IMPACT OF ADVERTISING ON CONSUMER PATRONAGE IN PETROLEUM PRODUCTS OF SHELL PETROLEUM NIGERIA PLC

PROJECT TOPIC- IMPACT OF ADVERTISING ON CONSUMER PATRONAGE IN PETROLEUM PRODUCTS OF SHELL PETROLEUM NIGERIA PLC

Abstract
This research study was set to find out the impact of advertising on consumer patronage in petroleum products of Shell petroleum Nigeria Plc. The study adopted descriptive survey research design to elicit information from the employees of Shell petroleum Nigeria Plc. The study made use of 100 workers in Shell petroleum Nigeria Plc. Port Harcourt, hence no sampling. Data was collected using the questionnaire and was analyzed and calculated with frequency mean. The findings from the data analyzed showed that advertising is an important aspect of a business. The effects of advertisement on the patronage of petroleum products of Shell Petroleum Nigeria Plc. is one that the company should not be overlook as corporate social responsibility is another effective means of advertising petroleum products of Shell petroleum Nigeria Plc. Hence, educating consumers on new entry in the market creates awareness on the use of such products. From the study, people’s culture has a way of affecting advertising as well as patronage of petroleum products. From the findings of the analyzed data, it proved that demand and pricing factor in marketing of petroleum products affects the customer patronage of Shell Petroleum Nigeria Plc. The study concluded that advertisement has positive impact on the patronage of petroleum products of Shell Petroleum Nigeria Plc., as the extent to which Shell petroleum products are advertised helps in sustaining relationship in product of Shell Petroleum Nigeria Plc; and finally ascertaining ways of improving the volume of sales of petroleum products of Shell Petroleum Nigeria Plc.; and finally recommended that Shell Petroleum Nigeria Plc should incorporate corporate social responsibility as a way of giving back to the people, as this will increase customer patronage of Shell petroleum products.

CHAPTER ONE
INTRODUCTION

Background of Study
Oil exploration began in Nigeria in 1908, although the documentation of the occurrence of minerals was reported some five years earlier in 1903. The exploration efforts were punctuated by the two wars but eventually yielded result with the discovery of oil in Oloibiri in 1956 by shell – BP. Production increased from a mere 5,000 barrels per day (bpd) in 1957 to 17,000 bpd by independence in 1960 and leap flogged to 450,000 bpd by 1966. Although this upward trend was slowed by the civil war, by 1970 daily production had reached one million barrels.

A peak production level of 2.4 million barrels per day was achieved during the second quarter 1979. Production had fallen since then to the current 1.611 billion bpd both on technical grounds and adherence to OPEC quota brought about by the need to control production to support prices. Government’s interest in the oil industry was handled by a number of government departments of petroleum in the ministry of mines and power 1970.

Although the Nigeria National Oil Corporation (NNOC), the forerunner to the Nigeria National Petroleum Corporation (NNPC), was formed in 1971 primarily to market. Nigeria crude oil, government’s direct involvement in the marketing of oil did not begin until 1973 that was when the government started having its own equity crude acquisition of participation interest in the operations of the oil companies.

The government initially sold back the bulk of its participation oil to the foreign oil operation companies through a buy-back arrangement. Under this arrangement, the government sold back 50 percent of its equity crude oil to another companies at a concessionary price to help cushion the effects of its participation and to enable the companies meet previous long term commitments.

It sold another 25% of its oil to the company’s option oil. The remaining 25% was sold to third party customers, that is, those buyers with no concession or stake in the country. The buy-back arrangement with the producing companies terminated in December 1975 giving way to a formal sales agreement between the NNOC and the various producing companies operating arrangement in all OPEC countries was meant as an interim arrangement to ensure the oil producing countries some access to government crude oil hitherto controlled and disposed by the companies and partly to enable government and it’s agency gradually develop the framework, for international oil sales.

The NNPC therefore had to develop avenues other than through international majors for disposing its crude oil. Hence NNOC entered into sales agreements effective in September 1973 with two independence oil companies namely, Gelsenberg (a German Company) and Termco can American oil company). The total sales of 40,000 bpd to these two companies represented the first successful efforts in direct marketing of govt. crude to third party buyers.

The second attempt at direct marketing took place during the lasting quarter of 1973 which coincided with the energy crises bought on by the Arab-Israeli war. The Crumble to purchase Nigerian crude oil brought as many as 113 foreign companies in a purchase bid. However, the four successful companies having initiated their contracts on December 22, 1973 failed to sign the contracts in January 1974 when invited to do so on the grounds that the 22 60 per barrel prices was higher than what they could live with.

The only new oil sale contract entered into during the oil crises was with the Ghana government which started oil lifting in Nigeria in the February 1974. The 10,000 bpd contract on the basis of government to-government contracts as consumer government in both the developed and developing nations besieged NNPC in the wake of oil shortage during the 1973 Arab oil embargo.

The oil shortage of 1979 following the sales to independent oil buyers and government of consumer countries.
The cyclical market downturn of 1976-1978 shared the independent oil as mere fail weather friends who besiege you when the trading merging are good but are the first to varnish at the slightest hint of a downturn. Between 1976 and 1978, during the world economic recession that followed the 1973 /74 four-fold oil price increases, about 65% of our direct sales went to the oil producing companies who had a stake in Nigeria.

