Literature review on consumer behaviour and branding

In addition, it can be understood by the model of consumer decision making process (Figure xx) which consists of three key elements, there are external influence factors, consumer decision making process, and post-decision behaviour (Schiffman and Kanuk, 2007; Kotler and Keller, 2009). Schiffman and Kanuk (2007) also mentioned that marketing and socio-cultural stimuli –e.g culture, sub-culture, social roles and statuses, and family– is an external influence that persuades consumers to acquire, consume, or refuse the products. Kotler (2000) argued that personal factors and psychological factors –e.g age, economic circumstants, lifestyle, perception, attitude, and motivation– are the internal influences that also persuades them. Also, Kotler and Keller (2009) stated that buying decision process could be divided into five stages–problem/need recognition, information search, evaluation of alternative, purchase decision, and post-purchase evaluation. These five stages can influence prospect customers to make a decision on selecting a brand and purchasing a product or service.

1) Problems recognition: This stage may happen when consumers recognise a difference between actual state and ideal state (Solomon, 2009). The difference will create their “Needs” and they will want to respond and fulfil those needs by doing or acting something such as buying, consuming, watching etc. Finally, target customers can be obviously seen if marketers discover the level of hierarchy of their needs — Physiological Needs, Safety Needs, Belongingness Needs, Esteem Needs, and Self-actualisation Needs — (Maslow, 1970).

2) Information Search: Being satisfied by closing the gap of the actual and ideal states, consumers have to seek information from many sources. Four types of sources which were stated by Kotler and Keller (2009) are personal source, commercial source, public source, and experiential source. These sources will bring about a set of choice in order to be evaluated in the next step.

3) Evaluation of Alternatives: Information gathered will be considered and evaluated through four criteria including performance of products, financial issues, social factors, and personal attitudes (Masterson and Pickton, 2004). Consumers, then, will realise the certain benefits of the product or service and will be able to make purchase decision.

4) Purchase Decision: After consumers have their preferences, their intention to buy will be found and executed by considering six sub-decisions which are product, brand, dealer, quantity, timing, and payment method. However, there are some intervene factors which include functional risk, physical risk, financial risk, social risk, psychological risk, and time risk (Kotler and Keller, 2009). These risks could be perceived and could influence consumer’s decision.

5) Post – purchase Evaluation: This step will influence customers to purchase again or refuse to purchase in the future. Therefore, marketers should monitor customers’ satisfaction, actions, product use and disposal after they buy and use the products (Schiffman and Kanuk, 2007; Kotler and Keller, 2009)

Figure 12: The Consumer Decision Making Process Model

Adapted from Schiffman and Kanuk (2007, p.513)

2.1.2 Consumer Perception

Perception is defined as the way in which an individual selects, receives, organises, and interprets stimuli (Kirkpatrick, 1982; Mowen, 1987; Schiffman and Kanuk, 2000; Kotler, 2000). It also can be described that perception is the meaning that people see and understand information around them (Nelson and James, 1996; Schiffman and Kanuk, 2000). People may recognise and expose to the same stimuli in the different process, based upon individual’s beliefs, needs, and expectation (Schiffman and Kanuk, 2000). As a consequence, from the marketing side, Russ and Kirkpatrick (1982) stated that consumer individually perceives those stimuli though distinctive specification and characteristic of product, brand, and price.

According to Solomon (2007), the stimuli include light, colour, and sound. Boone and Kurtz (1995) also mentioned that the stimuli can be perceived though the five senses which are touching, hearing, seeing, smelling, and tasting. Moreover, they explained that interacting between stimuli factors and individual factors would create individual’s perception of things and situations (Boone and Kurtz, 1995). Stimuli factors are features of an object that psychologically motivate one’s belief and thought (Hanna and Wozniak, 2001) whereas individual factors consist of sensory process, experiences, motivation, and expectation (Boone and Kurtz, 1995). Furthermore, Kotler (2000) also suggested three perceptual processes; Selective Attention, Selective Distortion, and Selective Retention, causing individuals to perceive the same stimulus differently. However, Schernerhorn, Hunt, and Osborn (2000) suggested that there are four stages of perceptual process which include not only Kotler’s three perceptual process — Attention and Selection, but also Organization, Interpretation, and Retrieval has been included. A diagram shown in figure XXX illustrates the four stages of perceptual process which influences one’s perception and response (Schernerhorn, Hunt, and Osborn, 2000).

