CHAPER TWO

LITERATURE REVIEW

2.1 INTRODUCTION
This chapter provides literature review related to the study, it begins with reviews of
theoretical literature which is composed of definitions of variables of the study and
theories that guide the study. The second section present review of previous works
done on advertising as an effective promotional tool for marketing new product.

2.2 DEFINITION OF ADVERTISING

Advertising has become a form of communication and a great source for promoting
services and products for any business in the whole market because of its broader
effect. The main ideal of an advertisement is to get the attention of the consumers,
build up the product’s strong image in their mind and provide information to help
the consumers make a purchasing decision.so the central focus in today’s diverse
global market place is the consumer.
American marketing Association recognizes the term advertising as “any paid form
of non-personal presentation and promotion of ideas of goods and services by an
identified sponsor” this definition mainly explains what advertising is, and help in
distinguishing advertising from other communication initiatives with which it is
often confused. Advertising is not the same as publicity. Publicity is another form of
communication like press release or public relation e.t news conferences that the
media covers on their own. Advertising which make use of mass media, either in
broadcast or in print-form as a vehicle to carry the advertising message to its
audience involves some payment as a consideration by the advertiser for using
media time and space. The AMA definition thus explains the typical characteristics
of an advertisement rather than advertising as a promotional activity.
Advertising as defined by Cohen is a business activity, employing creative
techniques to design persuasive communication in mass media that promote ideas,
goods and services in a manner consistent with the achievement of the advertiser’s
objectives, the delivery of consumer satisfactions and the development of social and
economic welfare: Advertising does not involve only presentation and promotion,
but an element of persuasion too. Due to such persuasions, it is expected that the
consumer is likely to change both their attitude and actions. The advertising
communication process as modeled b Batra, Myers and Aaker (1998). The model
shows various effect of advertising exposure leading to the information of a brand
attitude which is expected to result into favourable purchase behaviour.

Prasoon Joshi and Burt Manning defies advertising as the paid, non-personal form of
communication about product or ideas by an identified sponsor through the mass
media so as to inform, persuade or influence the behaviour of the target audience.
W.J Stanton “Advertising consists of all the activities involved in presenting to a
group a non-personal, oral or visual, openly sponsored message regarding a product,
service or idea, this message called an advertisement I disseminated through one or
more media and is paid for by an identified sponsor”.
Robert W. Sarnoff interestingly says that an: Advertising is the foot on the
accelerator, the land on the throttle, the spur on the flank that keeps our economy
surging ahead”.
Kolter (2002) “Advertising consists of non-personal form of communication to
target market through paid media under clear sponsorship.
In business world, well informed directors of multi-national companies in Nigeria
were compelled to examine what definition of advertisement would be, and they
define it as the summation of all business activities, individual research, packaging
distribution, additional publicity messages of product and services in the pass, on
television, radio promotional activities of all types and point of sales displays and
whatever goes in creating awareness for product or services in advertising tools,
offers (that is personal selling, sales promotion and publicity).

CONCEPT OF ADVERTISEMENT
Advertising concept is the voice we hear on radio, the printed words and illustration
we read in newspaper and magazine, the sound and features that are beamed on
televisions set and special promotional activities sponsored by companies, all these
are components of advertising. A new product needs to be launched after it has been
introduced, so there is existence, its value, how it is used, the benefit, where and
when it should be available. The situation of new idea and improvement on existing
ones in terms of durability, cost saving, cost effectiveness and cheapness has made
advertising a necessity.

METHOD OF ADVERTISING
There are two methods of advertising which are:
Direct advertising
Indirect advertising

Direct advertising: This is a form of advertising specifically directed to selected

group of individual only for example, an advertisement for books for nurses may be
made in journals or magazines used by nurses or letters sent directly to nursing
institutions. In such case, there would be no need of making a general advertisement
because its impact may not be felt on time.

Indirect advertising: is usually designed and made in a form which will attract the
attention of a large number of consumers as possible. This may take the form of
posters, television, handbills etc. product and services advertised this way are those
in common use e.g food items, all forms of foot wear.

TYPES OF ADVERTISING
Advertising can be classified into product or institution. The classification can
further be broken down into sub-groups, which are as follows:
i. Persuasive
ii. Informative
iii. Institutional
iv. Financial
v. Classified
Products advertising present information or reasons why a potential buyer
needs to buy a particular product or service while institutional advertising
works towards the enhancement of corporate image.

Persuasive Advertising
Persuasive advertising is am method of advertising that attempts to convince a
consumer to purchase a product or service by appealing to their needs and desires.
This advertising method attempt to frame products in a positive light and convince
consumers about its benefits.
Persuasive advertising uses emotional response instead of fact to motivate
consumers.

Informative Advertising
Informative advertising is advertising that is carried out in a factual manner. This
form of advertising relies solely on the goods or services strengths and features,
rather than trying to convince customers to buy a product using emotion.
Informative advertising is mainly used for two purpose; to augment market power,
and to inform customers of goods and services, prices and sales condition.

