This introductory section imperatively focuses on the background of the study. This chapter also discusses the reasons that why this subject has been taken. This section begins with the background of the problem to be studied which ultimately leads to the problem definition and the purpose of study.
Before going into the brand image of NIKE, there is an importance to know what exactly Brand and Brand image is. Brand is a name, term, sign, symbol, design or combination of all these which identifies the products or services of one merchant or the group of merchants and to differentiate them from the competitors (Armstrong & Kotler, 2003: 288). From a world of branded goods we have moved to world of branded companies, branded services, branded organizations-even Governments. Life is now branded. Not only have brands changed, so has our relationship with them (Baskin & Earls, 2003). As said by Clifton et al, 2003: 18 in the twenty-first century, branding ultimately will be the only unique differentiator between the companies. In the earlier times the brand mark was used to differentiate the goods of one producer to others. The word brand has its origin from the Old Norse word "brandr" which means "to burn". In the initial phase, the brand was used as a mark of identification on the animals (Keller, 2003). The ingredients in a brand comprise of the product itself, the packaging, the brand name, the promotion, the advertising and the overall presentation.
Today everything in the market is branded and consumers prefer the branded products. They even prefer the daily products like milk and fruits with a particular brand (Keller, 2003). Consumers know more about the brands they buy, and see more aspects of them and the context they operate in. They feel different relationships to different brands, depending on the type of subjective needs which the brands do or don't satisfy (Keller, 2003). Brands also have a symbolic value which helps the people to choose the best product according to their need and satisfaction. Usually people do not buy certain brands just for design and requirement, but also in an attempt to enhance their self-esteem in the society (Chernatony & McDonald, 1992). Some brands have very strong position in the market as they are more consumer friendly and customer purchases these branded products on trust and without any hesitation. Consumers who always purchase the same brand know that they can acquire the same features, advantages and quality each and every time they purchase. There was a quotation by Group Chief Executive of United Biscuits like "Buildings age and become dilapidated. Machines wear out. People die. But what live on are brands" (Feldwick, 2002: 3). Consumers perceive a brand as taking into account a set of values which they can specify that they will reject, or tend to reject, it's their point of view how they accept the brands. Therefore brands are the lasting assets if they are kept in good condition and as long as it continues to offer consumers the ethics or values they require. The reason that consumers believe in brand is because, on the whole, they keep their promises. Most successful brands continually improve or update their products to remain competitive or to meet changed market requirements. Most of the customers prefer to buy a branded product because they know this product has been developed by maintaining the protocols, like from the health and environmental prospective, quality etc. Most successful companies prefer customer preferences and obtain customers input through marketing research. Some companies introduce a latest technology in new product according to customers demand and requirements.
Importance of Brand
Figure 1: Different types of Brands
In order to answer the question what is the importance of Branding to customers we can say that the most powerful brands come from the great experiences of customer but not from the marketing. Product quality, creativity, features, consistency, performance, value and style are the main drivers of today's prominent consumer. Branding is required for the customers because it helps them to antithesize a product from the thousands of them available in the market. They are so confounded by the array of products available to them in the market by making the right choice based on the quality, price, and stylishness which is making them difficult.
Companies are identified or recognized through their brand and it is also most beneficial asset for endurance. Customers have many brand choices but they have less time to make a choice. The brand speciality helps the customer in decision making to purchase a right product with less risk and according to set expectations. Brand name is a promise to customer by maintaining and enhancing the strength over time (Aaker, 1991). Successful brand should be the representative of various elements together including design, packing, quality, style etc. Customers want to see all the elements in brand product according to his need.
"A product is something that is made in a factory; a brand is something that is bought by a customer. A product can be copied by a competitor, a brand is unique. A product can be quickly out-dated, a successful brand is timeless" (Mcquiston, 2004).
In today's business environment, companies must and should work harder to achieve some extent of degree of differentiation in their products. By branding their products, simply putting their company's name on the product, many companies have to achieve this differentiation (Aaker, 1991). The market is flooded with new and old brands and intensity of brand war is increasing day by day. The popularity of a brand is a tool for survival and success of company in the market. In this respect companies offer different packages to customers with the use of different resource weapons in this competition war for raising awareness among the customers about the branded product.
The buying behaviour of consumer is very important in maintaining the brand image, brand identity. The buying behaviour of consumer is influenced by many socio-cultural factors like personality, social class, beliefs and demographics etc. Not only the socio-factors but also the visual impact, the substantial colours and logos of the brand, price, the brand image and awareness (Blattberg and Wisniewski, 1989).
The Consumer behaviour study involves how an individual or groups select, purchase, use or dispose of products, services ideas, or experience to satisfy their need and desires (Solomon et al, 2002). The consumer environment influences how they feel, consider and act. The environmental features are, for instance, comments taken from other customers, advertising, packing, price, and product appearance etc (Paul & Olson Jerry, 2005).
