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The Notebook PC Industry in Taiwan: An Examination Of Consumer Perception and Evaluation of Hewlett-Packard
This management project is exploratory research to examine the Hewlett-Packard (HP) brand and the Taiwan notebook PC market. HP is one of major players in this market with a brand identity of 'personalisation, innovation and technology leadership'. This objective of this research is to measure the perception of Taiwan consumers about their brand preferences as well as evaluate the effectiveness of HP's brand communication.
By setting up focus group interviewing with wholesaler sales representatives and potential consumers, this research developed a structured questionnaire to test and analyse consumers' attitudes. The self-administrated questionnaire was conducted online, getting 152 valid samples. It surveyed 20 different attributes of notebook products and brand images to discover consumers' attitudes toward the 4 leading brands in the market- HP, Asus, Acer and Lenovo.
The results of this research indicate that HP was not able to deliver the brand identity with much success and was ranked in a weaker position then Asus and Acer in terms of all attributes expect reliability in the Taiwan notebook market. It also shows that price is not the most important factor for consumers when they choose a notebook.
Instead, much more emphasis is given to quality and function. In chapter 5 of this dissertation, there are some recommendations about HP's future development based on the survey findings. As low price is no longer the most important factor influencing consumers purchasing behaviour, HP should put much more effort on its brand image to create its competitive advantage and expand market share.
Brand Association; Brand Image; Brand Positioning; Brand Preference; Consumer Behaviour; Consumer Perception; Decision Making Process; Hewlett Packard; Loyalty; Marketing Communication
I worked for Hewlett Packard Taiwan from 2002 to 2006 as a partner business manager. In that period, I acquired a lot of knowledge in channel management, both from HP itself as well as its partners. However, as a sales representative from the original vendor, I felt that sometimes I made decisions just following past experiences and the suggestions and advices of others without sufficient insight into consumers. Therefore, to prepare for my next career plan, I view this research on consumer perceptions and the position of HP in the Taiwanese notebook market as important preparation for my ambition to become a product manager.
In helping me accomplish this management project, I would like to extend my thanks to many people for their confidence in me and for their professionalism. Firstly, I want to thank my supervisor, Dr. Steve Henderson for his patient guidance throughout the course of the research. Without him, it would have been difficult to finish this project. Secondly, I want to say thank you to all the friends who were willing to spare their time in helping me conduct the focus group and questionnaire survey.
Their generous help made my research proceed without too many difficulties. Last but not least, I would like to thank my family, for their love, patience and understanding of my prolonged absence from home while pursuing my academic career. With their full support, I have been able to fully focus on finishing this dissertation.
Branding has been discussed for several decades as a way to distinguish the products of one producer from others. In increasingly competitive markets, powerful brands become essential to achieve the sustainable development of business. There are a number of views related to brands that are dominant in the literature and in the way that brands have been approached. Traditionally, brands were seen as symbols, and that was reflected even in the definition of brands expressed by the American Marketing Association (2008).
In other words, brands were mainly regarded as transaction facilitators, far away from the relationship marketing perspective. Brands were also considered as the producer's property. It was implied that the producer is mostly responsible for the communication of the brand, brand related activities, and brand reputation over the long run (Veloutsou 2008).
Today, brands are compound entities and their expression includes the perception of the product characteristics, personality and values. It is acknowledged that they could be perceived differently by various corporate stakeholders. Accordingly, terms "brand identity" (the intended perception brand developers would like the brand to have) and "brand image/ brand reputation" (how it is perceived by the target audiences) have been developed.
Therefore, brands can be the relationship builders (Veloutsou 2008). Actually relationship marketing for fast moving consumer goods relies to a great extent on brands to help in the development of the consumer-firm relationship (Kapferer 2004a; Selame 1993). According to Selame (1993), the function and predominance of brands in the fast-moving consumer goods market is uncontested. Most marketing executives in such industries would not even think to question the importance of brands.
As well as the fast-moving consumer goods market, the high-tech industry sees a use of branding (Kapferer 2004). As Zajas & Crowley (1995) point out, until the end of the 20th century, the use of brands in marketing high-technology products was minimal. All too often, marketing executives who oversee computers and other high-technology products manage their product lines or marketing mix activities with little consideration for the development of long-term brand recognition. This brings a problem when greater emphasis is given to a product's features than to the positioning of its brand-name (Zajas & Crowley 1995; Kapferer 2004).
Taiwan's Notebook Personal Computer Industry
As a result of the increasing transition of consumers from desktop PCs to notebook PCs, Taiwan's Notebook PC market showed considerable growth in terms of shipment volume. In 2007, 90,165 thousand units were shipped with annual market growth rate reaching 42.1%. MIC (2008) projects that Taiwan's notebook PC market will maintain double digit growth until 2011.
There is manufacturing competitiveness of Taiwanese notebook personal computer industry during its developing stages of the original equipment manufacturers (OEMs), original design manufacturers (ODMs), and original brand manufacturers (OBMs). A number of trends are affecting the cost of components and materials used to manufacture PCs. The rising cost of oil, China's newly enacted labour law (which has increased the cost of assembly labour), reduced tax incentives and the appreciation of the Renminbi (RMB) against the U.S. dollar are challenging the PC manufacturing ecosystem's ability to maintain profit margins. Currently, profits run at about 5%. The top ODMs of notebook PCs have stated that they are unable to absorb the increased costs and plan to pass them on to clients (Tsai 2008).
On 21 May 2008, Simon Lin, chairman of Wistron, told Taiwan's Digitimes that Wistron would raise contract manufacturing prices. This follows similar statements in recent weeks from Compal and Quanta. Gartner (2008) has confirmed the disclosures with all three companies which controlled more than 69% of worldwide notebook PC production in 2007 (refer to Table 1-1). It is the first time these three have attempted, almost simultaneously, to raise prices, even at the risk of losing orders. However, the group carries some weight, which will likely strengthen their position in negotiations with vendors such as HP and Dell.
Due to challenges to their competitive advantages, Taiwanese hi-tech enterprises have to consider whether to stay in the OEM field or develop their own brand marketing strategies. Some corporations choose to specialise in the OEM such as Hong Hai Precision Industry Co. Ltd. (Foxconn) and Taiwan Semiconductor Manufacturing Company Limited (TSMC). On the other hand, several firms, including Acer, Asus, and BenQ, recognised the importance of their own brands and have switched their investments and endeavours towards high value-added activities such as research and development, product innovation, and brand building (Chen et al 2007).
The goal of all these development strategies is to strengthen competitiveness under the increasing pressure of the changing world environment (Tsai & Hung 2007). "At most Taiwanese companies, profit margins on sales of branded computers are roughly five times higher than on sales of computers and parts to resellers like HP and Dell", said Jerry Shen, Asustek's chief executive officer (2008). Taiwanese contract manufacturers such as Micro-Star Internal, Clevo, and Asustek (Asus) have started to market their own notebook PC brands through leveraging their manufacturing strengths, a trend that has increased competition across the industry (Simons 2008).
Based on the information mentioned above, worldwide brands such as HP and Dell are facing keen competition in the notebook PC market, especially in Taiwan. The IDC report, as summarised by Chinatimes (2007), showed that the notebook market share of local brands Asus and Acer accounted for 33 percent and 32 percent respectively, followed by HP with 12 percent and Lenovo with 7 percent in the 2007 third quarter. In 2008Q1 Asus and Acer, gained over 69% of Taiwan's notebook PC market share, including new product line 'Ultra Low-Cost PC' such as Asus's Eee PC products whereas HP and Lenovo remained in the 3rdand 4thplace (Apple news 2008)
Overview of HP
HP is a leading PC manufacturer, with an approximately 5.6% share in the global hardware market in 2006. It is a provider of personal computing and other access devices, imaging and printing related products and services, and enterprise information technology infrastructure, including enterprise storage. It operates its hardware business through three business units: Enterprise Storage and Servers (ESS), Personal Systems Group (PSG) and Imaging and Printing Group (IPG) and services individual consumers, small- and medium-sized businesses and large enterprises, including the public and education sectors (Hewlett-Packard 2008a).
During the three-year period, 2005-2007, its revenues grewat a Compound Annual Growth Rate (CAGR) of 10%, mainly due to increases in sales volume of personal systems in consumer and commercial markets. The PSG segment showed significant top line growth of 24.8% to $36,409m, and accounted for 43.5% of total hardware revenues in the fiscal year 2007. Increased sales volume of notebook PCs, particularly in emerging markets, contributed to higher revenue growth during the year (Business Insights 2008).
HP remained the leader in the notebook PC market for the seventh consecutive quarter, maintaining an almost 2 million-unit lead over second placed Dell. In the seasonally slow first quarter of 2008, HP also managed to increase their market share Q/Q in five of six regions. Dell was less successful in Q1'08, increasing share Q/Q in only two regions. Like HP, third placed Acer posted Q/Q shared gains in five of six regions. HP was market leader in three of six regions, and in the fast-growing APAC market, closed to within a few thousand units of Acer.
From a brand value perspective, The Interbrand's (2007a) annual ranking of the Best Global Brands, in co-operation with BusinessWeek magazine ranked HP is number twelve of the world's 100 top brands and number five of the technology brands (Table 1-3). HP has gained 9% in brand value since 2006, following a 10% slide from 2004 to 2005 (Kiley 2007). Kiley (2007) pointed out credit should go to CEO Mark Hurd, who told his subordinates that Hewlett-Packard Co. had to stop building and marketing the PC as if they were a commodity. Designing PCs that consumers actually want was the starting point.
The marketing team then went about pitching HP PCs as a personal reflection of consumers' desires and needs. Hence the slogan: "The computer is personal again." was created (Appendix C). Last summer the company rolled out ads showing hip-hop mogul Shawn "Jay-Z" Carter mixing music and planning tours using an HP notebook PC (Interbrand 2007c) and using self-made ads by celebrities such as Serena Williams, Petra Nemcova and Jean-Michel Gondry even though HP did not pay these people for these ads (BusinessToday 2008).
