Advertising Effects on Consumer’s Buying Behavior towards Cosmetic Products: Evidence from Female Consumers in Kathmandu Valley.
A Proposal submitted in the partial fullfillment as the requirement for the degree of Master in Business Administration in the Faculty of Business Administration
Table of Contents
Chapter 1 : Introduction
Background of Study………………………………………………………………1
Statement of Problem………………………………………………………………2
Significance of Study………………………………………………………………4
Organizational of Study……………………………………………………………5
Chapter 2: Literature Review
2.1 Theoretical Review………………………………………………………………..6
2.1.1 Psychological Theories………………………………………………………….7
2.1.2 Socio-Cultural Theories…………………………………………………………7
2.1.3 Maslow’s Theory of Needs………………………………………………………8
2.1.4 The Concept of Advertising……………………………………………………..8
2.1.5 Stages of Consumer Buying Behavior…………………………………………..9
2.1.6 Consumer Buying Behavior……………………………………………………12
2.1.7 Factors Affecting Consumer Purchase Decision……………………………….13
2.2 Review of Recent Literature………………………………………………………14
2.3 Research Gap……………………………………………………………………..16
2.4 Conceptual Framework…………………………………………………………..16
2.5 Operational Definition and Hypothesis…………………………………………..17
Chapter 3: Research Methodology
3.1 Research Methodology……………………………………………………………19
3.2 Research Design…………………………………………………………………19
3.3 Sources of Data Collection………………………………………………………20
3.5 Population and Sample…………………………………………………………..20
3.6 Model for Data Analysis…………………………………………………………21
3.7 Limitations of Study……………………………………………………………..21
Background of Study
Women, formulating world’s half population are now a critical consumer segment for the marketers and businesses. In case of female segment, lifestyle, advertisement, quality, price and other factors play key roles in making the marketing decisions. Nepal is a multicultural and multilingual nation, with over half 51.44% of the female population having diverse interest and choices (National Population Census, 2011). Thus, we can assume that increasing number of product and service purchases are made by Female Segment of the Nepalese market.
Improved technology, better education, advancement in science and economic growth has provided people with a chance to better standard of living. With increased purchasing power and increasing number of dual earning has made people more conscious towards beauty, hygieneand better lifestyle (Souiden;Diagne, 2009). Today women are more active, liberal moving ahead and taking part in every walk of life so they became more concerned towards their looks and appearance (Kumar, 1998). It effects the rapid growth of beauty care industry. Cosmetic not only increases the physical appearance of person but also the confidence and assurance of individual to meet the challenges of society with great ease than ever before. To meet this growing demand of cosmetics by women not only domestic companies but many multinational companies enter the market place to meet the growing demand of beauty care products (Moungkhem, et al. 2010). There are many factors which affect the choice of brands, make, and type of products to be purchased. Some women buy cosmetics because of brand, some buy cosmetics because of price, some buy cosmetics because of friends’ and relative’s recommendations and others buy cosmetics because of packaging design (Yinuo, 2011). Hence, the marketers need to consider many factors concerning women decision to buy cosmetics (Hawkins;othersbaugh, 2010).
This study focuses on the advertisement and various spending of advertisements on different factors of consumer buying behavior. Consumer buying behavior is mostly affected by some factors which include culture, family and brand image. Yet the brand awareness also helps the customer to buy a certain product. Due to this fact, cosmetic companies focus on advertising the products. This report also put light on other factors which can also influence the buying behavior of the consumers such as lifestyles, purchasing power, technology, traditional culture and income. Advertisers spend much amount of investment while advertising their product so they keep their focus on these factors so that they can influence consumer mind with advertisements.This research also put the light on the buying behavior of customers. Perceptions of the brands and buying behaviors usually change from person to person. So it is important and necessary to find out the changes of consumer behavior.
“According to Cohen, advertising is a business activity that employs creative techniques to design persuasive communication in mass media that promote ideas, goods, and services in a manner consistent with the achievementof the advertiser’s objective, the delivery of consumer satisfaction and the development of social and economic welfare”(Cohen, 1988). Advertisement helps the company to create the awareness in their customers and shape the perception of the customers either in the positive or in a negative way. People can perceive the quality of the products by gathering the information which they usually get through advertisements. The perception of the quality, awareness of the product and consumer opinion drives the consumer buying decision. The study critically evaluates these factors which shape the buying behavior and provides the deep insights towards the role of advertisements shaping the consumer behavior.
