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what factors impact consumer's choice on brand

By Karen Stevens,2014-07-08 13:16
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    Applied research project for marketing 6/22/2010

Abstract

    Purpose The purpose of this paper is to examine the effects of brand, a central

    concept in information approaches to brand effects, on consumer choice. This study tells people the relationship between brand choice and brand popularity, brand reliability, word of mouth, product quality and service. We are going to research how these variables influence on brand choice. And research consumers preference and

    help brand owner find the performance that consumers focus on brand.

    Design/ methodology/ approach The current study focus on the relationship

    between brand feature, product feature and brand choice.

    The finding is concluded by using descriptive research technique. In this research report, quantitative research and non-probability sampling technique is adopted to collect data. SPSS software is used to help test and analyze the data to work out the final result.

    Keywords brand choice, brand image, brand reliability, popularity, WOM, Paper type Research paper

    An executive summary for managers and executive readers can be found at the end of this article.

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    Applied research project for marketing 6/22/2010

Contents

    Introduction/ Background ................................................................................................................. 2

    Conceptual Framework ..................................................................................................................... 4

    Literature Review .............................................................................................................................. 5

    Brand popularity ....................................................................................................................... 5

    Brand reliability ......................................................................................................................... 7

    Word of mouth .......................................................................................................................... 9

    Product quality ........................................................................................................................ 10

    Service ..................................................................................................................................... 12

    Research Question .......................................................................................................................... 13

    Methodology ................................................................................................................................... 13

    Hypothesis............................................................................................................................... 15

    Analysis and Finding ........................................................................................................................ 19

    Basic Analysis .......................................................................................................................... 19

    Analysis of Hypothesis ............................................................................................................ 26

    Conclusion ....................................................................................................................................... 39

    Result ...................................................................................................................................... 40

    How does the research use for society, company ................................................................... 40

    Reference ........................................................................................................................................ 43

Introduction/ Background

    One of the most important roles played by brands (understood to be "a name, term, sign, symbol or design, or a combination of them which is intended to identify the goods and services of one seller or a group of sellers and to differentiate them from those of competitors"; Kotler1997) is their effect on consumer brand choice and consideration.

    Brand choice is as a function of consumer decision-making to their consumption. A decision is made by the selection from two or more alternatives. In other words, the consumer‟s choice is not limited to whether or not he/she will purchase a given product, but he/she also has the choice between Brand X, Brand Y or Brand Z. in fact, the choice becomes difficult in our modern world economy because of the diversity of brands.

    During the decision making process the consumer acts as a problem solver, seeking and evaluating information about brands and retail stores to fulfill his/her needs.

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    Applied research project for marketing 6/22/2010

    According to the cognitive model, the steps involved in decision making are: needs arousal, consumer information processing, brand evaluation, purchase and post purchase evaluation (Hind Nasir AI-Shudukhi, 1996). Each of these steps is related to the decision of choosing a specific brand.

    For almost any common grocery product, consumers shopping in the typical American supermarket are able to make their selection from among numerous competing brands. To help her decide which brand to select, the consumer obtains information from a variety of sources. (Jacob Jacoby, Donald E. Speller, Carol A.

    Kohn, 1974)

    As amount of information increased, feelings of satisfaction with the decision and certainty that one had made the correct decision also increased, while feelings of confusion decreased. However, the ability to correctly select the "best" brand was demonstratably poorer at both low and high information load levels, compared to intermediate levels.

    Furthermore, Brand is a complex concept of business and consume, market demand and consumer choice is the starting point for brand management, business development practical need to establish a strong brand to increase brand market power for playing a brand on consumer demand and consumer choice to induce. In fact, the result is uncertain in consumer purchase, and that there may be "value for money", is also possible that "poor value for money" on brand choice under Uncertainty, and thus consumer decision-making at risk. Select the enterprise's brand, or choose another, often depending on the brand value of consumer expectations and perceptions of purchase risk judgments. For businesses, understanding of consumer brand choice behavior affects the causes and ways to avoid the risk of brand management to inspire.

     To make good decisions, decision makers must have information that is available, accurate, and timely, but they also have to be able to comprehend that information and its meaning. They need to be able to determine meaningful differences between options and weight factors to match their needs and values. Finally, they must be able to make trade-offs and ultimately to choose.

