30221337 Study on Brand Switching in Consumer Products

A

Major Project Report

On

“Study on Brand Switching In Consumer Products”

Submitted for partial fulfillment of requirement for the award of degree

Of

Master of Business Administration

Of

CHHATTISGARH SWAMI VIVEKANAND TECHNICAL UNIVERSTY

BHILAI (C.G.)

Session 2008-10

Supervised By: - Submitted By:-

Dr Rajesh Kumar Agrwal Umeshanand Giri Goswami

Assistant Professor Roll No: 5053608222

Department of Management Enrolment No: AD 1687

DIMAT RAIPUR (C.G.) MBA IV Semester Sec ‘B’

DEPARTMENT OF MANAGEMENT

DISHA INSTITUTE OF MANAGEMENT AND TECHNOLOGY

(Disha Education Society)

Satya Vihar, Vidhansabha-Chandrakhuri Marg, Mandir Hasaud,

Raipur (C.G.) 492007

Disha Institute of Management and Technology Raipur

DECLARATION

I the undersigned solemnly declare that the report of the project work entitled

“Study on Brand Switching In Consumer Products” is based on my own work

carried out during the course of my study under the supervision of Dr Rajesh

Kumar Agrwal.

I assert that the statements made and conclusions drawn are an outcome of

the project work. I further declare that to the best of my knowledge and belief

that the project report does not contain any part of any work which has been

submitted for the award of any other degree/diploma/certificate in this

University or any other University.

______________________

(Signature of the Candidate)

Umeshanand Giri Goswami

Roll No.: 5053608222

Enrolment No.: AD1687


CERTIFICATE BY GUIDE

This to certify that the report of the project submitted is the outcome of the

project work entitled “Study on Brand Switching In Consumer Products”

carried out by Umeshanand Giri Goswami bearing Roll No.:5053608222 &

Enrolment No.:AD1687 is Carried by under my guidance and supervision for

the award of Degree in Master of Business Administration of Chhattisgarh

Swami Vivekanand Technical University, Bhilai (C.G), India.

To the best of the my knowledge the report

i) Embodies the work of the candidate him/herself,

ii) Has duly been completed,

iii) Fulfils the requirement of the ordinance relating to the MBA degree

of the University and

iv) Is up to the desired standard for the purpose of which is submitted.

_______________________

(Signature of the Guide)

Name:

Designation:

Department:

DISHA INSTITUTE OF MANAGEMENT AND TECHNOLOGY

Satya Vihar, Vidhansabha-Chandrakhuri Marg, Mandir Hasaud,

Raipur (C.G.) 492007

The project work as mentioned above is hereby being recommended and forwarded for examination and evaluation.


CERTIFICATE BYT HE EXAMINERS

This is to certify that the project entitled “Study on Brand Switching In Consumer

Products”

Submitted by

Umeshanand Giri Goswami Roll No.: 5053608222 Enrolment No.:AD1687

Has been examined by the undersigned as apart of the examination for the award

of Master of Business Administration degree of Chhattisgarh Swami Vivekanand

Technical University, Bhilai (C.G.).

___________________________ _______________________

___________________________ _______________________

Name & Signature of Name & Signature of

Internal Examiner External Examiner

Date: Date:

Forwarded by

Academic Head

Department of Management


ACKNOWLEDGEMENT

I express my deepest gratitude to Dr Rajesh Kumar Agrwal valuable inputs in the very early

stage of my project and helping me understand the objectives of the study. My special thanks

to Dr R.A.S. Benedict (Faculty of Management) for providing us such an opportunity in our

curriculum to carry out independent research and understand the market to the fullest extent.

The completion of this project would have been extremely difficult without the never ending

and blooming inspiration from my teachers specially Dr Satish Benedict, Prof J.K.Dewangan,

Prof Anish Abraham, Prof Siddhath Bhattacharya. Further I wish to thank my colleagues who

have always boosted my morale and filled me with “can do “attitude because of which I

pursued myself in successive direction to complete this report in the corridors of DIMAT. I

would like to express my special thanks to my friends in helping me carry out the work with

ease and comfort.

Above all I thank my family, for their constant motivation and support. It was just because of

their divine love and support that made me work properly and complete my objectives in a

splendid manner. Finally I thank the Almighty for creating an aura of favourable situations

for me and guiding me throughout the pathway.

______________________

(Signature of the Candidate)

Umeshanand Giri Goswami

Roll No.: 5053608222

Enrolment No.: AD1687


Contents

Serial No. Major Heads Page No.

01 Executive Summary 7-10

02 Research Methodology 10-11

03 Insights of Consumer Behaviour 12-16

04 What is a Brand 17-21

05 Brand Switching 22-34

06 Consumer Diagnostics:-

Brand Duplication Analysis

Brand Switching Analysis

Buyers Retention & Migration Analysis

23-25

25-28

28-30

07 Brand Positioning Analysis

36-40

08 Tabulation and Evaluation

Cross Tabulation(Age via Reason) VALS Framework 41-46

09 Reason Behind Brand Switching 46-47

10 My Brand Switching Table 47-49

11 Celebrity Endorsements and Resultants

50-56

12 Analysis and Findings 57-59

13 Questionnaire, Data Interpretation & References 60-66


Executive Summary

Consumer decision to purchase a product brand different from that previously or

usually purchased. Brand switching can be instigated by price promotions, in-store

displays, superior availability, perceived improvements or innovations in competitive

brands, desire for novelty, number of available brands, perceived risk, frequency of

purchase, changes in quality, or level of satisfaction with the most recent purchase.

Brand switching is most common with products that have no great perceived

variation in quality across brands such as bottled water, dairy products, or paper

towels

As the product life cycle and the price increase for most durable products,

consumers tend to be highly involved and become more rational in their purchase.

These factors, combined with others, such as the prevalence of global marketing and

the reduction of international trade barriers, have resulted in highly competitive

markets for durable products. In today's free and competitive markets, consumer

preferences and key attributes of products have become so diversified that

companies that can meet these customer expectations will prosper and grow, while

those that fail to do so will decline. Allenby (1989) and Kannan & Wright (1991)

suggest that the design of successful marketing strategies requires a thorough

understanding of the structure of the product market and the patterns of competition

within those markets. Thus, it is crucial to collect market data to analyze market

structures, especially for durable goods that have entered their mature stage,

characterized by maturing product technologies, lack of product differentiation and

similarity in product qualities. The increasing competition, brand image and attitude

toward brands will greatly impact on the purchase decisions of customers. In order to

position its products and brands, the manufacturer needs to comprehend the

consumer's attitude towards these factors. Therefore, it is essential to have a better

understanding of brand loyalty.


It is also useful to segment the market based on brand loyalty and to understand the

needs of loyal customers and potential brand switchers, as well as their attitude

towards key brand attributes. Based on such findings, corporations can find ways to

increase their market share by fulfilling the needs of repeat buyers. In addition,

corporations can convert brand switchers into loyal customers by focusing on certain

key factors.

Thus, the intent of this study is to provide insights of the needs of two groups of

customers, repeat buyers and brand switchers, in order to help corporations develop

appropriate marketing strategies. This study was carried out in two stages: (1)

segmenting the market into the two consumer groups; and (2) Analyzing the

differences of the two groups based on the key factors that affect consumption

behaviors.

Literature review

Definition of brand and brand loyalty:-

The American Marketing Association defines brand as 'a name, term, sign, symbol,

or design, or a combination of them, intended to identify the goods or services of one

seller or group of sellers and to differentiate them from those of competitors' (Kotlei

1995). Aaker (1995) defines a brand on different levels, stating that a brand is not

merely the physical product, but is also composed of brand attributes, symbols,

brand--consumer relationships, benefits of self-expression, customer profiles,

associations with the culture of the country of origin, and corporate identity. In

essence, the brand provides a simple means for the customer to distinguish it from

its peers. Padberg stated that in the marketing process, a brand provides a means of

communicating economic information; it facilitates product recognition and protects

the customer from the risks associated with buying an unknown brand.

