Impact of Brand Name on Consumer Decision Making

Published Date: 23 Mar 2015 Last Modified: 09 Jan 2018

Brand Name Consumer

Today's generation follows the pattern of capitalism where human values are measured by, ‘you are known by what you have not by what you are’. This naturally leads to a social structure where everyone seeks uniqueness by possessing things which sets them apart from everybody else.

Nowadays, brands not only represent the symbol of a company or product but also define the daily life of a person to a large extent . Products used by a person often reflect the person's tastes, status in society, and economic background. When customers purchase products, the consumer’s choice is frequently affected by brand name. Some customers purchase specific brand products only due to brand name.

The purpose of this thesis is to create a deeper consideration about how brand name affects consumers when they gor for purchasing a car. Moreover the author wants to identify if there is any connection between brand name and consumer decision making.

The research method involved a critically analysed review on secondary research upon the subject. It provides the reader with an understanding of the relation between companies and consumers in terms of brand equity, emotional branding, consumer behaviour, and consumer decision making.

From the secondary research, the basis for primary research was created. The use of a questionnaire allowed the author to identify individual feelings when people go for purchasing car. All of the respondents answered every question upon which quantitative data and findings were produced.

The findings and analysis of the research conducted, concluded that brand name is the most important aspect when people go for purchasing a car. Furthermore, the results show that most people prefer brand products which signify consumer status and social status.

The paper concludes with an evaluation of the study, limitations, and recommendations for further research.

Reasons for choice of topic

Every brand differs in names or symbols like logo, trade mark, design and packing. A brand name is a signal to protect the customer from similar brands and protect the producer from the competitors (Aaker, 1991). Brand names present many things about a product and give number of information about it to the customers and also tell the customer or potential buyer what the product means to them (Hansen & Christensen, 2003). Brand names affect consumers purchasing behaviour enormously. It is important for companies to find out customer’s decision process and pinpoint the criteria, which customers apply while making decision (Cravens & Piercy, 2006).

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 branding their products, simply putting the company’s name on a product (Aaker, 1991).

The author has chosen the topic to try to gain further knowledge about the subject of how brand name affects consumer decision in car choice. The reasons for attempting to gain further knowledge are simply based upon the author‟s great interest towards the car industry and consumer behaviour. The author is particularly interested in why customers prefer brand products in case of brand cars. Also the effect of brand name on consumer decision making will be of great curiosity to the author.

Academic objectives of dissertation

This study attempts to highlight and tackle the extent to how brand name affects consumer decision in car choice. This is to allow a greater understanding of the relation between companies and consumers in terms of brand equity, emotional branding, consumer behaviour, and consumer decision making. In order to achieve this main aim, the following objectives have been produced:

• To discover any assets and liabilities of brand equity in case of adding or subtracting value for customers.

• To understand why emotional branding creates feelings and what kind of feelings.

• To explore how individuals select, purchase, and use or dispose products to satisfy their needs and desires.

• To investigate consumer decision making and the way of information search when customers go for purchasing a car.

• Outline of chapters

As the introduction is chapter one, the surplus of this study is organised and structured as followed:

Chapter Two- This chapter is to set the scene for the study. It presents the background of the current situation of the car industry and the influence of brands in society.

Chapter Three- This chapter is a review of earlier research and literature on brand name and the effect it has on the consumers purchase decision. In this chapter the earlier literature is critically analysed upon its relevance and importance to the study.

Chapter Four- The methodology of the study is addressed in this chapter. It involves a description of the research undertaken for the study and a justification of why. The approaches and methods of research are detailed here and justified.

Chapter Five- This chapter is the findings and analysis of primary research as well as secondary research undertaken towards the study. The findings from the primary research are analysed against the earlier literature and research from chapter three.

Chapter Six- This chapter is a conclusion, commenting on the initial objectives of the study. The limitations and recommendations for further research are also discussed in this chapter.

Car Industry Background

The European Union is the world's largest car manufacturing region and the world's biggest market, not only in size terms, but also due to the intensity of competition (Lung, 2003). Europe constitutes a true “automobile space”, inasmuch as the routing and regulation of the supply and demand for automobile products here has mainly taken place at a regional level (Carrillo, Lung, van Tulder, 2004). We can therefore say that we are in the presence of what can be called a European automobile system (Lung, 2001).

From the perspective of car manufacturers the competitive pressure is increasing and their established role is threatened (Selz & Klein, 1998). Franchising dominates automobile distribution because of the need to decentralize pricing and control of decisions (Vazquez, 2004).

The sales and distribution sector is set to experience considerable change (Eurofund, 2004). The aim of the Commission regulation is to promote competition and a better deal for consumers. It separates new car sales, repair and parts supply, and gives more autonomy to dealers and repairers (Eurofund, 2004). The idea is that such liberalization will promote intrabrand competition, that is, competition between dealers of the same brand (Verboven, 2006).

