INTRODUCTION

People in our society are so conscious about their status and they prefer to use branded
products to show off their status symbol. Brand is considered as implied device
through which any business can attain the attraction of people and can enjoy the
competitive edge. In our local scenario it is also considered as a valuable asset for any
business as it can change people's buying behavior. It can play a vital role to expand
business. Marketing valuable strategies and tools can develop the brand of any
product. If brand is managed in effective ways a business can enjoy maximum number
of customers and can build long term profitable relation with customers. Refine
quality of products and social responsibilities of any business can positively affect the
behavior of people regarding brand image satisfaction and loyalty.
In today's business environment companies must work harder than ever before to
achieve some degree of differentiation on their products. A strategy differentiates
company brands to other competitor's brands. The intention to offer marketing
package for consumer benefits by a marketer is to win the completion by creating new
and decisive consumer value.
Due to increase of globalization homogenization of consumer's preference in the
world, global branding has become widespread. Consumers have their attributes and
forces behind before and during and before the process of purchasing branded goods.
If customers trust a brand quality it makes a positive connection to the brand and they
will have reason to become loyal to the brand. Most branded goods influence
consumers hence industries are in completion to win the market in a manner that
producers should be able to create loyal customers and not concentrate on increase in
sales only.
1.2 STATEMENT OF THE PROBLEM
There are various factors such as price, usage, benefits, compatibility, brand
preference etc. which influence consumer buying behavior. Here a study is under
taken to know how brand preference affects consumer buying behavior on electronic
goods. The project entitled "BRAND PREFERENCE IN CONSUMER BUYING
BEHAVIOUR OF ELECTRONIC GOODS — A STUDY IN CHENGANOOR
MUNCIPALITY" examines the effectiveness and impacts of brand preference on
selected electronic goods of different brands.
1.3 OBJECTIVES OF THE STUDY
• To identify the various factors influencing the buying behavior of customers.
• To analyze the consumer's attitude and perception towards different brands.
• To evaluate the impact of age and gender on consumer buying decision.
• To assess the constraints regarding the selection of branded products.
• To elucidate the reason for switching brands.
1.4 SCOPE AND SIGNIFICANCE
This research focuses on influence on consumer buying behavior in Chenganur
Municipality. This location is strategic due to the fact that the city is blessed with
different types of industries and multi cultural differences hence it is simple to collect
data as due to larger number of people living in the city. This study will only be based
on consumer.
This study is exploring the relations between variables that affect the buying decision
of consumer on brands. Understanding variables such as price, quality, brand name
and social status if are able to help further understand how these variables affect the
choice making of consumer. This study helps the present marketing managers to better
reposition their brands and advertising strategy to capture the correct target market to
improve the sales in time where economy is at a challenge.
With such study, the impact on advertisement is clearly an influential media to
promote branding of products and variables that influence buying decisions is surely a
focus to ensure the marketing communications are done correctly and effectively.
Ensuring effective execution of strategy is by understanding how variables such as
pricing, quality, perceived societal status and brand name can influence consumer
buying behavior of branded goods.
1.5 METHODOLOGY
AREA OF STUDY: Chenganur a municipal town in Alapuzha district on state of
Kerala, India. It is considered as one of the major educational and religious centers of
Kerala. As of 2011 India census, the total population of Chenganur UA/Metropolitan
region is 127,987. The male population of which is 61,807 while female population is
66,180. The literacy rate of Chenganur Agglomeration is 97.56% which is higher than
National Urban average of 85%. Literacy rate for male and female stood at 98.19%
and 96.98% respectively.
RESEARCH DESIGN: The study is analytical in nature.
TYPE OF DATA SOURCE: The study consists of both primary and secondary data.
Primary data were collected through questionnaire. Secondary data were collected
from books, online journals, websites etc.
SAMPLE DESIGN: In this study for the purpose of primary data collection, samples
were selected by using convenient sampling technique.
SAMPLE SIZE: Sample size for the study conducted is 100 customers.
TOOLS OF DATA COLLECTION & ANALYSIS: Primary data (a detailed
questionnaire, from the customers) for analysis were collected by admin. For analysis
of the data, various statistical tools are used. For statistical analysis, the tools that have
been applied are;
 Percentage Analysis
 Figures and Charts
1.6 LIMITATIONS OF THE STUDY
 Since the study is confined to Chenganur municipality the findings cannot be
generalized for whole Kerala.
 To research was carried out in short period duration. Therefore the sample size
and other parameters were selected accordingly.
 With respect to actual population, the sample size was too small. This might
affect the final result.
 The response given by the respondents are taken as true.
1.7 CHAPTERIZATION
1. The first chapter, topic of research is introduced along with objectives,
methodology and limitations.
2. Second chapter gives review of literature.
3. Third chapter is earmarked for theoretical overview.
4. In fourth chapter the problem is analyzed in detail using various statistical
tools.
 5. Fifth chapter gives findings & conclusion.
REVIEW OF LITERATURE
Consumer behaviour can be defined as the decision-making process and physical
activity involved in acquiring, evaluating, using and disposing of goods and services.
This definition clearly brings out that it is not just the buying of goods or services that
receives attention in consumer behaviour but, the process starts much before the goods
have been acquired or bought. The process of buying starts in the mind of consumer,
which leads to the finding of alternatives between products that can be acquired with
their relative advantages and disadvantages. This leads to internal and external
research. Consumer behaviour study is based on consumer buying behaviour, with the
customer playing the three roles of user, payer and buyer. For the study, literature
survey has been made and on that basis the review of the literature is prepared below;
Rogers (1995) in his study "Diffusion of Innovation" observed that various factors
influence the consumers when they are making a choice among alternate brands.
These factors consist of price, perceiver risk, compatibility, triablity, relative
advantage, complexity, image and observability. In this research article, influence of
following factors on brand choice has been measured: price, quality, brand image,
innovative features, promotion effectiveness, celebrity endorsement, user friendliness,
stylish appearance, post purchase services etc.
HundalB.S.(2001) has conducted a study on the topic "Consumer Behaviour in Rural
Market: A Study of Durables". In his study he investigated the role of family members
in purchase decisions of durables such as refrigerator, television, air-coolers and
washing machine. His findings projected that product selecting decisions in rural
families were mostly made by spouses together but they were highly influenced by
children.
Keller Kevin (2002) has conducted study on the topic "Branding and Brand Equity".
In his study he said that brand is sum total of all elements of the marketing mix.
Brands can also be explained based on their elements "those trademark-able devices
that serve to identify and differentiate the brand (e.g brand names, logos, symbols,
characters, slogans, jingles and packages)"
Kotler P, Chandler P C, Brown L, Adam S (2003) has conducted a study on the
topic "Marketing: Australia and New Zealand". Consumer surveys often reveal that
quality is one of the most important factors for consumers, if not the most important.