De Chernatony & McDonald (1998) stated that 'A successful brand is an identifiable

product, service, person or place augmented in such a way that the buyer or user

perceives relevant, unique added values which match their needs most closely.


Furthermore, its success results from being able to sustain these added values in the

face of competition.' Successful brands deliver benefits to satisfy customer needs.

These needs include rational needs (such as features, packages or the price of a

brand) and emotional needs (such as prestige, distinctiveness, style or the social

reassurance of a brand).

Brand loyalty refers to the consumer's behavior of repeatedly purchasing a specific

brand over a certain period of time. This is based on past behavior, and the local

consumer is highly likely to purchase the products of a specific brand currently and in

the future. According to Aaker (1995), a powerful brand enjoys a high degree of

brand loyalty. Related brand choice theories claim that, in order to increase the sales

volume or marketing shares of a particular brand of products, it is necessary to either

strengthen the brand loyalty of existing customers or try to persuade the consumers

of other brands to switch. The former is called inertia or brand loyalty, and the latter,

brand switching.

Previous studies concluded that a person's attitude toward a brand is relevant to the

degree of their brand loyalty. Brand awareness and brand association are linked to

consumers' brand preferences. Ehrenberg asserted that salient brands are high in

both intentions to buy the brand and brand loyalty. Ehrenberg stated that since the

selling brand tends to be copied quickly by competitors, competitive brands lack

variation between each other. Similar brands have different market shares because

of the different number of people to whom each brand is salient. Ehrenberg further

argued that the main function of advertising is to reinforce an existing consumer's

propensity to buy a particular brand.

There are many theories that are available to explain how consumers make product

and/or brand choices. The 'expectance-value model' argues that consumers assign

scores to two parameters and make a mental calculation before making a decision.

The first parameter is the degree to which consumers expect a pleasurable outcome.

The second parameter is the value the consumers ascribe to a favorable outcome.

This model is insufficient to explain the phenomenon because people have limited

brand information and limited mental processing capabilities.


The economist's view of consumer behavior hypothesizes that consumers seek

information until the marginal value that is gained is less than the cost of securing

knowledge of the product.

This model is also not acceptable since in many cases consumers are unable to

acquire 'perfect' information De Chernatony and McDonald propose a more accepted

model for brand buying behavior. It argues that the making of a brand purchase is

determined by 'consumers seeking and evaluating small amounts of information.

Consumer relies only on few piece of information with which they feel confident to

help them decide how the brand might perform.' The amount of information that

consumer seek may be determined by various factors such as time pressure,

previous experience, advice from friends and the level of involvement in the brand

purchase.

In recent years many researchers have studied brand choice and switching. The

scope of these studies not only includes the analysis of the factors that affect the

consumer's brand choice and switching, but it also helps to analyze the future

demand situation.

There has been always a shift in consumer brand loyalty and favours it can be

because of lack of consistency in quality, high cost of raw materials or profit motives

so as to increase the sales figure. Whatever it may be but a marketer can not

certainly overlook this things as he also drives with some expectation that his

product will get required recognition in market people will have a corner of support

for it and they will persist to it at least for some period of time and if it not happens

marketer becomes bound to think what really hampers the success of their product

and how they can differentiate their product in market and how they can restructure

their brand building strategy so as to gain the long term benefit and advantage.


RESEARCH METHODOLOGY

It’s imperative that any type of organisation in the present environment needs

Systematic supply of information coupled with tool of analysis of for making sound

Decision which involves minimum risk.

A research design is purely and simply the framework or plan for a study that guides

The collection and analysis of the data.

METHODS OF DATA COLLECTION

Through surfing the concerned web portals and sites.

Through questionnaires and interacting with people.

SAMPLE DESIGN

Considering the constraints, it was decided to conduct the study based on sample

size of 50 respondents.

The selection was made through combined approach of random sampling and

Convenient sampling. Scientific method was not adopted in this study because of

Financial constraints and also because of lack of time, also the basic aim of doing

the research was academic, hence most convenient way was selected.

TOOLS USED

There are several methods of collecting primary data, particularly in surveys and

Descriptive research. Important are:-

Observation method.

Through questionnaires.

Markov Process method.


Insights of Consumer Behaviour


Consumer Behaviour the Unlocked Aspect

Consumer behavior is the study of when, why, how, and where people do or do not

buy Product It blends elements from psychology, sociology, social anthropology

and economics. It attempts to understand the buyer decision making process, both

individually and in groups. It studies characteristics of individual consumers such

as demographics and behavioral variables in an attempt to understand people's

wants. It also tries to assess influences on the consumer from groups such as family,

friends, reference groups, and society in general.

Customer behavior study is based on consumer buying behavior, with the customer

playing the three distinct roles of user, payer and buyer. Relationship marketing is an

influential asset for customer behavior analysis as it has a keen interest in the re-

discovery of the true meaning of marketing through the re-affirmation of the

importance of the customer or buyer. A greater importance is also placed on

consumer retention, customer relationship management, personalization,

customization and one-to-one marketing. Social functions can be categorized into

social choice and welfare functions.

Each method for vote counting is assumed as a social function but if Arrow’s

possibility theorem is used for a social function, social welfare function is achieved.

Some specifications of the social functions are decisiveness, neutrality, anonymity,

monotonocity, unanimity, homogeneity and weak and strong Pareto optimality. No

social choice function meets these requirements in an ordinal scale simultaneously.

The most important characteristic of a social function is identification of the

interactive effect of alternatives and creating a logical relation with the ranks.

Marketing provides services in order to satisfy customers. With that in mind, the

productive system is considered from its beginning at the production level, to the end

of the cycle, the consumer

Belch and Belch define consumer behavior as 'the process and activities people

engage in when searching for, selecting, purchasing, using, evaluating, and

disposing of products and services so as to satisfy their needs and desires'.'


http://en.wikipedia.org/w/index.php?title=Belch_and_Belch&action=edit&redlink=1

http://en.wikipedia.org/wiki/Pareto_optimality

http://en.wikipedia.org/wiki/Consumer

http://en.wikipedia.org/wiki/Demographic

http://en.wikipedia.org/wiki/Economics

http://en.wikipedia.org/wiki/Social_Anthropology

http://en.wikipedia.org/wiki/Sociology

http://en.wikipedia.org/wiki/Psychology

The Black Box Model

ENVIRONMENTAL FACTORS BUYER'S BLACK BOX

BUYER'S RESPONSE

Marketing Stimuli

Environmental Stimuli

Buyer Characteristics

Decision Process

ProductPricePlacePromotion

EconomicTechnologicalPoliticalCulturalDemographicNatural

AttitudesMotivationPerceptionsPersonalityLifestyleKnowledge

Problem recognitionInformation searchAlternative evaluationPurchase decisionPost-purchase behaviour

Product choiceBrand choiceDealer choicePurchase timingPurchase amount

The black box model shows the interaction of stimuli, consumer characteristics, and

decision process and consumer responses. It can be distinguished between

interpersonal stimuli (between people) or intrapersonal stimuli (within people). The

black box model is related to the black box theory of behaviorism, where the focus is

not set on the processes inside a consumer, but the relation between the stimuli and

the response of the consumer. The marketing stimuli are planned and processed by

the companies, whereas the environmental stimulus is given by social factors, based

on the economical, political and cultural circumstances of a society. The buyers

black box contains the buyer characteristics and the decision process, which

determines the buyers response.

