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Dublin Business School
MBA DISSERTATION
AN INVESTIGATION ON BRAND LOYALTY OF
SOFT DRINKS IN IRELAND
Submitted by: ANEESH KARIPPERY FRANCIS
Student Number: 1715214
Supervisor: CHANTAL LADIAS
Word Count: 22972
Dissertation submitted in part fulfilment of the requirements for the degree
of International Masters in Business Administration at Dublin Business
School and Liverpool John Moore’s University
January 2013
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DECLARATION
I, AneeshKarippery Francis declare that no portion of the work referred to in the dissertation
has been submitted in support of an application for another degree or qualification of these or
any other university or other institute of learning. Further, all the work in this dissertation is
entirely my own, unless referenced in the text as specific source and included in the
bibliography.
Signed: –AneeshKarippery Francis-
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ACKNOWLEDGEMENT
I would like to take this opportunity to thank those who have contributed in any way, shape
or form to the completion of my dissertation. The journey so far has been easier only with
your help and support.
I would like to thank the entire faculty at DBS who helped me by giving ideas for research. I
am sincerely and heartily grateful to my supervisor, Chantal Ladias, for the support and
guidance she showed me throughout my dissertation writing. I am sure it would have not
been possible without her help.
I would like to extend my sincere thanks to my best friends and classmates Shone and Lumi
who boosted me morally and provided me great information sources. Finally, but most
importantly I would like to express my sincere thanks and appreciation to my parents for their
love and support throughout my master‟s programme and keeping me motivated. Your love
and support helped me to complete the course and dissertation.
Above all, I would like to thank God Almighty for wisdom and perseverance that he has been
bestowed upon me during this dissertation, and indeed throughout my life.
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ABSTRACT
Brand loyalty is when people choose to buy selectively one brand in a particular product
category. It consists of a consumer‟s commitment to repurchase or otherwise continue using
the brand and can be demonstrated by repeated buying of a product or service or other
positive behaviours such as word of mouth advocacy. This occurs when customers feel that
they have a product at the right quality for the right price. All companies are looking for
brand loyalty because it saves them time and money. This research paper focuses on soft
drinks. It investigates the reason, how and why customers are being loyal to the soft drink
brands. It reports the results of brand loyalty of 100 Irish customers.
This study explores brand loyalty behaviour on soft drinks and examines key brand loyalty
factors: brand name, product quality, price, style, store environment, promotion and service
quality. Consumers are classified into two categories by their degree of brand loyalty: hard-
core loyal customers and brand switchers. The study concludes that brand name, style and
promotion are the key brand factors which can distinguish hard-core loyal customers and
brand switchers. Brand name and style have more influence on the brand loyalty of hard-core
loyal customers, while promotion influences more on that of brand switchers. Product quality
is perceived by both groups as the most important factor affecting their brand loyalty. This
research also results the reasons why a loyal customer is switching to other brands (brand
loyalty of sportswear in Hong Kong, vol.5, 2006).
