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BRANDS.
Term Paper ID:28337
Essay Subject:
Focus on brand-consumer relationship; customer loyalty. Theories of consumer behavior incl. Decision-making process.... More...
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Paper Abstract:
Focus on brand-consumer relationship; customer loyalty. Theories of consumer behavior incl. Decision-making process.
Paper Introduction:
Introduction
For more than a century, the use of brands as a means of first identifying a product and then acquiring and maintaining consumer loyalty to that product and its manufacturer has been a key element in marketing activities (Berthon, Hulbert, and Pitt, p. 53). It is generally assumed that brands "create a distinction among entities that may satisfy a consumer's need. This primary distinction is the origin of a series of benefits for both the buyer and the seller (Berthon, Hulbert, and Pitt, p. 54). Brands are perceived as having the capacity to reduce search costs for consumers, to assure quality and reduce perceived risk, and to impart status and prestige to purchasers. For sellers, brands are regarded as fostering repeat purchases, facilitating new product introductions, consumer loyalty, and
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The pricing strategy is based on consumers' perceptions of value. Advertising can stimulate product development,but its main goal is to convince the consumer that a particular product issuperior to that of a rival producer. "The Tyranny of the Brands." New Statesman, January 24, 2 , 129(447 ), pp. The company monitors sources of brand equity.These traits of successful brands provide insight into the actual decisionmaking process that consumers employ when electing to purchase a branded asopposed to generic product. This primary distinction is the origin of a series ofbenefits for both the buyer and the seller (Berthon, Hulbert, and Pitt, p.54). Indifference theory suggests that some consumers are, at certaintimes, indifferent when choosing between combinations of goods and brands.Consumers will traditionally substitute one desired product for another insuch cases. 118). "Branding Baffles Consumers." Automotive News, November 22, 1999, 74 (5849), p. 53). Klein (p. 85 - 95.Webster, Frederick E. Buyers are more knowledgeable and experiences, less likelyto make irrational purchase decisions, and less likely to be overlyinfluenced by perceived brand status. 3.Keller, Kevin L. For example, a young married couple may divide availablefunds among six different furniture items because they need a bed, a tableand chairs, a sofa, a stove, and a television set; they are attempting tomaximize the utility of limited resources while acquiring neededcommodities that will enhance their lives. Thus, even a well plannedadvertising campaign is not universally successful in changing (much lessmaintaining) consumer purchase patterns. 519).For example, consumer loyalty appears to be more significant when it comesto buying toiletries, cleaning products, and food than it does whenfurniture is at issue. Consumers want to maximize their total utility by the carefulallocation of incomes, acquiring needed items and luxury items as fundsbecome available. 17) has described brands as a fundamental linkbetween manufacturers and consumers, and noted that brands have been usedby manufacturers to reach out directly to consumers - thereby reducing thestrength of the relationship between consumers and retailers. Consumers who wish to present a particularself image to the world (and to themselves) may elect to purchase brandedproducts because by doing so, they become intimately participative in theimage and lifestyle of the brand. Theextent to which consumers are likely to be influenced by advertising isdifficult to measure. The brand's managers understand what the brand means to consumers. 1) reported that the magnitude of brand loyalty isfalling off and that while consumers are still influence by perceived brandreliability and quality, they are more and more willing to "switch off"among brands than in the past. When Coca-Cola introduced its "New Coke" to competewith the taste of Pepsi, a glitzy advertising campaign was created; ClassicCoke purchasers rejected the new product and literally forced themanufacturer to re-offer the original product. 53 - 65.Halliday, Jean. At issue in this report is an analysis of the decision-makingprocess a consumer goes through in purchasing a branded as opposed togeneric products. In the high-tech arena, brands arenot created by advertising or crafted for a tightly defined targetconsumer. For sellers, brands are regarded asfostering repeat purchases, facilitating new product introductions,consumer loyalty, and promotional efforts, and conveying a coherent productand company message. Economistsspeak of this goal as the desire to purchase the largest possible amount ofconsumer utility. "Brand Management Prognostications." Sloan management Review,Winter 1999, pp. 1. 147). If income and perceived stylistic shifts are factors affectingconsumer behavior and purchase decisions, so too are the intangible effectsof advertising. "The Six Myths of Branding." Brandweek, September 2 , 1999, 4 (35), pp. Situational loyalty as opposed to"permanent" brand loyalty is becoming more characteristic of consumers hereand abroad, largely in response to the proliferation of so many brands andsub-brands - which has had the effect of confusing consumers andcomplicating the purchase decision process. Variables that have always been known to impact upon suchdecisions continue to do so, but other factors such as brand dilution,excessive branding, and technology are also beginning to shape and informsuch decisions. 9.Morrin, Maureen. Increasinglyvalue-conscious and educated consumers, it is argued are less and lesswilling to pay the premium prices associated with manufacturers' brands(and traditional retail selling formats); in order to decide to pay suchprices, consumers must be motivated by intangible (non-price) factors asdescribed above. 