to 1982 with the
introduction of "stabilization measures" which resulted in import controls and drastic budget
cuts. These, in turn, adversely affected the subvention to the financial institutions established
to provide financial assistance to the small scale business. For example, in 1983, out of a total
of 8,380 applications for loans received from the small scale business for a total of 559.13
million naira, only 18 per cent (1,470 projects) for a total of 46.66 million naira was
disbursed.
Financial challenges: Small scale businesses face challenges obtaining money for expansions.
Larger corporation have many more resources available to them to obtain capital to expand
even banks and lenders are much more willing to lend money to a large company with
tangible assets that can be used for collateral. Adelaja (2003) argued that the access to
institutional finance has always constituted a pandemic problem for small scale business
development in Nigeria (Oyelaran, 2012).
Inadequate infrastructural facilities: Small scale businesses in Nigeria are affected due to the
poor infrastructures that exist in the country. Many small scale business operates on a small
scale mostly in rural areas and these rural areas have poor infrastructures like bad
transportation network, Good roads will not only encourage people to patronize a business
but will equally reduce cost of transportation and carriages of raw materials and finished
goods to retailers or sales outlets. In the same way regular supply of electricity can enhance
maximum satisfaction of customers and reduction of operating costs such as diesel or any
other fueling cost. When there in definition of words, concepts and ideas are always subject
to controversies in social sciences as authors and scholars define such words, or concepts
based on their assumptions or understanding of such concepts. Therefore, the concept of
small and medium scale enterprise has not escaped such controversy. The definition of a
small scale enterprise may vary in different economies of the world, but the underlying
concept is the same. Small scale business enterprise can be defined in terms of annual sales,
asset valuation, net profit, balance sheet totals and the size of the business including the
numbers of employees available in the business. Different authors, scholars, and schools have
different ideas as to the variation in capital outlay, number of employees, sales turnover,
fixed capital investment, available plant and machinery, market share and the level of
development, these features equally vary from one country to the other. In
Nigeria, the Third National Development plan defined a small scale business as a
manufacturing establishment which employs not more than ten people, or whose investment
in machinery and equipment does not exceed six hundred thousand naira. S no water even to
the extent that people residing in these communities need to go to their neighboring
communities to fetch water, inadequate educational service which causes the people in that
community to be aware of the modern technologies or how the product or service the
company has to offer will affect them positively. When these facilities are very poor small
scale businesses might not be able to survive or even if they do it might be for a short period
of time.
Inadequate information: Small scale business managers at times usually have limited
knowledge and ability of running the business. Most of these small scale business managers
might just be primary or a secondary school dropout who doesn’t care of anything that is
going on in the economy, they are only concerned in making sales and making their profits.
Every business undertaking requires it own peculiar information, skills, abilities and basic
experience. Entering into a strange line of business without information that will keep the
business current and efficient is like testing a river depth with both legs. Most small business
owners that have excelled had the required information in their lines of businesses (Asaolu,
2005). Likely cessation of business after death of the owner: A number of small scale
businesses cannot outlive their founders. Most of such businesses stop to exist immediately
after the owner dies. Such problems exist in most small scale businesses such as Welding,
Tailoring, Bread Baking, Furniture Making, etc. This is more so when the children of such
owners refused to take up the businesses of their parents
3.1 Theoretical framework
3.1.1 The diffusion of innovation theory
This study's theoretical foundations were the diffusion of innovation theory and the uses and
gratification theory. The diffusion of innovation theory explains how information or ideas
spread over time in society through various channels and social systems (Katz et al, 1963
cited in Ojobor, 2002). The theory states that for a new idea to spread, it must go through
stages of awareness, interest, appraisal, trial, and adoption. The information dissemination
model proposed by Rogers (1962) and Rogers and Shoemaker (1973) included four stages:
information, persuasion, decision or adoption, and confirmation (McQuail, 2011). The
relevance of this theory to this work stems from the fact that social media are at the evolving
stage and as such, different users will adopt them in varying degrees. While some users have
passed awareness, interest and trial stages, adopting social media for advertising and some
patronizing products advertised on them, others are yet to embrace this new media even
though they are aware of them.
3.1.2 Uses and Gratification Theory
This study's theoretical foundations were the diffusion of innovation theory and the uses and
gratification theory. The diffusion of innovation theory explains how information or ideas
spread over time in society through various channels and social systems (Katz et al, 1963
cited in Ojobor, 2002). The theory states that for a new idea to spread, it must go through
