AN EMPIRICAL STUDY ON IMPACT OF ADVERTISEMENT WITH REFERENCE TO FAST MOVING CONSUMER GOODS IN CHENNAI

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1 INTERNATIONAL JOURNAL OF MANAGEMENT (IJM) International Journal of Management (IJM), ISSN (Print), ISSN (Online), ISSN (Print) ISSN (Online) Volume 6, Issue 1, January (2015), pp IAEME: Journal Impact Factor (2014): (Calculated by GISI) IJM I A E M E AN EMPIRICAL STUDY ON IMPACT OF ADVERTISEMENT WITH REFERENCE TO FAST MOVING CONSUMER GOODS IN CHENNAI R. Punniyamoorthy Ph.D Research Scholar, Thiru-vi-ka Govt arts college, Thiruvarur Dr. B. Parthiban Head, Department of Business Administration, Thiru-vi-ka Govt arts college, Thiruvarur ABSTRACT This paper aims to explore the role of advertisement on attitudes towards buying behavior. questionnaire has prepared to evaluate the impact of advertisement. The sample data has been collected from one of the reputed engineering college in state capital region Chennai. The consumers are chosen between the age limit of One of the important food segments in FMCG has been taken into account especially the packed foods. Five brands has been taken into consideration as FMCG s brand Lays, Kurkure, Bingo, Haldirams and Parle. Interviews were made in respect of their co-relations with advertisements. These results of this research exposed that advertisement attracts towards the preference and choices to influence the consumer buying behavior. The aim of this paper is, on one hand, to know the impact of advertisements on consumer behavior in fast moving consumer goods especially packed foods, On the other hand, to find out the effective media of advertisement. Prior to the formal survey, a survey was conducted in the form of questionnaires and interviews. After refining some questions, an improved questionnaire was developed. Then the questionnaire was distributed among 100 consumers with a response rate of 100%. Keywords: Consumer Behavior, Advertisement, FMCG, Purchase Intention. 280

2 INTRODUCTION The objectives of all business are to makes profits and a merchandising concern can do that by increasing its sales at remunerative prices. This is possible, if the product is widely polished to be audience the final consumers, channel members and industrial users and through convincing arguments it is persuaded to buy it. Publicity makes a thing or an idea known to people. It is a general term indicating efforts at mass appeal. As personal stimulation of demand for a product service or business unit by planting commercially significant news about it in a published medium or obtaining favorable presentation of it upon video television or stage that is not paid for by the sponsor. On the other hand, advertising denotes a specific attempt to popularize a specific product or service at a certain cost. It is a method of publicity. It always intentional openly sponsored by the sponsor and involves certain cost and hence is paid for. It is a common form of non- personal communication about an organization and or its products idea service etc. that is transmitted to a target audiences through a mass medium. In common parlance the term publicity and advertising are used synonymously. Advertising plays an important role in the process of moving the goods from the producers to the consumers. With mass marketing to distribute the output of production, the GDP may increase to a considerable extent. Advertising helps to increase mass marketing while aiding the consumer to choices and preferences from amongst the variety of products offered for his selection and option. It was only in the latter half of the 19th century, that mass advertising, as we know it today, came into being. Mass production became a reality, and channels of distribution had to be developed to cope with the physical movement of goods, creating a need for mass communication to inform consumers of the choices available to them. We are all influenced with advertisements in our day to day life. SCOPE AND NEED This present study helps in exploring the impact of advertisement on customer behavior, It is understood that advertisement is not only use for awareness about the product and services it also play an important role in purchase intention, selection option and preference towards the products. Moreover the study will help whether the direct or indirect advertising can improve the organization. It is a matter of fact that all the companies spend a lot of money on advertisements to establish the product in market as well as brand.it is also important for the companies to know whether their advertisements are effective or not. REVIEW OF LITERATURE Extensive academic research has been conducted on the psychology of emotion (e.g., Lazarus 1984) and the ways in which ad-evoked feelings may influence consumer response to marketing communication (e.g., Batra and Ray 1986; Holbrook and Batra 1987). Scholars have also observed that advertising may evoke both positive and negative emotions when seeking to persuade. Indeed, Brown, Homer and Inman (1998, p.115), suggest that from a practical perspective, the relative strength of positive and negative feeling effects potentially could guide advertisers decisions regarding executional strategies. 281

