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“The Importance of brand image for buyer’sperception in the automobile Industry”
A case study on Rancon Motors (Mercedes Benz).
FARIAZ FAHAD
ID # 0015MSOT0212
Declaration
I am Fariaz Fahad and I confirm that the report that has been submitted by me I of my own work and have beenformulated by my own words. The information that were used in the report from other author’s articles are formally acknowledged in the full list of references below.
Signature Date: 19/ 09/ 2014
Fariaz Fahad1
ID# 0015MSOT0212
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Acknowledgement
At first I want to thank ALLAH the Almighty.
I am very gratefully to my dissertation supervisor, MR. Zoeb Ur Rahman who has supported me, encouraged and supervised me from the beginning and help me to formulate an understanding of this subject. His guidance, patience and mainly his friendship was paramount in providing a versatile experience during my undergraduate program at London School of Commerce.
I would also like to thank all the lectures of London school of commerce without whom for me reaching to this level would have been impossible, especially our CEO Mr. Muktadir Rahman who has provided us the platform to achieve a world class international Degree.
I would also like to show my gratitude to the managers of Rancon motors who has helped me unconditionally to conduct this research.
In the end I would like to thank my family and friends who has supported me throughout my whole time at London school of commerce and without them the journey would not have come this far for me.
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Abstract –The following Research was conducted to analyze the importance ofbrand image when a customer makes a buying decision in the automobile industry. The research is based on Rancon motors who are the sole distributor of Mercedes Benz in Bangladesh.
The research is justified by gathering information from customer in Bangladesh through survey, and also by conducting an open-ended interview session with the managers of Rancon motors who helped us to understand the way they execute their business so maintain such high standard brand image.
The objective of this research is to prove that brand image thosehave a huge effect on the buying behavior of a customer, and it was also conducted to determine how a company like Rancon motor and Mercedes Benz manages its brand portfolio to keep its customers happy.
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Table of Conten
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tIntroduction............................................................10
1.1 Background of the study –.........................................10
1.2 Rational of the study -...........................................10
1.3 Statement of the Problem..........................................11
1.4 Beneficiaries from the study......................................11
1.5 Research Objectives...............................................11
1.6 Research Questions................................................12
1.7 Limitation of the research:.......................................12
1.8 Background of the Topic:..........................................12
1.9 The Automobile industry...........................................13
1.10 The main factors of Automobile industry..........................13
1.12 Automobile industry in Bangladesh:...............................14
1.13 About Rancon motors..............................................14
1.14 About Mercedes Benz..............................................14
Literature review.......................................................16
2.1 What is Brand image?..............................................16
2.2 Branding Strategies:..............................................16
2.3 The importance of brand image.....................................18
2.4 Importance of brand image for Automobile industry.................19
2.5 Brand equity......................................................20
2.5.1 Brand Loyalty:..................................................21
2.5.2 Brand awareness.................................................21
2.5.3 Perceived Quality:..............................................22
2.6 Theory of reasoned action on brand loyalty........................23
2.7 Colombo and Morrison model of brand loyalty on purchase decision:. 24
2.8 Consumer Behavior.................................................25
2.8.1 Buyer’s Black box model.......................................26
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2.8.2 Buyer’s characteristic..........................................28
2.8.3 Buyers decision making process –................................29
2.8.4 Buyers characteristic which influence their buying behavior –...32
2.9 The Brand identity prism by KAPFERER –............................33
2.10 Summary of the literature review –...............................34
Research Methodology –..................................................36
3.1 Research Design –.................................................36
3.2 Research Approaches –.............................................37
3.2.1 Inductive research Approach –.................................37
3.2.2 Deductive research approach –.................................38
3.2.3 Quantitative approach –.......................................39
3.2.4 Qualitative Approach –........................................39
3.3 Purpose of the research.......................................40
3.4 Research strategies –.............................................41
3.5 Data collection source –..........................................42
3.5.1 Primary data source –.........................................42
3.5.2 Secondary data sources –......................................42
3.6 Sampling Research:................................................43
3.6.1 Sampling technique............................................43
3.6.4 Sampling Size.................................................44
3.7 Data collection methods –.........................................45
3.7.2 Data analysis and presentation –..............................45
3.9 Ethical consideration of the research –...........................46
3.10 Time Horizon –...................................................46
3.11 Reliability and validity of research –...........................46
Data Analysis of 50 customers –.........................................48
Interview of 3 Top level managers of Rancon Motors in a Focus group discussion..............................................................56
Conclusion and Recommendation...........................................59
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Answers of Research Questions.........................................59
Justification of Research objectives:.................................61
Research Objectives.................................................61
Recommendation..........................................................63
Implication of further study:...........................................64
References..............................................................65
Bibliography –............................................................77
Appendices..............................................................82
Table of Figures 1 Perceived Quality.....................................................222 Theory of Reasoned Action.............................................233 Colombo and Morrison Theory...........................................244 Black Box model.......................................................265 Buyer's Decision making process.......................................296 Buyer's behaivor......................................................317 The brand identity prism..............................................328Research Design........................................................359inductive approach.....................................................3610Deductive approach....................................................3711 Sampling.............................................................43
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Dissertation Structure
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Chapter 1
Introduction - In this chapter the author has introduced the topic of the research and the problems has been located which will be evaluated in other chapters of this dissertation.
Chapter 2
Literature Review - In this chapter the concepts and theories which are related with the research topic has been discussed plus a summary of literature review has also been included.
Chapter 3
Research Methodology - In this chapter the researcher descrided the procedure in which the research was conducted.
Chapter 4
Data Analysis - In this chapter the research describes the findings of the research which where generated through primary and secondary data analysis.
Chapter 5
Conclusion and recommendation - In this chapter the justification of the research objective has been included along with the answers of the research conclusion. In the end the author provided a recommendation by analysing this research.
Chapter: OneIntroduction
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Background of the study
Rational of the Study
Statement of the problem
Beneficiaries from the study
Research Objectives
Research Questions
Limitation of the research:
Background of the Topic:
The Automobile industry
The main factors of Automobile industryImpact of Automobile industry towards the global EconomyAutomobile industry in Bangladesh
About Rancon motors
About Mercedes Benz
Introduction
1.1 Background of the study – There has been a long debate about the importance of brand image for the automobile industry. This research will indicate customer’s behavior while purchasing automobiles, how the brand image plays a key role in a customer’s decision making. With the help of this study we will also be able to verify the current market situation of the automobile industry. The study will indicate how Rancon motors executes its business in Bangladesh and how they have created their excellent brand image. In this research the author will suggest the necessary strategies a company like Rancon motors should apply to maintain its excellentbrand image and on the other hand can also provide customers muchneeded flexibility. Recent research shows that the automobile industry is the most lucrative industry because of improvement ofpeople’s living standing both in rural and urban sectors. Hence the demand of luxury products are increasing and Mercedes Benz can be considered as a luxury product, so the brand image of Mercedes Benz plays an important role in their success in the automobile industry. This research will analysis the validity of importance of brand image for an automobile industry, should the customers put more concentration on brands while purchasing a car.
1.2 Rational of the study - The purpose of doing this research is to determine the importanceof brand image while a customer wants to purchase an automobile.
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The research will help the readers understand what type of role brand image plays in a company’s growth. The reason of conductingthis research is to discover whether it is sensible to always go with best branded product or should buyers always evaluate their options. This research will help to prove whether the buyers are biased to branded products such as Mercedes Benz. The author willalso try to discover from the research the necessary steps companies like Mercedes Benz (Rancon motors) have taken to createa significant brand image and what strategies they are using to maintain this kind of image. The author will try to find out how satisfied consumers are with the service of Rancon motors, the author intends to reflect the positive and negative side of Rancon motors in Bangladesh’s automobile market.
1.3 Statement of the Problem
In an automobile industry it is very important to maintain standards to stay competitive, if a company with a strong brand image starts to compromise its quality of the product then the company starts to lose customer’s trust. This kind of things can create a negative image for a company. Rancon motors has a fixed segment of customers which shows lack of dynamism in Bangladesh’sautomobile market. Another problem can arise when a company do not provide enough after purchase facility, because it diminishesthe possibility of creating a strong customer relationship. This research will indicate the problems a company like Rancon motors faces to maintain its top class brand image. The buyers will always try to purchase car which has a good brand image, so it isvery difficult to survive in the automobile industry if the
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company does not have a good brand image and it also gets very tough for new companies to get a high market share.
1.4 Beneficiaries from the study
From this research all the entrepreneurs who started new businesswill be able to learn the importance of branding in the global market. Entrepreneurs can take help from this research to learn how to set different strategies to create a strong brand image which can help them to attract more customers. From this researchcustomers can also understand the importance of brand image because a well-known brand will always try to provide its customers with best quality products so that the customers stay loyal. Companies like Rancon motors can get some useful information for formulating their marketing strategy in Bangladesh. They will know what the Bangladeshi customers wants and how they take Mercedes as a brand. They will also know what type of aftermarket facilities must be provided for the customersin this region. From this research customers will be able to knowabout Rancon motors, and will also be able to know about their unique attribute which allows them to be a standout brand in Bangladesh.
1.5 Research Objectives 1) The research will try to evaluate the direct relationship of
brand image and sell of products.2) To prove Rancon motor’s success is due to their strong brand
image of Mercedes Benz.3) To analysis the customer loyalty of Rancon motors.
