The effects of advertisement on organisational profitability in the fashion industry in Ghana

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The fashion industry involves the design, manufacture, sale, advertisement, distribution and promotion of different types of attire. Preston (2013) conducted a research on the returns of advertising in the fashion retail industry in the United States. There are many independent variables that affect the profitability of a company that were not captured in the research. This research thus seeks to find out if there are other determinants that affect profitability. The objectives of the study is to investigate the nature of advertisements used in the fashion industry in Ghana and the trend in profitability in the fashion industry in Ghana from 2008- 2012. It also seeks to find out the causes of profitability in the fashion industry in Ghana as well as the effect of advertisement on the profitability of fashion industry in Ghana. A sample size of 146 out of a population of 420 students and proprietors from 20 fashion institutions was used for the study. Purposive and snowball sampling methods were used. The research found out that the main types of advertisement employed by fashion institutions in Ghana were radio, television, banners and billboards while the benefits of promise and the picture used were components of a good advert. The causes of profitability in the fashion industry were from fees and other administrative charges that students pay as well as other income generating activities undertaken by the various schools. There was a general increased trend of profitability in the fashion industry in Ghana over the last five years. Advertisement had a positive effect on profitability in the fashion industry in Ghana since it led to an increase in profits. The study recommends that fashion institutions in Ghana should use modern means such as the social media in advertising. They should also use celebrities in their adverts.
A thesis submitted to the Department of Marketing and Corporate Strategy, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the award of Master of Business Administration School of Business, College of Arts and Social sciences ©November 2014