Advertising Effects on Consumer’s Buying Behavior towards Cosmetic Products
Advertising Effects on Consumer’s Buying Behavior towards Cosmetic Products: Evidence from Female Consumers in Kathmandu Valley.
By:
Shraddha Khatiwada
A Proposal submitted in the partial fullfillment as the requirement for the degree of Master in Business Administration in the Faculty of Business Administration
IUKL
2018
Table of Contents
Chapter 1 : Introduction
Background of Study………………………………………………………………1
Statement of Problem………………………………………………………………2
Research Objectives……………………………………………………………….3
Research Questions………………………………………………………………..4
Significance of Study………………………………………………………………4
Organizational of Study……………………………………………………………5
Chapter 2: Literature Review
2.1 Theoretical Review…………………………………………………………………6
2.1.1 Psychological Theories…………………………………………………………..7
2.1.2 Socio-Cultural Theories…………………………………………………………7
2.1.3 Maslow’s Theory of Needs………………………………………………………8
2.1.4 The Concept of Advertising……………………………………………………..8
2.1.5 Stages of Consumer Buying Behavior…………………………………………..9
2.1.6 Consumer Buying Behavior……………………………………………………12
2.1.7 Factors Affecting Consumer Purchase Decision……………………………….13
2.2 Review of Recent Literature………………………………………………………14
2.3 Research Gap……………………………………………………………………..16
2.4 Conceptual Framework…………………………………………………………..16
2.5 Operational Definition and Hypothesis…………………………………………..17
Chapter 3: Research Methodology
3.1 Research Methodology……………………………………………………………19
3.2 Research Design………………………………………………………………….19
3.3 Sources of Data Collection……………………………………………………….20
3.4Instrumentation……………………………………………………………………20
3.5 Population and Sample……………………………………………………………20
3.6 Model for Data Analysis…………………………………………………………21
3.7 Limitations of Study………………………………………………………………21
Refrences
CHAPTER-1
INTRODUCTION
Background of Study
Women, formulating half population of worlds are now an important consumer segment for the marketers and businesses. In case of female segment, lifestyle, advertisement, quality, price and other factors play key roles in making the decisions of marketing. “Nepal is a multicultural and multilingual nation, with over half 51.44% of the female population having diverse interest and choices” (National Population Census, 2011). Thus, we can believe that maximum numbers of product and service purchases are made by Female Segment of the Nepalese market.
According to (Souiden&Diagne, 2009), “Improved technology, better education, advancement in science and economic growth has provided people with a chance to better standard of living. With increased purchasing power and increasing number of dual earning has made people more conscious towards beauty, hygieneand better lifestyle”. According to (Kumar, 1998), “Today women are more active, liberal moving ahead and taking part in every walk of life so they became more concerned towards their looks and appearance”. It effects the rapid growth of beauty care industry. (Moungkhem, et al. 2010) depicts that “Cosmetic not only increases the physical appearance of a person but also the confidence and assurance of individual to meet the challenges of society with great ease than ever before. To meet this growing demand of cosmetics by women not only domestic companies but many multinational companies enter the market place to meet the growing demand of beauty care products”. There are many factors which affect the buying decision of cosmetic products. “Some women buy cosmetics because of brand, some buy cosmetics because of price, some buy cosmetics because of friends and relative’s recommendations and others buy cosmetics because of packaging design” (Yinuo, 2011). Therefore, the marketers need to study and consider many factors concerning women decision to buy cosmetics (Hawkins&othersbaugh, 2010).
The study focused on the advertisement and various spending of advertisements on different factors of consumer buying behavior. Consumer buying behavior is mostly affected by various factors which include culture, family and brand image. Yet the brand awareness also helps the customer to buy a certain product. Due to this fact, cosmetic companies focus on advertising the products. This report also put light on other factors which can also influence the buying behavior of the consumers such as lifestyles, purchasing power, technology, traditional culture and income. Advertisers spend much amount of investment while advertising their product so they keep their focus on these factors so that they can influence consumer mind with advertisements.This research also put the light on the buying behavior of customers. Perceptions of the brands and buying behaviors usually change from person to person. So it is important and necessary to find out the changes of consumer behavior.
