The role of branding varies with the product and its stage of development. Branding compresses time horizons for the acceptance of products and facilitates the introduction of new products. Critics have explained that a new product may be a fundamental, functional, or strategic innovation. Fundamental and functional innovations necessitate basic changes in consumer habits, which are difficult to achieve and require heavy branding. Strategic and tactical innovations do not demand great change in consumer habits, a fact that may shift the focus of the branding job.
Following Gregory (2007): “a brand is the consumer’s idea of a product” (p. 49). This could be thought of as the first principle of brand equity–that a brand is different from a product and that the difference is something with which it is invested by the consumer. Most definitions of brand equity concentrate on this difference. The total equity –or value–of a brand consisting of two different sorts of “equities.” The first are those we might call the “fundamental” equities–the classical marketing variables of product, price, and packaging–together with distribution and measured brand image. The second type is the “added value” equities, which are usually much more elusive to define because of their intangible nature (Hotchkiss and Franken 2008). Because we generally measure added-value equities indirectly, by inference, it is easy to slip into thinking that brand equity is just an incremental return on marketing investment. The consumer is an active participant in the creation of equity. We might even call the consumer an equity partner in the brand (Schmitt and Simonson 2008).
The Organization’s Level
Branding has a great impact on a company’s market position and adds value to its image. A company’s market share, current, and future, may fluctuate readily. Competitors’ marketing mixes are designed to switch customers to their own brands. Thus, executives are concerned with brand switching–they wish to increase the switch-in rate and decrease the switch-out rate. A lack of consensus often exists within a company as to what branding is designed to do. Branding is aimed at immediate sales impact, the introduction of a new product, the development of a general image, or the promotion of a brand name. All of these are legitimate branding tasks, each of which requires a different solution. It is useful to distinguish the task of maintaining market position from that of cultivating and developing new markets. Marketing management must define its branding tasks unambiguously before effective campaigns are launched (Schmitt and Simonson 2008). The nature of branding tasks is indicated by the decisions that must be made: the amount of money to be spent on branding, the allocation of the budget among classes of media, the specific media to be selected within each class, the frequency and continuity of ads, the makeup of the specific messages to be presented, and the kinds and amount of branding research. These are difficult decisions to make. For instance, management is faced with the decision of whether to brand in markets where sales are high or low. Absolute decision guides are lacking, but fragmentary information may exist. For some agricultural products, for example, experiments indicate that sales increased significantly more in those areas where sales volume was already highest (Christopher et al 2007).
From the corporate point of view, the total purpose of a marketing program is to capitalize on existing and potential resources and translate them into profitable marketing ventures. The example of China Mobile shows that to do so, China Mobile attempts to shape, change, and modify consumer behavior in order to bring it into line with corporate objectives and thereby gain competitive advantage. Hence, although consumers shape business activity, marketing programs are designed to influence consumer behavior. During periods of expanding markets, volume, price, and distribution channels are important factors and mass branding supports them. As markets mature, branding becomes a competitive weapon. Now minor product adjustments are stressed to persuade consumers who know the product to select it over competitors’ products, and to endeavor to increase the rate of use. Branding does support the actual distribution of products, and can be used to push or pull a product through distribution channels. By creating demand at the ultimate consumer level, L’Oreal branding can influence retailer and wholesaler decisions to carry a product — this pulls the product through the channels. To a large extent the product is presold. Conversely, by aggressive promotion, by the development of dealer and retailer campaigns, by providing branding allowances, and by preparing merchandising programs, branding can also push a product through the channels of distribution to final consumers (Gregory, 2007).
The purchasing process and the related acts of accumulation and consumption are means of achieving goals both of the purchaser and those he represents. The acts of accumulation and consumption indicate the differences between consumers and purchasers, and between consumption and buying. Both industrial purchasing agents and “consumer purchasing agents” are essentially engaged in solving problems. The example of Gree products allows to say that in the household, performing purchasing activities to satisfy all the wants of one’s family and friends through the evaluation of an overwhelming array of available goods and services is an impossible task. Within a family unit, wants and needs are not directly known. Usually one decision maker, the wife, purchases for the group. She acts as household purchasing agent with the responsibility of maintaining and improving the family’s stock of goods in order to provide for the wants and needs of members of the household. The housewife, therefore, must anticipate consumption needs and try to obtain the best value for the money (Hotchkiss and Franken 2008).
The added value concept can be explained by the following facts. For organization, recognizing customers’ wants and needs and the constraints, consumers attempt to evaluate purchase alternatives to achieve the greatest utility from their limited resources. The acceptance of new products requires that they meet at least certain minimum standards. Some of the standards are rational and even rationalized, while others are unconscious and psychologically based. Some may be specified and others hidden. Yet, when innovations are offered to the market, the differences between the innovation and competing items must be discernible to customers. Innovations should be different enough so that they elicit favorable purchase reactions (Ind, 1998).
