Why does the Type of Branding Affect Consumer Purchasing Behaviour - Case Study Example

Why does the type of branding affect consumer purchasing behaviour? Consumer behavior is partly unpredictable, though in some cases the type of branding might affect the purchasing behaviour of the consumer. There are different sections of consumer in a society formed according to the basis of monthly household income for example lower income class, higher income class etc. (Earl and Kemp, 2002) The purchasing behavior of a consumer partly depends on Consumer Psychology. A purchase decision confronts the consumer with a host of potential changes. Most important is the problem structuring that occurs before taking any decision: becoming aware of the necessity or availability of a new product or service, collecting information of alternatives, and thinking about the future circumstances relevant to the purchase decision & also considering the possible outcomes contingent to the decision. Now these types of action vary within the different sections of consumers. In this context the marketing of the product or the branding has a quite influence on the consumer purchasing behaviour. (Earl and Kemp, 2002; Zaichkowsky, 2006) During the current phase of globalization, branding has a lot of influence on middle class consumers also. To buy a product, consumers first think about the quality of the product. If two different brands of a kind of product with more or less same appearance, & same price are there in the market, brand name & its branding effect matters a lot. Consumers often judge on the basis of various informational cues that they associate with the product. For a high technology product like mobile/cellular phone, brand name with quality is an important indicator for a consumer. For example, two mobile companies say Nokia & Geepee; both companies have successfully marketed their product but still people prefers Nokia rather than Geepee since quality of Nokia regarding every aspect is far better than Geepee. As Nokia has opened various departmental stores like Nokia Priority Dealer & many others, & within shorter distance i.e. in every locality that would provide services regarding every aspect required for a high technology product than Geepee. These is one kind of relationship marketing as the company trying to make aware about every details of the product to the consumer by establishing a relationship with them as commuters walking by the road side could come in & have a chat with the customer executives & could know about various range of products. It is also one type of internal marketing as staffs would tell the consumer which brand is good or bad or the distinctive features of various products of Nokia. Further these are high end departmental stores containing broad category of products. Further some other factors which further lead to visible branding effect on consumer purchasing behaviour are attractiveness of the brand, distinctiveness of the brand, self expressive value of the brand personality & last but not the least is brand loyalty. The brand loyalty appears to rise with age. For example in Spain it has been found brand loyalty increases further among those aged 65 & above. (Zaichkowsky, 2006; “Brand loyaltys influence on consumer behavior”; Fournier, 1998; King, 1991) At this point of time one question is evident to be raised- is it brand that makes people buy products? In the 21st century effects of brand on consumers’ purchasing behaviour can not be ignored. In fact it has become a prime factor that determines how a consumer would behave towards a product. In the present world, branding has become an important phenomenon. Branding refers to the purchasing of the brand that is supposed to fulfill a subconscious desire of human being. To have a better understanding of this phenomenon Abraham Maslow’s (1954) famous theory of human motivation can be explored. Maslow introduced a hierarchy of human needs. This hierarchy includes deficiency needs as well as growth needs of consumers. According to this theory, within the category of deficiency needs, when a consumer is moving upwards in the hierarchy deficiency needs at each lower level have to be met before moving on to the next level and if a deficiency need is detected in future then the consumer is bound to act to remove the deficiency. Deficiency needs include different aspects including psychological, safety, love and self esteem. All these aspects are discussed below in order to find out how brand names affect consumers’ buying behaviour. (“Brand Names versus Generic, what motivates people to buy?” 2005; Consumer Buying Behaviour, n.d.) Psychological aspects: Brands are capable of improving the chance of meeting the psychological needs of the consumers. The needs which are psychological in nature are basically the needs of unconscious minds of people and they can well influence mental responses of individuals. People have a tendency to buy brands because brands provide a kind of enjoyment to the consumers. Brand names are so much effective in attracting customers that a brand only requires to show an attractive model to the consumers. Psychological needs are actually some kind of feelings. Brands are actually related to some kind of humanness and uniqueness through the process of helping people in solving their problems regarding the choice of products. Brands helps in conciliating the negative feeling of consumers that are generally stem from different needs and also extend support the feeling and thinking of the consumers through the process of decision making. People purchase brands because they think that brands understand them rather than the reverse. (“Brand Names versus Generic, what motivates people to buy?” 2005) Safety: The safety considered to be a strong motivation for sticking to a particular brand. Brands carry with themselves the assurance for quality. Familiar brand names are generally preferred to the unknown ones due the safety concerns. Branding is generally found to take place in competitive environment and it is quite capable of persuading consumers to prefer certain brand to competition. (‘Brand Names versus Generic, what motivates people to buy?” 2005) Aspects of love and feeling of belonging: After the safety aspects, it is love and a sense of belonging through which brand is capable of determining consumers purchasing behaviour. Once the safety needs of the consumers are met, there emerges an urge for love and a sense of belonging. Brands are found to have a cultish quality which is able to fulfill the need of love and the need of a