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1.6 Research Questions1) What is the customer’s perception towards Rancon motors? Are
they happy with their service?2) What are the strategies Rancon Motor is considering to
promote their brand?3) How positive brand image can help to retain customers’ in
the automobile industry?
1.7 Limitation of the research:
The focus was more on secondary data because of the budget constraint. To complete the research by only using primary data would have taken a lot of budget and would have taken a lot of time. The author had a fixed 12 weeks’ time frame which the author had to strictly maintain, that’s why the author could not conduct more interviews and surveys. But all the secondary data are taken from authentic scholar reports. Direct information about Mercedes Benz was hard to grasp because Rancon motors is a distributor of Mercedes in Bangladesh not a franchise.
1.8 Background of the Topic:
Automobile is a very essential product for our daily transportation, the automobile industry has a great impact on theworld economy as large firms are engaged with multi-billion dollar business in this industry. Firms that have started their journey at the early stage are now considered as the leading brand product in automobile industry. The automobile industry
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have various kinds of company who produces different types of automobile.
1.9 The Automobile industryThe Automobile industry consist of a wide range of companies, this industry was created in the 1890’s when they started to produce horseless carriage. After that the United States of America dominated the automobile industry for several decades. Then in the 1980 America’s Automobile market was overtaken by theJapanese and they became world leaders in 1994 (Schumpeter, 2013). But japan overcame U.S market by just a slight margin and they kept on maintaining that gap till 2009. Currently this industry is being dominated by the Chinese manufacturers, in 2009they overtook japan by producing 13.8 million units and then in the 2012 they were able to produce 19.3 million Units (Maynard, 2014). Whereas countries like United States produced 10.3 millionUnits and japan produced 9.9 million units.
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1.10 The main factors of Automobile industryThe safety factor in Automobile industry is very important hence it is very highly supervised. To produce an automobile the companies have to maintain some following norms and regulation, and always have to meet a certain safety standard (Maynard 2014).
1.11 Impact of Automobile industry towards the global Economy
The Automobile industry have a major impact towards global economy, as in the recent survey it shows that over 805 million cars and trucks are on road which consumes more than 260 billion U.S dollars’ worth of gasoline yearly (Yang, 1995, pg. – 35) . Inthis modern world automobile is the most popular for transportation in all developed countries. According to the research of Boston consulting group (BCG) within the end of year 2014 one out of three world’s demand will be from Brazil, china, India and Russia (Forbes, 2014).
1.12 Automobile industry in Bangladesh:The Bangladeshi automobile industry has been for years dominated by Toyota. Their reasonable price range and as well as their
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excellent product quality has helped them to quickly capture the automobile market of Bangladesh. Toyota provides both its luxury and economical products in Bangladesh automobile industry (Star Business Report, 2009). But in recent years other companies like Kia, BMW and Mercedes Benz are getting more into the market of Bangladesh. As in the recent research shows the income level of Bangladeshi consumers has increased hence the living standard hasimproved. (businessnews24bd, 2013) That’s why consumers are encouraged to purchase a luxurious product like Mercedes Benz. But unlike Toyota’s products Mercedes Benz provides brand new product and Rancon motors is the sole distributor of Mercedes Benz in Bangladesh (Habib, 2014).
The Author will do a case study on Rancon motors, about its brand image in Bangladesh and what type of strategies they have undertaken to increase customer loyalty.
1.13 About Rancon motorsRancon motors LTD is an automobile company which is situated in Bangladesh. They are the sole Mercedes Benz Dealer in Bangladesh,their journey started as Rancon Service Center with special equipment which was bought in only to repair, backup and maintenance of Mercedes Benz vehicles. Then later on they became the sole dealer of Mercedes Benz in Bangladesh, their unique strategy is their after sale program which allows them to create a positive brand image for their customers (mercedes-benz.com.bd,2014).
1.14 About Mercedes BenzThe Mercedes Benz is a German automobile manufacturer which is famous for producing luxurious automobiles, buses, coaches and trucks. The main head office of Mercedes Benz is situated in Stuttgart of Germany. Mercedes’s slogan is “das beste oder
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nichts” which means the best or nothing, this slogan sends a strong message among the customers about its brand image and its product’s quality (daimler.com, 2005).
Chapter – two- Literature Review
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Literature review2.1 What is Brand image?A Brand image is an impression in a customer’s mind about a company’s personality. It helps the consumers to judge a
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What is Brand Image?
Branding strategies
The importance of brand image
The Importance of brand image of automobile industries
Brand Equity-Brand loyalty.-Brand Awareness.-Perceived Quality.
Theory of reasoned action
Colombo and Morrison model of brand loyalty on purchase decision.
Consumer Behaivor- Buyer's black box model- Buyer's characteristic - Buyer's decision making process-Buyer's characteristics which influence their buying behaivor
The brand identity prism KAPFERER
Summary of the literature
company’s reputation while purchasing their items. To create a strong brand image a company must be consistent with their product quality and marketing campaign which will add values to its products and brand (Ulrich & Smallwood, 2007). Now a days a great brand image can be as important as the products or service of a certain company, it can be considered as a powerful asset. When a company creates a recognition in a particular market customers starts to trust the company more hence it increases theprofitability of the company (Pallotta, 2011). This is one of thebiggest reasons why companies like Mercedes and BMW put more emphasis on building a strong brand image and put more value on their products (Barwise & Meehan, 2010).
2.2 Branding Strategies:In the modern business market the way of branding products are quickly evolving through social media. This can be considered as a new field for branding in which mostly consumers from new generation can be attracted (Clark, 2011).Now a days it is more difficult to create relationship with consumers because of the increased competition within the companies in a certain market. To get the competitive edge in branding companies should implement some strategies (Williams, 2014).
1) Be more innovative in branding – company should always focuson finding new ways of branding their products rather than following what other companies are doing (Llopis, 2014). This will be them a competitive advantage because it will attract more customers because consumers always wants something new. It is very important for a company to be always unpredictable and always try to surprise customers which will create a quick fuzz in the market (Abbing, 2010, Pg- 12). Companies should always think about customers demand and should not take them for granted. That’s why
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companies should always refresh their marketing strategy every year (Mizik & Jacobson, 2005).
2) Create an identity which is easily relatable – Companies should not make their Unique value proposition (UVP) complicated to get more attention more the customers. While they try to reinvent they often make it more complicated andthat irritates their consumers and shareholders (Bingham, Eisenhardt and Furr, 2011). When a company is able to align its value proposition strengthens which the changing demand that is when the brand identity of the company is more powerful. Consumers will not want to discover what a brand is try to prove, they want brands to be more deliberate about their identity and be more straightforward (Joachimsthaler, Aaker, Quelch, Kenny, Vishwanath & Mark, 1999, Pg – 170).
3) Creating a lifestyle for customers through branding – to be successful in this highly competitive market companies should think about promoting their products in such a way that it can lead to create a lifestyle among the customers. Brands like coca – cola has been extremely successful by applying this strategy, with the help of their slogans and other promotional activities their all create a greater customer relationship like no other company (Murray, 2014). In the modern market the customers always expects more from the brands. They not only gets tempted by the message of thebrand but they also wants analyze the ways it has been executed (forbes.com, 2013). This is reason content marketing is very important in modern market and it always has to be perfectly executed. The company’s value propositions have to make an impact in customer’s lifestyle with messages that are knowledgeable and acceptable. If thebranding is good enough to give customers hope it will
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quickly accelerate the company’s ability to gain customer trust and loyalty (Tochtermann & Dauriz, 2012).
4) Constant innovation with perfect timing – innovation is a strategy that most companies now a day implies to gain more market share, but this does not guarantee success because ifthe innovative product is launched with wrong branding and timing it will fail in the market (Ayyar, 2014). Some examples are blackberry and Volvo. Companies cannot gain success by only providing new products, they need to have the right marketing strategy to promote the innovation and have to do this in a perfect timing (Franzen & Moriaty, 2008, Pg- 452) . The company’s timing have to sync perfectlywith customers’ demands. A company should not launch new products if the brand’s customers are not prepared for it (Baveystock, 2014)
2.3 The importance of brand image Branding in this modern business world is more important than it was 100 years ago, now a days brands creates a psychological
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impact towards the customers. All products have a life cycle which always comes to an end but a brand is always valuable whosevalue can now increase. Many companies now a days put their brandvalue on their yearly balance sheet too. This shows how the importance of brand image has increased over the last few decades(Geller, 2012). For example – why Tata motors of India acquired Jaguar and range rover from ford? They did not by their factories, raw materials and employees they just bought their name for 2.56 billion USD because that was the price of Jaguar and range rovers brand name.
Branding has become an essential part for growing business, a company who does not emphasize on building its brand cannot grow its business to a successful one (Park, Eisingerich and Pol, 2013). By building brands companies can add great values to its products. There are some reason why branding is so important in modern business world than in the past, first reason can be the increase of online shopping because customer always likes to buy branded products from online which can be reliable (Glynn & Woodside, 2009, Pg.- 347). Plus many new markets are growing in middle class countries like India, china, brazil, Russia etc. in which customers tends to purchase premium brands products. Company which have a great brand image are more reliable in the online market and they are always more creative with their branding campaign which increase customer awareness (Hori, 2013).Second reason is in industry such as pharmaceutical almost everything is under patent law created by the well-known brands. This makes the existing brands to play a monopoly and increases their brand value. Which also means that it is very difficult fornew ventures to enter in this kinds of markets and requires various types of sophisticated strategies to face the challenge (Goodson, 2012).
