Chapter II: Review of Related Literature

The review of related literature for this study focuses on the effects of advertising to the

sales volume of a product. In a research entitled “Effects of Advertising on Sales Volume”,

Kokemuller Neil (2016) analyzed how advertising increases the profit or the sales volume of a

business:

This article aimed to find out how advertising can increase the sales volume of a product.

The researcher identified that having promos and investing in different businesses can

increase the sales volume of a product. He stated that it is important to have promos to

attract more customers in order to gain more profit. He found that promos have a long

benefit to businesses since it doesn't immediately increase sales volume but instead builds

brand awareness and trust that can increase product demand in the future. He also added

that investing in different business can increase sales volume because it can further promote

a product. Therefore, he concluded that if businesses really want to have higher sales

volume, they should invest and have promos.

Another study entitled "Impact of Advertising on Organizational Sales Turnover: Nigerian

Breweries Plc Experience ", Sajuyigbe, A. S., Amusat, W. A., and Oloyede, O. (2013) examined the

impact of advertising on organizational sales turnover:

The study regarding the Nigerian Breweries aimed to know what the impact of advertising

is to their overall organizational sales. The researcher used the Pearson Product Moment

Correlation Coefficient with the aid of statistical page for social science version 16. The

data was collected through structured questionnaires and six years of annual reports and

accounts of Nigerian Breweries. The results showed that there is a very strong positive
 relationship between advertising and sales turnover. It was also discovered that the

importance of advertising cannot be underestimated in achieving organization stated

objectives.

The next article entitled "The Positive Effects of Advertising", Morley, Miranda (2016)

enumerated the positive effects of advertising to sales volume of a product:

The researcher of the article identified the positive effects of advertising to sales volume of

a product, namely its social benefit and economic benefit. Advertising can help benefit the

society by letting more people know about a product while simultaneously increasing the

sales volume of a product. Advertising will also benefit the economy since the demand for

products and services will go up and more people will be needed to manufacture, supply,

ship and test products and services, thereby creating more jobs.

In addition, another article entitled "Top 5 Advantages of Advertising", Ghose, Shreyasi

(2016) also enumerated the advantages of advertising to businesses and sales volume of a

product:

Advertising is considered multi-dimensional. It helps in a number of marketing activities

and it is a technique of sales promotion. Sales volume is increased by advertising. It helps

and supports a salesman in selling a product. Consumer’s knowledge about a product is

increased by advertising. Therefore, the researcher enumerated the advantages of

advertising to sales volume. These are: it increases sales volume and net profit, it stabilizes

the sales volume, it secures more dealers, it helps in opening new market and it wider

information about the product.

In contrast, an article entitled “The Negative Effects of Advertising to Society”, Archon, Sofo

(2012) discussed the negative effects of advertising to the society:

do it. The researcher stated some negative effects of advertising. First, he said that

advertising can make people feel that they are not enough. Advertisements do their best to

convince people that they not beautiful, intelligent, confident, and so on. They try in any

way they can to make people feel insecure, with the only purpose to manipulate them.

Also, advertising makes people believe that buying stuff is the only thing that can bring

happiness in their lives. Therefore, the researcher believe that advertising is not always

beneficial to people.

In addition, another article entitled “Negative Impact of Advertising” Jensen, Studio (2016)

also discussed the negative effects of advertising to sales volume of a business:

Advertising takes money, whether purchased through an online advertising service, print

ads in a newspaper or commercials on radio and TV. Designing the ads and the copy costs

money, as well. On the high end, companies spend up to $2.6 million for a 30-second

commercial during the Super Bowl. While the positive effect of advertising is bringing in

sales dollars, the negative effect is felt by those who are the target of the advertising.

Additionally, the companies themselves may also experience a negative effect since their

constant advertising of a product does not guarantee that it will be sold, resulting in a

waste of funds.

Another article entitled “The Relationship Between Advertising and Sales Performance”,

Linblad, Marilyn (2016) discussed the relationship of advertising and sales performance:

Business owners nowadays are interested in finding out which ads are the most effective in

promoting products. However, it is hard to accurately determine whether or not

advertising really affects sales performance. This is because some customers shows bias in
 their product preference by almost always choosing their trusted brands regardless of

advertising. Brand advertisement don't just endorse one product, but instead provides

information about the business and pronounces it's identity as a brand.