Statement of Problem
There are various other factors that have impact on consumer buying decision. Among them, Advertisement is very important tool used to stimulate the consumer buying behavior as they inform and persuade consumer about the products.Advertising plays a vital role in shaping dreams; aspirations and helps customers take a conscious product and brand decisions.The company spends a large amount of investment on different types of advertisement to keep their product at the top of the customer’s mind.The main purpose of this study is to identify the level of impact adverts have on the consumer’s purchase decision to buy or not.
Advertising is essential to fulfil the traditional desire of firms to reach the ever increasing population so that their products may receive optimum exposure. The role of advertisement in increasing sales revenue and profits of the firms and increase the demand for goods has been falling apart. The reason people lost interest was the fact that the role of advertisements was falling apart due to the fact that most increase in product and sales, especially; cosmetics products had been attributed to other factors like taste,brand image, quality, lifestyle, purchsing power, long term use of products and users unwillingness to switch products (Sundarsan, 2007).
The falling role and importance of advertisement has raised numerous questions which became the problem of this study. The main purpose of the study is to know why cosmetic firms still do advertisement and invest larger amount of money in advertisement.The researcher therefore intended to get answers as to how and why cosmetics companies do advertise their products while they know the increase in product and sales is attributed to other factors and no longer advertisements as it plays a neutral role and affect on sales of the product.With this information, one can draw conclusions as to what influences these consumers’ behaviors. Furthermore, one can see how much advertising influences these decisions, and if there needs to be changes in the advertising of makeup and cosmetics and how can company use advertisement effectively to attract customers?
The main objective of the study is to find out that if there is any relationship betweenadvertisement and consumer buying behavior of female consumer in Kathmandu valley and tostudy the impact of advertisement on consumer buyingdecision towards cosmetic products. Some of the specific objectives of the study are as follows:
To identify the advertising effect on consumer awareness
To identify the role of advertisement on building consumer perception
To study the impact of consumer awareness and perception on buying behavior
To identify the media of advertising used to get the attention of consumers.
Following are the reasearch questions that are based on the objectives of the study.
How does advertisement create awareness in consumers?
Do advertisements build perceptions in the mind of consumers?
Does consumer awareness and perception affect their buying behavior?
Does advertising contain all the necessary information needed by consumers?
What are other factors beside advertisement that may influence the buying decision of customers?
Significance of Study
Advertisements have been used for many years to influence the buying behaviors of the consumers. Advertisements are helpful in creating the awareness and perception among the customers of cosmetic products; both of these variables are lethal combination to influence the buying behaviors of the consumers. The purpose of this study is to discover the consumer behaviors and purchasing decisions of those who use makeup and cosmetics. Primarily, the purpose of this study is to discover how much advertising affects purchasing decisions over other influencing factor like brand, price, quality, etc.This study focuses on the impact of advertisement on the consumer’s behavior and their buying pattern towards cosmetic products.It explores the factors which are affected by the advertisement and ultimately influence the buying behavior of the consumers.
The study informs consumers on how advertisers try to persuade them to purchase their products. The study may help advertisers to identify the advertising medium that gets the attention of consumers.The study will help the readers to understand the consumer behavior while purchasing the cosmetic products so that they can use appropriate strategy to advertise their product in a best possible way.This study will be a significant endeavour in promoting advertising awareness among the consumers. This study will be beneficial to the consumers and business industries particularly in product and service promotion. By understanding the needs of the consumers and the benefits of effective advertisement, these business industries will be assured of a competitive advantage. Moreover, this study will help to examine both the positive and negative relationship between consumer buying behavior and advertisement.
The study also contributes relevant knowledge on advertisement. Furthermore, this study puts light into advertisement issues to the cosmetic companies and help them on how to do and improve their sales focusing on the proper use of advertisement and reach the ultimate customers.The results of this study would be beneficial to the marketers in order to choose appropriate advertisement themes and styles in observance of the traits, norms, values and religious beliefs of consumers which conveys the informational and emotional message in a positive way.It also helps in identifying the perception level of consumers about the cosmetic products based on the various advertisement and other influencing factors.
