The Relationship between Customer Satisfaction and Branding - Literature review Example

The Relationship between Customer Satisfaction and Branding

• Literature Review:
• Introduction

Modern era of marketing depends on branding, promotion and marketing activities. It is absolutely necessary for every organisation to focus properly on branding and promotional strategy to get competitive advantage over others. Branding is not only used as a strategic marketing tool for the organisations but at the same time, it is used by the organisation to establish a long lasting relationship with the customers and also increase the customer base while expanding their business in new countries or areas (Wang, 2006. In recent time, marketing is not only dependent on increasing the profitability only but at the same time to make sure that consumers are getting value for their money and organisation is able to deliver their responsibilities towards the society by fulfilling all the social responsibilities as well as looking after the protection and safety of the environment which is one of the core areas that every organisation’s CSR aim. Branding is closely related to the level of customer satisfaction that any organisation can deliver to gain the competitive advantage in the market.

• Branding: Definition and Characteristics:

There are number of definitions associated with the term branding. The term brand can be define as “a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors (Wang, 2006). According to Hollebeek (2011a), the concept of brand is a very complex issue as it is associated with six different levels of meanings namely attributes benefits, values, culture, personality and user. The term brand can be defined as product or service which helps any particular organisation to differentiate it from the other organisation.

DeMers (2013), in his report has categorically mentioned 7 different characteristics associated with branding and those are knowledge of the audience, uniqueness associated with the brand, passion of the organisation to develop brand value for a long period of time, consistency associated with the quality of the branding strategy, competitiveness linked with the branding policy, exposure associated with the branding and finally, the leadership of the organisation which helps to create a particular brand.

There are number of ways through which one can differentiate any particular brand and those are:

Related to Product Performance: This includes points such as functional, rational and tangibility. Examples of this kind of branding are Gillette, Merck, Sony, 3M etc (DeMers (2013),.

Related to Brand Identity: Branding of this format is associated with symbolic, emotional activities and intangible options. Examples of this kind of branding are Coca-Cola, Calvin Klein, Gucci, Tommy Hilfiger, Marlboro etc (DeMers (2013).

• Why Branding is important:

In modern era of globalization, branding is not only important from organisation’s point of view, but it is also important from customer’s point of view as well. Here are the reasons why branding is important from the consumer’s perspective:

• Branding policy of any organisation helps consumers to identify the uniqueness associated with the manufacturers of the product or service provider and at the same time, helps them to get associated with the organisation of their choice.
• Branding policy of any organisation helps to simplify the decision making from consumer’s perspective.

If one look at the branding from organisational perspective, it is helpful for the companies to

• Ensure legal security to get associated with all the features and aspects of the products
• One of the key points associated with the branding that helps any organisation is brand loyalty. Its loyalty helps companies to retain their existing consumer base and at the same time, diversify the product or service offerings. Brand loyalty helps to develop a security of demand that assist in developing a barrier for other manufacturer or organisation to easily get away with the existing customers
• Every single organisation (especially the MNCs) generally adds a certain amount of premium as a brand value which helps the company to boost profitability..
• Brand generally helps to add overall value to any organisation when the experts calculating the total market worth of any firm.

In the modern era, branding is associated with various other marketing factors starting from consumer behaviour, influencing decision makings of the consumers and managing the overall marketing performance.

• Consumer Behaviour and Branding

One of the key points associated with marketing is the consumer behaviour as it helps the organisations to analyze and understand the changing pattern of choices of the consumers. The process of consumer behaviour can be defined as a systematic process through which any individuals particularly search, select, purchase, use or dispose various kinds of goods and services which can be helpful for satisfying their needs and wants in daily life (Allen and Hill, 2006). It is a process which mainly focuses on analyzing how the consumers make decisions related to spending their available resources (mainly time, money and effort) associated with consumption of various important items - which they will buy, from where they will buy and how frequently they will buy it (Andrews and Teller, 2007).

According to Belk (2011), there are 2 types consuming entities, one is personal consumer and the other one is organizational consumers.

Personal Consumers: Generally, this group of people buy or purchase goods for their personal usage or to give the same as gift to someone in any kind of occasions. Here, the consumers are known as end users.

