Do the consumers' perceptions of a brand collaborate with the actual qualities of a brand?
"Do the consumers' perceptions of a brand collaborate with the actual qualities of a brand?"
Synopsis
Consumers have a wide choice of branded products in the modern world each with its own attributes and added value to the consumer. However with rapid innovation and technology it has become increasingly difficult to compare various brands with each other and marketers are using every aspect of the marketing mix to target and persuade consumers that their brand is the best.
This essay investigates whether consumer perceptions of brands are accurate and then explores the reasons why, looking at how consumer perceptions form and how the brand is able to reflect certain images to influence the consumer.
Introduction
This essay investigates if consumer perceptions and images of a brand are accurate. I will be using information from various scholars who have studied this subject, as well as my personal experiences to look at how perception is formed and why it differs from actual brand qualities.
The objectives of this essay are to:
* Show that consumer perceptions differ to the actual qualities of certain brands.
* Suggest reasons why this differentiation occurs
* Explore the formation of consumer perceptions in relation to brands
* Explain why they are formed in this fashion.
I will then conclude the essay by summing up the evidence and arguments to give the main reason(s) for the differences between perception and brand qualities.
Firstly an analysis of the title will provide a better understanding of the aims of the essay and a better guide for me to follow by.
Perception, 'is the process of selecting organising and interpreting information inputs to produce meaning' (Dibb, 1991,pg 119) I also think 'Image' is an appropriate word for use, 'a functional and psychological picture in the consumer's mind.' (Dibb, 1991,pg 438)
This definition of perception tells us that it is a subjective process formed by information intake, and therefore has the potential for large variations.
The word 'Selection' means that each person can choose information from wide variety of sources, leaving the potential for bias. With the use of marketing and advertising however subliminal or subconscious messages may be passed to the consumer without their conscious selection of that information.
The 'interpretation' of information is obviously going to differ from person to person as they evaluate using their intellect, attitudes and knowledge. The end result in ones perceptual processes will be an evaluation or the creation of an 'image' that represents a collection of attitudes and feelings towards a product.
Consumer's buying processes are very complex and so when forming perceptions and purchase decisions about products, we need to consider that consumers use different levels of product knowledge to aid them in their decision.(Peter,Olsen,Grunert.1999.pg62) A useful distinction of different levels of product knowledge is the product class, product form, brands and models where a pyramid hierarchical structure exists. Consumers acquire separate meaning concepts and combine them into larger, more abstract categories of knowledge to attribute more meaning to the product. For instance, the footwear category branches out into various specialised categories from mountain climbing to basketball. These categories can then be divided into different types as well meaning that consumer knowledge can vary between levels.
We as consumers view brands in a similar way to this, a collection of attributes that we then combine to form the overall image or perception of a brand. (Peter, Olsen, Grunert, 1999. pg65) Some attributes will be better or more desirable than others and it may be only one attribute that results in the purchase of a brand over a close substitute. For instance one may evaluate a pair of Nike trainers by their price, comfort, quality, fashionability or availability, the purchase decision may be based predominantly on the attribute of price, perhaps in the event of a reduction in a sale, however other factors will be considered by the consumer In a mental list of most important attributes down to the least.
A 'brand' refers to point of differentiation between two products, carrying the name of the manufacturer or the retailer and the specific name of the actual product. The difference between a brand and a commodity can be explained by 'added values,' a brand is more than just the sum of all its attributes, it also embodies additional intangible attributes to the purchaser affecting at an emotional level. Marketers emphasise the particular 'qualities' of their brand through aspects such as the brand name, packaging, shelf location and other such cues which give information to the consumer about the nature of the product. They do this through the marketing mix, consisting of product, promotion, price and distribution. Using these elements marketers can position the brand in the consumers mind and attempt to influence them to buy their brand over rival brands.
The place or distribution variable refers to the availability of the product to the right people whilst keeping costs as low as possible. Promotion is the communication to one or more groups in order to stimulate awareness, increase interest or to educate about product features. The product variable refers to all the aspects of the actual product like the packaging and actual attributes. The price variable is obviously associated with the price of the product in relation to demand and market forces.
One useful term that distinguishes brands from commodity items is that of 'brand equity.' This comprises of three components, the characteristics of a brand, how they affect its strength and how this is reflected in its financial value. Brands consist much more than just their physical value, it is the intangible value of brand loyalty, brand name awareness, perceived brand quality and brand associations which make up the overall brand equity, representing the marketing and financial value of brand strength in the market.