An article entitled “Importance of Advertising –Why Advertising Is Important?”, Akrani,

Gaurav (2013) examined the significance of advertising to the sales volume of a business:

Advertising is very important in launching new product, service or idea in the market. If

the advertisement of any concerned product, service or idea is done correctly, through

proper media, and within a particular time constraint, it can attract more customers. In

addition, advertising sparks an interest of advertised products and services in the masses.

Interest can create demand in the market. Thus, the growing demand soon results in higher

sales so it is important to advertise to increase sales and improve product awareness.

Another article entitled "Importance of Advertising in Business", Greene, Felicia also stated

the importance and benefits of advertising in business:

The research stated that businesses, companies, and corporations use advertisements in

diverse media as well and not only in traditional venues such as newspapers, magazines

and etc. The reason for this is because advertising is one of the most effective ways to let

consumers know about limited time sales and event promotions. This research found that

businesses who frequently use advertising are able to better showcase that their products

are more beneficial and effective compared to other products, resulting in a higher sales

volume compared to their competitors.

In addition an article entitled "Importance of Advertising in Today's World", Taylor, Robin

(1996) also explained the importance of advertising in today's world:

buy a particular product. In the article, it was stated that people can be differentiated by

how they encounter advertisements from different medias. In other words, the consumers

who look at advertisements at newspapers or more traditional medias are different from

those who use the internet. The article also states that even though advertising is

successful, it is impossible for the customer to provide feedback on products asked

personally. The researchers conclude that advertising may come in many forms and it is

very important to a business since this would help increase sales volume.

Moreover, an article published on smallbusiness.chron.com, Leslie McClintock also

discussed what the significance of sales is to a business, hence the title "The importance of sales in

an organization":

The sales department of any business establishment is the primary generator of revenue

therefore the effectivity and efficiency of the sales mechanism used will determine whether

the company will prosper or not. Sales must be well-compensated and supported by a

strong marketing strategy to be successful. Other sources of the firm's revenue include

operating income, royalties, dividend and interest income from financial assets, payouts

from insurance policies, and rental income. Investments such as these, however, wouldn't

have been purchased and maintained without the money obtained from sales efforts.

An infographic was presented on Khalid Saleh's article entitled "Effectiveness of online

advertising - Statistics and trends". It analyzes how online advertising affects a brand and how

customer respond to them:

in marketing methods as it is said to be extremely profitable for both small and large

businesses. Google, for example, acquires 95% of its revenue from online advertising but

not all banner ads posted online are viewed. Businesses continue to play the game,

nonetheless. By filtering failed ads and retaining good ones, no damage is done to the rate

of profit as a matter of fact, an increase of 31% in brand lift was attained. According to

statistics, products and services related to computer and technology received the most

feedback coming from male internet users aged 18-49.

"What type of advertising has the most influence?" was posted on Mitch Joel's digital

marketing blog Six pixels of separation by Mirum. It talks about why and how television

advertising is the most influential among all other forms:

Many believe that personal and interactive advertising such as online advertising is the

most effective medium of promoting a good or service but statistics say otherwise.

According to Deloitte's fifth edition "State of the media democracy" survey, 86% stated that

TV advertising still has the most effect on their buying decisions. Internet and social media

enhances the overall television viewer experience as nearly three-quarters of consumers

have their television on in the background while they are online, talking on cellphones, or

sending text messages. Joel concluded that television is still a powerful advertising tool

despite technological advancements today.

The last article entitled "Sales revenue and related terms explained" which was published on

Building the business case analysis, the relation of sales revenue and profit to a business is tackled:
 Sales revenue refers to the sum of money to be received or received after a sale of a good or

service. A company's growth and financial performance relies heavily and is measured

through this by calculating important metrics such as gross profit, operating profit, and net

profit. Sales revenue also plays a major role in business planning and business analysis and

helps define the company's objective for growth, market share, and market position.

Furthermore, potential investors consider an establishment's ability to grow sales revenue

and profits when buying shares of stocks. When a firm has these traits, it can reap the

benefits of having people invested in the company.

The review of related literature of this study showed the different effects of advertising

and how it contributes to the increase or decrease of the sales volume of a product. The results of

these studies will help provide a clearer understanding of the effects of advertising and serve as a

reference for this research