Individual Report: Advertising's Impact on Consumer Buying Behavior

This individual report examines the impact of advertising on consumer buying behavior within the food and beverage industry, focusing on a case study of Ceylon Cold Stores PLC in Sri Lanka. The study investigates the influence of factors such as brand image, entertainment, persuasiveness, and celebrity endorsements, using a structured questionnaire distributed to 80 respondents. The report includes an introduction, literature review, methodology, and analysis of the data collected. The research aims to identify the impact of advertising on consumer behavior, the factors that influence advertising effectiveness, and provide recommendations to improve advertising strategies. The study highlights the importance of advertising in shaping consumer preferences and driving purchasing decisions, emphasizing the need for creative and well-executed advertisements to capture consumer attention and build brand loyalty. The limitations of the study include potential biases and language barriers, as well as challenges related to data collection during the Covid-19 pandemic.

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Acknowledgement
The success and final outcome of this report required a lot of guidance and assistance from
many people and I am extremely privileged to have got this all along the completion of my
report. All that I have done is only due to such supervision and assistance and I would not
forget to thank them.
I would like to express my deepest appreciation to all those who provided me the possibility
to complete this report. A special gratitude I give to my lecturer, Mr. Perera, whose
contribution in stimulating suggestions and encouragement, helped me to coordinate my
report, especially in writing this report.
Abstract

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The present research paper is focusing on the impact of advertising on consumer’s buying
behaviors in food and beverage industry. Brand image, entertainment, persuasiveness and celebrity
endorsement in the advertising are the key factors, which raise the consumers’ intentions towards
the product and buying behaviors. The primary data of the study is collected through as
selfdeveloped structured questionnaire and secondary data was collected through previous studies,
text books, internet, journals and business magazines. This study was conducted based on a leading
food and beverage manufacturer in Sri Lanka namely, Ceylon Cold Stores PLC. A sample of 80
respondents was taken, out of 150 of the population. Data were obtained by distributing
questionnaires through online platforms to consumers from different demographic factors. The
study explores that a creative and well executed advertisement has always a great impact on the
buying trends or purchasing behaviors of the consumers. Further, the study concludes that the
positive impact of all the above-mentioned factors, on the buying behavior of the consumer.
Key words: Advertising, Consumer behavior, Brand image, Entertainment, Persuasiveness,
Celebrity endorsement.
Table of Contents

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CHAPTER ONE-INTRODUCTION ..................................................................................................................................... 4
1.0 Introduction ....................................................................................................................................................... 4
1.1 Background of the study................................................................................................................................... 4
1.2 Problem identification ...................................................................................................................................... 5
1.3 Research questions ............................................................................................................................................ 5
1.4 Research objectives .......................................................................................................................................... 6
1.5 Significance of the study .................................................................................................................................. 6
1.6 Limitations ......................................................................................................................................................... 7
CHAPTER TWO-LITERATURE REVIEW ............................................................................................................................ 8
2.0 Introduction ....................................................................................................................................................... 8
2.1 Advertising ........................................................................................................................................................ 8
2.2 Consumer behavior ........................................................................................................................................... 8
2.3 Impact of advertising on consumer behavior in food and beverage industry.............................................. 8
2.3.1 Brand image ............................................................................................................................................... 9
2.3.2 Entertainment ............................................................................................................................................ 9
2.3.3 Persuasiveness ............................................................................................................................................ 9
2.3.4 Celebrity endorsement ............................................................................................................................ 10
CHAPTER THREE-METHODOLOGY ............................................................................................................................... 11
3.0 Introduction ..................................................................................................................................................... 11
3.1 Research approach .......................................................................................................................................... 11
3.2 Population and sample.................................................................................................................................... 11
3.2.2 Sample ...................................................................................................................................................... 11
3.3 Sampling method ............................................................................................................................................ 12
3.5 Analysis methods ............................................................................................................................................. 13
3.6 Conceptual framework ................................................................................................................................... 14
3.7 Hypotheses ....................................................................................................................................................... 14
3.8 Questionnaire design....................................................................................................................................... 15
References ................................................................................................................................................................... 15
List of Tables
Table 3.1 Methods of Data Collection…………………………………..……………………….22