Organizational of Study
The study consists of three chapters. Chapter one includes Background of Study, Statement of Problem, Research Objectives, Research Questions and Significance of Study. The second chapter includes Literature review while the third chapter consists of research methodologies that were used in the study.
LITERATURE REVIEW AND CONCEPTUAL FRAMEWORK
2.1 Theoretical Review
Buying is a complex process which involves series of decisions and important questions such as what to buy, where to buy, when to buy and how to buy. These series of decisions drive from the consumer awareness and consumer perceptions. Buyers aware of the product through one source or multiple sources have more information regarding the brand and the product. In this research, the advertisement is considered as a basic source of creating awareness in the mind of customers. The main reason behind the creating awareness in the mind of the customers is the content and information used in the particular advertisement. In the same way content of the advertisements also build the perceptions of the customers who are watching these advertisements. The results of our research depict that advertisements are the main source of creating awareness as well as shaping the perceptions of the customers.
In the present era, marketers are focusing customer rule that is customer is their first preference. To keep deep eye on customers the primary responsibility to the organization is to gain the knowledge about the customers. In this way marketers will be successful in fulfilling the needs and wants of the customers and seek the better opportunities in the market. Researchers find out that marketers need to understand these four things in order to serve their customers better. Firstly marketers must know that customers make rational decisions so they can get the best product available in the market. Secondly customers also make irrational decisions and they are very impulsive and can be attracted towards the promotional activities. In the same way emotional association also put an influence on the mind of customers. In the last customers also buy as a problem solver, they seeks the products which can solve their problem (Gupta, 2013).
Consumer awareness and consumer perceptions are considered as the two main drivers that lead towards the buying decisions.Attitudes are formed through experience and learning and that attitude influence the buying behavior. The positioning of the brand is dependent on the success and failure of the company. Middle aged people have positive attitude towards the cosmetics and beauty products because they want to look young and also they are settled in their life so they have spending to spend on these luxuries (Tamizhjyothi, 2013).
In conducting this study, the researcher was guided by the following theories;
2.1.1 Psychological TheoriesThe essence of psychological theories /learning theories lies in the fact that people learn from experience and the results of experience will modify their actions on future occasions. The importance of brand loyalty and repeat purchase makes learning theory more relevant in the field of marketing. Among the learning theories come stimulus response theories and cognitive theories.
Contributors of stimulus response theories include Purlon, Skinner Thorindike and Kotlew. According to them, “learning occurs as a person responds to some stimulus and is rewarded with need satisfaction for a correct response”. They proved that most frequent and recent stimuli are remembered and responded. This approach is the basis of reported advertisements.
2.1.2Socio-Cultural TheoriesThe credit of formulation of this theory goes to (Veblen, 1899) and is known as Veblenian Model. Using his theory, Veblenia asserted that a man is primarily a social animal and his wants and behaviour are largely influenced by the group of which he is a member. He argued that people have a tendency to fit in a society in spite of their personal likes and dislikes.
Veblem’s Model explains culture in terms of social classes’ reference groups whereby families are the different factor groups that influence buyer behaviour. All the above theories give guidelines to the marketing managers on how a consumer behave in a particular situation and what are the factors which influence their decision making process.
2.1.3 Maslow’s Theory of NeedsMaslow’s Theory of Needs explains “why people are driven by a particular need at a particular time. According to the theory, human needs are arranged in hierarchy, from the most pressing to the least pressing, in order of importance. When a person succeeds in satisfying an important need, he/she will try to satisfy the next important need”. This theory explains how purchase decision is influenced by individual needs (Maslow, 1954).
2.1.4 The Concept of AdvertisingThe concept of advertising can be explained in five process i.e. sender, encoding, message, decoding and receiver. This process explains the different stages through whichMessage is formed and traveled to the target audience. Advertising message is a bundle of representation of the product and the company. The advertising process starts from sender and end up to receiver (Schramn, 1995).
Figure 2.1: Elements in Advertising Process ModelMedia
(Czinkota and Ronkainen, 2008) explains as “the individual or firm who feels the need to deliver the message and selects the combination of symbols, pictures, music or words as a message to be transmitted. All the responsibility of the whole process is on the shoulders of the sender. It is up to the sender how he designs the message and which information he is using for audience”.
