Brand Building and Firms’ Performance,

A Study of Small and Medium Firms in Hong Kong

BY

Tam Yuk Man

07010168

China Business Studies Major

&

Wong Yin Yuk

07014716

China Business Studies Major

An Honours Degree Project Submitted to the

School of Business in Partial Fulfillment

Of the Graduation Requirement for the Degree of

Bachelor of Business Administration (Honours)

Hong Kong Baptist University

Hong Kong

April 2010

ACKNOWLEDGEMENTS

First of all, we would like to express our sincerest thankfulness to everyone who assisted

and encouraged us in doing this project.

We especially like to express our deepest gratitude for our supervisor, Professor Ji Li,

who provided us valuable guidance and many professional opinions in the whole process.

With his expertise in marketing and research, he gave us lots of valuable advices and

challenges that pushed us to strive for excellence in this research.

Lastly, we wish to thank the industry experts who were involved in the study. Their

cooperation and diligence in completing the questionnaires was critical in bringing the

success of our study.

i

EXECUTIVE SUMMARY

This study was concerned about the brand building and business performance

of Hong Kong small and medium-sized firms which set up their own factory in mainland

China. Since the electronic industry and the electrical & optical products industry are

now facing a relatively stiff competition, to establish and consolidate the intangible assets,

particularly brands, become one of the most effective strategies to sustain the business.

Three variables namely trade shows, ISO certificates and magazine

advertisings were examined. And their contributions on the brand images were further

investigated. Then, the impacts of brand images toward the company survival and the

brand longevity were tested.

The results of this research reveal that ISO certificates in 2001 plays a

significant and positive role on the brand image. However, the result is insignificant in

2009. Besides, trade shows attendance and advertising placement in magazines are not

significant in contributing better image of the company brands. At the same time, there is

no positive and significant effect of brand image on the survival of the brand name can be

concluded. On the other hand, the analysis supports the positive relationship between the

brand image and the survival of firms.

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TABLE OF CONTENTS

ACKNOWLEDGEMENTS i

EXECUTIVE SUMMARY ii

CHAPTER I INTRODUCTION 1 - 2

1.1. Background 1 - 2

CHAPTER II LITERATURE REVIEW 3 -10

2.1. Trade Shows 3 - 5

2.2. ISO Certificates 5 - 6

2.3. Magazines advertising 6 - 7

2.4. Brand survival 7 - 8

2.5. Firm survival 8 -10

CHAPTER III METHODOLOGY 11-14

3.1. Setting, Sample, and Data 11

3.2. Measurement 12-14

3.3. Data Analysis Method 14

CHAPTER IV RESULTS 15-22

4.1 Descriptive statistics 15-16

4.2 Hierarchical linear regression 17-18

4.3 Logistic regression analyses 19-21

4.4 Summary table 22

CHAPTER V DISCUSSION 23-29

5.1. Discussion 23-27

5.2. Limitations 28

5.3. Implication 29

CHAPTER VI CONCLUSION 30

REFERENCES

Appendix 1: Questionnaires

Appendix 2: Electrical and Optical products industry

Appendix 3: Electronic products industry

CHAPTER I INTRODUCTION

The study was about investigating the correlation between brand building and

firm’s performance. Some recommendations were provided after analyzing the

relationship. The main objective was to find ways that help small and medium-sized

firms to outperform the others under the financial crisis.

1.1 Background

Facing the intense competition within the industry and the increasing number

of new entrants, many Hong Kong small and medium-sized firms counter this challenge

by building its own brands. Brands play as important a role in business to business as

they do in consumer markets.

In the last decade, the business practitioners especially those from electronic

industry, the electrical & optical products industry developed names for their lines, with

the prime objective of differentiating themselves from competitors. In industrial

marketing, the most important components of brand equity were considered to be

perceived quality and recognized image. Therefore, many of them attended trade shows,

advertised in magazines and acquired ISO certificates to strengthen the brand equity.

More importantly, positive brands are a valuable asset for an organization, it

performs five main functions: identity, shorthand summary, security, differentiation and

added value (Randall, G. (2001)). Therefore, it may able to help the company to achieve

the ultimate goal: profitability and growth. As a result, the longevity of the company can

1

be ensured.

In summary, the purpose of this study is to explore the key factors

contributing to the brand building first, and then to examine the correlation between

brand building and the business performance, and finally to suggest feasible ways for

small and medium-sized firms to improve its performance under the economic downturn.

