EFFECT OF BRANDING ON CONSUMER BUYING BEHAVIOR

NAME: LAVINA L. TAURO

ADMISSION NO: HPGD/OC16/1712

WELINGKAR INSTITUTE OF MANAGEMENT & RESEARCH

 INTRODUCTION
• Brand is a Guarantee, an assurance for a defined standard of quality for the first time and for every time but not the vice versa. Brand is

name or logo that plays the role in the mind of the customer.

• Brands do not compete in the product area but compete for the mind space of the customer. A brand once established in the mind of the

customer becomes indelible when customer identifies itself with that particular Brand.

• Brand these days have become a status symbol. Customers all over the world now prefer branded products. But why is the question. Is it

the quality that attracts customers towards brand or some other related factor?

• This study is aimed at analyzing the effect of brand on consumer buying behavior. Along with finding the effect of brand on consumer

buying behavior the purpose of the study is to have an in depth knowledge of what actually is branding and consumer behavior.

• A brand which is sold at a high price and the other which is sold at low price while both have same quality and attributes, why is that?

• Brand studies always have remained the key attention of the marketer’s because of its importance and direct relationship with consumers.

• Marketers use brands as to get the competitive advantage on other competitors playing an imperative role in the success of companies.

• Brand holds a great importance in consumer’s life. Consumer’s choose brands and trust them the way they trust their friends and family

members to avoid uncertainty and quality related issues.

 HISTORY OF BRANDING
• Branding is as old, as the Stone Age, though at that time it was restricted for the purpose of protecting one’s own
property, than for merchandising. Stone Age paintings in Southwest Europe clearly depict brands on Bison.

• Branding for the purpose of merchandising arrived later, and the advent of product branding can be traced to around
4,000 to 5000 years ago among the Chinese, and 6,000 years ago among Egyptians.

• In ancient Roman and Greek society, shopkeepers advertised their products by hanging pictures in their shops. It is to
be noted that, though the term Brand Piracy may be relatively new, the ignominious concept existed even during the
ancient times.

• The Industrial Revolution changed the way brands were projected and perceived, too. Brands such as C&A (1841),
Levi’s (1850), Tabasco (1868) and Heinz (1869) were born during the Industrial Revolution. Advertising gained
momentum and brand consciousness developed.

• The late nineteenth and early twentieth century created a platform for brands and branding. By the twentieth century
branding freed itself from the isolated concepts of logo and brand name, and focused on the development of the all-
round personality of the brand.

• For starters, the Vedic period (1100 BC to 500 BC) gave India one of its oldest generic brands, which has been in
continuous use since then – the Chyawanprash.
 OBJECTIVES OF BRANDING
• Identity & Image - Establishing an identity for a brand in the market. Measured with surveys that discover how a brand
is viewed by your target market.

• Recognition - The percentage of customers who recognize your brand name and visual symbols such as logo, packaging,
brand colors and products.

• Awareness - Brand awareness is the percentage of customers who can recall your brand. For example, top of mind awareness
is the percentage of customers who name your brand first when given a product category such as "coffee."

• Engagement - A measure of how often customers interact with your brand. Interactions are defined by you and can include
things like visiting your website, visiting a location, making an order and reviewing a product.

• Brand Loyalty - The number of customers who regularly purchase your brand.

• Brand Advocate - The number of customers who recommend your brand to others.

• Brand Equity - The estimated value of your brand.

• Market Share - The percentage of your target market that are customers.

• Margins - Revenue margins of a brand driven by factors such as brand identity, brand awareness, brand
legacy and premiumization of products.
 12 THEMES OF BRAND
Leslie de Chernatony and Francesca Riley (1998), however, classified definitions of brand into 12 themes, in
order to develop the brand construct:
1. Brand as a legal instrument
2. Brand as a logo
3. Brand as a company
4. Brand as a shorthand
5. Brand as a risk reducer
6. Brand as an identity system
7. Brand as an image
8. Brand as value system
9. Brand as a personality
10. Brand as relationship
11. Brand as adding value
12. Brand as an evolving entity.
 CONCEPT OF BRANDING

• Branding more or less for centuries has been a mean to differentiate goods of one producer from that of
another. Brand studies have always remained a key attention of marketers because of its importance and
direct relationship with consumers.

• Several studies illustrate that, marketers use brands as the primary point of differentiation to get that
competitive advantage on other competitors playing an imperative role in the success of the company.

• Brand holds a very significant place in the life of a consumer. Consumers choose brands and trust them
to avoid uncertainty and quality related issues.

• Brand serves as a pivotal role for distinguishing goods and services from those of the competitors, Aaker
(1991) and Murphy (1998).

• The emergence of brand equity underlies the importance of brand in marketing tactics and hence
provides useful insights for managers and further research, Keller (2003).
 ADVANTAGES OF BRANDING
1. Awareness and Differentiation
Branding makes the customer aware about the product or service, because without branding how customer will
recognize the product or the service. There are so many similar products and services that are used for same cause
and for satisfying the same customer needs. Just imagine if there was no branding then all cold drinks would have been
same? It's hard to imagine I know, that's why branding helped many customers to prefer to use Coca - Cola while some
other prefer to use Pepsi and so on.

2. Premium prices
Branding helps the company in charging a premium price for their product because a strong brand can charge a higher
price than its competitors which in turn leads to higher profit margins for the company. An example would be Apple and
Samsung charging a higher price of their smartphones than Sony and Huawei because customers have that brand
image that Apple and Samsung have the best quality when it comes to smartphones.