(Czinkota and Ronkainen, 2008) depicts that “encoding is the design of the symbolic arrangements which should be understandable by the receiver. It is in fact a crucial stage to develop the basis of the message. Encoding is the functional stage where sender of advertising message sees the functionality of the codes towards the receiver of that particular advertising message”.
The message is actually the complete form of encoding. (Bovee and Thill, 2002) define “the message as the idea which is capable of being transmitted. When the complete message is encoded, it is now ready to transmit to the audience. From here the message is diffused to the audience through the prescribed media or combination of media by the source”.
Decoding is the understanding of the delivered message. It is the process to translate the message into an idea (Bovee and Thill, 2002). It is also the crucial stage of Advertising that indicates how the receiver of the message perceives the delivered message. If it was designed rightly according to the knowledge and understanding level of the receiver then the feedback can be positive.
(Kotler and Keller, 2006) describes that “the sender should know the audience very well before designing the message. The audience can be varied preferences or homogeneous which should carefully be studied. The suitability of all of the elements is important. The intensity of the noise can be increased if the message will not be suitable which can lead to the failure of advertising”.
2.1.5Stages of Consumer Buying ProcessConsumers go through seven stages before reaching their final decisions. These seven steps include; need recognition, information search, pre-purchase, evaluation, purchase, consumption, post-consumption evaluation and divestment (Blackwell et al., 2011). Most buying decisions by consumers are primarily based on these seven stages of consumers’ buying decisions.
The buying process is initiated when people recognize their unsatisfied need. There are two kinds of needs, namely functional needs and psychological needs. Functional needs are related to the performance of the product whereas psychological needs are intrinsically obtained when customers feel contented with shopping or owning a product which they long for (Blackwell et al., 2011).
Although there are many different ways to characterize needs, the most widely known is Maslow’s hierarchy which specifies five need categories arranged in a sequence from basic lower-level needs to higher-level needs. Five needs are identified: physiological, safety and security, social, ego, and self-actualization. Products can fill all these needs, and they become increasingly important (Zeithaml and Bitner, 2000).
Information search begins when a consumer perceives a need that might be satisfied by the purchase and consumption of a product. The recollection of past experiences might provide the consumer with adequate information to make the present choice. On the other hand, when the consumer has had no prior experience, he or she may have to engage in a search for information (Schiffman and Kanuk, 2007).
A customer can obtain information from several sources such as; personal sources like family, friends, neighbors etc, commercial sources like advertising, salespeople, retailers, dealers, packaging, point-of-sale displays, public sources like newspapers, radio, television, consumer organizations; specialist magazines and experiential sources like handling, examining, using the product (Tudor, 2008).
Evaluation of alternatives
Stage three comes to the pre-purchase evaluation that consumers compare between different products and brands to make a purchasing decision. In this stage, consumers pay particular attention to the attributes which are most relevant to their needs. Attributes like quantity, size, quality and price are commonly used to judge a brand by customers (Blackwell et al., 2011).
When evaluating potential alternatives, consumers tend to use two types of information; a list of brands from which they plan to make their selection and the criteria they will use to evaluate each brand. Making a selection from a sample of all possible brands is a human characteristic that helps simplify the decision-making process (Schiffman and Kanuk, 2007).
Stage four refers to the purchase decisions made by the consumers after evaluating the offers from different retailers. This is made by judging which retailers to buy after investigating the attributes from the previous stage whereas in-store selection is affected by the selling skills of salesperson, visual displays inside the shops, as well as point-of-purchase advertising (Blackwell et al., 2011).
Consumers make three types of purchases: trial purchases, repeat purchases and long term commitment purchases. When a consumer purchase a product for the first time and buys a smaller quantity than usual, this purchase would be considered a trial. Thus, a trial is the exploratory phase of purchase behavior in which consumers attempt to evaluate a product through direct use. .
The last stage is the post-purchase evaluation of the decision. It is common for customers to experience concerns after making a purchase decision. This arises from a concept that is known as “cognitive dissonance”. The customer, having bought a product, may feel that an alternative would have been preferable. In these circumstances that customer will not repurchase immediately (Tudor, 2008).
