The Influence of Advertising on Consumer Behavior

Business Case Development

Term Paper, 2019

30 Pages, Grade: A


Table of Contents


Research goal and objectives

Elements of the External Business Environment

Analysis and Discussion of Recommended Solutions

Elements of the Internal Business Environment

Marketing Strategy (4P’s)

Ethical Considerations





Founded in 2017, Professionals in Business Group (PIBG) is a black owned, South African accounting firm targeting mainly small and medium enterprises with the salient objective of providing them with affordable and organized financial reporting structures. PIBG endeavors to provide this much-needed service to small and medium institutions at the most cost effective way possible without compromising the quality of their work output. According to Thubelihle Maphosa, Financial Accountant and founder of PIBG, much growth potential is lost in small businesses because of failure to manage funds in an operational, tactical and strategic manner and that is where PIBG comes in, as the key to unlocking growth potential

Professionals in Business Group uses most major accounting software in the market namely Pastel Accounting, QuickBooks and Palladium Accounting. Nonetheless, PIBG leadership believes that this software are not necessarily in harmony with the company’s identity of simplicity to serve even the smallest of clientele. In a nutshell, the scope of these software is too big and not usable in its entirety to small businesses and in response to this, PIBG is building a tailored Accounting software PIB-X Accounting and Payroll ’Accounting made simple’. This development will go a long way in helping small businesses thrive, giving them control of the running of their company by simplifying accounting data to packages comprehensible by all small business owners regardless of their level of accounting command. This innovation is in line with the company’s mission “To develop innovative and transparent systems that will form an integral part of our clients’ business success, and to serve our clients with integrity, professionalism, independence, impartiality and excellence”. (Source: )

PIBG prides itself in the level of growth they have experienced since inception attributing this to the good reputation they have created with every client they serve. The company has managed to grow its business by 35% in their first 2 years of operation (from first year to second year).Part of this growth has been coupled with PIBG securing clients that are on the borderline between medium enterprise and large institution (R24m/year in turnover).

According to Tom Head (2018), South Africa’s Gross Domestic Product (GDP) grew by 1.3% through 2017 exceeding the National Treasury’s expectation of 1% growth. PIBG believes their growth is also in response to the level of national GDP growth.

Research goal and objectives

The general objective of the study was to find out if there is any effect of advertising on consumer ‘buying’ of accounting services. In a quest to achieve this objective, the following specific objectives were set:

– To determine if there is any relationship between consumer consciousness and advertising.
– To find out if there is any relationship between advertisement and consumer opinion.
– To find out if consumer consciousness and consumer opinion have impact on purchasing power.

To determine these objectives, the researcher tested the following hypotheses;

- H0: There is no relationship between advertisement and consumer consciousness
- H1: There is a relationship between advertisement and consumer consciousness
- H0: There is no relationship between advertisement and consumer opinion
- H2: There is a relationship between advertisement and consumer opinion
- H0: Consumer consciousness and consumer opinion have no impact on purchasing behavior
- H3: Consumer consciousness and consumer opinion have impact on purchasing behavior

Elements of the External Business Environment

Hitesh Basin (2017, April 17) PESTLE Analysis [digital image]. Retrieved from

According to Kotler and Keller, 2014, no industry is immune to the evolving macro environments. With this background in mind, it is imperative that businesses assess the current environment and future changes prior to launching a new product or service and PESTLE research has proved to be the preferred and most widely used tool for this particular exercise. PESTLE, is an acronym with each of the letters symbolizing certain facets of the research. These facets influence the market in a number of ways and reshape the way strategies are conceived. P denotes political factors, while E denotes economic

-nes. S represents the country social factors whereas T is a conglomeration of all the technological characteristics of the market. L represents legalities of the environment and E stands for the environmental characteristics and its influence on the business.

Abbildung in dieser Leseprobe nicht enthalten


The PESTLE research tool has a plethora of advantages namely;

- Reviewing existing organizational strategies.
- Formulating a revised direction for the organization with solutions to existing problems.
- Gaining strategic edge on rival businesses.
- Assessing the risks associated with the company’s target markets.



The Southern African Institute for Business Accountants (SAIBA), South African Institute of Tax Practitioners (SAIT) and Association of Chartered Certified Accountants (ACCA) regulate PIBG as an accounting firm. This implies that the company should uphold a solid standard of regulations set out by these boards.


The political factor is the external aspect of the business that the company cannot control. It is of paramount importance to examine government statutes followed by making inferences about the stability of the government. Government actions and political shape of the country influences the organization in a number of ways, either positive or negative.


- Helps in spotting business openings as well as personal opportunity.

- Helps in the avoidance of starting new initiatives that will negatively influence the company.

- It will bring diversity and new business options to the economy.


- Unforeseen change in the government programs and policies.

- Change in the regulations of the accounting make-up.



Economic conditions have the greatest impact on a business, notwithstanding the line of business. The global economic downturn experienced about a decade ago forced many companies to recalibrate their sales and marketing campaigns.


Inflation and deflation completely impede the circular flow of earnings in the economy. Inflation is the sustained rate of price increase for goods and services whereas deflation refers to the opposite resulting from the fall in demand. In addition to these two factors there is another key dimension to business i.e. employment rate also known to obstruct business because of decreased efficiency.


The company stands to benefit from loan opportunities if the government sustains a stable rate in the interest structure.


Alteration in the interest rate structure will discourage the company from going for loans in view of expansion.


Mandatory for all accounting firms, PIBG has to conform to the strict ethical standards as well as heartily safeguard sensitive client information. In addition, PIBG has to spread its footprint as a national and regional brand reaching as many potential clients as possible.


Client preferences and trends are key factors in this line of business, so any changes have the potential to affect the company, either negatively or positively.


If the South African economy continues in this trajectory, it will usher a positive impact in the earnings level of the consumers.


Population dynamics is the major threat in this particular facet of the PESTLE analysis.



Technology is evolving at lightning speed and if fully exploited, this factor will enable the firm to lower operational costs because of increased efficiency. The most recent trend to hit both the social and business spheres is social media. This surge has increased interface between consumers and businesses with results seen in real time.


PIBG and its clients will benefit in numerous ways, the most notable being expansion in the overall productivity and financial gain.


Unforeseen change in the technological evolution will present various forms of obsolescence.


There can be a number of legal connotations in the accounting industry. I would quote a particular incident that occurred to one accounting firm that stood accused of assigning interns (with no board accreditation) to jobs meant for either junior or senior partners.


Environmental factors can affect PIBG, but not particularly remodel its output as these factors mostly influence agro- based businesses.

Customer Based Pricing

PIBG should position themselves as the ‘to go to’ accounting firm as they continue to grow their reach nationally and regionally. In order to win the hearts of more and new clients they should consider adopting ‘penetration pricing’. This pricing technique involves setting a comparatively low initial entry price in order to attract new customers. Naturally, customers are swayed to try the new service at a lower cost. This risk will result in low profits in the interim but presents significant benefits in the long-term financial gain.


Excerpt out of 30 pages


The Influence of Advertising on Consumer Behavior
Business Case Development
Marymount University
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ISBN (eBook)
ISBN (Book)
influence, advertising, consumer, behavior, business, case, development
Quote paper
Thembisani Maphosa (Author), 2019, The Influence of Advertising on Consumer Behavior, Munich, GRIN Verlag,


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