ESTABLISH THE NEED FOR MARKETING RESEARCH
Most of the companies and industries have embarked on advertisement campaign so that they can create a large customer base as well as generate maximum profits. Advertisements are carried out because of the decreased demands of consumers and they aims at influencing the consumer to purchase their products and services.
There are many reasons to conduct Marketing research on the effect of advertisement on sales. This is because most of business firms are using advertisement as a tool create awareness to customers about their products. It is obvious that sales will be affected by the way advertisements are carried out (Mouncey, & Wimmer, 2007).
When market research is conducted, it will be easier to establish what the customers like or dislike. This is because sales will be affected depending on the customer preferences and satisfaction. The market research will help the individuals to know the exact price of the products that are offered so that they can assess their ability to afford the products that are offered. Conducting the market research will be necessary since it will identify the specific number of individuals who have a likelihood of buying certain products. The customers profile will also be established because of the market segmentation (Mouncey, & Wimmer, 2007). Market segmentation will also be established since the target market will be easily identified. The market groups will be divided into sections and they will have homogenous characteristics.
Effect on advertisement on sales is carried out so that it can establish the places that client’s buys products offered. The competitors in the business will be analyzed and companies will use the most effective promotional techniques so that they can remain effective in the competition.
Research Objectives
Research Design
In the research, primary research design will be the utilized. A questionnaire will be designed to collect data from the people who will be interviewed. The design will be exploratory since face to face interviews will take place during data collection. The questions that will be designed will either be closed or open-minded. After the sample size is determined, the researcher will administer the written questionnaires to them. Secondary sources will also be utilized during the market research (Creswell, 2007).
INFORMATION UTILIZED, TYPES AND SOURCES
The research utilized both secondary and primary information. However, sheer weight was given to the primary data source as they provide first-hand information that can highly be depended upon. We held onto the notion that data reliability has an effect on the kind of deductions made and consequently its validity and applicability in divergent situations. The primary information was collected by use of questionnaires, one on one interview, interviews over the phone and observation. On the other hand we were able to obtain quite a good amount of information from secondary sources such as journals and magazine on marketing and various literature reviews on marketing that had been done by proficient experts in the field of marketing.
METHODS OF ACCESSING DATA
The research majorly utilized questionnaires as a data collection tool. We designed a detailed questionnaire which we distributed to the people living around. Basically, the questionnaires were administered to 150 respondents that included company officials and consumers scattered in Charleston, SC (Brace, 2008). They we humbly requested to fill the questionnaires which were to be collected after one week. The research was tailed to consider the effect of advertisement on Medias such as radio, television, billboards and newspapers to ensure that it comprehensively covers most of the advertisement types that are currently prevalent in the business world (Brace, 2008). This method received outstanding cooperation from members of the public. To our dismay, most of them responded to the questionnaires with a lot of positivity and this guaranteed the success of the research.
Additionally, we sent several research experts who went around interviewing people. On various instances, we had to integrate mobile communication. Though costly, the strategy finally proved to be well paying as it enabled our field experts to obtain lots of the required information from the targeted sample. Additionally, we integrated information from various printed documents that were apparently in line with the information collected from the field and more so closely tied to the general effect of advertisement on sales volume. The vast area covered by the study was of utter importance as it enabled us integrate views from people with different needs, preferences and tastes hence bringing out the true picture of what advertisement can actually do to sales volume. Additionally, we inspected financial statements of various companies within Charleston, SC to determine the relationship between advertising expenses and sales revenues and this provided very practical information that supported the research.
Concurrently, prevalence of occurrence of advertisement of a product was compared to prevalence in the consumers’ behavior to purchase such products. The effect of advertisement was observed in both male and female with the main intention of ascertaining the ultimate function of advertisement, consumers’ response to advertisement and the effect of their response on the sales volume and overall profitability of a company. Their overall attitude towards various forms of advertisement was also observed as this provides vital information that can be of great value in making management and marketing decisions (McDaniel & Gates, 2005).
LIMITATIONS OF THE STUDY
The hypotheses for the study were:
• Advertising programs of a company do not have an impact on the sales volume of the company.
• There is no significant relationship between sales volume and advertisement expenses incurred by various companies in financing advertising programs.
The responses to the questionnaires were used to test the null hypothesis. Being centered towards determining whether the hypotheses were null or if any was alternate, or if both were null and come up with an alternative hypothesis, the research had to be comprehensive. However, the research study was constrained by insufficient data and information, issue of information, and the setting of the company used as a in studying the various effects of advertising on sales. Finance and time was also another factor that constrained the research as we could not cover the population in the various places that were of interest to us. Since the research intended to examine the impact of advertising on sales volume of a company, Data was confined to information collected from the management and some consumers (McDaniel & Gates, 2005). These factors may have somehow limited the outcome of this research work and its findings are therefore subject to changes as might be required from time to time.
DETERMINE THE SAMPLE PLAN AND SIZE
Determining the right sample size for the research is very important in providing reflective findings on the research question. The research sample is a portion of the target population that is used in the research to reflect or represent the whole population (Cohen, 2006). Choosing a research sample is important because it helps one work with a manageable group size. It is therefore important to select the sample appropriately. A large sample might not be appropriate as it proves to be very expensive, unmanageable and time consuming. A small sample on the other hand will provide limited information thus limiting the research outcomes.
