Analyzing the Effect of Online Advertisement on Consumer Behaviour (Case: Haigh's Chocolate)

This research analyzes the impact of online advertisement on consumer behavior using Haigh's Chocolate as a case study. It explores factors affecting consumer behavior and evaluates the effectiveness of online advertising strategies.

Running head: ANALYSING THE EFFECT OF ONLINE ADVERTISEMENT ON
CONSUMER BEHAVIOUR (CASE: HAIGH'S CHOCOLATE)
1
Analyzing the Effect of Online Advertisement on a Consumer Behaviour (case: Haigh's
chocolate)
Student’s Name
Institutional affiliation

ANALYSING THE EFFECT OF ONLINE ADVERTISEMENT ON
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ANALYSING THE EFFECT OF ONLINE ADVERTISEMENT ON
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Table of contents
1. Introduction..................................................................................................................................2
1.1 Statement of the problem...........................................................................................................4
1.2 Aims and Objectives of the research.........................................................................................4
1.3 Research questions.....................................................................................................................5
1.4 Justification and Potential Output of the Research....................................................................5
2. Conceptual framework and hypothesis development..................................................................6
2.1 Analysis of Consumer Behaviour..............................................................................................6
2.2 Compatibility of factors impacting consumer behavior with online advertisement..................8
2.2.1 Age..........................................................................................................................................8
2.2.2 Culture....................................................................................................................................8
2.2.3 Perceptions..............................................................................................................................9
2.3 Effects of strategies used on online advertising........................................................................9
2.4 Haig’s Chocolate Company.....................................................................................................11
3. Methodology..............................................................................................................................14
3.1 Research Design......................................................................................................................14
3.2 Target population and Sample frame.......................................................................................14

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3.3 Sample and sampling procedure..............................................................................................14
3.4 variables and data analysis.......................................................................................................15
3.5 Organization of Study..............................................................................................................15
3.6 Budget and Project activities...................................................................................................16
3.7 Project Activities and schedules..............................................................................................17
4.0 Conclusion...............................................................................................................................18
References......................................................................................................................................19

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1. Introduction
The advancement in technology has led to the revolution of how businesses are
conducted. Citing back ten years ago, most of the businesses and sales were created through the
word of mouth. There were physical locations for purchase of products and thus customers trust
to a specific brand was only based on the quality and mode of purchase service offered in the
physical purchasing center. However, the emergence of new technology platforms such as social
media has revolutionized the way business is carried out and the factors which influence
customers. Most businesses have also understood the importance of making their products
visible online.
As time goes by, online advisement has become one of the main modes of carrying out
business. Currently, more than 80% of business owners have been found to be using one of the
different forms of online advertisement strategies (Al Qudah et al., 2014). Most of these
marketers use social media as their main channel of advertisement. This is because, statistically,
it has been found that many people globally are able to access social media platforms. Therefore,
it means there are many potential customers on those platforms. The use of social media
platforms for advertisement is based on many factors among them being the product which one
is selling.
Large companies have also adopted their specific media social media preferences where
they carry on their advertisements. Most of them have social media pages. According to
research, 86% of the large firms believe that the use of specific pages which have the brand name
of the organization is one of the contributing factors of reaching a larger audience as compared to

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the use of a personal account (Huang and Ho, 2015). This perception among others lays diverse
ideas about an online advertisement.
On the other hand, E-commerce adoption is influenced by the consumers' potential and
his or her behavioral patterns which dictate the purchasing habits. Therefore, some firms carry
out online advertisements but end up getting negative results as opposed to their expectations.
For instance, some end up getting a few customers whereby the cost of advertisement outweighs
the total purchase revenue thus leading to a loss. Based on this perception, a research gap is left
on what factors of advertisement positively impact consumer behavior.
Also, based on the online advertisement mode, individual attitude is shaped concerning
that specific brand and thus influences customers’ purchasing power. However, this attitude
shaping is based on different factors which vary across cultures. For instance, in Spain despite
the increased growth and advanced online advertisement modes, only 48% of the total population
in the country was willing to do a purchase online by the year 2015 (Wojdynski and Evans,
2016). Additionally, only 27% of the consumers returned to purchase another product online
after purchasing the first one. These findings hold despite the fact that most of the businesses had
fully followed different factors which are thought to influence consumer behavior based on
online advertisement. Therefore, this research focuses on analyzing the impacts of online
advertisement to consumer behavior.

