Final The Effectiveness Of Internet Advertising On Consumer Behaviour c72q

“THE EFFECTIVENESS OF INTERNET ADVERTISING ON CONSUMER BEHAVIOR”

A Report Submitted to JIWAJI UNIVERSITY GWALIOR In Partial Fulfillment of Master of Business istration At

MAHARAJA INSTITUTE OF MANAGEMENT AND TECHNOLOGY Airport Road, Gwalior

Submitted To:

Submitted By:

Ms. SWECHCHHA JAIN (Faculty)

DEEPAK CHOUMAL MBA IV (2014-2016)

CERTIFICATE This is to certify that Deepak Choumal student of MBA IV Semester programmed has completed Ms. Swechchha Jain Major Research Report entitled “THE EFFECTIVENESS OF INTERNET ADVERTISING ON CONSUMER BEHAVIOR” under my guidance.

Date:

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(Faculty Guide)

ACKNOWLEDGEMENT I, Deepak Choumal express my sincere gratitude to Ms. Swechchha Jain for giving me the opportunity to work under her guidance on the project report “THE EFFECTIVENESS OF INTERNET ADVERTISING ON CONSUMER BEHAVIOR”. I would like to express my gratitude towards Mr. Achal Pillai (Director ), Dr. Subeer Banerjee ( Dean – Academics). I would like to express my special gratitude and thanks to Faculty and other friends for their valuable suggestions in the execution of project preparation. I am also thankful to other staff that guided and helped me at each and every step whenever I required. I also acknowledge & convey thanks to the library staff, computer department of MIMT for their kind and valuable .

Date: Place: Gwalior

DEEPAK CHOUMAL MBA IV Semester

DECLARATION I, Deepak Choumal Student of MBA IV Semester of Maharaja Institute of management and technology Gwalior, hereby declare that the project report entitled “THE EFFECTIVENESS OF INTERNET ADVERTISING ON CONSUMER BEHAVIOR” is submitted in the line of partial fulfillment of objectives for the degree of Masters of Business istration. I assure that this project report has not been submitted to any other university or institute for the award of any degree or diploma.

Date:

DEEPAK CHOUMAL MBA IV Semester

ABSTRACT The present research paper is focusing on the effectiveness of internet advertising on consumer behavior. Advertising, Consumer Behavior, promotion in the internet advertising is the key factors. rs are anticipated to shift and expend millions in internet advertising in the coming years than TV, print ads and other conventional marketing media. With the rapid growth in technology, the internet is becoming an important one stop point for consumers in finding most of their needs. Be it communication, activity, shopping, information explore, internet serves as a solution for all their requirements. Many consumers are online every day for their individual work, but do they observe the ads, posters displayed on that web page and most important their value. The current study examined the effectiveness of internet advertising on consumer behavior by performing. The study required to decide the effectiveness of internet advertising on reach and creation of attentiveness; to establish the reliability of internet advertising through ; and to decide the relationship between internet advertising and purchase decision. The target people were the Gwalior peoples. The study used stratified sampling method to select 100 study respondents. The primary data was collected using questionnaires. Content analysis was used to analyze qualitative data while the quantitative data was analyzed using descriptive statistics using SPSS. Regression and Correlation analysis was used to show the relationships among the variables. The data was presented through percentages, means, standard deviations and frequencies. The study found that internet advertising was effective on achieve and formation of awareness due to various usage, and established that its reliability as an advertising media was low compared to TV. Internet advertising has important relationship with purchase decision of the consumers and therefore is a key determinant in influencing consumer behavior. The study determined that there is a optimistic relationship between internet advertising and consumer purchase decision and further advocates that companies should perform a market research on the different markets in various countries to make sure that the internet advertising schemes being realized suits the targeted markets to get better product purchases. Keywords: Internet Advertising, Consumer Behavior, Promotion, Purchase decision.

TABLE OF CONTENTS CHAPTER 1: INTRODUCTION 1.1 Background to the study ..........................................................................................1 1.1.1 The Concept of Promotion ...................................................................................2 1.1.2 The Concept of Internet Advertising....................................................................3 1.1.3 The Concept of Consumer Behavior ......................................................................4 CHAPTER 2: LITERATURE REVIEW 2.1 Introduction..............................................................................................................8 2.2 Theoretical Foundation of the Study........................................................................8 2.3 Internet Advertising ................................................................................................10 2.4 Integrated Marketing Communication ....................................................................11 2.5 Effectiveness of Internet Advertising .....................................................................12 2.6 Consumer Behavior ..............................................................................................13 2.7 Internet Advertising and Consumer Behavior .....................................................16

CHAPTER THREE: RESEARCH METHODOLOGY 3.1 Introduction............................................................................................................18 3.2 Research Design......................................................................................................18 3.3 The Sampling ..........................................................................................................18 3.4 Data Collection ......................................................................................................19 3.7 Data Analysis .........................................................................................................20 CHAPTER FOUR: DATA ANALYSIS, RESULTS AND DISCUSSION CHAPTER FIVE: CONCLUSION AN D RECOMMENDATIONS REFERENCES APPENDICES APPENDIX I: RESEARCH QUESTIONNARIESIST OF TABLES

Table 4.1 Distribution of the respondents by age bracket ...........................................22 Table 4.2 Gender distribution of the respondents ........................................................22 Table 4.3 Attitude towards ments.................................................................23 Table 4.4 Time spent on various platforms of advertising ..........................................24 Table 4.5 Watching the TV commercials during commercial break ...........................24 Table 4.6 Change the channel during commercial breaks ...........................................25 Table 4.7 checking an online advert ............................................................................25 Table 4.8 Ad recall.......................................................................................................27 Table 4.9 Mode of advertising influencing intention to buy product ........................27 Table 4.10 Statements on internet advertising and purchase decision.........................29 Table 4.11 Model Summary ........................................................................................30 Table 4.12 ANOVA of the Regression ........................................................................31 Table 4.13 Coefficient of determination ......................................................................31 Table 4.14 Correlation matrix and the coefficient of determination ...........................32

