BRAND EVALUATION AND PATRONAGE INTENSION

SUBJECT:-CONSUMER BEHAVIOR

SUBMITTED TO: PROF. VINAY CHAUHAN

Submitted by: Mandeep Singh Chib(22-mba-14) Radhika Gupta(32-mba14)

Sanamdeep Kour(44-mba-14)

BRAND : The American Marketing Association (AMA) defines a brand as a "name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers.

Therefore it makes sense to understand that branding is not about getting your target market to choose you over the competition, but it is about getting your prospects to see you as the only one that provides a solution to their problem.

OBJECTIVES OF A GOOD BRAND:

Delivers the message clearly

Confirms the credibility

Connects the target prospects emotionally

Motivates the buyer

Concretes User Loyalty

BRAND TYPES

1) Generic Product : Item characterized by plain label, with no clear differentiation e.g. Xerox, Bisleri

2) Manufacturers’ Brand : Brand name owned by a manufacturer or other Producer e.g. Coca Cola

3) Private Brand : brand name placed on products marketed by wholesalers & retailers e.g. Stop garments from Shoppers Stop

4) Family Brand: Brand name that identifies several related products e.g. Kissan Annapurna Atta , jams , biscuits etc..(Food category)

5) Individual Brand : unique brand name that identifies a specific offering within a firm’s product line and that is not grouped under a family brand e.g. Dove soap from HLL

BRAND EVALUATION

Brand evaluation is crucial in effective brand management. This process enables marketers to obtain a more accurate idea about how powerful a brand name is. In turn, this will help marketers decide what their future marketing strategy would be.

To succeed in branding marketer must understand the needs and wants of the customers and prospects. Marketer do this by integrating brand strategies through company at every point of public contact.

OBJECTIVES

The main objective of a brand evaluation is to help the organization or company to identify the current changes that need to be made to revitalize the brand.

It helps an organization or company to develop their brand based on the core values and beliefs of the brand.

A brand evaluation plays an important role during brand building and planning stages and is critical to the process of building and sustaining brands.

IMPORTANCE AND NECESSITY OF EVALUATING BRANDS-

The necessity of evaluating brands resides both in the company’s and in the marketing environment’s interests, especially those organizations or persons who are interested in the company’s and its brands’ financial performance. It is about the company’s stakeholders (suppliers, investors, financial institutions, distributors, employees, customers etc.) and the competition.

The situations in which brand evaluation is essential could be categorized as it follows:

Mergers and acquisitions - Nowadays, the main determinants of mergers and acquisitions are not only facilities or technologies, but even more important, the value of brands. A few examples could comprise: Row tree Macintosh acquisition by Nestle in 1988 for a price of 2.75 billion, three times the company’s capital market value and 26 times its profits; Kraft Foods acquisition by Philip Morris in 1988 for a price of 12.9 billion USD, of which 90% represented Kraft Foods’ brands value.

Informing financial partners (investors, shareholders, banks, insurance companies etc) - Financial partners perceive brand value as a reference when establishing the extent to which they are willing to take risks and finance the company that possesses the brand. The interest of the brand’s proprietor is to over-estimate the value of its brand. This situation could be avoided through using a formal method of evaluation implemented by an acknowledged third party.

Brand licensing- Brand value is a reference in negotiating the price of a brand licensing contract or the fee paid in order to use the brand name. It is important to consider in this case the potential future market and financial outcomes generated by the power of the brand. Negotiation partners’ opposite interests of over/under-valuing could be harmonized through using a formal method of evaluation agreed by both parties.

Compensation establishment in cases of unauthorized usage of

brand names- Strong brands’ proprietors are exposed to brand piracy which basically leads to weakening the brands ‘value. Compensation establishments can be done considering: the difference between the brand’s value before and after the piracy act, a retroactive brand name usage fee, or the share of the pirate’s profit earned due to using the brand name. All of the considerations above imply a brand evaluation process

Elaborating marketing strategies and plans and evaluating the efficiency of implementation- Brand portfolio evaluation can lead to identifying: weaknesses and strengths among brand’s determinants, ways of restructuring the brands mix, key-brands management, strategies and plans implementation efficiency through after-before evaluations.

BRAND EVALUATION METHODOLOGIES:

Since brand evaluation appeared as a response to the necessity of introducing their values into the financial reports of the companies,

the most popular methods of evaluation are those based on different financial indicators.

