THE INFLUENCE OF TECHNOLOGY DEVELOPMENT ON
ADVERTISING LEVELS
CASE STUDY:
SPEAR MOTORS UGANDA LIMITED
BY
SSEKAMANYA RAYMOND
REG. NO.
07/U/15134/EXT
STUD. NO.
207015451
SUPERVISOR:
DR. BIREVU MUYINDA PAUL
A RESEARCH REPORT SUBMITTED TO MAKERERE UNIVERSITY IN PARTIAL FULFILLMENT FOR THE AWARD OF THE DEGREE
OF BACHELOR OF COMMERCE
JUNE 2011
1
DECLARATION
I Ssekamanya Raymond, hereby declare that the information concerned in this research is my original work and has not been published or submitted for any other degree to any University or institution before.
Signed……………………………Date……………………
SSEKAMANYA RAYMOND
APPROVAL
I certify that Mr. Ssekamanya Raymond carried out this research under my supervision and submitted with my approval.
Signed……………………………Date……………………
DR. MUYINDA PAUL BIREVU
DEDICATION
I dedicate this piece of work to my bereaved mother PASSY NAKANWAGI who passed away in February 2009.
May her soul rest in eternal peace.
ACKNOWLEDGEMENT
The successful completion of this study was through the combustion of many people. The contribution of such advise, financial and moral support sincerely are appreciated and l owe them a lot for their sacrifices.
Many thanks to my supervisor Dr. Muyinda Paul Birevu for this guidance and professional advice accorded to me throughout the research period.
My sincere appreciation goes to my course mates Apollo Karamira, Diana Namayengo, Stella Namusoke, Gule Swardick, Kwesiga Joseph and Buyinza James. For their association and discussion group we had for examinations.
I must also thank Nabulime Veronicah, my girlfriend who was there all the time for me wherever you may be I love you.
I wish to thank Nancy, the accountant at Spear motors who helped me supply my questionnaires when I was collecting data. May the almighty God reward you the best.
I am grateful to Almighty God for providing me with good health, my needs, tender care and continued wisdom during the course and expect more in the future.
TABLE OF CONTENTS
DECLARATION
APPROVAL
DEDICATION
ACKNOWLEDGEMENT
TABLE OF CONTENTS
LIST OF TABLES
ABBREVIATIONS
ABSTRACT
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background to the Study
1.2 Statement of the Problem
1.3 Purpose of the Study
1.4 Objectives of the Study
1.5 Research Questions
1.6 Content Scope of the Study
1.6.1Geographical Scope
1.6.2Content / Variable scope
1.6.3 Time Scope
1.7 Significance of the Study
CHAPTER TWO
2.0LITERATURE REVIEW
2.1 INTRODUCTION
2.2 Definition and Meaning of Advertising
2.3 Advertising has many Purposes which include;
2.4 Setting Advertising Objectives
2.5 Deciding on the Advertising Budget
2.6 Deciding on the Message
2.7 Choice of Technology
2.8 Effect of Technology on Advertising
2.9 Relationship Between Technology and Advertising
3.0 Technology Development
CHAPTER THREE
3.0 METHODOLOGY
3.1 Introduction
3.2 Study Design
3.3 Area of Study
3.4 Population
3.5 Sample Size and Selection Methods
3.6 Data Collection Tools / Methods
3.6. 1 Questionnaire
3.6.2 Interviews
3.7 Data Management
3.7.1 Data Processing
3.7.2 Data Analysis
3.8 Limitations
CHAPTER FOUR
4.0 PRESENTATION, INTERPRETATION, AND DISCUSSION OF FINDINGS
4.1 Introduction
4.3 Modern Technology and Advertising
4.4 Level of technology used by Spear Motors to Advertise
4.5 Aims of clarifying the general performance of Spear Motors Company
4.5.1The relationship between the influence of Technological Development and Advertising at Spear Motors.
