An Investigation of Advertising's Influence on Nestle Customer Loyalty

This report investigates the relationship between advertising and customer loyalty, focusing on Nestle as a case study. The introduction highlights the importance of customer retention and the role of advertising in informing consumers about products and services. The report aims to determine the impact of advertising campaigns on Nestle's customer loyalty, the significance of advertising for the company, and strategies for effective advertising. The literature review analyzes research on advertising and customer loyalty, exploring the various media used for advertising, the role of advertising in building brand loyalty, and the impact of advertising on consumer behavior. The research methodology section describes the use of primary research through questionnaires to gather data from respondents, and the analysis of the findings. The report concludes by summarizing the key findings and their implications for Nestle, emphasizing the importance of understanding customer expectations, developing clear communication, and implementing effective marketing strategies to foster customer loyalty. The report also examines the SERVQUAL model and the role of communication in maintaining service quality. The report uses both primary and secondary research to support its findings. The report also includes a questionnaire used to collect primary data and an interpretation of the findings.

Foundation Project
Research Plan

Table of Contents
INTRODUCTION...........................................................................................................................1
Literature review.........................................................................................................................1
Research methodology................................................................................................................5
Ethical consideration...................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
It is fact that without customers any organisation will not be able to carry out their
activities. For this it is essential for them to retain their customers by providing them with high
standard quality (Buil, De Chernatony and Martínez, 2013). Advertisement is way through which
companies can tell people about their products and services. This research is based on Nestle,
Swiss transnational drink and food. It is one of the largest food company in terms of revenue and
various metrics. This research describes relationship among advertisement and loyalty of
customers. This topic is considered in research as it is essential for organisation to recognise
what impact does advertisements create on mindset of people so that they can formulate
strategies according to that.
Aim: An investigation of relationship between effective advertising and consumer loyalty.
Questions: Does advertising campaigning impact on customer loyalty of Nestle?
 Importance of advertisement in Nestle
 Role of advertising in earning customer loyalty for Nestle
 Strategies to frame effective advertising campaign for influencing potential customers
towards products and services
Literature review
Research work of different authors has been analysed to investigate relation between
advertisement and customer loyalty. In this aspect researcher has formulated certain research
questions have been to acknowledge this concept in depth. With respect to Nestle questions
which is examined is: Does advertising campaigning impact on customer loyalty of Nestle?
Importance of advertisement in a company
According to Jahn, advertisement builds effectual relationship among message receiver
and sender of message, this means that information related with services and products is received
by customers. By usage of advertisements Nestle can make people or customers aware of what
products they are about to launch either its new services or products within market (Jahn and
Kunz, 2012). As per The Economic Times, advertising refers to a means through which
communication occurs with customers of services and products. They are messages for which
organisation like Nestle pay with an intention that they can give information to their customer.
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This definition is given by Advertising Association of UK. Organisations have opted to use
various media like magazines, newspapers, journals, television, mailers, hoardings, internet,
press, posters, and contests and even communicate with people (endorsements).
Organisation tends to hire advertising agencies for creation advertisements and host of
people such as brand managers, creative heads, copy editors, designers and visualizers. Nestle
tells about themselves to these agencies about their brand, their imaginations, values and ideals
behind that (Keller, 2012). They also target specific sector of population. These agencies are
responsible for conversion of these ideas or thoughts into reality in terms of text, themes, layouts
and visuals by which Nestle can communicate with their potential customers. After getting
approval from management and board of directors, these ads go on air. As per Keller, an
advertisement acts as a reason behind purchase of services and products. By usage of
advertisements, people can find out what products are being offered by different organisations
and they can differentiate among those in terms of ingredients being used, their appearance and
also they can identify their taste up to some extent by visualising them. Objective of Nestle
behind advertisement is to promote their services and products. As by this they will be able to
make people know what all products they are offering. By this Nestle can enhance their sales and
profit margin. Furthermore, they can also tell their customers about what they are offering at
present scenario and what they will be offering in future. By usage of advertisements, morale of
existing customers can be build when they see products of Nestle and they will to use them. They
can have value for money by analysing different products, this provides enhanced value for
them.
On perspective of Nestle ads will assist them to know what all their competitors are and
what they are being offering and and will offer in coming future. By this Nestle can build their
own strategies and make changes in their services accordingly so that they can fascinate their
customers as well as enhance their brand value. This will also create goodwill for Nestle and it
will also assist them to attain customer's loyalty (Mirabi, Akbariyeh and Tahmasebifard, 2015).
