Tag: Marketing Theory

Standardization versus Adaptation International Marketing

Standardization versus Adaptation Debate in International Marketing

In the international business market field, standardization versus adaptation debate is not new, where thus far researchers have not agreed on which strategy is effective to be adopted in international market. Taking a business into international market and successfully selling its products and services can attract a range of challenges. For many years, many multinational corporations make costly mistakes when trying to sell to the global consumers or audience. Such mistakes are mainly described by a lack of awareness of the role and contributions of adaptation and standardization in international markets. This paper seeks to analyse the issues of adaptation (customization) and standardization (global strategy) within international marketing strategies and proposes specific approaches that can help companies compete efficiently and effectively within these global setting.

Available Evidence

Since the start of the 1980s, globalization issue has developed significantly and critical to modern businesses. Globalization has helped in reducing the differences between countries. Both international of businesses and an increasing level of globalization have had a significant impact on how businesses plan and view their global marketing strategy (Wang & Yang, 2011). As a result, various research studies have been done on whether companies need to standardize or adapt certain behaviours in international market. As these multinational businesses start to market their products and services in foreign markets, one important strategic decision is whether to change the marketing strategies and mix to match the unique aspects of each local market or whether to adopt a standardized marketing mix (people, promotion, place, price, product, process management, and physical evidence) and a single marketing strategy in all international markets (Vrontis & Thrassou, 2007)

One consideration shows that markets are becoming more integrated, increasingly more global and similar and consider that the main element to business survival is its capability to standardize. In contrast, the other consideration identifies the challenges in adopting a standardized strategy, and thus, supports market adaptation or customization. Nevertheless, evidence proposes that following adaptation or standardization strategies depends on the positioning and dimensions present in respective international market.

Standardization versus Adaptation

Based on some studies, followers of standardization consider that there is an integration of cultures with the same customer demand and environmental demands across the world. They also state that trade barriers are being reduced and advancements in technology, where multinational companies reveal global integration in their strategies. Under standardization, providing a single strategy for the international market, along with standardizing the marketing mix components, can enable constancy with customers and also reduce costs. Brei, et al (2011) state that businesses managed effectively have shifted away from customizing their products to serving internationally standardized items that are low priced, reliable, functional, and advanced. Brei, et al (2011) further state that businesses can attain long-term success through focusing on what customers need instead of being afraid of the particulars of what customers think they might need.

In contrast, followers of international adaptation strategy focus on the significance of customization. The key base of the adaptation strategy is that when a business enters an international market, it needs to reflect on all environmental aspects, constraints, and factors, such as societies, cultures, different laws, taste, education, occupations, race, climate, and language (Akgün, et al., 2014). Nonetheless, studies have reported significant source of constraints that may be challenging to measure, for example, customs, manners, attitudes, values, religion, aesthetics, education, and cultural variations originated in history, along with variations in legal systems, economics, wants, and needs. Vrontis and Thrassou (2007) stated that multinational corporations need to realize how they should alter their whole marketing strategy and include how they order, distribute, and sell to match the new international or local market demands. It is also very vital to adjust the marketing strategy and mix to fit local preferences and tastes, customer non-equivalent requirements, and special market needs.

Advantages and Disadvantages of Standardization

Global uniformity and standardization have various benefits. First, customers can anticipate similar quality level of any particular brand in all outlets across the globe. Moreover, Hise and Choi (2013) posit that standardization facilitates positive consumer perceptions towards certain product. If companies that have a strong reputation and brand identity decide to follow the standardized approach, they will certainly gain success. In a global setting, positive word-of-mouth can imply an improvement in sales. Another benefit embraces cost reduction that provides the economies of scale (Hise & Choi, 2013). Selling huge amounts of non-adapted, same product and purchasing certain constituents in bulk may help in reducing the cost-per-unit.

Other benefits linked to economies of scale consist of reduced investment costs, marketing operational costs, and enhanced research and development. Additionally, standardization is a rational strategy in an era in which trade barriers are diminishing. Adopting a standardized approach assists multinational businesses to direct their emphasis on a uniformed marketing mix particularly concentrating on one single product or service, enabling adequate space for quality improvement. By focusing on one single uniformed product, employees will be trained to improve the product quality, which enables manufacturers to make equipment and technological investment that can protect the quality of the standardized product being served.

Nevertheless, standardization poses a range of shortcomings. Aforementioned, different international markets mean different consumer’s preferences. As a result, selling or offering one unified item poses lack of uniqueness. This enables competition to acquire bigger market share through adjusting their products to fit the need of a certain segment or market. Given that different markets have varied tastes and needs, by adopting the standardized strategy, businesses can become more at risk. One company example is Walmart’s failure when it entered international markets (Kim, 2008). Walmart encountered various challenges when it entered foreign markets such as Japan, South Korea, Brazil, and Germany as it realized that its recipe for success in the US (a huge set of merchandise, inventory control, and low prices) did not actually activate the same level of success in foreign markets with shoppers with varied habits and own discount chains. The key problem for the retail giant was that the company tried to inflict its values globally. Particularly, Walmart’s incident is Germany, where the company lost large sum of dollar as of 1998, has become an example or reference point for how not to expand internationally.

Another disadvantage is that it relies mainly on economies of scale. In nature, companies that are global often engage in manufacturing in various countries. This may also pose a great problem because some countries adopt trade barriers such as the EU and the US (Dimitrova & Rosenbloom, 2010). For such a case, adaptation is predetermined. However, even though the standardization strategy is more used, its adoption is not absolute. Standardization approach raises the performance of a firm. Nevertheless, this is only true for businesses where competition occurs in a global range, such as perfumes, luxury goods, fashion, electronics, consumer durables, among others. In such cases, similar product may be sold across all markets. In contrast, there are other sectors where this same action does not apply and thus, this needs to be considered.

standardization versus adaptation of international advertising strategies
standardization versus adaptation of international advertising strategies

Moreover, consumer non-durables, such as food products, are highly responsive to variations in national habits and tastes, making the companies to consider some adjustments to fit different markets. For instance, Unilever realized a greater opportunity among Indian low-income consumers who intended to purchase personal care products and high-end detergents, but might not afford them. To respond to this, Unilever produced a low-cost packaging product and various other alternatives that enabled it to provide radically cheaper alternatives. According to Theodosiou and Leonidou (2003), such a flexibility not only increase a new market for the business, but enabled also it to produce brand loyalty that customers benefit from it when their income increased and might afford higher-end products from similar manufacturer.