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CONTENTS
Chapter 1 INTRODUCTION ——————————————- 1
1.0 Introduction—————————————————-2
1.1 Reason of the Research—————————————- 4
1.2 Research Focus—————————————- 5
1.3 Research Questions —————————————— 6
1.4 Research Objectives ——————————————- 7
1.5 Research Recipients—————————————– 8
1.6 Background and Suitability———————————- 8
1.7 Learning style————————————— 9
1.8 Time tabling and Cost issues———————-9
Chapter 2 LITERATURE REVIEW———————————-10
2.1 Introduction—————————————————- 11
2.2 Branding ——————————-11
2.2.1 Brand preference—————————- 12
2.3 Brand———————————————————13
2.3.1 Theoretical Background of Brand———————-13
2.3.2Factors influence consumer perceptions of a brand—-14
2.3.3Brand equity————————15
2.3.4 Brand Awareness——————————16
2.4 Brand Loyalty———————————–17
2.4.1 Levels of Brand Loyalty—————————— 18
2.4.2 Maintaining and Enhancing Brand Loyalty————-20
2.4.3Types of brand loyal consumers————-22
2.4.4 Factors of brand loyalty———————-23
2.4.5 Brand Loyalty model————26
2.5 Brandquality————————-27
2.6 Brand association————–27
2.7 Consumer Behavior—————————————-29
2.7.1 Factors influencing consumer behaviour————–29
2.7.2 The buying decision process——————-32
2.8 Soft drink industry in Ireland————-34
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Chapter 3 RESEARCH METHODOLOGY
3.1 Introduction—————————————————-37
3.1.1 Definition of Research Methodology———-37
3.2 Research objectives———————————————38
3.3 Research Philosophy—————————————-39
3.3.1 Research onion——————————————— 40
3.4 Research Approach——————————————–41
3.5 Research strategy——————————42
3.6 Research Hypothesis————————————– 43
3.7 Data collection and sampling—————-44
3.7.1 Research questionnaire————–45
3.8 Time Horizon——————————— 47
3.9 Data collection methods——————47
3.9.1 Secondary data collection methods—————47
3.9.2 Primary Data Collection————————————-48
3.10 Data analysis tool——————-49
3.11 Ethical issues and limitations————–49
Chapter 4 DATA ANALYSIS ——————–50
4.1 Introduction—————————————————– 51
4.2 Quantitative analysis——————————————–51
Chapter 5 FINDINGS AND CONCLUSIONS——————–73
Introduction——————————————————74
Findings and Conclusions of Research———————–77
Chapter 6 SELF REFLECTIONS————————————–78
6.1 Introduction——————————————————-79
6.2 Reflection on Learning—————————————–79
6.3 Self-assessment and Learning & Skill Development——–82
6.4 Challenges encountered—————————————–84
6.5 Conclusions——————————————————-84
BIBLIOGRAPHY———————————————-85
APPENDIX—————————————————-90
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LIST OF TABLES
Gender classification of respondents
Age group classification of Respondents
Are you a user and consumer of soft drinks?
Are you especially loyal to any soft drink brand?
Frequency of buying soft drink brands.
Soft drink brands are reputable
The prestige of the brand reassures me when purchasing a soft drink
Goodwill of the company is vital when choosing a soft drink.
Soft drink brand reflects my personality.
Availability of soft drink brand in several quantities suits with my convenience.
Soft drink is healthy.
Soft drink brand is tasty.
Soft drink brand has sufficient flavour choice.
sensitive towards price.
Soft drink brand provides good value for money.
The packaging of soft drink brand is important.
The soft drink brands are easily available in the stores.
The influence of TV advertisements.
Window displays of soft drink brands in the store, attracts me to purchase.
Salespersons of the stores are willing to help me to find out the soft drink brand.
Recommendation of soft drink brand to others.
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LIST OF FIGURES
levels of brand loyalty
Creating and Enhancing Brand Loyalty
ResearchModelofBrandLoyaltyandConsumerTypes
Model of buyer behaviour
Maslow’s hierarchy of needs
Research onion
Gender classification of respondents
Age group classification of Respondents
Are you a user and consumer of soft drinks?
Are you especially loyal to any soft drink brand?
Frequency of buying soft drink brands.
Soft drink brands are reputable
The prestige of the brand reassures me when purchasing a soft drink
Goodwill of the company is vital when choosing a soft drink.
Soft drink brand reflects my personality.
Availability of soft drink brand in several quantities suits with my convenience.
Soft drink is healthy.
Soft drink brand is tasty.
Soft drink brand has sufficient flavour choice.
Sensitive towards price.
Soft drink brand provides good value for money.
The packaging of soft drink brand is important.
The soft drink brands are easily available in the stores.
The influence of TV advertisements.
Window displays of soft drink brands in the store, attracts me to purchase.
Salespersons of the stores are willing to help me to find out the soft drink brand.
Recommendation of soft drink brand to others.