The black box model considers the buyers response as a result of a conscious,

rational decision process, in which it is assumed that the buyer has recognized the

problem. However, in reality many decisions are not made in awareness of a

determined problem by the consumer.


http://en.wikipedia.org/wiki/Marketing

http://en.wikipedia.org/wiki/Behaviorism

http://en.wikipedia.org/wiki/Black_box_theory

http://en.wikipedia.org/wiki/Stimulus_(psychology)

The Information Search

Once the consumer has recognised a problem, they search for information on

products and services that can solve that problem. Belch and Belch (2007) explain

that consumers undertake both an internal (memory) and an external search.

Sources of information include:

Personal sources

Commercial sources

Public sources

Personal experience

The relevant internal psychological process that is associated with information

search is perception. Perception is defined as 'the process by which an individual

receives, selects, organises, and interprets information to create a meaningful

picture of the world'

The selective perception process

Stage Description

- Selective exposure consumers select which promotional messages they will

Expose them to.

- Selective attention consumers select which promotional messages they will pay

Attention to

- Selective comprehension consumer interpret messages in line with their beliefs,

Attitudes, motives and experiences

- Selective retention consumers remember messages that are more meaningful or

Important to them

The implications of this process help develop an effective promotional strategy, and

select which sources of information are more effective for the brand.CV


Information Evaluation

At this time the consumer compares the brands and products that are in their evoked

set. How can the marketing organization increase the likelihood that their brand is

part of the consumer's evoked (consideration) set? Consumers evaluate alternatives

in terms of the functional and psychological benefits that they offer. The marketing

organization needs to understand what benefits consumers are seeking and

therefore which attributes are most important in terms of making a decision.

Purchase Decision

Once the alternatives have been evaluated, the consumer is ready to make a

purchase decision. Sometimes purchase intention does not result in an actual

purchase. The marketing organization must facilitate the consumer to act on their

purchase intention. The organization can use variety of techniques to achieve this.

The provision of credit or payment terms may encourage purchase, or a sales

promotion such as the opportunity to receive a premium or enter a competition may

provide an incentive to buy now. The relevant internal psychological process that is

associated with purchase decision is integration. Once the integration is achieved,

the organization can influence the purchase decisions much more easily.

Post Purchase Behavior

It is common for customers to experience concerns after making a purchase

decision. This arises from a concept that is known as “cognitive dissonance”. The

customer, having bought a product, may feel that an alternative would have been

preferable. In these circumstances that customer will not repurchase immediately,

but is likely to switch brands next time.

To manage the post-purchase stage, it is the job of the marketing team to persuade

the potential customer that the product will satisfy his or her needs. Then after

having made a purchase, the customer should be encouraged that he or she has

made the right decision it is not affected by advertisement.


What is a brand?

A brand is a name, sign, symbol, slogan or anything that is used to identify and

distinguish a specific product, service, or business. A legally protected brand

name is called a proprietary name.

Brand is the image of the product in the market. Some people distinguish the

psychological aspect of a brand from the experiential aspect. The experiential aspect

consists of the sum of all points of contact with the brand and is known as the brand

experience. The psychological aspect, sometimes referred to as the brand image,

is a symbolic construct created within the minds of people and consists of all the

information and expectations associated with a product or service.

People engaged in branding seek to develop or align the expectations behind the

brand experience, creating the impression that a brand associated with a product or

service has certain qualities or characteristics that make it special or unique. A brand

is therefore one of the most valuable elements in an advertising theme, as it

demonstrates what the brand owner is able to offer in the marketplace. The art of

creating and maintaining a brand is called brand management. Orientation of the

whole organization towards its brand is called brand orientation.

Careful brand management seeks to make the product or services relevant to

the target audience. Therefore cleverly crafted advertising campaigns can be highly

successful in convincing consumers to pay remarkably high prices for products

which are inherently extremely cheap to make. This concept, known as creating

value, essentially consists of manipulating the projected image of the product so that

the consumer sees the product as being worth the amount that the advertiser wants

him/her to see, rather than a more logical valuation that comprises an aggregate of

the cost of raw materials, plus the cost of manufacture, plus the cost of distribution.

Modern value-creation branding-and-advertising campaigns are highly successful at

inducing consumers to pay, for example, 50 dollars for a T-shirt that cost a mere 50

cents to make, or 5 dollars for a box of breakfast cereal that contains a few cents'

worth of wheat.


http://en.wikipedia.org/wiki/Target_audience

http://en.wikipedia.org/wiki/Brand_orientation

http://en.wikipedia.org/wiki/Brand_management

http://en.wikipedia.org/wiki/Marketplace

http://en.wikipedia.org/wiki/Advertising

http://en.wikipedia.org/wiki/Business

http://en.wikipedia.org/wiki/Service_(economics)

http://en.wikipedia.org/wiki/Product_(business)

Brands should be seen as more than the difference between the actual cost of a

product and its selling price - they represent the sum of all valuable qualities of a

product to the consumer. There are many intangibles involved in business,

intangibles left wholly from the income statement and balance sheet which determine

how a business is perceived. The learned skill of a knowledge worker, the type of

metal working, the type of stitch: all may be without an 'accounting cost' but for those

who truly know the product, for it is these people the company should wish to find

and keep, the difference is incomparable. Failing to recognize these assets that a

business, any business, can create and maintain will set an enterprise at a serious

disadvantage.

A brand which is widely known in the marketplace acquires brand recognition.

When brand recognition builds up to a point where a brand enjoys a critical mass of

positive sentiment in the marketplace, it is said to have achieved brand franchise.

One goal in brand recognition is the identification of a brand without the name of the

company present. For example, Disney has been successful at branding with their

particular script font (originally created for Walt Disney's "signature" logo), which it

used in the logo for go.com.

Consumers may look on branding as an important value added aspect of products or

services, as it often serves to denote a certain attractive quality or characteristic (see

also brand promise). From the perspective of brand owners, branded products or

services also command higher prices. Where two products resemble each other, but

one of the products has no associated branding (such as a generic, store-branded

product), people may often select the more expensive branded product on the basis

of the quality of the brand or the reputation of the brand owner.

Brand Awareness

Brand awareness refers to customers' ability to recall and recognize the brand under

different conditions and link to the brand name, logo, and jingles and so on to certain

associations in memory. It helps the customers to understand to which product or

service category the particular brand belongs to and what products and services are

sold under the brand name. It also ensures that customers know which of their

needs are satisfied by the brand through its products. (Keller)


http://en.wikipedia.org/wiki/Generic_brand

http://en.wikipedia.org/w/index.php?title=Brand_promise&action=edit&redlink=1

http://en.wikipedia.org/wiki/Value_added

http://en.wikipedia.org/wiki/Go.com

http://en.wikipedia.org/wiki/The_Walt_Disney_Company

Brand Salience

Brand salience measures the awareness of the brand."To what extent is the brand

top-of-mind and easily recalled or recognized? What types of cues or reminders are

necessary?" (Keller)

How do customers remember?

The tendency of a brand to be thought of in a buying situation is known as “brand

salience”. Brand salience’s is “the propensity for a brand to be noticed and/or

thought of in buying situations” and the higher the brand salience the higher it’s

market penetration and therefore its market share. Salience refers not to what

customers think about brands but to which ones they think about.

Brands which come to mind on an unaided basis are likely to be the brands in a

customer’s consideration set and thus have a higher probability of being purchased.

Advertising weight and brand salience are cues to customers indicating which

brands are popular, and customers have a tendency to buy popular brands. Also, an

increase in the salience of one brand can actually inhibit recall of other brands,

including brands that otherwise would be candidates for purchase.

