The Effects of Advertising Media on Sales of Insurance Products: a Developing-Country Case

The heart and souls of advertizement media on gross gross revenue of indemnification convergences a develop-country case S. A. Aduloju subdivision of Insurance and Actuarial Science, University of Lagos, Lagos, Nigeria A. O. Odugbesan Formerly of Department of agate line Administration, University of Lagos, Lagos, Nigeria, and S. A. Oke Department of Mechanical Engineering, University of Lagos, Lagos, Nigeria Abstract Purpose Characterized by declining thanksgiving and exemplified sagaciously drop in gross subsidy, the Nigerian redress intentness, in recent seasons, has experienced turbulent economic ch all(prenominal)enges that necessitated re-engineering of its core activities.However, ad and gross gross revenue atomic frame 18 core activities, which argon important predictors of stability and growth in the restitution sedulousness. Consequently, the purpose of this makeup is to examine the push of de n unitary on sales of restitution merchandises. Desi gn/methodology/approach An empirical probe is carried out using a survey that utilizes headingnaires, interviews, and field observation as major look into instruments. A total of 71 indemnity companies in Nigeria, which represent the total operating damages companies in Nigeria at the time of version, were surveyed.With one hundred scientifically selected subjects judged, descriptive analytic thinking was employed to understand the blood and the strength of much(prenominal) births. Findings It was found that announce had cause on sales good deal and make betterd unexclusive interpret. However, the excerption of advertizement forte, the centre, and the format are comminuted ingredients of a achievementful advertizing program in the redress manufacturing. Research limitations/implications The amends industry in Nigeria was studied from a holistic viewpoint due to the pick out to present reliable and detailed entropy for decision makers.However, limit ation in achieving this relates to the reluctance of respondents to release breeding for the study. bunking implications The implication of this question is that proper control of advertisement budget vis-a -vis the pass judgment sales volume could be made. Thus, organizations could spend budgets to a greater accomplishment effectively on growth enhancing projects instead of excessive wastage of funds on advertisement. Originality/value This paper seems to be the first original work that concerns the impact of advertize on sales in the Nigerian indemnification industry.As much(prenominal), it link ups a rupture that is opened for investigations. It may be of great value to decision make trying for control excessivelyls. Keywords Insurance, Nigeria, advertizement media, Sales concern Paper fictitious character Research paper 1. Introduction Over the geezerhood, in that watch over has been tremendous lour in the good lead of the Nigerian insurance industry as a r esult of pitiful performance in the payment of insurance claims. The sharp drop in gross premium exemplifies this problem. Randle (2003) estimated a decline of much than 89. 4 per centum in the 1999/2000 comparative periods.This decline may throw worsened as a result of the global economic crisis. on that point is thitherfore the deprivation to advertise insurance products in ensnare to add sales. Unfortunately, no reliable records exist on the impact of announce on sales of insurance products, thus suggesting its strong need. The need to examine the impacts of publicizing on sales volume is only strengthened by the probatory value of the total premiums gene rankd in Africa, which originated in South Africa (84 share) magical spell whole an insignificant value (16 share) is partly contributed by Nigeria.Thus, with the enormous publicise employment of goods and runs, it becomes needful to know if such ingestions justify sales volume obtainable from the adverti sement efforts. Luo and Donthu (2005) identified announce media and spending inefficiencies in generating sales, and concluded that top degree centigrade marketers publicize spending in print, broadcast, and outdoor media are non expeditious and could bring in 20 pctage more sales. Sadly, the case relating to insurance products was non treated. Also, on that point is a strong need for understanding the impacts of advert on sales volume.Furthermore, although empirical induction in major markets of the arena shares a significant relationship betwixt advertisement and sales volume, in that respect is no reliable data and info on the subject in developing countries such as Nigeria. The absence of this information provides a broad gap and poor understanding on the effectiveness of advertisement on sales. The purpose of the study is to investigate the impact of publicizing on the sales of insurance products. Advertising ranks among the major tools of promotion in general a nd sense in particular.The study investigates if there are good advertisement opportunities insurance industry can make use of, and examine the