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List of Figures
Figure 1: Conceptual framework……………………………………………………………… .24
CHAPTER ONE-INTRODUCTION
1.0 Introduction
Modern advertising is developed with the development of mass production in the late 19th and
early 20th centuries. After the success of print advertising, the idea of radio advertising prevailed
this was then followed by the television advertising and social media advertising (Purdy, 2012).
The buying behavior is strongly influenced by image of the product which is built by the
advertisers. Not only that, a creative and well executed advertisement has always a great impact
on the buying trends or purchasing behaviors of the consumers. At the same time quality of the
product and price are also included with their strong impact on buying behavior of consumer. Also,
it proves that the loyalty created through advertising to attract consumer towards brand which helps
in promotion of the advertised product and changes the buying behavior towards buying intentions.
Therefore, the following study is carried out to examine the impact of advertising on consumer
behavior in the food and beverage industry, with a special reference to Ceylon Cold Stores PLC.
1.1 Background of the study
Advertising is a form of communication which is used to persuade a specific group of people to
take some new action. Furthermore, the developments and technological advancements have
turned advertising to a more pervasive and powerful in its impact and affect (Leiss et al., 1986).
Ceylon Cold Stores PLC is a leader in Sri Lanka’s carbonated soft drinks and frozen confectionery
markets, offering an exciting array of products to discerning customers, through its heritage brand
‘Elephant House’ and several emerging brands (Ceylon Cold Stores PLC, 2019). Deep industry
insights gained over 15 decades of market strength have sharpened the Company’s understanding
of evolving customer preferences, enabling it to consistently deliver great products through
convenient and accessible channels (Daily FT, 2019). They have designed various creative and
innovative advertisements to attract different age groups of consumers and by catering consumer
demand effectively to gain the compeititve advantage over rivals. Today, unprecedented adoption
of technology and connectivity is transforming customer expectations and they interact with
retailers. The entire retail experience of Ceylon Cold Stores has been digitalized, from product
research, advertising and ordering online to home deliveries. Meanwhile, social media has become

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a powerful tool for shaping brand perceptions engaging with customers. Therefore, for an
organization like Ceylon Cold Store PLC, advertising strategy plans a vital role in influencing the
consumer behavior.
1.2 Problem identification
Consumers buying behavior in the food and beverage industry has always been given so much
importance and space in the literature study of impact of advertising regarding its effectiveness
(Ajzen, 2002). There is a general point of view of many societal members, that advertising may
have a negative, unintended or intended influence on consumers’ buying trends (Burr and Burr
1977 and Verbeke, W. 1992). Actually, advertising has a strong potential on changing our social
values, as well our buying behaviors through influencing our cultural values (Schudson, 1984).
Specifically, advertising may lead a consumer to prefer material objects over more morally and
socially oriented alternatives; it may potentially increase conflict and lead to an unhappier and a
more disappointed person of the society (Goldberg and Gom 1978). While the major aim of
advertising is to give something new, creative and useful to get long term benefits of brand loyalty
and image building of the product and company by establishing an emotional relationship and
persuasion for buying that product. This is also a debatable issue that which kind of impact of
advertising effects the beliefs and collective attitudes of the consumer with respect to the buying
behavior (Barbara, J. 1997). In the modern times, it’s really difficult to be successful in persuasion
and to mold or effect the buying behavior of consumer in this era of tough competition (Robinson,
1997).
1.3 Research questions
The following are the research questions which are going to examine through this study:
1. How does advertising impact on consumer behavior?
2. What are the factors impact on effectiveness of advertising and how it influences on
consumer behavior?
For the image building of the product and better market share the Ceylon Cold Stores PLC should
have to keep the following things in mind. First of all, the advertisements should be based on
variety and reality. There should be more emphasis on quality rather than glamour and price. While
to make an advertisement effective it should be telecasted only 3 or 4 times in a day, otherwise it
creates boredom. The advertisers should have to keep this thing in mind that an advertisement