It is widely acknowledged that buyer’s do not see their brand as being any different

from other brands that are available. They buy a particular brand because they are

more aware of it, not because it is more distinctive, or has a point of difference. We

now know that all decisions made by humans involve memory processes to a greater

or lesser extent. Incoming information from the external environment travels by the

sensory memory into the short-term (or working) memory (STM) but if it is not acted

upon in a very short time the brain simply discards it.


But salient information that is important and received on a regular basis through

different channels is passed to the long-term memory (LTM) where it can be stored

for many years. Memories are stored or filed via connections between new and

existing memories in the different parts of the memory. They are laid down in a

framework making some memories easier to access than others. Recall is the

process by which an individual reconstructs the stimulus itself from memory,

removed from the physicality’s of that reality.

Global Brand

A global brand is one which is perceived to reflect the same set of values around the

world. Global brands transcend their origins and create strong, enduring

relationships with consumers across countries and cultures.

Global brands are brands which sold to international markets. Examples of global

brands include Coca-Cola, McDonald's, Marlboro, Levi's etc.. These brands are used

to sell the same product across multiple markets, and could be considered

successful to the extent that the associated products are easily recognizable by the

diverse set of consumers.


Factors Affecting Consumer Behavior

Social Factors

Groups Family

Membership Husband, wife, kids

Reference Influencers, users, buyer

Roles and Status

Social Class

People within a social class tend to exhibit similar buying behavior.

• Occupation

• Income

• Education

• Wealth

Personal Influences:-

Age and Family Life Cycle Stage Occupation

Personality & Self-Concept Economic Situation

Lifestyle Identification

Activities Opinions

Interests


INTRODUCTION WITH BRAND

SWITCHING

What is Brand Switching?


Consumer decision to purchase a product brand different from that previously or

usually purchased. Brand switching can be instigated by price promotions, in-store

displays, superior availability, perceived improvements or innovations in competitive

brands, desire for novelty, number of available brands, perceived risk, frequency of

purchase, changes in quality, or level of satisfaction with the most recent purchase.

Brand switching is most common with products that have no great perceived

variation in quality across brands such as bottled water, dairy products, or paper

towels.

Brand Switching Matrix

A two-way table that indicates which brands a sample of people purchased in one

period and which brands they purchased in a subsequent period, thus highlighting

the switches occurring among and between brands as well as the number of persons

who purchased the same brand in both periods.

Here we can the site the Markov Process analysis to understand the market moves

and customer brand switching that leads to loosing for one and gain for other player

of their prospective customers.

Markov processes

Consider the following problem: company K, the manufacturer of a breakfast cereal,

currently has some 25% of the market. Data from the previous year indicates that

88% of K's customers remained loyal that year, but 12% switched to the competition.


In addition, 85% of the competition's customers remained loyal to the competition but

15% of the competition's customers switched to K. Assuming these trends continue

determine K's share of the market:

In 2 years; and

In the long-run.

This problem is an example of a brand switching problem that often arises in the sale

of consumer goods.

In order to solve this problem we make use of Markov chains or Markov

processes (which are a special type of stochastic process). The procedure is given

below.

Solution procedure

Observe that, each year, a customer can either be buying K's cereal or the

competition's. Hence we can construct a diagram as shown below where the two

circles represent the two states a customer can be in and the arcs represent the

probability that a customer makes a transition each year between states. Note the

circular arcs indicating a "transition" from one state to the same state. This diagram

is known as the state-transition diagram (and note that all the arcs in that diagram

are directed arcs).

Given that diagram we can construct the transition matrix (usually denoted by the

symbol P) which tells us the probability of making a transition from one state to

another state. Letting:

state 1 = customer buying K's cereal and

state 2 = customer buying competition's cereal

We have the transition matrix P for this problem given by

To state 1 2

From state 1 |0.88 0.12 |


2 |0.15 0.85 |

Note here that the sum of the elements in each row of the transition matrix is one.

Note also that the transition matrix is such that the rows are "From" and the columns

are "To" in terms of the state transitions.

Now we know that currently K has some 25% of the market. Hence we have the row

matrix representing the initial state of the system given by:

State

1 2

[0.25, 0.75]

We usually denote this row matrix by s1 indicating the state of the system in the first

period (years in this particular example). Now Markov theory tells us that, in period

(year) t, the state of the system is given by the row matrix st where:

st = st-1(P) =st-2(P) (P) = ... = s1 (P)t-1

We have to be careful here as we are doing matrix multiplication and the order of

calculation is important (i.e. st-1(P) is not equal to (P) st-1 in general). To find st we

could attempt to raise P to the power t-1 directly but, in practice, it is far easier to

calculate the state of the system in each successive year 1, 2, 3... t.

We already know the state of the system in year 1 (s1) so the state of the system in

year two (s2) is given by:

s2 = s1P

= [0.25, 0.75] |0.88 0.12 |

|0.15 0.85 |

= [(0.25) (0.88) + (0.75) (0.15), (0.25) (0.12) + (0.75) (0.85)]

= [0.3325, 0.6675]


Note that this result makes intuitive sense, e.g. of the 25% currently buying K's

cereal 88% continue to do so, whilst of the 75% buying the competitor's cereal 15%

change to buy K's cereal - giving a (fractional) total of (0.25)(0.88) + (0.75)(0.15) =

0.3325 buying K's cereal.

Hence in year two 33.25% of the people are in state 1 - that is buying K's cereal.

Note here that, as a numerical check, the elements of st should always sum to one.

In year three the state of the system is given by:

s3 = s2P

= [0.3325, 0.6675] |0.88 0.12 |

|0.15 0.85 |

= [0.392725, 0.607275]

Hence in year three 39.2725% of the people are buying K's cereal.

Now it is plainly nonsense to suggest that we can predict to four decimal places K's

market share in two years time - but the calculation has enabled us to get some

insight into the change in K's share of the market over time that we otherwise

might not have had.

Package solution

The above problem was solved using the package, the input being shown below.

The output is shown below, first after a single time period (year in this case), then for

after two time periods.


http://people.brunel.ac.uk/~mastjjb/jeb/or/software.html

Brand duplication Analysis

Duplication analysis

This approach isolates buyers of a particular brand over a total year. It then

quantifies the proportion of them who buy other brands at some

Gain & Loss Analysis

This analysis identifies the source of change in a brand’s share, volume or value

over 2 identical time periods. The 4 possible sources of a brand’s volume change

are:

New category buyers

Added to repertoire

Increased purchasing

Switching

The most important source of volume is usually the Switching component, which

consists of the volume directly stolen by or lost to other brands.

Repeat/lapsed/new buyers analysis

If the objective of the analysis is to understand which brands have my brand

gained from, the focus would be on the new buyers. Comparing their brand

purchasing behavior to average brand shares will highlight brand “gainers”.

Conversely by looking at lapsed buyers the analysis provides an indication of

who my brand has lost to.


Expert Analytics

There is a wide range of expert analytics. But the Consumer Panel provides a

very wide range of analytical possibilities that we as well offer as customized

solutions for your questions. Below you find some of the most common ones:

Category Expandability

Could I get consumers to buy more of my category?

If shoppers buy more will they consume faster?

Is my market more expandable than others?

If a consumer is persuaded to buy a larger pack will they use it at the same rate?

What are the best pack sizes to encourage faster use?

What are the best promotional mechanics to encourage faster use?

Are certain pack formats better at encouraging expandability?