Furthermore, cars of different manufactures look increasingly similar. Product differences are reduced to design aspects, and thus require new branding concepts. At the same time, we move away from the simple durable good car to a complex bundle, incorporating diverse s and after-sales s (Dudenhöffer, 1997). When a company is deciding which new products to add to its line, it should consider two key factors: First, which new product contenders best fit its distribution system, and second, whether the distribution system will add value to the product in the eyes of the end user (Fites, 1996).

Brands in Society

Today's generation follows the pattern of capitalism where human values are measured by, ‘you are known by what you have not by what you are’. This naturally leads to a social structure where everyone seeks uniqueness by possessing things which sets them apart from everybody else. Brands not only represent the symbol of the company or product but to a larger extent define the general life of a person.

Brand is a combination of name, symbol and design. Brands represent customer perceptions about the performance of a product. A powerful brand is which resides in the mind of the consumer. Brands differ in the amount of power and worth they have in the market place. Brands with high awareness have a high level of acceptability and customers do not refuse to buy such brands as they enjoy the brand performance (Kotler et al., 2005).

The history of branding goes back when people utilized burned mark on cattle in order to identify quality (Bengtsson, 2002). Brands differ in name or symbol, trade mark, design and packing. Products are recognized through these elements and thus make it possible to differentiate one product from the other. A brand is a signal to protect the customer from similar brand names and protect the producer from the competitors (Aaker, 1991). Usually people do not buy certain brands because of design and requirements, but also in an attempt to enhance their self esteem in society (De Chernatory & McDonald, 1992).

Brand names present many things about products and give a number of information to customers. When customers consider to purchase they evaluate the product immediately by reconstructing the product from memory (Hansen & Christensen, 2003).

In today’s business environment, companies must work harder than ever before to achieve some degree of product differentiation. Many companies have sought to achieve this differentiation by branding their products, simply putting the company’s name on a product (Aaker, 1991). In this respect companies offer different packages to customers in this competition war for raising awareness among the customers about the branded product.

Brand and Consumer Perceptions

In every industry corporate executives are finding that to be competitive they must increase the communication and contact between their company and their customers (Girsky, 2003). Automotive is no exception: car manufacturers face mounting pressures related to acquiring and retaining customers. While many dealers have assumed that customers make decisions primarily on a rational, fact-driven basis, the truth is that most purchase decisions also involve emotion, intuition and impulse (Zaltmann, 2003).

The reason customers buy cars is more connected to the overall experience of the purchase and ownership of an automobile than it is to any traditional impetus such as brand loyalty, price, or personal relationship with the dealer (Bolton, 2002). In this environment, competitive advantage will shift to the player whose value net is most tightly linked and built around the customer: To attract new customers, and sell more to each of them over a lifetime, manufacturers need to move away from their traditional "build it and they will come" approach to capture customer wallet share (IBM, 2003). To facilitate increased revenue capture over the customer lifecycle, dealers should work to create a collaborative business environment. Increased collaboration will help dealers manage customer touchpoints more efficiently and effectively, increase personalization and establish emotional bonds between themselves and their customers (IBM, 2003).Seeing, touching, and driving the product are still crucial to the purchase decision for most consumers (Helper, 2000).

The evolution of customer needs advances continually (IBM, 2003). Successful marketing requires understanding how customers' relationships with an organization change over time. Todays interactive generation demands products that are valuable to them and that enhance and enable their lifestyle as well. In this environment, quality and price are no longer enough, customers want to make purchases that improve their quality of life – and their buying power will go to the companies that offer them the best (IBM, 2003).

Product differentiation is no longer adequate to ensure profits. Traditional customer-focused marketing "to determine the needs and wants of target markets" is still largely product, rather than customer, focused. Even customer satisfaction itself is no longer enough (IBM, 2003).

Customer Touchpoints

A car company's marketing instruments have different effects on customer behavior and ultimately on customer lifetime value (Bolton, 2002). Customer lifetime value is characterized by the length, depth and breadth of each customer’s relationship with a dealer in terms of the customers purchase behavior (Verhoef 2001). Length and depth are also reflected in upgrading behavior, which is the purchasing of premium higher margin products instead of low cost variants (Bolton, 2002). Loyal customers are sometimes assumed to be willing to pay higher prices (Reichheld 1996a; Reichheld 1996b) but in some markets loyal customers pay lower prices due to discounts. The breadth of a relationship primarily concerns “cross- buying” or “add-on buying” that is, the number of additional (different) products purchased from a company over time (Blattberg, Getz and Thomas 2001). In addition to purchase behavior, customer lifetime value is influenced by non-purchase behaviors, such as word-ofmouth behavior and the provision of new product ideas that may be more difficult to observe and predict (Bettencourt 1997).

It is important to know how each of these categories of marketing instruments differentially influence relationship duration, customer usage and cross-buying of products. These marketing activities generate revenues via their effect on individual customer behavior (Bolton, 2002).

Satisfaction and Quality Management

Marketers typically assume that satisfied customers are more loyal (Szymanski and Hise 2001). However, studies of actual customer behavior have established that the effect of satisfaction on relationship length is complex. Bolton (1998) argues that satisfaction is an indicator of the subjective expected, and finds a positive effect of satisfaction on relationship length that is enhanced by relationship age. Mittal and Kamakura (2001) show that demographics, such as age and gender, moderate the effect of satisfaction on relationship length.

