CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND TO THE STUDY

Today, advertising is a multi-billion industry, employing hundreds of thousands of people and affecting billions of people’s lives worldwide. Yet, seeing as advertising clutter has increased tremendously and is more intense than ever, it is vital that companies differentiate themselves from competitors by creating even more powerful, entertaining and innovative advertising messages, as well as sponsoring different events. The end point of any production or manufacturing activities is consumption. Therefore, whatever product or service that is produced must satisfy the needs of the consumer adequately. The consumer is said to maximize his satisfaction when his money utility equals the utility of the offer he received in Exchanged for the money. Contemporary marketing calls for more than just developing a good product/service, Pricing it attractively and making it accessible to consumers. Companies must also communicate with their present and potential customers. Advertising is one of the major tools companies use to direct persuasive communications to target buyers 11 and publics. The spender includes not only business firms but museums, professionals and social organization that advertised their causes to various target public.

Organizations obtain their advertising in different ways. In small companies advertising Agencies are used. A large companies set up their own advertising department, who develop advertising strategy, approved advertising agency, advert and campaign and handle direct mail advertising, dealer display and other forms of advertising not ordinarily performed by the agency most companies use an outside advertising and to select and purchase media. Advertising objective is a specific communication and achievement level to be accomplished with a specific audience in a specific period of time. If, the desired results are to be achieved, the product must be good and acceptable to the consumer; advertising must be carefully planned in advanced; right appeals/claims must be adopted; the right type of media must be used; the cost must not be excessive; reasonable frequency must be provided; right distribution channel must be selected; and the price of the commodity must be right i.e. acceptable to the consumer (Anthony, 2009).

1.2     STATEMENT OF PROBLEM

For a couple of years since its operation started, GLONigeria has managed to capture a large percentage of market shares (53%) in the Telecommunication industry by creating a brand image. Surprisingly, Nigerians have been made to love GLO as they see it as the funky network that everybody is on. Segmentation analysis across GLO markets has been undertaken. This has facilitated improved product offering. GLO phone communication is meant to ease life and add flavour to it. However, it has turned out to be a nuisance to Nigerians in the past few months, fed-up subscribers of GLONigeria have continuously and publicly complained of bad network and unsolicited marketing advertising messages from the company (Wafula, 2009). O. Annabel, a subscriber on the network, published her complaint in one of the daily newspaper of August 27, 2008. She said “I am really growing weary of all the unsolicited text adverts messages of all kinds.” Despites the intermittent interruption in the network, GLO still keeps intensify their advertisement and campaign to increase market share. GLONigeria observed that promotional messages have grown in popularity globally and the trend is expected to continue with associated unforeseen problems. It is doubtful, GLO with its bad network still increase its market share and whether any form of advertising, promotional is solely capable of influencing GLO subscribers choice. A number of other factors may influence consumers‟ decision to buy GLO product. This includes other marketing communication stimuli such as product quality, packaging, price, brand image and so on. The problem is, how much of GLO adverts, (in terms of frequency) can be used to generate the desire level of favourable responses? Due to the afore-mentioned problems, it has therefore become prudent for this study to be conducted to find out the effect of advertising on consumers behaviour.

1.3     PURPOSE OF STUDY

The study sought to examine the effect of advertising on consumer’s behaviour. Specifically, the study intends to achieve these objectives:

1.       To identify the factors that motivates consumers to respond to advertising.

2.       To find out specifically the type of advertising that motivates consumers to respond to an offering.

3.       To determine the effect of advertising on consumer behavior in the service industry in Nigeria.

1.4     RESEARCH QUESTION

This study has these research questions.

1.       What are the factors that motivate Nigerian consumers to respond to advertising?

2.       What type of advertising motivates Nigerian consumers to respond to offering?

3.       How does the advertising affect consumer behaviour of the service industry in Nigeria?

1.5     SIGNIFICANCE OF THE STUDY

The implications of this study will help GLO to take advertising more seriously and so as to give them a better exposure in the fast growing competitive markets. Again, would also serve as a reference material for students and marketing practioners. Furthermore, would help to capture customer’s feedback and will served as a guide in drawing up service improvement strategies to meets the subscribers demand.

1.6     SCOPE OF THE STUDY

This study was limited to one service firm, GLO in Nigeria due to time constrain. Only effects of advertising on consumer behaviour are researched in this study since all other components of advertising and consumer behaviour could not be researched due to lack of documented information on those components of advertising that also affect consumer behaviour.

1.7     DELIMITATION OF THE STUDY

The limitation of the study was that survey items and independent variables were based on the information given by managers. Another limitation was time dimension.

The period within which this research must be completed for submission was less than one academic year.

1.8     DEFINITION OF TERMS

Advertising:         Is an audio or visual form of marketing communication that employs an openly sponsored, nonpersonal message to promote or sell a product, service or idea by an identified sponsor.

Consumer: A person who purchases goods and services for personal use.

Behavior:    The way in which one acts or conducts oneself, especially towards others.

Campaign:  A series of military operations intended to achieve a goal, confined to a particular area, or involving a specified type of fighting.