Analyzing the Effect of Online Advertising on Consumer Behavior

This research project critically analyzes the effect of online advertising on consumer behavior, using Haigh's Chocolates as a case study. It aims to understand the factors affecting consumer behavior, evaluate the impact of online advertisements on purchasing behavior, and provide recommendations for the organization. The study explores the compatibility of factors like age, culture, and perceptions with online advertising strategies. It investigates the research questions related to the impact of online advertising, the factors influencing consumer behavior, and the effect of online advertising on purchasing decisions. The research employs a conceptual framework analyzing consumer behavior and discusses the methodology, including research design, target population, sample frame, variables, data analysis, organization of the study, budget, and project activities. The study provides insights into the effectiveness of online advertisement models and their influence on consumer purchasing willingness.

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
CONSUMER BEHAVIOUR (CASE: HAIGH'S CHOCOLATE)
2

ANALYSING THE EFFECT OF ONLINE ADVERTISEMENT ON
CONSUMER BEHAVIOUR (CASE: HAIGH'S CHOCOLATE)
3
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

ANALYSING THE EFFECT OF ONLINE ADVERTISEMENT ON
CONSUMER BEHAVIOUR (CASE: HAIGH'S CHOCOLATE)
4
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

ANALYSING THE EFFECT OF ONLINE ADVERTISEMENT ON
CONSUMER BEHAVIOUR (CASE: HAIGH'S CHOCOLATE)
5
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

ANALYSING THE EFFECT OF ONLINE ADVERTISEMENT ON
CONSUMER BEHAVIOUR (CASE: HAIGH'S CHOCOLATE)
6
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.

ANALYSING THE EFFECT OF ONLINE ADVERTISEMENT ON
CONSUMER BEHAVIOUR (CASE: HAIGH'S CHOCOLATE)
7
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

ANALYSING THE EFFECT OF ONLINE ADVERTISEMENT ON
CONSUMER BEHAVIOUR (CASE: HAIGH'S CHOCOLATE)
8
 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

ANALYSING THE EFFECT OF ONLINE ADVERTISEMENT ON
CONSUMER BEHAVIOUR (CASE: HAIGH'S CHOCOLATE)
9
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.

ANALYSING THE EFFECT OF ONLINE ADVERTISEMENT ON
CONSUMER BEHAVIOUR (CASE: HAIGH'S CHOCOLATE)
10
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?

ANALYSING THE EFFECT OF ONLINE ADVERTISEMENT ON
CONSUMER BEHAVIOUR (CASE: HAIGH'S CHOCOLATE)
11
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.

ANALYSING THE EFFECT OF ONLINE ADVERTISEMENT ON
CONSUMER BEHAVIOUR (CASE: HAIGH'S CHOCOLATE)
12
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.