Marketing effect in Ghana, Degree thesis for Marketing. University of Cape Coast
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kwesi-assafuah25 September 2017

Marketing effect in Ghana, Degree thesis for Marketing. University of Cape Coast

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Marketing thesis in the 21st Century. effect and consequences
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CHAPTER ONE

INTRODUCTION

1. Background to Study

In today’s competitive market, brand building is crucial to the survival and dominance in any

industry. Kailkati’s study has shown an interesting number that from the first half of 2000 to

2001, Rebranding around the world increased by 7 percent. The United States of America led the

world with a total of 1,761, followed by the United Kingdom which was the first across the

Atlantic. Next were Canada, Germany, France and Japan (Kailkati 2003). As the activity carries

forward, rebranding has become one of the most discussed topics in Africa and Asia. From

Muzellec’s (2003) study, it shows that companies that undergo rebranding represent over 40

different industries. The categories with most rebranded companies are the information

technology and telecommunications industries. This evidence shows a market trend of

technology that it is changing rapidly. Many telecommunications companies will change their

strategies and re-position to par up with technology movement. Branding and brand-based

differentiation are powerful means for creating and sustaining competitive advantage. Prior

research has examined differences in how consumers perceive and evaluate brands. More

recently, researchers have noted that consumers differ not only in how they perceive brands but

also in how they relate to brands (Fournier 1998; Muniz and O’Guinn 2001).

The business environment in Ghana is growing keener by the passage of time. There are some

businesses that have to rebrand their products because the ‘almighty’ competition in the system

can cause it to fade within a twinkle of an eye.The brand history tells us how the people have

used branding as a mark of identification. In the earlier times the brand mark was used to

differentiate the goods of one producer to others.Literally, the word ‘rebrand’ is a coinage which

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is made up of two terms: re and brand (Muzellec & Lambkin, 2006). Re is the prefix which

means ‘again’ or ‘anew’, while the word ‘brand’ derived from the Old Norse word ‘brandr’,

which means “to burn”; as brands are still used as a means to mark livestock for easier

identification and ownership (Interbrand Group, 1992). By adding‘re’ to ‘brand’, the word

‘rebrand’ implies the action of ‘branding again’, or ‘brand renewal, refreshment, makeover,

reinvention, renaming and reposition’ (Merrilees and Miller, 2008). Most customers prefer to buy

a branded product because they know this product has been developed by maintaining the

protocols, like from the health and environmental prospective, quality etc. Most successful

companies prefer customer preferences and obtain customers input through marketing research.

Some companies introduce a latest technology in new product according to customers demand

and requirements e.g. introduction of camera in cell phone, cell phone holder, charger in current

edition of branded cars etc. They also use latest machinery for improving the product quality,

shape, design, use of computer graphics in the labeling of products etc.

2. Problem Statement

When talking about rebranding, “from a CEO’s perspective, there are just two kinds of

rebranding” “have to and want to.” (Spaeth, 2005, p. 18). But whether, it seems to be a have to or

a want to, a necessity or luxury, real or cosmetic, rebranding has been an increasing phenomenon

worldwide (Kaikati and Kaikati, 2003). The rebranding topic is important not just because many

companies are doing it but perhaps also because of the tremendous cost involved. The cost of

rebranding includes hiring a branding consulting firm to work on the rebranding strategy and

implementation costs that follow. The changes involved in rebranding a firm from its buildings

to its business cards present a picture of the tremendous amount of work to be done and all the

possible cost involved. This is not to mention the possible effects on the different stakeholders,

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the most important of which are the customers, shareholders and of course the employees.

Rebranding has been estimated to cost from thousands to millions of dollars especially for name

changes. For instance, the cost of renaming to Exxon cost Esso some $200 million (McQuade

1984). To perhaps get an idea of the size of work needed and to forecast the possible costs

involved, we can take a look at the new AT&T logo. The changes for the new AT&T logo

include: “nearly 50,000 company vehicles, more than 6,000 company buildings, roughly 40,000

uniforms and hardhats worn by company service representatives, more than 30 million monthly

customer bills, millions of business cards, customer information pamphlets, and phone and

online directories and company Web sites. This does not include any ads and commercials

announcing the change. KFC, in perhaps a very unique way of announcing their logo change,

had the new logo painted on an 87,500 square-foot area in the Nevada Desert that can be viewed

literally from space. The importance of rebranding is also evident by the creation of a forum

called rebrand.com which holds a worldwide competition for the best rebrands every year.

