CHAPTER ONE

INTRODUCTION
1.1 Background to the Study
Advertising presents the most persuasive selling message to the right prospects for a product or
service at the least possible cost (Dogudje, 2009). According to Kankarofi (2009) any company
that doesn’t advertise will die hence, the need for corporate/business organizations to sufficiently
appreciate the place of advertisement in the survival of their business. Kaufman (1980) asserts
that “advertising is not chemistry, with rules and laws that, if followed with reasonable precision,
will lead to predictable results every time. In other words, it’s not a panacea that can restore a
poor product or rejuvenate a declining market; it is not a substitute for sound business judgment
nor is advertising merely the words and pictures that appear in newspapers and magazines, on
billboards and on television screens (Kankarofi, 2009).
According to Robinson, cited in Ashkan, (2016) advertising is a prominent feature of modern
business operations. One can encounter advertising messages, while watching TV, reading
magazines, listening to the radio, surfing the internet, or even simply while walking down the
street, as advertisement has a stimulating influence on purchasing behavior of the customer. This
mammoth surge of advertisements from every possible source is basically to fulfill the urge of
marketers to reach to a large number of people so that their product may receive optimum
exposure. In addition, Ashkan, (2016) asserts that the role of this mass mode of communication
in creating brand loyalty, deterring entry and consequently increasing sales revenue and profits
of the organization and causing impact on the business cycle has been emphasized at various
points of time by different studies {Ozga, (1999); Sundarsan,(2007)}.
Broadly speaking, according to Greunes, Kamershcen, and Kllin,(2000), the role of advertising
expenses in an economy can be classified under two heads. According to one school of thought,
advertising increases profits and reduces consumer welfare by creating spurious product
differentiation and barriers to entry. While the other school of thought focuses on the informative
character of advertising, which makes markets more competitive and reduces profits by
informing the customers about prices and quality (Greunes, etal.,2000).
In the pre-historic era, advertisement appeared in the form of Egyptian papyrus with the
information of the upcoming sale of a slave. Advertising in those days was presented by written
or oral announcement touting a particular product or service. The oral advertising was spread by
some sort of barker. Besides papyrus scrolls and wax boards, the written advertising was
embodied in inscriptions on roadside rocks, as well as on buildings. As nowadays, there was a
promotion of almost everything - olive oil and amphorae to keep the oil, oxen, horses and other
livestock, tools and weapons (Frolova , 2014) . However, advertisement would probably would
not have expanded so much, without the era of mass communication. The first impetus for this
was typography. Another important development was the invention and subsequent spread
around the world of the art of photography in the mid- 19th century. A photograph has served as
an irrefutable proof of benefits of the advertised product. (Presbrey, 2009).
Meanwhile, the most important developments in the global advertising business were made in
the 20th century. It is no exaggeration to say that the 20th century was the “century of
advertising”- at that time there were profound changes and innovations in the field of technology
and advertising. It was the 20th century when advertising became this so popular – primarily due
to the unprecedented growth rate of world industrial production, as well as due to the appearance
of more and more sophisticated means of creating and distributing advertisements: multicolor
printing, analog and then digital radio, television, satellite communications, and finally,
computers and the Internet. Advertising is day to day becoming more professionally organized
and more quality performed (Presbrey, 2009).In spite of the import and evolution on advertising,
one cannot deny the fact that ultimate function of advertising expenses is to promote sales
revenue. That is why every organization with the expectation of earning return is investing
millions of naira or dollars on this mode of marketing communication (Ashkan, 2016).
Furthermore, Shahram, Narges and Ensieh (2013) opined that advertisement has positive
impact on insurance industry in term of opinion, image making, and information but nothing
was said evolving advertisement strategy, use of advertisement agencies that can give
advice on process and branding of the company and its services, since insurance is a service
industry. However, Aduloju et al , (2009) did not specify the need to streamline advertisement
to meet the need of the audience since advertisement is about the company, its products, it
people, tools and culture thus, the need to streamline insurance products for ease to engender
public acceptance which can improve the insurance industry on the long run.
According to Ashkan, (2016), it is important to adopt the measure of advertising in order to
mitigate major factors contributing to this undesirable performance; low levels of awareness,
general poverty levels and low incomes of the clients plus all the other extraneous variables like
educational background, religious belief and custom that could act as impediments to the
