Impact of Unethical Advertising on

Customer Retention

By

Ahmad Shuaib Sediqi

Supervised By

Dr. Sarfaraz Karim

October/2021

Thesis submitted in partial fulfillment of the requirement for the degree of MBA at
Kardan University, Kabul, Afghanistan
 Declaration of Authorship

I hereby certify that the work embodied in this thesis project is the result of original
research and has not been submitted for a higher degree to any other university or
institution.

Name: Ahmad Shuaib Sediqi

Registration Number: 912-1904004

MBA Thesis –Kardan University

Supervisor: Dr. Sarfraz Karim

 Abstract

This study was done on telecom companies in Kabul-Afghanistan to assess the impact of
unethical advertising on customer retention with two other sub-independent variables of
customer satisfaction and customer loyalty which affect customer buying behavior and
the result could be to retain or deny the services. The study was designed as quantitative
research with a sample size of 150. Five Likert type of questionnaire was distributed to
different age group form 20 above with diverse educational level who get services from
telecom companies in Kabul-Afghanistan. Inferential statistics were used to predict about
the real population and test the hypotheses with the help of SPSS software. The results of
the study showed that unethical advertising significantly impacts on customer retention
and many people who feel deceived denies the product or services and have no
commitment to the telecom company. Customer satisfaction, a main independent variable
directly affecting customers to retain or deny the products and services was studied and
results shows that customer satisfaction is not only necessary but it is a must for telecom
industries to gain. Customer loyalty, the last independent variable which significantly
affects buying behavior of customers and loyal customers purchase the products or
services more than anyone else. This study suggests for telecom companies interested to
stay as a powerful competitive and top of the market to take care of all people with a real
and honest picture in all their ads and services they provide. On the other hand, when
people feel cheated, feel low quality services, get false information, high prices, bad
network quality, inconvenient services, they will turn away and prefer to try something
new and different.
Contents
Declaration of Authorship............................................................................................................................i
Abstract.......................................................................................................................................................ii
INTRODUCTION.......................................................................................................................................6
1.1 Background of the Study...............................................................................................6
1.2 Problem Statement.........................................................................................................7
1.3 Significance of study.....................................................................................................9
1.4 Research Questions........................................................................................................9
1.5 Research Objectives.......................................................................................................9
2.1 Review of Literature....................................................................................................11
2.2 Theoretical framework.................................................................................................18
2.3 Hypotheses of the study...............................................................................................20
RESEARCH METHODOLOGY...............................................................................................................21
3.1 Research Design..................................................................................................................................21
3.3 Population of Study.....................................................................................................21
3.4 Sampling Procedure.............................................................................................................................22
3.5 Data Analysis Procedure......................................................................................................................22
DATA ANALYSIS AND FINDINGS......................................................................................................23
4.1 Preliminary Data Gathering Procedure................................................................................................23
4.2 Response Rate..............................................................................................................23
4.3 Gender Distribution.....................................................................................................23
4.4 Age Distribution..........................................................................................................24
4.5 Educational Level........................................................................................................25
4.6 Reliability Test.............................................................................................................27
4.7 Normality Test.............................................................................................................30
4.8 Regression Analysis.....................................................................................................34
4.9 Hypothesis Test and Discussion..................................................................................38
CHAPTER FIVE.......................................................................................................................................41
CONCLUSION AND RECOMMENDATION.........................................................................................41
5.1 Conclusion...................................................................................................................41
5.2 Implication of the Results............................................................................................42
5.3 Limitations and Future Research.................................................................................43
References.................................................................................................................................................44
Appendix: Questionnaire...........................................................................................................................47
 CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Unethical advertising causes the customers to get confused with logos and messages.
Unethical advertising means clearly distorting a product or service or using unconscious
information to carry out secret operations. These ads use fraudulent techniques to work
with consumers or to persuade consumers to buy these products or services. Well-known
examples of unethical advertising are Reebok ads that encourage immoral behavior. The
title of the ad was, “Girls cheat, don't practice”. These ads are very immoral because they
encourage fraud. The shoe company strongly opposed the opposition of customers.
Misleading statements are another type of immoral advertising. For example, Kentucky
Fried Chicken tried to label the company's “Kitchen fresh chicken” brand to reduce the
company's “frying”. This not only misleads consumers, but distorts their own healthy
food chain. If advertising misleads consumers, it is immoral. Based on the above
information, the researchers analyzed that if a company engages in unethical advertising,
it has a negative impact on customer retention and can easily lose customers (Xie et al.,
2015).

Advertising plays an important role in attracting old customers and new ones. In addition,
advertising helps to retain customers and increase their loyalty. When a customer sees an
ad, it increases the attractiveness of the product to the customer and this attraction can
help customers to visit the market or buy the product. If customers realize that there is a
difference between the advertised product and the original, it will reduce customer
loyalty and retention. Therefore, unethical advertising has a negative effect on customer
retention. Companies are always looking for ways to increase their profits and therefore,
companies should try to create opportunities to advertise their services or products.
Successful advertising is critical to the survival of any organization. However, ads can be
useful or harmful because they are made for the benefit of a business. This can obscure
the line between ethical and unethical advertising. Ethical advertising identifies the

6
difference between the advertised product/service and a competitor's product or service
(Iqbal & Siddiqui, 2019).

Advertisers sometimes exaggerate their reputation so that consumers can psychologically

pay for the cost pressures of advertising and make a sensible decision to buy advertising
products. Some people think that most consumers now avoid advertising because they
find it boring and immoral. Psychology, sociology, aesthetics and politics all depend on
advertising. Some critics even criticize the idea that advertising harms the general interest
of society. However, advertising fans support his claim that the main purpose of
advertising is to sell products rather than to influence social and cultural values. In
ancient times, people were self-sufficient. It is used to treat or find food. They also try to
find or do something that meets their basic needs. Over time, their sustainable production
began to show signs of surplus, and sometimes this surplus failed to meet the needs of
others (Xie et al., 2015).

