THE EFFECT OF ADVERTISING ON THE DEMAND FOR A NEW PRODUCT
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Study Level: BTech, BSc, BEng, BA, HND, ND or NCE
This study is on the effect of advertising on the demand for a new product. The total population for the study is 200 staff of Maria pure water, Anambra state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made front production managers, marketers, senior staff and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies. The study revealed that
TABLE OF CONTENT
Background to the study
Statement of Problem
Purpose of the Study
Significance of the study
Delimitation /scope of study
Limitation of Study
Review of Related Literature
Summary of Literature Review
RESEARCH DESIGN AND METHODOLOGY
Population of Study
Sample and Sampling Techniques
Validity of Instrument
Administration of the Instrument
Method of Data Analysis
DATA PRESENTATION AND ANALYSIS
Data presentation and Analysis
Discussion of Results
SUMMARY, CONCLUSION AND RECOMMENDATION
1.1 Background of the study
Advertising is a primary tool for firms to affect the performance of their products, especially in markets for consumer goods such as cars, computers, cell phones, and digital cameras. Such markets are characterized by the continuous turnover of multiple relatively close substitute products. Therefore, advertising becomes crucial in making consumers aware of the existence and characteristics of new products. Marketing literature therefore acknowledges how advertising influences consumers, beyond the traditional effects on their preferences. That is, a second channel is important inasmuch as it changes the consumer awareness of a product. This awareness determines consumers’ choice sets; among the large number of products in the market, consumers are only aware of a few of them when they make their choice.
Advertisements are part of our social environment in the 21st century, and can be seen throughout any industrialized country. The average American is exposed to as many as 5,000 advertisements a day, stated by Jay Walker-Smith, and nearly 10,000,000 in their lifetime (Anderson & Palma, 2010). Ranging from print advertisements to commercials, consumers are bombarded with companies compelling them to purchase a product or service, and if the process of marketing and advertisements is not used in an ethical manner, disastrous results can occur; as such, the advertisements that are part of this environment can alter and potentially damage the audience to which they are being exposed (Gulas, 2000).
Although most of the literature has focused on the static effect of advertising in the consumer choice set, this assumption is not very compelling when we aim to study the entry of demand for new products in markets for infrequently purchased goods. To the extent that consumers currently aware of a product are more likely to keep it in their choice set in the future the awareness of a new product increases over time. We denote this dynamic effect as the awareness process for new products. Of course, this awareness process makes advertising a dynamic firm choice. Not all marketing advertisements are as damaging as others, but some can have long-term effects (Martin, 1993). It is important to note that negatively charged advertisements not only bring upon a change in the mental thinking of a subject, but also influence the actions of that subject (Capella, 2010).
This dynamic effect, together with the entry of new (and better) competing products in the future, can explain why firms concentrate their advertising expenditures early in a product’s life cycle, where the novelty and its innovative features might compare favorably with competitors’ offerings, and reduce them over time. In recognition of these effects, we propose an empirical model to measure the dynamic effect of advertising on consumers’ product awareness and the evolution of their choice set over time. To disentangle this effect of advertising from the effect that operates through the utility function we use the importance of the effect of advertising on awareness early in the life cycle of a product whereas for mature products the awareness process has finalized and the effect on the utility is more dominant. An illustration, using data from the Spanish automobile market, suggests that the awareness process may vary significantly among products. We show that the effect of advertising on awareness is dynamic and that accounting for it is crucial in explaining the evolution of product sales over its life cycle.
Organizations in both the private and public sector have learned that the ability to communicate effectively and efficiently with their target audience is critical to their success. Advertising has important consequences for the advertisers who use it and for individuals who are exposed to it. It attempts to persuade prospective buyers to buy a product/service and equally contributes to economic growth by helping to expand the market; helping to develop new market segments. Various strategies, including advertising are employed to make potential buyers aware of new products. Advertising can be used to promote new products and to call attention to changes in old products
1.2 STATEMENT OF THE PROBLEM
When a new product is introduced into the market, the product either fails or succeeds. Estimates as to the proportion of new products success range from 2 to 20 percent (Agbonifoh et al, 2007). Various reasons have been adduced as to why so many new products fail. The failure of a new product poses a very serious problem to the firm introducing the product. New products are important to a firm because of their implication for its continued survival, growth and profitability and because of the emergencies of competition. These new product face success/survival problem when not properly managed or promoted advertising is perhaps the most conspicuous of all marketing activities.
1.3 OBJECTIVE OF THE STUDY
The general objective of this research is centered on the effect of advertising on the demand for a new product. However, other specific objectives are to;
- To ascertain the advertising types that can improve new product demand by consumers.
- To determine the extent that advertising can influence consumer’s purchase behavior
- To determine the various advertising campaigns and/or communication used on new product
- To ascertain the relationship between advertising and demand for a new product
1.4 RESEARCH HYPOTHESES
For the successful completion of the study, the following research hypotheses were formulated by the researcher;
H0: there is no relationship between advertising and demand for a new product
H1: there is relationship between advertising and demand for a new product
H02: there are no advertising types that can improve new product demand by consumers
H2: there are advertising types that can improve new product demand by consumers
1.5 SIGNIFICANCE OF THE STUDY
This study will give clear insight on the effect of advertising on the demand for a new product. The study will be beneficial to students, Companies and the consumers. The study will also serve as a reference to other researchers that will embark on this topic.
1.6 SCOPE AND LIMITATION OF THE STUDY
The scope of the study covers the effect of advertising on the demand for a new product. The researcher encounters some constrain which limited the scope of the study;
- a) AVAILABILITY OF RESEARCH MATERIAL:The research material available to the researcher is insufficient, thereby limiting the study
- b) TIME:The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
- c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.
1.7 DEFINITION OF TERMS
ADVERTISING: Advertising is an audio or visual form of marketing communication that employs an openly sponsored, non-personal message to promote or sell a product, service or idea
DEMAND: An insistent and peremptory request, made as of right.
NEW PRODUCT: In business and engineering, new product development (NPD) covers the complete process of bringing a new product to market.
1.8 ORGANIZATION OF THE STUDY
This research work is organized in five chapters, for easy understanding, as follows
Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and recommendations made of the study
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