HO POLYTECHNIC

DEPARTMENT OF STATISTICS ANALYSIS OF ADVERTISEMENT STRATEGY ON SALES OF FRUIT JUICE. (A CASE STUDY OF PAPSO GHANA LTD) BY ABDUL-KARIM KADIRI ANDY ISSAC

OCTOBER 2011

DECLARATION
We do hereby declare that project entitled MEAN CALORIE INTAKE OF

CEREAL CONSUMERS. was done entirely by us under the

supervision of Mr. COKER AYIMAH

ABSTRACT
Competition in the fruit juice industry has brought about a lot of strategic decision been taking by marketing managers of fruit juice to see their products dominating the market. Advertisement therefore is used by this companies to sell their products. Effective advertising can present information about new or existing products, demonstrate meaningful uses of the product, and establish or refresh the brands image.. The main objective of this paper is to determine To determine whether sales in the three cities differ.To identify these factors,secondary data on sales was obtained 20 samples was obtained from each city. Analysis of variance was used to run the analysis. Also, MS Excel was the software used to run the analysis From the preliminary analysis, there exist differences in sales made among the three cities. City two seem to be performing very well hence having their sales exceed the other two cities. The average of city two again exceeds that of the other cities. Sales in city three appears to vary widely compared to other cities. From the further analysis, we significantly reject the null hypothesis and conclude that differences exist in sales made in the three cities.

CHAPTER ONE 1.0 INTRODUCTION

1.1 Background Competition in the fruit juice industry has brought about a lot of strategic decision been taking by marketing managers of fruit juice to see their products dominating the market. Advertisement therefore is used by this companies to sell their products. Effective advertising can present information about new or existing products, demonstrate meaningful uses of the product, and establish or refresh the brands image. It can reach a diverse or wide audience with repeated communications and gives a company the opportunity to dramatize its products and services in a colourful way. Advetising stimulates demand, help build brand success, develops and shapes buyers behavior and gives the seller a measure of certainty about the level of sales. In addition it informs buyers about the product characteristics and availability and makes markets more competitive.

In many markets such as the fruit juice, first time purchases are rare. Here advertising is entirely important in affecting brand shares by inducing switching or retaining customers who otherwise might switch. Brand switching is generated from advertising through building brand awareness or altering consumer belief about brands. Advertising performs other functions as well. Some advertising supports personal selling efforts. Example many companies advertise to increase consumer awareness of products, making later personal selling efforts easier. Such advertising if executed effectively, generates sasles leads and communicates products advantage to prospective buyers. It is important to remember that advertising is expensive and must be targeted effectively to achieve a firms objectives, because firms do not have unlimited income or budget thus the allocation of these funds must be made with a clear view of target markets and hence the audience for the organizations advertising. Bearden et al (1998) Papso Ghana limited was incorporated in 2004 to produce quality fruit juice to satisfy consumers through the use of good quality management skills and advertisement. The company produces and markets six main brands of of fruit juice which are guava juice, tropical juice, orangejuice, mango juice, tangerine juice and pineapple juice.

Their aim is to be the largest and most reputable producers f fruit juice in Ghana and beyond by satisfying customers with quality products. Currently, the company sales its products in three city which are Accra, Kumasi and Tamale. The company seems to be facing a lot of competition from other players in the market especially T.T. Brothers distributors of Pure Joy Fruit Juice. Due to this competition, management has decided to intensify advertisement and opt to stress on the following features of their product. Convenience which was stresss in Accra, Quality which was stressed in Kumasi and Price was stressed in the Northern part of the country precisely Tamale. 1.2Research Problem Increase competition in the fruit juice industry has forced management of Papso Ghana limited to bring out new product which they wish to put on the market. Management believes this product is more convenient, of better quality and less in price than what they use to produce. Based on this idea, the marketing manager, whishes to launch an advertisement but wonders which of these features to stressed on. The marketing manager stressed on convenience in Accra, Quality in Kumasi and Price in Tamale. The aim is to find out whether sales made in the three cities will be different. 1.3Research Objectives 1. To find out which of the qualities yielded an increase in sales 2. To find out how varied sales are in the three cities.

3. To determine whether sales in the three cities differ. 1.4Research Hypothesis At least sales of fruit juice in two of the cities differ. 1.5 Significance The study will help management of Papso Ghana Limited to determine which of the cities to continue selling their product and what advertisement message to carry along. It will also enable them to know whether to change advertisement strategy in the other cities or to change the products they are currently selling in those cities.

