*Lecturer,
Department of Business administration, The Sarhad University of Science and
Information Technology Peshawar, Pakistan
Email: sarmad.ba@suit.edu.pk
**Assistant
Professor, Department of Business administration, The Sarhad University of Science
and Information Technology Peshawar, Pakistan
Email: rabia.ba@suit.edu.pk
***Lecturer,
Department of Business administration, The Sarhad University of Science and
Information Technology Peshawar, Pakistan
Email: sana.ba@suit.edu.pk
Abstract. The critical role of advertising is to generate
awareness about organization offerings regardless of the industry in which it
is operating. Advertising and its effectiveness on mutual funds products in
terms of awareness is studied in this paper. Arif Habib Investment limited was
taken as case to investigate the impact of advertising on its funds awareness.
Employees were interviewed for this purpose. Due to the investigative nature of
the research qualitative research technique is used by the researchers. The
studied showed that advertisement has positive impact on the attentiveness of
products offered by mutual funds among patrons. The significance of advertising
in generating brand awareness in financial sector is revealed during the course
of the study.
Key words: Advertisement, awareness, mutual funds
Introduction
In order to build good connection
with customers, companies must do more than just producing good products,
pricing it appealingly and making it available in market. It is significant for
organizations to correspond their brands to target audience and it should be
done with precision and effectiveness. The decisive role of communication is constructing
profitable relationship with customers (Kotler, Armstrong, Wong, & Saunders, 2008). Imperative
role performed by advertising is informing clients about the benefits of
organizations products and services. Companies
working in consumer goods markets and financial markets have realized the
significance of advertising and mostly depend on advertising to communicate
with their consumers, moreover consumer try those products which are advertised
on regular basis as advertising helps
them in reminding about company’s offerings and it keep them fresh in their
reminiscence (Shimp, 1997).
Advertising perform essential function in company’s
overall marketing program. Its importance has been realized by businesses
working on national and international fronts, because it performs the role of
providing information, reminding, convincing and establishing subsistence of a
product and services. It is useful because it is considered an important
element to converse with large number of audience and enlighten target audience
about organizations products, different functions performed by the product and
show contrast between competing products. It is used for differentiating
between competing products/services to consumers and informs them about their
unique selling propositions. Furthermore advertising is used to sustain
competitive advantage. Advertising plays a helping role in financial markets
for consumer in making coherent decisions as long as there is factual
information about companies’ products. The increasing impact of advertising on corporate
sales, profits, and market share and manufactured goods awareness has been felt
by companies working in both financial and frequently marketed consumer goods
markets (Pickton & Broderick, 2001).
Literature
Review
Advertising is a progressively crucial
fact in mutual fund industry as
mutual fund business use advertising to draw attention of customer’s to their
past performance, uses it for building their product awareness, and help
consumers in reducing their search cost, in return achieving increased sales
and profitability (Cronqvist, 2006). The main efficient media to
generate mutual funds awareness is advertisement (Nagaiah, Naidu, & Nagaraju, 2014).
Advertising plays a major
function in generating brand responsiveness of a firm’s offerings as it has
number of key roles. It is commonly recognized that without having brand
awareness, feeling for brand and brand likeness cannot be formed. To encourage customers to consume
specific company products, awareness is an important element to indulge them in
to purchase decision. Consumers might downsize between the heard brands and think that immense efforts are made in its
advertising. Sustainable competitive advantage can be achieved while investing
in brand awareness programs and can have positive consequences on long run
value of the business (Mcdonald |& Sharp1996). It is the ability of
purchaser to identify product under diverse conditions (Korgaonkar, Bellenger,
& Smith, 1986).
Advertising is considered a
central path for increasing brand acquaintance and understanding; it assists in
ascertaining brands in minds of consumer’s through sufficient occurrence of the
brand by noticing and thinking about it, these
results were founded using non-probability sampling technique that is
expediency and judgment sampling (Radder, & Haung, 2008; Keller, 2003). Awareness can add value to the brand
by inserting brand in a customer psyche and this awareness can act as barrier
to ingress for recently launched un- recognized products (Stoker, 1985).
