The Effect Of Online Advertising On Consumer Buying Behavior

Project and Seminar Material for Marketing

Abstract

This study assessed the effect of online advertising on consumer buying behaviour among students of federal polytechnic, Bida in Nigeria. More specifically, the study intended to identify the relationship between radio advertisement, television advertisement and online advertisement and the consumer buying behaviour. The study was conducted in Federal polytechnic, Bida, Niger state. The sample of this study was 150 students. The study used a descriptive design. Primary data were collected through questionnaires while secondary data were collected through reviewing various documents. Data collected were analyzed both quantitatively and qualitatively. SPSS (Statistical Package for Social Science) and excel were used to extract tables and charts that presented the findings of the study. The study found that advertisement has direct influence on consumer buying behavior. Moreover, the study found out that television advertisement appears to be the most influencing factor. Furthermore, the study found that out an online advertisement has begun to gain trust to consumer in buying products online. The study recommends that creativity should be considered in television advertisement.

Chapter One

Introduction

1.1 Background of the Study

The rapid growth of information technology has enhanced the importance of online advertising. Out of the innovations of the information technology, internet is by far the most attracting considerable media.

Moreover, the internet is emerging as the most important source of information because of its ease wealth of information. Furthermore consumers shopping online may modify or change the way they search for information to take advantage of certain characteristics of the internet (Peterson and Merino, 2003)

With the growing age of the internet and the increasing trend of people using the internet, and the increasing trend of people using the internet for shopping and searching, the marketers are facing a lot of competition in order to keep in mind what the consumers are looking for and hot to target them.

There are four factors affecting the consumer buying behaviors namely Psychological, Social, Personal and cultural. In some studies the cultural factor has been taken separately but in most studies the cultural factors come under the social factors. For this research the psychological factors will be taken into account and the main focus will be on the beliefs and attitudes of the consumers.

Online advertising became popular in the early 20th century in the United States. Internet advertising continues to grow and capture the attention of traditional and new direct marketers. Online stores can do many of the things like the real stores such as display products, offer special deals, take orders from customers, and process credit card transactions. The only thing that is extra is to add a shipping charge and then process the shipping. In the beginning, the consumers only relied on the internet for information. They would search for the products online, look up for the alternatives but were hesitant to buy it. But with the passage of time and increase in awareness, consumers now shop online. At first, only luxurious items were purchased online. Owing to awareness, consumers now shop online. At first, only luxurious items were purchased online. For example, laptops, cameras etc. But now-a-days people in the more developed countries often buy their groceries online.

The inclination of people towards online advertising in Nigeria is also in its infancy period. The people are somewhat reluctant to buy things online, this is because of the increasing trend of online frauds and because of this trend, and the websites could not be trusted fully.

Various Researches carried out in the past has proven that the average man watches over 40,000 commercial ads in a year which is quite many. Some companies such as Proctor and Gamble, AT&T spend up to 4 billion dollars a year on advertising. The official definition of advertising is an impersonal one way mass communication about a product or service that is paid for by the marketer.

Advertising, public relation, sales promotion and personal selling are all essential parts of the promotional mix of a marketing plan. Advertising is everywhere and reaches consumers all day. The amount companies spend on advertising is amazing. Advertising also plays an important role in developing sales and market share.

In general, most companies need to spend an enormous amount of money on advertising to maintain their market share and to keep their company and its products on top of their consumers minds, they need to use advertisements as reminders, if not the competitors will be able to steal some of their market share and sales. Traditionally companies that are either smaller or new in market share have to spend a larger amount on advertising that their big competitors. The reason behind this is called advertising response function.

As a promotional strategy, advertising serve as a major tool in creating product awareness in the mind of potential consumer to take the eventual purchase decision. Advertsing, sales promotion and public relations are mass communication tools available to the marketers. Advertising through all medium influence audiences, but the internet at this moment is becoming one of the strongest medium of advertising due to its mass reach, it can influence not only the individuals attitude, but his behavior, lifestyle, exposure and in the long run even the culture of the country (Latif and Abideen 2011).