This is an important concept because it goes beyond the bounds of tangibility and takes an all around perspective of the brand. Brand equity has to be built over time and expenditure through careful planning and management. The aim is to create a standardised perception of the brand, desired by the manufacturers, from the consumer point of view.
Consider a brand like 'Marlboro cigarettes.' Even to non-smokers it has connotations of a high quality brand with it's distinctive packaging and high advertising expenditure. A large percentage of people could also link the 'cowboy' image to the brand, representing the rough masculine characteristics of the brand and the notion of American freedom, suggesting a suitable market segment and sustaining a desirable image for people to aspire to.
A brand of this stature and awareness takes on intangible attributes rather like that of it's physical ones, embodying them into the overall perception and image of the brand as if they were physical characteristics. The table below gives the estimated value of the world top ten brands1:
Brand
Value ($bn)
Coca-Cola
77
Microsoft
75
IBM
58
Intel
40
Nokia
40
General Electric
39
Ford
28
Disney
27
McDonald's
23
AT&T
22
To illustrate what I mean by the difference between consumer perception and actual brand qualities, recently I bought the brand 'Olivio,' a cooking oil. It was the name that immediately caught my attention with its similarity to 'olive' suggesting an obvious connotation to the consumer, as well as the small Mediterranean village surrounded by olive groves on the product packaging. Both these factors led to my perception of a product consisting of olive oil. However it was only later that I discovered that in fact it only contained 15% olive oil and the rest constituted of vegetable oil.
On this occasion my perception was totally different to the actual brand qualities. Since Olive oil is known to be a more expensive cooking oil as well as the fact it is probably the healthiest oil to use in cooking, means that it is more popular with the consumer and therefore in the marketer's interest to emphasise the Olive oil constitution of the product to increase sales.
Do Consumer Perception's differ?
First of all I will look at evidence that differences do occur and then will look in more detail whether these differences occur more depending on the type of product or strength of the brand.
Generic and Private label products:
Generic products are those that are not branded, they are simply commodity items and represent a good example of differing perceptions. Groceries are probably the biggest and widely used generic product as they are quite simple in their tangible attributes and produced and sold in bulk. The scholar Roma Yelkur (2001, pp446) stated:
'Generic products have faced many challenges over the years. Two of the major hurdles for generic product sales have been consumer perception that they are of lower quality and the lack of promotion.'
Consumers have automatically assumed that the generic products are of lower quality to branded ones because there is less positioning by the marketers and a perceived risk seen by the consumer from the lack of a recognisable name. When there is limited or no information regarding the product, price inevitably becomes the quality indicator.
Generic products have been replaced in many countries by private labels in many of the categories although in some countries such as New Zealand and Mexico there is still a large market. (Prendergast and Marr, 1997,pg93) Generics have been in existence in Mexico for several years, spanning across various product categories from beer to children's toys covering 320 product categories. Much interest has been shown on consumer perceptions of generic products in relation to price and quality, differing perceptions among different demographic groups and whether perceptions vary according to the product category.
In the USA acceptance ...
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Generic products have been replaced in many countries by private labels in many of the categories although in some countries such as New Zealand and Mexico there is still a large market. (Prendergast and Marr, 1997,pg93) Generics have been in existence in Mexico for several years, spanning across various product categories from beer to children's toys covering 320 product categories. Much interest has been shown on consumer perceptions of generic products in relation to price and quality, differing perceptions among different demographic groups and whether perceptions vary according to the product category.
In the USA acceptance took a lot longer and generics spanned far less product categories. Success in the USA was based upon the substantially lower prices at a time of high inflation from 1972-1977 that were enough to combat the lack of promotion and marketing in the generic sector. I believe that it was consumer usage that allowed perceptions to change, not so much in terms of quality because the quality line was in fact at a lower level and the small level of marketing would have sustained consumer perceptions too, but in terms of value for money. Consumers were inclined to use the generic products during the high inflation and gradually acceptance became wide spread.
Results of a questionnaire conducted by Roma Yelkur (2001,pp449), showed that lower income groups had perceptions of higher quality towards generic products than higher income groups. This suggests that lower income groups have less choice or less buying power due to their lower disposable income and therefore more pressure to buy the cheaper, generic products. Whereas higher income groups can afford to buy branded products, with their additional values and reputation, and therefore form their perceptions through lack of usage of generic products and beliefs through the implementation of the marketing mix. Indeed when interviewed in the questionnaires conducted, higher income groups indicated that they felt it was too risky to purchase a generic product as opposed to a brand name one.
