Advertising effectiveness in the South African motor industry

Bendixen, Michael Thomas
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This research was aimed at examining in detail, advertising effectiveness in the South African Motor Industry over the period 1977 to 1985. In examining previously used methodologies, significant theoretical deficiencies were found in both the econometric and time series approaches. The literature is sparse on the integration of the two approaches and an integrated model form was developed as the measuring instrument for this research. As a consequence of the integrated model form, three distinct theoretical advertising effects were identified: viz: - brand loyalty; - current effects (simple and compound.); - carryover effects. The inherent nature of these effects was related to the degree of involvement and the affective or cognitive aspects of the purchase decision. Consequently, the positioning of products on the FCB grid was used to hypothesise the type of advertising effect that could be expected. In addition, the Schultz and Wittink framework was used to hypothesise market advertising effects. Application of the integrated model to a sample of motor industry data clearly indicated that advertising effects in the motor industry were characterised by: - dominantly "current" effect forms; - the presence of competitive effects; - dominantly primary sales effects. Further analysis of the data indicated that a strong negative exponential relationship existed between the extent. to which a medium was used and the advertising effectiveness of that medium. This is indirectly supported by other research findings and by the law of diminishing returns and led to the following propositions: (a) The creative devices and content of an advertisement determine whether or not that advertisement will be effective but not the magnitude of the effect. (b) The magnitude of the effect of an advertisement is dictated by the extent to which the medium in which it is placed is used. The greater the extent of usage of the medium, the less the effectiveness of that medium. Feedback, i.e. sales influencing advertising expenditure, was commonly found in the development of the models.
A thesis submitted to the Faculty of Business Administration, University of the Witwatersrand, Johannesburg, in fulfilment of the requirements for the degree of Doctor of Philosophy. April 1991.