There are some questions which most businesses in the international market expansion need to answer: what products do we aim to standardize? And do we standardize distribution channels, pricing, marketing communications, product support and customer service? The answer to such questions need to either all adapted or all standardized.

Advantages and Disadvantages of Adaptation

Customization is also commonly considered an adaptation. Moreover, product adaptation is more applicable in the case in which: (1) there is an intense competition, compelling differentiation of products; (2) there is a considerable variations in consumer wants and needs; and (3) to meet essential host country requirements, including legal, technical, and packaging issues. These are also essential reasons for product adaptation and modification; literacy, customer lifestyle, and consumer’s income level.

The key arguments towards implementing adaptation approach is that it entails the individual approach as it enables the company to be aware of the preferences, wants, and needs of each market or consumer. Followers of adaptation strategy credibly support the idea that there is a considerable variation in consumer’s lifestyle, political system, regulations and rules, economic condition, culture, and consumer belief and values across the globe. Such elements need to be reflected on for the success of the company (Hussain & Khan, 2013). The application of adaptation marketing strategy supports the companies to gain an increased competitive advantage. In addition, the ultimate aim of a business needs not to be the cost reduction using standardization, but the actual long-term corporate profitability through improved sales attributable to the enhanced use of the differing consumer needs globally.

Poturak & Duman( 2014) assert that the followers of standardization does not possess the conventional knowledge of contemporary marketing. Irrespective of various arguments of improved consumer homogeneity, various studies have reported that consumers are becoming progressively more complex or diverse and do not essentially intend to substitute quality over price. Moreover, product modification or adaptation approach will results in a boost in sales volume of the company in international market; by highly meeting the wants and needs of the consumers, but reflecting on the competing companies; and by also retention of the current customers through frequently updating the product.

There are also certain drawbacks of product adaptation or modification of different marketing strategy, including duplication of the practices across the company and additional cost needed for the promotional practices. In this strategy, the company will need extra resources for research and development. The increased costs are attributable to defender fights and developments, which are also more risky. Moreover, companies may lack knowledge and experience regarding the technical elements of the different products and understanding on how to market a product (Hossain & Yazdanifard, 2015). This strategy also promotes decentralization of management.

Most Appropriate Strategy

These two strategies emerge to be coherent, logical, and rational, outlining the benefits that a company intending to expand internationally can acquire through implementing either strategy. When an international company puts forth all its efforts of the extreme side of either strategy, it normally becomes incoherent and unfeasible. The point is that marketing for international companies is not based on either of the two opposite strategies, since both strategies are probably to coexist, even in similar multinational company, brand, and product line (Rocha & Silva, 2011).

Vrontis and Thrassou (2007) stated that standardizing some components of the marketing mix, while adapting other components to differing market conditions is required. Adaptation and standardization should not be considered an ‘all or nothing’ proposal; rather it should be considered a matter of degree. For instance, diversity across various countries and markets does not enable whole standardization. Nevertheless, Schilke, et al. (2009) opines that higher cost associated to adaptation can limit the application of adaptation strategy. Wei and Yazdanifard (2014) focus on three factors to analyse adaptation and standardization practices: transferability of competitive advantage; homogeneity of various consumers’ reponse towards the marketing mix; and similarities in the level of economic freedom.

Schilke, et al. (2009) point out that even in markets or countries with the same cultures, such as across the EU, there are variations in customer wants and needs. In addition, they state that standardization will be effective when the customer response homogeneity and the level of sameness in economic freedom are higher, with easily transferable competitive advantages. Components of both strategies need to be integrated so that it can enable international companies to achieve desirable success. Acquiring the benefits of both strategies needs various firms to not only standardize different components of marketing strategies and marketing mix, but to implement also adaptation when needed with the aim of meeting the evident market needs (Batraga & Pūķe, 2015).

McDonald’s Case Study

An example of a major corporation that has been able to demonstrate the benefits of both adaptation and standardization strategy is McDonald’s. With around 35,000 restaurants in around 120 countries globally, McDonald’s competently manages its franchise system, providing an outstandingly reliable branding and customer experience, while also enabling for locally appropriate service and menu differentiations in segments or markets globally. Moreover, all advertisements are provided in twelve different languages, characterizing the tailored products organized to each region or market (Vignali, 2001). McDonald’s launched the McArabia (a flatbread sandwich product) in 2003, to its outlets in the Middle East. In addition, in India, it launched the McVeggie, while introducing EBI-Fillet-O shrimp in Japanese markets.

The company also selects convenient locations for its franchises, which include local neighbourhoods, airports, and malls. Such marketing strategies have proven to be efficient, showed by the company’s 8% increase in profit margins within the last five years. Nonetheless, McDonald’s has placed various efforts to improve them using the latest marketing practices in regards to the 7Ps. The company has started to modernize its eateries, shifting from a plastic-appearance to a more wood and brick design with the aim of sustaining a modern image (Yeu, et al., 2012). McDonald’s has also chosen to “re-image” its business operations in their advertisements through integrating a hip-hop theme with young generation icons such as Lee Hom and Justin Timberlake in China as a way of attracting young people. Moreover, this company has started to serve healthier foods (e.g. oatmeal), provided consumers are highly health conscious.

Conclusion on Standardization versus Adaptation

The regular topic in international marketing is whether multinational firms need to plan for adapted or standardized marketing strategy is immensely debated in scholarly setting and is a major issue to all multinational firms and marketing individuals. Followers of standardized strategy state that the international market has become homogenized and thus, these firms can market their commodities similarly across the globe. Using similar approaches will lead to higher margins and reduced costs. On the contrast, followers of the adaptation strategy focus on the evident differences between the markets of various countries and markets, particularly those for consumer goods, and favour adopting global differentiated marketing initiatives

This paper listed some advantages and disadvantages of every strategy, suggesting that the solution to an effective market strategy lies between these two extreme strategies. Firms can promote a strong international marketing strategy with the relevant structure, attitude, and operating behaviours that attain an effective and efficient balance between standardization versus adaptation approaches. Companies intending to expand internationally need not to treat the world as one singular market. Rather, they should initiate market research and establish their customers, and their wants and needs.