Product quality stands for the ability of a product to perform its functions. Given that
literature on brand choice in the dairy products is relatively sparse, the relevant
research hypotheses were guided by the above studies. It has been hypothesized that
choice or preference of diary brand is influenced by:
1. Price of brand
2. Product quality
3. Brand design
Selvakumar M and Jegatheesan, (2012) have written a paper on "Brand Preference:
A Study with Reference to Washing Machines". It explains that washing machine is
one of the widely used home equipment which is used to wash cloths. India is one of
the fast developing countries in the world. At present it is needed both in family to
work. Therefore to simplify the washing work, the people need machine for washing.
In washing machines a number of varieties are there. Today, Indian consumers not
only have a wide variety of brands to choose from, but also the option to buy a
machine that is just right for them from amongst the several models available. Apart
from these factors that they should consider the various wash programs, the wash
mechanism and some convenience features that their machine should behave in order
to provide the maximum level of comfort. With this backdrop, this article makes an
attempt to analyze the brand preference of washing machines.
Lhotakova, M and Olsanova, (2012) in their study entitled, "The Role of Positioning
in Strategic Brand Management — Case of Home Appliance market", explained that
with growing competitiveness in the national as well as international markets, brands
have increased importance in consumer decision making process. Brands help
consumers to choose products that satisfy their needs, suits their emotions and help
them demonstrate their place in the society. Current financial crises proved that strong
brands can do well even in bad times. Global brands, which are ranked at the top as
the world's most valued brands, put a lot of efforts into positioning development,
keeping it up-to-date and consistent across all brand activities.
Fatimah Furaiji, Malgorzata Latuszynska, Agata Wawrzyniak (2012) have
written a paper on "An Empirical Study of the Factors Influencing Consumer Buying
Behaviour in the Electric Appliances Market". This study contributes a deeper
understanding of the impact of different factors on consumer buying behaviour. It
analyzes the relationship between several independent variables, such as cultural,
social, personal, psychological and marketing mix factors and consumer behaviour (as
the dependant variable) in the electric appliances market.
The purpose of this study was to determine the factors affecting consumer preferences
and behaviour in the electric appliances market in Iraq.
Arash Shahin, All Kazemi and HamzehKazemiMahyari (2012) in their study
titled, "how consumer's perception of country of origin Affects Brand Equity: A
Case Study in Iran ", state that the main purpose of this study was to investigate the
influence of country of origin on brand equity. Results indicate that brand country of
origin has a direct and significant effect on perceived quality, brand loyalty, brand
association and brand awareness. It was suggested the marketers and producers should
carefully consider the brand country of origin effects on brand equity dimensions
when designing their branding strategies.
Seyed Fathollah Amiri Aghdaie (2012) has written a paper on "An Analysis of
Impact of Brand Credibility and Perceived Quality on Consumer's Evaluations
of Brand Alliance". The purpose of this study was to analyze the effects of brand
credibility and perceived quality on consumer's evaluation of brand alliance. This goal
had been followed by examining the impact of constituent brands credibility on co-
brand overall credibility, effect of perceived quality of the constituent brand brands on
co-branded product perceived quality and constituent credibility and perceived quality
on perceived price and purchase intention of co-branded product as the hypotheses of
the study.
Mohammad Hussein Askariazad and Maria Yousefian (2012) made a study on, "A
Comparative Study of Consumer Attitudes in Iran and Dubai towards Marketing Mix
Elements for Small Home Appliances". This study examined the attitude of small
home appliance products in Iran and Dubai towards four elements of the marketing
mix; Product, Price, Place and Promotion.
Janaki, P and Premila, (2012) in their study entitled, "A study on Customer
Involvement in Purchase of Home Appliance", explains that consumer behaviour is a
complex, dynamic, multidimensional process, and all marketing decisions are based
on assumptions about consumer behaviour. The people consume things of daily use,
and buy these products according to their needs, preferences and buying power. These
can be consumable goods, durable goods, special goods or industrial goods.
Involvement can be viewed as the motivation to process information. To the degree
that there is perceived linkage between a consumer's needs, goals or values and
product knowledge, the consumer will be motivated to pay attention to product
information.
Mokhlis, S. and Yakop, Y.A.(2012), conducted a study on topic "Consumer choice
criteria in Mobile Phone Selection: An Investigation of Malaysian University
Students", the mobile phone feature are basically the set of competencies services and
according to Mokhlis and Yaakop there are countless factors that influence the way a
consumer perceives a particular brand and prefers it over the others.
Sardar, R. (2012), conducted a study on topic "Brand preference of passenger cars in
Aurangabad district", according to his research study Indian people give much higher
values to brands. In India, a brand is due to quality because the unbranded products
have huge varying quality. Consumer surveys often show that applications are offered
to users. These can be Bluetooth, camera, dual sim, video-recorder, mp3 player,
memory card reader, wifi connectivity and so on and they vary from brand to brand.
Vijayalakshmi, S and Mahalakhmi, V (2013) conducted a study on the topic "An
impact of consumer buying behaviour in decision making process in purchase of
electronic home appliances in Chennai (India): An Empirical Study". The study
presents consumer behaviour as the study of individuals, groups or organizations and
the processes they use to select, secure and dispose products, services, experiences or
ideas to satisfy needs and the impacts that these processes have on the consumer and
society. It blends elements from psychology, sociology, social anthropology and
economics. It attempts to understand the decision-making process of buyers, both
individually and in groups. It studies characteristics of individual consumers such
demographic and behavioral variables in an attempt to understand people's wants. It
also tries to assess influences on the consumer from groups such as family, friends,
reference groups, society and society in general. This empirical study contributes to a
vital role comprehension of impact of dissimilar factors on consumer buying
behaviours. The numerous independent variables in electronic home appliances
market in India are deeply analyzed. The factors that are affecting the consumer
behaviour in electronic home appliances markets in India have been taken as the
empirical study of this research.
Srinivasa Rao Kasisomayajula (2013) conducted a study on the topic "A study on
Customer Preference of LG Laptop". It explains that the consumer tastes change
rapidly. They want new models with the latest features. It is a very hard fight. The
completion is on features differentiation, time to market promotion, basically on every
font. The dealer-push and brand pull, both, plays a very crucial role. Hence the
company concentrates on both fronts equally will have an upper hand over the others.
Companies like HP, Lenovo, Sony and LG have practiced this very well and leading
on the sales front. The dealers have to observe that the consumers have lot of value
after sales and service provided by the company while making a purchase decision.
Today Management of Customer's relationship is assuming more and more
importance and company cannot afford to ignore this. Based on the above response,
HP provide better customer as compared to others.
Kalaiselvi, K.T and Muruganandam,(2013) made a study on "Consumer Attitude
towards Promotional Schemes and Influence of Brand on Purchasing Home
Appliances". They point out that the consumer attitude is an important part of the
marketing process to realize the challenges faced by markets in comprehending the
consumers mind. The marketers have to know why a buyer makes and processes in
the mind of the buyer which influences him or her in buying different products or
service. Sales promotions are designed to have an immediate impact on sales. The
main objective of this study is to find the impact of promotional purchase schemes on
consumer attitude and to find out the brand loyal consumers and also brand switchers
of consumer home appliance only because of promotional offers.