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CHAPTER 1
INTRODUCTION
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1.0: Introduction
The title of dissertation is an “Investigation on brand loyalty of soft drinks in Ireland”. This
study is mainly trying to explore the importance of the brand loyalty of consumers in the
success of modern business organizations. The research is also trying to find out the factors
influencing the brand loyalty of the consumers and analyses the reasons why consumers are
continuously switching from one brand to other. The paper analysing the consumer
behaviour, the buying process, branding and brand awareness along with the brand loyalty as
they are interrelated with each other. This research is important though the branding and
brand loyalty plays a vital role in the present business world. In the present scenario, most of
the consumers are branding conscious. They believe a branded product will be rich in its
quality and durability. Branded products are also became status symbols among the large
number of customers now a days (European Journal of Communication, June 2003). In such
situation, multi-national business organizations must identify or understand the brand
preferences of customers and the factors affecting the brand loyalty of customers for
surviving in a very competitive business world. A business organization which has the clear
understanding about the perceptions and preferences of customers on a brand can only satisfy
their expectations on a product and maintain or secure the customer‟s loyalty on their brands
(Pamela .L. Alreck, Robert B. Settle.1999). This research is also relevant to many business as
many of the business from western countries are started their activities in Asian countries
especially in India and china and vice versa. So understanding a clear idea about the markets
of different countries will enable the business to use an appropriate strategy for maximising
their revenue and will help them to make strategic decisions (Dana L.Alden, Jan-Benedict E.
M. Steenkamp and Rajeev Batra. Jan- 1999)
The main reason for choosing this topic is the importance of branding and brand loyalty
prevailing in the modern business world. The research is done in Ireland because; Ireland
commercial industry is giving more importance for branding of products and services. Ireland
can claim to have been one of the first countries to consciously manage its brand image. State
involvement in branding the country as a tourist destination dates back over 50 years and
theIDA began advertising the country as a location for overseas investment in the late 1960s
(John Fanning, 2006, importance of being branded). The research is based on the soft drinks
because the soft drink industry has a very strong presence in Ireland. Most of the
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Irishcustomers are regular users of soft drinks. The regular customers might be loyal to
particular brands of soft drinks. The Ireland soft drink industry consists of a lot of strong soft
drink brands. So the competition is fierce in soft drink market. Well established brand names
continue to contribute investment and time in upholding brand identity, preserving brand
loyalty and developing new soft drink product lines so as to occupy more market share.
Marketing managers realize the rising trends of brand switching and recognize the customer
retention as an easier and more reliable source of superior performance (Reichheld&Sasser,
1990). Therefore it is important for marketers to acquire more knowledge in brand
loyalty.Research using factors on brand loyalty to distinguish hard-core loyal customers and
brand switchers has not yet been explored. Thus the aim of this research is to understand the
level of brand loyalty of Irish customers on soft drinks and to distinguish brand loyal
consumers and brand switchers in the Ireland soft drink market. From this study, we can
provide useful information to brand companies for developing their competitive branding
strategies.
This paper has four sections. First it depicts a theoretical back ground of brand loyalty, its
factors, and put forth a conceptual model to demonstrate the relationship of the variables.
Then it describes research hypothesis, methodology on research instrument design and data
collection. A survey questionnaire is administered to collect data from Irish customers.
Subsequently, we base on our findings to classify respondents into brand loyal customers and
brand switchers and to distinguish consumers by different factors of brand loyalty. Finally
concludes with a discussion of our recommendation on strategies for soft drink marketers and
future research directions.
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1.1: Reason for the Research
In the modern era, soft drink industry is showing intensive growth and
development all over the world. Especially in Ireland, soft drink plays a vital role in the Irish
market. Soft drink industry in Ireland is in the path of quick development and expansion. The
soft drink industry is very rich with enormous number of product lines, brands and brand
expansions. It‟s an industry that gives a significant contribution to the economy in terms of
finance, trade and employment opportunities. Moreover it is a highly sustainable source of
income because of the influence of soft drinks on Irish customers.