CHAPTER 1 INTRODUCTION 1.1 Background to the study Internet has grown extremely in both its functions and number of s due to its exclusive uniqueness of flexibility, interactivity, and personalization. It has been a very useful tool for communication, amusement, education, and electronic buy and sell (Ko et al., 2004; Koyuncu and Lien, 2003). The revolutionary change brought forth by information technology has an significant impact on the everyday lives. It has changed the way we do business by permitting retailers to offer unlimited range of products and services to all customers from around the world at any point in time. The Internet has appeared as an advertising intermediate (Silk et al., 2001). Many companies have turned to the Internet to their products and services; and the Internet is estimated to be the most significant direct marketing channel for the worldwide marketplace (Faber et al., 2004; Ko et al., 2004; Korgaonkar and Wolin, 2002). Companies are pouring billions of dollars into Internet advertising to get greater return on savings on ads (Edwards, 2005; es et al.,2003). The Internet has given consumers more control in accessing information on products and services. There are several factors that contribute to consumers pull for online content— consumers are the one who decide when, where, what, and how much commercial content they wish to view (Korgaonkar and Wolin, 2002). The Internet enables consumers to access an unlimited range of products and services from companies around the world, and it has reduced the time and effort they spend on shopping (Ko et al., 2004). Consumers play a much more active role in searching for information online with some goal in mind, and that goal can influence individual behaviors and responses to online information and ments (Smith, 2002). With the rapid advancement in the computer industry, many companies have made the Internet as part of their advertising media mix to take advantage of the online technologies (Calisir, 2003). The Internet has become a popular advertising platform because marketers found that the Internet possess greater flexibility and control over the advertising materials (Ducoffe, 1996). Since the Internet can be used as an efficient marketing communication tool, both scholars and practitioners are interested in understanding how to take full advantage and maximizing the value of this communication medium (Rodgers and Thorson,2000).

1.1.1 The Concept of Promotion Promotion is the component of a company's marketing system that involves delivery of messages to target customers that emphasizes the benefits of your brand, products and services. A few common communication tools such as advertising are used in a promotional plan. Goals of promotion include building brand awareness, creating favorable brand attitudes, gaining market share, inducing buying, building loyalty and growing sales (Kurtz 2010). To reach its promotional goals, a company develops an effective promotional mix, which is a combination of strategies including advertising, personal selling, sales promotion, direct marketing and public relations through a cost effective allocation of resources (Robinson, 1991). In large companies, the marketing department has many roles. It determines the promotional mix, establishes the budget, allocates resources, coordinates the campaign, supervises any outside resources, and measures the results. Manufacturers often develop a promotional mix for each segment of the distribution channel. To promote a product to large retailers that sells its products, a manufacture might want to use a mix of personal selling, advertising, and buying discounts. This study focuses on advertising as one of the strategies in the promotional mix used by company within India. 1.1.2 The Concept of Internet Advertising Internet advertising is a form of promotion that uses the Internet and World Wide Web for the expressed purpose of delivering marketing messages to attract customers. Examples of online advertising include contextual ads on search engine results pages, banner ads, Rich Media Ads, Social network advertising, online classified advertising, advertising networks and e-mail marketing, including e-mail spam. Online video directories for brands are a good example of interactive advertising. These directories complement television advertising and allow the viewer to view the commercials of a number of brands. Response to brand communication is instantaneous, and conversion to business is very high. Consumer can gather information about products and services, communicate with other consumers and firms for related products and services, and sometimes complete transactions. As the Internet session is a self- selected environment of the consumer, the promotion message will be more effective. Internet advertising is also capable of providing an experiential environment to the consumer through virtual reality interfaces thus allowing the consumer to experience some of the features of products before making the purchase decision. Consumer can provide content about the product, to the firm and to other consumers. A positive becomes a good promotion for the marketer. A marketer can even exploit a negative by solving the consumer’s problem and showing the commitment of the organization to satisfying consumer needs. Consumer can also add “collective content” to the medium through discussion forums like the virtual communities (Ducoffe, 1996). In Kenya, online advertising has gained increased popularity with more people spending time online.

1.1.3 The Concept of Consumer Behavior The term "consumer behavior" refers to actions and decisions that factor into a customer's purchase. Researchers, businesses and marketers study consumer behavior to understand what influences a consumer's shopping preferences and selection of products and services. Multiple factors affect c onsumer behavior, among them economic status, beliefs and values, culture, personality, age and education (Kotler, 2004). Findings on consumer behavior are used to develop methods and products that will boost company performance and sales. Customers are becoming more powerful. The number of internet s in Kenya was estimated at 10.2 million in 2011 according to Communications Commission of Kenya (CCK). This majority of internet s are youth especially university students, who regularly use the social network sites through their mobile phones, either searching for information or chatting with friends online. Many students from the Jiwaji University have embraced the evolution in technology, and adopted latest variety of android products, tablets, iPods, and the popular models of Samsung galaxy for easy access of the internet. The growth has been fuelled by the implementation of the ICT policy by the government and the introduction of the fiber optic network offering fast internet connections. This study used a sample of these university students from the main campus to determine and explain the relationship between internet advertising and consumer behavior. The students come from a diverse background and were ideal in studying various characteristics related to consumer behavior. Students are enrolled in different study programmers through fulltime and module II, with some operating from outside the institution while others have residence within the university leading to variability in exposure to advertising.