References

Akgün, A. E., Keskin, H., & Ayar, H. 2014. Standardization versus Adaptation of International Marketing Mix Activities: A Case Study. Procedia – Social and Behavioral Sciences, 150(15), pp.609–618.

Batraga, A., & Pūķe, I. 2015. Integrating Standardization versus Adaptation in International Marketing Strategies: Companies in Latvia. Proceedings of the 2015 International Conference, pp.27-36.

Brei, V., D’Avila, L., Camargo, L., & Engels, J. 2011. The Influence of Adaptation and Standardization of the Marketing Mix on Performance: a Meta-Analysis. BAR, Curitiba, 8(3), pp.266-287.

Dimitrova, B., & Rosenbloom, B. 2010. Standardization Versus Adaptation in Global Markets: Is Channel Strategy Different? Journal of Marketing Channels, 17(2), pp. 157-176.

Hise, R., & Choi, Y.-T. 2013. Are US companies employing standardization versus adaptation strategies in their international markets? Journal of International Business and Cultural Studies, 1-29.

Hossain, A., & Yazdanifard, R. 2015. Which One of Standardization or Customization Works the Best When It Comes to Online Marketing? American Journal of Industrial and Business Management, 5, pp.45-52.

Hussain, A., & Khan, S. 2013. International Marketing Strategy: Standardization versus Adaptation. Management and Administrative Sciences Review, 2(4), pp.353-359.

Kim, R. 2008. Wal-Mart Korea: Challenges of Entering a Foreign Market. Journal of Asia-Pacific Business, 9(4), pp.344-357.

Poturak, M., & Duman, T. 2014. The Role of Marketing Standardization versus Adaptation Strategies on Managers’ Satisfaction with Export Performance: Proposal of a Conceptual Framework. European Journal of Economic Studies, 10(4), pp. 252-262.

Rocha, T. V., & Silva, S. C. 2011. The Standardization versus Adaptation Dilemma: The Case of an American Company in Brazil. Internext – Revista Eletrônica de Negócios Internacionais da ESPM, 6(1), pp.63-83.

Schilke, O., Reimann, M., & Thomas, J. 2009. When Does International Marketing Standardization Matter to Firm Performance? Journal of International Marketing, 17(4), pp. 24–46.

Theodosiou, M., & Leonidou, L. 2003. Standardization versus adaptation of international marketing strategy: an integrative assessment of the empirical research. International Business Review, 12, pp.141–171.

Vignali, C. 2001. McDonald’s: “think global, act local” – the marketing mix. British Food Journal, 103(2), pp.97 -111.

Vrontis, D., & Thrassou, A. 2007. Adaptation versus standardization in international marketing – the country-of-origin effect. Innovative Marketing, 2(3), pp.7-20.

Wang, X., & Yang, Z. 2011. Standardization or Adaptation in International Advertising Strategies: The Roles of Brand Personality and Country-Of-Origin Image. Asian Journal of Business Research, 1(2), pp.25-36.

Wei, S., & Yazdanifard, R. 2014. Comparison on the Impact of Standardization and Adaptation on International Marketing. Journal of Research in Marketing, 3(1), pp. 250-259.

Yeu, C., Leong, K., & Tong, L. 2012. A Comparative Study on International Marketing Mix in China and India: The Case of McDonald’s. Procedia – Social and Behavioral Sciences, 65, pp.1054–1059.

Other Relevant Blog Posts

Marketing Dissertation Topics

Example Marketing Dissertations

Brand Management Reputation Marketing

Did you find any useful knowledge relating to the impact of standardization and adaptation on International Marketing in this post? What are the key facts that grabbed your attention? Let us know in the comments. Thank you.

Social Media and Consumer Decision Making

Social Media Influence In Consumer Decision Making

Abstract

The impact reference groups or social connections have in an online marketing environment, on the product purchase decisions of consumers is analyzed in this article. The influence of social media in the decision making process of consumers is investigated, and the influence of the strength of social ties on the final decision are discussed. The article discusses theories and concepts related to social relations, social media, and consumer purchase decision making process. To understand the impact social media has on consumer purchase decision, interview is conducted with micro and macro business owners using Facebook business pages, and having over 50 fans for their fan page. To analyze the data statistical analysis, and descriptive analysis methods are used. The research concludes that a strong tie in social relations serves to influence the purchase decision making process of consumers positively. To create a successful business by adopting an online marketing strategy, building strong social relations is important.

Research Overview

Social scientists have for a long duration highlighted the importance of group membership when it comes to determining individual or group behavior. The fact that individuals act according to a reference frame produced by groups to which they have widely been accepted has been perceived as a sound premise for some time. Marketers have widely accepted the construct of a reference group as critical in at least some forms of consumer decision-making. With the growth of the internet, and online marketing, social media is becoming an indispensable part in everyday lives of people. People are social beings, and at present, consumers are participating in activities like sharing experiences, knowledge, and opinions online. They also take part in online discussions to share their experiences with a product or a service.

The speed with which information transfers has increased with the electronic word of mouth growing more rapidly. Positive recommendations and discussions online have the potential to bring in increased business volume for firms in a short time. There is also the probability of a negative complaint online that can cause mistrust in a service or a product. A new form of social communication has been made possible by online media. Groups or individuals who might never meet in person are able to influence consumer behavior and their purchase decisions. The increasing use of social media is evident from the growth in online population using social network sites. Facebook the leading social media website has observed 23% growth in its user population during 2013, with 1.1 billion users making use of the site each month.

Social Media Decision Making
Social Media Decision Making

This study investigates the influence of reference groups online brand and product purchase decisions by looking at the interrelations between forms of product use conspicuousness and forms of influence from reference groups in social media. Consumers have a wide access to different types of social media, tools, and platforms. Social media significantly impacts the process of information sharing amongst individuals in the online shopping environment. Through this research, the role played by social media reference groups in forming strong or weak relationships with consumers that can influence the consumer decision making process are investigated.