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conveys direct information about the product rather than to show the fashion and style of the model
therefore it should always have to present bare facts about the product rather glamour and
exaggeration.
1.4 Research objectives
Primary objective
• To identify the impact of adverting on consumer behavior.
Secondary Objectives
• To identify the factors, impact on effective advertising.
• To identify the impact of those factors on consumer behavior.
• To examine suitable recommendations to increase the effectiveness of advertising which
has an impact on consumer behavior.
1.5 Significance of the study
The impact of mass communication is felt all over the globe through advertising, newspaper,
internet, music, films, videos, magazine, movies and billboards. Among these media, advertising
is the one that has lasting impact on viewers mind, since its exposure is much broader (Katke,
2007). Advertising is the main source of communication tool between the producer and the
consumer. Advertising can influence the attitude of individual behavior, life style in the long run
as well as the culture of the country (Latif & Abideen, 2011). A company can enhance the brand
of their product by investing in promotional activities in order to compete in a consumer market
that is dominated through advertising (Hussainy, Riaz, Kazi & Herani, 2008). For an organization
like Ceylon Cold Store PLC, advertising strategy plans a vital role in influencing the consumer
behavior. The study would help organizations to find possible measures/strategies to advertise their
products and services. It would be of great interest and valuable to marketing managers and help
them to sell their products/services and make reasonable profits to the company/organization. for
Consumers: It will create brand awareness to motivate them emotionally to buy the product.

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1.6 Limitations
A few of the limitations to be expected are as follows;
• Covid-19 impact
Prevailing situation in the country can be negatively impacted on carrying out this study as it does
not allow the researcher to conduct face-to-face interviews with respondents when obtaining data.
• Lack of previous studies in research area
The literature review is an essential part for any research as it helps to understand the scope of the
issue and its objectives. However, there aren’t many researches that are readily available to take
into consideration when carrying out this research based on the food and beverage industry in Sri
Lanka.
• Scope of discussion
The scope and depth of the discussion carried out in this research can be limited and compromised
due to lack of experience in conducting researches.
• Not providing relevant information and difficulties faced by respondents.
Consumers in the general public may refuse to offer truthful answers and be genuine with regard
to this topic as they may fear that their personal opinions and information will be available to
public. There could also be the possibility of the consumers misinterpreting what is asked of them
and providing irrelevant information. Also, the data obtained to the study was mainly through an
online survey. Busy lifestyle, language barriers, inadequate understanding on the purpose of this
study will be impacted negatively on respondents and they will refuse or ignore to participate in
the survey.
• Language barriers.
This could be an issue since English will be the main language used within this research, but it
isn’t the native tongue for Sri Lankans. However, it could be compromised to use Sinhala only to
gain further information.

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CHAPTER TWO-LITERATURE REVIEW
2.0 Introduction
This chapter includes the scientific knowledge, insights, findings on previous studies, articles,
journals and etc. conducted by various researchers and scholars in both Sri Lanka and other
countries.
2.1 Advertising
Advertising is a subset of promotion mix which is one of the 4 phases in the marketing mix,
comprising product, price, place and promotion. Advertising is a promotional strategy used in
creating product awareness in the minds of consumer to take purchasing decision (Latif &
Abideen, 2011). It is a communication tool used by marketers. Advertising influences individual’s
attitudes, behavior and life style. It is one of major source of communication tool between the
producer and the user of product. For a company product to be a well-known brand, they must
invest in their promotional activities especially advertising (Hussein et al, 2008). Latif and Abideen
(2011) argued that advertising have the potential to contribute to brand choice among consumers.
Advertising was defined by Arens (1996) as a communication process, marketing process,
economic process, social process, a public relations process or an information and persuasion
process.
2.2 Consumer behavior
Consumer purchasing behavior is about how individuals, groups, and organizations to select
purchase, use and disposal of products, services, ideas, or experiences to meet the consumers’
demand (Shih, Yu, & Tseng, 2015). It is a study of ways of buying and disposing of goods etc. to
satisfy their needs and wants (Dudovskiy, 2013). Consumer is someone can either be an individual
or an organization who is the end user of the goods or the services whichever available in the
market. Further, consumer behavior is defined as the mental, emotional and physical activities that
people engage when selecting, purchasing using and disposing of products and services in order
to satisfy need and desires (Schifman & Kanuk, 2009). It includes purchasing and other
consumption related acitivites of people engaging in exchange process.
2.3 Impact of advertising on consumer behavior in food and beverage industry
Most of the time consumers buying behavior is influenced by liking or disliking of consumer
towards the advertisement of the product, advertised (Smith et al., 2002). Likewise, Allen. Et al.,