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    Applied research project for marketing 6/22/2010

    Conceptual Framework

Figure 1

     Brand feature:

     Brand popularity

     Brand reliability

     Word of Mouth Brand Choice

     Product feature:

Product quality

Service

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    Applied research project for marketing 6/22/2010

Literature Review

    Brand popularity

    Popular brands are those (e.g. Honda. Hyundai) that are widely sought after and purchased by the population at large; brand popularity is considered to be the accumulation of market acceptance and brand goodwill over time. Behind vehicle firms' efforts in creating or maintaining the popularity of their car models is a strong belief that once a particular model has become popular, the popularity component will bring a positive contribution to the brand effect.

    Therefore, brand popularity positively influences brand effect not only directly in the short run but also indirectly in the long run by creating favorable brand effect. In other words, the effect of brand popularity on brand effect is not limited to the current period, but extends to future ones as well (e.g., through word-of-mouth). The long-term effect of brand popularity is expected to occur due to the contribution of brand popularity to brand effect, which tends to be country-specific in a global market, as subsequently discussed [Erickson, Jacobson and Johansson 1992].Although the concept and the effect of brand popularity have been found to be important for successful brand management, no study has attempted to address the issue of brand popularity in the context of global competition. The Short- Term Effect of Brand Popularity

    In previous studies, brand popularity has typically been operational zed as either consumer awareness level, current market share, or penetration level measured through cumulative sales. Existing studies have used brand popularity on an ad hoc basis (e.g., Raj [1985]). In the current study, however, brand popularity is formally defined as the extent to which a brand has been widely sought after and purchased by the population at large [American Heritage Dictionary 1994]. Therefore, brand popularity is considered to be the accumulation of market acceptance and brand

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    goodwill over time. It is a longer term concept that does not significantly change periodically in the short run.

     Firstly, the brand popularity holding the extremely advantage position when consumer shopping. Many research results show that consumers to a particular brand rarely, loyal to a group of brand or few brands. Because the typical of the customers' purchasing behavior, will only consider a few brands, and have higher well-knownness. The brand which has well-knownness is easier to place on the list of consumer choice. Some people think they eat hamburgers; the preferred option may be McDonald's and burger king.

     Consumers even wanted to identify which brand has the best quality, but they often have no knowledge or experience to make judgment, such as high precision technology and products. In addition, even more ordinary products, consumers could not know how to judge the quality. Students for the first time in pushing carts oscillated between the supermarket shelves, don't know which to prefer. In fact, the quality of the commodities choice unless they are experienced professional, otherwise it is an equivocal and difficult thing to judge. In this case, consumers will use every possible shortcut to make the right decision. In most cases, they simply choose those they most familiar brand.

     In charge of IT influence enterprise information of product evaluation factors in the survey, the brand popularity have 25% (the highest), and we expected results are consistent. Brand popularity rely on long-term accumulation, the influence between the brand effect and users to choose, because of brand popularity, consumers to choose this brand‟s product, and the user choice will also further increase brand popularity.

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    brand

    popularity

    product

    function

    product

    quality

    use

    experience

    Peer

    evaluation

Brand reliability

    Will increasing of brand reliability lead brand effect to strengthen accordingly? In other word, will it attract customers consumption?

    When consumers are uncertain about brands and the market is characterized by asymmetric information (i.e., firms know more about their products than do consumers), brands can serve as signals of product positions (Wernerfelt 1988). As a signal of product positioning, the most important characteristic of a brand is its reliability. A firm can use various marketing mix elements besides the brand to signal product quality: for example, charging a high price, offering a certain warranty, or distributing via certain channels. Each of these actions may or may not be credible, depending on market conditions including competitive and consumer behavior. However, what sets brands apart from the individual marketing mix elements as credible signals is that the former embody the cumulative effect of past marketing mix strategies and activities. This historical notion that credibility is based on the sum of past behaviors has been referred to as reputation in the information economics literature (see Her- big and Milewicz 1995).