Problem Statement

The study proposes to investigate the relationship between the social media influence of online users, the behavior intentions of consumers, and the role of social media influence in consumer decision making process. The strategy of information search online is adopted by consumers to reduce the risks involved in a purchase decision. Increasing technological advancements lead to ease of information access. Consumers can easily obtain information about services or products through social media before making a purchase. This research is focused on making both practical and academic contributions. Academically, it serves to bridge the gap between consumer decision making and the influence of social media reference groups in forming weak or strong relationship with consumers. Practically, social media marketers benefit from the research results. They can gain a deeper understanding of an online shopping consumer’s decision making process.

Research Questions

Research questions to be explored to investigate the social media phenomenon in online shopping are;

  1. What are the characteristics of social and online influence groups and references?
  2. Personal and demographic factors like gender, age, education, and profession have an influence on information shared through social media. Their experience and prior knowledge influences their level of social influence.
  3. What are the ways through which information and ideas travel through such a reference group or an online community?
  4. The credibility of the source depends on the reference group and the way in which information is conveyed. An understanding of how information or ideas travel through the reference community helps in identifying factors that have a high level of influence on consumer decision making.
  5. What are some forms of ties or connections do consumers have to other consumers in the communities?
  6. Consumers form ties in the online community, resulting in the establishment of a reference group or community. By investigating in what ways and how such communities are formed, social media marketers can leverage their online advertising campaigns.
  7. How is consumer decision making influenced by social media reference groups and communities.
  8. Social media reference groups, and communities alike, are proposed hypothesized to play a major role in the purchase decision of consumers.

Research Aims and Objectives

The research aims to investigate the ways in which social media influences consumer decision making during an online purchase. The various ways in which a social media group or community is used as a reference, the ways through which such groups or communities are accessed, and ways in which information is accessed from these groups by consumers are investigated. Main objectives of research are;

  • To identify the ways in which social media has established a source of power and leveled the playing field for consumers?
  • To investigate in what ways leaders of these reference groups or opinion leaders develop in online communities or any other reference group.
  • To analyze what some of the roles of social capital play when it comes to value of the social communities created on social media?
  • To offer recommendations to social media marketers on how reference groups and communities can be leveraged to their firm’s advantage.

Rationale for Research

The results obtained from this research could offer considerable evidence on the influence social media has on online marketing. The overall process of consumer decision making while making an online purchase decision, combined with the influence of social media helps managers reduce risks involved in social media marketing, at the same time offering recommendations on the ways in which they can increase their online credibility. Research on social media marketing is relatively new in marketing research. Negligible research exists on interrelating social media marketing and its influence in the consumer decision making process. This research focuses mainly on online shopping, social media, and reference group influence on consumer decision making. So, the theoretical contribution of this research helps fill in the gap in previous literature.

Research Methodology

Business pages created on Facebook are the central tool and the key research methodology is action research. Action research involves making systematic observations, and collection of data, that can be used to solve problems, and improve professional business practices. Micro and small businesses are focused. Data is gathered through interview and by using questionnaire. Facebook pages created by small entrepreneurs are used to create a fan base for their small enterprises. As the page continuous to grow and increase in size when it comes to the fan base of about 50 to 60 users data is to be conducted, mainly by carrying out semi- structured interviews.

The research design is action, qualitative research oriented with the conviction that reality is virtual created by factors of socio- economy. Primary data is gathered through semi- structured and open interviews. Data regarding the experiences of the entrepreneur while using and adopting social media like Facebook is focused upon. Secondary data is generated by the recording transcripts from the weekly training and interaction with the participants to understand their requirements and experiences. Tertiary collection of data is carried out through virtual ethnography by carrying out internet-based interviews through Google talk, chat, Skype and blogs.

Structure of Article

To ensure research meets its aims and objectives, clear research questions and research focus are developed first. Analysis of theories and concepts is done in the literature review part. Here theories and concepts relevant to social media as a marketing tool, and consumer decision making process are explored. Research methodology is developed based on literature review, and research aims. This gives a detailed outline of the research methodology to be employed for data collection. The research approach, philosophy, choices, ethical issues and methodologies are explained. Analyzed data gathered from semi – structured interview, and research findings are presented in based on which, conclusion discusses the research concisely, using which suitable recommendations are offered.

Conclusion

The way in which consumers make purchase decision has changed with the advent of social media. Rather than waiting for messages or advertisements giving information about a service or a product from companies, consumers are now seeking information on social media directly. Online community has the greatest amount of influence, especially on online shoppers. Research proposes to investigate the characteristics of online communities and reference groups involved in social media. The ways in which such groups influence the consumer decision making process is explored. For data collection, semi – structured interviews are conducted with online micro and small business entrepreneurs making use of social media tools like Facebook and blogs.

View Marketing Dissertations Here

Brand Loyalty Customer Behavior

How does Brand Loyalty Influence Customer Behavior?

The rise in living standards, ease of accessibility to finance coupled with a wide variety to choose from has made consumer durable market to grow with a rapid rate. Many players are getting into the market. With the advances in communication and technology, new lifestyles and the quest to appear young and beautiful, the demand for quality beauty products has increased significantly. Consumer quality sector is characterized by the emergence of exchange offers, discounts and intensive competition. People nowadays want to imitate in regards to dressing, language, and politics among other lifestyle aspects. The increasing population is bombarded with information about maintaining a youthful look, making women seek for cosmetics that suit them.  With this knowledge in mind, beauty manufacturing product companies make every effort to brand them to capture the booming market. Companies are competing on the basis of firm grasp of the local and international market, their well acknowledged brands and hold over wide distribution network. The penetration level of consumer products remains high.

This research is scoped down to understand the relationship between consumer behavior and brand loyalty, factors affecting consumer decision making, the role of brand loyalty in consumer durable goods and the position of the individual consumer in the segment. The path forward will be to study the secondary data for industry overview, collect primary data for more insight and  derive conclusions based on primary and secondary data. The research findings will be addressed based on the theories of consumer buying behavior and brand loyalty.

