The Impact of Branding on the Purchase Decision of Consumer - Essay Example

The Impact of Branding on the Purchase Decision of Consumer The importance of marketing in the current business environment cannot be denied. Most of the companies around the world consider consumer driven approach as the best alternative to satisfy the innumerable needs of consumers. Among the consumer driven approaches of the companies, branding has emerged as one of the most popular activities. Branding has helped companies to build loyal customers for their products and services. Moreover, it has also emerged as one of the most important elements of the marketing strategies of a firm. This study is about uncovering the relationship between branding and purchase decision of consumers. For this purpose, literature about the area of concern has been reviewed. It revealed that brands offer a symbolic value to the products and it has now become a basis of product differentiation. In addition, a number of scholars argue that, in this present business environment, brands are imperative for organizations to sustain in the market. Apart from that, scholars have also identified the role played by brands in influencing the purchase decision of the consumers. Table of Contents Table of Contents 3 INTRODUCTION 4 Research Objectives 4 Research Questions 5 LITERATURE REVIEW 5 Defining Branding 5 Branding and its Related Concepts 6 Theoretical Review 7 RESEARCH METHODOLOGY 9 Research Design & Strategy 9 Research Philosophy 10 Research Approach 11 Data Collection 12 RESEARCH ETHICS 13 TIMELINE 13 RESOURCES 13 REFERENCES 14 APPENDIX 15 Appendix I – QUESTIONNAIRE 15 Appendix II - FOCUS GROUP INTERVIEW QUESTIONS 16 INTRODUCTION This report will aim at underpinning the relationship between branding and purchase decision of consumers. The focus will however be on the UK market. On successful completion of the project, the influence of brands on the purchase decision of a consumer can be uncovered. Hence the study has high significance to business research. The topic of the study is ‘the impact of branding on the purchase decision of consumer’. In other words, the study will try to get insights into the role of branding in attracting customers towards the company. One of the most obvious reasons for choosing this topic is that, there were hardly any studies done on this topic previously. This topic is also important because it appeals to mass population. Furthermore, branding and consumer behaviour are relatively new concepts in the field of marketing, but have gained huge popularity in the recent past. There are several studies related to branding such as importance of branding for a company, branding and its relation with the stakeholders etc., but customers relationship with a brand, has hardly received any attention. This study will also shed light on the relationship between sponsorship and branding. Therefore, this study has high relevance in the field of marketing and can open new dimensions of business. Research Objectives The study has several objectives but it will be divided into three broader objectives. The objectives of the study are detailed below: - Branding is a broader topic and consists of several other related concepts. Therefore, one of the prime objectives of the study is to get insights into the related concepts of branding. Apart from that, this study will also try to identify the advantages of having a brand in a company. Along with that, how users get benefitted by it will be identified. The main aim of the study is to find the relationship between customers and brands. Therefore, another objective of the study is to know how branding influences the purchasing decision of a company. The final objective of the study is also related to the concept of branding. In this case, the study will try to uncover the relationship of sponsorship with a brand. In simple words, the study will aim to unearth how sponsorship connects with a brand. Research Questions This study will consist of three different research questions. These research questions will try to satisfy the objectives of the study. On the basis of the objectives of the study, the following are the research questions. Q1. How branding influences the purchase decision of a consumer? Q2. What is the relationship between sponsorship and brand? Q3. What are the advantages of branding for a company as well as for the customers? LITERATURE REVIEW In this section a theoretical review of the studies conducted earlier regarding the impact of branding on the purchase decision of consumer will be carried out. In addition, some of the vital concepts, related to the study will also be underlined. At the first glance, there were very few literature found in the area of concern. However, it is believed that substantial amount of information regarding the chosen topic will be available from different sources. Defining Branding In order to gain a clear idea of the definition of branding, it is important to know the literary review of a product. According to Baker (2000), a product is anything that satisfies the psychological, economical or functional needs of a consumer. He further stated that the degree to which a product satisfies a customer’s needs determines value of the product. With the increasing level of competition, marketers were finding it difficult to make their products visible. Thus with the need to increase visibility of products, the concept of branding came into light. Branding is a tool used by the companies to make their products more visible and also to give an identity to the product. Moreover, in saturated markets, brand helps companies to stand out among the mass. It also gives a competitive advantage to the firm and helps them to showcase their core competencies to the customers. American Marketing Association defined brand as the identity or any other feature which distinguishes one product from the other. On the other hand, according to Jay Baer, branding is defined as the art of aligning what the customers actually think about the company and what the company wants people to perceive about the company. Branding and its Related Concepts Branding is a broader term and is more than just a mere identity. Some of the major areas of branding are brand awareness, brand loyalty, brand value and brand image among others. This study will however focus only on the brand image and brand awareness. The concepts of branding are