Brand impact on Consumer Buying Behaviour

Consumer driven approaches is widely adopted by the companies in order to enhance countless emerging needs of modern customers. Branding becomes a crucial activities of consumer driven approach and its aim to build a loyal customer base and creation of an effective brand image.

In this document, the author presents a research report complied after analyzing the effects of branding on the consumer purchase decision. The research had been carried at the shopping centre called Shoppers Stop in India. The research had attempted to find whether there is positive relation between the positive effect of the brand and the consumer purchase decision.

“There are so many parity products out there that the only way to differentiate yourself from the others is to create an aura, an image, around your brand. Consumers need a road map; they need to find a way to get from their need to a product purchase that’s simple, easy, not full of a lot of noise, and most brands get lost somewhere between the shelf and the consumer mindset.”

-Karen Benezra, editor of Brandweek

The paper also discusses the literature “the importance of branding and the consumer purchase decision”. It details the research rationale along with the research philosophy, the approach used, the context, sample and procedure. As well as It discussed the significance of the proposed research along with its limitation. A provisional work schedule is also provided.

Aims

The aim is to determine the extent of the correlation between the activities of branding and consumer purchasing as well as put into perspective the main functions and values branding can offer companies in term guiding valued customers through the often complex process of purchase decision-making.

Thus the basic research question would be, how does branding affect the consumer purchase decision?

Objectives

This research will have the following objectives:

To assess whether positive feelings towards a brand will translate into a consumer purchase decision.

To establish the changes in the relationship between branding and consumers’ purchasing decision when other factors such as price are introduced.

To examine the consumers tendency to recommend brands and its effect on purchasing decisions of their friends and family.

Chapter 2: Literature Review

Origin of Branding in Market.

After the First World War, the whole world economy was under Great Depression during 1930s and also gives rise to socio-economy problems because of impact of war wages on the people and hence left a dent in people’s pockets and curbed the desire of society to spend and consume.

Strangely, the Second World War and the period after the war had seen a different pattern in manufacturing industries that a increased capacity to produce goods whereas the society was left with an ingrained desire to be frugal.

Bass & Company, the British brewery, claims their red triangle brand was the world’s first trademark. Lyle’s Golden Syrup makes a similar claim, having been named as Britain’s oldest brand, with its green and gold packaging having remained almost unchanged since 1885.

Source: http://www.quaffale.org.uk/php/brewery/578

What is Branding?

The word “Brand” the Germanic root meaning is “burn”. In commercial market branding is all about the product attributes that make a lasting impression in a customer’s mind.

As per Karl Marx, people make their own decisions about who to be, how to live, and what to buy, but under circumstances shaped by brands’ advertising, marketing and publicity.

Thus a brand exploits the underlying attribute that is storytelling and emotions which are the buying behaviour.

James Walter Thompson published a house ad explaining ‘trademark advertising’, in 1900. Thus Branding was coined for the first time with commercial explanation. Mr. Thompson appeared as the philosopher of Branding by ‘drawing a straight line between the manufacturer and the consumer’.

Source: http://library.duke.edu/specialcollections/hartman/guides/jwt-history.html

“Human civilization is dependent upon signs and systems of signs, and the human mind is inseparable from the functioning of signs-if indeed mentality is not to be identified with such functioning.”

Apple Logo Design

Apple was selected as main form of branding depending upon the company name.

Initially, the logo depicted a small apple shape sitting under a tree with Apple Computer Co set into the frame of the picture. It is this apple that has continued to be used. The first logo design was perceived to be a bit too complex and hard to view, so Regis McKenna worked on the logo some years later and added a “bite mark” to symbolize the concept of seduction of the customers and the marketplace in general. Next, the monochrome version was replaced with the rainbow-colored logo as a reference to the Biblical story of Adam and Eve in which the apple represents the fruit of the Tree of Knowledge. It brings to mind that people must pursue their dreams. While this was not initially a deliberate goal, it did encourage business and consumers to consider the Apple brand for the first time and was successful in generating increased profits.Source: Charles Morris, Foundations of the Theory of Signs.

Source: http://www.logoorange.com/logodesign-A.php

A brand is an end result. Branding is the process by which a brand comes to be. A brand is many, many things, but it is never an accident.

Present Day Branding.

A branding provides a platform for consumer choice process. Today’s market offer different products among thousand for similar offerings, this complexity makes the users to follow their choice that have satisfied already in past. The pattern of this consumer behaviour was also supported by Assael in 1993 with a concept that in a situation of low-involvement of consumer, the consumers completely rely on past consuming experience; hence it provides a clue that consumers with minimum purchasing areas could be targeted by advertisement campaigns.