3 According to the Morden (1991) advertising gives the knowledge about the product and create the idea in mind about it. Rosaldo (1989) cited in Monaghan and just (2000) found that culture influences all human activity is about culture. New technology give the different product to the consumers, it enhance the product quality and change the style of product (Stantone and Futrell (1987). Geert Hofstede (1984) has been more studied about culture on work values; he says that change in culture can be easily understand but the evaluation of the culture in the human nature is difficult. Perception is the mental process, the information is got by the individual from the environment after organizing it, and individual draws meaning from it. Park and Lessing (1981) proposed that a better understanding of consumer decision making process by the subjective knowledge because the objective knowledge is independently related to the consumer perception and their decision making behavior. OBJECTIVE OF THE STUDY 1. To study the impact of the advertisements on consumers behavior in educational institution 2. To find out the most effective media for advertisement. 3. To identify the attitude towards advertisement and creation of awareness 4. To determine the relationship between advertising and purchase decision. HYPOTHESIS H1: There is a significant effect of the advertisement and preference of the consumer. H2: There is a significant effect of consumer preference and media. H3: There is a significant effect of advertisement and purchase decision. RESEARCH METHODOLOGY The methodology of the study depends mainly on the primary data collected through a wellframed Questionnaire to elicit the well-considered opinions of the respondents. The research design undertaken by the researcher is Descriptive Research Design. Stratified sampling technique was used for the survey. Data was collected through primary and secondary sources. 1. Primary data: primary data was collected with the help of structured questionnaire and personal interview. 2. Secondary data: Source of secondary data was collected with help of published reports, magazines, newspapers and the websites. A sample of 100 was taken for the purpose of study and analysis. Sampling unit consists of all consumers having interest in FMCG goods especially packed foods at reputed engineering college in Chennai. This study was undertaken from August 2014 to November The questionnaires were designed, to know the point of view of public people regarding the impact of advertisement in changing the consumer behaviour. To complete the survey of 100 samples. Total questionnaire were distributed of 100 and finally we receive 100 so our respondent rate is 100%. The questionnaires are filled by First, Second, Third and Final year of engineering students. After the data collection in form of questionnaire, The collected data was entered in SPSS 17. The obtained data were then processed by Regression analysis & karl pearson co-efficient. 282

4 LIMITATIONS The research of the study has several limitations. The first limitation was about the sample selection because the entire sample is taken just from particular engineering college due to time constraints. Second, limited brands of packed foods were used in our research for getting the consumer perception. Third, It was also difficult to get proper information from the people because they were indulging in some other activities. TOOLS AND ANALYSIS Distribution of respondents by year of study Year of students Frequency Percentage First year Second year Third year Fourth year As shown in table the study sample was representative of all the years of study with the second year students forming the highest proportion of the sample. The respondents were also asked to indicate their age bracket. The study findings are DISTRIBUTION OF THE RESPONDENTS BY AGE BRACKET Age bracket Frequency Percentage years. The findings indicate that majority of the students at the engineering college were aged The study sought to establish the gender of the respondents and the findings are as GENDER DISTRIBUTION OF THE RESPONDENTS Gender Frequency Percentage Male Female From the table, The study recorded a higher response rate from males than females in their various years of study. 283

