Advertising Strategy Impact On Consumer Buying Behaviour Marketing Essay

Advertising Strategy Impact On Consumer Buying Behaviour Marketing Essay Introduction: Understanding the advertising strategies is an important which determines the consumer motivation towards the purchase decision making. Depending on the nature of the product consumer will follow a certain distinctive stages which will form the purchase decision making process. Consumer purchase decision making process starts with problem recognition like identification of a problem or unfulfilled need of the consumer than the search for information. They can search information by different ways like impulse purchase decisions, internet, advertising etc. Then they will evaluate the alternatives and finally make the purchase decision. The final part of purchase decision making process include post-purchase evaluation. This is a very important sector for all the marketing managers to satisfy their after making the purchasing decision by checking whether the products meet the level of expectations or not. Advertising is a paid, mediated form of communication from an identifiable source which is designed to persuade the receiver to take some action at now or in the future. (Richards and Curran, 2002) 1.2 Problem Definition: Advertising strategy has an impact on consumer buying behaviour. Advertising strategy is a campaign developed to communicate ideas about the product and services to potential customers for convincing them to buy those products or services (www.enotes.com). the advertising strategy should be built in a rational and intelligent manner will reflect business consideration like overall budget and brand recognition and objectives such as public image enhancement, market share growth. 1.3 Rationale: Retail industries in UK are facing problems of understanding the consumer behaviour. Consumer interest to a particular product can be increased by their advertising strategy. Advertising strategy should be made in such a way which will understand the consumers mind and satisfying the needs and wants of the consumers. I want to use this study to protect customer rights and to increase awareness in customers mind. Also I want to raise the issue of establish societal marketing concept by the company, where a company should play an ethical role in the society for the benefit of society and normal consumer. 1.4 Organizational Background: This research is based upon Tescos advertising strategies to motivate their customers. Tesco is one of largest retail industry in UK. In the year 2000 Tesco has launched in UK. At the year 2001, Tesco launches `Customer Champions in many stores an in many implement a new labour scheduler to further improve service for customers and Tesco becomes the leading organic retailer in the UK and reaches to  £1 billion price cuts. In 2002, Tesco enters to Malaysia and offers Free-From products designed for customers with special dietary needs. In 2003, Tesco entered in Turkey and Japan in order to expand their business. Day by day Tesco is increasing their business in different areas and in 2004 Tesco enters in China and launched own-brand Fair trade range and Broadband. At this time tesco.com become the first major British supermarket to enter music and download music. In the year 2005, Tesco Home plus launches and Tesco announces annual profit of  £2 billion and Tesco exists the Taiwanese market in an asset swap deal with Carrefour involving stores and operations in the Czech Republic. In 2006, Tesco Direct launched and in 2007 Tesco opens Fresh and Easy in the US. In 2008, Tesco announces plans to establish cash and carry business in India and acquires 36 hypermarkets in South Korea from Homever. Tesco also launched discount brand and personal finance acquisition in this year. In the year 2009, another advertising strategy club card re-launched in the UK with  £150 million investment offering customers the opportunity to double up their vouchers. (www.tescoplc.com, 2010) 1.5 Research Background: At present, retail companies are giving aggressive advertisement to attract customers which impacts great changes on customers buying pattern. Sometimes their advertising strategy leads to un-ethical issues in the society. So, general customers and people in the society have been affected by enormous advertisement. This study will explore that issue. 1.6 Research Questions: What is the concept of advertising and consumer buying behaviour in the context of retail industries? What is the impact of advertising strategy on consumer buying behaviour in the UK retail industry? What is the impact of Tescos advertising strategy on the buying behaviour of its customers? 1.7 Research Objectives: Critically review literature on advertising and consumer buying behaviour in the context of marketing and business strategy in the UK retail industry. Collect and analyze the data obtained through questionnaires targeting Tescos customer and interview the managers. Literature Review 2.1 Indicative Literature Review: The aim of this chapter is to demonstrate knowledge of relevant literature. Identifies key debates, concept and theories. Following two key points are the backbone literature of the proposed research topic: Advertising Customers buying behaviour The aim of this literature review in this report is to identify the literature gap. 2.2 Advertising: One of the major goals of advertising must to generate awareness of the business and its products. Once the business is established and its products are positioned in the market then the advertising will increase and develop consumer loyalty to the product. Definition of advertising: Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. (Kotler Armstrong, 2004) A dictionary definition of advertise would be to make known: to inform. All advertisements can be seen to offer information, and can be regarded as communications about products, services and organizations. Viewed in this way, advertisings purpose can be seen as communication, but since all advertisements contain persuasive elements directed at the ultimate purpose of a sale, advertising must also provide motives. Consumers must be moved towards purchase; ideas must be communicated.