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Impact of Internet Advertisement on Consumers

A
DISSERTATION REPORT
ON
IMPACT OF INERNET ADVERTISEMENT ON CONSUMERS

SUBMITTED BY:

SANJEEV KUMAR MISHRA

IN THE PARTIAL FULFILLMENT OF THE

POST GRADUATE DIPLOMA IN MANAGEMENT (2008-2010)

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Impact of Internet Advertisement on Consumers

CANDIDATE DECLARATION

I hereby declare that the dissertation work “Impact of Internet Advertisement on Consumers” is
original and bonafide work carried out by me under the able guidance of Prof. V. K. Suri in
partial fulfillment of the requirement of post Graduate Diploma in Management (PGDM) at
Institute of Technology and Science (ITS), Ghaziabad.

I am also declare that this report is a result of my effort and no part of this report has been
published earlier or been submitted as a report by me for any degree or diploma or any similar
type of award for any Institute or University.

The above statement is true to the best of my knowledge.

SANJEEV KUMAR MISHRA

Enrollment No. 2008132

Date:

(Signature)

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Certificate

Certified that Sanjeev Kumar Mishra has carried out the research work
presented in this thesis entitled “Impact of internet advertisement on consumers” for
the award of Post Graduate Diploma In Management from I.T.S-Management and IT
Institute, Mohan Nagar under my supervision. The Dissertation embodies result of
original work and studies carried out by Student himself and the contents of the thesis do
not form the basis for the award of any other degree to the candidate or to anybody else.

(Prof. V.K. Suri)

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ACKNOWLEDGEMENT

I would like to acknowledge my profound gratitude to my faculty mentor, Prof. V. K. SURI,


Faculty, Institute of Technology & Science Group of Institutions, for his guidance, constant
inspiration and her keen interest shown on me during the completion of the dissertation report.

I would also like to thank all the respondents for giving me their precious time and relevant
information and experiences.

Last but not the least I would like to express my sincere thanks to my friends. I would have not
been able to complete my report without their constant support, care and encouragement.

Sanjeev Kumar Mishra


Student
PGDM (2008-2010)

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Table of content

Chapter number Topic name Page number


One Introduction
1.1 Introduction 06
1.2 Objective of study 09
1.3 Methodology 10
1.3.1 Background of research 10
questions
1.3.2 Research design 11
1.3.3 Survey, sampling and 12
procedures
1.3.4 Questionnaire 12
1.3.5 Tools and Techniques 13
1.3.6 Model 15
1.3.7 Software 17
1.4 Scope of study 17
1.5 Hypothesis 18
1.6 Limitations of study 19
Chapter two Literature review
2.1 Introduction 20
2.2 Youth’s access to and use of 23
the internet
2.3 Internet as a promotional tool 24
2.4 Integrated marketing 24
communication
2.5 Internet values 25

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Chapter three Theoretical concepts


3.1 Consumer buying behavior 26
3.2 Advertising 28
Chapter four Data Analysis 29
Chapter five Discussion 35
Chapter six Summary, findings and
Implications
6.1 Summary 38
6.2 Findings 39
6.3 Implication 39
References
Annexure

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Chapter one: INTRODUCTION

“Advertising research is one-half frustration, one- half exclamation point, and one-half question-
mark. If this adds up to more than 100 percent, it proves that mathematics and research
sometimes gives confusing results.” (Michael Ryan cited in Baker 1968, p. 144)

1.1 - Introduction - The evolution of the Internet has provided a new communication tool for
people all over the world to access a vast amount of data and resources from any geographical
location. The internet has experienced widespread adoption. The evolution of new technology
and the internet has introduced interactive and new opportunities for integrated marketing
communication into the company-customer relationship. Traditional advertising agencies are
being forced to adopt interactive marketing strategies in order to fulfill their clients’ online
marketing needs. Within the adoption and use of interactive technology within the advertising
industry this study investigates the difference between traditional advertising and the value of the
internet as a promotional tool.
Online advertising is the means of promoting a product on the Internet using various Internet
features. With the arrival of Internet, the business world has become digitalized and people
prefer buying things online, which is easier and faster. Online advertising otherwise known as e-
advertising gives a new dimension and unique charm to the product, which is an added
advantage.

The primary benefit of online advertising over offline business is monetary advantage, which
cannot be gained locally. This leads to great progress in business, which is the ultimate aim of
any businessman. Online advertising offers a wide spectrum of recognition, which is
incomparable to any other mode of advertising. Online advertising has no time limitations and is
viewed day and night throughout the globe. Online advertising reduces the transaction cost and
contributes to the profit of the company and is secure in competition against international
marketing. The owner is much more satisfied because a secure business is more beneficial and
reliable. Certainly online advertising is one step ahead over others and helps to keep pace with
the fast changing world. 'Pay- per- click' advertising is one form of advertisement and is a very

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cost effective way of getting advertised for the price of a half page advertisement in a regional
newspaper. Another form of online advertising, which is gaining popularity, is e- mail and it has
enjoyed tremendous growth in the last few years. Since there is a change in trend of shifting from
print to online, online advertising will continue to grow as long as the technology advances.
Small businesses find online advertising offering maximum exposure for a minimal cost. Small
businesses target their ideal clients and find that online advertising is an affordable way of
advertising. Online advertising gives a direct response, making it profitable to both the consumer
and the seller. Banner advertisements depict in pictorial form and are commonly viewed on high
traffic sites and also give a hyperlink back to the advertisers own site. The price varies according
to the number of advertisements shown. Sponsorship advertisements are larger than banner
advertisements and contain considerable amount of text and placed on e-zones
or online newsletters. The price varies according to the number of readers of the newsletter.