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CHAPTER II LITERATURE REVIEW

How can firms improve their brand image?

Brand image is largely a subjective and perceptual phenomenon that is formed

through consumer interpretation, whether reasoned or emotional (Dobni and Zinkhan,

1990). It includes conceptions of quality, value, and attitude—as well as brand

associations.

2.1 Trade Shows

Trade exhibitions are temporary marketplaces where suppliers can meet

buyers (Wright, R. (2004)) . Many small and medium-sized industrial companies

invest little or no money in advertising, promotion, market research, new product

development, or other marketing activities, but most attend trade fairs, either as

visitors or as exhibitors (Jackson, D. W., Keith, J. E., & Burdick, R. E. (1987)).

Trade shows offer exhibitors a chance to display and demonstrate products that are

often difficult to move and complex in design and operation. It allows direct contact

with prospects and enables customer the quick comparisons of products (Reeder, R.,

Brierty, G. & Reeder, H. (1991)).Trade Shows participation—like other business

investments—is expected to yield positive results (Hansen, K., 2004). And the roles

of exhibition include: reinforce relationship with prospects, generate goodwill and

improve public relations (Wright, R. (2004)).

There are different determinants on brand image during the stages of pre-show,

at-show, and post-show activities of the trade fairs are shown below:

3

Pre-show and personal promotion characteristics make booth staff

training affect all four dimensions namely image-building, sales-related,

information-gathering, and relationship-improvement performances of trade shows.

Booth staffs provide the explanations about the company, product demonstrations,

and promotional materials more actively and these allow exhibitors to enhance their

corporate and brand image among the visitors (Lee, C.H. ,& Kim, S.Y., 2008).

At-show impersonal promotion has an impact on the performance of

image-building and information-gathering. An increase in booth size results in a

greater number of visitors attracted from the potential audience (Gopalakrishna &

Lilien, 1995). With larger number of potential customers, the exhibitor can enhance

corporate and brand image and gather information about the visitors attracted to the

booth. In addition, booth location is expected to have a positive effect on

image-building and information-gathering performance since good booth location

places the exhibitor in a better position to exposure them to the attendees and gather

information about the market and customers. Besides, a great number of booth

personnel can have more opportunities to communicate directly and improve the

relationships with the visitors attracted to the booth. They can provide the

explanations about the company, product demonstrations, and promotional

materials more actively and these may assist the exhibitors to strengthen their

corporate and brand image among the visitors (Chan, S.W. & Wong, C.K., 2008)

Follow-up activities were also found to have valid influence on

4

image-building performance, and this result implies that it is important to further

reinforce corporate and brand image positioned in visitors during the trade show, by

carrying out feed back activities after the trade show. (Chan, S.W. & Wong, C.K.,

2008)

In sum, if an exhibitor take the above variables into consideration and attend

more trade show, the product brand image will be sharpened. Based on such arguments,

following hypothesis is established:

H1: The more a given firm attending the trade shows, the better the image of its brand.

2.2 ISO Certificates

International Organization for Standardization (ISO) is the world largest

standards developing organization. It has published more than 18 000 International

Standards, ranging from standards for activities such as agriculture and construction,

through mechanical engineering, to medical devices, to the newest information

technology developments. Qualification certificates can tell a customer something about

the products and services such as quality, environmental friendliness, safety, reliability,

efficiency and interchangeability - and at an economical cost.

It is suggested that implementing ISO Environmental Management System

(EMS) standard can bring benefits to a company not only in financial terms through a

reduction in energy costs and other resources, but also in terms of improving the

5

company’s goodwill with the general public and other stakeholders (Hemenway, G.&

Hale, J.,1995). The achievement of ISO certification is an endorsement of the company’s

commitment towards product and service excellence. It can contribute a positive impact

on the image of the brands.

The hotel industry is also taking various initiatives for the sake of the

environment, for economic reasons, or to build a positive image. Internally, hoteliers may

pursue ISO certification …[that] enhance their company’s competitive position by

portraying a better image of the company(Chan, S.W. & Wong, C.K., 2004). That is to

say, more quality accreditation would lead to more reputable image. The value of a firm′s

overall reputation is easily seen in its relationship to firm′s revenues: as a firm′s

reputation increases, so does its sales (Shapiro, 1982). A firm with a good overall

reputation owns a valuable asset – ―goodwill‖: brand names, corporate logos and

customer loyalty (Herbig, P. & J. Milewicz (1995)). Based on this, the following

hypothesis is proposed:

H2: The more a given firm obtains ISO certificates, the better the image of its brand.