Negative discrepancies between a customer’s satisfaction with of a product provider and its competitor (i.e., competitor performs better than company) influence customer retention, whereas positive discrepancies do not (Kumar 2002).

A positive link between satisfaction and usage has been documented by Bolton and Lemon (1999). The underlying rationale for this link is that higher satisfaction scores reflect a higher utility of the provided product. This higher utility will be reflected in higher future usage rates.

However, a customers’ experience with a particular product will not necessarily transfer to additional products offered by the same organization (Verhoef, Franses and Hoekstra (2001).

Relationship Management

In direct marketing it is distinguished between marketing instruments that directly stimulate product sales, and those that focus on the maintenance and development of customer relationships (McDonald 1998). Marketing instruments can also be classified based upon whether they provide economic gains or social benefits to the customer (Bhattacharya and Bolton 2000). But these effects of relationship marketing variables have not been extensively investigated (Jain and Singh 2002). Since direct marketing focuses on creating immediate sales, direct marketing is not expected to influence the length of the customer-firm relationship. However, in the case of successful direct marketing policies, direct marketing may positively affect the depth and/or breadth of the relationship (Bolton, 2002).

A key objective of concentrating on loyalty is to enhance relationship depth, although it is also intended to increase customer-firm relationship length (Bolton, 2002). Although there is considerable anecdotal evidence that loyalty programs strengthen social bonds between customers and product providers (Sharp and Sharp 1997). In existing relationships, direct marketing is an important tool to sell additionals (Roberts and Berger 1999). Direct marketing often offers attractive propositions to customers, such as economic benefits (Bolton, 2002).

Brand Equity

Most observers define the brand equity in term of marketing impact that exceptionally attribute to a brand. Brand equity relates to the information that usually gets different results from marketing of a product (Keller, 2003). Brand equity is a set of brand assets and liabilities linked to a brand, its name and symbol that add to or subtract from value provided by a product to a company and/or to the companie's customers (Aaker, 1991). Brand awareness, brand loyalty, perceived quality and brand association are the core assets for the brand equity. These are important assets for building strong brand equity helps in increasing the brand awareness in the market. The perceived quality and its association with the brand name can effect the customer’s satisfaction and gives him the reason to purchase. This results in the high brand loyalty among the customer and greater share in market (Chen, 2001).

A power full brand enjoys a high level of customer brand awareness and loyalty. Company can have a competitive advantage through high brand equity (Kotler et al., 2005). Brand equity provides a great value for customers; brand equity assets help the customers to capture and process the brand and store large number of information about it. Brand equity can help to attract new customers and/or to maintain the loyalty and faith of old customers (Aaker, 1991).

Customer based brand equity arises when customers are well acquainted with the brand name and keeps some favorable, strong and unique about brand association in memory (Keller, 2003). Brand equity also involves the value added by a product through customer relations and perceptions about a specific brand name (Wood, 2000).

Brand equity supports the company in facing the competition. If a brand has a strong position in the segment, another brand will find a very difficult to compete in the same segment as they already correlate various characteristics with the recognised brand (Papanastassiu & Rouhani, 2006).

Brand Loyalty

Brand loyalty shows customer preferences to purchase a particular brand; customers believe that the brand offers the enjoyable features, images, or standard of quality at the right price. Initially customers will purchase a brand for trial, after being satisfied, customers will keep on buying the product from the certain brand (Bolton, 2002). Brand loyalty represents an encouraging approach towards a brand resulting in regular purchase of the brand over time (Tuominen, 1992).

Brand Loyalty reflects the ratio of regular buyers to satisfied buyers who like the product This is more useful in marketing the product to existing customers because of good brand loyalty it will cost less effort and money, than to attract new ones (Tuominen, 1992). When loyal customers see any lack to a brand attribute, then they immediately transfer to other brand products that offer a better deal. The reason for buying a same product from a familiar brand saves time and reduces risks (Bloemer & Kasper, 1995).

Perceived Quality and Brand Association

Perceived quality defines a customer’s perception about product superioty. Perceived quality provides fundamental reasons to purchase. Perceived quality provides greater beneficial opportunity of charging a premium price. Perceived quality enables a strong brand to extend on a large scale (Hoyer & Brown, 1990).

Mostly customers prefer to buy products from a well-known and familiar brand, rather than opting for unknown or new brands (Rust et al, 1999). Perceived quality of a brand influences decision making of consumers. This influence is important when customers are unable to analysis the quality of a product (Aaker, 1991). All customers are conscious about product quality. The majority of people prefer to go for well-known brands which have high reputation in the market.

Favorability, strength, and uniqueness of brand associations are the dimensions distinguishing brand knowledge that play an important role in determing responses that makes up brand equity, especially in high involvement decision settings (Chen, 2001).

There are values of a brand that are not as visible as other brands. These values can be based on brand association with certain factors that provide confidence and credibility among customers. Companies try to associate certain attributes to their brand, which makes it harder for the new brands to enter the market (Aaker, 1991).