stages of awareness, interest, appraisal, trial, and adoption. The information dissemination
model proposed by Rogers (1962) and Rogers and Shoemaker (1973) included four stages:
information, persuasion, decision or adoption, and confirmation (McQuail, 2011). The
implication is that business organisations or entrepreneurs who use social media are active as
they willingly create their social media page. The users choose social media as a means to
fulfil their wants and goals over other sources. Basically, the business
organisation/entrepreneur signs up an account on Facebook or Twitter, for example, for a
particular purpose. That is, the need to connect with customers to promote a product/service.
For other users, it could be the need to connect interpersonally with friends or the need to
patronise a product/service advertised on those social platforms or just to know an
organisation they are interested in the better. The assumption is that those who decide to
patronise products/services on social media may be doing so because of the gratification they
hope to derive from those products/services. While those who do not patronize the products,
may not have seen any gratification in the messages. Therefore, the theory is relevant to this
study because it deals with how people use media for advertising.
4.1 Empirical Review
The nature of advertising (being a very important part of the promotional tools) as well as the
In recent years, the relationship between advertising and sales has become more of a research
topic. The association between advertising and sales volume: a case study of Nigerian
bottling firm plc was investigated by Akanbi and Adeyeye (2011). The student's test and the
ordinary least square regression method were employed as statistical analytical approaches in
this investigation. Secondary data was gathered from the company's annual financial records
and accounts for a period of eleven years, from 1999 to 2009. The main finding revealed that
there is a considerable link between advertising and corporate sales. The analysis also
revealed that advertising has resulted in a large increase in the company's revenues.
Gitau (2012) conducted a study on the effects of advertising on small and medium enterprises
in Kenya: a case study on East African packaging industries, with the goal of examining the
overall nature of advertising and the effects it has on SMEs' growth and development,
particularly in terms of sales volume. The study employed a cross-sectional research design
with cluster and simple random sampling proceduresThe information was processed and
shown in the form of discussion tables. Overall, the research found that advertising is an
expensive effort for any SME, and that its repetitious nature makes it increasingly difficult to
embrace. The role of advertisement in sales rise and promotion: a case study of Hamadan
province insurance businesses was investigated by Ashkan (2016). The data was examined
using computer software programs (SPSS software) and the data significance was confirmed
using the T-test and regression. Advertising has an effect on sales growth, according to the
data.
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
This chapter presented the research method employed in carrying out the study. These are:
1. Research design
2. Population,
3. Sample size& sampling technique
4. Research instrument
5. Validity of the instrument,
6. Data collection procedure and
7. Method of data analysis.
8. Limitation of the study
3.2 Research Design
The design for this study is descriptive survey. The design is considered suitable for this
study because it enables the researcher to determine the characteristic of the population
objectively.
3.3 Population of the Study
The population of the study comprised of staff of AB Logistics Limited in Lagos State.
3.4 Sampling & Sample Size
The sample size comprised of one hundred (100) to be selected using the simple random
sampling technique.
3.5 Data Collection Instrument and Validation
The instrument used was well-structured questionnaire which was validated by the supervisor
of the researcher. The questionnaire contained two sections. Section A elicited information on
the bio data of the respondents, while section B is structured and characterized by close-
ended questions, the use of four (4) point scale (ranging from 1-strongly agree to 4 disagree).
3.6 Method of Data Analysis
In the analysis of data collected, statistical method of simple percentages, and frequency
distribution tables were used for descriptive purpose while Pearson’s product moment
correlation method of analysis was employed for testing of hypotheses.
3.7 Limitation of Methodology
There is no doubt a study of group would not have inadequacies. Some of the limitation that
was encountered in the course of carrying out this study includes gathering and collating the
circulated questionnaires, openness to some valuable information by the respondents and
tedious work schedule of the respondents which did not allow them to give total attention
while filling the questionnaires.
CHAPTER FOUR
DATA ANALYSIS, FINDING AND DISCUSSION
4.1 Introduction
This chapter explains how the data obtained from respondents was analyzed. The respondents
were given a total of one hundred (100) questionnaires, all of which were returned in full. As
indicated in chapter three, the data analysis was based on basic percentages, which were
utilized to show both biographic and operational data, while Pearson Product Moment
Correlation (PPMC) statistical techniques were employed to assess the study hypothesis.
Presentation and Analysis of Data According to Research Questions
Table 1: Demographic Data
S/N Question Characteristics Percentage
1 Sex Male 56(56.0%)
Female 44(44.0%)
2 Age 21-30 30(30.0%)
31-40 54(54.0%)
41& above 26(26.0%)
3 Marital Status Single 42(42.0%)
Married 56(56.0%)
Divorced 1(1.0%)
Widow 1(1.0%)
4 Academic Qualification OND/NCE