Organisational Consumers: It is more like a business to business sale where the customers are profit or non profit agencies, various government and non government organisations and several institutional organisations. These groups purchase various goods and services to run their business operation smoothly.

• • Factors Influencing Consumer Behaviours:

Generally, before designing the branding strategy, it is important for the organisation to understand the factors which are influencing the process of consumer behaviour. There are 4 key influential factors which controls the consumer behaviour and those are:

Social and Cultural Environment: Culture of any society plays an important role understanding the consumer behaviour of any particular society or people belonging to that particular society. Generally, any individual always gets influenced by his or her family members, friends, surrounding societies; all of these play a major role in teaching him or her value, common behaviours of the culture in which he or she is born and bough up and also the preferences (Bian and Moutinho, 2011). It is important for any brand to take into consideration all these value and cultural factors while designing their product or services, as well as designing their own marketing strategies. One of the great example of considering culture and values of different market and design marketing strategy based on that is McDonald’s. In order to meet the demand of the consumers of various markets and different cultures, the organisation has developed a wide variety of product line in different countries such as a Chicken Maharaja Mac and a Masala Grill Chicken in India (with Indian spices), McBaguette in France (with French baguette and Dijon mustard) and a Mega Teriyaki Burger (with teriyaki sauce) or Gurakoro (with macaroni gratin and croquettes) in Japan. In the same manner, in Arabic and Muslim nations, the ingredients used by the organisation are certified halal and keeping in mind the social responsibilities, the organisation never offer any pork or bacon items (Buttle, 2008). There are three sub classes associated with this point and those sub points are Sub Culture, Social class and Cultural Trends (Buttle, 2008).

Social Factors: The second important point associated with the consumer behaviour is social factors. In the social factors there are three key areas namely reference group, family and importance of social role and status.

Reference Group: This can be defined as a cluster or people which can influence the decision making capabilities as well as choices of any particular individual or group of individual. It is not important that an individual needs to belong to a particular group to get influenced by the same, without being a member of any group; an individual can be influenced by any other group which he or she might not be a part of. Within a reference group, there are several factors which control consumer’s buying decisions and those are the influencer, the initiator, the decision-maker and the buyer (Cahill, 2007).

Family: Among social factors, most important point which influences consumer behaviour is family. It plays a major role in development of consumption habit, brand awareness, pattern of the consumption and buying behaviour. For example, if parents from childhood do not allow their child to consume soft drinks citing the reason that it is full of sugar and not good for health then there are very less chances that he or she will develop a habit of drinking soft drinks in the future. Among various sectors, it is a biggest challenge for the FMCG and CPG industry to successfully integrate the family concept in their branding as it can be a great opportunity for them to increase their consumer base (Cant, 2008).

Apart from these two factors, social role and status of the consumer plays an important role in consumer behaviour as well. People belonging to high society always looks to purchase branded products as for them price, brand quality status all matters. Whereas, people belonging to slightly lower class not having much of much of financial powers, looks for products within an affordable price range that can fulfil their requirement (Conner, 2008).

Personal Factor: Among personal factors, the key points which have significant influence on the consumer behaviours are age of the consumer, lifestyle that the people are enjoying, purchasing power of the customers and lifestyle of the people. Personality of an individual and self concept also plays a major role in the process of consumer behaviour. Any individual with healthy and balanced life style will prefer organic food therefore organisations that are into organic food can use this opportunity to promote their brand among those segment. Likewise, from the very beginning, Apple Inc. represents itself as an organisation which believes in creativity, innovation and modern technology to deliver high quality of product (Conner, 2008).

• Theories of Consumer Behaviour

There are number of theories associated with the consumer behaviour which helps organisations to understand the changes that takes place over the time in the patterns associated with consumer behaviour. There are following key theories like: Economic Theories, Psychological Theories, Psycho-Analytical theories and Socio-Cultural theories which are associated with consumer behaviour

Economic Theory: This theory is associated with how people allocate their income and how the allocation of the income helps to determine the demand for different goods and services. This theory is based on different other theories which are associated with marketing and economy such as marginal utility theory, absolute, relative and permanent income hypothesis, psychological law of consumption etc.