Paramanand Dasar, Hundekar, S.G and Mallikarjun Maradi (2013) made a study
entitled, "Consumer Behaviour on Consumer Durables with Reference to Bijapur
District". Which explains that consumer is the nerve center of the modern marketing,
understanding his behaviour is quite essential for efficient marketing management.
Customers may state their needs and wants, but act otherwise. They may not be in
touch with their deeper motivations. Indian consumer market is riding the crest of the
country's economic boom. Driven by a huge population with access to disposable
incomes and easy finance options, the consumer market has been throwing up
staggering figures. Marketing problem enhance from the consumer's behaviour has
greater degree of similarity in behavioral problems relating to the consumer durables.
CHAPTER 3 THEORETICAL FRAMEWORK
3.1 Consumer
Consumer is an individual who buys products or services for personal use and not for
manufacture or resale. A consumer is someone who can make the decision whether or
not to purchase an item at the store, and someone who can be influenced by marketing
and advertisements. Any time someone goes to a store and purchase a toy, shirt,
beverage, or anything else, they are making that decision as a customer.
3.2 Consumer Behaviour
The consumer behavior study involves how an individual or groups select, purchase,
use or dispose products, services, ideas or experience to satisfy their needs and
desires. The consumer environment influences how the consumer feel, consider and
act. The environmental features for instance, comments taken from other customers,
advertising, packing, price and product appearance etc. (Paul & Jerry C, 2005 pg 5)
The consumer behavior related to the physical action of a consumer, which can be
measured straight. Frequency of visiting stores or shopping malls can be measured. To
select a specific store then to go there is very difficult to choose and observe directly.
Where different types of behavior can be measured including a shopping pattern in
stores. This kind of measurement is very hard. The behavior can be analyzed in
different ways, by offering lower price, better services and good quality.
(Papanastassiu& Rouhani, 2006)
Consumer behavior mainly sheds light on how consumers decides to spend their
various resources like time, money etc. on various products so as to meet their needs
and requirements. Consumer behavior encompasses study of what, when, why and
where the consumers will buy products. It also focuses on how often the consumers
use the products. Furthermore, it also sheds light on how the consumers evaluate the
products after the purchase and the effect of evaluation on their future purchases.
( SchiffinanKanuk, P.08 )
To give an example of how consumer behavior evolves while buying a handset, he
will start with recognizing his or her need for a handset. Then comes the information
collecting and processing stage. After making up his mind to buy one specific brand,
for instance Samsung galaxy s8, the consumer makes the purchase. In the post-
purchase stage, the consumer evaluates the performance of handset against the
expectations he or she had before buying the handset. In this stage, the consumer is
either satisfied or dissatisfied. So, it is evident that study of consumer behavior
involves lot things.
3.3 Types of consumer buying behavior
3.3.1) Complex Buying Behaviour
Complex buying behaviour can be defined when consumers are highly involved for
making a purchase decision. Complex buying behaviour calls for high level of
involvement from the part of consumer. In case of high involvement, consumers
distinguish salient differences among the competing brands. Consumers are highly
involved in case of expensive and highly self expressive products. The consumer
engages in extensive information to search and learn about product category so as to
be able to , take a good purchase decision. For example, when a consumer decides to
buy a car, he seeks information about the available brands and compares his collected
information each brands with each other and finally makes up his mind to buy the car.
(Kotler and Armstrong, 2003 pp.276-277)
3.3.2) Dissonance Reducing Buying Behaviour
In case of dissonance reducing buying behavior the level of consumer involvement is
also high. Consumers typically undergo dissonance reducing buying behavior in case
of costly and infrequent purchase. In this type of consumer behavior the consumers
find it difficult to differentiate among the brands. For example consumer buying
carpet may come across of dissonance reducing buying behavior, as carpets are
usually expensive and self-expressive. In case of carpets, consumers may look for
most of the available carpet brands in the market within a certain price range with the
same quality. Consumers may respond primarily to a relatively better price. After the
purchase consumer might experience post purchase dissonance (after sales
discomfort). (Kotler and Armstrong, 2003 p.277)
3.3.3) Habitual Buying Behaviour
In case of habitual buying behaviour, consumer's level of involvement is low. This
means that consumers don't search much information about the available brands and
they don't find significant differences among the brands. An example of low
involvement product is toothpaste. The level of consumer involvement in this sort of
product category is very low. In case of habitual buying behavior, consumers merely
go to the store to buy the product of the same brand over and over again, it becomes
their habit. It is as if that the consumers have developed a brand loyalty for that
specific brand rather they buy the product out of habit. Generallyspeaking, consumers
are usually lowly involved when the product is cheap. (Kotler, Wong, Saunders and
Armstrong, 2005 p.277)
The level of consumer's involvement is also low in case of products that are frequently
purchased. Consumers do not usually seek information much pertaining to available
brands before making purchase decision. The consumers don't assess different
attributes of the available brands and make purchase decision as to which brand to
buy. Consumers collects information relating to various brands and their attributes
through watching television or reading newspapers. (Kotler, Wong, Saunders and
Armstrong, 2005 p.27'7)
3.3.4) Variety Seeking Buying Behaviour
In case of variety seeking buying behaviour the level of consumer involvement is low,
but consumers perceive significant differences among the brands. In variety seeking
buying behavior, consumers very often switch from one brand to another. As an
example we can think of confectionery, consumers might have beliefs about a brand
and choose a brand without evaluation. But they evaluate that product at that time of
consumption. But when the consumer goes for shopping next time, he or she may go
for another brand either because of boredom or simply to test a different brand. Brand
switching happens not because the consumer is dissatisfied but because of variety.
(Kotler, Wong, Saunders and Armstrong, 2005 p.277)
Uggla(2001), explain consumer behaviour in to two different types; cognitive and
experience oriented . The consumers who have cognitive behavior are rational and
logical consumers while the experience orientedconsumers have more emotional
motives for buying a product.
In comparison, Dalqvst and Linde (2002) have defined four types of consumer
behaviour; rational, unconscious, learned and social behaviour. The different
behaviors are characterized by the order of three steps: knowledge, attitude and action.
Rational behaviour: If consumer have a rational behaviour, they start to get some
knowledge about the product and what the market may offer. By evaluating the
information they get an attitude towards the products and finally act, either by buying
the product or not. This behaviour is more common when consumers are buying
expensive products like cars.
Unconscious behaviour: When consumers have unconscious behaviourthey star with
an attitude towards the products and the attitude comes from emotions and feelings.
From the attitudes the consumer findinformation about the product and from that they
get knowledge. At last they have the action, their choice. This type behaviour is
common when it comes to voting for politics.
