Brand Equity and Consumer Buying Behaviour

Brand is an influential tool to focus the consumers to buy the particular products. Some people named it as equity because it adds values to the products. This study explains the factors that contribute to brand equity and the consumers’ buying behaviour which is based on the four aspects of brand equity namely brand awareness, perceived quality, brand loyalty and brand association.

The study has involved the qualitative study of branding where the secondary data has been analyzed. For that, this research has collected various literatures given by other researchers. Their literature has been reviewed and analysed.

The findings were that branding can be used give the positive results. Branding activities affect the consumer’s buying pattern. It is important that the values that are used are credible. However, more emphasis should be placed on the marketing strategies such as rewarding customer loyalty with a view to enhance the sustainable development of the brands.

Table of Contents

Signed Declaration i

Acknowledgements ii

Abstract iii

Table of Contents iv

List of figures and tables vi

Chapter 1: INTRODUCTION 1

1.1 Research Background: 1

1.2 Importance of research: 1

1.3 Research questions and Research objectives: 2

1.4 Scope and Purpose of Research: 3

1.5 Research Limitations: 3

CHAPTER 02: LITERATURE REVIEW 4

2.1 Introduction: 4

2.2 Brand: 4

2.2.1 The characteristics of successful brands: 5

2.3 Brand Equity: 6

2.3.1 Brand Loyalty: 7

2.3.2 Brand Awareness: 7

2.3.3 Perceived Quality: 7

2.3.4 Brand Associations: 8

2.4 Consumers’ buying behaviour: 8

2.4.1 Models of Consumer behaviour: 9

Chapter 03: RESEARCH METHODOLOGY 11

3.1 Research Design: 12

3.1.1 Exploration: 12

3.1.2 Description: 12

3.1.3 Explanation: 12

3.2 Research Approach: 12

3.2.1 Qualitative Research Approach: 13

3.2.2 Quantitative Research Approach: 13

3.3 Research Strategy: 13

3.4 Data Collection: 14

3.5 Data Analysis: 15

CHAPTER 04: ANALYSIS AND FINDINGS 15

4.1 Introduction 15

4.2 Analysis 15

4.2.1 Effect of brand equity on consumer’s buying behaviour: 16

4.2.2 Importance of brand equity: 17

4.3 Findings 18

Chapter 05: Final discussion and overall conclusion 20

5.1 Final discussion 20

5.2 Overall Conclusion 21

5.2.1 Implications: 22

5.5 Recommendations for further research 22

Chapter 06: REFERENCES 23

List of figures and tables

Figure 1: A conceptual framework for brand equity 7

Figure 2: Schematic model of consumer decision process 9

Figure 3: Validity and reliability of the research 11

Table 1: Relevant Situation for different strategies 14

Chapter 1: INTRODUCTION

1.1 Research Background:

The study of product and the brand equity was begun in the early 1960s. There were a few researchers who have investigated the relationship between brand and the consumer’s behaviour. Due to lack of common theory these researchers has to suffer. The researchers like Birdwell (1964) were interested in the relationship between the customers’ self-concept and their perception. This perceived personality was measured using a list of bipolar items. Later, Dolich (1969) adopted human personality scales in order to study the product personalities of four products (beer, cigarettes, bar soap and toothpaste) and their relationships between consumers’ actual and self-image.

Aaker (1997) realized this limitation and he developed the brand personality scale (BPS) model. He considered five human personalities: excitement, sincerity, competence, sophistication and ruggedness. Since then, the brand personality dimensions have been applied to various setting across different cultures to gauge consumers’ symbolic consumption and their effects on behaviour (Aaker, Benet-Martinez and Garolera 2001, Supphellen and Gronhaug 2003). As a result, some dimensions of human personality might acts as a mirror in brands whereas others might not (Aaker, 1997).