This research is important though the branding and brand loyalty plays a vital role in the
present business world. In the present scenario, most of the consumers are branding
conscious. They believe a branded product will be rich in its quality and durability. Branded
products are also became status symbols among the large number of customers now a days
(European Journal of Communication, June 2003). In such situation, multi-national business
organizations must identify or understand the brand preferences of customers and the factors
affecting the brand loyalty of customers for surviving in a very competitive business world. A
business organization which has the clear understanding about the perceptions and
preferences of customers on a brand can only satisfy their expectations on a product and
maintain or secure the customer‟s loyalty on their brands.
The Ireland soft drink industry consists of a lot of strong soft drink brands. So the
competition is fierce in soft drink market. Well established brand names continue to
contribute investment and time in upholding brand identity, preserving brand loyalty and
developing new soft drink product lines so as to occupy more market share. Marketing
managers realize the rising trends of brand switching and recognize the customer retention as
an easier and more reliable source of superior performance (Reichheld&Sasser, 1990).
Therefore it is important for marketers to acquire more knowledge in brand loyalty. It is
because of these reasons that a research on the brand loyalty of soft drinks in Ireland has been
found relevant and imperative (Introduction, An investigation on brand loyalty of soft drinks
in Ireland, 2013).
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1.2: Research Focus
In the present scenario, Ireland is a potential market for soft drinks. The presence of soft
drink industry is very strong in Ireland and it is in the path of intensive development. The soft
drink industry in Ireland is very rich with enormous number of brands and brand expansions.
The soft drink sector achieved active support from government, beverage council of Ireland
and customers because it is proactively engaged in achieving healthy life styles along with
the product innovation and partnerships with government and other relevant stakeholders
(The beverage council of Ireland position paper). However it is a doubtful and moreover a
matter of concern whether a business source capable of generating high revenues for the state
and the country has been utilized to the fullest of its capacity ( research on Kerala tourism,
Jan 2013, Lumianna Mathew, Dublin business school).
The main aspect of this research is the loyalty of Irish customers towards the brands of soft
drinks. This study analyses how a consumer is being loyal to a particular brand of soft drink.
The research is mainly concentrating on two types of consumers according to the degree
brand loyalty. They are hard core brand loyal and brand switchers (David A. Aaker, 1996,
Building Strong Brands). The research is also trying to find out the factors influencing the
brand loyalty which are differentiates brand loyal customers and brand switchers and
analyses the reasons why consumers are continuously switching from one brand to other. The
research could additionally serve as a source of information for the soft drink companies for
developing their competitive branding strategies. Additionally the research also analyses the
issues related with the soft drink industry in Ireland and the future prospects for development
and growth.
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1.3: Research Questions
The following questions are a part of the research from which the research objectives
originate-
1. How a consumer being loyal to a particular brand of soft drinks?
The research is focused on the brand loyalty of Irish customers on soft drink brands. To
analyse the loyalty of consumers towards soft drink brands, it is very important to
understand how a consumer is being a brand loyal from a common buyerby discussing the
factors influencing brand loyalty and causes leads to brand switching.
2. What are the factors influencing brand loyalty?
The study is discussing the brand loyalty on soft drinks by classifying
customers into hard-core loyal customers and brand switchers. There are some factors of
brand which will motivate or demotivate the customers. Motivated customers will be
brand loyal. Unsatisfied customers will switch to other brands. So the clear perception on
the variables of brand loyalty is essential for the research.
3. How the factors on brand loyalty distinguish brand loyal consumers and brand
switchers?
The research is analysing the brand loyalty of two groups of customers. They are hard-
core brand loyal consumers and brand switchers. The customers are being brand loyal or
brand switcher because they are affected by different variables on brand loyalty. The
factors of brand loyalty such as brand name, product quality, price, style, store
environment, promotion and service quality are influencing customers according to their
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attitudes and preferences on branding (brand loyalty of sportswear in Hong Kong, vol.5,
2006). Analysing which factors affecting a consumer to be brand loyal or brand switchers
is vital to meet the objectives of the research.