Organizations must engage in making strategic decisions that are capable of improving the firms’ image so that they can have an advantage over competitors. To be specific, these image enhancing strategies ensure that the organization increase the loyalty of the current customers. In addition, the image enhancing strategies should help in the attraction of new customers to the organization. Strategic decisions that can bring enhanced image to the organization have included the selection of target markets, and modification of products to suit the demands of the customers. Other strategic decisions on prices, location of products and services, promotional efforts, and operating policies help in improving the organizations’ image.

The implementation of these strategies ensures that there is a solid background for effective image in the organization. An organization’s image ensures that if there is something about it that is not known, the knowledge the customers have on the organization fills the void. The main concern of this research is to determine whether the perception about the brand image affects customer behavior.

Research Objectives

The interest of the research is to determine if brand loyalty influences consumer behavior. This study would be of value to those organizations concerned about the society and those concerned with the attaining off the highest possible profit. Further, the study aims to find if consumers have positive attitudes for those organizations that improve their brand loyalty and social responsibility.

Specific research objectives include:

  1. To find the relationship between consumer behavior and brand loyalty.
  2. To find out whether consumer behavior leads to change in the brand image quality, for instance, product quality or service quality.
  3. The influence of customer satisfaction on the brand’s image
  4. Does consumer behavior affect brand image?
  5. Does consumer behavior lead to change in the brand image quality?
  6. Does customer satisfaction affect brand image?

Literature Review

The main focus of this study is to measure the attitudes of customers in relation to brand loyalty and to ascertain its influence of this attitude on brand loyalty. Study of attitudes enables organization managers to answer questions as to why a consumer purchased one product over another. The understanding of the consumer attitude towards particular products ensures that they come up with strategies and decisions on major products and market decisions.

The image associated with a particular product or service ensures that it has a competitive advantage over other products and services. A company’s brand is valuable strategic asset in achieving goals and objectives. Brand loyalty can be referred to as the consumer decision; whether conscious or unconscious concerning the use of a product or service. It may also refer to the intention to buy or use a particular product for a long duration of time. Brand loyalty is achieved due to the right features, and the quality of the brand. Quality of the product must be at the right price for the consumer to perceive the brand as being loyal to their needs. Organizations can change consumer behavior concerning a particular product or service through advertising. Advertising ensures that consumers acquire new habits, and instill those habits by telling the consumers how the product is of value to their money. Consumers should also be encouraged to continue using the products and services in the future (Hoyer and Maclnnis, 2008, p. 27).

According to Pride and Ferrel (2008, p.123), the main reason why organizations do not have strong brand loyalty is because they are not familiar with various ways of disseminating a strong and clear message that distinguishes their product with that of the competitor. In addition, the message should distinguish the product in a positive and memorable manner. The major challenge of organizations is to avoid the disadvantages of portraying a particular product or service as having negative image. An organization’s image should not be viewed in terms of the product and service attributes; the organization’s philosophies concerning environmental management, philanthropy, and ethical considerations are critical in influencing consumer behavior.

Societal Conscious Marketing

Most organizations have adopted marketing strategies that focus on societal needs. Each of these strategies is philosophical or operational concepts used by organizational leaders to enhance the objectives of their businesses. The following are some of the concepts widely used in organizations (Phillips, 2010, p. 45).

  1. Product concept: products should be produced in large volumes since all of it can be sold to the consumers
  2. Selling concept; products can only be consumed if they are heavily promoted
  3. Product concept; consumers will buy high quality products that are within their price range
  4. Marketing concept: specific customer demands can only be met if organization produces products that are equal or better than those of the competitor. In addition, the products should be priced lower than the competitor.
  5. Societal marketing concept: This term involves marketing in a manner that does not harm the society, people, and the environment. Societal marketing concept is motivated by the need to satisfy direct customers and other constituents in the market.

Brand loyalty can be exercised in several ways. The main activities that organizations can do to improve brand loyalty include environmental friendly activities, philanthropy, ethical activities with local, national, and international communities, customers, and employees. Environmentally friendly activities can include recycling, waste reduction, and other strategies aimed at minimizing the organization’s impact on the environment. Philanthropic activities include engaging donations of money, food, facilities, and time. These activities are classified under the title known as cause related marketing (Kahren, 2009, p.36).

Brand Loyalty
Brand Loyalty

According to Dutton (1997), organizations have been turning philanthropy activities inward towards their employees. This is done through paying them in order to volunteer for their favorite charities. She asserts that words like “ethics’, honesty, truth and trust are good sentiments. She, however, notes that they mean nothing if they are not adopted by organizations. Ethical activities include using different hiring practices and employee relations such as high moral values, fair pay, equal treatment, and equal opportunity for all workers. Organizations that do not treat workers fairly have the risk of lowering their brand image. Brand image should start with internal operations; there is no point of trying to show the external clients that business ethics are good while simultaneously engaging in unethical activities towards the employees. Employees play an important role in advertising the organization to outside clients more than any other marketing strategy.

The question of how brand loyalty affects product evaluation was examined by Brown and Dacin (1997). Their study looked into the differences between the impact of organization brand loyalty which include the organization’s ability to produce and deliver quality products and services and the corporate social responsibility’s impacts on consumers. In their first research, students analyzed their hypothetical scenarios. The outcome was that brand loyalty had a significant effect on the way consumers evaluated the product attributes and the overall image of the organization. Further, the authors found out that social responsibility had no direct impact on the organization’s image. Their second study found out that social responsibility became significant predictor of product loyalty in the consumers and its evaluation.

According to Kim (1996) product demand is determined by non-product factors such as cleanliness, public relations, atmosphere, advertising and the convenience of the brands’ locations. In any organization, quality of products can be determined according to the consumer attitude towards the product with other products available to the consumer in the market.

“Perceived quality is different from objective or actual quality, a higher level abstraction rather than a specific attribute of a product, a global assessment that in some case resembles attitude, and a judgment usually made within a consumer’s evoked set” (Zeithaml, 1988, p.4).

Zeitmal further assert that few consumers are able to analyze and measure the objective properties of a product. This is because the objective assessment depends on the verifiable standards, the objective measurement can be questioned because it depends on who set the standards.