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1.1 Statement of the problem
In this digital era, the internet has become one of the most emerging sources of business.
Many organizations have shifted to online advertisement to market their products. On the other
side, many people are visible online, therefore, making it easy to reach many potential buyers
through advertisement. For instance, three in every ten people in Australia purchase products on
online sources (Danaher and Dagger, 2013). The online advertisement has been found to
generate five times more sales as compared to the traditional modes of advertisements like
televisions and radios.
Most of the organizations make different use of online marketing strategies to brand
awareness to consumers. However, while this is the case, not all organizations make it while
using online advertisements. Some incur losses due to the lack of customers even after
advertising. Therefore, these different experiences lead to the development of divergent ideas on
the effects of online advertisement to consumer behavior. The question remains why is it that
some organizations acquire many customers while using the online advertisement while others
do not.
1.2 Aims and Objectives of the research
The main aim of carrying out this research is to critically analyze the effect of online
advertisement to consumer behavior. For the purpose of carrying out the research, a case study of
Haigh's Chocolates which is a famous Australian chocolate brand has been considered. The
following are the main objectives of the study

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 To understand the factors affecting consumer behavior
 To evaluate the impact of carrying out an online advertisement on consumer's purchasing
behavior
 To provide recommendations for the organization regarding online advertisement
1.3 Research questions
 What is the impact of online advertisement to consumer behavior?
 What are the factors which affect consumer behavior?
 What is the impact of carrying out an online advertisement on consumer's purchasing
behavior?
1.4 Justification and Potential Output of the Research
This research is very important especially to the mentioned chocolate brand since it will
make them understand the main behavioral patterns which are adopted by the consumers when
online advertisements are carried on. Through the analysis of different articles, the research will
be able to lay out a comparative impact of online advertisement to consumer behavior. Also, the
research will figure out any mythical and misleading information which has been adopted in
relation to the topic under study thus making it easy for the company under study and other
organizations to focus on what generates more sales and ignore the misleading actions.
The study will also give a platform for further research. This is because, through the
critical analysis of the literature, many research gaps will come out and thus lay a foundation for
other scholars to carry out extensive research to cover up those gaps. It will also enable the

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organizations to critically think before adopting online advertisement models so that they can be
able to acquire only those which benefit them. The study will also shade into light the main areas
which ought to be focused while carrying out the online advertisement to minimize costs while
generating more sales and maintaining long term potential customers.
2. Conceptual framework and hypothesis development
2.1 Analysis of Consumer Behaviour
Human behavior is an amalgamation of every thought, feeling, or action by people. This
means that every thought, motive, and sensation which leads to decision making are the classical
interpretation of human behavior (Fetscherin and Heinrich, 2015). On the other side, consumer
behavior is a different case. This is the study of human behavior in a consumer role (Tobbin,
2010) and (Gilaninia et al., 2013). The consumer behavior is a combination of specific aspects
which affect the purchase and trust of a given brand and the services of particular organizations.
While consumer behavior can be perceived to be different from human behavior, in a logical
manner both can be perceived as a compliment (Majhi et al., 2010).
From a historical view, consumer behavior became a field of interest due to the
development of the marketing concept (Hernandez et al., 2010). This concept demands that
before the marketers adopt any marketing strategy, they should first define the benefits of that
strategy to the consumers in the market place (Fetscherin and Heinrich, 2015). This means that
despite the method used for marketing, it is essential to first focus on the consumer behavioral
patterns.