In 1979 and 1980 when the oil market had improved substantially. There was a swing back to third–party customers and government to-government sales. Direct sales to the oil producing companies dropped from 65% in 1977 t0 3% in 1980 sales to third party customer’s and on government to government basis increased from 30% and 5% in 1977 to 43% and 18% respectively.

The collapse of the market in 1986 again witness a shift back to the oil producing companies averaging about 61% percent of oil sales while third party government to government sales dropped to 28% and 12% respectively.
The culmination of the givens back and forth from independent third-party buyers, most of them merely traders to oil producing companies let to the termination in early 1988 of all third parties contracts when almost all such third parties had stopped lifting during unfavourable market conditions. It was then decided by government to adopt a new sales strategy that would guarantee regular and secure outlets for the crude oil and steady flow of revenue.

Brief History of Infra Oil Nigeria Plc, Presently Shell Plc
INFRA oil Nigeria Plc is a leader among the major Nigerian marketers of refined petroleum products. The company was incorporated on the 8th of July 1975 following the acquisition of 50% equity share of Shell Nig Ltd by the federal government of Nigeria. Before this period, the company was operating as SHELL Trading Company Service 1927. By 1938, it existed as oil Storage Company of Apapa-OSCH and also existed as Shell Company of West Africa. Ltd by 1952, covering Nigeria and the English speaking West African countries.

The company registered as SHELL Company of Nigeria ltd in 1960 following the Nigeria’s independence and the companies Act of 1968 saw it converted to shell Nigeria limited. In the these transformations, the total equity holding was held by SHELL International petroleum company limited. Later, the company became jointly owned by federal government of Nigeria, and SHELL Petroleum Company Lagos limited following an arrangement reached in Lagos on Tuesday April, 1975 between the company and then Military Government of Nigeria.

INFRA Oil Nigeria Plc emerged as a result of this. Under the government the Federal Government has 60% interest, while shell Nigeria limited had 40% interest in the company.
As a result of this, the familiar SHELL Emblem was replaced by the Eagle-the Nigeria National Emblem. However, with the federal government sales of a third of its equity share holding in the company publicly quoted on the Nigeria Stock Exchange in 1989. From the foregoing, this study is set to find out the impact of advertising on consumer patronage in petroleum products of shell petroleum Nigeria.

PROJECT TOPIC- IMPACT OF ADVERTISING ON CONSUMER PATRONAGE IN PETROLEUM PRODUCTS OF SHELL PETROLEUM NIGERIA PLC

Statement of the Problem
Marketing efforts do not impact performance (product sales or market share) independently of each other. Marketing mix activities need to be coordinated because they interact to determine performance. This helps managers to take advantage of the complementarities and to avoid incompatibility between marketing mix instruments given constraints by budget and the variables themselves.

Nigerian consumers are increasingly becoming uneasily satisfying especially in the area of exposure to advertising messages. This is largely due to their expectation of good value for the money spent. Marketing is totally about customers; hence the core mission of marketers is to provide the solution to customers’ needs and wants by identifying and meeting them.

There are four main factors on which marketing have been built up; these are four elements of the marketing mix: place, product, price and promotion. Advertising, as a component of the promotional mix further enhance creation of customers’ awareness towards organizational products and then the need to patronize such products if it meets the needs, expectation and satisfaction of the consumers.
Purpose of the Study
Generally, this research work is set to find out the impact of advertising on consumer patronage in petroleum products of Shell petroleum Nigeria Plc. Specifically, the researcher seeks to:
1. Examine the advertising strategy adopted by Shell products to enhance consumer patronage.
2. Investigate the effects of advertisement on consumer patronage of petroleum products of Shell Petroleum Nigeria Plc.
3. The extent advertising helps in sustaining retainership in product of Shell Petroleum Nigeria Plc.
4. Ascertain ways of improving the volume of sales of petroleum products of Shell Petroleum Nigeria Plc.
Significance of the Study

The information from this study would help the government carry out a more purposeful and result oriented planning, control and evaluation of the petroleum industry with a view to enhancing consumerism.
The dealers and various oil companies through this study and findings would know what customers want in terms of services offered and the availability of products as and at when required.

The information from this study will be useful to the institution and individuals in the petroleum industry, highlighting some of the problems and the solutions. It will add to the body of knowledge in the academic institutions; serve as guide for further research work and broaden and enlighten the knowledge of the researcher of this work. Finally, this study would encourage the use and application of marketing research as a tool for business decision-making.
Research Questions
The following research questions guided the study:
1. What are the advertising strategy adopted by Shell products to enhance consumer patronage?
2. What are the effects of advertisement on consumer patronage of petroleum products of Shell Petroleum Nigeria Plc?
3. To what extent does advertising help in sustaining retainership in product of Shell Petroleum Nigeria Plc.?
4. What are the ways of improving the volume of sales of petroleum products of Shell Petroleum Nigeria Plc.?
Scope of Study
This research work is on the impact of advertising on consumer patronage and shall cover the petroleum products of Shell petroleum Nigeria Plc.

PROJECT TOPIC- IMPACT OF ADVERTISING ON CONSUMER PATRONAGE IN PETROLEUM PRODUCTS OF SHELL PETROLEUM NIGERIA PLC

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