CHAPTER ONE
INTRODUCTION
1.1. Background of the Study
This study investigated whether marketing communication was relevant in influencing a consumer’s decision to purchase a product. Explanations from the American Marketing Association (AMA), marketing’s professional organization, define marketing as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Further, Kotler (2011) defines marketing as “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines, measures and quantifies the size of the identified market and the profit potential. It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services.”
According to Wood (2004), communication is “a systemic process in which individuals interact with and through symbols to create and interpret meanings.” The Oxford dictionary, communication takes place when one individual, a sender, displays, transmits or otherwise directs a set of symbols to another individual, a receiver, with the aim of changing something, either something the receiver is doing (or not doing) or changing his or her world view. This set of symbols is typically described as a message.
Marketing communication has therefore been defined as a process for planning, executing and monitoring the brand messages that create customer relationships (Duncan, 2005). Marketing communication has also been defined as the coordination and integration of all marketing communication tools, avenues and sources within a company into a seamless program that maximizes the impact on consumers and other end users at a minimal cost (Clow & Baack, 2007). Marketing communication therefore represents the voice of a brand and the means by which companies can establish a dialogue with consumers concerning their product offerings. It allows marketers to inform, persuade, incite, and remind consumers. It can provide detailed product information or ignore the product all together to address other issues (Keller, 2001).
Marketing communication activities come in a wide variety of flavors based on audience, media platform and business in today’s evolving and dynamic marketplace. One of the most important changes in today's marketplace is the increased number and diversity of communication options available to marketers to reach customers (Häuser & Daugherty, 2011). The need for an organization to properly coordinate its marketing communication strategies in order to deliver clear, consistent and competitive messages about itself and its products is therefore highly imperative for every result driven organization (Häuser & Daugherty, 2011). Innovative and creative marketing communications have great impact on a companies’ products/services sales. This study specifically investigated how these four marketing communication strategies: advertising, sales promotions, personal selling and social media, affect the urban Nigerian consumers’ purchase behavior.
The marketing communication theory implies that studying the effects of marketing communications on customer's response require understanding how organizational customers under different circumstances, exposed to different situational factors and to different types of communications respond to these factors. Consumers obviously vary on a host of different characteristics demographic (e.g. age, gender, race, etc.), psychographic (e.g. attitudes towards oneself, others, possessions, etc.), behavioral (e.g. brand choices, usage, loyalty, etc.) that often serve as the basis of market segmentation and the development of distinct marketing programs (Häuser & Daugherty, 2011). But customers may differ in their prior knowledge, especially in terms of what they know moving from the general to the specific. (Barnham, 2012). Hence, consumer purchase behavior is influenced by different factors, like cultural, social, personal and psychological factors. A successful company marketer knows and needs to analyze very well all the factors that affect consumer purchase behavior (Zemack et al., 2012).
Consumer purchase behavior is considered to be an inseparable part of marketing. Marketers’ point of view issues specific aspects of consumer behavior that need to be studied which include: the reasons behind consumers making purchases, specific factors influencing the patterns of consumer purchases, analysis of changing factors within the society and others. Blackwell et al., (2006) informs that consumer purchase behavior is itself is a complex, dynamic issue which cannot be defined easily and commonly. Therefore, the concept of consumer buying behavior has been defined in different ways by different researchers.
Kotler and Keller (2011) state that consumer purchase behavior is the study of the ways of buying and disposing of goods, services, ideas or experiences by the individuals, groups and organizations in order to satisfy their needs and wants. It also investigates behavior which is the earlier process of buying, the process of purchasing and the next purchase after buying (Yakup & Savl, 2011). Buyer behavior has also been defined as a process, which through inputs and their use though process and actions leads to satisfaction of needs and wants. Alternatively, consumer buying behavior “refers to the buying behavior of final consumers, both individuals and households, who buy goods and services for personal consumption” (Kumar, 2010).
Consumer buying behavior has been defined as a process of choosing, purchasing, using and disposing of products or services by the individuals and groups in order to satisfy their needs and wants. Similar definition of consumer buying behavior is offered by Schiffman and Kanuk (2000) in which they describe it as behavior that consumers express when they select and purchase the products or services using their available resources in order to satisfy their needs and desires.
In light of all these definitions, Kotler and Keller (2011) highlight the importance of understanding consumer buying behavior and the ways how the customers choose their products and services can be extremely important for manufacturers as well as service providers as this provides them with competitive advantage over its competitors in several aspects. For example, they may use the knowledge obtained through studying the consumer buying behavior to set their strategies towards offering the right products and services to the right audience of customers reflecting their needs and wants effectively. Egen (2007) also informs on the importance of understanding the consumer behavior, he says that better awareness of consumer buying behavior is a positive contribution to the country’s economic state. In agreement to Kotler and Egen, this study investigated how marketing communication affects purchase behaviour specifically in the FMCG sector.