Chapter 2 Literature Review 2.1 Introduction This section provides discriminating reference to some of the literature a through clearer considerate of internet advertising idea and draw preceding research finding of the effectiveness of internet advertising based on determine of advertising effectiveness. 2.2 Theoretical Foundation of the Study Touching appeals in advertising theory and standard conditioning theory in education consumer behavior form the hypothetical basis of this study. General educational research has been conducted on the psychology of ion (e.g., Lazarus 1984) and the ways in which ad-evoked feelings may persuade consumer response to marketing communication (e.g., Batra and Ray 1986; Holbrook and Batra 1987). Scholars have also practical that advertising may suggest both positive and negative emotions when seeking to persuade. Indeed, Brown, Homer and Inman (1998, p.115), recommend that from a practical perception, “the relative power of positive and negative feeling effects potentially could guide rs’ decisions concerning execution strategies.” It has been recommended that ads use positive influence to make consumers like the ad and then buy the product, and negative influence to evoke an uncomfortable state that makes consumers desire the “solution” offered by the promoter (Aaker, Stayman and Hagerty 1986). Regrettably, there are no promises that what the consumer actually experiences will be the affective response the r intended to create: Research has shown that this kind of disparity between r intentions and consumer response occurs all too often (Cotte, Coulter and Moore, 2004; Englis 1990; Stout, Homerand Liu 1990). These insights notwithstanding, a number of fundamental questions remain unanswered with respect to ad appeals. Proponents o f applying classical conditioning to marketing believe that the association between a product and positive stimuli may help explain the effect of many variables in communication and attitude change. Gorn (1982) tested the effects of a positive unconditioned stimulus on product preference. His results the notion that the simple association between a product (conditioned stimulus) and another stimulus such as music (unconditioned stimulus) can affect product preferences as measured by product choice. 2.3 Internet Advertising As a new advertising channel the Internet and particularly the World Wide Web (WWW) portion of the Internet, are challenging traditional forms of mass media advertising (Hoffman and Novak, 1996; Hearn, Mandeville and Anthony, 1998). Meeker (1998) defines a mass communication medium as the communication from “one

person or group of persons through a transmitting device (a medium) to a large audience or market”. The Internet offers an interactive alternative to mass media communication through the use of web pages, discussion groups and email (Hoffman and Novak, 1996). rs will need to re-address their techniques, services and agency structure and evolve new communication strategies for the Internet as market share is being lost to this more personalized, interactive form of Internet advertising. Schlosser et al., (1999) surveyed a national sample of over 400 participants and found no majority opinion of Internet advertising-about a third of the participants liked, disliked, and felt neutrally toward Internet advertising respectively. The Internet s found online advertising was informative but less entertaining, and it did not encourage them to make purchases even they did not perceive it to increase product prices. Korgaonkar and Wolin (2002) examined the differences between heavy, medium, and light web s and concluded that “heavier s hold stronger beliefs about and attitudes toward Web advertising which likely lead to stronger purchase intent”(p: 201). 2.4 Integrated Marketing Communication The Internet has contributed to a greater adoption of integrated marketing communication (IMC) strategies, by allowing marketers to communicate more directly with individual consumers(Low, 2000). Internet functions become integrated into a company’s communications mix, which permits the operation of the Internet as an advertising medium to be incorporated alongside more traditional media types. The application of the IMC concept involves the progression away from the traditional one-to-many marketing communication model for mass media to the one-to-one communication, or many-tomany communication model (as illustrated in Figure 2.2) (Hoffman and Novak, 1996). The influence of the Internet on business-to-consumer (B2C) relationships has introduced a new dimension of interactivity to the communication industry (Shiva, 1997). Along with the introduction of the Internet, advertising as a form of communication has become more interactive. Traditionally advertising has involved the reduction of information about a product, service or idea’s core benefits into a 30 second TVC, a full page color magazine ment, or a 15 second radio spot, in order to persuade the target market to take action (Shiva, 1997). Berthon, Pitt and Watson (1996, p. 53) argue that the WWW represents a “remarkable new opportunity for rs and marketers to communicate with new and existing markets in a very integrated way.” This is because the Internet, and in particular the WWW, frees consumers from their traditional ‘ive’ roles as receivers of marketing communication and gives them greater control over their information search and acquisition process. As a result, consumers are now becoming interactive and more active participants in advertising and marketing processes (Hoffman and Novak, 1996; Hoffman, Novak and Chatterjee, 1997). Dreze and Hussherr (2003) also examined the effectiveness of ad characteristics on the ability to recall ad. Animation content, the shape of the banner ad, and frequency of the ad

(repetition) leads to higher advertising recall but not the size of the banner. In addition, the authors reported that “a banner’s message influences both aided advertising recall and brand recognition. This indicates that what an ad says is more important than how it says it” (p: 21). In contrast, Yoon (2003) found that banner image is more significantly effective than text to assess consumers’ preferences toward online ads. In of consumer responses in the form of liking online ads, researchers such as Goldsmith and Lafferty (2002) and Metha (2000) have found that a more favorable attitude towards ads can lead to a higher ability to recall ads. Goldsmith and Lafferty (2002) found a significant relationship between positive responses to web sites and the likelihood of recall the brands d on the web. The authors reported that “In general, research suggests that those consumers who have a positive attitude toward an ad are more able to recall than those with a negative attitude (p: 320). Metha (2000) made a similar conclusion but the study was based on print advertising performance. Click-through rate is a widely used measure for assessing the effectiveness of banner advertising, which is the average number of times a viewer clicks on a pop-up ad and is then exposed to the target web site (Dreze and Hussherr, 2003; Faber, et al., 2004). As reported by Cho (2003), “the banner ment click-through is believed to be the most common way to draw consumers into a target site and engage them with a brand or product. 2.5 Effectiveness of Internet Advertising Various researchers have studied numerous factors that might have an impact on Internet advertising recall. The factors include ad characteristics, Internet s’ viewing mode and duration of viewing, campaign publicity, attitudes toward the web site or ad, and curiosity and innovative advertising strategy (Danaher and Mullarkey, 2003; Goldsmith and Lafferty, 2002; Menon and Soman, 2002). Danaher and Mullarkey (2003) examined the effects of such factors as viewing mode, visit duration, text and page background complexity, and the style of banner ads on both aided and unaided recall. The authors did not find any significant impact of the web site context factors on advertising recall. The key finding was that the duration of page viewing is a strong determinant of the ability to recall banner ads; however, a minimum level of exposure (around 40 seconds per page) is required to achieve a reasonable level of advertising recall. The black box model shows the interaction of stimuli, consumer characteristics, decision process and consumer responses. It can be distinguished between interpersonal stimuli (between people) or intrapersonal stimuli (within people). The black box model is related to the black box theory of behaviorisms, where the focus is not set on the processes inside a consumer, but the relation between the stimuli and the response of the consumer.