The objective of the campaign was to grow a more profitable worldwide business through the introduction, support, and marketing of innovative products, services, and solutions that will deliver the absolute best customer experience in personal technology. The campaign was targeted at users aged between 18 and 34 and small to medium-sized companies.
Besides, HP delivered images related to innovation and technology leadership via both press and the Internet. The company first employed the innovative imprint technique for notebook PCs, which is a casing design created by advanced moulding techniques that integrate a hard-coat surface using a film transfer process. According to Hewlett-Packard's (2008b) publicity, not only does the HP Imprint look fabulous, it is also more durable than traditional paint. HP intended to convey the message about personalisation, innovation and technology leadership to communicate with the public. Rising sales and market share show that customers seem to have had a favourable for reaction for HP notebook PCs.
However it is difficult to know how consumers choose between the top four notebook PCs brands, namely Asus, Acer, HP and Lenovo. Consequently, this research aims to take a fresh look at consumer preferences, with a particular focus on HP because it is one of the most successful brands facing particular competition in Taiwan. Of particular interest is to understand how the HP brand image can help to promote it position in the market place, and what influence this has on consumers' preferences.
This research examines consumers' perception and evaluation of the HP brand and makes a comparison with other three major brands in order to get a better understanding of brand strength and preference. There are three objectives in this research to help achieve the overall aim.
Firstly, to understand key research issues by a literature review. The literature search will establish the main issues in this field to set the right direction for the study
Secondly, to find out consumers' brand preference among the four main players in Taiwan's notebook PC market by carrying out questionnaire.
Finally, to identify and evaluate consumer perceptions of HP's existing brand identity and communication methods.
This study aims to provide significant data to support the selected topic. As DisplaySearch (2008) analysis indicates the increasing transition of consumers from desktop PCs to notebook PCs is having a direct impact on brands' growth and market share, and as such the competition in the Taiwan notebook PC market is becoming increasingly intense. HP, one of the most successful and global notebook PC brands, currently operating in over 170 countries (Hewlett-Packard 2008a), needs to expand its market and succeed in Taiwan's notebook PC market. Brands with established enterprise and retail presences have had the most success in growing market share in the past several quarters.
HP promotes its brand with the slogan "the computer is personal again", trying to emphasise personalised, advanced technology, together with an image of innovation image in order to gain worldwide market share. However, it seems these efforts are not working in Taiwan as effectively as in other regions. Therefore, HP struggling in the Taiwan market and facing increasingly strong international and local competitors in this market, does the brand identity which demonstrates 'personalisation, technology leadership and innovation' really helps HP win the fierce competition in Taiwan market? And how HP can influence consumers' attitude to improve HP's competitiveness in Taiwan?
To this end some of the following questions will be part of the survey:
1. What are most important factors when consumers choose notebook brands?
2. How do consumers respond to HP brand identity?
3. What do consumers think about HP brand communication methods?
4. How do consumers position HP compare with three other brands?
The dissertation is structured as follows. The introduction chapter is the overview of topic, industry status and research case objectives and goes in detail about the research work towards revealing consumer perceptions of brands. Chapter two is a literature review focusing on theories from concepts in branding discipline, consumer behaviour and marketing communication related to the notebook PC industry. Chapter three describes research methodology including research philosophy, research approach and strategy, the questionnaire design, and data collection. The fourth chapter consists of the research findings, where the empirical date is interpreted and discussed. The final part gives general conclusion as well as recommendations to HP, limitations of this study and directions for future research will also be presented.
Consumer Behaviour Definition
Arnould et al (2005) define consumer behaviour as the psychological and social processes that individuals or groups undergo in the acquisition, use and disposal of products (for example, notebook PCs), services (for example, professional software installation), ideas (for example, spiritual beliefs) or experiences (for example, travelling) and suggest that concept of the circle of consumption results in the marketing opportunities (see Figure 2-1).
Understanding acquisition is very important to marketers and requires an understanding of the other phases where these links influence consumer beliefs, value and attitudes (Arnould et al 2005). Consumer behaviour is examined from market perspective that focuses on a particular brand and how to induce people to buy that brand whereas other academic researchers study consumer behaviour from behavioural and social sciences perspectives that emphasise an understanding and explanation of why, what and how people buy (Bagozzi et al 2002).
Moreover, consumer behaviour is a division of human behaviour (Bagozzi 2002). Human behaviour refers to the process in which the individual interacts with his/her environment. This perspective tends to emphasise consumer behaviours and practices that help to organise our understanding of phenomena such as consumption rituals, myths and symbols as well as contribute a concern with the meaning and significance of consumption. Walters (1974) suggests that consumer behaviour concerns specific types of human actions that have a direct relation to the purchase of goods and services from organisations.
The Use of High Technology
It is necessary to know how people use high technology and what they intend to use it for by reflecting on the development of the high technology industry (Hamann et al 2007). Inventions such as the motor car provided products and were created to satisfy the real needs of people during the industrial age (Tomkins 2005). However, as life becomes busier and more stressful, people are forced to adapt the newest features offered by high technology continuously in all areas of their lives, even though they might not fully understood what it can do to help them (Kallaman & Grillo 1996).
This adaptation process is based on the evaluation of meaningful attributes that support a consumer's beliefs, resulting shifts in a consumer's frame of reference and evaluation criteria derived from the constantly changing environment, which makes it impossible to define a general pattern of purchasing behaviour (Hill 2003; Jiang 2004). Nowadays consumers expect convenience, quality and service in a product which is made available at anytime and at any place (Yelkur 2000; Winkler 1999; Silverhart 2004). Furthermore, people may adopt high-technology in order to remain in a particular social group or to join one they want to belong to (Kim et al 2001; Haughey 2004).
Hamann et al (2007) define 'consumer electronics' as electronic equipment intended for everyday use, which usually finds its application in entertainment, communications and office productivity technology such as mobile phones, digital cameras and notebook PCs. As the high-technology industry increased the speed of its development and started to increasingly focus on particular consumer segments and individual needs, people become more ready to accept technological innovations (McDaniel & Gates 2002). For example, radio attracted 50 million listeners within 38 years of its invention and television required thirteen years to reach 50 million viewers, yet it only took the Internet four years to gain 50 million users (Temporal & Lee 2001).
The connection with brands and the problem of providing a unique selling point (USP) in current markets becomes a critical issue in this context, resulting in a shorter product life cycle (PLC), which has been reduced to a matter of weeks from what used to be years (Zajas & Crowley 1995; Winkler 1999; Temporal & Lee 2001). However, the most important change can be seen in the increasing adaptation of a mass-customisation strategy (Jiang 2004). The new toys produced by high-technology companies, such as the iPod and the Sony Playstation Portable (PSP), deliver apparently unique benefits to consumers, based on their image and preference match (Tomkins 2005; Klein 2000; Temporal & Lee 2001). In order to build an effective branding strategy for current markets, it is therefore necessary to investigate consumers' reasons behind buying high technology.
The Consumer Decision Making Process
'Decision making' is defined as a balanced combination of emotional and rational elements used to keep on looking for alternatives, to make a purchasing decision, or to get off the idea to buy entirely (Schiffman & Kanuk 1994; Witt & Meyer 2004; Hill 2003). Furthermore, the decision making process (refer to Figure 2-2) is a series of steps a consumer or an organisation may go through before choosing a brand or a product (Blackwell & Engel 2005; Jobber & Fahy 2003; Solomon M. et al 2002; Jobber 2007).
This decision making process will be definitely influenced by consumer characteristics (Phillips & Sternthal 1977; Wang et al 2008). Solomon et al (2002) suggest that consumer characteristics can be divided into two factors: demographic and life-style. In this research, some of the important elements of each factor appear in the questionnaire. Table 2-1 maps out the contents of each factor.
A key determinant of the extent to which consumers evaluate a brand is their level of involvement which means the degree of perceived relevance and personal importance accompanying the brand choice (Blackwell & Engel 2005). Jobber (2007) demonstrates that computer purchases are an example of high involvement decision making in Ajzen & Fishbein's (1980) model (refer to Figure 2-3), which suggests that an attitude towards a brand is based on set of beliefs about the brand. High-involvement purchase models have proven more robust in predicting purchase behaviour than low-involvement purchases (Budd & Spencer 1984; Farley et al 1981; Shimp & Kavas 1984). Thus, investigating consumer attitude can be helpful in understanding consumers' purchasing intensions.
Effect of Consumer Attitude/Preference
As we have stepped into the 21st century, the role of attitude has become increasingly important in influencing all aspects of consumer behaviour (Malhotra 2005). During the consumer decision process repeated, consumers have a kind of attitude to purchasing, such as beliefs, opinions, inclinations or biases, called consumer attitude that affects their decision making. More important these attitudes can be influenced and changed if the organisation adopts an effective communication strategy (Goldsmith et al 2000; Haugtvedt et al 1994; Brown & Stayman 1992).
Many studies identify the construct of attitude towards a brand as one of the most important determinants of consumers' behavioural intentions (Fishbein & Ajzen, 1975; Laroche et al 1996). Belk (1988) and Sirgy (1982) conclude the self-congruence theory explaining how consumers evaluate products to match their self-image. Ekinci & Riley (2003), Graeff (1996) and Hong & Zinkhan (1995) further suggest that a higher congruence between self-image and product image would positively prompt consumers' attitudes or behaviour regarding brand attitude, brand preference, repurchasing intentions, product purchase decisions, and consumer satisfaction.
Ahluwalia et al's (2000) research shows that customers who have a positive attitude towards a brand (high commitment) would counter-argue negative information related to the brand and support the positive information. High commitment customers relate brand loyalty and advocacy with positive information about their favoured brand. Accordingly, low commitment customers give more weight to negative information than positive information because they perceive it to be more diagnostic.