2.3 Magazines advertising

Every advertisement must be considered as a contribution to the complex

symbol which is the brand image --as part of the long term investment in the reputation of

the brand (Herr, M.,1994). Marketing communication and advertising in particular is an

extremely well-suited instrument to give content to the brand image (Rik Riezebos, 2003,

6

P.66).

Magazine advertising is associated with the largest number of consumers

impacted per media dollar spent, based on the subset of 10 studies in terms of brand

awareness, ad awareness, brand favorability, and the purchase intention / consideration

(Havlena, J. (2006)). That is to say, advertising in magazine is effective in promoting

brand image. Higher frequency that the brand appears in the magazine implied a more

positive image. Based on these reasons, following hypothesis is established:

H3: The more a given firm advertising in magazine, the better the image of its brand.

How may brand building influence performance?

2.4 Brand survival

In the marketing literature, brand survival is defined as the longevity of the

brand over time (Butterfield, L., 2007). Similarly in this research, brand survival is

defined simply as the continued existence of a particular brand in the market.

Branding has become a critical factor in business performance over the last

few years. It is widely recognized that brands can provide value and strength in the

market well beyond that which is provided by the intrinsic characteristics of the products.

Indeed, strong brands stand the test of time, are leveraged for decades and provide

increases in revenue streams for the products sold under those brands (Aaker, D.A.

(1996); Kapferer, J.N. (2004); Keller, K.L., 2003)).

7

Brand equity and brand image are highly related terms because in building

brand equity, managers attempt to influence consumer perception of a product (i.e.,

develop a positive brand image). There are multiple inputs to brand image: (a) perceived

quality, (b) brand attitudes, (c) perceived value, (d) feeling, (e) brand associations, and (f)

attitude toward the ad. (Herr, M.,1994).There is a strong positive relationship was found

between brand recognition and probability of brand survival. In addition, a positive

correlation between brand awareness and brand survival were found (Esch, F.-R.,

Langner, T., Schmitt, B.H. and Geus, P.,(2006)). Brand awareness allows a brand to more

easily become part of the set of options that customers will consider when making

purchase decisions and the willingness of a customer to pay premium prices for the

product. This significantly increases the likelihood that the brand can be chosen for

purchase. Based on such points, following hypothesis is established:

H4: The better the brand image built, the more likely that the brand will survive in the

market over the years.

2.5 Firm survival

If a customer's perception of a brand's quality is positive, then there is a

greater likelihood that the brand will be chosen into consideration set. Hence, it leads to

greater the likelihood that a brand will be chosen for purchase and consequently the

greater the likelihood that the brand will be a business success and that it will survive in

the market. Additionally, perceptions of product quality have been found to positively

influence many important marketing variables including sales, market share and

8

profitability (Jacobson, R. & Aaker, D.A., 1987).

It was suggested that good brand image should positively impact on

customers' loyalty, which at long run should also influence customer perceived quality,

enable satisfaction and should also influence to a greater degree the extent to which

customers are willing to express commitment to such offering for sustainable profit

(Ogba, I.E. & Tan, Z.Z. (2009)). The strong brand values can protect a product from

intensifying price competition and can serve as a bulwark against substitute products

(Wright, R. (2004)). Therefore, if the company builds and consolidate the brands it own,

it will sustain as long as the brand image is positive.

To summarize, a successful brand delivers sustainable competitive advantage

and invariably results in superior profitability and market performance that, in turn,

ensure the survival of a firm in an industry (Leslie de Chernatony and Malcolm

DcDonald, 2003). Therefore, the following hypothesis is proposed:

H5: The better the brand image, the more likely that the firm that owns the brand will

survive.