performance of the industry. This informed Yegon, and Nagib, (2016) assertion that there is
need for planning advertising messages, in a manner that suggests four general purposes is to
attract attention, create interest, and stimulate desire and pushing people to buy.
Financial challenges are constantly being experienced in Nigeria and accessing insurance or
government assistance has also being limited because of the economic downturn. According to
Ackah and Owusu (2012) people have very low access (about 4.1% ) to insurance which
excludes public health insurance. The low patronage of insurances is attributed to several socio-
economic development factors which usually pose challenges to insurance system, the most
obvious being that a majority of economically active people work in the informal sector (Ackah
and Owusu, 2012). Ibok (2012), also argue that socio economic factors such as age, sex, income,
access to health insurance information, education, age, marital status, sex, family size,
occupation are jointly contributed to the state of health care insurance system in Nigeria.
Daniels (2015) opined that Insurance industry over the years have not fully employ the tools of
advertisement as a measure of ensuring sale and share patronage but rather has relied on
regulators to ensure their survival, this has led to their underperforming hence, the need to fully
adopt self sustaining strategy to grow and developed . Daniels (2015) further argue that growth
in premiums and assets under management should be a natural consequence of policy changes
and their implementation by the regulator, coupled with the revitalization of the players by the
influx of fresh ideas and best practices by the foreign players.
Several policies and program have been put in place in the past to address the low performance
of the insurance industry, in spite of this the performance seems not have improve as many
Nigeria still shy away from taking insurance policy except they being compelled to do so.
Besides, the perception among Nigeria about insurance policy has been negative because of their
past experiences with many insurance companies hence this study intend to explore the impact of
advertising on the performance of insurance industry focusing on five selected insurance firms
including AIICO Insurance plc, Anchor Insurance Limited, Capital Express Assurance,
Cornerstone insurance Plc. and Consolidated Hallmark insurance plc .
1.2 Statement of Research Problem
Although advertising can play an important role in the economic growth, some economic still ask
the question such as, is money spent for advertising an undesirable allocation of society scarce
resources? Or put in another way is advertising an economic waste?
Some critics of advertising believes so, some said that the millions of naira wasted on
advertising could be used in establishing industries to give employment to the unemployed,
others said that the money used to produce good and portable drinking water and other social
amenities to the rural areas for a better standard of living for the people, yet other said such
millions could be used to build rehabilitation centers for the disables or the privileges, build
hospitals and providing drugs both in the rural and urban areas.
Some people argued that advertising has no important use to the economy, it should be noted
that advertising expenditure in the United States are currently at 2% to 3% percent of their gross
national product (GNP) Winter and Zeigher (1982, 12).
The traditional economic view that advertising is wasteful is based on assumption that customer
already possess perfect information and can make their choice without advertising.
The assumption is not true in the real world, because there are a lot of people who spent much
in seeking information about product or services daily this is because people do not have
complete information and they seem to go after such information.
Another problem of advertising is that, the difficulty of its evaluation, it is very difficult to measure
the effectiveness of advertising, the problem is the liability of identifying the possible result of
any given advertisement or even an entire campaign. Except in the case of mail-order
advertising, we cannot attribute a given unit of sale or services to any specific advertising or
campaign.
And as a result of heavy amount been spend on advertising cost of production increase in effect
higher prices is charge for a production of a commodity which is subsequently passed to
consumers, thereby decrease their demand for the product.
The main issue here is or what not clears about advertising to many people is whether
advertising has been doing its job affectively and that is the main concern of this write up.
Advertising research tries to clear this issue by measuring or attempting to measure advertising
effectiveness and the same time improve its efficiency.
Advertising effectiveness refer to the degree by which an advertising campaign help to achieve
overall marketing objectives. In other words, what we assume is that advertising has done
related to the objectives for which it is carried out.
If the gap between what on advertising campaign has achieved and what was expected to
achieve is narrow then we conclude that advertising campaign has been run several times, the
conclusion will be that the campaign has been ineffective efficiency on the other hand is defined
as the best possible use of the advertising budgeting and media mix in carryout and advertising
campaign.