Theoretical framework

The A Priori Approach

According to Lunn (2011), the theory introduces theories and concepts from other disciplines including behavioral sciences. The value of behavioral sciences has been used in consumer knowing what the consumer wants. Well known examples are included in the manifestations of motivational research and such attitude theories as those of Festinger and Fishbein. The A Priori approach involves giving the consumer an all embracing label such as “economic man”, “problem solver”, “learner”, and “existentialist”. The strength of the a priori lies in the organization and the systematic basis of knowledge provided about certain aspects of the consumer.

Brand Loyalty Theory

According to Katz (1960), Brand loyalty theory has three distinct dimensions. The first dimension is referred to as emotive tendency towards products and services. The emotive tendency refers to the consumer likes and dislikes which is manifested on how they purchase a particular brand in the market. The second dimension is known as evaluative tendency towards products and services. Katz refers to this tendency as positively biased evaluation of a product or service. Organizations use positive characteristics to define brand utili6ty to the customers. The evaluative tendency of the product or service can also be determined from past experience in using the brand.

Behavioral tendency towards the brand is the next dimension. Katz (1960) refers to the behavior tendency as the biased responses consumers have towards a particular product or service regarding its procurement, purchase and consumption characteristics. Consumer characteristics such as shopping, paying for the product, as well as its consumption determine the behavior tendency. Behavior tendency is developed after using the product for a long period of time. In addition, behavior tendency can be developed from good or bad tendencies toward other brands.

Black Box Theory of Behaviorism

Sandhusen (2000) assert that the black box model is an interaction of several perspectives concerning a specific brand. The perspectives include the stimuli, consumer characteristics, choice patterns and consumer responses. The focus of the organization is not in the internal processes within the customer: the organization focuses on the relation between stimuli and response of the customer. Stimuli are related to the marketing characteristics developed by an organization in order to lure the customer in purchasing of the brand. The environmental stimuli are determined by social factors such as politics, economy and the culture in which the brand is to be used. The black box symbolizes the buyer characteristics and their choice patterns, which determine their response towards a particular brand.

Hypothesis

This research focuses on the various factors that influence consumers’ brand loyalty towards a given brand. From the various factors that influence brand loyalty, below are the hypothesis derived.

H1: There is a positive correlation between brand loyalty product and brand name

H2: There is a positive correlation between brand loyalty and product quality.

H3: There is a positive significant relationship between brand loyalty and product design

H4: There is a positive significant relationship between brand loyalty and product price.

H5: There is a positive correlation between brand loyalty and promotion.

H6: There is a significant correlation between service quality and brand loyalty.

H7: There is a positive significant relationship between store environment and brand loyalty.

Research Methodology

The main objective of this research was to establish how brand loyalty influences cosmetics buying behavior of UK female consumers. This section also highlights the various processes undertaken in obtaining and analyzing the information gathered for this research. This includes a description of the research design and methods used in collecting the data that were analyzed to arrive at a conclusion in the study.

Research philosophy

Based on the nature and the topic to be studied, this research will be conducted on positivist philosophy. It will be based on this philosophy because the research will involve testing of hypothesis developed from deductive theory, involving measurement of observable social realities.

Approach

This research will be conducted on deductive approach based on hypothesis testing from the data collected. Data will then be analyzed to either confirm or disapprove the hypothesis.

Data Collection Methods

Data collection will consist of surveys, filling in questionnaires and conducting interviews with cosmetic consumers and dealers in London, UK. Qualitative evaluation shall be employed in this research besides using subjective techniques such as interviews and observations to gather relevant and substantive data. Quantitative approach is preferred for this research due to the varying experiences of the consumers of these products. Upon collecting data using interviews and questionnaires, the data will then be carefully analyzed. This shall be carried out using both the One-way ANOVA and the Pearson’s guideline to establish how brand loyalty influences consumer behavior with respect to cosmetic consumption in UK.

Questionnaire Design

In this research, a questionnaire was developed, and pilot tested through personal interviews with seven senior-most managers at Superdrug, which is the second largest health and beauty retail shop in UK. The questionnaire used for collecting data was divided into two segments: the first section concerns the demographics of consumers and the second were about brand loyalty factors. This research involved sampling randomly 400 female cosmetic consumer of between 18 to 42 years of age. In order to obtain a reliable data, the survey was distributed in London City at five major cosmetic shops. The malls included L’Occitane, Jo Malone, Floris London, Boots and Screenface, in addition to Superdrug retail shop.  A total of 400 usable questionnaires were then returned and collected 60% response rate.

Table 1 reveals that age composition of those aged between 18-25 years were 25% of the respondents. Yet again, the table reveals that close to half of the respondents ages varied between 27-35 years. About 26% of the respondents were between the ages of 36-42. The sample survey was almost balanced at 51% for the married and 49% for the unmarried. With regard to education level, the surveyed respondent revealed that 72% of the respondent had at least a degree and 18% having completed high school. This implies that only 10% of the respondents had postgraduate degrees.

Data Analysis

This research used the One-way ANOVA to establish whether there is any significant correlation between independent variables (product quality, brand name, design, price, service quality, promotion, and store environment) and age and income the consumers interviewed. The main reason for adopting the One-way ANOVA as the most appropriate tool is that it was found to be the best for testing the hypothesis when at least two groups are measured on an interval scale. The purpose of the One-way ANOVA is to show the degree of variability of the sample values taken by considering to what extent the observation within each group differs and how much the group means differ.  Apart from the One –Way ANOVA, the researchers also found it appropriate to use the Pearson Correlation for purposes of analyzing the relationship between the two variables, which are both ratio and interval-scaled. This is based on the fact that the correlation coefficients determined using the Pearson’s guideline is used to establish the degree and direction of the correlation, which is suitable for hypothesis testing. In this regard, the research used Pearson correlation principle to test the independent variables (product quality, brand name, price, promotion, design, store environment and service quality) that influenced consumer brand loyalty and to establish if there is any correlation between the variables.

Results

Table 2 below shows the Cronbach’s Alpha (coefficient alpha) of each of the variables tested.  The findings reveal that all the variables have a high degree of reliability. Table 3, on the other hand, shows the seven autonomous variable factors of brand loyalty that were experimented during the research through questionnaires given out to the respondents. The results were also ranked using the Likert scale in the questionnaire: strongly disagree, disagree, neutral, agree and strongly agree. The result is then gotten from the uppermost average score of brand loyalty factors based on the answers provident by the respondents. In overall, the result reveals that product quality is the most vital factor. In UK environment, most respondents choose product quality as the core aspect that influences their brand loyalty.