Brand Name Awareness

Brand name awareness plays an important role in consumer decision making; if a customer has already heard a brand name, the customer would feel more comfortable at the time of decision making. Customers do not prefer to buy unknown brands. Therefore companies’ strong brand name is a wining track as customers choose brand products (Aaker, 1991).

People generally tend to buy brands that they are familiar with and in which they have confidence. Brand awareness is responsible for loyal customers, for which unknown brands have to face tough competition (Hoyer & Brown, 1990).

However, well-known brands are always more likely to be recognized and therefore it is more likely that customers prefere brand products.

Emotional Branding

At present, successful companies have built relationships with consumers by attractively engaging them in a personal communication which responds to their needs. Marketers have done so by connecting with customers and creating strong emotional bonds with their brands (Brand Week, 2001).

When companies want to know what consumers feel about them, they have to build a personal communication with them. This is the good way for a company to consider itself because customer perceptions are very important for companies. However a company can learn a lot by listing to its customer's views (Daryi, 2000). For companies it is essential that its brand corresponds with its products to create emotion; thereby products become connected with a brands image in the customer’s mind (Papanastassiu & Rouhani, 2006). Emotional branding is the fine approach that clarifies the values of a company to its customers (Marken, 2003).

Pricing Strategies

The effect of price on customer behavior in their relationships with companies do not focus only on actual prices. They also focus on price perceptions, such as price fairness or payment equity (Bolton and Lemon 1999). Higher absolute prices lead to lower perceptions of price fairness, but price fairness is also be affected by competitors’ pricing policies (Rust, Zeithaml and Lemon 2000). Negative changes in price perceptions over time (e.g., price fairness decreases), will probably have a larger influence than positive changes (Tversky and Kahneman 1991). Furthermore, differences between the price perception of the dealer and its competitors can lead to regret (Tsiros and Mittal 2000). Positive price perceptions relative to competitors have a large effect on customer retention, and negative price perceptions relative to competitors have a small effect (Bolton, Kannan and Bramlett 2000).

Price plays an important role in the acquisition of new customers. In contrast, after the relationship has been established, the role of price tends to become less prominent and experiential aspects of the relationship, such as quality, become more important (Zahorik and Keiningham 1995).

Brand Name

The name of a brand is the fundamental indicator of the brand. The name of the brand is the basis for raising awareness of the brand and communication efforts. Often even more important is the fact that it can generate association which serves to describe the brand (Aaker, 1991). Brand name is a significant choice because sometimes it captures the central theme or key association of a product in a condensed and reasonable fashion. Brand names can be extremely successful means of communication (Keller, 2003). Some companies assign their products with a brand name that in reality has nothing to do with the emotional experience but is catchy and a name that people can easily memorize. The core base of naming a brand is that it should be unique, that it can be easily differenciated from other names, that is easy to remember, and that it is attractive for customers (Papanastassiu & Rouhani, 2006).

Symbol and Logo

Symbols have a long history which shows brand identification of the company. Logos and symbols are an easy way to recognize a product. It is a greater success if symbol and logos became a linked in memory to corresponding brand name and product to increase brand recall. Customers may perhaps identify definite symbols but be unable to link them any particular brand or product (Keller, 2003). Logos helps companies to develop the brand equity through raised brand identification and brand loyalty. Logos are very important assets, companies spend enormous time and money to promote brand logos and symbols (Hem & Iversen, 2003).

Experience

All brands create feelings; some brands are designed to give customers more experience in the true sense of the word than other brands. The most powerful brand goes beyond the traditional means to steal customers’ heart away and take on special meaning to customers through their product. With time and experience, consumers learn about the brands, they find out which brands satisfy their needs and which ones do not (Daryi, 2000). Customers have used a same branded car for many years, because customers have good experience company brands product.

Self esteem

Usually people have some pre-conceptions about themselves, which is the image of ideal self and also reflects the person’s desire how he would like to be. When the person tries to think about himself he tries to compare it to the people who are well known in society and have high image in the society. It is a very basic and natural tendency of a human being to look into his self esteem and personality by comparing it to others (Solomon, 2005).

Self-esteem refers to person’s self-concept. When people have a bad self-esteem it shows that they will not perform well and they think that when they will do a certain work and they might be rejected or fail (Solomon, 2005). When self esteem advertising is done, there are attempts to change product attribute by motivating a positive feeling about the self. One approach of doing this is to challenge the customer self esteem and then it shows a product with a linkage of that can provide a solution (Solomon, 2005).

Consumer Behaviour

The Consumer behaviour study involves how an individual or groups select, purchase, use or dispose of products, s ideas, or experience to satisfy their need and desires (Solomon, 2005). The consumer environment influences how the consumers feel, consider and act. The environmental features are, for instance, comments taken from other customers, advertising, packing, price, and product appearance etc (Peter & Olson, 2005).

