EFFECTS OF ONLINE ADVERTISEMENT ON CONSUMER BUYING BEHAVIOURS A CASE STUDY OF KONGA ONLINE SHOP (WWW.KONGA.COM)

CHAPTER ONE

INTRODUCTION

Background to the Study: Advertisement plays an important role in modern era as it shapes the attitudes and perceptions of individuals and society which strikingly influences their buying behaviour (Edwards, 2005). Advertisement is considered the prime factor for the success of any business. Advertisement can be done through different media. Some majorly used media are print medium (newspapers, magazines, and brochures), outdoor medium (billboards, events), broadcast medium (television, radio, cable TV) and online medium (websites, social network sites, etc). Online advertisement is a type of digital advertisement that has become an effective means of marketing communication through the help of widespread internet access. It is the state-of- the-art and fastest growing way to advertise. The internet now provides everything from links on sites, to banner ads on sites, to small ads on sites, to pay per click advertising. Internet advertisements are unique in the way that, consumers visit the advertisements, when compared to traditional print and TV media, where advertisements are placed in front of the viewers. Online advertisements include banner ads, interstitial ads, text ads, pop-up ads and Hyper Test Make-up Language (HTML) ads; and are found to be a dominant media where companies uses to market their products and services via the internet.

Online advertising is about delivering advertisements to internet/online users via web sites, e- mail, ad-supported software and internet-enabled smart phones. It is a type of showcasing and promotion which utilizes the internet to convey special advertising messages to shoppers. This can be useful in creating awareness of an organization and its product and services. Edwards (2005) stated that online advertisements are portions of a website that are formatted for the purpose of delivering a marketing message that seek to attract customers to purchase a product or service. Hence, the internet as a communication medium has broadened the scope of marketing communications considering the number of people who can be easily reached. This has also increased the richness of marketing communications by combining text, video, and audio content into rich messages posted on the web. Thus, the web is arguably richer as an advertising medium than some traditional channels such as the television or radio; because of the complexity of messages available, the enormous content accessible on a wide range of subjects and the ability of users to interactively control the experience (Laudon and Traver 2013).

Consequently, the improvements in global telecommunications and World Wide Web (WWW) have given impetuous and new mechanisms for businesses and marketers to promote and advertise their products and services. Introduction to modern electronic advertising, popularly called online advertising, has seen tremendous growth over the past decade and it continues to be the preferred form of advertising for many companies. Even though traditional advertising continue to play its role as an important advertising technique, to-date, more and more organizations are turning to online advertising to promote their goods and services. As explained by Yaveroglu and Donthu (2008), most marketers are now taking advantage of the internet revolution to make their products accessible to the world.

To this end, online advertisement is one of the elements in shaping consumer buying process. Wang and Sun (2010) indicate that online advertising impact on consumers’ purchasing intention variously from one country to another due to differing beliefs, attitudes and behavioural responses. Wang and Sun (2010) also found that a country’s cultures, history, political system, technological and economic and market development have impacted on their purchasing behaviour via online advertising.

Therefore, it would be valuable to know whether the influence of online advertisement lead to purchases of the advertised products or services. This study will therefore seek to analyze the effects of online advertisements on consumer buying behaviour, using Konga Online Shop (www.konga.com) as a case study.

Problem Statement

The revolutionary change brought forth by information technology has an important impact on the daily lives of the populace. It has transformed the way we do business by allowing retailers to offer unlimited range of products and services to all consumers from around the world at any point in time. The internet has emerged as an advertising medium (Silk et al., 2001). Many companies have turned to the internet to advertise their products and services; and the internet is deemed to be the most significant direct marketing channel for the global marketplace (Faber et al., 2004). Companies are pouring billions of dollars into internet advertising to obtain greater returns on investment on ads (Edwards, 2005; Joines et al., 2003).

Internet penetration in Nigeria is very low compared to Europe, South East Asia and the United States. However, many of the internet users are not taking advantage of the opportunities afforded by the internet, to purchase what they need. Even though online users have increased; yet, the influence of online advertisements towards forming positive purchase intentions needs to be studied to assist advertisers in using online advertisements effectively in their marketing campaigns.

While a lot of research has been done on advertising, the effectiveness of online advertisement in Abia State and Nigeria is a segment that has been missing from these studies. Also, understanding the factors that influence online advertisement effectiveness is crucial. While much research has addressed this issue, few studies have considered the case of developing countries, as in Nigeria and Abia State in particular. This project therefore seeks to explore the factors that contribute to the effectiveness of online advertisements and how it affects consumer purchasing intention from the perspective of developing countries.

Again, in spite of the popularity of advertising on the internet, a lot of studies has not being conducted which addresses the key issues regarding the effectiveness of online advertising, especially the impact it has on the purchase behaviour of users. Studies conducted on the attitude of online users towards online advertising are mainly found in the US, Asia and Europe (Bakshi and Gupta, 2013). However, since attitudes and behaviours differ across cultures, it is worthwhile to study consumer attitude from the perspective of developing country like Nigeria. In spite of the remarkable opportunities offered by online advertising, the attitude and behaviour of Nigerian online users towards online advertising remains unclear. To this end, this study attempts to investigate the effectiveness of online advertising using a Effects of Online Advertisement on Consumer Buying Behaviour: Case Study of Konga Online Shop (www.konga.com). Thus, understanding the mechanisms of online shopping and the consumer behavior in Abia State, Nigeria is the priority of the research.