“According to Cohen, advertising is a business activity that employs creative techniques to design persuasive communication in mass media that promote ideas, goods, and services in a manner consistent with the achievementof the advertiser’s objective, the delivery of consumer satisfaction and the development of social and economic welfare” (Cohen, 1988). Advertisement helps the company to create consumer awareness and shape the consumer perception in both positive and negative way. People can perceive the quality of the products by gathering the information which they usually get through advertisements. The perception of the quality, awareness of the product and consumer views drives the consumer buying decision. The study significantly evaluates the various factors which shape the buying behavior and provides the deep insights towards the role of advertisements shaping the consumer behavior.
Statement of Problem
There are various other factors that have impact on consumer buying decision. Among them, Advertisement is very important tool used to stimulate the consumer buying behavior as they inform and persuade consumer about the products.Advertising plays a vital role in shaping dreams; aspirations and helps customers take a conscious product and brand decisions.The company spends a large amount of investment on different types of advertisement to keep their product at the top of the customer’s mind.The main purpose of this study is to identify the level of impact adverts have on the consumer’s purchase decision to buy or not.
“Advertising is essential to fulfil the traditional desire of firms to reach the ever increasing population so that their products may receive optimum exposure. The role of advertisement in increasing sales revenue and profits of the firms and increase the demand for goods has been falling apart. The reason people lost interest was the fact that the role of advertisements was falling apart due to the fact that most increase in product and sales, especially; cosmetics products had been attributed to other factors like taste,brand image, quality, lifestyle, purchsing power, long term use of products and users unwillingness to switch products” (Sundarsan, 2007).
The falling role and importance of advertisement has raised numerous questions which became the problem of this study. The key purpose of the study is to know why cosmetic firms still do advertisement and invest larger amount of money in advertisement. The researcher therefore intended to get answers as to how and why cosmetics companies do advertise their products while they know the increase in product and sales is attributed to other factors and no longer advertisements as it plays a neutral role and affect on sales of the product. With this information, one can draw conclusions as to what affect the consumer buying behaviors. Furthermore, one can see how much advertising influences the buying decisions of customer, and if there is any needs to be changes in the advertising of beauty and cosmetics products and how can company use advertisement effectively to attract customers?
Research Objectives
The main objective of the study is to find out that if there is any relationship betweenadvertisement and consumer buying behavior of female consumer in Kathmandu valley and tostudy the impact of advertisement on consumer buyingdecision towards cosmetic products. Some of the specific objectives of the study are as follows:
To identify the advertising effect on consumer awareness
To find the role of advertisement on building consumer perception
To study the impact of consumer awareness and perception on buying behavior
To identify the media of advertising used to get the attention of consumers.
Research Questions
Following are the reasearch questions that are based on the objectives of the study.
How does advertisement create awareness in consumers and affect their buying behavior?
Do advertisements build perceptions in the mind of consumers and affect their buying behavior?
Does advertising contain all the necessary information needed by consumers?
What are other factors beside advertisement that may influence the buying decision of customers?
Significance of Study
Advertisements have been used for many years to influence the consumer buying behaviors. Advertisements are useful in developing the cognizance and appreciation amongst the customers of cosmetic products; both of these variables are deadly combination to have an effect on the buying behavior of consumers. The purpose of this study is to discover the consumer behaviors and purchasing decisions of those who use beauty care and cosmetics products. The main purpose of this study is to discover how much advertising affects purchasing decisions over other influencing factor like brand, price, quality, etc. This study focuses on the impact of advertisement on the consumer’s behavior and their buying pattern towards cosmetic products. It explores the factors which are affected via the advertisement and ultimately influence the consumers buying behavior.
The study informs consumers on how advertisers try to persuade them to purchase their products. The study may help advertisers to identify the advertising medium that gets the attention of consumers.The study will help the readers to understand the consumer behavior while purchasing the cosmetic products so that they can use appropriate tactic to advertise their product in a best possible way. This study will be a major endeavour in promoting advertising awareness among the consumers. This study will be beneficial to the consumers and business companies particularly in product and service promotion. By understanding the needs of the consumers and the benefits of effective advertisement, these business companies will be assured of a competitive advantage. Moreover, this study will help to study both the positive and negative relationship between consumer buying behavior and advertisement.
