What influence does a well established brand have on consumer behaviour? Apple Inc. vs. Italian teenagers and their parents: an in-depth case study.

Chapter 1: Introduction

1.1 Background to Context

In today’s competitive environment as organisations grow larger and stronger at a very rapid pace the management of these organisations and the various functions involved in management become very complicated. One of the major functions carried out in organisations is marketing and marketing in the modern times has also become very complicated and difficult as it is quite overloaded with jargons and creates overwhelming confusion for professionals in the industry. One of the main aspects of marketing effectively is the comprehension and understanding of consumer behaviour and how this behaviour can be influenced to entice the consumer in acting in a specific way and buying a specific product or service. Marketing is not just about studying and influencing consumer behaviour as it involves various functions such as development of products, advertising, product design, research and promotion. There are many ways and techniques organisations market their products and services and one of the most popular techniques is differentiation and product placement. The organisations implement various marketing techniques which influence the buying patterns and behaviours of consumers in significant proportions. The analysis of consumer behaviour enables organisations to implement future product and service management techniques in an effective manner. The analysis of this behaviour also informs companies exactly how to produce, label, market and sell their products. In the post modernistic era where consumers are bombarded with loads of information through various communication channels, they hardly remember all the things they have seen or heard but the things which are quite close to their norms or attract them in a specific manner tend to remain for a long time. Organisations spend large sums of money and utilise various resources to enhance the organisational image and the image of the brand as well. These corporations go to great extents to achieve a better image in the minds of consumers in general. Creating and maintaining brand awareness and keeping the brand unique from the competition is considered by organisations as a very effective utilisation of resources and time of the organisation. However complicated the scope of brands may be brands are a means of differentiation and uniqueness which make a certain product or service stand out among others. Brands are seen as a very powerful tool of influencing consumer behaviour and the brand image is used by many companies to market their products and services successfully. As organisations emphasise more and more on brands with increased resources put into over all brand image, logos and branding it has become quite important to fully understand how the brands of a specific organisation impact and influence consumer behaviour and affect purchasing patterns and consumer loyalty. Atkin (2005) performed a research to study why people prefer specific brands and found that people select specific brands just as they join particular cults and groups. People find meaning to and connection along with experienced of community through specific brands such as Apple or Harley Davidson. In the study Atkin (2005) found that people show a profound cult like loyalty towards brands and his study mainly consisted of common people leading normal lives in the community. He explains in his study that brands are in fact the new religions of people and the analysis of consumer loyalty towards brands alone shows how much an established brand like Apple impacts and influences the behaviour of consumers. Marketing is considered by many organisations, theorists and practitioners as a process of successfully creating and maintaining the image of a particular brand in the minds of consumers. If companies and marketing personnel in that company are able to build and maintain this image the marketing technique of that company will be deemed successful and the success of Apple Inc. is a very good example of this phenomenon. On the other hand if a company is unable to establish a better image of its brand all other functions performed in the process of marketing such as promotion, advertising and campaigning would be rendered useless and the company may not achieve the marketing objectives which were set at the beginning of the marketing campaign. These statements imply that marketing is actually the process of creating and maintaining a brand image which means that the whole marketing department and personnel are directly or indirectly involved either with establishing an image of the brand in the consumers’ minds or enhancing the already created brands in minds of the consumers. This major emphasis on brands and branding highlights the importance of branding and brand management in a highly competitive environment such as today and brand identity plays a very important role in retaining loyal customers to a specific organisation or specific brand. (White, 2010) argued that “brand identity can be described as a promise.” The brand image is presented to a consumer to imply a certain characteristic of a product or brand such as the price, quality or service which may vary in different brands. Major emphasis has been laid on the identity of a brand in the past and branding goes back to very old days. The concept of branding came from cattle farming where the farmers used to brand cattle with a hot iron to mark the owner of the cow. This practice was also followed by brick manufacturers who used to put markers on bricks so that the manufacturer of the brick could be identified and a major motive behind this practice was differentiation where the product could be differentiated from other brands and products of competitors (Aaker, 1991). Albeit brands have a very important role in trade and commerce businessmen and organisations did not realise this importance until the 12th century and eventually it became evident to organisations and entrepreneurs that branding and brand image building was one of the most important functions of an organisation. The marketing in the modern era has taken a new form of branding where brand associations are created for the purpose of differentiation. The value and identity of a brand is usually associated with the value of the underlying commodity, product or service by consumers today. A positive or negative image of a product is usually portrayed by a brand and consumers rely on this message when making purchase choices (Kim, C.K; Chung J.Y , 1997). This implies that the value of a product is primarily judged by the value of a brand by consumers and the brand values of Toyota, Kodak, Apple, Sony and Coca Cola are very good examples of this phenomenon (Kinthung, 2009). Manzie Lawfer (2004) in his book entitled why customer comes back argued that the actual questions companies should ask themselves is “which of our customers are most loyal?” and as an answer to the question Lawfer explains that customers have no interest in and give no importance to loyalty rather the satisfaction they derive from consumption of a service of product is what they actually seek when making purchase decisions. The loyalty of customers is basically the reaction to the presentation of services and products by an organisation (Lawfer, 2004). Actually consumers have no obligation whatsoever to purchase a specific product from a specific organisation and in reality consumers are buying specific brands not because of their loyalty towards the brand but because the general appeal they have towards the offering and presentation of a specific product or service. Lawfer also explains that consumer loyalty or disloyalty is not inherent and loyalty should not be perceived as a characteristic of the consumer but rather it is the response of the consumer towards the actions of the brand managers and the brand as a whole which implies that the issue of loyalty is relevant and linked to the organisation instead of the consumer. It is very easy to conduct business with loyal consumers or customers as their behaviour is quite predictable but attracting new consumers is a completely different task which is quite difficult and expensive as well. Organisations which have many loyal and returning consumers are quite profitable and are in far more better economic conditions than companies which continuously have to attract new customers. The focus of this study is to examine how a well established brand influences consumer behaviour. The researcher is especially interested in exploring the case of Apple Inc. vs. Italian teenagers and their parents. The researcher will thus attempt to examine how famous brands have attracted the attention of consumers, whether the brand image can make consumers loyal to the products associated with it and how consumers perceive the important of a good brand for their purchase intention.

1.2 Project Aim Brand identity has attracted the attention of scholars due to its vital role in retaining customers loyal to a brand. The phenomenon of brand identity has been explored from different perspectives. The present study aims to examine and investigate the phenomenon of brand identity from the consumers’ perspective in order to determine the impact of brand identity on their purchase intention and loyalty for the specific brands. For this purpose, the researcher’s main focus will be on Apple Inc. and Italian teenagers and their parents.

1.3 Objectives • To define brand identity after the review the current and classical literature in the context of consumers purchase intention and loyalty for the brand
• To investigate the relationship between brand identity and successful marketing strategies
• To examine the importance of brand identity from consumers perspective

1.4 Research Hypothesis The hypothesis presented below has been devised by using the deductive approach in the carried out research in the given paper. The evidence has been gathered by the secondary and primary sources to test the hypothesis regarding the relationship between the brand identity and the customer loyalty. The hypothesis developed is given as follows: The brand identity of brand plays an integral role in augmenting the customer loyalty and influences consumer behaviour significantly.

1.5 Research Questions The research hypothesis presented above is tested and accepted or rejected by finding appropriate answers to the research questions presented here. However, it should be understood clearly that these research questions are not exhaustive in nature and other information which is applicable and useful for achieving the desired research objective will be included in the research.

• How consumers’ purchase intention is influenced by the brand identity and to what extent do consumers value a particular brand among products that appear similar in use and nature?
• Does Brand identity help in generating customer loyalty?
• Does a change in the characteristics of brand bring a change in customer loyalty?
• What characteristics enforce a customer to be loyal?
• Why is customer loyalty important for brands?
• What is brand loyalty and brand identity?
1.6 Disclaimer This research and data collection required in this research has been completed after appropriate approval and authorisation of the instructor. The information concerning various areas of research has been incorporated in this research with complete consideration of plagiarism and copyright issues. Extreme caution has been taken regarding from where data is acquired from. Participants who want to remain anonymous are not shared with third parties while considering all aspects of privacy issues. The data obtained and studied from several secondary sources including books, reports, journal articles, periodicals and websites has been accredited appropriately through citation and referencing. The researcher has taken extreme caution while researching various aspects of study, critical business decisions should not be made on foundation of the report. This research report is distributed with a condition that it will not be commercially or otherwise resold, lent, redistributed and hired out without previous authorisation of both the researcher and supervisor.