Responsiveness to the brand can be measured through how well the information is
disseminated to consumer about the availability of the brand and its
subsistence (Clark, Doraszelski, & Draganska, 2009). Using conventional
mediums in advertising that is television and print media serve the function of
generating brand awareness and aspiration among consumers for company’s goods (Keller,
2003). Significant positive impact was found on consumer’s awareness when
social media advertising is used (Hutter,
Hautz, Dennhardt & Fuller, 2013).
The use of innovation, uniqueness
and segregation in advertising strategies have affirmative impact on creating
customer brand awareness and it also creates positive acuity of their brands:
impact of advertising on brand awareness is positive (Buil, Chernatony & Martinez, 2011). Advertising is important contrivance in
building brand knowledge (Sawant,
2012). Using advertising for creating awareness can have significant positive
consequence on consumer behaviour (Aaker & Day, 1974).
Main purpose of advertising is to
shift consumers from lack of knowledge to information about the subsidised
brand by providing information about the supported brand (Lavidge &
Stiener, 1961; Grewal, Kavanoor, Fern, Costley, & Barnes, 1997). It was established that through
advertising better message and brand awareness is achieved. Different cognitive
and emotional results such as awareness can be attained through advertising
(Lohtia, Donthu, & Hershberger, 2003).
Researchers like Mitra and Lynch
(1995) found that awareness is created through advertising and with the help of
this awareness consumers can take in dissimilar brands in their deliberation
set. Once awareness is formed about the specific brands customers easily
retrieve brand names while making selection between diverse substitutes (McMahan,
1980). Advertising is used as a main source for creation of awareness and
providing information to consumers about the difference between rival products (Soberman,
2004).
Advertising message is
considerably associated with creation of awareness: using right media and
proper timing engenders awareness and increases the chances of product to be
successful (Korgaonkar, et al., 1986). The above literature provides sufficient evidence that advertising
creates awareness and has revealed affirmative relationship. Mutual funds may
use advertisement to their competitive advantage by creating awareness of their
present products as well as recent products among consumers.
Advertisement
of individual fund in a family by mutual
funds must assist in progressing brand awareness of that specific family,
advertised fund will carry this effect and brim over other funds in the family;
therefore it will facilitate and draw the attention of investors towards those
brands who are not advertised and provoke them to invest in it, likewise
advertisement of a single fund in a family may augment brand awareness in
general and positive relation is found between advertising and performance of
funds (Wei, Chen, & Peng, 2010). When implemented through right media
advertising can be very effective and this success can be measured in the form
of amplified brand awareness; the result may be in the form of purchase of
product and services (Bendixen, 1993; Korgaonkar, et al., 1986).
Methodology
The main
reason of the research study is to explore the impact of advertisement on
mutual fund awareness and to observe whether advertisement has
positive/negative effect on mutual fund understanding. Employees of Arif Habib
Investment limited were interviewed using purposive sampling. In purposive
sampling the selection of participants are based on serving an explicit purpose
(Tashakkori, & Teddlie, 2003).
Participant belonging to marketing department were selected for in depth
interviews and five in-depth interviews were conducted. Participants with two
or more than two years of experience were interviewed. As the nature of the
study was exploratory so it encouraged researchers to use qualitative research
method and for the collection of desired data in-depth interviews were used as
tool.
Also know as
one on one interview, it is a formalized process in which an expert interviewer
asks respondents predestined and inquiring questions normally in face-to-face
meeting (Shiu, Hair, Bush, &
Ortinau, 2009).
In-depth
interviews are helpful so as to it allows researchers to cover all time frames
that is precedent, current and potential and helps them in collecting
behavioural and attitudinal data from the subjects under investigation (Malhotra,
& Birks, 2006). Telephone can be
used for conducting in-depth interviews in unique cases (Chisnall, 2005).
Observing behaviour of respondents and their beliefs about certain topic can
better be achieved through in-depth interviews as it allows getting an initial
insight in to the topic (Shiu, Hair,
Bush, & Ortinau, 2009).
In-depth
interviews are useful for enlightening feelings, judgments or values which
helps the researcher in understanding the various components of subject
thoughts and why they exist (Cooper & Schinlder, 2008; Stokes, &
Bergin, R. 2006; Shiu, et al., 2009). It persuades respondents to give
information about his/her feelings and behaviour towards an identified theme or
purpose (Shiu, et al., 2009).
