ADVERTISING’S EFFECT ON CUSTOMER BEHAVIOR AND RETENTION
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Abstract
This study studied the impact of advertising on consumer behavior and loyalty. The goals were to determine the influence of advertising on customer behavior, the effect of advertising on customer retention, and the function of advertising in shaping consumer perceptions. This study utilized a survey research methodology. We utilized both primary and secondary data sources. The primary data consists of a structured questionnaire administered to clients of a reputable fast food restaurant in Ibadan, while the secondary data consists of the utilization of relevant materials, magazines, and periodicals. The study suggests that organizations embrace and implement the marketing strategy that enables them to be more effective than their competitors in producing, delivering, and communicating superior customer value to their chosen target markets.
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Chapter one
Introduction
1.1 Background of this research
Companies and organizations have long been hampered by limited resources. Due to this constraint, it is vital to utilize them efficiently and affordably. Utilization of resources is one characteristic that distinguishes a business from its competitors. A portion of an organization’s financial resources, such as its advertising budget, is one of the most essential resources it possesses. Money is necessary for the success of a marketing campaign.
No business can become a market leader in today’s competitive business environment without spending millions of Nigerian naira on advertising. The primary objective of advertising is to acquire valuable consumers by influencing their attitudes, knowledge, and purchasing patterns. There are several kinds of communication for raising awareness, including events, personal selling, public relations, direct marketing, word-of-mouth marketing, and advertising ((Fill, 1999); (Kotler, 2010)).
Every firm moves toward a position where customer happiness is prioritized. In other words, customer satisfaction is a concept that must be realized optimally for the efficient and successful attainment of specified objectives and for the continuity of corporate operations. Customer satisfaction is a vital aspect of organizational objectives that must be met in order for a firm to retain its consumers. Customers are a precious asset that must be maintained in a satisfactory state. The raison d’être of any business-oriented organization is the performance of business activities that will flow from the organization to identified target customers through the provision of need-satisfying packages in order to satisfy the needs of the customers and achieve the stated goals of the organization. The chance to keep and cultivate customer loyalty for continued patronage is afforded by the meeting of the needs of each individual client. Likewise, client retention is a powerful predictor of business objectives. The level of client retention determines, to some extent, the extent to which organizational goals are attained. In other words, if clients do not purchase the organization’s products or do not purchase them again, sales and profitability will undoubtedly decrease, which will have a negative impact on the firm’s overall performance.
This thesis examines the impact of advertising and advertising expenditures on many aspects of consumer purchase behavior. Culture, family, and brand image are significant influences on the purchasing behavior of consumers. On the other side, brand recognition also influences a customer’s decision to purchase a product. Due of this, cosmetic companies place a strong emphasis on advertising their products. This paper also sheds light on additional aspects, such as lifestyles, purchasing power, technology, traditional culture, and income, that influence the purchase behavior of consumers. Advertisers invest a substantial amount of money in promoting their products, thus they pay close attention to the aforementioned variables in order to influence the consumer’s thoughts through advertisements.
Person-to-person variations in brand perceptions and purchasing habits are typical. Consequently, it is crucial to identify any changes in consumer behavior. Advertising enables a business to raise customer awareness of its products or services, and the positive or negative connotations conveyed by advertisements can influence customers’ perceptions. People might perceive the quality of a product by obtaining information from commercials. A consumer’s purchasing decision is influenced by their perception of the product’s quality, their product knowledge, and their opinion. This study analyses various determinants of purchasing behavior and provides a comprehensive understanding of the impact of advertising in changing consumer behavior.
1.2 Statement of the study
As a result of their desire to keep their goods at the forefront of the customer’s mind, businesses are spending substantial sums on advertising. Advertising has shown to be an effective medium for communication, but businesses are still uncertain as to which elements should be included and how these advertising will influence customer purchasing behavior. Researchers and academics have underlined the necessity of creating and maintaining consumer happiness. This is due to the fact that the achievement of other company goals is contingent on the level and degree of satisfaction the target market receives. This is why firms are concentrating on customer happiness and client retention.
1.3 Objective of the study
The study has the following objectives:
Determine the impact of advertising on customer behavior
To determine the impact of marketing on client retention
To determine the contribution of advertising to shaping consumer perceptions
1.4 Research question
Does advertising influence consumer behavior?
Does advertising influence client retention?
Does advertising contribute to the formation of customer perception?
1.5 Hypotheses in Research
The researcher developed the following research hypotheses in order to complete the study successfully:
There is no impact of advertising on consumer behavior
There is an effect of advertising on consumer behavior
There is no relationship between advertising and customer retention.
There is a relationship between advertising and client retention
There is no function for advertising in shaping consumer perceptions, according to H3.
There is a function for advertising in shaping customer perceptions
1.6 Significance of the study
This study examines the influence of advertising on customer behavior and retention. It investigates the factors that are influenced by advertising and eventually effect the buying behavior and retention of consumers. The study will assist readers in comprehending consumer behavior during the purchase of goods, allowing them to formulate the most effective advertising strategies. The work will also serve as a resource for future researchers interested in the same subject.
1.7 The study’s scope and limitations
The scope of the study encompasses the influence of advertising on customer retention and behavior. This study focuses solely on food issues and pepperoni in Ibadan.
1.8 Organisations of the study
To facilitate comprehension, this study paper is divided into five chapters as follows: Chapter one is devoted to the introduction, which includes the (overview, of the study), historical context, statement of the problem, objectives of the study, research question, research hypotheses, significance of the study, scope and limitations of the study, study organization, and a glossary of terms. The second chapter focuses on the theoretical framework upon which the study is founded, as well as a survey of the relevant literature. The third chapter discusses the research design and technique utilized for this study. The fourth chapter focuses on the collecting and analysis of data, as well as the presentation of findings. The summary, conclusion, and suggestions of the study are presented in the fifth chapter.
1.9 Definition of Terms
In sales, trade, and economics, a customer is the recipient of an item, service, product, or idea from a seller, vendor, or supplier in exchange for money or another useful consideration.
Customer retention refers to a company’s or a product’s capacity to retain its customers over a predetermined time frame.
Consumer behavior is the study of how individuals, groups, and organizations select, purchase, utilize, and dispose of ideas, commodities, and services to meet their needs and desires. It refers to the activities and motivations of customers in the marketplace.
ADVERTISING’S EFFECT ON CUSTOMER BEHAVIOR AND RETENTION
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