Another interesting result was that risk perception differed over product categories. Non-food products (like personal care and hygiene) had the highest risk factor whereas 'canned food' had the lowest risk factor.(Yelkur,2000,pg450) Similar results occurred in a nation wide mail survey in New Zealand (Prendergast and Marr,1997,pg103) where Shampoo and washing powder received some of the lowest ratings in the categories of value, quality and package. Attention was attributed by Prendergast and Marr to the lower perceptions of less standardised products. This correlates with the extent of advertising and marketing of Shampoo, Coffee and other such items as opposed to products such as rice which is very standardised with much less variation in quality.
In the United Kingdom, private labels have become nation wide through stores such as Lidl, Netto and Aldi supermarkets. Aldi is a low cost international retailer that offers a limited selection of products to the consumer. It strips out costs by cutting down on variety and multiple package sizes and offering very basic services to the consumer. Aldi also lowers costs significantly by offering mainly private label products, allowing for prices 30% lower than name brand products which incur national marketing, sales and advertising costs.
The private label products are based upon leading national brands because it makes sense to copy an already successful brand rather than risk sunk costs into development and innovation of a new one.
The Aldi website states, 'Private label products are products that have been produced according to Aldi quality specifications based on the leading national brand.....'
The table below shows the percentage of private labels in comparison to other supermarkets2:
It is interesting when walking around an Aldi store because their private labels are designed in a very similar fashion to branded products:
These pictures above represent some of the private label products stocked by Aldi. The 'Cocobay' product is based upon the Rum and Coconut liqueur Malibu, the Sprinters crisps are very similar to the leading brand Walkers, and the Cola is also similar to the leading soft drink brand Coca Cola.
As I explained above, Aldi sells the majority of its products as private labels. It uses the stimuli and marketing cues of national brands to trigger awareness of the consumer, whereby hoping for perceived attributes of national brands to rub off on to theirs. It also limits the information search that consumers need to do because they recognise the similarities and make logical assumptions.
Aldi represents one company on the verge of passing off their product with another to benefit from the associated advantages, however there are constant legal disputes between companies in related matters. In recent years Hoover were reported to have copied the successful design of Dyson vacuum cleaners in an attempt to rival them in the market place. They were required to change the design of their vacuum cleaners to respect the patent that had been implemented.
Another case occurred between United Biscuits 'penguin bar' selling over 400 million annually and Asda supermarket's own brand 'Puffin bar.' A report by E.J. Swetsky (Barrister) contained statements made by judge who ruled in favour of United Biscuits.
'....the name Puffin and the prominent picture of an upright dark-coloured bird with a white front gives me the expectation that a substantial part of the public would see an association between the Asda product and Penguin.'
In both the cases of United biscuits and Aldi therefore, there is a direct strategy to persuade consumers to form positive perceptions about particular products which are not assisted by large advertising and marketing campaigns. Similarities to leading national brands means that consumers perceive similar attributes which may not in fact exist, in which case perceptions do not align with actual brand qualities.
Overall, generic products show that consumer perceptions do differ from product attributes. The reasons for this difference are the lack of marketing and promotion, which create awareness and subconscious recognition as well as informing the consumer of value and added benefits. The discounted price had a large effect on the higher income groups, creating a perception of lower quality since the two factors usually complement each other. Also the extent of usage by consumers determined perceptions by overcoming pre-conceptions as the gradual acceptance in the U.S.A was demonstrated.
Although lower income groups tend buy more generic products, there is conflicting behaviour by lower income groups who will sometimes purchase top branded products despite their economic situation. This is perhaps the result of more susceptibility to advertising and marketing or simply the desire to live up to social pressures or project a 'better image.'
Sales of generic products differ significantly between product categories. It is clear that those products which are perceived to have minimal differences in quality to branded products will succeed in the market.
Trends are now shifting to the promotion of the retailer where the cost is the main attraction as with generic products but there is the added incentive of a consistent retailer brand name.
Cultural effects on consumer perceptions:
Another example of differing perceptions can be taken from border constraints and cultural differences, specifically concerning east and southern Asia.( Hong, F, C., et al.2002).
In 1979 China opened its doors to the western world and was described as 'the last and largest consumer market in the world' (Dr Fan,Y. 1998) This gave way to a new approach to international branding, trying to overcome the language barrier and understand the linguistics in terms of culture.