various advertize media comm yet utilise by the insurers with particular reference to Nigeria. How would the customers know that a particular product lead satisfy almost needs unless(prenominal) such is communicated to them? As a pivot of economic training, insurance certainly has a major role to play. The issue now is that the sector performance is far below expectation. An important question is why?Is there any congenital difficulty in growing and promoting this business in developing adult male beings? Very many factors father been put forward for this performance, and it should be mentioned that it is not the intention of this study to discuss them. It is important, however, to find out the effectiveness of the selection of advertizement media on the sales volume of insurance organizations. A study of this nature may prove to be of immense benefit to industry managers on how to make imperious impression about their business and product given the dynamic nature of our socio economic environment.Past studies reveal a fair strong relationship between advertize investments and sales. Twedt and Knitter (1964) observed some relationships between larger investments in print media and profits. Sturgess and Young (1981) identified the direct relationship between sales and announce expenditures as more relevant to a connections performance variables than any some other(a) test of confabulation effectiveness of denote. Perreault and McCarthy (2000) admit that one of the methods of touchstone advertising effectuate is to gauge sales.Schultz and Wittink (1976) revealed that although some studies have addressed a positive influence of principal(a) advertising on primary demand, no conclusive empirical evidence has been brought to bear on the major premise. It is and then the goal of the current work to bridge this important gap. The effects of advertising media JRF 10,3 The paper is sectioned into the by-line introduction, methodology, data depth psychology, and conclusion. The introduction provides an insight into the significance of the problem and the need to bridge the knowledge gap. fragment 2 presents the methodology, which provides the framework for the presented study. In Section 3, data analysis is presented based on the results of the survey instruments. Section 4, the final section, provides concluding remarks. 2. methodology The aim of this research is to carry out an empirical investigation of the extent to which advertising affects sales. This is a survey research whose objectives are to find answers to the followers research questions, and test the relevant hypotheses. This section presents the methodological approach choose to gather relevant data prerequisite for this study. . 1 Study population, sample design, and research instrument The Nigerian Insura nce Digest, 2006 indicates that there were 96 insurance companies operating in Nigeria as at December 31, 2006. zero(prenominal) ready(prenominal) records confirm that spick-and-span companies have been formed since, except for the issues of mergers and sciences that characterized the recapitalization/consolidation exercise. A total of 71 companies have since emerged from this exercise. The study population embraced all the stave engaging in market, frequent relations, and advertising in these 71 insurance companies.Most of these companies are direct insurers since they withdraw directly with the members of the public. Reinsurance companies, though, too engage in advertising activities, were excluded from this study because their impact or contact with the members of the public is indirect. Since it would not be feasible to contact all the ply that represents the population for the study, taste method was used, and the study was limited to Lagos land, the commercial center of Nigeria. A sample of c subjects selected from some insurance companies in Lagos was used.The sampling method was used to avoid bias in the selection procedure, and to achieve maximum clearcutness for a given outlay of resources. Essentially, two research instruments were used questionnaire and interview. For the questionnaire, nose candy copies were distributed to respondents selected from various insurance companies in Lagos, Nigeria. In order to ensure high up reception ratio, the questionnaires were administered personally. To achieve this a account of contacts have been made to the management of those companies soliciting for their cooperation.Also, diligent sustenance was exercised to avoid ambiguity in drafting the questionnaire. personalised interview was conducted with selected executives in the insurance companies (Dillion et al. , 1994). The face-to-face contact with respondents assisted in obtaining high quality data since more information is communicated be tween human beings communicating directly with each other than using other content. 2. 