Figure 2.2: Stages of Consumer Buying ProcessThe figure below provides a description of the five stages of the buying process that each buyer has to go through.
For clarity, each level is depicted as mutually exclusive. However, there is some overlap between each level, as no need is ever completely satisfied. For this reason, although all levels of need below the level that is currently dominant continue to motivate behavior to some extent, the prime motivator, the major driving force within the individual is the lower level of need that remains largely unsatisfied (Schiffman et al 2001).
2.1.6 Consumers Buying Behavior
Consumers buying behavior is focusing on how individuals make decisions to spend valuable resources (time, money and effort) on consumption related items. This includes what they buy, why they buy it, when they buy it, where they buy it, how often they buy it, how often they use it, how to evaluate it after the purchase and the impact of such evaluation in future and how they dispose of it.
According to (Proctor et al, 2002), “the principle aim of consumer buying behavior analysis is to explain why consumers act in a particular way under certain circumstances”. Other author argues that, it’s important to marketers to recognize why and how individuals make their purchase decision. With this information, marketers are able to determine better strategic marketing decisions.
They will be able to predict how consumers are likely to react to various informational and environment cues and to shape their marketing strategies accordingly once they have understood consumers behavior on purchasing. With no doubt, marketers who understand consumer behavior have great competitive advantages in the market place (Schiffman et al 2001).
2.1.7 Factors Affecting Consumer Purchase Decision
There are three factors which affect the consumer behaviour namely cultural factors, social factors and personal factors.
Cultural factors determines a person’s wants and behavior and has deep influence on consumer behavior which including the roles of buyers’ culture, subculture and social class. Each culture contains smaller subcultures, or groups of people with shared value systems based on common life experiences and situations. Subcultures include nationalities, religions, racial groups, and geographic regions (Kotler and Armstrong 2008).
A consumer’s behavior also is influenced by social factors, such as the consumer’s small groups, family, and social roles and status. Social class is an invisible stratification of the inhabitants of the society into different groups based on some traits of the people. Inhabitants in a society can be divided into different social classes according to their income level, occupation, education and so forth (Kotler and Armstrong 2008).
A buyer’s decisions also are influenced by personal characteristics such as the buyers’ age and life-cycle stage, occupation, economic situation, lifestyle, and personality and self-concept. People change the goods and services they buy over their lifetimes. A person’s occupation affects the goods and services bought. Similarly, a person’s economic situation affects product choice (Kotler and Armstrong, 2008).
A person’s buying choices are further influenced by four major psychological factors: motivation, perception and attitudes. Motivation is the driving force within individuals that impels them to action. Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world (Kotler and Armstrong, 2008).
2.2 Review of Recent Literature
(Ahmed and Ashfaq, 2013) conducted a study to explain the impact of advertising on consumers’ buying behaviour on purchasing cosmetics products. The findings of the study showed that 41% of respondents were influenced by product quality, 39% were influenced by to persuasiveness of the advertisement while 20% were influenced by the information provided by the advertisement.
Another study conducted by (Olomofe ,2010) on the factors which influence purchasing decision by Nigerian women with regard to cosmetics found that 54% were influenced by celebrity endorsements, 14% were influenced by the price of the product, 12% were influenced by the packaging of the product while 10% were influenced by the testimonials see in Television advertisements.
(Rehman et al ,2014) in his research on how advertising affects the buying behavior of consumers in Pakistan analyzed impact of advertisement on consumer buying behavior, and the results of correlation indicated that advertising is positively correlated with buying behavior at highest correlation of 0.414 or in other words consumer buying behavior is impacted by advertisement .
(Sonkusare, 2013) concluded that advertisements have great impact on buying behavior of women customers. Before purchasing any product customers/consumers collects information for their comparing alternative product options before making proper purchasing decision making activities hence advertising is mostly adopted to get information about FMCG products.
(Abideen et al, 2011) also found that advertising is the main factor which influences consumer buying behaviour especially if the advertisements are created in such a way that they make the consumer excited, stimulated and frenzied. This is because such advertisements are more likely to attract the attention, arouse interest and create desire to purchase the advertised product.