1.2 Importance of research:

Now a day’s consumers are highly advanced and they are modernized also. They choose the brand and want to establish a multifaceted holistic relationship with those brands. Because of this reason consumers expect the brand to give them positive and protective roles in their lives. Thus the brand equity plays forge strong and meaningful affective bonds with the consumers and hence result in change in their buying behaviour and change the part of their life in their social networks. There are many such well-known brands who adopted emotional-branding strategies over the past few years such as Apple, Nike, Lexus, IBM, Sony Vaio etc. Brand equity helps to show a kind of self-expression or symbolic function and high reputation in the minds of the consumers. Various products such as credit cards, gold, watches or prestige items tend to think themselves that they are different from others.

Brand equity helps to create a set of unique and favourable links in consumer memory. The well established brand influences consumer favourite and investment and develops a very strong trust and loyalty with the brand. Such brands were used with the objectives of personal satisfaction and to fulfil the exploit of richness of the personality associated with them.

There is the great relationship between the human characteristics (consumer’s behaviour) and the performance of the brand (brand equity). That is why now a days, the brand equity is an appealing concept in the field of marketing. Aaker (1996) described it as one of the core dimensions of the brand identity and as the closet variable to the consumers’ buying decisions making process.

1.3 Research questions and Research objectives:

Aaker’s (1997) proposed tha “additional research is needed to determine the extent to which these brand personality dimensions are stable across different products”. The questions has arises about the brand equity and how the consumers are stable or change their buying behaviour according to the different products (brands).

With the devoted interest of brand equity some questions may arise which are as follows:

What is brand equity?

Why consumers’ changed their buying behaviour for brand equity?

This research helps to give answers the above questions and relate the brand with the consumers.

Brands and the consumers are interrelated. Consumers’ pays money for products and in returns they want the satisfied results and if it is a branded product they are willing to pay more for the same type of products. They feel proud to use that. So, this research has found that why the consumers change their buying habit and what is so, special about the brand equity for the consumers.

For this research followings are some research objective:

To find out how brand equity affects the consumers’ buying behaviour.

To analyse the importance of the brand equity.

With these set of objectives and questions this research has been done. The basic idea is that the power of brand lies in what the consumers’ have heard, seen, and learned about it. These are the factors which consumers believed. They believed what they heard, what they saw and what they learned. The brand helps give all the answer and satisfied the consumers.

1.4 Scope and Purpose of Research:

Different consumers’ developed different knowledge about the brands as the different categories of the products. Some has got high degree of knowledge in electronics goods or some may have high knowledge in brands of clothes. These types of knowledge in brand may depend upon the consumer’s interests, their occupation and their hobby. Such people are always aware of the market and the new products especially the branded one. This research includes how the consumers’ think about the brand and how it works to change the behaviour of the consumers.

The main scope of this research is to know how brand literacy developed and why do so many people in today’s world care about the brands. This research helps to define the relationship between brand and customer. When there is a new product launched in the market then it is going to affect the customer. They might accept the product or might not be. It depends on how the product is launched and the manufacture or suppliers made strategies of the brand to lunch it.

1.5 Research Limitations:

The limitation of this research is, it only concerned with Brand Equity and cannot cover the consumer’s buying behaviour on other normal products. The topics itself has got wider aspect but is bounded with only two research objectives. The other limitation is it only based on the secondary data which has various disadvantages which are listed below:

It is often available in summary based.

Because of huge data collection there were many conflicts occurs during the analysis and interpretation of data.

There was a potential problem inherent in the collection, interpretation and reporting.

CHAPTER 02: LITERATURE REVIEW

2.1 Introduction:

Consumers’ behaviour indicates to the activities in which people gain, consume and dispose products and services (Blackwell et al., 2001). In the recent scenario there were numbers of research accomplished in the field of consumers’ buying behaviour. Most of the researches were focus on the single brand, in spite of the significance of innovative ideas for understanding the fast-changing consumer’s habits. This research is going to explore the consumer’s buying behaviour under the influence of the brand equity.

In this chapter, the literature that concerned with the functions and roles of brand and brand equity are reviewed to provide a theoretical framework for the analysis.