One of the advantages of in-depth interview is that respondents are at ease and
there is no communal pressure on them which helps in maintaining the free flow
of information and for this reason sensitive issue can be discussed with the
participants (Malhotra, & Birks, 2006).
Researchers
have better control over respondents’ selection in in-depth interviews which
helps researchers in gathering more deep, context and flexible information in
the process of exploration (Cassell & Symon, 2004). Respondents feel empowered
as they know that their opinion is heard and is essential (Berent, 1966). In-depth interviews provide possibility for
researchers to determine the views of individuals which lead to more precise
understanding. Further more comfort zone and trust is established between
respondent and researcher which lead to gathering of high quality data; due to
comfort ability respondents can easily express themselves (Webb, 1995).
Findings
It was found
during the course of in-depth interviews that as compared to other types of
promotional tools advertising is more effective while reaching people as the
coverage area of advertising is far greater as compared to other communication
tools giving organizations an edge over its competitors. Moreover due to
awareness which is created through advertising a positive brand image and brand
attitude is formed in consumers’ mind which helps them in selecting appropriate
product. Media selection is of great significance as appropriate medium choice
and placement of advertisements has colossal outcome on buyer awareness.
Response
towards advertised fund increases while using billboard and news paper
advertisements and it has significant positive impact on consumer awareness by
dissemination of information; moreover
advertisement can have positive impact on awareness of those funds which
are not advertised as investor also inquires about funds which were not
advertised. In addition it was established that mutual funds can use
advertisements to their reasonable benefit by informing consumers about
distinctive-ness and communicate investors about their differential advantage
in the shape of annual returns plus features of funds as compared to their
competing mutual funds. Furthermore mutual funds can make attentive their
customer by communicating their previous performance to their current and
potential target audience through advertisement. It is evident from the above
findings that advertising does create awareness.
Discussion
The most important source of generating awareness among consumer
about company’s offerings/brands is advertisement and it may help in increasing
performance of the organization brands as it is observed that consumer always
form optimistic approach towards those brands which are advertised regularly.
This has been found consistent in the extant literature on the prelateship of
consumer behavior and advertisement. For
example Macdonald and Sharp (1996) argue that “advertising helps in creating
brand image in consumers’ mind and it generates enough awareness to make them
purchase a product. It is natural in human beings that they form and buy those
things with which they are familiar and avoid products/brands/services with
which they are unfamiliar” (p. 15).
Performance of a good brand is
dependent on awareness, organizations have to show consumers about the benefits
which they are going to get while using a certain product and making them
believe that it will solve their problems and advertising is the tool which can
serve this purpose. In addition advertisement is very efficient means for producing
brand understanding, medium choice/communication channel is of critical
importance and positioning of advertisement is the means for creating awareness
about company’s product. Moreover when proper medium,
place and time slots are used advertisement can act as an important tool in
increasing awareness and response rate towards company’s products.
Limitations
of the Study
Limitations of the qualitative
research are generalization of its findings. Another limitation is that
findings of qualitative research are not consistent. Advertising is taken as
the only independent variable to study its effect on fund awareness of mutual
funds. As this study is limited to only one company and only employees of one
company were interviewed it’s results therefore cannot be a true representation
of mutual fund industry; whether advertising really have an impact on the
awareness of mutual funds offerings.
Conclusion
The effectiveness of advertising
on mutual fund product awareness was observed by researchers in this paper.
Arif Habib Investment Limited operating in mutual fund industry was taken as
case study. To know the positive/negative impact of advertisement on awareness
of the communicated fund In-depth interviews were conducted with the workforce
of the organization to probe the research topic at hand.
The research study concluded that
using accurate medium for propagation of information has significant positive
impact on funds awareness. Formation of customer’s positive attitude towards
mutual funds products is not possible without regular advertising in
appropriate medium as it has two fold effects; firstly it keeps products fresh
in their minds by focusing on its previous performance, secondly it helps in
spreading knowledge about newly launched offering. Different funds in a mutual fund are benefited from
advertisement of only one fund as once a single fund is advertised it will
definitely bring customer attentions towards other funds offered by the
specific company. Customer might opt for investing in those funds which are not
advertised as they might be of interest to them. It can be said that
advertising can increase the overall performance of mutual fund by increasing
awareness of all the funds in the family and significant positive relation has
been found between advertising and performance of funds.
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