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2.4 Importance of brand image for Automobile industry
Every year in an automobile industry there are survey conducted to rate the brand position of each company that are involved in the industry. These surveys are conducted through consumers whichprove the customers perception towards the brands (Diehlmann & Häcker, 2013, Pg – 10). In the latest consumer reports car brand perception survey its shows that the gaps between top brands are decreasing even though there is a little shift in the rankings and the results shows that companies like Toyota, Ford, Honda, and Chevrolet is still the top choice of the customers (Hirsh, Hedlund and Schweizer, 2003). However there is a new comer in industry and is quickly rising up in the table and name of the company is tesla. From the customer’s point of view the brands are evaluated in seven categories and they are quality, safety, value, performance, technology and innovation, style and design, and environmental friendly. By combining all these factors the scores are generated in the ratings and these reflects a brand image in customer’s minds (Rust, Zeithaml, and Lemon, 2004).
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This show how important it is for an automobile company to have agood brand image, in order to stay successful in the market companies must maintain their brand standards (Raffelt, 2012). For companies which are new in the market, they should concentrate on building brand image from the starting which will help them to gain market share quickly a great example is Tesla.
2.5 Brand equity
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Every company wants to increase value of its brand and in order to do so they use different marketing strategies to add value to its brand, and when the value of a brand increase the brand name also increases and this known as brand equity. It has been provenin the past that products of a well-known brand always generate more revenues than the products of a less known brand. It is alsobelieve that the name of the brand is one of the most important and more valuable assets of a company because it affects the financial aspect of a company. A slight change in the brand equity can result in change in market share, profit margin and many more. A better brand equity means a company can charge its customers more because of its unique brand image and for this examples can be Perfume Companies and Automobile companies (Aaker, 2009, PG- 20).
The purpose of brand equity is to identify the value of a brand which contains the name, logo, image and vision. These aspects are provided to get the brand’s name in customer’s mind, and these are delivered through advertising, packaging and various other marketing media and these helps to create a relationship with the customers (Aaker & Bie, 2013, Pg. – 4). When a brand create a relationship with its customers by promising them betterquality, performance and other values, the customers starts to trust the brand. This means that customers will select the brand over its competitors even if the price is premium (Keller, Parameswaran & Jacob, 2011, Pg. – 47). There are many ways to measure a brand and they are –
1) Firm level – in this approach the brand is measured as a financial asset, which means the worth of the brand as an intangible asset is determined through calculation.
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2) Product level – in this approach the price of the brand is measured by comparing its product with a private labeled product or equivalent branded product. They measure the difference in price by determining all the factors.
2.5.1 Brand Loyalty:When a person buys products of a certain brand repeatedly rather than buying from others is known as brand loyalty. In different survey’s its shows that the loyalty factor can be a very successful strategies for companies. In marketing this is a very popular term which consist costumer’s commitment to purchase products or keep on using products from a certain brand. In brandloyalty it is not always necessary to always convince customer for repurchasing, sometimes different types of constraints can lead to stay loyal to a particular brand for example if there is a lack of alternative products then customers have to stay loyal to a fixed brand (Jacoby & Chestnut, 1978). (Further information in Appendix B)
2.5.2 Brand awarenessTo gain market share a company must aware its customers about theproducts first, it is impossible for a company to increase sells without creating any awareness among the customers about the brand. It has been proven that brand awareness is one of the mostimportant aspect of marketing. If a company is able to produce a good brand awareness then customers will easily know about its products and will be interested to try their products. As it suggest in AIDA model (Awareness, interest, desire, action) awareness is the first step for marketing a product (Michaels, 2013). (More information in Appendix C)
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2.5.3 Perceived Quality:To improve a product or service companies must take feedbacks from customers to find out the negative or positive side of its products. This customer’s perception is referred as perceived quality where the customer’s gives feedback about the overall quality and eminence of a certain company’s product or service. (Holt, Quelch, & Taylor, 2004). Since perceived quality is a perception given by the customers it always differs to concepts such as –
Objective quality – how superior the product or service is delivered.
Product’s quality – this refers to type of products is beingdelivered and the quantity of ingredients, features and etc.
Manufacturing quality – the quality of manufacturing the products and always trying to secure the “Zero defects” goal(Garvin, 1984).
The perceived quality is referred as an intangible feeling about a brand which is usually based on some characteristic of a
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product of a certain brand, for example – reliability and performance of the product (Verma, 2006, Pg- 226). So it is very important for companies to understand customer’s wants and the perceived quality should be closely evaluated because it’s a perception directly from the customers mind (Sanyal, 2011).
1 PERCEIVED QUALITY
2.6 Theory of reasoned action on brand loyalty
2 THEORY OF REASONED ACTION
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This theory of reasoned action was developed to replace the concept of brand loyalty. The theory refers that the roots of purchase behavior are reaction towards the purchase and subjective norm. The theory suggest that if the antecedents of purchase behavior are combined to forecast and determine brand loyalty, the forecasting and measurement of brand loyalty will result in to be more stable and will be more accurate. The theory’s ambition is to integrate three key factors of brand loyalty, and to evaluate the connection between several roots of behavioral brand loyalty through this theory of reasoned action (Lyong Ha, 1998).
This theory of reasoned action was first developed by Fishbein and Azjen (1975), the theory was developed as a modelling decision making processes from the psychological sector. The theory is a very simple and brief model which is mainly used for decision making based on behavioral results that are generated bycombining customer’s attitude towards the company’s behavior, andthe subjective norm of a customer’s external environment which will give us a customer’s behavioral intention (Stone & Desmond, 2007).
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2.7 Colombo and Morrison model of brand loyalty on purchase decision:
Aggregation of individuals is a commonly practiced methodology ofacquiring brand-oriented data. This model can be utilized when the measures are predominantly based on aggregated switching matrices (Colombo & Morrison, 1989). The model is a frugal methodto incorporate heterogeneity in brand-oriented behavioral measures. Morrison and Colombo were able to distinguish the buyers into two groups: i) loyal buyers who strictly adheres to buying the same brand on every single purchase occasion, and ii) potential switchers who carefully make choices at every single purchase occasion with a certain probability distribution, for example, they choose brand ‘X’ with a probability of 0.3 where asthey choose brand ‘Y’ with a probability of 0.7 (Cooper & Inoue, 1993). The proportion of the hardcore loyalists can then be used to demonstrate the size of brand’s loyalty base. The measures obtained by this are more reliable than Markov matrices as they consider the fact that repeating purchase of a brand does not always imply loyalty towards it. Hence, Colombo and Morrison’s measures are considered to be more realistic than the estimates formulated on Markov matrices (MELLENS et al., 1996).
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3 COLOMBO AND MORRISON THEORY
2.8 Consumer Behavior Consumer behaviors are analyzed by observing a certain customer or a group of customer’s process of choosing products and how they use it and their experience of using the product. The study also includes the satisfaction of the customer with the product or service. It is a mixture of marketing, economics, psychology, sociology and social anthropology. Taking all this into consideration it tries to analyze and understand the decision making process of consumers. It also determines how loyal customers are towards a product and service, and are they purchasing it on a regular basis. The consumer behavior is study
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within a selected demography which contains different types of customer hence mean analysis different types of demand. Research in the past has reported that analyzing customer behavior is verydifficult because each individual has different perspective of a product or service (Weed, 2012).
The history tells us that in the past is was very easy to identify the nature and response of consumers on a daily basis because the market was small. But in the modern age because of increase in growth of firm and market is has become very difficult for marketing decision makers to contact directly with their customers. Which is why marketing managers are now willing to spend huge amount of money to understand customer needs (Deighton, 2011).
The company which will be able to understand its customer intention and demand will be the most successful in its respective industry. By understanding consumer’s nature it will generate its pricing strategy and promotional strategy which willcreate advantage over its competitors (Belk, Grayson, Muniz, Jr. and Schau, 2011, Pg – 156).
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2.8.1 Buyer’s Black box model
This Model shows how Marketing and other stimuli determines the buyer’s Black box, to understand customers in modern age the first model that companies can use it the Stimulus-response model.
In the marketing Stimuli that 4ps plays a great role in buyer’s decision making process. Companies should understand the customerdemand and should properly deliver its message to the customer bygenerating a good marketing strategy-
Product – it is very important for the companies to identify whattype of products customers wants, which means marketing managers,have to monitor buying behavior of customer so that they can understand their demand.
Price – Price plays a big role in consumer behavior, if the companies pricing strategy does not fulfill or in not in range
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Marketing
ProductPricePlacePromotion
Other Stimuli
EconomicTechnologicalPoliticalCulture
BuyersResponse
Productchoice
Brand choice
Purchase4 BLACK BOX
MODEL
Buyers Black box
Buyers Characteristic
Buyers Decision making process
for the customers then the demand will fall and companies will lose market share. Customers will look for alternative or substitute product if they don’t find the pricing strategy reasonable.