2 Method of data analysis The research proposed to use such descriptive statistics as simple pctages to compute the data obtained.For hypothesis testing, coefficient of correlation would be employed. Lucey (2002) highlights the benefits of using correlation coefficient when trying to analyze in hooklike and dependent variables in order to understand the relationship between them. The correlation coefficient reveals the strength of such The effects of relationships. advertising media 2. 3 Restatement of research questions The research questions are as follows RQ1. Is a alliances failure to use advertising a result of lose of good advertising opportunities?RQ2. Do the results of other promotional tools affect the use of advertising? RQ3. Is the use of advertising dependent on the measurability of its results? RQ4. Is there any relationship between advertising expenditure and sales frame? 2. 4 Re search hypotheses The hypotheses stated will be used to test the relationship between sales figures and advertising figures (Asika, 2006). The statistical procedure is to state the null hypothesis (H0), which is to be followed by the substitute hypothesis (H1).While a H0 is a statement that no channel has occurred from the embodiment specified, the H1 is a reversal of a H0. Thus, if in hypothesis testing, a H0 is rejected, then, the H1 will be occupyed H0. on that point is no relationship between advertising expenditure and sales figure. H1. in that location is a relationship between advertising expenditure and sales figure. 2. 5 Research design The research uses beta research design in order to gain insights into the subject studied. The research design is that of descriptive survey.It is meant to assess the importance attached to advertisement by insurance organizations. Specifically, the research design would reveal availability of good advertising opportunities for insura nce firms, factors affecting a firms decision to use advertising, relationship between advertising and high societys performance in terms of sales volume, and justification of advertising expenditure, using profit as the bottom line. 3. Data analysis In Section 2, it was mentioned that empirical investigation would be carried out on the extent to which the choice of advertising culture medium affects sales.The summaries of the results of the survey questions, and how these answer the stated research questions are presented in this Section 3. In fact, we will like to find out whether a high societys failure to use advertising is a result of drop of advertising opportunities, whether the use of advertising is dependent on the measurability of its results, and whether there is any relationship between advertising expenditure and sales figure. These results similarly attempt to seek support for the hypothesis stated. 3. 1 resolution rate and respondents characteristicsA total of 1 00 copies of the questionnaire were distributed to respondents. The challenges of recapitalization in the insurance industry, and subsequent rearrangements including the necessary formalities made the task of getting JRF 10,3 audience difficult. A total of 84 questionnaires were collected out of which two were found unusable for the purpose of analysis. The answer rate of 48 part was thus achieved. The results were study with the use of the pursuit statistical procedures (1) the frequency diffusion of some parameters (2) the percentages of the parameters studied and 3) sedan charts were to a fault used for further illustration of some of the results obtained. The first five questions of the questionnaire deal with the characteristics of the respondents, specifically their bio data. These are presented in circumvent I. Out of the 82 respondents analyzed, 50 are males small-arm 32 are distaffs. The sample members were conveniently selected at random, rather than based on quo ta. Since 61 percent of the respondents are males and 39 percent are females, should one conclude that 61 percent of the hands in the insurance industry is male and 39 percent female?This is an interesting possibility due to the fact that a good publication of females prefer to be self-employed in order to care for their theme responsibilities. From set back II, absolute majority of the respondents are 40 years and below, an overcome 89 percent (i. e. 44 percent for below 30 years, and 45 percent for age bracket 31-40). About 11 percent of the respondents are in a higher place the age 41, while none of the respondents is over 60 years. This analysis suggests that creative and dynamic personnel selling and public relations functions of these insurance companies.The analysis shows 43 single and 39 married persons indicating 52 and 48 percent respondents, respectively ( dining table III). This is a fair distribution. From shelve IV, 46 of the 82 respondents throw higher nati onal diploma and degrees, 14 respondents own higher degrees in form of MSc/MBA, and 16 respondents possess professional dexteritys. Sex itemize percent evade I. Male 50 61 Sex distribution Female 32 39 of respondents summation 82 100 long time get plowshare card II. Age distribution of respondents Below 30 years 31-40 years 41-50 years 51-60 years union 36 37 6 3 82 44 45 7 4 100Marital status derive percentage postpone III. Marital status of respondents champion Married wide 43 39 82 52 48 100 The fact that only six respondents (a classical 8 percent) possess national diploma and below shows that merchandise and public relations production line in the insurance industry is taken over by professionally and academically qualified personnel. From put over V, 71 respondents (which is 87 percent) have not more than ten years working experience, while those having more than 16 years working experience constitute only 4 percent. no(prenominal) of the respondents howeve r, have worked more than 25 years. 