Objectives of the Study

The broad objective of this project is to evaluate the effects of online advertisement on consumer buying behaviour, using the Konga Online Shop (www.konga.com) as a case study. The specific objectives will be to:

1. examine the socio economic characteristics of the respondents in the study area;
2. ascertain the disposition of consumers towards online advertisement in Abia State;
3. examine the influence of online advertisement characteristics on consumer buying behaviour in Abia State;
4. analyze the effect of online advertisement on consumer buying behaviour;
5. determine the effect of Konga Online Shop (www.konga.com) website features on consumer buying behaviour in the study area;
6. ascertain the challenges consumers encountered while patronizing products and services seen advertised on Konga Online Shop.

Research Questions

Although, many studies have researched different aspects of consumer behavior on online advertisement, very few studies have studied the consumer responsiveness to online advertisement in Abia State, Nigeria. Moreover, less research has looked into the impact of online advertising effect on consumers’ purchasing intent. This project will therefore seek to answer the following research questions:

1. What socio economic characteristics influence consumers online buying behaviour?
2. What are the dispositions of consumers towards online advertisement in Abia State?
3. What are the significant influences of online advertisement characteristics on consumer buying behaviour in Abia State?
4. What are the major effects of online advertisement on consumer buying behaviour?
5. What are the effects of Konga Online Shop (www.konga.com) website features on consumer buying behaviour in Abia State?
6. What are the challenges consumers encountered while patronizing products and services seen advertised on Konga Online Shop?

Justification of the Study

This study is justified based on the significance of online advertisement on consumer buying behaviour. Online advertising has gained increased popularity with more people spending time online. It is therefore relevant to understand consumers’ attitudes toward online advertising. Marketers and advertisers will find this study relevant. By understanding consumers’ attitude, the advertisers can make the necessary efforts to increase consumers’ exposure to online advertising.

The results of this study will assist advertisers in planning and designing their online advertisements by considering the relevant predictors. Effective planning of online advertising will help reduce consumers who find online advertisements repulsive. This would provide a friendlier online platform. Besides marketers, this study is also useful to government and non-government agencies in planning and designing their online advertising as these agencies also use online advertising in their cause related marketing.

With an increasing number of consumer groups using the internet, an understanding of consumer attitudes and behaviour towards its advertising becomes useful for businesses. Furthermore, greater attention needs to be paid to the function of online advertising in influencing the purchasing process.

The  rapid  online-technology  development  and  diffusion  makes  the  internet  a  serious businesses asset for achieving competitive advantages (Kiang et al., 2000). In fact, the internet became key business infrastructures that help marketers understand and satisfy diverse consumer needs (Constantinides and Fountain, 2008). As a result the Internet is currently considered a cost efficient, effective and very productive marketing platform (Kiang et al., 2000).

The findings of this research will significantly create awareness of the impact of online marketing on the buying behaviour of individuals especially those who wish to purchase electronic devices via online shopping stores. The study will serve as a piece of motivation to organizations wishing to market their products via websites. It will also be beneficial to web designers who are instrumental in the designing and launching of online stores. Finally, this study will be of importance to academia as additional literature in the understanding of online marketing and its effect on people’s buying behaviour.

This study will enlighten intending advertisers on how to package their online advertising campaign since it will reveal the extent of awareness of the use of online media in advertising. This project will equally serve as a platform for further enquiries in related subject matters and as a resource material for researchers who intend to carry out studies in this and other related areas.

Scope of the Study

The focus of this project is to examine the effectiveness of internet advertising in terms of its utilization to make online purchase decision. In this study, internet advertising is synonymous with online advertising and web advertising. In accordance with various researchers, internet advertising can be delivered via any channels, in any form, and provides information at any degree (Schlosser et al., 1999). It broadly consists of various commercial content formats delivered by video clip, print, and audio; either solicited or unsolicited. It includes company web sites, corporate logos, e-mail messages, pop-ups, banner ads, skyscraper ads, buttons, interstitials, hyperlinks, dynamic media, and interactive games (Korganokar, 2003). This project will seek to examine the effects of online advertisement on consumer buying behaviour, using the Konga Online Shop as a case study.

Definition of Terminologies

For a proper understanding of this project, the key terminologies used are defined based on their conceptual consequence to the study:

Konga Online Shop

Konga online shop enables consumers to access an unlimited range of products and services from companies around the world. Konga.com is a Nigerian electronic commerce company founded in 2012 with headquarters in Yaba, Lagos. It offers a third-party online marketplace, as well as first-party direct retail; spanning various categories including consumer electronics, fashion, home appliances, books, children's items, and personal care products.

Social Media

This refers to online social interaction sites in which messages are developed by the users and also shared by those users between or among themselves. For example Facebook.

User-Generated Content

These are information contents that are primarily written, published or shared via social networks by their users.

Social Media Advertising

This refers to a special area of advertising that uses Internet’s social platforms (social networking sites) to deliver commercial messages to potential consumer.

Social Platforms

This includes social websites or networking sites.

Blogs

Blog is short for web blog. They are online personal journals in which people write about their interest for instance, business, politics, sports, music, movies reflections, comments etc. Readers can post and engage in conversation with the blog author and often, links to other blogs provided by the writer.

Micro Blogs

Micro blogs allow users to exchange small elements of content such as short sentences not more than 140 characters, individual images, or video links. Twitter is an example of a micro blog.

Web 2.0

This refers to websites or web services that utilize “social” interaction. It is characterized by openness, collaboration and user participation and generation of content.

Social Authority

This is developed when individuals or organizations establish themselves as experts in their given field or area, thereby becoming an influence in that field or area.

Brand

A trademark or a name of a product.

Hyperlink

A hyperlink, also sometimes referred to as a "hypertext link," is simply a highlighted word, phrase or, sometimes graphic, that allows users to link to another website by simply clicking on the hyperlink.