Companies are recognized through their brand and it is the most valuable asset for survival. The

brand specialty helps the customer in decision making to purchase a right product with less risk

and according to set expectations. Successful branding should be the representative of various

elements together including design, packaging, quality, style etc. Customers want to see all the

elements in brand product according to their needs. A successful brand is timeless.

In today’s business environment, companies must work harder than ever before to achieve some

degree of differentiation in their products. Many companies have sought to achieve this

differentiation by rebranding their products by either changing the name, logo and even shapeof

the product. The market is flooded with new and old brands and intensity of brand war is

increasing day by day. The popularity of a brand is a tool for survival and success of company in

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the market. In this respect companies offer different packages to customers with the use of

different resource weapons in this competition war for raising awareness among the customers

about the branded product.

Nevertheless, not all brands perform well and branding campaigns mean more than just giving a

brand name to a product or services (Kapferer, 1992). For survival, these ‘no longerperforming’

brands have to undergo painful process of rebranding which is both challenging and risky

(Clavin, 1999; Dunham, 2002), and in many cases as a necessary evil for survival, and is prompt

for mistakes.

3. Objectives of the study

The main objective of the study is to investigate the effect of product rebranding on consumer

behavior in Ghana (Accra), a case study of Malta Guinness. Specifically, the study will examine

the following:

■ The reason behind Malta Guinness Product Rebranding.

■ To evaluate the theories behind Product Rebranding and how those theories influenced

Malta Guinness.

■ The relationship between Product Rebranding, Consumer Behaviour and Sales.

■ The Impact of Product Rebranding on Malta Guinness.

4. Research Questions

The study examined the following questions:

■ What is the reason behind Malta Guinness Product Rebranding?

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■ What are the theories behind Product Rebranding and how those theories influenced

Malta Guinness?

■ What is the relationship between Product Rebranding, Consumer Behaviour and Sales?

■ What is the impact of Product Rebranding on Malta Guinness?

5. Significance of Study

In spite of the great importance of rebranding, it has received very little attention in the academic

research and most research done is covered in practitioner journals and the business press

(Muzellec, Doogan, and Lambkin 2003). Research on rebranding seems to have concentrated

mostly on name changes (Howe, 1982; Horsky and Swyngedouw, 1987; Karbhari, Sori, and

Mohamad, 2004; Bosch and Hirschey, 1989; Lee, 2001; Cooper, Dimitrov, and Rau, 2001).The

consumer side of rebranding has, however, received less attention. On product change

specifically, several studies showing the importance of getting customers’ feedback has

sometimes been overlooked (Kohli, et al., 2002; Hem & Iversen, 2004). In this research, We

propose to study consumers’behaviour towards a product change. Previous research has not

examined consumers’ thoughts and reactions to product rebranding.The outcome of this study

will also be of immense benefit to organizations that need and are yet to undertake a rebranding

of their product.

6. Scope of the Study

Wide-ranging survey questionnaires were designed to capture the facts and figures, as well as

qualitative responses about product rebranding on consumer behaviour. The questionnaires were

sent to customers of Malta Guinness to sample their views. The total number of respondents

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chosen was 50. Apart from the primary data that were gathered from the field studies, secondary

data were also used in analyzing and comparing the primary data to arrive at a well-founded

position.

7. Limitation of the study

Even though a study of many more companies that have undergone product rebranding would

have been much appropriate, there were constraints of time and financial resources which made

it pragmatically impossible. The study didnot cover the whole of Ghana but just the city of

Accra. Also some of the respondents felt reluctant to respond to the questions which were

prepared for the survey. Notwithstanding all these limitations, the research was conducted taking

advantage of the limited resources available. The limitations were not setbacks to the overall

success of the study.

8. Chapter Organization

The present study is organized into five chapters. Chapter one presents the background to the

study, problem statement, objectives of the study, research questions, scope of the study and

chapter organization. Chapter two presents the literature review where relevant theories were

studied. Chapter three focuses on the research methodology and discusses the data analysis

method. Chapter four deals with data analysis and interpretation of results.Chapter five presents

summary and conclusion

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CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

This chapter brings to light key concepts that are pertinent to the study of the effect of product

rebranding on consumer behaviour. We will also be taking a look at some theories and principles

that are relevant to the study.

2.2 Rebranding

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Rebranding has been sometimes referred to as the repositioning, revitalizing, or rejuvenating of

a brand and in some cases as even having a brand being totally “reborn. So in general one can

say, rebranding represents updating or changing the image of a brand in the minds of the

different stakeholders involved. Rebranding is the creation of a new look and feel for an

established product in order to differentiate the product from its competitors. Rebranding efforts

may include a name change, new logo, new product packaging and updated marketing materials.