5 FREQUENCY OF TAKING PACKED FOODS Frequency of consume No. of respondents Percentage Once a day Twice a day More than twice 6 6 Not regular Table reveals that 60% of the respondents eat packed foods it once a day, 20% twice a day, 6% more than twice and 14% eat it no regularly. PREFERENCE OF BRAND Brand name No. of respondents Percentage Kurkure Haldirams Lays Bingo 5 5 Parle Table indicates that out of 100 respondents 38 like Haldirams, 25 like Lays, 22 like Kurkure, 10 like Parle and 5 like Bingo. Advertisement of Packed Foods Advertisement of packed foods is required No. of respondents Percentage Yes No Table indicate that 80% of the respondents are of the view that the advertisement of the packed food is required. While 20% shows that advertisement is not required. EFFECTIVENESS OF ADVERTISING ON REACH AND CREATION OF AWARENESS The first objective of the study was to examine the impact of advertisement on consumer behavior on the other hand effectiveness of advertising on creation of awareness. The study sought to establish whether the respondents were aware of various forms of advertisements adopted by various companies. Majority of the respondents attested to being aware of various forms of advertisements. This illustrates that the effectiveness of advertising on reach and creation of awareness was 284

6 determined by the level of knowledge about the existing platforms of advertisements adopted by various companies. The respondents were asked to indicate their attitude towards advertisements. The table illustrate the study findings. Frequency Percentage Informative Creates awareness Entertaining Irritating 6 6 Waste of time. 3 3 As shown in above table, most of the respondents 50% indicated that advertising was creating awareness. 20% indicated that advertising was informative. 21% indicated that advertising was entertained. 6% indicated that advertising was irritating finally 3% indicates advertising was 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 advertising on creation of awareness. Time spend on various platforms of advertising Media Mean Standard deviation Tv Newspaper Social blogs Internet According to the findings in Table above on an average, a person spends more than 4 hours on the television during his free time which is more than that of internet, Social blogs and print medium. Hence, on an average the exposure of television to an individual is around 40% more than that of other mediums i.e. the reach of medium television 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. Frequency Percentage Yes No

7 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 65% of consumers had a positive perception towards advertising on TV. Change the channel during commercial breaks Frequency Percentage Depend on AD Often Every time Never Sometimes Respondents were asked to indicate if they change channels during commercial and the results were tabulated. Table shows that the degree of attractiveness of the advert and its relevance to the respondents determined their attention to the advertisement. The viewers would see the advertisement if the ad is attractive and appealing. Hence there is a probability of 0.78 of a consumer viewing the particular advertisement for creating awareness on television making it an effective mode of communication. RELATIONSHIP BETWEEN ADVERTISING AND PURCHASE DECISION The fourth objective of the study was to determine the relationship between 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 below Frequency Percentage Television Word of mouth Magazines & newspaper Internet advertisement 3 3 Blogs, forums, social networking sites 3 3 Based on Table above, the highest number of students, 62% of the respondents were influenced to buy a product based on television, being with the second 20% were influenced by word of mouth through the information provided by friends. Magazines and newspaper holds the third place with 12%, Internet advertisements and social networking sites were least in influencing their decision at 3%. Regression analysis In determining the effectiveness of advertising on consumer behaviour, the study conducted a multiple regression analysis to determine the nature of relationship between the variables. 286

8 The regression model specification were as follows Y=α+β1X1 +ε. Where; Y= consumer behaviour X1= advertising ε= error term β=coefficient α= constant Multiple regressions to determine the predictive power of advertising on consumer behavior. The researcher conducted a multiple regression analysis so as to test relationship among variable (independent) on the consumer behavior. The SPSS 17 was used 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 taken as advertising. Model R R square Adjusted R square Standard error The independent variable was explained only 84 % of the consumer behavior as represented by the R2. It means that other factors not studied in this research contribute 16% of the consumer behavior. Therefore, further research should be conducted to investigate the other factors that affect consumer behavior. ANOVA OF THE REGRESSION 1 Model Sum of squares d.f Mean square F sig Regression Residual Total The significance value is which is less than 0.05 thus the model is statistically significance in predicting how advertising affects the consumer behavior. The F critical at 5% level of significance was Since F calculated is greater than the F critical (value = 9.687), this shows that the overall model was significant. 1 Standardised Co-efficient Model T sig B Std.error Beta Constant Advertising Multiple regression analysis was conducted as to determine the relationship between consumer behaviour and the one independent variable (advertising). As per the SPSS generated table, regression equation 287