Figure XX: The four stages of perceptual process

Source: Adapted from Schernerhorn, Hunt, and Osborn, (2000)

According to Figure XXX, the perceptual process can be divided into Attention and Selection, Organisation, Interpretation, and Retrieval stages.

1) Attention and Selection stage: Lewison (1994) and Kotler (2000) divided this stage into three groups which are;

Selectivity exposure is the process of receiving in which individuals screen out unimportant information and pay attention to only potential messages matching to their attitudes and beliefs (Berkowitz et al., 1994).

Selective Distortion occurs when people organises and adapts incoming information to support their own beliefs and thoughts (Kotler, 2000).

Selective Retention describes that consumers do not receive and remember everything they exposed to. They usually retain only some parts which support their beliefs (Kotler and Armstrong, 1999).

2) Organisation stage: Lewison (1994) explained that each individual has various ability to receive, store, organise, and simplify data mentally; therefore, consumer will interpret and react to problem when making purchase decision differently. Furthermore, people should be able to develop and organise their knowledge though their experience efficiently (Schermerhon et al., 200)

3) Interpretation stage: This process is to assign meaning to stimuli by mentally comparing what consumer sees, knows, and feels from his past experiences (Hanna and Wozniak, 2001).

4) Retrieval stage: This process is different from the previous since those processes is about how people receive and store information in our memory. However, this stage is to retrieve the stored information when it is needed to be used. Schermerhon et al., (2000) also described that only some stored data can be retrieved from our memory.

Based upon consumer perception, everybody has different knowledge of products and brands. Some may think positive towards a brand while others may not even though they have never bought or used it before (Arnold, 1992). This is because individual’s beliefs, experiences, and perception could influence customer trust in a brand (Buttle and Burton, 2002). Kotler (2000) also stated that consumer decides to purchase base upon his perception of reality, not reality itself. Therefore, consumer marketer should have deep understanding of perceptual process in order to comprehend how he perceives a brand or a product and makes his purchase decision (Keith, 1992).

2.2 Brand and Branding

With the intense competition in the today’s marketplace, a firm with only product focus may not be capable to run a successful business. Branding strategy has now become widely discussed among the business since its function not only means an established brand name, but also “a direct consequence of the strategy of market segmentation and product differentiation” (Kapferer, 1992, pp.46-7).

According to Kotler (2000, p.396), brand is “the name, associated with one or more items in the product line, that is used to identify the source of character of the item(s).” Previously, brand was considered as ‘an off-hand’ concept or a step in the whole marketing process (Urde, 1999). However, nowadays marketers divert their focuses to the brand since it is believed to function as ‘an identifier’ differentiating one product or service from one another as well as to gain consumer awareness towards the product (Ind, 1997; Kay, 2004). Literatures in brand subject have addressed the significance of brand as something unique which cannot be imitated or copied (Ind, 1997; Aaker & Joachimsthaler, 2000). This statement has been accepted as it is obviously shown that when a new product or service has been launched, it must be accompanied with ‘brand’ (i.e. name, logo and symbol )(Keller, 2003a). Kapferer (1997) and Kohli and Thakor (1997) explained the significant difference between traditional and current brand concepts as traditional concept is used to build distinctive brand image among the similar products or services whereas present concept emphasises on the quality of the products or services which cannot be accessed from external. Building brand image is identical for those who mainly focus on short-term outcome whilst revealing the hidden product quality can be used as a long-term strategy (Kohli and Thakor, 1997). Aaker and Joachmisthaler (2000) mentioned that traditional branding model creates a distinctive product image for the short-term result. Branding strategy can be basically implemented with the cooperation of other related-departments (manufacturing and sales departments) to increase sales volume and market shares (Aaker and Joachmisthaler, 2000). However, to deliver long-term plan, educating and raising consumer awareness towards the distinctive characteristics of the products are vital (Kohli and Thakor, 1997). Davis (2002) and Davis and Dunn (2002) noticed that at present, most firms heavily rely on advertising campaigns since they believe that the campaigns can expose their brands to the public. As a consequence, brand is portrayed to be more than a strategic or visionary plan but become a crucial marketing tactic instead (Davis and Dunn, 2002).

