.

IMPACT OF BRAND AWARENESS

ON CONSUMER BRAND LOYALTY
A STUDY ON FAST FOOD
RESTAURANTS
BRM GROUP PROJECT
Submitted by: Group 3D
Abstract
According to the theory, consumers choose a brand they recognize, before an unfamiliar brand. If the
consumers dont choose according to the theory then what are the aspects driving the purchase decision?
One of the primary purposes of the project was to do research on brand awareness and to see the extent to
which it matters for a first-time buy in an unfamiliar environment. The study was limited to the students
of IIM Shillong and the topics in the questionnaire were limited to daily use commodities.
The research questions helped us in shaping the problem that was to be answered and made it easier to
restrict the scope of the project. The questionnaires were prepared based on our research questions. This
made us realize the most and least recognized product among the students. We also used the statistics
computer program SPSS, to easier see the significance of the result.
The conclusion of this project was that all the factors have some importance for the choice of the brand.
Also, there was no difference in the buying behavior for the first time user and the current user and that
the brand awareness has no direct relationship with consumer brand loyalty in a new demographic
condition.

1. Introduction
Brand awareness can be defined by the extent to which a brand is recognized by the potential set of
customers, and is correctly associated with a particular product. It is usually expressed as a percentage of
the target market. From a company's advertisement perspective, brand awareness is the primary goal in
the early months or years of a products introduction.
Brand loyalty arises when a customer chooses to purchase a product produced by the same company
repeatedly instead of a substitute product produced by a competitor. Brand loyalty is often based on
perception. A consumer will be buying the same product because of the perception of that product being a
superior product to a given line of product. Brand loyalty usually relates to a product and not a company.
In this research project, we will be looking for the relationship between brand awareness and consumer
brand loyalty by the means of a survey and various statistical tools and theories. In this section, we shall
be starting with the background to the project and discussion of the problem. The purpose of research and
scope of the project are also included in this particular section.

1.1 Background
The term brand awareness is a highly discussed topic in the industry today. Pair it with consumer brand
loyalty, and it becomes an important aspect of many companies as to how to make the customer loyal to a
particular brand. While living in Shillong, we have all faced situations when we had to choose between a
familiar brand and an unknown brand. Hence, we found it interesting to find a relationship between brand
awareness and consumer brand loyalty.

1.2 Purpose
The very objective of this study is to research about brand awareness and its effect on purchasing
decisions in unfamiliar demographics. According to many theories, it has been found that customers
choose a familiar brand over an unfamiliar one. Our research revolves around what if the customers dont
choose according to the theories, then which factors affect their buying behavior.

1.3 Scope

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Due to the increased globalization and homogenization of customers preference, global branding has
become more widespread. So, it is important to take the demographic aspect into consideration while
marketing a particular brand. Although the customers are becoming homogenous, with changing
demography it might become difficult to find the same brand everywhere. Then the consumers are placed
in a dilemma and have to choose between unfamiliar brand and brands they recognize.

2. Literature Review
Brand awareness is often considered to be a prerequisite for consumer's buying decision process, as it
represents the primary factor for including a brand in the consideration set. Brand awareness is the
likelihood that consumers recognize the existence and availability of a company's product or service. To
increase the barriers to entry of other brands, marketers have to be the first to get their brand implanted in
customers' minds.

Farquhar (1989) considers that to build a strong brand in the consumer's minds would require creating a
positive brand evaluation and awareness. Aaker (1991) suggested that brand awareness may also be a
driving factor in influencing perceptions and attitude and can be a driver of brand loyalty.

Few parameters for brand awareness accepted by authors over the years are:

Visibility
Reach
Advertising spending
Positioning (evoked, inept and inert sets)
Type of market (monopoly, duopoly, oligopoly, etc.)
Market stability (moderately competitive, stable, hyper-competition)
Behavioural aspects of target segments
Retail spacing and positioning

According to Keller (1998), awareness can influence consumer decision making by affecting brand
associations that form the brand image. Brand awareness is an essential element in the buying decision-
making process as it is important that consumers recall the brand in context to a given particular product
category, and thus increasing the probability that a brand will be a member of the consideration set of the
customer while buying. In a low involvement decision setting, a minimum level of brand awareness may
be sufficient for the choice to be final.