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Based on the online advertisement, many businesses have been able to attain full
potential due to the impacting nature of the marketing model to consumer behavior. Some
scholars argue that online advertisement brings the trust of a specific brand to consumers and due
to its convincing power, majority of the consumers find it irresistible to purchase the advertised
products. However, on the other side, other scholars argue that online advertising does not
influence the consumers to buy the products but instead makes them aware of brands which they
did not have knowledge of in the past.
Surprisingly, research has found that most of the developing countries make more sales
based on the traditional modes of marketing as compared to online advertisement models. For
instance, in the USA, 70% of the population trust online shopping more and are bound to
purchase products as opposed to other countries like Africa where despite the majority of the
population being visible online, they do not trust the adverts for products hence account for only
17% of those who buy products online (Foxall and Sigurdsson, 2013). This analysis shows that it
is not the inability to buy the products online but instead it is the consumer behavior which
dictates the mode of purchasing.
Also, based on the 17% of the population in the developing countries who buy products
online after an organization carries out online advertisement, it leads to the critical question as to
why some people within the same locality would trust the online advertisement to the extent of
buying a product while another remains rigid and unwilling to buy the same product online.
Therefore, what is the impact of online marketing on consumer behavior and associated
purchasing willingness?

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2.2 Compatibility of factors impacting consumer behavior with online advertisement
2.2.1 Age
Initially, age was considered as one of the main factors influencing consumer behavior.
However, based on current statistics of sales which have been generated due to online
advertisements, the trend is different and unique. For instance, in the USA, 70% of the
population prefer buying online products for brands which have advertised themselves to create a
trust to the consumers. Among those willing to purchase the products, 48% are aged 35 years and
above (Wolny and Mueller, 2013). These statistics eliminate the thought that age is an impacting
factor to an online advertisement and consumer behavior. This is because; more old customers
are even willing to buy products online more as compared to the young in the USA (Bashar et
al., 2013). Also, in Finland, the consumer preference based on online purchases is slightly higher
for old people as compared to the young.
2.2.2 Culture
Cultural diversity has been termed as one of the main determinants for purchasing behavior.
Based on an online advertisement, it has been found that the mode adopted for the advertisement
varies from one region to another. This difference has been witnessed due to the beliefs and
norms within specific regions which influence the perception of the consumers in that particular
area (Gambetti and Graffigna, 2010). For instance, in Canada consumers prefer the
advertisement of non-alcoholic drinks online but would give bad reviews for any alcoholic
drinks advertised online (Cantallops and Salvi, 2014). This aspect is based on the fact that
children should not be exposed to drugs which are strongly held in the country.

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However, despite the cultural diversity, online advertisement attracts customers to purchase the
products and what changes is only the number of sales made. For instance, in Canada, the sales
for alcoholic drinks which are advertised online are still made only that they are few as compared
to the sales of those who use the traditional methods of advertising. This means the behavioral
patterns for the consumers are not consistent and thus it is hard to evaluate the impact of online
advertising on consumer behavior based on a cohort.
2.2.3 Perceptions
Humans are sensory beings. This is because they have a series of receptors which
influences them in making decisions. Sensory and emotional online marketing strategies have
been used to win the perception of consumers and influence their purchasing behavior
(Prendergast and Siu, 2010). While these strategies are seen to be the most effective, they have
not performed well in influencing the consumers to fully purchase products online. For instance,
despite the fact that 90% of the USA population is online, only 70% do shopping online. This
means the remaining population has a bad perception of shopping online. Therefore, even though
online advertisement changes the perception of the consumers towards purchasing products, it
still remains unknown to what extent does it influence the consumers and does it impact them
positively or negatively. Those who purchase the products is it due to flexibility or due to the
positive perception created by the online advertisement.
2.3 Effects of strategies used in online advertising
Research also suggests that different strategies used in the advertisements online impact
the consumers differently thus leading to different impacts on the consumer purchase behavior.

