Effect Of Internet Advertising On Consumers’ Purchase Decision (A Study Of Jumia Online Stores In Lagos)

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Effect Of Internet Advertising On Consumers’ Purchase Decision (A Study Of Jumia Online Stores In Lagos)


Abstract


The use of online advertisement in Nigerian market is increasing and businesses are more and more considering the internetas a source of marketing communication. However, few studies have considered the factors that influence online buyer’s decision when Nigeria is considered. Thus, the main objective of this study was to examine the factors that contribute to the effectiveness of online advertisements and how they affect consumers’ buying decision. JUMIA online shopping company was selected as the study organization. The targeted population was the entire students of University of Lagos, Akoka campus who must have at any time visited JUMIA online shopping platforms to make purchase. The method of carrying out the study was based on survey design. A total number of 180 undergraduate students were randomly selected from stratified groups within the University as sample size for the study. The survey questionnaire was used to collect primary data from respondents. The data collected was analyzed based on simple percentages and frequencies. The Chi-square technique was used to test the proposed test the proposed hypotheses. The core findings revealed that income of the user (c2 cal = 70.07) internet skills (c2cal = 87.65), cost of using the internet (c2 cal= 134.89), content of the advert (c2 cal = 70.074), location of advert (c2 cal 98.69), and the quality of advertised products (c2 cal = 124.89) are significant factors that affect the effectiveness of online advertisement and therefore influences buyers’ decision. It was recommended that Web advertisers should try to provide adequate and relevant information content so that consumers consider web ads when making purchase decisions. In addition, government should make internet cost affordable to enhance customer accessibility, and issues of internet fraud should be handle appropriately.


Table of Contents


  • Title Pages
  • Certification
  • Dedication
  • Acknowledgments
  • Abstract
  • Table of contents

Chapter One:

Introduction

  • 1.1 Background to the Study
  • 1.2 Statement of the Problem
  • 1.3 Aim and Objectives of the Study
  • 1.4 Relevant Research Questions
  • 1.5 Research Hypotheses
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Definition of Terms

Chapter Two:

Literature Review

  • 2.1 Preamble
  • 2.2 The Concept of Advertising
  • 2.3 Review of Empirical Findings
  • 2.4 Theoretical Framework
  • References

Chapter Three:

Methodology

  • 3.1 Introduction
  • 3.2 Research Design
  • 3.3 Population of the Study
  • 3.4 Sample Size and Sampling Procedure
  • 3.5 Data Collection Instrument
  • 3.6 Method of Data collection
  • 3.7 Method of Data Analysis
  • References

Chapter Four:

Data Presentation and Analysis

  • 4.1 Preamble
  • 4.1.1 Demographic Background Characteristics of Respondents
  • 4.2 Presentation and Analysis of Data According to Research Questions
  • 4.3 Testing of Hypotheses

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendations
  • Bibliography
  • Appendix

Chapter One


Introduction

1.1 Background to the Study

Advertising has been in existence for many decades. It is one means of promotional mix which has its ultimate function to inform, persuade and promote ideas in order to sell goods and services (Akinkugbe 2006; Kotler, 2009). Advertising, over the years, has grown to become a prominent form of marketing communication, and as a marketing communication tool, it utilizes various forms of mass media to get sales messages across to a large number of people. The traditional mass media for advertising include TV, broadcasting, magazines and newspapers (Belch & Belch, 1998). However, with the increasing development in information technology, the Internet in addition has become another interesting advertising media commonly used nowadays by advertisers and markets to communicate messages to consumers (Ashraf and Mohammed, 2012).

Internet advertising, (also known as online advertising) is the delivery of advertising messages and marketing communications through websites. It can be delivered through various electronic platforms including mobile phones, iPods, desktop computers, and laptops etc. As a marketing communication tools (Esiri, Kolade, Oloyede, and Ogungbamigbe, 2014) internet advertising takes a multitude of forms, ranging from Search advertising to Banner and Rich Media Adverts (i.e. ads that incorporate sound, animation and interactive digital video commercials).