The services of online advertisement agencies have made them to run the campaigns in an
effective way and are more feasible. It also helps the marketers to keep an eye on the
performance of advertising campaign, which is impossible in other types of media. This enables
them to modify the campaign by analyzing the data thus targeting the customers. The online
advertising agency ensures a wide reach to the audience through the central advertisement server
since it uses online advertising network. In conclusion, online advertising is the cheapest and
effective mode of advertising whose success has proved its potential.
Across the product categories internet advertising share in marketing budget has been on
continuous increase. Internet is a new medium for interacting and communicating with partners,
customers, and suppliers locally and globally (Fink and Laupase, 2000) and Internet advertising
can enhance efficient use of advertising dollars (O’Connor and O’Keefe, 1997). Internet
advertising has rapidly become a new popular communication medium ( Luk, Chan and LI 2002)
firms have been exploring possibility of usage of Internet in marketing because of its core
advantage in the capacity of fast , integrated and interactive exchange of information (Avlonitis
and Karayanni 2000). The importance of successful communication was highlighted in Sheth’s
conceptual framework of buyer- seller interaction, which suggested that a satisfactory sales
outcome is dependent on degree to which the parties involved are compatible regarding the style
and content of their communication.

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Advertising is an important aspect of the brand communication to connect with the consumers,
there are several modes to communicate with the consumers, and Digital advertisement is one of
them. It is a relatively new mode to promote brands by using Internet, mobile and other channels.
It is the practice of promoting products and services using digital distribution channels to reach
consumers in a timely, relevant, personal and cost-effective manner. Digital advertising includes
many of the techniques and practices contained within the category of Internet Marketing; with
the internet becoming accessible by mobile phones now, Internet is becoming all pervasive to the
consuming class. Previously seen as a stand-alone service in its own right, it is frequently being
seen as a domain that can and does cover most, if not all, of the more traditional marketing areas
such as Direct Marketing by providing the same method of communication with an audience but
in a digital fashion. Some companies like Amazon and Dell created success stories through the
usage of internet in marketing that it has made a large number of organizations motivated to
harness the potential of Internet Marketing. Advertising on Internet is distinctive because of its
ability to be interactive (Hoffman, Novak and Chatterggee 1995) and enables potential and
existing customers to customize their viewing behavior (Luk et.al2002). In some product
categories which are digital in nature the usage of Internet are well documented. For this
research work the focus of study will be on the laptop buyers as it belongs to an Internet and
computer usage related product category. The consumers and potential consumer of this product
category is expected to be the target of Internet advertising.

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1.2 Objectives of the study

The objective the study is to measure the effectiveness of internet advertising, that what is the
impact of internet advertising on consumers in today’s scenario.

1. To study the effectiveness of Internet advertising on generation of awareness


among consumers.

2. To study the effectiveness of Internet advertising in consumer decision making

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1.3 Methodology

“Advertising people who ignore research are as dangerous as generals who ignore decodes of
enemy signals.”
(David Ogilvy cited in Richards 1996, p.45)
This chapter explains the research methodology used to test the overarching research question in
this study, that is “How will the introduction of the internet as a promotional tool impact on
consumers?” The chapter outlines the following relevant information, including discussion of the
research design used to address this research question, justification for adopting a survey
research method to measure customer expectations and challenges and limitations of using web-
based data collection procedures.

Researchers all have their own long term research goals and therefore they can often develop
their own justifications for any possible error or harm to their research in short term, based on the
perceived long term benefit to society (de Vaus, 1995). This study adopts a non-probabilistic and
convenience, qualitative and quantitative data analysis is also utilized in this study to explain
opinions and attitudes in the research participants own words, in particular, regarding the value
of the internet as a promotional tool.

1.3.1 - Background and Research Questions

The adoption and provision of Internet services is important concern to the advertising agency.
Advertising agencies need to understand how the promotion of a client’s product, services or
idea through and online advertising.
Several research studies have been conducted on the use of the internet and World Wide Web
(WWW) over the past decade. The earlier researches primarily focused on profiling Internet
users, as well as the number of hosts and users online, and more recently on research and
measurement issues relative to internet use (Harvey, 1997). Only limited research to date has
been undertaken to examine the implementation and the implications of incorporating the

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Internet into marketing and advertising strategies. In the marketing domain Donna Hoffman and
Thomas Novak’s work, published in the Journal of Marketing in 1996 is an exception. Whilst
considerable B2C research has been undertaken to examine changing relationships in marketing,
only limited research to date has focused on explaining how the internet will change
relationships in business to consumer transactions. The business to consumer literatures has been
reviewed and applied to this study in order to respond to the board research questions that will be
addressed in this study.
The focus of this study is on the use of the internet in the advertising industry and examines if
internet based advertising experiences are influencing consumer expectations. This is important
research because new technology, such as the internet, will influence how advertising agencies
maintain the right company-customer relationship to build customer loyalty.

1.3.2 Research Design

The internet is not restrained by boundaries. The survey tool developed gathered both qualitative
and quantitative data. A web- based survey approach was selected for this study because sending
the questionnaire via email allowed respondents to receive and answer the questionnaire, without
any time restrictions and at a time most convenient to them and the submission of questionnaire
via email and internet access was an inexpensive method of data collection.
A sample of 310 respondents was selected by following non-probabilistic convenience sampling
technique, as it suits the exploratory study like this (Tull et.al, 2001, pp 544). A non disguised
structured questionnaire was used for the study. The study is done on a population of youth in the
National Capital Region. An attempt was made to take a good cross section of the population.
Through this methodology our intent will always be focused to ascertain the impact of internet
advertisement on effectiveness of consumer decision making and purchase behavior of the
consumers.

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1.3.3 Survey sampling and procedure


Survey research is one of the most important used research methods for collecting primary data
(Assael, 1993). Kotler (1994, p.135) suggests that survey research “stands midway between
observational and focus group research, on the one hand and experimental research on the other
hand”. Survey method is therefore well suited to a descriptive analysis on consumer perceptions
of the value of the internet as a promotional tool. Survey data can be reveal the descriptive,
quantitative information that can be used to measure peoples’ beliefs, knowledge, preferences
and level of satisfaction (Kotler, 1994). A further innovation of the research undertaken in this
study was incorporating the use of web-based survey data collection approach to gather
participant’s responses.
This study employed a non-probabilistic sampling approach. A non-probabilistic sample occurs
where people have a greater, but unknown chance than others of selection and are used in
situations where probability sampling techniques are either impractical or unnecessary (Babbie,
1995; de Vaus, 1991).