2.2 Brand:

A brand refers to the name or symbol used to identify the source of the product. According to marketing association (1960) brand is a name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller and to differentiate them from those of competitors. But there was the lack of intangible features such as image so; this definition has been criticized (Kotler 1996, Wood 2000).

Brand is a name in every consumer’s mind (Mooij, 1998) and which is also characterized by a noticeable name or symbol which can differentiate the goods and services from the rivals (Aaker, 1991; Keller, 1998). Different researchers and different writers have given different definition on Brand highlighting various aspects of brand such as: The concept of brand equity (Keller 1993, Aaker 1996, Brand personality (Aaker 1997) etc.

From the consumers’ point of view, Roman et al. (2005) defined brand as a guarantor of reliability and quality in consumer products. In addition consumers like to buy and use brand name products with a view to highlight their personality in different situational contexts (Aaker, 1999; Fennis and Pruyn, 2006). Consumers nowadays have got a wide variety of choice. It is found that consumers’ emotions are one of the major determinants which affect their buying behaviour (Berry, 2000).

When the consumers decide which products to purchase then they made preferences on the products which develop the perceptions towards the brand. Successful branding could make consumers aware of the presence of the brand and hence could increase the chance of buying the company’s products and services (Doyle, 1999).

2.2.1 The characteristics of successful brands:

For the successful brands the brand should be everlasting and lucrative asset which must satisfied the consumers’ needs (Batchelor, 1998; Murphy, 1998). But Levitt (1983) mentioned that there are four elements for building a successful brand which are as follows:-

Tangible Product

Basic Brand

Augmented Brand

Potential Brand

Tangible products refer to the product or goods which fulfil the basic needs of the customers. On the other hand Basic brand indicates the packaging of the tangible product in order to make a product attractive and to gain the attention from the potential customers. The brand can then further improved with the provision of credibility, effectiveness after sales and the service which is known as the augmented brand. Finally the most important is the potential brand which is established through the customer loyalty towards the products which helps to create the image of the brand in the customers’ mind.

2.3 Brand Equity:

Branding is an important decision when a new product is developed and it can add the considerable value when it is well renowned and has a positive image in the mind of the consumer. This concept is simply referred to brand equity. The concept of brand equity was emerged as the central concept in marketing over the past 20 years. From the managerial point of view, Farquhar (1989) defines brand equity as the “added value” with which a brand name endows a product and Aaker (1991) defines 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. Brand equity is the intangible feature of a particular company or product that depends on associations made by the consumer. It is used to describe both the brand’s component values and the value of brand.

However, brand equity is concerning the positive side only when the consumers are willing to pay more for the same level of quality just because of the name attached to the product (Bello and Holbrook, 1995). Moreover, brand equity could be considered as a ruined if it is not properly managed. The poor product quality and deprived customer services could directly affect the brand image which reduced the sales volume.

One of the typical examples regarding brand is; it is a kind of equity that is imposition of laws to protect intellectual property (Murphy, 1998). In addition he said that it is also a tradable product which has a measurable financial value. To find some familiar brands listed on the stock market is a common thing in which they could be bought or sold. Brands like Marks and Spencer, Vodafone, Tesco and HSBC are all famous brands which are listed in the stock market.

Brand Equity could provide the consumers about the information of brand and manipulate their confidence during the purchasing process. Brand equity, itself is a wider and broad concept which can further subdivided into four main areas (Aaker, 1991; Keller 1998)

Namely Brand Loyalty

Name Awareness

Perceived Quality

Brand Associations

Figure 1: A conceptual framework for brand equity

(Source: Aaker, 1991)

These areas are defined briefly in following sections:

2.3.1 Brand Loyalty:

Brand loyalty is considered as one of the core components of the brand equity which affects the brand equity positively and directly (Atilgan et al., 2005). Because of the brand loyalty consumers continue to buy the brand, regardless of the superior features, prices and convenience owned by its competitors (Aaker, 1991). Consumers make the purchase as a habitual towards a particular brand just because of the reason that its prominence in stock and effective promotions.