Marketing Mix

Here we analyze the contribution of all Marketing factors for your brand

performance to help you optimize your marketing activities:

Understanding product positioning

Understanding pricing

Understanding promotions


Understanding placement

Ranging

1. Understand what the shopper is looking for in your category in order to work out

what needs your range has to meet

2. Build up a portfolio of skus starting with the absolute essentials, then adding to

drive incremental sales

3. Identify skus in your range which aren’t adding anything to your brand and could

be rationalised

4. Identify your “ideal range” and calculate the impact on your brand and on the

category if you list this rather than what you currently offer

Category Manager

Offers insight into category performance so you can highlight your opportunities

within the category and gain information on your competitive threats. Understand

the dynamics behind your consumers' behavior, identify the measures that

contribute to store loyalty and analyze lost expenditure from individual stores at

brand, sector and category level.

Brand Switching Analysis

A simple indicator of consumer satisfaction in a competitive market is the buyers’

repeat purchase rate over time. Brand switching analysis is also useful to forecast

the brand dynamic evolution. This approach is based on the analysis of purchase

sequences.


Consider the market share development of brands A, B and C shown in Figure below

Figure Web 5.1

The Dynamics of Market Share Movements

Brand B

Market Share Brand A

Brand C

Time

The stability of brand A's market share can be interpreted in two very different ways:-

• A fixed number of consumers buy the same quantity of brand A at regular intervals.

• The number of consumers dropping brand A is equal to the number of consumers

Adopting brand A; entry rate then compensates exit rate exactly.

On the basis of aggregate market data, it is not possible to decide which the true

state is. Similarly, one could give the following explanations for brand B’s growth:

• Brand B has a fixed number of loyal buyers to whom new buyers are added at a

Regular pace,

• Entry rate is higher than exit rate,

• The number of brand B's buyers remains unchanged, but some of them are

Purchasing an increased quantity per buying occasion.


Here again, the available information does not permit us to discriminate between

these possible explanations.

To keep the analysis simple, let us limit ourselves to a market composed of two

competing brands. As shown in Figure Web 5.2 each particular purchasing act,

viewed in a dynamic perspective, can be described in terms of three origins and

three destinations.

For each brand, we can thus define a loyalty rate and an attraction rate as follows:

• The loyalty rate is the percentage of buyers who, having purchased brand A in the

Previous period (t-1), continue to buy brand A in the current period (t).

• The attraction rate is the percentage of buyers who, having purchased a

Competing brand in period t-1, purchase brand A in period t.

These proportions, known as transition probabilities, can be estimated through

survey or on the basis of panel data. To illustrate, the transition probabilities

observed in the Belgian market among six makes of heavy trucks are presented in

Table Web 5.1.

Table Web 5.1 Example of Brand Switching Analysis:

The Heavy Duty Truck Market Replaced Brands in Period (t)

Brands Purchased in Period (t+1)

Daf Mercedes Renault Scania Volvo Others Market share in t

Daf 55.2 15.3 1.3 2.3 11.4 13.5 7.6%


Mercedes 8.2 59.5 2.4 2.3 11.1 15.5 15.3% Renault 9.0 9.2 53.0 5.0 1.2 22.6 3.2% Scania 8.1 13.3 0.0 65.6 5.1 5.9 3.3% Volvo 15.5 12.9 1.2 1.7 60.0 7.7 5.2% Others 11.7 17.1 4.8 2.9 10.3 53.2 63.4%

Market share in t+1 14.6% 23.2% 5.3% 4.8% 13.2% 38.9% 100.0%

These transition probabilities allow the market analyst to explain market share

movements over time, to describe the underlying competitive dynamics and to

formulate predictions on market developments assuming that the observed transition

probabilities will remain unchanged within a reasonable planning horizon.

If α denotes loyalty rate and β attraction rate, brand A's market share in future

period t+1 will be,

MS (t+1) = MS (t) + β [1 - MS (t)]

Brand A’s long-run or equilibrium market share, MS (e), can be calculated from the

following expression,

β

(1-α) + β

Note that equilibrium market share is independent of the initial market share. It

describes the brand's trajectory, assuming constant transition probabilities. This type

of dynamic analysis is particularly useful at the launching stage of a new product.

Βαβ+−=−=) (1rate) n (attractio+rate) loyalty 1(rate Attraction’s (e)

Retention and Migration Analysis


Retention analysis answers two important questions: 1) are the customers you're

acquiring good ones (meaning they stay customers for a long time), and 2) is the

contact strategy you're using maximizing the maintenance of your customer file (in

other words, are you contacting your customers enough)?

Migration analysis pays particular attention to how customers interact with your

business over the course of time. Once a catalog buyer, always a catalog buyer, and

only a catalog buyer? Maybe, but probably not. Migration analysis aims to examine

how customers interact with your business over time and should be examined in

conjunction with an analysis of the overall contact strategy.

The goal is to gain insights into customer behavior and to then overlay that behavior

with a communication plan. Many multichannel merchants today believe that

customers acquired online don't need print catalogs. They may be right — but they

also may be leaving significant revenue on the table. They can't know for sure

without comprehensive testing. The pinnacle of this analysis is to link a

communication plan to a set of customer behaviors by channel and to increase

retention by communicating with customers in the right channel with the right

message at the right time.

Setting up a retention and migration table shouldn't be difficult but may be somewhat

time consuming. To conduct the analysis, identify all of the customers from period A,

the prior period, by channel. Your choices could include catalog, Web, retail, and

multichannel, for example, but should represent the customer's purchase(s) only in

the prior period.

From that customer set, tap into your database to identify the customers who have

come back in period B, the current period, and in which channel(s) they purchased.

For the current period you'll also want to include columns for new-to-file customers,

reactivated customers who hadn't purchased in the prior period, and inactive, who

had purchased in the prior period but not the current. Each cell in the table should

include two pieces of data: number of customers and total sales dollars.


Once complete, this table illustrates how well your contact strategy performed at

bringing back your most recent customers or how well you retained your active buyer

file. (For the sake of benchmarking, the average business-to-consumer cataloger will

see about 40% of its 12-month file return the following year.) Also, you'll see how

your customers migrated from channel to channel and the spending habits that were

associated with the shifts.


BRAND POSITIONING ANALYSIS

& PROCESS

Brand Positioning Analysis

Product positioning is an important strategy for achieving differential advantage. Positioning reflects the "place" a product occupies in a market or segment. A successful position has characteristics that are both differentiating and important to consumers.


Every product has some sort of position — whether intended or not. Positions are based upon consumer perceptions, which may or may not reflect reality. A position is effectively built by communicating a consistent message to consumers about the product and where it fits into the market — through advertising, brand name, and packaging.

Positioning is related with market segmentation, you can not define your positioning

to be good until you have divided your segments as unique and different.

Product Positioning Process

Generally, the product positioning process involves:


http://www.s-m-a-r-t.com/Exp_Concept.htm

http://www.s-m-a-r-t.com/Exp_penetration.htm

http://www.s-m-a-r-t.com/Exp_marketseg.htm

http://www.s-m-a-r-t.com/Exp_brandpos.htm

http://www.s-m-a-r-t.com/Exp_brandequity.htm

http://www.s-m-a-r-t.com/Exp_AAU.htm

http://www.s-m-a-r-t.com/Exp_csm.htm

1. Defining the market in which the product or brand will compete (who the

relevant buyers are)

2. Identifying the attributes (also called dimensions) that define the product

'space'

3. Collecting information from a sample of customers about their perceptions of

each product on the relevant attributes

4. Determine each product's share of mind

5. Determine each product's current location in the product space

6. Determine the target market's preferred combination of attributes (referred to

as an ideal vector)

7. Examine the fit between:

The position of your product

The position of the ideal vector

8. Position.

The process is similar for positioning your company's services. Services, however,

don't have the physical attributes of products - that is, we can't feel them or touch

them or show nice product pictures. So you need to ask first your customers and

then yourself, what value do clients get from my services? How are they better off

from doing business with me? Also ask: is there a characteristic that makes my

services different?

