The effect of advertising on sales volume in Uganda, a case study of valley wines limited in Bushenyi District.

Abstract

This study investigated the effect of advertising on the sales volume taking a case study of Valley Wines limited in Bushenyi district, Uganda. Since advertising is applied in order to raise awareness among customers. Thus, it could maintain customer loyalty and then boost up the organization performance in terms of sales volume thus profitability of the organization and its value. However, it is not certain whether adverting can increase organization sales volume in Valley Wines Limited because the cost may be too high for the organization to sustain it, thus it may have adverse effects on organizational performance. The specific objectives of this study were as follows: To establish the forms of advertising, to access the level of sales volume and to investigate the relationship between advertising and sales volume in Valley Wines Limited. This study was guided by the theory of advertising promotions, advanced by Smith and Taylor (2003). The theory postulates that advertising promotions involve high costs and, hence, companies are always looking for ways to reduce the cost of promotions but still maintain the effectiveness of the promotional activities being carried out. This is where companies use joint promotions. This study employed a descriptive correlational and a cross sectional survey design. Therefore, the descriptive design enabled the researcher to determine the picture or document current conditions or attitudes to describe the effect of advertisement on the sales volume of Valley Wines Limited. It was descriptive correlation because the study intended to describe and establish the relationship between extent of advertising of and the sales volume of the companies. The use of cross-sectional design was justified because data was collected at once across the selected respondents. The researcher targeted 73 employees of Valley Wines Limited. For reasons of accuracy and the reliability of the data provided, the researcher carefully selected managerial staff, sales and marketing personal and 3 customers from each company. The sample size consisted of (73) respondents from the target population. The sample size was determined from the population of the study using Keish Leslie (1965) which is stated in the study. The data was collected from the employees of selected companies using stratified sampling to select the respondents based on the departments they are attached from which a simple random sampling was carried out. The researcher employed questionnaires as the main tools for data collection. This instrument was chosen by the researcher because it is the most effective data collection tool and perhaps less costly. The data was analyzed using qualitative analysis and was presented using tables and charts computed using the STATA version 15. The researcher used descriptive data analysis techniques to summarize the data using frequency counts, means and standard v deviations. The chi-square test was used to test for the relationship between advertising and sales volume. Recommendations: From the findings of this study, the researcher recommends that if the Valley wines limited is to successfully increase their sales volume, the following should be done; Valley wines limited should try to offer a variety of products to customers and increase on training of their sales staff. This means that the management of VWL should always be in market to see what others are doing and what the customers want. After establishing needs, they should train their sales staff on how to address these needs and how to convince customers. Companies should also ensure that their quality meets the expectations of their customers. This also means that management should always conduct customer satisfaction surveys so that they get the quality issues and address them accordingly. They need to increase speed in serving customers and make their terms of sale flexible. The company should use most of the local languages commonly used in Uganda to win customers from all tribes, use of e marketing to be adopted by the industry to reach most of the people who can access the internet than listen to radios and televisions and also the use celebrities in advertising their products, and finally the researcher recommends the use of other forms of advertising for example sponsoring events and also the use of mobile phones, bill boards to advertise.