1.4 Objectives of the Study

The general objective of the study is to examine the impact of advertisement on customer
patronage of insurance services in Benue State, the specific objectives are stated below;
1. To examine the impact of person- to- person insurance policy campaign on sales volume of
insurance services in Benue State
2. To examine the effectiveness of electronic advertising /promotional activities on sales
volume of insurance services in Benue State
3. To understand and measure the impact of advertising on insurance product awareness in
Benue State
1.3 Research Questions
1. What is the impact of person- to- person insurance policy campaign on sales volume of
insurance services in Benue State?
2. To what extent is the effectiveness of electronic advertising /promotional activities on sales
volume of insurance services in Benue State?
3. How has advertising impacted on insurance product awareness in Benue State?
1.5 Research Hypotheses
Hypothesis One
Ho: Person- to- person insurance policy campaign does not have impact on sales volume of
insurance services in Benue State.
H1: Person- to- person insurance policy campaign does not have impact on sales volume of
insurance services in Benue State.
Hypothesis Two
H1: There is no significant effect of electronic advertising /promotional activities on sales
volume of insurance service in Benue State.
Ho: There is significant effect of electronic advertising /promotional activities on sales volume
of insurance firms in Benue
Hypothesis Three
H0: Advertising does not have significant impact on insurance product awareness in Benue State.
H1: Advertising does have significant impact on insurance product awareness in Benue State..
1.6 Significance of the Study
First and foremost, the study is significant because of its expected usefulness to formulators of
insurance policy in Benue State. Since the enactment of the first insurance legislation in 1961,
several insurance policies and guidelines have been formulated, and new insurance regulations
enacted to encourage the development and sustenance of insurance consciousness and awareness
and ensure the penetration of insurance in Benue State. Most of these policies and laws have
failed to achieve the desired objectives. This study will serve as an eye opener to policy makers
by revealing the current level of insurance awareness and factors influencing or militating
against the cultivation of insurance awareness/habit in Benue State. It will also guide them in the
formulation and implementation of appropriate insurance policies and enactment of insurance
laws that will bring insurance services nearer to the people at the grassroots and inculcate good
insurance consciousness and habit into the Nigeria populace. Thus, this study will assist policy
makers in formulating policies that conforms to the objectives of enhanced growth and
productivity of the Nigerian economy.
1.7 Scope of the Study
The study covered advertising as the independent variable and sales performance as the
dependant variable, it is limited to the Nigeria insurance sector, We are measuring performance
in term of sale of insurance products, attractions of investor to patronize insurance share. This
will ensure increase capacity to underwrite risk on all part of our economic both oil and non oil
risk, development of the sectors to perform and enhance our fragile infrastructural through the
use of advertisement.
The issue of arriving at actual capital to write insurance business will continues to be an issue in
Nigeria but if adequate measure is taking to advertise the sector in this regard to general public
on opportunities and benefit, there will be mad rush to invest and the industry will be better for it
The study will depend on both primary sources, questionnaire for gathering data and secondary
data like journal, textbook and online sources. Our primary limitation is reluctant of insurance
companies to response to our questionnaires and also general public are also reluctant to fill our
query.
There is also the cost consequent of travelling to all the part of the country to examined broad
knowledge of insurance and not being able to ascertain the number of life assured in the Nigeria
insurance industry. Research material are limited in scope and also you have few sources you
can reviews also lack of accurate statistics is also an impediment. The tool of persuasion was
intensively use to lure respondent to responds to our query and will still implore researcher to do
same.
 CHAPTER TWO
LITERATURE REVIEW
2.1 Conceptual Framework
2.1.1 Concept of Advertising
Advertising is the practice and techniques employed to bring attention to a product or service.
Advertising aims to put a product or service in the spotlight in hopes of drawing it attention from
consumers. It is typically used to promote a specific good or service, but there are wide range of
uses, the most common being the commercial advertisement.
Advertising plays an important role in our everyday life. It mainly determines the image and way
of life and it has an impact on our thinking as well as on the attitude towards ourselves and the
world around us. Advertising shows us ready forms of behavior in a certain situation. It
determines what is good and what is bad. We buy what people say or "advise”. I chose this topic
because it is very relevant today and it is interesting by its complexity and psychological essence.
Everyone, even without realizing it, is influenced by advertising. We do not notice how it affects
us. We have become slaves of scientific and technical progress, and advertising uses that
skillfully.
The pressure of advertisement is growing every day. A significant amount of money is spent on
advertising campaigns bringing to the companies multi-billion profits. Moreover, it is a "product
of the first necessity" for any enterprise, aimed at a commercial success, and it is becoming more
and more expensive. According to statistics media the money spent on advertising in Finland
was 1313,1 million euro in 2012 and 1206,7 million euro in 2013. (Finnish Advertising Council,
TNS Gallup, Ad Intelligence 2014)
Advertising is directly linked to politics. It determines not only the purchase of toothpaste, but
also the choice of political candidate. In the end it determines the path of political development
of the country and the politics itself. This function of advertising is very important in our society.
Advertisement appeared a long time ago. Its existence in prehistoric times is confirmed, for
example, by an Egyptian papyrus with the information of the upcoming sale of a slave.
Advertising in those days was presented by written or oral announcement touting a particular
product or service. The oral advertising was spread by some sort of barker. Besides papyrus
scrolls and wax boards, the written advertising was embodied in inscriptions on roadside rocks,
as well as on buildings. As nowadays, there was a promotion of almost everything - olive oil and
amphorae to keep the oil, oxen, horses and other livestock, tools and weapons. There was
advertising of services as well: in the announcements of that distant era, there were calls to visit a
pub that sells unique snacks and wine, or an invitation to visit public baths. (Feofanov, 2004).
However, the advertising would probably have not expanded so much, if once human had not
discovered the era of mass communication. The first impetus for this was typography. Another
important development was the invention and subsequent spread around the world of the art of
photography in the mid- 19th century. A photograph has served as an irrefutable proof of
benefits of the advertised product(Presbrey, 2009).
However, the most important developments in the global advertising business were made in the
20th century. It is no exaggeration to say that the 20th century was the “century of advertising”-
at that time there were profound changes and innovations in the field of technology and
advertising. It was the 20th century when advertising became this so popular – primarily due to
the unprecedented growth rate of world industrial production, as well as due to the appearance of
more and more sophisticated means of creating and distributing advertisements: multicolor
printing, analog and then digital radio, television, satellite communications, and finally,
computers and the Internet. Advertising is day to day becoming more professionally organized
and more quality performed (Presbrey, 2009).