In the Asian markets, language is very important and defines consumer perceptions significantly. Usually the brand name conveys a specific set of attributes or added benefits to the buyers or it expresses the values of the manufacturer. However there are a number of other strategic options that can be considered in regard to foreign brands in Asian markets. The western name can be maintained giving a strong image of an imported product, which can either give positive associations, like 'the freedom of the capitalist world', or negative associations in terms of breaking highly upheld traditions. It is sometimes difficult for western countries to understand this because Europe and North America have more of an understanding despite cultural differences.
The brand name can also be directly translated to the equivalent meaning or translated phonetically, where the pronunciation is retained but local connotations are also attained.
Evidence provided by Chan (1990) states that previous research has found that brand names can have a significant effect on consumers' perceived quality of products and therefore the level of difficulty in brand name pronunciation can affect the sales of products. Furthermore, children prefer sounds produced by their mother in their native tongue and consumers on the whole prefer their native language.
Dr Ying Fan (1998) also stated that China tend to encode verbal information in a visual mental code and judge a brand name based on visual appearance. English speakers however rely primarily on a 'phonological code' and judge a brand name on whether the name sounds appealing.
F.C Hong, (et. al. 2002.pp32) conducted six experiments to investigate the effect of brand name translation and product physical quality with consumers of different educational backgrounds. Surprisingly the results showed that a brand name translated into local languages was not rated higher than products with brand names in a foreign language, contrary to previous research. ( Allison and Uhl 1964; Dodds, Monroe, and Grewal 1999) However this questions the validity of this argument.
Despite this there was a clear indication in the results that there was a significant crossover interaction between brand translation and whether the consumer had a mandarin or English education, providing preliminary evidence that a familiar language may be more effective in creating the necessary bond with the consumer. Companies have to weigh up the consequences of keeping their brand name in the hope of familiarity in the market or translation and modification of the brand name to appeal more strongly to the local population. The brand name along with the logo provides consumers with their first impressions of a product and can influence whether the consumer will evaluate the product in more detail or move attention on to a rival brand. However this of course can lead to differences in perception and actual product attributes, as essentially the name does not affect the tangible aspect of the product.
Therefore, there is the potential for perceptions to differ depending on the brand name and how it is conveyed to the consumer. This example demonstrates that simply the name of the brand can have different meanings for the consumer. In the Asian markets it is the different culture and the nature of their languages in comparison to western ones that is the cause of this discrepancy. From a domestic perspective, it is the memorable names with good connotations that are important; they can be used to portray certain product attributes or a positive aura, that is attractive to the consumer. Differences in perceptions may be caused by different interpretations by the consumer of the meaning of the brand name either through the use of different information or social context in which it is viewed.
Beyond the brand name, brand attributes also vary in consumer perceptions in Asian markets. A journal by Giana M. Eckhardt and Michael J. Houston (2002) investigated the meaning and perception of McDonald's in Shanghai. McDonald's is an interesting company for study because its success is based upon its standardised procedures and quality. However even McDonald's must alter it's strategy and menu to adapt to local environments, offering salads in countries like Italy and vegetarian alternatives in India.
It has also succeeded by a large advertising expenditure and highly effective marketing mix to gain global recognition, very much representing the nature of the capitalist world that the U.S.A stands for.
At the moment there is a change occurring in the culture in China with western ideologies intermingling with their deep-rooted traditions and through the effective shrinking of the world, in terms of communication, and therefore perceptions are constantly in a state of change. I thought the experiments lacked some ability to provide results with substance because it was a small study based upon peoples personal opinions and I also disagreed with the assumption that westerners see McDonald's as an acceptable place to hold a birthday party as opposed to the Chinese who do not. Generally I would expect McDonald's to be seen as cheap and shabby place to hold a birthday celebration with the exception of very small children.
However there were some points that arose which were very interesting and beneficial to the understanding of varying perceptions. After interviews took place, cultural differences began to surface with some people seeing McDonald's as too public, because traditionally in China eating out tended to be in large parties of about eight people occupying their own space. One interviewee described McDonald's as having 'the wrong kind of noise' because it was a public noise rather than the recognisable voices of friends around a table.
Other people who were interviewed saw McDonald's as a good place to have a date, dating being a relatively new concept in China. Often the home is seen as being too formal a setting to take a potential partner, and the average housing space is a lot smaller than that in which we would expect in Britain. On top of this there is also the tendency for relatives outside the main family unit to live within the house as well, which overall makes it a low priority for a location for a date. McDonald's is then a seriously considered venue with its two seated tables and young, modernistic appeal.