CHAPTER TWO 2.0Literature review

2.1Product Development Concept Fruit juice industry is one of the rapidly developing industries in the business world. The fruit juice sectors want to see success and growth in their business. Three growth strategies for the business are convenience strategy, product quality strategy and price strategy (Lord, 2000 & Kotler 1997). 2.2Price: Price plays a vital role in fruit juice market especially (Kollmann, 2000). Generally, a price-dominated mass market leads to customers having more choices and opportunities to compare the pricing structures of diverse providers. A company that offers lower price would be able to attract more customers committing themselves to purchasing such product. According to Kollmann (2000), income from the number of sales determine the basic commercial success for the network fruit juice manufacturer. He also added that the success of the fruit juice in a market place largely depends on continuing usage and pricing policies, which need to be considered on several levels. Draganska and Jain, 2003 states

that a common strategy for a company extending their product or service is to differentiate their offerings vertically. Trebing (2001) mentioned that there are three sets of strategies for pricing behavior.

The first is limit entry pricing, which is used for protection of the market position of the firm; second is the high access charges for new entrants, and the third one is tie-in sales to write off old plant or standard investment against captive customers. According to the author, limit entry pricing involves setting low prices in highly elastic markets to attract or retain large customers with monopolistic buying power, while maintaining high prices in inelastic markets.

Market penetration strategy is gaining more market share of current products in existing markets. Market development strategy (or market extension) is aiming to expand the current products to new markets. Product development strategy is creating the new potential product to serve current markets. Diversification strategy is finding the new products to target new markets.

The change of industries has been required to meet consumers preference due to changing of consumers need, age, habit, lifestyle, and ethnicity. The consumer always wants more information, variety, and a new eating experience. Research and development will give a better understanding of the process of food product innovation. According to Fuller (1994) new product development is driven by several factors. These factors include the life cycle of products. Products are introduced into the marketplace and at some point the products lose customer appeal. Many food companies have aggressive growth plans and encourage risk taking. Aggressive growth plans are needed to stay competitive in the global marketplace. The changing of marketplace also requires new products that fit consumers desires. New technology and knowledge may alter new products, make them available, and suite them to consumers. Changing of legislation, health programs, and government policy are factors that force producers to develop new products. Best (1990, p.3) stated that new product design demands a carefully choreographed total concept approach that goes beyond simply designing products that survive successive consumer test hurdles. New product development requires seven steps which are 1) setting new product development targets, 2) gathering the strategic information, 3) mapping the strategic geography, 4) creating a list of new product options, 5) setting criteria, 6) creating the portfolio, and 7) managing the portfolio (Gill, Nelson, & Spring, 1996). New food products can be classified into several groups such as line extensions,

repositioned existing products, new form of existing products, reformulation of existing products, new packing of existing products, innovative or added-value product, and creative product (Fuller, 1994). Meltzer (cited in Fuller, 1994, p. 7) defined value added and added value processing as any technique that effects a physical or chemical change in a food or any activity that adds value to a product. 2.3Product Quality and convenience: Consumers perception of product quality is always an important aspect of a purchasing decision and market behavior. Consumers regularly face the task of estimating product quality under conditions of imperfect knowledge about the underlying attributes of the various product offers with the aid of personal, selfperceived quality criteria (Bedeian, 1971 adapted by Sjolander, 1992). According to Sjolander (1992) the consumer behavior in modern market is different from the theoretical case of consumer decision making infree markets. Generally, free and competitive markets are composed of buyers and sellers each of whom must possess perfect information about all possible products and their respective utilities; a well defined and explicit set of performances; the ability to determine optimal combination of various products given their budget constraints; a knowledge of prices, which does not affect the subjective wants or satisfaction oftheconsumer. (Monroe and Petroshius, 1973 adapted by Sjolander, 1992).Notwithstanding the facts, it is necessary to define quality in the first place before it can be measured. Although, there is no global definition of quality exists (Sebastianelli andTamimi, 2002), it can be defined in a varieties of ways. Yoon

and Kijewski (1997) pointed out that quality can be categorized into two perspectives. One is the marketers perspective, which is typically product-based or manufacturing-based and the other one is consumers perspective, which is typically user-based or value-based. Generally, product quality from the marketers perspective is associated with specific feature, function or performance of a product.