4. What are the factors to be focused to enhance or develop the brand loyalty on
soft drinks?
Brand switching is a great challenge for the soft drink industry in the present
competitive soft drink market. The increasing number of new market entrants, high
volume of promotions from soft drink brands and severe competition among soft drink
brands resulted in the massive loss of brand loyal customers and hike in the number brand
switchers. To maintain the profitability and growth, soft drink companies must retain and
increase the brand loyalty of customers on their brands. By analysing the factors
influencing the brand loyalty, the soft drink companies can formulate competitive
branding strategies to be successful in achieving brand loyalty on their brands.
1.4: Research Objectives
On a broad basis, objectives of this research would be the following:-
To carry out an in depth research on brand loyalty of Irish customers on soft drink
brands.
To distinguish brand loyal consumers and brand switchers in the Ireland soft drink
market by analysing factors of brand loyalty.
The specific objectives of the study would be:-
To analyse the factors of brand loyalty.
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To find out the factors of brand loyalty which are influencing customers to be brand
loyal or brand switcher.
To discuss about the Ireland soft drink industry and the challenges faced by the
industry in the present scenario.
1.5: Recipients of the Research
The recipients of this research study would be the following-:
1. Dublin Business School
2. Professor – John staunton
3. Dissertation Supervisor – Chantal Ladias
4. Students of marketing management and business.
5. Readers who are interested in knowing of the Ireland soft drink industry.
6. Students of management studies interested in knowing the practical applications of
modern management tools.
1.6: Background and Suitability of the Researcher for the
Research
The researcher of this project is a South Indian with a Bachelor‟s degree in business
administration, specialized in marketing, human resource management and finance from a
reputed university and currently doing MBA. The researcher is doing a part time job as a
sales assistant in Irish retail out let along with the studies. The experience as a sales executive
in retail outlet and customer service made the researcher to understand the customer
preferences and attitudes towards brands. The researcher have seen that the most of Irish
customers are very much loyal to the soft drink brands by analysing day to day sales of soft
drinks from the shop and the repeated buying behaviour of customers on the same soft drink
brands.This assumption has made the researcher to be more sensitive to this topic. This study
will help in finding out the factors of brand loyalty which are influencing a customer to be
brand loyal or brand switcher. The results of this research will help the soft drink companies
to formulate competitive branding strategies to maintain or develop the brand loyalty of
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customers on their soft drink brands. This research will also help in gaining a better
knowledge and understanding of the issues that the Ireland soft drink industry is currently
facing. Researcher‟s knowledge of marketing and branding would help him to find out the
factors which are affecting brand loyalty of consumers on soft drink brands. This research is
also bound to work as an insight to enhance researcher‟s skills and understanding of
marketing and brand management practically.
1.7: Learning Style
The researcher in this case is using a practical style of learning with a fair amount of
emphasis on interaction and communication with customers who are buying soft drinks. The
first step was to make an in depth knowledge on branding and brand loyalty by the
application of traditional marketing theories. For primary data, the researcher mainly
depended on questionnaire, telephonic interview and face to face interview. The secondary
data sources were books, journal, magazines and internet.
1.8: Time Tabling and Cost Issues
The time span of the research is around three months. This is inclusive of the time starting
from identifying the research problem, defining the research objectives and actually
conducting the research to drafting and finalising the report. It also includes the time that was
allocated to the collection of data from various sources like the beverage council of Ireland
and the local customers of soft drink brands. The research is basically a collection of data
from various sources and analysis of the same. Hence there are no major costs to be incurred
expect the compliments given to customers who were ready to answer the questionnaire of
the research, and lastly for making a hard copy of the report and the research results collected
and analysed. (Babu P. George, Tony L. Henthorne, (2007).
