FULL PROJECT – IMPACT OF ADVERTISING ON CONSUMER LOYALTY TO A PRODUCT

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 CHAPTER ONE

INTRODUCTION

 1.1       Background to the Study

The role of advertising on consumer’s loyalty to a product can never be undetermined. We can trace the word ’advertising’’ to where it  started as in the issue of trace by barter where individual or a company will begin to advertise what  they have at hand in exchange of what others have and need.

 Advertising, sales promotion and public relations are mass-communication tools available to marketers. As its name suggests, mass communication uses the same message for everyone in an audience. The mass communication tools trade off the advantage of personal selling, the opportunity to tailor a message to each prospect, for the advantage of reaching many people at a lower cost per person.

The Genesis of advertising was due to advancement of many industries of the same product, brand, package etc. Nowadays, a lot of factors influence the quality of goods of service purchased at a given price like the price of the goods or services, tastes of preference, size of the consumer’s income, price of other goods and service and also a lot of factor may account for causes of change in demand like new product of good introduction to the market, change, in real income, change in population, change in price of other commodities or services. All these mentioned above factors that influences quality and change in demand of consumer’s loyalty to a product are not more effect as that of advertisement (Najam, 2016).

However, taking decision on sales is the most difficult tasks facing many business executives. This is because it is difficult to predict, estimate or determine with accuracy, potential customers’ demands as they are uncontrollable factors external to an organization. Considering, therefore, the importance of sales on business survival and the

connection between customers and sales, it is expedient for organizations to engage in programmes that can influence consumers’ decision to purchase its products. This is where advertising and brand management are relevant. Advertising is a subset of promotion mix which is one of the 4ps in the marketing mix i.e product, price, place and promotion. As a promotional strategy, advertising serve as a major tool in creating product awareness and condition the mind of a potential consumer to take eventual purchase decision (Adeolu, Taiwo & Matthew, 2005).

The main objective of advertising is to affect the consumer buying behavior. The behavior can be changed or reinforced frequently in people’s minds. Consumer behavior analysis aims to elaborate ˜why customers act in a specific ways under specific situations. Advertisements creates brand image it can also be changed or strengthened through advertisements. These brand cognition influence consideration, evaluation and finally purchases. The hierarchy of effects model of advertisement states that advertisements lead from cognitive awareness to co native purchase. This model can be applied easily but now a days it is difficult to follow this simple model because there is so much differentiation in products and services of every company. So creating a product conation is not an easy task. The consumers mostly respond to those advertisements which are emotionally attached, because positive emotional appeals provide a strong brand cue and excite category based processing (Najam, 2016).

More so, the major aim of advertising is to impact on buying behavior; however, this impact about brand is changed or strengthened frequently in people’s memories. Memories about the brand consist of those associations that are related to brand name in consumer mind. These brand cognition influence consideration, evaluation, and finally purchases. The principal aim of consumer behavior analysis is to explain why consumers act in particular ways under certain circumstances. It tries to determine the factors that influence consumer behavior, especially the economic, social and psychological aspects. When young people choose advertising information and characters as their role models, they may not only identify with them but also intend to copy them in terms of how they dress and what they are going to buy.

A company cannot make dream to be well known brand until they invests in their promotional activities, for which consumer market have been dominating through advertisements. As the primary mission of advertiser is to reach prospective customers and influence their awareness, attitudes and buying behavior. They spend a lot of money to keep individual’s interest in their products. They need to understand what makes potential customers behave the way they would like. It also appears that advertising may have the potential to contribute to brand choice among consumers (Kumar & Raju, 2013).

1.2       Statement of the Problem

Advertising can be said to be one of the most highly criticized part of  marketing system while advertising has been improved through the years much still remain to be done. We need to increase the effectiveness of advertisement and we must find better ways to evaluate this effectiveness management needs its test advertising to know of not only which advertisement are better than others but also why they are considered better.

As a result of the economic recession, this has lead to a considerable decline in profit margins and increase competitors as well. It is now obvious that the management of both small and large scale industries have now resulted to appraising all the expenditure carefully. The top executive are also found it be demanding for more proof of the roles that advertising does really play. They want to know whether Naira spent on advertising is proportional to sales volume.

One other fact is that, it is very difficult to measure the effectiveness of advertising. One of the problem is to identify the result of any given advertisement or even an entire campaign. By the very nature of the marketing mix, all elements including advertising are so intertwined that measurement of any one by itself is impossible. Many factors besides advertising influences sales success based on my assumption in holding other condition and or factors constant, however this research work will pay attention to the problem stated.