There are a number of factors which result in a consumer's attitude to change including the nature of product change, strength of attitude towards the product, stored information about the product, product importance and communication. Based on these factors and research findings, discussion and recommendation will be introduced in the chapter five, mainly directed at possible changes in communication and perceptions in order to make the HP notebook brand more competitive in the Taiwanese market.
Otherwise, the current research will provide some initial and exploratory insights into how notebook consumers perceive the different notebook brands in the Taiwanese notebook market. The survey questionnaire that examines consumer perceptions can be found in appendix B, and discussion on the main research findings are introduced in chapter four.
A brand is a distinguishing name or symbol (such as logo, trademark or package design) aimed to identify the goods or services of either one seller or a group of sellers, and to differentiate goods or services from those of competitors (Ghodeswar & Luang 2008). Thus a brand signals to the consumer the source of the product and protects both the customer and the producer from competitors who would attempt to provide products or services that seem to be identical (Aaker 1991).
Weilbacher (1995) argues that brands provide the main upon which consumers can identify and associate with a product or service or a group of products or services. From the consumer's point of view, a brand can be defined as the total accumulation of all his/her experience. In other words, the brand is built up from all points of contact with the consumer (Kapferer 2004). A successful brand is an identifiable product, service, person or place, extended in such a way that the buyer or user perceives relevant, unique added values which match their needs most closely (Chernatony & McDonald 1998).
Branding in high-tech markets is also gaining increasing attention, since there is general consensus that branding becomes more important when high-tech products become accessible to mass consumers (Schoenfelder & Harris 2004; Pettis 1995; Reddy 1997; Ward et al 1999). Successful brand building can not only strengthen a producer's competitive position to withstand the increasing power of retailers (Park & Srinivasan, 1994) but also bring advantages such as defending against competitors and building market share (Adams 1995). When the term "brand equity" is used in marketing functions it means brand description or brand strength, which is sometimes referred to as 'consumer brand equity' to distinguish it from the accounting asset valuation meaning (Wood 2000). A better understanding of brand equity measurement is essential for an enriched operation of brand management (Pappu et al 2005).
Pappu et al (2005) established a multi-dimensionality of consumer-based brand equity, consistent which is the conceptualisation of Aaker (1991). The overall results of the confirmatory factor analysis confirmed that consumer-based brand equity was a four-dimensional construct including brand awareness, brand associations, perceived quality and brand loyalty (Pappu et al 2005; Cobb-Walgren et al 1995; Zajas & Crowley 1995). Washburn & Plank's (2002), Yoo & Donthu (2001, 2002) and Yoo et al. (2000) developed a consumer based brand equity measure based on Aaker's (1991) and Keller's (1993) conceptualisation but combined the dimensions of brand awareness and brand associations into one.
Nevertheless, Wright et al (2007) discussed research issues concerning data collection, timing and measures of brand performance for the PC market and emphasised that it is important that the term "brand equity" is clearly defined and enjoys organisational consensus and perceived validity given the objectives and strategy for PC brands and the dynamics of the marketplace. There is no agreed measure of brand equity just as there are different measures of the various aspects of a brand. An important issue is how management finds it useful to define and use the term "brand equity".
Brand awareness is regarded as an important notion in consumer behaviour, especially in terms of its implication to brand equity, which can be referred to as the value a brand name adds to a product. Keller (1993) declares that brand awareness is reflected upon consumers' ability to recognise the brand under different circumstances. He suggests two basic approaches to measuring brand awareness. One is brand recall that relates to consumers' ability to retrieve the brand when given the product category, the needs fulfilled by the category, or some other type of hint. Another is brand recognition that relates to consumers' ability to confirm previous exposure to the brand when given the brand.
Laurent et al (1995) also propose three classical measures of brand awareness in a given product category: (1) Spontaneous awareness: consumers are asked to name the brands they know without any cue, even if only by name, in the product category. The spontaneous awareness of brand X is the percentage of interviewees indicating they know the brand; (2) Top-of-mind awareness: using the same question, the top-of-mind awareness of brand X is the percentage of interviewees who name brand X first; (3) Aided awareness: brand names are showed to interviewees; the aided awareness of brand X is the percentage of interviewees who mention they know the brand.
Laurent et al (1995) point out that for a leading brand, its aided awareness score may be extremely high, not allowing for detections of temporary changes; such changes may be more visible in a spontaneous awareness question. Conversely, if one is interested in a minor or start-up brand, one can be sure that its spontaneous score will be very low, maybe a few percent, not allowing for a very sensitive measure of evolution; its aided awareness will be more sensitive, and therefore more able to detect progresses in brand awareness. In this research, we are going to brand awareness for the four top laptop manufactures with both spontaneous and top-of-mind techniques to explore HP notebook's brand awareness in comparison with three other brands.
Brand awareness plays an important role in understanding the consumer decision-making process. Many researchers assert that brand awareness has a significant effect on brand attitude and encourages consumers to consider products and services of that brand when purchasing (Brown & Stayman 1992; Keller 2003; Macdonald & Sharp 2000; Yoo et al 2000).
MacInnis & Nakamoto (1990) refer to brand-specific association as an attribute or benefit that differentiates a brand from competing brands. Aaker (1990) argues that brand associations are the categories of a brand's assets and liabilities that include anything 'linked' in memory to a brand. Accordingly, brand associations facilitate consumers to process, organise and retrieve information and thus assist them in making purchase decisions. Understanding consumers' perceptions of brands is complex because the multi-dimensional constructs of brand associations are very similar to each other (Aaker 1996; Keller 1993).
Wuk Kwun & Oh (2007) explain that brand strength as brand characteristics that make consumers more or less inclined to the brand whereas Srivastava & Shocker (1991) refer to brand strength as the set of associations that allows the brand to attain a sustainable and differentiated competitive advantage. A constructive brand attitude undergoes a cognitive-affective-cognitive process and is prominent in the information processing and decision-making process (Lutz 1975; Rosenberg 1956).
Generally speaking, brand strength has been conceptualised in terms of consumers' brand beliefs and attitude, generally defined as overall evaluations of a product or brand. According to Aaker (1990), consumers' overall attitude toward a brand is the centre of many conceptualisations of brand strength as well as the basis of brand associations. Marketers take advantage of brand associations not only to position, differentiate and extend brands, but also to create positive attitudes and perceptions toward brands.
However, high-tech corporate brands are rarely the basis of brand research (Schoenfelder & Harris 2004; Chen 2001). Chen (2001) summarises past research on brand association and categories it into two types- product associations and organisational associations. Product associations can be divided into functional attribute associations (such as product attributes, perceived quality and functional benefits) and non-functional attribute associations (such as symbolic association, emotional association, price (value), user (usage) situation and brand personality (Yoo & Donthu, 2001; Pappu et al 2005).
Organisational association can be grouped into corporate ability associations and corporate social responsibility associations (Chen 2001; Pappu et al 2005). Corporate ability associations are those associations related to the company's expertise in producing and delivering its outputs such as the expertise of employees, superiority of internal research and development, and the resulting technological innovation, manufacturing expertise, customer orientation, industry leadership and so on.
Corporate social responsibility associations reflect the organisation's status and activities with respect to its perceived social obligations, which are often unrelated to the company's abilities in producing goods and services, and usually focus on environmental friendliness, community involvement, and cultural activity sponsorship or increases in visible support of social causes through cause-related marketing and so on.
Nevertheless, not all associations for a brand are equally important to the every brand (Chen 2001; Schoenfelder & Harris 2004). Three different product categories including PCs, printers and athletic shoes in Taiwan were researched by Chen (2001). The research shows that corporate social responsibility association was nearly absent across the three brands, and in contrast to Brown & Dacin's (1997) study, found core associations were corporate ability association, functional attribute associations and non-functional association. Furthermore, the more associations the consumer has of the brand, the greater his/her ability to recall the brand from memory. From whole view of brand marketing, marketers can influence these associations in many ways (Chen 2001).
Schoenfelder & Harris (2004) explore reactions of different consumer segments to technological brands (specifically the mobile phone market) to draw inferences and build more effective brand strategies. The findings reveal three shared key dimensions of brand association that are related to this type of market including functionality, image & style, and credibility & intimacy. The evidence shows that perceptions of company 'credibility' are based on experiential and emotional associations rather than rational ones. This is not accordingly acknowledged in existing brand literature which indicates credibility usually comes from expertise and competence (Brown & Dacin 1997). Consumers are often unwilling or unable to distinguish brands by rational attributes only while technologies mature and product features become more similar, (Temporal & Lee 2001).
Aaker (1991) defines brand loyalty as 'the attachment that a customer has to a brand'. Oliver (1997) defines brand loyalty with an emphasis of the behavioural dimension as 'a deeply held commitment to re-buy or re-patronise a preferred product or service consistently in the future, despite situational influences and marketing efforts having potential to cause switching behaviour'. However, Rossiter & Percy (1987) argue that brand loyalty is often characterised by a favourable attitude towards a brand and repeated purchases of the same brand over time, which is conceptualised based on an attitudinal perspective.
For example, Chaudhuri & Holbrook (2001) compare that the definitions of brand loyalty based on behavioural perspectives emphasise the consumer's actual loyalty to the brand as reflected in purchase choices (such as hard-core loyalty, repeat purchase probability, etc.) whereas the definitions based on an attitudinal perspective stress consumer intentions to be loyal to the brand (such as brand preference, commitment, or intention-to-buy) (Hsieh & Li 2008; Yoo & Donthu 2001).
In respect of behaviour, consumer loyalty has been measured as probability of the long-term choice for a brand (Jeuland 1979; Carpenter & Lehmann 1985). Nonetheless, Day (1969) has suggested that a behavioural definition is insufficient because it does not distinguish 'true loyalty' from 'fictitious loyalty' as a result of a lack of available alternatives for the consumer, for example. In response to these criticisms, researchers have suggested measuring loyalty by means of an attitudinal dimension besides a behavioural dimension (Jeng 2004; Pappu et al 2005).