The goal of rebranding is to influence a customer's perception about a product or service by

revitalizing the brand and making it seem more modern and relevant to the customer's needs.

Rebranding helps in developing a new, differentiated identity in the minds of consumers,

investors, and competitors. Such changes typically aim to reposition the company.

Muzellec et al. (2003) stated that rebranding in an organization can take place on the corporate

level, the business unit level, and the product level, the most critical of which is the corporate

level which represents a company’s identity as a whole. Daly and Moloney (2004) presented a

rebranding field made up of three main categories: minor changes, intermediate changes, and

complete change. Minor changes focus on aesthetics and “varies from a simple face lift, to

restyling, to revitalizing the brand appearance which may be outdated and be in need of change.”

Intermediate changes focus on repositioning and uses “marketing tactics especially

communication and customer service techniques to favorably reposition an existing brand name,

thus giving it a new image”. Finally a complete change involves getting a new name and brand

and all the necessary marketing communications involved to make all stakeholders aware of this

change (Stuart and Muzellec, 2004). Muzellec et al. defined rebranding as “the practice of

building anew a name representative of a differentiated position in the mindset of stakeholders

and a distinctive identity from competitors”. A product change may enhance market recognition

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and position and generate an increase in the stock market value of renamed firm (Horsky and

Swyngedouw, 1987). Daly and Moloney explained that rebranding consists of changing some or

all of the tangible (the physical expression of the brand) and intangible (value, image, and

feelings) elements of a brand. Hankinson and Lomax agreed with the explanation that rebranding

involves change not only the visual identity but it also leads to real change within the

organization. The confusion in the rebranding definition occurs because rebranding is a

continuing action and involves steps that can be referred to as the process of changing a brand

identity and image. Rebranding is costly and time-consuming and as the number of corporate

rebranding practice increases, the failure rate is high compared to the successes. Kapferer also

agreed that rebranding can cause danger such as loss of choices, loyal customers, and market

share. However, this strategy is still practiced widely by firms to modify the brand.

Rebranding sometimes occurs when a business or organization decides to change a significant

element of the brand. Such a change could be glaringly obvious like a new brand name or logo

or product or it might be more subtle such as a slight shift in messaging to better communicate a

more relevant brand promise. Rebranding is extremely important. Not only can it be expensive to

execute a complete rebrand, but it can also be risky. Sometimes employees and consumers won’t

accept a rebranding, and that’s when disaster strikes. The need for rebranding must first be

determined and should be based on the premise that something has changed in the business mix

that dictates a need for evolving the brand to keep up with the times and keep pace with

changing consumer needs (e.g. services, accessibility, convenience, choice, fashion and

technology). For a new product to be launched, however, the old product has to be abandoned, an

action likely to nullify years of branding effort in terms of creating awareness. Companies will

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occasionally discover that they may have to rebrand their products because customers change

preferences and new competitors enter the market.

2.3. Drivers of Rebranding

As the culture, values and images of a company evolve and change over time, rebranding is a

way of communicating these changes. A key feature of rebranding is that it communicates to

stakeholders that something about the organization has changed, such as a change in strategy,

structure or redesign. (Muzellec et al. 2003, 33-34; Stuart & Muzellec 2004, 473.) Stuart and

Muzellec (2004, 472-473) further point out that rebranding can help transform company image,

where the idea is to create a new image that is more positive in the marketplace. Shetty (2011,

53) adds that companies’ need for continuous brand innovation and reinvention that stem from

rapid change and competitive pressure provide a stimulus for rebranding. Muzellec et al. (2003,

33-34) propose that the rationale for rebranding can be summarized in terms of four categories.

The main drivers of rebranding are change in ownership structure, change in competitive

position, change in corporate strategy and change in the external environment. Furthermore, in a

study which researched 166 rebranded companies, Muzellec and Lambkin (2005) identified that

a decision to rebrand is most often caused by mergers and acquisitions (33.1%), spin-offs (19.9%

) and brand image related issues (17.5%). More interesting and relevant to this thesis, is the

industry spread revealed by the study, where the IT-telecommunications industry ranks highest

for rebranding (22.3%). (Muzellec & Lambkin 2005, 808-810.) Kaikati and Kaikati (2004,

46-49), on the other hand, suggest that the major motivations for rebranding can be classified in

terms of proactive and reactive motivations. Proactive motivations are company-initiated

motivations for rebranding. Reactive motivations, on the other hand, represent a company’s

response and adaptation to changes caused by the external environment. Reactive motivations

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can come about as a result of changes in, e.g. ownership structure or competitive position,

similarly identified by Muzellec et al. (2003).