Thus consumer plays a key important role product branding process in current market. Even nowadays a good number of consumer emotionally attach with the brand that helps to understand the impact of image among consumers.

With this a natural differentiation concept was introduced by Adcock in 1998, with differentiation process , the company start developing a set of unique differences that help to provide a distinctive identity among other products in market. Hence, differentiation provides a cutting edge for the branding of product in present competitive market.

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As per Prof. Kevin Lane Keller, author of “Strategic Brand Management”: The trend in marketing of brand depends upon the changes in the environments around the consumers. A social, cultural, political, economic and technological environment changes the life of human and with this the branding need to adopt the trend for example

Online Marketing

Social Networking Online-Media such as Face book, MySpace, Google.

A corporate social responsibility and sustainability impacting the product image.

Philip Kotler in 1999, a brand captures consumer’s attention through a Six Dimensions of Brand:

Attributes

A brand will communicate specific attributes, such as prestige.

Benefits

A brand strengthens a product’s attributes by communicating a set of benefits that makes it more attractive.

Values

A brand represents a company’s core value and belief system.

Culture

A brand is representative or targets a target audience’s socio-cultural characteristic.

Personality

A Brand Project behavioural personality patterns of targeted consumers.

User

A brand can emulate the end user.

Identification of Branding Differences step by step

Difference 1: A Visual difference, Symbols and logotype.

In the seventies, when the phrase generation was being coined and used in any number of contexts such as in movies, music, technology etc, Pepsi annex the beverage style of young adult segment of the inhabitants and dubbed them “the Pepsi Generation,” in an endeavour to make Coca-Cola seem old and staid. In the 1980s, Coca-Cola executed what was perhaps the most celebrated marketing mistake in history, discontinuing production on its core product, the most recognizable brand name in the world; in favour of a more Pepsi-like formula it dubbed New Coke. This Grand Canyon-size blunder eventually worked in the company’s favour when consumers revolted with startling vehemence and Coca-Cola quickly announced it would bring back its revered product, now under the name Coca-Cola Classic. Sales rebounded, and more media attention was lavished on the Cola Wars. The campaign also managed to underline the loyalty and affection so many consumers had for original Coca-Cola-which might very well have been the goal of the company to begin with. Coca Cola eventually dropped the word Classic from its name, and remains the most widely recognized brand in the world to the present.

Difference 2: Culture (Hofstede’s onion)

Difference 3: Personality (Aaker)

Difference 4: Identity and positioning (Kapferer)

Brand Equity and Brand Loyalty.

Brand

American marketing association defines the brand as ‘A name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers’. The legal term for brand is trademark. A brand may identify one item, a family of items, or all items of that seller. If used for the firm as a whole, the preferred term is trade name

Advantages and disadvantages of branding

Advantages:

1. Helps in identifying the goods and services.

2. It stimulates the purchase decision of the consumer.

3. It helps in creating customer loyalty.

4. It helps the company to maintain the leadership position in the market (if they are already market leader)

Disadvantages:

1. Requires huge investment.

2. An unsuccessful brand will bring negative image to the company.

3. Customer may not be willing to pay extra just because it is branded

Brand equity

Brand equity is set of assets linked to a brand’s name and symbol that adds to the value provided by the product or a service to a firm and/or that firm’s customer.

Components of brand equity:

1. Brand loyalty

2. Brand awareness

3. Perceived quality

4. Brand associations

Brand loyalty is consumer’s commitment to repurchase the brand and can be demonstrated by repeated buying of a product or service or other positive behaviours such as word of mouth advocacy. True brand loyalty implies that the consumer is willing, at least on occasion, to put aside their own desires in the interest of the brand. This will help organization to reduce the promotion cost.

Brand awareness: The number of customers exposed to the brand name. Higher the brand awareness, higher will be the brand equity. Organizations put all the effort in the introduction stage of the product to create awareness among the customers.

3. Perceived quality: the customer perception about the actual quality level of the product.

4. Brand associations: The attribute of the brand that customer associates with his/ her belief.

A person may associate the brand for power, strength or protectiveness.

Brand Development

Company can develop the brand on the basis of product category and brand name. Now we will

discuss the different strategies adopted by companies to develop the brands.