Chapter 2: Literature Review

2.1 Background Literature A brand represents a distinctive trademark or name identifying a manufacturer, product, or service. Brands symbolise differences between competing and similar products, allowing consumers an opportunity to distinguish variables in quality, value, price, content, purpose, and performance. Traditionally, branding represented major manufacturers only as opposed to regional companies (McEwen, 2001). As an identifier and manager of perceptions, brands play an integral role in consumer culture. Wally Olins, commenting on the prominence said, “Brands and branding are the most significant gifts that commerce has ever made to popular culture. “Branding has moved so far beyond its commercial origins that its impact is virtually immeasurable in social and cultural terms” (Olins, 2005, p. 12). In fact, it is difficult to even conceptualise, in this present age, the detachment of product from brand. . The practical function is helping consumers differentiate between similar product offerings. Parity “is when a company’s products or performance are no better and no worse than the competition’s” (Interbrand, 2006, p. 94). Branding plays a major role in transforming negligible differences into defining characteristics or from mere “commodities to luxury items” (p. 94). . . . . . . . . . . . Over the last two decades, brand equity has become a central focus for marketplace managers. Keller (1993) defines brand equity as marketing effects that can only be attributable to the brand. This definition establishes the brand and its leverage relative to other purchase choices. At increased levels of brand equity, a brand’s effect with consumers is considered relevant when a decreased preference for the product would be shown in the absence of brand attributes, such as name and symbol (Simon & Sullivan, 1993). For example, if Coca-Cola was simply called Cola, packaged in silver instead of red and used block lettering instead of the trademark cursive, consumers would buy less of it even if it tastes exactly the same as before. As a result, increased brand equity is accompanied by a plethora of advantages in a competitive marketplace. Aaker (1991) discovered that strong brands serve as a safety net against risk for the consumer when consistency across brand experiences meets or exceeds their expectations. He also found that brands that are associated with high product quality are afforded premium pricing. Lastly, increased brand equity yields bargaining power when negotiating with distribution channels. Keller (1993) notes that understanding brand knowledge is important because it influences what come to mind when consumers think of a brand. He proposes that brand knowledge is composed of two elements: brand awareness and brand image. Brand image is determined by the type, favourability, strength and uniqueness of various associations that consumers make about a brand. If a consumer strongly believes this association is favourable, brand image – and in turn brand equity – is enhanced.

2.2 Consumer Purchase Behaviour It is not necessary that customers purchase the same product from the same buyer again and again. Customer needs and preferences tends to change, thus it is very essential that brand identities are maintained. According to Lawfer, reduction in costs and predictability are not the only two advantages why customers carry out business. Rather there is a third advantage as well. The third advantage plays a vital role in decreasing costs while dealing with customers. When a new customer comes in, he has to learn how to deal with the company and learning that takes time. New customers have a million other problems such as high returns, bad credit habits etc which the company has to overcome in order to figure out ways through which the companies can work best with them. Overcoming these sorts of problems takes time. The companies need to think on these aspects such as the how the new customers will make the payment. What their delivery requirements are going to be. What selection or styles these companies prefer. Will these customers change their minds on a regular basis regarding the changing and the returning of the products. To what extent these customers are demanding of service and how responsive they are to promotions and special sales. Only after a company learns about a specific customer, only then it is able to deal with the customers effectively. All the extra time spent, costs a company some money. Since the more the amount of time is spent in understanding customers means a lost potential profit. There are two ways through which a customer can learn, either by learning from his own mistakes which is very costly. Mistakes cause time or money or maybe both. The second way to learn mistakes is by analysing the mistakes that other people make which proves to be costly for the person who is giving the example. The third way of learning is through ones own positive actions. This is not costly but it has the tendency to take many years. The fourth way of learning is through the positive actions depicted by others. Learning through the successes of others one can learn without the pain of making a mistake and the learning will come more quickly. Money is created through customer loyalty. In commerce the idea is different. In commerce the concept is different. If one has to win than the other one has to loose. This concept is not applicable when considering customer loyalty. In customer loyalty, if one business is able to gain a loyal customer, it is at no expense to the other organisation. The only time when an organisation can make a profit is when the customer returns for making a purchase for the second, third and fourth time. If a customer is buying different brands every time then there lays no loyalty. None of the brands are able to make a profit from the customer. That customer is always a new customer as he changes from one business to another one. In this situation, the customer also doesn’t win anything for he is not able to achieve much satisfaction out of any of the relationship and transaction that might force the customer to come back and buy again from the same business. When a company starts understanding the customer and gives him what he wants, that’s when a customer starts turning into a loyal customer. He starts purchasing on repeat basis and is able to create profit where no profit existed prior to that. This profit does not come at the expense of the competition; rather it is derived from savings and other benefits from selling to a loyal customer. Thus everyone wins in this situation. The competitor is no longer losing money on the disloyal customer. The business that now possesses customer loyalty is now making a profit which failed to exist before. The customer is satisfied with the relationship, transaction, services or products to become a loyal customer. Manzie Lawfer states that there are five principles that play a fundamental role in creating customers loyalty. The first principle states that that customer do business with individuals not objects. The second principle forces businesses to differentiate from other businesses. The third principle focuses on giving value and assurance to customers. The fifth principle requires companies to have effective communication strategiesand the fifth principle is all about focusing on loyal customers. The reason why there is a need for customer satisfaction is because businesses today can be indecisive. Internet, changing technology and overnight delivery to anywhere in the country has changed the rules of the competition. Thus getting customers back again and again has become one of the most important endeavors of any business. In the year 1977, in America, Nolan Bushnell, the inventor and founder of Atari video game company sold his company for a fortune. Bushnell opened a new company called Chuck E.Cheeses (Lawfer, 2004). The restaurant targeted towards special events and birthday parties. Every kid who lived in the vicinity of Chuck E. Cheeses wanted to have his birthday party there. The kids were in love with the restaurants in spite of the fact that the parents hated to host their kid’s birthday parties there. When the franchises started to become popular, the pizzas became terrible and the service worsened. Bushnell admitted that the pizzas served were mediocre at best; however he refused to improve them. According to him improving the quality was not important enough as it did not matter to him if anybody ever came back to his restaurants. He had thought that he could base the success of his restaurant on a continuous stream of onetime customers. His plan flawed once the word of terrible pizza and poor service traveled quickly. Despite the appeals by their children, parents refused to consider Chuck E. Cheese (Lawfer, 2004). Bushnell plan backfired. The stream of customers that had visited the pizza place told others about their terrible experience. Bushnell dream came to an end due to the negative word of mouth that ended his plans to franchise these restaurants. This it can be concluded that businesses depend on customers that come back again and again. Few of Chuck E. Cheese’s franchises continued their operations independent of Bushnell’s philosophy, with their own philosophy of carrying on with a repeat customer trade. This example brings forth a conclusion that businesses today cannot prosper or even exist without repeat customers. The Chuck E. Cheeses establishments that agreed onto repeating businesses are thriving even today. Today, both children and their parents love the birthday parties at Chuck E. Cheeses (Lawfer, 2004). Thus customer loyalty is the ultimate competitive advantage

2.2.1 Applications of consumer behaviour Consumer behaviour study is important in various fields, few of which are Environmental analysis, Market research, Segmentation of market place, Product differentiation, product positioning and marketing mix development (Mowen & Minor). Product positioning pertains to assessing how a competitor perceives a brand as compared to those of his competitors. The main aim is to increase demand by creating a product with differentiated characteristics (Mowen & Minor). Product Differentiation is the procedure of manipulating of the marketing mix so as to position the product in a way that allows consumers to recognise meaningful differences between the brand and its contenders. Environmental analysis is the evaluation of the external forces that acts upon the consumers and the firm and thus creates threats and opportunities. Marketing research applies to consumer research that is designed to inform the management on factors that impact consumption, consumer’s acquisition and disposition of service, goods and ideas.

2.2.2 Consumer buying behaviour Customer satisfaction and customer loyalty is not one and the same thing (Lawfer, 2004). Most of the businesses today are interested in creating only loyalty. The main thing that needs to be understood is that customer loyalty cannot be created in customers by creating customer satisfaction. Manzie in his book presented the view that people don’t do business with equipment, business or storefronts rather they only do business with people. This idea becomes the sole basis of creating loyalty relationship between the consumer and the customer. This can be explained with the help of an anecdote narrated by Mr Iacocca when he was the CEO of the Chrysler Corporation. Once a work engineer came to him and told him that he was really happy with his work but it was the people who were giving him trouble. Mr Iacocca explained to him that it’s the people who they were dealing with and he should find a way that should ensure that the people they were dealing with were satisfied (Lawfer, 2004). All consumers are looking for the same thing that is to carry out business with those people who confirm their importance. Customer Importance can be demonstrated through four aspects popularly known as KUHL (Lawfer, 2004):
• Know me
• Understand me,
• Help me,
• Lead me.

