Masstige Brand and Products: The Impact of Brand and Price on Customer Purchase Habits - Research Paper Example

Marketing Dissertation Proposal November 13, 2006 Working 3 Rationale 3 Preliminary Literature Review 4 Branding 4 Marketing 5 Masstige Brands7 Aims and Objectives 8 Objectives 8 Research Strategy 9 Qualitative 9 Quantitative 10 Data Analysis 10 Assumptions 11 Content 11 Critical Pathway 14 Reflexive Statement 14 References 16 Bibliography 18 Appendix A: Consumer Questionnaire 21 Working Title Masstige Brand and Products: The Impact of Brand and Price on Customer Purchase Habits Rationale Within a competitive market, companies are forced to spend a lot of money in branding and marketing. With the rise of the masstige brand, which exist between prestigious high-priced brands and mass-market low cost brands, more companies must relate to the customer's price sensitivity and desire for a more lucrative product, as well as maintain and build a customer base. Marketing and information about brands have created more knowledgeable and price sensitive customers leading to a more competitive market and a penetration of international brands. Thus, the development of the brand marketing and the task of keeping customers' loyalty becomes harder and harder. To gain competitive advantage, companies need to find the factors that influence buying decision and loyalty of customers, especially in the masstige brand category which is fairly new to commerce, being only half-century or so old (as a recognised category). As the differences between the brands tighten and the differences in the prices gets closer, the customer's perceptions of brand and price, as well as the marketability of a particular masstige product become of increased importance to companies which exist between prestigious and mass-market categories. The rationale is that, if research can better understand the impacts of brand and price on customer purchase habits in relationship to the company marketability, a stronger framework for customer relationships and building customer perceptions towards the masstige products can be built. The ultimate goal of doing so is to promote better marketing procedures for companies in this 'middle class' bracket. Preliminary Literature Review Branding Shimp (1999) defined a brand as a label for describing any object of concerted marketing effort. In the context of services marketing therefore, this label can be a name, sign, term, symbol or a design (Krishnan and Hartline, 2001). Brands however can mean different things to different people. These differences largely stem from the way and manner brands can be perceived or understood. A cursory review of the history of brands informs us that customers' perceptions of brands have not been static. It has evolved over the years as understanding of the concept deepened. Clifton (2000) recalled the days when brands were perceived as either bottles of coca cola or cans of Kellogg's and compared it to modern times when the concept can be applied to anything and everybody. Amber (2000) has defined "branding" as an intangible asset built by marketing, and which exists largely in the heads of stakeholders, especially those of the end user. The author further pointed out that if a company got its brand equity right, profits should largely take care of it. The import of this statement can be understood from the components that make the equity of a brand. These are brand awareness and brand image. A brand that people have good knowledge about and can readily recall with favourable associations is an enduring asset to whoever owns it. Furthermore, it would have favourable image and therefore well perceived. Such a brand can be said to have a higher equity or value. It is not too difficult to sell products and services with this brand name tacked on it. Higher volumes of sales at minimal costs transcend into higher profits. From a financial viewpoint, Aaker (1996) defined branding as a set of assets and liabilities linked to a brand, its name and symbol that add to or subtract from the value provided by a service to a firm's customers. He further gave the main determinants of brand equity as name awareness, perceived quality, brand associations, brand loyalty and the intellectual properties such as patents, trademarks, etc it owns. Low and lamb (2000) built upon this model and tested empirically three dimensions of brand associations. such as brand image, brand attitude and perceived quality. This study was important in that if one knew the extent to which each dimension contribute in building equity, greater resources shall be committed to that dimension which gives greater value. From this study also, the efficacy of brand image protocol was