On the other hand, product quality from the consumers perspective is associated with the capacity of a product to satisfy consumer needs (Archibald et al., 1983). According to Lambert (1980), consumers often attribute quality to branded products on the basis of price, brand reputation, store image, market share, product features and country of manufacture. So, price is an indicator to measure the product quality, which is based on the theory that quality is a measure of the utility, or the want-satisfying capacity of products (Sjolander, 1992). The author has also added that the more the quality a product possesses, the more the utility it contains, and the higher the price it will obtain in an open market exchange. This means that similar products offered to the market at different prices, contain different amounts of utility, and that there is a direct relationship between quality and price.

The actual price-quality relationship is a complex interaction between price, brand name, store image, product features, and brand awareness (Lambert, 1980; Gerstner, 1985). Overall, the quality of a product is also related to the availability of the products main functional features on one hand and the consumers experience-in-use of the other auxiliary features on the other hand (Yoon and Kijewski, 1997). A products main functional features are the sources of the primary benefits that the consumers expect to obtain when purchasing a product. In general, consumers evaluations of a products overall quality are related to the convenience of these features in comparison with thecompetition (Lambert, 1980; Nowlis and Simonson, 1996).

Hence, it is necessary for the fruit juice industry to effectively communicate with the consumers for measuring the quality. Quality reflects the extent to which a product or service meets or exceeds consumers expectations (Wal et al. 2002). Therefore, the success of the fruit juice industry in the market place significantly depends on product quality and convenience.

2.
Analysis of variance (ANOVA) is a statistical procedure for summarizing classical linear modela decomposition of sum of squares into a component for each source of variation in the modelalong with an associated test (the F-test) of the

hypothesis that any given source of variation in the model is zero. When applied to generalized linear models, multilevel models, and other extensions of classical regression, ANOVA can be extended in two different directions. First, the F-test can be used (in an asymptotic or approximate fashion) to compare nested models, to test the hypothesis that the simpler of the models is sufficient to explain the data. Second, the idea of variance decomposition can be interpreted as inference for the variances of batches of parameters (sources of variation) in multilevel regressions. Analysis of variance (ANOVA) represents a set of models that can be fit to data, and also a set of methods that can be used to summarize an existing fitted model. We shall first consider ANOVA as it applies to classical linear models (the context for which it was originally devised; Fisher, 1925) and then discuss how ANOVA has been extended to generalized linear models and multilevel models. Analysis of variance is particularly effective tool for analyzing highly structured experimental data (in agriculture, multiple treatments applied to different batches of animals or crops; in psychology, multi-factorial experiments manipulating several independent experimental conditions and applied to groups of people; industrial experiments in which multiple factors can be altered at different times and in different locations).

CHAPTER THREE 3.0 Research methodology 3.1Introduction The research will help the management of Papso Ghana Limited to determine whether sales made in the three cities differ based on the features stressed in the advertisement. This chapter discusses the area of study, the research strategy, defines the population, the sample size and sampling techniques, the

instruments for the data collection, validation, data collection procedure and data analysis procedures.

3.2 Area of study In order to make the study broad-based as the topic depicts, the study is intended to cover a wide range taking into the various features stressed in the advert, the outcome could produce the results which is the aim of the study; due to time and other factors, the research has intended to solicit all necessary information within Papso Ghana Ltd.

3.3 Target population The targeted population was the three cities were sales are been made daily. This cities are Accra, Kumasi and Tamale.

3.4 Sample Size

The study used secondary data obtained from sales records of the three cities. 20 samples each was selected from the three cities using simple random sampling. 3.5 Sampling Technique In achieving the objectives of the study, simple random sampling technique was used in selecting the sample size. The researcher used simple random sampling technique in order to collect relevant data needed for the study.

CHAPTER FOUR 4.0 Data Analysis The analysis of the research is to help management of Papso Ghana Ltd to find out whether sales made in the three cities was different. Ms Excel was used to bring out output.

3.1 Discriptive statistics of sales made in the three cities

The table below displays summary statistics of the sales made in the three cities.

Table 3.1 Distribution of Mobile phone Ownership by Gender

Groups Convenience Quality Price

Count 20 20 20

Sum 11551 13060 12173

Average 577.55 653 608.65

Variance 10775 7238.105 8670.239

From the table, it appears that there exist difference in sales made among the three cities. City two (Kumasi) seems to be performing very well hence having their sales exceed the other two cities. This tells us that quality of product been expressed by the marketing manager in the advertisement seem to yield the greatest result. The average of city two (Kumasi) which tells us the amount of sales fetch by each individual product if the entire sales were divided among them, appears to have exceeded that of the other cities. Sales in city three (Tamale) appears to vary widely compared to the other cities.