Within the context of drivers of rebranding, the impetus for corporate rebranding, creating brand

identity and brand repositioning are seen as reactive responses to external factors. With reactive

change to the external environment and the idea of adapting to change, there is an intensifying

need for companies to face challenges brought on by trends in globalization. For international

companies with operations, products and services spanning different countries, brand strategy

favors the idea of a united identity which conveys the appeal of size and stability, but at the same

time the sense of a local presence to consumers. The implication is therefore that companies are

seeking to align their brand architecture into a ‘branded house’. Regardless of the reason leading

to rebranding, the goals of rebranding are always the same: to communicate a change to internal

stakeholders, thus reflecting a new identity and communicating change to external stakeholders,

thus creating a new brand image.

2.3.1 Proactive Rebranding

Sometimes a company sees reason to rebrand to seize an opportunity or thwart potential threats

in the future. For example, proactive rebranding might happen in the following situations:

Predicted Growth: When a company is preparing for expected growth, particularly international

growth, it might rebrand products and services into a consolidated brand. This is often done for

consistency and to save money over time. This type of rebranding is also done when a company

simply needs to create a greater sense of brand unity across its business.

New Line of Business or Market: When a company enters into a new line of business or market

that is not cohesive to the existing brand identity, a rebranding might be in order. Remember

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when Apple was known as Apple Computer? As the company evolved into new lines of business

beyond computers, the original brand name was too restrictive. With a simple cut to the

subsidiary word ‘computer’ in the brand name in 2002 (which most people didn’t use anymore),

the brand was ready for new growth and opportunities.

New Audience: When a company wants to appeal to a new audience, a rebranding might be

necessary. Keep in mind, the rebranding might not require an actual name or logo change.

Relevance: When a company realizes its brand is losing relevance in consumers’ minds, it might

be time to rebrand. In situations when a brand has been firmly established yet it is simply

outdated or needs to be refreshed due to the addition of new products or services, modification is

required, rather than a full blown rebrand. In these cases, marketers do not want to eliminate the

brand value that has been developed over the years, but merely make subtle changes to update it

or make it representative of an expanded offering.

2.3.2 Reactive Rebranding

Other times, companies rebrand in reaction to an event that is so significant that the existing

brand must be changed. For example, reactive rebranding might happen in situations like the

ones listed below:

Merger or Acquisition: When companies merge or acquire other companies (and even when

they break apart), rebranding is often required. When AT&T broke up into three separate

companies in the late 1990s, Lucent Technologies was born. These types of rebranding are very

common and often go through multiple iterations.

Legal Issues: There are a number of different legal issues that could cause a company to

rebrand. Trademarks are often at the root of these rebranding examples. That’s why it’s so

important to conduct an exhaustive trademark search and obtain the trademark rights to your

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brand name before you launch it. One kind of situation where a business might consider

rebranding partially or totally is when bad public relations has caused a negative image of the

company in the general consumer market, or in their target audience. Another similar situation is

when a product loses its appeal to consumers, where rebranding a product (sometimes as part of

launching a new product line) can help. In these damage control situations, rebranding often goes

along with other public relations efforts. When organizations have failed to establish a brand, or

have been through any kind of scandal, total rebranding may also be in order. In these cases, the

intent is to erase any previous brand identity and replace it with completely new imagery and

messaging.

Competitive Influences: Sometimes a company’s competitors’ activities can be the catalyst to

rebranding. When a competitor renders your brand useless or outdated, rebranding could help

you regain a foothold in your market and give you the facelift you need to effectively bounce

back.

Reflecting New Management: There are also many cases, particularly with small businesses,

where rebranding such as a name change is simply a way to reflect new management. When

there is a changing of the guard, there will often be new staff, new policies, and new way of

doing things in general. Rebranding help accommodate these differences.

2.4. Rebranding processes

An approach to a rebranding process can be understood by looking at the corporate framework

within the framework of rebranding, and how its strategy can be developed within the structure

of the company. An overview of such a framework is provided by Daly and Moloney (2004) in

their corporate rebranding framework. The framework consists of three main stages. In the

analysis stage, a new brand decision is taken based on situation analysis. In the planning stage,

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the rebranding strategy is determined in a rebranding marketing plan. The final stage, evaluation,

takes place as the whole process is going on and also includes a final evaluation once the whole

process is complete. According to Muzellec et al. (2003, 34-35), the rebranding process

comprises of these seven phases; triggering, analyzing and decision making, planning, preparing,

implementing, evaluating and continuing. It should be noticed that the phases might be

intertwined and/or overlapping, and do not necessarily follow each other in this order.