2.3.2 Brand Awareness:

Brand awareness refers to the ability of a potential consumer to recall and recognize the brand, linking the brand with its corresponding product class (Aaker, 1991). To know about the product and to be aware of that is important for the potential consumers so that it could be one of the purchasing choices to them. This is because of the fact that the product needs to enter the awareness set before it comes to the consideration set (Blackwell et al., 2001). The increase in brand awareness is conductive to a higher chance of entering the later set (Nedungadi, 1990). So, the brand with higher awareness would be more likely to be purchased (Yasin et al., 2007).

2.3.3 Perceived Quality:

Perceived quality is defined as the perception of the customer’s over the overall quality or superiority of a product or the service (Aaker, 1991; Keller, 1998). More specifically Aaker (1991) further classified into quality of product and quality of service. Quality of product has got seven dimension which affect the customer’s perception which are performance, features, conformance with specifications, reliability, durability, serviceability and fit and finish. On the other hand service quality is judged by its corresponding tangibles, competence, reliability, empathy, responsiveness.

2.3.4 Brand Associations:

Brand association is the last dimension for brand equity. Aaker (1991) defined brand association as the specific linkage between memory and the brand. Keller (1998) and Yasin et al. (2007) further added that the equity of brand is largely supported by consumers’ associations towards the brand, which contribute to a specific brand image. Brand association is one of the most complicated dimensions which connect to one another, consisting the multiple ideas, episodes, examples and facts that create a brand knowledge network (Yoo et al., 2000). Keller (1993, 1998) further illustrates brand associations into three categories which are attributes, benefits and attitudes. Attributes refer to the specific character of the product. Benefit can be functional, experimental and symbolic where as attitudes are regarding the consumer’s overall assessments towards a brand.

2.4 Consumers’ buying behaviour:

Schiffman and Kanuk (2000) mentioned that the consumer behaviour is about how people make their decisions on personal or household products with the use of their available resources such as time, money and effort. On the other hand Gabbott and Hogg (1998) and Blackwell et al. (2006) provide a holistic view that defines consumer behaviour as the activities and the processes in which individual or groups choose, buy, use or dispose the products, services, ideas or experiences.

The study of consumer buying behaviour is most important topic in this research. In the very beginning, the consumer behaviour can persuade the economics of a nation (Blackwell et al., 2006). They have their preferences of purchasing the products from a specific retailer which helps to make the retailers to survive in their competitive world. On the other hand by understanding the reasons for consumers to buy the products and their buying habits, an organisation can use such information to devise corresponding marketing strategies in response to the consumers’ needs (Blackwell et al., 2006). In addition, present consumer behaviour studies regard consumers as important determinants of organizational success and it is found that the most successful organizations are customer-centric (Blackwell et al., 2006).

2.4.1 Models of Consumer behaviour:

To define explain the consumer buying behaviours there are several models developed which are vary in presentation such as pre-purchase, purchase and post- purchase (Hoyer and Maclnnis, 2001; Rayport and Jaworski, 2003). But Blackwell et al. (2001) argued by defining consumer behaviour as a summation of acquisition, consumption and disposal of products or services. Later on Arnoud et al. (2004) proposed the circle of consumption that recognize purchasing process as a loop, comprising acquisition of goods and services, consumption and the disposal of used goods.

For the models of consumer behaviour Blackwell et al. (2006) proposed the seven stages which include need recognition, search for information, pre-purchase, evaluation, purchase, consumption, post-consumption evaluation and divestment. His models of consumer’s decision process can also be explained with the help of the following figures:

Figure 2: Schematic model of consumer decision process

(Source: Blackwell et al., 2001, p.71)

Stage one is the need recognition and this occurs when an individual customer is aware of a difference between the actual satisfaction and their perception level. Their buying process is initiated when they identify their satisfaction and dissatisfaction needs. Functional needs and psychological needs are two different types of needs.

The second stage is search information. Based on the customers personality, social class, income, size of purchase, past experiences, prior brand perceptions the length and the depth of search may vary (Moorthy et al., 1997). Solomon et al. (2006) divided search information further into pre-purchase search and ongoing search.