( Kumar A, 2011) conducted a study to determine factors which influence consumer buying behaviour among consumers of electronic products impact of advertising on consumer buying behaviour. The study found that consumer behaviour is determined by the effectiveness of marketing and advertising efforts of the company which influence the perception of customers on product quality.
Another study conducted by (Bin Junaid A. et al, 2013) found in their study of female buying behaviour of cosmetic products in New Delhi and NCR that, as income of females increase, their purchase of cosmetic products also increase. They also, added that, this increase in expenses on cosmetic product is made possible by the advertisement made on them.
(Gramm, 1969) conducted a study on the impact of advertising on demand generation and wanted to establish the relationship between advertising and purchase intention. The study found that advertising has a positive impact on demand creation and also established that there is a positive relationship between advertising and consumption.
(Chen ,2003) conducted a study on factors that influence purchase of cosmetics in the USA and found five important factors for cosmetics purchasing decision: the quality of the product, product shape and colour choice, the size and weight, price along with associated accessories, ease of use, new technology, product design, appearance and price.
The study also established another factor influencing consumer purchase decision among Tanzanians to be the country-of-origin whereby products from highly developed countries e.g. Italy, Germany were perceived to be of better quality while products from developing countries e.g. China, India were perceived to be of lesser quality (Gabriel Byabato Bakilana, 2009)
2.3 Research Gap
From literatures reviewed, we can say that, indeed advertising has a positive effect on the purchase of consumers and it positively influences the sales of companies. We found that most work done in the subject, found out the effects of advertising on companies’ sales using various econometric tools. Little can be said of work done on the consumers’ side using econometric analysis.
In this study most literature were from abroad, hence, there is a gap on local empirical literature review on the influence of advertising on consumer buying behavior of cosmetics products. This study aimed to fill this gap by focusing only on Female Consumer of Kathamndu Valley as a case study.
2.4 Conceptual Framework
Word of mouth
Consumer Buying Behavior
Figure 2.3: Conceptual Framework Advertising and Consumer’s Buying Behavior
The conceptual framework provides a description of the relationships between the concepts being used (Fisher and Krutilla, 2009). Defining the concepts and creating a conceptual framework are means to simplify the research task and to clear away issues that are not related to the topic and research question.
This study focuses on the relationship between the customer buying behavior and advertising. The conceptual framework of this study describes the link among the customer buying behavior and different Medias of advertising. In this conceptual framework for the analysis of the study we have taken television advertising, celebrity endorsement, word of mouth and online advertisement as the independent variables. And Consumer buying behavior as a dependent variable.
2.5 Operational Definitions and Hypothesis
Television Advertising: A television advertisement also called a television commercial, commercial or ad is a span of television programming produced and paid for by an organization. It conveys a message, aimed to market a product or service. Television (TV) advertisement is considered one of the most effective medium to influence the purchase decision of consumers. The hypothesis is given below:
H1: There is a relationship between Television Advertising and Consumer Buying Behavior.
Celebrity Endorsement: Celebrity endorsement is a form of advertising campaign or marketing strategy used by brands, companies, or a non-profit organization which involves celebrities or a well-known person using their social status or their fame to help promote a product, service or even raise awareness on environmental or social matters. Marketers endorsed celebrities with their products and brands in the advertisement to increase their sales and change the perception of the viewer’s regarding their brand, which positively impacts on their buying behavior. The hypothesis is given below:
H2: There is a relationship between Celebrity Endorsement and Consumer Buying Behavior.
Word of Mouth: Word of Mouth is an unpaid form of promotion in which satisfied customers tell other people how much they like a business, product or service. Word of mouth is one of the fundamental means of distribution. Word of mouth can influence others’ views, thoughts and their decision. If word of mouth power utilized correctly, it could market any product/services for the long time. It has the power to create strong image in the individual mind. Word of mouth could be beneficial as well as harsh. The hypothesis is given below:
H3: There is a relationship between Word of Mouth Communication and Consumer Buying Behavior.
Online Advertisement: Online advertising is a marketing strategy that involves the use of the Internet as a medium to obtain website traffic and target and deliver marketing messages to the right customers. Online advertising is geared toward defining markets through unique and useful applications. Online advertisement has become the major source of communication in today’s world. It is the leading source of communicating to the people about everything. The hypthesis is given below:
H4: There is a relationship between Online Advertisement and Consumer Buying Behavior.