The study also contributes significant knowledge on advertisement. Furthermore, this study puts light into advertisement issues to the cosmetic companies and help them on how to do and improve their sales focusing on the effective use of advertisement and reach the final customers. The results of this study would be beneficial to the marketers in order to choose suitable advertisement themes and styles in observance of the traits, norms, values, ideas and religious beliefs of consumers which conveys the informational and emotional message in a positive way. It also helps in identifying the level of perceptions of consumers about the cosmetic products based on the various media of advertisement and other influencing factors.
Organizational of Study
The study consists of three chapters. Chapter one includes Background of Study, Statement of Problem, Research Objectives, Research Questions and Significance of Study. The second chapter includes Literature review while the third chapter consists of research methodologies that were used in the study.
CHAPTER-2
LITERATURE REVIEW AND CONCEPTUAL FRAMEWORK
2.1 Theoretical Review
Buying is a complex procedure which entails collection of decisions and necessary questions such as what to buy, the place to buy, when to purchase and how to buy. These collections of choices drive from the client recognition and consumer perceptions. Buyers aware of the product through one source or more than one source have extra statistics regarding the company, brand and the product. In this research, advertisement is considered as the main source of creating consumer awareness. The main motive behind the creating awareness in the mind of the customers is the content and information used in the particular advertisement. In the same way content of the advertisements also build the customer’s perceptions who are watching these advertisements. The results of research depict that advertisements are the most important source of creating awareness as well as shaping the perceptions of the customers.
In the present era, marketers are mainly focusing on customer and their preferences as they are the king of the markets. To maintain deep eye on customers the most important responsibility to the corporation is to attain the information about the customers. In this way marketers will be successful in identifying and fulfilling the needs and wants of the customers and seek the better opportunities in the market. “Researchers find out that marketers need to understand these four things in order to serve their customers better. Firstly marketers must know that customers make rational decisions so they can get the best product available in the market. Secondly customers also make irrational decisions and they are very impulsive and can be attracted towards the promotional activities. In the same way emotional association also put an influence on the mind of customers. In the last customers also buy as a problem solver, they seeks the products which can solve their problem” (Gupta, 2013).
Consumer awareness and consumer perceptions are considered as the two predominant drivers that lead towards the purchasing decisions. Customer’s attitudes are created through experience and learning which influence their buying behavior. The positioning of the brand is dependent on the success and failure of the company. “Middle aged people have positive attitude towards the cosmetics and beauty products because they want to look young and also they are settled in their life so they have spending to spend on these luxuries” (Tamizhjyothi, 2013).
In conducting this study, the researcher was guided by the following theories;
2.1.1 Psychological TheoriesThe essence of psychological theories lies in the fact that humans learn from experience and the results of experience will modify their actions on future occasions. The significance of brand loyalty and repeat purchase makes learning theory more relevant in the field of marketing. Among the psychological theories come stimulus response theories and cognitive theories.
According to Purlon, Skinner Thorindike and Kotlew, “learning occurs as a person responds to some stimulus and is rewarded with need satisfaction for a correct response”. They proved that most frequent and recent stimuli are remembered and responded. This approach is the base of reported advertisements.
2.1.2Socio-Cultural TheoriesThe theory is founded by Veblen and is known as Veblenian Model. (Veblen, 1899) asserted that “a man is primarily a social animal and his wants and behaviour are largely influenced by the group of which he is a member. He argued that people have a tendency to fit in a society in spite of their personal likes and dislikes”.
Veblen’s Model explains culture in terms of social classes and reference groups whereby families are the different factor groups that influence the buying behaviour. The above theories give guidelines to the marketing managers on how a consumer behave in a particular situation and what are the various factors which influence their decision making process and helps them to make appropriate strategy.
2.1.3 Maslow’s Hierarchy Theory of NeedsMaslow’s Need Theory explains “why people are driven by a particular need at a particular time. According to the theory, human needs are arranged in hierarchy, from the most pressing to the least pressing, in order of importance. When a person succeeds in satisfying an important need, he/she will try to satisfy the next important need”. This theory explains how purchase decision is influenced by the needs of an individual (Maslow, 1954).
2.1.4 The Concept of AdvertisingThe concept of advertising can be explained using five process i.e. sender, encoding, message, decoding and receiver. This process explains the one-of-a-kind levels through which message is shaped and traveled to the target audience. “Advertising message is a bundle of representation of the product and the company. The advertising process starts from sender and end up to receiver” (Schramn, 1995).