2.6 Consumer Behavior According to Warner, consumer behavior is the study of individuals, groups, or organizations and the processes they use to select, secure, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society (Malcolm). Warner emphasized the consumption related behaviors are often undertaken collectively. For example, some activities performed by individuals but consumed by a family or group of people, similar as organization purchasing activities usually followed by group decisions. Beside this point, the consumer behavior is not just purchasing, but has usage and disposal the goods, this type of information always be useful for company to make marketing decisions (Malcolm). Measuring customer behavior is a crucial part of any business. Knowing what the consumer wants and how he acts is vital in of product design, and marketing (Todd, 1997). 2.7 Internet Advertising and Consumer Behavior The evolution of the Internet as a global communication infrastructure (Cae, 2000) has created a new advertising channel for rs and advertising agencies to utilize and will provide rs with the means to more cost effectively target their promotional messages to consumers. As consumers experience and respond to stimuli around them, emotions arise. Their reactions manifest themselves as physiological changes they experience as feelings. Likewise, as people react to stimuli online. On the other hand, when customers repeatedly experience the same stimuli, they may not cause any emotional response. People become conditioned to ignore the ever-present ads on Web sites, which is called ad blindness (Wolhandler, 1999). Advertising and promotion offer a news function to consumers. As Yoo W., Suh K. and Lee M. (2002) mentioned in their report, personal interactions with other customers and service providers play a very important role while shopping online. Viewers of ads learn about new products and services available to them, much like they learn about events in the news. Customer behavior at this stage encomes expressions of curiosity. Consumers have a rational response to advertising when they look at the features of a product or service. This response focuses on a logical listing of all the functional aspects of the offering. This is an intellectual response, rather than an emotional one (Lee, 2002). Consumer behavior splits between loyalty and alienation depending on how well the product lives up to its d benefits (Thorson, 2000). Corporate behavior – such as scandals or charity work – can also affect alienation and loyalty responses. Once the consumer makes this choice, advertising and promotion are not likely to undo that decision. The Cannon-Bard Theory that Walter Cannon and Philip Bard advocated suggests human beings feel emotions first, and then act upon them. When customers visit a Web site, the ads they encounter evoke an emotional response—before they even decide what their next step.

CHAPTER THREE RESEARCH METHODOLOGY 3.1 Introduction This section focal point on research methodology that was used in the study. It offers a detailed explanation of the research advance adopted in this study. Research design, target people, research instruments, data collection and analysis methods used were presented in the consequent sections. 3.2 Research Design This study used descriptive research. Descriptive research occupies gathering data that describe occasion and then organizes, tabulates, depicts, and describes the data collection (Glass & Hopkins, 1984). It frequently uses image aids such as graphs and charts to aid the reader in understanding the data distribution and thus offered a superior clarification on online advertising, and eventually gives a clear image on the effectiveness and reliability of online advertising and its relationship to buying decision.

3.3 The Sampling Sample Design: Population all the people within Gwalior region. Sample Element: Individual respondent was the sampling element. Sample Size: The sample size of the study was 100 individual. Sampling Method: Non purposive technique used in this study.

3.5 Data Collection The research made use of primary data, which was collected using structured questionnaire distributed to the 100 respondents sampled in Gwalior region peoples.

3.7 Data Analysis The study applied both nominal and ordinal scale to measure a range of factors establishing the effectiveness of internet advertising on consumer behavior and an interval scale in determining the relationship between internet advertising and consumer behavior. Descriptive statistics was used to analyze this data. The mean responses, standard deviation and other relevant statistics were computed to better understand the data. The data collected was compiled and edited to check for logical inconsistencies. The data was then coded according to the responses. Relationships between responses was assessed and presented using tables and graphs and analysis was done using SPSS. Regression and Correlation analysis was applied in this study to reveal relationships among variables in the findings from the data.

CHAPTER FOUR DATA ANALYSIS, RESULTS AND DISCUSSION

The respondents were also asked to indicate their age bracket. The study findings are illustrated in Table 4.1. Table 4.1 Distribution of the respondents by age bracket Age Bracket

Frequency

Percentage

19-25 years

82

82

26-35 years

80

80

Total

100.0

100.0

Source: Field data. The findings indicate that majority of the peoples were aged 19-25 years.

The study sought to establish the gender of the respondents and the findings are as shown in Table 4.2. Table 4.2 Gender distribution of the respondents Frequency

Percentage

Male

72

72

Female

28

28

Total

100

100.0

Source: Field data. From Table 4.2, the study recorded a higher response rate from males than females in their various field.

4.2 Effectiveness of internet advertising on reach and creation of awareness The first objective of the study was to determine the effectiveness of internet advertising on reach and creation of awareness. The study sought to establish whether the respondents were aware of various forms of ments adopted by various companies. Majority of the respondents (98%) attested to being aware of various forms of ments adopted by various companies. This illustrates that the effectiveness of internet advertising on reach a nd creation of awareness was determined by the level of knowledge about the existing platforms of ments adopted by various companies in Gwalior. The respondents were asked to indicate their attitude towards ments. Table 4.3 illustrates the study findings. Table 4.3 Attitude towards ments Frequency

Percent

Informative

35

35

Creates awareness

31

31

Entertaining

25

25

Irritating

3

3

Annoying

3

3

Waste of time

3

3

Total

100

100

Source: Field data. As shown in Table 4.3, most of the respondents (35%) indicated that advertising was informative, with a closer percentage indicating creation of awareness. 3% indicated that advertising was either irritating, annoying or a waste of time. These findings mean that most of the respondents had a positive attitude towards advertising as illustrated by their various perceptions about the use of advertising. This clearly shows a positive attitude toward advertising and hence is a good indication for marketers. In order to further identify the effectiveness of internet advertising on reach and creation of awareness, the respondents were requested to indicate the amount of time spent on various platforms of advertising. The responses were rated on a five point Likert scale where: 1=less 1hr, 2=1 2hrs, 3=2 - 4hrs, 4=4 - 6hrs while 5=over 6hrs.

