ABSTRACT
Advertising as a profession and a
field of study explains the reason why it cannot be underestimated. However,
advertising in the 21st century has gone beyond making use of the
traditional sources of the media to create awareness about product services,
goods and ideas to prospective consumers. The advent of the new media has
solidified the relevance of the internet in advertising. This research exercise
examined online advertising and consumers’ perception on purchase decision of
Smartphones. The study examined the general level of exposure which consumers
had towards online advertising. The attention, awareness and perception level
of consumers towards Smartphone brands advertised online was being checked as
well. The relevance of Gibson’s theory of direct perception and the AIDA model
was used in backing up the study.
In this study, the descriptive
survey research design was adopted making use of the quantitative research method to accurately establish the
relationships between the variables considered in the study. Residents of Lagos
State from Agege and Ikeja Local Government Areaswere the accessible population
for this study. The multi-stage sampling technique was used because more than
one sampling method was combined in order to arrive at a finite representative
sample size for the study. Validated questionnaires were distributed and data
was being gathered, analysed and interpreted making use of frequency counts,
mean, standard deviation, tables and charts.
This study adopted five objectives and three
hypotheses. Eight hundred and sixteen (816) copies of the questionnaire were
administered. Majority of the attendants were females and young individuals. It
was deduced from this study that pricing,
features, brand preferences, social Influence as important factors which
contribute to the purchase decision of Smartphones being advertised online. The
study also revealed that majority of the respondents pay less attention to
online advertisements but are attracted to the graphic quality of advertised
contents on social media which is also a form of online advertising. Overall,
the study found out that the new media is capable of influencing consumer’s
choice of purchasing Smartphones being advertised online. This research work
made it evident that it becomes mandatory for and strategic for Smartphone
manufacturers, vendors and marketers to adopt online advertising through social
media.
It was concluded that Smartphone manufacturers,
vendors and marketers need to identify online platforms that would enhance user
interactivity with the potential for consumer online Smartphone advertisement
customized exposure. This study proffered recommendations to Smartphone manufacturers,
marketers, and vendors about the appropriate utilization of online advertising
for Smartphones; with a view to improving the contents of online adverts of
Smartphones as well as making use of the best platform for new media
advertising to boost the purchase of Smartphones.
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
The practice of
advertising creates a positive and maximum potential for any manufactured
product to be seen as an existing brand being made known to the general public
otherwise, such a product will not sell. Advertising is capable of drawing the
attention of customers to any kind of product, service and brand and this is
done by making use of the media sources to persuade potential consumers or
customers to buy the advertised product.
Advertising
informs potential customers of an advertised product and it spells out the
functions and features of the product. Good advertising is necessary as it
creates a demand for the product which is being advertised. Advertising
may even create a brand identity for a product or series of products as well as
creating an image surrounding a product, so that customers feel that they need
it. Advertising can promote a new product and increase sales of existing
products. The entire function of advertising is a determinant factor in
developing the perception of diverse consumers either in appositive light or in
a negative about an advertised product and this in turn determines the final
purchase action or purchase decision made by consumers.
Advertising is a non-personal form of
communication usually paid for, designed to be persuasive about products,
services or ideas by identified sponsors through various media (Belch &
Belch, 2004; Dzisah & Ocloo, 2013;
Nwankwo, Aboh, Obi, Agu, & Sydney, 2013). According to Balakrishnan
& Kumar (2011), advertisements are designed to appeal to different types of
audience for the purpose of information dissemination about products and
services so as to bring about positive consumer perception and purchase
decision. It helps to deliver carefully prepared messages to target audiences
thus facilitating marketing programs of the products and services of
organizations (Zipporah & Mberia,
2014). The practice of advertising is very important as it helps in
building a reputable and positive image about a brand or service in the sight
of heterogeneous consumers. Advertising uses various sources of the media in
reaching out to the target audience which advertising messages are being
designed for. The professional practice of advertising is extended towards the
radio, television, newspapers and magazines. Other sources of advertising
include public speaking, door hangers and flyers, event sponsorship and
word-of-mouth advertising.
