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Advertising Strategy Impact On Consumer Buying Marketing Essay

Introduction:

This research proposal is based on the impact of advertising strategy on consumer buying behaviour in the retail industry at UK. This report is based Tesco’s advertising strategy which will impact their consumer buying behaviour. Tesco is a big supermarket in the UK making a large revenue in the retail industry.

Understanding the advertising strategies is an important which determines the consumer motivation towards the purchase decision making. Depending on the nature of the product consumer will follow a certain distinctive stages which will form the purchase decision making process. Consumer purchase decision making process starts with problem recognition like identification of a problem or unfulfilled need of the consumer than the search for information. They can search information by different ways like impulse purchase decisions, internet, advertising etc. Then they will evaluate the alternatives and finally make the purchase decision. The final part of purchase decision making process include post-purchase evaluation. This is a very important sector for all the marketing managers to satisfy their after making the purchasing decision by checking whether the products meet the level of expectations or not.

Advertising is a paid, mediated form of communication from an identifiable source which is designed to persuade the receiver to take some action at now or in the future. (Richards and Curran, 2002)

Problem Definition:

Advertising strategy has an impact on consumer buying behaviour. Advertising strategy is a campaign developed to communicate ideas about the product and services to potential customers for convincing them to buy those products or services (www.enotes.com). the advertising strategy should be built in a rational and intelligent manner will reflect business consideration like overall budget and brand recognition and objectives such as public image enhancement, market share growth.

Rationale:

Retail industries in UK are facing problem of understanding the consumer behaviour. Consumer interest to a particular product can be increased by their advertising strategy. Advertising strategy should be made in such a way which will understand the consumers mind and satisfying the needs and wants of the consumers.

(HERE U NEED TO ADD MY BENEFIT AND HOW OTHER ORGANIZATION WILL BE BENEFITED BY THIS)

Organizational Background:

This research is based upon Tesco’s advertising strategies to motivate their customers. Tesco is one of largest retail industry in UK. In the year 2000 Tesco has launched in UK. At the year 2001, Tesco launches `Customer Champions’ in many stores an in many implement a new labour scheduler to further improve service for customers and Tesco becomes the leading organic retailer in the UK and reaches to £1 billion price cuts. In 2002, Tesco enters to Malaysia and offers ‘Free-From’ products designed for customers with special dietary needs. In 2003, Tesco entered in Turkey and Japan in order to expand their business. Day by day Tesco is increasing their business in different areas and in 2004 Tesco enters in China and launched own-brand Fair trade range and Broadband. At this time tesco.com become the first major British supermarket to enter music and download music.

In the year 2005, Tesco Home plus launches and Tesco announces annual profit of £2 billion and Tesco exists the Taiwanese market in an asset swap deal with Carrefour involving stores and operations in the Czech Republic. In 2006, Tesco Direct launched and in 2007 Tesco opens Fresh and Easy in the US. In 2008, Tesco announces plans to establish cash and carry business in India and acquires 36 hypermarkets in South Korea from Homever. Tesco also launched discount brand and personal finance acquisition in this year. In the year 2009, another advertising strategy club card re-launched in the UK with £150 million investment offering customers the opportunity to double up their vouchers. (www.tescoplc.com, 2010)

Research Background:

1.5Research Questions:

What is the concept of advertising and consumer buying behaviour in the context of retail industries?

What is the impact of advertising strategy on consumer buying behaviour in the UK retail industry?

What is the impact of Tesco’s advertising strategy on the buying behaviour of its customers?

1.6 Research Objectives:

Critically review literature on advertising and consumer buying behaviour in the context of marketing and business strategy in the UK retail industry.

Collect and analyze the data obtained through questionnaires targeting Tesco’s customer and interview the managers.

Chapter-2:

Research Methodology

There are two kinds of research methodologies used in this research such as:-

Qualitative Research:

Qualitative research involves using techniques that will attempt to gain an understanding of the existence of attitudes and opinions and then goes to depth and breadth of those attitudes. Qualitative research studies do not measure the amount of emotion or opinion but they indicate the dominant feelings. Qualitative research includes the use of discussion, observation and projective methods used to elicit responses. (Bradley, 2007)

Quantitative Research:

Quantitative research is everything concerning about numbers and statistics. This kind of research will create the meaningful segmentation, which brings us the original meaning of the statistics, providing information to the government about the state and gives an account of population. Quantitative research goes beyond basic profile demographics and gives accounts of uses and attitudes. Various measures of dispersion used in this research to measure the variability of the data. (Bradley, 2007)

(HERE HE SAID U USED ONLY ONE BOOK REFERENCE ‘BRADLEY,2007’. SO U NEED TO USE MORE BOOK REFERENCE)

(HE ALSO ASKED WHERE IS YOUR RESEARCH)

Chapter-3:

Data collection method:

There are two kinds of data collection methods used in this research such as:

Primary Data:

The term primary data is used to describe information that is collected for a specific purpose.