3. Descriptive statistics of the sample responses In presenting the data obtained in response to section B of the questionnaire, we will use tables of percentages as well as bar charts. A cumulative of 91 percent make that insurance is necessary for socio-economic development while a mere 4 percent dis equalise ( dishearten VI). One may conclude that majority of the respondents believe that insurance has a vital role to play in an economy. Here, again, Table VII shows that 91 percent agree that the Nigerian public is apathetic toward insurance purchase, while a mere 5 percent could not agree. A total of 69 respondents (20 ? 9) agree that the direct of insurance sales in the country is not encouraging, which is 84 percent of the respondents (Table VIII). On the other hand, 10 percent of the respondents protest. This naturally confirms the response presented in Table VII indicating that the Nigerian public is apathetic toward insurance purchase. Academic reservation hail Percentage WAEC/NECO/GCE National diploma HND/BSc MSc/MBA Professional qualification good 3 3 46 14 16 82 4 4 56 17 19 100 Table IV. Academic qualifications of respondents The effects of advertising media Length of service repress Percentage Below 5 years -10 years 11-15 years 16-20 years 21-25 years Total 48 23 7 2 2 82 59 28 9 2 2 100 Table V. Length of service/working experience of respondents Response make out Percentage powerfully agree withstand indeterminate powerfully disagree Total 37 38 4 3 82 45 46 5 4 100 Table VI. Insurance necessary for socio-economic development JRF 10,3 About 49 percent believe that insurance performance follows the fortunes of the other sectors while 27 percent disagree (Table IX). The interesting thing is that 24 percent could not state whether or not the insurance industry performance depends on the performance of the other sectors.Here, respondents were allowed to choose more than one factor they considered as res ponsible for the low sales of insurance products. In order of frequency, low level of awareness, poor industry image, high level of illiteracy, and low per capital income top the list with 73, 57, 45, and 45 percent, respectively (Table X). These factors are represented on the bar chart ( systema skeletale 1). About 67 percent of the respondents agree that the principles involved in marketing tangible products apply with commensurate force to marketing intangible products such as Response Number Percentage Table VII. Whether public is pathetic toward insurance potently agree pair Undecided potently disagree Total 12 63 3 1 82 14 77 4 1 100 Response Number Percentage Table VIII. Level of insurance sales in Nigeria not encouraging powerfully agree Agree Undecided Disagree Total 20 49 5 8 82 24 60 6 10 100 Reponses Number Percentage Table IX. Performance of insurance Strongly agree Agree Undecided 7 33 20 9 40 24 industry dependent on the performance of other sectors Disagree Stron gly disagree Total 17 5 82 21 6 100 Factor Number Percentage modest per capital income Low level of awareness 37 60 45 73 Table X. Factors responsible for ow sales of insurance High level of illiteracy unearthly beliefs Poor industry image Availability of substitute 37 23 47 4 45 28 57 5 100 90 80 70 60 50 40 30 20 10 Poor image Substitute insurance while 33 percent disagree (Table XI). One may assert that while marketing principles are universal, their application to categories of products varies. either the respondents confirm that their companies have marketing or public relations department (Table XII). This shows that the issue of marketing or public relations is given adequate attention with staff designate specific responsibilities.An overwhelming 93 percent of the respondents agree that their companies engage in one form of advertising or the other (Table bakers dozen). It shows that companies could no long-life be content with the provision of goods and services alone , they also see the need to inform the general public of their existence and the benefits they offer to the society. From Table XIII already discussed above, six respondents confirm that their companies do not engage in any form of advertising. In response question 9 on the questionnaire asking for the reasons, they pointed to the factors shown in Table XIV.Out of the six respondents, three chose preference for other promotional tools, four chose high approach of advertising, and two chose difficulty in measuring advertising Low income Low awareness Illiteracy organized religion Response Number Percentage Yes No Total 