In addition, they have to turn to their company and compensate for the overproduction.
They are beginning to realize that they have to compete with others for the same product
in the contract so that advertising can be among the best in the world. Not all ad
campaigns and edits are free. Some researchers believe that advertising can support
ethical issues. These ethical issues include the exploitation of women, subconscious and
child-centered advertising, deceptive advertising and other factors that can lead to a
decline in social ethics. The fact that potentially immoral advertising is being marketed
suggests that current methods of advertising censorship may not be sufficient to address
the most controversial or innovative advertising campaigns of our time. Ethics is one of
the branches of philosophy. Ethics can be defined as “a set of rules, principles, values,
and characteristics that regulate and regulate interpersonal relationships: interpersonal
relationships” (Xie et al., 2015).

1.2 Problem Statement

A lot of studies are conducted which mainly focus on service quality and customer
satisfaction but it is also discovered that unethical advertising makes customers to retain
or move on to a new product or service to a different company. Moreover, customers find
the overall picture of the company for future purchases based on the ads. People feel

7
cheated when they experience something different from the ads to what they receive by
the service providers. Researchers recommend that service providers should confirm that
there is no negative difference between taking pictures of your ads and placing it on
electronic media or on the internet. Afghanistan has been a country with a monopolistic
market in the telecommunication sector but from the past two decades, both international
and national participant have modified its dynamics for working business. As the bigger
population volume of the country was a tantalizing factor for telecom companies to
penetrate the market. With the passage of time, the mobile-phone operators have
appeared in every area of the world. The occurrence of many operators in the
marketplace gave way to competitive pricing and hard competition. Given the strong
competition, businesses resorted to deceptive ads in order to exploit emotions, take profit
from low literacy of the customers and as well as manipulate customer psyche. The
researcher also explained that the transmission of misleading information in respect to
telecommunication services and products may take any form, it may be through
television advertisements, brochures, billboards and banners, print media, advertisement
on the internet, short message services (SMS) offers. Telecom companies in Afghanistan
have somehow engaged to deliver overstated statement to influence the consumers due to
which customers lost their money and get mental misery. As (Jeeva, 2016) said that
misleading advertisements affect consumer's choices concerning what they purchase.
Such advertisements generate a belief about the quality of the product and services which
is not true and also create the wrong impression about the product in the result to which
customer preference will be distorted. The packages offered such as SMS charges,
connectivity charges, call rates, post, and prepaid connections are always taking up extra
charges for just subscribing, which the customers don't realize and have not much
awareness of this charged information, which ultimately irritates consumers which trend
the consumers for brand switching.

8
1.3 Significance of study
The aim of this study was to investigate the impact of unethical advertising on customer
retention. Sometimes due to poor performance and failure to keep a promise, customers
are frustrated with advertising. The survey was conducted in Kabul Afghanistan to people
of different age groups and gender. The study also looked at gender vulnerability of
customers and if telecom industries lose customers by unethical advertising. Conducting
this study is important in the context of Afghanistan, as the study was previously
conducted in the other countries, but not Afghanistan. In addition, due to the popularity
of e-commerce, most companies receive paid customer reviews, market their products,
and attract more customers.

Advertising plays a key role in influencing the behavior of customers who purchase
services or products. Over time, various unethical marketing and advertising activities
have a serious impact on customers. Unethical advertising is confusing because most
customers cannot explain or understand unethical ads. Advertisers sometimes exaggerate
the benefits of products/services and advertise them effectively and give customers a
clear decision to make a purchase. The problem is that some telecom or other industries
use that method which affect customer retention. Another problem is that Afghan
companies often use unethical advertising and do not publish complete product
information or actual product images and therefore, the customers cannot make the right
decision to purchase or leave the product.

1.4 Research Questions

This research aims to find the answers to the following questions:

 What is the impact of unethical advertising on customer retention?

 Does customer satisfaction influence on customer retention?
 Does customer loyalty influence on customer retention?

1.5 Research Objectives

This research highlights the impact of unethical advertising which helps to recognize its
effect on customer retention, customer satisfaction and customer loyalty. In most cases,
customers are dissatisfied with the ads because they are not delivered on time or
9
delivered with a different quality. This study is done in Kabul from different age group
and gender.

The following are the objectives of the study:

 To identify if unethical advertising influences on customers to retain.

 To analyze if customer satisfaction influences on customer retention.
 To identify if customer loyalty effects on customer to retain

10
 CHAPTER TWO

2.1 Review of Literature

(Azhar & Shah, 2015) showed that unethical advertising influences women's shopping
behavior and this study found factors related to unethical advertising. The results of the
study show that there is a strong relationship between the dependent variable and the
independent variable. The importance of this future study for women who are willing to
conduct research on unethical advertising and the buying behavior of women suffering
from unethical advertising is that they can support the study and, if possible, use
additional research with more parameters. (Huq et al., 2016) the aim of this study is to
educate customers about the unethical advertising behavior of the region. In parallel with
this research, the researcher examined the status of unethical advertising behavior and
decided on solutions to the problem of unethical behavior. In this study, seven products
related to different companies were selected as samples containing unethical advertising
practices. The researcher has collected all the data through "Qualitative methods" and
analyzed the data with the help of thematic analysis. This study also highlighted that
today, most companies do not adhere to ethical standards in advertising and are unable to
protect consumer rights. (Bellé and Cantarelli, 2019) examined the social impact of
ethical governance, project performance and behavioral visibility, external regulation,
and unethical behavior in public administrations. Experiment 1 allows students to
participate in laboratory experiments and observe two inappropriate behaviors. Ethical
knowledge and visibility reduced the subjects' dishonesty in publishing project results,
which affected their benefits but did not affect their own results in project-related
exercises. Save money. In the latter project, ethical management and visibility interact.
Financial incentives and social impacts continue to increase unethical personal behavior
in these two projects. Experiment 2 is a privacy selection experiment designed to
examine the love of public employees for abuse in the workplace. (Tuncay Zayer &
Coleman, 2015) looked at how advertising professionals think about how gender
formation affects men and women, and how such perceptions influence their strategic and
creative choices. Two sets of qualitative data were collected to investigate these issues.
The results of the survey showed professionals' perceptions of women's vulnerability and