The goal of advertising

Advertising goals are what a company hopes to achieve by conducting an advertising campaign.
Companies usually connect advertising goals to larger company goals such as increased sales,
customers or web traffic. You might connect your goals to timelines or other metrics to measure
your success. Consider setting flexible goals to ensure you can update them as you respond to
customer feedback and market changes.
A company can usually categorize each goal into one of the three major objectives for
advertising:
Informative: Informative advertising uses proven facts or features to advertise products or
services. A company might provide a logical reason why a customer might purchase a product.
Persuasive: Persuasive advertising is advertising that strives to convince potential customers
why they may benefit from engaging with a brand. Persuasive advertising often appeals to the
emotions of the target audience. The main goal of persuasive ads is to influence consumers to
make a decision.
Reminder: Reminder advertising, or retentive advertising, is when a company engages with
existing customers to remind them about products, services or company values. Companies may
use this advertising tactic to encourage repeat customers to continue shopping with them.
The concept of insurance
Insurance coverage can be defined as a contract in the form of a financial protection policy. This
policy covers the monetary risks of an individual due to unpredictable contingencies. The insured
is the policyholder whereas the insurer is the insurance-providing company/the insurance
carrier/the underwriter. The insurers provide financial coverage or reimbursement in many cases
to the policyholder.
The policyholder pays a certain amount called ‘premium’ to the insurance company against
which the latter provides insurance cover. The insurer assures that it shall cover the
policyholder’s losses subject to certain terms and conditions. Premium payment decides the
assured sum for insurance coverage or ‘policy limit’.
Insurance services
1. Long-Term Disability Insurance
The prospect of long-term disability (LTD) is so frightening that some people choose to ignore
it. While we all think that "nothing will happen to me," relying on hope to protect your future
earning power is not a good idea. Instead, choose a disability policy that provides enough
coverage to enable you to enjoy your current lifestyle even if you can no longer continue
working. 
Long-term disability provides a monetary benefit equal to a portion (e.g., 50% or 60%) of the
insured's salary for covered disabilities. Long-term disability typically begins when  short-term
disability ends. To receive benefits, the disability must have occurred after the policy's
issuance and then, typically after a waiting period. Medical information, often confirmed by a
physician, must be provided to the insurer for consideration.
Most long-term disability insurance policies categorize disabilities as own occupation or any
occupation.1 Own occupation means the insured, due to disability, is unable to perform their
regular job or a similar job. Any occupation means the insured, due to disability, is unable to
perform any job for which they are qualified.
Similar to short and long-term disability insurance, workers' compensation , or workers' comp,
it pays a monetary benefit to workers who become injured or disabled at work or while
performing their jobs. Most states require employers to carry workers' compensation insurance
for their employees. In exchange, employees may not sue their employer for negligence.
While long-term disability insurance and workers' compensation insurance both pay for
disabilities, long-term disability insurance is not limited to disabilities or injuries occurring at
work or while working.
2. Life Insurance
Life insurance protects the people that are financially dependent on you. If your parents,
spouse, children, or other loved ones would face financial hardship if you died, life insurance
should be high on your list of required insurance policies. Think about how much you earn
each year (and the number of years you plan to remain employed), and purchase a policy
to replace that income in the event of your untimely demise. Factor in the cost of burial too , as
the unexpected cost is a burden for many families.
3. Health Insurance
The soaring cost of medical care is reason enough to make  health insurance  a necessity. Even a
simple visit to the family doctor can result in a hefty bill. More serious injuries  that result in a
hospital stay can generate a bill that tops the price of a one-week stay at a luxury resort.
Injuries that require surgery can quickly rack up five-figure costs. Although the cost of health
insurance is a financial burden for just about everyone, the potential cost of not having
coverage is much higher. 
4. Homeowner's Insurance
Replacing your home is an expensive proposition. Having the right homeowner's insurance  can
make the process less difficult. When shopping for a policy, look for one that covers the
replacement of the structure and the contents, in addition to the cost of living somewhere else
while your home is repaired. 
Keep in mind the cost of rebuilding doesn't need to include the cost of the land since you
already own it. Depending on the age of your home and the amenities it contains, the cost to
replace it could be more or less than the price you paid for it. To get an accurate estimate, find
out what local builders charge per square foot and multiply that number by the amount of space
you will need to replace. Don't forget to factor in the cost of upgrades and special features.
Also, be sure the policy covers the cost of any liability for injuries that might occur on your
property.
Renters Insurance
Renters also need peace of mind that they will be made whole in the event of a loss.
Fortunately, renters insurance  is a type of property insurance available to people who rent or
lease properties. This insurance provides coverage for personal belongings, liability, and
additional living expenses for covered losses.
For one property, there may be two types of property coverage: homeowner's insurance and
renters insurance. However, homeowners insurance does not cover the personal property of the
tenant. Therefore, it is important for lessees to obtain renters insurance to protect their assets.
Advertisement of insurance
Advertising is communication and the introduction of non-specific products or services through
various carriers in contrast receipt of missionary for profit institutions or non-profit institutions
or people who that somehow marked in the message. (Elahi & Heidari 2005)
 Commercial Advertising: Commercial advertising is a process of communication with
customers so that relying on advantages and benefits and positive features of a product, service
or commercial agencies through art and creativity do intrusion in thoughts and mental potential
customers or probable and also do encourage them than selection or purchase certain goods or
services. (Nili Ahmad Abadi 2004)
Commercial Advertising Purposes: Advertising can will have very different purposes.
Acquiring customers' desires in order to own preferred satisfy, convincing the audience,
organization benefits provision by influence and infiltration and dominate on audience. Also
Some of the main objectives of the advertising are as follows :
i. Increased of consumption type
ii. Increased of purchase amount
iii. Increased of consumption
iv. Increased of consumption frequency
v. Attract of new generation
vi. The development of institution name or product name
vii. Fight against opinions dissenting
2.3 Theoretical framework
There are several theories propounded that actively discuss advertising, its relevance to
consumers and how consumers are affected by advertising. The following are some of these
theories, however, three of these theories; Active Learning or Information Processing Theories,
the Behaviour Learning or Low Involvement Theories, and of course the Dissonance Reduction
or Cognitive Dissonance Theories are discussed below.
2.3.1 The Active Learning Theories by Nord and Peter (1980)
Also known as the Information Processing Theories, this group of theories operate upon the
premise that any piece of advertising presents a message which the consumer finds to be
meaningful. The active learning theories generally postulate that learning comes before
