Research on the Importance of Brand Names to Customers
Research objectives and questions
Background and literature review
Research Objectives and Auestions
The competitive landscape in the most markets is fairly differentiated, but product or technology-based advantages are difficult to maintain. Products are becoming more alike, and intangible attributes take the reign. As technology evolved, the market has slowly shifted from a sellerss playground to a consumer-dominated turf. The consumer-king has become a reality, taking commercial competition to the next level. The client is the judge and jury in this game, ruling spontaneously, unpredictably and very subjectively. At the same time todayss over communicated society has forced the individualss mind to turn to simplification as a defence mechanism. Consumer insights become crucial in the design of efficient branding programs. Markets are a highly unstable environment; most components modify rapidly. Every trimester brings a new technological discovery, threatening to completely change the rules. The only possible attitude for the companies is a prospective, proactive one. It is a jungle where the only certainty is the survival of the fittest. Change is the only constant.
This paper proposes an investigation into the values of the top brands to customers. The main purpose is to uncover the basis of consumer preferences and of purchase decision drivers in front of an over-diversified offer. Previous research emphasizes the role of consumer ethos on the decision making process. Accepting the assumption that top brands in every sector perform similarly, and that technical features donst provide a base for differentiation, this research is set to study the intangible basis of consumer preference, the social and personal factors that act as influencers on the purchase decision. This proposed study seeks to provide a comprehensive picture of how perceptions of a product are affected by individual differences, and branding.
- What are the determinants of brand preference, e.g. design, features, service support?
- Is there brand loyalty and can it be measured?
- What causes customers to switch between brands?
Background and literature review
The times are tough in the branding world. Business is not running as smoothly as before due to changing customer requirements and fast developing technology. All the major players in most sectors are struggling to keep up to the new demands. At the beginning of a new millennium and a new technological era characterized by speed, companies that operate in technologically sensitive fields have to look for opportunities in order to adapt, a requirement for survival. Being merely reactive is not an option any more. In order to maintain market position companies have to make spectacular efforts and good choices. The competition is fierce and the margin for error shrinks every day with every innovation. Products are alike, offering the same benefits, hence customer choices are many times guided by other principles. The high quality of products is implicit, but never sufficient (Olins 1989). Innovations are the key to success in these markets, but they come at a high price and are very easily copied. It takes a mix of luck, great management and a visionary business approach to make it in todayss overcrowded marketplace.
There is more than one kind of competition. Brand competitors offer the same kind of services to the same target; this is direct competition. There are also indirect forms of competition, companies may compete for satisfying the same need. For example, digital photo cameras compete with mobile phones or with traditional cameral for answering the need of capturing the moment in a photograph. Also, companies may compete for the same resources. The customer has a finite income, and virtually all products compete for it, especially in an economically unstable environment. The priorities are set on psychological and sociological criteria (the Maslow pyramid is one theoretical model that suggests a hierarchy of human needs: situated at the base of the pyramid - the vital needs such as food or sleep represent the most important ones, followed by psychological needs, safety, belongingness and love, need to know and understand, aesthetic needs, self-actualisation and transcendence).
The business world is a rapidly changing environment in which technological progress and social dynamics play crucial roles. Top brands face harsh competition and have to constantly reinvent marketing rules to appeal to an audience that is gradually becoming more exigent and demanding. But tuning in with the present is a difficult challenge. Product quality is no longer sufficient to assure success, it needs to be sustained and enriched by intangible attributes.
The global business revolution is a phenomenon of the present. The last period's trend towards oligopoly and concentration is more and more obvious. In an oligopoly, a market is dominated by a small number of sellers, each of them being aware of the actions of the others. The globalisation has lead to pronounced competition in all fields and at all levels, also fueled by the oligopoly situations, resulting in relatively low prices and high production, thus increasing customer power and stimulating high expectations. Manufacturers are now forced to struggle hard just to maintain position and customers are the key to success. When a company's reputation is high, so are customer's expectations. People expect only the best from the best, and products are never enough. They have to come in a package with pre- and after-service, have to mean something, have to hold intrinsic value. Quality is implicitly assumed but never sufficient in the high-end segments of the market (Olins 1989). Intangible attributes many times out-rank functional ones, and people are constantly changing.
The social perspective is extremely important in this analysis. Customer preferences have shaped many markets over the last decades, dictating many times the success or failure of companies, and perceptions are extremely sensitive in an era dominated by communication. At the same time a different lifestyle and rhythm of life have imposed changes in habits and attitudes. Products and services transcend their functional nature and become pure experiences The key to success in this marketing context is to make the intangible tangible (Berry 1986), and branding is a powerful tool capable of selling experiences.
Economists and marketing researchers have given considerable attention over recent years to the importance of brands for customers, developing multiple approaches and creating a certain amount of confusion regarding the implications of branding in fast developing fields. The multitude of definitions and approaches make the concept of branding and its relevance to customers difficult to investigate in a practical research setting. The role of brands in determining consumer purchase-making decisions is widely discussed and requires further investigation.