Online
advertising is the application of internet capabilities to the process of
carefully packaging non-personal communication messages to specific audience in
order to engender positive perception and purchase decision of products and
services (Tavor, 2011). Online advertising ensures wider coverage because it
has a very wide interconnection of individuals, businesses and organizations
with huge processing capabilities overcoming geographical boundaries (Ducoffe,
1996). Tavor (2011) observes that the Internet has become a major source of
information and has to some extent replaced old media such as the radio,
television and the newspaper; this has occurred because the Internet gives the
advantage of access to current information and mass dissemination of
information. These factors according to Tavor (2011) have jointly contributed
to ensuring that over 700 million people world-wide use the internet daily for
important activities such as information search and product/service purchase.
In addition, the
ubiquity of internet connection has brought about a diversion of companies’ and
businesses’ attention towards the online advertisement platform. Consequently,
many companies advertise their products and services online. According to Tavor
(2011), online advertising is preferred because it commands a daily audience
that is greater than the sum of the entire historical audience of traditional
media and it offers interactivity, colorfulness and information currency which
ultimately leads to either local or international purchase or products and
services.
Kotler (2001) points out that perception involves
someone selecting, organizing, and interpreting information and inputs such in
order to create a meaningful picture of the world and that each customer
perceives the world differently, and perceptions are manifested as attitude.
Exposure to advertisements irrespective of the advertising source through which
the advertised message is being communicated to consumers has a significant
impact in building up the perception of consumers towards an advertised brand. Consumer perception refers to the process by which a consumer selects, organizes, and
interprets information and stimuli inputs to create a meaningful picture of the
brand or the product (Blank, 2013). Consumer perception is an advertising
concept that encompasses a customer's impression, awareness
or consciousness about an advertised brand and
products with relevant information about its offerings. Consumer perception is
typically affected by advertising, reviews, public relations, social media, personal experiences and other channels
According to Blank (2013), Consumer perception applies the concept of sensory perception to
marketing and advertising. Just as sensory perception relates to how humans
perceive and process sensory stimuli through their five senses, consumer
perception pertains to how individuals form opinions about companies and the
merchandise they offer through the purchases they make. Merchants apply
consumer perception theory to determine how their customers perceive them. They
also use consumer perception theory to develop advertising strategies intended to
retain current customers and attract new ones.
Kazmi (2012) posits that consumer usage and buying of
any product largely depend upon their perception about the product. The author
identified accessibility, availability, and quality, durability regular supply
of product and mode of payment as the most important factors that influence
consumer perception. Similarly, Wollenberg and Thuong (2014) asserts that brand
perception is a term used to describe how consumers experience a particular
brand of product; perception can be seen as reality, so brand perception can be
seen as real customer’s views based on what was promised. Customers’ perception
helps to increase customers’ level of satisfaction which leads to brand loyalty
and increases the chance of product repurchase.
McCoy, Everard, Galletta and
Polak (2004) found that advertisements on an online platform such as websites
could bring about negative or positive perception. This is because it might
negatively influence intention to return; however retention of website
information was higher when advertisements were in-line or when advertisements
were not congruent with website content. However, contrary to expectations,
intentions to return were not affected by advertisement placement, while retention
of site content was not affected by the existence of advertisements, and
intrusiveness of advertisements was not affected by advertisement congruence.
CCS Insight (2014) observes that the global Smartphone
market has gone through a high growth rate in recent years, with shipments
rising by 40 percent in 2013 which surpassed the 1 billion unit threshold and a
forecast of Smartphone shipments of 1.89 billion units by 2018. This
development has increased competition in the Smartphone industry to the extent
that Apple has redefined their hardware business model while Samsung has scaled
its operations; and the barriers to entry have reduced because of the increased
adoption of the Android operating system and many design platforms (CCS
Insight, 2014). The increased competition among Smartphone manufacturers has
brought about a reduction in the market share of notable Smartphone
manufacturers. This contributes to the reason why notable Smartphone makers are
investing huge in marketing and advertising Smartphone brands via the internet.