11
men's immunity to the negative effects of advertising, as well as the societal debate and
organizational movements that drive their business decisions. (Munjal, 2016) the aim of
this research is to identify and highlight ethical issues in print and television advertising,
and to analyze various unethical advertisements in India with reference to ASCI
principles. Today, the Indian advertising industry is growing rapidly and the Indian
advertising industry has gained a foothold and been on the world map in a very short
time. However, over the years, advertising and marketing have raised controversial
ethical issues, such as other advertising, obesity, unsubstantiated claims, female
stereotypes, comparative advertising and the use of children's advertising. advertising
issues. In today's highly competitive marketplace, advertisers sometimes follow unethical
practices when competing. (Tomažič, 2016) advertising has become an important part of
the modern information society. Advertisers usually get attention through aggressive and
unethical advertising. Confidential advertising means that all texts are paid for as local
texts, but they only want business compensation. Our aim is to study surreptitious media
advertising in Slovenia, to make a comparative analysis of three articles from 2008 and
2012, and to examine current theories of surreptitious advertising in the context of local
government to promote democracy. , which is a principle of democracy and the rule of
law. We find that the number of such studies is increasing every year and laws and
regulations are not respected at all. (Zaman et al., 2015) the aim of this research is to
address ethical issues related to advertising. Data were collected through questionnaires
from 12 universities in Islamabad and the Rawalpindi twins in Pakistan. SPSS software is
used to analyze reliability, value, and regression. Research shows that advertising
etiquette and advertising attractiveness are closely related to the effects of advertising.
Statistical results also show that advertising information clearly affects advertising.
Research shows that the ethics of celebrity defenders have little effect on advertising
ethics. The results of advertising and the attractiveness of advertising show that people in
Pakistan reject the current practices of the media and advertisers. (Bachnik & Nowacki,
2018) building trust in a product, brand or business is an essential part of a successful
consumer business. Two-way communication is one of the key factors in consumer
confidence. Advertising as a means of communication that generates a lot of attention
and emotions is an important part of building trust. Many companies try to use

12
unconventional and controversial advertising designs and colours because there seems to
be some social recognition for the original, emotional and offensive marketing message.
The purpose of this study is to further, analyze this social acceptance and this study had a
sample size of 626, which includes business leaders. The study compared unethical
advertising efforts and consumer perceptions of the information they displayed.
(Abdullahi, 2017) explored the field of ethical advertising related to Islamic business
ethics, with an emphasis on marketing and advertising skills in Nigeria. This article
introduces quantitative research methods, combines critical research methods with
experimental research, and collects data through questionnaires. The results of the study
show the great potential of Islamic advertising. The study found that women tolerate
fashion shows and beauty pageants much less than men in advertising. (Belanche, 2019)
described the department's experience in creating better advertising standards that set
thresholds for globally applicable advertising formats through self-regulation. Building
on classical and current methods of advertising ethics, this work explains that, for
practical reasons, not only very annoying advertising should be banned, but that ethics
should also go beyond conviction, justice is needed. conviction and social responsibility
to the public. This study is proposed to mimic further research on the ethical limits of
advertising interventions. It is very important for many stakeholders to decide which
advertising formats may remain and which advertising formats should be abolished, and
this will require further consideration by consumers and researchers. (Shafiq et al., 2016)
ethics are generally comparable, there is no universal supervisory authority, but there is
no uniform interpretation and action. Islamic advertising is offered as a possible solution
to the unethical method of advertising. This paper was written after the library had
researched and combined the principles of Islamic advertising from the materials of
various scholars and theologians. These principles proved to be, at least in theory, a
satisfactory response to advertising criticism. It can be assumed that most of the problems
associated with modern advertising can be alleviated by applying these principles. (Van
Reijmersdal et al., 2016) offered two studies examining the impact of local information
on online advertising, which included “sponsored content on blogs, brand attitudes, and
people's buying patterns”. To investigate the underlying mechanism of these effects, the
researcher integrated resistance theory into an interesting knowledge model. The

13
researcher tested our predictions with two experiments (N = 118 and N = 134) and found
that participants applied persuasive knowledge based on the information that emerged
and then used strategies of cognitive (conflict) and emotional (negative impact) resistance
to reduce persuasion.

(Ullah & Hussain, 2015) the purpose of this study is to examine the impact of unethical
advertising, misleading information or misleading and stereotyped advertising on
customers' purchasing patterns, as well as the impact of word of mouth in Pakistan.
Based on the variables, the author tried to determine the effect of each variable on
customer satisfaction. Field surveys (questionnaires) collected data from 600 respondents
at various levels and in different regions, such as Islamabad and Rawalpindi twin
workers, students and civilians. The results show that unethical advertisements or
misleading information and stereotypes are negatively related to customers' purchasing
behavior or intentions, as well as verbally negatively related to customer satisfaction.
(Anjum et al., 2015) the main objective of our study is to analyze the impact of current
religious beliefs on consumer buying behavior in Pakistan by looking at women's
interpretations in television advertising. To this end, relevant data were collected from
200 respondents through a questionnaire. Our survey tool lists 30 statements on a five-
point scale. To test our model, the researcher performed a regression analysis using
SPSS, which showed a positive relationship between TV advertising and consumer
buying behavior in the presence of women. However, this relationship is negative for
people with religious beliefs and the results of this study are significant. The results of
our research reflect the true meaning that marketers choose appropriate advertising
themes and styles in line with the cultural values and religious beliefs of the local
community. (Chauhan & Shukla, 2016) focused on the advertising campaigns of
“Myntra”, one of India's leading e-commerce platforms, and examined the impact of
social media on consumers. The ad referred to LGBT agreements, highlighting how
modern Indian women can talk, create their own characters and have a place in society.
Myntra launched a digital advertising campaign called "Brave is Beautiful" to promote
the clothing brand Anouk, which presented three women-centered themes that society
found uncomfortable with homosexuality. According to the survey, the brand believes