Sender
According to (Czinkota and Ronkainen, 2008), “the individual or firm who feels the need to deliver the message and selects the combination of symbols, pictures, music or words as a message to be transmitted. All the responsibility of the whole process is on the shoulders of the sender. It is up to the sender how he designs the message and which information he is using for audience”.
Encoding
(Czinkota and Ronkainen, 2008) describes that “encoding is the design of the symbolic arrangements which should be understandable by the receiver. It is in fact a crucial stage to develop the basis of the message. Encoding is the functional stage where sender of advertising message sees the functionality of the codes towards the receiver of that particular advertising message”.
Message
The message is in fact the complete form of encoding. (Bovee and Thill, 2002) defined that “the message as the idea which is capable of being transmitted. When the complete message is encoded, it is now ready to transmit to the audience. From here the message is diffused to the audience through the prescribed media or combination of media by the source”.
Decoding
Decoding is the understanding of the delivered message by the audience. According to (Bovee and Thill, 2002), “It is the process to translate the message into an idea”. It is an essential stage of Advertising that shows how the receiver of the message perceives the delivered message. If decoding is done rightly according to the information, knowledge and understanding level of the receiver then the feedback can be positive.
(Kotler and Keller, 2006) explains that “the sender should know the audience very well before designing the message. The audience can be varied preferences or homogeneous which should carefully be studied. The suitability of all of the elements is important. The intensity of the noise can be increased if the message will not be suitable which can lead to the failure of advertising”.
2.1.5Stages of Consumer Buying Process(Blackwell et al., 2011) suggests that “Consumers pass through seven stages before reaching their final purchase decisions. These seven steps include; need recognition, information search, pre-purchase, evaluation, purchase, consumption, post-consumption evaluation and divestment”. The buying decisions of consumers are mostly based on these seven stages.
Need recognition
(Blackwell et al., 2011) describes that “The buying process is initiated when people recognize their unsatisfied need. There are two kinds of needs, namely functional needs and psychological needs. Functional needs are related to the performance of the product whereas psychological needs are intrinsically obtained when customers feel contented with shopping or owning a product which they long for”.
According to (Zeithaml and Bitner, 2000), “There are many different ways to distinguish needs, the most widely known and used is Maslow’s hierarchy theory which specifies five need categories arranged in a sequence from basic lower-level needs to higher-level needs: physiological, safety and security, social, ego, and self-actualization. Products can fill all these needs, and they become increasingly important”.
Information search
(Schiffman and Kanuk, 2007) explains that “Search for information begins when a consumer perceives a need that might be satisfied by the purchase and consumption of a product. The reminiscence of past experiences might provide the consumer with adequate information to make the present choice. On the other hand, when the consumer has had no prior experience, he or she may have to engage in a search for information”.
(Tudor, 2008) suggests that “A customer can get the information from various sources such as; personal sources like family, friends, neighbors etc, commercial sources like advertising, salespeople, retailers, dealers, packaging, point-of-sale displays, public sources like newspapers, radio, television, consumer organizations; specialist magazines and experiential sources like handling, examining, using the product”.
Evaluation of alternatives
According to (Blackwell et al., 2011), “The third stage is the pre-purchase evaluation where consumers compare between different products and brands to make a purchasing decision. In this stage, consumers pay particular attention to the attributes which are most relevant to their needs. Attributes like quantity, size, quality and price are commonly used to judge a brand by customers”.
(Schiffman and Kanuk, 2007) explains that “When evaluating potential alternatives, consumers tend to use two types of information; a list of brands from which they plan to make their selection and the criteria they will use to evaluate each brand. Making a selection from a sample of all possible brands is a human characteristic that helps simplify the decision-making process”.
Purchase decision
(Blackwell et al., 2011) explains that “Stage four refers to the purchase decisions made by the consumers after evaluating the offers from different retailers. This is made by judging which retailers to buy after investigating the attributes from the previous stage whereas in-store selection is affected by the selling skills of salesperson, visual displays inside the shops, as well as point-of-purchase advertising”.
The three types of purchases made by consumers are trial purchases, repeat purchases and long term commitment purchases. When a consumer purchase a product for the first time and buys a smaller quantity, this purchase would be considered as a trial. Thus, a trial is the investigative phase of purchase behavior in which consumers attempt to evaluate a product through direct use. .