The primary parameters for consumer loyalty as suggested by various authors were as follows

Ease of achieving purchase decision

Product or service experience

Smooth purchase process
Post purchase servicing and aftermarket
Repurchase rate
Brand switching behaviour of a customer
Behavioural and attitudinal commitment

Other authors (Laurent, Kapferer, and Roussel, 1995) suggested three classical measures of brand
awareness in a given product category: spontaneous (unaided), top of mind awareness and aided

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awareness. In spontaneous or unaided awareness the customer is asked the names of the brands they know
in the product category. In this case, the percentage of interviewees indicating they know that brand is
recorded while the top of mind awareness the percentage of respondents who name the brand first is
considered. In the case of aided awareness, the proportion of interviewees who indicate they know that
brand is recorded.

Again there are two types of brand loyalty:

Affective loyalty: results from previous favourable experiences with a brand. But it only results in
repurchase intention and might not lead to an actual purchase.
Action loyalty: it means that consumers not only have a preference towards particular brands but also
buy products of those brands repetitively. This can be related to a type of action inertia that the brand
develops in its customers.

The outcome of a brand choice will only be known in the future, and thus, the consumer is forced to deal
with uncertainty. Brand choice can be considered as the central problem of the consumer behavior while
the perceived risk associated with buying decisions is a pivotal aspect of brand choice. From a
consumers perspective, a brand is considered to be the minimization of perceived purchasing risk, which
helps cultivate a trust-based relationship. Brand awareness allows in influencing a consumer's perceived
risk assessment and their confidence in their purchase decision, due to familiarity with a particular brand
and its characteristics.

3. Research Questions
The project is primarily based on the following research questions:

What is the importance of brand awareness in case of fast food restaurant

What is the importance of brand loyalty in case of fast food restaurant
How much your purchasing behaviour is dependent on the brand image of the fast food restaurant?
If the customers dont have any recognition of brands, what influences their buying decision?
Is there any difference in the buying behaviour of the customers at their purchases today as compared
to that of the first time?

4. Hypothesis
In our project, we have considered three Hypotheses for testing:

Ho: Brand image has no effect on brand loyalty

H1: Brand image has an effect on brand loyalty

Ho: There is no impact of brand awareness on brand loyalty

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 H2: There is an impact of brand awareness on brand loyalty

Ho: There is no impact of perceived quality on brand loyalty

H3: There is an impact of perceived quality on brand loyalty

5. Objectives of the Research

The primary purpose of this project is to find a relationship between brand awareness and customer brand
loyalty of fast food restaurants in India. Also, the factors influencing the buying decision of a consumer in
case of no brand recognition will also be founded and based on all the above a comparison of the buying
behavior will be carried out for their first purchase in a new demography and subsequent purchases in the
same demography.

6. Research Methodology
The process which is used to collect information and data so as to make business decisions can be defined
as research methodology. For this we have taken primary data from the students of IIM Shillong. We
received 40 responses and that made our sample size. For the primary data a questionnaire was prepared
with the focus on change in brand awareness with time and effect of brand awareness on consumer brand
loyalty. For the same we have taken help of an internet survey form to collect data from people. The
survey form was sent to the group over various online communication channels such as Facebook,
WhatsApp and email.

7. Method of Research-Exploratory/Descriptive/Causal
Exploratory research can be defined as an initial research into a hypothetical and theoretical idea. This is
where a researcher has an idea or has observed something and sought to know more about it. An
exploratory research project attempts to lay the groundwork that will lead to future studies that determine
whether a currently existing theory might explain the observed. Most often, exploratory research lays the
initial groundwork for future studies. Exploratory research can mainly be of two significant forms namely
a new topic or a new angle.

A new topic is often unexpected or startling in its findings whereas new angles may arise from the new
ways of looking at things from a theoretical perspective or by a new way of measuring something. In our
area of the research project, we have used the exploratory research as we are exploring brand awareness
and consumer brand loyalty in a new angle where we are using the demographic factor into consideration,
and the questionnaire is based on that basis only.

8. Sampling Design- Population, Sampling Unit, Sampling Element, Sampling

Method, Sample size,

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The sampling design broadly constitutes of the sample population, sampling unit, sampling element,
sampling method and the sample size in place. Sampling element is defined where every unit of the
sample has an equal probability of being selected. When a unit is divided for the purpose of sampling,
each unit is regarded as individual or indivisible during a selection process then it is known as sampling
unit.