This suggests different perceptions to that of western countries, where a date at McDonald's is not considered a viable option because it gives the impression that the other person on the date is not worth the expense of a proper meal and it is seen as too public a place.
Some women saw McDonald's as a safe environment, with the absence of alcohol for sale. Traditionally, social eatings out are often met with the men consuming large volumes of alcohol and women having to take care of them, this benefit would not even be considered by Women in western countries.
Perceptions differ, from the youth in China who are more willing to try the unfamiliar western food and embrace the culture, to the older generation, who dislike western influence and changes from tradition. Of course demographic differences are also inherent in western society but it is the way in which different perceptions are formed in comparison to that of Asia which is of the most significance.
As a gradual acceptance occurred in the Asian countries, so are perceptions slowly shifting in a negative fashion in western countries, as people are becoming more aware of the health risks involved with consumption of fast food in large quantities. There is more communication by governing bodies about health risks, not just on food products but on other products such as cigarettes. Schools are beginning to serve healthier options for school children and supermarkets now offer their own range of healthy foods.
Therefore perceptions differ in this example because of cultural differences, shaping and conditioning beliefs despite the fact that the actual brand qualities are consistent world across. It has also shown the different perceptions in relation to the qualities of the McDonald's brand, a progression from the effect of brand names as mentioned earlier.
Why do perceptions differ from actual brand qualities?
In this section I will be looking at possible reasons why perception differs from actual product attributes. Firstly an insight into consumer behaviour processes may be the explanation for differing perceptions.
The consumer buying decision process is described (Dibb,2001 pp109) as problem recognition followed by information search, evaluation of alternatives, purchase and post purchase evaluation.
These stages show how subjective the decision process is and therefore the potential for variation between consumers. The problem recognition occurs when the buyer becomes aware that there is a difference between a desired state and an actual condition. Two consumers could therefore have two different desired states that they can achieve through the same purchase. For instance one consumer may feel their shoes are not fashionable enough, or they need to purchase a particular pair of shoes to be perceived as part of a certain social group. Whereas another consumer may recognise the problem that they have no shoes for running in, and therefore make the same purchase. So the same pair of shoes is bought but for totally different reasons, the first from social pressures, and desired self-confidence, and the second from a mere practical perspective.
The next part of the consumer buying decision process is the information search. Again this can cause differing perceptions dependent on the type of information received, whether it is biased, accurate or semi complete. Also the extent of information is an important factor, the more information that is received the better the chance of an accurate perception. Although too much information can confuse the consumer and result in negative effects. The mobile phone industry was criticised for its complex pricing and tariff system, consumers often not aware of some of the details of the contract they had actually signed. Today the average consumer is more educated about the mobile phone either from experience or from advice by one of the many other consumers now in possession of a phone. In this situation it is the amount of information that causes confusion amongst the public.
Information is also divided into an internal and external search. (Dibb, 2001, 111) The internal search is a search into the memory about information on a product, even with a very limited amount of internal information; it is likely that the consumer has already some kind of perception about a product.
The external search is one that can be controlled by the consumer by asking different peoples' opinions or looking at advertisements etc. Different methods are used to combat different problems. Using the example from before, if wanting to buy a fashionable product, a consumer is likely to talk to the relevant social party, or observe the context in which the product is used. If wanting to buy a comfortable product, the consumer is more likely to ask a knowledgeable shop assistant and have a pre-trial session to form an accurate perception.
The information aspect of the consumer buying decision process is important for marketers to address because it gives insight into the way in which perceptions are formed. Information comes from a wide variety of sources in a wide variety of mediums with each piece having the ability to affect the consumer. Sub consciously it is difficult to know what stimuli are being affected, indeed Peter (2000,pp 121) discusses 'salient beliefs,' activated beliefs from a linked network of beliefs stored in the memory over time. Consumers acquire many beliefs but do not have the cognitive capacity to activate all of them and therefore only some are consciously considered at once. These salient beliefs are triggered in certain situations, leading to different attitudes towards a brand. Certain locations, events, situations and times will cause different salient beliefs to be activated causing varying perceptions.
Salient beliefs link in with the whole concept of 'Comprehension' and this in turn affects how we form our perceptions about products or brands. If a random consumer was walking down the street how might an advertisement in a shop window affect him or her compared to another random consumer?