Post-purchase evaluation
According to (Tudor, 2008), “The last stage of consumer buying process is the post-purchase evaluation of the decision. It is common for customers to experience concerns after making a purchase decision. This arises from a concept that is known as “cognitive dissonance”. The customer, having bought a product, may feel that an alternative would have been preferable. In these circumstances that customer will not repurchase immediately”.
Figure 2.2: Stages of Consumer Buying ProcessThe figure given below shows the five stages of the buying process that each buyer has to go through.
2.1.6 Consumers Buying Behavior
Consumers buying behavior is focusing on how people make choices to spend valuable sources such as time, money and effort on consumption related items. This consists of what they buy, why they purchase it, when they buy it, the place they buy it, how frequently they buy it, how frequently they use it, how to evaluate it after the buy and the affect of such evaluation in future and how they dispose of it.
(Proctor et al, 2002) decribes that, “the principle aim of consumer buying behavior analysis is to explain why consumers act in a particular way under certain circumstances”. It is important to marketers to recognize and understand why and how individuals make their purchase decision. With this information, marketers are able to determine better strategic marketing plan and decisions.
(Schiffman et al 2001) “The marketers will be able to predict how consumers are likely to react to various informational and environment cues and to shape their marketing strategy accordingly once they have understood consumers behavior on purchasing. With no doubt, marketers who understand consumer behavior have great competitive advantages in the market place”.
2.1.7 Factors Affecting Consumer Purchase Decision
The three factors which affect the consumer behaviour are cultural factors, social factors and personal factors.
Cultural Factors
(Kotler and Armstrong 2008) explains that “Cultural factors determines a person’s wants and behavior and has deep influence on consumer behavior which including the roles of buyers’ culture, subculture and social class. Each culture contains smaller subcultures, or groups of people with shared value systems based on common life experiences and situations. Subcultures include nationalities, religions, racial groups, and geographic regions”.
Social Factors
(Kotler and Armstrong 2008) depicts that “A consumer’s behavior is influenced by social factors, such as the consumer’s small groups, family, and social roles and status. Social class is an invisible stratification of the inhabitants of the society into different groups based on some traits of the people. Inhabitants in a society can be divided into different social classes according to their income level, occupation, education and so forth”.
Personal factors
According to (Kotler and Armstrong, 2008), “A buyer’s decisions are influenced by personal characteristics such as the buyers’ age and life-cycle stage, occupation, economic situation, lifestyle, and personality and self-concept. People change the goods and services they buy over their lifetimes. A person’s occupation affects the goods and services bought. Similarly, a person’s economic situation affects product choice”
Psychological factors
(Kotler and Armstrong, 2008) suggest that “A person’s buying choices are further influenced by three major psychological factors: motivation, perception and attitudes. Motivation is the driving force within individuals that impels them to action. Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world”.
2.2 Review of Recent Literature
(Ahmed and Ashfaq, 2013) conducted a study and explain” the impact of advertising on consumers’ buying behaviour on purchasing cosmetics products. The findings of the study showed that 41% of respondents were influenced by product quality, 39% were influenced by to persuasiveness of the advertisement while 20% were influenced by the information provided by the advertisement”.
Another study conducted by (Olomofe, 2010) “on the factors which influence purchasing decision by Nigerian women with regard to cosmetics found that 54% were influenced by celebrity endorsements, 14% were influenced by the price of the product, 12% were influenced by the packaging of the product while 10% were influenced by the testimonials see in Television advertisements”.
(Rehman et al ,2014) in his research explains on” how advertising affects the buying behavior of consumers in Pakistan analyzed impact of advertisement on consumer buying behavior, and the results of correlation indicated that advertising is positively correlated with buying behavior at highest correlation of 0.414 or in other words consumer buying behavior is impacted by advertisement” .
(Sonkusare, 2013) concluded in his research that “advertisements have great impact on buying behavior of women customers. Before purchasing any product customers/consumers collects information for their comparing alternative product options before making proper purchasing decision making activities hence advertising is mostly adopted to get information about FMCG products”.
(Abideen et al, 2011) found that “advertising is the main factor which influences consumer buying behaviour especially if the advertisements are created in such a way that they make the consumer excited, stimulated and frenzied. This is because such advertisements are more likely to attract the attention, arouse interest and create desire to purchase the advertised product”.
A study conducted to determine factors which influence consumer buying behaviour among consumers of electronic products impact of advertising on consumer buying behaviour by (Kumar A, 2011) “found that consumer behaviour is determined by the effectiveness of marketing and advertising efforts of the company which influence the perception of customers on product quality”.