9

The following diagram depicts the various hypotheses:

Trade Show

ISO

Magazine

Brand Image

Firm Survival

Brand Survival

+ H1

+

H2

+ H3

H4

H5

+

+

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CHAPTER III METHODOLOGY

3.1 Setting, Sample, and Data

This research was conducted in two Hong Kong industries which set up their

factories in mainland China, i.e., the electronic industry and the electrical & optical

products industry in Hong Kong. Specifically, we collected data about 136 local brand

names from the electronic industry and 64 local brand names from the electrical & optical

products industry, which were extracted from the Federation of Hong Kong Industries

Members’ Directory 2001 and 2009 (abbreviated as ―Members’ Directory‖ in the

following part) respectively, published by the Federation of Hong Kong Industries. All

these brand names exist in the year 2001, we collected information relevant to these

brand names in the period 2001-2009 so that we can test our hypotheses proposed in this

study. Meanwhile, the Members’ Directory also provides a relevant and comprehensive

listing of company information such as status, nature of ownership, annual turnover, ISO

certificates etc.

To avoid common method biases, we collected data from multiple sources,

including government statistics, industry’s yearbooks and expert interviews. The expert

interviews were conducted as they possess specialized knowledge and information about

the designated industry. Our target populations of this research were experts in those

corresponding industries. 6 questionnaires were sent while 5 were received. There are 3

respondents from electrical and optical products industry while 2 from of electronic

industry. The respond rate of the interview is 83%.

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3.2 Measurement

Independent Variables

The participation of trade show (trade show) was coded from a website run by

the government in Hong Kong (Hong Kong Trade Development Council,

http://www.hktdc.com/). This website records the participation of the local firms in the

trade shows organized by Hong Kong Trade Development Council. We counted the

number of times a given firm in our sample participated in the trade shows during the

period 2001-2009.

The obtainment of ISO certificate (ISO) was measured by number of ISO

certificate obtained by a given firm in our sample. To test the possible long-term effect of

ISO certificates, we coded the number of ISO obtained by a given firm in both the year

2001 and the year 2009, which were also obtained from Members’ Directory. Then we

tested their effects separately. In this way, we could compare the effects of ISO over

time. In other words, we could observe whether it made any difference to its brand

images if a firm obtained the ISO certificates in 2001 or in 2009.

The placement of magazine advertisements (Adverts) was also coded from the

website run by the Hong Kong Trade Development Council. This website records the

details of company advertisements in the publishment material. The number of times a

given firm in our sample placed advertisements in the HKTDC Magazine was counted

during the period 2001-2009.

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Dependent Variables

The image of a given brand name (image) was tested through a series of

expert interviews. We asked five experts in each of the two industries to assess the

image of each brand name. Questionnaires are on a five-point likert scale which regards 5

as the very good whereas 1 as very poor. In order to prevent from biases, interviewees

will not be asked to rank the brand name(s) of his/her own company. After that, the

scores of each brand name were aggregated so that an average score of each of the brand

names was generated.

The survival of a given brand name (brand survival) was measured by data

from the Members’ Directory 2001 and 2009, which is published by the Federation of

Hong Kong Industries annually. The directory shows data of brand name produced by

local firms in the two industries. We coded data about brand names 2001 and compared

with that in 2009.If a brand name disappeared or changed, we coded as one, otherwise we

coded as zero.

The survival of a given firm that produced a given brand name (firm survival)

was coded from the Hong Kong Trade Development Council website. This website

reports all the information about the survival of firms registered in Hong Kong. If a

given firm in our sample was closed down in a given year, we coded as one, otherwise we

coded as zero.

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Control Variables

We controlled for the effects of several factors, which were all extracted from

the Members’ Directory 2001 and 2009 respectively. Firstly, we controlled the effect of

firm age because the relationship between independent variables and brand image, and

also relationship between brand image and survival of both brand name and firm, may be

moderated by their age of operation. Secondly, firm size is regarded as another control

variable. Larger firms may have more recourses than smaller firm, which may moderate

both relationship between independent variables and brand image as well as brand image

towards the survival of firm and brand name. After that, the moderating effect of the

ownership of the firm, which means whether firm was registered as a limited company, is

also controlled when testing the two relationships mentioned above because of burden of

responsibility. Lastly, the moderating effect of industry, i.e., whether a given firm was

from the electronic or the electrical and optical products industry, should also be taken

into account.

3.3 Data Analysis Method

In data analysis, SPSS was applied. Hypotheses and samples were tested by

using hierarchical linear regression and logistic regression. The first half part of the study,

the relationships among the obtainment of ISO certificates, attendance of trade shows,

advertisement placement in HKDTC magazine and the image of brand names were tested

by hierarchical linear regression, whereas the second half part of this study, logistic

regression was used to test relationship among brand image and survival of both firm and

brand name.