Promotion – The promotion of a company’s certain product can alsohave a big effect in consumer behavior. Companies have to make sure to deliver its message to the customers in an attractive manner which can lure them in purchasing their product. A first impression is very important in consumer behavior and an effective promotional strategy can create a good impression amongthe consumers (Tyagi &Kumar, 2004, pg. 54).
Place – It is important for companies to reach out to its customers as much as they can, a lack of distribution channel canaffect consumer behavior, because if a product of a certain company is not easily accessible then the products full potentialmarket cannot be fulfilled and consumers will look for alternative product.
After all this factors the other stimulus comes into play for a buyer to make its decision, these stimuli contains major forces and activity inside a buyer’s environment. The Stimulus is and they are-
Economic – The economical view always plays a role in consumer behavior, this falls under the external forces of a consumer. Thelevel of income and lifestyle depends on the economy of the country. This factors eventually effects buyer’s behavior while purchasing. He or she will not purchase a product which is not favorable for their economy.
Technological – like economic this is one of the external factorswhich can affect the consumer behavior, consumers will always
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demand products that will make their life easier, and technology is an everyday changing sector which changes customers buying perception, organizations have to understand customers technological needs which will increase their demand. If the customers thinks that a certain product of a company in not innovative enough then he or she will hesitate to purchase it.
Political – Some political decision which effects products price can manipulate a buyer’s decision making process. Sometimes because of change in tariff or tax system the price of product increases or decrease, this change in price can manipulate buyerspurchasing decision and all create an unknown demand for a particular product.
Culture – Companies have to understand customer’s cultural point of view to lure them into buying their product. If a product is launched in a region where it collides with its cultural view then the product will fail to create demand, hence it will effectcustomer purchasing behavior. It is very essential for a company to follow the cultural view of the respected country that it intends to do business in (Sandhusen, 2000, pg. 218).
According to the black box model after the marketing stimuli and external environment stimuli, the buyer’s characteristic comes into action.
2.8.2 Buyer’s characteristic –
Several factors determines a buyers characteristic and the factors are-
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Attitudes – in the beginning of a purchase the attitude of the buyer is very important, the attitude of the buyer can indicate the necessity level of the customer for a particular product. Thebuyer attitude while buying a product can also indicate the confidence level of customer towards the product.
Motivation – before going for purchasing a product the customer needs motivation to consume a product that it wants. And this motivation is created through promotional activities that are conducted by organization to create awareness about their product. The first stage of a buying action is motivation, if an organization cannot motivate its customers to buy its product then margin of sale will not increase for their products.
Perception – when organization promotes its product through a marketing mix it creates a perception in customers mind about theproduct. The perception can be either negative or positive which will effect customer purchasing behavior. To create the right perception about its product towards the customer organization have to deliver its message to the customer with great promotional strategy.
Personality – the buyer’s personality actually determines what type of product he or she is looking for, the personality of buyers can vary on different age group as different age group hasdifferent personality. It is very rare to spot a 15 year old customer to purchase a Rolex watch, so customer purchasing behavior can also depend on its personality.
Lifestyle – Lifestyle is a factors which can differ with time, economy and taste, different customer has different taste which
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means they have different preference of products. The lifestyle of a customer determines what type product he or she will buy.
Knowledge – a customer will feel confident to buy a product when he or she has enough knowledge about a particular product. This knowledge are gained through reviews and rating of a product which customers find really useful while purchasing a product (Helmstädter & Perlman, 1996).
After considering factors like Marketing stimuli, environmental stimuli and buyer characteristic final the stage of buyer decision making process arises.
2.8.3 Buyers decision making process –
5 BUYER'S DECISION MAKING PROCESS
In the following model it is suggested that while customer are ina buying process it goes through five stages. All of this stages are considered when the customers are in a high profile buying process in other words buying something important and expensive, which means all five stages are not necessarily followed while purchasing a daily product. In this model the five stages reflects the range of consideration a customer need to deal with while purchasing a new product (Horton, 1984, Pg. 196).
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Problem Recognitio
n Information search
Evaluation of
alternativePurchase decision
Postpurchase
behaivor
Five stages of buyer’s purchasing process –
1) Problem recognition – the first stage of buying process is when a buyer realizes that it has a problem and need to dealwith a replace or a new product. In this stage the consumer feels that his or her current state is not satisfactory enough and needs a change. The new demand can be acceleratedby internal or external stimuli (Mullins, 2009, pg.101).
2) Information search – After identifying the problem customersstarts collecting information about the product that can potentially find a solution to their problem. Customers determine the external and internal factors while analyzing the information. The sources from which customers can gatherinformation are advertisements, other buyers experience and public sources. While collecting information about a product, customers start to have a perception about the product which helps them to create a projected image about the product ability. This habit of collecting information ofthe customers helps the market managers to predict the purchasing plan of customers (Verma, 2009, pg. 53).
The factors that can effect a customers buying perception are –
Exposure – consumers buying perception is derived by the promotional message that they want themselves to expose to.
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Attention – customers pays attention to the message that they think is interesting enough
Selective Comprehension – Customers tends to comprehend message according to their experiences, motivation, attitudes and their view.
Selective Retention – Customers stores messages of companiesin their minds that are meaningful or related to their lives.
3) Evaluation of alternative –
In this stage customers normally compares the option it has for fulfilling its demand or the product or service that can help to solve its problem. The customers picks the best final options it has and starts to evaluate them at a time to he or she can find the best possible deal for its problem solving. The duty of marketing managers is to impose strategy that can increase the probability of picking their brands products in the evoked set ofthe customers. In the time of evaluating alternatives customers mainly compares the functions and psychological upper hands that the products can offer them. The job the marketing managers is toidentify what type of benefits the major of the customer wants and should generate strategies according to that. The managers also needs to evaluate other brands offering which can alter customers purchasing decision and should also generate a backup strategy to counter rival companies attempts.
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4) Purchase Decision –
After evaluating all the alternatives that the customers had in the options, the customers finally comes to decision were they pick the right product which will help to fulfill their void. Purchase intention is not necessarily converted into an actual purchase decision. Marketing organization needs to generate strategies which will lure customers into making purchase intention for their products. Various techniques can enhance the chance to attracting customers, for example – A credit card payment system can increase the chances of purchase, likewise various sales promotion like to receive a premium, entry to a competition can add an incentive to buy now. The main psychological procedure which manipulates the purchase decision is known as integration. The companies who are able to secure integration has the capacity to manipulate the purchase decision of customers very easily (Liu, 2004, Pg. 14).
5) Post Purchase behavior – Companies should analyze how customers are reacting towards the products after the purchase, they should investigate whether the customers are satisfied with their products, and this is an important factors because it determines the customer retention for a company. A good post purchase strategy can assure an organization to enjoy more brand loyalty of the customers. For example – if a car company offers the customers post purchase offers like free maintenance, free car wash and many more, then customer will be more interested in buying their products.
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2.8.4 Buyers characteristic which influence their buying behavior–
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6 BUYER'S BEHAIVOR
There are various factors that can determine the buyer’s characteristics that can influence their buying behavior. But there are some key factors which help to analyze a buyer’s characteristic. And the factors are described in Appendix D
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2.9 The Brand identity prism by KAPFERER –
7 THE BRAND IDENTITY PRISM
The kapferer brand identity Prism is considered as one of the most influential models in the brand communication sector. Here the senders are known as the brand identity in which strategies are formulated to sends information to the customers, and the receiver are explained as brand image, because after the customerreceives the message they generate a brand image towards the brands. (Kapferer, 2008, pg. 183)
Receiver – The brand image is considered as the receiver because customers are the targeted people to whom the brands sends information, with these information they perceive a product or a brand. The sender’s task is to formulate strategies that will enable the receivers to understand its information easily (Rossolatos, 2008, pg. 11.
Sender – brand identity is allocated on the sender side, and thisis because the purpose of brand identity is to specify the
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meaning of the brand and create a self-image. The creation of theimage is the final result and understanding for the customers. Sobefore projecting any kind of image towards the customers, companies must know what to project and what they do want to project towards the customers (Chernatony, 2010, pg. 245). Because the projection that the customers are going to see will regarded as the final image and it must be meaningful enough to create a positive image in customer’s minds about the brand. The brand management should execute a perfect way of sending their message to the customers. A brand image can be created through various branding message, for example – brand name, visual symbols, products, advertisements, sponsoring, patronage and articles.
Competition and noise –
Sometimes the images are interfered by converted messages, extracting meaning and interpreting signs. These competition and noises are generated through two possible sources.
1) There are other company who always tries to imitate its competitors because they have no creativity and idea generating strategy; they have no knowledge about their known brand identity. They simply keep an eye on their competitors and copy their marketing communication.
2) There are some companies who are very much obsessed with theidea of creating the most appealing brand image that will beperceived by all. So concentrate on trying to meet every customer’s expectations. This nature of reaction from companies causes the brands to surfer from always having to satisfy all types of customer and in the end gets caught on surfing on the changing waves of social and cultural fads (Arnhold, 2010, pg. 36).