The “knowing me” terms pertains to knowing the customers name or maybe knowing the last transaction that was carried out with them. Knowing a customer by name is beneficial, for the next time they come in, they will repay you by coming again and again. Knowing a customer by name makes the customer feel that he is important. All customers desire to be understood. The reason for this is so that one can lead, help and serve them. Consumers consider themselves important enough to have their needs and wants taken care of. The customer will not allow the company to lead until they understand his/ her needs. Customer needs the product to help them satisfy their needs.

2.2.3 Post purchase behaviour Post purchase behaviour sheds light at the experiences and activities of the consumers after they have made the purchase. It has been showed in a study that after making a purchase, what consumers usually face is a post purchase dissonance i.e. they regret their purchase decision (Consumer Behaviour, 2010). The main reason behind the post purchase dissonance is the attractiveness of forgone alternatives, the difficulty caused in purchase decision and a greater number of alternatives available. In order to reduce the Post purchase behaviour, the customer sometimes even exchange or return the product. This creates an opportunity for the marketers to decrease consumers risk perception by putting forth good return policies and lessen their post purchase dissonance by messages targeted at this segment. Consumers select a specific retail store based on the store image. There are cases mentioned in which the consumers use the product but with the passage of time fails to do so. Thus, it is pertinent for the marketers to not to not to consider the purchase of a product as a product consumed. A non-used product is also more likely to affect the repurchase pattern of the consumers negatively. Consumers need to dispose off the products or packaging before, during, or after the use. The issue of disposal is gaining considerable importance for marketers as it directly affects the repurchase pattern of the consumers. As the products get more consumed, it becomes more likely for the consumers that they will purchase the products again. It is very normal that the consumers are not able to get rid of the problem due to financial constraints and space. Disposal options for consumers constitute of permanently disposing off and temporarily disposing off. Retailer plays a very important role for the consumer on disposing the product. Once the product has been consumed, the consumers enters the next stage that is of evaluation which might lead to satisfaction if the perceived information exceeds the desired expectation or it may lead to non- satisfaction if the perceived performance equals minimum desired expectation or to dissatisfaction when the perceived performance is less than the minimum desired expectation. If the consumer is not fully satisfied then he may make complaints and may not come back to purchase the product. Consumers may take an action against the marketer or the service provider by warning friends of not making the purchase of the same product, returning the product, switching the brand, boycotting the brand, complaining to the marketer regarding the product or even taking legal action towards the marketer. Marketers should use this as an opportunity by using the complaints for assessing their performance the way it is perceived by the consumers. Moreover they should use this opportunity as a way to delight their consumers. Most of the marketers these days are very actively seeking consumer feedback to make their products better and improve their quality service for the long term goal of retaining the existing customers and attracting a segment of new customers. To them customer retention is of major concern as a research has shown that even the most satisfied customers cannot be claimed as loyalists and they may even switch to a competing brand to get a better offer. Thus, for the marketers the quality of the product and service as a means to evaluate consumer’s intention of repurchasing the product rather than the customers level of satisfaction. It is only the committed and the satisfied customers who are known to be brand loyalists. Brand loyal customers are a very effective at spreading positive word of mouth and are less likely to switch to other brands. Marketers today have become fond of loyalty marketing in order to increase customer retention by offering various discounts, schemes for their highly valued customers. Some of the critics are of the view that if such tactics are not implemented properly, they can fail to deliver what was initially promised that can lead to irritated consumers. Many others believe to classify the consumers on the basis of their satisfaction and later treat each group differently. Post purchase behaviour, if evaluated properly can lead the company into assessing the problem and solving it in order to achieved customer satisfaction. This can b explained with the help of Harley Davidson case study. In the early 1960s Harley carried a very outlaw image and produced very poor quality vehicles. It was not unusual to see the cardboards placed under the kick stands of the display bikes so the oil leaking from the engines would not foul he showroom floors (Bacon & Pugh, 2008). Only Dedicated gear head who knew how to take care of the bike and repair them were intimidated with Harley Davidson’s name. With the arrival of 1970s, the market started flooding with the Kawasaki’s, Hondas, Suzuki’s, Yamahas which in the Japanese fashion offered much more product quality, more product features and a more professional and informed army of dealers. In the 1980, a series of Harley Davidson’s officers bought the company that was facing bankruptcy for the second time in twenty years and initiated a quality crusade (Bacon & Pugh, 2008). Some of the management of the company were sent to Japan to study the methods of manufacturing, Inventory management and quality control. They later applied much of whatever they learnt in their own factories back home. Currently Harley Davidson motorcycles meet the highest quality criteria. There is now virtually no difference in terms of quality between a Honda, Harley and a BMW. The traditional source of completive advantage for Harley Davidson is the look and feel of their motorcycles. Harleys are identified by the guttural roar of their pipes and the deep retro designs, which were pioneered by Wille. G. Davidson, one of the founder’s grandsons (Bacon & Pugh, 2008). Harley owners work hard on an image that displays an irreverent part of themselves that they don want to let go of. This brings forth the idea that how much it is important to differentiate the product and importance of maintain the consumer interest through quality and consistency that will led to their satisfaction and will ultimately urge them to come back again for the product.

2.2.4Types of buying behavior According to studies by Peppers and Rogers (2006), customer datum indicates high-value customers are unique and are determined by characteristics of frequency. Peppers and Rodgers described consumers who frequently travelled (i.e., shopped) and limited their budgetary allocations, consumers who travelled less frequently and spent more for each trip, and consumers who travelled infrequently and budgeted larger amounts for the trip. The knowledge of consumer purchase frequencies and patterns supports marketing efforts to identify the various needs of consumers and sustain long-term consumer dedication. Reciprocity between manufacturers and consumers is a potential consumer decision-making stimulus (Mitchell, 2007). Human beings act in reciprocal ways. When consumers receive value, the common response is to return the gesture in kind. Marketing of consumer brands has traditionally included gifts, contests, and nutritional claims of significance to consumers with the goal of obligating the consumer to the product and producing repeated purchase responses (Mitchell, 2007). Mitchell (2007) cited the significance of expert authority, personal appeal, commitment of a brand to a consumer, and consistency of value and quality performance to influencing consumer decision-making processes. “Studies have found, for example, many brand preferences are formed after and not before purchase - as humans seek to justify and rationalise the decisions made” (Mitchell, 2007, p. 26). Human decision making heuristics constitute a learning process for manufacturer and store brand marketers to maintain connections with their customers. Research findings have shown , as consumers become familiar with the attributes of a product, they become less afraid of the consequences of value and social proofing (i.e., the inability of consumers to determine the appropriate behaviour in a given situation), but shifts in consumer perspectives necessitate a constant review of marketing initiatives (Mitchell, 2007).

2.3 Consumer Decision Making Consumers face situations in which they must form judgments based on marketing messages derived from personal observations (Briley & Aaker, 2006). The conditions under which survey respondents make decisions are socially influenced by culture, age, and the proximity to the respondents’ socio-cultural environment (Briley & Aaker, 2006). Cultural beliefs, attitudes, values, are necessary to interpret marketing messages. The ability for a respondent to relate personal knowledge and experience while associating a marketing message to a particular cultural experience is important for marketers and retailers to better understand culturally influenced consumer thought patterns and decision processes (Hong, Morris, Chiu, & Benet-Martinez, 2003). Briley and Aaker (2006) stated, “Culture does not exert an unwavering effect on people across continents. Cultural knowledge can have precedence when people are not able to give deliberated thought to a judgment (decision)” (Briley & Aaker, 2006, p. 402). Briley, Morris, and Simonson (2000) inferred searching for reasons to justify decisions activates cultural knowledge, further suggesting generalised deliberation by respondents can bring strong cultural forces into bearing. Given the strength of the population demographics in San Francisco and the high probability that respondents belong to the Asian or Hispanic cultures, cultural factors were considered as possible determinants to consumer decision-making processes in the proposed study.

2.4 Consumer Measured Value The concept of measuring consumer value emerged in the early 1990s as a contributing factor to achieving success in organisations and as a key source of competitive advantage on which organisations can rely (Sanchez-Fernandez & Iniesta-Bonillo, 2006). Consumer value continues to suggest ambiguous interpretation (Khalifa, 2004; Van der Haar, Kemp, & Omta, 2001) as well as variations present among individual consumers’ perception of a value (Sinha & DeSarbo, 1998). Khalifa described value as the outcome of the valuation of judgment. Holbrook (1999) separated values as the “rules, criteria, norm, goals, or ideals serve as the basis for those evaluative judgments” (Sanchez-Fernandez & Iniesta-Bonillo, 2006, p. 46). Implicit beliefs guide consumer behavior to achieve ultimate-ended states of existence (Flint, Woodruff, & Gardial, 1997). Sanchez-Fernandez and Iniesta-Bonillo (2006) stated, “Value is a concept that is not well differentiated from other related constructs such as utility, price, quality, or satisfaction” (p. 45). Sanchez-Fernandez and Iniesta-Bonillo pointed out no clear results had been obtained to explain the interaction between related marketing variables. There are extensive studies on price and value relationships, especially perceived price and consumer value (Chang & Wildt, 1994; Chen & Dubinsky, 2003; Sweeney, Soutar, & Johnson, 1999; Teas & Agarwal, 2000). Sweeney and Soutar (2001) suggested price value was a subcomponent of overall value (Sanchez-Fernandez & Iniesta-Bonillo, 2006). Sanchez-Fernandez and Iniesta-Bonillo concluded there is a general lack of agreement among scholars as to a definition of value.

