BRAND AS A DOMINANT FACTOR IN ...

BRAND AS A DOMINANT FACTOR IN DETERMINING THE COMPETITIVENESS OF FIRMS: EVIDENCE FROM THE CZECH CONSUMER MARKET Chovancová, Miloslava/Asamoah, Emmanuel Selase/Adambarage, Chamaru De Alwis/Samarakoon Mudiynsela, Ajantha Kumara/Guo, Yiying Tomas Bata University in Zlin, Czech Republic Abstract Brands´ can create value for a company especially when they receive positive evaluations from consumers compared to that of other companies. This study analyses the competitiveness of companies with reference to the process of consumer brand search, and the role of brands in consumer decision making. Using the nonprobability sampling method, 212 respondents from different age groups were selected and a semi-structured questionnaire was administered. The results of this study does not only add to theory, but it also provides practical, proactive and result oriented analysis that will enable businesses augment their strategies in consumer markets, thus, making branding the pivot around which other marketing activities revolve. Key words: competitiveness, consumer, brand, branding, Czech INTRODUCTION Over the years, business entities have realized that the brand is more than just names and logos. The identity of a brand needs to be based on a unique idea and told through a compelling story (Greenwood, 2007). It needs to connect with potential customers and also form positive emotional bonds among them. The strength of some world known brands enables them to charge a significant price premium. Therefore the brand power is reflected in higher firm valuation (Simon & Sullivan, 1993). Brands increase the value of products and services by differentiating them from the competition, creating positive mental associations and forming emotional relationships with the customer (Greenwood, 2007). In a clustered market where other brands are fighting for the attention of consumers, the brand serves as a distinguishing feature when consumers are searching for products in the same category. The brand must be easily identifiable and recognized among others in the same category. Also, it should facilitate easy recall and meet the motives and values of customers. In order for a company to be competitive, the brand must be made to play a dominate role in the company’s marketing strategy. The brand must be the pivot around which all other marketing efforts rotate. One way to do this is to ensure that the brand provides a promise and explains to the customer what they can expect from the products and services on offer. BRAND AND COMPETITIVENESS In this modern age of business, having a strong brand can ensure a company's long-term success. Evidence from some top global brands indicates how a company can command a large market share through its strong brand management initiatives. According to Bradford (2008), in an increasingly intense global business arena, branding can serve two distinct functions. Firstly, a brand ensures an entrenched customer base that is more difficult (and expensive) to displace. Secondly, a brand can provide a company with a foot in the door when seeking to enter new geographic areas. The brand can be a useful offensive tool and defensive tool when you are competing with non-local companies (Bradford, 2008). The most important value in a brand is the value that it holds for customers. This value is very difficult and expensive to build but fragile and easy to destroy. Brands are valuable and a major source of competitiveness simply because they increase the inclination of individuals to purchase a particular product of a company rather than that of another company. For products that hold little meaning for the customer, this might be worth less, but in markets where the customer invests his or her ego in the purchase of a particular brand, that meaning can be priceless (Bradford, 2008). Some brands will sell well just about anywhere they show up, because the customer associates them with unique qualities and it meets customer’s values and expectations. BRANDING AND CUSTOMER EXPERIENCE Brands are built from nothing less than the sum of a customer's experiences with a product, service or company. Customer experience is an interaction between an organization and a customer as perceived through a customer’s conscious and subconscious mind. It is a blend of an organization’s physical performance, the senses stimulated and emotions evoked, each intuitively measured against customer expectations across all moments of contact (Shaw, 2010). This definition takes into account three fundamentals of customer experience namely, perception, expectation and performance. According to Sterne (2002), it should be easy for customers to discover the offering of a company amongst the lot. They should be able to learn about it, compare it, and form a desire that is strong enough to compel them to shell out hard-earned cash to acquire it. The sum total of an individual’s experiences with a company will form his or her perception of it and build an image in his or her mind (Sterne, 2002). The predisposition of customers towards a company’s brand is important because, as a prerequisite, the brand needs to be of relevance to customers so as to provide any economic or marketing relevance for the firm.

CONCEPTUAL FRAMEWORK AND OBJECTIVES OF THE STUDY In this research, we identify certain factors from a pilot study among consumers and literature resources that contributes to the competitiveness of companies. These factors stand out and are what consumers’ value most in searching for and buying their preferred brand. The study therefore explains the competitiveness of brands through the eyes of consumers. The factors were designed into a conceptual framework and are broadly classified as follows: relevance of brand in a product category, brand recall, brand search, brand loyalty, brand recommendation/Unsolicited consumer to consumer marketing, risk reduction and social demonstrance motive of consumers. These are depicted in the figure below: Figure 1: The interaction between companies, consumer experience and factors that determine competitiveness of brands.