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2.10 Summary of the literature review –In the beginning of the review the brand image has been identified, importance of brand image has been elaborately discussed in the brand image section which helps us to understandwhy all companies should emphasize on creating brand image to runtheir business successfully. In the brand strategy section the different ways in which companies can generate branding strategies has been discussed which will help the readers to understand the brand strategies. The literature also elaborately reflects the importance of brand in the automobile industry, which helped the author to briefly analyze about the research topic. In the brand equity section it has be analyze the functions of brand equity and the four factors that effects the brand equity of a company.
Since the research title says the importance of brand image for buyer’s buying perception, the consumer behavior section discusses how the customers behavior towards brands and what types of demand can arise which the companies have to fulfill. With the help of buyers black box models the author was able to identify how consumers reacts in the market and what types of strategies companies must imply to control or at least get a goodassumption of the consumer behavior. In the buyer characteristic section the author briefly discussed what type of customers companies have to deal with in the market, and to succeed in the market what type of strategies they should generate to serve the customers from different cultures. In the end the brand identity prism of KAPFERER helped the author to discuss how brand identities are created and what role it plays in a company’s
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succession period.
Chapter Three
Research Methodology
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Research Design
Research Approaches
Purpose of the research
Research strategies
Data collection source
Sampling Research
Data collection methods
Data analysis and presentation
Ethical consideration of the research
Time Horizon
Reliability and validity of research
3.0 Research Methodology –3.1 Research Design – To start doing a research an author must decide what type of research it is going to use to conduct the research, a research design means a structural plan to evaluate or study a specific problem. A structure of research heavily depends on the nature ofthe research which will decide how the author will plan out its research design (Hakim, 2012, pg.2). There are many types of design that helps to study and formulate a research and they are –
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Descriptive – a descriptive study can be a case-study, naturalistic, observation or
survey. Depending on the topic and nature of the research the author will decide which one to use (Yin, 2009, pg. 50).
Correlational – in this study the results are depended on hypothesis
which helps to formulate the research, for example –
case-control study and
observational study
(Salkind, 2010, pg. 1110).
Semi-experimental – this study are
based to practical
research and the results
are formulated through semi- experiment for
example – quasi-
experiment and field
experiment.
Experimental – sometimes research want to discover results
through pure experimentatio
n and the results are not always accurate or fixed (Bynner & Stribley,
2012, pg. 64).
Review – in this study, research are conducted through
literature review and systematic review. This is a rather theoretical
approach where different academic models are used to generate
information
8RESEARCH DESIGN
3.2 Research Approaches – There are two types of research approach a researcher can use forconducting a research and they are -
3.2.1 Inductive research Approach –
In this research approach it is suggested that researchers can execute a research by observing the research topic or subject. In this approach a researcher begins with the collection of data, which means it does not depends on the theories. After the collection of data the research performsa data analysis which helps to recognize themes or regularities of the topic and gets suggestions of relevant theories. The main advantage of this approach is its flexibility because the hypothesis and theories are not generated in advance. The researcher formulates is own theories which are based on his discovery and observation. The problems and issues of the topic can be investigated with different manners which will provide the option of alternative explanation for the occurrence of the event. (Feeney & Heit, 2007, pg- 3).
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9INDUCTIVE APPROACH
3.2.2 Deductive research approach – In this research approach the researcher relies on theory and hypotheses which are based on relevant information whichare already available in the field and theoretical considerations related to that field, which are used to experiment in the analysis. The concepts that are analyzed have great links with the hypothesis, which needs to convertinto a researchable entity. The important thing for the researcher is to identify the source of data collection which is related to the concepts that form the hypothesis (Saunders, 2003, pg. 105).
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10DEDUCTIVE APPROACH
The researcher used both of approaches for conduction the research. Among the approaches the inductive was used for qualitative information and deductive for quantitative analysis.
3.2.3 Quantitative approach – A quantitative research approach means that data that are quantify are used to generate analysis in a statistical form. Thediscovered materials are statistical which are often moderately huge in number and representative set of data. In this approach the use of deductive approach is necessary because the theories needs to be tested and the models needs to be measured. The qualitative research deals with data that are normally structured
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and one of crucial advantage of it is that can duplicated easily and realistically. The data collection method which are related to qualitative research approach are – experiments, surveys, content analysis and existing statistics (Maxwell, 2012, pg. 125).
3.2.4 Qualitative Approach –
In this approach the researcher deals with an unstructured and exploratory research field. This research approach is concentrated on minimized samples which offer understanding and details of the problem. The approach allows researcher to collectdata of various types of form and it deals less with numeric data. The inductive approach can be related with the qualitative approach because both are more related with theories. The qualitative approach helps to evaluate human variation and the social processes which is considered as one of its best advantages. In this approach the research question are often openended and it focused more on the study unfolds (Balnaves & Caputi, 2001, pg. 150).
In this research the researcher will use a mixture of both the qualitative and quantitative research as both will help the author to conduct the research.
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3.3 Purpose of the research –
The purpose of research are often categorize in exploratory, descriptive or explanatory, the author can use any of these research types or can use a mixture of these depending on the requirement of the research.
3.3.1 Exploratory research – In the exploratory research the author looks for new insights, which are adaptable and flexible to change. In the beginning of the research it tends to deal with a broad focus but as the research reaches its climax the focus becomes narrow. This research can help authors when there are less knowledge availableabout the problems which arise in the course of the study. The goal of this research is to provide a detailed understanding of the identified problem that addresses the research (Zikmund & Babin, 2009, pg. 305)
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3.3.2 Descriptive research - In this research category the author conducts research in a descriptive manner which represent a precise number of events, people or situations. For the researcher it is vital that he/she has a clear idea or vision of the topic on which basis it is going to collect information. The design of a descriptive is often structured and it uses formulation of particular hypothesis. The researchers needs to heavily rely in existing research, theories and hypothesis (Malhotra, 2008, pg- 82).
3.3.3 Explanatory research - In this research the author attempts to establish a bridge among variable. The authors uses explanatory research to concentrate onevaluating a problem or situation for explaining relationship among variable. The explanatory research includes close-ended questionnaires which used in a more structured manner (McNabb, 2004, pg. 96).
The purpose of this research is both explanatory and descriptive because the research is conducted on evaluate the importance of brand image for buyer’s perception in an automobile industry. This is way descriptive research is used and the exploratory is used to understand the importance of brand image for rancon motors.
3.4 Research strategies –
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Explarotary
Research
Descriptive
Research
Explanatory
Research
There are various types of research strategies which the authors can use and the selection of the strategy is dependent on the objective, the type of knowledge available, the time frame and other materials available and the philosophical consideration of the researcher (Comer & Kendall, 2013, pg. 13). And the strategies are
3.4.1 Survey
In this strategy the information are collected via interview or questions. This strategy falls under the descriptive and explanatory researches. The survey strategy is used to analyze a problem within a large population. With the help of this researchstrategies researcher can collect large amount of data at once, but the major flaw of the strategy is that dishonesty is discouraged while data collection. With the help of the questionnaires researchers gets access to significant amount of data from a huge population. The data which are collected are later analyzed by inferential and descriptive statistics. Survey are popular for collection data for management and business researchers (Marsden & Wright, 2010, pg. 8).
Survey has been used in the research to collect data from around 50 customers from the automobile industry of Bangladesh which helped to understand the value of brand image for a company like rancon and Mercedes Benz.
3.4.2 Case study
In this method the author examines research problems that are related with the research topic. The advantage of this technique is only for those researcher who are interested in finding deeperperception of a certain phenomenon, the case study helps researcher to gather accurate information. In a case study is it very difficult to apply methods of recording and observation
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because in the nature of a case study is to demonstrate the situation and depth of the research topic. Case study is regardedas an informal method which turns out to be more subjective rather than objective (Yin, 2009).
The case study has been used to understand the company “rancon” motors, whichhelped the author to evaluate the research problems which eventually with support the primary data analysis.
3.5 Data collection source –
For the researcher there are two types of data collection sourceswhich they can use in the research, and the two data collection sources are known as secondary data and primary data. In this research the author has heavily relied on both of the data sources. The data that are collected mostly from the research project is considered as primary data. And the information which are collect from already published sources like books, magazines,newspaper are known as secondary data.
3.5.1 Primary data source – The primary data is necessary for to gather opinions and views ofdifferent individuals related to the research problem. With the help of these information the author can compare and analyze the answers of the research questions. The ways in which primary datacan be collected are – interviews, surveys, observations and questionnaires (yale.edu, 2014).
In the following research the author has used unstructured interviews and questionnaires for collecting primary data.
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3.5.2 Secondary data sources – The secondary data source is one of the most common source of data which researchers use to answer research problems, and also for gathering information and knowledge about the research problem and issues in an expanded framework. The secondary data source can also help to create an effective research design and enhance the analysis of primary data. The way in which the secondary data can be collected are – journals, books, newspapers, articles and official publication of government information or a company (Patzer, 1995, pg. 35).
The author has used secondary data source for conducting the literature review and for analyzing the company overview. The data were collected from sources such as – hbr.org, ranconmotors.com and etc.
3.6 Sampling Research:
3.6.1 Sampling technique Researchers uses sampling techniques to decrease the amount of data that are required to be collected by only considering information from a sector which cover every possible elements andcases. There are two types of sampling techniques which researchers can use and they are (Levy & Lemeshow, 2013, pg. 10).-
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3.6.2 Probability sampling
In a probability sampling the researchers can chose a randomly selected sample which increase the chances of inclusion of each element within a population are included. The key advantages of employing this technique are –
i) It increasingly decreases the probability of selecting a non-representative sample.
ii) The researchers can generate a precise assumption ofthe possibility of being a different sample than theactual population (Wiid & Diggines, 2010, pg. 199).