Learned behaviour: It is when the consumers choose a product they do not plan their
choices; they do it by habit. This behaviour usually occurs when consumers buy
newspaper.
Social behaviour: When consumers have a social behaviour they choose the products
depending on what social environment they live in. Their lifestyle, status and
influence from others decide what product they will buy.
According to Khaswneh and Hasouneh (2010) customers realize the importance of
brand while in their purchasing decisions and customer's demographic characteristics
have no significant relation and effect on brand awareness. People prefer the branded
products with high prices because they consider that branded items have more quality
than non branded products. Brand preference is also a symbol of status.
3.4 Marketing Influence on Consumer Behaviour
Marketing strategies are often designed to influence consumer decision making and
lead to profitable exchanges. Each element of the marketing mix can affect consumers
in various ways. It is this regard that, Peter and Donnelly Jr.(2004) explain how the
marketing mix (4ps) affects consumer behaviour.
3.4.1) Product
Many attributes of a company's products, including brand name, quality, newness and
complexity can affect consumer behaviour. The physical appearance of the product,
packaging and labeling information can also influence whether consumer notice a
product —in-store, examine it and purchase it. One of the key tasks of marketers is to
differentiate their products from those of completion and create consumer perceptions
that the product is worth purchasing.
3.4.2) Price
The price of products and services often influence whether consumers will purchase
them, and what completion offering should be selected. Stores such as Wal-Mart,
which is perceived to charge lowest price attract many consumers. For some offerings,
higher prices may not deter purchase because consumers believe that, the products or
services are higher quality or are more prestigious. However, many of today's value-
conscious consumers may buy products merely on the basis of price than other
attributes.
3.4.3) Promotion
Advertising, sales promotion, sales people and publicity can influence what
consumers think about products, what emotions they experience in purchasing and
using them, and what behaviours they perform including purchasing in stores and
purchasing specific brands. Marketing communication play a critical role in informing
consumers about products and services, including where they can be purchased, and in
creating favourable image and perceptions.
3.4.4) Place
The marketer's strategy for distributing products can influence consumers in several
ways. Products that are convenient to buy in a variety of stores increase the chances
for consumers finding and buying them. When consumers are seeking low
involvement products, they are unlikely to engage in extensive search. Therefore,
availability becomes very important. Second, products sold in exclusive outlets, may
be perceived by consumers as higher quality. In fact, one of the ways marketers create
brand equity is by selling them in prestigious outlets. Third, offering products by non-
store methods such as on the internet or in catalogues, can create consumer
perceptions that the products are innovative, exclusive or tailored for specific target
market.
3.5 Consumer Decision Making
The consumer decision making process defines different steps when a consumer goes
through to purchase a product. If customer wants to make a purchase he or she takes a
sequence of steps in order to do complete purchase. Problem recognition includes
when consumer feel a significant difference between the current state and ideal so
consumer thinks there is some problem to be solved. The problem maybe small or big.
In the second step, the consumer seeks information about the product. The extent of
information search relies on the level of consumer involvement. In case of expensive
products, the level of involvement is high. Conversely, in case of relatively cheap
products the level of involvement is usually low. In the third step, the consumer
evaluates the different attributes of the brands. Consumer may consider the product
attributes and compare different brands. In the final step consumer makes his choice
about a product. (Solomon, 2005 pp.304-305)
It is true that a consumer may not necessarily go through all the decision making steps
forever purchase she or he makes. At times, consumer makes his or her decision
automatically and decision may be based on heuristics or mental shortcuts. Other
times, in case of high involvement products consumer may take a long time before
reaching a final purchasing decision. It depends on consumer's importance of the
products like purchase of a car or home (Solomon, 2005 pp.305). More over
consumers try to make an estimated brand universe on the basis of available
information about the brands, and to make an estimated utility function on the basis of
past consumption experience (Davies, 2005 p801),
This is another interesting way to find out customer's decision makingprocess through
this study. When people go for purchasing a car, they go through different steps before
reaching a decision for final purchase, like search information about the cars, evaluate
the cars attributes, get to know the experience of different people in vicinity.
3.5.1) Decision Rules
decision to them. People rely on a shortcut to make a choice. In other cases though,
they put more effort and though into carefully weighing alternatives before they come
to decision (Johanna, p.24)
The consumer applies a decision rule to the attributes and alternatives chosen. A
decision rule can be explained as strategy used by the consumer when selecting from
the alternatives. If a purchase decision is habitual, a simplistic decision rule is likely to
be applied. The consumer may simply decide to buy the same brand as last time. The
complexity of decision rule depends much on the level of involvement and the
perceived importance of outcome of purchase decision. There is clear division
between more complex rules, which are compensatory and non compensatory
Non Compensatory Decision Rule: when a non-compensatory decision rule is applied
it means that a weak performance in one aspect will not be compensated by a strong
performance in another (Johanna, 1999, p.25). Non compensatory decision rule can be
defined as a decision makingprocess in which the consumer eliminate all product
options that do not fulfill his basic desired attributes. As far as the non compensatory
decision rule is concerned, a product with a low standing on one attribute cannot make
up by being better on another attribute. To put it differently, consumers simply
eliminate all available options that do not have some requisite attribute desired by
him.
When consumers are less acquainted with a product category they usually resort to
non compensatory decision rule. It's also true that when the consumers are inclined to
engage in complicated information processing they turn to non compensatory decision
rule to make their purchase decision (Solomon, 2005 pp.33 1). Non compensatory
decisions rules are divided into three categories and they are lexicographic rule,
elimination by aspects rule and conjunctive rule. When it comes to lexicographic
decision rule, consumer opts for the brand that is based on the most important attribute
desired by the consumer. If two or more brands are equally good on most important
attribute, then consumer makes a comparison among the brands on the basis of second
important attribute. This process goes on until the consumer can make his purchase
decision (Solomon Michael R, 2005 pp.331)
The buyer evaluates brands on the most important attribute in case of elimination by
aspects rule. Under this consumers might have particular cutoffs based on which
decisions are made. In case of lexicographic and elimination by aspects rules
consumers compare attributes of different brands. But in case of conjunctive rule the
consumers make decision by comparing brands (Solomon, 2005 pp.331-332)
Compensatory Decision Rule: if a compensatory rule is used a perceived strength of
one attribute will compensate or even eliminate the weakness of another (Johanna,
1999, p.24). As far as the compensatory rule is concerned, consumers tend to be more
involved in the purchase. The consumers are keen to put additional endeavor to reflect
on the entire picture in more meticulous manner (Solomon, 2005 pp.332). It identifies
two types of compensatory decision rules, simple additive rule and weighted additive
rule.