Three main brands evaluation methods are well known:

Economic income approach

Market comparable approach

Cost approach

1. Economic income approach

This method is based on projected incomes conversion into a unitary sum, subsequently adjusted based on different factors that lead to determine a final value of the brand.

2. Market comparable approach

This method is based on evaluating the brand by comparing it with the selling values of similar brands and the use of some different factors based ratios, such as the price – earning relationship.

3. Cost approach

This approach is based on brand evaluation throughout determining base costs necessary for the creation of a similar brand and their introduction in an equation which allows for a brand’s final value determination.

DIMENSIONS OF BRAND EVALUATION:

The corporate brands can be evaluated along the five dimensions:

Competence (factor 1)

Exuberance (factor 2)

Credibility (factor)

Forcefulness (factor 4)

Sincerity (factor 5)

Competence: It is a cluster of related abilities, commitments, knowledge and skills that enable a brand to (or an organization) to act effectively.

Exuberance: It is a joyful enthusiasm that a brand shows.

Credibility: It is the quality of being believed or trusted.

Forcefulness: Something that is forceful in a brand and has a very powerful effect and causes you to think or feel something very strongly.

Sincerity: It is the quality or condition of being sincere; genuineness, honesty, and freedom from duplicity.

EVALUATING THE BRAND STRENGTH ON THE MARKET

To evaluate brand strength, whether it is of a consumer product, a business service or a public sector organization, there are different questions which can be asked to the client are:-

What is unique about the function or purpose of your brand or organization?

What are your service or performance targets?

What are the characteristics you want to associate with it?

How do you position yourself against the competition?

What we can actually measure is:

Functional benefits – performance based on defined service factors

Emotional benefits – based on how closely customers identify with the brand, its status and its reputation

Loyalty to the brand or organization (where relevant), or readiness to switch supplier

Advocacy – how ready people are to recommend the product or service

Using these measures we can identify which factors are the most important in defining the market value of the brand. These may concern levels of service, familiarity, or perceived quality – the analysis will identify where investment may be made to improve the position of the brand in the market.

Self-brand

Throughout the long history of consumer research, there has been much interest regarding how consumers choose which brand to buy and why they continue to purchase these brands. Self-branding describes the process in which consumers match their own self-concept with the images of a certain brand.

People engaged in consumption do not merely buy certain products to satisfy basic needs. In fact, consumer buying habits are at a much deeper level. Owning a certain brand can help consumers to express and build

their own self-concept. Specifically, consumers will often only purchase certain trademarks when he/she finds a match between the brand image (communicated through advertisement, design of retail shop, or even package design) and his/her own self-concept. Thereby, the value of a brand also depends of its ability to help consumer to build and create self-concept

Formation of self-brand connections

Self-branding based on self-congruity theory

The above explanation for self-branding can be summarized by Sirgy’s self-congruity theory. It is proposed that consumer behavior is partially determined by the similarity between consumers’ psychological comparisons of the brand-user-image. This self-congruity affects consumption behavior of consumers through motives such as need for self-consistency (e.g. I am a good student because I work hard to prepare for examinations and I always get good grades) and self-esteem. On the other hand, high self-congruity occurs when the consumers find appropriate match between their own self-image and the brand-image. Only high self-congruity would help consumers maintain and enhance self in a positive direction. Further from the above notions, high self-congruity will lead to positive attitudes towards the brand and repeated purchase

Brand evaluation

Besides assisting consumer to choose which product and brand to buy, the matching process between self-concept and image of brand and product also determines how consumers evaluate the brand and product. When we say that a brand has a positive brand-image, it means that the brand has established some strong, favorable and unique associations with the consumer’s self-image(e.g. IPod has a strong and explicit image of trendy, fashionable and high-tech, this

combination of brand image is unique and valued by young people). These strong, favorable and unique associations can be mainly divided into two parts. They are image of users and the psychological benefits experienced by the users in buying this particular brand or product. Firstly, image of users means that when consumer evaluate the brand they will image the typical user of this particular brand and see whether they are similar to the typical user. Demographic and psychological profile of the typical user is usually a good source of information for consumer to make these comparisons (e.g. if I perceived myself as a trendy youngster and valued advance technology, the chance that I will buy an IPod for my own use is very high). Secondly, psychological benefits experienced by consumers include increase recognition by the peer group (i.e. social approval) and expression of how I would like other people to see and think of me (i.e. personal expression).

Brand Evaluation

Message Clarity

This standard addresses visual communications only. Specifically, how well an explicit corporate or campaign message comes across by means of a purely visual language.