1.3.4 Questionnaire

Questionnaire are one of the most commonly used research tools in management research and
are highly useful when data is required from a representative sample of a larger population. This
study required to develop one questionnaire to know the consumer perception and knowledge
about the internet advertising. Five point Likert scale is most common interval scale used in
survey research, typically taking the format of: 1-strogly disagree, 2-disagree, 3-can’t say, 4-
agree, 5-strongly agree.

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1.3.5 Tools and Techniques used

The Chi-Square test is used for the analysis for the data to know the significance of the study.
Chi-Square Variate – The Square of a standard normal Variate is known as a Chi-Square
Variate with 1 degree of freedom.

χ2 ~ N (µ, σ2), then Z=X-µ/σ is N (0.1)

And Z2 = (X-µ/σ) 2 is Chi-Square Variate with 1 degree of freedom.


In general If Xi (i=1, 2… n) are n independent normal variates with mean µi and variance
σi2, (i=1, 2… n), then
χ2=∑ (X-µ/σ) 2, i=1,2,…,n, is a Chi-Square variate with n degree of freedom.

The sum of independent Chi-Square variates is also a Chi-Square variate. More precisely,
if χi2 , (i=1,2,…,k) are independent Chi-Square variates with ni degree of freedom
respectively, then the sum ∑ χi2 , i=1,2,…k, is also a chi-square variate with ∑ ni ,
i=1,2,…k, degree of freedom.
Application of Chi-square Distribution- Chi-square Distribution has a large number of
applications in statistics, some of which are enumerated below:
I. To test if the hypothetical value of the population variance is σ2= σ02.
II. To test of goodness of fit.
III. To test the independence of attributes.
IV. To test the homogeneity of independent estimates of the population variance.
V. To combine various probabilities obtained from independent experiments to give
the single test of significance.
VI. To test the homogeneity of independent estimates of the population correlation
coefficient.

Chi-Square Test of Goodness of Fit- A very powerful test for testing the significance of the
discrepancy between theory and experiment is known as “Chi-Square test of goodness of fit”. It

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enables us to find if the deviation of the experiment from theory is just by chance or it is really
due to the inadequacy of the theory to fit the observed data.
If Oi, (i=1,2,…,n) is a set of observed frequencies and Ei, (i=1,2,…,n) is the corresponding set of
expected frequencies, then Karl Pearson’s chi-square, given by

χ2= ∑ [(Oi - Ei)2/ Ei]


∑Oi = ∑ Ei
Where, i=1,2,…,n
Follows, chi-square distribution with (n-1) degree of freedom.

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1.3.6 Model

CONSUMER BUYING DECISION PROCESS


Consumer buying decision process is the processes undertaken by consumer in regard to a
potential market transaction before, during and after the purchase of a product or service.
Consumer decision making process generally involves five stages. Those are as follows:

Newest Design & Price Quality Brand Features


Technology Technology

Problem Information Alternative Purchase Post


Recognition Search Evaluation Decision Purchase
Actions

Interpersonal
Influence

1- Problem Recognition:
Purchase decision making process begins when a buyer becomes aware of an unsatisfied need or
problem. This is the vital stage in buying decision process, because without recognizing the need
or want, an individual would not seek to buy goods or service. There are several situations that
can cause problem recognition, these include:
• Depletion of stock
• Dissatisfaction with goods in stock

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• Environmental Changes
• Change in Financial Situation
• Marketer Initiated Activities
It’s when a person recognizes that she cannot make a call from her mobile phone that’s when she
recognizes that her phone has been damaged i.e. the phone has hardware problems and needs to
be repaired or buying a new piece.
2- Information Search:
After the consumer has recognized the need, he / she will trying to find the means to solve that
need. First he will recall how he used to solve such kind of a problem in the past, this is called
nominal decision making. Secondly, a consumer will try to solve the problem by asking a friend
or goes to the market to seek advice for which product will best serve his need, this is called
limited decision making.
Sources of information include:
• Personal sources
• Commercial Sources
• Public sources
• Personal experience
3- Alternatives evaluation:
Consumers’ evaluates criteria refer to various dimension; features, characteristics and benefits
that a consumer desires to solve a certain problem. Product features and its benefit is what
influence consumer to prefer that particular product. The consumer will decide which product to
buy from a set of alternative products depending on each unique feature that the product offers
and the benefit he / she can get out of that feature.
4- Purchase Action:
This stage involves selection of brand and the retail outlet to purchase such a product. Retail
outlet image and its location are important. Consumer usually prefers a nearby retail outlet for
minor shopping and they can willingly go to a far away store when they purchase items which
are of higher values and which involve higher sensitive purchase decision. After selecting where
to buy and what to buy, the consumer completes the final step of transaction by either cash or
credit.

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5- Post-purchase Actions
Consumer favorable post-purchase evaluation leads to satisfaction. Satisfaction with the
purchase is basically a function of the initial performance level expectation and perceived
performance relative to those expectations. Consumer tends to evaluate their wisdom on the
purchase of that particular product. This can result to consumer experiencing post purchase
dissatisfaction. If the consumer’s perceived performance level is below expectation and fail to
meet satisfaction this will eventually cause dissatisfaction, and so the brand and/ or the outlet
will not be considered by the consumer in the future purchases. This might cause the consumer
to initiate complaint behavior and spread negative word-of-mouth concerning that particular
product.

1.3.7 Software

1- Statistical Package for Social Science 12.0 (SPSS)


2- M.S. Excel

1.4 Scope of study

The dawn of the internet era opened up amazing new possibilities. Impossible is not a word
anymore! India has also joined the bandwagon and the numbers themselves do all the talking.
The latest statistics reveal that 400 million people access internet regularly in India and that is
jump of 700% in last six years. And, here comes the best part; the internet users as of now
comprise of only 3.6% of the population. Now you can imagine the scope of internet
Advertisement in India! Now that we have come to terms with the tremendous scope of internet
advertisement in India, we have to understand that advertisement through the internet can be an
entirely different ball game. In fact it is a potent combination of technology and marketing
insight.