Consumers are the final end users of the products; they keep the production cycle moving. Consumers do play a vital role in the economic system of any nation, thus any nation will face crises if the consumers don’t have the effective demand for goods produced.

According to Cohen (1988), advertising is a business activity that employs creative techniques to design persuasive communication in mass media that promotes ideas, goods and services in a manner consistent with the achievement of the advertiser’s objective, the delivery of consumer satisfaction and the development of social and economic welfare. (Cohen, 1988)

From Cohen’s definition, it can be found that advertising satisfies three objectives; to increase sales of the firms, to guarantee consumers a great deal of services and finally to ensure the social and economic welfare of the society. Advertising has thus, a stimulating influence on the purchasing behavior of the consumers. Consumers demand different things based on their task and preference for them. Awareness of goods influence consumers purchase of that good.

1.2 Problems of Study

With the growing age of the internet and increasing trend of people using the internet for shopping and searching, internet Advertising which in recent times have being utilized by all companies due to the accessibility and wider coverage than the traditional media seems to be the most recent means for adverts .

The question now is,

Does the internet advertisement prove to be very effective than the traditional media?
Do people buy product due to internet advertisement? What other factors influence the way people see advertisements?

1.3 Research Objectives

The objectives of this work include the following:

To ascertain the rate of online advertising exposure to students
To ascertain if online advertising influence consumer buying behavior
To discover the factors that influence students of Federal Polytechnic Bida’s view of internet advertising.

1.4 Research Question

The purpose of this study is to observe and study the relationship between online advertising and psychological factors of consumers buying behaviors. In evaluating the statement, this study attempts to answer the following questions:

What is the rate of online advertising exposure to student?
Does online advertising influence consumer buying behavior?
What factors influence students of Federal Polytechnic, Bida’s view of online advertising?

1.5 Significance of Study

Every research must have significance. Significance is very important because it provides justification for the study, (Khan, 2007).

This study is significant in view of the following:

It examines the impact of online advertising in shaping the people’s perception on products. Thus, it proves to be of great benefit to companies who wishes to utilize and invest on internet advertisement
It sheds more light on how people perceive products and services seen advertised on online. And that the study will provide empirical data to support or disprove supposition about the internet advertisement in the country
This study also serves as a reference material for students who may desire to carry out similar study.

1.6 Scope of Study

This research focuses on the ‘effect of online advertising on consumer buying behavior’, which is increasing day by day and will focus on students of Federal Polytechnic Bida, Niger State and enfaces will be laid on students of the institution who have access to online advertising and they will serve as respondents. As it is assumed that in Nigeria generally people share similar characteristics. Based on this assumption the result of this finding could be generalized.

1.7 Limitations of the Study

For a topic like this which is supposed to elicit responses from a larger respondent across the nation or the world at large, this research study is however limited to internet active students of Federal Polytechnic Bida, Niger State only.

Secondly, there was scarcity of core textbooks on online advertisement. Thus, the researcher relied heavily on online text books, publications and researches

Again, the researcher used only the questionnaire as his primary data collection instrument. This is a limitation as the study can be enriched with direct personal observation so that findings will be all encompassing

Finally, the issue of financial and time constraints cannot be overemphasized. Essentially, the researcher paid heavily for downloaded material from the internet at commercial cyber cafes and the short time for carrying out a wide topic.

1.8 Definition of Terms

Online Advertising:

Is the form of promotion that uses the internet and world wide web for the express purpose of delivering marketing messages to attract customers.

Consumers buying behavior:

This refers to the buying behavior final consumers- individuals and households who buy goods and services for personal consumption.

Attitude:

It denotes a learned predisposition to respond to an object in a consistently favorable or unfavorable way. The fact that attitudes are learned means that they will be affected by information and experiences.

Beliefs:

This is a descriptive thought that a person/consumer has about something.