The One-way ANOVA scrutiny of the factors of income level and brand loyalty was conducted. This was meant to establish if there could be any significant relationship between the two variables. Here, there are four variables that are most significant according to the study, which include brand name (0.000) promotion (0.004), product quality (0.009) and service quality (0.038). In overall, the result shows that, in UK, majority of the consumers prefer brand name, promotion, and product and service quality as factors of brand loyalty. According to table five below, only two variables that are significant. These are price (0.014) and the brand name (0.050). An analysis of this data reveals that, among the age groups surveyed, female consumers aged between 36-42 prefer brand names more compare to other age groups.

Test of Hypothesis

As revealed in Table 4 below, brand name was found to have considerable positive relationship with brand loyalty. The results of this research revealed that consumers preferred brand image only when they foresee positive functions or benefits from the product in question. It is then that they will recommend the brand, react positively to the price premium and accept brand extension to other categories of products within the same brand.

The quality of the products was shown to have a positive correlation with brand loyalty. This kind of correlation is demonstrated based on Cohen’s (1988) principle, in which a correlation of (r=0.0302) is considered moderate. Therefore, based on these statistics, the finding showed that product quality has a lot of significance with regard to consumer decision-making process. The findings of this research revealed that brand loyalty and price had a positive relationship. In this case, price was found to be more important for any average consumer in the market. Nevertheless, those consumers with high brand loyalty were not very much sensitive to prices. The research showed that as long as these consumers were satisfied with a given brand, they would continue buying the product with the same brand irrespective of the price increase.  On the other hand, the findings did not show any correlation between product design and brand loyalty. Out of all the seven variables tested, many consumers did not consider product design as an important factor for UK consumers to become loyal to a given cosmetic brand.

According to the findings, promotion and brand loyalty were found to have a positive relationship. Product promotion was considered as one of the most valuable factor in determining a consumer’s brand loyalty. This includes the use of sales promotions, commercial adverts, personal and public selling. In fact, the research revealed that many female consumers spent considerable time reading product labels before purchasing the product. The research also revealed that brand loyalty and service quality had a positive relationship. Findings showed that service quality encouraged many consumers to prioritize a store. The result indicated that salesperson consumer relationship results in long-term orientation of customers towards a given store. Similarly, trust developed in the salesperson seems to relate to the overall discernment of the store’s service quality, which leads to customer’s total satisfaction with the store.

The findings also showed that the environment of the store is also positively related to brand loyalty. The store environment is seen as major factors that influence consumer brand loyalty. This research revealed that many consumers were much sensitive to attributes of the store such as a variety of selection, merchandise displays, packing space, and ease of accessibility to vehicles and the overall goodwill of the store in buying products.

Table 1. Demographic Sample Description

Frequency Percentage (%)
Age18-2527-3536-42 100196104 254926
Marital statusMarriedUnmarried 204196 5149
Education:High SchoolUndergraduatePostgraduate 7228840 187210

Table 2. Reliability Analysis of Brand Loyalty factors

Variables Alpha
Product QualityBrand namePricePromotion

Design

Service Quality

Store Environment

Brand Loyalty

 0.65720.70280.66180.6974

0.7482

0.8200

0.7139

0.6646

Table 3. Brand Loyalty factor Ranking

Factor of Brand Loyalty

 Ranking Mean/Average
Product Quality 1 3.68
Q1. The brand is durable than others 3.69
Q2. The materials used by the brand are natural 4.11
Q3. The brand has sufficient color 3.65
Q4. The brand has good functional quality 3.77
Mean Average 3.80
Design   2
Q1. The brand provides wide variety of designs 3.72
Q2. Designs of the brand are suitable for me 3.79
Q3. Designs of the brand have distinctive features 3.73
Q4. Designs of the brand are trendy and fashionable 3.85
Mean Average 3.77
Brand Name                                       3
Q1. The brand is trustworthy 3.70
Q2. Brand image and name attract me to buy 3.82
Q3. Brand Name is selected irrespective of price 3.41
Q4. Brand reveals my individual personality 3.96
Mean Average 3.72
Promotion               4
Q1 Ads of the brand is attractive 3.64
Q2. Ads of the brand attract me towards purchasing the product 3.44
Q3. Product displays are entrancing 3.62
Mean Average 3.56
Store Environment                                5
Q1. The brand has good store location 3.64
Q2. There are adequate outlets for the brand 3.76
Q3. The interior show is gorgeous 3.50
Q4. Music and color inside the store are beautiful 3.36
Mean Average 3.57
Price        6
Q1. Increases of price not hinder me to purchase 2.99
Q2. The brand provides goods value for money 3.52
Average Mean 3.56
Service Quality         7
Q1The salesmen in the store are knowledgeable 3.21
Q2. The salesmen in the store are willing to help 3.39
Q3. Vendor of the store is and courteous and friendly 3.18
Q4Vendors in the store have neat appearance 3.33

Mean Average 3.28

Table 4. Significance of Brand Loyalty factors with brand loyalty

Variables

 Pearson Correlation Sig. (2-tailed)a
Product Quality

Brand name

Price

Promotion

Design

Service Quality

Store Environment

Brand Loyalty0.304

0.561

0.466

0.411

0.140

0.333

0.369

0.002

0.002

0.005

0.006

0.162

0.001

0.010

 

Conclusions and Findings

Various studies have focused on understanding the concept of brand loyalty and the factors influencing it. Product attributes, after sale service, marketing capabilities, perceived quality or aesthetics, depth of product line as the key differencing factors influencing the behavior of purchasers. Brand commitment is also a necessary condition for true brand loyalty to occur.  Packaging, new product trial, price, store location corporate social responsibility and advertisements influence consumer behavior. While several factors influencing brand loyalty have been studied in the extant literature, this research has revealed that brand loyalty influences consumer behavior. Consumers may also compel entrepreneurs to change the brand image in terms of product or service quality. Similarly, the brand image has been proven to satisfy the consumer expectations.