Firstly it depends upon whether the consumer recognises the stimuli. Most consumers across the world when seeing a can of Coca Cola will understand what it stands for and activate certain beliefs towards it. However less familiar stimuli would require more conscious thought and control and the consumer would use less relevant knowledge for interpretation, leading to difficulty, uncertainty and therefore unreliable perceptions.
Involvement would also be an important factor in this situation because it affects the motivation of the consumer to comprehend marketing information. If the advert is of intrinsic self relevance then the consumer will process the information in a more conscious, intensive and controlled manner, possibly forming deep and meaningful perceptions. Other consumers who have low involvement will pay little attention to the advert and may not even consciously be aware of it.
The more a consumer visits a shopping centre or area, the more they will know the locations of certain stores and the locations of most interest to them, and so may ignore the shops of little interest as they pass them focusing on the ones that are of interest. This means that marketers lose out from deliberate information selection.
Marketers fight back through such mediums as the Internet and written advertisements in newspapers and magazines, where they can place adverts that are related to the subject that the consumer is interested in. On the Amazon website, if you browse and enquire about a particular product they will suggest similar products for purchase or give a discount for the purchase of two related items simultaneously. They even state the products that other consumers bought after buying the product you have bought, hoping for consumers to make another purchase.
These are all clever techniques that are based upon the principle of involvement, the marketers know that their advertising is being put to greater affect by channelling to a selective audience.
Another factor is the 'situation' the consumer is in whether it be a consumer in a rush to make a certain deadline or a consumer in a particular mood when they see the advertisement, many possible factors that can effect perception or awareness and therefore purchase.
Overall, I have explained how consumer cognitive processes can lead to different perceptions of a brand. Perceptions may differ in terms of 'deepness' with some consumers acknowledging basic brand attributes while others perceiving emotional and intangible associations. Levels of knowledge and involvement will provide the potential for different perceptions on actual product attributes too, as a brand or product with absolutely no self relevance to a consumer may mean they have no knowledge of what the brand is or does.
Ian Phau and Kong Cheen Lau (2000) proposed the theory that consumers have a part to play in influencing how a brand personality is perceived, in contrast to the suggestion that brand personality is created by how marketers want it to be. When consumers have a trusting relationship with their preferred brand, they will reinforce positive attitudes including their personality onto the brand. It follows that users of a brand represent certain personality traits that others may aspire to, relate to or want to avoid. Typically marketers try to steer the direction of personality by idealising through advertising, such as Harley Davidson bikes with the image of a rugged and outdoor persona.
Cultural orientation is also a determinate of brand personality, "consumer goods are imbued with cultural meaning through instruments of advertising and fashion." (McCraken) The concept of "self-congruity" suggests that consumers tend to choose situations and companions that reaffirm themselves, therefore brands with the right personality traits can serve the same purpose.
Not only will perceived personality traits differ dependent on the personality of the individual, but also depending upon whether they are individualistic or collectivist in their thinking. Consumer's behaviour is contingent on the balance of social and personal attributes and pressures that effect people differently. Individualists are motivated to express their differences in relation to their reference groups, and use brands as a vehicle to express uniqueness. Collectivists, on the other hand, use brands to display conformity, and express similarities to members of their reference group.(Hofstede 1991).
This shows the self expressive nature of brands and the need for marketers to match brands to consumer personalities. It also suggests that consumer personalities can rub off onto a brand, altering or reinforcing brand image to other consumers.
Today technology is improving at an incredible rate, with companies competing to bring the best and most up to date attributes to their products. This has lead to equilibrium in the market place where all the products in the product category tend to be very similar in physical operation and appearance. When one product attains a competitive advantage, it is not long before rival companies copy and develop to compete effectively. This has lead to two avenues of significant importance, firstly the 'added value' concept and secondly the effectiveness of advertising.
Added value is a concept used extensively by professor Leslie De Chernatony,(2002) and is described as those values that exceed the expected. Today it is the best way to develop a competitive edge and gain loyalty with the consumer. Added value also allows for a price premium to be put over the commodity form of the product, as consumers perceive the beneficial difference.
There are many examples of added value, Singapore airlines are often referred as one of the best airline companies in the world by consumers and are known to cater for consumer needs exceptionally well. Frequent flyers enjoy the flattering system whereby their personal likes and dislikes are recorded and acted upon so that consumers are given their favourite drink before asking for it, or a magazine of personal interest etc. so that they really feel important to the airline. 'The Marriott story' book also explains the significance of added value, as each employee has an allocated sum of money which they can use to help out guests in the hotel if in need of assistance. This is added value because it is a relevant and unique attribute showing that the hotel is prepared for the unexpected; a common phenomenon in the hotel business.