Consumer behaviour is related to the physical action of a consumer, which can be measured directly. Frequency of visiting stores or shopping malls can be measured. To select a specific store then to go there is very difficult to choose and observe directly. Where different types of behaviour can be measured including a shopping pattern in stores. This kind of measurement is very hard. The behaviour can be analyzed in different ways, by offering lower price, better and good quality (Papanastassiu & Rouhani, 2006).

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 (Schiffmann, 2004).

Consumer Decision Making

The consumer decision making process defines different steps when a consumer goes through to purchase a product. If customer wants to make a purchase he or she takes a sequence of steps in order to do complete this purchase. Problem recognition includes when consumer feel a significant difference between the current state and ideal so consumer thinks there is some problem to be solved. The problem may be small or big. In the second step, the consumer seeks information about the product. The extent of information search relies on the level of consumer involvement. In case of expensive products, the level of involvement is high. Conversely, in case of relatively cheap products the level of involvement is usually low. In the third step, the consumer evaluates the different attributes of the brands. Consumer may consider the product attributes and compare brand products. In the final step consumer makes his choice about a product (Solomon, 2005).

It’s true that a consumer may not necessarily go through all the decision making steps for every purchase he or she makes. At times, consumer makes his or her decision automatically and the decision may be based on heuristics or mental shortcuts. Other times, in case of highinvolvement products consumer may take a long time before reaching a final purchase decision. It depends on consumers’ importance of the products like purchase of a car or home (Solomon, 2005). More over consumers try to make an estimated brand universe on the basis of available information about the brands, and to make an estimated the utility function on the basis of past consumption experience (Davies, 1986).

Decision Rules

Consumers apply decision rules to 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 (Solomon, 2005).

Social Class

Social class is an invisible stratification of the inhabitants of the society into different groups based on some traits of the people. Inhabitants in a society can be divided into different social classes according to their income level, occupation, education and so forth (Hawkins, 2004). Social class of a person is determined by a wide variety of set of variables including income, family background and occupation (Solomon, 2005).

People of a certain social class will also have different choices and preferences for different products. Members of a specific class will also vary in taste. People form higher social class will have preferences for reputed branded products as they buy products not only to satisfy their needs but also to say who they are through the products (Schiffmann, 2004).

Purchase Intention

The purchase intention shows customers preference to purchase the product, whose image is very close to customer. Moreover customers are well aware of certain brand name through advertising, from their past experience or information form their friends and relatives (Solomon, 2005).

The intention of a consumer to purchase a particular brand can be defined as his willingness to buy that brand.

This chapter aims to describe and justify the chosen methods of research undertaken for this project. Advantages and limitations of the research will be discussed, as well as explaining how the research will be analysed after it has been collected.

When considering what types of research to use, it was important to understand the benefits and drawbacks of each source. The deciding factor in the decision making process was the suitability of a method with respect to meeting the specific objectives of the project.

Secondary Research

Before the primary research was undertaken secondary research was carried out. This research aimed to help set the context for the primary research.

Secondary data is an essential element of almost all research carried out. Churchill (1995) suggests that the researcher puts themselves at a disadvantage if they don’t carry out this kind of investigation, especially now when there is such an information explosion readily available.

The literature review for this study involved consulting; academic and practitioner based library books, electronic journals, trade journals and magazines, and online research websites.

Advantages

An advantage of the secondary research was the amount of information available, as identified by Churchill (1995) above. In addition, the research found provided information that can be used in order to solve the problem under investigation more comprehensively.

Limitations

A number of limitations were discovered in the secondary data collection. Car manufacturers are facing intensive competition and consumer behaviour is changing rapidly over the last decade. Therefore, up-to-date academic literature, especially regarding needs of todays interactive generation, and many journal articles and books were only based on academic theory. Therefore, collecting detailed data is most difficult, as practitioners may have much more knowledge of the area investigated. Another limitation was the limited access to many online research websites.

Due to the different focus of all the research found and the changing nature of the theory involved, it was anticipated that the secondary research found would not be sufficient to fulfil the objectives of this study. It is therefore necessary for primary research to also be carried out. As Churchill (1995) suggests, secondary data rarely will provide a complete solution to a research problem.

Primary Research

The purpose of my study was to explore and find how brands affect consumers in their decision making process before making a final purchase. With a view of being able to find this, I decided to conduct my study encompassing a few well-known brands that have attained outstanding brand image. I selected three multinational automobile companies namely Mercedes-Benz, BMW and Audi. Therefore, the survey was conducted in Germany. All these brands are reputed in Germany for excellent products and they have a good market share. Customers trust these companies’ product. Moreover there is great competition between the products of these companies. In my opinion these are the best companies suitable for my study.

Mercedes-Benz views itself as an active member of society, which is why their commitment to their customers, neighbours, and other groups is geared toward their long-term satisfaction and well-being. Customer satisfaction is a key corporate goal at Mercedes-Benz. Accordingly, the wishes of customers are taken into consideration throughout the entire product cycle – from product development right up to the environmentally compatible disposal and recycling of end-oflife vehicles. Through its customer relationship management (CRM) system, the Mercedes-Benz has created an effective framework and developed key figures for customer satisfaction evaluation (Daimler AG, 2008).