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1.5 Hypothesis

Inferential statistics allow marketing researchers to make suggestions or draw conclusions from a
sample to the population of respondents (Neuman, 1994). Such statistics infer that the pattern of
behavior exhibited by a sample, are likely to be the same in the greater population from which
the sample was drawn (de Vaus, 1995). In inferential statistics probability theory is utilized in
order to test hypothesis formally (Neuman, 1994). Firstly, hypothesis testing involves predictions
being developed from a review and understanding of relevant theory, and then data being
collected and interpreted based on an understanding of the theory in order to test a hypothesis (de
Vaus, 1995).
In order to examine the hypotheses for this research study so as to explore whether relationship
exist between customer awareness and internet advertising, survey data where calculated and
analyzed using the chi-square statistic. The chi-square statistic can be employed as either a test
for statistical independence: which tests whether there are associations between 2 or more
variables in the study; or as a test of goodness of fit: which tests to reveal whether there are any
significant differences between and observed frequency distribution and a theoretical
distribution?
Ticehurst and Veal (1999) states that the Chi-Square statistic compares the difference between
the observed values and the expected values, and the greater the difference between the observed
and expected values contributes to a greater value of Chi-Square. Also Chi-Square has no upper
bound which makes it difficult to ascertain of feel for its value, and further more the chi-square
does not indicate exactly how 2 variables may be related ( Aaker et al., 2001). When measuring
the association between two variables chi-square is also viewed as being flawed, in that even
though chi-square may reveal an association or a relationship between two variables, it only
provide a weak indication of the strength of the association (Aaker et al., 2001).

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The following hypotheses are examined using statistical analysis-

H01: There is no significant effect of advertising on generation of awareness amongst consumer.


H11: There is significant effect of advertising on generation of awareness amongst consumer.

H02: There is no significant effect of internet advertising on consumer decision making.


H12: There is significant effect of internet advertising on consumer decision making.

1.6. Limitation of the study

Internet advertisement needs the user to be a Computer literate and requires a Broadband Internet
Connection since some Website cannot be viewed properly or takes longer time to load in low-
speed or dial-up connections this will makes the targeted audiences to step away. If the Website
designing lacks user friendly nature then it results in a negative manner. There will be a
possibility of delay in goods deliveries and the inability to touch and feel the products moreover
the concern about the refund policy of a company which makes the user to think twice before
going to shop on-line. The Major disadvantage is the fear of Security by giving their financial
transaction details over the Internet however there are some good number of trusted Website for
on-line shopping is there which is relatively safe to Shop. In this way one can easily say that
consumer only prefer internet as a source of information and willing to purchase anything online.

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Chapter two: Literature review

“It is insight into human nature that is the key to the communicator’s skill. For
whereas the writer is concerned with what he puts into his writings, the
communicator is concerned with what the reader gets out of it. He therefore
becomes a student of how people read or listen.”
(Bill Bernbach cited in Richards 1996, p. 10)
2.1- Introduction:

Before the dot.com bust in late 2000, few had ever pondered whether there was a need for
increasing corporate profits by customizing marketing communications for different segments of
Internet users (J.W. Kim et al., 2001). According to the market-tracking firm Webmergers.com
(2003) at least 4854 Internet companies were either acquired or declared bankruptcy in the three
years following the investment boom in the first quarter of 2000. As dotcoms accounted for two-
thirds of the advertising dollars spent on-line in 2000 in the USA (Rosner, 2002) it is important
for advertising practitioners and researchers to identify the factors affecting the effectiveness of
Internet advertising. Many factors have been found to influence the effectiveness of Internet
advertising. For example, Rodgers and Thorson (2000) proposed the interactive advertising
model in which Internet advertising effectiveness was influenced by consumer-controlled factors
(e.g. the motives and modes for using the Internet and cognitive tools) and advertiser-controlled
factors (e.g. advertisement types, advertisement formats and advertisement features).
Consumers’ attitudes towards Internet advertising were included as a critical consumer-
controlled factor influencing advertising effectiveness.
In order to explain better whether and how clusters of Internet users differ in their attitudes
towards Internet advertising this study proposed a lifestyle segmentation approach to
understanding the relationships between these variables. Earlier studies (Ducoffe, 1996;
Kamakura and Wedel, 1995; Mehta and Sivadas, 1995; Schlosser et al., 1999) mainly employed
demographic variables for classifying Internet users. However, the advertising literature has
repeatedly pointed out the limited explanatory power of these traditional demographic criteria
(Plummer, 1974; Wells, 1975; González and Bello, 2002). Despite the availability of lifestyle

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segmentation literature only a few studies (K.H. Kim et al., 2001; Schiffman et al., 2003) have
investigated the applicability and predictive power of lifestyle segmentation for understanding
Internet users’ attitudes towards Internet advertising.
Recent interest in Internet advertising has produced a plethora of literature in marketing and
advertising areas. While marketing researchers have often employed consumer behavior
variables for studying Internet advertising (Pavlou and Stewart, 2000; Dholakia and Bagozzi,
2001; Stewart and Pavlou, 2002) advertising researchers have followed the advertising research
traditions in order to focus on media characteristics (Shamdasani et al., 2001), message
characteristics (Rodgers and Thorson, 2000; Kim and Leckenby, 2002) and the processing of
advertising information (see Rodgers and Thorson (2000) for a review).
Internet advertising has been perceived by many consumers to be intrusive (Li et al., 2002) and
disturbing (Reed, 1999). As a result, consumers rely on cognitive, behavioral and mechanical
solutions for avoiding Internet advertisements (Speck and Elliott, 1997). Li et al. (2002)
summarized earlier studies on advertisement avoidance and argued that such behavior occurred
as a result of users’ general attitudes towards advertising. Although scholars (Rust and Varki,
1996) have posited that interactive advertising should be less intrusive because of its
interactivity, many advertisers have found that forced exposure may be the most effective way of
ensuring consumer awareness. Green and Elgin (2002) found that banner advertisements on the
Internet produced dismal results, with the click-through rate being as low as 0.3%. In addition,
software for stopping pop advertisements on the Internet or filtering spam e-mails completely
has been widely available.
The current interest in internet advertising gives the advertising researchers region to reconsider
the fundamental ways brands are communicating in the established mass media (Philport &
Arbittier, 1997). Abernethy and Frank, 1996 data analysis of studies of advertising content
provides an extensive review of variation in information levels across media. Resnik & Stern,
1937 content analytic procedure for measuring types of information has been widely used in
cross media and within medium study. It would be prudent to address several research issues that
question the relevance of these norms in today and tomorrows media environment (Philport &
Arbittier, 1997). It provides us an outline that up to which extend internet advertising is useful
for the organization point of view and what is the importance of brand communication. Internet
advertising helps market products, services, and the company (Van Doren et al, 2000; Fink and