confirmed. However, the authors pointed out that brand associations were different for different product (service) categories, which require that specific studies be carried out for each category using different items. Marketing Clifton (2002) reported that three factors make brands marketable. These are (i) clarity of vision and values (ii) consistency in the manner in which the brand is applied and (iii) leadership in the way the brand renews itself and exceeds customer expectations. The clarity of what their brands stand for and their foci embodied in their visions, missions and goals constitute the first of the three-pronged brand building process. With this approach, employees and customers alike are adequately informed of what the brand is seeking to achieve and benefits that shall accrue to them if they are successfully accomplished. Such an approach garners employee commitment and also offer customers opportunity where to place their loyalty in the long term. A hallmark associated with all of these companies is their insistence on quality service. This standard is true of them irrespective of where their facility is located. The model of Helliel and co-workers (2003) throws more light on this fact. In their research, the stronger marketing of the brand, the more likely positive customers purchase intent. Using a general service model of repurchase intention, they established that the main factor influencing brand preference was perceived value. Customer satisfaction and expected switching costs were found to exert lesser influence. These authors further observed that even though perceived quality does not directly affect customer satisfaction, it does so indirectly through customer equity and value perceptions. This particular study informs us about the utmost importance of perceptions in any brand building endeavour. Helliel et al. (2002) have enumerated factors that affect the buying intentions of customers as quality of services, equity, perceived value, satisfaction, past loyalty, perceived cost of changing supplier and brand perception. Most of them variables are inter-related and they impinge upon customer purchase behaviour cumulatively. High quality products can be created without input from marketing. However, in practice, it has been established that products that make market success received market or customer research support. There are several determinants that contribute to the success of a brand. Quality and quality perceptions in the mind of the customer are just but two of them. The importance of these factors has earlier been stressed. A brand can be successful in the short term with a quality that is not exceptionally high. However, continued market success requires continuous renewal to be able to meet customer expectations and values. Concerted efforts should also be made to influence customer perceptions towards the brand using appropriate marketing communication media and channels (Shimp, 1998). Masstige Brands Masstige brands exist between the prestigious, high cost brands and the mass-produced generic brands. Mary Ford (2004) explains that the masstige brand is geared towards meeting the prestigious and mass market, where the differences are between the high-end retail products and mass-market retail products is growing smaller. This is due to a higher educated consumer force as well as the influx of middle-income purchasers who have a desire for prestige brands, but at mass-market price settings (Ford 2004). The highest markets in the masstige brands are home furnishings and clothing lines (Ford 2004). Jordan (2001) examines that the masstige trend is the latest in marketing and packaging, and is especially noticeable as secondary lines by prestige manufacturers and by the marketing style of the packaging. This is because there is a narrower gap between mass-market and prestige market product lines, which forces brand marketing to focus on the value added for the price (Jordan 2001). Again, Jordan (2001) supports that masstige marketing is a newer force that arises because consumers are more educated about the products and prices for their purchases. Hudson Group (n.d. pp 49) panellists report that the European expansion have developed trend-wise changes in shopping centres, where "The changing nature of consumers themselves has also impacted on the sector in ways hitherto unanticipated. We are witnessing, for example, the rise of the 'masstige' shopper, as in mass-market prestige. The new breeds of shopper are increasingly critical and promiscuous." Other researchers (Chou et. al. 2005) explored the impact of the new market as being middle class retailing that has evolved over the last half century, promoted by discount retailers of originally prestige