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An investigation into the effect of deceptive advertising on customer loyalty in telecom sector: A case study on Vodafone

Harvard, 12000 Words

Abstract

Nowadays deceptive advertisement is adopted by many companies. This practise is even more acute in the competitive industry like the telecommunication sector of UK. This research is intended to find out the adverse impacts of deceptive advertisement on company’s customer loyalty of Vodafone. This has been designed as a primary research which has been conducted by collecting and analyzing raw data from 100 samples. The collected data has been put through suitable research tools to turn them into valuable information for the Vodafone management. Moreover qualitative form of the research provided insight into the findings and analysis of the data. Prior to this relevant literature was discussed and evaluated to understand findings of the empirical studies done before.  Most of the findings of this research too matched to those of the previous ones. At the end of this study some recommendations have been proposed which have  derived from findings of the study.

 

 

Table of Contents

1        Chapter 1: Introduction

1.1       Introduction

1.2       Background of the study

1.3       Rationale of the study

1.4       Research aim and objectives

1.5       Research questions

1.6       Research hypothesis

1.7       Structure of the study

1.8       Conclusion

2        Chapter 2: Literature review

2.1       Introduction

2.2       Advertisement defined

2.3       Functions of advertisements

2.4       Different forms of advertisements

2.5       Deceptive advertisements

2.6       Types of deceptive advertisement

2.7       Consumer loyalty

2.8       Effects of deceptive advertisements on customer loyalty

2.9       Conceptual framework

2.10         Conclusion

3        Chapter 3: Research methodology

3.1       Introduction

3.2       Research philosophy

3.2.1        Justification of the research philosophy

3.3       Research approach

3.3.1        Justification of Research Approach

3.4       Research method

3.4.1        Justification of Research Method

3.5       Research strategy

3.5.1        Justification of the research strategy

3.6       Research purpose

3.6.1        Justification of the research purpose

3.7       Data collection techniques

3.7.1        Primary data

3.7.2        Secondary data

3.8       Sampling technique

3.8.1        Justification of Sampling Technique

3.9       Data analysis techniques

3.10         Research Reliability and Validity

3.11         Ethical considerations

3.12         Limitations of the methodology

3.13         Conclusion

4        Chapter 4: Analysis and findings

4.1       Introduction

4.2       Questionnaire findings

4.2.1        Respondent’s Personal Questions Analysis

4.3       Respondent’s Personal Questions Analysis: Effects of advertisements

4.3.1        Respondent’s Personal Questions Analysis: Questions relate with Vodafone’s present advertisements

4.3.2        Respondent’s Personal Questions Analysis: Questions related with adverse effect of deceptive advertising

4.3.3        Respondent’s Personal Questions Analysis: Questions related with the negative effect of the advertisement on customer loyalty of the company

4.4       Conclusion

5        Chapter 5: Conclusion and Recommendation

5.1       Concluding remarks

5.2       Summary of Objectives Based Findings

5.3       Recommendations

6        References

7        Appendix

 


1        Chapter 1: Introduction

1.1       Introduction

Advertisement is one of the most important tools of promotional mix. Companies make and broadcast advertisement to communicate product and service information with the intended customers (Aaker, 1974).  But sometimes companies resort to deception and unfair means in advertisement. Deception can be defined as use of false or deceptive advertisement in all kinds of publicity. Deception information can be defined as false, wrong, misleading or overstated information.

Deceptive advertisement contains false or deceptive information. This practise can benefit the company temporarily by boosting sales for the time being. But in the long term it can have disastrous impact on company’s reputation and customer loyalty (Aditya, 2001).  When customers don’t find the product to have the features or benefits that were supposed to have as indicated in the advertisement, they feel deceived and frustrated.  It triggers a negative perception about the product in customer’s mind which can affect customer loyalty and retention in the future.

The telecommunication sector in UK is an extremely competitive one.  With nearly 90 million users, companies are struggling hard to get share of talk time from this huge number of customers. The competition is further intensified by estimation of further expansion in the industry in the post financial crisis period. This competition has led to advertisement war among the companies.  In 2013 six telecom companies spent nearly 800 million in total. Vodafone is also trying hard to increase its share in the telecom industry with nearly 74.59 million advertisement spending in 2013 (Alsop, 1988).

This research will find out what effects deceptive advertisement can have on Vodafone’s customer loyalty and how does it affect company’s customer loyalty. This research will also show how this kind of practise can shape customer’s perception about Vodafone and how it affects their buying decision. Although these are the primary areas on which this research will shed light on, but there are also other areas of profitability and non-financial matters that can be affected by deceptive advertisements. So the result of this study can also help the readers find out other implication of this practise on a whole lot of things related with customers.