In simple additive rule, the consumer just opts for the brand with biggest number of
positive attributes desired by the consumer. When the consumers have limited ability
or motivation to engage in complex processing, the consumers tend to use simple
additive rule to make their purchase decision. One of the shortcomings of the simple
additive rule is that a few of these attributes might become insignificant. When it
comes to make a purchase decision, weighted additive rule is more complicated than
simple additive rule. When consumer goes through the weighted additive rule, he
takes a decision considering the relative significance of positive attributes (Solomon,
2005 p.332). The fishbein model and ajzenmodel, states that the perception of a
product attributes is weighed b the salience of these attributes. The consumer's attitude
towards the actual product will be based on the conclusion drawn from this weighing
(Johanna, 1999 p.24).
3.5.2) Social Class
Social class is an invisible stratification of inhabitants of the society into different
groups based on some traits of people. Inhabitants in a society can be divided into
different social classes according to their income level, occupation, education
(Hawkins, 2004 p.131). Social class of a person is determined by a wide variety of set
of variables including income, family background and occupation (Solomon, 2005
pp.446).
A person's social class can be defined by what he or she does with money. The
consumption choice of a person determines the person's position in the society. Every
social class varies from each other because of having its own traits that set it apart
from other class. Social classes vary in costumes, language patterns and many other
activities and preferences. People belonging to the working class usually assess
products in term of utility. This class of consumer will possibly never buy product on
an experimental basis (Greogri&Heden, 2002 p.173). Social class is very important
source to know which social class a person belong. Mostly people have different
preferences and choices from others (Stephens, Sarah and Townsend, November
2007, p.814).
People of a certain class will also have a different choices and preferences for
different products. Members of specific class will also vary in taste. For example,
lower middle class consumers will usually have a strong inclination for t-shirts, caps.
People from higher class will have preferences for reputed branded products as they
buy products not only to satisfy their needs but also to say who they are through the
products (Schiffman, 2004, pp.398-399). The people's choice and preference shows
their social class in the society. People use different branded products that defines and
reflects their social class.
3.5.3) Conspicuous Consumption
Conspicuous consumption can be defined as the way of consumption by the people
who have financial ability to afford expensive brands not only just to consume the
products but also to show off with the view to inspire envy among others. People of
higher class usually go for a wide array of status symbol for consuming conspicuously
(Solomon, 2005 p.474). Conspicuous consumption is related to the person's class,
generally the upper class consumer would purchase and display exclusive items to
show off their wealth and power. They purchase expensive branded products like cars,
latest electronics even if not necessary for them to purchase (Hoyer, Maclnnis 2004
p.341).
3.5.4) Purchase Intention
The purchase intention shows customers preference to purchase the product, whose
image is very close to customer. Moreover customers are well aware of certain brand
name through advertising, from their past experience or information from their friends
and relatives (Marken, p.02, 2003). The intention of a customer to purchase a
particular brand can be defined as willingness to buy that brand. After being exposed
to a TV commercial, a consumer might be interested about the product but being just
interested in a product does not mean that the consumer have the intention to buy the
product.
3.6 Characteristics Affecting Consumer Behaviour
According to Kotler and Armstrong (2000) in their book of principles of marketing,
the following are the characteristics affecting consumer behaviour;
3.6.1) Cultural Factors
Culture: basically, culture is the part of every society and is the important cause of
person wants and behaviour. The influence of culture on buying behaviour varies from
country to country therefore marketers have to be very careful in analyzing the culture
of different groups, regions or even countries.
Subculture: each culture contains different subcultures such as religions, nationalities,
geographic regions, racial groups, etc. Marketers can use these groups by segmenting
the market into various small portions. For example marketers can design products
according to the needs of a particular geographic group.
Social class: every society possesses some form of social class which is important to
the marketers because the buying behaviour of people in a given social class is
similar. In this way marketing activities could be tailored according to different social
classes. Here we should note that social class is not only determined by income but
there are various another factors as well such as; education, occupation etc.
3.6.2) Social Factors
Social factors also impact the buying behaviour of consumers. The important social
factors are; reference groups, family, role and status.
Reference groups: they have potential in forming a person attitude or behaviour. The
impact of reference groups varies across products and brands. For example if the
product is visible such as dress, shoes, car etcthen the influence of reference groups
will be high. Reference groups also include opinion leader (a person who influences
other because of his special skill, knowledge or other characteristics).
Family: consumer buying behaviour is strongly influenced by the member of a family.
Therefore marketers are trying to find the roles and influence of the husband, wife and
children. If the buying decision of a particular product is influenced by wife then
marketers will try to target the women in their advertisement. Here we should note
that buying roles change with change in consumer lifestyles.
Roles and status: each person possesses different roles and status in the society
depending upon the groups, clubs, family, organization etc. to which he belongs. For
example a woman is working in an organization as finance manager. Now she is
playing two roles, one of finance manager and other mother. Therefore her buying
decisions will be influenced by her role and status.
3.6.3) Personal Factors
Personal factors can also affect the consumer behaviour. Some of the important
personal factors that influence the buying behaviour are; lifestyle, economic situation,
occupation, age, personality and self concept.
Age: age and life-cycle have potential impact on the consumer buying behaviour. It is
obvious that the consumer changes the purchase of goods and services with passage of
time. Family life-cycle consists of different stages such as young singles, married
couples, unmarried couples etc. which help marketers to develop appropriate products
for each stage.
Occupation: the occupation of a person has significant impact on his buying
behaviour. For example a marketing manager of an organization will try to purchase
business suits, whereas a low level worker in the same organization will purchase
rugged work clothes.
Economic situation: consumer economic situation has great influence on his buying
behaviour. If the income and savings of a customer is high then he will purchase more
expensive products. On the other hand, a person with low income and savings will
purchase inexpensive products.
Lifestyle: lifestyle of customers is an another important factor affecting the consumer
buying behaviour. Lifestyle refers to the way a person lives in a society and is
expressed by the things in his/her whole pattern of acting and interacting in the world.
Personality: personality changes from person to person, time to time and place to
place. Therefore it can great influence the buying behaviour of customers. Actually,
personality is not what one wears; rather it is the totality of behaviour of a man in
different circumstances. It has different characteristics such as; dominance,
aggressiveness, self-confidence etcwhich can be useful to determine the consumer
behaviour for particular product or service.
3.6.4) Psychological Factors
There are four important psychological factors affecting the consumer buying
behaviour. These are; perception, motivation, learning, beliefs and attitudes.
Motivation: the level of motivation also affects the buying behaviour of consumers.
Every person has different needs such as psychological needs, biological needs, social
needs etc. Therefore a need becomes a motive when it is more pressing to direct the
person to seek satisfaction.
Perception: selecting, organizing and interpreting information in a way to produce a
meaningful experience of the world is called perception. There are three different
perceptual processes which are selective attention, selective distortion and selective
retention. In case attention, marketers try to attract the customer attention. Whereas, in
case of selective distortion, customer try to interpret the information in a way that will
support what the customers already believe.
Beliefs and attitudes: customer possesses specific belief and attitude towards various
products. Since such belief and attitudes make up brand image and affect consumer
buying behaviour therefore marketers are interested in them.
3.7 Definition of Brand
The American market Association (AMA) defines 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 of 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."