products. This shows that retailers must acquire different skills and customer relationship strategies in the changing market environment where the customer's experience and emotional engagement (such as self-esteem) play a larger role in the customer's purchasing habits (Chou et al 2005). Aims and Objectives The aim of this research is to able to establish whether it is beneficial for masstige companies to make more investments to achieve stronger marketing and branding or lower price domains to gain a customer. This will also allow a better understanding of the consumer's perception of brand marketing and forecast purchase habits. The secondary rational is to understand the relationship between the companies as being prestige, masstige or mass-market, as well as sustainability as a brand market force. The objective of this research questions both the company sustainability and consumer purchase habits in relationship to one another. Objectives a) Understand the relationship between brand, marketing and masstige companies. b) Understand the relationship between prestige, masstige and mass-market (generic) products. c) Understand the customer's perception of the importance between brand name and price. d) Understand the customer's purchase habits for their demographics. e) Develop a marketing plan specifically for masstige based companies. Research Strategy To investigate and to analyse the in detail, qualitative research is used as a primary method for this research and will choose a case study as the main tactics, this will be combined with secondary qualitative information gathered from the case study and other available documentation to form a triangulation strategy. Qualitative research does not allow for hard statistical facts, as it is based on empirical and observational review of the case study and interviews. Furthermore quantitative analysis of surveys and documentation does not allow for behaviours and experiences to be analysed, as it only shows trends and linear equations. Qualitative Case studies have been used in varied investigations, particularly in sociological studies, but increasingly, in instruction. Yin (1993) has identified some specific types of case studies: Exploratory, Explanatory, and Descriptive. This will be a descriptive case study analysis. The case study allows for a multi-perspective analysis, where multiple sources of data are examined to come to a conclusive meaning in relationship to the accounting methods. While the case study analysis has sometimes been considered a generalisation, Yin (1993) describes this method as a template to develop empirical results, but asserts that there is a caution towards generalisation. The qualitative study will focus on the case study of prestige, masstige and mass-market companies by examining their different marketing strategies. Quantitative The quantitative method will be used because of the need to gather new information in the consumer purchase habits. Furthermore, there is a need to gain an understanding of the values customers' place on price and brand. To this, the quantitative research methodology answers the generalisation concern noted in the case study method. The quantitative method includes the Likert Scale Questionnaire survey that quantifies responses to a survey on a scale of 1-5. The Likert Scale is used to identify consumer responses to the above questionnaire. Data Analysis The qualitative data analysis will be highly comparative in nature. It will critically examine each company sector based on their marketing strategy used, the impact of strengths, weaknesses, opportunities and threats (SWOT) as well as the product life cycle compared to products in the other categories. The quantitative data will be statistically analysed based on the survey questionnaire, response matrices, the flow of the consumer's values from brand to price, and the relationship between customer demographics against brand choice and price choice. This will also include standard statistics: ANOVA, mean, median and mode ran in Microsoft Excel. Assumptions There are several assumptions made in this research. Primarily, this research assumes, based on theories from the preliminary literature review, that brand and marketing are impacted by the product category as prestige, masstige, or mass-market. Secondly, as far as companies are concerned, this research assumes that there is a relationship in the company product/brand category to the marketing strategy and company economic sustainability. This research assumes that, based on the preliminary literature review, the consumer being surveyed at random is the average customer with a knowledge or care towards brand and price. This is because most literature points to consumers being