A brand is a unique and identifiable symbol, association, name or trademark which serves to differentiate competing products or services; it represents not only a physical trigger but moreover an emotional hook to create a relationship between consumers and the product/service (Blackston 2000). On the one hand, a brand is concrete (e.g. a symbol or name); on the other hand, it is also a relatively ambiguous 'trigger' that over time is used to class beliefs and feelings toward products so labelled. For this reason, the meaning of the brand is of critical concern to advertisers. Meaning (in the context of brands) refers to the overall assessment on the part of the consumer regarding what a particular brand means to him or her (La Foret & Saunders 1994). Over time, the meaning marketers infuse in a brand - and the subsequent meaning consumers associate with the brand - is transferred to the products to which the brand is attached. Thus, the factors that contribute to the meaning consumers associate with particular brands and their products are critical to this proposed study.
Smith and Whan (1992) found that the creation of an effective brand not only captures a greater share of the market, but optimises marketing effectiveness as well. Successful branding requires a strategic perspective (de Chernatony, 1988). Strong and durable brand concepts communicated to well targeted segments result in favourable brand images which reflect the brand s identity (Kapferer, 1997). Brands signal a level of quality to consumers and can be effectively used to gain a competitive advantage. After reviewing a body of research on how loyalty toward a particular brand or product is cultivated in consumers, Costabile (2000) organized his findings based on the process of how loyalty is created and maintained - a process that integrates aspects of cognitive, behavioural, and emotional constructs into a cyclical relationship. The first stage of this model is a feeling of trust, accompanied by anticipated satisfaction. The second stage is confirmation or disconfirmation following purchase. The importance of the brand is emphasized by the fact that customers tend to generalize their positive or negative experiences with a brand to all products that share the brand name. The more similar the two products are, the more readily they are used as predictors of attribution generalization.
Branding has been generally recognized as the key to success in nowadays business, especially in rapidly developing fields. It provides value to the consumer through the buying process and thus assures value to the company by attracting consumers and stimulating loyalty. Although complex and versatile, the branding principle has imposed itself as the new business paradigm, and is implemented virtually across all markets and categories. Recent literature underlines the relational aspects of branding, emphasizing trust and dependability between consumers and the company (Chow & Holden, 1997). There is an important distinction that should be considered between image and identity ' two aspects connected to the branding process. The former one is external to the company, being a reflection of its initiatives; the latter is internal and deeply rooted in the company, and underpins the whole architecture. Brand image represents a set of associations established within the minds of customers, implying a promise to them and representing what the brand currently stands for (Batra & Homer 2004). Image represents what consumers think of you, while identity represents who your brand is and what it stands for.
Similarly, there are two multi-dimensional concepts that merge into the idea of brand equity: brand value and brand strength (Lassar, Mittal, et al. 1995). Brand strength sums the perception and behaviour of external publics (consumers, distributors etc.) that shape the image of a company, while brand value represents a management function, depending on tactical and strategic initiatives and differentiating companies at the level of resources and competencies (Teas & Grapentine 1996). Managers are prone to focus their efforts on leveraging brand strength through well designed branding programs in order to increase equity.
From the perspective of consumer behaviour, brand equity gains importance when related to the process of evaluation of products and services. Teas and Grapentine (1996) analysed the influence of brands over the purchase decision making process, and developed a framework that facilitates the understanding and measurements of brand equity issues. The model distinguishes the specific ways in which brands provide value to customers during the various stages of the purchase process. According to the authors, brands simplify the buying task, reduce the perceived risks associated with product quality and provides added value directly to the consumers through intangible and psychological mechanisms (satisfaction, prestige). The purchase decision process in this abbreviated version comprises four stages: information research, first evaluation, purchase decision and post-purchase behavior/evaluation. The brand influences every step of this process.
The Role of Brand in Affecting Consumer Choices
|Brand effects issues||Information research||Evaluation 1 - Establishing the consideration||Evaluation II - Purchase decision||Post-purchase behavior/evaluation|
|Indicator of search attributes||Reduce information acquisition||Inclusion criterion|
|Indicator of use attributes||Inclusion criterion||Risk reducer via attribution indication|
|Indicator of credence attributes||Risk reducer via attribution indication|
|Brand loyalty/inertia||Reduce information acquisition effort||Decision simplification||Decision simplification and risk reduction|
|Brand as a valued attribute||Inclusion criterion||Decision criterion||Satisfaction/Prestige|
Source: Teas & Grapentine 1996.