Added value is a significant concept for explaining differences in perception and actual brand qualities because it is often an emotional setting or aura built around the product, so it is not a tangible feature but rather a part of the marketing campaign to increase sales and differentiate. Since products are generally the same, it is remarkable to consider how perceptions can differ so widely.
Nike is a very clever marketing company, creating the perception that their products will make you feel like a winner, the famous motto 'just do it' creating added value that consumers appreciate. It effects the consumer at an emotional level and therefore the perception is excelled to a level above its tangible existence. The products themselves are unlikely to physically improve sporting performance much beyond rival companies as the composition of the brand is not affected by any emotional attachment, any improvement would be the result of a psychological boost.
Airlines provide a good example of added value, because the service is of the utmost importance and it is the small differences that really count. Easy jet has taken a different approach and created added value through its very low prices. Its 'no frills' policy through not providing a meal, travelling to B standard airports and basic services allow them to drive costs down and streamline the organisation. Emirates were the first airline to put televisions in the back of passenger seats enhancing the consumer experience.
Therefore added value allows companies to improve perceptions of their products and even charge a price premium with the concept that the added benefit is value for money. Consumers value the emotional benefit because their perceptual processes work on the principle of means to an end chains. The functional benefits are the first link in the chain however consumers are not buying them for the functional benefits in themselves, consumers always have other, higher needs to satisfy.
The question is whether the added value, as an emotional benefit, should be counted as an actual product attribute or not, because tangibly speaking the emotional benefit is just a concept created by the firm to improve sales. For instance the newest mobile phone is not necessarily going to make you a more popular person, or a hair product make you more attractive these are certainly not guaranteed product attributes.
However if everyone perceives the emotional attachment as being an implicit part of the product it could be argued to be an actual attribute. The majority of people see Mercedes as a status symbol, perhaps because of the usually dear prices associated with it but in general different cars project an image of the owner driving them. Also the consumer can experience the apparent emotional benefit through purchase, from their own psychological doing, believing the stated claim and exercising it through behaviour.
Quite often Marketing is seen as the major contributor towards altering consumer perceptions but is it all that persuasive? Indeed 'loyal' consumers, those you would expect to be the most likely victims of a marketing campaign, are not seen as especially important to sales. People who generally fall into this category are those who do not buy into a product category that often, and therefore do not actually spend much money. Ehrenberg states about 50% of the annual buyers of a US instant coffee brand buy the brand only once a year, nonetheless are still relatively loyal.
Most consumers tend to fall into a split loyal group where they have a set of brands that they will switch between. In today's world, even with more effective advertising than ever before, I think there is a certain amount of scepticism or filtered selection by consumers who are bombarded every day by advertisements. Even when one brand satisfies a consumer's needs, it is often the novelty and curiosity of change that will drive a consumer to switch between brands. This would suggest that consumers do have aligned perceptions with the brands in their brand repertoire, as they are not totally persuaded by advertising to become exclusively loyal and will know from experience and usage of the brands the actual attributes.
There is no doubt that advertising plays a significant part in changing consumer perceptions of a brand, but perhaps it is not as persuasive as some people feel. Ehrenberg suggests that advertising reinforces brand customers' existing propensities to buy as one of several brands, nudges consumers to perhaps buy it more often or may result in it being added to their existing brand repertoire.
Conclusion
In this essay I have shown that consumer perceptions do sometimes differ to actual brand qualities using at examples from Generic and private label products and the effects of cultural differences. I have then explored the reasons why by showing how cognitive processes can lead to differing perceptions and buying behaviour and how marketers can influence and persuade the consumer.
Through the evidence of different journals and the concepts of Dibb et al.(2001) De Chernatony (1998) and Peter et al(1999) I constructed the diagram below to explain how I believe perceptions are formed.
Consumers form their perceptions by cultural and social factors, marketing and advertising and usage of the product. Perception also depends upon the extent and accuracy of the individual's knowledge. All these factors will then determine a subjective perception, categorised as good or bad. It is then personal influences that will finally decide whether a purchase is made or not.
The involvement of the consumer is important because if the product has little self relevance or importance then a purchase is very unlikely to occur. Also the demographic status of the consumer may determine the purchase decision, although this may be a result of expected social normalities, and therefore counted as a culture/ social affect. Finally Situational factors may also affect the purchase decision, for instance the purchase of an ice cream is more likely to occur on a bright sunny day.