Purchase decision is a thoughtful, on-going process
that is carried out to ensure eventual satisfaction. Consumers are rational
beings and as such apply a systematic process of information utilization for
making accurate decisions. This explains why online advertisements of
Smartphones become a key factor in either building or collapsing the purchase
decision of Smartphone brands by consumers. Purchase decision could also mean
meeting target customers' needs and increasing their positive perception
(Shareef, Kumar & Kumar 2008). Lay-Yee, Han and Yin-Fah (2013), assert that Smartphone purchase decision is influenced
by brand concern, convenience concern, dependency concern, price concern,
product feature concern and social influence concern which determine whether
advertised Smartphone brands online would be eventually purchased or not.
Furthermore Christopher, John
and Sudhahar (2014) discover that peer influence affects the purchase
decision of Smartphone users when they come across advertised Smartphones
online. This study is poised to studying the role of online advertisements on
consumers’ perception and purchase decision of Smartphones. The purchase
decision of various Smartphone brands by prospective consumers in Nigeria would
be measured based on the effectiveness of the online advertisement of
Smartphones which consumers are exposed to on daily basis thereby strengthening
the relevance of this study.
1.2 Statement of the Problem
The social
significance attached to certain Smartphone brands has qualified Smartphone
ownership to be a status making factor. The social influence being driven by
Smartphone ownership alongside advertised contents of Smartphones online
contributes to the eventual purchase of Smartphones (Kotler & Armstrong,
2010). With the mobile subscriber base pegged at over one hundred million
(Nigerian Communications Commission, 2016), Nigeria seems to be an attractive market for
Smartphones. This is evident in the number of different Smartphone brands
available in the country. Some of which are Samsung, Apple, Infinx, Techno,
Lenovo, Blackberry. The significance of Smartphones for consumers lie the
variety of applications present on the Smartphones that allow individuals to
perform different activities efficiently (Altena, 2012), even leading to a
state of dependency on Smartphones. Thus, Smartphone ownership and the usage of
certain Smartphone brands have come to be associated with a level of social
status and social significance.
The rapid increase in the number of Nigerians with internet subscription
translates to the maximum possibility of an average internet user in Nigeria
being exposed to online advertisements of Smartphones which in turn plays a key
role in influencing the perception and purchase decision of Smartphones.
(Nigerian Communications Commission, 2016) Smartphone
marketers continuously invest huge budgets in advertising their brands in order
to increase awareness and purchase among consumers. In a bid to maximize visibility
for their brands, Smartphone marketers are incorporating online advertising
into their strategy (Nielsen 2013). This is in consideration of the fact that
more consumers spend time on the internet. Therefore, it becomes imperative to
question the return of online advertisements on the investment of Smartphone
makers.
Too many
advertised messages being displayed at the same time creates a shift in
attention by consumers (Miller 2004). This becomes a check to the effectiveness
of Smartphone brands advertised online. Consumers’ perception is being
determined by the contents of smartphone brands advertised online. The
developed perception is what determines the eventual outcome of purchase
decision by consumers. The high level of investment into advertising by
Smartphone manufacturers raises certain questions such as: do consumers pay
attention to Smartphone online advertisements? Do the features of Smartphones
displayed in Smartphone online advertisements influence consumer perception and
purchase decision? Does the budget in online advertising for Smartphone online
advertisement reflect positively on consumers’ perception and purchase
decisions? Thus, this study intends to examine the role of online advertisement
on consumers’ perception and purchase decision of Smartphones.
1.3 Objective of the Study
The general
objective of this study was to examine the role of online advertising in
consumers’ perception and purchase decision of Smartphones. The specific
objectives are to:
1.
examine
consumers’ level of exposure to online advertisements;
2.
ascertain
consumers ‘awareness level of Smartphone brands advertised online;
3.
explore the
extent of consumers’ attention towards Smartphone online advertisements;
4.
explore
consumers’ perception (price, features, quality, durability, class) of online
advertised Smartphones and
5.
determine what
relationships exist between perception (price, features, quality, durability
and class) and purchase decision of online advertised Smartphones.