Third stage is pre-purchase evaluation. In this stages the consumers compare the brand with different other products to make a better purchasing decision. Here, consumer pays particular attention to the attributes which are most relevant to their needs (Kotler et al., 2005). Such attributes are: size, quality, quantity and price which are used by the customers to judge before they buy something and if any changes occurs in these attributes may affect their decisions on brand and product choices (Blackwell et al., 2006).

The fourth stage is purchase decisions which are taken by the customers after evaluating the offers from different retailers. There are two phases contributing which contributes the decision making processes including retailer and in-store selection. Retailer selection is made after judging from which retailers the product should be buy by investigating the attributes from earlier stage and in-store selection is because of the selling skills of salesman, display inside the shop and advertising (ibid).

In stage five, consumers’ starts using the products and in stage six they start evaluating the using products. These both stages are after purchasing stages i.e. post-purchasing stages. In this stage there will be rise to satisfaction when consumers’ expectations are higher than the perceived performance and vice versa (Blackwell et al., 2006).

The last stage is divestment. In this stage consumers dispose the products. This stage is very important and key stage since the customers could be possible to make repeat purchases provided that they are satisfied with the above mentioned stages (Rayport and Jaworski, 2003).

Chapter 03: RESEARCH METHODOLOGY

This chapter explains the different methodology and it also justify that which methodology is appropriate and why it is chosen. The different method used for data collection are also explained and justified with the research requirements alongside.

The research should be valid as well as reliable and for that the most appropriate research method should be chosen. For validity and reliability of the research it has got five different parts which are describe briefly below:

Figure 3: Validity and reliability of the research

3.1 Research Design:

The research design used in this research is scientific research. The Scientific research starts with the structure of hypotheses from background knowledge and the casual observations which is also known as the inductive reasoning to give the reason for the consequences of hypotheses i.e. the deductive reasoning. This is followed by the confirmation or rejection and implications of the hypothesis. Scientific research is simply the integrated use of inductive and deductive reasoning.

Svensson (1999) gives three basic objectives for the scientific research.

3.1.1 Exploration:

When there is confusion or the researcher is not sure of which model to use, then the exploration is needed for the focus on developing the systems. Exploration studies tend toward loose structures with the objective of discovering future research tasks (Cooper and Schindler, 2003). One of the great advantages is that it is flexible and adoptable to change (Sunders et al., 2000). Though it is flexible it inherent the exploratory research which does not mean absence of direction to the enquiry (Adams and Schvaneveldt, 1991).

3.1.2 Description:

The main objective of the descriptive research is to portray an accurate profile of persons, events or situations (Robson, 1993) and to describe market characteristics or functions (Malhotra, 1996). In this research the problem is well structured and completely clear but the researcher doesn’t know the answer. If the research is concerned with finding out who, what, where, when or how much, then the study is descriptive (Cooper and Schindler, 2003).

3.1.3 Explanation:

This describes the set of facts that clarifies the relation and the cause of different phenomena.

In view of the fact that this research has aim to find out, describes and test the Brand equity and the consumers, the research purpose is descriptive. Since the research concerned with how by asking the question “How the brand equity affects the consumer’s buying behaviour?” the suitable research purpose for this research is descriptive research.

3.2 Research Approach:

There are two types of research approaches which are as follows:

3.2.1 Qualitative Research Approach:

“Qualitative Research seeks the meanings and motivations behind behaviour as well as a thorough account of behavioural facts and implications via researcher’s encounter with people’s own actions, words and ideas” (Mariampolski 2001).

The characteristics of Qualitative research are as follows:

There will be the deeper understanding of the research problem.

It helps to answer the questions like what, why and how.

3.2.2 Quantitative Research Approach:

“Quantitative Research seeks to quantify the data and typically, applies some form of statistical analysis” (Malhotra 1999).

The characteristics of Quantitative Research are as follows:

It focuses on numerical representation.

Any information before presenting it is tested by using the systematic approach.

It is Objective type.

It concerns with breadth rather than depth.