Another definition by Kapferer (2004) says that a brand is a set of mental associations,
held by the customer, which add to the perceived value of a product or service. These
associations should be unique (exclusive), strong (salient), and positive (desirable). To
many, a brand suggests the best choice, while others see a brand as something the
customer knows and will react to. Despite the formal definition, the purpose of
branding is essentially to build the product's image (Keller, 2003). This image will
influence the perceived worth of the product and will increase the brand's value to the
customer, leading to brand loyalty (Kapferer 2004).
Organizations develop brands as a way to attract and Keep customers by promoting
value, image, prestige, or lifestyle. By using a particular brand, a consumer can
cement a positive image. Brands can also reduce the risk that consumers face when
buying something that they know little about. Branding is a technique to build a
sustainable, differential advantage by playing on the nature of human beings. Only
humans can attach meaning and feeling to inanimate objects and a random collection
of symbols, which suggests the appeal of branding, is not entirely rational (Keller,
2003).
According to Schmmit (1999), brand cannot only be seen as an identifier. He states
that a memorable name and a good image is not enough: a company has to deliver
experiences. Schmmit suggests two approaches to branding: the first is to see the
brand as an identifier where the names, logos and slogans give the consumers
awareness and specific image. The other approach is to see brand as an experience
provider where the names, logos, slogans, events and other consumer contact give the
consumers sensory, affective, creative relations and lifestyles with the brand. Keller
andArmstrong (2004) also believe that brand is more than identifier. It stands for
consumer sensitivity as well as emotions to the product.
Keller (2003), states that there is a difference between a small brand and a big brand.
A small brand can be defined as in the AMA definition earlier; to create a brand is to
create a big brand also means to actually create a small amount of awareness
reputation, prominence etc. in the market place. Keller states that is important to
recognize this distinction since there are disagreements around the definition of what a
brand really is.
3.7.1) Brand Function
From the moment a potential customer meets you, views your business card, visits
your website, or walks into your office, the building of your brand is at work. Without
solid brand, customers are confused, resources are wasted, and customers won't have
the confidence they need to hire you. Getting branding right can make all the
difference, and help you grow your company, your assets, and your image (Gumas,
2009).
Over the last decade, firms have markedly increased their investments in the creation
and development of brands. In fact, in most economic sectors a gradual brand
generalization can be observed, even in those markets that have traditionally been
more hesitant to use them (as is the case of food and agriculture or high tech product
markets). The creation of a brand implies communicating a certain brand image in
such a way that all the firm's target groups link such a brand (and thus the products
sold using its name) with a set of associations. Brand equity research in marketing, is
rooted in cognitive psychology and focuses on consumer cognitive process.
Thus, this view of brand equity proposes that: one, the brand creates value for both the
consumer and the firm. Second, the brand provides value to the firm by generating
value for the consumers; and third, consumers brand associations are a key element in
brand equity formation and management (Keller, 2003).
3.7.2) Brand Associations
Brand associations may take many different forms. They range from the concrete to
the abstract, from the conscious to the unconscious, the direct to indirect. Direct
associations are those that occur directly between two elements without the need or
presence of a third, intermediary element. Indirect associations are what lead to
associative chains, where elements are linked together thorough one or more
intermediary elements. Brand associations are categorized into three significant
groupings: attribute (product related or non product related), benefits (assist in
consumer decision making process) and attitudes (consumer's effective responses to a
brand) (Batey, 2008).
Brands have a number of types of associations and must be accounted for all in
marketing decisions. Not only there many different types of associations to link to the
brand, there are many different means of creating them. By creating perceived
difference between products through branding and developing a loyal consumer
franchise, marketers create value that can translate into financial profits of a firm.
Therefore, brand is a product that one adds other dimensions that differentiate it in
some way from other products designed to satisfy the same need. These differences
may be rational and tangible or more symbolic, emotional and intangible. Brand can
generate consumer interest, patronage and loyalty as consumers learn to expect certain
brands and products that help tocreate an image and establish positioning such as
luxury brand goods (Keller, 2008).
3.7.3) Brand Equity
There are different views about brand equity that prevail. Most observers define the
brand equity in term of marketing impact that exceptionally attribute to a brand. Brand
equity relates to the information that usually gets different result from marketing of a
product (Keller, 1991, p.42). David W. Cravens in his book Strategic Marketing has
narrated the following description of Brand equity as;
Brand equity is a set of brand assets and liabilities linked to a brand, its name and
symbol that add to or subtract from the value provided by a product or service to a
firm and or to that firm's customers (Carvens, p.276). Above explained definition
shows that the assets and liabilities have a connection with brand name or symbol so if
some changes are introduced in the name or symbol, these may affect assets and
liabilities. The changes can be so influential or effective that few of these factors have
to be moved out of the brand. Aaker has developed and compiled a group of these
assets and liabilities in following five categories to make them easier to understand.
For assets or liabilities to underlie brand equity they must be linked to the name and or
symbol of the brand. If the brands name or symbol should change, some or all of the
assets or liabilities could be affected and even lost, although some might be shifted to
a new name and symbol. The assets and liabilities on which brand equity is based will
differ from context to context.
Aaker (1991) approaches brand equity as a set of fundamental dimensions grouped
into a complete system comprising mainly brand awareness, brand perceived quality,
brand loyalty and brand associations. However, they can be usefully grouped into five
categories; brand loyalty, name awareness, perceived quality, brand association,
propriety brand assets.
3.7.4) Brand Loyalty
Brand loyalty is customer behaviour pattern where he/she starts trusting and becomes
committed to one brand and conducts repeated purchases from the same brand over
time irrespective of the marketing pressure generated by the competing brands.
Commitment to the brand in the form of brand loyalty can be seen in the case of
Apple where the customers are most likely to upgrade to the new version of the same
brand (iPhone) rather than trying any new brand.
Types of Brand Loyalty
Having loyal customers gives you an upper hand over your competition as you don’t
always have to compete on the usual factors like price and convenience as long as
you’re delivering the promise.
Here are three types which you can use to segment your customers on the basis of
brand loyalty:
No Loyalty
Some customers are indifferent towards which brand they’re buying as long as their
other needs in terms of price and/or convenience are fulfilled. An example would be a
man who buys plain t-shirts from any shop which sell them for $5 or less.
These people consider the brand as a commodity and buy your products as long as you
are accessible or providing products within their budgets. They, however, shift to a
new brand if they come with a better offer.
Inertia
Inertia loyalty stems from repeated purchases coupled with some sort of attachment.
These are the customers who buy your brand out of habit. They are the ones which
follow “because we’ve always used it”, “because we always buy from here”, or
“because it is convenient”. Situational factors are the main triggers in this form of
loyalty because users can’t really differentiate the brand from others. An example
would be a man who takes his car to the same gas station every day because he has
always done the same, even though there are new gas stations on the same route now.