CHAPTER FIVE
5.0 SUMMARY, RECOMMENDATIONS AND CONCLUSION
5.1 SUMMARY
5.2 Conclusion
5.3 Recommendations
5.4Areas of Further Research
REFERENCES
APPENDICES
APPENDIX I:
QUESTIONNAIRE
APPENDIX II:
INTERVIEW GUIDE
APPENDIX III
APPENDIX IV
LIST OF TABLES
Table 1: Respondents’ Bio-Data by Gender
Table 2: Marital status of Respondents
Table 3: Academic levels of the respondents.
Table 4: Findings on whether Spear Motor uses Modern Technology to advertise its business.
Table 5: Findings on the form of technology used to determine customer’s orders in a given period and produce on sale.
Table 6: Adverts are run basing on target population and this determines the form of technology to be used
Table 7: Findings on whether an evaluation on sales return is done in case technology is involved when advertising.
Table 8: Findings on whether the format of technology used for any targeted clients is determined.
Table 9: Findings on whether Spear Motors staffs attend trade shows, workshops by Uganda Investment Authority on issues of technology.
Table 10: Finding on whether the company carries out inquiries from its internal departments before adopting a new technology
Table 11: The advancement in technology has increased the number of companies advertising their products as they reach their customers easily.
Table 12: There has been improvement in awareness of products and sales revenue basing on advanced advertising method.
Table 13: Correlation between the influence of Technological Development and Advertising at Spear Motors.
ABBREVIATIONS
PC: PENTIUM COMPUTERS
LANS:LARGE AREA NETWORKS
WAN:WIDE AREA NETWORK
NET:THE INTERNET
DNS:DOMAIN NAMING SYSTEM
E-MAIL:ELECTRONIC MAIL
E-ADVERTISING:ELECTRONIC ADVERTISING
PDA’S:PERSONAL DIGITAL ASSISTANTS
LTD:LIMITED
ABSTRACT
The purpose of the study was to establish the relationship between technology development on advertising levels. The objectives of the study were to find out the advertising strategy used at Spear Motors, to identify the advertising technology at Spear Motors, to establish the performance of Spear Motors in relation to advertising strategy and level of technology.
The nature of the research was descriptive survey design using self administered questionnaires. This involved quantifying data, tabulating findings and understanding treatment of information respectively.Data was collected from Spear motors Uganda Ltd 30 staff members were grouped into strata from which representative of the population were selected. Both primary and secondary data was collected during the survey.
Primary data was obtained from the field using questionnaires and secondary data was got from text books, journals and websites which was later tabulated for information.
The findings revealed that there is a significant effect of technology development on advertising This implies that modern technology influences advertising of products at Spear motors in a positive response.
The researcher therefore recommends that companies should adopt modern technologies to advertise their products.
1
CHAPTER ONE
1.0 INTRODUCTION
The scientific study of the practical or industrial arts. Application of the most advanced of the techniques available in the current “state of art” or to mean the development of techniques known in general outline but not yet developed into practical and productive application (Harry 2000).
Technology means the use of technology involving the application of new development in pure science that is scientific knowledge of the human environment and its properties requiring the investment of large amounts of capital (Rainer et al)
Technology entails the use of modern equipment in order to carry out work more effectively and efficiently. Technology can be in form of data devices, communications networks, policies and producing, storing, retrieving, transforming and disseminating information. Though technology has advanced organizations have not quickly adopted it for advertising their companies. This study focused on establishing the influence of technology on advertising levels.
1.1 Background to the Study
Technology advancement has led to development of equipments such as telephones, televisions, computers, radios, newspaper etc... Mobile computing which refers to a real, wireless connection between a mobile device and other computing environments, such as the Internet or an Intranet. This innovation is revolutionalising how people and organizations advertise.
Advertising can be traced back to the very business of recorded history Archeologists working in the countries around the Mediterranean Sea had dug up signs announcing various events and offers. The Romans painted walls to announce gladiator fights and Phoenicians painted pictures promoting their works on large rocks along parade routes. A Pompeii wall painting praised a political regime and asked for votes. During the Golden age in Greece, town careers announced the sale of cattle crafted items and cosmetics. An early singing commercial casts after girlhood is gone or for prices in reason the woman who knows will buy her cosmetics from Aesclyptos. (Kotler, 1996).
