My research aims to study the impact of advertising on consumer behaviour and determine the various effects advertising has on consumer behaviour. My study would also examine the methods to increase the awareness of consumer through advertising and also t

University Degree Business and Administrative studies

200712203 Research Project Neil Smith Review of Literature

Relation between Advertising and Consumer Behaviour

Literature Review

‘Advertising’ May seem like a simple word we use or see around us being used in our day to day life but after giving a deeper thought to it we may realise how essential advertising is in the business environment and tends to be the backbone of businesses varying in shape and size. According to Oxford (2010), “Advertising means to present or describe (a product, service or event) in a public medium so as to promote the sales”. Advertising is at the fundamental level conducted with an intention to sell or promote and get the message across to the target consumer. While looking at another perspective, Merriam-Webster (2010), states that “Advertising is an action of calling something to the attention of the public especially by paid announcements”. As Advertising has a history of being a one way form of communication, so it does not allow the receiver of the message or consumer the choice to respond and seek more information immediately. Furthermore, consumers or receivers of the message were not able to purchase the product quickly as they see or hear the advertisement which often meant loss in interest by buyer and delay on the part of the seller. In future, that is over one or two decades these characteristics are expected to change as consumer may be able to click a button for more information on the product being advertised on television.

Advertising has been widely used across many mediums for many decades as the preferred tool of competition. Nowadays, the advertisements on Television are similar to a warzone, trying to outdo each other through the creative and innovative advertisement campaigns

Why do advertisers advertise?

Primarily to develop consumer value in their brands (ISBA, 2004). Advertisers advertise to persuade and influence people in most cases. Sometimes they succeed and other times they don’t. One such study I came across during my review is about “milk moustache” marketing campaign conducted in Scotland by the collaborated efforts of dairy farmers, liquid milk producers and Scottish dairy marketing company (SDMC) 2003 (Bower and Mateer, 2004). The sole purpose to run the campaign was to promote and encourage the people or consumers to consume more milk as the sales were declining rapidly. Bower and Mateer (2004) examined the effects of the “milk moustache” marketing campaign and recorded the perception of people about the campaign. The research was conducted by them through questionnaire method where public opinion was monitored. Surprisingly, the study found that people already knew about the campaign and were able to recall the celebrities involved in it as well as were aware of the benefits of milk, despite that the marketing campaign was not successful in persuading and motivating them to increase their consumption. This was one such example I found which stands out from the other studies I reviewed.

Most of the advertisers advertise to exaggerate their product line and brand as well as boost its image and portray to the target market. Even though many organisations do not show the position of the balance sheet and the profit and loss details, still consumers get influenced by the ability of a business to convince a consumer with its advertisements. In addition, most of the organisations are concerned to prove in the advertisements that their products and services are superior to the competition.

Kotler, (2001, p578) states that advertising objectives can be classified on the basis of whether the ...

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Kotler, (2001, p578) states that advertising objectives can be classified on the basis of whether the aim is to inform, persuade or remind. Informative advertising is usually done to inform about the company or a specific product. Informative advertising can also inform the buyers or prospective buyers about the benefits of a particular new product. As Kotler (2001, p578) describes that the yogurt industry initially had to inform consumers of the nutritional benefits in order to persuade them to consume it. Persuasive Advertising is particularly relevant in a competitive situation, wherein there’s a neck to neck situation between few firms so they are always trying to persuade the consumers for their own product and may be against the other product, if required. Kotler, (2001, p579) states that Burger king used to conduct comparative advertising against McDonalds (Burger King’s burgers are flame broiled and McDonald’s are fried). Reminder Advertising is particularly relevant with products which have existed in the market for a long time. As the logo or the colour combination of the company is so popular, it is used in advertisements to remind the consumers about the existence of the company.

My research aims to study the impact of advertising on consumer behaviour and determine the various effects advertising has on consumer behaviour. My study would also examine the methods to increase the awareness of consumer through advertising and also to maximise the influence of advertising in the buyer’s behaviour. My hypotheses is that advertisement promotes consumer behaviour towards advertised product and brand although there are few exceptions as encountered in the review. In addition, I hypothesise that some of the intentions with which producers advertise are to promote sales, promote the brand, improve the top of the mind index and intention to purchase and that the advertisements usually are not successful in changing purchasing preference of a loyal consumer unless there is a price difference.

Cross Promotion

Some advertising may unintentionally cause ill-effects as well such as hurt the sentiments of the consumer or irritate them by practicing cross promotion of products and passing on irrelevant information.