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(1992) argue that it is actually the emotional reaction which is developed after the advertising, for
the product advertised, that influences the consumer behavior. In the words of Gorn, 1982, the
consumer behavior towards a product is totally depending on advertising, without any 3 assessment
of the quality of the product. Furthermore, Controversies over the impact of advertising on the
consumer’s buying trends and habits has always been present (George, 1989). Sometimes the
advertisers over exaggerate about the product’s benefits in such a tactful manner that consumer
goes psychologically under the pressure of advertising persuasiveness and intentionally decides to
buy the advertised product (Smith et al., 2006). In the point of view of some people, now most of
the consumers avoid the advertisement, because they consider the advertisement, just annoying
and misleading (Bishop, 1997). Today, advertisements have been impacted on psychological,
sociological, aesthetic and political grounds.
2.3.1 Brand image
Keller’s was proposed by Aaker who defined that “brand image is stated as a set of associations,
which are organized in some meaningful way”. Brand image is developed from consumer
interpretation, whether emotional or logical. According to Hsieh, Pan, and Setiono (2004), "a
successful brand image allows consumers to recognize the needs from advertising and how that
brand satisfies and to distinguish the brand from its competitors, and increases the probability that
consumers will purchase the brand" (p. 252).
2.3.2 Entertainment
Some consumers give importance to the quality of the product while some consumers are just
persuaded by the proper communication techniques and some impactful factors. This likeability
which is created by the advertisers, through information and entertainment and involvement of the
viewer is later becomes a solid reason of buying intention of the consumer (Smith et al, 2006).
Entertainment has been one of the primary criteria for creating an advertisement. Entertainment is
used as a tool to gain attention of customers. An interesting and entertaining ad is more likely to
be remembered by consumers rather than a boring one. Therefore, it can be said that entertainment
increases the effectiveness of advertising.
2.3.3 Persuasiveness
Persuasion normally requires that you connect with someone's rational or emotional motives in a
purchase situation. In many cases, emotional appeals carry more influence (Business Insider,

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2018). Effective ads typically rely on strong market research to uncover what makes target
customers tick, or what benefits and message content will get their intention (Sivanesan, 2016).
Emphasizing the benefits that most appeal to a target audience in a way that makes an emotional
impact is a key ingredient. Effective and persuasive ads are delivered in the right way through the
right medium. In a TV ad, setting, lighting, sound, character expressions and dialogue all contribute
to the mood of the message. In print ads, the design, use of color and copy impact tone (Purdy,
2016). On the radio, the blend of sound and copy set the tone. The medium and message should
work together for clarity and impact (Reynolds, 2016).
2.3.4 Celebrity endorsement
Schlecht (2013) mentioned that one of the most common methods used to deliver the advertising
messages and to convince the consumers to buy their brands is taking advantage of a spokesperson.
Spokesperson can be anonymous; however, the most common method is to use celebrities as
spokesperson of brands, and in literature this is referred to as “celebrity endorsement.” Also,
Celebrity endorsement can be indicated as brand alliance between a corporate brand and a human
brand, which is the celebrity and expressed that celebrity endorsement is important to enhance
value of the corporate brand or its products and turn it into a brand that is preferred by consumers
(Muda et al., 2012).

