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Buying behavior, TV advertisements, ethical and unethical.

Essay Topic:

CHAPTER
1.1 INRODUCTION

It is believed that the buying behavior of consumers can be influenced by vast promotions. Among all types of promotional techniques, TV promotions play a vital role in consumers’ buying behavior.

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“Advertising perception has a significant impact on consumers’ intention to reject the products and the brand” (Chan et al, 2007).

The marketers around the world use different kinds of promotion techniques as a tool of conveying the message about their products or services to the target consumers. Marketers tend to believe that all consumers around the world have similar needs as well as desires and that the global market is growing increasingly homogeneous (Chan et al, 2007). Therefore they try to capture the market through advertising without considering what customers expect from the firms. Due to the rapid growth in the media, all most all firms use TV as their media of promotion to grasp the target market.

The Sri Lankan structure of advertising industry is also affected by globalization. At present, there are number of private and government advertising companies inSri Lanka. The advertising companies are also affected by the local FMCG companies.

Due to the arising completion, companies should involve in vast promotions in order to capture the market before their competitors. It is believed that there is a relationship between TV promotions and buying behavior of consumers. In order to identify what the customer expects from marketers, it’s vital to carry out a research on how ethical and unethical TV advertisements affect on consumer buying behavior in FMCG industry inSri Lanka?

1.2 PROBLEM STATEMENT

How ethical and unethical TV advertisements affect on consumer buying behavior in FMCG industry in Sri Lanka

1.3 PROBLEM JUSTIFICATION

The companies that are operating in the FMCG industry inSri Lankashould focus on increasing their sales through identifying their customer expectations. Today almost all the organization around the world, use TV advertisements as a way of conveying the message about their product to the target market. Therefore it is important for marketers to identify the consumer perception about ethical and unethical TV advertisements and its impact on the company sales. Most of the companies do not analyze their customer expectations before they telecast their advertisements on TV. This has created a contradictory situation in the society which may result in negative perceptions about the product which is promoted through the advertisement.

R.C. Earnest (2007), who conducted a research on ethnically targeted advertising, has found that “there were negative attitudinal, emotional, and behavioral reactions by those who are not targeted, which may result in a drop of sales.”

With the arising competition, it’s important for organizations to find out the ways and means of satisfying customers in order to make the existing customer retain with the company and attract new customers through vast promotions.

The level of understanding of what local customer expect from the marketers when they are doing their promotions through television is, questionable. It is important for organizations to understand and examine the impact of TV advertisements on consumer buying behavior in order to be successful in the future.

1.4 OBJECTIVES

To identify how consumers react to unethical and ethical TV advertisements done by FMCG industry inSri Lanka.
To find out the impact on buying behavior of the consumers depending on the ethicality and unethicality of the TV advertisements.
To find out the relationship between different types of advertisements and buying behavior
To find out what type of advertisements attracts more customers towards the product.
To recommend alterations to enhance the quality of suitable TV advertisements inSri Lanka.

1.5 SIGNIFICANCE OF THE STUDY

Companies

The buying behavior of the consumers would be analyzed with regard to the TV advertisements done by companies who are operating in the FMCG industry inSri Lanka. This study will enable the companies to understand their consumers and plan their future promotions in a way in which it will increase customers’ satisfaction.

The study also emphasis on possible consequences that may arise in the long run if the company target only one ethnic or religious group in their advertisements. It will also enable the companies to get an idea about the effectiveness of using Indian and other foreign TV advertisements in Sri Lankan context.

As this study enables to indentify customer’s perception of the ethical and unethical advertisements, the companies would be able to fulfill customer expectations by providing what customers perceive as ethical. It will create positive attitudes towards the product and the company, ensuring their sales would not drop as a result of an unethical advertisement.

Consumers

As the study focuses on customer perception regarding ethical and unethical advertisements, the customers will be able to watch TV advertisements without feeling uneasy and embarrassed and they wouldn’t become offended regarding controversial advertisements

Further as the production of unethical advertisements diminishes due to the awareness created among the advertising firms through the study and the consumer would be able to grasp the exact message which the company wishes to deliver to the customers when the advertisement is devoid of unethical content.

The study will provide an opportunity for the customers to express their views on ethical and unethical TV advertisements.

Advertising firms

As the study provides details regarding the factors that should be considered when producing TV advertisements for Sri Lankan audience, the advertisement firms will be benefited in terms of understanding the target audience and to be more responsible about the content of the advertisements.

The study will specify on what is ethical and what is unethical in terms of customer perspective, which should be the main concern of the advertising firms. Through the provided recommendations the firms can improve the quality of their advertisements, meeting customer expectations which will enable them to serve the society better.

1.6 SCOPE AND THE LIMITATIONS OF THE STDY.

Limitation associated with this study begins with the nature of sample, which are the working women in selected areas whose minimum educational level would be the completion of GCE (A/L) and the advertisements done by companies who are operating in the FMCG sector inSri Lankawithin the time period of 2007-2008.