The sampling population consisted of the students in IIM Shillong. Since our research was restricted to
the boundaries of IIM Shillong the sample size for the project which we gathered through online surveys
and the questionnaires prepared was 40. For the sake of our project, the sampling unit and sampling
elements consisted of the college students.

Since we have only considered the students of IIM Shillong for our survey who were very convenient for
us to reach we have use a convenience sampling method for our questionnaires. Also in our case, the
samples selected are based on the subjective judgement of the researcher, here the group, which is a core
characteristic of a non-probabilistic convenience sampling.

9. SPSS

Variables
X1: Importance of brand awareness in case of fast food restaurant
X2: Importance of Perceived Quality in case of fast food restaurant
X3: Importance of brand image in case of fast food restaurant
Y: Brand loyalty

9A. Regression Analysis

1. Independent Variable: X1: Importance of brand awareness in case of fast food restaurant
Dependent Variable: Y: Dependence of purchasing behavior on the brand image of the
fast food restaurant

ANOVA

Model Sum of Squares df Mean Square F Sig.

1 Regression .823 1 .823 .422 .520a

Residual 74.152 38 1.951

Total 74.975 39

a. Predictors: (Constant), X1

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b. Dependent Variable: Y
 2. Independent Variable: X2: Importance of brand image in case of fast food restaurant
Dependent Variable: Y: Dependence of purchasing behavior on the brand image of the
fast food restaurant

Model Summary

Change Statistics
Std. Error
Mod R Adjusted R of the R Square F Sig. F
el R Square Square Estimate Change Change df1 df2 Change Durbin-Watson

1 .118a .014 -.012 1.395 .014 .536 1 38 .469 2.414

a. Predictors: (Constant), X2

b. Dependent Variable:
Y

ANOVA

Model Sum of Squares df Mean Square F Sig.

1 Regression 1.043 1 1.043 .536 .469a

Residual 73.932 38 1.946

Total 74.975 39

a. Predictors: (Constant), X2

b. Dependent Variable: Y

Coefficients

Standardize
Unstandardized d 95% Confidence Interval Collinearity
Coefficients Coefficients for B Statistics

Lower Upper Toleranc

Model B Std. Error Beta t Sig. Bound Bound e VIF

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 Model Summary

Change Statistics
Std. Error
Mod R Adjusted R of the R Square F Sig. F
el R Square Square Estimate Change Change df1 df2 Change Durbin-Watson

1 .118a .014 -.012 1.395 .014 .536 1 38 .469 2.414

a. Predictors: (Constant), X2

b. Dependent Variable:
Y

ANOVA

Model Sum of Squares df Mean Square F Sig.

1 Regression 1.043 1 1.043 .536 .469a

Residual 73.932 38 1.946

Total 74.975 39

a. Predictors: (Constant), X2

b. Dependent Variable: Y

Coefficients

1 (Constant
2.639 .509 5.185 .000 1.609 3.670
)

X2 .118 .161 .118 .732 .469 -.208 .444 1.000 1.000

a. Dependent Variable: Y

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 3. Independent Variable:X3: Importance of Perceived Quality in case of fast food restaurant
Dependent Variable: Y: Dependence of purchasing behaviour on the brand image of the fast food
restaurant
Model Summary

ANOVA Durbin-
Change Statistics Watson
Model Std. Error
Sum of Squares df Mean Square F Sig.
Mod R Adjusted R of the R Square F Sig. F
1 el Regression
R Square Square .143
Estimate Change1 Change .143
df1 df2 .073
Change .789a

1 Residual
.044a .002 -.024 74.832
1.403 38
.002 .073 1.9691 38 .789 2.414

Total (Constant), X3
a. Predictors: 74.975 39

b. Dependent
a. Predictors: Variable:
(Constant), X3
Y
b. Dependent Variable: Y

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 Coefficients

Standardize
Unstandardized d 95% Confidence Interval Collinearity
Coefficients Coefficients for B Statistics

Lower Upper Toleranc

Model B Std. Error Beta t Sig. Bound Bound e VIF

1 (Constant
3.106 .536 5.796 .000 2.021 4.191
)

X3 -.046 .170 -.044 -.269 .789 -.389 .298 1.000 1.000

a. Dependent Variable: Y

9. Data Analysis and Interpretation

We have used the students of IIM Shillong for our survey and they have been subjected to four questions.