2.5 Identity of a brand Mark Gobe in his book Emotional Branding: The new paradigm for connecting brands to people explains that Identity for a brand is its recognition whereas personality is about charisma and character (Gobe, 2010). Brand identities are unique and represent a point of difference as compared to the competitive landscape. Brand personalities on the other hand are very special. Theory character is charismatic that provokes the emotional response. For example American Airline has a strong identity whereas Virgin airlines constitute a personality. There are lots of businesses that are respected, but very few businesses have vocal, loyal passionate fans. These kind of customers don’t not come back again and again but rave wildly to family, friend and even strangers that they come across (Bliss, 2009). These kinds of customers can drive explosive growth through blogs, e-mail, face book and twitter. There is no short cut for earning a loyal customer. Even the worlds biggest marketing budget can’t make customers love you.

For example Griffing hospital, a regional hospital in Connecticut changed their philosophy in order to gain more customer loyalty from their patients. They gave them full medical access to their medical records, en ding secrecy that led a sharp decrease in lawsuits. Since Griffing hospital realised the importance of customer loyalty, thus they were able to decrease the number of lawsuits against them. In order to make customers come back to their shop again and again. Apple did something special with their stores in spite of the high costs incurred. It is providing the experience of its stores to make them appear as destinations (Bliss, 2009). The reason why they have become destinations is because the experience wrapped around the product and the communities using it. Another example is that of a Connecticut based bike shop called Zanes cycles. This shop sells 13 million dollars worth of supplies and bikes a year (Bliss, 2009). The way through which this company created loyalty was by giving away parts of bicycle that was worth less than a dollar. Another example is that of Netflix. The company apologised to its customers when they realised that there was a delay in shipping DVDs (Bliss, 2009).

From all these examples it can be concluded that all these companies constantly found out new ways to weave humanity into their businesses. The reward of this came out to be a volunteer publicists and cheerleaders who spread a positive word of mouth as well as they urged their colleagues and friends to try these companies. The Kodak story narrated below demonstrates how brand equity can be created and managed. In the 1980s, in order to take a picture a photographer had to come equipped with all the items such as glass plates, a tripod, a dark tent, a giant plate holder, water container and a nitrate bath. This tiresome process was changed thanks to George Eastman. He founded a brand KODAK that has been of great influence ever since its inception. KODAK, with its bright yellow background and its block letters has been used over the past hundred years to communicate the essence of Eastman’s organisation and products. The reason why this brand still exists today is because of its commitment to quality, the fostering of loyalty, the generation of awareness and most important a clear and strong brand identity (Aaker, 1995). In the late 1870s, Eastman came up with a patent of dry plates that assured to simplifying the photographic process. The plates became known for their superior results, particularly in long exposures and weak lights. A year after the introduction of such plates, a trouble occurred with the components that caused the plates to loose some sensitivity. Eastman’s risky step towards recalling the plates reflected the importance given to quality so that customer satisfaction could be ensured. It also helped in developing customer associations between quality and brand associations. . . . . . Later in 1988 Eastman Company started to market a camera that made photography accessible to all. In 1988, the marketing campaign for Kodak ran with a line "You press the button, we do the rest”. One by one the long term innovation and quality consistency increased Kodak’s awareness. The result of innovation plus ongoing marketing campaigns increased Kodak familiarity with customer. . . One of the reasons or Kodak’s presence world wide is because of its early decision to distribute products outside US. After five years of its presence in the U.S, a sales office was opened in London that’s was quickly followed throughout Europe. By 1930 KODAK had captured 75 percent of the world market for photographic equipment. Kodak has different set of associations that provides a distinct image and basis for consumer loyalty. Kodak’s decades’ long identity backed by old products and marketing campaigns can be summed up with two words: family and simplicity. Because of repeated marketing efforts like these backed by a huge range of quality products has led to perceive Kodak as a family friend who is always there to enjoy good times and keep memoirs of the past. This image has acted as a key factor in strengthening customer loyalty for Kodak. . . . . . Customer loyalty for Kodak is visible by an incident that took place in the year1976. Their customer loyalty acted as brand resilience in the face of the mishap. Kodak instant camera had captured one- third of the market in the year 1976. However after a successful patent encroachment suit by Polaroid, Kodak was asked to discontinue its product in the year 1986. As a result Kodak was forced to withdraw the product from the market. Any famous brand could have been irreversibly tainted by such an activity. However Kodak survived this dilemma only because of the brand strength and its customer loyalty that helped them pass the painful situation. In order to not cause any problem to their customers, every camera owner was invited to return their Kodak instant camera and exchange it with Kodak film and disk camera that were fifty dollars worth of Kodak products. The customers were also given an option to get a share in Kodak’s stock. Kodak used this opportunity to show how important theory customers were to them and to maintain their image.

2.5.1Brand Loyalty In his book Building strong brands Aaker justifies that there are two reasons why brand loyalty is important. The first reason is that the brands value for a firm is mostly created by the customer loyalty it commands (Aaker, 1995). The second reason is once an organisation justifies and encourages loyalty building programs; it will then enhance and create brand equity (Aaker, 1995).

2.5.2 Loyalty and Brand Value Brand loyalty should be given a high weight age once a value is being placed to a brand reason being that a highly loyal customer base can generate a very generous profit and sales stream. Thus a brand without a loyal customer base is very vulnerable. Moreover it is much less costly for a brand that has a strong customer base to attract new customers. One of the most common mistakes that business today make is seeking growth through enticing new customers for the brand while neglecting the existing ones. The loyalty provided by the existing customer base also acts as an entry barrier for the competitors. The cost associated with enticing customers to change their loyalties is often expensive. Most of the organisations should make sure to estimate the value of their existent customer base. The results can be very instructive and surprising. One of the examples is the experience of Charles Cawley who was the president of MBNA America, a Delaware based Credit Card Company. In the year 1982, Delaware called a meeting of the 300 employees that were working for him and announced that he had received many letters from unhappy customers. It was then he declared that his company is going to work hard on these customers, retain them and will make sure that they are happy. In order to fulfil the goal, the company started to ask their customers what was the reason that made them leave? What were their issues? What did they want in a credit card company? Once the information was gathered, the company initiated a plan and went forward towards implementing it. They made frequent changes to the changing needs of the customer base. As a result of all of thus hard work fewer customers left the company. After eight years of implementing the plan MBNA enjoys the lowest defection rate in the industry. Even though MBNA made no acquisitions, its industry ranking moved upward from thirty eighth to number four. Its profit soared sixteen fold (Griffin & Herres, 2002). Till date MBNA retains 97 percent of its customer base. In fact the company believes so much in loyalty that so far it is the only credit card company reporting loyalty statistic in its annual report. The rewards of loyalty are cumulative and long term. Research suggests that a company can increase its profits from 25-85 percent by only increasing its customer retentions by 5 percent (Griffin & Herres, 2002). Increased loyalty can bring profitability to a company in six areas. Marketing costs are reduced, transaction costs are reduced, customer turnover expenses are reduced, cross- selling success is increased leading to a larger customer share, a positive word of mouth is spread, and failure costs are reduced.

2.5.3 Loyalty Segmentation Focus on loyalty segmentation can prove to be important on getting tactical and strategic insights that can be prove to be very important in building strong brands. A market can be distributed into the following groups (Aaker, 1995):

• Non customers: those who buy competitor brands.
• Price switchers: who are extremely price sensitive
• Passively loyal: who buy out of a habit and not for a reason
• Fence sitters: those who are indifferent towards the brands
• Committed

The main challenge that remains is to develop brand loyalty’s profile. That is to increase the number of customers who are not price switchers, to strengthen the fence sitters consumers and commit them to a specific brand (Aaker, 1995). To increase the number of consumers who are willing to pay more in return to using a specific brand or service. Two segments that remain under invested are committed users and passively loyal. The passively loyal customers are mostly taken for granted. The management for this segment does not involve identity building rather it works towards avoiding distribution gaps or out of stock situations that might force the buyer to switch brands. It also pertains to having the flavors, colors and sizes that might be desired. This however can become very economically unattractive for the company. The analysis needs to be made on the basis of habitual performance of passively loyal segment. Firms sometimes also tend to take the committed and the highly loyal group as granted where as there may be a possibility to increase business for the very loyal. For example, Marriott customers that are very loyal can be encouraged to select Marriott with their improved portfolio of businesses such as fax machines in rooms. However, there also lies a risk that the loyal customers can be enticed away by a competition in case the service or the products not improved. For this sole purpose, firms avoid to divert resource from the loyal customers to the price switchers and non customers.