The ways in which probability sampling methods can be formulated are –
i) Systemic sampling.ii) Simple random sampling.iii) Cluster random sampling.iv) Stratified random sampling.v) Simple random sampling.
3.6.3 Non – probability sampling The non-probability sampling is very much different from probability sampling, in this technique the selection of sample
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are conducted in such a method which makes the probability of selecting each element in a population unknown. There are some major disadvantage of non – probability sample and one of them isthat it decreases dimension of findings from which the sample canbe generalized to showcase the whole population. The non-probability sampling are conducted through – snowball sampling, quota sampling, and purposive sampling and self-section (Connaway& Powell, 2010, pg. 117).
The author has used the non- probability sampling method by selecting 50 automobile customers from two area. There are some time and monetary constraint which is why probability sampling was not conducted which means the results of the non-probability sampling may not represent the actual response of the whole population.
3.6.4 Sampling SizeBefore conducting any sampling technique an author must analyze the sampling size it is going to deal with. For example in this research the author has surveyed 50 customers to collect data andconducted an open-ended interview session with four managers of Rancon motors.
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11 SAMPLING
3.7 Data collection methods – The author has solely focused on survey and unstructured interview for collecting data for this research. The maximum datathat are collected via survey are quantitative and the data that was collected through unstructured interview are qualitative.
3.7.1 Unstructured Interview –
In this type of interview there are more flexibility, the interviews are taken from a one to one sessions between the interviewer and the respondent. An unstructured interview has advantages like it helps the researchers to discover information which other interviews like semi-structured or structured interviews fails to gather. There is no limitation for gathering information which are related with the problem and normally the collected data are huge (Klenke, 2008, pg. 126).
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3.7.2 Data analysis and presentation – In this research the author has used the software Microsoft Excel2013 for evaluating primary data which are collected through the two questionnaires. In the data analysis part the discovered information are briefly elaborated with the help of graph and charts. The discovered information which are gathered from the unstructured interview are represented in a descriptive manner.
3.8 Limitation of the research –
There are various limitation which the author had to overcome to conduct this research, and the limitations are –
There was a big time constrain which disabled the author toconduct the research more briefly.
There was also a financial constrain. There was no manpower because the research was conducted by
the author himself. Since non-probability sampling is involved in the research
the validity and creditability of the case study might comeunder questions.
3.9 Ethical consideration of the research –An ethical consideration means whether the way of conducting the research was legitimate or illegal. The researcher’s needs to be
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fully aware about the ethical consideration of the social research community which all researchers must follow. The author has put emphasis on ethical consideration like –
Truthfulness Confidentiality Permissions Diplomacy Ambiguity Accurate reports of information without bias. Deliberate participation
The research was executed in such a manner that the companies which are associated with the research will not encounter any disruption in their daily operation. The author intention was to conduct the research without disturbing anyone who are directly or indirectly involved with the research and the author also followed a confidential policy to protect information and data that were provided by the company Rancon.
3.10 Time Horizon – The author was given a 12weeks time period to complete the research, which is why the author had to maintain a fixed time management to finish the research on time. The first 2 weeks wereused to generate the introduction sector, after that the literature review part took 4 weeks. The research methodology wasconducted in 1 week. Then remaining 5 weeks was used to collect primary data to perform the data analysis and then to draw up a conclusion and recommendation.
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3.11 Reliability and validity of research – All the information that were collected are from reliable sources, authentic scholarly articles were used for collecting secondary data, sources like HBR.com, Forbes.com, Google scholar and google books were heavily used for collecting purified data. For primary data the author has conducted survey by itself which proves the validity of the information gather and on the other hand the open ended interview was also conducted by the author itself.
Chapter FourData Analysis
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4.0 Data Analysis of 50 customers –The following 8 questions were asked to 50 different customer through a survey and the findings are –
1. Do you agree that the brand image of Rancon motors plays a key role in the purchase decision?
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Data Analysis of 50 customers –
Interview of 3 Top level managers of Rancon Motors in a Focus group discussion
Strongly Agree
Agree
Disagree
Strongly Disagree
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
40%
30%
15%
5%
No. of Customers
The result of the survey shows that maximum respondent strongly agrees with the fact that the rich brand image of Rancon motors who are the sole distributor of Mercedes Benz in Bangladesh have an impact on the purchase decision of the customers. According tothe buyer’s characteristics a customer first needs the motivationto take the initiative of buying a product. If he/she is tempted by the brand image of product then it will definitely plan on buying the product. In Bangladesh Mercedes-Benz automobiles are considered as luxurious products which very few people can afford(Newman, 2014). Due to its rich brand image the customers who belongs in the elite level are always interested to buy a Mercedes-Benz to maintain its social standards. Among the 50 respondent 40% of customer believes that Rancon motors brand image is one of its competitive advantage which it has over its competitors. The no. of customer who strongly disagree with it because they think Mercedes-bens as a brand still needs to add more value to it
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2) Are you happy with Rancon motors after sales offers? Does itreflect their high brand standards?
Very happy Happy Unhappy Very unhappy0%
10%
20%
30%
40%
50%
60%
70%
No. of Customers
After conducting the survey it has been identified that the customers are relatively very happy with the after sales activitythat Rancon motors are offering to them. Rancon motors are the only dealers in Bangladesh are engaged in business with Mercedes which means they are the only company who can offer genuine Mercedes parts which customers in Bangladesh cannot find anywhereelse. They also offer free servicing which customers of Mercedes enjoys the most in Bangladesh. They also sends out rescue team ifthere is any kind of accidents so that customers goes through less hassles’. According to the buyer’s decision making process,customer’s analysis what after sell service it is going to get sothat he/she can fells more comfortable in the future while using the product (Davenport, Mule & Lucker, 2011). Mercedes Benz and
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Rancon motors has identified this factor has put a deep concentration on this for gaining more customer retention. The customers who are not happy with service of Rancon may have little knowledge about their after sale offers which Rancon motors should resolve by delivering their message to the customers more efficiently.
3) How satisfied are you with the quality Mercedes benz cars that Rancon motors are offering?
50%
20%
10%
17%3%
Quality of Product
Very Satisfied Satisfied Moderatedissatisfied Very dissatisfied
Among the 50 customers survey the result show that 50 percent of the respondents are very happy with the quality of the product that Rancon motors and Mercedes Benz are offering. Other 20 % arehappy with their product and 10% of the respondent feels that the
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product that Rancon motors are providing are moderate and the rest of the respondents are not quite happy with their products. But since maximum customers are happy let their products the author has briefly elaborate the reason behind it. Mercedes Benzslogan is "Das Beste oder nichts"(German) which means the best ornothing, this statement from the company indicates their focus onproduct quality which adds values to their brand. Customers feel more confident while purchasing their product because Mercedes has a history of providing the best. According to the Brand identity prism by KAPFERER the first message that companies should send to their customers is about their products and its quality. This will help to attract more customers and eventually increase the value of the brand. The perceived quality also suggest that companies should take feedback from customers to increase the quality of their product, so Mercedes should take feedback from the customers so that the number of unhappy customers decreases (Kiley, 2007).
4) To what extent do you agree or disagree with the statement "The Mercedes-benz brand offers a safety car"?
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Agree strongly Argee
disagree strongly disagree
0%
10%
20%
30%
40%
50%
60%
70%Customers
Customers
The survey allowed the author to analyze the behavior of the customers toward Rancon, the customer’s perception of Mercedes’s product seems very good. In this survey it has been identified that the customers of Mercedes automobile thinks that their products are always reliable. 65% of the respondent agrees with the statement that the brand Mercedes Benz always provides cars that have no safety issue. According to various branding strategies providing safety of products for the customers adds a lot of value to the brand identity of a company, and Mercedes’s one of the key branding strategy is to provide customers with excellent quality products which includes safety (Elliot, 2009). There are very few respondents who actually disagree with the statement and the reason is unknown. Mercedes Benz main strategyof maintaining the safety standard is innovation.
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5) How much do you agree that because of Mercedes-bens rich brand image the price of its products are extremely high in Bangladesh?
Strongly Agree
Agree Disagree Strongly disagree
0%5%10%15%20%25%30%35%40%
No. of Customers
No. of Customers
Mercedes Benz slogan says that it provides the best product and nothing else, which means they don’t compromise in their production quality which means the production cost is high. Amongthe respondents 30 percent agrees and 35% strongly agrees with the fact that in Bangladesh Rancon motors follows a premium pricing strategy because of the rich brand image of Mercedes Benzcars and their target market are the customer who can afford the premium price. Among the other respondents 20 percent disagrees and other 15 % strongly disagrees with this fact, because they think Rancon charges more for Mercedes benz cars because they are
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sole dealers and because of various tax issues. But Mercedes-Benzcars are considered as a luxurious product in Bangladesh because of its high brand image (Silverstein and Fiske, 2003).
6) Do you agree with the fact that Rancon motors target market is very one dimensional and because of this they are losing market share in Bangladesh’s automobile industry?
