Effect of Internet Advertising on Consumers’ Purchase Decision (A Study of Jumia Online Stores in Lagos)
Chapter One
Aim and Objectives of the Study
Generally, the main aim of this study is to assess the effect of Internet advertising on consumers’ purchase decisions. However, it is set to:
- Examine the influence of background characteristics of online users on internet advertising success.
- Assess the effect of online product advertisements on internet users.
- Assess the effect of online adverts on consumers’ decision to purchase products.
- Examine the impact of internet sources or mediums on consumers’ decision to purchase advertised products.
- Assess the influence of demographic, advertisement, website and product characteristics on consumer buying decisions.
CHAPTER TWO
LITERATURE REVIEW
Preamble
This chapter contains the contributions from various authors on the theme of advertising, internet advertising, consumer buying decision and other related topics. In that aspect, the review has a theoretical framework which states theories that explains the relationship between online advertising and consumer buying decision, the conceptual framework and the empirical review of previous studies.
The Concept of Advertising
The concept of internet or online advertising has received remarkable theoretical and empirical attention in the marketing literature and industry practitioners over the years (e.g. Braham, 2010; Laimona, 2009; Clinton, Gary, and David 2008 etc). However, a review of literature on internet advertising would be incomplete without examining the notion of Advertising itself. Thus, an overview of the concept of advertising is a good starting point for this literature review.
Literally, Advertising is defined by the dictionary of contemporary English as to make known, to inform or to persuade. Advertisements are informative and can be regarded as communications about products, services, organizations and ideas. In other words, communication can be seen as purpose of advertising but since all advertisements contain persuasive elements directed at the ultimate purpose of a sale, advertising must also provide motives (Glasser, 2005). It is important for consumers to be moved toward making purchase decisions hence the idea must be appropriately communicated.
Geoff- Lancaster, (2007) noted that advertising is concerned with the identification and presentation of desirable and believable benefits to the target audience in the most cost effective manner. The “American marketing Association (2004) described advertising as consisting of paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor” other definitions by various authors and writers are as follows:
While reviewing the concept of advertising and relying on the definition offered by the American Marketing Association, Kotler (2005) described advertising as one of the ways of disseminating information about a product and services, the author argued further that advertising is any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor with the use some element of persuasive communication.
Glasser (2005) defined advertising as the use of paid media of mass communication to inform, persuade and pre-sell, on the other hand Asker and Myers (2000) defined it a “mass communication involving an identified sponsor, the advertiser who normally pays a media organization such as TV network to run an advertisement that has usually been created by an advertising agency. These definitions to some extent define advertisement as it occurs in the authors’ environment. However, it should be noted that the theme of symbolic communication which is a foundation and a crucial success factor in online advertising is a common factor among the various definition. For this particular reason and for the purpose of this research study, the definition given by Ferguson (2003) is adopted as working definition in this study.
According to Ferguson, (2003) advertising is a non-personal one way mass communication directed at specified market “advertising is a non-personal communication directed at target audience through the various media to present and promote products, services and ideas, in order to generates favourable and continuous consumer responses by some persuasive means and the costs of which are borne by an identifiable sponsor” (Woolf, 2001; 234). From the definitions it can be seen that advertising informs or communicates and attempts to persuade people to accept ideas products or services that the sponsor believes to be of benefit to them.
Not all advertising are designed to increase profit of capitalist organization. For instance, government department and agencies advertise such things as road safety measures and warnings of health, other organization may perform advertising functions which are free of charge. In all cases mentioned so far, the sponsor of the advertising would be identifiable, and would be non-personal while some element of persuasion is present. These three factors distinguish advertising from other form of marketing communication such as publicity which may be headlines in the free press in some case for example: mentions in the press, free showing description and discussion of product and services in the various media (Asker and Myers 2000). The advertising department job is to develop the total budget, help develop advertising strategy, approve advertising agency, adverts and campaigns and handle direct market advertising, dealer display and other forms as advertising not ordinarily performed by the agency.
Effective advert must be able to achieve the purpose of the organization which it was adopted in the first instance. To that extent, an advertising manager must always start by identifying the target market and buyer motives. Then, they can proceed to make the major decisions in developing an advertising programme. Some of the objectives of advertising are now discussed.
CHAPTER THREE
METHODOLOGY
Introduction
The focus of this chapter is on the procedures and methods for the collection and analysis of data in order to provide answers to the research questions, solve the research problem, and therefore achieve the study objectives. To this end, the research design, population characteristics, sample size and sampling technique, data collection instrument, method of data collection, and method of data analysis are the components examined in this chapter.
Research Design
The research design for this study is purely descriptive survey. The descriptive design takes the form of cross sectional study using simple survey. Survey design was used in this study for its economy, rapid data collection and ability to understand the characteristics of the population under study. In addition, the survey design was deployed to collect data from a defined population in order to describe the present condition of the population using the prescribed variables. The independent variable in this study is internet advertising while consumer buying decision is dependent variable. The study is based on primary data derived through sample survey using pre-tested structured instrument (questionnaire).The method of data collection includes a combination of both the primary (questionnaires) and the secondary method (including periodicals, journals and other related materials).
