EFFECT OF ADVERTISEMENT ON CONSUMER
BRAND
PREFERENCE
CHAPTER I
INTRODUCTION
Advertiser’s primary mission is to reach prospective customers
and influence their awareness, attitudes and buying behaviour. They spend a lot
of money to keep individuals (markets) interested in their products. To
succeed, they need to understand what makes potential customers behave the way
they do. The advertisers goals is to get enough relevant market data to develop
accurate profiles of buyers-to-find the common group (and symbols) for
communications this involves the study of consumers behaviour: the mental and
emotional processes and the physical activities of people who purchase and use
goods and services to satisfy particular needs and wants. The essence of being
in business by any business outfits is to produce for sales and profits. In
order to remain in business an organization must generate enough sales from its
products to cover operating costs and post reasonable profits. For many
organizations, sales estimate is the starting point in budgeting or profit
planning. It is so because it must be determined, in most cases, before
production units could be arrived at while production units will in turn affect
material purchases. 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.
1.1
BACKGROUND
OF THE STUDY
In
June 1836, French newspaper La Presse was the first to include paid advertising
in its pages, allowing it to lower its price, extend its readership and
increase its profitability and the formula was soon copied by all titles.
Around 1840, Volney B. Palmer established the roots of the modern day
advertising agency in Philadelphia. In 1842 Palmer bought large amounts of
space in various newspapers at a discounted rate then resold the space at
higher rates to advertisers. The actual ad – the copy, layout, and artwork –
was still prepared by the company wishing to advertise; in effect, Palmer was a
space broker. The situation changed in the late 19th century when the
advertising agency of N.W. Ayer & Son was founded. Ayer and Son offered to
plan, create, and execute complete advertising campaigns for its customers. By
1900 the advertising agency had become the focal point of creative planning,
and advertising was firmly established as a profession. Around the same time,
in France, Charles-Louis Havas extended the services of his news agency, Havas
to include advertisement brokerage, making it the first French group to
organize. At first, agencies were brokers for advertisement space in
newspapers. N. W. Ayer & Son was the first full-service agency to assume
responsibility for advertising content. N.W. Ayer opened in 1869, and was
located in Philadelphia.
Advertisement
for a live radio broadcast, sponsored by a milk company and published in the
Los Angeles Times on May 6, 1930. At the turn of the century, there were few
career choices for women in business; however, advertising was one of the few.
Since women were responsible for most of the purchasing done in their
household, advertisers and agencies recognized the value of women’s insight
during the creative process. In fact, the first American advertising to use a
sexual sell was created by a woman – for a soap product. Although tame by
today’s standards, the advertisement featured a couple with the message
“The skin you love to touch”.
In
the early 1920s, the first radio stations were established by radio equipment
manufacturers and retailers who offered programs in order to sell more radios
to consumers. As time passed, many non-profit organizations followed suit in
setting up their own radio stations, and included: schools, clubs and civic
groups. When the practice of sponsoring programs was popularised, each
individual radio program was usually sponsored by a single business in exchange
for a brief mention of the business’ name at the beginning and end of the
sponsored shows. However, radio station owners soon realised they could earn
more money by selling sponsorship rights in small time allocations to multiple
businesses throughout their radio station’s broadcasts, rather than selling the
sponsorship rights to single businesses per show.
1.2EMENT OF THE PROBLEM
The
role of advertising in determining consumer behaviour and brand preference has
been undermined by many firms in Nigeria over the years. Some firms spend huge
amounts of money advertising their products and still claim about indifference
in their sales volume. This misconception seems to be based on an entirely
understandable initiative reaction: how can advertisers claim that advertising
does not increase consumption and sales and still spend so much money on it?
According
to Ambler (2000), advertising has major influences on consumption volume of
consumers, as well as sales volume. Adverts may not necessarily bring about huge
volume of sales in the short-run, but will certainly increase sales and profits
in the long run if done properly. Even if some marketers believe that accurate
knowledge about consumers, how they buy, why they buy, and where they buy- is
unnecessary as it is possible to manipulate hapless buyers into parting with
their money in return for products that they do not want. However, models about
advertising as a strong force have survived despite various empirical studies
showing that the view of advertising as a strong persuasive force is largely
unfounded.
1.4 RESEARCH OBJECTIVES
The
following are the research objectives of this study:
1. To
examine the impact of advertising on consumer brand preference.
2. To
determine advertisement channels that are most effective for influencing
consumer buying behaviour.
3. To
examine the impact of celebrity endorsement on consumer brand preference.
4. To
find out factors that encourages brand loyalty amongst consumers.
1.5 RESEARCH QUESTIONS
In-order
to achieve the objectives of this study, the following research questions were
used:
1. Does
advertisement influence consumer brand preference?
2. Which
advertisement channel is most effective for influencing consumer buying
behaviour?
3. Does
celebrity endorsement affect consumers buying preference?
4. What
factors encourage brand loyalty among consumers?
1.6
RESEARCH HYPOTHESIS
1.
Ho: Advertisement does not influence consumers’ behavior and preference for a
brand.
Hi:
Advertisement influences consumers’ behavior and preference for a brand.
2.
Ho: There is no significant relationship between media channel and
effectiveness of advertisement.
Hi:
There is a significant relationship between media channel and effectiveness of
advertisement.
1.7 SIGNIFICANCE OF THE STUDY
The
study will help firms understand the importance of advertising. It will also
enable them structure their adverts and brands to make them more appealing in order
to improve sales and lead to better performance. As this study gives a clear
insight into how advertisement can influence consumer behaviour, many firms
will be encouraged into using adverts to market their products. When firms
start making more sales and profits as a result of advertising, the economy of Nigeria
will be boosted, as more income from tax will be accrued to the government of Nigeria.
The findings and recommendations of this study will go a long way in helping
firms to adopt good advertising strategies, and appealing brand designs to help
get more consumers for their products and services.
1.8 SCOPE OF THE STUDY
The
study is limited to the influence of advertising on brand awareness and
consumer preference in Uyo, using selectedconsumers of various beverage brands as a focus point.
1.9 LIMITATION OF THE STUDY
The
only limitation faced by the researcher in the course of carrying out this
study was the delay in getting data from the various respondents. Most
respondents were reluctant in filling questionnaires administered to them due
to their busy schedules and nature of their work. The researcher found it
difficult to collect responses from the various respondents, and this almost
hampered the success of this study.
1.10
DEFINITION OF TERMS
Advertisement: Any form of
non-personal communication through mass media that is paid for by an identified
sponsor(s).
Advertising: A process activity
or program necessarily to prepare message get it to the intended market.
Influence: The effect somebody
or something has on somebody or something.
Media: The main ways that
large number of people generates information or get entertained.
Consumers: Persons who buy
goods and use it for services.
Product: Anything that can be
offered to the market for attention, acquisition, and consumption or use that
might satisfy a need or want.
Services: Any act of performance
that can be offered to another that is essentially tangible and does not result
in the ownership of anything.
Consumer Behaviour: The behaviour at
which the consumer will display if searching for purchasing.