Furthermore, the phases are seen as consisting of several sub-processes, which include several

phases and can be, again, intertwined and/or overlapping in a sequence of time. These are

discussed below.

Triggering: It is the first phase of the process. It consists of recognizing the driving forces

behind Rebranding, namely, decisions, events or processes causing a change, including change in

ownership structure, corporate strategy, competitive position and external environment. Change

in ownership structure may happen, not only from private to public ownership (Muzellec and

Lambkin 2006) but also from public to private ownership or better still from private to private.

The decision to rebrand is often made by a handful of people, generally by the management

(Griffin 2002). A brand team is normally formulated which consists of top managers.

Planning: It is seen here as a wide phase of a corporate brand plan creation. It includes e.g. an

envisioned end stage, goals and vision for a new brand formulated on the basis of corporate

values. At this stage stakeholders, like customers and employees, might be important sources e.g.

for pre-testing or even developing a logo or a new name. This phase includes several decisions

and consists of the several sub-processes. These sub-processes are; re-positioning, re-naming, re-

structuring and re-designing (Muzellec et al. 2003; Kaikati 2003).

Re-positioning- Repositioning is required when there is a decision to create a new position in the

minds of customers and other stakeholders.

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Re-naming- Renaming is considered in order to send a strong signal to all stakeholders that the

company is changing its strategy, refocusing its activity or changing ownership.

Re-designing- This stage concerns brand aesthetics and tangible elements, such as the logo,

offices, advertisements and other visible elements of the company’s desired position.

Re-launching- Publicizing the new brand is the final stage and determines how the public at

large (employees, customers, investors, and journalists) may regard the new name.

Preparing: This stage consists of preparing the plans and pre-testing for launching (the next

phase of the process). For example, preparing includes re-designing how the corporate aesthetics

(Daly and Moloney, 2003), including the corporate visual identity system (CVIS) (e.g. Baker and

Balmer, 1997; Van den Bosch et al., 2005; 2006), will be changed. Key elements of a CVIS are

the corporate name, logo, color palette, font type, and a corporate slogan and tagline (see, e.g.

Van den Bosch et al., 2005). Often an advertising agency is utilized; they help especially with

communications, advertising, media buying and/or with new visual identity development

(Lomax and Mador, 2006).

Launching: This is about communicating the new brand first to internal stakeholders and after

that to external stakeholders (Gotsi & Andriopoulos, 2007). Internally, the brand can be

introduced through internal brochures, newspapers, annual meetings, workshops, intranet (Daly

and Moloney 2003), team meetings or training/education. To external stakeholders the new

brand can be communicated through press releases, advertising brochures and in routine

communications, including for example business cards, office stationary, emails and personal

contacts. In addition, a new CVIS can be applied on stationery, printed matter, websites,

vehicles, buildings, interiors, and corporate clothing (Van den Bosch et al., 2006).

Evaluating: This includes measuring the success or failure of the process. Measuring is difficult,

and therefore it is suggested that rebranding should be evaluated with regards to its initial goals

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(Stuart and Muzellec, 2004). Kaikati (2003) suggests monitoring and tracking reactions

periodically. At its best, evaluation covers all the phases of the process. The goals reached, e.g.

awareness among stakeholders, customer surveys and corporate image surveys are also ways to

evaluate the success of the process. In addition, profit and attractiveness as an employer can be

considered as well as an evaluation.

Continuing: This is the last phase of the process. For customers, it includes the quality of the

corporate operations, in this case the quality of the services and fulfilling the brand promise. For

the personnel, continuous orientation and education need to be offered. For the management and

personnel, it includes the continuous consideration of the corporate brand strategy in every

action. And, finally, it includes a visible view of the service environment.

2.5. Consumer Behaviour

The Consumer behaviour study involves how an individual or groups select, purchase, use or

dispose of products, services ideas, or experience to satisfy their needs and desires. The process

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

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

is much more than buying things, it also embraces the study about how having (or not having)

things affect our lives, and how our possessions influence the way we feel about ourselves and

about each other. It attempts to understand the decision-making processes of buyers, both

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

demographics and behavioral variables in an attempt to understand people's wants. It also tries to

assess influences on the consumer from groups such as family, friends, reference groups, and

society in general. Customer behaviour study is based on consumer buying behaviour, with the

customer playing the three distinct roles of user, payer and buyer. Research has shown that

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consumer behaviour is difficult to predict, even for experts in the field. The actions a person

takes in purchasing and using products and services, including the mental and social processes

that precede and follow these actions.