Messages are broken into both explicit and implicit groups. Explicit messages generally reflect definitive market attributes (i.e. educational technology, non-profit healthcare, southwest home decor). Implicit messages cover a more generalized range of market attributes (i.e. professional, trustworthy, and approachable) and are usually achieved through form & function and creativity & style.

Form & Function

Using such practices as balance, contrast, scale, and depth as well as theories like gestalt (proximity, similarity, continuity, closure) form and

function serve as the fundamental design principles that govern effective technical execution.

Through proper layout and handling of graphical arrangement, an unsophisticated design can be refined to an extremely high competitive standard. Likewise, a strong visual program can quickly become unstable through ineffective execution of design fundamentals.

Creativity & Style

As the most subjective measure of good communications, creativity and style act as both the icing on the cake to good design and a fundamentally strategic element to more directly connect with an intended audience.

Understanding style requires a historical lesson in graphic design. However, it is helpful to note that styles like Art Deco, Bauhaus, and Post Modern have influenced cultural views through visual communications for decades and having an understanding of these and more recent styles will go far in gaining a command over their application.

Creativity is almost purely subjective – measured only by ranges of originality.

Brand Evaluation Systems

Three Brand Measurement Strategies

Brand Equity – brand assets (or liabilities) linked to a brand’s name and symbol that add to (or subtract from) a product or services*

Brand Valuation – Assigning a dollar value to the brand

The Brand Report Card

Essentials of Brand Measurement

BrandMeasurement

Use pretests and posttests

Use a consumer response model

Establish communications objectives

Understand and implement proper research

Use multiple measures

PATRONAGE INTENTIONS IN CONSUMER BEHAVIOR

MOTIVES

Needs which are unsatisfied are motives

Consumers buy goods/services because of some motives

Motive can be a strong desire, feeling, stimulus or emotion which play vital role in consumer buying decisions.

CLASSIFICATION OF BUYING MOTIVES:

“Reasons” why a person buys a particular product.

1. Innate and Acquired Motive

2. Primary and Secondary Motive

3. Conscious and Unconscious motive

4. Positive and Negative Motive

5. Product and patronage Motive

6. Rational and Emotional Motive

Product motives- Related to product, its price, size, quality etc.

Patronage motives - Related to the physical evidence of the store, goods/services.

Why do buyers purchase from certain specific shops?

Considerations/factors persuade the buyer to display his store patronage

Emotional - to gain social recognition , to imitate others , favorite/most preferred shop based on subjective reasons

Rational - logical reasoning (offer a variety of products , latest design stock, prompt delivery, assure good after sales services)

EMOTIONALRATIONALEMOTIONALRATIONAL

EMOTIONAL MOTIVES

Selection of goods acc. to the personal and subjective criteria, e.g. pride, fear, status, affections etc.

These impulses persuade to purchase products spontaneously & without fore thinking on the consequences.

Buyer “let the heart rule over the mind”

E.g. parents purchase cloths, toys to their child.

RATIONAL MOTIVES

Consumer select goods based on total objective criteria such as size, weight, price etc.

Involve careful reasoning & logical analysis of purchase.

Carefully consider diff. alternatives & choose one which gives him greater utility

E.g. Furniture purchase for house suitability to home environment, durability, economy

Product Emotional Buying Motives:

1. Pride2. Fashion or Imitation 3. Gender4. Habits5. Love and Affection

Comfort: Praise

Product Rational Buying Motives:

Safety or Fear Suitability Durability Economy Convenience Versatility Hobbies

There are four types of approach/avoidance behaviors including:-

1) Physical, related to store patronage intentions

2) Exploratory, related to in-store search and exposure (response to emotional states)

3) Communications, related to personal interactions

4) Performance and satisfaction, related to repeat shopping and time/money expenditures.

As with brand loyalty, store loyalty concerns a consumer’s intentions and behaviors toward a particular store.

Retailers are interested in store image and store atmosphere because they focus on the influence of store attributes on consumers’ affect and cognitions.

A common conflict between manufacturers and retailers centers on brand loyalty versus store loyalty.

Perceived service quality

Perceived merchandise price

Perceived merchandise assortment

Perceived merchandise qualityPerceived shopping mall value

Store patronage intension

PATRONAGE MOTIVES

1. Patronage Emotional Motives :

o Appearance of the store o Recommendation of friends and relatives o Imitation o Prestige o Habit

2. Patronage Rational Motives:

o Proximity

o Widest Assortment o Credit Facilities o Treatment o Services Offered