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CHAPTER 2
LITERATURE REVIEW
,
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2.1: Introduction
The main aim of doing review of literature is to avoid rediscovering the knowledge
that has been reported already (Fisher 2007:78). In this session, the literature in relation to the
dissertation topic is discussed, assessed and criticised.
The literature review on brand loyalty on soft drinks in Ireland comprises of a study and a
critical review of the academic journals, research papers and various other sources of
literature related to the topic. This chapter contains different sections, firstly the focus on
brand and how brand was evolved.With in this area the researcher examined theoretical
background of brand; factors influence consumer perception of a brand. However, as
marketing was too vast an area to study in this dissertation, the attention concentrated on
brand loyalty along with brand equity, brand awareness, brand quality and brand association.
It also describes about the behaviour of consumer for making purchases, as consumer
behaviour, what are the factors affecting consumer behaviour. The chapter concludes with a
detailed study of decision making process and the buying decision process of customers for
selecting a particular brand along with the literature on soft drink industry in Ireland.
This chapter discusses each of these parts in minute detail and the pattern followed is
presentation of information, both qualitative and quantitative, the findings of research done
by other famous practitioners and finally a close assessment of these conducted by the
researcher (research on Kerala tourism, Jan 2013, Lumianna Mathew, Dublin business
school).
2.2: Branding
Branding plays a vital role in marketing and experiencing a dramatically shift in this
era. The tradition of brand was that, a name associated with one or more products in a
product line that is used to identify the source of character of items (Kotler 2000, p.396).
According to American marketing association (AMA), “brand is a name, term, sign or
symbol or a combination of them intended to identify the goods and services of one seller or
a group of sellers and to differentiate it from those of competitors”. Branding is an added
value to the offerings of a manufacturing organization by naming them. It is about making a
promise to the ultimate consumers about the fulfilment of their needs by satisfying their
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expectations on the offerings of a particular business organization. (Kellogg on Branding-
2005).
2.2.1: Brand preference
Customers are the major factors affecting the stability of a business. Brand preference can be
defined as the measure of brand loyalty of a customer towards a particular product in the
presence of competitor‟s product, but customer will accept substitutes of that product if that
particular brand is unavailable.
Customers are selecting a particular brand because of promotions. Sales promotion doesn‟t
affect the post promotion brand preference. However, depending upon the characteristics of
the sales promotion and the promoted product, promotions can either increase or decrease
preference for a brand. (Kalwaniarticle 2000) explains about the brand choice of customers
with customer‟s price expectation as the mediating construct consist of two modelling
procedures. In the first stage it say about the expected price of a customer about a product and
the second procedure says about the brand preference depend upon the brand‟s retail price.
Author test the hypothesis of losses and gains in the retail price from expected price. The
result of the research is that the expected price is not only dependent but it is also affected by
the frequency of brand promotion, economic condition, customer characteristics and the type
of store. These things can be used in the research in the way, influence of brand retail price to
make a customer as loyal and researcher can find out what is the expected price of a
particular branded product for a customer and to what extend the brand promotion have an
impact on brand loyalty of a customer.
In an article written by Orth and Kahle explains the intrapersonal variation
in consumer susceptible to normative influence in brand preference. In this author found
individual prefer brands based on the brand benefits and individual who gives more internal
values and more complex social identities gives less emphasis on social brand benefits. By
using these intrapersonal variations, the researcher can find out what kinds of benefits are
expected by a customer from their preferred brand.
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2.3:Brand
“ A brand is a name, term, sign, symbol or design or a combination of any of these, intended
to identify the goods and service of one seller or group of sellers and to differentiate them
from those of competition” (Keller, 1993). The brand and branding are as old as known
civilisation (Moore and Reid, 2008). According to them there are two key roles played by
brands. The first role is a conveyor of information (origin and quality); of brands. The second
role is a conveyor of image or meaning (status/power, value) of brands. “A product is what
the factory makes: a brand is what customer buys” (Berenstien, 2003).