Some of the approaches have been aggregative, including analysis of total expenditures by consumer as members of groups and total expenditures for different classes of items. Other studies have focused on individual customer decisions, dealing with both static and dynamic models of consumption. Whereas some studies concentrate on behavior at a point in time, others focus on behavior over a period of time. Several investigations have dealt with elementary descriptions of behavior, which are most unrealistic and superficial, but still useful for purposes of analysis. The example of Lenovo Electronics correlation shows that some companies employ sophisticated quantitative models and simulations, or use qualitative models to relate attitudes, expectations, and motives with purchase incentives, perceptions, and structures. Among the most relevant investigations of consumption are those that focus on behavior as part of the broader sweep of problem-solving situations. They are concerned with cognitive problem-solving by individuals, families, and households, and segmenting markets by attitude and behavior rather than solely on a demographic basis. Such approaches have been referred to as psychographics and sociographics paralleling demographics (Goodstein et al 2001).
Consumer’s Perception of Branding
From the consumer’s standpoint, branding informs and persuades. It furnishes information, calls attention to some clues and not others, changes attitudes and opinions, relates products to consumer need, gives consumers support for their decisions, affects the intensity of desires, and thereby generates action. Within the firm, a lack of clear-cut, integrated branding objectives results in aimless branding and wasted resources. The main causes of ineffective branding are vagueness of objectives and goals; misconceptions and conflicting ideas of the function of branding among all those who influence branding decisions; lack of planning; insufficient emphasis on tactics and day-to-day activities; and failure to use available research aids (Schmitt and Simonson 2008).
Consumers provide the economic rationale for business and marketing activity. The products and services offered for sale, the manner in which they are offered, the distribution channels employed, the methods of branding and personal selling, and every other factor of marketing are all molded by consumer preferences, opinions, habits, beliefs, wants, needs, and desires. In this way, the total business system attempts to meet the desires of consumers. It is essential, therefore, that we analyze the antecedents of consumer behavior, the behavior itself, and the consequences of consumer reactions (Knox and Maklan 1998). Uncertainty exists in the purchasing-consumption cycle, since present purchases are made for future consumption.
The example of Air China shows that the consumer purchasing agent (housewife) is constrained by limited resources and information. Somehow estimates must be made of the values expected by a variety of people from future consumption of goods purchased currently. This includes evaluating a myriad of products and services, translating them into purchasing decisions, and doing so efficiently. This process may even be more complex for some industrial goods. Obviously it is impossible to determine precisely future needs for each member of a group; it is even more difficult to determine how valuable various desires are to each member, and then to arrive at a rational means of making total purchasing decisions. The role of a household purchasing agent is at best a difficult one to play. Yet it is the core of the consumption process, and determines the value that consumers ultimately derive from expenditure of their resources. These decisions direct our marketing process. As an economy develops and reaches the stage of intensive consumption, wants multiply rapidly. The variety and assortment of goods and services available in the market bears this out. Consider, for example, the varieties of soap, toothpaste, grinding wheels, automobiles, refrigerators, files, fertilizer, and clothing offered to customers which reflect the broad spectrum of underlying wants (Keller, 1999).
Purchase responses are shaped by communications which, in part, are controlled by the seller in the form of branding and selling. But seller-dominated market communications do not furnish all the information necessary to satisfy the curiosity and needs of buyers. Moreover, branding and selling may not be fully trusted. Both often fail to furnish the credibility or authoritative information that consumers need. Buyers therefore turn for information to the external informal groups with whom they are in contact. The latter can be more influential than the sellers. Buyer behavior includes reactions to marketing measures. A reaction may be influenced by opinions and preferences which, in fact, shape consumption. Both opinions and preferences are acquired and not inherited-they must be learned. The household that shapes the learning of tastes and preferences is a very influential force in personal consumption (Ind, 1996). In such corporation as China Telecom, buyer behavior is also concerned with ways of reducing perceived risk. Two types of uncertainty inhere in product decisions. First, products may not be as functional or durable, or perform as well, as anticipated. Second, there is the risk of unfavorable product reflection on one’s self image. Product risk is a function of the degree of product knowledge, the price of the product, product visibility, and the social significance of products and their newness (Aaker and Joachimsthaler 2000).
Branding is designed to affect and shape demand by causing changes in buyer preferences and reactions or by bringing products and services into line with customer desires. Branding, personal selling, sales promotion, product development, pricing, and other marketing decisions endeavor to elicit favorable reactions from customers. They attempt to expand and shift demand for company products, thus extending market opportunity. Factors other than economic ones are significant determinants of buyer behavior. Certainly, less than optimal economic decisions are often made by buyers. These may result from imcomplete information, lack of insights, and imperfect knowledge of the consequences of various actions, as well as from psychological and sociological forces. Behavioral scientists, in assessing consumer behavior, have been greatly interested in the role of habit, impulse, and drives in buyer selections and decision making. There are many situations in which each consumer choice does not involve a new decision process but becomes rather habitual. Reliance on habit is especially evident in many purchases of convenience products (Schmitt and Simonson 2008). Here the expectations are based on past experience and learning, and circumvent the decision process. However, in situations involving important decisions, where there is less experience available, buyers will go through a more intensive process of information gathering and decision making. Where incentives are strong enough and the expectations are high or great, the buyer does not act habitually and is willing to put some effort into solving his consumption problems. Owing to needs, consumers face tension states. When they are cognizant of products and services capable of satisfying their needs, then they have wants. Buyers try to assess the expected outcomes of product purchases, including risks. Cues and drives are stimuli for purchase actions. When a purchase decision is made the product may prove satisfactory, in which case a problem is solved. On the other hand, the product may not prove to be satisfactory, or the decision may be made not to purchase, in which case no solution has been reached and the need is unsatisfied. The successful completion of the cycle that moves from needs to drives to wants to purchases and finally, perhaps, to need satisfaction, involves both behavior necessary to make the purchaseinstrumental behavior — and consumption behavior (Aaker, 2003).