There are many advantages of higher consumer loyalty for a company. Firstly, it can demand relatively higher prices compared to its competitors since higher consumer loyalty implies a higher market share and a higher bargaining power (Chaudhuri & Holbrook 2001). Secondly, the increased consumer loyalty can help lower marketing costs, allure more consumers, and effectively operate trading leverage (Aaker 1997).
Furthermore, loyal consumers multiply positive word-of-mouth promotion and resist competitors' strategies (Dick & Basu 1994), resulting in higher corporate profits (Fornell & Wernerfelt 1988; Reichheld et al 2000). We can say that an organisation's most reliable success indicators are loyalty factors (Zeithaml et al 1996). Consequently, developing, maintaining, and enhancing consumer loyalty toward a company's products or services is generally regarded as the core thrust of marketing activities (Dick & Basu 1994).
Product and Service Quality
Quality has been identified as one of the most important factors related to the brand strength. According to previous studies (Jacobsen & Aaker 1987; Zeithaml 1988), the perceived quality of products and services is central to the notion that strong brands add value to consumers' purchase evaluations. Additionally, Aaker (1996) states that perceived quality is a basic measure of the impact of a brand identity. Quality is one of the most influential factors in purchase decisions process and is the most closely relevant in overall brand attitude (Aaker 1990; Smith & Park 1992).
Quality is a multi-dimensional conceptualisation and consumers may build and process brand associations differently according to dimensional characteristics. For the purpose of the current study, however, we examine the overall quality of a notebook brand in two dimensions: service and product quality. Although the service quality literature further suggests that service quality can be conceptualised into multiple constructs, it is beyond the scope of this study. In this study, the conceptualisation of quality into two dimensions mostly follows recent studies that revealed high quality of both services and products enhances brand image (Nguyen & LeBlanc 1998; Wang et al 2003; Zins 2001).
The reputation associated with a brand name is nearly in relation to the perceived quality of the product or service (Aaker & Keller 1990; Shapiro 1983; Zeithaml 1988). Moreover, Yoon et al. (1993) suggest that a company's or brand's reputation can be communicated effectively to its target audiences by high quality of its products or services. Tellis et al (2008) investigate nineteen categories in the high-tech market and indicates that markets are generally efficient resulting from both quality and network effects influencing market share flows. Not surprisingly, market share leadership changes often. They concluded that switches in quality leadership is nearly followed by switches in share leadership since the best quality brands dominate the market and network effects increase the positive effect of quality.
However, Hamann et al.'s (2007) research reveals that quality has actually become less important in consumer purchasing decisions for high-tech products. Consumers seem have become used to similar levels of performance among products reaching industry standards. An emotional sense of belonging and prestige are the outstanding factors.
A favourable reputation or image of a brand has been conidered a valuable competitive advantage for a company (Wuk Kwun & Oh 2007; Ind 2003). Kotler (1991) defines brand image as "the set of beliefs held about a particular brand", while Aaker (1996) and Keller (1993) refers to brand image as a set of associations held in consumer memory, organised in some meaningful way ,and should be unique (exclusive), strong (salient), and positive (desirable) (Kapferer 2004b).
There is a school of literature regarding brand image as being directly related to the product category. According to Martinez & de Chernatony (2004), there was a protocol created by Low and Lamb (2000) for assessing brand image based on the product category which has been employed in different ways in various studies (Hogg et al 2000; Hsieh 2002; Faircloth et al 2001). These studies have established that not only physical attributes of products but also the emotional, functional and self-expressive benefits. The method of measuring brand image by physical, functional and emotional attributes will be used to what refer to as product brand image in this project.
As to business, this development demands strong brands, which gain people's trust while offering perfect solutions to consumers. In fact, many successful companies founded in the past, such as Coca Cola, managed to establish a strong brand in the consumer's mind and become market leaders in their own market segment. Similarly, brands in the high-technology industry follow the same rule (Hamann et al 2007).
The image of a strong brand always provides something that could not be copied easily (Keller 2003). As a result, names like Hewlett Packard, Sony, Toshiba, IBM, or Apple are well known and the products of those companies have enjoyed a high perception of quality and reliability (Hamann et al 2007). However, the product ranges of high-tech companies have become diversified so that brand has become diluted. As a result, companies have made efforts to develop a brand image that builds up a positive synergy
between the brand and its products. (Lindstorm 2003).
Many studies reveal a positive relationship between a favourable brand image and performance. Fombrun & van Riel (1997) indicate that brand reputation which represents the brand's performance is a stable construct that stands for the essence of multiple images over time. Moreover, Fishbein and Ajzen (1975) argue that every brand is expected to have its own descriptive characteristics that shape an image over time. Oh (2000) and Chaudhuri (2002) report that important antecedents of customer value and behavioural intentions were brand effect, such as brand reputation.
It is common to distinguish brands based on their positioning. Positioning a brand means stressing the distinctive characteristics that make it different from its competitors. As a result, brand position reminds us that consumer choices are made on the basis of comparison. Positioning is a two-stage process: first, indicating to what category the brand should be associated and compared with (association phase); second, indicating what the brand's essential differences are in comparison to the other products and brands of the category (differentiation phase) (Dickson & Ginter 1987; Sujan & Dekleva 1987; Kapferer 2004b; Punj & Moon 2002).
.There are two positioning options provided by Punj & Moon (2002). Exemplar-based positioning attempts to demonstrate brand consideration through direct comparisons with the market leader or other major brands to associate with the brand chosen as the exemplar, facilitating the entry of the advertised brand into the consumer's consideration set.
In contrast, abstraction-based positioning is also to achieve brand consideration but without direct comparisons with the market leader or a major brand (Punj & Moon 2002). In the latter instance, Miniard et al (1993) argue that consumers are more likely to refer to standard ''constructed'' from memory about the attributes of the product category, because no brand comparison is provided or encouraged by the advertiser.
In Punj & Moon's (2002) research, choosing between two positioning options should be driven by a knowledge of how consumers categorise (identify and evaluate) brands with the processing of brand level information including product market definition (Srivastava et al 1984), structure of market and competition, history of industry organisation and market share condition (Carpenter et al 1994; Dickson & Ginter 1987), the product category's life cycle stage (Kardes & Kalyanaram 1992) and product knowledge (Alba & Hutchinson 1987; Bettman & Sujan 1987).
It is being challenged that, from traditional assumption, consumer preferences is predetermined. Conversely, it may be possible to mould consumer preferences, particularly in fragmented and information-rich markets. Carpenter et al's (1994) study which researched on product differentiation also suggests that consumer preferences can be shaped based on the information provided to consumers. Thus, it may be better to adopt a proactive stance by attempting to influence consumer preferences through a positioning strategy, rather than reactively responding to them (Punj & Moon 2002).
The perceptual map is a useful tool for determining the position of a brand in the marketplace. It is a visual representation of consumer perceptions of a brand and its competitors using attributes (dimensions) that are important to consumers (Jobber 2007). The key steps in developing a perceptual map are as follows.
Identify a set of competing brands.
Identify important attributes that consumers use when choosing between brands using qualitative research.
Conduct quantitative marketing research where consumers score each brand on all key attributes
Plot brands on two-dimensional maps.
This method will be employed in this research.
Integrated Marketing Communications
Integrated marketing communications (IMC) emphasise the benefits of dominating synergy across multiple media to build brand equity of products and services. Researchers and practitioners have embraced the concept and it is now firmly embedded in marketing strategy. The American Association of Advertising Agencies (Schultz 1993) defines IMC as follows:
A concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines - for example, general advertising, direct response, sales promotion, and public relations- and combines these disciplines to provide clarity, consistency, and maximum communications impact.
The basic premise of the IMC approach is that, through the coordination of marketing communications efforts, the firm can reach diverse audiences with a consistent message, thus resulting in optimal market coverage and greater impact on the target market for the least amount of investment. Wright et al (2007) indicate that a global brand has perceptual aspects related to the minds of its users or customers where successful brand communications relay messages about specific qualities and characteristics such as product reliability, status, sophistication and elegance (see Czerniawski & Malo 2000).
The "brand knowledge" (Keller 2003) consists of brand awareness (recognition and recall) and brand image (associations held mentally by customers). Any product that is sold under the umbrella of a brand name will develop an identity that is based on a customer's experience of the product, marketing activity, word-of-mouth and the customer's individual psychological set. Hence a brand is not real in any absolute sense but a psychological construction based on the inputs mentioned above (Ries & Trout 1993).
But how is it possible to integrate the marketing communication mix? Marketers may choose to employ any combination of advertising, personal selling, word of mouth, publicity, sales promotion or any other tool that gains attention, creates awareness and develops an image dependent upon the objectives and the specific response required (Pitta et al 2006).
Building awareness requires effective advertising and public relation, while brand switching requires some kind of integrated sales promotion initially supported by advertising or direct mail. And also the usage of advertising and sales promotion sometimes can be designed to create a database which allows dynamic dialogue and relationships to be nurtured. Clearly all these issues need to be taken into consideration when developing an effective communications strategy.
Besides traditional communication tools, innovative marketing such as event marketing and internet marketing (e-communication) has been also integrated into marketing communication (Pitta et al 2006; Smith & Taylor 2004). Exhibit marketing is the most cost-effective means of reaching customers and prospects. It reduces the buying cycle and it allows companies to reach hidden buyers (Pitta et al 2006). This is a popular marketing tool for consumer electronic products including desktop, notebook and digital cameras in the Taiwanese market.
One industry expert called a trade show a four-day "bricks and mortar retail store" where customers could enter, learn about products and perhaps even buy. Most important, though, is that it can reduce the cost of a sale by as much as 75 percent (Weisgal 1999). To be successful, exhibit marketing must be firmly integrated within the IMC process and the company's marketing strategy.