Table 4.4 Time spent on various platforms of advertising Mean

Standard deviation

TV, Movies

2.42

1.241

Newspaper, Mages

1.11

1.372

Radio

1.03

0.927

Internet

4.21

0.515

Source: Field data. According to the findings in Table 4.4, on an average, a person spends more than 4 hours on the internet during his free time which is more than that of TV and movies, radio and print medium. Hence, on an average the exposure of internet to an individual is around 40% more than that of other mediums i.e. the reach of medium internet is much better than that of others.

The study sought to establish whether the respondents watched the TV/ or listened to Radio commercials during commercial break. The findings are as shown in Table 4.5. Table 4.5 Watching the TV commercials during commercial break Frequency

Percent

Yes

70

70

No

30

30

Total

100

100

Source: Field data. According to the findings, the majority of the respondents attested to watching the TV/ commercials during commercial break. This implies that for television commercials, around 70% of consumers had a positive perception towards advertising on TV.

Table 4.6 Change the channel during commercial breaks Frequency

Percent

Never

26

26

sometimes

17

17

depends on ad

33

33

Often

13

13

every time

11

11

Total

100

100

Source: Field data. Respondents were asked to indicate if they changed channels during commercial and the results were tabulated. Table 4.6 shows that the degree of attractiveness of the advert and its relevance to the respondents determined their attention to the advert. The viewers would see the ment if the ad is attractive and appealing. Hence there is a probability of 0.75 of a consumer viewing the particular ment (for creating awareness and information) on television making it an effective mode of communication. 4.3 Reliability of internet advertising through recall The second objective of the study was to establish the reliability of internet advertising through recall. First, the respondents were asked whether they would check an online advert and the findings presented in the Table 4.8. Table 4.7 checking an online advert Frequency

Percent

Yes

21

21

No

79

79

Total

100

100

Source: Field data. In case of online advertising, majority (79%) of consumers ignored the advert completely while 21% indicated that they would check an online advert. Further the study found out that, out of the 21%respondents, 15% said that the intention was not to see the ads, but they didn’t have any option but to see them as they were Interstitial

Adverts, Pop – up ads or Floating ads. These ads either block the view of the content, or appear right in the middle of the page, or keeps on floating (moving) around which is considered to be very irritating for the consumers. Checking the ads determined the level of interaction with the online ads. Therefore, even though the reach of internet is much higher than that of other modes, its ability to attract consumers for awareness creation is very low. The respondents were further asked to indicate their purpose of using internet. The study findings are illustrated in Figure 4.1. Figure 4.1 Internet usage

Source: Field data. As shown in Figure 4.1, 30% of the respondents used internet for E-mail, 25% for information, and others for chatting and social networking, indicating that communications has been the fundamental value of the internet to consumers. There was a higher chance of interaction with various online ads as reflected by the diverse usage of internet. To establish the reliability of internet advertising through recall, the respondents were asked to indicate whether they would recall the last three TV and online ads.

Table 4.8 Ad recall Recall TV Online ads

Frequency

Percent

Yes

84

84

No

16

16

Yes

30

30

No

70

70

100

100

Total

Source: Field data. This is for the last three ads that they had seen consciously or unconsciously. In case of TV ads, 84% ed their last three ads which is a very good score in of creating awareness. In case of online ads, only 54% could their last three interactions with the online ads. Therefore, one can easily make out the reliability of online and TV ads recall values. The study found out that TV ads are much reliable than internet advertising and other forms of advertising. 4.4 Relationship between internet advertising and purchase decision The third objective of the study was to determine the relationship between internet advertising and purchase decision. Respondents were asked to indicate the mode advertising that mostly influenced their decision to purchase a product. The results were tabulated in Table 4.9. Table 4.9 Mode of advertising influencing intention to buy product Frequency

Percent

Magazines and newspaper

17

17

Friends and relatives

40

40

TV Commercial

29

29

Online ments

6

6

Social Media – Blogs, forums, Social Networking sites

8

8

Total

100

100

Source: Field data. Based on Table 4.9 above, the highest number of students, 40% of the respondents were influenced to buy a product based on information provided by friends and relatives, with TV commercials being second. Online ments were least in influencing their decision at 6%. Therefore, friends and relatives were the major influencers behind decision making. This depicts that traditional form of advertising has an edge over internet advertising in of consumer preference to mode of advertising. Traditional mode got over 86% preferences than that of internet advertising which is a huge margin. Secondly, the respondents were also asked to indicate whether the internet ads they came across influenced their purchase decision. 52% of the respondents indicated that the internet ads they came across never influenced their purchase decision while 48% posited that the internet ads they came across influenced their purchase decision. This depicts that the internet advertising influenced purchase decision of the customers to a moderate extent as only nearly half of the respondents were influenced purchase decision. In order to further determine the relationship between internet advertising and purchase decision, the respondents were requested to indicate their level of agreement on relevant statements on effects of internet advertising on purchase decision. The responses were rated on a five point Likert scale where: 5-To a very great extent, 4- To a great extent, 3-To a moderate extent, 2-To a little extent, and 1-To no extent. The mean and standard deviations were generated from SPSS and presented in Table 4.10

Table 4.10 Statements on internet advertising and purchase decision Statements on Internet advertising and purchase

Mean

decision Internet advertising influences customers’ purchase

Standard deviation

4.21

0.513

duration of page viewing is a strong determinant of

4.13

0.746

the ability to recall banner ads Animation content, the shape of the banner ad, and

3.92

0.841

4.11

0.62

decision

frequency of the ad (repetition) leads to higher advertising recall Companies should aim to strengthen customer interactions with ments on the Web

Most companies provide a generic experience to all

4.01

0.738

Customers rather than relying on customer analysis to deliver a personalized experience. When customers weigh benefits, they become 4.05

0.673

Emotionally involved with advertising and promotion. Repeated advertising messages affect consumer

3.98

0.847

Behavior. This repetition serves as a reminder to the consumer.