Marginal utility theory clearly mentioned the fact that consumers will continue to buy a certain product which is able to deliver maximum utility and satisfaction at a reasonable price. There are two laws which govern the application of this theory –one is diminishing Marginal Utility and the other one is Equi Marginal Utility. Economists accept this theory keeping in mind the fact that only this economical concept cannot explain the variation associated with changes as there are number of other factors such as psychological and social factors that plays an important role in deciding the decision making process (Ali, 2009).

Psychological Law of Consumption: It is the foundation of income theory linked with the consumer behaviour. This law is dependent on three different concepts and those are:

• Consumption expenditure increases in a slow manner when the aggregate income of the people increases;
• An increase in the proposition of income is being divided into savings and expenditure, and
• Increase in the public income seldom resultant into less spending or less savings than before.

Economic Theories of Spending Behaviour: The economic theory of spending behaviour is dependent on 3 different theories namely; absolute income hypothesis, permanent income hypothesis and Relative Income Hypothesis (Anderson and Kerr, 2008).

Diagram 1: Economic Theory of Spending Behaviour

(Source: Kilger and Romer, 2007)

• • Brand Building Theories:

Development of brand is a very methodical process. The process is more or less same for every sector but the success of the process is dependent on the fact that how much an organisation is able to add innovation to the process of brand building. The process of brand building is an integral aspect of personal and business development. It not only increases consumer awareness about an organisation, its product or services but it also gives an identity and worth to every organisation. The advent of participatory and interactive platforms has given many businesses the chance to enhance brand awareness and equity” (Schultz and Block, 2011).

• • Process of Brand Building:

Brand building is a systematic process which helps an organisation not only to increase the popularity among the consumers but at the same time will help consumers to understand what they are paying for and how much value they can earn from the overall expenses that they make (Hollebeek, 2011b). There are 7 key stages associated with development of a brand and following diagram helps to understand how an organisation builds a brand:

Image 2: Brand Development process

(Source: Author’s Creation)

In order to make a brand building process successful, any organisation needs to focus on some of the key facts such as creating a proper or accurate tagline for the organisation, making it differentiate from the crowd in the sector, developing brand value based on the company culture, remain patient when the brand is moving slowly in terms of getting popularity(keeping patience), remain constant in terms of brand image and brand value and message that the organisation needs to pass on, looking for help from the expert consultancy as and when required as the modern market is very competitive in nature and most importantly, it is necessary to put people first in the list in terms of branding (Hollebeek, 2011a).

• Brand Building Theory:

There are number of theories associated with the process of brand management. Out of those, three most common ones are theory of brand loyalty, the branding theory and the value based brand theory.

Brand Loyalty Theory: This theory represents the relationship between psychology of the customer and brand image that an organisation represents. Generally, when a consumer shows positive intent towards any particular brand, then there are three different aspects associated with the same and those are evaluating the brand effectively, attachment with the brand and behavioural aspects of the consumers (Saxena, 2009). Brand loyalty theory can be represented through following pyramid:

Image 3: Brand Loyalty Pyramid

(Source: Saxena, 2009)

Consumer Behaviour and Brand Loyalty theory: The above mentioned brand loyalty pyramid associated with five different types of consumer behaviours loyalty scale namely committed buyers, brand likers, switchers, satisfied or habitual buyers and satisfied buyer with switching cost (Saxena, 2009).

Switchers

Habitual Buyers

Satisfied Buyers with switching Cost

Brand Likers

Committed Buyers

There are number of customers who are not very committed towards any particular brand and they mainly focus on purchasing goods on sale. It is easier for organisation to target these group of consumers

People in this group are less habitual towards a particular brand and they make purchase just due to habit. They are generally more or less satisfied and it is very hard to attract them towards another brand unless there is a drastic fall in the quality of their preferred once

There are buyers who are more or less satisfied with a particular brand and they seldom prefer switching due to various thresholds such as time , money, finding right quality of product etc.

This group of people can be termed as true brand enthusiasts as they are more or less emotionally attached with the particular brand. Their attachments can be due to quality, price, shopping experience, media advertisement etc

These people are the proud user of any particular brand as it is playing an important role in their daily life. When any consumer able to relate a brand with his or personal value then they become committed buyers.