There are different processes involved in the consumer behavior. Initially the consumer tries to

find what commodities he would like to consume, then he selects only those commodities that

promise greater utility. After selecting the commodities, the consumer makes an estimate of the

available money which he can spend. Lastly, the consumer analyzes the prevailing prices of

commodities and takes the decision about the commodities he should consume. Meanwhile,

there are various other factors influencing the purchases of consumer such as social, cultural,

personal and psychological. Consumer behaviour is related to the physical action of a consumer,

which can be measured directly. Consumer behavior mainly sheds light on how consumers

decides to spend their various resources like time, money etc. on various products so as to meet

their needs and requirement. Consumer behavior encompasses study of what, when, why and

where the consumers will buy their products. It also focuses on how often the consumers use the

products. Furthermore, it also sheds light on how the consumers evaluate the products after the

purchase and the effect of evaluations on their future purchases.

2.6. Consumer Decision Making

The consumer decision making process defines different steps that a consumer goes throughto

purchase a product. If a customer wants to make a purchase he or she takes a sequence ofsteps in

order to complete the purchase. These steps are discussed below.

Need Recognition: Marketers often try to stimulate consumers into realizing they have a need

for a product. It is no mere coincidence that beverage makers and energy drinks locate their

machines in gymnasiums so you see them after a long, tiring workout. Movie previews are

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another example. Many times, people have no interest in a movie until they see it being

previewed. Afterward, there is a strong urge to want to see it. The difference between a person's

ideal and actual situations is big enough to trigger a decision.

Search for Information: Internet shopping sites such as Amazon.com have become a common

source of information about products. Epinions.com is an example of consumer-generated

review site. The site offers product ratings, buying tips, and price information. Amazon.com also

offers product reviews written by consumers. People prefer “independent” sources such as this

when they are looking for product information. However, they also often consult non-neutral

sources of information, such advertisements, brochures, company Web sites, and sales personnel.

The information search stage clarifies the options open to the consumer and may involve Internal

and External search. Internal searching involves scanning one’s memory to recall previous

experiences with products or brands which is often sufficient for frequently purchased products.

However, when past experience or knowledge is insufficient, the risk of making a wrong

purchase decision is high. On the other hand, external search comprises of Personal sources, such

as friends and family, public sources, including various product-rating organizations such as

consumer reports, marketer-dominated sources, such as advertising, company websites, and sales

personnel.

Product Evaluation: Good sales personnel and marketing professionals know that providing

you with too many choices can be so overwhelming, you might not buy anything at all.

Consequently, you develop what’s called evaluative criteria to help you narrow down your

choices. Evaluative criteria are certain characteristics that are important to you such as the price

of the product, the size, the number of compartments, and colour. Some of these characteristics

are more important than others. For example, the size of the product and the price might be more

important to you than the colour—unless, say, the colour is hot pink and you hate pink.

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Marketing professionals want to convince you that the evaluative criteria you are considering

reflect the strengths of their products. For example, you might not have thought about the weight

or durability of a product you want to buy. However, the manufacturer might remind you

through magazine ads, packaging information, and its Web site that you should pay attention to

these features—features that happen to be key selling points of his product. The information

search clarifies the problem for the consumer by suggesting criteria to use for the purchase,

yielding brand names that might meet the criteria and developing consumer value perception. A

consumer's evaluative criteria represent both the objective attributes of a brand and the

subjective factors (such as prestige). These criteria establish the group of brands that a consumer

would consider acceptable from among all the brands in the product class of which he or she is

aware.

Product Choice and Purchase: This is the point at which you decide which product to

purchase. However, in addition, you are probably also making other decisions at this stage,

including where and how to purchase and on what terms. Maybe the product was cheaper at one

store than another, but the sales personnel there was rude. Or maybe you decide to order online

because you’re too busy to go to the mall. If you’re buying a high-definition television, you

might look for a store that will offer you credit or a warranty. There are three options which

depend on such considerations. First, from whom to buy which includes, terms of sale, past

experience buying from the seller and return policy or warranty. Second, when to buy, which can

be influenced by store atmosphere, time pressure, a sale and pleasantness of the shopping

experience. The last is to completely forego the purchasing of the product.

Post purchase, Use and Evaluation: At this point in the process you decide whether the product

you purchased was everything it was cracked up to be. Hopefully it was. If it was not, you’re

likely to suffer what’s called post purchase dissonance or what some call buyer’s remorse. You

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want to feel good about your purchase, but you don’t. You begin to wonder whether you should

have waited to get a better price, purchased something else, or gathered more information first.