Nigeria bottling company is very much as the name suggests: high quality products that fly off the production lines as fast as they fly off supermarket shelves (Anunda, 2012). They can also be referred to as consumerpackaged goods (CPG); products that are sold quickly and at relatively low cost. Typical products include personal care products (bathing soaps, toothpaste, lotion, hair food, shoe polish etc.), home care products (pesticides, laundry, toilet care, etc.), foods (snacks, grains, etc.) and beverages (cold, hot, alcoholic and non-alcoholic). Major players include companies like Procter & Gamble, Unilever Nigeria, Nestle Foods, GlaxoSmithKline and Reckitt Benckiser which produce a wide portfolio of products, while other companies like Weetabix and British American Tobacco Nigeria Limited tend to focus on single product areas (Anunda, 2012).
Nigeria has 47 FMCG manufacturers hence faced with intensified competition because of consumers who are more value conscious and less brand loyal, dwindling product life cycles and increasingly powerful retailers; this mean that many new FMCG products fall by the wayside. Despite the critical nature of the product launch process, very little is known about what even makes a new product launch in the FMCG industry successful in Nigeria (Saronge, 2004). However, it is notable that today, consumers use many sources of information, and the value of the marketing communication has grown considerably. Highly targeted, the marketing communication campaigns are based on the strengths of existing communication tools, to favorably influence the behavior of the target audience (Saronge, 2004).
Research suggests that customers go through a five-stage decision making process in any purchase. Five Stage Model initially proposed by Cox et al. (1983) is considered to be one of the most common models of consumer decision making process and it involves five various stages. These stages are: recognition of need or problem, information search, comparing the alternatives, purchase and post purchase evaluation. It is therefore imperative to have impactful communication at all stages in order to positively influence how consumers make decisions on the FMCG products they purchase frequently. A marketer’s communication should influence their decision making before, during and after the purchase process. Before the communication to make them consider, during to influence action and after for repeat purchase (Cox et al, 1983).
1.2. Statement of the Problem
This research established the effectiveness of marketing communication on consumer purchase behavior of Nigeria bottling company. FMCG companies spend a large share of their annual budgets in marketing communication activities which include advertising, sales promotions, direct marketing and personal selling amongst others. The purpose is to achieve profitability by driving sales of their products (Kotler & Keller, 2011). It is therefore imperative to understand the buyer in order to accurately meet their dynamic and evolving needs to achieve this objective. An understanding of the influence of purchase factors such as cultural, social, personal, psychological factors is essential for marketers in order to develop suitable marketing mixes to appeal to the target customer (Kotler et al, 1994).
In a global context, marketing communication plays an important role in developing sales and market share (Kotler & Keller, 2011). In agreement, the companies that spend the highest amount overall on marketing communication such as advertising in the USA would be the toy and gaming industries. For example, Ninja Corporation is an awardwinning design company, making the most innovative toys and outdoor activity products for children worldwide. It owns 52% of the market while their 2 main competitors only have about 15% each. In order to keep its products on top of their consumers' minds, they constantly use advertisements as reminders. As much as this can be generalized for every market, such findings have not been extensively covered in the Nigerian market.
In the Nigerian context, we have witnessed both positive and negative scenarios where marketing communication has been deemed effective or ineffective. In reference to the Reja study done in 2014 by Consumer Insight, a Nigerian based market research
Company, the maize flour brand ‘Soko Ugali’ had the lead market share in 2014. This was a great shift in the market where the ‘Jogoo’ brand always had the outstanding lead over the years. It is notable that in the same year, ‘Soko Ugali’ had massive communication on this new brand on all traditional media; TV, radio, print and outdoor.
They have remained Jogoo’s closest competitor to date (2017). This creates a hypothesis that communication affects purchase behavior. The same study showed a different scenario in the juices category where Afia juice, a brand that has zero marketing communication to end consumers, had an outstanding market share while brands like Minute Maid that spend billions yearly to advertise did not match up to Afia juice’s lead market share. In light of these 2 scenarios in the Nigerian context, the need to establish the effectiveness of marketing communication on consumer purchase behavior of Nigeria bottling company in Nigeria cannot be overlooked.
1.3. General Objective
The general objective of this study was to determine the effect of marketing communication on consumer purchase behavior in the FMCG sector in Nigeria.
1.4. Specific Objectives
1.4.1. To establish the effects of advertising on consumer purchase decisions on
FMCG products
1.4.2. To determine the effects of sales promotions on consumer purchase decisions on
FMCG products
1.4.3. To evaluate the effects of personal selling on consumer purchase decisions on
FMCG products
1.4.4. To assess the effects of social media on consumer purchase decisions on FMCG products.
1.5. Rationale of the Study
This study was important to management teams in FMCG, consumers, marketing professionals, academicians and researchers, authorities and regulators.
1.5.1. Management in FMCG
FMCG organizations such as beverages, beauty, personal care, home care, and foods, will benefit from this study because they will be able to understand which touchpoints are most relevant to consumers and they will be able to prioritize these touchpoints when allocating budgets and planning the marketing strategies mix in the campaigns. Finance managers and related persons in FMCG organizations will understand the extent to which marketing communication provides short term and long term financial benefits to the business as a whole and will see the relevance of allocating adequate budgets to such activities.