Secondary Data:

Secondary data is already published data which is already done by the other researcher. Traditionally secondary data is published in books, special reports or even loose pieces of paper. Now-a-days massive amount of secondary data is available in the internet. Good researcher start with secondary data before designing the primary data. (Nigel Bradley, 2007)

There are various uses of secondary data. It may answer the research question; it may also help to refine question¸ design the primary research, assists in sampling, help to pre-codes for questionnaires. Sometimes secondary data can be conjunction with the primary data.

The key to using secondary data is to locate effectively, to evaluate the usefulness of the research, rework and combines with other facts. Secondary or desk research involves more than consulting and reading documents. Fact-finding interviews, expert interviews with leading figures in a particular market place play a major role in desk research.

Chapter-4:

Indicative Literature Review:

The aim of this literature review in this report is to identify the literature gap.

4.1 Advertising strategy:

One of the major goals of advertising must to generate awareness of the business and its products. Once the business is established and its products are positioned in the market then the amount of resources for advertising will decrease and the consumer develops a kind of loyalty to the product. Advertising strategy starts with the positioning strategy of the product. A positioning strategy explains how a company’s product and services can be differentiated from those of the competitors. It will helps to make foundations for the development of a selling proposal.

4.2 Stages of Advertising strategy:

The stages of advertising strategy start with target consumers, product concept, communication media and advertising message.

Advertising objectives:

There are some major objectives of making the advertising such as building brand image, providing information, persuasion, supporting marketing efforts and encouraging action. Building brand image include creating a global brand and corporate image. This brand will in turn generate brand equity. Brand equity is a set of characteristics that makes a brand more desirable to consumers and businesses. It can be made possible if there is a combination of effective advertising with the quality of the product. Higher level of brand equity will give the company a distinct advantage as consumers move through the purchase decisions.

Advertising also provide information to both consumers and the business buyers to make a purchase decisions. Typical information for the consumers include a retailer’s store hours, business location and detailed product information. Information will make the purchasing process more convenient and relatively simple which can entice customers to finalize the purchasing decision and travel to the store.

One of the major goals of the advertising is the persuasion. Advertising can convince customers that a particular brand is superior to the other brand. They can show consumers the negative consequences of failing a particular brand. Changing consumer attitudes and persuading them to consider a new purchasing choice is a very difficult task for marketing managers.

The final objective of the advertising is action-oriented advertising. Action-oriented advertising is heavily used in the business-to-business sector. The main goal of this advertising strategy is to generate more sales leads. Many business advertisements provide a web address or telephone numbers that buyers can use to request more information and move towards a purchase more easily and quickly.

Target consumers:

It will includes the persons who are buying the products or those who decide to buy the product or those influence product purchases like children, spouse, friends etc.

Product Concept:

Communication Media:

Advertising Message:

Advertising budget:

4.3 Advertising theory:

For the development of the advertising strategy it is useful to use different theoretical framework which are the following:-

Hierarchy of effects model: This model will help to clarify the objectives of the advertising strategies as well as the objectives of a particular advertisement. It is also helpful to identifying the communication strategy. This model describes that a business buyer or a consumer moves through a series of six steps to make a purchase like awareness, knowledge, liking, preference, conviction and the actual purchase. (Kenneth E. Clow and D. Baack, 2002)

Means-End Theory: The second theoritical model of Advertising strategy called the means-end chain. An advertisement contains a message or a means to lead the consumers a desired end state. Here the end-states include the personal values. The purpose of the means-end chain is to cause a chain reaction in which viewing the ad leads to the consumer to beliefe the product will achieve one of these personal values. The means-end theory model suggests that there are five elements in creating advertising like the product attributes, consumer benefits, leverage points, personal values and the execution framework.

This model is designed to move the consumers through these five elements. Thus, the attributes of the product should be linked to the specific benefits consumer can derive and these benefits can lead to the attainment of a personal value. (Kenneth E. Clow and D. Baack, 2002)

Leverage Point model: The hierarchy of effects model and the means-end chain approach are associated with leverage point methods. A leverage point is such a feature in the ads that lead the viewers to transform the advertising message into a personal value. To construct a quality leverage point, the marketers tries to build a pathway connecting a product benefit with the potential buyer’s value system. (Kenneth E. Clow and D. Baack, 2002)

Verbal and visual images: The final type of advertising model is called verbal and visual images model. Here the degree of emphasis is given on the visual elements. Visual images often lead to more favourable attitudes toward both the advertisement and the brand. Visuals also trend to be more easily remembered than a verbal copy. Visual elements will be stored in the memory as both pictures and the verbal copy. This dual processing makes it easier for people to recall the message and also visual images are usually stored in the left and right hand sides of the brain while verbal messages are tend to be stored in the left side of the brain only. (Kenneth E. Clow and D. Baack, 2002)

4.3 Methods of Advertising:

a) DRIP Model: To make an advertisement it is important to understand the DRIP acronym.