Relationship marketing is significantly important in the Taiwanese market. IMC is not the same as relationship marketing, but it is an essential part of a relationship marketing strategy (Duncan & Moriarty 1999). If relationship marketing is to be successful, an integration of all marketing communications messages is required to establish, maintain and enhance relationships with customers and other stakeholders. To achieve effective communication, relational (active or a passive) and transactional modes of relationship with consumers require different approaches to communication (Gronroos 2004).
This chapter introduces the methodology used in the research. It is based on the research objectives and requirements derived from the overview of the Taiwanese notebook PC market and the HP brand as well as the literature review. The research philosophy and strategy are first introduced, followed by data collection, questionnaire design and research sample.
Research philosophy is the way that researchers think about the development of knowledge (Saunders et al 2003). There are two views of the management research process: positivism and phenomenology. Positivism believes in the generalisation of research that aims to capture the rich complexity of social situations whereas phenomenology agues that a given business situation is complex and unique and generalisation is not of crucial importance.
The philosophy of this research is a mixture of the two. It is focused on trying to understand consumers' preference among the four main notebook PC brands in Taiwan and exploring whether these preferences were influenced by HP's branding and communication strategy. In reality these perceptions reflect large scale social and psychological factors as well as the influence of the marketing communication tools. Without awareness of brand strategy, people do not realise how marketing communication can influences their perceptions of brands or their behaviour in purchasing products and services.
Research Approach & Strategy
Multi-method approaches are employed here including case study and survey. Robson (1993) defines case study as the development of detailed, intensive knowledge about a single case or a small number of related cases. Surveys allow the collection of a large amount of data from a sizeable population in a highly economical way (Saunders et al 2003). In this research, we conducted a consumer perception and attitude survey in Taiwan, especially focusing on HP. There were two different types of methods used. One was qualitative and another one was quantitative.
Saunders et al (2003) indicate that the qualitative approach is mainly concerned with describing events, persons and so on, both scientifically and without the use of numerical data, usually through interviews and observation methods. On the contrary, the quantitative approach is 'objective in nature and concentrates on measuring phenomena' (Collins & Hussey 2003), involving collecting and analysing numerical data and applying statistical tests.
Thus, its concern with 'measurement' and 'objectivity' place quantitative research firmly within a positivist tradition. In comparison with quantitative methods, a qualitative approach is more open and responsive to the subject and descriptive in nature so that it can be used to interpret findings rather than offer statistical data. Consequently both types of research are valued and useful and it is possible for a single research to use both methods to find out different kinds information.
Existing brand research is under significant attack from a growing number of scholars due to the limitations of quantitative methods in investigating consumer beliefs and perceptions (Schoenfelder & Harris 2004). As the focus shifts from building brands to understanding the different relationship between consumers and brands, more suitable methods of research are required (Fournier & Yao 1997). This research is in line with Blackston (2000) and Supphellen (2000) who put forward key possible factors influencing consumers' perception, preference and value association through qualitative research techniques as well as employs quantitative technique to get general ideas from the consumers and likely to lower the bias from the respondents
This research consisted of primary data collection: qualitative (focus group) and quantitative (questionnaire) methods as well as secondary data collection.
Focus group means a small group of people interacting with each other to seek information on a small (focused) number of issues (Ghauri & Gronhaug 2005). Since this research examines consumer perceptions and preferences about notebook brands in the Taiwan market, a focus group interview is likely to provide an understanding of the most important factors that influence consumer behaviour in this industry.
The focus group in this research consisted of four Taiwanese. Two of them work in the industry as notebook distributor's sales representatives in charge of retailer management and the other two provide an insight as potential consumers. They were chosen as focus group in order to build and refine the content and structure of the research questionnaire.
Issues such as comprehension and brand attributes were also addressed to aid data collection and the appropriateness of questionnaire questions. In fact, the focus group became very significant not only for its contribution to developing questions for the questionnaire but also for providing the researcher with an insight into consumer opinions, behaviour, preferences and perceptions. The focus group interview lasted around two hours.
Self-administrated questionnaires that are completed by respondents were employed in this research. Otherwise, because of time constraints and to ensure effective data collection from consumers in Taiwan, the online questionnaire was designed and developed with a Chinese language version. A reliable and high security database was used to make sure safe data storage and respondent confidentiality. In addition, all data was input into my3q website to enable easy analysis. The sample number was monitored on real time basis by setting up website that counted completion of the online questionnaire.
Considering this is a self-administrated questionnaire, questions were designed to be read and understood easily. Additionally, open questions were avoided as far as possible since closed questions tend to be easier to answer. To minimise the risk that the respondents fail to follow the filter questions or inadvertently miss a question, we used an easy-to-follow design. Finally, to decrease the risk of respondent fatigue and increase the response rate, there are only 21 questions (including the demographic data) in this questionnaire (see Appendix B).
Table 3-1 demonstrates the arrangement of questions for each session in the questionnaire. The first session involves two questions about the respondent's brand preference and HP brand awareness. The next session includes seven questions investigating the respondent's purchasing habits, notebook brand currently used, level of loyalty, and factors influencing their purchasing decision. The third session contains four questions which aim to reveal consumers' perception of the four main notebook brands. In terms of brand image, a 5-point-Likert Scale, with '5' strongly agree, '4' agree, '3' general level, '2' disagree, and '1' strongly disagree, is employed to create a ranking condition from a positive opinion to negative opinion. The final part asks respondent's personal data.
For quantitative surveys, probability sampling should be the preferred approach where possible. However, non-probability sampling was suitable for the survey here because there is either no sampling frame or unknown chance of being included in the sample so that probability sampling would be inefficient (Ghauri & Gronhaug 2005). It provides a range of alternative techniques based on subjective judgment (Saunders et al 2003). Among all the non-probability sampling techniques, convenience sampling is the most economical and least time consuming. Therefore, due to the cost involved and the limited time available for the research convenience sampling was considered to be the best choice to handle this survey.
Although it is easy to measure and coordinate, convenience sampling has its limitations. There is a likelihood of selection bias and may not represent any definable population. For example, the people chosen in Taipei or Taoyuan city may not be representative of people in other cities and because it omits opinions from other people there may be bias or sampling errors.
Since the sample size primarily depends upon the degree of accuracy that is needed, the Uniform Resource Locator (URL) of prepared online questionnaire was sent out through Microsoft Messenger (MSN) in order to reach a large number of people. We aimed for 120 primarily targeted respondents. Moreover, respondents were also asked to pass the link to the web page to others. The obtained snowball sampling effect enabled the questionnaire to reach a higher number of people with, therefore, a total of 152 responses, which more respondents increased the credibility of the findings (Aaker et al 2001).
The main objective of the secondary research is to find information to understand and resolve research problems and to better understand and explain research problem from gathering all sources of published information from the University Library- ProQuest, Emerald, Science Direct, online searches and published materials. The information and data collected by this way should be accurate and legal. Ghauri & Gronhaug (2005) suggest that researchers should begin with secondary data review because it is easier and more cost effective than the primary data collection.
In this research, information and data are gathered from following sources:
- Government and government agency statistics
- Company information such as annual reports and press release
- Market and industry reports
- Relevant journals, newspapers, magazines and electronic data sources
Analysis of Findings and Discussion
This chapter starts from an outline of respondent demographics and then moves onto examine consumer perceptions and preferences with regard to HP and competitors' brands. A discussion of how communication strategy relates to the image of major notebook PC brands in Taiwan follows. It is organised in terms of research objectives and reports survey result.
In addition, it discusses whether consumers perceive HP as an 'innovative, personalised and technology leading' brand, investigates the most important factors for consumers when they choose notebook brands, and discusses consumer position the four brands. The analysis of this data is presented along with explanatory comments to clarify and highlight important findings.
A research methodology was proposed in chapter three to gain a deeper understanding of the branding strategy adopted by HP. The research methodology utilise both primary and secondary data, where primary data will be gathered from online self-administered questionnaires. A total of 152 valid questionnaires were collected from Taiwanese people, which comprises both existing HP consumers and other brands' consumers. The respondents' characteristics are shown in Table 4-1.
Firstly, all age groups were represented in the tables, from 20 years old or below (1%), 21 to 30 (68%), 31 to 40 (30%) and over 40 years old (1%). This clearly shows that the respondents aged 21-30 were the largest group of the sample and 98% of the total respondents were between the ages of 21-40, which means the sample is not representative of whole Taiwanese population. The results of this survey more properly demonstrate opinions of people aged from 21 to 40.
Then, of the 152 respondents, 51% were female and 49% were male. In terms of monthly income, 26% of the respondents had a monthly income of less than NT$ 30,000 and around half of sample earned between NT$30,000 and NT$50,000. From an educational perspective almost 55% of participants had completed a university course and graduated with bachelor degree, with 45% achieving a master degree or above.
The final category is life-style and includes six types life-style grouped by Leo Burnett Taiwan Ltd. (survey conducted from August 2007 to September 2007 with 2584 respondents) and summarised in Global Views Monthly (2008) (see Appendix D). It broke the traditional view of segmentation by age, gender or income and indicated that consumer values are blending into each other. According to Leo Burnett's research report, values are distributed evenly across in the different age levels. For example, from a traditional point of view, people may think the 'playing group' is made up primarily of young people. However, research shows that people belonged to this group distributes in the age level from 25 to 49 years old. In our research, about 50% of respondents were the members of the 'balance group', followed by the 'carefree group' with 21%.
Question 1 & question 4 examine brand awareness and brand preference. We employed the measures of brand awareness, 'spontaneous awareness' and 'top-of-mind awareness', proposed by Laurent et al (1995) explained in chapter 2. In answer to question 1, respondents mentioned the brand names including Asus, Acer, Sony, HP/Compaq, Lenovo/IBM, Apple, Toshiba, and Dell (see Table 4-2). Asus, Acer, Sony, HP/Compaq and Lenovo/IBM were the top five most frequently mentioned brands by the 152 respondents with 72%, 62%, 60%, 50% and 36% respectively.