Role of advertising in earning customer loyalty for Nestle
According to Sasmita, customer loyalty is main asset through which organisation can
succeed in terms of market shares and economic performance. This can be attained by using
advertisements in media field through which will give desired results. Loyal customers signify
enhanced profitability in terms of value making at low cost. Increase in customer loyalty is a
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critical issue which is aim of marketing strategies. Loyalty is defined by different authors in
different ways (Sasmita and Mohd Suki, 2015). As per few, it is considered as attitude factor
whereas some looks at it as behavioural factor and others look at it as combined factor. Brand
loyalty is associated with satisfaction of customers and their behaviour towards services being
offered by Nestle. Loyalty personify willingness of individual for supporting objects of loyalty of
individual so that they can continue to support for longer period of time thereby creating
attachment and commitment towards what is being offered and what they are receiving. As per
Dr Ozhan loyalty identify relationship among repeat patronage and relative attitude. Moreover, it
also comprises of behavioural as well as attitudinal elements. Advertisements acts as a source
through which customers can be told about what they are being offered and with what they will
be served in coming future. This will make them aware of services they will be given. By
advertisements new customers can analyse and make comparative analysis between what others
are serving them, at what prices they are being served. Furthermore, old customers can visualise
what they will get in future and depending upon present products and its quality they can decide
whether new services or products will meet their present requirements or not and can decide
accordingly whether to go with them in nearby future or not. If they go for their products then it
depicts brand loyalty.
As per Scheinbaum, advertisements acts as magic for organisation as marketing without
advertisement do not yield high result or it gives nothing. Customers believe in what they see,
that means by having visualisation of services they can get idea of what they are being offered
(Scheinbaum, 2012). Products act as profitable when they are being able to create an impact on
mindset of individuals and this can be only attained when effective methods for advertisement
are being used. Advertising method comprises of advertisement on magazines, television and
social media. Advertisements plays major role for attracting large number of customers and their
retention.
Strategies to frame effective advertising campaign for influencing potential customers towards
products and services
According to Strom, creative advertisement can be more impactful on both existing and
new potential customers. It is essential for Nestle it will create direct impact on sales of
organisation. According to author there are certain stats associated with building of customer
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loyalty and delivering services to them. This states that acquisition of new customers is more
costly than retention of their existent one. Nestle can opt for paid social and according to 57%
(approx) people buy products from brands they are being following on social media. Around
75% people said that they buy products on basis of what they see on social media and reviews on
those products. By usage of social media nestle can retain their potential customers as well as
attract new customers through advertisements.
Nestle can use SERVQUAL model to identify gap between needs of customer and what
they are offering to organisation. This comprises of knowledge, standard, delivery,
communication and satisfaction gap. These gaps are further analysed so that they can be fulfilled
by Nestle through which these strategies can be implemented in efficient way. Knowledge gap
occurs when knowledge of organisation in terms of expectation of customers is lacking and
preventing them from reaching potential customers in appropriate way (Ström, Vendel and
Bredican, 2014). Standard gap arises when organisation has formulated their own idea with
respect to expectation of their customers. Suppose this idea goes wrong then Nestle will not
respond to what customers need and there will be risk that rules and quality policies will be
wrongly translated. Delivery gap signifies that there is significant gap between expectation of
customers and what organisation is offering them. This also comprises of inappropriate
implementation. For example way in which policies for employees is carried out.
Communication gap arises when marketing or external communication which
organisation sends formulates wrong expectations in customers. Like Nestle marketed their new
product but customers interpreted it as something else, this will cause communication gap as
expectations of customers will be different from what organisation is offering them. This gap can
also occur when organisation tells something, promises something and delivers things which are
not in line with respect to what they can deliver. Satisfaction gap occurs there is relevant
variation between what customers expects and what services they are being delivered. This will
result in biggest gap with respect to quality (Mirabi, Akbariyeh and Tahmasebifard, 2015).
Communication among service providers, customers and internal communication within
organisation plays critical role in maintaining and enhancing quality of services. As per author,
organisation can yield good results when they know expectations of their customers (Thompson
and Malaviya, 2013). Nestle must ensure that these gaps do not arise so that reputation of their
organisation is not hampered. Nestle need to have effective strategies of marketing by which
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they can acknowledge what customers expect from them and develop a clear communication
with their potential customers. This can be done by organising advertisement campaigns and
making people aware of what they are being served and will be offered in future. Also they can
take into consideration expectations of customers and decide their products and services
accordingly (Keller, 2012).
Research methodology
Primary research refers to investigation which is carried out by researcher themselves
or they hire someone else to do this job for them. In this research sources are reached normally
customers and they are point of view is analysed by asking questions and collecting information.
Primary research is done by methods like surveys (mail or online), questionnaires (online or
mail), interviews (face-to-face or telephonic) and focus groups. Through this research
information which is gathered is exploratory means that it is open-ended and general. This
basically consists of interviews with individual or groups. Moreover, it is specific which signifies
that information is précised and knowledge which has been gained from exploratory research is
resolved. It comprises of formal and highly structured interviews.
Secondary research can be described as research which has been already conducted
by researcher. This information is gathered, compiled, published and organised by other people.
This includes studies and reports made by trade associations, government agencies or any other
organisation that is operating in same industry like Cadbury. This information can also be
published like in magazines, books, industry publications, library, trade journals and by
contacting trade organisations or industry associations (Jahn and Kunz, 2012).
In this research researcher has used primary research for gathering information
related with Nestle. For this they have used questionnaire as a method which has been
illustrated beneath. In this total respondents are 30.