14
that creating such ads is a necessary step to maintain a healthy public image. A survey
was conducted among management students from large institutions with an excellent
Master of Business Administration (MBA) degree. The results show that most people
agree that when these issues are addressed publicly, there is resilience and strength in the
LGBT community. (Kadir & Al-Aidaros, 2015) most modern advertisements make false
promises to attract new customers to products that are highly forbidden in Islam. Many
regulations prohibit the use of all methods to influence consumer demands. Therefore,
this study can make a significant contribution to the advertising industry, especially to
ensure that Islamic teachings are followed. The aim of the study is to analyze the
existence of advertising through three cultural, governance and emotional factors through
Islamic research in Malaysia. Quantitative methods, a structured questionnaire, and data
analysis with various correlations and regressions were used for the studies. (Sweetser et
al., 2016) used pre-test and post-test online experience (N = 105) to examine the impact
of local advertising agency information on the organization and public relations (PRO),
reputation, brand attitudes, and advertising attitudes. Reputation and brand image predict
two OPR factors; however, participants' perceptions of sponsorship/advertising do not
affect OPR. The brand's attitude towards clearly sponsored content (such as advertising
was displayed) decreased slightly. However, the presence or absence of a sponsor does
not significantly affect the credibility or position of the ad itself. The study also examined
the use of sensory information. (Gächter & Schulz, 2016) measured the actual truth in an
anonymous specific experiment with compression. We performed experiments on 2568
young participants (students) who did not. affected the PRV in 2003 due to their age in
2003. We found that the internal honesty of individuals in the country is at odds with the
database. Low GRP is stronger than the share of countries with high GRP. Model lying
supports the honest psychological theory. The results are in line with the theory of
cultural integration of institutions, values, and state that weak institutions and cultural
heritage lead to breaches of the rules, which not only have direct detrimental economic
consequences but also damage the economy. (Alshurideh et al., 2017) examined the
impact of child abuse, sexual harassment, intimidation and misleading advertisements on
Jordanian parents' advertisements using a self-administered questionnaire of 450 parents.
After testing the building with the equation model, a multiple regression model is used

15
and path analysis is used to test the theoretical relationship. The study found that sexual
attraction and violence against children are factors influencing parental consent in ethical
advertising in the Jordanian market. (Ahmed & Mateen Khan, 2017) sought to read the
literature in detail to understand ethical marketing and advertising standards and to see if
the Pakistani telecommunications industry is considering setting standards. The practical
sample analysis used to collect the data shows that advertisers most often ignore the
standards set by rating agencies such as “PEMRA (Pakistan Electronic Media Regulator)
and 4A (American Advertising Agency)”. It is also concluded that consumers perceive
that electronic communications advertising has exaggerated features and services, and
believe that the frequency of advertising and the money spent on advertising is
unnecessary and unnecessary. (Shafiq et al., 2017) examine people's belief in Islamic
advertising. To be an exploratory beauty, this article uses qualitative research methods
that use inspiring data collection techniques. This method is based on data collection
projection technology, also known as “word link technology”. This allows respondents to
think freely and thus helps to create rich data that is most needed for qualitative research.
Different views of Islamic advertisements are compiled and divided into different
dimensions. These factors include the potential, nature, characteristics, real-time
decision-making, and potential consequences of Islamic advertising. This study helps to
establish a standard for measuring attitudes towards Islamic advertising. (Ariffin et al.,
2016) examine the role of religious beliefs in controlling Muslim consumers' self-defense
and attitudes towards the advertising of controversial products. In April 2014, survey
methods and quantitative methods were used to collect data. These studies used a
practical attitude theory to support this framework. Respondents were 375 Muslim
consumers in Malaysia. This study provides experiential information on how religious
beliefs reduce self-defense and consumer attitudes toward advertising. Consumers with
higher religious beliefs tend to react poorly to consumers, while consumers with lower
religious beliefs tend to react poorly. In addition, religion can be expected to reduce the
negative effects of self-defense. (Förster & Brantner, 2016) the use of humor in
advertising has become the subject of several studies, most of which focus on the
effectiveness of humor and ignore the ethical issues that are often used in the use of
humor. In response, the author explored the extent to which humor overshadowed the

16
ethical aspects of offensive advertising. The author has examined the advertisements and
decisions of the Austrian Advertising Council, which are adopted by MEPs on special
occasions. Through their analysis, they contributed to the promotion of ethics by looking
for organizations that are important in the practice of advertising criticism. (Schauster &
Neill, 2017) the head of advertising and public relations says that ethics are changing.
Based on 29 in-depth interviews with advertising and public relations officials, analyzing
self-image, and ethical protection, new perspectives address the most pressing issues
today, the most unethical behavior and the lack of ethical training. Some leaders believe
that personal responsibility is moral, while others are selfish and believe that publishers
or consumers are responsible for making moral decisions. New marketing methods have
increased the demand for ethical training and more sophisticated knowledge of
professionalism and ethical behavior, which are also flexible enough to be used for
envelope-promoting methods. (Selin, n.d) identifies consumer attitudes towards unethical
advertising. This article examines business ethics, marketing ethics, and unethical
advertising. Advertising is the cornerstone of marketing. Data for this study were
collected using quantitative methods. A sample that is not probable is a study sample of a
study. Sampling quotas can help to investigate age differences. The survey was
conducted using an online questionnaire. The results of the study were analyzed in a
descriptive manner. The results show that customers are aware of unethical advertising.
People are worried about unethical advertising but never notice unethical reasons. Some
are willing to boycott companies that encourage unethical behavior, while others are
simply frustrated with the company's behavior.