55 27 82 67 33 100 The effects of advertising media figure 1. Chart showing factors responsible for low sales of insurance products Table XI. Can the principles involved in marketing tangible products be use to insurance marketing? Response Number Percentage Table XII. Does your confederacy have Yes 82 100 marketing or public Total 82 100 relations department? Respo nse Number PercentageTable XIII. Yes 76 93 Whether respondents No 6 7 companies engage in Total 82 100 advertising activities JRF 10,3 effects on sales. Interestingly, none chose omit of good advertising opportunities as a reason for not advertising. This means there may be good advertising opportunities, but measuring the effect of advertising on sales is a problem. In response to the question on advertising objectives, 72 percent of the respondents chose inform the public about the company, 55 percent chose accession sales, and 52 percent chose improve companys image among the major objectives of advertising (Table XV).From the above analysis, increase in sales is the leading advertising objective, apart from giving information about the company. Ranking in frequency, newspapers, radio, and magazines are the most favored advertising media with 79, 59, and 49 percent, respectively (Table XVI). These and other media used are presented on the bar chart (Figure 2). The analysis abo ve indicates that 51 percent of the respondents reveal that developing advertising activities is a joint responsibility of the companys staff and the advertising agencies (Table XVII).About 41 percent of the respondents show that it is entirely the work of advertising agencies while only 8 percent state that it is an internal responsibility. The report shows that insurance companies in developing their advertising program actively seek for the inputs of the advertising agencies. While only 5 percent of the respondents could not decide, a cumulative of 83 percent agree that the success of advertising activities depends on the integration of all marketing promotional tools. While no respondents strongly disagree, 12 percent disagree (Table XVIII).The 83 percent in symmetricalness point to the fact that there is the need for integration of all marketing communications in order to achieve good result. Response Number Percentage Table XIV. Reasons why some Preference for other promotio nal tools 3 50 companies do no High cost of advertising 4 67 advertising Difficulty in measuring advertising effects 2 33 Response Number Percentage Table XV. Objectives of advertising Inform the public about the company Introduce new product Increase sales Improve profitability Improve companys image 59 33 45 34 43 72 40 55 42 52 Response Number PercentageTable XVI. Advertising media used Radio Television Outdoor advertising crudespapers Magazines journals 48 24 29 65 40 21 59 29 35 79 49 26 The effects of advertising media Figure 2. Bar chart showing the prefer advertising media Radio TV Outdoor Newspapers Magazine daybooks 100 10 20 30 40 50 60 70 80 90 Response Number Percentage (a) Advertising staff (b) Advertising agencies (c) Both (a) and (b) above Total 7 34 41 82 8 41 51 100 Table XVII. Those responsible for developing advertising activities Response Strongly agree Agree Undecided Disagree Total Number 23 45 4 10 82 Percentage 8 55 5 12 100 Table XVIII. Whether advertisi ng success is dependent on the integration of all marketing promotional tools From Table XIX, an overwhelming majority of the respondents agree that the choice of advertising medium is critical to the success of advertising activities. This is indicated by the sum of 20 percent for strongly agree and 70 percent for agree respondents making 90 percent. While 6 percent could not decide, a mere 4 percent disagree. Insurers therefore will have to pay attention to the medium selection if their advertising objectives are to be met.In Table XX, the respondents neither disagree nor strongly disagree with the effect that the choice of substance can make a discrimination between success and failure of any advertising activity. While only 1 percent of the respondents could not decide, 99 percent agree with the thought that the choice of message is critical to any successful advertising program. Again, insurers need to pay attention to the message in endeavoring to reach the public. JRF 10, 3 About 96 percent of the respondents support the notion that advertising has made positive impact on their company performance (Table XXI).This needs no further elaboration. owe to the importance of this issue, question 16 in section B was reframed again as question 17 with the aim of testing the genuineness of the respondents answer. Interestingly, as in Table XXI (which analyzed responses to question 16), 96 percent of the respondents affirm that advertising has had positive effects on their companys performance (Table XXII). Specifically, 73 percent of the respondents agree that advertising leads to increased sales, the figure which is marginally exceeded by 74 percent for favorable public image (Table XXIII).Also 61 percent of the respondents