2.5.4 Enhancing Loyalty One way of enhancing loyalty towards the committed and the offence sitters is to strengthen and develop their relationship with the brand. A clear Brand identity, brand awareness, perceived quality can contribute towards this goal increasingly. Some of the programs that can build customer loyalty are as follows: Programs A frequent buyer program provides a tangible and direct reinforcement to the loyal customers. These programs play a very important role in enhancing the value proposition of the brand. They also confirm the commitment, they are making to the loyal customers. The frequent buyer programs were initiated by United Airlines Mileage plus, British Airways frequent travelers programs and American Airline Advantage and are now being used hotels, fast food chains and even automotive Industry. Clubs A more intense loyal program can be precipitated by customer clubs. For example, upon joining the Nintendo fun club, customers received newsletters. Caldridge casino and Hotel provides member receive discounts, News regarding upcoming events, Limo services, monogrammed bath robes and other special services. Marketing Database marketing can be used for marketing focused and narrow segments. News related to special promotions and new products is targeted towards those segments that are most likely to respond. This will make the customers feel that the firm is connecting to them individually. These will result in an enhanced brand customer relationship. For example Beverages and more, a retail chain offers wide collection of beers, wines, liquors and drink complements. Ever customer is offered to join its “Club Bev” and is given a card that will track all the purchases of the customer. In addition to that a newsletter, a frequent buyer program, personal notifications are also provided. All of this makes every individual customer feel that he is important. 2.6 Relationship between Brand Identity and Consumer Behaviour Building strong brands has proved of providing various financial rewards for the firm and is the top priority of top organisations these days. According to the research paper, it is very essential to creating strong brands. Creating strong brands involves four steps. The first step is about establishing proper brand identity of the brand (Keller, 2001). For example Nike has a brand identity that penetrates the entire organisation that is to experience the emotion of winning, competition and crushing competitors. Nike’s office seems more like a shrine to the competitive spirit. The walls of the office are covered by photos of Nike heroes, Nike athletes bronze plaques hang along the Nike hall of fame, Nike athletes statues are placed are placed along the running track (Brandenburger & Nalebuff, 1996). Moreover the building there honour champions such as tennis pro Jon McEnroe, Basketball superstar Michael Jordan and Olympic marathoner John Benoit. As a result of the integrated competitive spirit in the organisation leaves less room for employees who do not feel simulated by the competitive spirit. The second step involves creating suitable brand meaning through favourable and strong brand associations. The third step involves eliciting positive media responses and the forth step entitles to building brand relationships with customers that are narrated by intense, active loyalty. IKEA one of the largest global retailer is based in Sweden with a specific and clear positioning. Ikeas main customers are individuals who want wants to have good style with low cost. A tailored set of activities turns this marketing concept into a strategic position. IKEA mainly plans to perform activities differently from its rivals. If we analyse a typical furniture store, this is what we will probably see. Showrooms display many samples of the merchandise. On area might contain 25 samples while other will be displaying only five dining tables. However both these areas represent a fraction of what’s available o the customers (Brandenburger & Nalebuff, 1996). Dozens of books containing fabric and wood samples with alternative styles are available for the customers to choose from. Sales persons escort customers through the maze of choices available. Once the selection has been done, the order is communicated to the third party manufacturer. If the customer is lucky, he will receive the order in six to eight weeks. This is a value chain that maximises service and customisation but with high cost. A brand identity that is understood well leads to the satisfaction of customers needs. This can be explained with the help of IKEA brand identity. The products and related services that IKEA provide are uniquely aligned with those of the customers who are not very wealthy, are young, who are most likely to have children and since they are working to make a reasonable living they are working at odd hours (Brandenburger & Nalebuff, 1996). At IKEA, the concept is totally different. IKEA believes in serving customers who are happy to exchange service with cost. Instead of having a sales associate trailing the customer around the store, IKEA makes use of self service models that are clearly visible in store. Rather than relying on the third party manufacturers, IKEA designs it ready to assemble, low cost furniture that fit its strategic positioning (Brandenburger & Nalebuff, 1996). IKEA has a large number of stores where it display all of its products in room like settings so the customers are not in need of a decorator to help them put the pieces together . Next to the furnished showrooms is a warehouse section where products are stocked in pallets or boxes. Customers are expected to carry out their on delivery or pickup. IKEA has even taken care of making a roof sack available for customer’s cars that come to collect the goods. The roof sack can be refunded o returned on the next visit. Most of Ikeas low cost positioning comes from customers who have a do it yourself behavior. Moreover IKEA also provides extra services that their competitor doesn’t offer such as child care, extended hours. Griffin in her books puts forward the idea that it is very essential for the companies to win back their customers. One of the methods of doing so is having a feedback from the customer. This is very essential in knowing what the customer wants. In order to get feedbacks, newsletters, online communities, using staff feedback surveys, responding to customers changing needs and making use of channel partner collaboration for driving customer value delivery (Griffin & Herres, 2002). In her book she interviewed a farmer regarding how he creates loyalty with the people who come to do business with him. Upon survey, he found out that his customers didn’t come to him because of low prices offered; rather they came to him because of his uniqueness and the quality of the work (Griffin & Herres, 2002). Moreover griffin also states another example, that of a Nebraska travel agent who learned that he was able to retain his corporate accounts as he was willing to hold regular sessions with his clients.

2.7 Summary A customer is a very vulnerable person. In spite of the fact that he is satisfied with a certain product or service, there is a possibility that he might not go to the same buyer again. For this purpose companies are advised to clearly define their brand identity so that customers are retained. Customer satisfaction and loyalty are two separate areas. After a purchase is made, a customer tends to face dissonance due to the opportunities lost. In order to retain and create more customers, companies can introduce database marketing, customer clubs and frequent flyer programs.

Chapter 3: Research Methodology

3.1 Introduction The techniques used in this study are there to analyze the data presented in the research. The research conception, methods applied to the research and rationalization of the research methodology applied are discussed within the presented chapter. Various approaches such as quantitative, qualitative, and Likert scale approach are explained in the following chapters with their respective limitations and advantages. The chapter also sheds light on the most appropriate data collection methods for the current research. The data collection procedures utilised the primary and secondary research are also reviewed in this chapter. There are two main methods of research: qualitative and quantitative. Though both of the methods have their own significance, the researcher used exploratory quantitative research design for this study because a survey methodology to gather data from a large population is easily quantifiable, and the use of the Likert-type scale is familiar and a previously tested type of instrument (Neuman, 2003). The descriptive quantitative study has relevant value as it uses consumer response datum to evaluate the extent to which consumers demonstrate their understanding of brand identity. The purpose of the quantitative survey design research was to examine the impact of brand identity on the consumers’ loyalty. For this purpose the researcher conducted online surveys inviting the participants to complete the survey form where the researcher had subscription and an account to host the survey. Research questions dictate the selection of methods. The consistency between research questions and research design is the standard criterion for high quality studies (Newman, Ridenour, Newman, & DeMarco, 2003). The research questions of this study focus on “how” and descriptive “what” questions for understanding the relationship between brand identity and the consumers’ loyalty.

3.2 Research Methodology Research methodology pertains to estimating historical data from the preceding researches, articles, books and other sources as well as carrying on a personal research in order provide views that can increase human knowledge regarding a specific topic. The main objective behind the research is to enhance the knowledge of the readers within a specific area and present convincing facts in any discipline. Research methodology depends upon deducing from the researches that had taken place previously and justification of the details of those studies. It also takes into account the analysis and examination of a specific part of a discipline to provide a new and fresh viewpoint. (Kumar 2002). It is not possible to have an effective research by only interpreting and collecting the data. The data should always be backed by conclusion from other available researches. The means through which the data is composed, evaluated and the form in which the results are presented should be such that the research is termed effective. Processes through which people try to determine unknown and discover new ideas is termed to as research. The methodology in a research describes the methods through which data is composed, interpreted and analysed to form a conclusion in a particular area of study (Goddard and Melville 2004)

3.3 Quantitative Approach The quantitative methods of the positivist paradigm are usually applied to researches done in medical sciences to evaluate the connection among different variables related to human health, infections and diseases (Ulin, Robinson and Tolley 2004). The quantitative approach interprets and lays down results by applying numerical data and making use of the data associated with measurements. This approach is based on statistical and numerical data. A variety of statistical techniques are applied to the numerical data acquired from research subjects and other sources. Quantitative approach is applied to various scientific areas for example psychology, for the purpose of testing research hypotheses after assessment of data obtained from different sources. The similarity and disparity present in the statistical and numerical data are demonstrated through the research that is based on this approach. The researcher cannot tamper with the components and data of the research. In case another research is conducted using similar mathematical and statistical methods and same data, it should produce the same results. The data, whose statistical analysis is composed through research in the quantitative approach, is carried out by using measures of central tendency or averages. The capable relationship of the collected data in a population is tested by applying statistical processes such as regression and correlation (McNabb 2002).