There were more than 10 respondents who mentioned HP and Compaq at the same time. Moreover, almost 80% of respondents mentioned IBM rather than Lenovo. That is to say consumers aware that HP and Compaq are two different notebook brands. Conversely, Lenovo has not gained much awareness from Taiwanese consumers even Lenovo purchased the IBM PC and notebooks department. IBM is not a brand name of Lenovo notebook.
Interestingly, in terms of top-of-mind awareness, almost 30% of respondents put Sony in first place, making it brand leader for customers in this research. It was different from our assumption that Asus, Acer, HP and Lenovo are the top four brands in the Taiwanese's minds. This is followed by Asus, HP, Apple, Acer, Lenovo and Toshiba, with the final 5 % divided among Dell, Fujitsu, Benq and NEC. From our comparison of market share discussed in chapter 1, it is worth noting that although Sony has high brand awareness this is not reflected on sales shipment units.
Question 4 examines brand preferences by aided awareness. We turned into focusing on the four main notebook brands based on 2007 Q3 market share (IDC research report), Asus, Acer, HP and Lenovo in order. '1' means 'buy it nowadays', '2' means 'bought in the past no longer buy it', '3' means heard of it but not bought it' and '4' means 'never heard of it'.
From this question, we can see that HP has 14% of current consumers in the Taiwanese market, 4% less than Acer and 16% less than Asus. As far as brand switching is concerned, small parts of consumers who used to buy certain brands now tend to switch brands. All four brands showed this trend, with Asus having the highest switching percentage. This suggests that while this brand has been popular with consumers, in the current notebook market they are likely to switch to other brands. In contrast, Acer, HP and Lenovo have a smaller number of consumer switches, with 9%, 5% and 3% respectively.
On the other hand, some people might know a brand name, but have never actually bought the brand's products. In this research, Asus, Acer and HP are the top for brand recognition, followed by Lenovo. In fact, in the Taiwan notebook market, very few consumers do not know any brands from this list. Only one respondent had not heard of Asus and HP. However, 23 people had never heard of Lenovo possibly because some people did not recognise Lenovo as IBM. Looking at HP, even though it gained the highest level of brand recognition, only 19% of respondents had bought an HP notebook. Therefore, transferring consumer awareness to purchasing action is a critical issue for HP if it wants to expand its notebook business in Taiwan.
Regarding market share by considering question '3' and question '4' together, we can see that respondents owned a total of 205 notebooks and then was divided by current units owned by respondents in terms of each brand. Consequently, market share was counted (see Table 4-4 and Figure 4-1), showing that HP, Asus and Acer and Lenovo are in the four leading notebook brands, together accounting for the over half of the market share. This figure, nonetheless, is less than the finding in IDC's report which revealed market share at over 80% in the third quarter of 2007.
Purchasing Habit and Usage Attitude
Some questions on the survey examine consumer purchasing habits, such as question 3- 'How many notebooks do you have?' and question 5- 'Where do you usually buy notebooks?' In addition, there is one question about the cost of consumption - 'How much do you spend on purchasing notebooks?
As to question 3 in Figure 4-2, the result shows that over 70% of respondents had one notebook whereas 30% of respondents have two or more notebooks. This finding breaks with the traditional idea that consumers nearly always have only one notebook. Nowadays many have more than one notebook. However, establishing the reasons for this is beyond the scope of this research.
In terms of purchase location, as we can see, 3C retailers (the retail outlets sell computing, communication and consumer electronics products) and other retail shops were the most popular. 77% of respondents had bought notebooks in these locations. Almost half of respondents preferred purchasing notebooks in computer exhibitions.
Choosing these locations as purchase locations shows that consumers still prefer to physically touch and see before buying them, as well as appreciating the benefit of product consultations and recommendations. Besides, there were 15% of respondents have experienced e-shopping of notebooks. Although the percentage of respondents purchasing online is relatively low, it is a purchasing channel with large potential that providers would do well to develo
In respect of consumer spending, 42% of respondents spent between NT$ 30,001 and NT$ 40,000 purchasing a notebook, whereas 26% of respondents spent no more than NT$ 30,000 on each notebook. Only 18% and 10 % of respondents spent NT$ 40,001-NT$ 50,000 and more than NT$ 50,000 respectively (Figure 4-4).
Figure 4-5 shows the like between respondents' brand choices and level of spending. Here we can see that HP and Lenovo had more purchases from respondents who had budget higher than NT$ 50,001 than Asus and Acer. Additionally, over 80% of HP and Lenovo's current users were willing to spend between NT$ 30,001 to NT$ 50,000 purchasing a notebook, in comparison of 60% of Asus' current users and 44% of Acer's current users. 31% and 48% of Asus' and Acer's consumers respectively spent less than NT$ 30,000. Consumers were clearly willing to spend more buying HP and Lenovo notebooks than buying Asus and Acer notebook.
From question 8 to question 12 were focused on usage attitude in terms of brand loyalty. In response to question 8, when asked 'have you switched brands', only 39% of the total participants answered 'yes' and 61% respondents said they have not switched brands since their first notebook purchase. We can therefore assume there is some degree of brand loyalty in the notebook market. Similarly, when asked 'what was the first brand you chose?' and 'what was the second and third?' it became clear that respondents regularly switched brands (question 9). Therefore it was important to ask 'what was the reason for switching brands?' (question 10).
The results showed that function (26%), product quality (21%), appearance (17%) and price (16%) are as important reasons to switch brands. However, it is unclear which of these factors are the most important since some people switched to HP due to 'function', whereas others switched to Asus due to 'function'. If the figures are combined, we can see that 26% of the total respondents switched brands because of 'function'. Looking into each brand. respondents switched to HP mainly because of product quality considerations and recommendations, they switched to Asus and Acer because of function and price considerations, and they switched to Lenovo because of function considerations and recommendations.
After measuring brand switching, respondents were asked if they would buy the brands they are using again and if they would recommend the brand they are using to others?' Table 4-6 is the cross analysis with the current users excerpted from question 4 to examine the brand loyalty in respect of willingness to repurchase and willingness to recommend, defined in the chapter 2. From these two tables, we can see that Acer had highest level of brand loyalty with 70% willing to repurchase, and 59% willing to recommend. Over 60% of respondents indicated that they were willing to repurchase HP's and Asus' notebooks as well as over half of respondents were willing to recommend these two brands to others. However, Lenovo had lowest level of brand loyalty among the researched brands.
Brand Attributes and Perception
Next, the survey investigated the consumers' ratings of the importance of twenty different attributes. The first ten attributes are related to the brand evaluation (question '7'), in other words why they buy this brand, namely appearance, product quality, service quality, function, price, image, promotional activities, advertising, loyalty, and recommendations (word of mouth). The other ten factors described the brand image in terms of reliability, fashion, value, popularity, technology leadership, green (environmental protection), innovation, professionalism, personalisation and luxury (Question 13).
Respondents were asked to review their satisfaction rating of these twenty attributes. The overall scores of each attribute was based on a scale from 1-5. This ranged from '1' which is the 'worst level' or 'strongly disagree' to '5', which is the 'highest level' or 'strongly agree'. Once the information had been collected, it was multiplied by frequency and then was divided by sample size for further analysis. The aim of this rating was to rank the factors which had the most influence on consumers and to relate the ranking of importance to the level of consumer satisfaction. The findings can help notebook brands to assess consumer satisfaction more readily.
The results on the percentage rating the attributes from 1 to 5 and sorted by mean (showing the sequence of importance of product attributes). According to the literature review, quality can be divided into 'product quality' and 'service quality' which are remarkable brand associations. Indeed, these two factors were rated as the two most important attributes to notebook brands. 96% of respondents thought the product quality a 'very important' or 'important' factor in the purchasing decision and 91% regarded service quality as very important or important.
Function, price, appearance and brand image were also considered important factors during the decision making process. 91% of respondents thought it was highly important or important that the function of the notebook met their needs. Moreover, price and promotion were quite important when consumers choose brands, with nearly 85% and 60% of respondents putting a value of '4' or '5' on these two factors. When the price is lower than general or a promotion is on offer, they may switch brands. But some loyalty consumers (12% and 29%) said they do not care about the price and promotion. Interestingly, appearance was regarded as a critical factor when choosing a notebook by 87% of respondents and this may affect brand image, which was one element inducing purchase.
Nearly two-thirds (61%) of respondents said they like to listen to their friends or relatives' opinions, so that they rated recommendation as important and very important. Only 10% of people said this factor is unimportant.
Compared with other industries, the notebook market has medium level in terms of loyalty ranking. In this research, only 36% respondents said they were loyal to any single brand for a period of time while 44% of participants stated they did not care about the brand loyalty while buying a notebook. Some even said they did not have loyalty to any single brand of notebook (20%).
Advertisements may increase consumers' awareness but were not a critical factor influencing people to buy a notebook. Surprisingly, 51% of respondents thought that advertisements were not the main factor encouraging purchase of a particular brand of notebook. Only 8% said this is important for them when choosing brands and 41% said advertisement was not an outstanding factor during their decision processes.
To sum up, most of the selected product attributes scored more than 3 with only advertising scoring 2.34. The three highest attributes scores were product quality (4.65), service quality (4.5) and function (4.45). It shows that these three factors were of most concern to the respondents, and most effective in influencing them to choose particular brands. In addition, price (4.26), appearance (4.2) and brand image (4.02) are also fairly important. Other factors, such as promotion, recommendation and loyalty may have a more marginal effect on consumer decision making.
Brand Image Attributes
The completed table of brand image attributes rating for four brands can be found in Appendix E (categorised by brand name) and Appendix F (categorised by attribute). In this section, we focus only on HP brand image attributes which are sorted by mean in sequence from the biggest to smallest number.
