CHAPTER 1

INTRODUCTION

1.1 Background of the study

The past decade has witnessed the development of information and communication technologies that enable easy and rapid interaction between customer and advertiser. As a result, advertisers are increasingly relying on various modes of interactive technology to advertise and promote their products and services. Advertisements play a major role in changing the perception and consumption pattern of the society in general advertising is a form of controlled communication that uses strategies to convince to make a buying decision the audience and take advantage of certain services.

Every Advertisement aims to create awareness and arouse interest in the minds of customers. To do so advertisers employ several of marketing techniques. Source Credibility is “a term commonly used to imply a communicator’s positive characteristics that affect the receiver’s acceptance of a message. The concept of credibility has received considerable attention since the late 1990s when the internet began providing a new information interaction environment that allowed users to seek for information and communicate with others in ways never been possible. As a consequence the researchers and practitioners in diverse fields including information science, marketing, management information systems, communication studies and psychology have examined credibility from a variety of different perspectives (Danielson, 2007). Source credibility can help to increase the efficiency of advertisement since it can influence consumers” attitudes and their behavior (Forouhandeh et al., 2011). Belch & Belch (2009) observed that

trustworthy and expert sources are more persuasive than sources that are perceived as having less trustworthiness and expertise.

Credibility is the objective and subjective components of the believability of a source or message, credibility has two key components: trustworthiness and expertise, which both have objective and subjective components. Trustworthiness is based more on subjective factors, but can include objective measurements such as established reliability”. Ohanian, (2000) defines Source credibility as communicator’s constructive characteristics that affect the receiver’s acceptance of a message. (Ohanian, 2000).Credibility signifies the scope of the source, perceived of having relevant expertise and knowledge of the subject which can be trusted and who gives an honest and believable opinion on the subject or the product, Brand and Services (Ohanian, 2000).

The Source can be the Celebrity Endorsers Credibility, Company’s credibility, and advertisings credibility. Perceived expertise and trustworthiness of the endorser is an important bases of credibility, and effectiveness of celebrity and other endorsements derives from the credibility of a product’s endorser (Hovland, Janis, and Kelly 2003; Ohanian 2001). Endorsers are also used as sign in low involvement situations, whereby a consumer’s reaction to the endorser is directly passed on the brand (Petty, Cacioppo, and Schumann 2003).

Organizations and Groups also act as endorsers by providing either their expertise or trustworthiness (Kertz and Ohanian 2002). They can enhance the credibility of an advertisement. Advertisement effectiveness helps ordinary consumers save their precious time by providing their expertise and personal charisma. In other words, by using an endorsement, the advertiser is asking the consumer to rely on the endorser’s judgment about the service or product in making a purchase decision. Here comes the concept of reliance. This proposed reliance on the endorser is what the advertiser hopes will occur in using the endorsement and the company thinks of cashing on. However, reliance is one of the most vital base for the endorser’s legal liability when claims about the product are false or deceptive (Kertz and Ohanian 1992). Source credibility and Advertisement effectiveness analyze the factors which make advertising effective and credible. There are legal implications if consumer rights are not protected from the misleading advertising and other media sources.

1.2 Statement of the Problem

The credibility of an advertisement refers to a person’s perception of the truth presented in the content. It can be discussed in other forms, including corporate credibility (the perceived truthfulness of the perceived sponsor) and ad credibility (message content and endorsers’ credibility. Effectiveness of advertising is one of the very important issues in the realm of advertising.

Advertising is any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor. Most business establishments generally cherish competition especially when it is healthy and worthwhile. Competition also thrives well in a mixed economy such as Nigeria where the tents of capitalism provides for free enterprise activities.

The problem of competition arising from other companies in the same product line and also cost of operation, in today’s business environment, as well as lack of agility can hinder an organization’s ability to be competitive. With high capital costs and ever-increasing energy expenditures, an organization can become locked into patterns where it is implementing shortsighted, cost-cutting measures that can adversely affect operational productivity— decreasing overall market responsiveness. It is generally known that advertisement is the creation of awareness for goods and services directed at promoting sales of such goods and services. It is in this light that this research set out to critically study the impact of Source Credibility and Advertising Effectiveness of firms in Port Harcourt Metropolis.

1.3 Purpose of the Study

The general purpose is to examine Source credibility and advertising effectiveness of firms in Port Harcourt Metropolis while the specific objectives are:

1        To examine the relationship between Trustworthiness and Advertising effectiveness of firms in Port Harcourt Metropolis.

2        To examine the relationship between Expertise and advertising effectiveness of firms in Port Harcourt Metropolis.

3        To examine the relationship between Attractiveness and Advertising effectiveness of firms in Port Harcourt Metropolis.

1.4 Research Questions

1        To what extent does Trustworthiness enhances Advertising effectiveness of firms in Port Harcourt Metropolis?

2        To what extent does Expertise enhances Advertising effectiveness of firms in Port Harcourt Metropolis?

3        To what extent does Attractiveness enhances Advertising effectiveness of firms in Port Harcourt Metropolis?

1.5 Research Hypotheses

The following null hypotheses are formulated from the above specific objectives:

Ho1: There is no significant relationship between Trustworthiness and Advertising effectiveness of firms in Port Harcourt Metropolis.

H02: There is no significant relationship between Expertise and Advertising effectiveness of firms in Port Harcourt Metropolis.

H03: There is no significant relationship between Attractiveness and Advertising effectiveness of firms in Port Harcourt Metropolis.

1.6 Significance of the study

The study will be a source of secondary data to other researchers who wish to conduct studies on related issues. It will again act as mainstream for generating, keeping and maintaining customers.

The study will allow the organizations to structure suitable and effective communication for their social campaigns when pursuing collaboration efforts or working independently.

1.7 Scope of the Study

This study is confined by scope to three main areas namely: Content scope; geographical scope and unit scope:

Content scope: This study address theoretical content bordering on Source credibility and Advertising Effectiveness.       

Geographical scope: This study focus on four (4) selected firms situated in the Port Harcourt metropolis of River State, Nigeria. These Firms are: Expand Global Industrial Ltd, Procter and Gamble Nig. Ltd, Dangote Noodles and Natural Prime Resources Nig. Ltd.

Unit scope: The unit scope of the analysis covers the individual elements and members of the selected firms; hence analysis shall examine all the workers of the target firms as units of measurement for the study analysis.

1.8 Limitations of the Study

The study was limited to Port Harcourt Metropolis due to the financial constrained and geographical distance.

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.9 Definition of Terms

Source credibility: is “a term commonly used to imply a communicator’s positive characteristics that affect the receiver’s acceptance of a message

Advertising effectiveness: Advertising effectiveness can be defined as the extent to which advertising generates a certain desired effect Trustworthiness: able to be relied on to do or provide what is needed or right: deserving of trust

Expertise: as “the extent to which a communicator is perceived to be a source of valid assertions” and trustworthiness as “the degree of communicator’s intent to communicate the assertions he considers most valid”.

Awareness: Extent to which the intended audience or targeted customers are aware of an advertising message.