Since this research is about the consumer’s behaviour on brand equity which indicates the people’s action on brand and their habits and also the research is all about how the brand equity affects the consumer’s buying behaviour the approach used in this research is Qualitative Research Approach.

3.3 Research Strategy:

Paul and Eriksson (1998) mentioned three major research strategies that are available in social sciences which are case studies, experiments and surveys where as Yin (1994) proposes archival analysis and histories. In general all of these strategies can be determined by three different conditions:

The different types of research questions posed.

The extent of focus on present days as opposed to past events.

The degree of control of a researcher over actual behavioural events.

Yin (1994) relates the above mentioned three conditions to the different strategies which can be visualizes in the below given table.

Research Strategy

Research Question form

Required control over behavioural events

Focuses on contemporary events

Experiment

How, Why

YES

YES

Survey

Who, What, Where, How many, How much

NO

YES

Archival Analysis

Who, What, Where, How much, How many

NO

Yes/NO

History

How, Why

NO

NO

Case Study

How, Why

NO

YES

Table 1: Relevant Situation for different strategies

The main aim of this research is to find out how the brand equity affects the consumer’s buying behaviour by considering the above, so that the appropriate strategy for this research is chosen.

3.4 Data Collection:

There are two types of data collection:

Primary data

Secondary data

Primary data can be collected by different questionnaire as well as interview where as secondary data can be collected by library method. Secondary data is based on information or data which was collected by others (Stewart & Kamins, 1993; McQueen & Knussen, 2002). According to Schutt (1996) secondary data is a second hand data.

Since this research is based on the secondary data only the library method is used. To collect the information related to the research literature and background i.e. secondary data various types of articles and books were used.

The motive for choosing the secondary data in this research is because of the following reasons:

It is given in a pattern so, it is quicker to analyze

It saves time, effort and money.

It will lead to the identification of social issues which can be useful in a primary research investigation.

3.5 Data Analysis:

Marshall and Rossman (1995) mentioned that the data analysis is a process of bringing structure to a mass of collected data. Analysis is a sorting out procedure (Creswell 1998).He also adds that the process of analysis involves displaying and findings through tables, charts, diagrams and figures. It engages in penetrating for patterned regularities in the data. In more meaningful ways data analysis is the pulling data apart and pulling them back.

The data were collected from books and articles which are mainly based on the Consumer’s Brand Equity, branding and brand personality. And also many journals were used such as Advance in consumer research, Journal of marketing research, Journal of marketing management, European journal of marketing etc. These journals are viewed via internet and from the data bases like: Business Source Elite (Ebsco), science direct, Emerald Insight etc.

CHAPTER 04: ANALYSIS AND FINDINGS

4.1 Introduction

The aim of this chapter is to analyze, present and discuss the findings obtained from the research questions and its objectives concerning the effect of brand identity on the consumer buying behaviour. As mentioned in research methodology this research is completely based on the secondary data, the analysis and findings done here are on the basis of literature given by other researcher or the writers.

4.2 Analysis

Easterby-Smith et al. (2002) referred the Qualitative researchers needs to communicate the findings in an honest and systematic manner by disseminating the richness of the findings and hence the experience of the researchers. In addition as far as possible the analysis should be open for verification so that the others are free to repeat in order to check what has been done and its conclusion (Breakwell, 2006). This chapter consists of two sections where it analyzes the objectives of research i.e. how the brand equity affects the consumer’s buying behaviour and also the importance of the brand equity.

4.2.1 Effect of brand equity on consumer’s buying behaviour:

This can be further classified into following sections which is described below briefly:

4.2.1.1 Significance of brands on consumer buying decisions:

As mentioned in literature review, brand is important for product development in that it can be instilled in consumer’s mind (Mooij, 1998) and therefore it could have a beneficial or detrimental effect on consumer’s buying decisions (Yasin et al., 2007). When it comes to the effect of brand it also contains the quality, style and price which are some of the determining factors. Most people look for the brand name before they buy something, in which one of them highlighted the importance of past shopping experiences as mentioned in the above literature (Aaker, 1991). If the consumer