Existing

New

Existing

Line Extension

Brand Extension

New

Multi Brands

New Brands

Line extension:

Company uses its well known brand name to introduce additional items in a given product category such as new forms, flavours, ingredients or package sizes.

For example, Karnataka Milk federation, Uses its top brand name Nandini to introduce new Items like toned milk, full cream milk, curd and milk powder. It is less risky and requires fewer investments to introduce the product. In the above example Nandini used the extension to meet the excess capacity that it has. The milk procurement was more than the demand from the customer. Hence it started producing the milk powder. But all the products introduced need not to be successful in the market. In case of KMF Nandini Ice creams didn’t click in the market. Another risk of line extension is brand cannibalization i.e. Company’s brand/items compete each other.

Brand extension:

A strategy in which company uses one of its familiar brand names to new

product category’s items. For example, United breweries (UB) limited group used its flagship

brand kingfisher to different categories. Kingfisher was originally a beer brand extended to

airlines. Brand extension gives instant recognition to the brand. In the above example people

required very less time to know kingfisher airline brand because parent brand was very well

Known. Brand extension if it fails then it may hurt the parent brand reputation in the market.

Multi brands:

The techniques of introducing the product or items in existing product category with a new brand name. For example, Hindustan Unilever uses different brand names for their home and personal care category. The above example shows us that HUL have breeze, Dove, Liril Lux, Lifebuoy and Pears in the bath soap segment itself. It helps company to come out with new features in the product or product category. Organizations adopt this strategy to avoid brand cannibalization in the given category. The major disadvantage of this strategy is none of the brands will enjoy major market share and result in lesser profitability. In case of Hindustan Unilever company had more than 100 brands and was forced to reduce it to 30 power brands. Other brands were not adding enough profit for the company.

New brands:

The strategy of coming out with new brand for new category products. In this

strategy, company believes that existing brands can not be extended to the new category. The new

brand strategy requires huge resources to build it. The new category if it already had some brands

of other companies, investment requirement will go up. For example, Hindustan Unilever launched

Pure it in the water purifier category. The category and brand is new to the company.

Consumer Buying Behaviour : Branding a influencing factor

What influences consumers to purchase products or services? The consumer buying process is a complex matter as many internal and external factors have an impact on the buying decisions of the consumer.

When purchasing a product there several processes, which consumers go through? These will be discussed below.

3- COMPONENTS OF BRANDING

Branding is a process of creating a product or company identity – a personality creation and development by a number of differential professionals with same objective or goal.

1. Advertising. It’s a wonderful thing to create a unique, user-friendly brand that the public is sure to embrace. However, if the public doesn’t find out about the brand-and much of the public will find out through advertising-all that effort, time, and money will go to waste. The look and attitude of the advertising also help define the brand in the public’s mind. Nike is well known for spending millions on celebrity endorsements for advertising. Its ads are legendary, and its “swoosh” logo is known the world over without a word being said.

2. Marketing. In devising the personality of the brand and determining how it will be presented to the public, marketing, which is usually done in-house and through consultants, helps to create the entity that the brand will become. It’s a fine thing to own the recipe for Oreo cookies, but if you decided to sell the recipe and not the cookies, you would be making a very large marketing mistake. Marketing is not just selling; it knows what to sell and how to sell it as part of a larger plan.

What marketing does is to determine the proper audience for a product, and then deliver to that audience what it wants. The target demographic can be as narrow as 15-year-old boys living in the suburbs, or it can be literally anybody. That will depend on the product. But once the demographic is identified, marketing professionals analyze it, make sure the characteristics of that demographic are compatible with the product, and then emphasize the strengths of the product. The strengths of the product here are very specific: They are the strengths that will best convey the personality the demographic wants to see in it. For example, if Philips had tried to market its flat-screen TV to an audience over 65, which traditionally is not warm to change, it might not have been successful, no matter how innovative the product may have been. Instead, the company aimed its ads at people in their twenties and thirties, emphasized the newness and difference of the product, and had a great success.

3. Public relations. If advertising is the juggernaut of public attention, public relations is the stealth bomber. PR generates publicity for the brand, helps solidify the public’s opinion of the brand, and defines the brand-all without being perceived by the public

“A lot of clients don’t understand the difference between Branding, PR, advertising and marketing,” says Rob Frankel, author of Revenge of Brand X. “Personally, I prefer PR to advertising. I like PR because a lot of my Branding program is based on third-party endorsement. It’s way more credible and fast-acting than when you pay for ads.