The research sample will be determined in accordance to the research objective. Since our sales cover a large area of Charleston, SC, we shall therefore have the whole of Charleston, SC as our research population. Since we cannot conduct the research on the entire customer base residing in the city, we shall use random sampling method in determining the research sample size. The sample size will be influenced by our resources, time and the confidence interval. The random sample will therefore take such a formula as picking every tenth customer in our stores to participate in the research. The sample should be representative of the city population and therefore we shall ensure that it covers people from all social groups including race, socioeconomic status, religion and gender among others (Cohen, 2006). The customers will be picked without replacement, that is, when a customer is chosen for the research, they will not be eligible for another selection. Due to the limited time and resources, the sample size will not be big. It will consist of a hundred and fifty customers who are a complete representative of the whole population.
DATA PRESENTATION AND ANALYSIS
The main aim of this field is to analyze, interpret and present the data that was gathered from the research findings. A total of 45 questionnaires were sent out to gather the relevant data and 30 were fully answered and returned.
Sales (dependent variable, is affected by advertising, gender and education level as independent variables.
Advertising
Advertising was dependent on the sales volume of the respondents. A bigger percentage agreed 54.29% while 45.71% strongly agreed.
Gender
Out of the 35 respondents used in the study 23 were observed to be males while the female respondents were 12. This composed of 65.71% and 34.29% respectively.
Education
Education level was anticipated to influence the level of sales volume of a product. The researcher therefore sought to know the education level of the respondents. 5 options were chosen; i.e. never attended, primary, secondary, technical, college/ university. The five groups were coded 0,1,2,3,4 for easy analysis.
Regression analysis
Where Y is the sales volume in million dollars
X1 is the level of advertising on thousand dollars spent on advertising
X2 represent gender
0 – male
1 - female
X3 represent level of education: where
0 if never attended school,
1 if primary level,
2 if secondary level,
3 if Technical
4 if college/university
Regression analysis using Microsoft excel
Interpretation of the result finding
The model in this analysis was regressed at a confidence level of 95%. The independent variables, X1, X2and X3, as var2, var3, and var4 respectively, were regressed against the independent variable Y.
The R2 measured the coefficient of determination which should be greater than 0.3 (R2>0.3). The R2 in this analysis was 0.6696, implying that it is fairly acceptable. Consequently, holding all other factors constant, the variable of interest, (X1) accounts for 66.96% of the changes in the dependent variable. Hence, there is a fair correlation between the dependent variable Y and independent variable X2.
At 5% significance level, X1 has a t-value of 7.40 and P>|t| = 0.0000. This implies that 0.0% chance that the observed results have come from random distribution and hence the null hypothesis is rejected. This is because there is a 100% probability that the independent variable X1 has effect on dependent variable Y. the coefficient β1 is 10.18 which implies that, holding other independent variables constant, a unit increase in variable X1 will result to 10.18 increases in Y.
Variable X2 has a t-value = 0.95and P>|t|= 0.349, which is less than 0.05. Therefore, variable X2 is not statistically significant to the model at 95% confidence interval.
Variable X3 has t= 14.56 and a P>|t|= 0.0217. This implies that at 5% significance level, there is a 70.3% chance that the independent variable X3 has effect on dependent variable Y. By extension, variable X3 is statistically significant to the model. The coefficient is β3 is 10.439 hence a unit increase in variable X3 would increase variable Y by 10.439
The constant coefficient β0 is 172.01 with a P>|t|=0.000. This proves the significance of the model. The mean value of independent Y is 172.01 meaning that, when all other variables are zero the mean value of dependent variable is 172.01
Therefore the specific model can be written as follows;
Y= 172.01+10.18X1+9.33X2+10.439X3
Significance of the model
After the analysis, F-calculated was found to be greater than the F-critical, such that F–Calculated > F-critical. That is, the F-calculated from the ANOVA table was 2044.03 and the F-critical was 23.97. Therefore, the overall model can be said to be statistically significant because the F-calculated was more than F-critical.
POLICY IMPLICATION
The data obtained from this research indicates that there is positive relationship between the levels of advertising and the sales volume of a product. However, all the sales determinants except gender considered in this research were found to influence the sales volume except. Therefore, when firms utilizing their strategic policies to improve their sales volume, they should consider advertising as a major influence and also the level of education on their audience.
References
Brace, I. (2008). Questionnaire design: How to plan, structure and write survey material for effective market research. London: Kogan Page.
Cohen, W. A. (2006). The marketing plan. Hoboken, NJ: J. Wiley & Sons.
Creswell, J. W., & Creswell, J. W. (2007). Qualitative inquiry & research design: Choosing among five approaches. Thousand Oaks: Sage Publications
McDaniel, C. D., & Gates, R. H. (2005). Marketing research. Hoboken, NJ: Wiley.
Mouncey, P., & Wimmer, F. (2007). Market research best practice: 30 visions for the future: a compilation of discussion papers, case studies and methodologies from ESOMAR. Chichester, England: Wiley
Appendices
Questionnaire
Questionnaire #Date
Thank you for agreeing to participate in the study. Please answer the following questions as truthfully as possible. Please DO NOT write your name on this form. Answers to this study are strictly confidential and will only be reviewed once all samples have been collected. Ensure that there is NOW WAY to identify you.
Section 1
Tick where appropriate
- Please indicate your gender
Male
Female
- Please indicate level of your education
Does the level of advertising influence the sales volume