The brand image 'reliable' gained the highest score (4.01 among attributes of HP in Table 4-8 and 3.83 among all attributes in Appendix F). That is to say, respondents thought reliability was the most import image attribute to associate with a notebook brand. Additionally, HP was the most reliable brand among the researched brands (Table 4-9), with responses of 'strongly agree' (26%) and 'agree' (54%) to the notion of reliability. 16% expressed a neutral position while only 4% 'disagree' and 'strongly disagree' with the view that HP is a reliable brand.
Not surprisingly, almost two-thirds of respondents thought that HP was popular (see Table 4-10) since HP is one the of top three notebook brands in terms of market share mentioned in chapter 1, below Asus and Acer but ahead of Lenovo. 18% of respondents viewed HP as 'very popular' or 'popular', 28% expressed a neutral view and only 6% of participants viewed HP as not popular enough.
Since most of respondents to this questionnaire are aged between 21 and 40 (98%), belong to either the 'balance group' (52%) or 'carefree group' (21%) who are demanding work and life balance and sense of belonging. They likely tend to purchase a notebook matching with self image note only fashionable but also professional. HP was viewed as a fashionable and professional brand. For HP, both attributes were the 3rdand 4thimportant images. Nevertheless, Asus and Acer were regarded as more professional and fashionable than HP.
As the previous overview of current HP branding strategy showed, 'innovative', 'technology leadership' and 'personalised' are the key elements in the HP's current brand promotion (chapter 1). Surprisingly people did not perceive these three images first in comparison with other attributes (Table 4-12). Looking in detail, around one-third of the respondents either 'do not care' or had a 'general level' of impression about these three attributes, while more than half of the people were impressed by innovation, technology leadership and personalisation.
There are small numbers of participants who either 'disagree' or 'strongly disagree' that HP is an innovative, technology leading and personalised brand with figures of 8%, 10% and 11% respectively. However, as we can see in Table 4-12 that in terms of innovation and technology leadership, Asus and Acer still gained higher scores than HP. As to the personalisation, HP's rating is higher than Acer and Lenovo but lower than Asus. It is thus clear that even though HP has tried to build up an association with these three elements, there have not been a strong response from respondents.
In the analysis of product attributes, respondents showed that price was an important factor during the decision making process with score 4.26. A clear majority of customers (85%) want more value from brands, so that they 'agree' or 'strongly agree' about the importance of price. Table 4-8 shows that value did not have high association with the HP brand (3.60) in relation to other attributes, yet, HP products gave just half of respondents a sense of good value for money, while a further 35% expressed neutral positions. Even 11% gave negative marks about the value of HP products.
In comparison, Asus and Acer have good value reputations with 85% and 77% of respondents respectively identifying them as good value brands, while a further 8% and 20% of respondents respectively giving neutral answers. In fact only 8% and 3% respondents disagreed or strongly disagreed that these two brands represented good value. Lenovo, on the other hand, had a poor reputation for value with only 28% responding positively.
Two hot issues in the Taiwan consumer market recently have been the environment friendly and brand luxury. The two image attributes, 'green' and 'luxury', can be unique factors bringing some companies into competitive positions with positive perceptions and profitable performances. We tested these two elements to examine if they were associated by notebook brands. People participating in this survey did not tend to associate these two attributes with four notebook brands. 'Green' (3.45) and 'luxury' (3.09) are listed in the last two places among the 10 researched attributes in appendix F, as well as in the HP brand image attributes list in Table 4-8 with figures of 3.57 and 3.28 respectively.
Nonetheless, HP still has tried to deliver a green image with environmental friendly practices. For example, some notebooks which are certified through by ENERGY STAR meet strict energy efficiency guidelines set by the U.S. Environmental Protection Agency and the Department of Energy (Hewlett-Packard 2008d). HP states that it is committed to offer products and services worldwide that help customers save money, conserve energy and improve the quality of our environment. However, these efforts have not been noticed by Taiwan consumers.
We can see that 60% of people choose a neutral response to the 'green' attribute and only 28% of respondents agreed or strongly agreed that HP wad a green brand. Lenovo was in fact regarded as non-green brand with a score under 3. Luxury was the only attribute marked with an overall score of less than 3. It is thus clear that most people did not have an association between notebooks and luxury.
In summary, from these factors researched, we can see that the 'reliable' (4.01) and 'popular' (3.78) attributes are regarded as most important and notable elements of the HP brand image. Only one factor, reliability, gained the highest rating in comparison with competitors- Asus, Acer and Lenovo (Appendix F). Other attributes got lower scores than Asus and Acer but higher scores than Lenovo. although HP was seen as more luxurious than other competitors with exception of Asus. Aperceptual map of reliability and popularity illustrates as following Figure 4-7. Moreover, if we assume the most important product attribute 'quality' results in the 'reliable' image and 'function' and 'price' result in the 'value' image, the perceptual map by reliability and value.
Effectiveness of Marketing Communication
HP marketing communication was examined by question 2 and section D. We tried to survey the way respondents knew about the notebook brands, and then compared to the way people saw HP advertisements and finally investigated how people felt about the content of HP advertisements.
The respondents were asked 'where did you get to know these brands?' 77% of respondents said that they knew the notebook brands through TV advertising. The Internet and press advertising made brand awareness for 61% and 56% respectively. 45% knew these brands from their friends and relatives. Posters (24%) influenced people less effectively while even fewer people got to know the brands via radio, promotion or others means such as educational materials or computer exhibitions.
In the section D, question 14 asked 'have you seen advertising from HP?' 63% of respondents have seen its advertising from HP in different forms at different time. However, many people (37%) said they had never seen advertisements from HP. Next a question 15 asked in which way the advertisements had been seen. Table 4-15 shows details of answers given and it is not surprising that most people saw HP advertisements through press advertising (71%) and the Internet (60%).
In comparison of how brands gaining brand awareness (question 2), TV advertising was much less effectively delivered HP advertisements to the public than press advertising. That may be because HP's TV advertising exposure is less frequent than other brands such as Asus and Acer or delivered in the wrong TV channels. The reasons for this are a possible direction for future research.
The final question in this section was about personal evaluation. In other words 'what do you think about these advertisements?' The following table 4-16shows that 43% of participants said HP advertisements were interesting whereas 20% people thought they were attractive. Only 2 participants considered the advertisements to be boring, suggesting that HP's advertisements were not a negative influence on the HP brand. However, 39 respondents (35%) stated they did not get any feelings from the HP advertisements. They considered that HP should improve its advertisements and make them more creative and more attractive.
Conclusion and Recommendations
The major objective of this chapter is to review the major findings of this research study on perceptions and preferences towards key brands in the Taiwan notebook market and to discuss their implications. Then, it will give recommendations for HP's strategy and marketing communication activities, based on the research findings. Finally, the limitations of the study as well as future research directions will be also identified.
The current Taiwan notebook market is fiercely competitive, with every brand striving for a higher market share. From chapters one and two, we have been able to understand HP's communications strategy: HP is in all senses a consumer-oriented notebook vendor with personalisation, innovation as well as the technological leadership in the notebook industry. But is this brand image of 'personalisation, innovation and technology leadership' working well in the Taiwan notebook market?
Brand awareness affects perceptions and taste. People like the familiar and are prepared to ascribe all sorts of good attitudes to items that are familiar to them (Aaker & Joachimstaler 2000). Therefore, this research starts from reviewing the brand awareness of different notebook brands. Asus, Acer, Sony, HP and Lenovo gained the top five level of brand awareness in this research. Next, we figured out which factors are most important in effecting the consumer decision making process. Based on research findings, price is not the only factor to influence consumer behaviour.
Besides, product and service quality, function, appearance and brand image are also the key factors. That is to say, more than bargain price consumers also expect notebook product with a premium product and high service quality, the function to fulfil specific needs, and the appearance and brand image to conform to their personal image. A positive recommendation and more frequent promotional activities ensure that consumers are influenced at different points in time could stimulate consumer purchase intention. Respondents show that they do not think loyalty and advertisements affect their buying decision making.
Nevertheless, our research reveals that 61% have never switched the brand, 63% are willing to repurchase their current brand, and 54% are willing to recommend the brand to others. Thus, we can assume that there is medium level of loyalty in the notebook market, resulting from the fact that most people are experience their first notebook. Moreover, the results of surveying the important product attribute accord with the reasons why people typically switch brands- function, product quality, appearance, and price. In the other words, consumers consider functional attributes (product quality, service quality, function, appearance) more than non-functional attributes (price, brand image, loyalty) when buying a notebook.
This research has examined Taiwan consumer perceptions of brand and preferences, HP's strategy, and finally examined the effectiveness of this strategy and how it influences purchasing behaviour. At a strategic level this survey has found that HP, as an American brand playing in a Taiwanese notebook market, has got a very good reputation of reliability in comparison to its competitors. However, other brand image attributes in terms of popularity, professionalism, technology leadership, value, innovation, fashion, personalisation and green credentials have gained weaker responses than Asus and Acer, while still stronger than Lenovo. It deserves to be mentioned that the key elements of HP's brand communication- personalisation, technology leadership and innovation have not been impressed in consumers' minds.
Why do not consumers perceive what HP wants to deliver? According to the research findings, only 60% people have been seen HP advertisements before. Most people saw HP advertisements through press advertising and the Internet. However, in comparison with how other brands gaining brand awareness, TV advertising has been much less effective in delivering HP message to the public. Moreover, while its marketing and promotional activities are seen as attractive and interesting for Taiwan consumers, they are still not impacting 35% of the market.
In short, in comparison to other markets HP in Taiwan does not enjoy the same brand prestige nor employ the mass media as effectively. It still needs more work to improve its brand strength with the higher standard and competition in the Taiwan notebook market. Some recommendations will be suggested in the following section.
Recommendations for HP
Base on our research, this part suggests the potential for brand and marketing communication strategy to HP business development in the Taiwan notebook market. Although a single case study can not reveal everything about the consumer perceptions and different notebook brands' strategy in the Taiwan market, this study is able to suggest some directions to HP for the future development. Obviously, HP needs to strengthen its present levels of brand positioning and brand loyalty levels through integrated marketing communications.