1.4 Research
Questions
1.
What is the
level of consumers’ exposure to online advertising?
2.
To what extent
are consumers aware of Smartphone brands advertised online?
3.
To what extent
do consumers pay attention to online advertisements?
4.
What is consumers’
perception (Price, features, quality, durability, class) of Smartphones?
5.
What
relationship exists between perception (price, features, quality, durability,
class) and purchase decision of Smartphones?
1.5 Hypotheses
The following
hypotheses were tested with 0.05 level of significance:
H1: Consumers’ exposure to online advertising
significantly influences awareness of
Smartphone brands advertised online.
H2: Attention to online advertisements
significantly influences perception (price, features, quality, durability and
class) of different Smartphone brands
H3: Consumers’ perception (price, features,
quality, durability and class) of Smartphones significantly influences purchase
decision of Smartphones
1.6 Significance
of the Study
This study
unraveled the impact of online advertisements on consumers’ perception and
purchase decision of Smartphones. Consumers’ awareness about Smartphone brands
facilitated by online advertisements either builds up or discourages their
perceptions and purchase decision because consumers have access to the metrics
that are individually important them. This study would increase the knowledge
of Smartphone makers about the Nigerian market, as it immensely contributed to
concretely exposing the current perceptions and purchase decision trends of
their products as being viewed by Smartphone consumers. Furthermore, Smartphone
manufacturers at the international level now have an insight into features and
factors that are most important to majority of the Smartphone users which they
may harness in order to develop a comprehensive Smartphone specification plan
to suit majority of the Smartphone consumers in Nigeria which may represent the
standard that Smartphones may need to meet before they are being allowed to
import or manufacture in the country.
Moreover, the
relevance of this study centered on assisting advertising practitioners,
marketers and Smartphone manufacturers and vendors towards embracing online
advertising as this research captured how online advertisements determines the
level of consumers’ perception and purchase decision of Smartphones.
1.7 Scope of the Study
This study
investigated online advertisement on consumers’ perception and purchase
decision of Smartphones. In the context of this study, Smartphones were not
specifically limited to specific brands. This study investigated perception
from the perspective of price, features, quality, durability and class, while
factors that influence purchase decision was limited to price, features and social influence. This study was conducted
among Lagos residents in Ikeja local government and Agege local government,
between September and December 2016. In the context of this research work, the
category of the respondents that was used for the purpose of this study were
individuals ranging from the category of the youths to the adults who were
Smartphone users with a considerable level of access and exposure to the
Internet, excluding minors.
1.8 Operational
Definition of Terms
Online Advertising: This refers to activities carried out on electronic platforms that are
powered by the internet and are used to consciously make potential consumers
aware of particular brands.
Brand Awareness: This is a process of increasing a consumers’ state of information about
a brand. It will be measured by developing scales that will require respondents
to state their level of awareness of Smartphone brands. In the context of this
study, the level of brand awareness by consumers would be determined by the
available choices of the smartphone brands which the Smartphone customers are
being exposed to via online advertisements.
Purchase Decision: This is an activity carried out by a consumer to take ownership of a
Smartphone brand advertised online by Smartphone makers. In the context of this
study, consumers’ purchase decision of Smartphone brands advertised online will
be measured and determined by the extent to which information about advertised
smartphones online influence consumers purchase decision.
Perception:
This explains the impression which is being created on the mind of various
consumers about the quality and features of Smartphone brands they are exposed
to via online advertisements. Consumers’ perception in the context of this
study is the combination of price, features, quality, durability and class.
Therefore, perception of consumers towards smart phone brands advertised online
will be measured and determined by the extent to which price, features,
quality, durability and class affects consumers’ perception before an
advertised smartphone is being purchased.
Smartphones: They
are mobile phones with the functional capability of a computer system with the
ability to access the internet and conveniently run downloaded applications.
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