Spear motors Uganda Ltd is located at plot M428, Jinja road Nakawa, Uganda. Spear motors are the exclusive dealer of Mercedes Benz, Jeep and Chrysler cars in Uganda.
They have been in business for over 32 years and there have been an increasing desire for their products.
Spear motors are the only agents of Mercedes Benz in Uganda and they are looking for greater future contribution to be made in years and decades ahead.
They deal with stakeholders, employees, business partners, suppliers, customers, government and non government organizations and communities to achieve their goals in line with their mission. Like any other business in order to improve sales revenue Spear Motors has to carry out advertising. Due to the new developments in technology spear motors has also adopted the trend. However it has not been successful in this area.
1.2 Statement of the Problem
Advertising through modern technology brings a lot of benefits to the business. Despite this fact, Spear Motors continue to advertise using traditional means. The impact of the practice has been studied.
1.3 Purpose of the Study
The purpose of the study was to establish the influence of technology development on advertising levels and its effectiveness to organization performance.
1.4 Objectives of the Study
- To find out the advertising strategy used at Spear Motors.
- To identify the advertising technology at Spear Motors.
- To establish the performance of Spear Motors in relation to advertising strategy and level of technology.
1.5 Research Questions
i.What advertising strategy is used at Spear Motors?
ii.What technology is used to advertise at Spear Motors?
iii.How does spear Motors perform as far as advertising is concerned?
1.6 Content Scope of the Study
The study covered the influence of technology development on advertising levels.
1.6.1Geographical Scope
The study covered the headquarters (Spear Motors Ltd) Located in Nakawa, though it has several branches all over the country.
1.6.2Content / Variable scope
- Technology development
- Benefits of technology
- Advertising strategy
- Benefits of advertising
- Objectives of advertising
- Advertising budget
1.6.3 Time Scope
The research covered the period of 2009-2010
1.7 Significance of the Study
The study was based on the belief that technology development influences the way adverts are run by organisat ions promoting sales. The ultimate findings of the study were to;
i) Help Spear Motors improve on revenues by using the most effective technology to advertise.
ii) Improve the knowledge of the researcher and future research students about the importance of technology on advertising.
iii) Benefit other organizations that operate / run the same business as spear motors Uganda Ltd.
iv) Help the researcher since its partial fulfillment of the requirements for the award of the degree in Bachelors of commerce.
CHAPTER TWO
2.0LITERATURE REVIEW
2.1 INTRODUCTION
This chapter gives different views of different authors and researchers on how they define technology and advertising.
2.2 Definition and Meaning of Advertising
Advertising is defined as any paid form of non – personal presentation and promotion of ideas, goods or services by an identified sponsor. (P. Kotler 1998, pg 596). Primarily advertising is a marketing tool. It is used in various forms like the magazines, newspaper space, radio and television, posters, bill boards, direct mails like calendars, tear pads put on cars and buses, circulars etc…
2.3 Advertising has many Purposes which include;
a) Institutional Advertising
This is concerned with the building of the corporate image of the organization. It is usually long term oriented and seeks to impart the company’s good image to the public permanently.
b) Brand Advertising
It is the long term information built up that singles out the characteristics of a particular brand. Advertising by branding is intended to tell consumers that no matter where they are, they can be sure that the product or service will be of the same quality (Hesketti, 1990)
c) Classified Advertising
This is the dissemination of information regarding the sale of goods and services that will take place in specific places and on specific clients.
d) Promotional Advertising
Perhaps the most commonly used by private business men, it is focused on the announcement of a special sale of a produce of service. It is usually meant to attract the attention of consumers as they seek to know special element in the product. This can lead to decreased prices or improved quality of the product.