defined below: - Brand image is defined as the impression of a brand in the minds of a consumer. In other words, brand image is the set of beliefs that customers have about a particular brand. Therefore, it is important to position a brand properly in the market. A proper positioning will also allow the company to portray a positive image of the brand among the customers. Brand awareness is defined as degree to which a brand is acknowledged by the people. It helps companies to make people familiar with their products and services. Companies around the world use several techniques to increase the brand awareness. One such technique is ‘guerrilla marketing’. Branding plays a vital role in the success of a company and has direct relation with several aspects of a business. Several studies have been carried out regarding the association of a brand with the elements of a business. One such example is the study by Feldwick (1995), where the author emphasized on how a brand reflects a consumer’s personality. Likewise, Macrae (1996), studied on how branding links the internal and external environment of an organization. However, it is hard to find a study which shed light on how branding has a direct impact on the purchasing decision of a company. Therefore, through this report a relationship between the purchasing decision of a consumer and branding will be established. Along with this, the study will also try to establish a relationship between sponsorship and branding. Theoretical Review A consumer typically undergoes a series of processes before finally making a purchase. This phase is known to as consumer decision making process. The purchase decision of a consumer depends on several factors. In this context, brand plays a crucial role in influencing the purchase decision of consumers. According to Rapier (2013), the biggest opportunity of a brand to influence the purchase decision of a consumer lies in the information search phase. A company with brands has the opportunity to directly make the customers aware of their products and services. This approach greatly increases the visibility of a brand and has the ability to influence the purchasing decision of a consumer. Similarly, Roumeliotis and Ihailanen (2011) stated that brand awareness directly impacts the attitude and perception of consumers and thus drives brand choice. The author also stated that brand awareness is an influential factor in the purchasing decisions of consumers. Moreover, purchasing decision of a consumer also depends on the consumer’s capability to recall the brand name when searching for an item. Therefore, it is important for the organizations to create awareness about its brands. Another interesting finding from the author is that a consumer makes its purchasing decision either outside or inside the store. However, in case of outside-the-store decision branding is less effective to influence the purchasing decision, but when it comes to inside-the-store decision, branding acts as one of the most crucial influencer. Kumar (2007) feels that a company needs to constantly maintain its brand value and awareness, in order to ensure that customers quickly recall specific brand. The author also suggested that, apart from advertisements companies should also consider retail outlet demonstration of their brands. The retail demonstration is more effective in influencing a consumer’s in-store purchase decision. A brand which is not so popular is also capable of influencing purchase decisions of a consumer. For example, a brand targeting niche customer segments may influence other segments as well. A brand such as Rolex only targets people from higher income group and a person who has the ability to afford this product can get easily influenced to buy a Rolex watch to showcase his/her social class. Therefore, the literature review on the impact of branding on the purchase decision of consumer clearly states that branding plays a crucial role in influencing the purchase decision of a consumer. Another objective of the study is to unearth the relationship between sponsorship and brand. According to Jalleh, Donovan, Giles-Corti and Holman (2002), sponsorship has a direct impact on the brand attitude and brand awareness. The author also points out that, sponsoring large events greatly increase the brand awareness of a company. However, the degree to which sponsorship impacts a brand depends upon the events, a company is sponsoring. For example, sponsoring football world cup will obviously tender better results. Brands have always provided competitive advantage to the companies. It not only differentiates and provides identity to a product, but also offer several other additional benefits to both company as well as the users. In case of a company, a brand provides it an opportunity to generate higher profitability and higher revenue, gain better loyalty of customers, create barriers for the competitors and lowers the cost associated with marketing (Floor, 2006). For example, Apple Inc is one such company which practises brand oriented marketing techniques. The company gets highly benefitted with this marketing approach and has been able to increase their sales greatly. The benefits of branding is clearly visible in their digital store venture, there are large number of players operating in this industry, such as Napster, Emusic, Apple’s iTunes Music Store, Tesco and Kazaa and several other small players. However, due to share strong brand image, Apple iTunes Music Store has been able to achieve 80% of the market share. In the context of consumers, a brand helps them to gain both emotional and functional benefits. A brand provides high convenience to the consumers as it offers trust and assurance about the quality of the offerings. According to survey reports, consumers have more faith in a branded product than products which do not carry any brand name. The searching time for a product greatly reduces and helps consumers to save time. Apart from that, a brand also allows consumers to gain emotional benefits in the form of self expression and social status (Floor, 2006). RESEARCH METHODOLOGY The research methodology of the report will shed light on the methodology to be adopted for accomplishing the study. The methodology part for this project is divided into two parts, namely research design and data collection. Research Design & Strategy The study is aimed at finding the impact of branding on the