(Geoff Lancaster et. all,2002) 2.3 Advertising Decisions: Marketing management must make four important decisions when developing an advertising program, and evaluating advertising campaigns. Campaign evaluation Communication Impact Sales impact Message decisions Message strategy Message execution Budget decision Affordable approach Percent of sales Competitive parity Objective and task Objectives Setting Communication objectives Sales objectives Media decision Research, frequency, impact Major media types Specific media vehicles Media timing 2.4 Advertising objectives: There are some major objectives of making the advertising such as building brand image, providing information, persuasion, supporting marketing efforts and encouraging action. An advertising objective is a specific communication task to be accomplished with a specific target audience during a specific period of time. Advertising objectives can be classified by primary purpose whether the aim is to inform, persuade, or remind. (Kotler Armstrong, 2004) Following table will illustrate core advertising objective. Informative Advertising Telling the market about a new product Describing available services Suggesting new uses for product Correcting false impression Informing the market of a price change Reducing consumers fears Explain how the product works Building a company image Persuasive Advertising Building brand preference Persuading customer to purchase now Encouraging switching to your brand Persuading customer to receive a sales call Changing customers perception of product attribution Reminder Advertising Reminding brand preference Keeping customer to purchase now Encouraging switching to your brand during off seasons Changing customers perception of product attributes Maintaining its top-of-mind awareness 2.5 Setting the Advertising Budget: After determining its advertising objectives, the company next sets its advertising budget for each product. Four commonly used methods such as; affordable approach, percent of sales, competitive parity, and objective and task. A brands advertising budget often depends on its stage in the product life cycle. For example, new products typically need large advertising budget to build awareness and to persuade consumers to try the products. In contrast, mature brands usually require lower budgets as a ratio to sale. Market share also impacts the amount advertising needed: Because building the market or taking share from competitors requires larger advertising spending than does simply maintaining current share, low-share brands usually need more advertising spending as a percentage of sales. 2.6 Developing Advertising strategy: Advertising strategy consists of two major elements: creating advertising messages and selecting, advertising media. In the past, companies often viewed media planning as secondary to the message-creation process. The creative department first created good advertisements, then the media department selected the best media for carrying these advertisements to desired target audiences. 2.7 Creating the Advertising Message: Good advertising messages are especially important in todays costly and cluttered advertising environment. Just to gain and hold attention, todays advertising messages must be better planned, more imaginative, more entertaining, and more rewarding to consumers. Message strategy is the first step in creating effective advertising messages is to decide what general message will be communicated to consumers- to plan a message strategy. Message execution is the second step. The advertiser has to turn the big idea into an actual ad execution that will capture the target markets attention and interest. The creative people must find the best style, tone, words, and format for executing the message. Any message can be presented in different execution styles, such as; Slice of life Lifestyle Fantasy Mood or image Musical Personality symbol Technical expertise Scientific evidence Testimonial evidence or endorsement. 2.8 Selecting Advertising Media The major steps in media selection are: Deciding on reach, frequency, and impact. Choosing among major media types. Selecting specific media vehicles. Deciding on media timing. 2.9 Advertising Evaluation: The advertising program should evaluate both the communication effects and the sales effects of advertising regularly. Measuring the communication effects of an ad- copy testing tells whether the ad is communicating well. Copy testing can be done before of after an ad is printed or broadcast. Before the ad is placed, the advertiser can show it to consumers, ask how they like it, and measure recall or attitude changes resulting from it. After the ad is run, the advertiser can measure how the ad affected consumer recall or product awareness, knowledge, and preference. 2.10 Importance of Advertising strategy: The importance of advertising strategy are the following:- Advertising strategy will help to reach the large number of customers across different geographic markets. Effective advertising will allow larger audience to be reached with specific messages. Depending on media used, cost of reaching individuals can be lowered compared to other forms of communications. Advertising can be used to provide information for consumers at different purchasing stages. Advertising strategy will be effective in awareness creation at early stages of new product launched. Advertising strategy include a wide range of media to carry the advertising. 