17
2.2 Theoretical framework

The model shows customer retention as independent variable with dependent variables of
unethical advertising, customer satisfaction and customer loyalty as dependent variables.
Customer retention is used as an independent variable. Customers routinely face
numerous ads in a variety of media and this prevents them to determine the incorrect
nature of all these messages. They mainly respond to unethical behavior, dissatisfaction
or disloyalty. Most people in telecommunications sector share their experiences with
others and this can bring a strong awareness to others who can go to service with
conviction. If a customer feels positive with our product or services, they might
encourage their family and friends to buy it. This is because customers trust each other
about which products are worth the money and time and which are not. When a customer
learned that advertising was a scam, he experienced real-life services and made a
difference between advertising and reality, so his belief in telecommunications began to
quiver before making a purchase. They are faithful to the past. According to (Hussain,
2016), misleading information has a negative correlation with customer satisfaction, but
it is not important. Customer satisfaction is also measured as a serious business activity in
today's highly competitive market, and telecommunications companies are no exception.
The customer's loyalty and ownership depend on the customer's perceived value. A
customer's perceived value is a customer's observation of social psychology, quality,
rewards, money, and profits associated with business or services. Therefore, if the

18
customer's perceived value is positive, this creates customer satisfaction. (Farrell, 2011)
Feeling unfulfilled and overrated engagement reminds us that it has a negative impact on
customer satisfaction. There are other factors that also affect customer loyalty. One of the
most important factors is customer trust. Trust is important in building a strong
relationship. Relationships are built on trust, so the most important thing about trust is
that without trust there is no connection. This affects not only the customer service
environment, but the situation of all human beings. In order for a customer to make a
long deal with a company, they need to gain trust, which doesn't happen overnight.
(Relationship between Customer Satisfaction and Loyalty Business Essays, 2016) Trust
is a company's commitment to live up to its expectations so that it helps them stay loyal
to their brand and company. We cannot accept loyalty without the trust of our corporate
customers. To build trust, it is imperative that customers evaluate and extract information
from their products (Ahmed, 2014). The main problem that undermines customer trust is
when a company breaks a pledge. As a result, customers do not trust the company and
may even look for a competitive company that offers better services (Eideh, 2016).
Promising brilliance is very easy, but slow delivery can affect your customer
relationships. Brand trust is one of the key factors influencing brand loyalty. Meanwhile,
it is suggested that misleading advertising creates suspicion among consumers.
Responding to allegations caused by fraud will create unfair perceptions among
consumers, which will reduce the likelihood of repurchases. Dissatisfied consumers may
engage in other harmful acts, such as exposing or disapproving the company's image.
Another factor that influences loyalty is customer satisfaction. In today's market,
customer satisfaction is a business challenge. Every company wants to attract customers
and they will have a strong brand for their products and services. For this reason,
customer satisfaction is an important factor in getting customers to do it. From this
perspective, if consumers are happy with their brand, they will buy repeatedly and show
engagement. Today, companies recognize the importance of understanding, anticipating,
and meeting their customers' needs.

19
2.3 Hypotheses of the study

Based on the Theoretical Framework, the following hypotheses can be formulated to

study the impact of unethical advertisement on Afghan customer retention.
H1: There is a negative effect of unethical advertising on customer retention.
H2: There is a significant effect of customer satisfaction on customer retention.
H3: There is a significant effect of customer loyalty on customer retention.

20
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Research Design

It is an evaluation type of research which measures the positive or negative effect of

unethical advertising using quantitative research design because we use numbers and
statistics to analyze and explain the human behavior with the help of experimental design
where we try to discover a cause and effect relationship between two variables,
independent and dependent. This study will be based on individual-level analysis because
responses were collected from different individual and respondents did not belong to any
particular organization or sector but used services from any telecommunication industry
in Kabul, Afghanistan.

3.2 Questionnaire Design

The questionnaire included two parts of questions, first personal questions about gender,
age, and education. The researcher used close-ended questionnaire for this study and the
questions were based on 5-point Likert scale ranging from strongly disagree to strongly
agree. Survey questionnaire/close-ended questionnaire was used for this study. The
questionnaire was distributed in the form of online forms or distributed personally;
therefore, the researcher sent the questionnaire to some selected people.

3.3 Population of Study

The research is quantitative and the population is defined as the group of individuals
taken from a large group of Kabul citizens. They will be selected randomly for
conducting the study. Moreover, the sample for this study will be 108 from population
size of 150 according to Uma Sekaran, which means the researcher will collect the data
from different 108 respondents.

21
3.4 Sampling Procedure

Probability and non-probability are two different methods of sampling, however, for this
study, the researcher used probability sampling. Through selected sampling method, the
researcher used random sampling and collected all the data/responses randomly from the
group of people.

3.5 Data Analysis Procedure

As this study is based on quantitative analysis, so the data is based on normativity, which
is the phenomenon explaining some actions or outcomes in human societies as good,
desirable, permissible or bad, undesirable, or impermissible. The researcher analyzed all
the collected data with the help of statistical analysis using SPSS software/tool for
analyzing the collected data.

22
 CHAPTER FOUR

DATA ANALYSIS AND FINDINGS

The literature review showed that a lot of studies have been conducted on impact of
unethical or deceptive advertising on customer retention or loyalty. In the context of
Afghanistan this is supposed to be the first study conducted but there’s chance of
developing this study not only in Kabul but throughout the country with a greater
population size to present better and more exact results on this topic. I share all my
findings from the mentioned study and wish it could present valuable results to the
telecom industries services providers and to the customers who suffer from unethical
advertisements in the sector of telecommunication.

4.1 Preliminary Data Gathering Procedure

A structured questionnaire of five Likert scale was used to collect the data. This research
was based on quantitative analysis and all the data was collected with the help of survey
(close-ended) questionnaire distributed online. The number of questionnaires distributed
to collect the data were 150.

4.2 Response Rate

The number of questionnaires distributed online were 150 to different age, gender and
education level in Kabul city. The number of questionnaires received from the
respondents are a total of 108 and the response rate is 100 percent. After the collection of
all the questionnaires and picking the complete ones, 108 accurate questionnaires were
picked up. The response rate is 100 percent after receiving the accurate questionnaires.

4.3 Gender Distribution

The below table shows the gender distribution of the sample size selected for the study.
The table shows that males are counted as 92 out of 108 which is the largest participants
in the study from the target group and makes the 85.2%. Female participants are counted
as 16 out of 108 and makes the 14.8 % .