2.3 Branding Models

Kapferer (1997) clarified the significant change of branding approach, as previously firms were more likely to focus on a product capability and capacity (i.e. chocolate or pasta producers). However, at present they shifted their interests to own product’s brand instead (i.e. KitKat or Buitoni)(Kapferer, 1997). This signifies that firms are more aware in ‘identifier’ which plays a major role in consumer’s mind (Kapferer, 1997). Kapferer (1997) categorised brand functions into 8 vital consumer perceived functions: identification, practicality, guarantee, optimisation, characterisation, continuity, hedonistic, and ethical (Table XXX). ‘Identification’ and ‘Practicality’ are systematically and directly concern with the importance of brand recognition as it facilitates consumer’s choice and loyalty (Kapferer, 1997). ‘Guarantee’ and ‘Optimisation’ are served to mininise the perceived risk whereas ‘Characterisation’ is used to indicated consumer values and consumption aspect as products can be represented their self-image (Kapferer, 1997). ‘Continuity,’ ‘Hedonistic,’ and ‘Ethical’ reflect consumer’s pleasure towards the brand as it brings consumers familiarity, intimacy, satisfaction, and relationship towards the society (Kapferer, 1997). Kapferer (1997) also added up that in the ‘economic function’ aspect, brand values basically come from the positive and exclusive attitudes of the public towards the brand.

Table XX: Brand Functions Categories

Source: Adapted from Kapferer (1997)

As a consequence, developing brand value is one of the most important aspects marketers should not omit in the branding strategy process. Kapferer (1997) considered brand value as an intangible and monetary assets. Implementing branding strategy without good orientation and understanding in brand value may reduce potential in maximising sales volumes and profit gains (Doyle, 2001a). Four significant factors determining consumer attitudes towards perceived brand value are what marketers should be aware of: brand awareness; perceived quality level; level of confidence, of significance, of empathy, of liking; and expressive value and attractiveness enhanced by the brand (Doyle, 2001a). Based on the brand orientation model, the departure point of the model is to seek for brand mission, then followed by building the brand by creating a vivid picture and forming characteristics of the internal brand identity (Urde, 1999). Later, the brand can perform as a comprehensive strategic foundation providing a guideline on how to response to customers’ needs and wants; how to understand what customers value; and what identification they would like to express themselves (Urde, 1999). With the better understanding on brand orientation model, it encourages the strong attachment and commitment between the brands and customers in the end.

Figure XXX: Brand Hexagon

Source: Derived from Urde (1999)

Urde’s Brand Hexagon (1999) portrays brand equity and identity integration in accordance with firm’s direction, and brand strategy leading to consumers’ brand awareness, brand association, and brand loyalty (Figure xx). The right side of the figure shows rational factors as consumers purchase the products from ‘product category’ and ‘product’ whereas the left side presents emotional references that consumers select the products from ‘company name’ and ‘brand name’ (Urde, 1999). Urde (1999) elaborated that a brand is formed when both rational and emotional references are integrated. Moreover, firm’s vision and mission are also vital since it signifies firm’s intentions to the product and its brand name (Urde, 1999). At the centre of the figure, brand positioning and core values are the central linkage between product and brand which leads to the interpretation process and target audience in the end. In conclusion, the core objective of the brand-oriented organisation is to establish ‘value’ with a strategic fundamental to create product awareness, product, its brand name association and consumers’ loyalty towards the brand name in the end (Urde, 1999).

However, Aaker and Joachimsthaler (2000) controverted the traditional model and instead illustrated the brand leadership model. In this case, a strategic and visionary perspective is emphasised. Brand managers’ responsibility become boarder and horizontally authorised as they are in charge of strategic planning, and team communication (Aaker and Joachimsthaler, 2000). Main objective of this model is to leverage brand equities as well as to develop the measurement of the brand equity (Aaker and Joachimsthaler, 2000). Since the model tends to emphasise on multiple brands, products, and markets, as a result; brand identity and building value of the brand are considered as the core factors of the strategy (Aaker and Joachimsthaler, 2000). According to Aaker and Joachimsthaler (2000), in order to construct the brand leadership model, four challenging tasks must be concerned as follows:

1) The organisational challenge: firm needs to agree on structures and processes which later become the important elements to create the strong brands as well as to appoint a strong brand managers or leaders for individual product, market and country. This includes sharing common knowledge, information, an up-to-date IT system, structures, news, experiences and initiatives across the firms. McWilliam and Dumas (1997) added that to accomplish the task, every team member must understand the process of brand building as it is metaphorically considered as an intelligent transmitting tool transferring firm’s value across. Moreover, brand management itself should not be viewed as only the market activity but the important part of the whole management process (Doyle, 2001b).