The BMW Group aims to provide an excellent and regular s to its customers so as to keep its customers level of satisfaction high. The results are outstanding brands with an unmistakable profile. The BMW Group operates with the main objective, to provide customers with highgrade products and attain customer satisfaction through offering the best option to them, improvement of market leadership and giving first priority to customer preferences. To achieve its aims, the company knows how to deploy its strengths with an efficiency that is unmatched in the automotive industry. The BMW Group is the leading provider of premium products and premium s for individual mobility (BMW Group, 2008).

Audi is pursuing a dual objective. One the one hand, it aims to strengthen the desirability of the brand and supply fascinating cars in order to improve yet further on its position in the market on the premium cars. On the other hand, it harbours the ambition of optimising processes and utilising resources even more purposefully in order to enhance the effiency of the company as a whole. Audi sets its own benchmark very high. Customers and test experts confirm that the current “Vorsprung“, or competitive edge, that is the brands very essence. In such a mature and advanced industry as the car sector, success con only be achieved with a strong, appealing distinctiv brand (Audi, 2004).

The reasons for why these brands are successful in the German market are high brand awareness, good quality, easy availability of car parts, good after sale, centers in all big cities, and customer trust. Furthermore, companies manufacture the products according to its customer needs.

Questionnaire

In order to satisfy the main objectives of this study, as described in the introduction, the primary research sets out to provide enough comparative data so that the set of research can be successfully interpreted.

There are two types of methods that researchers can employee when collecting data for a study: qualitative and quantitative methods. For the purpose of this study the primary research that will be carried out will take the form of qualitative research. The reason of qualitative research is to know what is in a consumer’s mind. It can be done to admittance and take a rough idea about customer’s perspective. It assists the researcher to be oriented to the variety and complexity of consumer’s activities and concerns. The Qualitative data is collected for various reasons. It is very helpful to know things which researchers can find out through qualitative data analysis. Researchers can directly measure practical things which are impossible otherwise, like respondents feeling about specific product or brand, thoughts, intensions and behavior (Aaker, Kumar, Day). Qualitative research focuses on people’s understanding and interpretations rather than finding external causes or ‘laws’ for behavior and allows the researcher to experience research issues from a participant’s perspective. Furthermore, qualitative methods are useful in examining personal changes over time (Ticehurst & Veal, 1999).

The quantitative data analysis also plays an important role in the research, this is leading method used mainly in business and economics. Quantitative research is mainly utilized as a synonym for any data analysis collection technique for example questionnaire, data analysis produced through graphs and statistics that create or utilizes numerical data (Saunders, 2004).

It is very useful to gather information through a qualitative method for this study. The main reason of this study is to identify what influence brands can have on a consumer decision. Therefore it is useful to analyze the opinion of a large number of people. To reach the truthful conclusion in this topic qualitative research is used as a tool for this study.

Survey gathers information by asking participants about their experience, attitudes or knowledge (Graziano & Raulin, 1985). The survey is conducted for gathering data for specific purpose, generally researchers conduct different surveys for different purposes to identify the nature presented conditions (Cohen & Manion & Morrision, 2007). Survey does not consume long time while on the other hand interviews can take longer time. It is easier for a researcher in less time to find answers to all questions by following the same sequence to all of the respondents, therefore respondents will be more straightforward when answering the questions (Papanastassiu & Rouhani, 2005).

When employing a small part of the total population, the correct denomination is called sample. The research is designed in a right way; the sample selection can be seen as a depiction of the total population, although of a smaller size (Papanastassiu & Rouhani, 1996).

During the conduction of the survey, due to the lack of time, the first objective was to get more respondents in the limited time. So, the survey was conducted in shopping malls, car showrooms and streets. The survey was conducted in Stuttgart because it is a large, industrialized and prosperous city with high population which gives the great opportunity for people to have a wide range of different brand cars.

The aim of this survey was to conduct approximately 100 surveys, which were thought to be enough for my study if filled out correctly. While approaching people, it was necessary to explain them the reason for collecting this data. After that they were requested to participate as it would take them approximately 10-15 minutes. Furthermore, it was assured not to influence respondent’s choice of answers.

Having conducted the survey next step was to analyze the respondent’s views and answers. For the data analysis different diagrams and tables about the statistics were created to find a clearer overview.

To conduct the survey, 23 questions were designed which included which would take approximately 10-15 minutes, to fill out this survey questionnaire. I tried to construct the questionnaire very simple and easy. While designing the questionnaire all questions were considered carefully so that any question does not have a negative impact on the respondents. The main aim was to design a questionnaire so that respondents feel easy to choose the appropriate answer.

Advantages

An advantage of structured questioning is that all respondents are answering the same question, and the likelihood is that questions would be answered in a similar fashion if they were asked again at a later date, increasing the reliability of the research (Churchill, 1995). In addition, Silverman (2001) describes how bias can occur through unstructured interviews where there is frequent and unpredictable departure from the interview schedule.

Limitations

A potential limitation to be aware of when using interviews as a primary research method is interviewer bias. It is important that participants are not encouraged to answer a question in a particular way, or influenced by the interviewer’s opinions and beliefs. The questions are therefore designed in a manner that asks the participants the questions required without any external influences coming into effect.