attitudinal response and finally a change in behaviour. Therefore, if a piece of advertising was
exposed to consumers, the said consumers first receive the message or stimuli, this is then
internalised and thought through. After the processing and decision-making, the customer then
responds through action which becomes the purchase of the advertised product. Active learning
theories sharply contrast with the behavioural learning theories by insisting that the consumer to
whom the advertising is exposed plays an active role by being involved in the processing of data
acquired and by, subsequently, taking action, hence the theories are sometimes as the
information processing theories.
Nord and Peter (1980) have tried to study how consumers acquire and process information, and
how that information leads to behaviour change in the final analysis. This has found relevance in
advertising practice as well as in social studies. The whole question of meaning has also found
importance in the active learning theories.This is so because in the processing of the advertising
message, the consumer has to make some meaning out of the exposure before it can affect his
behaviour. An attempt to simplify meaning by Collinge (1990) has produced three
classifications. These are descriptive meaning, expressive meaning, and evocative meaning. The
descriptive meaning of a sentence for example refers to that aspect of its meaning which
determines whether the sentence will be a truth or a falsehood. Descriptive meaning has often
been freely and conveniently interchanged with cognitive, prepositional, denotative and ideating
meanings. Expressive meaning, on the other hand, has to do with that which can only be
expressed rather than described. This includes feelings, emotions, sentiments and attitudes.
Expressive meaning has validity only at the time and place where it is uttered. Furthermore, it
does not have to be exclusive at all times, as it can have a mutual occurrence with the descriptive
meaning, even in a word such as “smile”.
Whan and Young (1983) have come up with the contribution that consumers tend to show a
favourable change of attitude where the expressive meaning is at work. Their work tends to
suggest that a piece of advertising which offers a preponderance of expressive meanings stands
the chance of registering more efficacies with the consumer.
Suggestive meaning concerns itself with the degree to which words can evoke feelings and
images in the hearer or reader over and above what the expressive or descriptive meanings might
be. The evocative meaning has been effectively employed in propaganda, poetry and advertising
from time to time. Wenburg and Wilmot (1973) will strongly disagree that meanings are found in
words. They assert that, far from what most people assume, meanings are in people. According
to them, when people talk or write they merely transmit words whose meanings are left to those
who receive them. Words, they argue can stimulate meanings, but are not meanings in
themselves. They further aver that words can be connotative or denotative.
2.3.2 The Behavioural Learning Theories Pioneered by Edward Thorndike (1911)
Also known as the Low Involvement Theories, this group of advertising theories appear to
directly counter the postulations of the active learning theories. These theories have developed
from the pioneering works of the Edward Thorndike (1911) which was essentially hinged upon
instrumental conditioning. The principle of reinforcement was much later introduced into the
whole equation by Skinner (1953). These earlier works were advanced upon by Kassajian
(1978), where he argues that consumer decisions do not spring from any “grand theory of
behaviour”, as such responses were insignificant and uninvolving. As far as he is concerned, the
matter is so simple and easy because if a product satisfies a consumer, he is most likely to repeat
the purchase behaviour.
The issue of positive reinforcement initiated by Skinner was revisited and elaborated upon by
Rothsochild and Gaidis (1981). They noted that initial and repeat purchase is central to
advertising and marketing. Therefore, they continue, the provision of positive reinforcement
should be a most critical objective of practitioners in the said fields. In their observation,
intermittent reinforcement will create enough room for behavoural change, which might mean a
shift in purchase loyalty to a competing brand whose reinforcement is unbroken. The Low
Involvement Theories seem ultimately to indicate that learning comes before behaviour change,
which predisposes to a change in attitude.
Behavioural change theories appear to have two distinct features. The first is that they are
interestingly relevant to the television medium. As a matter of fact, Krugman (1972) formulated
his theories based absolutely on television. The next is that the Low Involvement Theories also
suit non-television advertising with lower information content, rather perfectly. According to
Weilbacher (1984), the concept of involvement leaves us with two significant implications. The
question as to whether it is the value of the product that solely determines variations in consumer
involvement is the first. The second implication is that it might not be totally right and safe to
place a consumer on “low” only, as there could be a graduation from “low” to “high”
involvement.
It is also not improper to add that the Behavioural Learning or Low Involvement Theories appear
best suited to a laboratory situation, where the experimenter has considerable degree of control
over the variables. Reality is, however, what matters most; in the competitive market, the
marketer will have little or not control over market-related variables like the availability of
competing products and going prices.Also, the behavioural learning theories appear to have left
complex luxury products such as houses and choice cars out of consideration. Where products
such as the above are involved the consumer will tend to show not low but high involvement,
owing to the complex nature of the product and the high price which it must command.
These criticisms are not enough to make the Behavioural Learning or Low Involvement Theories
irrelevant. Whereas some of the notions may be untransferrable from theory to practice, this
group of theories nonetheless presents a paradigm for better and more effective marketing,
advertising and promotion.
2.3.3 The Dissonance Reduction Theories Pioneed by Festinger (1962).
Otherwise called the Cognitive Dissonance Theories, this group was pioneered by Leon
Festinger (1962). The dissonance reduction theories operate upon the premise that human beings
are in an unending search for consonance or harmony in a world full of dissonance or
disharmony. The differential or margin between thought/ cognitive environment and actuality or
reality is dissonance while consonance stands for the measure of similarity or conformity
between thoughts or cognitive elements and what really obtains.
Weilbacher (1984) continued the flow of thought when he further explained that there is
cognitive consonance when we find what we expect. Festinger (1962), finally submits that reality
exerts a certain degree of pressure on the individual, thereby bringing in line with reality the
individual’s personal thoughts and cognitive elements.
There are implications for advertising and marketing, as the producer or marketer can choose to
offer a product advert which meets the expectations of the consumer and so record a
“consonance”. Alternatively, the advertising produced and aired may fail to agree with the
cognitive elements of the consumer, thereby creating a state of “dissonance”. The earlier
development might encourage the consumer to carry out initial and repeat purchases. In the latter
situation, however, the consumer could transfer loyalty to a competing product, or simply stop
buying, where practicable.
Festinger (1962), also offers two ways of reducing the dissonance phenomenon. By changing
one of the known cognitive elements and by adding a completely new element, he believes, the
degree of disharmony could be reduced. Since advertising presents information which affects
behaviour and determines attitude, the same can be managed in such a way as to achieve a
degree of dissonance reduction. The Dissonance Reduction or Cognitive Dissonance Theories
advocate a pattern which puts behaviour change before attitude change, and then learning as the
ultimate stage.