2.11 Advertising strategy framework: For the development of the advertising strategy it is useful to use different theoretical framework which are the following:- Hierarchy of effects model: This model will help to clarify the objectives of the advertising strategies as well as the objectives of a particular advertisement. It is also helpful to identifying the communication strategy. This model describes that a business buyer or a consumer moves through a series of six steps to make a purchase like awareness, knowledge, liking, preference, conviction and the actual purchase. (Kenneth E. Clow and D. Baack, 2002) Means-End Theory: The second theoritical model of Advertising strategy called the means-end chain. An advertisement contains a message or a means to lead the consumers a desired end state. Here the end-states include the personal values. The purpose of the means-end chain is to cause a chain reaction in which viewing the ad leads to the consumer to belief the product will achieve one of these personal values. The means-end theory model suggests that there are five elements in creating advertising like the product attributes, consumer benefits, leverage points, personal values and the execution framework. This model is designed to move the consumers through these five elements. Thus, the attributes of the product should be linked to the specific benefits consumer can derive and these benefits can lead to the attainment of a personal value. (Kenneth E. Clow and D. Baack, 2002) Leverage Point model: The hierarchy of effects model and the means-end chain approach are associated with leverage point methods. A leverage point is such a feature in the ads that lead the viewers to transform the advertising message into a personal value. To construct a quality leverage point, the marketers tries to build a pathway connecting a product benefit with the potential buyers value system. (Kenneth E. Clow and D. Baack, 2002) Verbal and visual images: The final type of advertising model is called verbal and visual images model. Here the degree of emphasis is given on the visual elements. Visual images often lead to more favourable attitudes toward both the advertisement and the brand. Visuals also trend to be more easily remembered than a verbal copy. Visual elements will be stored in the memory as both pictures and the verbal copy. This dual processing makes it easier for people to recall the message and also visual images are usually stored in the left and right hand sides of the brain while verbal messages are tend to be stored in the left side of the brain only. (Kenneth E. Clow and D. Baack, 2002) 2.12 Customers Buying Behaviour Consumers around the world vary tremendously in age, income, education level, and tastes. They also buy an incredible variety of goods and services. How these diverse consumers connect with each other and with other elements of the world around them impacts their choices among various products, services, and companies. (Kotler Armstrong, 2004) 2.13 Models of Consumer Behaviour Buyers black box Buyer Buyer Character- Decision Istitcs Process Marketing and other stimuli Marketing Other Product Economic Price Technological Place Political Promotion Cultural Buyer responses Product choice Brand choice Dealer choice Purchase timing Purchase amountConsumers make many buying decision every day. Most large companies research consumer buying decisions in great detail to answer questions about what consumers buy, why they buy, how and how much they buy, when they buy. Marketers can study actual consumer purchases to find out what they buy, where, and how much. But learning about the whys of consumer buying behaviour is not so easy the answers are often locked deep within the consumers head. This figure shows that marketing and other stimuli enter the consumers black box and produce certain responses. Marketers must figure out what is in the buyers black box. Marketing stimuli consist of the four Ps: product, price, place, and promotion. Other stimuli include major forces and events in the buyers environment: economic, technological, political, and cultural. All these inputs enter the buyers black box, where they are turned into a set of observable buyer responses: product choice, brand choice, dealer choice, purchase timing, and purchase amount. The marketers want to understand how the stimuli are changed into responses inside the consumers black box, which has two parts. First, the buyers characteristics influence how he or she perceives and reacts to the stimuli. Second, the buyers decision process itself affects the buyers behaviour. (Kotler Armstrong, 2004) 2.14 Characteristics Affecting Consumer Behaviour Consumer purchased are influenced strongly by cultural, social, personal, and psychological characteristics. For the most part, marketers cannot control such factors, but they must take them into account. 