3.3.1 Advantages and Limitations Research that has quantitative approach has various limitations and advantages at the same time. The amount of time taken for collecting, evaluating and presenting data of numerical nature is very minimal and in case changes in the variable occur, it can easily be identified and measured. As numerical data is quite objective and easy to understand than subjective data therefore the objectivity of the quantitative approach helps the users of the research and researchers themselves in evaluating variables and evaluating results. The limitations of this approach includes the over simplicity and its incapability to provide desired results. In real life, it becomes difficult to apply quantitative approach to common situations. Moreover the data used in this approach has to be objective as the statistical techniques would not have been proved useful when applied to subjective data. The results obtained from a research using quantitative approach may only be relevant for a specific research and would be difficult to utilise in generalised conditions. The specific variables of a situation are focussed in this approach and some other important variables may be ignored (French, Reynolds and Swain 2001).

3.4 Qualitative Approach to Research The qualitative approach establishes a new hypothesis instead of testing the previously presented hypothesis. This is contrary to what happens in quantitative approach. The strength, concentration and richness of an occurrence or problem are tested by the qualitative approach by analysing behaviour patterns and life experiences. The approach is mostly applied to research studies that involve finance, social sciences, behavioural studies and economics. The quantitative approach puts emphasis on data and interpretation of data presented in a research whereas the qualitative approach stresses the abilities of the researcher and the interaction that takes place between the participants and the researcher. This approach presents the view point that the knowledge, abilities, personal beliefs and perception of the researcher play a very vital role in the outcome of the research. Researches performed in areas of finance, economics, social sciences and other areas of study where numerical and statistical data is not available and quantitative approach to research cannot be applied, the qualitative research approach is applied (Burns and Grove 2004).

3.4.1 Advantages and Limitations The qualitative approach also has advantages and limitations just like the quantitative approach. This approach has a major advantage of being flexible which allows it to be moulded according the changing scenarios and situations. The deep involvement of the researcher in the entire process makes this research much more useful than the quantitative approach reason being that this approach uses more open ended questions in the interviews and questionnaire. The participants of the research offer creative and descriptive answers that are more useful for the research process. When the researcher and the participant’s knowledge come together, it helps in drawing valid and logical conclusions. The open ended questions and interviews work as a rich source of knowledge and information. The main limitation of this approach is the biasness of the researcher and the participants in the area of research. The emphasis on subjectivity and limited scope is another disadvantage of this approach as it is possible that if the same sample is used for another research in the same area, it might produce different results. The amount of time spent on qualitative approach is quite higher than quantitative approach while analysis and evaluation of the data in this approach is also complicated (Harrison 2001).

3.5 Case Study Approach to Research The case approach to do research is based on the qualitative approach to research in the interpretivist paradigm. This perspective focuses on the study of a particular entity, phenomenon and event. This research carried with this approach sheds light on the specific area of research rather than evaluating other components and factors. The reason why case study approach is also known as the exploratory approach is because it deeply investigates the research area and the problems related with it. The researcher is provided with a situation or case similar to the one being researched to help in identifying data and help determine the causes and effects of the variables prevalent in the current research (Jupp 2006). The researcher can effectively identify the variables and elements of the case in this approach and carry out an analysis to determine the cause and effect relationships and arrive at a logical conclusion at the end of the research process (George and Bennett 2005). Under this approach, the research carried out is based on factual information and actual data rather than speculation. Factual information is obtained from the participants involved in the research or the company to which the participants belong. Factual information analysis helps the researcher in evaluating the trends and patterns in the current research. The researcher would not be able to reach a suitable conclusion or make any recommendations regarding the research based on speculation and assumptions in the absence of appropriate facts (McNabb 2004).

3.5.1 Advantages and Disadvantages There are different advantages and disadvantages of the case study approaches like the research approaches. A more detailed and comprehensive analysis of the scenario is provided by this approach. The varying point of views provided on the single case enhances the cause and effect relationship of variables. The researcher is able to provide a true and clear picture of the case due to the methods in the case study that enables the researcher in recognising the basics of a case. The main limitation of this approach is its inability to generalise from a specific case. The researcher might use ways for the purpose of arriving at the normal conclusion. The data collected in a case study may be prejudiced due to various reasons including the biasness of researcher, participants or the sources used in the research may be biased. Another disadvantage of the case study approach is the degree of objectivity and subjectivity in the research (Duff 2007).

3.6 Deductive Method One of the methods n the quantitative approach is the deductive method which is the process of arriving at conclusions by narrowing down the research process by the end of the research. In the deductive method, for the purpose of deriving a conclusion, a researcher starts with various principles and logical rules. If the principles the researcher starts with are correct then the conclusions of the research are also correct. The researcher starts from general premises and principles of logic and ultimately arrives at a specific conclusion after deducting these premises or principles (Mitra and Bokil 2008). The deductive approach is based on establishing research hypothesis based on previous researches rather than establishing new hypothesis. This approach is also known as top down approach and travels from a generalised pattern to a more specific pattern for the purpose of deriving conclusion. It is important to note that this method accepts or rejects a previously established hypothesis instead of devising a new hypothesis (Belkaoui 2004).

3.7 Inductive Method The inductive method pertains to formulation of a particular hypothesis about something that was previously unknown. For the purpose of arriving at generalised conclusions in an inductive approach, a particular research area is selected and various assumptions, facts or principles are implemented onto the research. Researches based on the inductive method should offer a clear step by step flow of research and give details of the components of the research to avoid ambiguity (Goldbort 2006). Within an Inductive approach, a new hypotheses and principles are established instead of establishing the formerly established research hypothesis. Inductive approach is a reliable method of research in the area where facts are unknown or have been interpreted inappropriately. The area of research or study that needs to be assessed is chosen first and additional research is carried out by including data from various sources such as journals, books, previous researches and other sources. The inductive approach is very helpful in researches where the researcher has a lower level of knowledge about a specific research area (Garmo 2009).

3.8 Primary Data Primary data is the data that has been collected with the aim of evaluation that is related to the current research and that has no past existence. Data collected through primary research has many advantages over the other sources of data available. The main reason why the current research is most relevant is because primary data is carried out for the current research. The amount of time spent on the primary data collection is the main limitation of the primary data. Another limitation related to primary research is the cost incurred by the researcher for the purpose of carrying out the research. The cost can be due to getting an effective questionnaire designed, transportation travelling expenses, fax expenses, telephone expenses and other costs relevant to the collection of primary data in the research (Tull and Hawkins 1993).

3.8.1 Primary Data Collection Methods There are many data collection techniques and methods available that can be implemented during a research. The two main elements of the survey research techniques are questionnaires and interviews. The method of observation pertains to observation made by the researcher in making a cause and effect relationship among variables. Focus group discussions are one of the most commonly used means for collecting data using personal observation (Shank 2004). Observations are basically based on focus group discussions for the aim of collecting primary data. Questionnaires Questionnaires are a collection of closed ended and open ended questions that have been answered by participants in a research. The questionnaires can be delivered by hand, mailed, filled out by using telephonic conversations, posted on a website or some other pertinent source. The researcher is able to evaluate the research hypothesis and questions with much ease due to the answers provided to the questions. Interviews Interviews are carried out to analyse the views that have been provided to have an overall understanding of the situation. Interviews play an important role in collecting a large amount of data which is not possible through other means. The interviews enable the researcher to carry out specific a well as general information. The interviews are used to extract descriptive information from the people who are being interviewed for the sole purpose of getting an overall idea of the research area. Focus Group Discussion Focus group interviews are also termed as group discussions where the researcher guides the participants about an issue and allow the members to share ideas and give their views on these ideas. Focus group discussions are more comprehensive as compared to interviews where participant’s comments on other ideas that helps in refining the research. There are several advantages of focus group such as cost efficiency, flexibility and time saving for the researcher as well as the participants. Focus group can become expensive if there are any special requirements like recording the video or audio of the discussion for later use. There is also another hazard of getting varying results from the discussion if it is not closely moderated and managed (Smith 2002).

3.9 Secondary Data The data acquired from secondary sources is very important in forming the base for the primary research to be carried out. Cost and time effectiveness are the biggest advantages of the secondary sources which attracts the users to use these sources. The limitations of secondary sources entails to reliability of the source and difficulty in finding recent and relevant data. The secondary data is collected from articles, books, journals, reports and other reliable sources. Moreover other sources such as public libraries, Universities and government sources can also be used for the collection of secondary sources. These sources have extensive data available on different research areas. Data can also be collected from directories and catalogues available in libraries or internet (Reid and Bojanic 2009).