The limitations of the research project were fully understood. The crude sample and qualitative nature of the study does not provide results that can be generalised to what is happening in terms of customer behaviour in general. Interviewer and interviewee bias was also considered. Bias towards of the interviewee’s own organisation was considered as well as the desire to please.

From this research it is expected that more questions will be raised than solved. It is acknowledged that the researchers own interpretations may be incorrect. Although the research project is not of a technical nature every attempt has been made to make it as accessible as possible.

Analysis of Research

Once the survey has taken place and both the primary and secondary research have been completed, it is anticipated that the primary research findings will be compared with the secondary research findings.

The survey transcripts will be studied, and any similar categories/themes that have arisen from the participants’ responses will be discussed, and any similarities or differences to the literature found will be mentioned. This categorisation will ensure that the most important and relevant areas of the survey are drawn out, in order for a more comprehensive analysis to take place. The results of the survey were analysed looking for specific areas of interest which related to the answering of the research aims and objectives as well as areas raised in the literature review.

Clearly the research undertaken is of a limited sample size therefore research is needed on a more multi-national scale in order to understand exactly how brands affect consumer decision.

Ethics of Primary Research

When the primary research was carried out a number of ethical considerations were accounted for. The data collected from using the questionnaire was through the agreement of implied consent as outlined above in 4.3.4.4. The questions did not seek any hidden agenda‟s or information that any of the sample would find offensive. No vulnerable individuals were used in the research; a reason for this was because the age of the participants used was over twenty-five years old.

Throughout the collection of the primary research, individuals were kept at ease, with no distractions or outside persuasions affecting them. This was important to the author so no interferences could affect the findings obtained.

However the ethics of the study were tested when as stated in the limitations of the study 4.4.1, many females were present with the male individuals who were completing the questionnaire. Nevertheless this was resolved, when the author explained the focus of the study and the reasons behind it.

Finally before the questionnaire was created the author read and complied with Northumbria University ethical standards. Upon which no information given by individuals will be used in other research, than that research which the individual consented too.

The purpose of this chapter is to explain and analyse the findings from the primary research.

The author has attempted to identify parallel connections, trends, associations or anomalies of the primary research with the secondary research literature. This is in order to identify comparisons and disagreements with the theory.

Primary Research Findings

This chapter provides the primary research findings that have been gathered for the study. In the chapter, diagrams were used to make the connection between the text and study conducted clearer.

Furthermore, it shows the demographic information of the respondent and the statistical analysis of the information collected from the respondents.

Demographic Information on the Respondents

Table 01 shows the demographic information of the respondents. The first table provides the gender information which shows that 68% of the respondents are male and 32% respondents are female. The survey shows that the majority of the respondents are male. The respondents were selected randomly without any bias. Ownership of car is 100% because only people who own a car were selected for the survey.

Furthermore the table provides information about the respondents age. The first age group (25 to 35 years) accounts for 31%. The next age group (36 to 45 years) makes up for 38%, and the 46 to 55 years age group accounts for 21%. The 56 to 65 years age group makes up 8% and the age group above 66 years only accounts for 2%. How explained above all of the cases were selected at random.

The table also explains the respondents’ income. It is a very important variable. Most of researchers include this variable in their survey. The analysis shows that only 8% of respondents’ income is less than 1,000 € once a month. 29% of respondents' income by a month is between 1,100 and 2,000 € and 34% of respondents earn between 2,100 and 3,000 € once a month. 23% of respondents’ income is between 3,100 and 4,000 € by a month and 4% of respondents’ earning is between 4,100 and 5,000 € once a month. Finally, 2% of respondents' earn more than 5,000 € by a month. All respondents have a different car brand, matching their individual income level.

Furthermore, table 01 shows the demographic variable occupation which indicates that 20% of the respondents work in the private and 23% of the respondents run their own business. 14% of the respondents work in government offices and 8% respondents are university teachers. 11% of the respondents are doctors and 4% respondents are lawyers. Lastly, 20% of the respondents carry on other occupations.

• Ownership of Brand Car

â–º The following diagramm displays the result of the question asked the respondents about the specific car brand they own:

After having asked the respondents which car brand they own, I gave them five different car brand names which include the most common brands in Germany. 29% respondents replied to have Mercedes-Benz car and 21% respondents are running a BMW. 17% of the respondents own an Audi and 9% of the respondents replied to have an Opel. 13% of the respondents own a VW and 11% replied to have other car brands.

The majority of the respondents which is 29% answered that they own a Mercedes- Benz which is the highest percentage in the survey. In terms of ownership of a specific car brand, Mercedes-Benz is followed by BMW and Audi.

â–º The table below relates to the respondents' rank five car brands:

Table 02 demonstrates that the respondents kept Mercedes-Benz as their first choice followed by BMW and Audi. As many as 30% respondents ranked Mercedes-Benz first, 24% BMW second and 22% Audi third. 11% ranked VW fourth and 4% ranked Opel fifth, whereas 11% ranked other car brands.

