The Influence of Marketing Communications on Brand Awareness and Loyalty - Research Proposal Example

The influence of marketing communications on brand awareness and loyalty The influence of marketing communications on brand awareness and loyalty Introduction The study analyses the importance of spending on marketing communication to achieve brand loyalty and brand awareness. Brand awareness and brand loyalty are dimensions of brand equity. Brand equity refers to the value added to a product in its relationship with customers. Research indicates that brand equity is a strategic aspect of marketing management and can be created by strengthening one of its dimensions (Giese & Cote, 2000). Consequently, marketing has a potential effect on the brand equity because brand equity represents the impact of investment in the brand. The consumers are attracted to the product brand. The organization without brand deficits to sustain the competitor’s strength equates towards opponent brand equity (Grossmanova, Vojtkova & Kita, 2009). Organization should recognize its brand as an indefinable property. There is a direct connection with organization brand equity inside an intensive economics. Thus, companies need to look at the brand process and carry out these methods to cope with the well-known brands (Morgan & Hunt, 1994). The brand offers distinct concepts and features, thus conveying relevant information to the consumers. Although advertising plays an essential role in the marketing programs and strategies, growth and development of brand equity the primary goals. Due to the flexibility, brand equity is distinctly affected by the marketing communication. Marketing communications provide information regarding brand such as progression of brand equity, customer’s optimistic interactions, endorsement of apprehension and the facilitation of shaping strong connection in customers as well as compliance with the brand (Keller, 2008). Problem statement According to Hyun (2009), the probability of choosing a particular brand increases due to the customer awareness and loyalty. Various organizations have adopted this strategy for growth and expansion of their products and services. However, brand equity should be accredited to provide licenses legal rights and efficiency of marketing communications (Whittaker & Ledden, 2007). The marketing expenses accounts for all the organization activities required for creating a brand, new products so that to provide a good image of the organization, and retain the existing customers. The perceived advertising spending contributes to the successful creation of brand equity, as stated in some studies. Advertisement is very crucial because it has a positive impact on customer behavior (Keller, 2003). When the consumers perceive that high spending on advertising, it contributes to their perception of the level of confidence that the marketing managers have in the products. Perceived advertising influences not only the brand equity, but also its elements such as loyalty and awareness (Nguyen & Leblanc, 2001). This implies that there is a relationship that is established between various advertising actions and the dimensions of brand. Investment in marketing communication affects the brand quality and supports the purchase decision by increasing the product value. High advertisement spending increases the probability of the brand being includes in the groups of alternatives that the customers have chosen from (Simon and Sullivan, 1993). It also allows the simplification of the decision-making process and the brand loyalty behavior. Additionally, the level of advertising is related to advertising recall, which measures brand awareness (Yoo and Donthu, 2001). Brands achieve awareness through marketing communications, and advertising is the main promotional tool for product and services in the consumer markets. For this reason, brand equity dimensions impacted by advertisement should be acknowledged in order to allocate the communication resources and make the best decisions (Zeithaml, 2000). Hypothesis of the study In view of the above statement problem, our research hypotheses are: i. The advertising spending of a firm on the product brand has a positive affect the perception of brand equity in Nike Company. ii. The advertising spending of a firm on the product brand has a positive impact on brand loyalty in Nike Company. iii. The advertising spending of a firm on a product brand has a positive effect on brand awareness in Nike Company. Literature review Due to the growing market competition, there is increased focus on the customer and how to maintain the existing customer base (Hong & John, 2010). The business performance may improve as the number of loyal customers grows (Chiou & Droge, 2006.). Customer retention has become crucial in any business today (Flint, Blocker & Boutin, 2011), particularly due to the increased cost of customer acquisition (Buil, Chernatony, and Martinez, 2011) as well as high customer turnover (Chen & Green, 2009). Attracting new clients does not guarantee the long-term success of the business if does not retain its existing customers (Wang & Wu, 2012). For this reason, it is crucial to focus equally on both customer acquisition and customer retention in order to boost organization performance. Nike has a well organized its marketing programs through all aspects of integrated marketing communication through contracts with athletes, partnership with players of reputable field of sailing, athletic, football, and so on. It has also used the platform in game advertising through virtual games video for brand awareness. PUMA has a strong advertising campaigns and its brand message is communicated through, Usain Bolt, a renowned world athletic in 100 meters. Brand awareness Apparently, Brand awareness denotes the strength of brands present in the customers mind. There are various levels of the brand awareness including recognition and dominance, implying that the same brand is the only one a customer recalls. Brand awareness can be in the form of names, personality, price, product characteristics, and distribution (Strenkens & Ruyter, 2004). It can be strengthened by marketing communications (Keller, 2009). Thus, it is the ability of customers to confirm the previous experience of a brand. Research indicates brand awareness is one of the factors that increase brand trust in the industries (Chaudhari and Holbrook, 2001). Rajh (2005 state that higher brand awareness results in greater brand trust, particularly in the decision-making process. Table 1 : Literature search for brand