Brand Identity Brand Capital Company

Brand Functions

Consumer experience

Brand Recognition

Source: Authors The main objective of the study is to examine the role branding plays in the decision making process of consumers and the factors that influence their buying behaviour. This study brings out relevant interpretation and determination of competitiveness with reference to branding; as well as certain theoretical and practical approaches related to it. Consequently, the study aims at examining the strategies that companies can adopt to satisfy the needs of consumers so as to gain competitive advantage over rival companies. However, the research also examines the performance of some brands of Czech origin on the Czech consumer market and the behaviour of Czech consumers towards their own national brands. BRANDS OF CZECH ORIGIN There are more than 2,000 Czech and foreign brands that are non-performing on the Czech market. Most of the famous Czech brands, which went away from the market during the 90’s, are coming back to the shops. A study by the European Brand Institute (EBI) in 2010 found that the most valuable Czech brand is Sazka - a lottery company. But the brand value of Sazka fell to € 413 million from €444 million last year (Vandrovec, 2010). According to marketing managers of some Czech companies surveyed, the most successful Czech brands include – Škoda Auto (72%), the brand of dark lemonade tmavé Kofola (72%), the well known beer brand Pilsner Urquell (36%), the Baťa shoe brand (32%) and Budweiser Budvar beer brand (28%). The marketing managers sampled had nostalgic feelings about resurrecting some Czech brands on the market. These brands include the ‘Tatra’ automobile brand, legendary motorcycles of ‘Jawa’, and the once famous Czech sport shoe brand ‘Botas’. Škoda, one of the three best-known Czech brands, is registered in 92 countries. Recently Škoda Holding agreed to sell its subsidiary Škoda Power to Doosan Heavy Industries & Construction of South Korea for Kč 115.5 billion. The Czech soft drink ‘Kofola’ made a name for itself in the 1960s and 1970s, but was squeezed to the edge of the market following the arrival of Western competitors. Nevertheless, in Moravia especially, Kofola remained popular and survived the onslaught of large international rivals. Kofola distributes its products in five countries in the CEE region. For the first half of 2009, the Kofola Group showed consolidated net profit in the amount of Kč 68.6 million. Another brand, the Plzeň, West Bohemia-based Plzeňský Prazdroj, the producer of Pilsner Urquell and Gambrinus beers, is now owned by international brewing conglomerate SABMiller following a transaction with the former Investiční a Poštovní Banka and Japanese bank Nomura. Pilsner Urquell beer was registered 150 years ago as Pilsner Bier and 40 years later it was re-registered under its current name (Bayer, 2009). Many of the Czech companies realized during the last years how ruthless foreign competition can be. One typical example is seen with the company Elton which produces the watch brand called ‘Prim’. After the falling of the Iron Curtain and the emergence of the free market economy, Czech consumers preferred to buy various foreign products. Therefore, Elton Company’s production fell to 85%. However, the renaissance to buying products with Czech brand names was caused by the disappointment of Czech consumers with the very low quality of foreign goods, especially those from Asia. Consumers realized that brands of Czech origin were of

better quality. The Czech brands still have space in the consumers’ mind. Some very famous and traditional Czech brands survived the crises in 1929, but did not survive the financial crisis in 2008. These includes Bohemia Crystalex Trading, which previously produced 90% of glass in the Czech Republic, with roots from 1876; Carlsbad Porcelain, established in 1794 but currently has very serious operational problems; and producer of matches Solo Sušice in the Czech Republic had to transfer its production to the East. Accordance to Bednář (2010), the world does not know brands of Czech origin because Czech firms prefer to export under foreign names. For instance, the producer of small lorry AVIA Prague exports under the company of Ashok Leyland, which is the second biggest lorry producer in India. Exporting under a foreign brand name helps to increase sales in South America and Russia, because such small lorries do not perform well on the European market. The traditionally known Czech producer of keys and locks FAB sells its products like Ikon in Germany, Vachette in France, and under the brands of TrioVing, Ruko and Assa in Scandinavia. The beer producer Budweiser Budvar, located in the city of České Budějovice, sell beer in foreign market under the brand name Czechvar, because of legal issues. Similar strategies were chosen by Sporten Company which produces 200,000 ski and snowboards for Alpina, Asnes, Decathlon, Hagan, K2 and Rossignol. CZECH CONSUMERS´ BEHAVIOUR Bayer (2009) explains that the counterfeiting of famous branded products is big business. According to Ernst & Young’s estimates, counterfeit products cause European producers losses of up to €35 billion annually. Although consumers consider buying counterfeit products as socially acceptable, many companies see the phenomena as a serious threat. Most commonly imitated goods are clothes, cigarettes and portable audiovisual players are purchased by Czech consumers, probably, because of their sensitivity to price. The average monthly salary in the Czech Republic is 22,321 CZE (Euro 893). But Czech consumers realize the health risk of counterfeit food products and that is the main reason for the development of the bio food market. According to a research by the association of Czech Brand (Česká Značka) in 2009; 77% of Czech consumers prefer domestic products or national brand. Such consumers focus on price before quality and brand image (Hospodářské noviny, 2009). If Czech consumers buy Czech product they buy it because of the price and long-term tradition. But if they buy goods from abroad, the brand preference is ahead of price and quality. But consumers have a preference for quality, especially when it has to do with food. The demand for bio food is increasing rapidly – but price still wins. MARKETING STRATEGY PROBLEM Many of the failed Czech brands were phenomenon in their era, but tradition and good quality product are not the only successful factors for a brand. The problem is with the Czech people’s reluctance to engage in rigorous selling, and many companies are aware of this problem. To support the development of good marketing strategy for Czech brands, the Association of Czech Brand was established. The main objective of the Association of Czech Brands is to support and promote brands of Czech origin and advocate for the protection of intellectual property. However, consumers should expect the price of domestic branded products to increase because of higher marketing for bigger visualization on the market. LITERATURE REVIEW AND HYPOTHESIS This section reviews literature on the salient aspects of brand competitiveness that forms the basis of the conceptual framework. Hypothesis are formulated and tested from the literature review. RELEVANCE OF BRAND IN A PRODUCT CATEGORY Brand relevance explains how sensitive customers react to differences in brands. The relevance of brand in a product category explains how the brand stands out in the product category. Product category refers to the specific generic to which a good or service belongs; for example, while Fanta is a brand name, the product category to which it belongs is soft drinks. Research has shown that when customers feel that brands are important for their buying decision, they do so because they expect the brand to provide (intangible) benefits (Kapferer 2008; Mitchell & McGoldrick 1996). Hence, the following hypothesis is formulated: Hypothesis 1a: Brands play a significant role in the purchasing behaviour of consumers when choosing from different product in the same product category Also, among brands in the same product category, firms can have an advantage over other brands if consumers are able to recognize the brand of a company in spite of the availability of other brands. Consumers are so overwhelmed by the variety of products available to them that making the right choice on the basis of quality, price, and stylishness, among others becomes difficult. Therefore, the brand tends to alleviate the dilemma that consumers go through. A brand which is widely known in the marketplace acquires recognition. This conceptual framework seeks to find how easy consumers are able to recognize and form clear pictures of different brands in the same product category. The hypothesis is given as: H1b: In the same product category, consumers have a clear picture about many different brands BRAND RECALL Brand recall is the extent to which a brand name is recalled among different brands in the same product category. Some researchers divide recall into both "unaided" and "aided" recall. "Aided recall" measures the extent to which a brand name is remembered when the actual brand name is prompted. The first recalled brand