Institutional Advertising
Institutional advertising is marketing and promoting a company, corporate, firm or
institution rather than its product or services. The main objective or aim of
institutional advertising is to build a positive industry, rather than promote sales.

Financial Advertising
Financial advertising is geared to the world of finance such as brokerage firm, banks
or insurance companies. Typical products in financial advertising are offered
partnership shares. Financial advertising is also utilized for production of both
profit/l9oss account and the company’s provide the public with more entailed
information.

Classified Advertising
Classified advertising is a form of advertising, particularly common in newspapers,
online and other periodicals which may be sold or distributed for of charge.
Classified advert are much cheaper than larger display advertisements used by
business although displayed advertising is more widespread.

2.3 THE PROPORTION OF INCOME TO BE ALLOCATED FOR THE

ADVERTISING A PRODUCT.
There is no magic number to serve as the amount a business organization should
spend on marketing and advertising their products. How much a company like
NASCO group should allocate to such endeavors depends on teir goals, projected
sales and disposable income/revenue. Money spent on advertising can also be seen
as an investment in building up their business. In order to keep advertising budget in
line with promotional and marketing goals, business organization should start by
answering this important questions:
i. Who is the target consumer?
ii. What media type will be most useful in reaching the target consumer?
iii. What is required to get to the target consumer to purchase the product?
iv. What is the relationship between advertising expenditure and advertising
impact on campaign of products or services purchased?

2.4 WHAT IS NEW PRODUCT?

New product is a product that is new to the company introducing it even though it
may have been made in same form by either. For example, in the area of toilet
soaps, different brands have been introduced by different company as in the case of
NASCO beauty soaps. New products are those whose degree of change for
customers is sufficient to require the design or re-design for marketing strategies.

2.5 CLASSIFICATIOPN OF NEW PRODUCT

As you can see the following are the categories in which new products are
classified.

1. NEW-TO-THE-WORLD PRODUCTS (Really new product)

The expression for new-to-the-world products (really product) already
indicates that, it is what most people will call new product, they are
inventories that create a whole new market.
 2. NEW-TO-THE-FIRM PRODUCTS (new product line)
These are products that takes a firm into a category new to it. The products
are not new to the world, but are new to the firm.

3. ADDITIONS TO EXISTING PRODUCT LINE

These are simple line extensions, designed to flush out the product line as
offered to the firm’s current market.

4. IMPROVEMENTS AND REVISIONS TO EXISTING PRODUCTS

Current products made better, examples NASCO beauty soap have been
revised and repackaged numerous times throughout their history, and
countless other examples.

2.6 WHY THE NEED FOR NEW PRODUCT

Why do we need new products? The first and most important reason for any new
products is to offer new value to the customer. Without this, there is no other
reason for the company to invest their money in the new products or services.
However, if the new products or services offers exceptional values, then customers
will stick to it. This new and maximized value is what keeps your company
growing. If there is no other new value to offer customers, the firm will not exist
further and will eventually die. If the value offered is not on the increasing side,
then the company will lose its strength in the market as its competitors keep
increasing in their value in the market.

Many new products in the market are simply an incremental innovation over the
previous version with only some new features added or slightly faster performance
than the last one. These products may strengthen the company by offering enough
new values to generate additional revenue on sales, but they are hardly beneficial
to society. There are some instances where new products will raise society beyond
just the immediate satisfaction of the consumer.

New products and services are the lifeblood of any firms. Without them, the firm
will face its decline stage and either dies or is acquired by some other firm.

REASONS FOR DEVELOPING NEW PRODUCT

Change in Market

Today’s market is more dynamic as compared to the past; it keeps on changing due
to the wide variety of customers need. Due to increased literacy rate, globalized
markets, heavy competition, and availability of a number of substitute, products
have given tremendous challenges in today’s market. Market fashion and trends,
preference and needs, behaviour and habits are constantly changing and marketers
finds no other options rather than accepting the market changes by providing
positive response in terms of innovation. Thus, consumer behaviour drives the
innovation and become the dominant reason.

Change in Technology

Due to continuous technological growth and development, new manufacturing

methods are invented. Old technologies and manufacturing method are replaced by
newer ones. A firm spends a huge sum of money for technological research. To
keep up with the technological changes, new products are being developed.

Increasing Competition

Increased competition is one of the major reasons leading to new product

development. Every firm struggles to fulfil and retain consumers by offering
exceptional products. To offer more competitive advantage over the others and to
satisfy consumer needs more effectively and efficiently.

Seasonal Fluctuations

Now and then, new products are created just to reduce seasonal fluctuations in
demand. By manufacturing new products, a firm can meet seasonal requirements
of customers in the market. Customers are satisfied due to matching products in
each of the seasons and companies can get reasonable business.

Growth and Development

Creativity and innovation is an efficient way to attain more market share or sales.
Marketers can explore emerging opportunities by innovative products or services,
when it is not able to accelerate growth rate by the existing product, a firm prefers
to develop new products to widen its market, and increase sales.