    Credibility (reliability) is broadly defined as the believability of an entity's intentions at a particular time and is posited to have two main components: trustworthiness and expertise (Tülin Erdem and Joffre Swait, 2004). Thus, brand

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    credibility is defined as the believability of the product information contained in a brand, which requires that consumers perceive that the brand have the ability (i.e., expertise) and willingness (i.e., trustworthiness) to continuously deliver what has been promised (in fact, brands can function as signals since-if and when they do not deliver what is promised-their brand equity will erode). Both the expertise and trustworthiness of a brand reflect the cumulative effects of associated past and present marketing strategies and activities. The credibility of a brand has been shown to be higher for brands with higher marketing mix consistency over time and higher brand investments, ceteris paribus (Erdem and Swait 1998). Consistency refers to the degree of harmony and convergence among the marketing mix elements and the stability of marketing mix strategies and attribute levels over time. The consistency of attribute levels over time-for example, consistency in quality levels-implies low "inherent product variability" (Roberts and Urban 1988), which can be achieved by a dedication to quality standardization. However, the consistency to which we refer is that of the brand positioning in general. Brand investments, on the other hand, are resources that firms spend on brands to (1) assure consumers that brand promises will be kept and (2) demonstrate longer-term commitment to brands (Klein and Leffler 1981). Furthermore, it has also been shown that the clarity (i.e., lack of ambiguity) of the product information contained in a brand is an antecedent to brand credibility (Erdem and Swait 1998).

    Here is the analysis from reliability feature in 5 main decision variables. (1) Perceived Quality: the definition of perceived quality perception widely accepted given by Zeithaml (1988): the overall performance evaluation about consumer product Quality from consumers. Zeithaml thinks that perceived quality is different from objective or actual quality, it is a higher level of abstract concepts rather than specific features of products, in some conditions, it is similar to the overall evaluation of attitude, and it is a judgment from consumers.

    (2) Perceived Risk: It is that consumer products in the purchase process, for the purchase of the unforeseen consequences caused by quality and uncertainty,. The importance of reliability from information asymmetry to consumers of uncertainty

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about the product attributes.

    (3) Information cost: Information Costs including the time, money, spiritual and similar expenditure. Because of the high cost of information, consumers can't really know a certain product function. In order to reduce transaction costs, a consumer must seek a judgment of the inherent quality product logo or signal. In the long term business evolution, as the trademark or brand name becomes the brand logo to judge product quality. Most consumers choose a brand, because they thought that the brand is the guarantee of product quality, a good brand also can produce high quality product.

    (4) Relative Price: Relative Price means that after brand reliability influences the Price of premium on this product. Erdem&Swait has been verified the brand assets as a signal of the study has in 1988, for American consumers, the brand credibility can increase the products quality, reduce the perception of perceived risk and cost of information search, thereby increasing consumer expectations for this brands product

    in the brand product positioning.

    (5) Brand choice preferences: Brand choice preference is that the customer during in the whole set of buying process who consider for the service, relative to other companies provide service of preference. Brand choice preference is not only the customer emotional reaction, it is a kind of attitude and the customer by this tendency, preference, to express it‟s for the brand of emotional.

    Word of mouth

    Word of mouth is a reference to the passing of information from person to person. Originally the term referred specifically to oral communication (literally words from the mouth), but now includes any type of human communication, such as face to face, telephone, email, and text messaging. Word of mouth can be seemed as one kind of advisement.

    Johan Arndt (1967) defines word of mouth advertising (informal group influence) as oral communication between two or more persons concerning a brand, product or

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    service on a non-commercial basis. Arndt (1967) has reviewed 147 studies on the effects of word of mouth advertising on consumer behavior and he offers three reasons for the dominant power of informal group influence on consumer behavior compared with other information sources:

    1. Group influence is thought to give reliable, trustworthy information, and hence, it can help people to make better buying decisions.

    2. In contrast to the mass media, personal contacts offer social support. 3. The information provided is often backed by social pressure and surveillance. How does word of mouth advertising affect consumers' willingness to choose risky product and brands? Under what conditions will word of mouth advertising increase, decrease or produce no change in brand effect a consumer's willingness to brand choices?

    WOM is a powerful in?uence on consumer behavior. Keaveney (1995) noted that

    50% of service provider replacements were found in this way. WOM may be positive (PWOM), encouraging brand choice, or negative (NWOM), discouraging brand choice.

    Brand purchase probability will be affected by the relative incidence of PWOM and NWOM about the brand and also by the relative impact of instances of PWOM and NWOM. WOM acts within a frame work of acquired consumer beliefs, preferences, habits, and commercial in?uences that may constrain or assist response to the advice. (Robert East, Kathy Hammond, Wendy Lomax, 2008)

    Product quality

    Product quality means that in the commodity economy, enterprises based on specific standards, product planning, design, manufacture, testing, measurement, transportation, storage, sales, service, and ecological recovery of the necessary information such as full disclosure.

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