name has a distinct competitive advantage in brand space, as it has the first chance of evaluation for purchase. In a research conducted by Swaminathan (2007), it was found that older people did poorly relative to their younger counterparts when asked to recall some information. Research has also shown that when a person is in the 20s, the brain cells begins to deplete few at a time and the body also starts to make less of the chemicals the brain cells need to work. The older a person is, the more these changes can affect memory. Aging may affect memory by changing the way the brain stores information and by making it harder to recall stored information. Furthermore, specific results indicated that women excelled in verbal episodic memory tasks, such as remembering words, objects, pictures or everyday events, and men outperformed women in remembering symbolic, non-linguistic information. Based on the discussions above, the following hypothesis is formulated: H2: There is a significant relationship between the ability to recall brand name and age and sex BRAND SEARCH Brand search is a form of visual search process of reducing spatial uncertainty about a specific target among a set of distractors (Wolfe 1998). The target could be a specific brand in a product category. The distractors are all the elements on the display, not being the target. Due to increasingly packed retail shelves, line extensions, store brands, and look-alike packaging, consumers frequently get confused and are not able to find the product they are looking for. In the United States, Kurt Salmon Associates (2004) found that 40% of the consumers say they find it hard to locate what they want. This research demonstrates that the most important reasons for consumers’ dissatisfaction with retailers and manufacturers are all related to speed and the ease of finding what they want in a category. Research by Drèze, Hoch, and Purk (1994) indicate that, consumers do not buy a brand when they are not able to find it quickly. Hoyer (1984) and Leong (1993) also found that consumers spend little to no time on decision making and pick up a brand quickly after minimal search. We therefore test a hypothesis of the relationship between brand search and customer’s income level and age. H3a: The higher the age of a consumer, the more likely they are to spend a lot of time in searching for alternatives of products of different brands and vice versa. H3b: The higher the income of consumers, the less likely they are to spend a lot of time to compare alternative brands in markets before taking a decision to buy. BRAND LOYALTY Research on behavioural (as opposed to attitudinal) brand loyalty has generally considered loyalty as a notion of consumers being exclusively loyal to one single alternative in their purchase behaviour. Brand loyalty can be expressed as behaviour (consistent purchase) (Andrews & Srinivasan, 1994), responses to advertising (Deighton, Henderson & Neslin, 1994), and/or attitudes (preference). A way of determining brand loyalty is the degree or intensity of the brand, or mere brand preference. The combination of psychological (this brand fits my image) with behavioural (I purchase this brand most) congruencies gives the most robust measure of brand loyalty. The loyalty of a consumer for a given brand is a function of both behaviour and attitudinal measures. Furthermore, there is an understanding among researchers and practitioners that the brand loyalty construct is of importance in understanding consumer experience (Howard and Sheth, 1969; Jacoby & Chestnut, 1978). According to Mittal and Kamakura (2001), with regards to repurchasing behaviour, females are more loyal to brands than males (Mittal & Kamakura, 2001). Specifically, Mittal and Kamakura (2001) found that the probability of repurchasing a specific brand is uniformly higher among women than among men, with the same level of satisfaction. The contribution to purchasing decisions of young people may be primarily due to their increasing knowledge of the marketplace and product alternatives. Thus, it is brands that are considered in nice and trendy that young people tend to demonstrate loyalty towards. Furthermore, when young people begin to earn money, they establish an increased sense of independence, and are more likely to purchase the products (branded) they desire, without reverting to consultation of parents (Derbaix & Bree, 1997). In terms of income level and brand loyalty, Huang, Perloff, and Villas-Boas (2005) found that, as household income rises, consumers are more likely to be less loyal to a brand and more likely to switch. In short, wealthy households buy a leading brand and stick with them, even though it may cost more than other brands. Hence, the hypothesis is given as: H4: There is a positive relationship between brand loyalty and age, sex and income of consumers. BRAND RECOMMENDATION/UNSOLICITED CONSUMER TO CONSUMER MARKETING Customers could be very important marketing agents for a company especially when they get total satisfaction from their purchases. The total brand experience of customers' will determine whether they will buy anything more from the company and, just as importantly, whether they will spread awesome or awful word-ofmouth to friends and family (Taylor and Cook, 2006). When a customer recommends a brand they prefer to their friends or relatives or engage in unsolicited consumer to consumer marketing, it will cause an increase in the customer base of a company. We assume that unsolicited consumer to consumer marketing varies with age and gender, hence the following hypothesis: H5: The tendency of a consumer to recommend his preferred brand to friends and relatives varies with age and sex.