Differentiate: it is important to differentiate the advertising from the competitors by adding more value than other competitor products in the market.

Reinforcement: it can be done by adding product features, benefits and support facilities, reassuring them in terms of continuity value and reliability.

Information: It is important to put required information of the product or services for making an advertisement. It is important to put market and product information in the ads.

Persuade: it is important to persuade the customers by providing facilities and meet the required service level. It is important to provide promotional support and financial conditions to persuade more buyers. (Chris Fill, 2006)

Key Accounts Management (KAM):

Key Account Management is an important tool to retail customers and give them new offers to persuade them to buy again and again. According to the Pareto principle more profit can be made by holding the key accounts rather than getting the new customers. Key Accounts are the business customers who are wiling to enter into ling-term relationships and who has got strategic importance. Co-ordination of meetings, mail, telephone and various electronic communication will help to maintain a good relationship with the Key Account holders.

There are some risk associated with the Key Account Management like satisfying the target customers required a huge amount of cost and it should be in relationships with the return on investment. There is risk of committing to one partner at the exclusion of others and there is a risk of misunderstanding the relationships and failing to achieve reciprocal security. These risks can be minimize by making close relationship with the key accounts, not making relationships with a few accounts and customer relationships should be carefully selected and prioritize for prudent investment of scarce resources.

4.4 Importance of Advertising strategy:

The importance of advertising strategy are the following:-

Advertising strategy will help to reach the large number of customers across different geographic markets.

Effective advertising will allow larger audience to be reached with specific messages.

Depending on media used, cost of reaching individuals can be lowered compared to other forms of communications.

Advertising can be used to provide information for consumers at different purchasing stages.

Advertising strategy will be effective in awareness creation at early stages of new product launched.

Advertising strategy include a wide range of media to carry the advertising.

4.5 Analysing the advertising strategy:

4.6 Consumer Behaviour:

Consumer behaviour involves the psychological processes that a consumer goes through for recognizing the needs and finding out the ways to solve these needs when making a purchase decision, interpret information, make plans and implement these plans by engaging in comparison shopping or actually purchasing a product. (www.consumerphychologist.com, 2010)

4.7 Relationships between the consumer behaviour and the Advertising strategy:

4.8 Ethical issues in Advertising:

It is important to consider the ethical and moral issues when making a advertising strategy. Advertising should be made in such a ways which will be beneficial for the society and its well-being. It can be done by the following ways:-

Pre-testing: Pre-testing is an important technique by which unfinished ads can be shown to the representative group of focus groups of the target audience with a view to ensure that the final creative will meet the advertising objectives. To do this pre-testing of advertising three important factors should be considered like the internal effects like checklists and readability analysis, communications effects like physiological tests, recall and direct opinion measurement and finally the behavioural effects which is designed to measure actual rather than predictive response using trailer tests and split scan procedures. (Chris Fill, 2008)

Post-testing: post-testing is concerned with the campaign after releasing the final product. This will measure the number of inquiries or direct responses stimulated by the single advertisement or campaign and can take the form of returned coupons and response cards, requests for further literature and actual orders. There are three types of tests can be done to measure the advertising effectiveness like recall tests which is assess how memorable a particular advertisement is with a target audience. The second one is called recognition tests which are based on the ability of respondents to reprocess information about an advertisement and finally the sales tests with the use of single-source data. (Chris Fill, 2008)

Financial Test: it is important to do the financial tests in order to understand how much money it is required to spend in the advertising and how they are spending and when. It is important to consider the balance and efficiency of the promotional investment into different media.

Tracking Studies: A tracking study involves collecting data from buyers on a regular basis in order to measure their perceptions about the advertisement.

Likeability test: it is the deep set of meanings inside the individual to understanding their personality, stimulating interest and curiosity about the brand and enjoyment of using that particular brand.

4.9 Integrated Marketing Communications (IMC):

Integrated marketing communications is a communications process that entails the planning, integration and implementation of diverse forms of ads, sales promotions, publicity, events etc that delivered over time to brand a target customers and prospects. (Shimp, 2007)

Chapter-5:

5.1 Hypothesis Statement:

Problem question: How do advertising strategies impact on consumer buying behaviour?

H0: Advertising strategies have an impact on consumer buying behaviour.

H1: Advertising strategies have no impact on consumer buying behaviour.

Chapter-5:

5.1 Conclusions:

5.2 Limitations of the Research:

The limitation of this research is to submit this project within a short period of time and for that reason some of the important issues may have not been discussed on this research. Another limitation can be limited sources of secondary information available in the market and that’s why this research can not use a major sources of information in order to make an extensive project.

Chapter-6:

6.1 Recommendations:


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