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CHAPTER IV RESULTS

4.1 Descriptive statistics

Table 1 presents the descriptive statistics for our data. It suggests some

interesting correlations among control variables and independent variables, which support

our hypotheses. First of all, the analysis denotes that there is a positive relationship

between the obtainment of ISO certificates in 2001 and the acquirement of ISO

certificates in 2009 (p<0.05), which suggests that if firms acquired ISO certificates in

2001, they tend to obtain ISO certificates continuously in 2009. Then, we found that

participation in trade show also has significant relationship with the obtainment of ISO

certificates, both 2001 and 2009, as well as the placement of advertisements in HKTDC

magazines (p<0.05; p<0.01; p<0.05).

15

16

4.2 Hierarchical linear regression

To test the first three hypotheses proposed above, we adopted the approach of

hierarchical linear regression. The reason for selecting this approach is its power in testing

the relationship among dependent and independent variables and its efficiency in making

full use of the data information. First we entered firms’ image, which was measured by the

ratings from industry experts, as a dependent variable. Subsequently, the control

variables, i.e., firm size, age, sort of industry, and ownership of firms were entered (Model

1), which was followed by the measurement of major independent variables, i.e., the

acquirement of ISO certificates in both 2001 and 2009, number of times that participating

in trade shows and the placement of advertisements in HKTDC magazine (Model 2).

Table 2 is part of the analysis, which indicates an uncertain relationship

between ISO and brand image. In 2001, the effect of acquirement of ISO is significant and

positive on the brand image (S-beta = 0.133; p < 0.1), which supports hypothesis 2; yet the

effect of obtainment of ISO in 2009 is insignificant on the brand image(S-beta= -0.097;

p>0.1) that doesn’t support hypothesis 2. And it is noteworthy a significant and positive

effect of industry on the image of a given brand name was shown(S-beta=.297; p<0.01).

However, hypothesis 1 and 3 are not supported by the results.

17

18

4.3 Logistic regression analyses

We then tested the effects of brand image on the survival of firms and that of their

brand names, both of which were coded as dummy variables, which are also called as indicator

variables. Because of the data character of the dependent variables, we adopted the approach of

logistic regression analyses, which is useful to predict the presence or absence of a

characteristic or outcome based on the values of a set of predictor variables. In the first set of

the analysis, we entered firms’ survival as the dependent variable. Four control variables, i.e.,

type of industry, the firm size, firm age and the ownership of firms were subsequently entered

(Model 1). After that, the brand image was entered as the key independent variable (Model

2).

Table 3 shows the relevant results, which support the hypothesis predicting a

positive effect of brand image on the survival of firms (B= -1.228; p < 0.05), which means the

better brand image (higher average marks obtained), and the higher chance of survival of firms

in these two industries.

19

By the same approach of logistic regression, we also tested the effects of brand

image on the survival of brand names. We first entered the survival of a given brand name as

the dependent variable. Four control variables, i.e., kind of industry, firm size, firm age and

ownership of firms, were subsequently entered (Model 1). After that, the brand image was

entered as the key independent variable (Model 2). The below table (Table 4) illustrates the

logistic regression result.

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According to the table, the result does not support the hypothesis predicting a

positive effect of brand image on the survival of this brand name (B=.209; p>0.1). Data from

both electronic industry and the electrical & optical products industry, which set up their

factories in mainland China, do not display a significant relationship between brand image and

survival of brand name.

Surprisingly, the analysis reveals positive effect of industry on the survival of brand

name (B=1.091; p<0.05). The significant effect of industry seems to suggest that firms in

electronic industry have a higher survival rate than those in electrical & optical products

industry. This point will be further discussed in the next section. Meanwhile, the results also

denote a positive relationship between the ownership of the firm and the survival of brand

name (B=1.961; p<0.1), which means limited companies tend to terminate a brand name more

easily than companies with unlimited liabilities.

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4.4 Summary table

The data in Model 1 indicates that the effect of type of industry is positive and

significant (standardized beta = .283; p < 0.01), while the explanatory power of the equation is

significant (F = 4.152, p < 0.01). For Model 2, the data also illustrates that the effect of type of

industry is positive and significant (standardized beta = .297; p < 0.01), while the acquirement

of ISO certificates in 2001 has a significant and positive effect on brand building (standardized

beta = .133; p < 0.1). And the explanatory power of the equation is significant (F = 2.857; p <

0.01).