PRICE AND BRAND CHOICE Further to the discussion on brand loyalty, when brands are more relevant to customers’ needs and values, it is likely that they will be more willing to accept a higher price for a brand name product or to be more loyal to their preferred brand. Price premium and brand loyalty are important drivers of financial brand equity (Kapferer, 2008). Hence, if the willingness to pay a price premium and to build a loyal brand relationship is higher, it is likely that it will translate into a higher overall level of brand equity. The next hypothesis focuses the relationship between price and sex, age or level of income and consumer choice. H6a: The tendency of consumers to pay additional price in order to get their preferred brand varies with sex and age. H6b: The higher the income level of a consumer, the more likely they are to make an automatic choice when buying a product. BRANDING AND RISK REDUCTION MOTIVE Brand aids in identifying the source or maker of a product. Consumers recognize a brand and activate their knowledge about it (Zhang & Sood, 2002). Consumers are able to form reasonable expectations about the functional and other benefits of a brand based on what they know about the brand in terms of its overall quality and specific characteristics. Therefore, brands plays a role in reducing the consumer’s (subjective) risk of making a purchase mistake (Kapferer, 2008). The brand name may provide the means to reduce the risk associated with the evaluation of a newly introduced product. Branding enables consumers to lower the information costs that arise from assessing alternatives from a larger range of products (Erdem, Swait, & Valenzuela, 2006). According to Erdem and Swait (1998), branding offers to consumers an important quality signal in advance that reduces the perceived risk. Because of the difficulty in assessing product attributes and quality with experience and credence goods, it is hard to determine product quality and thus consumers may perceive high risks in product decisions. An important avenue for consumers to handle these risks is by buying well-known brands, especially those with which consumers have had favourable past experiences (Aaker, 1991; Mitchell & McGoldrick, 1996). Brands serve as a source of guarantee of trust in the expected performance of the product and provide continuity in the predictability of the benefits of the product. This is because they raise mean perceptions about quality and lower their variance. It follows that, brands perform a risk reduction function and we expect risk reduction to be an important determinant of consumer decision making. From gender-related research (Byrnes, Miller & Schafer, 1999), we know that men are less risk averse than women. Hence, we expect risk reduction motive to apply more to women than men. Previous research on consumer behaviour suggests that risk aversion increases with age (Pålsson, 1996). Older people have more consumption experience during their life than younger people. Therefore if risk avoidance is of higher value for elder people, our expectation is that, they will put a larger weight on the risk reduction when making a purchase decision. This study expects risk reduction to vary with age, gender and income level. Hence, the following hypothesis: H7: There is a significant relationship between the risk reduction motive for buying brands and age, sex and income level of consumers. BRANDING AND SOCIAL DEMONSTRANCE MOTIVE Brand serves as a symbolic tool that allows consumers to project their self-image to their peers (Levy, 1959). A brand can represent intrinsic values (self-expression) or extrinsic values (prestige) to consumers. However, this largely depends on whether the individual involved is communicating with themselves or with their social surroundings (Grubb & Grathwohl, 1967). Also, the theories of self-congruity (Sirgy, 1982) and selfenhancement (Shrauger, 1975) explain the reasons why consumers strive for these symbolic benefits of brands. By purchasing certain products consumers are able to preserve and enhance their self-concept (Shrauger, 1975). In order for brands to serve as a social symbol that contributes to achieving self-congruity of consumers it must allow for a personalization of products. The self of an individual evolves within a complex process of social interaction (Grubb & Grathwohl, 1967). Generally, consumers use brands to communicate to others the type of person they are or they would like to be (Belk, 1988; Escalas & Bettman, 2005). Consumers use brands as a status symbol or as a means to signal group-membership. The visibility of the brand in the product category serves as a prerequisite for the use of brands as status symbol. When people are young, they focus on the development of their professional and “social” careers. They are likely to be interested in portraying their progress in life and personal achievements. Therefore, they are likely to value the social effect of brands higher than older consumers. This results in a higher emphasise on the social demonstrance motive of brands when making a purchase decision. It is however hard to find directional arguments for gender-related differences with regard to the influence of social demonstrance on consumer purchases. The value of brands as a signal to other consumers may be high for both male and female consumers. We also assume a significant relationship between the level of income and the social demonstrance function. Hence, the following hypothesis is postulated:

H8: There is a significant relationship between social demonstrance motive for buying brands age and sex and income of consumers. METHODOLOGY This study uses the non-probability convenience sampling method. The convenience sampling method is used as it enables the researchers to reach the respondents quickly, considering the size of the population. The population were made up of citizens of the Czech Republic. In all, a total of 225 respondents from different age groups were sampled from the sample. A semi-structured questionnaire was administered to all the respondents. The questionnaire which was originally in English was translated into Czech language to ensure that the respondents understood the questions posed to them. The questionnaire were returned and checked by the researchers to ensure that they were valid and useable and 212 were used for the analysis. The independent t-test was used in the analysis of data related to sex. The rest were analysed with the ANOVA. The ANOVA was used to find within-groups and between groups variations on income level and age in the sample. The 17 version of the Statistical Package for Social Scientist (SPSS) was used in the analysis and interpretation of data. DATA ANALYSIS AND DISCUSSIONS DEMOGRAPHIC BACKGROUND OF RESPONDENTS The sample was made up of 106 males and 102 females. The table below shows the demographic background of the respondents. Table 1: Sex of respondents

Valid

Missing Total

Frequency

Percent

Valid Percent

Cumulative Percent

Male

106

50.0

51.0

51.0

Female

102

48.1

49.0

100.0

Total not mention

208 4 212

98.1 1.9 100.0

100.0

Also, 3 of the respondents were below the age of 14 years, whiles 82 were between the ages of 15-26 years. 69 of them were between the ages of 27-35 years while there were 29 respondents were between the ages of 36-45 years. There were only 29 respondents above the age of 45 years. The figure below provides the age distribution of the respondents. Figure 2: Age distribution of respondents

In this study, the Euro (€) equivalent of the Czech Koruna (Kč) was used (June 20, 2010 exchange rate). It seen from the graph above that, majority of the respondents earned a total monthly income of less than (€) 1000. Figure 3 below provides the income distribution of the respondents. Figure 3: Income distribution of respondents

The analysis of data was done with relevant statistical test of significance. With a p-value 0.05, the data collected was analysed, interpreted and the hypothesis were tested with discussions as indicated below. In testing the hypothesis, if the test statistic probability or significant level is less than the p-value i.e., 0.05, the null hypothesis is rejected in favour of the alternative hypothesis. FACTORS THAT INFLUNCE CONSUMERS WHEN BUYING PRODUCTS The table below describes the distribution of the factors that influence consumer purchases among the respondents. With a frequency of 140, it seen that majority of Czech consumers sampled, regard brand image as the dominant factor that influences their purchasing habits. This is closely followed by the price and possible maintenance cost of the product, which has a frequency of 58. Table 2: Factors that influence for purchase Frequency