Two Indian researchers have conducted a study which aims to find the factors which trigger irritation among the consumer due to cross promotion practiced by producers (in order to get a larger share of consumer’s wallet) and how would those factors influence the buyers’ decision towards the advertiser and the advertised focal product (Focal product means the product which has the focus or emphasis of the buyer) and their intention to purchase the brand. Thota and Biswas (2009), hypothesised that degree of irritation is more in the consumers with high need to evaluate (HNE) as compared to consumers with low need to evaluate (LNE), they also hypothesised that cross promotion effects the attitude of the buyer towards the company with regards to future endeavours. They conducted the research with undergraduate students and the research found that the degree of irritation was existent on conveying irrelevant information to the consumer but it was far below their expectations. However, the research found that, cross promotion may influence the future purchases made by the consumer. It may seem like an anomaly study but it is useful is examining the long term effects of cross promotion practiced by some companies in order to boost there sales as it may change the buyers outlook towards the advertised company. Although, Thota and Biswas (2009) tried to make the research value-free, I would argue that irritation is a natural phenomenon which occurs among the buyers when irrelevant or unrelated product is marketed. The method of involving undergraduate to role play as buyers may have diverted the results as it was not conducted in the natural environment.

Exceptions to advertising

Advertising is usually conducted to promote consumer behaviour towards advertised product and brand although there are few exceptions. Sometimes, it may be difficult for the advertiser to influence the spending behaviour and increase market share so instead he may increase the market size itself. During the review of the literature, I came across a study carried by McMullan and Miller (2009) which is based on commercial advertising of lottery gambling. The researcher conducted the research in order to determine the response of buyers towards purchasing lottery tickets influenced by advertisements consisting of top prize winners, improvising the packaging of lottery ticket and associating huge jackpots and attractive consumer goods. In addition to the answer of the corresponding research questions, it was observed that provincial governments in Canada are in a monopoly position as suppliers of lottery products so other companies cannot increase their market share. Therefore, in order to increase there profits they rely on increasing the size of the market itself by either increasing the users of lottery by adding new players or by increasing the overall usage (Waging) by existing players. The above mentioned study conducted by McMullan and Miller (2009) definitely threw some light on an exception to conventional advertising as usually the advertising is undertaken to increase own market share but as it was not possible in that case then companies resort to increasing the whole market size.

Top of the mind advertising

In order to study the relation between advertising and consumer behaviour accurately it is essential to know if the brand, its product or the advertisement campaign stay in the top of mind of the prospective buyer.

Zielske(1959) conducted a study to examine the rate at which consumers can be made to remember advertising and the rate at which they forget it. He suggested various hypotheses such as: (a) Exposure at weekly rate will develop rememberance of advertising at a faster rate. (b) Advertising will be quickly forgotten if consumer is not continuously exposed to it. (c) As the number of exposures to advertising increases the rate at which they are forgotten decreases. Zielske(1959) posted re-prints of advertisements weekly to one group and monthly to the other group. After the completion of the mailings, he made phone calls to ask questions to answer his research questions. I strongly feel that the methodology of Zielske(1959) was ahead of his time and is still applicable. Furthermore, this study will be very reliable and useful for researchers studying the same subject areas.

The review has given an account of various studies on and around the subject areas which will be valuable for my research. The purpose of this review was to determine whether studies have been conducted in this area in past. Previous studies have looked at verifying if the advertising has gotten the message across (Bower and Mateer, 2004) and worked outside the circumference of conventional advertising (McMullan and Miller, 2009). Although, past studies have looked into the subject area but it is still not clear and known as to what factors should be considered while advertising in order to influence the consumer most and what factors influence the shift in purchasing decisions. In Summary, my research will answer the unanswered questions in the subject area and assist the future researchers.

Assumptions

The validity and credibility of information was deemed to be true when the published literature was reviewed. Major reforms may have taken place in the subject areas of particularly seminal studies.

Bibliography

Anon, March 2004.Creative adverts selling drinks.

< > [Accessed on 14th November, 2009]

Bowler.J & Mateer.N. The White stuff. Nutrition & Food Science, 38(2), 164-170.

Oxford. Defination. <http://www.askoxford.com:80/concise_oed/advertise?view=uk>[Accessed on 19th February, 2010]

Boyd.H, Westfall.R & Stash.S (2005), Marketing Research. 7th Ed A.I.T.B.S

McMullan.J & Miller.D (2009), Wins, winning and winners: The commercial advertising of lottery gambling. J Gambl stud, 25, 273-295

Merriam-Webster. Defination.< on 20th February 2010]

ISBA., October 2004. Briefing Paper. <> [Accessed on 18th November, 2009]

Kotler.P., 2001. Marketing Management. 10th Ed. Prentice Hall

Thota.S & Biswas.A. I want to buy the advertised product only. Journal of Advertising, 38(1), 123-136

Zielske.H., 1959.The rememberance and forgetting of advertising. The Journal of Marketing, 239-243

My research aims to study the impact of advertising on consumer behaviour and determine the various effects advertising has on consumer behaviour. My study would also examine the methods to increase the awareness of consumer through advertising and also t

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