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CHAPTER THREE-METHODOLOGY
3.0 Introduction
This chapter determines the research approaches, how data will be collected and analyzed,
hypothesis and conceptual framework of the study to carry out it further. Methodology can be
considered as the backbone of the research as it defines the systematic process of collecting and
analyzing data to take necessary actions (Williams, 2019).
3.1 Research approach
Quantitative approach
Quantitative research is defined as a systematic investigation of phenomena by gathering
quantifiable data and performing statistical, mathematical, or computational techniques.
Quantitative research collects information from existing and potential customers using sampling
methods and sending out online surveys, online polls, questionnaires, etc., the results of which can
be depicted in the form of numerical. After careful understanding of these numbers to predict the
future of a product or service and make changes accordingly (Research Methodology, 2020).
Quantitative aspect of the research provides valid information and statistical analysis for clear
insight for the researcher and it ensures the accuracy of data analysis as well.
3.2 Population and sample
3.2.1 Population
Ceylon Cold Stores PLC is a leader in Sri Lanka’s carbonated soft drinks and frozen confectionery
markets, which has a large customer pool access through more than 100,000 of retailers throughout
the country. Population for this study was 150 of ICBT students who consume Ceylon
Cold Stores PLC’s products. Researcher has considered demographic factors such as gender (Male
and female), age, and Occupation. By using these demographic factors, researcher can obtain
necessary, accurate and sufficient data for the study to make needed recommendations.
3.2.2 Sample
There was a population of 150 of consumers in ICBT and the sample size of 80 has been selected
using the cluster sampling method. By using this method, 80 students from Higher National
Diploma in Business management, ICT, Engineering and Biomedical science has been selected to

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distribute the questionnaire through online platforms. The sample size was adequate to come up
with conclusions and make necessary recommendations for this study.
3.3 Sampling method
Cluster sampling method
Cluster sampling is a probability sampling technique where researchers divide the population into
multiple groups (clusters) for research. Researchers then select random groups with a simple
random or systematic random sampling technique for data collection and data analysis. (Research
Methodology, 2019).
Types of Data
Below table demonstrate the sources of data collection, purpose of using the selected methods and
facts and information that was collected. Table 3.1: Methods of Data Collection
Data source Information obtained.
Primary data
Self-developed questionnaire The impact of advertising on consumer behavior.
To determine which factors are significantly impact
on effective advertising and how it impacts on
consumer behavior. Identified factors:
• Brand image
• Entertainment
• Persuasiveness
• Celebrity endorsement
Secondary data
Empirical findings To examine certain theories, models, statistical
information, opinions, ideas of other both local and

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(Previous researches on this study area,
Journals, articles, text books and
Internet sources).
international authors and researchers impact of
advertising on consumer behavior.
Company publications, Annual reports
and corporate website.
To obtain information company’s business
operations, employees, organizational structure,
culture, financial performance and related
information and etc.
3.5 Analysis methods
Both primary and secondary has been collected for this study, primary data mainly collected
through a self-developed questionnaire distributed among 80 ICBT students through online
platforms. Secondary data were collected through Previous researches on this study area, Journals,
articles, text books and Internet sources. When analyzing the data SPSS statistical analysis tool
has been used and the questionnaire data has been analyzed thoroughly.

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3.6 Conceptual framework
Based on the empirical evidence identified in the chapter 2, author has identified dependent and
independent variables to construct the conceptual framework for the study. Based on these two
variable types, conceptual framework has been developed in order to address the research
questions and achieve research objectives.
3.7 Hypotheses
According to the study, the hypothesis is listed as below:
Figure 1: Conceptual framework
Independent variables D ependent variable
Brand Image in adverti si ng
Entertainment in adverti si ng
Persuasiveness in adverti si ng
Celebrity endorsement in
advertisi ng
Consumer behavior

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Hypothesis A
HA 0: There is no relationship between brand image in advertising and consumer behavior.
HA 1: There is a relationship between brand image in advertising and consumer behavior.
Hypothesis B
HB 0: There is no relationship between entertainment in advertising and consumer behavior.
HB 1: There is a relationship between entertainment in advertising and consumer behavior.
Hypothesis C
HC 0: There is no relationship between persuasiveness in advertising and consumer behavior.
HC 1: There is a relationship between persuasiveness in advertising and consumer behavior.
Hypothesis D
HD 0: There is no relationship between celebrity endorsement in advertising and consumer
behavior.
HD 1: There is a relationship between celebrity endorsement in advertising and consumer behavior.
3.8 Questionnaire design
(Please refer Annexure 1)
References
Andrews, K., (1980), the concept of corporate strategy (2nd Edition), Dow– Jones Irwin.

