An Evaluation Of The Impact Of Advertising On Consumer Behaviour
[A CASE STUDY OF DE-UNITED INDUSTRIES LTD: MAKERS OF INDOMIE NOODLES]

1.1 BACKGROUND OF THE STUDY

We are in a very dynamic and complex world. The business environment is becoming sophisticated day by day and as such, decision-making is becoming more and more challenging and risky. Business organizations are failing due to poor decisions. Investors are losing their money and are unhappy. They are being discouraged and this is quite unhealthy   to the economy. In some other instances, organizations are springing up in great numbers; some are successful in the marketing of their products and services, while others are still akin to the barber’s chair syndrome where all is motion  but no  movement; struggling to  reach their target audience. Consumers are also faced with the challenge of choice making due to indecisiveness, skepticism, indifference and confusion which are among the key sales killers  in business world.

However, the consumer perception challenge is the first and greatest hurdle that advertisers must cross. Perception guides all activities of the consumer from the people he  associates  with to the product he buys.  In  the business world, it has always been what people say about  a product or service and not what the marketer says. How a consumer perceives each of the different brands in a category, determines which brand he chooses.  So  many  companies spend so much money on advertising, sales promotion, point of purchase displays and other marketing communications only to discover that many people don’t even remember the product or the promotion. On the other hand, whether consumers ultimately purchase the marketer’s brand also depends on whether the promotion and marketing communication variables facilitate purchasing.

Today, it is no longer news that we are in a season of economic anomie. All that could go wrong have been going wrong with the global economies and having ripple effects on our local business environment. Reports about the current economic crisis have been terrific and scaring. More companies are recently reported to have shut down operations while some are planning their exit from the Country due to harsh economic conditions. In the  face  of all these, the few others in operation are engaged in fierce battle for the soul of the consumers.

 To succeed, they need to understand what makes potential customers behave  the  way they  do.

This study therefore, seeks to evaluate the impact of advertisement of indomie noodles, a product of De-united Ltd on Consumer behavior. The brand indomie with its varieties of flavours such as Onion flavor, chicken flavor, Suya flavour has become a household name since the late 90s that even a child of 2years of age could pronounce it so fluent amidst other competing brands like Chikki noodles, ‘O’ noodles, Mimi noodles of May & Baker and now the latest of them all, the Golden Penny noodles of Flour Mills Plc. With these range of competing products, massive advertising budget becomes necessary for the indomie brand, which the researcher tends to evaluate its impact on the behavior and/or perception of the consumers.

1.1.1 BRIEF HISTORY OF DE-UNITED FOOD INDUSTRIES LTD

De-united food Industries limited was commissioned in Nigeria in 1995 as the first  instant  noodles manufacturing company with head office in Ota, Ogun State. The company is a joint venture between Salim group of Indonesia and Tolaram group of Singapore.

Salim group is the majority shareholder of PT Indofood Sukses Makmur, a listed company in Indonesia which owns the indomie trademark, technology and expertise in instant noodles manufacturing.

Tolaram group is a Singapore based group that has businesses in Nigeria and eleven countries around the world.

According to Mr. Ashish Checker, chief operating officer of De-united, the vision of  the company is to become a leading instant noodles manufacturer in Africa, committed to customers’ satisfaction through a variety of products; increase stakeholder’ value and continuously develop  its human capital and the community. The company’s mission statement also reads thus “To dominate the instant noodles market by providing a variety of quality products that meet customers’ satisfaction”.

1.2 STATEMENT OF PROBLEMS

 Advertising is costly; often its effects are uncertain, and sometimes it takes a while before it makes any impact on consumers’ buying behavior. It is for these reasons that  many  companies think it appropriate, occasionally to reduce expenditures on advertising or to entirely eliminate it. On  the other hand, some companies sometimes consider it unnecessary  to advertise when their brands are already enjoying great success without  advertisement.  Such behavior implicitly fails to consider the fact that advertising is not just  a  current  expense or mere exercise but an investment.

Competition poses another problem area of this study. Prior to year 2004, indomie was the only noodles in the market, which means, absence of competition. Given this situation, the product recorded high sales within the afore-mentioned period. Today, the massive introduction of the noodles earlier mentioned had made way for competition as so many women who used to sell only indomie noodles now share their resources among the different brands in order to maximize profit. Also, identified was in the area of children who  are seen  as the chief consumers of indomie noodles. Before now, the indomie jingles (indomie, indomie,indomie noodles, delicious and tasty ……………) was sang often among them. Today, it’s amazing how these children now sing the mimi noodles jingles more than the popular indomie jingles. This means that perhaps, these children hear more of the  mimi jingles than that of indomie, and as a result, a good percentage of them would no doubt  change from consumption of indomie to mimi. All these, have resulted in low sales  of  indomie noodles.

1.3 OBJECTIVES OF THE STUDY

This study is guided by the following objectives.

1. To determine the role of advertisement in marketing of consumer goods

2. To understand consumers’ views and or opinions towards advertisement of consumer products in general and indomie noodles in particular.

3. To measure the extent to which advertisement influences the behavior of consumers of indomie noodles.

4. To ascertain if a consumer good can overcome competition without advertisement

5. To  determine  if advertisement increases consumer’s  preference of a particular product  to others

6. To ascertain which  medium of advertisement will make  greater impact in advertisement of consumer goods

1.4 RESEARCH QUESTIONS

This study seeks to address the following questions:

• Is advertisement an effective tool in marketing of indomie noodles or just a mere excercise?

• To what extent do other promotional activities undertaken by the company impact positively on the consumers of the product?

• Are there steps taken to ascertain the impact of advertisement of Indomie noodles on consumers?

• Has advertisement improved consumer preference for the product to other noodles?

• Has the company been able to overcome competition through advertisement?

• Did advertisement play any role in defusing the bad publicity that was associated with the poisonous indomie in 2005?