The name „brand‟ originated from the Germanic word „brand‟ which
referred to the mark made by burning a mark with a hot iron. Its usage was first noted in 1552
(The oxford dictionary). In the initial phase, a brand was used as a mark of identification for
animals, but its original inspiration to help customers easily differentiate products, came from
craftsmen who it to mark handcrafted goods in order to recognise their source (keller,1993).
2.3.1: The theoretical background of brand
Until late in the 20th century, branding was associated with consumer goods and services.
Today this is widely used to describe anything connected with identity and reputation
(Barrow and Mosley, 2006). Brands of modern civilization involve both the informational
characteristics of the ancient proto-brands and the more complex image characteristics of
modern brands including status/power.
Today in the 21st century, the HBS definition seems to best describe a brand:
“The brand is a company, it is the product, it is the company‟s reputation, it is the company‟s
philosophy, it is the company‟s weapon and shield and it is the distinguishing feature of the
company and its product”
Today, in an era with advanced technology and heavy competition in every field, there are
few differences between competing offers. The unique selling proposition (USP) is no longer
valid and being replaced by the emotional selling proposition (Aitchison, 1999). This is
treated as an opportunity to influence a customer‟s emotion to achieve a brand differentiation.
Conventional branding believes the ultimate aim is distinction from the competition (Fan,
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2005). A successful brand believes the ultimate aim of branding is to gain a favourable
position in the minds of consumers and distinction from the competition. A good brand is
believed to bring financial value in terms of higher sales or premium prices. Most people
cannot evaluate the relationship between price and quality for many products, then we can
assume that brand perception is the answer (Thjmore, 2008).
The main objectives of branding are to dominate the market (to reduce and eliminates
competition; to increase customer loyalty and to raise the entry barriers (Fan, 2005).
Branding is now used in many sorts of contexts; politicians, pop stars, and sports stars all
have a form of brand identity. Having a branded product or service will help to market a
product as there is trust in the brand. It would be safe to say that nowadays branding is a
necessity; it is an investment for any company.
2.3.2: Factors influence consumer perceptions of a brand
Perception is defined as the process by which information is received, selected, organised and
interpreted by an individual (Kotler 2005). Some of the factors that influence consumer
perceptions of a brand include,
Quality: consumer always gives importance to quality while choosing brand. It is
essential part of a brand.
Price: price, place and brand are three significant aspects while deciding consumers
to buy a daily product.
Society: every consumer has that nature of seeking advice from each other about a
new product or brand. These word of mouth communications have a strong influence
on consumers buying behaviour (Kotler, 1999).
Advertising: through advertising the marketer can create awareness among
customers. Advertisement is a prominent form of communication. If the advertising,
promotions and packaging hold an expected positioning strategy over a period of
time, then the brand could be strong (Aker 1991)
Packaging: this process is very important to influence a customer. A nice
package/design of product/brand attracts customers. Packaging is a form of
advertisement in the logic that it attracts consumer, describing and selling the product
(Kotler 1999).
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Convenience: easy access to brand/product in store is important when buying low
involvement product.
2.3.3: Brand equity
Most scholars defined brand equity as an additional value that a brand to a product or service.
Brand equity is complex matter and can be considered as intangible. „A brand is a set of
brand assets and liability linked to a brand, it is 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‟ (David
W. Cravens 2006).
The advantage of brand equity is that it enables mangers to consider specifically how their
marketing activities improve the value of brand in the minds of the customers (Cravens,
2006). Further, Cravens claimed that with in the marketing literature, a consumer based brand
falls into two groups: consumer perception (brand awareness, brand associations, perceived
quality) and consumer behaviour (brand loyalty, willingness to pay higher price). Both
suggested groups are examined later in this study.
Brand reorganisation from the consumer point of view: Aaker’s Brand Equity model
Brands are images associated with the logos, words and other kind of symbols. They are
projected by our minds when we come into contact with a product or a company. Once these
have been „stored‟, these inner images shape our attitude-positive or negative towards a
company and its products and services. In purchase situations, this store experience retained
in image helps consumers to make decisions (Aker, 1991).