Strongly Agree
Agree
Neutral
Disagree
Strongly disagree
0%5%
10%15%20%25%30%35%
No. of customers
Bangladesh is developing country which means the number of elite class customers in this country is low compared to the middle class and lower class. Among the respondents maximum of them have
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a neutrals view over this fact and among other 10 percent strongly agrees, 30 percent agrees, 20 percent disagrees and 5 percent strongly disagrees. The theory of reasoned action suggestthat when companies builds a strong brand image they have the right to charge more for its products, which means Rancon motors has no other options then to only concentrate on one segment because all of Mercedes’s products are of top class and are of high price. The middle class and lower class level customer’s market is dominated by Toyota and it will really hard for Rancon motors to capture that market (Bagley, 2013).
7) All the customers of Rancon motors stay loyal to the brand, do you agree with this statement?
Strongly Agree
Agree
Disagree
Strongly disagree
0% 10% 20% 30% 40% 50% 60% 70% 80%
No. of customers
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Rancon motors are the sole dealer of Mercedes Benz in Bangladesh which means customers have nowhere else to go for buying or servicing Mercedes cars. But Mercedes is a brand which always succeeds in satisfying it customers which helps them to create such a strong brand image, which means customers relies on Mercedes cars and stay loyal to the brand. In the survey among the respondents 70 percent strongly agrees with the fact that maximum customer of Rancon motors stay loyal to the brand, Mercedes and Rancon motors follows a great customer retention strategy which allows its customers to stay loyal to them. Customers need to order for spare parts of Mercedes Benz car to Rancon motors who are the only company who sells them. Mercedes Benz cars technology are quiet complicated which local Bangladeshi workshops fails to understand, but Rancon motors has engineers who are specialized on servicing Mercedes Benz. These factors make the customer of Mercedes Benz to stay loyal to Rancon motors (Gorzelany, 2011).
8) Are you happy with the promotional campaign of Rancon motors? Do you have enough knowledge about Rancon motors products?
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Very happy Happy Neutral unhappy Very unhappy0%
5%
10%
15%
20%
25%
30%
35%
No. of Customers
From this survey it has discovered that customers have a mixed Perception towards Rancon motors, because it has been identified that Rancon motors has not implemented any mass marketing. Ranconmotors brand image is high because it’s the sole dealer of Mercedes Benz who are very well reputed Brand. In the survey 30% of the respondents are unhappy with the promotional campaign and more 10% of them are very unhappy, but 20-25 % of the respondentsare very happy or happy with their campaign. The brand identity prism of KAPFERER suggests that brand should be the sender of information and customer should receive it, and that is when a true brand image will be created. So it is very important for Rancon motors to notify its customers about the products its offering. Rancon motors uses various social media and billboard for marketing which is way 45 percent of the respondent are satisfied but they are lacking in Television commercials which isthe most popular source of advertising in Bangladesh and this canbe the reason of unhappiness of the 40 percent of the respondents.
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Interview of 3 Top level managers of Rancon Motors in a Focus group discussion
To gain more in-depth understanding a focus group discussion was carried out with 4 managers then answer the question.
The managers who have been interviewed have experienced of about more than 12 years, so the validity of the information that were collected from is of very high standards. Rancon motors are the only dealers of Mercedes Benz which is regarded as one of the most popular Automobile Manufacturer in the Automobile industry.
The Questions that were asked to the Managers are –
1) Do you think that the market strategy of Rancon motors is effective enough in the Bangladeshi Market?
In the interview the first manager responded very positively, he described that their marketing strategy is successful enough to attract the customers from their targeted segment which is the elite class segment. He said that they main source of marketing is digital Media from which customers can get information about their products and offers. Rancon motor’s primary product is Mercedes Benz sedan cars which are very popular all over the world, and to send message to the customers about the products Rancon motors relies on different types of social media such as Facebook. He said that Mercedes Benz is a huge brand and
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customers have very clear idea about it, Mercedes globally performs massive marketing through billboards and Digital Media. But the Second manager pointed out some areas were Rancon motors can still improve in terms of marketing. He said that Bangladesh is a country in which television advertisements are very popular and it can easily send the company messages to a mass number of people. Rancon motors can in the near future improve its communication Mix which will enhance the company’s promotional activity and will add values to the products of Rancon motors.
2) Do you think Rancon motors should expand its operations in other parts of Bangladesh? Does this factor increase the market share of Rancon in Bangladeshi automobile industry?
Before conduction this interview it has been identified that Rancon Motors only has an office and showroom in Dhaka city, which means their operations are restricted and they are losing market shares in other parts of the country. In the interview thefirst manager response indicated that they are quiet concerned about this fact. He said that they are losing customers in Syhletand Chittagong cities in which they have lots of elite class targeted customers. By being able to distribute products of such a high caliber brand like Mercedes it is very important for Rancon motors to reach out to its customers and gain market share. The second who was also interview also agree with the factthat they should expand their business in other parts of Bangladesh, and if they cannot open up showroom in the near future then they should at least provide an option for the customers of those region to buy the automobiles from online.
3) Rancon motors only imports sedan and SUVs, do you think Rancon motors should also enter in the bigger automobile markets for example Bus and trucks?
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Ans – The first manager said that Rancon’s current target market are the elite class customers of Bangladesh and they only wants to buy automobiles for their personal use, which is why dealing with sedans and SUV’s are more appropriate at this moment, but the transportation business in Bangladesh is growing and more high standard highways are being created. Rancon can in the near future move towards the public or private bus service industry ofBangladesh. The second managers gave the author some more in-depth information, he said that they have already been approachedby some local firms about the availability of the Mercedes Benz buses and they are interested to offer their customers the quality bus service that the Mercedes buses can offer.
Chapter Five
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Conclusion and Recommendation
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Answers of Research QuestionsJustification of Research objectives:Recommendation Implication of further study
5.0 Conclusion and Recommendation
5.1 Answers of Research Questions1) What is the customer’s perception towards Rancon motors? Are
they happy with their service?
After conducting the research the author has discovered various factors about Rancon motor’s business and about their dealership of Mercedes Benz in Bangladesh. At the beginning the author’s questions was what are perception of customers towards Rancon motors and at the end of the research it seems the customers havea very positive perception of Rancon motors and its products. In the data analysis the first question was about brand image of Rancon motors and the analysis shows that customers considers Rancon motors as a high standard brand because it is the dealer of Mercedes Benz which is regarded as one of the leading brand inthe global automobile industry. Rancon motors are the only distributor of Mercedes Benz in Bangladesh and in the automobile industry the products of Mercedes is regarded as a luxurious branded product. As the economy of Bangladesh is improving the living standard is also increasing which means public demand for branded products is increase too. In one of the data analysis it was also asked that whether the brand image of Mercedes Benz increases the price of its products and many of the customers whowere surveyed agrees with this fact and this is because Mercedes insures the best quality product for its customer and good quality products do not come for cheap price. All of these factors indicate that customer perception towards rancon motors is that it is a very posh brand. In another survey the customers were question about their satisfaction towards Rancon motors service and the results shows they are very satisfied with it.
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Rancon motors provides spare parts of Mercedes Benz which are notavailable in any other place in Bangladesh which makes them unique, plus on the other hand Rancon motors offers top engineersfor maintenance service of Mercedes Benz cars which is one the best post-purchase services that they offer to their customers.
2) What are the strategies Rancon Motor is considering to promotetheir brand?
Rancon motor target market are the elite class customers who can actually afford their products and Rancon motors believes that their main strategies are working according to their plan and thestrategies that they has implemented are digital media marketing,Sponsored events, Billboards and they also rely on the word of mouth of the customers. Rancon motors strategy is to promote their offers through digital media for example facebook and they also use the customer to customer (C2C) product selling website to promote their products. Rancon motors also has a service center where customers can inquiry about their products, this service center contains top quality sells agents who can help thecustomers with their inquiries. Other than that Rancon follows the tradition marketing tools like billboards and new paper advertisements. In the survey the results shows that some of the customers are not happy with the promotional activity of Rancon motors. According to the black box model it is very important forcompanies to spread awareness about their products so the customers’ gets attracted hence buy their products. Mercedes Benzare famous for conducting some of the best promotional campaign and customers are fully aware about their products, they follows the communication mix model which contains strategies like – advertising, sales promotion, Public relationship, Sponsored
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events, direct marketing, interactive marketing and personal selling.
3) How positive brand image can help to retain customers’ in the automobile industry?
A Company who has successfully been able to establish a strong brand image starts to create a positive impression towards the customers and customer starts to stay loyal to that company. Mercedes Benz boast of being one of the best branded company in the world and customers of Mercedes automobiles are very happy with their products. According to brand identity prism brand image is created when companies successfully manages to send its messages about product, place, price and promotion to the customers. When the customer receives it a brand image is created. A customer looks for products and brands in which he/shecan rely on and a good brand image of a company can make a customer to trust on its products. Customers of Rancon motors andMercedez Benz are very happy with the product quality according to the survey results which means customers will always stay loyal to Rancon motors if they can maintain their standard of products and after sells services.
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5.2 Justification of Research objectives:
5.2.1 Research Objectives
1) To evaluate the direct relationship of brand image and sell of products.