39(39.0%)
BSC/HND
45(45.0%)
MSC/MBA/OTHERS
16(16.0%)
5 Years Of Experience Less than 5 years 29(29.0%)
6-10 years 49(49.0%)
11-15 years 14(14.0%)
15 & Above years 8(8.0%)
The table above indicates that 56.0% of the respondents were males while 44.0% were
females. The results show that 30.0 percent of the respondents were between the ages of 21
and 30, 54.0 percent of the respondents were between the ages of 31 and 40, and 26.0
percent of the respondents were 41 and up. Furthermore, the results suggest that 42.0
percent of respondents were single, 56.0 percent were married, 1.0 percent were divorced,
and 1.0 percent were widowed. Similarly, the results show that 39.0 percent of the
respondents had an OND/NCE, 49.0 percent had a BSC/HND/OTHERS, and 16.0 percent
had an MSC/MBA. The results also show that 29.0 percent of respondents have less than 5
years of experience, 59.0 percent have 6-10 years of experience, 14.0 percent have 11-15
years of experience, and 8.0 percent have more than 15 years of experience.
Item Options Frequency %

Do you believe advertise increases Yes 75 75.0%
products sales No 25 25.0%
Which of the following advertising Billboard product display 12 12.0

activities increases products sales Online advertisement 15 15.0
The use of handbills 17 17.0
Radio advertising 22 22.0
Branded Promotional Gifts 11 11.0
Television promotion 09 9.0
Newspapers promotion 10 10.0
Point of sale displays 04 4.0
How often does your organization Very often 56 56.0
engage in advertising activities Sometimes 33 33.0
Rarely 11 11.0
What inspires the decision of your The state of competition 35 35.0
organization to engage in advertising The goal of the organization 48 48.0
activities The decline in market share 17 17.0
How successful has the advertising Very successful 78 78.0

strategy yielded to the growth of Somewhat successful 18 18.0
your organization Not really successful 02 2.0
Advertising activities bring about Strongly agree 45 45.0