Questionnaire
1. What are the different ways in which advertisements can be carried out?
 Ads in newspapers
 Television
 Promotional campaigns
2. What impact does advertising campaigns have on customers?
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 Positive
 Negative
3. Does an advertisement play any role in customer’s loyalty?
 Yes
 No
Theme 1: Ways of advertisement
1. What are the different ways in which advertisements can be
carried out?
Respondents
 Ads in newspaper 5
 Television 14
 Promotional campaigns 11
Interpretation: From above graph, it has been analysed that according 5 respondents
advertisement in newspaper is appropriate method by which people can made aware about what
they are being offered by Nestle. As per 14 respondents television is suitable method for
advertisement as by visualising things they can learn more about what Nestle is offering them
and can see what exactly it is. According to 11 respondents promotional campaign is way
through which more number of people can be contacted as well there point of view, expectations
and feedback can be gathered which can assist Nestle in future perspectives.
Theme 2: Impact of advertisement campaigns
2. What impact does advertising campaigns have on customers? Respondents
 Positive 22
 Negative 8
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Interpretation: As per above graph, it has been analysed that according to 22 respondents there
is positive impact of advertisement. As they will know about services which will be given by
Nestle and also what will they get in future. By this they can analyse that whether there
requirements are taken into consideration or not. According to 8 respondents, advertisement will
have negative impact as they say that if customers are aware about their services and like what
they are being offered then there is no need of advertisement instead of that this money should be
used to enhance services and products they are delivering.
Theme 3: Role of advertisement in customer’s loyalty
3. Does an advertisement play any role in customer’s loyalty? Respondents
 Yes 20
 No 10
Interpretation: It is evident from above graph that advertisement plays effectual role to gain
loyalty of customers. As per 20 respondents it has been stated. When Nestle makes people aware
about what products they will be being served then this will make them feel valued and also
identify that their expectations have been taken into consideration. According to 10 respondents,
it not have any impact on customer’s loyalty as it completely depends on quality of services they
are given.
Ethical consideration
Research ethics renders effectual guidelines which are responsible for conducting
research. They motivates, monitors and educate researchers to conduct research in ethical way. It
is necessary for researcher to maintain record of research activities and formulate reports
accordingly so that it can have relevant impact on strategies which are to be created. Researcher
also needs to take into consideration various personal or financial interest which either directly or
indirectly creates impact on work. Foremost, they to consider intellectual property rights,
confidentiality and privacy by acknowledging efforts made by other authors. Furthermore,
researcher also need to make sure that data is not manipulated.
According to... research ethics encourage aims of research as well as they expand
knowledge in different terms. They also addresses the values which are required for collaborative
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work like fairness and respect, this is important as scientific research is dependent on
collaboration in between groups and researchers. Moreover, researchers can be considered
responsible for their actions in respect of misconduct, public money or rules and regulations
(Buil, De Chernatony and Martínez, 2013). This research is carried out by researcher in ethical
way and they ensured that they do not obviate any kind of laws, rules, regulations or policies.
Apart from this researcher has also taken into account privacy and confidentiality of data. This is
attained by making sure that data is not manipulated and data which is obtained is from genuine
resources.
CONCLUSION
From above discussion, it has been clear that advertisement creates a positive impact on
organisation. By this they can make people aware of what services they are being offering. There
are different methods through which advertisements can be done they include newspaper,
magazines, pamphlets, television, social media or through campaigns. This will help organisation
to raise their profit margins as well as brand image. Moreover, their customer base will also have
relevant impact.
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REFERENCES
Books & Journals
Buil, I., De Chernatony, L. and Martínez, E., 2013. Examining the role of advertising and sales
promotions in brand equity creation. Journal of Business Research. 66(1). pp.115-122.
Jahn, B. and Kunz, W., 2012. How to transform consumers into fans of your brand. Journal of
Service Management. 23(3). pp.344-361.
Keller, K. L., 2012. Understanding the richness of brand relationships: Research dialogue on
brands as intentional agents. Journal of Consumer Psychology. 22(2). pp.186-190.
Mirabi, V., Akbariyeh, H. and Tahmasebifard, H., 2015. A study of factors affecting on
customers purchase intention. Journal of Multidisciplinary Engineering Science and
Technology (JMEST). 2(1).
Sasmita, J. and Mohd Suki, N., 2015. Young consumers’ insights on brand equity: Effects of
brand association, brand loyalty, brand awareness, and brand image. International
Journal of Retail & Distribution Management. 43(3). pp.276-292.
Scheinbaum, A. C. ed., 2012. Online consumer behavior: Theory and research in social media,
advertising and e-tail. Routledge.
Ström, R., Vendel, M. and Bredican, J., 2014. Mobile marketing: A literature review on its value
for consumers and retailers. Journal of Retailing and Consumer Services. 21(6).
pp.1001-1012.
Thompson, D. V. and Malaviya, P., 2013. Consumer-generated ads: does awareness of
advertising co-creation help or hurt persuasion?. Journal of Marketing. 77(3). pp.33-47.
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