Source: Field data. The study established that Internet advertising influences customers’ purchase decision (Mean=4.21) and duration of page viewing is a strong determinant of the ability to recall banner ads. Other factors as repeated advertising messages affect consumer behavior. This repetition serves as a reminder to the consumer (Mean=3.98), and that animation content, the shape of the banner ad, and frequency of the ad repetition leads to higher advertising recall .This implies that the internet advertising is a key determinant of purchase decision of the customers as they consider it to be an interaction point between them and the company from which they buy their products from. 4.5 Inferential statistics In determining the effectiveness of internet advertising on consumer behavior, the study conducted a multiple regression analysis to determine the nature of relationship between the variables. The regression model specification were as follows Y=α+β1X1 +ε. Where; Y= consumer behavior X1= internet advertising ε= error term β=coefficient α= constant The study further applied multiple regressions to determine the predictive power of the internet advertising on consumer behavior. The researcher conducted a multiple regression analysis so as to test relationship among variable (independent) on the consumer behavior. The researcher applied the statistical package for social sciences (SPSS V 17.0) to code, enter and compute the measurements of the multiple regressions for the study.

Coefficient of determination explains the extent to which changes in the dependent variable can be explained by the change in the independent variables or the percentage of variation in the dependent variable (consumer behavior) that is explained by the independent variable (internet advertising). Table 4.11 Model Summary Adjusted

R Std.

Error of

Model

R

R Square

Square

The Estimate

1

0.919

0.845

0.789

0.6273

Source: Field data. The independent variable that was studied, explain only 84.5% of the consumer behavior as 2 represented by the R . This therefore means that other factors not studied in this research contribute 15.5% of the consumer behavior. Therefore, further research should be conducted to investigate the other factors that affect consumer behavior. Table 4.12 ANOVA of the Regression Model 1

Sum

of

df

Mean Square F

Regression

2.534

50

1.267

Residual

9.307

200

2.327

Total

11.841

250

9.475

Sig. a

.000

Source: Field data. The significance value is 0.000 which is less than 0.05 thus the model is statistically significance in predicting how internet advertising affects the consumer behavior. The F critical at 5% level of significance was 3.23. Since F calculated is greater than the F critical (value = 9.475), this shows that the overall model was significant.

Table 4.13 Coefficient of determination Model

Unstandardized

Standardized

t

Sig.

5.132

0.000

7.287

.000

Coefficients Coefficients B Std. Error Beta 1

(Constant)

1.147

0.2235

Internet advertising

0.752

0.1032

0.1032

Source: Field data. Multiple regression analysis was conducted as to determine the relationship between consumer behavior and the one independent variable (internet advertising). As per the SPSS generated table, regression equation (Y=α+β1X1 +ε) becomes: (Y= 1.147+ 0.752X1+ ε) According to the regression equation established, taking all factors into (internet advertising) constant at zero, consumer behavior will be 1.147. The data findings analyzed also shows that taking all other independent variables at zero, a unit increase in internet advertising will lead to a 0.752 increase in consumer behavior; This infers that internet advertising contribute most to the consumer behavior. At 5% level of significance and 95% level of confidence, internet advertising was a significant, factor in predicting the consumer behavior. To quantify the strength of the relationship between the variables, the study used Karl Pearson’s coefficient of correlation. The Pearson product-moment correlation coefficient (or Pearson correlation coefficient for short) is a measure of the strength of a linear association between two variables and is denoted by r. The Pearson correlation coefficient, r, can take a range of values from +1 to -1. A value of 0 indicates that there is no association between the two variables. A value greater than 0 indicates a positive association, that is, as the value of one variable increases so does the value of the other variable. A value less than 0 indicates a negative association, that is, as the value of one variable increases the value of the other variable decreases. The data presented before on internet advertising was computed into single variables per factor by obtaining the averages of each factor. Pearson’s correlations analysis was then conducted at 95% confidence interval and 5% confidence level 2-tailed. The Table 4.15 below indicates the correlation matrix between the internet advertising and consumer behavior.

Table 4.14 Correlation matrix and the coefficient of determination Internet advertising

Consumer behavior (r)

Consumer behavior 1.000

(p) Sig. (2 tailed) Internet advertising (r)

0.894

1.000

(p) (2 tailed)

0.018

Source: Field data. According to the Table 4.14, there is a positive relationship between consumer behavior and internet advertising of magnitude 0.894. The positive relationship indicates that there is a correlation between the consumer behaviors with internet advertising. This notwithstanding, all the factors had a significant p-value (p<0.05) at 95% confidence level. The significance values for relationship between consumer behavior and internet advertising was 0.018. This implies that internet advertising was a significant factor on consumer behavior. 4.6 Discussion of Findings The study recognized that the effectiveness of internet advertising on reach and creation of alertness was determined by the level of awareness about the existing platforms of ments adopted by various companies in Gwalior Most of the respondents had a optimistic attitude towards advertising as illustrated by their various awareness’s about the use of advertising. This clearly shows a positive attitude in the direction of advertising and hence is a good sign for marketers. The findings enhance the findings of Baltas (2003) who indicated that marketing is perceived by the internet s as a major source of information on available product in the market as reflected by their positive attitude in the world over. According to Calisir (2003) internet advertising is an valuable channel for marketing as the ad is attractive and appealing which changes from time to time. The study recognized that even though the reach of internet is much higher than that of other modes, its capability to attract consumers for attentiveness creation is very low. The study concludes that the reliability of internet advertising through was low as only a small percentage of the respondents could the online ads they had seen. The study found that TV ads are much reliable than internet advertising and other forms of advertising. The findings are substantiated with Danaher and Mullarkey (2003) who posited that TV ads are much dependable than internet advertising.

