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Factors influencing brand purchase decisions

Aim of research: In view of the increased level of product development, merchandising and marketing activities for private label branded household paper products by NTUC Fair Price supermarket retailer in the past three years, the main aim of this research is to find out the socio and economic profiles of NTUC customers who purchase house brand household paper products and various factors which influences their brand choice decisions for this product category

1) Key Objectives

The key objectives of this research are to:

Understand the socio-economic and demographic profiles of NTUC Fairprice customers who buy house brand household paper products in NTUC supermarkets in Singapore

Surveying and analysing the responses from pre-determined different customer segments will aid in determining the profiles of customers who buys these products.

Identify and understand the factors influencing their brand purchase decisions on buying house brand household paper products versus national manufacturers’ brands

The factors to be researched will include the following:

the segments of customers who purchase this category

the type of sub-categories and products purchased

reasons for purchasing the sub-categories and products

any variance in buying behaviour for different use occasions

By mapping the respondents’ sensitivities to various elements in the retail and marketing mixes, it will help determine the factors which will influence their purchasing decisions on this house brand category. Knowing the key factors will provide valuable information to NTUC Fair price category and marketing teams on how to tap into the ‘black box’ of the customers’ minds and be able to market appropriately to influence them to start buying or increase transaction and frequency of purchases

Understand the impact of NTUC Fair price household paper products house brands development, merchandising and marketing programs influencing the brand choice decisions of their shoppers . By surveying respondents’ receptiveness and actions towards various merchandising and marketing activities, it will help determine the role these activities play in impacting respondents’ buying decisions

2) Value of the research

The main aims of this research is to provide NTUC Fair price supermarket chain a report out on the social-economic and demographic profiles of customers segments who buy their house brand household paper products, the factors influencing their brand choice decisions and how their merchandising and marketing programs may have impacted these decisions. The report will also include recommendations for the category for the management of NTUC to consider implementing to further build on the category. Secondary aim is to assess any changes in attitudes and buying behaviour towards this category over the past three years

The main value of this research lies in providing NTUC Fair price an understanding of the customer segments and key driving factors which influence their buying decisions on house brand household paper products. Armed with these pieces of information, retailers will be able to improve on their marketing, category development and merchandising programs to effectively reach these customer segments. It will also provide a sense check on whether shoppers are now more receptive to buy these brands over the last three years. This knowledge will help establish the growth potential for these brands and will provide as another valuable source of information for NTUC Fairprice in formulating their strategy for house brands household paper products

The other area of value will be around using the learning and findings on how marketing and merchandising activities may have influenced customers’ buying decisions. Knowing the impact of their merchandising and marketing activities on influencing customer choices will help improve business planning. It will also shed

some light on whether having grocery private label brands help engender customers to retailers’ store brands and build brand/store loyalty.

3) Prior research in this area

A big body of research and journal papers have been written on store brands in European and American grocery retailing. For local context, apart from grocery research conducted by AC Neilsen, KPMG and Interbrand, very little research has been done on local store brands. Prior research in this area included Professors Kusum L Ailawadi & Kevin Lane Keller published paper in Journal of Retailing 80 (2004) on understanding retail branding and how that influences customer perceptions and drive store choice and loyalty. Professor Ailawadi also jointly published papers on analysis and relationship between store brands building store loyalty and whether it is benefiting retailers. Professor Steve Burt in 2000 published a paper in European Journal of Marketing on ‘The strategic role of retail brands in grocery retailing”. His assessment of the evolution of retail brands within British grocery retailing over last 25 years will help us draw parallel lessons on understanding their role and impact upon the company’s strategy and how to develop NTUC Fairprice paper house brands into brands consumers will perceive as equal in attributes to manufacturers’ brands. Professor Kevin Lane Keller focussed his published work on exploring how consumers evaluate brand extensions and methods to examine them in the light of brand management. The published works by Livesey, F. and Lennon, P. (1978), Myers, JG (1967), Rao, T. (1969), Rosen, D.L. (1984) and Cummingham, ICM, Hardy, AP & Imperia, G (1982) also focused extensively on various aspects of consumer perceptions and attitudes towards store brands . Consumer behaviour and marketing strategy books are also available as resource to draw insights for this research work.

4) Methodology to Research

a) Approach of the research

The intention is to use the non probability approach to interview shoppers to understand their usage of supermarkets for their non-food grocery shopping, the marketing mix elements which influence their purchase decisions, their awareness of and experiences with house brand household paper products and NTUC Fair price category activities impacting their perception of this category. Sampling techniques used will be a combination of convenience and judgemental sampling.

The findings from the primary research will shed some light on the factors influencing their perception and receptiveness towards these store brands and consequently, may affect their purchase choices

b) Quantitative and Qualitative Research

It is proposed that quantitative data be collected via a shopper questionnaire conducted through email & personal interviews. Questions will be structured to establish who buys and what motivate them to buy these private label products. There will also be questions probing into social economic and demographics profiles of these customer segments, their category purchases, spend per visit. The degree of influence retailers’ category activities impacting buying choices and building brand loyalty will also be investigated. These findings will aid in post analysis of various variables within the research. The sample of shoppers required for further qualitative data collection will be ‘post-pay’ shoppers interviewed at NTUC stores

Effort will be made to ensure minimal errors at point of data collection but consideration should be given to shoppers who did not participate or submit incomplete questionnaires. Questionnaires will be screened for accuracy and completeness and sampling errors accounted for in analysis and feedback

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