The above mentioned sample is selected based on following assumptions:

As the society acceptance is more towards the working females, the data gathered through them would be more reliable.
Minimum educational level is specified considering the fact that they are knowledgeable enough to distinguish what is ethical and unethical.

Further the selected area would beColombomunicipal council and the time period is specified due to time limitation and ease of data gathering.

The study is carried out considering only a group of customers which might cause biasness in the findings. Selection of TV as media of advertising and FMCG industry are limiting the study to one particular sector.

CHAPTER 2

2.1LITERATURE

“Ethics of advertising intends to ensure that advertisers and consumers co-exist without being harmed by the messages of advertisements.” Ethical advertising provides information regarding the product without harming any parties involved as well as people who watch.“Unethical advertising, by contrast, deceives consumers by concealing significant facts about a product or service.” Unethical do not satisfy the interests and expectations of the consumers (AcaDemon, 2008)

2.2 LITERATURE REVIEW

Numbers of researches around the world have carried out research to find out if there exists a relationship between TV advertisements and the buying behavior.

Implications for the Western World

It is interesting to observe that TV advertisements have an impact on the Buying behaviors of the New Zealandcustomers. A group of researchers who carried out a research “to examine what influences perceptions of infomercial advertising effectiveness among a sample of actual infomercial buyers” (Martin et al, 2002), have found that the consumers included in the sample which was 2,670 customers who had bought one of six different products advertised within two weeks, has admitted that the infomercial advertisements (Appendix 1) had been effective in getting them to buy the product (Martin et al, 2002). Unlike most researchers, this group has identified a relationship between a demographic factor which is age and the buying behavior of the consumers. According to the findings of Martine et al, (2002) age impacted how consumers view infomercials, as did the product type purchased. Hypotheses Ho1 and Ha1 were developed according to the findings of this study.

Barrio-Garcia & Luque- Martinez (2003) who conducted a research inSpainhad focused on a different aspect of advertising. In contrast to the above mentioned group, this group has selected the comparative advertising in order to find out the relationship between TV advertisements and buying behavior of the consumers. The study was carried out on the objective of “to provide marketing professionals with a theoretical outline that will allow them to understand the persuasive mechanism that underlies comparative advertising effectiveness, helping them in their marketing decision-making processes” (Barrio-Garcia & Luque- Martinez, 2003). Comparing to the above group, this group had identified a negative relationship between advertisements and buying behavior of the consumers. The findings of the study states that, “increase in comparative advertising intensity negatively affect towards the brands advertised and also purchase intensions” (Barrio-Garcia & Luque- Martinez, 2003). In order to gather data, they have used relatively a small sample which consisted of 720 consumers selected from four geographical areas ofSpain. The finding of this study was utilized in order to develop Hypotheses Ho2 and Ha2.

Petrovici & Marinov (2007), two British researchers have also concentrated on how TV advertisements affect on buying behavior of the consumers. They have used a different approach to attempt the research objective which is “to explore the relationship between determinants and primary antecedents of advertising and attitudes to advertising in the context of European Union accession countries” (Petrovici & Marinov, 2007). Even though the sample selected was small (797 respondents) comparing to New Zealand researches (sample of 2,670 respondents), this group has selected their sample from two different countries (Romania and Bulgaria) which helps to broaden their study further and their findings are more reliable as they have conducted face-to-face interviews with the respondents. It is proved that brand recognition and acquisition can be achieved through realistic, truthful and fair advertising (Petrovici & Marinov, 2007). Hypotheses Ho3, Ha3 and Ho4, Ha4 were developed in relation to the findings of this study.

Romani (2006) who conducted the research inItalyhas used different types of variables compared to other western researches to test the relationship between TV advertisements and buying behavior. The variables used in this study were, willingness to buy the advertised product, trustworthiness towards the source of information and completeness or clarity of price information contained in the advertisement. The researcher has used qualitative and experimental studies in order to identify the misleading price communication strategies and consumer response to those advertisements. The respondents sample were very small (480) compared to above mentioned studies which is a drawback of the study. The conclusions drawn from the study show that there is a negative relationship between price misleading advertisements and the customer’s willingness to buy and there is a positive relationship between trustworthiness towards the source of information. The objective of the study was to “investigate consumers’ reactions to advertisements containing misleading information on price” (Romani, 2006). Development of hypotheses Ho5, Ha5 and Ho6, Ha6 were based on the findings of this study.