Purchase Decision:

This simply means that the buyers decision about which brand to purchase or patronize.

Gender:

This refers to the distinguishing characteristics between a male and a female.

1.9 Organization of the study

This study is organized into five chapters.

The first chapter introduces the study. It provides the background of the study, statement of the problem, research objectives, research questions, significance of the study, scope and limitation of the study as well as the organization of the study.
Chapter two provides the literature review related to the study. It defines the key conceptual in the study. It also provides the theoretical perspectives, empirical studies and the conceptual framework of thestudy.
Chapter three discusses the methodology of the study. It explains area of the study, research design, population of the study, sampling design, data collection methods, reliability and validity of the study as well data analysis procedures.
Chapter four presents the findings of the study.
Chapter five concludes the study. It provides the summary, conclusion and recommendation including area for further studies.

Chapter Five

Summary, Conclusion and Recommendations

5.1 Summary of Findings

The study was conducted in Niger state, Nigeria. The objective of the study was to assess the effect of online advertising on the consumer buying behaviour among students of federal polytechnic, Bida. The study involved 150 students, The study employed descriptive design. It was selected because it has the advantage of producing good amount of responses from a wide range of people. Both qualitative and quantitative data were collected.

In this study, randomly sampling and focusing group sampling were used by picking only the sample that brought the best information that satisfied the intention of the study. Purposive sampling technique was used in choosing the sources of data. On the other hand the study employed judgment sampling. Purposive sampling method was used to get respondents.

Both primary data and secondary data were collected. Primary data were collected through focus group discussion, observation, interview and questionnaire. On the other hand, secondary data were collected through documentary review.

5.2 Conclusion

From the findings of the study it may be concluded most of customers are influenced by advertisements on television followed by radio then and finally online media. Generally, it was observed that most of the consumers are affected by advertisement in the buying behaviour. Most of them they buy products which are mostly advert and they make them to be loyal. Television advertisement has more impact on consumer buying behaviour more than other media. Statistical analysis of consumer attitude shows that among three dimensions (loyalty, previous buying experience and word of mouth) are significant factors which effect consumer buying behaviour. Advertisers had their largest profits from knowledge of previous purchases of consumer and also the loyalty of consumer to any product plays another important role in leading consumer attitude to purchase of that product as also noted by Mohammed and Alkubise (2012).

On the other hand, it was observed that traditional media (radio and television) adverts are more trusted than new media advert. Reason of less significant impact of online ad on consumer purchase behaviour is the lack of trust and lack of industries involvement in online media. On the other case, online media has started to be familiar and beginning to be trusted by people in the society in the current time of 21st century. There are hundreds of advertising agencies but only few of them actively manage and control online media. Moreover, it was observed that advert has influence in consumer buying behaviour compared to marketing communications. People want to purchase products they have already seen or through experience. Word of mouth and other communication are also powerful of convincing consumer in buying behaviour. Moreover, old people are not easy to try new products compared to youth.

5.3 Recommendations

From the findings of the study, a number of recommendations are provided.

The study recommends that newspaper media should continue to be used in advertisement because still people believe and trust it. Advertisers should consider creativity when designing print advertisements.

The radio is among the media which has big influence to audience due to its strength such as to be flexible, universal and cheap. Therefore, recommends that advertisers should design radio adverts which are easy to be understood by customers.

Television has more power to influence more than other media. Advert which is displayed in television can be remembered easily and fast because people see and hear the advert. The study recommends that advertisers should use television adverts well and the message should be supported well by visual so as to gain new customers, create brand loyalty and persuade well.

Online media is very new to many people but it is fast, easy, cheap and global. It has no gate keepers which make it to be in some way not to be trusted as an old media. The study recommends that online media should be used as much as possible because it has no geographical boundaries. It has second chance and easy to assess. Online media can reach large number of customers and can help people to purchase products online fast and avoiding queuing. Advertiser should invest well enough in online media.

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