Converting inertia loyalty into a higher form of loyalty isn’t that hard. All you need is
to court him and communicate how you’re different and better from others.
Pride
Pride, also known as premium loyalty, is the high to highest form of loyalty. This gets
into the picture when a high level of attachment and repeat purchase coexist. Premium
loyalty is when the customer feels proud of associating himself with the brand and
takes pleasure in sharing the knowledge about the same with the friends and family.
A premium loyal customer not only buys from the same brand always but also
becomes a vocal advocate who helps the brand in its word of mouth marketing
strategies. The usual factors which affect the purchase like price differences don’t
usually affect the premium loyal customers as all they look for is the brand promise
and the pride of their association with the brand.
An example of a premium loyal customer is a man who always buys an iPhone and
even recommends his friends who own an Android to buy an iPhone.
Importance of Brand Loyalty
The flood of debates after Nike’s controversial ‘Just do it’ advertisement was aired
should have technically affected the sales of the company in a negative way but to
everyone’s surprise, the ad resulted in a $6 billion increase in the value of the
company. Well, thanks to loyal customers.
Brand loyal customers make you stand firm when everything else is drowning. They
are your vocal advocates. They market your product while paying for it.
You can expect a minimum recurring profit from your offering as long as you keep
loyal customers happy. This can be proven by taking the example of Coca-Cola and
Pepsi. According to a study, 90.5 per cent of regular Coke and 88.9 per cent of regular
Pepsi drinkers remain loyal to their preferred brand. However, when Coca-Cola
decided to replace its original coke with the new coke, even the loyal customers hated
the move. The loyal customers made it so obvious that the company had to relaunch
the original product.
Your loyal customers are the community which helps you in your every step, be it
production or marketing. They’ll tell you what’s working and what should be altered
or replaced. Many brands like OnePlus and Samsung have capitalized on this
community loyalty to make their products and marketing efforts better.3.7.6)
Perceived Quality
Perceived quality is how a brands quality is seen by consumers. It is one of the key
dimensions in Aaker's brand equity model. There is a connection between price and
experienced quality. A strong brand always has a higher price. The higher price
becomes a sign of high quality to the consumers. The quality is highly associated with
other reasons for buying a special brand. Moreover, if the consumers image of the
brand is high quality, they may buy the brand because of the quality image that they
have (Uggla 2001, Aaker 1991)
A positive link between loyalty and perceived quality has also been found by
researchers. Perceived quality makes the consumers satisfied which make them
researchers. Perceived quality makes the consumers satisfied which make them
repurchase the product which leads to loyalty (Lin and Chang, 2003). Further,
perceived quality help consumers to reduce risk; the consumers trust the brand and
know the brand what they will get (Uggla, 2001). Perceived quality associated with
the brand will influence the buying behaviour of branded goods.
3.7.7) Propriety Brand Assets
A Competitor is someone who wants to take business away from you (Falk , 2006) . In
the Previous categories we have discussed more about how the customer perceives
and respond to the brand.
This final category of brand equity will focus on assets life trademarks and channel
relationship. A propriety brand asset is most valuable for company assets in the shape
of trademark that cannot be copied easily. A trademark provides the protection to
companies their brand name or symbol. It is not easy for other companies to use their
names because majority of customers identify the brand product through trademark
design. Companies have to make further protection to their brand. The patent is very
helpful tool for company. It can stop the competitors to copy the product. A brand can
control distribution channel through history of the brand performance (Aaker 1991,
p21).
3.7.8) Emotional Branding
At present, some successful companies are said to have built relationships with
consumer by attractively engaging them in a personal communication that responds to
their needs. Marketers have done so by connecting with customers and creating strong
emotional bonds with their bonds (making emotional connection, brand week, January
2001, Vol.42, Issue 5, p.23). Emotional branding include part of branding but it is
quite difficult than regular branding to measure, it is only when companies perform to
accomplish their jobs how they do it, how they come cross to the customers and
perform their jobs, if they are friendly and reliable (Green Don, June 2003, pg 12).
When companies want to know what consumer feels about them, they have to build a
personal communication with customers. This is the good way in a company can
consider itself because customer perception is very important for companies.
However, a company can learn a lot by listing toits customer views (Travis Daryi,
2003 p.39). It is essential for companies to correspond by their product by relating to
their customers emotionally otherwise product can be a product and become a brand
image in customer's minds (Papanastassiu and Rouhani, 2006, pp.39&l74). Usually
branding starts when company design a product with great features and capabilities
better than what their competitors are offering. The company then has a position in a
product distinct category against competitors. The problem increases when neither of
the groups has made efforts to create emotional bond between the customers and the
company and its products. Emotional branding is the fine approach that clarifies the
values of the company to customers (Marken G.A, 2003, p.12).
3.8 Factors influencing consumer buying behaviour in branded goods
The consumer can have many reasons for buying specific brand. The reasons can be
rational, emotional or self-expensive or the three combined (Uggla, 2001). In
comparison,Willialms (2002) concluded that the criteria for brand or product choice
may relate to either utilitarian criteria (subjective, emotional, irrational, symbolic).
Examples of utilitarian criteria are low price, warranty, product features, well-known
brand name. Hedonic criteria include prestige, quality and style etc.
(Baltas&Papastathopoulou, 2003)
3.8.1) Social Status
Social status is an important concept to marketers, since consumers within each social
stratum often have similar values, lifestyle and buying behavior, thus the various class
groups provide natural basis for market segmentation. Consumers in different social
classes differ in the degree to which they use various products and services and their
leisure activities. Advertisers often show how the benefits of their products help to
perform certain roles. Most often, promotional messages suggest that using the
advertiser's product will help raise one's status in the eyes of others, while using
competitor's product may have a negative effect (Solomon 2002).
3.8.2) Beliefs and attitudes
A belief is a conviction that an individual has on something. Through the experience
he acquires, his learning and his external influences (family, friends, etc.), he will
develop beliefs that will influence his buying behaviour. While an attitude can be
defined as feeling, an assessment of an object or idea and the predisposition to act in a
certain way towards that object. Attitudes allow the individual to develop a coherent
behaviour against a class similar objects or ideas.
Beliefs as well as attitudes are generally well-anchored in the individual's mind and
are difficult to change. For many people, their beliefs and attitudes are part of their
personality and of who they are. However, it is important to understand, identify and
analyze the positive attitudes and beliefs but also negative ones that customers can
have on a brand or a product. To change the brand's marketing message or adjust it's
positioning in order to get consumers to change their brand perception.
3.8.3) Family
The family is maybe the most influencing factor for an individual. It forms an
environment of socialization in which an individual will evolve, shape his personality,
acquire values. But also develop attitudes and opinions on various subjects such as
politics, society, social relations orhimself and his desires. But also on his consumer
habits, his perception of brands and the products he buys.
We all or for many of us kept for some products and brands, the same buying habits
and consumption patterns that the ones we had known in our family. Perceptions and
family habits generally have a strong influence on the consumer buying behaviour.