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Laupase, 2000) by showing colorful product catalogues and by providing potential and existing
customers with detailed product information and online order forms around the world (Herbig
and Hale, 1997; Quelch and Klein, 1996). Brand equity research conducted by Agres and
Dubitskey, 1996 stresses that the communication requirement of brands vary significantly by
their relative equity or position among consumers. Mc Queen, 1993 has pointed out that in this
media- rich world, consumers come in contact with brand commercial communications in a
variety of media environment. Stern, Krugnan and Resnik, 1981 rather than focusing on the
variation of informational content in each commercial advertisement, this investigation analyzed
the number of unique ads for each brand by media. “All player advertising will use lifestyle
imagery to relate product to its core target group by association” (Spitzer, Miss & Bates, 1980 a,
p.2). A key guideline for building strong brand to have an identity, position, and execution that
are consistent over time (Aaker, 1996; D’Alessandro, 2001; Ries & Ries 1998). The multi-
channel solution mix only provides the means of communication. Having permission- based
consumer data, which overtime and through a continued dialogue with the desired audience will
transform into inside and knowledge (David Burden, Executive chairmen of legion interactive).
Internet advertising is a tool which may help an organization cut through the advertising clutter
and reach to the consumer mobile and mailbox. Several studies have compared online
advertising to other forms of media. Yoon and Kim (2001) found Internet advertising as the best
medium in terms of media preference but it lagged behind TV in advertising effectiveness. They
also found that that Internet advertising was better suited for high-involvement products
appealing to highly involved as well as rationally oriented consumers to fulfill their information
needs. Other studies found evidence that advertising initiatives for both print and the Web are
equally effective. Given equal opportunity for exposure to the target audience, advertisements
designed for print should be no less effective if transferred to the Web (Gallagher, Foster, and
Parsons, 2001a; 2001b). Research on banner-ad effectiveness found advertisements for familiar
brands tend to wear out quickly, whereas banner ads for unfamiliar brands need multiple
exposures to wear in. In addition, research on banner-ad effectiveness found that novice users are
more affected by banner ads than are expert users (Dahlen, 2001). In comparing different forced-
exposure levels of banner ads, those with the highest forced exposure level yielded the most
desirable advertising effect, including favorable attitude toward the banner ad, favorable attitude
toward the brand, and high purchase intention (Cho, Lee, and Tharp, 2001). A study on “smart

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banners,” or keyword-activated banners that are tied to Internet user search keywords, found that
as search keywords became more specific, search engines returned fewer exact banner matches
(Dou, Linn, and Yang, 2001).

2.2- Youth’s Access to and Use of the Internet

There is a body of literature which has estimated, and Monitored, the percentage of youth who
have access to and/or who use the Internet. This literature has also identified the uses that youth
make of the Internet. For example:
A national survey conducted by the Pew Memorial Trust in 2000 (Rainie & Packel, 2001)
reported that 66% of households with children under 18 had Internet access.
A national telephone survey conducted by the National School Boards Foundation (2000)
reported that 70% of households with children had Internet access at home.
An analysis of Internet use by the National Telecommunications and Information
Administration (U.S. Department of Commerce, 2002) based on a national Current Population
Survey conducted by the U.S. Bureau of the Census in 2001 reported that 51.1% of youth 10 to
13 years of age and 61.4% of youth 14 to 17 years of age had Internet access at home.
A national survey conducted in 2002 for the Corporation for Public Broadcasting (2003)
reported that 78% of youth 2 to 17 years of age had Internet access at home.
Although there are variations among these estimates of household access to the Internet for youth
due to differences in the time frames of the surveys and to the age limits of youth, these surveys
demonstrate that a considerable majority of youth have Internet access at home. In addition,
nearly all youth have Internet access at school. As early as 2002, it was estimated in a survey
conducted by the National Center for Educational Statistics (Kleiner, Lewis, & Greene, 2003)
that 99% of public schools had Internet access and that 92% of the instructional rooms in these
schools had access. These studies have also reported that youth, in general, use the Internet
primarily for communicating with friends, for playing games and engaging in other kinds of
recreational activities, and for searching for information both for personal use and for school-
related activities (see, e.g., Lenhart, Rainie, & Lewis, 2001).

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2.3 - Internet as a promotional tool

The internet is a relatively new communication tool that provides people with access to
information from anywhere in the word. The internet is a collection of information resources that
can be obtained with the ease. Hoffman et al. (1997) suggest that the introduction of the internet
has led to the creation of a global online marketplace. And , the evolution of the internet as a
global communication infrastructure (Cae, 2000) has created a new advertising channel for
advertising agencies to utilize and will provide advertisers with the means to more cost effective
target their promotional message to consumers.
As a new advertising channel the internet and particularly the World Wide Web portion of the
internet, are challenging traditional forms media advertising (Hoffman and Novark, 1996; Hearn,
Mandeville and Anthony, 1998). Meeker (1998) defines a mass communication medium as the
communication from “One person or group of persons through a transmitting device (a medium)
to large audience or market”. The internet offers an interactive alternative to mass media
communication through the use of web pages, discussion and email (Hoffman and Novak. 1996).
A significant advantage for advertisers will be the opportunity to communicate more directly
with individual consumers through this medium. Marketers will also be able to promote their
products and services in a personalized, targeted manner to interested people within their target
market. Advertisers will need to re-address their techniques, services and agency structure and
evolve new communication strategies for the internet as market share is being lost to this more
personalized, interactive form of internet advertising. The following section now turns to a
detailed discussion describing the influence of the internet on the advertising message and its
role in integrated marketing communication.