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CHAPTER V DISCUSSION

5.1 Discussion

The foregoing analyses highlight the below findings:

Firstly, we found two interesting findings in table 1. One is a positive correlation

between obtaining of ISO certificates in 2001 and the acquiring of ISO certificates in 2009. It

implies that if firms acquired ISO certificates in 2001, they tend to obtain ISO certificates

continuously in 2009, which may be explained in this way: Since obtaining ISO certificates

become prevailing among industries, ISO becomes a necessary element in doing business.

Moreover, consumers are used to purchase brands with more qualifications,. Hence, it would

be a kind of disadvantages if the firms stop acquiring the latest ISO certificates in the later

years. Another interesting finding is the significant relationship between the attendance in trade

show and obtainment of ISO certificates in both 2001 and 2009, as well as participation in

trade show and the placement of advertisements in HKTDC magazines. The explanation seems

to be the more advertisements placed in HKTDC magazines as well as more ISO certificates

obtained, the greater confidence that the firms can offer to their potential customers during the

trade shows. Though the two findings mentioned above support our hypotheses, they are not

conclusive enough. Therefore, a more in-depth study is needed.

Secondly, regarding hypothesis 1, the results reveal that the relationship between

23

attending trade shows and building brand image is not supported. It may be caused by the

following two rationales: small booth size thanks to the limited financial resources and lack of

high-quality staff, which lead to unclear introduction of a company and products. Both factors

reduce the functions perform by trade fairs, and result in failure of promoting brand name.

Thirdly, for hypothesis 2, the relationship between obtainment of ISO certificates in

2001 and brand image in the two industries, i.e. electronic industry and electrical & optical

products industry, is supported. Yet, the results fail to prove that there is a relationship between

acquirement of ISO certificates in 2009 and brand building. The differences between these two

results may be explained by change in consumers’ attitude towards acquirement of ISO

certificates during 2001 and 2009. In 2001, obtaining ISO certificates is a kind of business

honors as fewer firms acquired successfully and it was relatively new for consumers. Therefore,

it was easier for consumers to create a positive perception towards brands with ISO certificates

in 2001. By contrast, in year 2009, obtaining ISO certificates has prevailed among various

industries. This makes consumers become less sensitive towards ISOs and eventually affects

the effect of ISO certificates on brand image.

Fourthly, in regard to the hypothesis 3 (The more a given firm advertising in

magazine, the better the image of its brand), our results also do not support it. It may because

24

although advertising is essential to building consumer perceptions of brands values, advertising

works in the long term (one to three years) and relatively little effects on image on the short

term(Geoffery Randall, 2001).

Fifthly, we revealed that industry induces significant and positive effect on the

image of a given brand name. That means brands in electronic industry have better image than

those in electrical & optical products industry. There are two possibilities to explain this

phenomenon: First, there are more well-established and better known brands in electronic

industry compared with electrical & optical products industry; second, the experts in electronic

industry tend to give higher marks to every brand of their industry.

Sixthly, the data shows that brand image influences the survival of firms which was

also proposed by hypothesis 4. The rationales behind maybe just like what we stated in

literature review. Positive customer's perception towards the quality of a given brand leads to a

greater likelihood that the brand will be chosen for purchase. As sales increase, company earns

higher returns which ensure its longevity consequently.

Seventhly, hypothesis 5 was not supported by the above data. In other word, brand

image does not seem to have any significant effects on the survival of the brand name. It can be

25

explained by two factors: Firstly, a good brand may also disappear if the firm uses a new brand

name with more advanced technology to develop a new product line. Since improved

technology can produce better quality product with lower cost, when the better products are

launched to the market, there is a great chance for the new product line to steal sales from the

old one which has a better brand image. As the result, the failure for the old products to derive

sufficient income stream for the company would lead to shorter longevity because of the

managerial decision. Secondly, in recent decades, manufacturers continue to fill the shelves

with brands that are essentially the same as all other competitors. However, people in 21

century are skeptical of over-claiming by brand, fed up with paying a premium for non-existent

differences and looking for real value for money. In crowded, competitive, mature markets

consumers are sophisticated and knowledgeable, a brand that offers them reassurance and

familiarities but without given an acceptable value for money, cannot continue to attract

(Geoffery Randall, 2001,P32). Therefore, even a good brand may become extinct.