3.10 Proposed Research Strategy The researcher needs to opt from a particular research strategy and execute a specific methodology out of the several methodologies accessible for the research to be successful. The present research has been carried out by implementing qualitative approach to analyse the relationship between established brands and consumer behaviour. The qualitative approach along with the case study approach to research has been applied on data collected from various sources. The case study selected for the current research is Apple Inc. vs. Italian teenagers and their parents. The current research will implement the qualitative approach to analyse data collected from various sources.

3.11 Summary The qualitative and deductive approach for analysing the concepts of brand identity and consumer behaviour is explained in this chapter. This chapter gives an overview on the different research approaches and methods available to the researcher while carrying out the study. The advantages and limitations of the research enable the writer to evaluate them and select the most appropriate methodology from the different methodologies presented.

Chapter 4: Findings and Observations

4.1 Introduction As discussed in the methodology chapter, the data for this study was collected through survey questionnaires which were distributed among the teenagers of three secondary schools from respectively the north, centre, and south of Italy. These schools were randomly contacted and kindly requested to contribute to the research. Every school agreed on providing 20 students (aged 14-19) arbitrarily picked from different classes in order to obtain a sample of 60 individuals. The head of each school was initially contacted via telephone, in order to make light on the project. Those who agreed on participating provided the e-mail address and gender of every student and a computer randomly selected the participants (30 males and 30 females). The second stage involved e-mailing to the sample an explanatory pack containing instructions, deadlines, a questionnaire aimed at the students and one targeted to their parents. Every kid had to involve at least one parent to fill in the second questionnaire, in order to add 60 adults to the sample and obtain a “sample equivalence”, which means providing representative and unbiased results. The head of the school was also asked to cooperate and ensure that all questionnaires would be returned by the specified deadline. He was therefore copied on the emails sent back with completed questionnaires. The data collected was manually reviewed, in order to ensure that all parts had been completed. Questions and answers were then summarised in a table, in order to have a clearer picture of what answers were the most popular. Findings were also compared with trends provided by comScore, a worldwide market research company measuring online consumer behaviour (

4.2 Demographic characteristics As shown in the table 1, the participation ratio among male and female teenagers was equal (50% male and 50% female). Similarly, the age bracket of the participants was between 14-19 years and all of the participants were teenagers studying in various Italian schools.

4.3 Brand identity of Apple Inc The participants were asked if they knew Apple Inc. The response of the participants was 99% affirmative and only 1% responded negatively. The next question of the survey (see appendix A) was to about the participants’ perception of Apple Inc. As the table 1 shows, 50% declared the brand of Apple as young, for the 20% of them the brand was viewed as producing iPods, 15% declared the brand as expensive and for the 5% of the participants it was stylish. So from these responses we can infer that the brand identity of apple Inc has been established as young, stylish and expensive products of iPods and computers. The focus of the next question was to know from the participants if they liked to work for the Apple Inc. The responses shown in table 1 reveal that the majority of them liked to work for the Apple Inc (70%) whereas only 30% did not want to work for Apple Inc. The further breakup of this question shows that among the 70% who wanted to work for Apple Inc, there were the majority belonged to male teenagers and only 40% female teenagers wanted to work for Apple. Similarly, the majority of them wanted to work for Apple as it was a big organization (80%). Competitors and rating of Apple Inc

The next question asked the participants to name at least one brand which they considered as the competitor of Apple Inc. as shown in table 1, the majority of them 60% viewed Microsoft as the leading competitor whereas for the 10% of them Windows was one of the significant competitor of Apple Inc. Next, the participants were asked to rate the Apple Inc in terms of its popularity and sales. To this, the majority of them (10%) rated Apple as average in terms of its popularity and5-6% of them rated it average in terms of its sales. The next question focused on the products of Apple Inc. and the patricians were asked to name the products associated with the brand of Apple Inc. As shown in table 1 below, the brand of Apple was associated with iPod (70%), Macintosh 10%, iPhone 10% and other 10%. These results show that the Apple Inc has successfully established its brand identity in the iPod which has become popular especially among the teenagers. To continue exploring the popularity of Apple products, the researcher again asked the participants if any of their family member owned at least one Apple’s product. The results presented in table 1 suggest that the majority had apple products (80%) while only 20% of them did no posses any Apple product. Similarly, the results presented in table 1 suggest that the majority of the participants used the Apple products everyday (50%) or during their school time (25%). The next question intended to examine which products were more popular among the teenagers. The results show that the majority of them liked to have Macintosh (50%) and iPod (30%) whereas iPhone and other products were rated at 10% respectively. Similarly, the participants rated iPod as the best product of Apple (90%) and iPhone (5%) which shows that iPod has been established as a strong brand identity of the Apple Inc. The question regarding why teenagers wanted to buy Apple products returned interesting responses. For example, for the 60% of the participants the colour and shape of Apple products was more attractive while for the 20% their friends had the Apple products that is why they too bought the product. For the 10% the looks of the Apple products were cool. Similarly, the best selling product of Apple was iPod (90%) and Macintosh (10%).

Table 1: Table 1: Demographic characteristics

To summarise the above discussion, the survey conducted in Italy proves that: 1) Italian people know the brand Apple;
2) They believe that the iPod is the best selling and most popular product;
3) They like it because it’s young, trendy, beautiful and highlights a social status;
4) Differences in consumer preferences are to be found in different generations/age groups;
5) Italians do not have a specific knowledge of the brand, as nobody mentioned names of computers’ specific models or references to the company’s past inventions. They tend to only talk about the most popular products, these being iPods – again, no specific versions/models were mentioned. Finally, the fact that the answers given were similar and it was relatively simple to translate them into percentages confirms that the Italian knowledge of this brand is also rooted in the culture, and turns general information into widely shared beliefs.

To discuss further this investigation, trends retrieved from comScore  data can be as well analysed. Observing the past 12 months for example, it is possible to see how many people within the age groups considered in the survey visited an Apple website in Italy. The graphs below clearly show that the number of visitors aged 35-54 (1,643,000 in January 2010) is higher than the one referred to the group 15-24 (987,000 in January 2010) .

Figure 2: Persons 35-54 accessing an Apple website from Italy in the past 12 months

This means that, once again, consumer behaviour is definitely influenced by the age of the target considered and that, in Italy, more adults visit Apple websites if compared to youngsters. The reasons for this may be varied:

A. adults spend more time on Internet than teenagers (see Total Internet Audience in the comScore table in Appendix D);

B. They probably have more means to do so (teenagers cannot surf the net from school, while their parents can potentially do so from work);

C. The budget that teenagers could spend to purchase anything from the online Apple Store is limited if compared to the money and credit cards that adults may have available.

Why generally iPods are more popular among teenagers while laptops are mostly owned by adults? This is due to the segmentation of markets that mainly depends on different demographics. In the same way as different cultures have different expectations and needs, different age groups have different necessities, mostly depending on the different access they have to relatively large sums of money. It is therefore normal that a teenager does not spend £1,500 for a laptop but is happy to spend his/her pocket money on a much cheaper item like an iPod shuffle (about £40) (De Mooij, 2004, p. 296). On the other hand, a teenager will ensure that his mp3 player is not “just an mp3 player” but it is cool, trendy and produced by a famous brand. Moreover, apart from adults mad about the latest technologies, an average woman, for example, would not care about having a mobile phone by Apple just because this is considered cool, but she would rather ensures that she learns how to send text messages. This very brief introduction provides a relatively general idea of what the situation is like today or, at least, what the generally shared perception is.

Italian culture is now looked into more in depth to study the habits of different generations: samples of the questionnaires collected in Italian are reported in Appendix B, while the tables in the next pages summarise the findings. Figures were translated into percentages, so that results could be interpreted more easily.