2.4 - INTEGRATED MARKETING COMMUNICATION

The internet has contributed a greater adoption of integrated marketing communication


strategies, by allowing marketers to communicate more directly with individual consumers (low,
2000). Internet functions become integrated into a company’s communication mix which
permits the operation of internet as an advertising medium to be incorporated alongside more
traditional media types.

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2.5 - INTERNET VALUE

The value of internet as an advertising service in this study relates to utilizing the internet as a
new advertising medium or promotional tool to the benefit of the advertiser. There are numerous
benefits of using the internet over a traditional mass media channel. The internet provides an
unlimited amount of information for the consumer to access, at a time convenient to them. Using
the internet as an advertising channel introduces infotainment and edutainment in to the service
experience, thus engaging and enticing a new online audience and buy a clients product, service
or idea. Apart from reducing wastage in the marketing budget traditionally evident in above the
line campaigns, more direct, personal and rewarding relationships can be developed through
advertising activities via this new online channel.

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Chapter Three: Theoretical concept

3.1- Consumer Buying Behavior

Definition & Meaning: Consumer behavior refers to the mental and emotional process and
observable behavior of consumers during searching, purchasing and post consumption of a
product or service. Consumer behavior involves study of how people buy, what they buy,
when they buy and why they buy. It blends the elements from psychology, sociology, socio
psychology, anthropology and economics. It also tries to assess the influence on the consumer
from groups such as family, friends, reference groups and society in general. Buyer behavior has
two aspects: the final purchase activity visible to any observer and the detailed or short decision
process that may involve the interplay of a number of complex variables not visible to anyone.
Everybody in the world is the consumer. Each of us buys and sells or consumes goods and
services in the life. Consumer behavior is very complex and is determined to a large extent by
social and psychological factors. Consumer Behavior can be defined as those acts of individuals
directly involved in obtaining, using and disposing of economic goods and services.
The relevance and importance of understanding consumer behavior is rooted in the modern
marketing. The needs of not even two consumers are the same. Therefore, they buy only those
products and services, which satisfy their wants and desires. To survive in the market, a firm has
to be constantly innovating and understand the latest consumer needs and tastes it will be
extremely useful in exploiting marketing opportunities and in meeting the challenges that the
Indian market offers. A study of consumer behavior is significant for regulating consumption of
goods and thereby maintaining economic stability. Within the broad framework of marketing, the
area that entices the most researchers is the study why a consumer behaves in a particular way.
The complexity of the behavior, however, varies with the nature of the product and the need,
which it is required to satisfy. The study of consumer behavior is the study of how individuals
make decisions to spend their available resources on consumption of related items. Consumer
behavior is an applied discipline. Its application exists at two different levels of analysis. One is
at the micro level perspective and other at the macro level perspective. Micro level seeks
application of the knowledge faced by the individual, firm or an organization. The macro

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perspective applied knowledge of consumer includes the aggregate level of problem faced by
large groups or by society as a whole. Consumer behavior provides a sound basis for identifying
and understanding consumer needs. It is the act of the individuals directly involved in obtaining
and using economic goods and services. The study of consumer behavior is an essential
component of marketing. The adoption of marketing concept by the marketers provides the
impetus for the study of consumer behavior. In case of New Product Introduction in the market,
there is a risk of product failure. To increase the chances of success of new products, better
information of the consumer behavior is required. Their desires, tastes and preferences are to be
taken care of. So from all these aspects the study of consumer behavior is important.

Factors Affecting Consumer Buying Behavior

Consumer buying behavior is influenced by the major three factors:


.
I. Social Factors
Social factors refer to forces that other people exert and which affect consumers’ purchase
behavior. These social factors can include culture and subculture, roles and family, social class
and reference groups.
II. Psychological Factors
These are internal to an individual and generate forces within that influence her/his purchase
behavior. The major forces include motives, perception, learning, attitude and personality.
III. Personal Factors
These include those aspects that are unique to a person and influence purchase behavior.
These factors include demographic factors, lifestyle, and situational factors.

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3.2- Advertising:

‘Advertising is the mother’s milk of all the mass media;” - Wall Street Journal technology
columnist Walt Mossberg
“Half the money I spend on advertising is wasted; the trouble is I don't know which half.” - John
C. Wanamaker, “father of modern advertising” (1838-1922)
Understanding how Internet advertising tools work and which ones Achieve communications
objectives are a challenge confronting the online advertising industry. Advertising on the Web
began to be viewed by many managers as a potentially serious form of communications in
1994whenthefirstcommerciallyavailablebrowserwasintroducedand the first banner
advertisements were sold (Internet Advertising Bureau, 1997). Banner ads have generally been
recognized as one of the earliest attempts at Internet advertising. Now, almost a decade later,
after ubiquitous trial and error, banner ad effectiveness as a marketing tool is being seriously
questioned (Bayan, 2001).

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Chapter Four - Data analysis

This chapter presents the findings of the study, which includes analysis of the data using
descriptive statistics, which describes the sample of consumers that responded to the survey. All
computation was carried out using SPSS 12. A combination of qualitative and quantitative data
analysis was used in this research study. This strategy was utilized in order to provide a
comprehensive reporting on all results using both statistical data analysis and descriptive
qualitative analysis. The use of quantitative data analysis in this study involved the use of a
specialized, standardized set of data analysis techniques which were based on applied
mathematics.

Descriptive Statistics

Widely used in survey research; descriptive statistics allow researchers to summarize patterns of
behavior within a sample draw comparisons (de Vaus, 1995).similarly, preliminary descriptive
statistics have been useful in this study to assist in describing the survey data collected from the
sample. The survey data has been used to categorize information to reveal trends and patterns in
usage of the internet value and other marketing factors from consumer perspectives.