(Source: Heath, 2009; Gambetti and Graffigna, 2012)

Value Based Branding Theories: This theory associated with development of long term values for the customers with the help of branding. According to this theory, the consumers are the ultimate forceful means to defeat the competitors. This theory simply state that if one considers the brand as having life then consumers are the blood of that life (Sprott, 2009).

The 3 Stages Theory of Branding: According to this theory, there are 3 key points associated with the overall process and those are design, value proposition and positioning statement. Every organisation has its unique identity in terms of brand image or logo. One cannot say that this is the only way of branding. Using logo is not creating brand but it is creation of a heuristic. A logo generally helps consumers to distinguish one organisation from another (Wang, 2006).

Value Proposition: Value proposition is mainly associated with the point that what an organisation is looking to offer. It is also associated with the value that the consumer are looking to get from the organisation and based on that, organisation add values to their offerings (VanDoorn et al, 2010).

Apart from the above three points, there are some other key points associated with this concept and those are positioning statement of the brand and searching of information by the consumers. The concept of positioning statement is associated with how an organisation likes to position their product or service offerings in front of the customers. It is one of the most integral parts associated with the branding theory and success or failure of any particular brand is largely dependent on this concept. The second factor is the evaluation of the alternatives. Evaluating the alternatives and comparing the same with the existing or preferred brand is also associated with the brand building theory from both organisations and consumers perspective (Verhoef et al., 2010; Gambetti and Graffigna, 2010).

• Business strategies of Brand Management:
  • What is brand Management?

Brand management basically is a process with the help of which any organisation maintain, improve and uphold the status of the brand that is associated with the company itself to get positive outcomes. The process of brand management is associated with number of factors such as cost, consumer satisfaction, competition in the market, in store presentation etc (Forbes, 2013). It has to be noted that the concept of brand management is to develop on the basis of the marketing foundation of any organisation and at the same time needs to make sure that the brand remain favourable and able to fulfil all the needs of the consumers (Brodie et al., 2011).

• • Consumer Brand Engagement (CBE):

In the modern era, CBE is one of the most recent concepts associated with marketing and more specifically with the process of branding and promotion. It is a basic driver for both consumer decision making process (which is less controlled by the consumer behaviour) and brand equity that any organisation generally has associated with their respective brand (Vivek et al., 2011; Bowden 2009; Sprott et al. 2009; Schultz & Block 2011). These are the most important points associated with any kind of branding strategies that organisations generally follows irrespective of sectors.

Academic Approach of CBE: Various authors in their surveys discuss about the concept of CBE in different ways. This entire concept can be broadly grouped under following three sub-heads from academic perspective:

Cognitive Dimension: The cognitive dimension approach clearly defines CBE as a mental activation process from consumer’s point of view towards any particular brand. It also considers the overall concept as self-concept which indicates the fact that there is a variable tendency among consumer to incorporate brand in their self concept (Bowden, 2009).

Affective Component of CBE: This component of CBE demonstrates the fact that a central role in eliciting customer commitment in the direction of advertising is associated with the feelings activated in any individual consumer during the processing of the advertisement (Boddy and Croft, 2007).

Conative Component: According to this concept, CBE is nothing but behavioural manifestations of the consumers towards any brand or organisation going beyond the normal purchase process.

Apart from the above 3 points, there are two separate views as well associated with this concept which are also considered as the academic perspectives namely comprehensive and dynamic view. Bowden (2009) in his analysis clearly mentioned that CBE is nothing but psychological process through which consumers are able to get associated with the brands slowly.

The practitioner approach to CBE: This concept emphasizes on the relationship among consumers with the social relationship that those consumers are having which act as a key driver in the development of brand building in modern era of communication mix it is very much evident that communication mix is playing an important role in the development of brand for any organisation. It is necessary for the brand manager to leverage on the messages that they are looking to give away with the help of branding, along with co-create multi sensor consumption experience and encourage in the development of consumer-brand related behaviours. This concept also provides emphasis on using online tool and technological advantages such as ICT and other social websites like Facbook, Twitter as a core tools to develop an effective association with the people. This clearly represents the fact that concepts such as socialisation, interaction, co-creation of brand value along with communication the consumers are the most important factors linked with the CBE concept (Armano, 2008).