2.15 Cultural Factors: Cultural factors exert a broad and deep influence on consumer behaviour. The marketer needs to understand the role played by the buyers culture, subculture, and social class. Cultural Culture Subculture Social class Social Reference groups Family Roles and status Personal Age and life-cycle stage Occupation Economic situation Lifestyle Personality and self-concept Buyer Psychological Motivation Perception Learning Beliefs and attitudes 2.16 Types of Buying-Decision Behaviour: There are four types of buying-decision behaviour such as: Complex buying behaviour: Consumers undertake complex buying behaviour when they are highly involved in a purchase and perceive significant differences among brands. Consumers may be highly involved when the product is expensive, risky, purchased infrequently, and highly self-expressive. Typically, the consumer has much to learn about the product category. Dissonance-reducing buying behaviour: It occurs when consumers are highly involved with an expensive, infrequent, or risky purchase, but see little difference among brands. Habitual buying behaviour: It occurs under conditions of low consumer involvement and little significant brand difference. Variety-seeking buying behaviour: consumers undertake it in situations characterized by low consumer involvement but significant perceived brand differences. In such cases, consumers often do a lot of brand switching. 2.17 The Buyer Decision Process: Post purchase behaviour Evaluation of alternatives Information search Need recognition Purchase decision Need recognition: The first stage of the buyer decision process, in which the consumer recognizes a problem or need. Information search: The stage of the buyer decision process in which the consumer is aroused to search for more information; the consumer may simply have heightened attention or may go into active information search. Alternative evaluation: The stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set. Purchase decision: The buyers decision about which brand to purchase. Post purchase behaviour: The stage of the buyer decision process in which consumers take further action after purchase, based on their satisfaction or dissatisfaction. Research Methodology 3.1 Introduction A good research methodology gives a clear picture of what the aims of the field work should be. In the main, the purpose of the primary research would be to identify some of the key issues behind the Tescos advertising strategy. This methodology chapter will begin by briefly looking at the theoretical underpinning underlying the carrying out of a marketing research activity. Thus it can be argued that regardless of the nature of the study, understanding the nature and limitations of various data collection methods can enable a researcher to better understand the data collected and the limits of their interpretation. Following this review, the chapter then goes to consider the choice of method and its implementation, with the entire attendant stages involved. 3.2 What is Marketing Research? Johnson (1994 cited in White 2003, p21) defined research as a focused and systematic enquiry that goes beyond generally available knowledge to acquire specialized and detailed information, providing a basis for analysis and elucidatory comment on the topic of enquiry. Any type of researches, including both marketing and academic research, contains the basic characteristics of a research activity. Cooper and Schindler (2006, p4) have argued that marketing research is a systematic inquiry that provides information to guide marketing decisions. 3.3 The Marketing Research Process The research process is the route map of any type of research. Aaker et al (2004, pp 43-5) have argued that by and large any research activity or study contains seven steps, as follows: (1) Agree on the research process. (2) Establish research objectives. (3) Estimate the value of information. (4) Design the research. (5) Collect the data. (6) Prepare and analyse the data. (7) Report the research results and provide strategic recommendations. 3.4 Qualitative Research Following the broad overview above, this section now briefly looks at the type of approaches in use in practice. 3.5 Definition Once a research approach is decided, researchers will need to focus on the research methods. Hague (1992, p120) argued that marketing research surveys include two main groups. They are quantitative and qualitative researches. Denzin and Lincoln (2003, p4) considered that generic definition of qualitative research could be described as qualitative research is a situated activity that locates the observer in the world. 3.6 Qualitative versus Quantitative In terms of the differences between them, Wright and Crimp (2000, pp 374-5) argued that qualitative research uses description by words and pictures, while quantitative research uses measurement and number. Hague and Jackson (1999, pp 17-8) believed that quantitative research emphasizes accuracy whereas qualitative research emphasises understanding rather than simple measurement. Hague (1992, p123) also argued that qualitative researches enables researchers to better understand the subject matter more so than quantitative researches. In conclusion, quantitative research emphasises the accuracy and quantity dimensions. On the other hand, qualitative research emphasises the nature or quality aspects. Given the nature of the problem posed in this study, it can be argued at this stage this study will utilise a more qualitative approach since we do not understand the reasons for the present push of Abu Dhabi as a destination and where exactly it will be positioned in the minds of consumers. 