A well-known brand can easily help a customer to make a purchasing decision, as the brand
can be perceived as “convenient summary” of the product, for the product, for example the
customer‟s feeling and knowledge of the product. (Romaniuk et al 2007) suggested two
approaches which can be used to achieve brand differentiation. The first is when the
consumer perceived that a brand offers something those others brand do not: the second is
through brand superiority, where the consumer knows other brands have the same attributes,
but perceive one brand to be better that the others.
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(Meenghan et al. 1995) summarised the brand function for the customer into three levels:
Convenience (Low level) – eases the decision making. Consumers are facing a range of
alternative products and are likely to pay more if they heard about the brand and its added
values. The brand awareness helps with the decision. Consumers are more likely to buy the
branded products if they know it fulfils their expectations.
Guarantee (high level) branding operates here as an offer of better quality or unspoken
guarantee.
Personal statement (highest level) brands operate at their highest level when the choosing of
particular brand shows that the customer is also making a personal statement.
To better understand the connection between customer and brand, researcher going to use
Aaker‟s Brand Equity Model (1991) which divides the assets of brand equity into five
dimensions. These categories can be considered as the cornerstones and crucial ingredient for
enhancing brand equity. It is fundamental for marketers to create a strong link between these
five dimensions in order to gain consumer‟s trust. This model is the standard template for
researchers and spans the entire spectrum of brand equity.
2.3.4:Brand awareness:
A well-known brand is more valuable than a non-brand, or a lesser-known brand.
(Pelsmacker et al. 2004) stated that the consumers have more faith in well-known brand.
Brand awareness also leads to more customer interest and can enhance the effectiveness of
making communications.
Aaker (1991) argued that the brand awareness is the ability of a potential buyer to classify the
brands membership within a specific product class. The connection between the product and
product class is the key component for the successful brand. The brand with the highest
recognition rate in product class has a huge advantage in terms of the benefits from its
promotional activities.
Brand awareness consists of brand recognition and brand recall performance (Keller, 2003).
Brand recognition relates to the consumer‟s ability to conform the brand when given only a
cue. Brand recall refers to the consumer‟s ability to retrieve the brand when given the product
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category. Further, the author stated that brand awareness plays an important role in consumer
decision making for three reasons:
Firstly, it is important that the consumer thinks about the specific brand at the point of
purchase. Secondly, brand awareness can affect decisions about brands, even if there are
essentially no other brand associations. Cited in Keller (1993), the „likelihood‟ model of petty
and cacioppo suggested that consumer makes choice on brand awareness considerations
when they have low involvement, which could results from either a lack of consumer
motivations or a lack of consumer ability. The third reason suggested by keller is that brand
awareness affects consumer decision making by influencing brand associations in the brand
image. The author further stated that a necessary condition for the creation of the brand image
is that a brand has been established in memory.
2.4: Brand loyalty
Companies invest considerably in strategies to ensure that they develop brand loyalty among
their customers, thus giving them a competitive advantage in the market share.
(De Chernatiry et al 2003) defined brand loyalty as a measure of a consumer‟s attachment to
a specific brand is a function of several factors such as perceived quality of the brand, its
perceived value, its image and the commitment the consumer feels towards it.
Customer‟s satisfaction is positively linked to customer loyalty:
A satisfied customer is likely to stay with the company and continue to buy from the
company over a long time. A satisfied customer is more likely to tell others about their
positive experience, which would be generate new accounts for the company (Naumann et al
2009). In agreement, (Egan 2008) proposed a simplified model – Return on relationship:
Customer satisfaction > customer retention > company profitability
However we can assume that the consumer satisfaction is not always a predictor of brand
loyalty. A customer who consistently chooses the same brand is the perfect customer and
having a numerous customers of this kind creates a dominate position for the company.
Customer loyalty is linked to a cost saving strategy, as it is estimated that the cost of
attractive new customers can be six times bigger than the cost of retaining existing customers