feeling of belonging. This cultish quality of brands persuades people to purchase them. (‘Brand Names versus Generic, what motivates people to buy?” 2005) Aspects of self esteem: Self esteem is another important aspect for which brands are supposed to make people buy certain labeled products. In a civilized society everybody needs to feel worthwhile. This need can be categorized as the need of self esteem. In the society everybody has a particular image of himself. This image is mainly formed from the way one individual interacts with the other members of the society. Researches have found that it is mainly the self-concept of individuals that forms the basis of all sorts of motivated acts (Franken, 1994). Use of brand extends an image to its customer. Brands can therefore be treated as some kind of accessories that are required to play a variety of roles since they are capable of boosting self esteem of individuals. Very often an individual wants a distinct identity for himself and express his need for uniqueness which is basically an outcome of the process of social comparison (Festinger, 1954). This need can be satisfied by relying on some unique brands. Now one can move towards finding out the economic interpretation of why people purchasing behaviour can be characterized by the loyalty of people to brands, or in other words to say why consumers’ purchasing behaviour are determined by brands. While making any decision regarding purchasing a product, consumers are generally found to be very much concerned about the price of the product. The full price of any commodity is considered to be a function of the monetary price of the commodity as well as of all other costs that the consumer faces while buying the product. Hence the full price of a product is expressed as a summation of monetary price of the product and all other costs associated with the purchase (Landes and Posner, 1987). So, it can be said that a consumer makes decision regarding the purchasing of a commodity on the basis of full price (FP) of the commodity as well as all other costs (AOC) associated with the purchasing. A firm’s one of the major objectives is to decide the factors that influence AOC and to determine how brand name could lower the AOC. AOC depends on the characteristics of the consumer as well as of the product. During the time of making a buying decision, a consumer is required to search out the desired characteristics of product, acceptable price level, and accessibility to the product. The searching is costly and the cost of searching is different for each consumer. The cost of searching depends mainly on consumer’s preferences as well as the time and wealth involved in the process of searching. Since FP depends of AOC, it can be said that as the cost of searching increases FP also rises. Apart from searching costs, AOC is also affected by the risk aversion that is exhibited by the consumers. The extent of risk aversion varies from person to person as well as from product to product. Searching costs and the extent of consumers’ aversion are found to be quite low for branded commodities since brands ensure consistent quality and reasonable prices. Consequently sticking to brands appears to lower FP for the consumers. (Landes and Posner, 1987; Jones and Hudson, 1995) AOC is also affected by the product’s characteristics. This can be illustrated with an example. Suppose there are two goods available in the market and both the goods have been used the same chemical formula. In this situation, there is no guarantee that these two goods will be perceived to be of same quality by the consumers. A rational consumer is generally interested in the manufactured product rather than in the formula that has been used. Hence, a consumer is willing to give higher price to the product which gives greater level of assurance that the good has actually been manufactured to the exact specifications of the formula. Brands generally provide higher assurance in this case. (Landes and Posner, 1987; Jones, and Hudson, 1995) Firms generally employ the mechanism of branding for developing high reputation for its product. The brand mechanisms include a number of vital things like maintaining high and consistent quality, developing a product with a high class image, marketing the product through extensive advertising, developing a favorable interaction with consumers and dependency on umbrella branding (a process of extending a brand through which a firm sends a signal that the new product is of equal or greater quality to the old product) (Werner, 1988) All these mechanisms are used by brands to offer signals to the consumers. Hence, it is often found that a strong brand name is capable of lowering AOC. (Stigler, 1961; Hawkins et. al, 1995) Consumers look for the signals offered by the brands for gaining an assurance regarding quality. A rational consumer does not accept a specific formula of producing a product at its face value. It wants some kind of warranty that would offer a commitment of providing the desired level of quality. The firm that has developed a good reputation of providing valuable warranty is able to attract more customers to its product (Shapiro, 1982). Wiggins and Raboy (1996) in their research have found out that the quality factors in a major way determine the price differences among brands. Adding to these, “the benefits of trademarks in reducing consumer search costs require that the producer of a trademarked good maintain a consistent quality over time and across consumers. Hence trademark protection encourages expenditures on quality.” (Landes and Posner, 1987) Hence, it can be found that consumers turn to brands not only for quality, but also for the consistency of quality that a trademark guarantees. While making in buying decision, a consumer always set a minimum acceptable quality and turn to a reputed brand with the expectation that the given brand will at least supply the minimum acceptable quality. (Grossman and Shapiro, 1988; Rozanski, et al.1999) Brands help a consumer in lowering their search costs by allowing the consumer to spend lesser amount of time in the process of evaluating quality. A firm with a reputed trademark is able to charge higher monetary price to the consumers keeping the FP same as other products as for branded products search costs are quite lower. Thus brand value becomes significant not only to the producers but to the consumers also who can now reduce the cost of search. Finally, by generating good interaction with consumers brand names are capable of reducing the risks that the consumers bear in their