Percent Valid Percent Cumulative Percent

Brand Image

140

66.0

66.0

66.0

Price and possible Maintenance cost

58

27.4

27.4

93.4

Advertising information about the provider 8 and product

3.8

3.8

97.2

I buy on impulse usually

1

.5

.5

97.6

Recommendation from someone

1

.5

.5

98.1

Convenience

4

1.9

1.9

100.0

Total

212

100.0

100.0

As seen from the table 2 above, there were also varied responses of the influence of factors such as impulse buying, convenience, recommendation from someone advertising on consumer purchasing habits. RELEVANCE OF BRAND IN A PRODUCT CATEGORY Table 3: Independent Samples Test of relevance of brand Levene's Test for Equality of Variances

t-test for Equality of Means 95% Confidence Interval of the Difference

Equal variances assumed

F 1.107

Sig. .024

T .990

df 206

Sig. (2tailed) .323

Mean Difference .10063

Std. Error Difference .10168

Lower .09983

Up per .30 10 9

Equal .992 205.182 .323 .10063 .10148 .30 variances .09945 07 not 0 assumed The study found a significant relationship between the role brand play in consumer purchasing behaviour. The null hypothesis was rejected for the alternative hypothesis because the significance level of the study (0.024) is more than the p-value of .05. This result complements the findings in table 2. Respondents (140) were of the view that, the brand has a tremendous influence on their buying behaviour. Therefore, like Sterne (2002) indicates, it behoves on companies to build brands that are appealing and form a desire that is strong enough to compel consumers to shell out hard-earned cash to acquire it.

Table 4: Independent Samples Test of brand recognition Levene's Test for Equality of Variances



F .137

Sig. .711

Equal variances not assumed

T 1.350

Df 206

Sig. (2tailed) .179

1.351

205.985

.178



.11672

.08639

Lower .05375

Upp er .287 19

.05359

.287 04

Also, there was no relationship between consumers perception of the clarity of brands of different products in the same category. The alternative hypothesis was rejected because significance level of the study, thus 0.711 is more than the p-value of 0.05. This goes to explain that consumers are able to form clear pictures of their preferred brand. This trend is positive in the sense that the dilemma the consumer has to go through in order to select a brand in a product category is alleviated by the clarity of the brand identification elements such logos, name, slogans among others. BRAND RECALL Table 5: Independent Samples Test of brand recall and sex Levene's Test for Equality of Variances t-test for Equality of Means 95% Confidence Interval of the Difference Std. Error Sig. (2- Mean Differenc Uppe F Sig. t Df tailed) Difference e Lower r Equal 3.741 .054 .888 204 .376 .07232 .08144 -.08826 .2329 variances 1 assumed Equal variances not assumed

.891

201.2 78

.374

.07232

.08120

-.08779

.2324 3

From the analysis, it is realized that, brand name recall has no significant relationship with the sex of our respondents. The significant level as indicated above (0.054) is more than the p value, i.e. (p>.05). Hence, the null hypothesis is supported and the alternative hypothesis is rejected. This implies that males and females among the respondents are able to recall the brand they prefer. Table 6: ANOVA of brand recall and age Between Groups Within Groups Total

Sum of Squares

Df

Mean Square

F

Sig.

1.626 71.398 73.024

4 205 209

.407 .348

1.167

.326

Also, the null hypothesis was supported when brand recall was tested with the age of the respondents. The significant level as indicated above is more than the p-value. This is contrary to the assertion by Swaminathan (2007) that the older a person is the more the changes in the memory structure can affect memory recall. In as much as it may be true that aging may affect memory by changing the way the brain stores information and by making it harder to recall stored information, in some instances when people have purchased a particular brand consistently for a long period of time, it is relatively easier to recall from memory anytime they want to repurchase. The study found that some customers have been using a product of a particular brand throughout their life, and so due to experience, they are able recall the brand name at the top of their head. For instance, in buying beer, not only do consumers remember and recall the brand names, also, due to regular patronage and consumption, they are able to distinguish between the tastes of different brands of beer. This trend was the same for both sexes and age groups. BRAND SEARCH Table 7: ANOVA of brand search and age Sum of Squares

Df

Mean Square

F

Sig.

Between Groups

3.438

4

.859

1.886

.114

Within Groups

94.311

207

.456

Total

97.749

211

The result of the study indicated no relationship between the amount of time spent in searching for alternative products of different brands and age. From the analysis, the significance level of the study is more than 0.05. Therefore the alternative hypothesis is rejected in favour of the null hypothesis. Table 8: ANOVA of brand search and income level Between Groups Within Groups Total

Sum of Squares

Df

Mean Square

F

Sig.

.496 97.253 97.749

3 208 211

.165 .468

.354

.786

When income level was compared with the amount of time consumers spend in comparing alternative brands in the market, there was no significant relationship. The alternative hypothesis was rejected because the significant level of the study (0.786) is more than the p-value of 0.05. BRAND LOYALTY Table 9: Independent Samples Test of brand loyalty and sex Levene's Test for Equality of Variances


Brand loyalt y

Equal variances assumed Equal variances not assumed

F 1.483

Sig. .225

t .251

df 206

Sig. (2tailed) .802

.252

205.241

.801

Mean Differenc e .02627

Std. Error Differenc e .10454

.02627

.10434

Lower .17984

Uppe r .232 37

.17945

.231 98

The study also, found no significant relationship between brand loyalty and gender. Hence the alternative positive hypothesis was rejected in favour of the null hypothesis because the significance level of the study is more than 0.05. This finding is contrary to the research by Mittal and Kamakura (2001), which indicated that females are more loyal to brands than males. In this study, we found that in the Czech consumer market, with the same level of satisfaction, the probability of repurchasing a specific brand is uniform irrespective of the gender. When consumers are satisfied with a particular brand, they are more likely to repeat purchase. The respondents were also of the view that, some brands have a wide product range; hence they are able to get all the various commodities they require from one particular brand. For example, Skoda as a brand has other models like Fabia, Fabia Combi, Roomstar, Octavia, Octavia Combi, Octavia tour, Yeti, Superb among others. The options in terms of variety of models make it possible for them to change or have options whenever they want to switch. Table 11: ANOVA of brand loyalty and age Sum of Squares

df

Mean Square

F

Sig.