2.4 Empirical Literature

In an attempt to lend their voices on the growing call for the development of the insurance sector,
several researchers, scholars and stakeholders have undertaken various studies to determine the
effect of advertising on insurance industry performance and the effect of insurance industry
performance on economic growth. in Nigeria and abroad.
Beenstock et al. (1988) applied pooled time series and cross-sectional analysis on 1970 to 1981
data, covering mainly 12 countries. They employed multiple regression model to analyze the
effect of premiums for property liability insurance (PLI) on gross national product (GNP),
income and interest rate development, and found that premiums are correlated to interest rate and
GNP; marginal propensity to insure (short and long-run) rises with income per capita and is
always higher in the long-run. Outreville (1990) conducted a cross-section analysis on PLI
premium for the year 1983 and 1984 for 55 developing countries onto GDP, insurance price and
macroeconomic figures. The results are similar to Beenstock et al. (1988) and support the
significance of income and financial development (M2/GDP). Brown and Kim (1993) analyzed
life insurance consumption per capita for 45 countries for the years 1980 to 1987 with the
multiple regression model on cross-sectional data on various country figures, such as income or
inflation rate: income dependency and social security expenses are positively correlated, while
inflation is negatively correlated and significant in both years.
The religious origin, that is, being a Muslim country is always negatively connected to insurance
consumption and so, the findings support the works of Hofstede (1995, 2004) and Fukuyama
(1995) in their reasoning that social backing influences insurance demand. Zhuo (1998) focused
on China and conducted a cross-regional study for 1995 and a time – series analysis for the
period 1986 to 1995. In accordance with other findings, both the cross-regional and the time
series analysis show that GDP per capita and consumer price index (CPI) are significantly
correlated with insurance consumption. Holsboer (1999) concentrated on the changes in the
external environment for insurance companies in Europe in the period under review. He argued
that the change of importance of insurance services in the economy is dependent on the growing
amount of assets and the increasing competition in the financial sector. He built the following
model which is based on Aaron (1966): interest rate (R), growth of the working population (N),
the economic growth rate (G), superior benefits of the pay-as-you-go pension system if R<
N+G, superior benefits of the funded pension system if R>N+G, and both pension system
providing equal benefits if R=N+G. As population aging and the move from pay-as-you-go
(PAYG) system to privately funded schemes favours the growth of the insurance industry and
facilitated capital market development with increasing supply of long-term savings, Holsboer
(1999) saw the interaction between the insurance and economic growth as bi-directional. Brown
et al. (2000) applied a pooled cross-sectional panel model to motor vehicle and general liability
insurance in the OECD over the 1986 to 1993 periods.
They analyzed liability insurance consumption on a variety of factors, including income, wealth
and legal system. Income and the legal system are positively correlated with insurance
consumption while loss probability and wealth are negatively correlated with insurance
consumption. They argued that income affects insurance consumption. Zurbruegg (2000)
examines the short and long-run dynamic relationships between economic growth and growth in
the insurance industry for nine OECD countries. This was achieved by conducting a co-
integration analysis on a unique set of annual data for real GDP and total real premiums issued in
each country from 1961 to 1996. Causality tests were also conducted, which account for long-run
trends within the data. The results from the tests suggest that in some countries, the insurance
industry Granger cause economic growth and in other countries, the reverse is the case.
Moreover, the result indicates that the relationships are country specific and any discussion of
whether the insurance industry does not promote economic growth will be dependent on a
number of national circumstances.
Ward and Zurbruegg (2000) analyzed Granger causality between total real insurance premiums
and real GDP for nine OECD countries over the period of 1961 to 1996 and found that the
insurance market is leading the GDP for Italy; they also found a bi-directional relationship. The
results for other countries shared no connection. The result of ECM added Australia and France
to the group of countries giving evidence for some kind of connection. Beck and Webb (2002)
applied a cross-country and time series analysis for the relation between life insurance
penetration, density, and percentage in private savings and GDP as the dependent variables, real
interest rate, inflation volatility and others as the explanatory variables. Strong evidence was
found for GDP, oil dependency ratio, inflation and banking sector development. Inflation, real
interest rate, secondary enrolment and private savings were found to be significant. The cross
country analysis shows a negative coefficient for a country being of Islamic origin and adds
institutional development to the indicators connected positively to insurance demand.
Webb et al. (2002) used a Solow-Swan model and incorporates both the insurance and the
banking sector, with the insurance divided into property/liability and life products. Their findings
indicate that financial intermediation is significant. When split into the three categories, banking
and life sector remain significant for GDP growth, while property/liability insurance lose their
importance. Furthermore, results show that a combination of one insurance type and banking has
the strongest impact on growth. Lim and Haberman (2003) concentrated on the Malaysian life
insurance market. While the interest rate for savings deposits and price enter significantly in the
equation, the positive sign for the interest rate puzzles the authors. This could be in line with
findings of Webb et al. (2002) who found the best results when insurance and banking sector are
combined in the estimates.
Webb et al. (2005) analyzed the effect of banking and insurance on the growth of capital and
output based on cross-country data of 55 countries for the period from 1980 to 1996. The
insurance variable is measured by average insurance penetration (insurance premium relative to
GDP) of life and non-life insurance respectively. At the first stage of ordinary least square (OLS)
estimation, assuming exogenous financial variables indicate positive effect of banking
development on economic growth, while insurance variables do not enter significantly. The
results of simultaneous equations, assuming endogenous relationship between financial activity