Population of the Study
A population is the whole set of individuals and other conceivable elements which form the subject of study in a particular setting. According to Asika (1991), a population is made up of all conceivable elements, subjects or observations relating to a particular phenomenon of interest to the researcher. Therefore, population for the study constituted all undergraduate students in University of Lagos campus that can use the internet. According to accessible records from the students’ affairs unit and substantiated by information from the school website, the total population of undergraduate students enrolled for the 2013/2014 academic session is 41,715. This population span across the 13 academic faculties and about 40 departments of the University.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
Preamble
This chapter presents the data gathered from selected Jumia online customers to measure the effect of internet advertising on consumers’ purchase decision through questionnaires. The results are presented into two parts. The first part is the respondents’ demographic background characteristics that include sex, age, educational qualification, status, and occupation. The second part is analysis of data according to research questions and testing of hypotheses using Chi Square Statistics Method in order to accept or reject them using a confidence interval of 0.05 alpha levels. It also went further to discuss the findings. The demographic background characteristics of respondents are provided in this section below.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Summary
This study was carried out to examine the effects of online advertising on consumer buying decision. The study was interested in evaluating the factors that may influence effectiveness of internet advert. Accordingly, it sought to find out whether demographic characteristics of online users, advertisement and website features, and characteristics of products advertised online has any effect on consumer buying decisions. After a careful collection and analysis of data, this chapter therefore presents the conclusions drawn from the findings in the study. In addition, recommendations are presented and areas of further research are also suggested. Based on the study, the following findings emerged:
- The use of online advertising has a significant effect on advertising success and customer patronage. Thus, it can be said that Internet advertisement creates awareness about products availability and their location; influences purchase habit; send information that is relevant to customers’ purchase; and through online advertising, customers’ needs are adequately satisfied.
- The demographic characteristics of online users such as gender, age, education, and internet skills have significant influence on internet advertising success.
- Product size, website design features, content, and location of advert on the webpage have significant influence on effectiveness of online advertising.
- The website characteristics such website reputation, aesthetic background, interactive quality, and number of adverts on the website can affect online advertising effectiveness.
- The quality of a product advertised online, its price, previous experience of the buyer, and information content has significant effect on buying decision of online customers.
- The perception of customers towards online advertisement has a significant influence on purchasing behaviour. This implies that customer perception of the advert has huge effect on how they react towards the products and service on offer. For instance, most internet users rarely consider switching to another brand as a result of the intensity of the company’s advert on the internet; they pay great attention whenever the jumia advertises on the internet; and would recommend to anyone who seeks advice on which goods to buy on jumia online platforms.
Conclusion
Nigerian is a growing economy. With population of over 140million people the potentials for commerce are enormous. The country is bedeviled with serious challenges in infrastructure such as roads, rails, and efficient delivery systems. There is therefore great need for the adoption of fast and very reliable means of exchange in order to drive commerce. E-commerce has been identified as the most important tool to revolutionalize the Nigerian business environment and to boost economic activities. Despite the numerous advantages of internet advertising and online sales over other forms of commerce, many Nigerians are yet to adopt this technology in their daily buying and selling activities.
The study established that while internet advertising was desirable to most companies operating in the study area, lack of technical know-how, low level of awareness and preference for traditional advert media are the major constraints to adopting e-commerce. Consumers on the other hand cite lack of internet access, irregular power supply, and cost of internet access as the limiting factors to adopting online shopping. Moreover, the study has established that income of the user, internet skills, cost of using the internet, content of the advert, location of advert, opinion of other users, and the quality of advertised products are significant factors that affect the effectiveness of online advertisement and therefore influences buyers’ decision.
Similarly, it is concluded in this study that Internet advertising and online sales have the capacity to change the face of retail business in Nigeria. Most companies and consumers alike are willing to adopt it as a veritable means of doing business in Nigeria. However the problems of irregular power supply; insufficient trained personnel; low level of awareness; and high cost of internet access need be addressed. However, findings have shown that there is relationship between internet skills, advert content, product quality, and effective internet advertising/online sales. There is relationship between perfect knowledge about market situations concerning internet facilities and exact information on consumers’ behavior. There is evidence to show that high cost of providing information scientifically through internet adverts affect consumer behavior.
Recommendations
Based on the findings and conclusion, the following recommendations are made:
- Most of the respondents consider internet access to be very expensive, therefore Government should intervene in the provision of internet services and infrastructure with the view of lowering its cost and making it more accessible to the majority of Nigerians, ii. Within the study, some of respondents express unawareness of online shopping websites, some have never shopped online before, and some feel they do not have need for online shopping. Companies offering products on the web should therefore promote the advantages of online shopping to traditional means of exchange.
- Government should make policies to regulate business through the internet activities to minmise fraud and increasing incidence of internet theft. Web advertisers should try to provide adequate and relevant content so that consumers consider web ads when making purchase decisions.
- Information about products advertised on the web should be adequate, relevant and authentic to make people rely on web advertising in making purchase decisions.
- The location of advert on the web should not interfere with the actual activity a user is working on at a particular time.
- Government should make internet cost affordable to enhance customer accessibility, and issues of internet fraud should be handle appropriately.
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