improved sales performance Agree 55 55.0
Disagree 03 3.0
Strongly disagree 02 2.0
Advertising activities ensure that the Strongly agree 35 35.0
organization meets its goal Agree 35 35.0
Disagree 20 20.0
The type of advertising activity Strongly agree 23 23.0
adopted by the organization Agree 65 65.0
influences the market share Disagree 6 6.0
The table above demonstrates how AB Logistic Limited's advertising activities in Lagos state
have influenced their growth. It was discovered that 75 percent of respondents (75.0 percent)
believe that advertising promotes product sales. 12(12.0 percent) of respondents said
billboard product display activities increased their product sales, 15(15.0 percent) said online
advertisement increased their product sales, 17(17.0 percent) said handbills increased their
product sales, 22(22.0 percent) said radio advertising increased their product sales, 11(11.0
percent) said branded promotional gifts increased their product sales, 09(9.0 percent) said
television promotion increased their product sales, 10(10.0 percent) said newspaper
promotion increased their product sales, and 4(4.0 percent) n addition, the table shows that
56(56.0 percent) said the organization does not engage in advertising activities very often,
33(33.0 percent) said it does so occasionally, and 11(11.0 percent) said it does not engage in
advertising activities at all. The status of competition, according to 35 (35.0 percent),
stimulates the organization's choice to engage in advertising activities, whereas the
organization's aim, according to 48 (48.0 percent), and the reduction in market share,
according to 17 (17.0 percent). Furthermore, 78(78.0 percent) of respondents said their
advertising strategy contributed to their company's growth, 18(18.0 percent) said it was
somewhat successful, and 2(2.0 percent) said it wasn't really successful. Advertising efforts
increase sales performance, according to 45 (45.0 percent) of those polled. 55.0% agreed,
2.0% disagreed, and 3.0% strongly disagreed. 35 (35.0%) strongly agreed that advertising
activities help the organization achieve its objectives. 35.0% agreed, 20.0% disagreed, and
10% strongly disagreed. Finally, 23.0% strongly agreed that the type of advertising activity
used by the company has an impact on market share, and 65.0% strongly agreed that the type
of advertising activity used by the company has an impact on market share.
Hypothesis
H0: advertising does not significantly affect the sales volume of small and medium
Correlation between Advertising and Sales Volume of Small and Medium
Advertising Sales Volume of Small and Medium
Advertising Pearson
1 0.530
Correlation
Sig. (2-tailed) 0.000
N 100 100
Sales Volume of Small Pearson
0.530 1
and Medium Correlation
Sig. (2-tailed) 0.00
N 100 100
Correlation is significant at the 0.05 level (2-tailed).
Decision Rule: P < 0.05 alternative hypothesis is accepted and reject null hypothesis while P
>
0.05 null hypothesis is accepted and reject alternative hypothesis. The table above shows that
a coefficient of 0.530 at p = 0.000 (r = 0.530 p < 0.05). The p-value (0.000) is lesser than the
significant level of 0.05, thus the alternative hypothesis is accepted and null hypothesis is
rejected.
Conclusion
The result of Pearson Correlation test revealed that advertising significantly affect the sales
volume of small and medium business.
Discussion of findings
Advertising has a considerable impact on the performance of small and medium-sized businesses
in the research area, according to the study. According to the information provided to the
researcher, the vast majority of respondents feel that advertising promotes product sales.
However, it was discovered that businesses that used radio advertising to boost product sales did
so for an extended period of time, validating the vast majority's belief that advertising in
businesses has an impact on sales volume. The outcomes of the study corroborated previous
findings by Akanbi and Adeyeye (2011), who found a significant link between advertising and
corporate sales. The findings of the study back up the findings of Ashkan (2016), who found that
advertising has a considerable impact on insurance company sales in Hamadan Province.
CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction
This chapter makes available a summary of the study, how it was conducted, the outcomes
and the objectives that were attained. It offers a brief of the results of the study and the
recommendations.
5.2 Summary
The study was to know if advertising plays a significant impact on the growth of small scale
business in AB Logistics limited, Lagos state. The specific objective is:
1. To determine the impact of advertising on the volume of sales in small businesses.
The research was conducted among the employees of AB Logistics Limited in Lagos,
Nigeria. One (1) hypothesis was proposed, literatures were reviewed, a questionnaire was
prepared and distributed to one hundred respondents, and the responses were thoroughly
returned and analyzed in order to evaluate the specific objective and provide answers to the
problems expressed in chapter one. To analyze the hypotheses, the researchers used basic
percentages and Pearson Product Moment Correlation (PPMC).
5.3 Conclusion
Advertising that builds up over time Of course, marketing entails determining the nature,
strength, direction, and interaction of marketing mix elements and environmental factors in a
given situation, and thus becomes extremely important, especially in any organization's attempt to
establish, build, defend, and maintain market share and competitive advantage in the industry.
According to the conclusions of the study, AB Logistics Limited's advertising strategy has an
impact on the performance of small and medium-sized businesses. The type, intensity, and reach
of a company's advertising campaign, on the other hand, determine its amount of influence. The
vast majority of employees agreed that advertising may assist them in improving their
performance, especially in terms of sales volume.
5.4 Recommendations
Other advertising methods that are accompanied by product qualities that may further
encourage present and potential customers to patronize AB Logistics Limited's items should
be considered by the company's management.
References
Ryans, C. (2006). Consumer Resources. Journal of Small Business Management, 34 (1996),
63-
Oyeleran, O. (2012). Promoting Small and medium enterprise in Nigeria oil and gas
industry,European Scientific Journal.
Harris, O., & Sauzer, D. (2006). The contribution of small scale industries to the
nationaleconomy, Standard research journal of business management, Vol.1(2):60-71.
Akanbi, P. A. and Adeyeye, T. C. (2011). “The Association between Advertising and Sales
Volume: A Case Study of Nigerian Bottling Company Plc,” Journal of Emerging Trends in
Economics and Management Sciences Vol. 2, No.2, PP 117-123.
MaQuail, D. (2011). McQuail’s Mass communication theory. London: Sage.
Folarin, B. (2005). Theories of mass communication: An introductory text. Ibadan: Stirling