Between Groups

5.680

4

1.420

2.605

.037

Within Groups

112.862

207

.545

Total

118.542

211

The study indeed found that, there is a positive relationship between brand loyalty and age of the respondents. Hence, the null hypothesis is rejected because the significance level of the study is less than 0.05. Young Czech consumers have a high sense of brand loyalty than older folks. The findings complement the research findings of Debaix and Bree (1997). It was realized that the degree of independence of young Czech consumers from their parents is higher especially when they are able to find jobs that brings them some level of income. They therefore have enough money to purchase the (branded) products they desire, without reverting to consultation of parents. This is not the same with older Czech consumers. It was found that, the older a person is, the more the responsibility on them to take care of their families. For such older people, emphasize is placed on quality and affordable and possible maintenance cost of what they buy rather than the brand. The level of responsibility makes them refrain from buying products just because they are of reputable brands. Furthermore, when brand loyalty was compared with the level of income, the same results were found. The significant level (0.002) was less than the p-value. That is to say that, there is indeed a significant relationship between brand loyalty and income level of respondents. The rest of the analyses are indicated in the table 12 below. Table 12: ANOVA brand loyalty and income level Sum of Squares

df

Mean Square

F

Sig.

Between Groups

8.435

3

2.812

5.312

.002

Within Groups

110.107

208

.529

Total

118.542

211

The study found that brand loyalty varies with income level. This result confirms the research by Huang et al (2005) which shown that as household income rises, consumers are less likely to be loyal to a brand and more likely to switch. This is because they will have enough money to buy brand which they could not afford in the past, hence, they will be likely to try other options. The lower a person’s income, the more likely they will shop around for prices and stick to products with lower prices. However, it was found that, low income earners are likely to switch brands when they find that there are products of other brand which cost less than what they are currently buying. This is especially true when the products are close substitutes. The findings are even more applicable to developing countries like Ghana and Sri Lanka, where the per capita income is low. When the results were compared with these countries, it was realized that brand loyalty depended on a person’s income level and cost of product. In Ghana and Sri Lanka for instance, loyalty to brands were because they were cheap and affordable to consumers. Expensive brands do not appeal to customers with low income levels.

BRAND RECOMMENDATION/UNSOLICITED CONSUMER TO CONSUMER MARKETING Table 13: Independent Samples Test of brand recommendation and sex Levene's Test for Equality of Variances


Recom mendati on


F 1.742

Sig. .188

Equal variances not assumed

t -1.433

df 204

-1.431

195.8 32

Sig. (2tailed) .153

Mean Differen ce -.19005

Std. Error Differenc e .13261

Lower -.45151

.154

-.19005

.13285

-.45205

Up per .07 142 .07 196

The study found no relationship between the tendency of consumers recommending their preferred brand to relatives and friends and sex. Findings: The null hypothesis could not be rejected because significance level of the study is more than 0.05. Table 14: ANOVA of brand Recommendation and income age Between Groups Within Groups Total

Sum of Squares df

Mean Square

F

Sig.

1.987 187.042 189.029

.497 .912

.544

.703

4 205 209

The study found no relationship between the age of the respondents and their willingness to recommend the brand they like to other people, be it their family or friends. Hence, the null hypothesis cannot be rejected, because the significance level of the study is more than 0.05. In the Czech Republic, the most discussed brands are O2, Vodafone, T- mobile, Ceska sporitelna (financial house), Coca-Cola, Kofola, Komerční banka, Mattoni (mineral water), Nivea and Gambrinus (beer). Consumers do not like to recommend the financial institutions and the mobile operators. However, Czech people trust their friends’ and their families’ recommendation. The most recommended Czech brands are Mattoni, Nivea and Pilsner Urquel. As indicated by Taylor and Cook (2006), the experience of customers' will determine whether they will spread awesome or awful word-of-mouth to friends and family. The potential of consumers doing this does not depend on the age level or gender. Good experiences are shared and they spread, so is unpleasant experiences. Companies must ensure that at any point in the brand-customer interaction, an indelible pleasant experience is offered to the customer. Such customers will serve as unofficial marketing agents of the company-spreading good word about the brand, hence, attracting more customers.

PRICE AND BRAND CHOICE The table below provides the results of the independent t-test analysis of the relationship between price and brand choice with age. Table 15: Independent Samples Test of price and brand choice with age Levene's Test for Equality of Variances t-test for Equality of Means 95% Confidence Interval of the Difference Std. Mean Error Sig. (2- Differenc Differe Uppe F Sig. t df tailed) e nce Lower r Equal 4.493 .035 -1.040 206 .299 -.18609 .17888 -.53876 .1665 variances 8 assumed Equal -1.043 204.831 .298 -.18609 .17849 -.53800 .1658 variances 2 not assumed The study found that, there is a positive relationship between the tendency to pay additional price to get a preferred brand and gender. The consumers sampled were willing to pay more in order to possess their preferred brand. The null hypothesis was not supported because significance level of the study is less than 0.05. This was especially true for those respondents who see themselves as brand loyalist. When consumers are satisfied with a particular brand or when they are addicted to a particular brand, they tend to buy more of that even when the price is increased. With them, the satisfaction they derive from the brand is worth the price paid, and the marginal utility is considered higher than the addition in price. They can also trust the brand to get the value promised. These results were different from developing countries like Ghana and Sri Lanka due to other reasons. It was realized that even though consumers in these countries would prefer to pay more to get their preferred brand, they were unable to because they did not have the means or resources. They were rather compelled to stick with other ‘inferior’ brands. However, in China, an inordinate taste for luxury brands by consumers meant that, they were willing to save and buy brand they desire. Also, there was no significant relationship between the tendency to pay additional price for a preferred brand and age of respondents. The null hypothesis was supported because the significant level was more than 0.05. The conclusion is that, age does not contribute to the amount of money consumers are willing to pay to get their preferred brand. Table 16: ANOVA of price and brand choice with age Sum of Squares

df

Mean Square

F

Sig.

Between Groups

10.323

4

2.581

1.564

.185

Within Groups

341.502

207

1.650

Total

351.825

211

However, the alternative hypothesis was supported when income level was analysed with the likelihood of making an automatic choice when buying a product. The null hypothesis was supported because the significance level of the study is more than 0.05. The analysis are shown in table 17 below: Table 17: ANOVA of price and brand choice with income level Sum of Squares

df

Mean Square

F

Sig.