CHAPTER FIVE CONCLUSION AND RECOMMENDATIONS

CONCLUSION The study recognized that friends and relatives were the major influencers behind decision making. This represents that conventional form of advertising has a frame over internet advertising in of consumer first choice mode of advertising. Traditional approach got high preferences than that of internet advertising which is a huge margin. According to Cho (2003) in the developing economies the traditional form of advertising has a better market share compared with the internet advertising in of consumer preference approach of advertising. The study recognized that internet advertising influenced buying decision of the customers to a reasonable extent as only nearly half of the respondents were influenced buying decision. The study recognized that internet advertising is a key determinant of buying decision of the customers. The study also recognized that internet advertising has important relationship with buying decision of the consumers. The findings supplement earlier findings of Goldsmith and Lafferty (2002) that internet advertising is a key determinant of buying decision by the customers and that internet advertising has an association with buying decision of the consumer. The purpose of the study was to conclude the effectiveness of internet advertising on consumer behavior using a sample of Gwalior region. After analysis of the study findings, the study concludes that the effectiveness of internet advertising on achieve and creation of awareness was determined by the level of information about the existing platforms of ments adopted by various companies in Gwalior and time spent on various media. This implies that the reliability of internet advertising is quite low. The research established that TV advertising is more reliable than internet advertising therefore conforming to Danaher and Mullarkey (2003), that TV ads are much reliable than internet advertising. The study concludes that internet advertising influenced buying decision of the customers to a reasonable extent as only nearly half of the respondents were influenced buying decision. However, internet advertising is a key determinant of buying decision of the customers as they think it to be a communication point between them and the company from which they buy their products from. The study also concludes that internet advertising has significant relationship with buying decision of the consumers. The study further concludes that internet advertising gives most to the consumer behavior and that internet advertising was a important factor in predicting the consumer behavior.

RECOMMENDATIONS The study recognized that the reliability of internet advertising is low and therefore suggests that the management of companies using internet advertising should offer unique skill to its consumers based on consumer analysis to deliver a personalized experience to the consumers, Calisir (2003). The study also established that internet advertising is efficient in reach and creation of awareness and recommends that the companies should spend more in internet advertising to enlarge their market share and provide product information. Finally, the study determined that there is a positive connection between internet advertising and consumer buying decision and additional recommends that companies should perform a market research on the different markets in a various countries to make sure that the internet advertising initiatives being implemented suits the targeted markets to get better product purchases. This is because there survive different background realities between different markets Wolin (2002).

REFERENCES Alvin, J. S, Lisa R. K, and Ernst, R. B (2002), Intermedia Substitutability and Market Demand by National rs, (20:4) Baltas, G., (2003), Determinants of Internet advertising effectiveness: An empirical study. International Journal of Market Research, 45: 505-513. Berthon, P.L., Pitt, F. and Watson, R.T.,(1996), The World Wide Web as an advertising medium: Toward an understanding of conversion efficiency. Journal of Advertising Research, 36: 43-54. Bhat, S., Bevans, M. and Sengupta, S., (2002), Measuring s’ web activity to evaluate and enhance advertising effectiveness. Journal of Advertising, 31: 97-106. Bloch, P.H., Sherrell, D.L. and Ridgway, N.M., (1986), Consumer search: An extended framework. Journal of Consumer Research, 13: 119-126. Calisir, F., (2003), Web advertising vs. other media: young consumers’ view. Journal of Internet Research: Electronic Networking Applications and Policy, 13(5): 356-363. Cho, C.H., (2003), Factors influencing clicking of banner ads on the WWW. CyberPsychology & Behavior, 6: 201-215. Danaher, P.J. and Mullarkey, G.W., (2003), Factors affecting online advertising recall: A study of students. Journal of Advertising Research, 43: 252-267. Dreze, X. and Hussherr, F.X., (2003), Internet advertising: Is anybody watching? Journal of Interactive Marketing, 17: 8-23. Ducoffe, R.H. (1996), Advertising value and advertising on the web. Journal of Advertising Research, 36: 21-35. Edwards, J., (2005), Pharma formulates plans to move marketing from TV. Brandweek, 46: 5. Faber, R.J., Lee, M. and Nan, X., (2004), Advertising and the consumer information environment online. American Behavioral Scientist, 48: 447-466. Goldsmith, R.E. and Lafferty, B.A., (2002), Consumer response to Web site and their influence on advertising effectiveness. Journal of Internet Research: Electronic Networking Applications and Policy, 12: 318-328.