Horden.
Umar, P. (2007). Small and medium scale enterprise as a survival strategy for
employmentgeneration, Journal of sustainable, 2011.
Adelaja, O. 2003. Promotion of small scale enterprise and their contributions to the
economicgrowth.Retrived on February, 3, 2014, from www.nairaproject.com.
MOPFED Report, 2010. Performance and Contribution of Small Scale Enterprise in Northern
Uganda, Prime Journal of Business Administration and Management, Vol. 2:649- 654.
Harris,O., & Sauzer, D. 2006. The contribution of small scale industries to the national
economy, Standard research journal of business management.
Asaolu, A. (2005). Promotion of small scale enterprise and their contributions to the
economicgrowth, from www.nairaproject.com.
Gitau, J. (2012). “Effects of Advertising on the Small & Medium Enterprises in Kenya: A
case study on East African Packaging Industries,” Degree Programme in Business
Management Bachelor’s Thesis,
Khan, I., Weishaar, L., Polinsky, S., & V.Karasyov. (2010). “Mobile Advertising: an in
Depth Look at the Future of Mobile Advertising, North America Equity Research, J.P.
Morgan Securities Inc. 1-23.

Small and Medium

Uploaded by

Document Informationclick to expand document information

Copyright:

Available Formats

Small and Medium

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Small and Medium

Uploaded by

Copyright:

Available Formats

For more project topics and materials visit: http://www.classgist.

NATIONAL OPEN UNIVERSITY OF NIGERIA

NAME INYANG JOSEPH UBONG

"Advertising is a marketing tactic whose main objective is to establish expectations for

emphasis on the impact of advertising on small business growth. AB Logistics is a logistics

Covert advertising is a sole kind of advertising in which a product or a particular brand is

4 Academic Qualification OND/NCE

Item Options Frequency %

Which of the following advertising Billboard product display 12 12.0

How successful has the advertising Very successful 78 78.0

Advertising activities bring about Strongly agree 45 45.0

MaQuail, D. (2011). McQuail’s Mass communication theory. London: Sage.

Folarin, B. (2005). Theories of mass communication: An introductory text. Ibadan: Stirling

You might also like