Branding managers are prone to emphasize how buyers are being manipulated by branding and salesmanship to purchase trivial and frivolous items. Such statements suggest, however, that an authority other than the individual buyer determines what is needed. It also neglects the ever-expanding nature of wants in an abundant society. In satisfying their wants and needs, buyers do not make decisions in a social vacuum. Their conclusions are shaped and influenced by relationships and experiences. Consumers occupying similar positions in a societal structure tend to respond to situations in much the same manner. Their responses are culturally patterned, and the particular society’s norms of behavior demand conformity. Because societal groups affect purchase and consumption patterns, buyers should be studied in relation to their reference groups — groups whose values and expectations are important to consumers in shaping what they ought to think or do. Such groups may be used both to determine consumers norms and as reference points to compare and position different consumer groups (Gregory, 2007).
The struggle for wealth, and the accumulation and possession of goods, has usually been interpreted as a struggle for subsistence. In the early stages of an economy’s development, this is the case, but in an economy of abundance, it is no longer true. Even though we have largely met the demands of subsistence, the desire to purchase, accumulate, and consume continues. Conventionally, the reason for buying goods is held to be their consumption. Rational purchase behavior establishes various consumption objectives, orders them, compares items that seem capable of achieving the objectives, plans and programs purchasing action, and audits the values actually realized during and after consumption. Rationality in purchase behavior, therefore, is based on both actual and vicarious experience. It deals with the attempt to provide goods that will solve consumption problems at some future time for many individuals in households in diverse situations. To date, business investment has received almost all of the attention as a significant factor in influencing business conditions. Nevertheless, as purchasers, consumers are playing an increasingly important role in stimulating economic growth and encouraging business investments. Customers perceive the marketing mixes offered them and try to assess expected satisfactions. Constraints exist that establish limits for their purchasing action. Included are economic, social, legal, and moral constraints (Schmitt and Simonson 2008).
Branding decisions are affected directly by the how and why of customer and consumer behavior. Understanding buyer behavior is fundamental to the development of effective marketing systems. Significant relationships between consumption processes and corporate actions are investigated. From a broad perspective, the consumption process involves use behavior, evaluation behavior, and levels of interrelated systems among different groups. Consumption is seen as a problem-solving process for physical and psychological, industrial, and household problems. Consumers provide the economic rationale for business activity. They direct business systems. Thus consumer life-style and life-space factors, which are significant purchase determinants, are also critical business forces. Consumer and customer wants and needs must be studied and understood to arrive at an effective marketing mix. Company demand, which depends on customer willingness and ability to buy, can be affected and shaped by marketing strategies. Both company offerings and customer reactions may be altered. Generalizations relevant to buyer rejection, buyer autonomy, buyer dynamics, buyer demand, and buyer motives are stated. Buyer behavior is shaped by psychological and sociological as well as by economic factors. Purchases made on emotional bases can indeed meet important consumer needs.
List of References
Aaker, D. 2003. Managing Brand Equity, New York: Free Press.
Aaker, D. and Joachimsthaler, E. A. 2000. “The Brand Relationship Spectrum: The Key to the Brand Architecture Challenge,” Californian Management Review 42 (4): 8-23.
Christopher, M., Payne, A., and Ballentine, D. 2007. Relationship Marketing, Oxford: Butterworth-Heinemann.
Gregory, J. R. 2007. Leveraging the Corporate Brand, Lincolnwood, IL: NTC Business Books.
Goodstein, L., Nolan, T., Pfeiffer, W. J. 2001. Applied Strategic Planning: How to Develop a Plan That Really Works. McGraw-Hill; 6 edition.
Hotchkiss, G. B. and Franken, R. B. 2008. The Leadership of Advertised Brands, New York: Doubleday Page.
Ind, N. 1998. “An Integrated Approach to Corporate Branding,” Journal of Brand Management 6 (5): 323-329.
Ind, N. 1996. The Corporate Brand, London: Macmillan.
Keller, K. L. 1999. “Brand Mantras: Rationale, Criteria and Examples,” Journal of Marketing Management 15: 43-51.
Knox, S. D. and Maklan, S. 1998. Competing on Value: Bridging the Gap between Brand and Customer Value, London: Financial Times/Pitman Publishing.
Schmitt, B. and Simonson, A. 2008 Marketing Aesthetics: The Strategic Management of Brands, Identity and Image, New York: Free Press.