Implications for Asian countries

According to R.C. Earnest (2007), “Unintended audiences often view advertisements targeted at other groups and make decisions regarding the advertisement, brand and company behind the advertising which affect future consumer behavior”. The objective of the study was “to extend current knowledge on advertising effects on those not targeted by noting unintended consequences on attitudinal, emotional and behavioral reactions” R.C. Earnest (2007). A similar type of sample which Petrovici & Marinov (2007), used in their study was utilized in order to gather data. Instead of selecting the sample from two countries, R.C. Earnest (2007) has selected the sample from two distinct ethnic groups (Malay and Chinese) inKuala Lumpur,Malaysia. A fair number of respondents (200 Chinese and 199 Malays) were selected from each group and data were gathered by means of a questionnaire which was based on fiction advertisements targeted at dominant and non- dominant ethnic groups inMalaysia. Hypotheses Ho7 and Ha7 were developed on the basis of findings of this study.

Chan & McNeal (2003) have concentrated on an atypical aspect of how TV advertisements influence on buying behavior of the consumers. They have emphasized on parent- child communications about consumption and advertising which distinguish their study from the others. Comparatively a large sample (1,665) of parents with children aged 6 to 14 were selected from 3 cities inChinaand a questionnaire is being distributed in order to gather data. Out of all the findings of their study most relevant finding to the current study is that, pluralistic and consensual parents take their children’s opinions about advertisements in to consideration when consuming certain products.

Implications for neighbor country

A study conducted by Fam & Grosh (2007) has derived an interesting finding from the data they gathered using 1,000 urban young adults. Even the sample selected was relatively low compared to theMartin et al’s, (2002) study, the sample was drawn from five Asian countries includingIndia. The method that they have used to gather data was telephone interviews which distinguish this study from the above mentioned studies. The respondents were questioned on their thoughts about the TV advertisements that they liked, product that was being advertised and purchase intensions. The objective of the study was “to examine likeable executional techniques in advertising across five Asian countries and their impact on purchase intension” (Fam & Grosh, 2007). The researchers found that unlike in the all other four countries India is the only country where the respondents’ react for the likeable executional tools and likeable attributes such as soft sell and relevant to me, has positively affected the respondents’ decision to buy more of a product/ brand after they exposure to the advertisement (Fam & Grosh, 2007). Further most interesting finding of the study is that unlike in other countries Indian customers have responded negatively to advertisements in which children misbehave. Hypotheses Ho8 and 8were constructed with relevant to the findings of this study.

Above discussed literature illustrates that advertisements have a significant impact on consumer buying behavior.

CHAPTER 3

3.1 CONCEPTUAL FRAMEWORK

The following variables are derived from the literature provided in chapter 2.


Independent Variables Dependent Variables

3.2 HYPOTHESES

Ho1: There is no relationship between infomercial advertisements and buying behavior.

Ha1: There is a relationship between infomercial advertisements and buying behavior.

Ho2: There is no relationship between Comparative Advertisements and buying behavior.

Ha2: There is a relationship between Comparative Advertisements and buying behavior.

Ho3: There is no relationship between Realistic Advertisements and buying behavior.

Ha3: There is a relationship between Realistic Advertisements and buying behavior.

Ho4: There is a negative relationship between Truthfulness of the information provided and thebuying behavior.

Ha4: There is a positive relationship between Truthfulness of the information provided and thebuying behavior.

H05: There is no relationship between Trustworthiness of the source and buying behavior.

Ha5: There is a relationship between Trustworthiness of the source and buying behavior.

Ho6: There is no relationship between Price misleading advertisements and buying behavior.

Ha6: There is a relationship between Price misleading advertisements and buying behavior

Ho7: There is a negative relationship between ethnically targeted advertisements and buying behavior.

Ha7: There is a positive relationship between ethnically targeted advertisements and buying behavior.

Ho8: There is a negative relationship between Children misbehaved advertisements and buying behavior.

Ha8: There is a positive relationship between Children misbehaved advertisements and buying behavior.

3.3 METHODOLOGY

Population, sampling and statistical approach will be discussed under this topic.

3.4 POPULATION AND SAMPLE.

Selected population for in order to gather data is working women inColombodistrict with a minimum education level of G.C.E (A/L). Below diagram elaborates the selection of sample. The sampling method adapted is a proportionate probability area sampling technique. Where the selected sample of individuals was chosen based on their geographical location (Colombo District) and were further chosen based on if they were employed and had completed the G.C.E (A/L). Since the sample is larger than 35, hence, this can be categorized as a parametric test. Note: – 16.7% is the whole Female, employed and above G.C.E (A/L) rate

19,886,000 is the whole Sri Lankan population

2,421,000 is the wholeColombodistrict population

647,100 is the whole population ofColombomunicipal council

210,546 is the whole population of Dehiwala municipal council

117,563 is the whole population of Moratuwa municipal council

116366 is the whole population of Sri Jayewardenepura municipal council

3.5 STATISTICAL APPROCH

According to the table provided in the Appendix 1, multiple regression analysis should be used to analyze data. Further Martine et al. (2002) also have used the multiple regression method to analyze data in their study. In order to gather data five point Likert scale would be adapted as previous researches, Chan & McNeal (2003) and Martin et al (2002) have also used the same scale to gather data.