1.3       Objectives of the Study

The broad objective of the study is to investigate the role of advertising on consumer’s loyalty. However, the specific objectives are to:

1. Determine the level of consumers’ satisfaction with the product resulting from advertising.
2. Ascertain if advertising make consumers have intention repurchase the product brand.

3. Know if advertising will make consumers to recommend the product brand to others.
4. Determine the image impression to the product brand due to advertisement.

1.4       Research Questions

In the light of the gaps in literature, an attempt is made to provide answers to the following pertinent questions:

1. To ascertain if the level of consumers’ satisfaction can affect the product resulting from advertising?
2. To what extent will advertising make consumers have intention repurchase the product brand?

3.      How will advertising help consumers to recommend the product brand to others?
4. How will the image impression of advertisement be determined to the product brand?

1.5        Research Hypotheses

Therefore, for the the purpose of this research, the hypotheses to be tested will be formulated in it null form. The Null hypothesis is usually stated in negative form. The hypotheses that are of necessity to be tested in the main study are stated in nulls forms and are as follows:

H₁:      There is no significant relationship between advertising and consumers’ satisfaction

H₂:      There is no significant relationship between advertising and product recommendation to others

H₃:      There is no significant relationship between advertising and customers intention to repurchase the product brand

H₄:      There is no significant relationship between advertisement and image impression to the product brand.

1.6      Significance of the Study

There have been many empirical studies which relates to advertising and consumer loyalty and in particular how it also affect consumer decision making. This research work is conducted to investigate how advertising leads to repeat purchase in consumer decision.

Specifically, the following are the salient significance of study: The finding would assist the management of Perterson Zochonics Industrial Plc in consolidating on the strength of their products; serving as an insight through which they can expand on the untapped opportunities while at the same time working to correct the threat to consumer loyalty.

The findings would be beneficial to customers on attributes that influence their decision before developing loyalty for products. It will serve as a better guide in their purchase decision. The study will also serve as an eye-opener to students, providing them a foundation through which further research can be made on product attribute and customers’ loyalty.

More so, the study would apart from the ones stated above serve as a reference for further research on the same or related topics among scholars, academicians, and a larger body of student population. And lastly to the ordinary reader, this research work serves as an eye opener and a valuable store of knowledge.

1.7       Scope of the Study

The essence of the main study is to investigate the role of advertising on consumer loyalty to a product. It is necessary to note that the data that are analysed in the main study is the data obtained from primary sources. The scope for the main study is limited to product of Perterson Zochonics Industrial Plc., Industrial Lagos State. This study will be helpful in knowing the perceptions of consumers about advertisements.

 1.8       Methodology

The main study segmented into five chapters. Chapter one provides background and the general introduction of the subject matter. The chapter states the research problem, objectives of the study. Chapter two entails the conceptual issues, theoretical reinforcement and groundwork, alongside various reviews of empirical studies on the role of advertising on consumer’s loyalty. Furthermore, the methodology where the model adopted in the main is specified. Chapter four exclusively reserved for analysis of data and findings while chapter five contain summary, conclusions, and recommendations based on the strength of the findings emanating from the main study.

 1.9     Definition of Terms

Advertising: Is any paid of non personal presentation and promotion of ideas goods and services by identify sponsor. It is also a means by which we make known what we    have to sell or what we have to buy.

Consumer: An individual or firm who uses a commodity or service of a company.

Consumer Loyalty: Since consumer is an individual or firm who uses the commodity or service of a company, the continuous patronage of such consumer or usage of the commodity of the company at the expense of other similar ones refers to his/her loyalty to it.

Product: It can be described as anything that is offer to someone in order to satisfy a need products are tangible things like food, water etc.

Customer Satisfaction: Satisfaction is a performance indicator and previous researches have shown positive relationship between these variables. Consumers who have different level of perception are also different in their level of satisfaction (Tsiotsou, 2005).

Repurchase Intention: the individual’s judgment about buying again a designated service from the same company, taking into account his or her current situation and likely circumstances (Lacey and Morgan, 2009).

Marketer: This is the ability or duties that, include the identification of the goods and services desired by a set of consumers, as well as the marketing of those goods and services on behalf of a company.

Questionnaire: A questionnaire is a research instrument consisting of a series of questions for the purpose of gathering information from respondents.

Brand Image: Brand image is the general impression of a product held by real or potential consumers.

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