Consumers commonly feel this way, which is a problem for sellers. If you don’t feel good about

what you’ve purchased from them, you might return the item and never purchase anything from

them again. Or, worse still, you might tell everyone how bad their product was. Companies do

various things to try to prevent buyer’s remorse. For smaller items, they might offer a money

back guarantee or, they might encourage their salespeople to tell you what a great purchase you

made. How many times have you heard a sale personnel say, “That outfit looks so great on

you!”? For larger items, companies might offer a warranty, along with instruction booklets, and

a toll-free troubleshooting line to call or they might have a salepersonnel call you to see if you

need help with the product. After buying a product, the consumer compares it with expectations

and is either satisfied or dissatisfied. Satisfaction or dissatisfaction affects consumer value

perceptions, consumer communicationsandrepeat-purchase behavior. Many firms work to

produce positive post purchase communications among consumers which contribute to

relationship building between sellers and buyers.Firms often use ads or follow-up calls from

salespeople in this post purchase stage to try to convince buyers that they made the right

decision.

Disposal of the Product: There was a time when neither manufacturers nor consumers thought

much about how products got disposed of, so long as people bought them. But that’s changed.

How products are being disposed is becoming extremely important to consumers and society in

general. Computers and batteries, which leech chemicals into landfills, are a huge problem.

Consumers don’t want to degrade the environment if they don’t have to, and companies are

becoming more aware of the fact. Take for example, some water-based beverage that’s sold

insupermarkets. You can buy it in a bottle however; many people buy a concentrated form of it,

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put it in reusable pitchers or bottles, and add water. That way, they don’t have to buy and dispose

of plastic bottle after plastic bottle, damaging the environment in the process. Some

supermarkets have adopted the habit of selling cloth bags that consumers can reuse instead of

continually using and discarding of new plastic or paper bags. Other companies are less

concerned about conservation than they are about planned obsolescence. Planned obsolescence is

a deliberate effort by companies to make their products obsolete, or unusable, after a period of

time. The goal is to improve a company’s sales by reducing the amount of time between the

repeat purchases consumers make of products. When a software developer introduces a new

version of product, older versions of it are usually designed to be incompatible with it. For

example, not all the formatting features are the same in Microsoft Word 2003 and 2007.

Sometimes documents do not translate properly when opened in the newer version.

Consequently, you will be more inclined to upgrade to the new version so you can open all Word

documents you receive.

2.7. Low-Involvement versus High-Involvement Buying Decisions

Consumers don’t necessarily go through all the buying stages when they’re considering

purchasing product. You have probably thought about many products you want or need but never

did much more than that. At other times, you’ve probably looked at dozens of products,

compared them, and then decided not to purchase any one of them. At yet other times, you skip

stages 1 through 3 and buy products on impulse. Perhaps you see a magazine with a celebrity on

the cover and buy it on the spot simply because you want it. Purchasing a product with no

planning or forethought is called impulse buying. Impulse buying brings up a concept called

level of involvement, which is, how personally important or interested you are in consuming a

product. For example, you might see a roll of tape and remember you need one or you might see

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a bag of chips and realize you’re hungry. These are items you need, but they are low-

involvement products. Low-involvement products aren’t necessarily purchased on impulse,

although they can be. Low-involvement products are, however, inexpensive and pose a low risk

to the buyer if she makes a mistake by purchasing them. Consumers often engage in routine

response behavior when they buy low-involvement products—that is, they make automatic

purchase decisions based on limited information or information they have gathered in the past.

For example, if you always order a Coke at lunch, you’re engaging in routine response behavior.

You may not even think about other drink options at lunch because your routine is to order a

Coke, and you simply do it. If you’re served a Coke at lunchtime, and it’s flat, it won’t necessary

prevent you from ordering another the next day. By contrast, high-involvement products carry a

high risk to buyers if they fail, are complex, or have high price tags. A car, a house, and an

insurance policy are examples. These items are not purchased often. Buyers don’t engage in

routine response behavior when purchasing high-involvement products. Instead, consumers

engage in what’s called extended problem solving, where they spend a lot of time comparing the

features of the products, prices, warrantees, and so forth. High-involvement products can cause

buyers a great deal of post purchase dissonance if they are unsure about their purchases.

Companies that sell high-involvement products are aware that post purchase dissonance can be a

problem. Frequently, they try to offer consumers a lot of information about their products,

including why they are superior to competing brands and how they won’t let the consumer down.