and economic growth, show that higher levels of banking and life insurance penetration predict
higher rates of economic growth. Kugler and Ofoghi (2005) examined the long-run relationship
between insurance market size and economic growth in United Kingdom for the period from
1966 to 2003 for long-term insurance, and for the period from 1971 to 2003 for general
insurance (from 1991 to 1997 for marine-aviation, transport insurance and reinsurance). The
study used disaggregated data for the measure of market size. That is, net written premium for
each market in insurance industry in the UK is used as a measure of market size for that market.
Causality tests show that there is a long-run causality from growth in insurance market size to
economic growth for eight (8) out of nine (9) insurance markets. Using Johansen’s co-integration
test, the result shows a long-run relationship between development in insurance market size and
economic growth for all components of insurance market. Adams et al. (2005) examined the
dynamics and historical relation between banking, insurance and economic growth in Sweden in
the period from 1830 to 1998. Insurance development is measured by annual aggregate (non-life
and life) insurance premiums. They used time series data and econometric tests of co-integration
and granger causality. The results show that the development of banking, but not insurance,
preceded
economic growth during the nineteenth century, while it was reversed in the twentieth century.
Insurance development appears to be driven more by the pace of growth in the economy rather
than leading economic development over the entire period of analysis. Peter and Kjell (2006)
worked on the relationship of insurance and economic growth, a theoretical and empirical
analysis which was presented as a paper at the 2006 ECoMOd conference in Hong Kong. They
applied a cross country panel data analysis using annual insurance premium data from 29
European countries over the 1992 to 2004 period. They found a weak evidence for a growth-
supporting role of life insurance and explain this with similarities to recent bank and stock sector
findings Arena (2008) worked on the empirical study and causal relationship between insurance
market activity and economic growth which include 56 countries (both developed and
developing ones) in the period from 1976 to 2004. Insurance premiums are used as proxies of
total life and non-life insurance activities separately. As an estimation method, the author used
the generalized method of moment for dynamic models of panel data. The result shows a positive
and significant effect of total, life and non-life insurance market activity on economic growth.
The author also examined the possibility of non-linear effect of life and non-life insurance
variables on economic growth, but the results did not show the non-linearity in the relationship.
Haiss and Sümegi (2008) applied a cross country panel data analysis from 29 European countries
in the period from 1992 to 2005. The insurance variable is measured by premium income and
total net investment of insurance companies. Premium income is split into life and non-life
premium income. As estimation method, the authors use ordinary least squares (OLS) or
unbalanced panel with country and time-fixed effects. According to the findings, there is a
positive impact of life insurance on GDP growth in the EU-15 countries; Switzerland, Norway
and Iceland, while non-life insurance has a larger impact in Central and Eastern Europe.
Wadlamannati (2008) examined the effects of insurance growth and reforms along with other
relevant control variables on economic development in India in the period from 1980 to 2006.
Growth of insurance penetration (life, non-life and total) is used as proxies of insurance sector
growth.
The author applied ordinary least square (OLS), co-integration analysis and error correction
models (ECM). The study confirms positive contribution on insurance sector to economic
development and a long-run equilibrium relationship between the variables. While the reforms in
the insurance sector do not affect economic activity, their growth has positive impact on
economic development. Marijuana et al. (2009) empirically examined the relationship between
insurance sector development and economic growth in 10 transition European Union
Justification of research
Insurance contract that whereby a party does commitment that in return for payment funds on the
other side, In case an accident compensate the damages inflicted or does pay a specific amount.
Insurance industry, including marine insurance, fire insurance, personal and life insurance, and
accident insurance. The insurance industry is divided compulsory insurance and optional
insurance. Based on the location of the an accident be divided to third category marine insurance,
aerial insurance, drought insurance. Also based on the quality included trade and commercial
insurance, social insurance, and cooperative insurance. Marketing is the science and act of
responding to the needs and the needy. One of the most important factors of marketing in service
organizations is advertising. Commercial advertising is a process of communication creation
with customers. So that relying on the advantages and benefits and positive features of a product
or service does penetrate in thoughts and mental potential or potential customers.
 CHAPTER THREE
RESEARCH METHODS
3.1 Research Methodology
This chapter deals with the method of research adopted in this project work. A research method
is the specification of procedures for collecting, analyzing data, necessary to help solve the
problem at hand. The areas covered include; Research design, population of study, sampling and
sampling procedure, data collection procedure as well as administration of research instruments.
The aim of this is to explain in detail the procedures in arriving at the inference of the study.
3.2 Area of the study and sample size
This research work was carried out in Benue State is one of the North Central states
in Nigeria with a population of about 4,253,641 in 2006 census. The state was created in
1976[4] among the seven states created at that time. The state derives its name from the Benue
River which is the second largest river in Nigeria.[5] . Sample Size is the number of elements that
are included in the sample, Asika (2004),since it is impractical to reach the entire population, a
sample is drawn to enable the researcher make an inference. To determine the sample size, a
simple Taro Yamen sample size technique would be adopted by the researcher. Using a
confidence level of 95%, a sample of 110 respondents was chosen from an estimated population
of 200 Given a significance level of 0.05%, the sample size was calculated as:
N
1+ N (e)2
Where;
Total CBN employees (N) is given as 5,844; Confidence level = 95%; and. Margin of error
(Significant Level) (e) = 0.05%.
200
=1+100(0.5)2
= 110