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For instance, the online word of mouth (WOM) marketing strategy is believed to increase
familiarity, connection, care and trust among the consumers (Filieri and MCleay, 2014). This
belief is based on the claim that through word of mouth, one can show actions which trigger
attentive listening to the consumers. However, some scholars argue that this method may not be
effective for long since humans by conservative nature need to hear new ideas and new stories
every day. Given that the process of making videos for the adverts is very costly, it makes the
organizations stick to specific videos for long hence many people may lose interest thus reduce
the sales.
Another unique method used by organizations to carry out online advertisement is the
display advertisement. This is done through the use of banners and the use of third party websites
in the generation of traffic to the organizations' website. However, while scholars view this
strategy as one of the most effective, other researchers hold different views. For instance, some
claim that through their research, they have found that popups and banners create an annoying
mood to people thus only few can view it consistently (Wang and Sun, 2010). In the USA
through a study, it was found that only 12% of the online purchasers view popups and banners.
In Australia, 32% of the online consumers claimed that they were more interested in the WOM
strategy as compared to the display adverts. This means the strategy negatively impact consumer
behavior even though it is an online strategy of advertising.
Other online marketing strategies are viewed as old fashioned by many consumers. For instance,
email marketing even though it is a technological advertisement method, it has little influence on
consumer behavior. For example, in Australia, most of the online consumers claim that they
spend more than seven days without opening their emails (Boateng and Okoe, 2015). However,

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90% of online consumers in Australia are online at least three hours a day. Therefore, based on
the low preference for emails, this marketing strategy may not be effective in the generation of
many sales.
2.4 Haig’s Chocolate Company
Haig’s is a chocolate maker company in Australia. It is one of the oldest private
organizations in the south of the country. It was found back in the year 1915 and currently has
employed more than 500 employees who work all over Australia (Buster, 2018). The
organization is well known for the production of quality goods which makes it well known due
to the increased loyalty among the customers. The marketing strategies in the organization are
the bottom line for the achievement of the set goals and thus it pays a lot of attention to the
strategies being used.
Due to the high demand for the products, the organization has many physical stores
which serve the customers in different areas in Australia. However, due to the increased demand
for the products, the organization decided to change the marketing strategy and invest in online
stores. For these stores to be effective there is a need to evaluate the impacts of the online
advertisement to consumers.
Unlike the main competitors who sell imported chocolates, this organization focuses
more on production and then selling the product to the consumers directly. They use the locally
available materials to produce quality products which in turn they sell at a lower price. To attain
the full potential of the online advertisement, the organization would need to get important

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recommendations based on the consumers’ behavior and the impact of online marketing to the
consumers.
Since the start of the online marketing strategy, the organization has not attained full
potential. As compared to the traditional methods of marketing the online marketing strategy has
not been able to produce as many as possible compared to the old marketing strategies, therefore,
there is need to come up with important recommendations about the same. The organization has
been using the WOM method as an online strategy for advertising. This study therefore based on
the analyzed literature will give recommendations on how effectively apply methods which
impact consumer behavior. Therefore, the study will focus more on analyzing the impacts of
online advertisement to consumer behavior. This will be done based on the laid methodology
which will enable it to fully make the research scientific and its findings more reliable. The
research will also outline the methods which will be used for data collection thus making it easy
to understand the analysis process.

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3. Methodology
3.1 Research Design
This is a conceptual framework within which a study is carried out. It includes a blueprint
for the process of data collection, measurement, and analysis (Patten and Newhart, 2017). This
study will be descriptive research which will utilize the use of secondary data to draw a
conclusion regarding online advertisement and its impact on consumer behavior. Since the study
will use secondary data, there will be no tool for data collection.
3.2 Target population and Sample frame
There will be no selection of sample in this study. However, the secondary data will be
collected from well-established firm’s websites. The organizations from where the data will be
retrieved will be based on purposive sampling. This means the selection of a firm for the data
collection will be based on the set rules which will make sure that all the included data is from
organizations which have used online advertisements in the past. This will lead to the generation
of reliable scientific results.
3.3 Sample and sampling procedure
Since this research will use secondary data, there will be no sample size. However, the
data will be limited to a maximum of 10,000 variables. The sampling procedure which will be
used in this study is purposive sampling. This is a non-probability sampling method which leads
to the selection of sample or data based on set guideline (Levy and Lemeshow, 2013). This