The dimensions of brand loyalty theory clearly depict how consumer’s tastes and preferences influence their buying power. This is followed by an assessment of the product to decide if they will buy it or not. The assessment also referred to as evaluative tendency compels organizations to brand their products to attract customers, an aspect of competition. Product branding can be enhanced by advertising, changing the brand name and promoting it to improve recognition.  The behavioral tendency proposed by Katz is creations of a bandwagon effect among consumers to enable them continue buying the product. The initial products are branded in a way of attracting customers though subsequent ones show depreciation, a strategy used by marketers.  Branding through advertisement show some favor of the product while despising others, thus discouraging customers from using those other products whether related or not. The black box model looks into the customers willingness created by the company’s emphasis of the product. The characteristics of the buyer determine their choice of product.

From this research, the brand name and image has a significant impact on customer choice with all factors kept constant. As part of consumer behavior, every brand has some features which consumers always associate the brand with. They consume a given brand on the basis of its features. Again, the consumers take into account the quality, and price while making buying decisions. The point of purchase is another factor that comes to a buyer’s mind. Being a highly demanded product by women, they want to buy cosmetics from a good reputed and trustworthy purchase point. Exhibition malls serves as favorite consumer purchase point.

Other factors like age, occupation and education of consumers will influence buying decisions following the way each group has been exposed about the product. Young people will have more taste of cosmetics because they want to look good while old ones are slightly less concerned with beauty. Exposure and knowledge of a product affects its demand. The raw materials making the brand also play a vital role of its choice. If a sample cosmetic is known to contain harmful chemicals, it loses its market. An organization will get to know what factors influence the purchase decision of a consumer before branding the product. Accordingly, it will direct its marketing effort so that it can get potential customers to purchase the products.

Subject Issues Learnt

Brand loyalty is the consumer’s conscious or unconscious choice that is expressed intentionally or a behavioral pattern to repurchase a brand again. This happens following the perception of the consumer that the brand provides the right image, characteristics or quality based on reasonable price. Hence, consumer behavior is habitual. Beginning from product design to creation of a mature brand, good marketing strategies, which depend on a clear understanding of the memory, motivation, learning and decision processes, influence the consumer’s choice. Launching of new products, market segmentation, timing market entry and brand management are all related to the theoretical framework employed in the research.  Branding is by far and large the most important factor influencing the product’s success or failure in the market place. It can also greatly impact the company’s perception by the buying public. Brand is not only a company’s product but also a representation of the individual company and that is where the core of brand loyalty falls.

Brand loyalty is simply more than the consumer’s commitment to repurchase a product. It incorporates the high attitude towards the product demonstrated by repeated buying.  This loyalty is a business investment because of the high prices being paid by the customers.  Depending upon the nature of the product versus basic necessities or luxuries, consumers a single or brand loyalty. This brand loyalty is affected by their brand choice as well as by their store loyalty behavior. The bondage of brand loyalty is strong especially through repeated advertising and promotional schemes. The main factors that influence brand loyalty are the quality of product, habit of use and regular availability of the product. Searching for a product means mental and physical information about products, prices and shops. Consumer information is thus a marketing tool that can be used to understand the interactions between a specific target segment and marketplace so as to meet the consumers’ needs and wants.

Brand image or the good reputation of a particular service ensures that it maintains a competitive advantage over other products and services. An organization’s brand is valuable strategic asset in achieving goals and objectives. Brand loyalty can be referred to as the consumer decision; whether conscious or unconscious concerning the use of a product or service. It may also refer to the intention to buy or use a particular product for a long duration of time. Brand loyalty is achieved due to the right features, and the quality of the brand. Quality of the product must be at the right price for the consumer to perceive the brand as being loyal to their needs. Organizations can change consumer behavior concerning a particular product or service through advertising.

The reasons why people become brand loyal are because the favored brand satisfies the consumer needs and wants than the competitors do. Again, there is a reduction of perceived risk, sticking with a favorite brand improves certainty. Brand loyalty helps maintain self image in reinforcing the customer’s self concept and confidence. It is also the path to least resistance. Marketers use strategies like in-store and o-location impulse triggers, notably point-of purchase displays.  Consumer innovativeness is the predisposition to buy new and different products rather than remain with the previous choices and consumption patterns.

Consumer behavior is influenced by social, cultural, Psychological and personal factors. Culture influences buying behavior depending on the country, geographical region, religion, nationality and racial groups. The societal classes such as wealth distribution, education and occupation impact the behavior of consumers towards a product. Social factors like family, reference groups, roles and statuses influence buyer behavior. Personal factors include lifestyle, economic situations, age, occupation, personality and self concept. Perception, motivation, learning, beliefs and attitudes are psychological factors affecting consumer behavior. Marketers should, therefore, look into these factors in branding particular products.

References

Brown, T. and Dacin, P., 1997. The Company And The Product: Corporate Associations And Consumer Product Responses. Journal Of Marketing, 61 (1), pp.68-84.

Dutton, G., 1997. Warming The Cold Heart Of Business, Management Review 86 (6), pp.17-20.

Hoyer, W. and Maclnnis, D., 2008. Consumer Behavior. New York: Cengage Learning.

Kahren, F., 2009. Brand Loyalty. Washington D. C: Whimsical Publications.

Katz, D.,1960. The Functional Approach To The Study Of Attitudes. New York; Public Opinion Quarterly.

Kim, H., 1996. Perceptual Mapping of Attributes and Preferences: An Empirical Examination of Hotel FandB Products in Korea. International Journal of Hospitality Management 15 (4), pp.373-391.

Lunn, J., 2011. Models Of Buyer Behavior: Consumer Decision Process Models. New York: Marketing Classics Press.

Phillips, C., 2010. Brand Loyalty. New York: Youwriteon.

Pride, W., and Ferrell, C., 2008. Marketing. New York: Cengage Learning.

Sandhusen, R., 2000. Marketing. London: Routledge.

Zeithmal, V.,  1988. Consumer Perceptions Of Price, Quality, And Value: A Means-End Model And Synthesis Of Evidence, Journal Of Marketing, July, pp2-22.

Click Here To View Marketing Dissertation Topics