Another study conducted by (Bin Junaid A. et al, 2013) of female buying behaviour of cosmetic products in New Delhi and NCR that, “as income of females increase, their purchase of cosmetic products also increases. They also, added that, this increase in expenses on cosmetic product is made possible by the advertisement made on them”.
(Gramm, 1969) conducted a study on the impact of advertising on demand generation and wanted to establish the relationship between advertising and purchase intention and found that “advertising has a positive impact on demand creation and also established that there is a positive relationship between advertising and consumption”.
(Chen ,2003) conducted a study on factors that influence purchase of cosmetics in the USA and found “five important factors for cosmetics purchasing decision: the quality of the product, product shape and colour choice, the size and weight, price along with associated accessories, ease of use, new technology, product design, appearance and price”.
(Gabriel Byabato Bakilana, 2009) “The study also established another factor influencing consumer purchase decision among Tanzanians to be the country-of-origin whereby products from highly developed countries e.g. Italy, Germany were perceived to be of better quality while products from developing countries e.g. China, India were perceived to be of lesser quality”.
2.3 Research Gap
From the above literatures reviewed, we can say that definitely advertising has a positive effect on the purchase of consumers and it positively influences the sales of companies. We discovered that most work done in the subject, determined out the effects of advertising on companies’ income and sales using various econometric tools. Little can be said of work done on the consumers’ side the usage of econometric analysis.
In this study most literature were from abroad, hence, there is a gap on local empirical literature review on the influence of advertising and its effect on consumer buying behavior of cosmetics products. This study aimed to fill this gap by focusing only on Female Consumer of Kathamndu Valley as a case study.
2.4 Conceptual Framework
Advertisement
(Independent Variable)
Television advertising
Celebrity endorsement
Word of mouth
Online advertisement
Consumer Buying Behavior
(Dependent Variable)
Consumer awareness
Consumer perceptiion
Figure 2.3: Conceptual Framework of Advertising and Consumer’s Buying Behavior
(Fisher and Krutilla, 2009) suggest that “The conceptual framework provides a description of the relationships between the concepts being used. Defining the concepts and creating a conceptual framework are means to simplify the research task and to clear away issues that are not related to the topic and research question”.
This study focuses on the relationship between the customer buying behavior and advertising. The conceptual framework of this study describes the link among the customer buying behavior and different Medias of advertising. In this conceptual framework for the analysis of the study we have taken television advertising, celebrity endorsement, word of mouth and online advertisement as the independent variables. And Consumer buying behavior as a dependent variable.
2.5 Operational Definitions and Hypothesis
Television Advertising: A television advertisement also called a TV commercial, commercial or advert is a span of TV programming produced and paid for via an organization. It conveys a message, aimed to market a product or service. Television advertisement is considered as one of the most effective medium to influence the purchasing decision of consumers. The hypothesis is given below:
H1: There is a relationship between Television Advertising and Consumer Buying Behavior.
Celebrity Endorsement: Celebrity endorsement is a form of marketing campaign or advertising and marketing method used by way of brands, companies, or a non-profit organisation which includes celebrities or a established person using their social popularity or their reputation to assist promote a product, provider or even elevate attention on environmental or social matters. Marketers endorsed celebrities with their products and brands in the commercial to expand their sales and change the appreciation of the viewer’s regarding their brand, which positively impacts on their buying behavior. The hypothesis is given below:
H2: There is a relationship between Celebrity Endorsement and Consumer Buying Behavior.
Word of Mouth: Word of Mouth is an unpaid structure of promotion in which satisfied customers tell family, friends and other people about how much they like a business, product or service. Word of mouth can have impact on others’ views, thoughts and their decision. If word of mouth power is utilized correctly, it could market any product and services for the long period of time. It has the power to create strong image about the brand and products in the mind of individuals. Word of mouth could be beneficial as well as harsh. The hypothesis is given below:
H3: There is a relationship between Word of Mouth Communication and Consumer Buying Behavior.
Online Advertisement: Online advertising is a marketing strategy that includes the use of the Internet as a medium to obtain and gain website traffic and target and deliver marketing messages to the right customers. Online advertising is geared toward defining markets through unique and useful applications. Online advertisement has become the predominant source of communication in today’s world. It is the leading source of communicating to the people about everything. The hypothesis is given below:
H4: There is a relationship between Online Advertisement and Consumer Buying Behavior.