Eighthly, when investigating the relationship between brand image and survival of

brand, another interesting result was found. Table 4 suggests that there is a relationship

between the type of industry and survival rate of brand. It reveals that brands in electronic

industry have a higher chance to survive than those in electrical & optical products industry. It

may be explained by the longer history and better performance of brands in electronic industry

26

than those in electrical & optical products industry.

Ninthly, we found that ownership of the firm also exerts impact on the survival of

brand name. The brands from limited companies have lower chance of survival. The critical

reason for this seems to be that the owners of limited companies bear limited responsibilities. It

means that they face less adverse consequences if they give up a brand, comparing with owners

of unlimited liability companies. Accordingly, if the image of a certain brand is ruined, owners

of that limited company tend to abandon it and to develop a new one; instead of try their best to

rebuild that brand.

In short, in order to have a more in-depth understanding of this area, further studies

should be conducted. First, though the data shows that there are high correlation of both the

relationship between obtainment of ISO certificates in 2001 and 2009, and the relationship

among participation in trade show, acquirement of ISO in2001 and 2009 as well as placement

of advertisements in HKTDC magazine, if we want to figure out a clearer relationship among

these independent variables, regression analysis should be conducted again and more control

variables should be included. Second, it is also worthy to conduct further investigation of the

correlation between industry and survival of brand. Lastly, we hope that the results provided in

this research paper will inspire others to carry out further verification.

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5.2 Limitations and suggestions

Although this report provides insight into the effective ways of establishing

brand image which helps to sustain the business and its brands, three limitations should be

noted.

To start with, the sample size of this study is relatively small and the

non-response error is high. Since our questionnaire design is not very attractive, and there

is a lack of incentives to encourage the experts to complete the questionnaire, we only

received 5 replies out of 9. We believed that personal reasons such as respondents’

busyness is another factor that contributing to the high non-response rate. As a result, some

of our results may not be that significant. In addition, bias may exist when the experts

filling our questionnaires. They are asked to rank the brand images based on their

perception, therefore, the results tend to be subjective. Consequently, it reduces the

accuracy of this study. Lastly, since we adopted 5-point Likert Scale in our questionnaire,

it may lead to central tendencies when the experts rating the brands. Central tendencies

refer to the tendency of data gathered from a process to cluster toward a middle value,

somewhere between the high and low values of measurement. As a result, the precision of

the questionnaire results is undermined.

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5.3 Implication

The findings from this study may be useful for Hong Kong managers, especially

those in these two industries. The acquirement of ISO certificates in 2001 is proved to have a

significant and positive impact on brand building, but as mentioned above, the power of ISO

certificates is diminishing in the later years. Therefore, managers should not solely focus on

acquiring ISO certificates, but should also figure out alternative ways to build up or consolidate

the brand image.

Moreover, in order to achieve better brand image through participating in trade

shows, managers should pay attention to the booth size and staff performance. Practically,

managers can try to enlarge the size of their booth in trade fairs and/or improve the quality of

staffs that are responsible for introducing company and products in trade fairs.

Furthermore, though literatures concluded that magazine advertising exerts the

largest number of consumers impacted per media dollar spent, it may not be applicable to these

two industries. In order to keep pace with other competitors, it is proposed that managers

should spend fewer resources on magazine advertising but focus on the previous two methods

to sharpen brand names.

29

CHAPTER VI CONCLUSION

In summary, this research study examined the relationship between brand building

and business performance of HK small and medium-sized firms which set up factories in

mainland China. With this research, it provided more information to have further

understanding about the electronic industry and the electrical & optical products industry. It

contributed more than the general knowledge academically.

The results supported the negative correlation among trade show attendance and

magazine advertising to brand image, and the brand image to brand survival. On the contrary,

obtaining ISO certificates was shown to have uncertain effect on the brand image, while brand

image produces a positive impact on the survival of firms.

Gathering all information, it is suggested that managers should still acquire ISO

certificates continuously to polish the brand image with the ultimate purpose of sustaining the

firm.

30

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Appendix 1: Questionnaires

Electrical and Optical products industry – Expert 1

Electrical and Optical products industry – Expert 2

Electrical and Optical products industry – Expert 3

Electronic products industry – Expert 1

Electronic products industry – Expert 2

Appendix 2: Electrical and Optical products industry

Appendix 3: Electronic products industry