Problem/Need Recognition for Future Branding

How do you decide you want to buy a particular product or service? It could be that your DVD player stops working and you now have to look for a new one, all those DVD films you purchased you can no longer play! So you have a problem or a new need. For high value items like a DVD player or a car or other low frequency purchased products this is the process we would take. However, for impulse low frequency purchases e.g. confectionery the process is different.

Q. What are the new branding challenges and opportunities especially nowadays with the global economic crisis?

The current economic crisis presents many challenges but also much opportunity for brand marketers at the same time. Research has show that in past recessions those firms that have been willing to invest in their marketing have emerged in a stronger position than those firms that have cut back spending and reduced their marketing investments. Obviously those marketing investments must be wise ones. Perhaps the most important branding consideration in tough economic times is to establish perceptions of good value. Being seen as low priced or less expensive is not necessarily the answer, the more important consideration is that consumers feel that they are getting appropriate value from a product or service. Value is basically all the benefits the consumer realizes versus all the costs that he or she incurs. It is important to view and these benefits and costs broadly. Benefits include the perceived monetary value of all the bundle of economic, functional, and psychological benefits that customers expect from a product. Similarly, costs are not restricted to the actual monetary price but may reflect opportunity costs of time, energy, and any psychological involvement in the decision that consumers might have. Top marketers in a recession will be sure to develop marketing programs and activities that optimally balance that equation so that consumers feel the collective benefits outweigh the collective costs as much as possible. That my involve framing the brand’s costs and benefits so that they are seen in the most positive light possible.

Q. What would you single out as the most important message out of your extensive experience in studying brands?

The most important message for marketers these days is to make sure they have a deep, rich understanding of consumers and how they think and feel about brands and their products and services. It is so fundamental and may seem obvious, but unfortunately many marketers still fall way short on that score.

Consumer Buying Behaviour

Q. What is the future of branding?

Brands will always be important given their fundamental purpose – to identify and differentiate products and services. A good brand makes people’s lives a little easier and better. People are loyal to brands that satisfy their expectations and deliver on its brand promise. In an increasingly complex and busy world, the ability of a brand to simplify consumer decision-making is powerful. The predictably good performance of a strong brand is something that consumers will always value. What will change, however, is the means by which firms will build those brands. Marketers must always be adopting state-of-the-art branding practices to ensure that their marketing programs and activities reflect the always changing economic, cultural, technological, social, and legal environments.

There are 4-Types of consumer buying behaviour: Assael 1987

Purchasing Experiences

High Involvement

Low Involvement

Significant differences between brands

Complex buying behavior

Variety-seeking buying behavior

Few differences between brands

Dissonance-reducing buying behavior

Habitual buying behavior

Source: Assael 1987, Consumer Behaviour and Marketing Action, 6th edition, p. 67

There are four types of consumer depending upon the degrees of involvement and degree of differentiation amongst the brands as per Assael.

A displaying Complex Buying Behaviour Pattern is a group of consumer who prefer to expand their beliefs regarding a particular product as a primary step and hence this process will lead them to develop positive attitudes regarding the product.

Dissonance-Reducing Behaviour of consumer is classified as the trend in which consumers are highly involved in the purchasing experience but unable to compare among the brand of products offering similar services or features.

Thus differentiation becomes the key point as consumers asks for the features or functionalities or price comparison among the brand but in a market which display low differentiation of brands, the consumer purchasing behaviour is influenced by convenience.

Displaying Habitual Buying Behaviour is a behavioural pattern as a result of consumer’s condition where the consumer buying decision depends on the product information acquired passively or the information embedded in their mind via review electronic media or promotional efforts, also the user shows low-level of involvement products.

Variety Seeker Buying Behaviour, the consumer buying reaction occurs because of low-involvement in a market that displays high levels of product differentiation , thus they prefer to follow “Brand Switching” , in order to satisfy their need for diversification.

Chapter 4: Survey, Analysis and Findings

Introduction

The survey was performed in India at “Shoppers Stop Mall” (New Delhi Ansal Plaza Branch), which has many branches across the country at major cities and in United Kingdom, at St. Anns Shopping Centre (Harrow, London). The survey template was design to understand the relation between a product brand and consumer, in a sense that how much they trust or rely on the brand that they go for the product, in short the impact of branding on consumer purchasing decision.