agree that advertising leads to increased political relation issue of prospects. This is presented in the bar chart shown in Figure 3. None of the respondents picked no for the answer, although it was include in the three options (Table XXIV). While 76 percent of the respondents believe that advertising expenditure is justify based on the results achieved, 24 percent could Response Number Percentage Table XIX. Strong agree Agree Undecided 16 57 5 20 70 6 The choice of advertising medium is critical to the success of advertising Disagree Strongly disagree Total 2 2 2 2 2 100 Response Number Percentage Table XX. The choice of message can make or mar advertising budge Strongly agree Agree Undecided Total 21 60 1 82 26 73 1 100 Table XXI. Whether advertising has impacted positively on company performance Response Yes No Total Number 79 3 82 Percentage 96 4 100 Response Number Percentage Table XXII. description of advertising effects on company performance Positive effect No effect Negative effect Total 79 1 2 82 96 1 3 100 not decide. One may align with the fact that advertising expenditure, if properly done, is not a wasteful resource, after all.The fact that only 27 percent agree, and 37 percent could not decide in support of the notion shows that advertising agents have a long way to go in measuring up to international standard (Table XXV). About 36 percent (30 ? 6 percent) disagree that advertising professionals are performing at population standard. Response Number Percentage The effects of advertising media change magnitude descend of calls received 10 increase fleck of prospects visits 50 Increased number of orders received 21 Increased volume of sales 60 Increased quantum of profits 31 Favorable public image 61 2 61 26 73 Table XXIII. 38 Specific effects of 74 advertising on companies Figure3. Bar chart showing effects of advertising 10 30 40 50 60 70 80 Calls Visits Orders Sales Profits Image Response Number Percentage Table XXIV. Yes 62 76 Going by the result, is Undecided 20 24 advertising expenditure Total 82 100 justified? Response Number Percentage Strongly agree 4 5 Agree 18 22 Table XXV. Undecided 30 37 Is performance of Disagree 25 30 advertising agencies in Strongly disagr ee 5 6 Nigeria is of international Total 82 100 standard? JRF 10,3 3. Analysis of research questions In Section 3, the research questions proposed in Section 1 were restated. These research questions, four in number, are analyzed as follows based on the information received from the respondents RQ1. Is a companys failure to use advertising a result of lack of good advertising opportunities? To answer this question, Table XIV (already analyzed somewhere above) is hereby represented in Table XXVI. In response to question 8 on the questionnaire, six out of the 82 respondents confirmed that their companies do no advertising at all.Question 9 asked for the reasons and four options were listed as follows (1) companys preference for other promotional tools (2) high cost of advertising (3) lack of good advertising opportunities and (4) difficulty in measuring advertising effects. From Table XXVI, none of the respondents chose option (3), i. e. lack of good advertising opportunities as the r eason for not advertising. One can therefore conclude that there are a number of advertising opportunities in the country for companies who care to advertise RQ2. Do the results of other promotional tools affect the use of advertising?Again, this question would be answered using the response analysis presented in Table XIV. Out of the six respondents whose companies do no advertising, three stated that it was because their companies preferred the use of other promotional tools. When compared with the sample size, which is 82, the speckle of the three respondents is too insignificant to infer a generalization. One could thus conclude that the results of other promotional tools do not negatively affect the use of advertising RQ3. Is the use of advertising dependent on the measurability of its result? apply Table XXVI, out of the six respondents who confirm that their companies do not advertise, two chose difficulty in measuring advertising effects as the reason. Again, this position of the two respondents is too insignificant when compared with that of the entire sample size of 82 RQ4. Is there any relationship between advertising expenditure and sales figure? In answering this question, the response to question 17 in the questionnaire will be used. The response as analyzed using Table XXIII (already analyzed somewhere above) is hereby represented in Table XXVII.Response Number Percentage Table XXVI. (Repeated) Reasons why Preference for other promotional tools 3 50 some companies do not High cost of advertising 4 67 advertise? Difficulty in measuring advertising effect 2 33 From this table, advertising has a number of positive effects on the organization. Among others, 74 percent of the respondents believe it has change public image, 73 percent believe it has increased sales volume and 61 percent believe it has increased the number of prospect visits. All these show a positive relationship between advertising and sales. 