more educated about the brand name, and price for value. However, this is an assumption because the research is based on all 200-consumer survey participants being knowledgeable about brand and product type in comparison to product value domains. Content Title Page Abstract Chapter 1: History and Introduction Introduction to Masstige Competitors Prestige Masstige Mass-Market Research Questions Practice and Theory Conclusion Chapter 2: Research Question Aims Objectives Goals Assumptions Chapter 3: Literature Review Prestige Masstige Mass-Market Practice and Theory Brand and Marketing Strategy Product Strategy (as prestige, masstige and mass-market) Price Strategy Conclusion Chapter 4: Research Methodology Justification Objective Methodology Case Study Phenomenology Descriptive and Qualitative Survey Questionnaire Objective and Quantitative Chapter 5: Data Analysis Introduction Statements Secondary Research Analysis Marketing strategy SWOT analysis Product Life-Cycle Comparison The relationship between prestige, masstige and mass-market (generic) products. Market Brand Price Relationships found--Discussion and Conclusion Strategy Comparison Primary Research Analysis Statistical Analysis Analysis of Variance Common Statistical Inferences Brand Image Marketing Perceptions Price and value perceptions Statistical Analysis Comparison and Conclusions Chapter 6: Final Recommendations Relationship found---Discussion and Conclusion Sustainability as a market force prestige, masstige or mass-market Beneficial for masstige companies Investments Branding Marketing Price References Appendix A: Forwards Statement to customers about anonymity Appendix B: Disclosure Statement about company information and implications, validity Appendix C: Questionnaire Copy of questionnaire without responses Appendix D Responses Copy of questionnaire with responses Critical Pathway December through February: Preparation over Christmas break by fine-tuning proposal, re-examining questionnaire. This includes deciding on which companies that have valid and direct public access information. Using this time to think about the case study and questionnaire will help develop the final outcome more than established in this proposal. February: Prepare case studies of companies for dissertation proposal. This includes contacting companies and reviewing company financial statements as well as published company information, web-based research of companies. Finalise questionnaire for distribution. March: Distribute questionnaire. Write case studies. Examine case studies. Data analysis of consumer questionnaire. Focus on relationships between prestige, masstige, and mass-market company analysis. April: Finalise and organise information. Write dissertation. Make final recommendations for masstige market companies. Reflexive Statement The final goal of this proposal is to initiate a stronger marketing plan for companies that are not 'prestigious' and companies that are not 'mass-market.' This will help fill the gap between customer expectations and product viability, as well as prepare masstige oriented product companies for development of stronger, more customer-focused marketing plans. The final recommendation is highly relative to a stronger marketing plan. References Aaker, D.A. (1996). "Building strong brands." Free Press, New York. Amber, T. (2000). "Marketing and the bottom-line: The new metrics of corporate wealth." Pearson Educational Limited, London, Great Britain. Chou Chun-Juei, Yong Gyun Ghim, Kim Andrew, Nyberg Pam, Ring Jason (2005) Design Analysis. Accessed Online November 13, 2006 http://72.14.253.104/searchq=cache:uRHJwofGzwsJ:www.akim95.com/pdf/2005/newluxury_final2.pdf+Masstige+filetype:pdf&hl=en&gl=us&ct=clnk&cd=64&lr=lang_en Clifton, R. (2000). "Brands and their importance in growing a business" Interbrand, Great Britain. Ford. Mary (2004) Changing Retail Landscapes. Crystal Ball. January. pp 50 Hellier, P.K., Geursen, G.M. , Carr, R.A. and Rickard, J.A. (2003). "The customer repurchase intention: A general structural equation model." European Journal of Marketing, 37(11/12):1762-1800. Hudson Group (n.d. pp 49) Panelist Research. Accessed Online November 13, 2006 http://72.14.253.104/searchq=cache:ijiMK84K6v8J:uk.hudson.com/documents/uk-research-full-report.pdf+Masstige+filetype:pdf&hl=en&gl=us&ct=clnk&cd=63&lr=lang_en Jordan (2001) Confronting the Competitiveness Challenge. Accessed Online November 13, 2006 http://72.14.253.104/searchq=cache:NUsn63YNmc8J:www.competitiveness.gov.jo/files/chapter%2520Five.pdf+Masstige+filetype:pdf&hl=en&gl=us&ct=clnk&cd=50&lr=lang_en Krishnan, B.C. and Hartline, M.D. (2001). "Brand equity: Is it more important in services" Journal of Services Marketing, 15(5): 