2) The brand architecture challenge: it is a brand portfolio’s organising structure which helps the firm to identify the brand roles, the relationships between brands and sub-brands involved, and how they connect to one another (Aaker and Joachimsthaler, 2000). Effective brand architecture will create a clear and positive clarification for customer offering as well as build synergies in the brands and communication approaches (Aaker, 2004a). A key concept in building an effective brand architecture is the better understanding of what the brand role, sub-brands and endorsed brands are as well as possible action on how to determine their respective roles in the portfolio (Aaker and Joachimsthaler, 2000). This would lead the firm to be able to find a right time to stretch a brand over the product. Aaker (2004a) defined brand architecture as brand portfolio since its main strategy is to identify the brand portfolio and relationships between each portfolio brands.

3) The brand identity and position challenge: the brand identity is important in the way that each brand should present its own identity, characteristics and proper position to provide a vivid clarification to consumers (Aaker and Joachimsthaler, 2000). Speak (1998) suggested that this task can be set as a long-term plan as it takes part in brand building process of the firm.

4) The brand building programme challenge: the key function is to create the synergies in the firm’s communication programme and related-product actions to perform brand building and identity on those particular products (Aaker, 2004a). Encouraging any necessary activities will bring clarity and focus to a brand. As a consequence, consumers are able to gain awareness and knowledge towards the brand and at the same time to strengthen their positive attitudes and brand loyalty in the end (Aaker and Joachimsthaler, 2000). In addition, with the fact that some strategies appear to be ambiguous and difficult to explain in word, an advertising including various media channels can bring in consumers’ attention and provide confidence to support the strategies (Aaker and Joachimsthaler, 2000).

With the fast growing of the current market situation, it is necessary to continuously implement the strategic plans to keep firms informed and updated to the today market environment. External environment and unpredictable factors produce a complicated condition to the brand and consumer equity (Logman, 2004). As a result, the Logical Brand Management (LOGMAN) model was introduced to cope with these key issues as firms need to answer the following statements (Logman, 2004):

Do customers perceive the firm’s brand drivers in the way firm requires them to be?

Do customers perceive the firm’s brand drivers in the way customers require them to be?

Do customers perceive the external brand drivers in the way the firm require them to be?

Any rational interaction among the firm’s brand drivers?

Any rational consistency among the firm’s brand drivers and each customer group/segments?

Any rational consistency of the firm’s brand objectives at each level of products and cultures?

Any rational consistency of the brand drivers in the past, and the present?

Firms need to answer these key questions as it would help the firm to identify the real condition, problem, and proper solutions to deal with including developing more potential to implement any related analysis (Logman, 2004).

2.4 Corporate branding

According to Aaker (2004a), a corporate brand acts as a brand representative of the firm which portrays its background, values, culture, strategies and people. Corporate branding is applied when the product(s) and firm name become the brand name (de Chernatony, 1999; Aaker, 2004). Corporate branding has been recently received more attentions from firms rather than attachment with the product brand (de Chernatony, 1999; Hatch and Schultz, 2003). Corporate branding needs to be managed by a multidisciplinary approach — a development of marketing – which both generates and results from the strategic landscape of brands (Balmer and Grayer, 2003; King, 1991). Hatch and Schultz (2003) also stated that it is an essential asset of the company which shows its value, cultures, characteristics, strategic management, and people. Many literatures on branding indicates the development of corporate branding during the past few years and it has come to a conclusion that it is now paving a foundation to a new concept of marketing – ‘corporate-level marketing’ (Balmer and Gray, 2003).

With the congruity between the corporate branding and the strategic brand vision, it would leverage on the brand development (Knox and Bickerton, 2003). This requires an interaction between the firm and its multi-stakeholder (Balmer and Gray 2003, Knox and Bickerton, 2003; Hatch and Schultz, 2003; Aaker 2004b). The organisational association first named ‘the corporate brand’ as a key discipline of an organisational characteristic development with its products and services (Aaker, 2004a). Urde (2003) mentioned that corporate brand concerns the establishment of the firm’s long-term visions and core values which lead the firm’s operation to reach the objective with the sophisticated brand building process, both internally and externally. Furthermore, the strong corporate brand should reflect depth and value of the products, behaviour and communication offering as Urde (2003, p.1036) explained “core values influence continuity, consistency and credibility in the building of a corporate brand.”

Balmer and Gray (2003) pointed out that corporate brand adopts same methodology and toolboxs from product brand, however; some differences can be found in the light of their composition, constituencies, maintenance, management, and disciplinary approaches. Hatch and Schultz (2003) categorised these approaches as follows:

1) The practice is shifted from product focus to corporate branding;

2) More attempt to expose the brand equity to be more visible and recognisable in the public;

3) The purported aim to strengthen its stakeholder relationship;

4) The requirement of high-level management personnel’s commitment and support to implement concrete corporate branding strategy;

5). The focus on all dimensions (i.e. past, present experiences and future prediction) of corporate brands;

6). The focus on the practice of using firm’s name as a product name in order to raise consumers’ product awareness and recognition and

7). The greater views on corporate brand as it produces more meaningful strategic significance than solely based on product brand.