Gong, W. and Maddox, L.M., (2003), Measuring web advertising effectiveness, Journal of Advertising Research, 43: 34-49. Kent W., Ian, F., (2010), The Essential Guide to New Media & Digital Marketing Ko, H., Jung, J.,Kim, J.Y. and Shim, S.W.,( 2004). Cross-cultural differences in perceived risk of online shopping. Journal of Interactive Advertising. Kotler, P., (2004), Marketing management, 11th International edition– Prentice-Hall, pp 706. Korgaonkar, P. and Wolin, L.D., (2002), Web usage, advertising, and shopping: relationship patterns. Internet Research: Electronic Networking Applications and Policy, 12: 191-204. Koyuncu, C. and Lien, D., (2003), E-commerce and consumer’s purchasing behaviour. Applied Economics, 35: 721-726. Kurtz, D., (2010), Contemporary Marketing Mason, OH: South-Western Cengage Learning. Lee H., Cho D. and Lee S., (2002), Impact of e-Business initiatives on firm value. Electronic Commerce Research and Applications, 1: 41-56. Malcolm Warner, International Encyclopaedia of Business & Management, 2nd Edition Menon, S. and Soman, (2002), Managing the power of curiosity for effective web advertising strategies. Journal of Advertising, 31: 1-14. Metha, A., (2000), Advertising attitudes and advertising effectiveness. Journal of Advertising Research, 40: 67-72. Newman, E.J., Stem Jr . and Sprott, D.E., (2004), Banner ment and web site congruity effects on consumer web site perceptions. Industrial Management & data Systems, 104: 273-281. Palanisamy, R., (2004),Impact of gender differences on online consumer characteristics on web-based banner advertising effectiveness. Journal of Services Research, 4: 45-74. Robinson, W., (1991), Promotional Marketing on the web. Rodgers, S. and Thorson, E., (2000), The interactive advertising model: How s perceive and process online ads. Journal of Interactive Advertising.

Rowley, J., (2000), Product search in e-shopping: A review and research propositions. Journal of Consumer Marketing, 17: 20-35. Schlosser, A.E., Shavitt, S. and Kanfer, A., (1999), Survey of Internet s’ attitudes towards Internet, Journal of Interactive Marketing, 13: 34-54. Silk, A.J., Klein, L.R., and Berndt, E.R., (2001), The emerging position of the Internet as an advertising medium. 3: 129-148. Smith, S.M., (2002), Electronic commerce issues for consumers and marketers. Todd P. A., (1997), Consumer reactions to electronic shopping on the World Wide Web. International Journal of Electronic Commerce, 1 (2): 59-88. Tom, D. (2008), Principals of Advertising and IMC Wanjoga,E., (2002), Consumer attitudes towards online advertising in Nairobi, Research Project Report. Wakukha, D., (2011), The use of internet advertising by Kenya mobile telephone industry, Research Project Report. Wolin, L.D. and Korgaonkar, P., (2003), Web advertising: gender differences in beliefs, attitudes, and behavior. Journal of Internet Research: Electronic Networking Applications and Policy, 13: 375-385. Wolhandler H., (1999), online commerce).

Real numbers behind Net Profits.

(6th annual survey of

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APPENDICES APPENDIX I: RESEARCH QUESTIONNAIRE SECTION A – BACKROUND INFORMATION

1. Age Group (yrs): ☐ up to 18

2. Gender: ☐ Male

☐19 to 25

☐26 to 40

☐41 to 55

☐ 55 +

☐ Female

3. Where is your place of residence?

SECTION B – ATTITUDES, REACH AND AWARENESS 4. Do you like ments? ☐Yes

☐No

☐Informative

☐Irritating

☐Entertaining

☐Annoying

☐Creates awareness

☐Waste of time

5. How much time do you spend on? TV, Movies

☐< 1hr ☐1 - 2hrs ☐2 - 4hrs ☐4 - 6hrs

☐> 6hrs

Newspaper, Mages

☐< 1hr ☐1 - 2hrs ☐2 - 4hrs

☐4 - 6hrs ☐> 6hrs

Radio

☐< 1hr ☐1 - 2hrs ☐2 - 4hrs

☐4 - 6hrs ☐> 6hrs

Internet

☐< 1hr ☐1 - 2hrs ☐2 - 4hrs

☐4 - 6hrs ☐> 6hrs

6. Do you watch the TV/ or listen to Radio commercials during commercial break? ☐Yes

☐No

☐Informative

☐Irritating

☐Entertaining

☐Annoying

☐Creates awareness

☐Waste of time

7. I change the channel during commercial breaks… ☐Never

☐sometimes ☐depends on ad

☐often ☐every time

SECTION C: AD RECALL

8. Which is the last Newspaper/Magazine ad you ? Which brand was it?

11. Which is the last TV commercial you ? Which brand was it?

9. Name any three TV commercials you lately? 1. 2

3.

10. Do you see/check online ads/mails when you surf the internet? ☐ Never

☐ sometimes

☐depends on ad

☐ often

☐every time

11. Which is the last online ad you ? Which brand was it?

12. Name any three online ads you lately? 1. 2. 3.

SECTION D: INFLUENCERS, PREFERENCE AND PURCHASE DECISION

13. You use the internet for? (Rank them in order of your preference) ☐Chatting and Social Networking

☐

☐Email

☐

☐Information

☐

☐Entertainment

☐

☐E -Commerce

☐

☐ing

☐

14. What mode of advertising influences you to buy any product? ☐Magazines and newspaper ☐Friends and relatives ☐TV Commercial ☐Online ments ☐Social Media – Blogs, forums, Social Networking sites 15. Which mode of advertising would you prefer? (Rank in order of preference) ☐TV Commercials

☐ ☐

☐Print Ads: Newspaper, Magazine ☐Banners, Posters

☐

☐Online Ads: Banners, Emails,

☐

16. Have you made any purchases after seeing internet ads? ☐ Yes

☐ No

17. What is the relationship between internet advertising and purchase decision, Please tick where appropriate: 5-To a very great extent, 4-To a great extent, 3-To a Moderate extent, 2-To a little extent, and 1-To no extent. 1

2

3

4

5

Statements on Internet advertising

To no To a

To a

To a

To a

and purchase decision

Extent little extent

moderate extent

great extent

very great extent

Internet advertising influences customers’ purchase decision duration of page viewing is a strong determinant of the ability to recall banner ads Animation content, the shape of the banner ad, and frequency of the ad (repetition) leads to higher advertising recall Companies should aim to strengthen customer interactions with ments on the Web Most companies provide a generic Experience to all customers rather than Relying on customer analysis to deliver a personalized experience. When customers weigh benefits, they Become emotionally involved with advertising and promotion. Repeated advertising messages affect Consumer behavior. This repetition serves as a reminder to the consumer.

i