1. Hypothesis 1: In this regression we found out P value (.522) to be very high and f value was
below the significant level. This showed that through this regression the evidence is not enough to
reject the null hypothesis .Thus Importance of brand awareness in case of fast food restaurant has
no significant effect on brand loyalty.
2. Hypothesis 2: In this regression we found out P value (.46) to be very high and f value was below
the significant level (.53). This showed that through this regression the evidence is not enough to
reject the null hypothesis .Thus Importance of Perceived Quality in case of fast food restaurant
has no significant effect on brand loyalty.
3. Hypothesis 3: In this regression we found out P value (.73) to be extremely high and f value was
below the significant level (.07). This showed that through this regression the evidence is not
enough to reject the null hypothesis .Thus Importance of Perceived Quality in case of fast food
restaurant has no significant effect on brand loyalty.

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11. Conclusions

A great amount of useful information about the customer behavior can be drawn from the study

It can be drawn from the analysis that the customers has a mixed reaction when asked about the
importance of different factors such as customer brand, customer awareness and perceived quality
on the brand loyalty

After conducting the data analysis we cant conclude that there is a strong relationship between
the three independent variables with the dependent variable

12. Limitations of the study

Due to time constraints, the focus was mainly on the best-known theories in the field. Also, the scope of
the research was limited to the students of IIM Shillong. The product in the questionnaire also included
daily use products that the students are bound to buy. Further, the factors that had the most effect on the
choice of brands were primarily considered.
Also, as the questionnaires were sent online and responses were collected through a google doc some of
the questions might have been wrongly interpreted and thus resulting in a different output. Since this
wasnt a focused group survey, some respondents might also have filled wrong or ambiguous responses
and thus not a proper data might have been generated.

13. Recommendations

Since we found out that there is no effect of brand awareness on brand loyalty and there is no change in
brand awareness with time, so we would recommend the companies to increase their promotions in all
parts of country so that change in demographics doesnt affect the consumer brand loyalty when
demographics are changed. Also another of our findings was that with time there is no increase in the
brand awareness. To improve the same, the companies should focus on educating college students about
the brands when they arrive on a new demography which would certainly lead to a higher brand loyalty.
Also in-store promotion activities can be carried out for the same purpose.

14. Areas of further research

This research model helped us to see whether or not there were any differences in the buying behavior
when subjected to a new demographic location. A survey was done, where the results came partly in the
favor of the supported model. The outcome also showed that the factors used in the research model

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describe the reality of a buying situation where the decision has to be made between a familiar and an
unfamiliar brand. Some suggestions for the areas of further studies are:

Our sample size was small and a similar research model with a greater sample size will be able to
give a more dependable and generalized result which may/may not be different from our result,
but will be a more significant result
Our research was done on students who have certain preferences and economic limits that may
not match with people that are working and are earning. Research can be done in a different
section of the society and observe their buying behaviour and compare it with that of our sample.
Another area of research can be mapping of the relationship between brand awareness to brand
loyalty
Our research focused on everyday commodities that affect a student life. If the items were
changed to say electronic gadgets where the investment is slightly more, the results could be
different. So, research on products based on price can be done.
It would be interesting to see the effect in other countries where cultural diversity also comes in
place along with the demographic factors.

15. Bibliography

Books:

Aaker, D.A. (2002), Building Strong Brand. UK: Free Press Business

Aaker, D.A. (1991), Managing Brand Equity: Capitalizing on the value of a brand name. New York: The
Free Press

Buchholz, A., & Wordemann, W. (2000) What makes winning brands different: The hidden method
behind worlds most successful brands. England: John Wiley & Sons Ltd

Saunders, M., Lewis, P., & Thornhill, A. (2003) Research methods for business students. (3 rd Edition)
England: Prentice Hall

Articles:

Baltas, G., & Papastathopoulou, P. (2003) Shoppers characteristics, product and store choice criteria: A
survey on Greek grocery sector. Journal of Retail and Distribution Management, 31:10, 498-507

MacDonald, E.K. & Sharp, B.M. (2000) Brand awareness effects on consumer decision making for a
common repeat purchase product: A replication. Journal of Business Research. 48, 5-15

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