CHAPTER 4

4.1 CONCLUSION

The proposed study analyzes the impact of ethical and unethical TV advertisements on buying behavior of the consumers in FMCG industry inSri Lanka. Further the study analyses the relationship of how different types of TV advertisements affect on the buying behavior of the consumers using a sample of 104 working women inColombodistrict who have completed A/L examination. Literature review of the current study provides sufficient evidence of past researches which have discussed the similar relationships between the variables selected.

Further the study enables the marketers to understand the customer well and as a result they will be able to fulfill consumer expectations through their advertisements.

References
Chan et al. 2007, ‘Consumers response to offensive advertising: a cross cultural study’, International Marketing Review, vol.24, no.5, pp.606-628.
R.C. Earnest 2007, ‘Ethnically targeted advertising views of those not targeted’, Asia Pacific Journal of Marketing, vol.19, no.3, pp.265-285.
Martin et al. 2002, ‘Infomercials and advertising effectiveness: an empirical study’, Journal of consumer marketing, vol.19, no.6, pp.468-480.
Barrio-Garcia & Luque- Martinez 2003, ‘Modeling consumer response to differing levels of comparative advertising’, European Journal of Marketing, vol.37, no.1/2, pp.256-274.
Petrovici & Marinov 2007, ‘Determinants and antecedents of general attitudes towards advertising’, European Journal of Marketing, vol.41, no.3/4, pp.307-326.
Romani 2006, ‘Price misleading advertising: effects on trustworthiness toward the source of information and willingness to buy’, Journal of product and brand management, vol.15, no.2, pp.130-138.
Chan & McNeal 2003, ‘Parent-child communications about consumption and advertising in China’, Journal of consumer marketing, vol.20, no.4, pp.317-334.
Fam & Grosh 2007, ‘Cultural values and effective executional techniques in advertising’, International Marketing Review, vol.24, no.5, pp.519-638.
City population 2008, Sri Lanka , [Online], Available:

http://www.citypopulation.de/SriLanka.html [Accessed 3rd December 2008]

Department of Census & statistics 2006, Bulletin of Labor Force Statistics, [Online], Available:

http://www.statistics.gov.lk/samplesurvey/labourforce/mainpage.pdf [Accessed 3rd December 2008]

AcaDemon 2008, ‘Papers on Ethical Advertising and similar term paper topics’, [Online], Available:

http://www.academon.com/lib/paper/31480.html [Accessed 10th December 2008]

Appendix (Statistical Approach)

INDEPENDENT VARIABLE DATA TYPEDEPENDENT VARIABLE DATA TYPE:Buying behaviorSELECTED STATISTICAL METHOD
INDEPENDENT VARIABLE 1:Infomercial advertisementsIntervalInterval Multiple Regression
INDEPENDENT VARIABLE2:Comparative advertisementsInterval IntervalMultiple Regression
INDEPENDENT VARIABLE3:Realistic advertisements IntervalIntervalMultiple Regression
INDEPENDENT VARIABLE4:Truthfulness of the information providedIntervalIntervalMultiple Regression
INDEPENDENT VARIABLE 5:Trustworthiness of the source IntervalIntervalMultiple Regression
INDEPENDENT VARIABLE 6:Price misleading advertisements. IntervalIntervalMultiple Regression
INDEPENDENT VARIABLE 7: Ethnically targeted advertisements IntervalIntervalMultiple Regression
INDEPENDENT VARIABLE 8: Children’s misbehave advertisements IntervalIntervalMultiple Regression

Appendix 2 (Operationalisation)

Types of variables

Measurement

Questions/ Description

Type of Data

Independent Variables

Infomercial advertisementsLikert ScaleI feel that infomercial advertisements make me buy the product compared to other advertisements.Interval

Comparative advertisementsLikert ScaleComparative advertisements annoy meInterval

Realistic AdvertisementsLikert ScaleI feel that realistic advertisements convince me more to buy the advertised product.Interval

Truthfulness of the information provided in the advertisementsLikert ScaleI tend to purchase the product if the advertised information is trustworthy.Interval

Trustworthiness of the sourceLikert ScaleI believe that TV advertisements are more reliable than other sources.Interval

Price misleading advertisementsLikert ScalePrice misleading advertisements makes me reconsider when buying the relevant product.Interval

Ethnically target advertisementsLikert ScaleAdvertisements targeting an ethnic group discourage me to purchase the product.Interval

Children misbehave in advertisementsLikert ScaleI reject buying products that are advertised using children’s misbehaviour.Interval

Dependant Variable

Buying BehaviourLikert ScaleTelevision advertisements encourage me to buy the relevant products.Interval

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