minds because of being positioned at the unfavorable side of the market in terms of information of the product. For the consumers, brand names reduce risks associated with the products in the market with imperfect information by allowing them to transfer some of the risks to the producers through brand equity. (Nelson, 1974; De Vany and Saving, 1983; Arrow, 1963) Apart from these brand names also provide the consumers with the ability to ascertain some features and attributes before making any purchase of a product and thereby bypassing a huge amount of cost associated with imperfect information in the market. Thus brand in a large way makes the consumers buy products by assuring quality, consistency of quality and reasonable price to the consumers. It has been found that the stores which assure good quality, consistency of quality and reasonable prices through providing branded products are capable of attracting more consumers. For example in China where people are considerably brand conscious, specialty stores have become more popular compared to shopping malls, boutiques, street stores etc (Yi-you, 2004). In general specialty stores are supplied by specific brands. Specialty stores generally sell only one brand. Strong brand information makes it possible for the specialty stores to attract huge customers in China. It has been found that irrespective of whether a product has been positioned in fancy display, people look for the product if they have heard about it. (Smith and Brynjolfsson, 2001; Klein, and Leffler, 1981; De Vany and Saving, 1983) However, apart from brand name which is supposed to be mainly a psychological motivation for purchasing a particular product, there exist a number of other factors that affect consumer’s purchasing decision. For example, culture can influence consumers’ purchasing decision. Culture can be defined as a set of attitudes and beliefs. These attitudes and beliefs are developed by looking at the behaviour of parents, other family members, friends, neighbors etc. These attitudes and beliefs affect a consumer’s purchasing behaviour. Apart from culture another important factor that plays a vital role in the determination of purchasing behaviour of social status of a person. A person who belongs to upper class of the society exhibits a purchasing behaviour that is quite different from the purchasing behaviour of a middle class people or a lower class wage earner. Brand loyalty is more visible for the consumers who belong to the upper class of the society. Over time, brand loyalty of middle class people have also increased by huge extent. (“Consumer Buying Behaviour”, n.d.) Apart from all these factors, there is one very important factor that greatly influences the purchasing behaviour of consumers. This factor is the state of economy. If the economy of a country goes through a slack season or recession, then consumption as a whole suffers hugely. Irrespective of the social status or culture, consumption level of all consumers declines as income falls. On the other hand during boom income level increases that in turn results in increase in expenditure on various products. Since branded products are relatively more costly, during the slack season demand for branded commodities declines, while during boom consumers exhibit higher level of brand loyalty. During recession consumers have to adjust with lower level of income and therefore have to look for alternatives to the branded products. However, as long as pocket permits to go for branded product, consumers show their brand loyalty. (Cellina, n.d.) One thing, however, can not be ignored in this 21st century that among all the factors that influences consumers’ purchasing decision, brands is one of the most important ones. Brand value occupies a significant position in the decision making process of the consumer and over time importance of brand in the decision making process has been increasing. The increasing level of brand loyalty also stems from the fact that brands provide some personality traits to its consumers. According to modern day marketing gurus, it is the personality traits conveyed to its customers by the brand names that make the customers proud of what they are buying and make them loyal to the brands. These personality traits are cherished by the customers of the product in their subconscious or unconscious mind and make them keep on purchasing products of a particular company or brand. This is turn results in business growth of the company. (“Brand personality Dimensions”, 2009) While analyzing consumers’ purchasing behaviour one important question can come into mind that is why do some consumers prefer to pay say £150 for an item of clothing when they could pay less for something that looks similar? This question can be addressed by the consideration of personality traits projected by brand names. The personality dimensions provided by brand names are important determinants of consumer purchasing behaviour. Brand personality can therefore be defined as the set of human characteristics associated with a brand (Aaker, 1997)). Today personality traits have become integral in every sector of business, starting from Airlines to fashion industry, from sporting goods to food and beverage industry. Today business houses have understood it clearly that depending only over their respective services and products, it would not be possible to survive in market until and unless stronger relationship, in comparison with earlier time, with people are developed. This very idea or business philosophy has given birth to the idea of developing personality traits through brand names and attract customers. In novel conception of brand personality trait is applicable for both corporate as well as product brands but a corporate brand has the capacity to cover wider range arena to reach people compared to product band. A corporate brand comprises certain personality traits, which are broader in dimension and every single personality trait in this set of traits, differ in comparison with personality traits of a specific product brand. If one judges from the perspective of nature, corporate brand personality can be regarded as a human personality whereas a personality trait of a product brand appeals to consumers through use of product related imagery. Though the business houses are very careful to maintain product personality traits but at the same time they are more focused over maintaining their corporate brand personality. The main reason for undertaking such initiative is to present before consumers such an image of the company that they