=110(Yamen, 1967)
3.3 Population of Study
This refers to "a collection of measurement about which we wish to make an inference". The
study area and the population is Benue State. Benue State is one of the North Central states
in Nigeria with a population of about 4,253,641 in 2006 census. The state was created in 1976
among the seven states created at that time. The state derives its name from the Benue
River which is the second largest river in Nigeria.  The study focused on five insurance firms
located in Benue State. These include: AIICO Insurance plc, Anchor Insurance Limited, Capital
Express Assurance, Cornerstone insurance Plc. and Consolidated Hallmark insurance plc

a. Sources of Data
The source of data for this research work was questionnaires.
3.5 Method of data collection
This researcher would adopt the simple percentage statistical method of analyzing the response
on the various elements of bureaucracy tendencies in the study area. Subsequently, in order to
test the hypotheses and establish the degree of dependence or independence of variables under
consideration, the chi-square statistical technique were used for that purpose using SPSS as
statistical package for the analysis. The study adopted the percentage statistical method of
analyzing the responses on the various elements of communication in the study area. This is
given by the formula: S/n * 100/1
Where: S = Response figure
n = Sample size
Similarly, in order to test the hypotheses and establish the degree of dependence or
independence, the chi-square statistical tool would be used for this study. Chi-square test
2
( fo−fe )
X =∑
2

is given by the formula: fe

With degree of freedom (N-1)
Where: ∑= the parameter to be estimated
χ2 = chi-square distribution
fo = the actual number
fe = the expected number
N= Number of variables

3.6 Validity and Reliability of the Instrument

The validity of the constructs of the questionnaire would be based on Cronbach alpha construct
validity method which is between 0.7and 0.9 (Nunnally and Bernstein 1994) .The questionnaires
would be constructed with the assistance of the Researcher’s Supervisor and his suggestions
would be incorporated into the instrument before it is administered.
Reliability Statistics
Scale Mean Scale Cronbach's
if Item Variance if Alpha if Item
Deleted Item Deleted Deleted
Person- to- person campaign 63.4074 122.917 .965

Electronic Advertising 67.9537 127.671 .967

Insurance Policy Awareness 62.8333 124.981 .968

Summary .966 No of Item: 3
Source: Researcher’s Computation.

3.7 Method of analysis

The research was carried out by gathering information from primary source. The researcher with
the help of members of staff of insurance firms in Benue State. 15 questions of self-administered
questionnaire tagged advertising and performance of insurance films in Nigeria (APIFINQ) was
administered to the workers of the organization. The questionnaires would be divided into 2
sections. Section A contained questions meant to obtain respondents Bio data. While sections B
of the questionnaire comprised the problem questions on the subject matter