Write out the value customers derive and the attributes your services offer to create

the first draft of your positioning. Test it on people who don't really know what you do

or what you sell, watch their facial expressions and listen for their response. When

they want to know more because you've piqued their interest and started a

conversation, you'll know you're on the right track.

Positioning Concepts

More generally, there are three types of positioning concepts:


http://en.wikipedia.org/wiki/Mind_share

1. Functional positions

Solve problems

Provide benefits to customers

Get favourable perception by investors (stock profile) and lenders

2. Symbolic positions

Self-image enhancement

Ego identification

Belongingness and social meaningfulness

Affective fulfillment

3. Experiential positions

Provide sensory stimulation

Provide cognitive stimulation

Repositioning a Company

In volatile markets, it can be necessary - even urgent - to reposition an entire

company, rather than just a product line or brand. Take, for example, when Goldman

Sachs and Morgan Stanley suddenly shifted from investment to commercial banks.

The expectations of investors, employees, clients and regulators all need to shift,

and each company will need to influence how these perceptions change. Doing so

involves repositioning the entire firm.

This is especially true of small and medium-sized firms, many of which often lack

strong brands for individual product lines. In a prolonged recession, business

approaches that were effective during healthy economies often become ineffective

and it becomes necessary to change a firm's positioning. Upscale restaurants, for


http://en.wikipedia.org/wiki/Stock_profile

example, which previously flourished on expense account dinners and corporate

events, may for the first time need to stress value as a sale tool.

Repositioning a company involves more than a marketing challenge. It involves

making hard decisions about how a market is shifting and how a firm's competitors

will react. Often these decisions must be made without the benefit of sufficient

information, simply because the definition of "volatility" is that change becomes

difficult or impossible to predict.

Nokia Brand Positioning

Nokia was named the 5th Best Global Brand in 2007 and has been one of the 10

best global brands for almost a decade. So what makes Nokia Brand so valuable

and what is Nokia’s value proposition? As Tam Harbert of Electronic Business

magazine has put it: "If Nokia Corp. were a person, it would be young, sexy,

sophisticated, hip and generally "with it"". Nokia newly released high-end phones

aimed at both the consumer and business user and is showing strength in both

emerging and mature markets.

Nokia has been successful in differentiating itself in the crowed and highly

competitive mobile communication industry and its newly targeted battle of internet

industry. Nokia emphasizes technology innovation, fun spirit, design, and ease of

use to build a “trusted relationship” with customers. The brand has lived up to the

vision of its “Connecting people” and “Human technology” slogan.

Nokia’s strategy can be easily spotted on company’s corporate website: Nokia’s

strategy is to build trusted consumer relationships by offering compelling and valued

consumer solutions that combine beautiful devices with context enriched services.

Example would be Nokia phone’s faceplates and different colours that suit user’s

personality, mood and lifestyle. By owing the “human” dimension of mobile


communications, Nokia has taken the best position for itself, leaving its competitors

behind pondering what to do, what strategy to adopt to position yourself in the

market.

According to Pertti Korhonen, Chief Technology Officer, Nokia, a 'consumer-first

mindset' remains at the core of everything at Nokia. This approach is communicated

down to Nokia’s employees including designers who sketch a new mobile phone

concept and hardware engineers who design complex technology enablers such as

multiradio and video sharing.

Nokia offers mobile phones in five categories: broad appeal, lifestyle products, entry,

CDMA and Vertu. Nokia ensures that every phone it offers can answer customers’

needs...


TABULATION AND VALS

FRAMEWORK ANALYSIS


Cross Tabulation (Showing Motives to Switch)

Age Category

Switching Reasons

Earlier Brand Switched Brand Switch Rate(In Percentage)

15-21 Protein and

Nutrients Complan Horlicks 40-60%

21-30 Quality & Effect Lifebuoy Soap Dettol Soap 28-45%

30-45 Service Quality

BSNL

AirTel 50-70%

45-60 Claim & Trust Oriental Insurance LIC Policies 40-70%

60 and above Service & Comfort

Air India Kingfisher 20-40%

From the above given table we can make the estimates and can withdraw the

conclusion that any brand which has failed to deliver the expected service and has

not shown consistency in product or service quality the customers have switched to

other brands or there has been a fall in his buying frequency of him/her.

So any other brand doesn’t matter how powerful it is or how much it is spending over

its advertisement or sales promotion until and unless is not delivering good quality

better service as it expected from the customer prospective switch rate between

brand has been very high.


VALS FRAMEWORK MODEL


With Japan-VALS, businesses can:

Monitor lifestyle trends and forecasts and interpret significant changes in the consumer environment—for example, they can spot consumption trends by monitoring the behaviour of innovative Japan-VALS segments.

Identify unfilled consumer needs and generate new product ideas. Thinking about Japan-VALS types leads to striking new strategies, concepts, ideas, package designs, and line extensions.

Segment the market. Japan-VALS is an ideal method to answer such questions as "To whom should I market my product?" "What should the main benefit be?"

Differentiate a brand. Determining the Japan-VALS profile of a product in comparison with that of its competitors demonstrates unfilled positioning and helps to set the brand apart through sales-promotion activities, packaging, and advertising.

Develop more effective, targeted selling tools and strategies. Examining the attitudes and behaviour of a selected segment can lead to startling insights about how to make merchandising and promotions more efficient.


Communicate effectively with the target audience. Marketers need to have a feel for their prospective market beyond broad demographics. Japan-VALS provide the understanding of people's psychology necessary to develop advertising that talks to them in their own language.

VALS FRAMEWORK with reference to Mobile Handsets & Services

High Resources High Innovation

Primary Motivation

Low Resources Low Innovation


Vodafone

Innovators

Videocon

Thinkers

BSNL

Strivers

Achievers

Nokia

IDEA

Experience

TATADocomo

Strivers

Reliance

Makers

AirTel

Believers

1. Innovators – Sophisticated, high self esteem, upscale and image is

important.

2. Thinkers – Conservative, practical, income allows many choices, look for

value.

3. Achievers – Goal oriented lifestyle, image is very important.

4. Experiencers – Like “cool stuff,” like excitement and variety’ spend a high

proportion of income on fashion.

5. Believers – Conservative, like familiar and established brands.

6. Strivers – Trendy and fun loving, money defines success, concerned about

the opinion of others.

7. Makers – Practical people, do it yourself, unimpressed by material

possessions, prefer value to luxury.

8. Survivors – Few resources, buy at a discount, very modest market, little

motivation to buy.


Reasons behind Brand Switching:-

Customers find it uncomfortable if product quality starts falling.

Unavailability of product brand and variant which they have demanded for.

Customer often switches to other brand if he gets variety and uniqueness in other brands.

Price escalation or hike also leads to brand switching that can be because of availability of other brand at competitive price or his purchasing power not allows to him to pay beyond a limit.

Low research and development which not provide improvisation in product

quality and standards.

Inconsistent Brand positioning of the product and brand.

Customer did not possess the desired satisfaction level which lures his attention towards alternatives available in the market.

Kleptomaniac customers who don’t believe in brand loyalty they just wish to taste and consume every kind of product and utility possession.