The research topic was to identify the importance of brand for buyer’s perception in an automobile industry, and in this research the author has been able to justify the fact the brand image has a direct link with product selling. The brand equity theory suggest that every company needs to concentrate on how it can improve its brand image which can enhance their proposition of selling products faster. Brand attraction is a psychological factor which affects the customer purchase behavior. A Customer will buy product on which he/she will have enough knowledge aboutand it is the job of the brands to feed this information to the customers and that is when a brand image is created. As the survey shows that customers buy Mercedes Benz cars with a premiumprice because it has a very rich brand image and this branded products will increase their social standards, this analysis proves that sell of products has a direct link with the company’sbrand image.
2) To prove Rancon motor’s success is due to their strong brandimage of Mercedes Benz.
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Rancon motors are the sole distributor of Mercedes Benz in Bangladesh, which factors actually gives them an enhancement in their brand portfolio. But in the survey it has been identified that the customers of Bangladesh consider Mercedes Benz as a luxurious brand. Mercedes Benz slogan says that “the best or nothing” which means they are fully determined for providing the best quality products for its customers, which is way they have been successful in creating of the best branded company in the world. When Rancon motors became the sole distributor of MercedesBenz in Bangladesh they inherited the brand image of Mercedes into theirs which is way they have been so far successful in fulfilling the demand of its target market.
3) To analysis the customer loyalty of Rancon motors, and to understand the satisfaction level of its customers.
After conducting the research it has been discovered that Rancon Motors is the only company in Bangladesh who are directly linked with the company Mercedes Benz, which means consumers who are using products of Mercedes Benz needs to be in contact with Rancon Motors for maintaining their automobiles and to purchase aMercedes Benz cars. As the Survey indicated that Mercedes Benz isregarded as a high luxurious car brand which means users of Mercedes Benz car takes good care of its vehicle. The analysis also indicates that Rancon Motors is famous for its outstanding after sells service which means customers of Mercedes Benz feels a lot safer of being the client of Rancon motors. They are only company to provide genuine Mercedes Benz parts which makes them
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unique and this is one of the very important of their excellent customer loyalty that they enjoy.
5.3 Recommendation According to the Black box model of buyer characteristic a company must generated and maintain its 4ps which are its products, price, promotion and place, these factors plays the initial role into a buyers purchasing decision. Rancon motors products are of top class because they manufactured in of best automobile company Mercedes Benz. The customers know about Mercedes Benz and its brand value and since Rancon motors is the only distributor of Mercedes Benz this fact also adds value to
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Rancon motors brand portfolio. To maintain the high standard of Mercedes Benz vehicle Rancon motors has established one of the best after sells service center which lures in more customers because of its safety standards.
After the research the author recommends Rancon motors to improvein some sectors which can further enhance their brand equity and at the same time increase their profitability through increased sale of products. The first thing Rancon needs to improve is its promotional strategy, in the survey it shows that some of the respondent are not happy with their promotional activity because it gives them little knowledge about their products. Rancon should implement strategies like Advertising, Sponsorship and Personal selling so that customer can gather more knowledge abouttheir products.
Rancon motors also needs to understand the cultural aspects of Bangladesh, the economic situation of Bangladesh is not as rich as countries in Europe, America and in some parts of Asia. Bangladesh is a developing country and the income level of the people of Bangladesh is moderate. Maximum customers of Bangladeshcannot afford to purchase Mercedes Benz because it falls under elastic products or luxurious products. If Rancon motors gives the customer the option of credit purchase or can implement some sort of discount strategy then the demand of Mercedes products inBangladesh will increase drastically and the profitability of Rancon motors will increase.
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Television commercials(Advert
ising)Sponsorship Personal seliing
5.4 Implication of further study:The researcher has very limited time frame to conduct the research, in this time frame the author could only survey 50 customers. To gather more information about customer behavior it is very important to collect information from more customer because each individual has a different way of thinking and it isvital to collect as much as information possible from them. The researcher did not get enough access to samples which is why the results are not accurate enough. For non-probability samples would have increases the value of the research, even though the researcher tried the level best to generate the best outcome. Theauthor also thinks that is very vital that more research are conduction on this topic so that entrepreneurs who are planning to start a business knows about the importance of brand image andexecute the right branding strategy.
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C r e d i t S a l e
o p t i o n s
D i s c o u nt
S t r a t e gy
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8.0 AppendicesAppendix A
1. Do you agree that the brand image of Rancon motors plays a keyrole in the purchase decision?
O Strongly Agree.
O Agree.
O Disagree.
O Strongly Disagree.
2) Are you happy with Rancon motors after sales offers? Does it reflect their high brand standards?
O Very Happy.
O Happy.
O Unhappy.
O Very unhappy.
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3) How satisfied are you with the quality Mercedes benz cars thatRancon motors are offering?
O Very Satisfied
O Satisfied
O Moderate
O Dissatisfied
O Very Dissatisfied
4) To what extent do you agree or disagree with the statement "The Mercedes-benz brand offers a safety car"?
O Strongly Agree
O Agree
O Disagree
O Strongly Disagree113
5) How much do you agree that because of Mercedes-bens rich brandimage the price of its products are extremely high in Bangladesh?
O Strongly Agree
O Agree
O Disagree
O Strongly Disagree
6) Do you agree with the fact that Rancon motors target market isvery one dimensional and because of this they are losing market share in Bangladesh’s automobile industry?
O Strongly Agree.
O Agree.
O Moderate.
O Disagree.
O Strongly Disagree.
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7) All the customers of Rancon motors stay loyal to the brand, doyou agree with this statement?
O Strongly Agree.
O Agree.
O Disagree.
O Strongly Disagree.
8) Are you happy with the promotional campaign of Rancon motors? Do you have enough knowledge about Rancon motors products?
O Very happy.
O Happy.
O Moderate.
O Unhappy.
O Very unhappy.115
Open-Ended questions for four managers of Rancon motors –
1) Do you think that the market strategy of Rancon motors is effective enough in the Bangladeshi Market?
2) Do you think Rancon motors should expand its operations in other parts of Bangladesh? Does this factor increase the market share of Rancon in Bangladeshi automobile industry?
3) Rancon motors only imports sedan and SUVs, do you think Ranconmotors should also enter in the bigger automobile markets for example Bus and trucks?
Appendix B
For automobile industry it is very important to keep customers and always try to keep them happy. This strategy is very effective and even more so in the automobile market. In differentresearches it shows that the automobile manufacturer who falls inthe luxury segment is more often enjoying the most loyal consumers in the market (Czerniawski, Maloney, 1999).
In the automobile industry brand loyalty is one of very importantaspects of consumer behavior. Companies like Mercedes Benz have such a huge brand image which allows its customers to stay loyal to it. A customer will stay loyal to a particular brand if he/shegets comfortable with that particular branded product. But whether these customer loyalties always remain constant that’s what the author wants to discover. (Hoyer, MacInnis & Pieters, 2012).
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Appendix C
Brand awareness is all about letting a company’s target market toknow about its existence and let them know about their service they offer or products. Brand awareness are not created in fort night it needs a lots of patience from company owners. There are countless number of strategies which can be used to boost a company’s brand awareness (Gelder, 2005). Normally the most basicstrategies can be to use billboards, bus banners, wall posters and TVC (Television commercial) to spread the message of the company among the customers. But first the company must target its desired customers and based to that should create their strategies (Kautish, 2013).
Appendix D
1) Cultural Factors – Different culture has different perception, values and demand, and these factors can affect a buyers buying behavior. Companies need to take into considerationof all the cultural factors before generating any marketing strategy. Customer from a certain country has different learned values and perception which derives their demands.
In a country there are subcultures which companies must consider before generating market strategy or any of promotional activity.A subculture means that a group of people that follows a culture which consists shared value system which is based on the daily life experience and situation. For example – the consumer market in the United States contains Hispanic, African American, Mature
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consumers and Asian American. To grab the market of all this subculture companies must produce their products in such a way which will generate demands for all kinds of subculture without creating a conflict of culture.
Social class is also an important aspect of cultural factors, a social class is determined by combining a person’s occupation, income, education wealth and many other relevant factors. These factors are very important which companies should consider beforecrafting marketing
Strategy (Kotler & Armstrong, 2013, pg - 168).
Social factors – The social factors can also determine how the customers will behavior in a particular region. The social factors can determine the demand of customer because customers will always buy product that are accepted in their society. The consumer wants, motivation and learning are influenced by opinionleaders, buyer’s family, reference group, culture and social class. The opinion leaders are those people which are among the reference group which contains special skills, knowledge and personality or many other characteristics that can impose on the social influence on others.
Now a day the social marketing is a very big trend and it is almost being used by every big companies. For example – Facebook and twitter.
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2Psychological factors – The customer’s buying behavior is determined by its psychological factors, there are four key factors that influences the buying choice of a customer and they are- learning, motivation, perception, motivation and attitudes.
Personal factors – The personal factors consist of different age cycle, economic situation, occupation, lifestyle, activities, interest and opinions. A customers buying decision can also be influenced depending on these personal factors. As people grows their taste of goods and services changes hence their demand changes. The occupation of a customer can also influence its buying behavior because customer will chose goods which fit in its budget and an occupation of a customer can determine its budget for good and services (Meents, 2009, pg. 6).
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