Between Groups

1.416

3

.472

.575

.632

Within Groups

170.753

208

.821

Total

172.170

211

RISK REDUCTION MOTIVE Table 18: Independent Samples Test of risk reduction motive and sex Levene's Test for Equality of Variances t-test for Equality of Means 95% Confidence Interval of the Difference

Risk Reduction

Equal variance s assumed Equal variance s not assumed

F .389

Sig. .534

t .279

df 206

Sig. (2tailed) .780

.279

205.997

.780



Lowe r .1707 4

Upp er .227 06

.02816

.10082

.1706 0

.226 93

The findings were that, there is no significant relation between the risk reduction motive and gender. The null hypothesis cannot be rejected because significance level of the study is more than 0.05. Table 19: ANOVA of Risk Reduction motive with age Sum of Squares

df

Mean Square

F

Sig.

Between Groups Within Groups

2.708 111.293

4 207

.677 .538

1.259

.287

Total

114.001

211

The hypothesis is supported when risk reduction motive is compared with the age level of respondents. There is therefore no significant relationship between age risk reduction motive of consumers and age. With a significant of level of 0.287, which is more than the p-value of 0.05, clearly, the null hypothesis is supported. Table 20: ANOVA of Risk Reduction motive with income level Sum of Squares

Df

Mean Square

F

Sig.


5.466 108.536

3 208

1.822 .522

3.491

.017

Total

114.001

211

Risk reduction constitutes an important factor when consumers are buying brands. From this study, it was found that there is a positive relationship between the risk reduction motive for buying brands and the income levels of the respondents. Hence, the null hypothesis is rejected. From the table above, it is seen that the significance level of the study (0.017) is less than 0.05. Similar results were found in countries like Ghana, China and Sri Lanka. Consumers want to spend their money on products that will last for a long time or provide them with the necessary gratification. Brand provides them with that assurance as it indicates the source of the product and guarantees quality. The findings of the risk reduction motive of the respondents go to explain that, risk aversion is of importance to consumers irrespective of age, gender or level of income. No one wants to bear the consequences that come with unpleasant feelings or the risk of buying an unknown brand. Therefore it is incumbent on firms to focus on placing their brand as a secured option among others in the same product category. This kind of strategy will ensure the competitiveness of the companies brand as consumers will be more comfortable buying it. Also, an assurance of quality is essential in the branding strategy. This is consistent with the views of Aaker (1991); Mitchell and McGoldrick (1996), that brands provide an avenue for consumers to determine product

quality and credence to goods and services. Also, Kapferer (2008) indicates that, consumers buy brands to reduce their (subjective) risk of making a purchase mistake. SOCIAL DEMONSTRANCE MOTIVE Table 21: Independent Samples Test of social demonstrance motive with sex Levene's Test for Equality of Variances t-test for Equality of Means 95% Confidence Interval of the Difference

Social Demonstra nce

Equal variances assumed Equal variances not assumed

F .749

Sig. .388

T -.862

df 206

-.863

205.6 52

Sig. (2tailed) .390

Mean Differenc e -.10502

Std. Error Differen ce .12185

.389

-.10502

.12167

Lowe r .3452 6 .3448 9

Up per .13 52 2 .13 48 5

It is also found from the study that, there is no significant difference between the social demonstrance motive for buying brands and sex. The null hypothesis could not be rejected because significance level of the study is more than 0.05. With the level of significance of 0.749, it is seen that the null hypothesis is supported. Social demonstrance motive does not vary with the gender of respondents. Both male and females seek to preserve and enhance their self-concept (Shrauger 1975) and self-congruity (Sirgy 1982) when they buy products of certain brands. As indicated by Belk (1988); Escalas and Bettman (2005), consumers use the brand to communicate to others the kind of people they are, and this is common in both males and females. Table 22: ANOVA of Social Demonstrance with age Sum of Squares

df

Mean Square

F

Sig.


6.503 156.312

4 207

1.626 .755

2.153

.076

Total

162.815

211

With a significant level of 0.076, less than the p-value of 0.05, the null hypothesis was not rejected when social demonstrance motive for buying brands was compared with the age of the respondents. Table 23: ANOVA of the Social Demonstrance motive with income level Sum of Squares

Df

Mean Square

F

Sig.


7.388 155.427

3 208

2.463 .747

3.295

.021

Total

162.815

211

The study found that, there was a positive relationship between the social demonstrance motive for buying brands and income levels of consumers. The significant level was 0.021 and this is less than the p-value of 0.05, hence, the null hypothesis is rejected. As the income of the respondent’s increases, they were likely to buy more branded items because they could afford it. Branded items serve as a reflection of their current financial situation and a boosts of their social status in the society. To them such an initiative portrays their level of income and puts them in or closer to elite section of the social fabric. The respondents were concern with the symbolic definition of the brand and how it contributes to their self-identity. Bradford (2008) explains that, when a customer invests his or her ego in the purchase of a particular brand, it must satisfy their social esteem need. Respondents were more concern about what people say

about them when they are seen with the brand. However, the group identity function was not of a priority of Czech consumers. This is understandable because the Czech society is seen as highly individualist according to Geert Hofstede. Different results were found when the study compared the social demonstrance motive in countries like Ghana, China and Sri Lanka. These three countries score high on Hofstede’s collectivism variable. In these highly collectivist countries, group integration and social acceptance is more important than the individual interest and aspirations. Therefore, to be competitive in the global market place, branding strategies should take into account the cultural orientation (individualist or collectivist) of the consumers, as it influences that purchasing habits. Firms must align their strategies to meet the social motive of consumers as indicated by the culture of the people. Table 24: Chances of trying new brands