must receive clarity of internal image of the company so that the consumers are attracted to it and it becomes easier for the company to reach a greater number of customers. It has been understood by the companies that until and unless through these personality traits values and behavior of the employees to the customers are not conveyed, it would not be possible to receive successful results against other competitors in the same sector. (Plummer, 1985; Mark and Pearson, 2001) Brand personality traits of a company mainly depend over three factors, namely products manufactured by the company, steps to make those products better and communication with consumers. For example, a particular product of the company is highly appreciated in the market and it has goodwill of its own. The company has to look after the matter that the rate of supply of the product does not decrease and at the same time certain level of innovation must be introduced to the product so that the rate of demand must remain constant. Standing on the foundation of such goodwill the company can launch another range of products and it is not unnatural if consumers have some kind of grievance against such products. Now, it is completely the onus of the company to interact with consumers and understand their point of grievance, so that it can take appropriate actions in modifying those products according to customer requirement and provide them with proper remedies. Every successful company across the globe focuses over all these issues and they try their level best to bring a harmony between all these steps. (Aaker, 1997) The secret behind creating successful brand personality traits is to give birth to various important associations at the psychological level of the consumer. These associations or links play the key role to differentiate the product than others of its class. Generally a consumer chooses a particular brand and rejects others mainly depending on three factors, such as, attributes of a common product, benefits that he receives and relationship with the company or product of the company. Hence, in all these categories, if a company can show his expertise or devotion to the consumer then he is sure to receive better results than other companies of its standard and at the same time it will be able to create certain personality traits or an exclusive brand image that will enable it to draw more number of customers to it. It is not that the brand personality traits factor has completely evolved in the 21st Century only. There are examples of brand personality but its presence was completely limited to product level rather than corporate level. In this particular context, Aakers five dimensions of brand personality is very contextual. Aaker, while doing her research on the brand personality traits, examined carefully sixty product brands of U.S and then came up with her framework. Aakers framework describes and measures brand personality of a product in five categories and in this process of describing and measuring, equivalence with a human character has been drawn. The five main dimensions of Aakers brand personality are Sincerity, Excitement, Competence, Sophistication and Ruggedness. Each of these facets includes certain traits. The facet, Sincerity comprises traits like, down-to-earth, wholesome, cheerful and honest, whereas Excitement is constituted by traits like, daring, spirited, up-to date and imaginative. (“Brand Personality Dimensions”, 2009) The facet, Competence brings within its scope three facets namely, intelligence, reliability and success. Sophistication and Ruggedness are the last two facets that include respective traits like, charming and upper class approach, outdoorsy and toughness. If you ponder a bit over all these traits each once of them has a particular identity of its own and due to this identity these traits create an image in the minds of consumers. According to natural self of the consumer he embraces that very image in mind. In a precise way it can be said that brand personality is the way through which consumers can easily exhibit his true self image that they idealize deep inside their minds. Consumers’ purchasing behavior is heavily dependent on the personality traits projected by the companies through their corporate or product brands. This dependency can well be found in various sectors. For example, in the market for audio mp3 players, a few years back there were audio mp3 players of various companies in the market but since the introduction of Apple I-Pod, it has been observed that this device is dominating the whole scenario. No doubt there are other devices as well and they are doing quite good business but the moment someone starts planning about purchasing an mp3 player, in his mind he visualizes shape of an Apple I- Pod. Apple has a completely different identity of its own in the market and the name I-Pod creates a special type of psychological effect in customers mind. Combination of both these effects creates a separate personality trait among consumers that is completely separate from the rest and provokes the customers to go for apple ‘I-pod’. (Aaker, 1997; “Brand personality Dimensions”, 2009) As far as brands has become an important factor in determining the buying behaviour of consumers, different types of high end and low end department store are being opened up. High end stores are those which sell the brands that are in the high end of the market in terms of their value, price and quality. High end stores mainly sell the most valuable brands existing in the market. The high end stores meet the need of those consumers who do not put much importance on the price of products, but on the status that are associated with the brand names. On the other hand, low end stores sell those brands whose status are relatively low but guarantee consistent quality and reasonable prices. The low end stores basically meet the demand of those consumers who are less concerned about status that are associated with brand names, and more concerned about quality and prices. With increasing brand consciousness both types of stores have been flourishing in the markets. (Anne, 2002) Marketers have been looking for better ways to manage the informational indicators like price & brand name in order to create more efficient & effective behaviour of branding. So it can be said that effect of a positively perceived brand formed as a result of a efficient branding method will enhance buyer’s perception about the quality, value & hence buyer’s willingness to buy the product. 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