Today, marketers have realised that people's relationships with products are motivated by deeper psychological desires and aspirations than just the core product, which if exploited can considerably increase the likelihood of purchase. However it is those products or brands which can collaborate their added value with solid, relevant, core attributes that will eventually succeed in the market place.
In the future, amidst the importance of the added value, it will be important for the main attributes of price and quality not to be forgotten but to be sustained and improved. Recent examples of Marks And Spencer's and McDonald's show the consequences of the failure to adapt and focus upon the core competencies of the organisation.
Bibliography
Aaker, J, L.(1997), " Dimensions of brand personality", journal of marketing research, Vol. 34 No 3 pp 347-364.
Bernard, N., Ehrenberg, A. (1998), "Advertising: Strongly persuasive or Nudging?", Journal of advertising research, Vol. 37
Davies, G., Chun, R.(2002), " Gaps between the internal and external perceptions of the corporate brand", Corporate reputation review, Vol. 5 No 2/3 pp 144-158.
De Chernatony, L., McDonald, M.(1998) " Creating Powerful Brands in Consumer, Service and Industrial Markets", Second Edition.
Dibb., Simkin., Pride., Ferrel.(2001) " Marketing Concepts and Strategies", Fourth European edition.
Hong, F, C., Pecotich, A., Shultz II, C, J.(2002) " Brand name translation: Language constraints, product attributes , and consumer perceptions in East and Southeast Asia", journal of International Marketing, Vol.10 No.2, pp 29-45.
Eckhardt, G, M., Houston, M, J.(2002) " Cultural paradoxes reflected in brand meaning: McDonald's in Shanghai, China", journal of International marketing, Vol. 10 No 2, pp68-82.
Hatch, Mary Jo, Schultz, Maijken.(1997), " Relations between organisational culture, identity and image", European journal of Marketing, Vol.31 No. 5/6
Hoek, J., Dunnet, J., Wright, M., Gendall, P.(2000) " Descriptive and evaluative attributes: What relevance to marketers?", journal of Product and Brand Management, Vol. 9 No 6, pp 415-435.
Low, G,S., Lamb,C,W.(2000), "The measurement and dimensionality of brand associations", journal of Product and Brand Management, Vol.9 No.6, pp350-368.
Phau, I., Lau,K,C.(2001), " Brand Personality and consumer self-expression: Single or dual carriageway?", journal of brand management, Vol. 8 No.6, pp428-444.
Peter, J,P., Olsen, J, C., Grunert, K, G.(1999) " Consumer Behaviour and Marketing Strategy", European Edition.
Prendergast, G, P., Marr, N, E. ( 1997) " Perceptions of generic products: a macro and micro view", journal of Product and Brand Management, Vol. 6 No 2 pp 93-108.
Rao, A, R., Monroe, K, B.(1989), " The effect of price, brand name, and store name on buyers' perceptions of product quality: An integrative review", journal of Marketing Research, Vol. 26, pp 351-357.
Yelkur, R. (2000) " Consumer perceptions of generic products: a Mexican study", journal of Product and Brand Management, Vol. 9 No 7, pp 446-456.
Journals:
. Descriptive and evaluative attributes: what relevance to marketers?(Hoek)
(Journal of brand and product management)
2. Consumer perceptions of generic products: a Mexican study. (Roma
Yelkur) ( Journal of Product and Brand management)
3. Advertising: strongly persuasive or nudging? (Ehrenberg)
(Journal of advertising Research)
4. Dimensions of Brand Personality (Aaker)
( journal of Marketing Research)
5. Gaps between the internal and external perceptions of the corporate brand
(Davis) ( Corporate Reputation review vol. 5)
6. Cultural Paradoxes reflected in brand meaning: McDonald's in Shanghai
( Eckhardt) ( journal of international marketing)
7. Brand name translation: Language constraints, Product attributes, and
Consumer perceptions in East and Southeast Asia ( Shultz II)
8. Organisational culture, identity and image ( European journal of marketing)
9. Brand personality and consumer self expression: Single or dual carriageway?
( Brand Management vol. 8)
10. The effect of price, Brand name, and store name on buyer's perceptions of
product quality ( journal of marketing research)
11. The national image of global brands (Dr Ying Fan)
Source: The Economist (Interbrand; Citibank.)
2 Source: John Stanley Associates.
Matthew Halsall - 319245