Valid

Missing Total

Frequency

Percent

Valid Percent

Cumulative Percent

Yes

200

94.3

95.7

95.7

No

9

4.2

4.3

100.0

Total Not mention

209 3

98.6 1.4

100.0

212

100.0

The views of the respondents on the probability of them trying products of other brands were very positive as almost all of them answered in the affirmative. Out of the sample of 212 views solicited, 200 of them responded that they will not hesitate to try other products from other brands. The reasons they gave were varied. For some of them, it was all about the freedom to choose other brands as and when they desire. Their willingness to try other options was also based on the assumption that there are other equally good brands so there was no point in sticking to only one brand. Others indicated that, if they realize that the price of other brands in the same product category are relatively cheaper, they would not hesitate to try them as the utility derived will be the same. CONCLUSIONS In conclusion, it is emphatically clear that the concept of branding is indispensable to any business. It is a key element of building profitable businesses with long-term sustainability. When the branding strategy is properly executed, it ensures the competitiveness of firms by increasing market share, gain consumer confidence, increase sales, add value to products and services and reduce marketing costs. In order for the products of a company to be competitive in the market, there is a need for brand building to be consistent, true to the organisation, embodied throughout their activities and consistent with the expectations of consumers. The consumer must not be alienated in the brand building process. This is only possible when a clear brand strategy is in place to act as a framework for implementation with continues evaluation to ensure that they are always working towards meeting the needs of consumers. Also, the brand should be the main focal point in the marketing and corporate strategy of companies as it provides a compelling platform for the competitiveness of companies. IMPLICATIONS FOR MANAGEMENT The result of this study is of significance to managers when making branding decisions. For top management with branding responsibilities, the question is how to strategize branding activities so as to give consumers a compelling experience to get their loyalty. This can only be done through regular research to find out whether the needs and expectation of consumers are been met. Managers must understand that, the motive for buying brands varies from consumer to consumer and it also varies from culture to culture. To provide receive positive evaluations from the market and to be competitive, the brand must meet the expectations of consumers. Given that the level of perceived risk differs among individuals, the conditions for building brand equity are also likely to be different as it depends on the subjective views of each respondent. Understanding the role brands place in consumer decision making process equips managers with firsthand information on how to strategize to meet customer expectations. Brand investment is also crucial in the brand strategy development and implementation. Ignoring this reality of brand investment decisions might result in lower market share and lower profits. It is therefore important for managers to carefully analyze the economic potential of brand investments in their business and the inherent experience it provides for consumers. When customers have a good experience of the brand they use, it serves as a means for the company to free themselves from constant price competition, reduce their marketing costs and increase the value of their services so as to develop long-term customer loyalty.

Building a successful, sustainable and competitive brand requires careful planning and consistency. There should be a clear and concise branding strategy that blends the suggested factors in our conceptual framework. The brand strategy should define the ideas and stories behind the brands, as well as the structure and relationship of the brands within the organization and the core identifying elements. These can include elements such as company and product names, tone of voice, logos, and colour schemes among others. Such elements must be clear and not ambiguous to permit easy identification, recall and recognition in the product category. The elements of branding should provide the framework for implementing the branding strategy throughout organizations operations and for the achievement of businesses goals. With a clear strategy in place, managers can make appropriate, co-ordinated, informed decisions not just in communicating, but in all other departments from product development through to customer service. Few organisations manage to achieve the full benefits of word of mouth, and for many organisations there are more negative stories than positive. To compensate for a lack of positive word of mouth advertising, organisations spend huge sums of money on ineffective marketing exercises. Without an effective brand strategy these exercises are often unfocussed, inconsistent and unauthentic. Consequently, they rarely pay for themselves, let alone make a profit. For management, it is important to note that marketing without a clear brand strategy is a chaotic, costly exercise that in essence is little more than shouting and showing off about the products and services. This does not provide any value for the customer who is mainly the target of the strategy development. In Czech Republic for instance, consumers are exposed to thousands of marketing messages every day through all the various channels of the communication mix. Hence, consumers have become largely immune to meaningless promotional messages, filtering them out and filing them in their mental recycle bins. Spending large sums of money on marketing communication does not guarantee brand equity. In order for the brand of a company to competitive, brand managers must therefore ensure that, the branding message is precise, clear and targeted at the right consumer, and the visibility of the brand should be unambiguous. Managers must ensure that the brand is clear and easily identifiable in product categories. Also, based on the evaluation of the performance of indigenous Czech brands, it is important for managers to follow the very basic principle of promotion, thus, to give information on Czech brands to consumers abroad. There should be a development of a holistic marketing strategy for Czech brands to effectively inform customers both within the country and especially in foreign markets. IMPLICATIONS FOR THEORY This study contributes further to our understanding of how consumer experience ensures brand equity; brand competitiveness arises and impacts on customer purchasing decision. It brings out the values that mean a lot to consumers in their purchasing decision. It further adds to the theory of brand relevance in product categories. The study explains that brand capital does not arise from only investing high amount of money in brand building but most importantly it is dependent on what the brand means to consumers and the overall experience it provides to consumers, as well as how the brand stands out among the lot of others offered by other companies. Based on the findings, we suggest a theory for developing branding strategy for competitive advantage. This theory indicates that, brand strategy should focus on innovative features that is attractive and valuable to customers and easily identified among the lot so as to shape preferences and thus create an innate desire in consumers for the brand. In order words, innovativeness in branding should link the salient aspects of the brand and consumer experience. As long as these innovative features become part of the image of a brand, they will contribute immensely to building brands that is highly relevant to customers and competitive in the market. Furthermore, the study enhances our knowledge and understanding of the theory of brand constructs. Even though some brand equity measures emphasize personal relevance of the brand as an important driver, they do not explain specifically where personal relevance comes from. This study explains how personal relevance such as consumer motives like social demonstrance and risk reduction play in consumer decision making. This study also provides further understanding and new interpretations of how psycho-socio-cultural concepts such as brand recall, individualism and collectivism, attachment to brand, self-brand connections or brand relationships gain prominence in consumer markets. Because this study examines the emphasis Czech consumers put on brands in purchasing, it provides an important connection between intra-personal brand theories and observable purchase behaviour. SUGGESTIONS FOR FUTURE RESEARCH This study is subject to limitations which may stimulate further research. It would be interesting to extend the study to cover other countries. With more countries, researchers could investigate the influence of demographic factors and income level on consumer buying decisions. 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