“According to estimates made by American marketing Association it takes 4 times more expenditure to get a new customer then retaining a potential customer”


Table Representing My Brand Switching Motives

Product Earliest Brand Switched Brands Motives

Bath Soap Lux Dettol Fragnence,Ingredients

Toothpaste Colgate Close-up Taste & Freshness

Hair oil Parachute Hair n Care Dandruff & Smoothness

Mobile handsets Nokia Apple Creativity & Life style

Deodorants

Faa Axe

Endurance

Face Cream Fair N Lovely Fair n Handsome Ad Influence


Undergarments Teen Ekka Gen X Comfort

Computer System LG Compaq Technical Sharpness

Tooth Brush Colgate Oral B Brushes

Shaving Cream Old Spice Axe Smoothness

This is how I have shifted between various brands and products with accordance to

my needs and life style to keep it flowing with comfort and glory. Somewhere

advertisements have also grabbed my attention because of that I have shifted to

other brand from earlier brand.

In real customers also not is always interested to switch to other brands, but its

situation and market factors which pushes his thought process and he switches to

other brand. Apart from it a customer always not enjoys after switching to other

brands like once I have switched to Bajaj Almond drop hair oil from hair and care and

I didn’t enjoyed doing so finally I switched back to my earlier trusted brand and felt

better.

So this is how things goes sometimes you enjoy after switching to other brands , but

many a times you starts criticizing yourself for opting a decision to leave your loyal

brand and switching to other brand and that can effect your brand portfolio your taste

and preferences. So its good that first you critically evaluate every other factor and

market condition along with your earlier brands experience before leaving your

trusted brand and adopting a new brand or sometimes adopting a new brand.


CELEBRITY ENDORSEMENTS

AND ITS IMPACT


Celebrity Endorsements and Resultants

A brief introduction

Endorsement is a channel of brand communication in which a celebrity acts as the

brand’s spokesperson and certifies the brand’s claim and position by extending

his/her personality, popularity, stature in the society or expertise in the field to the

brand. In a market with a very high proliferation of local, regional and international

brands, celebrity endorsement was thought to provide a distinct differentiation. But

over the years, many aspiring brands in Asia have jumped on to this celebrity

endorsement bandwagon. Even though endorsements have taken on a quasi-

industry stature, there is hardly any hugely successful collaboration as those of

Nike’s. There are many reasons for such a happening. The next section addresses

this issue.

Essentials of celebrity endorsements

Even though to an observer it may seem that Nike’s success is totally based on

Tiger Wood’s association with the brand, nothing can be far from the truth. As a

brand, Nike has established a very strong brand identity and a brand personality

over the years. What Nike did was to use celebrity endorsement as one of the main

channels of communicating its brand to a highly focused set of customers. So, Nike’s

association with Tiger Woods was one of the parts of an entire branding process that

Nike has been practicing consistently. Contrary to this, most of the brands in Asia

that have used celebrity endorsements have used it as the main brand building tool.

Before any brand signs on a celebrity, they should consider three main aspects.

Attractiveness of the celebrity: This principle states that an attractive

endorser will have a positive impact on the endorsement. The endorser

should be attractive to the target audience in certain aspects like physical

appearance, intellectual capabilities, athletic competence, and lifestyle. It has

been proved that an endorser that appears attractive as defined above has a

grater chance of enhancing the memory of the brand that he/she endorses.


Credibility of the celebrity: This principle states that for any brand-celebrity

collaboration to be successful, the personal credibility of the celebrity is

crucial. Credibility is defined here as the celebrities’ perceived expertise and

trustworthiness. As celebrity endorsements act as an external cue that enable

consumers to sift through the tremendous brand clutter in the market, the

credibility factor of the celebrity greatly influences the acceptance with

consumers.

Meaning transfer between the celebrity and the brand: This principle

states that the success of the brand-celebrity collaboration heavily depends

on the compatibility between the brand and the celebrity in terms of identity,

personality, positioning in the market vis-à-vis competitors, and lifestyle.

When a brand signs on a celebrity, these are some of the compatibility factors

that have to exist for the brand to leverage the maximum from that

collaboration.

Even though these three major principles must be adhered to by companies,

practically it might be difficult to find celebrities that satisfy all these three conditions.

Depending on the nature of the brand and the kind of product being used,

companies can selectively emphasize one factor over the other.

Celebrity endorsements – Do’s and Don’ts

All brands must be aware of some of the important aspects of celebrity branding as

discussed below:

Consistency and long-term commitment: As with branding, companies

should try to maintain consistency between the endorser and the brand to

establish a strong personality and identity. More importantly, companies

should view celebrity endorsements as long-term strategic decisions affecting

the brand.


Three prerequisites to selecting celebrities: Before signing on celebrities

to endorse their brands, companies need to ensure that they meet three basic

prerequisites, namely the endorser should be attractive, have a positive image

in the society, and be perceived as having the necessary knowledge

(although it might be difficult for a celebrity to meet all three prerequisites)

Celebrity–brand match: Consistent with the principles discussed earlier,

companies should ensure a match between the brand being endorsed and the

endorser so that the endorsements are able to strongly influence the thought

processes of consumers and create a positive perception of the brand.

Constant monitoring: Companies should monitor the behaviour, conduct

and public image of the endorser continuously to minimize any potential

negative publicity. One of the most effective ways to do this is to ensure that

celebrity endorsement contracts are effectively drafted, keeping in mind any

such negative events.

Selecting unique endorsers: Companies should try to bring on board those

celebrities who do not endorse competitors’ products or other quite different

products, so that there is a clear transfer of personality and identity between

the endorser and the brand.

Timing: As celebrities command a high price tag, companies should be on

the constant lookout for emerging celebrities who show some promise and

potential and sign them on in their formative years if possible to ensure a win–

win situation.

Brand over endorser: When celebrities are used to endorse brands, one

obvious result could be the potential overshadowing of the brand by the

celebrity. Companies should ensure that this does not happen by formulating

advertising collaterals and other communications.

Celebrity endorsement is just a channel: Companies must realize that

having a celebrity endorsing a brand is not a goal in itself; rather it is one part

of the communication mix that falls under the broader category of sponsorship

marketing.


Celebrity ROI: Even though it is challenging to measure the effects of

celebrity endorsements on companies’ brands, companies should have a

system combining quantitative and qualitative measures to measure the

overall effect of celebrity endorsements on their brands.

Trademark and legal contracts: Companies should ensure that the

celebrities they hire are on proper legal terms so that they don’t endorse

competitors’ products in the same product category, thereby creating

confusion in the minds of the consumers.

These guidelines are intended to provide companies a useful framework that they

can use while deciding on the celebrities to endorse their brand.

Conclusion

The important aspect that companies must note is that celebrity endorsements

cannot replace the comprehensive brand building processes. As branding evolves as

a discipline companies must be extra cautious to utilize every possible channel of

communication rather than just a celebrity endorsement. When all other steps in the

branding process is followed and implemented, then channels such as celebrity

endorsements can provide the cutting edge as it did for Nike.


Table Showing impact of Celebrity Endorsements:-

Former Brand Adopted Brand Brand Ambassador Reason

Dollar Club Micro Men Hrithik Roshan Follow Up

Reebok Bat MRF Sachin Tendulkar Inspiration

Lamborghini Car Ferrari Car Michael Schumakar Motivation

Banful Tel Navratna Oil Amitabh Bacchan Adaptability

Coca Cola Thums Up Akshay Kumar Sportiness

Addidas Nike Michael Jordon Role Model

Maruti Suzuki

Alto/Zen

Hyundai Santro Shahrukh Khan Fan Following

Lux Inner Ware Dollar Club Salman Khan Macho look

Local DTH Tata Sky Amir Khan Fan Following

Local Hair Remover Veet Katrina Kaif Beauty Quotient

Tanisk Nakshatra Aishwarya Rai Inspiration

In above given brand switching and adopting different brand we can see and assume

how celebrity endorsement and advertisement campaigns are influencing the

television watchers and loyal and potential customer of any braded product and due

to this they often changes their brands and adopts new brand of product. Even I after

looking at Hrithik Roshan wearing Micro men premium innerwear’s started buying

and using that product brand and even its really a nice product at competitive price

so thanks to company to offer a wonderful product and that too endorsing it by one of

the most dashing actor Hrithik Roshan.