23
Figure 4.1 shows the number and percentage of male and females particpants in the
study.

Gender

Gender Frequency Percent Valid Percent

Male 92 85.2 85.2
Female
16 14.8 14.8
Total
108 100% 100%
Table 4.1 Gender

Figure 4.1 Gender Distribution

4.4 Age Distribution

The below table shows the age of the respondents which is taken from less than 20 to
above 40. Out of the total respondents of 108, the big number of participants are from 21-
30 years old and makes the 65.7 percent of all participants. The number of participants
aged In public and private schools, there were 47 respondents aged 20 to 30 years old,

24
accounting for 26% of the total. The number of respondents aged 31 to 40 are 30 and
makes 27.8 percent of the total respondents and only 2 participants are aged less than 20.

Age
Age Frequency Percent Valid Percent
Less than twenty 2 2.1 2.1
21-30 71 65.7 65.7
31-40 30 27.8 27.8
40 Above 5 4.4 4.4
Total 108 100% 100%
Table 4.3 Age Levels

Figure 4.2 Age Distribution

4.5 Educational Level

The below table indicates the educational level of the respondents from the current study
of 108 people where majority of them counted as 60 are Master’s degree holders that
makes 55.6% of total respondents. 41 respondents are Bachelors that make 38% of total
size and only 7 respondents are High school students that make 6.4% of the whole
respondents.

25
 Education
Degree Frequency Percent Valid Percent
High School 7 6.4 6.4
Bachelor 41 38 38
Master 60 55.6 55.6
Total 108 100% 100%
Table 4.3 Educational Levels

Figure 4.3 Educational Level

4.6 Reliability Test

Case Processing Summary

N %

26
Cases Valid 108 100.0
Excludeda 0 .0

Total 108 100.0

a. Listwise deletion based on all variables in the procedure.

Item-Total Statistics
Scale Scale Correcte Squared Cronbac
Mean if Variance d Item- Multiple h's Alpha
Item if Item Total Correlati if Item
Deleted Deleted Correlat on Deleted
ion
Unethical Ads by 52.3426 101.685 .401 .324 .909
telecom
companies make
customers to
deny their
services.
Customers 52.2315 101.507 .450 .333 .906
abandon telecom
companies which
use false
information in
ads
Customers turn to 52.3889 101.137 .423 .274 .908
another telecom
company if they
don’t receive the
important
information.
Customers prefer 51.8519 95.380 .704 .637 .895
the telecom
company they are

27
satisfied with.
A telecom 52.1852 100.844 .495 .433 .904
company with the
cheapest price
has the largest
number of
customers.
Network quality 51.8519 95.940 .721 .701 .895
attracts more
customers.
Loyal customers 52.1296 101.460 .515 .365 .903
tend to keep
consuming
products or
services from the
same company.
If customers feel 52.0741 101.265 .569 .519 .901
convenient with
services from a
telecom
company, they
purchase more.
Products or 51.9630 98.111 .760 .680 .894
services which
maintain
customer
expectations in
every way,
encourages them
to purchase more.
Telecom 52.3241 97.343 .631 .456 .898
companies
participating in

28
community
services
encourage
customers to
build an
unbreakable
relationship
Satisfied 51.8611 98.868 .685 .694 .897
customers keep
using the
products or
services.
Telecom 51.9630 94.802 .813 .766 .891
companies with
good quality
services maintain
more customers.
Customers will 52.1759 97.978 .700 .560 .896
keep with a
telecom company
they are
committed with.
If I trust a 51.8611 97.167 .760 .690 .894
telecom
company, I will
continue to
purchase
services.

Reliability Statistics

29
 Cronbach's Alpha Cronbach's Alpha Based on N of Items
Standardized Items

.906 .910 14

We use reliability test to make sure to what extent the data we collected is reliable. The
minimum acceptance ratio is 0.6 and above the number the preferable. Based on SPSS
interpretation the above table show the Cronbach’s Alpha as 0.9 which is highly
preferable.

4.7 Normality Test

Item Statistics
Mean Std. Deviation N

Unethical Ads by telecom 3.7500 1.29069 108

companies make customers to
deny their services.
Customers abandon telecom 3.8611 1.19546 108
companies which use false
information in ads
Customers turn to another 3.7037 1.29166 108
telecom company if they don’t
receive the important
information.

Customers prefer the telecom 4.2407 1.22947 108

company they are satisfied with.

30
A telecom company with the 3.9074 1.16440 108
cheapest price has the largest
number of customers.
Network quality attracts more 4.2407 1.16707 108
customers.

Loyal customers tend to keep 3.9630 1.07587 108

consuming products or services
from the same company.
If customers feel convenient 4.0185 1.00449 108
with services from a telecom
company, they purchase more.

Products or services which 4.1296 .97724 108

maintain customer expectations
in every way, encourages them
to purchase more.

Telecom companies 3.7685 1.20440 108

participating in community
services encourage customers to
build an unbreakable
relationship

Satisfied customers keep using 4.2315 1.01950 108

the products or services.

Telecom companies with good 4.1296 1.11985 108

quality services maintain more
customers.
Customers will keep with a 3.9167 1.06011 108
telecom company they are
committed with.