3. Barrier to entry on the market

Having a strong and established brand under your portfolio in the market can be a barrier for entrance of new
competitors on the same market as yours. The potential new competitors will know that there is a strong leading brand
and they may never make a decision to entry on the market.
 DISADVANTAGES OF BRANDING
1. Huge development costs
The biggest disadvantage of branding is that it involves huge cost because brands are not created
overnight and companies have to spend huge sums on advertising and publicity. Often the brand
marketers calculate the ROBI (Return of Brand Investment) as they tend to predict and justify the brand
development process.

2. Limited quality flexibility

Limited flexibility in the quality of the products and services of the brands is emerging from the fact that
they offer quality for premium price. The only reason why customers will pay this premium price is the
guaranteed quality.

3. Changing the perception for the brand is hard

Another disadvantage of branding is that if due to some reason brand gets a bad name or reputation than it
is very difficult, if not impossible to regain the original position or status of the brand.
 CHARACTERISTIC OF BRANDING

• A brand can be an everlasting and lucrative asset as long as it is maintained in a good manner that can
continue satisfying consumers’ needs, Bachelor (1998) and Murphy (1998).

• Although successful brands can be totally different in nature, they share something in common, for
instances well-priced products and consistent quality, Murphy (1998).

• As mentioned by Levitt (1983), there are four elements for building a successful brand, namely tangible
product, basic brand, augmented brand and potential brand.

• Tangible product refers to the commodity which meets the basic needs of the customers. Basic brand, on
the other hand, considers the packaging of the tangible product so as to attract the attention from the
potential customers.

• The brand can be further augmented with the provision of credibility, effective aftersales services and the
like.
 BRANDING IN TODAY’S MARKET

• A central function of branding is the facilitation of the consumer choice process.

• Branding has the ability to negate the need for a consumer to seek out information when a need or a want
has been recognized, but rather, lead him to a brand that has been satisfying in the past.

• In terms of companies’ views on branding, it can induce the natural differentiation of their offerings, which
ultimately, will produce a state of competitive advantage.

• Consumers will instinctively attempt to simplify their choice process by selecting brands that have satisfied
them in the past.

• A consumer might strongly favour a brand with no prior purchasing experience. This type of consumer
behavior is based on stimulus provided by direct exposure to advertising campaigns, a company’s PR
efforts or even a high concentration of local distribution in an area that is in close proximity to a consumer.
 WHAT IS CONSUMER BEHAVIOR?
• Consumer Behavior is the study of individuals, groups, or organizations and the processes they use to select,
secure, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these
processes have on the consumer and society.

• It attempts to understand the decision-making processes of buyers, both individually and in groups. It studies
characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand
people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference
groups, and society in general.

• Behavior study is based on consumer buying behavior, with the customer playing the three distinct roles of user,
payer and buyer. Research has shown that consumer behavior is difficult to predict, even for experts in the field.

• Consumer behavior involves the psychological processes that consumers go through in recognizing needs, finding
ways to solve these needs, making purchase decisions (e.g., whether or not to purchase a product and, if so, which
brand and where), interpret information, make plans, and implement these plans (e.g., by engaging in comparison
shopping or actually purchasing a product).
 FACTORS AFFECTING CONSUMER BEHAVIOR

Consumer buying behavior is influenced by the major three factors:

1. Social Factors refer to forces that other people exert and which affect consumers’ purchase behavior.
These social factors can include culture and subculture, roles and family, social class and reference
groups.

2. Psychological Factors: These are internal to an individual and generate forces within that influence
her/his purchase behavior. The major forces include motives, perception, learning, attitude and
personality.

3. Personal Factors: These include those aspects that are unique to a person and influence purchase
behavior. These factors include demographic factors, lifestyle, and situational factors.
 CONSUMER DECISION MAKING PROCESS

A. Problem Recognition Purchase decision making process begins when a buyer becomes aware of
an unsatisfied need or problem.

B. Information Search: After the consumer has recognized the need, he / she will try to find the means
to solve that need.

C. Alternatives Evaluation Consumers’ evaluates criteria refer to various dimension; features,

characteristics and benefits that a consumer desires to solve a certain problem.

D. Purchase Action: This stage involves selection of brand and the retail outlet to purchase such a
product.

E. Post-Purchase Actions: Consumer favorable post-purchase evaluation leads to satisfaction.

 BRANDING’S INFLUENCE ON CONSUMER PURCHASING BEHAVIOR
• One must gain clear insight into the definition of consumer buying behavior in order to understand the impact branding
has on it.

• Consumers who are described as displaying complex buying behavior will expand their beliefs regarding a particular
product as a starting point. This stage will eventually lead them to develop positive attitudes regarding the product.

• Consumer who exhibit dissonance-reducing behavior as consumer who are highly involved in the purchasing
experience, however see few differences between brands.

• Consumer will seek information on the differentiation of the product offerings and will not be particularly price sensitive
when seeking functionality.

• Consumer finds him or herself in a market that displays low levels of differentiation, the consumer might result to
purchasing influenced by convenience.

• Consumers who display complex buying behavior, consumers with dissonance-reducing behavior will seek to establish
personal beliefs regarding the product.

• Displaying habitual buying behavior as consumers who did not experience the same sequence as the previous two
behavioral types.

• Variety-seekers are typical buying situation is summarized by low-level involvement in a market that displays high levels
of product differentiation.
 CONCLUSION

• Consumer Behavior is the study of the processes involved when individuals or groups select, purchase, use,
or dispose of products, services, ideas, or experiences to satisfy needs and desires.

• Marketing activities exert an enormous impact on individuals. Consumer behavior is relevant to our
understanding of the dynamics of popular culture.

• The field of consumer behavior is interdisciplinary; it is composed of researchers from many different fields
who share an interest in how people interact with the marketplace.

• The Internet is transforming the way consumers interact with companies and with each other.

• The positivist perspective emphasizes the objectivity of science and the consumer as a rational decision
maker.
Thank You!