Reliability Statistics

Cronbach's
Alpha Based
on
Cronbach's Standardized N of
Alpha Items Items
.931 .920 34

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Cronbach's alpha is a test for a model or survey's internal consistency called a 'scale reliability
coefficient' sometimes. Cronbach's alpha assesses the reliability of a rating summarizing a group
of test or survey answers which measure some underlying factor. A score is computed from each
test item and the overall rating, called a 'scale' is defined by the sum of these scores over all the
test items. Then reliability is defined to be the square of the correlation between the measured
scale and the underlying factor the scale was supposed to measure.
The value of Cronbach’s alpha is 0.931. If the Cronbach’s alpha is greater than 0.7, then the data
is fair for analysis, if it is greater than 0.8, then it is good for analysis and if it is around 0.9 then
the data is excellent for the analysis. Here researcher found that the value of Cronbach’s alpha
0.931 this shows that the collected data is excellent and reliable for analysis.

Summary Item Statistics

Maximu
Minimu Maximu m / N of
Mean m m Range Minimum Variance Items
Item Means 3.047 1.948 3.671 1.723 1.884 .269 34
Item Variances .858 .379 1.090 .711 2.876 .044 34
Inter-Item
.245 -.143 .701 .843 -4.914 .047 34
Covariance’s
Inter-Item
.253 -.221 .678 .899 -3.072 .057 34
Correlations
The covariance matrix is calculated and used in the analysis.

A mathematical representation of the typical value of a series of number, computed as the sum of
all the numbers in the series. The mean is most commonly used type of average and is often
referred to simply as the average.
It is a very important tool used in measurement of central tendency which shows the significance
of the distribution of probability in the collected data. And when mean, median and modes are

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equal in distribution then the distribution is known as normal distribution which means the
probabilities of the sample is normally distributed.
In probability theory and statistics, the standard deviation of a statistical population, a data set, or
a probability distribution is the square root of its variance. Standard deviation is a widely used
measure of the variability or dispersion, being algebraically more tractable though practically
less robust than the expected deviation or average absolute deviation.
It shows how much variation there is from the "average" (mean). It may be thought of as the
average difference of the scores from the mean of distribution, how far they are away from the
mean. A low standard deviation indicates that the data points tend to be very close to the mean,
whereas high standard deviation indicates that the data are spread out over a large range of
values. In addition to expressing the variability of a population, standard deviation is commonly
used to measure confidence in statistical conclusions.

1. What has been your general experience towards internet advertisement?

Mean Standard Deviation Chi-Square d.f.


Attractive 3.5097 0.93038 255.129 4
Explorer 3.5355 0.91218 239.290 4
Annoying 2.7935 1.0440 101.194 4
The above table is showing the value of mean, standard deviation and Chi-square for general
experience of respondents towards internet advertisement. As we see that the mean of
attractiveness and explorer towards internet advertisement is 3.5097 and 3.5355 and standard
deviations are 0.93038 and 0.91218 which indicates that most of the respondents are strongly
agree on the point that internet advertisements are attractive and able to explore the
information’s. And on the point that internet advertisements are annoying there is a mixed
response. Here calculated value of Chi-Square is 255.129, 239.290 and 101.194 with 4 degree
of freedom at p=.000 at 95% confidence level of interval and tabulated value of chi-square is
13.277 which shows that the null hypothesis is rejected.

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Impact of Internet Advertisement on Consumers

2. Do you think that internet Advertisements?

Mean Standard Deviation Chi-Square d.f.


Benefit Consumers 2.8935 1.01044 124.613 4
Powers the economy 2.9968 1.02240 103.774 4
Fund Sports & 3.4903 0.96117 252.903 4
Culture

Create social 3.2581 0.98755 145.419 4


awareness

The above table explains the value of mean, standard deviation and chi-square for the general
perception about the internet advertisement. As the results are clearly shows that internet
advertisements are very helpful in creating awareness.
3. Please rate the following features in an Internet advertisement based on their
preference to you:

Mean Standard Deviation Chi-Square d.f.


Attractive 3.4935 0.90215 266.290 4
Animation 3.3065 0.93803 217.323 4
Music 3.0774 0.93847 149.032 4
Textual content 2.9355 0.90791 159.258 4
Creative 2.9839 0.96024 133.387 4

The above table shows the test statistics for the liking of consumer that which kind of internet
advertisement mostly people preferred. As the test statistics shows that textual advertisements
are not very much preferred by the respondents.
4. How do you find the information content of online advertisements?

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Impact of Internet Advertisement on Consumers

Mean Standard Deviation Chi-Square d.f.


Helpful 2.8548 0.95271 153.323 4
Important 3.0839 0.92050 160.645 4

Easy Enabler for 1.9484 0.76993 115.858 3


purchase
Convey 1.9548 0.68116 200.271 3
Product/Service
Benefits
appropriately

This test statistics is to defining the information content of internet advertisement. In this table
we see that the respondents think that online advertisements are helpful but not helpful in
purchase decision making.

5. How do you find the internet Advertisements?

Mean Standard Deviation Chi-Square d.f.


Distracting 3.3323 0.88639 191.903 4
Disturbing 3.6710 0.96950 215.839 4
Forced upon you 3.5774 0.98145 189.032 4
Interfering 3.5161 1.00391 178.290 4

This table is showing the results of likeliness of the internet advertisement that what a general
people think about online advertisement. As the in the above table the value of mean is
3.3323, 3.6710, 3.5774 and 3.5161 respectively. This shows that internet advertisements are
liked by the respondents, and it is not a disturbing element.

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6. Do you find the message content of Internet Advertisements?

Mean Standard Deviation Chi-Square d.f.


Fair 3.5548 0.9763 157.000 4
Trustworthy 3.2452 0.97438 150.903 4
Complete 3.2548 0.99654 154.323 4
Help to make a 2.0968 0.61559 262.516 3
decision for a future
purchase

As in the above test statistics it is clear that internet advertisements are Fair, Trustworthy and
Complete but internet advertisements are not help to make decision for future purchase.
7. Do you think it’s acceptable to give personal information by registering on the site
after a click on internet ads?