31
If I trust a telecom company, I 4.2315 1.03767 108
will continue to purchase
services.

Scale Statistics
Mean Variance Std. Deviation N of Items

56.0926 113.786 10.66704 14

Descriptive
Statistic Std. Error

Uneth Mean 63.6574 1.16121

ical 95% Confidence Interval for Lower Bound 61.3554
Mean Upper Bound 65.9594
Adve
5% Trimmed Mean 64.8663
rtisin
Median 66.0000
g Variance 145.629
Std. Deviation 12.06769

Minimum 16.00
Maximum 80.00
Range 64.00
Interquartile Range 11.75
Skewness -1.766 .233
Kurtosis 3.863 .461
Custo Mean 12.3889 .26827
mer 95% Confidence Interval for Lower Bound 11.8571
Mean Upper Bound 12.9207
Satisf
5% Trimmed Mean 12.6914
action Median 13.0000
Variance 7.773
Std. Deviation 2.78794
Minimum 3.00
Maximum 15.00
Range 12.00

32
 Interquartile Range 4.00
Skewness -1.484 .233
Kurtosis 2.035 .461
Custo Mean 15.8796 .31290
mer 95% Confidence Interval for Lower Bound 15.2593
Mean Upper Bound 16.4999
Loyal
5% Trimmed Mean 16.1523
ty Median 16.0000
Variance 10.574
Std. Deviation 3.25179
Minimum 4.00
Maximum 20.00
Range 16.00
Interquartile Range 4.00
Skewness -1.147 .233
Kurtosis 1.688 .461

The number for Kurtosis needs to be between -2 to +2 which is considered as acceptance

in order to show normal distribution (George and Mallery, 2010). Date is considered to
be normal if Skewness is between -2 to +2 and Kurtosis between -7 to +7, Hair et al.
(2010) and Bryn (2010). The results show that the data is normally distributed.

4.8 Regression Analysis

Customer Satisfaction

Model Summary – Customer Satisfaction

Model R R Square Adjusted R Square Std. Error of the
Estimate

1 .795a .632 .629 1.69924

a. Predictors: (Constant), CR
b. Dependent Variable: CS
Table1

33
The model summary on table1 indicates that linear regression analysis where R square is
0.63 above 0.5 means that our dependent variable Customer Satisfaction is strongly
affecting our independent variable Customer Retention.

ANOVAa
Model Sum of df Mean F Sig.
Squares Square

1 Regressio 525.602 1 525.602 182.03 .000b

n 3

Residual 306.065 106 2.887

Total 831.667 107
a. Dependent Variable: CS
b. Predictors: (Constant), CR

The ANOVA date indicates the significance number as 0.000 which is below 0.05. It
means that this model shows a significant relationship between these two variables.

Coefficientsa
Model Unstandardized Standardize t Sig.
Coefficients d
Coefficient
s
B Std. Error Beta
1 (Constant) 2.341 .762 3.071 .003

CR .609 .045 .795 13.492 .000

a. Dependent Variable: CS

Customer Loyalty
Model Summary_ Customer Loyalty

34
 Model R R Square Adjusted R Std. Error of the
Square Estimate

1 .787a .619 .615 2.01753

a. Predictors: (Constant), CR

b. Dependent Variable: CL
Table2

The model summary on table2 indicates that linear regression analysis where R square is
0.78 above 0.5 means that our dependent variable Customer Loyalty is strongly affecting
our independent variable Customer Retention.

ANOVAa
Model Sum of df Mean F Sig.
Squares Square
1 Regressio 699.971 1 699.971 171.96 .000b
n 5
Residual 431.464 106 4.070

Total 1131.435 107

a. Dependent Variable: CL
b. Predictors: (Constant), CR

The ANOVA date indicates the significance number as 0.000 which is below 0.05. It
means that this model shows a significant relationship between these two variables.

Coefficientsa
Model Unstandardized Standardize t Sig.
Coefficients d
Coefficient
s
B Std. Error Beta

35
 1 (Consta 4.284 .905 4.733 .000
nt)
CR .702 .054 .787 13.114 .000
a. Dependent Variable: CL

Unethical Advertising
Model Summary_ Unethical Advertising
Model R R Square Adjusted R Square Std. Error of the
Estimate

1 .881a .777 .775 5.72591

a. Predictors: (Constant), CR
b. Dependent Variable: UA
Table3

The model summary on table3 indicates that linear regression analysis where R square is
0.88 above 0.5 means that our dependent variable Unethical Advertising is strongly
affecting our independent variable Customer Retention.

ANOVAa
Model Sum of df Mean F Sig.
Squares Square

1 Regressio 183.073 1 183.073 30.311 .000b

n
Residual 640.223 106 6.040
Total 823.296 107
a. Dependent Variable: UA
b. Predictors: (Constant), CR

The ANOVA date indicates the significance number as 0.000 which is below 0.05. It
means that this model shows a significant relationship between these two variables.

36
 Coefficientsa
Model Unstandardized Standardize t Sig.
Coefficients d
Coefficient
s
B Std. Error Beta
1 (Consta 5.385 1.103 4.883 .000
nt)
CR .359 .065 .472 5.506 .000
a. Dependent Variable: UA

4.9 Hypothesis Test and Discussion

H1: There is a negative effect of unethical advertising on customer retention.

Correlations
Unethical Customer
Ad Retention
Unethical Pearson Correlation 1 .472**
Advertisi Sig. (2-tailed) .000
N 108 108
ng

Customer Pearson Correlation .472** 1

Retention Sig. (2-tailed) .000
N 108 108
**. Correlation is significant at the 0.01 level (2-tailed).

The above table shows that the Pearson Correlation is 0.4 which indicates that the
relationship between Unethical Advertising and Customer Retention is Moderate.

Based on the given data above the H1 is accepted because there’s a significant
relationship between Unethical Advertising and Customer Retention.

37
H2: There is a significant effect of customer satisfaction on customer retention.

Correlations
Customer Customer
Satisfaction Retention
Customer Pearson Correlation 1 .795**
Satisfaction Sig. (2-tailed) .000
N 108 108
**
Customer Pearson Correlation .795 1
Retention Sig. (2-tailed) .000
N 108 108
**. Correlation is significant at the 0.01 level (2-tailed).

The above table shows that the Pearson Correlation is 0.79 which indicates that the
relationship between Customer Satisfaction and Customer Retention is Strong.

Based on the given data above the H2 is accepted because there’s a significant
relationship between Customer Satisfaction and Customer Retention.

H3: There is a significant effect of customer loyalty on customer retention.

Correlations
CL CR
CL Pearson Correlation 1 .787**
Sig. (2-tailed) .000
N 108 108
CR Pearson Correlation .787** 1
Sig. (2-tailed) .000
N 108 108
**. Correlation is significant at the 0.01 level (2-tailed).