148) identified the ten attributes shared by theworld's strongest brands, which are: 1. The consumer is "offered somany choices of brands and so many promotional offerings with each brand,that there's bound to be switching and less easily stated loyalty by theconsumer (Worcester, p. The brand is given proper support, sustained over the long run. 5. Numerous influencesdirectly shape these activities. Despite affluence, issues relatedto intrinsic as opposed to extrinsic value seem to be predominating. Theseconsumer activities shape a market in which goods of varying degrees ofquality with relevant pricing are necessary. It is further assumed that the goal of allconsumer spending is the maximization of personal satisfaction. 86) believe that theseactivities, along with brands and brand images themselves, are relevantonly when purchase decisions are "irrational" or "emotional," as in thecase of detergents, automobiles, and clothing. 518). This is due, to a degree. 115 -117). Ward, Light, and Goldstine (p. Worcester (p. The brand stays relevant. Inthe 198 s, the baby boomers who came of age (and reached peaks of economicproductivity and prosperity) consumed mass quantities of high-end brandname products. 18).Theoretical Understanding of Consumer Behaviors A market demand curve is the sum of individual household decisionsabout how many units of a particular product to purchase at varying pricelevels. A questionof enormous significance to economists and to manufacturers is why peoplemake the purchase decisions that they do. First, as Webster (pp. Thusit can be argued that the "process" of consumer decision making vis-a-visbranded versus non-branded products is also shaped by the product itself.The Strength and Appeal of Brands Conventional marketing wisdom has touted the significance of brandsas influences over the consumer decision making process (Hickins, p. 7. 2. A potential consumer may move fromThomasville products to those of the Baker Company when an income increaseis experienced; lacking greater financial flexibility, however, theproducts of the Baker Company will be beyond the financial reach of manyconsumers otherwise quite comfortable with the price structure of theThomasville line.The Consumer Decision Making Process and Brands Keller (2, p. 28). 6. Manufacturers - and not specific products - are the "brand," andconsumers are appealed to with respect to this factor rather than theattributes of the individual product itself. Brands are perceived as having the capacity to reduce search costs forconsumers, to assure quality and reduce perceived risk, and to impartstatus and prestige to purchasers. 25 -29.Hickins, Michael. In any open market system,advertising becomes a critical factor in shaping consumer choices. Introduction For more than a century, the use of brands as a means of firstidentifying a product and then acquiring and maintaining consumer loyaltyto that product and its manufacturer has been a key element in marketingactivities (Berthon, Hulbert, and Pitt, p. 57)note that consumers searching for value are turning more and morefrequently to retailers' "house brands" or other "generic" products asconfusion increases - a phenomena that also impacts the auto industry,where product similarities are seen as reducing "brand loyalty."Conclusions Consumers are driven by issues related to value in making purchasedecisions, particularly when choosing between branded and generic productalternatives. 26) states that the "goal isnow for brands to animate their marketing identities, to become real-world,living manifestations of their myths." Consumers want to experience thelifestyle of their brands, leading them toward branded purchases and away,in many instances, from generic purchases of selected items. The brand is consistent. move to a search forinformation about alternative products and brands, conduct an evaluation ofalternatives, making a purchase, and informally conducting a postpurchasebrand/product evaluation (Keller, pp. 9). 2. All theories of consumer behavior begin with the assumption thatconsumers are making rational choices about how they will allocate theirresources (Morrin, p. "Understanding the Relationships Among Brands, Consumers and Resellers." Journal of the Academy of Marketing Science, Winter 2 , 28 (1), pp. Budget constraints also influence consumer behavior and buyingpatterns and further facilitates the substitution effect. Technology is also making it difficult for consumers to gather thekind of information they need to make informed, "rational" choices aboutcertain kinds of products ranging from computer systems to automobiles.Halliday (p. The theory of marginal utility suggests that consumer demand for acommodity is not based upon its "total" utility, because the choice facingthe consumer is not whether to buy all of a commodity or none of it. 28 -29). 2)." In today's market, driven by high-technology innovations that enhancethe speed with which new branded (and unbranded) products reach market andinformation regarding them is disseminated, consumers are being literallybombarded with choices (Winkler, p. What results isa tendency to shift brand loyalty more and more frequently, reducing thetendency to select, for example, a single automobile manufacturer and stickwith that line of products over time. 25), forexample, states that brands have become less and less about products, andmore and more about lifestyle. In general, the consumer decision making process can be said to beginwith [problem recognition ("What do I pick?"). The relative strength of any of these influences naturallyvaried from one consumer to another, but is also varied with respect to theactivities of manufacturers, retailers, and marketers (Keller, p. 4. "Managing Brands For the Long Run." California Management Review, Spring 1999, 41 (3), pp. 1 . The brand makes use of and coordinates a full repertoire of marketing activities to