Brands play vital role in the decision making processes of the customer (Srinivasan & Fukawa, 2007). It is important for companies to find out customer's decision process and pinpoint the criteria, which customers apply while making decision (Cravens & Piercy, 1991).How brand names influence the customer purchase decision? Why customers purchase a particular brand also implies how customers decide what to buy. Customers follow the sequence of steps in decision process to purchase a specific product. They start realizing a requirement of product, get information, identify & evaluate alternative products and finally decide to purchase a product from a specific brand. When customers purchase particular brand frequently, he or she uses his or her past experience about that brand product regarding performance, quality and aesthetic appeal (Keller, 2003).
The company's reputation has an important influence on the consumer buying processes. This reputation is different due to the company's product and specific influence of the brand's image (Cretu & Brodie, (2007). The successful Company always provides the customers greater value of satisfaction than its competitor and adapt to the needs of the customers (kotler et al, 2002).In this increasing competition market; company cannot sell the brand unless it understands the customers' requirements. Companies make a strong relationship with customers through development of a customer friendly brand. Competition creates a new value for consumer.
The way how a brand is perceived and the impression person have of the brand, and therefore of the corresponding company, product(s) or service(s) is known as Brand Image or how a company's product is perceived (seen) by the consumer. Keller (2003: 66) defines brand image as perceptions about a brand as reflected by the brand associations held in consumer memory. Yastrow (2003: 4) says to a company that "Your brand is not what you say you are....Your brand is what your customers think you are."
Brand image is normally conscientiously developed by the owner of the brand through marketing campaigns and product positioning. Customer responses to a product may spontaneously develop the image of a brand. Brand image may develop instinctively through the responses from the customer to a product. Image of a brand can be damaged through improper advertising or affiliation with somebody or something that has descended from public favour.
The brand and image of a business are vital to its success. Strong brands can generate customer trust, which is particularly important in e-commerce where there are often concerns over privacy and security. Brand image is every customer's interaction with the company which creates an impression and also it's a company's character. It is a potpourri of observation and interaction by the people outside the company. It is the one which makes a particular organisation unique among the thousands of competitors.
The brand image should be positive and should reflect the character of a company. It should look like what a company is, what it feels, and smells like the company--it must be a reflection of the best traits. We often hear from some companies would like to bring about their brand image after they have been in the business for long time. A company should start thinking about building their brand image from day one. It is finer to take a positive step in developing a constructive brand image instead of letting it just happen.
For a company to identify its brand image it has to know why it is in business, what makes its business unique, what can customers get from them where they can't get elsewhere whether it is their price or quality or service or guarantee or the product, Is there something about the service that the customers actually enjoy paying the company money to do? Which part of their business are they passionate about, what is their target market? Do they have a clearly defined service, Customer profile and Prospect demographic? And at last what do they offer to their customers? If the company is well perfect in answering all these questions it can identify its brand image. There are three branding image elements like Logo, Slogan and image identifier. A company has to check whether its logo reflects the company's image and how good its slogan is and what does it say about their business.
In today's market reputation of a company has strong influence on the buying decisions which may vary from the more specific product- related effect of the brands image.
Background of NIKE
The Nike brand was adopted in 1971 and was named after the Greek goddess of victory. And today Nike is the paradigm of sports and fitness innovation (Kochan, 1996) with total revenues approaching $19.2 billion in 2009. A Nike T-shirt in 1971 began the enterprise which today incorporates Nike International Appeal built for the comfort and protection during high intensity outdoor workouts.
Figure 2: Nike Logo
Nike's mission statement is:
"To bring an inspiration and innovation to every athlete in the world"
Bill Bower man, one of Nike's Founders is quoted as saying "If you have a body, you are an athlete" and this defines how Nike pursues its destiny. In 1971 a student named Carolyn Davidson from Portland State University purchased Nike logo for $35. Davidson who is the founder of the company says that "I don't love it, but it will grow on me". Nike is one of the brands which is taken as the high profile example of an organisation which cares more about their brand image. Nike spends nearly billions dollars of money each year to promote its brand image.
Nike is one of the tremendous sportswear companies in the world which is operating in six continents. It is one of the top sports footwear brand with 47% of Market share (Mintel, September 2005). In UK Nike has employed more than 800 team members (www.nike.com, 1/11/2007). Now the Nike store in London became a tourist attraction. Nike describes the store as "3D experience of the brandâ€¦ to be the leading sports retail experience in the world" (Nike, 2007)
Nike also now owns many other brands to add to its portfolio. There are many companies which Nike owned like the cult brand which has accessories and retro style trainers, Hurley International for action sports, Cole Haan, a company for men's and women's shoes and dress. Although Nike owned these brands they operate with their own strategy. Nike has currently acquired Umbro in their portfolio to dominate the English football kit market.
How does brand image of Nike affects the buying decision of consumer.
To gain an efficient knowledge through this thesis about consumer decision and analysis at the time of purchase and how a particular brand influences the purchase decision of a consumer. In order to investigate the influence, brand name can have on consumer's decision; I want to ascertain any connection between the two.