Regardless of the particular format, displaying advertising content to online users is driven by two major objectives: (a) build new or reinforce existing brands, and (b) stimulate purchases. For that reason, the success (or effectiveness) of internet advertising has been traditionally measured by the number of clicks attracted by the adverts, or the ratio of the number of clicks over the number of impressions. In addition, many advertising experts argue that the mere exposure of online users to the advertising message can be beneficial in terms of building brand awareness (Flores, 2000) and increasing purchase intentions (Hollis, 2005). However, various factors may influence the rate of clicks attracted by online adverts, and it is the burden of this study to examine these factors in Nigerian context and to also find out how they influence purchase attitude and decision of consumers.


1.2 Statement of the Problem

Internet advertising is the delivery of advertising messages and marketing communications through the Websites. It has presented sustainable revenue growth since its inception in the mid-1990s. Internet advertising takes a multitude of forms, ranging from the “traditional” banners to today’s rich media ads. Due to its wide success, internet advertising currently constitutes a significant marketing channel for a large number of firms, ranging from news agencies to car manufacturers and retailers, and it is thus gradually gaining attention in the context of communications strategy, planning and implementation.

However, due probably to its infancy in Nigerian media market, there has been relatively little knowledge and empirical research on the factors that affect the success of online advertising in Nigeria. Consequently, when relying on insufficient knowledge to make decisions about their internet marketing strategy, companies run the risk of missing marketing opportunities, lost patronages, decline profits, and damaging image. To this end, this study attempt to make a number of contributions to the body of actionable knowledge pertaining to the factors that may influence success of online advertising campaigns using KJMIA online marketing company as a case study.


1.3 Aim and Objectives of the Study

Generally, the main aim of this study is assess the effect of internet advertising on consumers purchase decision. However it is set to:

  1. Examine the influence of background characteristics of online users on internet advertising success.
  2. Assess the effect of online products advertisement on internet users.
  3. Assess the effect of online adverts on consumers’ decision purchase for products.
  4. Examine the impact of internet source or medium on consumers decision purchase for advertised products.
  5. Assess the influence of demographic, advertisement, website and product characteristics on consumer buying decision.

1.4 Relevant Research Questions

The following questions are relevant to the study

  1. Do background characteristics of online users have significant influence in internet advertising success?
  2. What influence does online products advertisement have on internet users?
  3. To what extent have online adverts affected consumers’ decision purchase for products?
  4. Does the source of online advertised product influence consumer’s decision purchases?
  5. Do demographic, advertisement, website and product characteristics have any significant effect on consumer buying decision?

1.5 Research Hypotheses

The following null hypotheses were stated for the study

  1. H01: There will be significant influence of sex, age , marital status, education and occupation of internet users on internet advertising success
  2. H02: There will be significant influence of online products advertisement on internet users.
  3. H03: There will be no significant effect of online adverts on consumers’ decision purchase for products.
  4. H04: There will be no significant influence of internet source on consumer’s decision purchases.
  5. H05: There will be significant effect of demographic, advertisement; website and product characteristics on consumer buying decision.

1.6 Significance of the Study

Essentially this study will benefit business organizations and corporate bodies in the e- retail shopping industry as it will elaborate on the factors that may enhance/impede success of online advert. Findings will also enable online shop owners to be aware of those features and product elements that consumers considers very important in their purchasing intention and shopping experience. By extension, this would enable the manufacturers to improve on their products.

It is hoped that through the completion of this investigation, a body of knowledge is added to the marketing communication and promotion area of advertising.


1.7 Scope of the Study

This research is to examine the effects of internet advertising on the consumer buying decision. Investigation was limited to the vicinity of University of Lagos, using all categories of students who are mostly the users of internet facilities either for information, education, social interaction or shopping purposes. The focus of study was however restricted to various online platforms used by JUMIA online shopping mall. It concentrate on finding out if online advertising affords the students the opportunity of getting to know and continuously patronize products advertised by JUMIA electronic shopping websites.


1.8 Definition of Terms

The following terms were described according to their usage in the study

Advertising:

This is a form of communication used to help sell products and services. It is sometimes use to persuade consumers to switch from some popular brand to less known brands.

Advertisement:

Communication in the media paid for by identifiable sponsor(s) and directed at a target audience with the aim of impacting information about a product, services, idea or opinion.

Advertiser:

A person or organization who pays for the placement of an advert.