• • Stages associated with Brand Management:

If one analyses various author’s concept associated with brand development, it is very clear that the concept of branding generally takes place three times in the mind of the consumers, once during the time of information search, next when people start to compare one product or service with the another and third during post purchase evaluation of value creation or service that the consumer able to get from his or her decision (DeMers, 2016).

The process therefore can be demonstrated in following way:

Image 4: Choosing a Brand from Consumer’s Perspective

• (Source: Author’s Creation)

It is most important from an organisation’s perspective to figure out what are the key points that any consumer is looking for while developing branding and promotional strategy from the company it. The process of branding therefore more elaborately can be demonstrated taking into consideration both organisation and consumer’s perspective in the following way:

Image 5: Brand development

(Source: Verhoef et al, 2010)

• • Stages Associated with Development of Brand Loyalty:

Brand loyalty is a very hard thing to earns for any organisation and more harder to keep. In order to develop brand loyalty and at the same time keep the loyalty intact, organisations needs to focus on following three key areas namely: development of connection with the consumers, anticipating the needs effectively and most importantly keep continuous check of the quality of the product and service that the organisation is offering to the customers (Richardson, 2012)

• • Building Better Brands:

The process of developing a better brand is a long systematic one and the initial phase of this process is the research carries out by the organisation related to their particular product or service to find out how much important the thing is among consumers. In this phase, organisation needs to understand three key areas which are interrelated namely defining and understanding the consumer segment, determining the benefits associated with the product and service that the organisation going to offer and also find out the closest competitors in the same segment. Based on these key issues, organisation generally designs their branding policy. In order to demonstrate the better brand building process, Marion Integrated marketing organisation (2010) design a flow chart which clearly demonstrate all the possible aspects connected with better brand structure process. The diagram is given below:

Image 6: Image Better brand Building Model

(Source: Marion Integrated Marketing, 2010)

• Emotional Brand Attachment Theories:

In the modern era, the competition among the organisations is increasing at a rapid pace. Therefore, it is now becoming important for the organisation to develop brand image not only to attract people but at the same time keeping in mind their emotional attachment, values and family ethics. Cognitive approach, which is one of the most traditional approach of branding rely on the fact that emotion of the customers plays a major role in their purchasing decision. Generally, the expressive products (that is, products which are with more symbolic meaning) require more affective mode of branding. If one analyzes the overall attributes of these kinds of products or services, it is very clear that psycho-social character of the product or service makes more production which suppresses information dispensation rather than promoting the individual features of the product or services which helps to develop a better impression in the mind of the consumers (Malar et al., 2011).

If one looks at the overall perspective of emotional brand attachment concept, it is very clear that consumers generally like to represent their personality and self concept through purchasing pattern. From that perspective, the brand personality represents “human characteristics or traits to a brand on the basis of a consumer’s perception of that brand” and “self-concept is defined as the cognitive and affective understanding of who and what we are and can take two forms: the “actual self” and the “ideal self”. (Malar et al., 2011, p. 36)

Emotional branding helps to strengthen the relationship between consumer and brand as it directly creates an impact on the mind of the people. For example, companies such as Pizza Hut and KFC always prefer branding on the basis of quality as well as a place where people can come together and enjoy. This organisation believes in providing opportunity to the people to get along and enjoy. Likewise, organisation such as Apple Inc. focuses on innovation and high technology as they always believe that people who are looking for this kinds of products generally from the top half of the society and for them it is not only a product which gives them value for money but it is also a status symbol. According to Armano (2008), when any organisation is looking to develop emotional branding concept, organisations first needs to recognize the associated emotion cognition approach followed by placing the brand into the core position of the consumer’s life. The second phase will help the customer to get them associated with the brand itself which is the backbone of the emotional branding concept. The final framework associated with this theory is “antecedents and consequences of a successful and sustainable emotional branding strategy has to be developed, which reflects the systematization of this research. Finally, suggestions for future studies and concluding remarks are presented” (Akgun, 2013, abstract).

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