Advertising Budgets and Multinational Companies: The Nigerian Experience

Abstract

Every business organization has an objective which is profit maximization and market growth. Manufacturers will always want to get to the final consumer and this can best be achieved through rigorous advertising processes. This study sought to find out the methods and techniques adopted by multinational companies like; the Nigeria Breweries Plc. Guinness Nigeria Plc, Nigerian Bottling Company Plc, Nestle Plc. and Cadbury Nigeria Plc, in the making of their advertising budgets on sales so as to achieve, profitability and increased market shares. In carrying out this study, literature in related areas were reviewed, questionnaire issued to the companies’ executives. The sample was 10% of the population and the technique was purposively based on positions and responsibilities. The study revealed that advertising appropriations, in the companies studied, were not made on speculations and hunches; but along the line of known conventional methods. The calculation revealed that at 5% level of confidence, x2 critical (3.8428) was less than x2 calculated (6.56) thereby upholding the hypothesis proposed, that multinational companies in Nigeria draw up their budgets through conventional budgetary methods. Based on the findings, we recommend that the most reasonable way of making appropriations is by a combination of various methods which if applied and appropriate media should be used so as to reach the actual consumers as this will reduce budget and most likely increase profitability.