38
The above table shows that the Pearson Correlation is 0.78 which indicates that the
relationship between Customer Loyalty and Customer Retention is Strong.

Based on the given data above the H3 is accepted because there’s a significant
relationship between Customer Loyalty and Customer Retention.

Hypothesis Accept/Reject
H1: There is a significant effect of unethical advertising on customer Accepted
retention.

H2: There is a significant effect of customer satisfaction on Accepted

customer retention.

H3: There is a significant effect of customer loyalty on customer Accepted

retention.

39
 CHAPTER FIVE

CONCLUSION AND RECOMMENDATION

5.1 Conclusion
This study is done to show the impact of unethical adverting, customer trust and loyalty
affecting customer retention. Many studies have already been done in the other countries
but to study it in the context of Afghanistan was something new. Unethical advertising is
a false, misdirecting and misleading of a product that affects customer satisfaction and
behavior. It gets more clear when a customer purchases a product/service and feel
betrayed.

First, my finding reveals that unethical adverting, customer satisfaction and customer
trust negatively affect customer retention. This perception goes well with that results of
advertising and the amiability of advertising show that people in Pakistan reject the
present practices of the media and advertisers. Also, (Selin, n.d) found that people are
worried about unethical advertising but never notice unethical reasons. Some are willing
to boycott companies that encourage unethical behavior, while others are simply
frustrated with companies’ behavior.

Second, the results of this study also shows that customer satisfaction significantly
affecting customer retention with the mediation. It goes with the other previous studies
done (Alshurideh et al., 2017), the study found that sexual attraction and violence against
children are factors influencing parents’ satisfaction in ethical advertising in the
Jordanian market. Other studies also show that there is a close relationship between
customer retention with customer satisfaction. The result shows that customer satisfaction
affects customer retention and as the satisfaction grows in a product, the retention to the
product stays more stable. Also, customer loyalty influences on customer retention and
associates with other previous studies done (Bachnik & Nowacki, 2018) building trust in
a product, brand or business is an essential part of a successful consumer business. These
findings show that there is a powerful relationship between customer loyalty and
customer retention because consumers stay loyal to the company and the product when
the level of their trust increases and will result their buying excess.

40
Customer loyalty strongly affects customer retention. Previous studies done associates
with these findings and show the effect of loyalty is stronger than what media and
advertisers show to the people. The people who consumed a product with a positive
experience, are automatically starting to encourage their friends and family. with positive
word of mouth. On the other hand, people will start to leave a product when they come to
know that deception occurs in ads and they don’t get the real product or service they are
promised with. Finally, the findings show that unethical advertising negatively impacts
customer retention. Customer satisfaction and loyalty significantly influences customer
retention.
Customer satisfaction, customer loyalty and unethical advertising were found to have a
great relationship with customer retention. The results show that loyal customers,
satisfied customers and individuals who feel no cheat by telecom industries tend to
purchase more and the data received explain the scenario well.
It is recommended to telecom companies that customers are required to be delivered with
activities so that they could have different options while selecting services and products.

5.2 Implication of the Results

This study was done to find out the impact of unethical advertising on customer retention.
It was done among Kabul citizens in telecommunication sector of Afghanistan. The study
also found that companies with ethical and truthful advertising will attract more
customers because the customers will be satisfied and stay loyal to the present and future
products or services.

The study helps telecom industries to avoid lying or deceiving the customers because
companies might lose many customers or even get out the market. The companies need to
build a strong relationship with customers by providing them with good or best quality
services, telling them the truth about the product, and let the customers to obtain all
necessary information about each service or product they provide.

41
5.3 Limitations and Future Research
This research was done to study only the telecommunication sector of Kabul city,
Afghanistan but in the future researchers can carry out their studies on other sectors
around the country in all or one of the cities in Afghanistan.

Researchers can conduct this research with more sample size and into different other
cities to provide a much more accurate results, but to carry out such a research in all over
Afghanistan we need for more resources and time. The study is limited to one
independent variable with two sub-variables but for more details on this study the
researcher can look at other sub independent variables like, brand image, price
perception, and trust that directly affect customer retention. This topic seems to be more
of importance because we receive many types of ads through media where the right
decision to purchase a product or service looks difficult.

42
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 Appendix: Questionnaire
Questionnaire

Impact of Unethical Advertising on Customer Retention in Telecom Companies in

Kabul-Afghanistan

Investigator Research Supervisor

Ahmad Shuaib Dr. Sarfaraz

Karim

Respected Sir/Madam

We are carrying out an evaluation of telecom companies in Kabul-Afghanistan to see if

unethical advertising impact on keeping their customers.

Your answers are complete confidential and will only be utilized for the research
purpose!

Thank you for your time to fill in the questionnaire.

Name: __________________

Gender: Male Female

Educational Level: Illiterate High School Bachelor Master or

Higher

Note: Please indicate the extent to which you agree or disagree with the following
statements.

1. Strongly disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly agree

46
Statement Strong Disagre Neutra Agree Strongly
ly e l Agree
Disagr
ee
Unethical Advertising
1. Unethical Ads by telecom
companies make customers to deny
their services.
2. Customers abandon telecom
companies which use false
information in ads.
3. Customers turn to another
telecom company if they don’t
receive the important information.
Customer Satisfaction
4. Customers prefer the telecom
company they are satisfied with.
5. A telecom company with the
cheapest price has the largest
number of customers.
6. Network quality attracts more
customers.
Customer Loyalty
7. Loyal customers tend to keep
consuming products or services
from the same company.
8. If customers feel convenient with
services from a telecom company,
they purchase more.
9. Products or services which
maintain customer expectations in
every way, encourages them to
purchase more.
10. Telecom companies
participating in community services

47
encourage customers to build an
unbreakable relationship
Customer Retention
11. Satisfied customers keep using
the products or services.
12. Telecom companies with good
quality services maintain more
customers.
13. Customers will keep with a
telecom company they are
committed with.
14. If I trust a telecom company, I
will continue to purchase services.

48