3.2 FURTHER ANALYSIS

Test of Normality

Before we compare the three population using Anova, there must be evidence to show that the data is normal.

Table 3.2 Freqency of sales in city 1

convenience class

booundary 353-441 442-530 531-619 620-708 709-797

frequency 1 7 6 3 3

Figure 3.3 Distribution of sales in City 1

City 1 (Accra)
8 7 6 5 4 3 2 1 0 353-441 442-530 531-619 620-708 709-797 frequency

Sales distribution in city 1 as shown by the graph above, is quite nomal.

Table 3.3 Frequency of sales in city 2 (Kumasi)

quality

class boundary 492-554 555-617 618-680 681-743 744-826 frequency 2 5 5 5 3

Figure 3.4 Distribution of sales in city 2

City 2 (Kumasi)
6 5 4 3 2 1 0 492-554 555-617 618-680 681-743 744-826 frequency

The graph above shows how normal sales in city 2 is. Table 3.5 Freqency of sales in city 3 Price class boundary 443-510 frequency 3

511-578 579-646 647-714 715-782

5 3 7 2

Figure 3.6 Distribution of sales in city 3

City 3 (Tamale)
8 7 6 5 4 3 2 1 0 443-510 511-578 579-646 647-714 715-782 frequency

Sales in city 3 is quite normal from the histrogram above.

Since sales in the three city appear to be normal, we conduct a further a further analysis here to compare the mean sales in the three cities to determine whether differences actually exist in sales made in these cities based on the features stressed in the advertisement. Table 3.2 Source of Variation SS df MS F P-value Fcrit

Between Groups Within Groups Total

57512.23 506983.50 564495.73

2 57 59

28756.12 3.23 0.0468 8894.45

3.16

From the table above, since the test statstics F=3.23 is greater than the the critical value F crit = 3.16, the data might be calling for the null hypothesis and hence it appears that differences seem to exist among the sales made in the three cities of Accra, Kumasi and Tamale. The P-value which is 0.04, falls slightly into the rejection region and so the test is quite significant and supports the rejection of the null hypothesis. At a 95% confidence level, it can be said that the effect of advertising strategies resulted in difference in sales in the three cities. Hence at least two means differ. A further analysis is therefore needed to determine which one of the cities actually differ.

Table 3.3 Multiple Comparisons

LSD

Omega

Alpha = Treatment Convenience Treatment Quality Price Quality Price Difference -75.45 -31.1 44.35 0.05 59.7206485 59.7206485 59.7206485

Alpha = 0.05 71.7007034 71.7007034 71.7007034

From the output table, we observed that there is only a difference between convenience and quality and no other pairs differ. This is because, 75.4 > 59.75 but 31.1 < 59.72 and 44.36 < 59.72. This tells the manager that advertising emphasizing quality in city 2 (Kumasi) outsell advertising stressing convenience in city 1 (Accra) It also shows that there is no evidence to infer that advertising emphasizing price in city 3 (Tamale) is any different from the other two. Management should therefore focus on advertising stressing on quality and price.

CHAPTER FIVE
SUMMARY, DISCUSSION, CONCLUSION AND RECCOMMENDATION
This chapter presents a general discussion on the results on the analysis of the preceding. The chapter also assesses how far the objectives of the research have been achieved. Comparison and contrasting of the findings in relation to the previous findings are also presented.

5.1 Summary
From the preliminary analysis, there exist differences in sales made among the three cities. City two seem to be performing very well hence having their sales exceed the other two cities. The average of city two again exceeds that of the other cities. Sales in city three appears to vary widely compared to other cities.

From the further analysis, we significantly reject the null hypothesis and conclude that differences exist in sales made in the three cities.

5.2 Conclusion
The objective of this research is to find out which of the qualities yielded an increase in sales, we can confidently say that quality of product as exhibited at city two (Kumasi) yielded an increase in sales. The research also seek to find out how varied sales are among the three cities. Variation in sales has been predominant in city three (Tamale) than the other cities. Finally, the research seek to find out whether sales in the three cities differ, further analysis conducted using ANOVA, proved at 0.05 significant level at sales among the three cities differ.

5.3 Recommendation
We therefore recommend that, Papso Ghana Ltd are improving on the quality of the brand, they should also consider the price of selling it so as to make it affordable to all persons.