Brand names can be very important regardless of the consumer’s level of purchasing

involvement. Consider a low- versus high-involvement product—say, purchasing a tube of

toothpaste versus a new car. You might routinely buy your favorite brand of toothpaste, not

thinking much about the purchase (engage in routine response behavior), but not be willing to

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switch to another brand either. Having a brand you like saves you “search time” and eliminates

the evaluation period because you know what you’re getting. When it comes to the car, you

might engage in extensive problem solving but, again, only be willing to consider a certain brand

or brands.

2.8.Buying Behaviour

2.8.1 Complex Buying Behavior

Complex behavior can be defined when consumers are highly involved for making a purchase

decision. Complex buying behavior calls for high level of involvement on the part of the

consumer. In case of high involvement, consumers distinguish striking differences among the

competing brands. Consumers’ are highly involved in case of expensive and highly self-

expressive products. The consumer engages in extensive information to search and to learn about

product category so as to be able to make a good purchase decision. For example, when a

consumer decides to buy a car, he seeks information about the available brands and compares his

collected information about each brand and finally makes up his mind.

2.8.2 Dissonance Reducing Buying Behavior

In case of dissonance reducing buying behavior the level of consumer involvement is also high.

Consumers typically undergo dissonance reducing buying behavior in case of costly and

infrequent purchase. In this type of consumer behavior the consumers find it difficult to

differentiate among the brands. For example a consumer buying carpet may come across of

dissonance reducing buying behavior, as carpets are usually expensive and self-expressive. In

case of carpets, consumers may deem most of the available carpet brands in the market within a

certain price range to be of the same quality. Consumers may respond primarily to a relatively

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better price. After the purchase, consumer might experience post purchase dissonance (after sales

discomfort).

2.8.3. Habitual Buying Behavior

In case of habitual Buying Behavior, consumers´ level of involvement is low. This means that

consumers don’t search much information among the available brands and they don’t find

significant differences among the brands. An example of low-involvement product is toothpaste.

The level of consumer involvement in this sort of product category is very low. In case of

habitual buying behavior, consumers merely go to the store to buy the product without a high

level of involvement. If the consumers keep buying for the same brand over and over again, it

becomes their habit. It is as if that the consumers have developed a brand loyalty for that specific

brand rather they buy the product out of habit. Generally speaking, consumers are usually lowly

involved when the product is cheap. The level of consumer’s involvement is also low in case of

products that are frequently purchased. Consumers do not usually seek much information

pertaining to available brands before making purchase decision. The consumers don’t assess

different attributes of the available brands and make purchase decision as to which brand to buy.

Consumers glean information relating to various brands and their attributes through watching

television or reading newspapers

2.8.4 Variety Seeking Buying Behavior

In case of variety seeking buying behavior the level of consumer involvement is low, but

consumers perceive significant differences among the brands. In variety seeking buying

behavior, consumers very often switch from one brand to another. As an example we can think of

sweets, consumers might have beliefs about a brand and choose a brand without much

evaluation. But they evaluate that product at the time of consumption. But when the consumer

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goes shopping next time, he or she may go for another brand either because of boredom or

simply to test a different brand. Brand switching happens not because the consumer is

dissatisfied but because of variety.

2.9. Decision Rules

Consumer considers sets of product attributes by using different rules, depending on the

complexity of the decision and the importance of the decision to them. People rely on a short cut

to make a choice. In other cases though, they put more effort and thought into carefully weighing

alternatives before they come to a decision. The consumer applies a decision rule to the attributes

and alternatives chosen. A decision rule can be explained as a strategy used by the consumer

when selecting from the alternatives. If a purchase decision is habitual, a simplistic decision rule

is likely to be applied. The consumer may simply decide to buy the same brand as last time. The

complexity of the decision rule depends much on the level of involvement and the perceived

importance of the outcome of the purchase decision. There is clear division between more

complex rules, which are compensatory and non-compensatory.

Non Compensatory Decision rule: When a non-compensatory decision rule is applied it means

that a weak performance in oneaspect will not be compensated by a strong performance in

another. Non-Compensatory Decision rule can be defined as a decision making process in which

the consumer eliminate all product options that do not fulfill his basic desired attributes. As far

as the Non-Compensatory Decision rule is concerned, a product with a low standing on one

attribute cannot make up by being better on another attribute. To put it differently, consumers

simply eliminate all available options that do not have some requisite attribute desired by him.

When consumers are less acquainted with a product category they usually resort to non-

compensatory decision rule. It is also true that when the consumers are inclined to engage in

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