People will tend to keep the same as those acquired with their families.
3.8.4) Occupation
The occupation of a person has a significant impact on their buying behaviour. For
example, a marketing manager of an organization is trying to buy business suits, while
a low level worker in the same organization buy resistant clothing for work.
3.8.5) Age
Age and lifecycle have a potential impact on the purchasing behaviour of consumers.
It is obvious that consumers change the purchase of goods and service over time.
Family lifecycle consists of different stages as young singles, married couples,
unmarried couples etc. that help marketers to develop suitable products for each stage.
3.8.6) Reference Groups
Reference groups have the potential for formation of an attitude or behaviour of the
individual. The impact of reference groups vary across products and brands. For
example, if the product is visible as clothing, shoes, car etc., the influence of reference
groups will be high. Reference groups also include leader, a person who influences
others by his special skill, knowledge or other characteristics.
3.9) Why do we need branded products?
Whalley, A (2010), companies invest millions in the development and protection of
their brands, they do so because branded products have distinct advantages over non
branded ones, and this is akin to differentiated versus generic product positioning. A
strong brand is now seen as a key to commercial success by providing advantages.
The below mentioned are the advantages, there are others and exact mix of advantages
will depend on the context of the brand, product, market and environment on a case by
case basis. It will also depend on the investment made in building-up a brand; in order
to be strong and benefit from the above advantages a brand has to be crafted, designed
and invested in. It is not enough just to attach a name and logo to a product as with
products unless they are developed and adopted, brands tends to decline over time.
They must be nurtured and carefully managed or they become unfit. The following are
the advantages of brands;
3.9.1) High brand equity
The basis of brand equity lies in the relationship that develops between a consumer
and the company selling the product or service under the brand name. A consumer
who prefers a particular brand basically agrees to select that brand over others based
primarily on his or her prediction of the brand and its value. Thus a well-known brand
adds the value to a product both from the customer perspective and from the
companies. Indeed brands maybe the most valuables assets that a company has, a
quick examination of major international business balance sheets willshow that their
brand equity, usually shown as intangible goodwill is often over the fifty percentage
of their assets value, and in some cases such as coca-cola is very seventy percentage
over their value-far in excess of their tangible assets.
3.9.2) Increased product awareness
Clarity it is crucial that potential customer should be aware of a product; it is the first
stage on their journey to buying it. One of the key roles of advertising is to build that
awareness and an easy recognized brands makes that task much more achievable.
Product and packaging design play key roles here as well by making the product more
visible and reinforcing the brands values.
3.10 Premium pricing and reduced susceptibility to price wars
A good brand name helps a firm to achieve a premium price for its products. Thin of
the differences in the price of trainers. The well known brands like Nike and Rebook
can charge much more for their products than lesser known brands. It is not just a
question of having well known name; the strength of the brands depends upon the
values associated with it in that particular market. Marks and Spencer is well known
brand but they cannot get away with charging Nike prices for their trainers even if the
price is comparable.
Without a brand, a firm will have to settle for a commodity position in the brand
where low prices alone drive sales. Some firms actively choose this position, for
example the markets of generic pharmaceuticals, but it does not sit well with the
conceptof Marketing a serious of complex management tasks leading to greater future
success for the organization . In very price conscious markets , example children’s
shoes and clothing .
3.10.1) Competitive edge
A branded product simplifies shopping by assisting with the consumer's product
adoption process. If the marketing communications have worked well, then the
potential customer will always have built up a set of associations with the brand,
short-circuiting a lot of the information searching that they might otherwise have to
do. This is good for customers as they save time and effort ( this assumes that their
image of the brand is correct ) and is an advantage to the branded products as it is
likely to be preferred to other unknown, unless well thought of products.
3.10.2) Building relationships
The strength of a consumer's relationship with a brand is central to that brand's
growth. The relationship is normally between customers and the brand, rather than
between the customers and the brands owners who may even be a company that the
customers has even held off. There are many big companies who own many brands
which do not bear their owners name. For example, Diageo is the owner of a large
number of drinks brands (Smirnoff, Baileys, Guiness, Johnny Walker, Captain
Morgan) and yet I am not so familiar with his name.
The importance of brand relationship has prompted companies to develop various
relationship building activities which establish a two way flow of communication with
their customers and encourage them to integrate brands into their lives. Examples of
these activities include, club membership loyalty card schemes, registration of
warranties, other products such as T-shirts, bags with the brand name and logo on the
website activities. The number of brands communities is increasing rapidly, thanks in
part to the World Wide Web and they form a significant part of a growing number of
peoples social lives.
Muniz and O’ Guinn (2001) first coined the term brand community and they defined it
as a specialized, non geographically bound community, based on a structured set of
social relations among admirers of brand. Brand communities are characterized by a
set of shared attitudes, and believe about, the brand (shared consciousness), rituals and
traditions connected with the brand and a scene of moral guardianship for the brand.
A brand that is well liked enough to inspire a community to grow around it clearly has
a number of loyal consumers and therefore it is generally held to be a positive think
for the brand, through members of a brand communities can be the brand’s greatest
critics as well as greatest fans. Brand communities can be very possessive about the
importance of understanding their views as illustrated by the creation of loyal
customers to the introduction of a new recipe of coca-cola. .
3.10.3) Repeat Purchase
Most human beings instinctively avoid unnecessary risk. Buying things represent
atleast a financial risk in the money it may be wasted if the product is not fit for the
purpose. These are other possible risks too for example, ego risk if the product is
unflattering (eg: clothes) or ridiculed by others (eg: an un popular scent), or physical
risk if the product turns out to be unsafe (eg: faulty machinery). A brand that has been
both before and found to be satisfactory reduces these risks and so people are more
likely to buy that trusted brand again.
A good experience of a brand results in a happy customer who continues to purchase.
Conversely, a bad experience can lead to unhappy customer who may very well reject
future offerings bearing this brand, no matter how attractive the offerings appears to
be. Worse still, they may tell their friends, family, and acquaintances of their bad
experience, influencing them against the brand. Attraction and retention are the key
words when thinking about the development of a brand.
3.10.4) Retail Leverage
In many countries, notably the UK, large retailers have enormous power when it
comes to setting prices and dictating terms of purchase and sale. Tesco, for example is
one of the largest companies in the world much larger than many of the manufactures
who supply similar services like them. Tesco therefore as a great deal of buying
power. However, there are some branded products that are so popular that even a
retailer as power full as tesco is unlikely to leave them of its shelves.
3.10.5) New product success
Even the most innovative and high quality new products struggle to make headway in
to days market. Many entrepreneurs have launched seemingly superb products only to
watch them fail. A strong brand means that vulnerable new product a much better
chance of success. The customers can call on their experience of previous products of
the same brand, and transfer those brand values to the new product. This reduces the
risk associated with trying something new and so the new product is more likely to
make it into their evoked set of products, and therefore they are more likely to
purchase.