Maintain a Reputation for Reliability
Compared to Asus and Acer, HP has managed to achieve a strong reputation for reliability and popularity by meeting consumers' expectation for a premium product and service quality (the most important product attributes). From the long term perspective, HP should endeavour to maintain this reputation for reliability. The reputation comes from brand image and the recommendation of both consumers themselves and their friends.
Although HP has achieved reputation of reliability because of its product and service quality, which has given it a competitive advantage and its current market share, it needs to maintain and reinforce this unique advantage through various public activities with linkage of its desired image-technology leadership and innovation, for example, how HP's new technology improves product quality. This reputation should be built not only on stable product and service quality but also its ability to maintain technological leadership and innovation. Therefore, it needs to focus on these factors to maintain and improve them in order to retain and strengthen its brand image in the Taiwan notebook market.
Improve the Sense of Value and Fashion
Based on the research, we know that function, price and appearance are also regarded as important product attributes from a consumer point of view. Actually HP has got a good image of reliability among its main competitors. However, other attributes are showed weaker scores than Asus and Acer. Thus, to expand market share HP should associate its brand image with important product attributes by emphasising that its function brings more value than its actual price and its appearance is fashionable. Indeed, HP's new imprint technique has created an attractive selling point for HP but HP only highlights its new innovation and technology.
It would be better and more cost efficient if HP focuses more on its fashionable appearance achieved by new imprint technique. This mage can be also built up by linking with fashionable topics, celebrities or events. For example, HP can cooperate with other products and industries such as cars and fashion goods not only with technology or Internet related products such as online games. Moreover, HP can hold a creative notebook surface design competition in Taiwan to reflect their desired image- personalisation, with the prize of a personalised surface. In short, we suggest that HP should avoid price war, price promotions or more give-aways. Instead, they should put more emphasis on other attributes such as fashion and innovation to differentiate the position with Asus and Acer but still deliver value to consumers.
As to the research about why people switch to HP, recommendation is the second most frequently given answer following the product quality. Recommendations include consumers getting positive endorsement from not only friends or relatives but also sales persons in the shops, computer shows or celebrities via the media and so on. What HP can influence most from its side is sales persons' recommendations. Unlike Dell's direct selling model, channel management is very important for the HP notebook business in Taiwan. Although HP has built up a good relationship with Taiwan's wholesalers and retailers, getting sales persons to promote HP brand notebooks first rather than other brands is one of the critical factors in achieving market share.
Referring to Taiwan HP printer business' success, the HP printer team hires contracted printer promoters with well trained professional product knowledge in the main retailers. It may be a feasible idea that the HP notebook team collaborate with HP the printer team to share resource of promoters in 3C retailers and computer shows in which people typically buy notebooks (according to our research results). In this way, HP would enjoy the effective of synergy including business growth and cost saving.
Integrate Marketing Communication
In addition to adapting the right brand image, delivering the messages to the target audience is also of vital important. From this research, we know that the marketing communications is a very important factor pushing HP products into the Taiwan notebook market through various channels, such as advertisements, computer shows, and the Internet. However, as discussed above, HP seems to have had difficulty in catching the attention of Taiwanese consumers.
We would suggest HP to deliver the brand image in different ways to different consumer segments which are classified by lifestyle. As previously discussed, in a value mixing era consumers can not only be grouped by traditional criteria such as age, gender, education or income and so on. What HP delivers to consumers should be a kind of lifestyle that combines brand identity and consumer self image rather than single piece of information. It delivers the brand experience that interacts with consumers and tries to provoke resonance from consumers.
For example, integrating the results of this research and survey conducted by Global Views Monthly (2008) (see Appendix D), there are two proposed segments coming out- balance group (aged 21-29) and carefree group (aged 30-40). Then, the content of communication delivers different stories with key elements- reliability (quality), popularity, value, technology leadership, innovation and personalisation to these two groups. Additionally, localised content of communication could be better targeted to Taiwanese consumers.
Integrated marketing communication (IMC) is simply the process of advertising, promotions, and media working together in strategic and effective ways. IMC stresses that it not only delivers promotion message but also strengthens brand image. Principles of advertising and IMC add a thorough treatment of the practices critical to building customer relationships and brands. Therefore, HP brand identity should be delivered consistently via main channels- TV advertisements, press advertisements, 3C retailers, computer shows and the Internet while delivering notebook promotions.
The Internet has become a popular tool of marketing communication, with no exception for HP. Bulik(2007a) points out that HP boosted its global online spending from 28% of marketing budget in 2006 to 35% in 2007. However, our research shows that brands mostly gain awareness from TV advertising. As Brink (2007) argues that "The fact is you need multiple forms of media to get the best bang for your buck. Media consumption habits are changing, but that doesn't mean we should abandon what we've done in the past, because not everyone is changing. If we go all one way, we risk losing them." (Bulik2007b). We would suggest HP still maintains at least some extent level of brand exposure on the TV channels.
Research Limitations and Suggestions for Future Research
The first limitation is the sample size of the research study as it was small relative to the population size of Taiwan. Although the questionnaire was carefully designed, only 152 people were surveyed. The perception and evaluation from these participants may not present the same perception of the Taiwanese population as a whole even though special care has already been taken to ensure that the selection of the sample representation was not biased.
Additionally, limitations were caused by methodology selection. There are many advantages of self-administrated questionnaires such as no interviewer variability, absence of interviewer effects and convenience for respondents. However, there are also inevitable disadvantages including no on-site assistance for respondents, difficulty having insight into interviewees' emotions, and problem controlling the reliance on self-reported data. Unfortunately, respondents may do any of the following, impacting research reliability: lie intentionally, give answers based on wishful thinking rather than the truth; fail to understand the questions, and forget parts of the experience they need to describe.
Consequently, future research could take larger samples from a more diverse selection of the population. Furthermore, further research could make a more detailed analysis of consumer perceptions and preferences as well as their response to the marketing strategy of each brand. Finally, more in-depth research on consumer behaviours such as why consumers start to consuming one notebook or which TV channel HP's target consumers watch most and so on could be provided for more precise recommendations to HP's branding and communication strategy.
In conclusion, understanding consumers is the basic task for every company. Ewing (2001) shows that effective branding is one of key factors for a successful company. Strong brands with a loyal group of consumers will be more resilient to the fluctuations of the business environment. Therefore, in order to attain competitive advantage to expand business, HP must put effort into strengthening its brand position by comprehending consumer behaviour and utilising the right communication tools as shown by this research.
Appendix A: Project Proposal
Project Title: THE NOTEBOOK PC INDUSTRY IN TAIWAN: AN EXAMINATION OF CONSUMER PERCEPTION AND EVALUATION OF HEWLETT-PACKARD
Supervisor:Dr. Steve Henderson
Company:Hewlett-Packard Development Company, L.P. (Taiwan)
Submission: 8thof September, 2008
Scope/Rationale of Project
According to the information on the competitive situation of the competitors, Hewlett-Packard is facing particularly selling pressure on Personal Computers especially in Taiwan. This may be due to the fact that strong sales of Acer and Asus which account for over half of laptop market share with local brands advantage. Additionally, other Taiwanese contract manufacturers recently have begun to sell branded computers. The shift by Taiwanese companies into selling brand-name computers has been driven by shrinking profits as manufacturing has moved from Taiwan to China and competition for large contracts has increased.
At most Taiwanese companies, profit margins on sales of branded computers are roughly five times higher than on sales of computers and parts to resellers like H-P and Dell, said Jerry Shen (2008), Asustek's chief executive officer. Taiwanese contract manufacturers responsible for making most of the world's personal computers have leveraged their manufacturing strengths to market their own brands, a trend that has increased competition across the industry. Although Hewlett-Packard is the top-selling computer maker in the worldwide, those reasons result particularly high challenge to H-P to grow the market share in Taiwan.
The latest global brand analysis and ranking by Millward Brown Optimor provides insight into the impact of marketing and sales on brands. In top 100 most powerful brands ranking list without dividing into any sub-category, H-P made it to No. 16, finishing ahead of No. 41 Dell and even Lenovo, Asus and Acer are not on the list. Of those brands, though, H-P was gaining in brand value (17% for H-P whereas 10 % for Dell).
This research examines consumers' perception and evaluation of the HP brand and makes a comparison with other three major brands in order to get a better understanding of brand strength and preference. There are three objectives in this research to help achieve the overall aim.
Firstly, to understand key research issues by a literature review. The literature search will establish the main issues in this field to set the right direction for the study
Secondly, to find out consumers' brand preference among the four main players in Taiwan's notebook PC market by carrying out questionnaire.
Finally, to identify and evaluate consumer perceptions of HP's existing brand identity and communication methods.
There are two views of the management research process: positivism and phenomenology. Positivism believes in the generalisation of research that aims to capture the rich complexity of social situations whereas phenomenology agues that a given business situation is complex and unique and generalisation is not of crucial importance.
The philosophy of this research is a mixture of the two. It is focused on trying to understand consumers' preference among the four main notebook PC brands in Taiwan and exploring whether these preferences were influenced by HP's branding and communication strategy.
This research consisted of primary data collection: qualitative (focus group) and quantitative (questionnaire) methods as well as secondary data collection. Moreover, the literature review will cover the developments on consumer behaviour, branding and marketing communication.
Since this research examines consumer perceptions and preferences about notebook brands in the Taiwan market, a focus group interview is likely to provide an understanding of the most important factors that influence consumer behaviour in this industry.
Self-administrated questionnaires that are completed by respondents were employed in this research. Otherwise, because of time constraints and to ensure effective data collection from consumers in Taiwan, the online questionnaire was designed and developed with a Chinese language version.
Appendix C: Image of the HP Brand- The Computer is Personal Again
Source: HP official website and HP partner portal