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sampling procedure will be used to help in the selection of data which directly fits the set
guidelines and which directly relates to the topic under study. A large number of data variables
proposed to be used will make sure that the assumption of normality test is upheld. This will lead
to the analysis which will not be biased thus making the results more reliable.
3.4 variables and data analysis
This study will include an analysis of both nominal and scale data. Depending on the data
type, either parametric or non-parametric tests will be applied for the analysis. This will make
sure that either way, the data has been transformed into information. The assumption of
normality will be upheld in the analysis of scale data since the sample size is large enough. This
assumption is based on the central limit theorem which states that as the sample size gets larger
the data tends to approach normal distribution (Cramer and Eisert, 2010). On the other side, the
nominal data will be analyzed using non-parametric tests which do not require the assumption of
normality.
SPSS software and excel will be used for data analysis. First, the data will be retrieved
from online and then stored in an excel file for data cleaning. The date will be cleaned using
Excel software. After the data cleaning, the data will be moved to the Spss software for further
analysis. The Spss software has been chosen due to its advanced graphics and its flexibility in
using it. It also has simple parametric and non-parametric formulas which makes the best
software for this study to be used for data analysis.

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3.5 Organization of the Study
This study will be organized into different chapters whereby each section will discuss
unique content to fit for a specific context. The first chapter is the introduction which gives an
overview of the topic under study. This chapter also includes; the statement of the problem and
justification of the study. The next chapter is the literature review and conceptual framework
which critically analyzes the existing information about the topic under study. There follows the
research methodology which outlines the process which will be used in the research. Then it will
follow the chapter for the reporting of the findings and summarization of the important findings.
Finally, recommendation chapter will be discussed.
3.6 Budget and Project activities
The proposed budget for this research will be $ 3500. This budget will enable the
finishing of the project within the set time as outlined in the Gantt chart. The following is a
breakdown of the budget for the project.
 Buying of books and research journals which will be needed in the synthesis of the
literature review
 Purchasing of data from secondary sources
 Data analysis and cleaning
 Other expenses
Table break down of the budget
Activity Expenditure

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Purchase of literature review materials $ 700
Data collection $ 1000
Data analysis $ 1200
Other expenses 600
3.7 Project Activities and schedules
Task Name Duration Start Finish Predecessors
Basic research on
the topic under
study and
statement of the
problem
3 days Mon
03/06/2019
Thu
06/06/2019
Synthesis of the
literature review
6 days Fri
07/06/2017
Thu
13/06/2019
1
Drafting of the
methodology
4 days Fri
14/06/2019
Tue
18/06/2019
2
Data collection 8 days Wed Thu 2

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19/06/2019 27/06/2019
Data cleaning 2 days Fri
28/06/2019
Sun
30/06/2019
2, 1
Data analysis 10 days Mon
1/07/2019
Wed
10/07/2019
2, 1
Submission of the
first report
0 days Wed
10/07/2019
Wed
10/7/2019
3
Addition of the
research findings
3 days Thu
11/07/2019
Sun
14/07/2019
3, 6
Recommendations 2 days Mon
15/07/2019
Wed
17/07/2019
8
Final submission 0 days 17/07/2019 17/07/2019 9
4.0 Conclusion
This paper has discussed the formulation of research based on the impacts of online
advertisement to consumer behavior. Based on the literature review, it has been found that there
are many research gaps about the topic under study. Therefore, the formulation of the research is
based on that topic to bridge those gaps. The research includes a well-crafted methodology

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which will be used in the collection of data. The study is based on the Haigh’s Chocolate
Company in Australia. The findings will be used as a stepping stone for analyzing the impacts of
the online advertisement to consumer behavior.

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