328-342. Shimp, T.A. (1999). "Advertising Promotion- Supplemental aspects of Integrated Marketing Communications, 5th Edition" The Dryden Press, USA. Yin, Robert (1993) Case Study Research : Design and Methods (Applied Social Research Methods) Sage Publications, Inc; 2nd edition Bibliography Amber, T. (2000). "Marketing and the bottom-line: The new metrics of corporate wealth." Pearson Educational Limited, London, Great Britain. Barrow, C., Brown, R. and Clarke, L. (2001) The Business Enterprise Handbook, London: Kogan Page Limited. Bryant, Barbara Everitt, Cha, Jaesung (1996) "Crossing the threshold" Marketing Research; Vol. 8 Issue 4, p20-28, 9p Clifton, R. (2000). "Brands and their importance in growing a business" Interbrand, Eds. Hart, S. and Murphy, J. , Interbrand/Macmillan Press Ltd, USA. Hart, S. (1998). "Developing new brand names. In : Brands, The new wealth creators" Impact of corporate image on quality, customer satisfaction and loyalty for customers with varying degrees of service expertise." International Journal of Service Industry Management, 9(1): 7-23. Journal of Consumer Marketing ,12( 4): 11-19. Kim, Chan W. and Mauborgne, Rene (2005) Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant (Hardcover). Harvard Business School Press (February 3, 2005) Kotler P (2005) Marketing Management (12th Edition) (Marketing Management) Prentice Hall; 12 edition (March 1, 2005) Kotler P (2005) Principles of Marketing (11th Edition) (Principles of Marketing) Prentice Hall; 11 edition (February 1, 2005) Kotler, P (1999) Kotler on Marketing: How to Create, Win, and Dominate Markets Free Press (April 21, 1999) Lamb,C.W., Hair, J.F. and McDaniel, C. (2000). "Marketing, 5th Edition" Educational Management, 16 (2): 52-65. Lassar, W., Mittal, B., Sharma, A., (1995), "Measuring customer-based brand equity." 15 (6): 303-311. Low, G.S . and Lamb, C.W. (2000). "The measurement and dimensionality of brand associations" Journal of Product and Brand Management, 9(6):370. Nguyen,N., Leblanc G.,(2001) "Image and reputation of higher education institutions in students' retention decisions" The International Journal of Educational Management, Niguyen,N., Leblanc, G.,(1998) "The mediating role of corporate image on customer' retention decisions: an investigation in financial services" The international Journal of Nowak, Linda I. Washburn, Judith H.(1998) " Antecedents to client satisfaction in business services." Journal of Services Marketing; Vol. 12 Issue 4/5, p441, 12p. Pearce, J.A. and Robinson (1997) Strategic Management: Formulation, Implementation, and Control, Chicago: Irwin. Reputation, Satisfaction and Loyalty" European Journal of Marketing ,27 :9-27. Seines, F. (1993) "An Examination of the Effect of Producst Performance on Brand Shimp, T.A. (1999). "Advertising Promotion- Supplemental aspects of Integrated Marketing Communications, 5th Edition" The Dryden Press, USA. Simms, Jane (2005) "Promises, promises" :Marketing (UK) Haymarket Business Publications p30-32, 3p, Srivastara, R.K. and Shocker, A.D. (1991). "Brand equity: A perspective on its meaning and measurement" Marketing Science Institute, Working paper, 91-124. Storback, K., Strandvik, T. AND Gronroos, C. (1994). "Managing customer relationships for profit" International Journal of Service Industry Management,5(5): 23-28. Sweeney, Jillian C., Soutar, Geoffrey N., Johnson, Lester W. (1999) " The Role of Perceived Risk in the Quality-Value Relationship: A Study in a Retail Environment" Journal of Retailing; Vol. 75 Issue 1, p77-105 Thompson, J.L. (2001) Strategic Management, London: Thomson Learning. Western College Publishing, Ohio, USA. Yin, Robert (1993) Case Study Research : Design and Methods (Applied Social Research Methods) Sage Publications, Inc; 2nd edition Appendix A: Consumer Questionnaire Customer Questionairre Gender Male Female Age 15-25 25-35 35-45 45-55 55 + Income per year Under 20,000 20,000 to 30,000 30, 000 to 40,000 40,000 to 50,000 Over 50,000 Are you the primary purchaser of good in your home Yes No Other How often do you purchase the following Never Occasionally Unsure Often Always Prestigious brand names Mid-level "Masstige" brands Generic "Mass-Market" Brand How often do you consider the following in your purchases Never Occasionally Unsure Often Always Price Value Brand name Company How much do you agree with the following statements: Strongly Disagree Slightly Disagree Neutral Slightly Agree Strongly Agree Brand names are indicators of quality, A brand of product is more important price. Price is more important than brand Higher price is an indicator of quality Marketing influences my purchase habits I am more likely to purchase brands I have heard of through advertisements than brands I have not heard of. Read More