With these characteristic differences, a corporate branding model can be framed as in Figure XXX (Hatch and Schultz, 2003). The framework is composed of three elements – strategic vision, corporate image and firm’s culture. Hatch and Schulz (2003) claimed that corporate branding can produce an efficient outcome when these 3 attributes are involved either in articulating or aligning directions by entailing an effective communication between high-level firm management, stakeholders, and members of the firm’s cultures (Hatch and Schulz, 2003).

Figure XXX: Elements of Corporate Branding

Source: Adapted from Hatch and Schultz, 2003

However, Knox and Bickerton (2003) argued that multiple stakeholders should have involved in corporate branding. An additional variable – a competitive environment of the firm including the perspective of its present image and culture – should be added to enlarge the framework (Knox and Bickerton, 2003). Six corporate brand building attributes are discussed to produce more effective branding strategies as follows (Knox and Bickerton, 2003) (Figure XXX):

1) Brand context: understanding what is the position of the brand and where it is in the market;

2) Brand construction: how to position the brand with regards to consumers and stakeholder’s viewpoints and values;

3) Brand confirmation: the way to present the brand to the firm and its people;

4) Brand consistency: delivering the relevant, clear and precise message to all stakeholders (i.e. shareholders, media, competitors, and governments) via its effective communication channels;

5) Brand continuity: how to discipline corporate branding process into one alignment and

6) Brand conditioning: how the firm manages and/or deals the brand on a regular basis.

Figure XX: The Six Conventions of Corporate Branding

Source: Derived from Knox and Bickerton (2003)

Current marketing phenomenon is overpopulated with large, medium and small firms, as a consequence; firms are forced to arrange its resources and manage the process to elevate the core values since it is believed to strengthen corporate brand and help identifying added values to the customers (Urde, 2003). Urde (2003) addressed that corporate brand architecture is basically promoted by core values which can be shared by other products in the same family branding. It functions as a coordinator in the process of brand building as well as provides a reliability and credibility when communicating with stakeholders (i.e. the government, financial sectors, labour association, public, etc – Urde, 2003). Three main constructs – firm values, core values, and added values– are found significantly necessary when forming the foundation for corporate brand and producing a comprehensive value-creating process (Urde, 2003). Furthermore, the interaction between corporate brand and core values is vital for leveraging corporate brand equity as well as identifying firm’s competitive position (Urde, 2003). An addition issue regarding high-level personnel attention and firm-wide support are also crucial in this stage (Urde, 2003). Balmer and Gray (2003) noted that the corporate branding approach can be applied to either single or multi-corporations such as subsidiaries, and groups of firms which are under the same umbrella brands.

Today, many markets have become more complex with the increase in competitions among the firms. Firms are now experiencing difficulty to expose their products and get a market noticed. Retaining their corporate identity and differentiating the products from other competitors become a great challenge. Maintaining products’ credibility, corporate values, and images which cannot be imitated or homogenised is what firms should emphasise. This is why corporate branding is significantly important as it help to create a strong protection upon firm’s corporate brands (Balmer, 1998). The whole corporation position is required and regarded as a powerful competitive advantage rather than a product-focused marketing plan (Balmer, 1998; Hatch and Schultz, 2001). Many literatures view the assumption of forming a corporate brand as it educates consumers to be able to distinguish the firms and help encouraging the firms to put an effort to get the product offering become successful (Harris and De Chernatony, 2001; Ind, 1997; Balmer, 2001). Kelly (1998) and Sharp (1995) also added that establishing a positive attitude upon consumers’ perception is necessary.

In conclusion, Knox and Brickerton (2000) explained the development of the corporate brand as it originates from corporate image, to corporate identity, to corporate reputation, and at last to corporate branding respectively. Commitment and attention are required from firm’s members especially from high-level management. Gaining public awareness, recognitions and positive attitudes are what firms need to work on (Knox and Brickerton, 2000).

As a consequence, after reviewing the overall theories and concepts of consumer behavior, brand and branding, and corporate branding, dimensions of corporate branding related and affected to consumers’ perception are explained next. Also, research model and hypotheses are illustrated in the next chapter.