awareness Literature Authors Type of resource The chain of effects from brand trust and brand affect to brand performance: The role of brand loyalty Chaudhari and Holbrook (2001) Journal of Marketing Reconsidering nonlinearity and asymmetry in customer satisfaction and loyalty models: An empirical study in three retail service settings. Strenkens & Ruyter (2004) Marketing Letters Building strong brands in a modern marketing communications environment. Keller (2009) Journal of Marketing Communications The effect of marketing mix elements on brand equity (Rajh, 2005) Economic Trend and Economic Policy Marketing communications and Branding: Competitive Hypermarket Strategies. Chen & Green (2009) International Journal of Management and Marketing Research Brand loyalty Brand loyalty is the situation that reflects as a situation that reflects the probability of customer to switch to another brand, particularly when there are changes in the brand. Brand loyalty is based on the customer behavioral and attitude perspective. Oliver (1999) defines brand loyalty is the commitment to repurchase a preferred product in the future, despite situational influences in the market to switch the behavior. On the contrary, Selnes (1993) argued that brand loyalty is determined by a favorable attitude towards a brand repeated purchases over time. Customer loyalty increases the commitment to the brand; as a result the customers are more persistent to inducement to move to another brand (Oliver, 1999). In other words, maintaining a loyal customer is more profitable in the long run of the business (Wang & Wu, 2012). Table 2 : Literature search for brand loyalty Literature Authors Type of resource Whence consumer loyalty? Oliver (1999) Journal of Marketing Loyalty of customers and relationship length role. Wang & Wu (2012) Managing Service Quality An examination of the effect of product performance on brand reputation, satisfaction and loyalty. Selnes (1993) European Journal of Marketing The measurement and determinants of brand equity: a financial approach. Simon and Sullivan (1993) Marketing Science. Dimensions of brand personality. Aaker (1997). Journal of Marketing Research Using the Literature Search Material According to Keller (2008), a firm should always attract customers to their brands through marketing communication. Brand awareness and brand loyalty increase the customers’ expectations. If these expectations of the brand are met when customer try a product or service, then they become impressed with the brand. As a result, high consumer satisfaction will lead to a high level of brand trust. Marketing communication creates a useful link between a brand and the customers. The consumer normally has a perception of the brand in terms of the marketing communications spending made on it by the company (Strenkens & Ruyter, 2004). Advertising expenditure, as the primary marketing communications tool in the consumer market, should be considered when determining the effects of marketing communications with consumers. Also, the perceptions that the messages are provoking among different target individuals should be considered (Rajh, 2005). Although marketing strategies such as media, billboards, posters, web, and many others are the most crucial fundamentals of marketing, promotional activities can also be paramount. Advertisement Firms use a brand to attract the customers as well as making objectivity. Marketing determines the sale of goods and services. Promotion also allows the identification of the product, understanding and its impact on the customer. Although the advertisement does not affect the client performance, it is essential for the brand objectivity. Brand awareness and loyalty In the context of our study, brand loyalty refers to the consumer’s intention to repurchase a product as well as determination to influence other consumers to buy the product or service (Oliver, 1999; Aaker, 1997; Chaudhari & Holbrook, 2001). On the other hand, brand awareness is defined as the ability of the customer to recognize that a brand in relation to a particular product (Aaker, 1997). Brand recall is the capacity to retrieve a brand in the customers mind (Keller, 2009). High level of brand awareness holds strong and favorable brand association in the customer’s memory. Several studies show that that marketing communications has direct and indirect influence on various aspects of brand awareness and brand loyalty (Wallace, Giese & Johnson, 2004). Currently, there have been various changes in the concept of brand loyalty and awareness, and how marketing communications influence the customer loyalty. Relationship between advertising and brand awareness and loyalty The intensity of advertisements and perceived advertisement spending on the brand has a positive impact on the customer loyalty towards the brand. This can be explained through the by various brand loyalty indicators, which shows that when brand loyalty is high, the purchase intention increases (Kim, Han & Park, 2001). Brand awareness can be achieved through a company’s marketing communications efforts towards brand equity. Perceived advertising spending has an enormous impact on the brand awareness. In fact, brand awareness can imply a rise in the level of confidence regarding the products expected performance (Jandaghi et al., 2011). When buying durable goods, customers consider recognized brands with high level of awareness. Conclusions The primary aim of this study was to find out how the marketing communication affects the Brand awareness and loyalty. It is evident brand awareness, and brand loyalty is created either by direct company marketing communications mix or indirect contacts with customers. Marketing communications shape consumer perceptions and customer expectations while reinforcing brand trust. Consumers will be satisfied if the brand can fulfill their promises and meet their expectations. In return, customer satisfaction eventually affects brand loyalty References List Aaker, J. (1997). Dimensions of brand personality. Journal of Marketing Research, 34, 347-356. Buil, I., Chernatony, L.D., and Martinez, E. (2011). Examining the role of advertising and sales promotions in brand equity creation. Journal of Business Research, pp.1-8. Chaudhari, A., & Holbrook, B. (2001). The chain of effects from brand trust and brand affect to brand performance: The role of brand loyalty. Journal of Marketing, 65 (2), 81 - 93. Chen, C., & Green, D. (2009). Marketing communications and Branding: Competitive Hypermarket Strategies. 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