build loyalty. Works CitedAnonymous. As Berthon, Hulbert and Pitt (p. 15 -152). This type of data can be collected by the simple process ofobserving the way that consumers act in the marketplace - the items theypurchase, the reasons for such purchases, and the variables or influencesthat help to shape purchase decisions (Keller, 1, pp. 98). Psychologically, consumers are influencedby their own personality, perceptions, purchase motives (need versus want),and attitudes towards the inherent value of a specific purchase item.Socially, consumers are equally influenced by such factors as their ownroles and family constellations as well as traditions, the opinion ofreference groups of significance, social and economic class, and cultureand subculture. "What High-Tech Managers Need To Know About Brands." Harvard Business Review, July-August 1999, pp. 9. Once these basic needs have been fulfilled, these consumerscan begin to improve the quality of the items they have purchased, movingfor example from an nineteen inch to a twenty-seven inch color televisionset and from a generic to a branded (and status-enhancing) product. 17 -24.Winkler, A.M. Advertising allows the manufacturer or producer tomanipulate consumer interest and to define product positioning via branding(Keller, 2, pp. 1 4 -1 5). 1 -3.----------------------- 12 Because demand for lowerticket items is more widespread than a demand for higher ticket items, themarket is shaped accordingly and production is focused on lower ticketitems (Keller, 2, pp. When high-tech products areexamined and consumers are identified as experienced and sophisticated,these researchers contend that branding fails to be as critical adeterminant of purchase decisions as had traditionally been assumed. 17 -18) notes, consumersalmost always approach the purchase decision with reference to the issue ofperceived and inherent value; the consumer value equation refers to morethan price, and can include quality, lifestyle referents, statusindicators, and trust in the manufacturer and the retailer. 517 -526.Ward, Scott., Light, Larry, and Goldstine, Jonathan. It is generally assumedthat brands "create a distinction among entities that may satisfy aconsumer's need. The brand portfolio and hierarchy make sense to consumers. While consumer loyaltymay be a major factor influencing purchase decisions with respect toselected products, it is not universally true that consumer loyalty willeliminate the negative effects of enhanced competition (Morrin, p. Today, these same even more affluent consumers are stilldemanding such products, but an increasing number of affluent consumers areseeking out limited-edition objects or experiences. Berthon, Hulbert, and Pitt (p. 1 2 - 125.Keller, Kevin L. to the fact that mostfurniture manufacturers tend to produce goods that fall into specificquality and price categories. As their incomes and resourcesgrow, they will initially add new purchases to completely furnish a home orapartment. Whendeciding to buy an additional unit of a good, consumers become willing topay only the value of the marginal utility of the last unit they aregetting. 28 -43.Worcester, B.A. 57) note, there have been"slow but persistent fundamental change in consumer values," and it is thisset of interrelated changes that is shaping the consumer decision makingprocess today. The brands excel at delivering the benefits consumers truly desire. 3) commented that as consumers are given more and more choicesamong branded products, their level of confusion is rising. Much has been written about consumer loyalty to branded products andthe importance of acquiring this type of support. "Brand Names Losing Luster." Management Review, June 1999, 88 (6), p. 8. The brand is properly positioned to occupy a specific and well-defined niche in the consumers' minds. Implicit inthe brand-consumer relationship is the development and enactment of apsychological process by means of which a consumer elects (or is drawn or"pulled") to make certain purchases based upon brand appreciation orloyalty. "Brand Loyalty Loses Luster." Hotel & Motel Management, March 15, 1999, 214 (5), pp. Secondly, when deciding which factors will be most influential indetermining a branded versus generic product purchase, consumers are ofteninfluenced by the substitution of brands for "meaning." Klein (p. 9 -1 .Berthon, Pierre, Hulbert, James M., and Pitt, Leyland E. 15 -151). Utility, used in this manner, refers to the ability tosatisfy a particular want; it does not describe the actual usefulness ofany particular good or product. 3. The report will demonstrate that manufacturers have, inthe last century or more, used brands to acquire more control over theirmarketing channels as well as over the consumer (Webster, p. The substitutioneffect shapes markets because as the price of any commodity declines,consumers turn to that commodity as a substitute for other similar goodsand brands whose prices have remained the same (The Economist, p. Frederick Webster (p. "The Impact of Brand Extensions on Parent Brand Memory Structures and Retrieval Processes." Journal of Marketing Research, November 1999, 36 (4), pp. "The Brand's the Thing." The Economist, December 18, 1999, 353 (815 ), pp. Related to this question is theissue of how markets as well as branded and generic products themselves arechanged, shaped, and developed by the consumer decision making process. "The Brand Report Card." Harvard Business Review, January/February 2 , 78(1), pp. As more and more goods of a single type are acquired, the "law ofdiminishing marginal utility" comes into play and consumers become lesswilling to pay high or equal prices for more units of a particular good(Keller, 2, p. Advertising and other promotional and marketing strategies (includingpositioning, retailer selection, in-store placement, etc.), as notedbriefly above, also directly impact upon the purchase decision (Winkler,pp. 147 -155.Klein, Naomi.
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