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Andrews, K., (1980), the concept of corporate strategy (2nd Edition), Dow– Jones Irwin.
Ansoff, H.I., Business Strategy: Selected readings Baltimore, Md: Penguin Books 1969.
Blythe, J. (2009, p.130, 63, 99, 141) Key Concepts in Marketing [Online] London:SAGE
Publications Inc. https://books.google.lk/books?isbn=1446200043/. [Accessed: 28th March 2021]
Daft, Richad L. Management, 7th Edition, 2009, Thomson, South-Western Kotler, P. (2005),
Marketing Management, 12th edition, Prentice Hall
Ferrell, O.C., Hartline, M. (2013) Marketing Strategy [Online] 6th Ed. USA: South Western.
Available from: https://books.google.lk/books?isbn=1285607139/. [Accessed: 28th March 2021]
Kotler, P. (2005), Marketing Management, 12th edition, Prentice Hall Philip Kotler and Gary
Armstrong- principles of Marketing- 2016, (16th Edition) Pearson Education Limited
Kotler, P. (2007). Marketing management analysis planning implementation and control. New
Delhi, India: Prentice Hall.
Kotler, P. (2007). Marketing management analysis planning implementation and control. New
Delhi, India: Prentice Hall.
Muda, M; Musa, R; Putit, L (2012). “Breaking through the clutter in media environment: How do
celebrities help?”.Procedia - Social and Behavioral Sciences, Vol. 42: pp 374–382.
Newspaper Association of America. (2014). Public policy: Advertising. Retrieved from:
http://www.naa.org/Public-Policy/Government-Affairs/Advertising.aspx
Nigerian Communications Commission.(2018) GSM Market Share.Abuja, Nigeria : Author
Philip Kotler and Gary Armstrong- principles of Marketing- 2016, (16 th Edition) Pearson
Education Limited
Annexures
Annexures 1

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Questionnaire
Demographic information
Name:
Gender Male Female
Age
17-22 - ………………..
23-28 - …………………
29-34 - …………………
34 and above - ………...
Occupation
Student - ……………………….
Employed - ……………..............
Survey Questions:
Kindly state your opinion regarding the following statements under various factors given below:
Scale: 1- Never 2- Rarely 3- Occasionally 4- Usually 5-Constantly
Number Statement 5 4 3 2 1
Brand image
1. I’m aware about Ceylon Cold Stores PLC
2. I’m aware about the Elephant House brand of Ceylon Cold
Stores PLC
3. I’ve seen advertisements of Elephant house products on
TV/Social media/ newspapers etc.
4. I’m Loyal to the Elephant house brand
Entertainment
5. I think Elephant House advertainments are attractive
6. I think they are using attractive colors/ wordings on adds
7. They are using attractive models on their adds

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Persuasiveness
8. I have a positive emotional response for company’s adds
9. I think their slogans are motivating me to buy the product
10. They are utilizing credible, reliable and honest approach in
advertising
Celebrity endorsement
11. I think Elephant house use celebrities I personally like for their
adds
12. they have ensured the credibility of the product through celebrity
endorsement
13. I think they have to enhance the celebrity endorsement
furthermore.
Consumer behavior
14. I think the bard image of Elephant house impact on our motives
to purchase products.
15. I feel like the entertainment level of advertisements of Elephant
house will motivate us to purchase the products.
16. I think persuasiveness is impact on my purchasing behavior
regarding the elephant house products.
17. I think celebrity endorsement has been positively impacted on my
purchasing behavior.