PROJECT TOPIC: The effect of advertising on customer behavior and retention

Project Body:

Chapter one


1.1Background of the study

Organizations and companies have always confronted limitation of resources. Because of this limitation, it is necessary to use them economically and efficiently. One factor that makes a company differentiated from its rivals is how it uses its resources. One of the most important resources which organizations have in hand is financial resource such as their budgets, a part of which is allocated to advertising. The accomplishment of an advertising program requires money.

In today’s competitive business environment, no business can become a market leader unless they spent millions of naira in promotional purposes. The key purpose of advertisers is to achieve valuable consumers by influencing their thoughts, knowledge and buying behavior. There are various awareness modes of communication such as events, personal selling, public relations, direct marketing, word of mouth marketing, and advertising ((Fill, 1999); (Kotler, 2010)).

It is an obvious fact that every organization tends to move to a position where customer satisfaction is given a favourable consideration. In other words, customer satisfaction is a construct that must be met optimally for efficient and effective achievement of stated objectives, and for smooth continuation of business. Customer satisfaction is an integral part of organizational objectives that must be fulfilled for an organization to maintain its customers. Customers are valuable asset that must be properly kept satisfied. The existence of any business oriented organization is the performance of business activities that will flow from the organization to identified target customers through the provision of need satisfying packages in order to satisfy the needs of the customers, and achieve the stated objectives set by the organization. The satisfaction of the needs of the respective customers thereby gives room for an opportunity to retain the customer and create customer loyalty for continuous patronage. In a similar manner, customer retention is a strong indicator of organizational objectives. The level of customer retention dictates to some extent the level of achievement of organizational, objectives. In other words, if customers fail to patronize or repeat the purchase of the products of the organization, definitely sales and profitability of the organization will drop which will adversely affect the entire performance of the firm.

This particular thesis 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. On the other hand, 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 call also influence the buying behavior of the consumers such as life styles, 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.

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