3.7 Quantitative Research Quantitative research methodology deals with areas that can be expressed in numbers. It will tell researchers, for example, what proportion of the population uses luxury cars and what their ages and occupations are; what it will not do very easily is tell researchers why those people prefer such cars. Main quantitative research techniques are; Survey Questionnaire 3.8 The Survey Survey involves the systematic application of representative sampling, questionnaire design, information collection and statistical analysis techniques to obtain data which describes aspects of a market in as much detail required by the research user. The size of the sample is determined by a combination of factors including the structure of the market being examined, the level of detail required and the accuracy levels required at the overall cost of the research. (Malhotra, 2004) Figure : A classification of survey methods Traditional TelephoneTelephone InterviewingPP Personal Interviewing CC Computer Assisted Telephone InterviewingSS Survey MethodsEE Electronic Interviewing II In-HouseMM Mall Interviewing MM Mall InterceptCC Computer Assisted personal InterviewingMM MailMM Mail panelEE E-mailII Internet Source:Naresh.K.Malhotra, 2004 3.9 The Questionnaire They are a valuable method of collecting a wide range of information from a large number of respondents. Good questionnaire construction is critical to the success of a survey. Inappropriate questions, incorrect ordering of questions, incorrect scaling, or bad questionnaire format can make the survey valueless. A useful method for checking a questionnaire for problems is to pretest it. This usually involves giving it to a small sample of respondents, then interviewing the respondents to get their impressions and to confirm that the questions accurately captured their opinions.(Burns Bush, 2003). McDaniel and Gates (2005, p318) believed that questionnaire is a set of questions designed to generate the data necessary to accomplish the objectives of the research project. To design a questionnaire, they proposed a ten-step process as follows: -Step one: Determine survey objectives, resources and constraints. -Step two: Determine the data collection method. -Step three: Determine the question response format. His basic format of a questionnaire is closed-ended questions. Its main consideration is that it is more convenient for the respondents to utilise. But as will be seen in Appendix, this study used mainly open-ended questions because of the problem being investigated. One of the advantages is that it can provide more clues to analyse and judge the response (Aaker et al 2004, p320). -Step four: Decide on the question wording. -Step five: Establish the flow and layout. -Step six: Evaluate the questionnaire. After the first draft, the questionnaire should be reviewed. The main purpose is to make sure that all questions will collect necessary data which will accomplish the aim of the study. -Step seven: Obtain approval of all relevant parties. -Step eight: Pre-test and revise. -Step nine: Prepare the final copy. -Step ten: Implement the survey. 3.10 Sampling Methods Aaker et al (2004, p373) believed that sampling is useful when the population size is big, the cost is limited and time is limited. They argued that time spent on each would be limited if sampling is used properly and hence the quality of responses would be improved. In terms of the suitable situations of using each, Aaker et al (2004, pp 387-90) argued that non-probability sampling can be used in exploratory research as follows: judgemental, snowball, convenience, and quota sampling. For this study, judgemental sampling method is chosen mainly for the time limitation. 3.11 E-mail Survey More recently, the use of the e-mail survey method has become more common place. Aaker et al (2004, pp 167-8) are of the view that there are some advantages in collecting primary data by this means. The include: (1) It is speeder than the traditional postal mail. This study has benefited from this means since it was possible to contact potential respondents and solicit their co-operation well before the interview took place (2) It usually saves many of the costs involved in regular mail surveys (3) There are no intermediaries. E-mail is usually read only by the recipient, so that the respondent chosen by the researcher is usually the one to answer the questions (4) It is more convenient for the recipient. 3.12 Choice of Data Collection Method and Its Implementation In this study quantitative research method will be used to get accurate output from the study. The key element is face to face interview. The process is given below: 3.13 Face-to-face interviews (with an interview schedule/open-ended questions: See Appendix 1) with selected Tescos customers and line managers charged with responsibility of trading in the Tesco store. It was felt that given the time it took to respond to a request for interview that a questionnaire survey would have been far less satisfactory. In addition, in that part of the world face-to-face encounters are considered more respectful particularly when attempting to elicit answers from operational managers and customers. Nevertheless, the process was cumbersome and entailed constants with customer service in order to fix dates and diaries. The process took well over three months (from August to October, 2010). The researcher is of the view that the responses elicited do provide a good overall picture of the advertising strategy and its impact, was useful to the study. Hypothesis Statement: Problem question: How do advertising strategies impact on consumer buying behaviour? H0: Advertising strategies have an impact on consumer buying behaviour. H1: Advertising strategies have no impact on consumer buying behaviour. Limitations of the Research: The limitation of this research is to submit this project within a short period of time and for that reason some of the important issues may have not been discussed on this research. Another limitation can be limited sources of secondary information available in the market and thats why this research can not use a major sources of information in order to make an extensive project. PROPOSED TIME-TABLE: Following table will illustrate the possible deadlines and dates to complete the proposed dissertation properly on time. AREAS WK 1 WK 2 WK 3 WK 4 WK 5 WK 6 WK 7 WK 8 WK 9 WK 10 WK 11 WK 12 Identification Of Issue Literature Review Research design