2.4 Setting Advertising Objectives
The advertising objectives are classified as to whether they are going to inform, persuade or remind. The choice of the objectives also depends on the current market situation, the main classification are;
a)Informative advertising, the main aim here is to generate primary demand. It concentrates on the benefits and uses of a product especially in its early stages.
b)Persuasive advertising, most advertising falls in this category. It’s usually important in the competitive stage. Here the organizations’ aim is to build a selective demand of a product or service. This category is used to change the customers’ perception of the product characteristics persuasive advertising has developed into comparison advertising that seeks to show superiority of one brand of a product to other products.
c) Reminder advertising, this seeks to keep the customers thinking about the product. It is intended to remind the consumer that the product will be needed in the future and also reminds them of where the product can be purchased.
The choice of advertising should be based on thorough analysis of the current technology developments. If the product is in mature stage and the organization is the market leader then the advertising objectives should be to stimulate product usage.
2.5 Deciding on the Advertising Budget
The major role of advertising is to shift the demand curve upward i.e. to increase revenue. Therefore the organization must use the most appropriate means of technology to advertise which is not costly. (Kottler, 1990). The amount spent must neither be too much nor too little. If a company spends too little on advertising the impact is insignificant. However if it spends too much then some money spent could have been put to better use. Estimation of the advertising costs is needed in order to achieve the already set objectives. (Kotler, 2000) in his book marketing management analysis and planning, implementation and control describes the following factors considered when setting the advertising budget.
- Stage in the product life cycle, new products are usually given larger advertising budgets in order to create awareness. Established brands on the other hand receive lower budgets as ratio to sales.
- Market share and consumer base, products with a high market share require less advertising expenditures as a percentage to sales in order to maintain their market share. Those with less market share will however spend more on advertising in order to build and gain market share.
- Competition and cluster, when competitors in the market are many then the advertising expenditure will increase. A brand or product will advertise heavily so that it does not loose its market share to other competing product.
- Advertising frequency
The number of times needed to be put across the product message to the consumers will ultimately determine the advertising budget. The more frequent the need then the more expenditure expected.
e. Product substitutability, products with many substitutes will require heavy
advertising. This is done in order to establish a differential image. Such products
are soft drinks, beer, cigarettes, exercise books etc…
2.6 Deciding on the Message
The product message is decided upon in order to develop the product concept. It seeks to show the basic benefits that the brand offers. Some studies however have shown neglect of message creative factor in view of sales effect or advertising. They argue that creativity is not an important issue to decide upon. (Bernbach et al, 1991) observe that by leaving out the creative factor a substantial part of market differences are unexplained.
Another study found out that the choice of technology is more important than the dollars spent in an advert. An advert can only help to increase on the sales if it has gained attention from the public.
2.7 Choice of Technology
Selection of the mode of technology is the task of finding the most cost effective form to deliver the desired number of exposures to the target audience. The problem involves trying to find the most cost effective mode of technology to deliver the message to the target audience. (James Martin, 2000).
The effect of exposures on audience awareness is to be put into consideration. The extent to which the audience is exposed to the mode and how the exposure increases the awareness of the product is an important issue in collecting the format to be used. This depends on the reach, frequency and impact. (Jessup and Vailacich, 2006).
Reach means the number of different persons exposed to the format of technology, while frequency describes the number of times in a certain period an average household is exposed to the message. Impact depicts the qualitative value of an exposure through a given media.
Assessment of a technology mode is crucial in the process of selecting the mode to be used. This is to the extent that given the budget. What is the most cost effective combination of reach frequency and impact. While reach is more important when launching new products, frequency is more important where there are strong competitors. The combination of reach, frequency and impact should be decided upon depending on the market situation. (Harry, 2005).
2.8 Effect of Technology on Advertising
Technology advancement is a good example of the never ending “Good news and bad news” scenario. The good news is that effective implementation of an IT System, our ability to be highly productive can increase, the bad news is that this often doesn’t occur for that reason technology has become an easy blame magnet for many of our working areas.
The technology exposure effect (Dr. Deborah, Feb 2011), said that our technology habits physically alter our brains just as everything we do changes our brains.
2.9 Relationship Between Technology and Advertising
The issue of technology has played a major part in improving the promotional activities of the company. The immediate responsiveness of computer based programmes and the self placed advertising environment that technology warrants seeks to promote higher levels of motivation amongst clients worldwide.