purchase decision of consumers. In addition, the study will also try to establish a relationship between sponsorship and brands. The study therefore needs to be designed in such a way that it satisfies all the objectives. A research design is defined as the strategy or a plan, which will be put into practise to address the research questions. A research design has four formats namely case studies, experiment, cross sectional design and longitudinal design. Figure 1 – Among the available forms, cross sectional study will be chosen as it fits the requirement of the study. Therefore, the time horizon for this study is chosen as cross sectional. Research Philosophy Research philosophy is a standard on the basis of which information for a particular study must be collected and analysed. The research philosophies are divided into two broad categories, namely positivism and interpretivism. In a positivism philosophy, it is assumed that reality is stable and can be expressed from objective viewpoint. Moreover, researchers following this approach believe that reality can be recorded with instruments such as experiments and questionnaires. On the other hand, in an interpretivism philosophy, it is assumed that behaviour of human beings is dependent on what they perceive about the situation. The researchers who follows interpretivism philosophy states that human behaviour is influenced by the interpretation they give to communal circumstances. Therefore, as per the requirement of the study, positivism approach suits the best and hence this philosophy will be chosen. Research Approach There are two broad categories of research approach, namely inductive approach and deductive approach. The deductive approach is also referred to as ‘top-down’ approach and generally follows a waterfall model. In deductive method, the research follows a “funnel approach” where the research starts in a general topic and ultimately covers the specific topic. On the basis of the overall findings a conclusion is drawn. Figure 2 – Deductive Approach On the contrary, inductive approach moves from the specific topic to a broader generalized topic. This is the reason why it is also known as ‘bottom-up’ approach and follows a hill climbing model. In this research approach, the conclusion is made on the basis of the premise and involves high degree of uncertainty. Figure 3 – Inductive Approach On the basis of the findings and the requirement of the study, the best alternative is the deductive approach. This is because a ‘top-down’ approach will be followed to satisfy the objectives of the study. Data Collection Data collection is one of the most vital tasks of a research study. For this report, both primary and secondary data will be collected. Secondary data will be collected from books, articles, journals, as well as authentic electronic sources. In addition, other secondary sources such as newspapers, magazines will be also taken into account. The primary data will be collected with the help of questionnaire survey and focus group interviews. Questionnaire consists of a set of open-ended or closed-ended questions, which are used to gather data from the respondents. The biggest advantage of questionnaire is that the data collection process becomes faster. Its only disadvantage is that in-depth views of the respondents could not be recorded. Focus group interview is a process of recording the views of the respondents of a study. In this context, respondents are directly asked to present their views on the questions. It allows researchers to get in-depth views. However, its disadvantage is that the data collection process becomes lengthy. RESEARCH ETHICS The study will be conducted keeping in mind all the ethical guidelines. For example, there will not be any activity which physically affects a person associated with the study. In case of the feedbacks from the respondents, the questions will be designed in a way that does not affect their religion, caste, sex etc. TIMELINE The study will be carried out for a period of six months and the following is the break up. Activity Date MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB Collecting literature                         Writing of literature review                         Determining the research methods                         Completion of the first proposal                         Submit proposal                         Approval of the subject                         Collecting primary data                         Data analysis                         Working with the 1st draft                         Submit the 1st draft                         Finish and submit final draft                         Final oral exam                         Approval of the research project                         RESOURCES The resources needed to successfully accomplish the study include capital, research schedule, specialized software and people. REFERENCES Baker, M., 2000. The Marketing Book, 4th ed. Oxford: Butterworth-Heinemann. Floor, K., 2006. Branding a Store: How to Build Successful Retail Brands in a Changing Marketplace. London: Kogan Page Publishers. Jalleh, G., Donovan, R. J., Giles-Corti, B., and Holman, C. D. J., 2002. Sponsorship: Impact On Brand Awareness And Brand Attitudes. Social Marketing Quarterly, VIII (1), pp. 35-45. Kumar, S. R., 2007. Marketing and Branding: The Indian Scenario. New Delhi: Pearson Education India. Roumeliotis, J. D., and Ihailanen, V., 2011. Brand Awareness: The Influence in Consumers’ Purchasing Decisions. [online] Available at: [Accessed 27 February 2013]. APPENDIX Appendix I – QUESTIONNAIRE 1. Do you think Brands are important? a) Yes b) No 2. What are the benefits of having a brand? a) Greater profitability b) Greater sales c) High visibility d) All of these 3. Do you believe brands influences the purchase decision of a customer? a) Yes b) No 4. Do you think sponsorship has a relationship with branding? a. Yes b. No 5. What benefits do the consumers get from a brand? a. Trust b. Value for money c. Reduces searching time d. All of these Appendix II - FOCUS GROUP INTERVIEW QUESTIONS 1. How can a brand influence the customers? 2. What according to you is the best marketing approach for a company? Why? 3. How sponsoring an event will increase the brand awareness of a company? 4. What are the advantages disadvantages of having a brand? 5. Can you give a brief idea about the branding activities of your company? Read More