JOURNAL OF LIAONING TECHNICAL UNIVERSITY

EFFECT OF ADVERTISEMENT COSTS ON THE PROFITABILITY OF SMALL AND MEDIUM SCALE ENTERPRISES IN ADO-EKITI

Ajaja, Olukayode Babafemi

Abstract

This study investigated the effect, if any, of advertisement costs on the sales of products or services and hence on the profitability of some selected small and medium scale enterprises in Ado-Ekiti Ekiti State of Nigeria. The investigation was carried out on five (5) small-scale enterprises randomly selected for the study. Personal interview was used to collect information from the Managing Director and Sales Managers. The instrument was designed to enable researcher answer questions related to research questions and hypothesis of the study. Responses for specific items were tabulated and mean and standard deviations were used to describe the study. The t-test statistical method was employed to test the hypothesis at 0.05 level of significance. The findings of the study are as follows: the impact of media advertisement cannot be overemphasized. It was also found out that advertising is not wasteful but it creates awareness to consumer of good and promotes sales. There was a high increase in the volume of sales after advertisement was made. This indicates that the more an enterprise advertises its product, the more the increase in volume of sales.