CHAPTER-3
RESEARCH METHODOLOGY
3.1 Research Methodology
Research method is a way to systematically solve the research problem. It refers to the various sequential steps that are to be adopted by a researcher during the course of studying the problem with certain objectives. Research method discussed in this chapter helps to guide the research study providing different issues and aspects. This chapter is to outline the nature and sources of data, sample selection and classification of variables, validity and reliability test, techniques and steps adopted in interpreting and analyzing the data. It also focuses on how to collect required data, what are the population and sample, and techniques to be adopted to analyze and interpret etc.
3.2 Research Design
This study has employs descriptive research design and causal comparative research design to deal with the fundamental issues associated with the advertising effect on consumer buying decsion of cosmetic products. This study adopts descriptive research design for fact finding and searching the adequate data and information about the effect of advertisement on buying decision of customers on cosmetic products.This research design is a process of accumulating facts. It describes phenomenon as it exists. Such design involves the systematic collection and presentation of data to give clear picture of a particular situation. The advertising effect of consumer buying behavior on cosmetic products has been identified with the help of questionnaire.
This study also employs causal comparative research design to determine direction, magnitudes and relationship between consumer buying behavior and different independent variables. Causal comparative research design is used to find the cause and effect relationship among the different variables used in this study. The basic purpose of employing causal comparative research design in this study is to understand and identify the impact of advertisement on consumer buying decision on cosmetic products in Kathmandu Valley. The research design is mainly based on the issues of the study and available of resources.
3.3 Sources of Data Collection
The main sources of data for the study was primary data which was collected directly from the respondents through questionnaires, and secondary data which involves data already collected by other others authors hence stored in articles, newspapers, books, and research reports as examples, and these data was used based on the subject matter to find out what they say about the impact of advertising on consumers buying behavior.
3.4 Instrumentation
According to (Frankael and Wallen, 2000), “validity refers to the degree to which any inferences a researcher makes, based on the data he or she collects using a particular instrument, is supported by evidence. Therefore, the coverage and relevance of the instruments to the problem under study are subject to content validity. This entails the extent to which questions in the instruments cover the ground to be explored”.
In order to realize the validity and reliability of the instruments, the study was conducted involving 100 consumers. This study collect data from structured questionnaire survey which contains the respondent’s related information through tick mark questions, and 5-scale Likert scale questions and data are analyzed in descriptive and causal comparative method. The relationship between dependent and independent variable are analyzed in multi-step regression analysis.
3.5 Population & Sample
Kothari (2006) defines “population of the study as the sum total of individuals from which the researcher selects a sample of the study.” The population of this study consists of the female customers of Kathmandu Valley. This study is conducted to extract the information from the customer regarding the advertising effects of consumer buying decision towards cosmetic products.
3.6 Model for Data analysis
The study aims to analyze the impact of advertisement on consumer buying decsion towards cosmetic products. In this study, the model has been used to test the theoretical relationship of advertisement and consumer buying behavior decision. The Medias of advertising are categorized into four independent variables which are online advertising, Television Advertisement, Word of Mouth and Celebrity Endorsement whereas dependent variables are Consumer Buying Behavior. Regression models are used in this study to analyze the advertising effects of consumer buying decision towards cosmetic products in Kathmandu Valley. The regression model used in this study is as follows:
Model I
Model I represents the advertising effects on consumer buying decision towards cosmetic products in Kathmandu Valley.
CBB=?0+?1TA+?2OA+?3WMA+?4CE+e
Where,
CBB= Consumer Buying Behavior
TA= Television Advertisement
OA= Online Advertisement
WMA= Word of Mouth Advertisement
CE= Celebrity Endorsement
e= error term
?1,?2,?3,?4 are the beta coefficients of the explanatory variables to be estimated.
3.7 Limitation of Study
The major limitations of the study were as follows:
The study was predominately based on primary source of data regarding the customer satisfaction and advertising of cosmetic products. Therefore, the reliability of the result of the study depends on how much the facts and information provided by the respondents is accurate/ correct.
The sample size in this study was only from the Baneswar area. It did not include all the users of cosmetic products of Kathmandu.
The survey was conducted within limited respondents of cosmetic product users.
The study was conducted at very short period of time.
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