The studied brand effects issues represent the various roles that the brand is expected to play in the various stages, and these are: brand as an indicator of search attributes, brand as an indicator of use attributes, brand as an indicator of credence attributes, brand loyalty and brand as a valued attribute. Search attributes are product characteristics that can be evaluated by acquiring information during the pre-purchase decision process. Brand familiarity and trust can diminish the effort required to acquire search attributes information. When search efforts are reduced for a particular brand, some kind of information is automatically assumed to be true based on brand knowledge (Baldinger & Rubinson 1997). At the same time, this simplification mechanism stimulated by brand knowledge reduces the consumer's consideration set when making a purchase decision.
Use attributes are product characteristics that can only be evaluated after the purchase. Product performance is often forecasted on the basis of the brand name. A brand will have a competitive advantage over another to the extent in which consumers assume it will out-perform rivals. The primary mechanism that triggers this associations and build such beliefs is product usage.
Credence attributes are characteristics that can never be fully assessed by consumers. Brand associations can be used in the process of evaluation of such credence attributes. Brand trust can also reassure consumers regarding credence attributes, reducing the perceived risk. Brand loyalty occurs when consumers are driven by purchase inertia and tend to choose the same brands over and over. Loyalty significantly reduced information acquisition efforts, thus simplifying greatly the buying process.
Last, but certainly not least, brands offer intrinsic value to consumers, such as prestige or satisfaction. Brands become lifestyle choices and statements. The primary mechanism that drives such associations is a similarity between the consumer's and the brand's value systems. You are what you wear/use/choose. This aspect is strictly connected with social evaluations and perceptions of brands.
Brand equity is the value built-up in a brand over time, consisting of both functional, tangible attributes and emotional, intangible attributes. Equity in terms of branding is perceived superiority. Higher equity is indicated by higher loyalty. 'Brand equity lies the minds of the consumers, who carry fairly complicated sets of assumptions and beliefs about their roles" (Holbrook 1987).
It is critical that branding be considered within a broader context, because brand is not the only factor influencing consumer purchasing patterns. Other factors, such as price and features, affect brand preference. Meer (1995) examined how price and brand are used to describe four types of shoppers: brand loyals (those who purchase products and/or services from their chosen brands regardless of price); system beaters (those who have brand preferences, but are very sensitive to price as well); deal shoppers (those who have no brand loyalty whatsoever); and the uninvolved (those who do not care about either brand or price). Note that ' the uninvolved' was by far the smallest group. This means that either advertising and marketing strategies, whether focused upon building brand equity or simply attracting price-oriented shoppers, work, or that these factors determine choice. System beaters are not brand-unconscious; they have strong brand preferences, but they (similar to deal shoppers) have a strong price sensitivity. The combination of brand loyals and system beaters -- both of whom exhibit brand preferences -- is three-fifths of the market. In other words, 60 percent of the market for most products is strongly brand-loyal. This shows the importance of building and maintaining brand equity.
In a world dominated by brands, quality matters less than perceived quality. Perceptions of quality as they relate to a particular brand are also critical if brand loyalty is to be maintained. Crosby, DeVito, and Pearson (2003) examine how perceptions of quality are created and maintained in the minds of consumers. The first thing the authors note is that an understanding of quality is not necessarily something that is perceived, let alone established, in the mind of the consumer upon the first impression (Crosby, DeVito, & Pearson, 2003). Often, a sense of true quality emerges over time, as the consumer uses the product s/he has purchased and gradually cultivates an understanding that the item is of high quality (or low) - a perception in either direction takes time to generate. Therefore, branding can make consumers believe that a particular product is of high quality, but that perception is subject to confirmation.
Chaudhuri (2002), in studying brand equity, found that brand reputation ' performs better than brand attitudes in explaining the effect of brand advertising on brand equity outcomes' (Chaudhuri, 2002, p. 33). In other words, the reputation of a brand is a better predictor of the effect of brand communication upon equity outcomes than other attitudes toward the brand. This is an interesting finding, given that consumer brand associations (based upon attitudes) account for brand equity outcomes. The results indicate the immense power of the brand; for if reputation is a better predictor of the effects of branding than other attitudes, then such factors as individual difference should play a lesser role.
Marketing research studies are primarily aimed at identifying areas for improvement in the field in order to stimulate economic development. Choosing an appropriate methodology is crucial to the outcome of a study. All types of research are based implicitly or explicitly on a selected design, that connects data to the researcher's initial research aims and to the study's conclusions, like a blueprint for the entire research work.
In addressing the research questions, issues of social, personal, and technical context are central. The research design is a flexible set of guidelines that help the researcher achieve the most accurate analysis of the collected data and to interpret it properly, considering issues of reliability and validity. The chosen research method for the present study is a descriptive research design, focused on describing phenomena as they exist and explain them. The method does not look for a specific relationships or correlation between variables.
Secondary methods of research will be used in the study, to offer a complex and complete picture. Research will focus on the consumers, their demographic and psychographic characteristics , the values and identities they look for in brands and how they develop loyalty to them. The research will focus on academic journals, books and articles on the subject such as papers, magazines and the Internet.
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