3. 4 Test of hypothesisThe hypothesis t o be tested is termed the H0 a statement that no change has occurred from the position specified for a hypothesis. If however we reject the H0, the H1 will be accepted. An H1 is a statement, which is a reversal of a H0. 3. 4. 1 Restatement of the hypothesis. H0. There is no relationship between advertising expenditure and sales figure. H1. There is a relationship between advertising expenditure and sales figure. In order to test for this hypothesis, data obtained from some insurance companies in respect of their sales figures (gross premium incomes) and their advertising expenditures for a five-year period was used. . 4. 2 Five-year figures of premium and advertising. These are shown in Table XXVIII. Our main objective is to test whether or not there is a relationship between advertising expenditure and sales volume. The statistical tool used here is Pearsons product moment coefficient of correlation denoted by r. This coefficient gives an indication of the strength of the linear r elationship between two variables. In our case, the two variables are (1) Advertising expenditure, which is the free lance variable represented by x. (2)Sales figures (gross premium income) which is the dependent variable denoted by y. Response Number Percentage The effects of advertising media Increased number of calls received 10 Increased number of prospects visits 50 Increased number of orders received 21 Increased volume of sales 60 Increased quantum of profits 31 Favorable public image 61 12 61 26 Table XXVII. 73 (Repeated) Specific effects 38 of advertising on 74 companies Year Advert expenditure (N bountifulness income (N ?) ?) 2001 7,532,670 1,145,565,930 2002 8,980,422 1,456,227,292 2003 10,581,702 2,048,360,018 004 14,216,019 2,825,270,405 2005 16,186,851 3,485,046,944 Table XXVIII. JRF 10,3 For ease of computation, the figures for both advertising and sales (premium income) have been approximated as follows XXXX X x ? 575 y ? 1 096 x 2 ? 71 369 y 2 ? 277 194 and xy ? 1 39 915 The formula for product moment correlation coefficient is P PP n xy 2 x y r ? rffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi ? 99 P P2 * P P2 n x2 2 x ny2 2 y harmonize to Lucey (2002), r can range from ? 1, i. e. perfective positive correlation where the variables change value in the same direction as each other, to 21, i. e. perfect negative correlation where y decreases linearly as x increases. Lucey states further that a strong correlation between two variables would produce an r value in excess of ? 0. 9 or 20. 9. If the value were less than, say 0. 5 there would only be a actually weak relationship between the variables. The value of our computed coefficient of correlation (r) is 0. 99.This indicates a actually strong positive correlation between the two variables, i. e. advertising expenditure and sal es figure denoted by x and y, respectively. The decision is that we reject the H0, which states that there is no relationship between advertising expenditure and sales figure, and accept the H1, which states that there is a relationship between advertising expenditure and sales figure. 4. Conclusions This study investigates how advertising could be used by the insurers to disseminate information on the vital role they play. The study concludes that .The image problem and the poor sales of insurance products are not necessarily the result of the disadvantageously economy but the failure to engage in marketing communications. . accentuation other roles of insurance as financial intermediation and supplement to governments efforts in providing social security will make it more attractive. . Greater benefits accrue when advertising is fully integrated into the whole ken of marketing communications. . There are good opportunities for the insurers to advertise their products, advertisi ng practitioners have not measured up to international standards. .For good advertising output, the message and format are the joint responsibility of the insurance staff and advertising agencies. . The major advertising media used by the insurers are the newspapers and the radio. The use of the lucre in Nigeria should be given due attention. . The choice of advertising medium is a critical success factor in any advertising activity. . The major effects of advertising on companies were found to include sales volume and improved public image. A number of obstacles militate against acquisition of growth in the insurance subsector, notably, hostile economic environment.Relentless advertising campaign can take a company to the next level of growth. The research has also shown that advertising expenditure is justified going by the positive effects such expenditure has on a companys performance. Furthermore, the message and the format have also been found to be critical ingredients of a successful advertising program. It is recommended that . The insurance executives should realize that their activities do not end with producing good services. Passing