3.1 Research Methodology
Research method is a way to systematically solve the research problem. It refers to the various sequential steps that are to be adopted by a researcher during the course of studying the problem with certain objectives. Research method discussed in this chapter helps to guide the research study providing different issues and aspects. It systematically solves the various sequential steps to adopt by a various author in studying problem with the objectives in view. This chapter is to outline the nature and sources of data, sample selection and classification of variables, validity and reliability test, techniques and steps adopted in interpreting and analyzing the data. It also focuses on how to collect required data, what are the population and sample, and techniques to be adopted to analyze and interpret etc.
3.2 Research Design
This study has employs descriptive research design and causal comparative research design to deal with the fundamental issues associated with the advertising effect on consumer buying decsion of cosmetic products. This study adopts descriptive research design for fact finding and searching the adequate data and information about the effect of advertisement on buying decision of customers on cosmetic products.This research design is a process of accumulating facts. It describes phenomenon as it exists. Such design involves the systematic collection and presentation of data to give clear picture of a particular situation. The advertising effect of consumer buying behavior on cosmetic products has been identified with the help of questionnaire.
This study also employs causal comparative research design to determine direction, magnitudes and relationship between consumer buying behavior and different independent variables. Causal comparative research design is used to find the cause and effect relationship among the different variables used in this study. The basic purpose of employing causal comparative research design in this study is to understand and identify the impact of advertisement on consumer buying decision on cosmetic products in Kathmandu Valley. The research design is mainly based on the issues of the study and available of resources.
3.3 Sources of Data Collection
The main sources of data for the study was primary data which was collected directly from the respondents through questionnaires, and secondary data which involves data already collected by other others authors hence stored in articles, newspapers, books, and research reports as examples, and these data was used based on the subject matter to find out what they say about the impact of advertising on consumers buying behavior.
According to (Frankael and Wallen, 2000), “validity refers to the degree to which any inferences a researcher makes, based on the data he or she collects using a particular instrument, is supported by evidence”. Therefore, the coverage and relevance of the instruments to the problem under study are subject to content validity. This entails the extent to which questions in the instruments cover the ground to be explored.
In order to realize the validity and reliability of the instruments, the study was conducted involving 100 consumers.This studies collect data from structured questionnaire survey which contains the respondent’s related information through tick mark questions, and 5-scale Likert scale questions and data are analyzed in descriptive and causal comparative method. The relationship between dependent and independent variable are analyzed in multi-step regression analysis.
3.5 Population ; Sample
Kothari (2006) defines population of the study as the sum total of individuals from which the researcher selects a sample of the study. The population of this study consists of the female customers of Kathmandu Valley. This study is conducted to extract the information from the customer regarding the advertising effects of consumer buying decision towards cosmetic products.
3.6 Model for Data analysis
The study aims to analyze the impact of advertisement on consumer buying decsion towards cosmetic products. In this study, the model has been used to test the theoretical relationship of advertisement and consumer buying behavior decision. The Medias of advertising are categorized into four independent variables which are online advertising, Television Advertisement, Word of Mouth and Celebrity Endorsement whereas dependent variables are Consumer Buying Behavior. Regression models are used in this study to analyze the advertising effects of consumer buying decision towards cosmetic products in Kathmandu Valley. The regression model used in this study is as follows:
Model I represents the advertising effects on consumer buying decision towards cosmetic products in Kathmandu Valley.
CBB= Consumer Buying Behavior
TA= Television Advertisement
OA= Online Advertisement
WMA= Word of Mouth Advertisement
CE= Celebrity Endorsement
e= error term
?1,?2,?3,?4 are the beta coefficients of the explanatory variables to be estimated.
3.7 Limitation of Study
The major limitations of the study were as follows:
The study was predominately based on primary source of data regarding the customer satisfaction and advertising of cosmetic products. Therefore, the reliability of the result of the study depends on how much the information provided by the respondents is accurate.
The sample size in this study was only from the Baneswar area. It did not include all the users of cosmetic productsof Kathmandu.
The survey was conducted within limited respondents of cosmetic product users.
The study was conducted at very short period of time.
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