NIKE –Brand Possession and Celebrity Endorsements

Nike is known around the world for being one of the most iconic brands. It was

recently ranked as the world’s 31st most valuable brand in terms of its brand value –

USD10.8 billion – by the annual Business Week’s global top 100 brand survey. In

spite of many market maneuvers (such as the recent merger between Adidas and

Reebok), Nike has remained the leader in its category. Nike is also very well known

for another aspect and that is its consistent use of celebrities to endorse the brand.

In fact one of the most successful collaborations between a brand and a celebrity is

that of Nike and Michael Jordan.

So successful was the collaboration that Nike and Jordan launched a new brand

variant called the Air Jordan line of sport shoes. Nike pulled off a very similar coup in

the sports industry when it joined forces with the ace golfer Tiger Woods to enter the

golf category with its apparel, equipment and accessories. Nike had no experience in

golf before. Moreover, golf being a very elite game, it was generally considered that

a brand like Nike would not be very successful. This might have probably been true

had Nike chosen the traditional path to building its equity in the golfing arena. But

Nike chose to associate with the best golfer in the world and have him endorse the

brand. As is known today, Nike has emerged highly successful in golf.


ANALYSIS AND FINDINGS OF

STUDY


Analysis and Observation:-

After analyzing all the constraints and factors we come to know that majority of the

customers switch between brands in today’s scenario and that is not because they

seek thrill in doing, so instead sometimes they suffer to in the form of not getting the

expected quality and output from utilization of newly adopted or switched brand.

The main constraints behind brand switching is manufacturers who are not able to

keep their promise to deliver better product at competitive price, marketers not able

to put or expose their product in better way and part of those producers who are not

delivering the qualitative product which makes customer looking at other brands or

adopting different brands to cater their needs.

Jack Trout and Al Ries has rightly said that it is all up to you what positioning and

brand image your products possess and that reasonably depends how you segment

your product for varied market locations and core competency of product which only

can repeat the consumer buying process and if customer does it twice he is loyal to

your brand and depends to your product performance hardly he will try to other

brand unless your products quality falls it looses its standard or you became more

profitability oriented. So its always better that you keep eyeing the customer

prospective need sets and your competitors strategy if you are successful in doing

so your set of potential customers will be more and brand loyalty for your product will

sustain long lasting.

Above all exceptional cases are always there you will find n number of customers

who believes in brand switching its like a passion for them and that’s because they

are intended to taste all possible set of brands and they get thrill in doing so

switching between brands having different-2 taste and different-2 exposure which too

is somehow related to luring of marketers and advertisements and sales promotion

campaigns organized by different-2 marketers to bring the attention of customers

towards their brand and respective product.


Findings of this study:-

Consumer behaviours understanding are very necessary to be a successful

player in the market.

Marketers who often becomes focused more about their profitability and goals

fails to deliver the expected quality product and that betrayed them from their

potential customers.

Price of your product, your competitor, quality essence in your product and its

availability in the market this all decides whether customers will strict to your

brand or they will switch to other brand.

Celebrity endorsements and theirs fan following relationship deepens the rate

of brand switching.

Positioning of your product and advertisement play the important role in

getting your brand set of loyal customers.

In today’s competitive age level of research and development required is very

high perhaps it can be the key for you.

Market factors like demand supply up and downs helps the marketer to

estimate his market share and presence.

Market share of any product or brand solely depends upon the brand loyalty

shown by the prospective customers if there will be more loyal customers of

your brand sales volume of your product will be high.

Buying frequency analysis helps to determine the range of loyal customers.

Brand duplication and fraudulent trade practices are spoiling the image of

different brand as well as its capturing the market share of players.


QUESTIONNAIRE DATA

INTERPRETATION &

REFERENCES


Questionnaire and Data Interpretation Analysis

Dear Sir/Madam

I most humbly request you to please respond to my certain questions which will help me to depict conclusion for study conducted by me on topic entitled...

”Study on Brand Switching in Consumer Products”

I sincerely assure you about keeping your valuable opinions and relevant information provided by you will be kept confidential and safe.

Further I will appreciate your cooperation and help to let me complete my respective report.

Name of the Respondent……………………………………………………………………………………………………………

Age (Yrs)………………. Gender Male Female

Occupation ………………………………………………………………………………………………………………………

Contact Number ………………………………………………………………………………………………………………………..

Address ……………………………………………………………………………………………………………………………………..

Que1. Does it really matter for you to be brand conscious?

Yes No

Que2. What does a brand mean to you?

(a). Assured Quality (b). Unique Product

(c).Costlier Stuff (d). After Sales Services

Que3. Do you Believes in Brand Loyalty?

Yes No


Que4. Which is your favourite brand?

Please Specify ………………………………………………………………………………………………………………..

Que5. How often you switch between brands?

(a). Slowly (c). Moderately

(b). Rapidly (d). Didn’t Switch

Que6. What is unique about your liked brand?

Please Specify ………………………………………………………………………………………………………………..

Que7. If you have switched to another brand what was the reason behind that?

(a) Price factor (b) Bad Quality

(c) Unavailability (d) after sales services

Que8. Any Product brand you would say has consistently sustained its all essence of a perfect brand?

Please Specify …………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………


Que9. Which brand you think has transformed itself through Change/Transformation?

Please Specify ……………………………………………………………………………………………………………………….

Que10. Any tagline or punch line of any brand whenever comes which brand your mind recalls?

Please Specify ………………………………………………………………………………………………………………………

Que11. Any recommendation from your side to bring in your brands portfolio?

Please Specify………………………………………………………………………………………..

THANKS Allot

Note: - Opinions and Information provided by you will be kept confidential.

Data Analysis and Interpretation


No. of respondents

Quality After Sales Services

Sample Size Taken 40

1. Does it really matter for you to be brand conscious?

0%

50%

100%

Yes No

No. of respondents

No. ofrespondents

2. What does a brand mean to you?


Yes NO

88% 12%

0%

20%

40%

60%

Slowly Rapidly

No. of respondents

No. ofrespondents

3. Do you believe in brand loyalty?

No. of respondents

Yes

No

4. How often you switch between brands?

Opinions No. of respondents

Slowly 45

Rapidly 55

References


Yes NO

78% 22%

Someone has nicely said in today’s scenario wireless technology and internet is

playing a very important role that is unleashing the information creating its sharing

and to make the task easier and sophisticated.

So I too can’t get it away without the help of some good website and web links it

would not have been easier to prepare any report required.

Books consulted are given below:-

Damodar N Gujrati

Philip Kotler

Websites consulted are listed below:-

www.wikipedia.org

www.google.in/search/brandswitching

www.gfkcs.in

www.kelton.com

www.teacherweb.com

www.fisher.osu.edu/~allenby_1/2004%20Integrated%20Approach

www.findartcles.com

www.people.brunel.ac.uk

www.brainmss.com


http://www.brainmss.com/

http://www.people.brunel.ac.uk/

http://www.findartcles.com/

http://www.fisher.osu.edu/~allenby_1/2004%20Integrated%20Approach

http://www.teacherweb.com/

http://www.kelton.com/

http://www.gfkcs.in/

http://www.google.in/search/brandswitching

http://www.wikipedia.org/

30221337 Study on Brand Switching in Consumer Products

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Transcript of 30221337 Study on Brand Switching in Consumer Products