1.5.2. Customers and Consumers
This study will be relevant to consumers who are keen on or have interacted with marketing communication such as advertisements, sales promotions, personal selling and social media. The findings will verify to them that we have captured the feedback accurately and the existence of this information can be used to support the demands they create. For example, if the findings show that the do not have enough information they can use the facts and Figures to advocate for FMCG companies to provide more information on particular topics.
1.5.3. Marketing Professionals
This study will be of assistance to the marketing industry at large; as professionals will know where they stand when it comes to the effectiveness of their communication. They will get to know what they are doing right and what they are neglecting, how consumers feel and what needs to change. It will also spur healthy competition among FMCG companies.
1.5.4. Academicians and Researchers
This study will be beneficial to scholars and market researchers that specialize in studying consumer behavior because they will appreciate the role that communication plays in influencing the buyer’s behavior. In light of this it will be key factor to study when researching on different consumer categories.
1.5.5. Authorities and Regulators
Associations such as Marketing Society of Nigeria (MSK) and Marketing and Social Research Association Nigeria (MSRA) as policy makers will benefit from this study by having a confirmation on which communication touchpoints consumers interact with the most and also clarify which components of these touchpoints influence their purchase the most. This enables them to advice Marketing firms, Advertising agencies, and Market Research firms on key areas of focus when undertaking marketing activities and advising their clients on the same. They can also be used as variables to be tested overtime and creating benchmarks and norms to be surpassed when undertaking future research activities.
1.6. The Scope of the Study
The geographical scope covered by this study was Nairobi which was considered an urban area with highly active FMCG products consumers. Interviews were conducted in the town center to ensure a random selection of respondents who are coming from all parts of Nairobi and are within the target criteria.
The population scope of this study was purchase decision makers in the household – who are defined as the people who largely decide the brands to buy in the household and also pay for the shopping. Respondents were middle income males and females with a household net income of KES 40,000 and above. They were within the ages of 18-45 years old because this age group consists of people who are both decision makers of FMCG goods and are likely to be influenced to switch brands by marketing communication. Interviews were conducted amongst 385 respondents in Nairobi; this sample was statistically calculated and established as viable to represent a large population distribution of 250,000. The sample can also be analyzed across the various demographic groups under this study.
The scope of time for the research was from January 2017 to August 2017. The project proposal and questionnaire were developed from 9th January and finalized on 30th June, the questionnaire was programmed on a mobile platform for data collection from 3rd to 7th July, data collection was done from 10th to 18th July, data analysis and reporting was done from 19th July to 19th August.
The main limitation for this study was respondent hostility as they were not willing to sacrifice 30 minutes of their time when leaving a retail outlet to go through a survey they had not planned for. Those who agreed were skeptical about anonymity on the information shared. These limitations were mitigated by helping them to understand the benefits of their participation in this study and assure them of confidentiality through anonymity.
1.7. Defining of Key Terms
1.7.1. Marketing Communication
Marketing communication is defined as a process for planning, executing and monitoring the brand messages that create customer relationships (Duncan, 2005).
1.7.2. Consumer Buying Behavior
Consumer buying behavior is the study of how and why people consume products and services. It also investigates behavior which is the earlier process of buying, the process of purchasing and the next purchase after buying (Yakup & Savl, 2011).
1.7.3. Advertising
Advertising is any paid form of non-personal presentation & promotion of ideas, goods, or services by an identified sponsor. In simple words, Advertising is a means of informing and communicating essential information (Kotler & Armstrong, 2008).
1.7.4. Sales Promotion
Sales promotion is any initiative undertaken by an organization to promote an increase in sales, usage or trial of a product or service (i.e. initiatives that are not covered by the other elements of the marketing communications or promotions mix). Sales promotions are varied (Kotler, 2011).
1.7.5. Personal Selling
Personal selling is the oral presentations made by the individual salesperson. In this case a conversation with one or more prospective buyers who intended to create sales (Kotler, 2003).
1.7.6. Social Media
Social media marketing is about using social networking platforms such as Facebook, Twitter and Pinterest to deliver a message. It takes advantage of these channels’ massive user bases, innate engagement opportunities, and potential for virality to connect to consumers directly and spread information rapidly (Włodarczyk, 2014).
1.8. Chapter Summary
This chapter has explained how the study was undertaken to establish the outcomes of consumer purchase patterns of fast moving consumer goods as a result of marketing communication. They key objectives covered were to understand how they interact with advertising, sales promotions, personal selling and social media, and how each has impacted their purchase behavior. This study is beneficial to FMCG management teams, consumers, marketing professionals and academicians & researchers. The study was covered amongst purchase decision makers in the household who had a household net income of KES 40,000 within the ages of 18 to 45 years old from both gender. 385 interviews were conducted in Nairobi and the full study took a period of 4 weeks.
Chapter two covers the literature review that was done on how each marketing communication strategy (advertising, sales promotions, personal selling and social media) affects consumer purchase behavior. The literature review used the available literature in books and journals. Chapter three presents the research methodology that was used to actualize the study objectives by establishing the research design which took a quantitative approach, the population and sampling design, data collection method, research procedures and data analysis methods. Chapter four provides the results and findings while chapter five presents a discussion on the findings of the research as guided by the specific research objectives, and thereafter conclusion and recommendation of the study was given.