Internet Advertising:

Internet advertising is the delivery of advertising messages and marketing communications through the company Websites


Chapter Five


Summary, Conclusion and Recommendation

5.1 Summary

This study was carried out to examine the effects of online advertising on consumer buying decision. The study was interested in evaluating the factors that may influence effectiveness of internet advert. Accordingly, it sought to find out whether demographic characteristics of online users, advertisement and website features, and characteristics of products advertised online has any effect on consumer buying decisions. After a careful collection and analysis of data, this chapter therefore presents the conclusions drawn from the findings in the study. In addition, recommendations are presented and areas of further research are also suggested. Based on the study, the following findings emerged:

  1. The use of online advertising has a significant effect on advertising success and customer patronage. Thus, it can be said that Internet advertisement creates awareness about products availability and their location; influences purchase habit; send information that is relevant to customers’ purchase; and through online advertising, customers’ needs are adequately satisfied.
  2. The demographic characteristics of online users such as gender, age, education, and internet skills have significant influence on internet advertising success.
  3. Product size, website design features, content, and location of advert on the webpage have significant influence on effectiveness of online advertising.
  4. The website characteristics such website reputation, aesthetic background, interactive quality, and number of adverts on the website can affect online advertising effectiveness.
  5. The quality of a product advertised online, its price, previous experience of the buyer, and information content has significant effect on buying decision of online customers.
  6. The perception of customers towards online advertisement has a significant influence on purchasing behaviour.

This implies that customer perception of the advert has huge effect on how they react towards the products and service on offer. For instance, most internet users rarely consider switching to another brand as a result of the intensity of the company’s advert on the internet; they pay great attention whenever the jumia advertises on the internet; and would recommend to anyone who seeks advice on which goods to buy on jumia online platforms.


5.2 Conclusion

Nigerian is a growing economy. With population of over 140million people the potentials for commerce are enormous. The country is bedeviled with serious challenges in infrastructure such as roads, rails, and efficient delivery systems. There is therefore great need for the adoption of fast and very reliable means of exchange in order to drive commerce. E-commerce has been identified as the most important tool to revolutionalize the Nigerian business environment and to boost economic activities. Despite the numerous advantages of internet advertising and online sales over other forms of commerce, many Nigerians are yet to adopt this technology in their daily buying and selling activities.

The study established that while internet advertising was desirable to most companies operating in the study area, lack of technical know-how, low level of awareness and preference for traditional advert media are the major constraints to adopting e-commerce. Consumers on the other hand cite lack of internet access, irregular power supply, and cost of internet access as thelimiting factors to adopting online shopping. Moreover, the study has established that income of the user, internet skills, cost of using the internet, content of the advert, location of advert, opinion of other users, and the quality of advertised products are significant factors that affect the effectiveness of online advertisement and therefore influences buyers’ decision.

Similarly, it is concluded in this study that Internet advertising and online sales have the capacity to change the face of retail business in Nigeria. Most companies and consumers alike are willing to adopt it as a veritable means of doing business in Nigeria. However the problems of irregular power supply; insufficient trained personnel; low level of awareness; and high cost of internet access need be addressed. However, findings have shown that there is relationship between internet skills, advert content, product quality, and effective internet advertising/online sales.

There is relationship between perfect knowledge about market situations concerning internet facilities and exact information on consumers’ behavior. There is evidence to show that high cost of providing information scientifically through internet adverts affect consumer behavior.


5.3 Recommendations

Based on the findings and conclusion, the following recommendations are made:

  1. Most of the respondents consider internet access to be very expensive, therefore Government should intervene in the provision of internet services and infrastructure with the view of lowering its cost and making it more accessible to the majority of Nigerians, ii. Within the study, some of respondents express unawareness of online shopping websites, some have never shopped online before, and some feel they do not have need for online shopping. Companies offering products on the web should therefore promote the advantages of online shopping to traditional means of exchange.
  2. Government should make policies to regulate business through the internet activities to minmise fraud and increasing incidence of internet theft. Web advertisers should try to provide adequate and relevant content so that consumers consider web ads when making purchase decisions.
  3. Information about products advertised on the web should be adequate, relevant and authentic to make people rely on web advertising in making purchase decisions.
  4. The location of advert on the web should not interfere with the actual activity a user is working on at a particular time.
  5. Government should make internet cost affordable to enhance customer accessibility, and issues of internet fraud should be handle appropriately.

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