Mean Standard Deviation Chi-Square d.f.


In order to receive 3.2032 0.99545 161.323 4
regular update of new
products
In order to receive 3.3419 1.01407 136.968 4
promotional offer
from an advertiser

The above test statistics is shows that most of the respondents are usually give personal
information on the web site in order to receive regular updates about new products and
promotional offer from the advertiser.

8. Please indicate your likelihood of clicking on a Banner Advertisement. While....

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Impact of Internet Advertisement on Consumers

Mean Standard Deviation Chi-Square d.f.


Reading News & 3.5419 1.01916 163.032 4
other articles online
Researching certain 3.3710 1.04019 120.419 4
products online
Shopping for products 2.1129 0.63104 98.058 2
online
Using a search engine 3.0419 0.93209 142.548 4

This test statistics is shows the likelihood of respondents that for which purpose people click
on banner advertisement and researcher found that most of the people are click on banner
advertisement to read news and using for search engine and very few are click for shopping
products online.
9. How likely are you to click on a Banner Advertisement?

Mean Standard Deviation Chi-Square d.f.


When researching 3.2935 0.99560 161.389 4
consumer products
When offered a free 2.1677 0.67617 330.839 4
product
When offered a 3.1161 1.02370 125.419 4
discount
When shopping for a 2.0484 063418 249.871 3
particular product

The above table is shows the test statistics of the responses towards banner advertisement. As
the result show that consumer use banner advertisement for researching products and not usually
for shopping.

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Chapter Five - Discussion


The Chi-Square test is used for the analysis for the data to know the significance of the study.
Chi-Square Variate – The Square of a standard normal Variate is known as a Chi-Square
Variate with 1 degree of freedom.

χ2 ~ N (µ, σ2), then Z=X-µ/σ is N (0.1)

And Z2 = (X-µ/σ) 2 is Chi-Square Variate with 1 degree of freedom.


In general If Xi (i=1, 2… n) are n independent normal variates with mean µi and variance
σi2, (i=1, 2… n), then
χ2=∑ (X-µ/σ) 2, i=1,2,…,n, is a Chi-Square variate with n degree of freedom.

The sum of independent Chi-Square variates is also a Chi-Square variate. More precisely,
if χi2 , (i=1,2,…,k) are independent Chi-Square variates with ni degree of freedom
respectively, then the sum ∑ χi2 , i=1,2,…k, is also a chi-square variate with ∑ ni ,
i=1,2,…k, degree of freedom.

On the basis of result of the study researcher found that the value of Chi-Square for the
measurement of effectiveness of internet advertisement is 173.181 at 4 degree of freedom at 95%
confidence level of interval or in other words 95% significance level and the value of p=000
which is less than 0.05. Which shows that null Hypothesis is rejected i.e. alternative hypothesis
is significant difference.
χ2 = 173.181, with 4 d.f. at 95% significant level.
H01: There is no significant effect of internet advertising on generating awareness
amongst consumer.
H11: There is significant effect of advertising on awareness.

In this way we can say that H01 is rejected and H11 is accepted, it means there is a significant
effect of internet advertising on generating awareness amongst the consumer. This shows that

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internet advertisements are having the impact on consumers mind in creating awareness and
providing relevant information about the products and services.
The second hypothesis of the study is to find out the role of internet advertising on consumer
purchase decision making. The hypothesis is –
H02: There is no significant effect of internet advertising on consumer decision making.
H12: There is significant effect of internet advertising on consumer decision making.
The value of chi-square is 176.1252 with 3 degree of freedom on 95% of confidence level of
interval and the value of p=000, which is less than 0.05 which shows that null hypothesis is
rejected. In this way we can say that there is significant effect of internet advertising on
consumer decision making.

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Chapter Six – Summary, findings and Implication:

6.1 – Summary:

“The first thing one must do to succeed in advertising is to have the attention of the reader. That
means to be interesting, the next thing is to stick to the truth, and that means rectifying whatever
wrong in the merchants business. If the truth is not tell able, fix it so it is. That is about all there
is to it.”(John powers cited in fox 1984, p.28)
The internet has experienced tremendous growth as a communication medium, which has led to
the creation of a global online market place for business and consumers. Marketing scholars and
industry commentators suggest that these are challenging times for advertising agency as they
step in to the interactive era. Responding to these significant changes will influence the
advertising structure and functions. The research undertaken in this study responds to these
issues and has evolved from a broad research inquiry in to studying how the introduction of the
internet as a promotional tool might impact on consumers. On the basis of this study researcher
found that there is significant impact of internet advertisement on consumer in generating
awareness amongst the consumers and it is also helpful in their purchase decision making.

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6.2– Findings:

 The general opinion of consumers towards internet advertisement is that the


internet advertisements are attractive and informative.
 Internet advertisements are helpful in creating social awareness.
 Most preferred internet advertisements are animated and with attractiveness like
musical.
 The information content of internet advertisements are important but they are not
easy enabler for purchase.
 Internet advertisements don’t convey product service benefits appropriately.
 Internet advertisements are an interfering element.
 It is forced to see the internet advertisements.
 Consumers accept to give the personal information by registering on site in order
to receive regular updates.
 Consumers are usually click on banner ad to read news, articles, searching for
products online and using as a search engine.
 Consumers are not usually go for online shopping.

Implication:
The success of any research paper depends upon whether it is practically implemented or not this
report has determined the impact of internet advertisement on consumers. Internet
advertisements are the important part in current scenario that needs to be applied to develop a
favorable response from the customers towards the purchase of a specific product. It will give the
opportunity to the managers to adopt suitable strategies to promote a brand though internet. In
current scenario “customer satisfaction” and managing customer expectation is the next big
thing. So this report will give the idea of what really satisfies a customer and how the delivery of
the services of the product should be given to the customer to produce delightful experience
which is long lasting in the minds of the customer.

On the basis of this study researcher found that organization should have focus on internet
advertisement that will generate awareness and also very helpful in purchase decision making

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Impact of Internet Advertisement on Consumers

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