The research was to understand the influence of Brand in a developing and developed country. As the one could easily conclude that the consumer in developed country focus on more on brand image as the brand image define the quality of product whereas consumer in developing focus more on the need rather than quality for example a consumer in India purchasing a television will first look for the price and then maximum features within the price also the product should belong to reliable brand this is one of the key reason that even though India has certain level of free trade open market relation with china , still the Chinese cheap product unable to penetrate the Indian market.

Questionnaires

There are 150 and 180 interviews have performed in India and UK respectively, the pie chart display the same. The Number of interviews conducted with respect to different age group, the column chart below represent about the survey conduct in India at shoppers stop mall.

The below graph display the number of interviews conducted, focusing the age group in UK at St. Anns Shopping Centre. In our survey we have put more focus on the young generation and middle-age group to understand their psychology while purchasing a product and how its being influences by the brand of the product. We also get to know the preference made by female and male group in India and UK. The female group in India and UK both spend their most of their shopping time in costumes and they prefer detail analysis or observation between different brands and they could easily compromise on the brand.

Which brand do you use?

Brand P

Brand Q

Brand R

Brand S

In case of others, please specify….

Age group?

16- 24

24 35

35- 50

50-70

What to you perceive to be the key attributes of a brand and what do you associate it with?

Quality

Price

Status

Personality

Aesthetics

To what extent brands are important to you?

Very Important

Important

Neither Important nor Unimportant

Not Very important

Not at all Important

5. How does the “Made in trademark” influence your buying?

Very Much

Not much

Doesn’t Matters

Matter’s

Strongly Matter’s

What is the key difference between International and Domestic brands?

Quality

Price

Variety

Services

Does Culture difference play an important role in regards to your buying decision?

Agree

Strongly Agree

Depends

Disagree

Strongly Disagree

Do you agree shopping is different in abroad then in India?

Yes

No

Do you feel changing market of fashion and technology plays an important role in your buying decision?

Yes

No

What product of that particular brand do you use?

Product 1

Product 2

Product 3

Product 4

In case of others, please specify…..

How long have you been using this product?

1 year

2 year

3 year

4 year

5 year

In case of others please specify…

How did you first chance upon the product?

Advertising

Word of mouth

Display

In case of others, please specify…

Please suggest, if you want to make any changes to the product and why?

Are you satisfied with this brand?

Extremely satisfied

Satisfied

Fairly Satisfied

Not at all Satisfied

Which Cosmetic product brand you prefer?

Olay

Dove

Grainier

A combination of mixed product brand.

How long have you been using the product XYZ?

First Time

Regular user

Never.

What made you use the Product XYZ the very first time?

Advertising

Word of Mouth

Display at shop

If anything else, please specify…

Have you ever used competitor’s product?

Yes

No.

If you have used competitor’s product, then please confirm which product is better in the following terms:

Quality

Quantity

Brand Name

Are you:

Male

Female

How did you receive this product?

Gift

Purchase

If other, please specify?

How did hear about the sale of this product?

Advertising-Newspaper, radio, TV

Friend / family

Article / magazine

Store

Others, specify__________________________________

From which store did you made the purchase of this product? Specify.

_____________________________________________________________________________________________________________________

How many different brands did you look out for this product? Specify.

___________________________________________________________

Findings

In developing nations such as European countries, a different trend has been seen because of globalisation and free trade, the market is flooded with many products offering similar features and because of competition, the price of the product has fallen down, European industries has to reduce their cost of goods sales by compromising with the quality of materials or setting up manufacturing industries in developing or poor nation where the quality of production much more oriented towards manufacturing the product instead of manufacture quality product , for example Automobile industries , the number of automobile industries has gone down significantly in past 50 years.

As per the research performed by KPMG for Automobile industries, the future of automobile industries will not only be characterized by origin of OEMs.

Recommendations

Convergence: A Business Concept

The concept convergence has already entered into the market with innovation ideas of doing business, in automobile industries; e-Mobility and Car-sharing business are the best example the convergence of brand and business ideas, e-mobility provides convergence between Fiat OEMs and Power Suppliers and Car-Sharing e.g Deutsche Bahan is the convergence between OEMs and mobility providers.

From this we could able to figure out that convergence and innovative business ideas not only helps the Brand

Convergence – A New Business Player

Convergence example: E-Mobility and Car-Sharing

Assembled Product: Combination of Branded Products

In coming future, one could imagine of a product developed like an IT product, for example an IT product such as cloud computing systems , IT for green , Client computing , Advance Analytics (Business Intelligence software) is a combination of many software product provided by different brand leaders. This could be a future business concept across all products , one could think of his own car made up of worlds different brand leaders.