9 (Y=α+β1X1 +ε) becomes: (Y= X1+ ε) According to the regression equation established, taking all factors into account (advertising) constant at zero, consumer behavior will be The data findings analyzed also shows that taking all other independent variables at zero, a unit increase in advertising will lead to a increase in consumer behavior; This infers that advertising contribute most to the consumer behaviour. At 5% level of significance and 95% level of confidence, So that advertising was a significant, factor in predicting the consumer behaviour. KARL PEARSON CO-EFFICIENT Pearson correlation coefficient 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 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 below indicates the correlation matrix between the advertising and consumer behaviour. Consumer behaviour (r) (p) Sig. (2 tailed) Advertising (r) (p) (2 tailed) Consumer behaviour advertising There is a positive relationship between consumer behaviour and advertising of magnitude The positive relationship indicates that there is a correlation between the consumer behavior with the 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 behaviour and advertising was This implies that advertising was a significant factor on consumer behaviour. FINDINGS After analysis of the findings, the study concludes that the effectiveness of advertising on reach and creation of awareness was determined by the level of knowledge about the existing platforms of advertisements adopted by various media. Advertising was effective in providing higher reach and creation of awareness. The research established that TV advertising is more reliable than other mode of advertising. Television is the most effective media which is said by 62 % of the respondents. The significant relationship between advertising and consumer behaviour was found to be positive relationship as the magnitude of The study also concludes that advertising has 288

10 significant relationship with purchase decision of the consumers. This study shows that increase in advertising will lead to a increase in consumer behavior. The study further concludes that television advertising contributes most to the consumer behavior and that TV advertising was a significant factor in predicting the consumer behaviour. So television is the most effective media which influences the consumer purchase decision. In addition, there is a positive relationship between consumer behaviour and television advertising. This implies that companies should invest more in television advertising to increase their market share. CONCLUSION Research of the study concluded that advertisement and consumer behaviour was positively related. It was also found out that people form attitudes towards objects on the basis of their beliefs, perception and knowledge about the products. According to value expressive function of attitudes consumers preferred brand was haldirams and these findings explained that consumers purchased that particular brand because it seemed satisfactory to them. The consumers are mostly like the media advertisement. Through media consumer are attracted more so the companies are used the media as a mode of promotion for the product. These findings mean that most of the respondents had a positive attitude towards advertising 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 advertising on creation of awareness. Advertisement should not be too expensive, because the advertisement leads and increase the prize of the product. Media should be selected according to the choice of customers. Marketers are suggested to give more attention in making the advertisement to make it effective for the sales of packed foods. REFERENCES [1] 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: [2] Bhat, S., Bevans, M. and Sengupta, S., (2002), Measuring users web activity to evaluate and enhance advertising effectiveness. Journal of Advertising, 31: [3] Bloch, P.H., Sherrell, D.L. and Ridgway, N.M., (1986), Consumer search: An extended framework. Journal of Consumer Research, 13: [4] Cho, C.H., (2003), Factors influencing clicking of banner ads on the WWW. CyberPsychology & Behavior, 6: [5] Danaher, P.J. and Mullarkey, G.W., (2003), Factors affecting online advertising recall: A study of students. Journal of Advertising Research, 43: [6] Ducoffe, R.H. (1996), Advertising value and advertising on the web. Journal of Advertising Research, 36: [7] Edwards, J., (2005), Pharma formulates plans to move marketing from TV. Brandweek, 46: 5. [8] Faber, R.J., Lee, M. and Nan, X., (2004), Advertising and the consumer information environment online. American Behavioral Scientist, 48:

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