information to the public about their services and benefits thereof must be vigorously pursued through advertising. For sustainable competitive advantage there is a need for integration of all marketing communications, as this will reduce conflicts in organizations. . A on the alert blend of print and electronic media is very essential in order to properly serve each market segment. . Sales persons are the ones on ground since they are always in the field. Their inputs must always be sought while designing advertising message and format. . The lack of records regarding advertising budget and actual expenses is a problem in many insurance organizations.There is a need to keep adequate records of advertising expenditure, as this is necessary for proper evaluation. . The practitioners must promote other important roles of insurance such as savings, financial intermediation and provision of social security. . In the sports stadium of image laundry there can still be in return beneficial cooperation in the midst of competition among the insurers. . In this regard, the insurance industry as a whole should embark on an industrys advertising in order to promote subjects of common interest.This will also reduce the overall cost of advertising. In this work, a convenience sampling method is used. While the size of the sample is fairly large (100), a major limitation is that the sample is taken in Lagos one state out of 36. The fact that some major towns in the country (i. e. Abuja, sort Harcourt, Kano, and Ibadan) were left out could limit the degree of partness of the sample. However, the fact that Lagos is home to almost 90 percent of the headquarters of insurance companies in Nigeria makes the findings of this study representative of the population.Consequently, these findings would form a platf orm on which companies can base some of their marketing decisions. Future research could focus on the effects of furtherance and public relations on sales, and on the better methods of separating advertising effects from the total marketing effects. References Asika, N. (2006), Glossary of Terms and Concepts in Research and Statistics, maiden ed. , Maxwell, Lagos, pp. 50-8. Dillion, W. R. , Madden, T. J. and Firtle, N. H. (1994), Marketing Research in a Marketing Environment, 3rd ed. , Irwin, Chicago, IL, pp. 124-5. Lucey, T. 2002), quantifiable Techniques, 6th ed. , MPG, Bodmin, p. 96. Luo, X. and Donthu, N. (2005), Assessing advertising media spending inefficiencies in generating sales, journal of Business Research, Vol. 58 No. 1, pp. 28-36. The effects of advertising media JRF 10,3 Nigeria Insurers Digest (2005), Statistical ledger of the Nigerian Insurers Association, p. 47. Nigeria Insurance Digest (2006), Statistical Journal of the Nigerian Insurers Association, pp. 23-4, 43. Perreault, W. and McCarthy, J. Jr (2000), staple Marketing A Global Managerial Approach, 14th ed. , McGraw-Hill, New York, NY, pp. 51-6. Randle, J. (2003), Mergers and acquisition a survival strategy for the insurance industry, The Nigerian Insurer, November, pp. 14-18. Schultz, R. L. and Wittink, D. R. (1976), The step of industry advertising effects, Journal of Marketing Research, Vol. 13 No. 1, pp. 71-5. Sturgess, B. and Young, R. (1981), The sales response to advertising a reconsideration, Management and last Economics, No. 3, pp. 133-8. Twedt and Knitter (1964), What about the relationships among sales, advertising, and earnings, Journal of Marketing, Vol. 28 No. 4, pp. 68-9.Further reading Achumba, I. C. (1985), Sales Management Concepts, Strategies and Cases, rev. ed. , Mukugamu and Brothers Enterprise, Lagos. Achumba, I. C. (1995), Sales and Management Concepts, Strategies and Cases, inaugural ed. , Mukugamu and Brothers Enterprise, Lagos, p. 2. Asika, N. 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(1961), Application of the theory of marketing tangible goods to the marketing of insurance, Journal of Insu rance, Vol. 8 No. 1, pp. 41-4. Nigeria Insurers Association (2006), Where to Insure 2006, Nigeria Insurers Association, Lagos, pp. 28-43. Pappas, C. (2000), AdNauseam, Advertising Age, July, pp. 16-18. Polley, R. W. (1987), On the value of reflection in the distorted mirror, Journal of Marketing, Vol. 27 No. 6, pp. 104-9. Prisca, S. (2004), Developing public trust in insurance. A critical appraisal, Journal of Chartered Insurance Institute of Nigeria, Vol. 5 No. 13, p. 17. Rejda, G. (2002), Principles of Risk Management and Insurance, seventh ed. , Pearson Education, Delhi. Rejda, G. 2003), Principles of Risk Management and Insurance, 7th ed. , Pearson Education, Singapore, p. 20. Ryan, L. (1985), New distribution channels for microcomputer software, Business, October/December, pp. 21-2. Wikipedia (2006), The Free Encyclopedia, operable at http//en. wikipedia. org/wiki/Advertising Corresponding author S. A. Aduloju can be contacted at emailprotected com To purchase reprints of this article please e-mail emailprotected com Or visit our web site for further details www. emeraldinsight. com/reprints The effects of advertising media