Chapter 5: Conclusion

5.1 Conclusion The preceding chapter covered findings and observations of the researcher based primarily on the data collected from the surveys conducted in Italian secondary sources that included journal articles, books, periodicals and websites. The effects of brand identity of established brands like Apple Inc. on consumer behaviour were investigated and analysed through facts and data obtained from various sources. The observations that have been noted by the researcher provide basis for the acceptance or the rejection of the research hypothesis. It can be stated after careful analysis of data that in today’s era brand identity yields favourable results as consumers these days tend to buy brands that have a distinct brand identity. The findings presented in the previous chapter point out that there is a strong relation ship between brand identity and consumer loyalty where brand identity is an effective means used by the established brands for promoting their products and gaining customer loyalty especially among teenagers. The observations and analysis carried out also showed that there existed a positive relationship between brand identity and customer loyalty and brand identity enhances the impact on consumer behaviour in a positive way. The research hypothesis that was carried out in the research was the brand identity of brand plays an integral role in augmenting the customer loyalty and influences consumer behaviour significantly. The hypothesis is accepted based on the observations and analysis that were carried out within the previous chapter of the research report. Thus it can be concluded that established brands specifically Apple play an instrumental role in augmenting customer loyalty and influencing consumers, especially Italian teenagers and their parents. The evaluation of the data suggests that the consumer is very vulnerable reason being that when a customer buys something, he/she always makes a post purchase assessment which is commonly known to the marketers as post purchase behaviour. In this the consumer faces dissonance mainly because of the forgone alternatives. Once a product has been consumed, it is evaluated by the consumer who then makes the decision of purchasing the product again considering the satisfaction of his/her needs in the past due to the same product. This is where brand identity works in a positive way. If a customer is committed and satisfied, then there is a tendency for him to become a brand loyalist. A brand loyalist plays a very important role in spreading a good word of mouth regarding the product. In Consumer decision making few elements play a very important role such as age, culture, beliefs and attitudes reason being that hey play an instrumental role in interpreting a marketing message. It is thus very important for the marketers to understand the consumer thought process and consumer decision making since a respondent relates experience and personal knowledge to it and also associates a marketing message to a specific cultural experience. Consumer measure value plays a very important role in creating a competitive advantage on which organisations can rely. Brand loyalty is one of the elements of a brand that carries a lot of weight reason being that a loyal customer has a tendency to generate a generous stream of profit and sales. The absence of it causes the brand to become more vulnerable. Loyalty causes the brand to have long term rewards. Increased loyalty can cause the company to have benefits such as reduction in transaction and marketing expenses, increased market share and a positive word of mouth etc. Consumers can be categorized into various types depending upon their behaviour. Strategic insights in these types can prove to be very important in building strong brands. The categorization consists of non customers: who are customers who purchase competitor brands, price switchers: who are very price sensitive consumers, passively loyal: who buy because of a habit and not for a motive, fence sitters: who are indifferent towards the brand and committed customers. The challenge for the marketers in this categorization is to amplify the number of customers who are not price switchers, to strengthen the fence sitter consumers. To increase the number of customers who have agreed to pay more in return of a specific brand or service. The passively loyal and committed customers are mostly taken for granted by companies whereas there lays possibility in increasing businesses from the passively loyal. Different ways through which loyalty can be enhanced is frequent buyer programs, customer clubs, database marketing etc. Thus after analysis of the present situation it can be concluded that brand identity plays a very important role in the purchase of the brand and its presence helps in increasing loyalty towards the brand and that Apple has a significant impact on Italian teenagers and their parents. Research methodologies are based on the researches that had taken place in the past. It justifies those studies. The data is usually collected from the preceding articles, researches as well as other sources for the main purpose of increasing human knowledge’s regarding a specific topic. It is essential that the data should be backed up by sources from other available sources as well. Moreover, the way through which data is composed, evaluated and the form in which it is presented should be such that the research turns out to be effective The quantitative approach is used by making use of numerical data and making use of data that is associated with measurements. On the other hand the qualitative approach to data establishes a completely new hypothesis rather than testing a previously presented hypothesis. The case study approach is based on the qualitative approach. Under this approach, the research that is carried out sheds light on a specific area that is to be researched. Actual data and facts are used in this approach rather than speculation. Factual information can easily be obtained from the people participating in the researches. The deductive approach is used in establishing a research hypothesis that has been based on previous researches rather than establishing an overall new hypothesis. This approach is also known as top down approach. Inductive approach on the other hand is related to the formulation of a specific hypothesis that was previously unknown. Primary data is the data that is related to the current research and does not have an existence in the past. However the main reason why this research is not used widely is because of the expenses incurred. The secondary research utilised the literature collected from various sources in order to back the hypothesis.

5.2 Recommendations The examination of secondary sources facilitated the researcher in deriving a valid and rational conclusion from the current research which is that brand identity plays a very important role in increasing customer loyalty especially the buying trends of youngsters in the context of Apple Inc. Although the conclusion that we have drawn from this research regarding a positive relationship between both the variables is quite effective in making a customer buy a brand again and again. However, companies should also focus on all the elements that form an integral part of the brand such as logos, ways of communicating the brand, media used etc. Moreover if a brand is being introduced within a specific industry then it should be taken into consideration that a brand truly becomes a fundamental part of that industry. For instance according research, within the information technology industry Apple forms an essential part of the information technology industry and without it, the word technology is unthinkable. Another thought that is worth taken into consideration is that that brand identity plays a very important role in establishing the reputation of the brand. Therefore, for having a strong reputation a brand identity should be well thought of. Product value is one aspect which is easily determined by the product image. Thus is the companies are keen in getting a good value for their product then they should invest in the image of the brand. Every brand cannot be promoted through the same media. Different brands require different Medias, thus companies should use that media that best describes the product and reaches the maximum number of target audiences.

5.3 Suggestions for Additional Research The current research on brand identity and its impact in consumer behaviour in context of Apple Inc. was based on analysis of secondary sources using the quantitative and deductive approaches to research. Further research in this area can be done by analysing other businesses and increasing the number of brands studied in a business. A comparison of brands belonging to different industries or countries can also be done to evaluate the effectiveness of brand identity on consumer behaviour. The ways companies implement brand identity to increase sales can also be explored and analysed in detail. A comprehensive research can also be carried out using a larger sample size including youngsters from other countries or linked to other products and brands including cellular phones, computers, video game consoles and sports gear. The current research was based on a lesser sample size from a specific age group whereas a much broader study can be carried out by increasing the sample size and including customers from different age groups and states. The researcher has implemented a qualitative approach to research and data from various secondary sources has been analysed and evaluated to examine the effectiveness of brand identity in increasing customer loyalty whereas a case study approach can also be applied to assess the marketing strategies applied by organisations and include the managers and employees in marketing subdivisions of various companies as contributors in the research.

5.4 Limitations The research that has been carried out covers an analysis of buying behaviour, brand identity and impact of established brands such as Apple Inc. on consumer behaviour specifically Italian teenagers and their parents. The proposed research methodology has various limitations due to different issues in the methodology as well as the application of it in the current research. The limitations of the current research with respect to the research strategy and its application are described below as the findings and conclusions of this report rely heavily on the proposed research strategy. The various limitations of this research include biasness of the researcher and respondents, accuracy and reliability of secondary sources, time and cost constraints. The current research is an attempt to study and describe the relationship between brand identity and consumer buying behaviour. As the research is based on the analysis of these concepts any limitations found in the explanation of these concepts in secondary sources add to and augment the limitations of the current research. The examination of these concepts is a complex process and is performed in a context of certain objectives as a general study does not yield helpful results. When the analysis is carried out with a definite point of view the analysis lacks in several areas as the analyst only assesses specific parts of these marketing techniques. The use of different methodology and approaches in practical and theoretical application of these techniques results in important changes in explanations which twists any analysis carried out on the basis of these explanations. Any biasness on behalf of the researcher also causes the understanding of these concepts to be distorted. The earlier studies used in this research that also utilised questionnaires for illustrating conclusions also had their limitations in the direction of the questions that also add to the limitations of the present research. Any biasness of the researchers in the preceding researches affected the finding and conclusion of those studies which in turn would influence the result of the current research. The secondary sources used in the current study have been studied methodically and with great care. Although the secondary sources usually comprise of data obtained from consistent sources, the precision and reliability of this data is not guaranteed by the researcher and may have a consequence on the reliability of the current research. The researcher has studied the data obtained from preceding works and researches systematically and extensively to check the accuracy of these works but this accuracy is limited to the approach and understanding of the researcher. The findings and explanations of the current research are reliant on the analysis of secondary data which involves biasness towards a number of views of preceding researchers. The notions of marketing techniques such as segmentation marketing, geographically segmentation and consumer behaviour have been studied thoroughly by the researcher based on a qualitative approach due to a deficiency of time which might be inadequate to specific individuals and might be inapplicable to other individuals and countries. Although the researcher has studied the data cautiously within the context of consumers the observations and conclusions are reliant on the personal interpretations of the researcher. The time and cost requisite for a proper research are one of the most ordinary limitations in a research. The cost factor is one of the limitations in a research as there are limited sources available in funding the research process and the cost requisite for research work is usually quite elevated. The time and cost constraint both have an impact on the final result of the research as more time exhausted on the research would offer a more meaningful conclusion as it would facilitate the researcher to collect and examine more data and the data could be interpreted more cautiously. The cost factor limits the resources offered to a researcher as in a sufficiently funded research the researcher can gather more data through interviews or focus group discussions and secondary data can be obtained from more sources by visiting a variety of libraries or hiring people to gather the required data.

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