• Information Search

â–º The table below shows the result of the question asked about the extend of information search the respondents did before buying their preferred brand:

Table 03 shows the extent of the information search before buying a car. 17% of the respondents searched information extensively before buying a car. 23% of the repondents compared only a few brands before making their final purchase decision. The survey shows that 18% of the respondents were engaged in limited information search, and 42% of the respondents did not search any information before buying a car. According to the result of the survey, it can be inferred that most potential buyers usually engage in information at least to an extent.

â–º The table below shows the result related to the question asked to which extend the respondents sought information from others:

By asking this question the objective was to find out if customers seek any opinion from others or not before buying a car. The table shows that 41% of the respondents replied “yes” which is the largest followed by 31% of the respondents who replied “sometimes”. 21% answered “no” and 9% answered “never” which means they never seek any opinion from others.

â–º The diagram below displays shows the result of the question asked if the respondents sought information about attributes he/she was not aware of previously:

This question is related to the customers’ information to search about attribute of car brands he/she was not aware of before buying. The survey result shows that 42% of the respondents answered “yes” which means that they sought information about attributes of an unknown brand car. 16% respondents replied “no” and 35% respondent responded “sometimes”. Only 7% answered “never” which means that they never searched information about attribute of an unknown car brand.

• Purchase Decision Making

â–º The figure below portrays the result of the question asked the respondents related to their purchase decision making process:

The objective of this question was to find out whether the purchase decision was the respondents own individual decision or a collective decision. As we can see in the diagram above the majority of the respondents replied that the purchase decision was their own decision and only a few respondents answered that the purchase decision was a family decision. The lowest number of respondents replied to have asked a friend before buying, this is followed by the “others” which signifies that the respondents sought others suggestions before making buying decision.

â–º The following table displays the result of the question asked related to the most important attribute the respondents considered before making their final buying decision:

Regarding which most important aspect the respondents considered when they made a purchase decision. The purchase decision of a potential buyer is influenced by a number of factors namely past experience, brand, quality and price. The majority of respondents 36% answered when they purchased a car they considered the well known brand name and 31% respondents replied that they considered the car price and 14% said they considered the car quality and 7% respondent considered the car design. Finally, 8% considered price and quality and 4% considered other attributes.

â–º The figure below portrays the result of the question asked the respondents related to the number of brands they conxidered before buying:

The objective of this question was to find out how many cars the respondents considered before buying a car. The majority of the respondents asked which is 34% answered that they considered three different car brands before purchasing and 27% of the respondents replied that they considered two different car brands. 18% of the respondents considered four car brands whereas 12% of the respondents considered five cars and 9% considered six or more car brands.

â–º The table below portrays the result of the question asked if the respondents took a lesser known brand into consideration before making their final buying decision:

The table above shows that more than 43% of the respondents answered “No” which means that the respondents mainly considered only the brands that were in their preselection. 21% of the respondents replied “Yes”, 20% of the respondents answered “Sometimes”, and 16% replied “Never” which means they only considered the brands in their consideration set.

• Quality Perceptions

â–º The figure below portrays the result of the question asked related to the respondents quality consideration between a well-known brand and a lesser known brand:

The question regarding the quality perception of consumers between well-know car brand and lesser known car brand is important. This question is closed to brand name impact on consumer decision making. 46% of the respondents answered “Always” which means that the customer believe that well-known car brands always have better quality than lesser known brands. 17% of the respondents replied “Sometimes”, 23% answered “Most frequently”, and 15% answered “Not necessarily”.

â–º The table below shows the result of the question asked related to the respondents quality perception of well-known brand products:

When it comes to the question regarding a brand product quality it is necessary to find out what are the respondents views about the quality of brand products. The majority 48% answered “Yes” which means that the quality of brand products is always good. 8% of the respondents replied “No”, 27% of the respondents believe “Not always”, and 18% respondents answered “Not necessarily”.

â–º The table below shows the result of the question asked related to the respondents quality perception of lesser known brand products:

The table above shows that 35% of the respondents believe that lesser known brand products consists of inferior quality. 22% of the respondents answered “No”, 28% replied “Frequently”, and 14% of the respondents responded “Never”.

• Logos and Symbols

â–º The table below shows the result of the question asked whether well-known brands signify status symbols:

This question helps to investigate whether a well-known car brand is a status symbol. The majority, 35% of the respondents answered “Yes”, 16% of the respondents replied “No”, and 27% respondents responded “Not always”. Finally, 22% of the respondents answered “Not necessarily”.

â–º The table below shows the result of the question asked whether using a well-known brand signifies the social status of the consumer:

Table 10 shows that many respondents consider well-known brand products signify social class. As many as 35% of the respondents answered “Yes”, 22% of the respondents replied “Not always”, 30% answered “Not necessarily”, and 13% of the respondents responded “No”.

â–º The table below shows the result of the question asked to which extent the brand name is more important than the desired attributes of the product:

It is helpful to find out the importance of brand name to customers opposed to the desired attributes of a product. As many as 41% of the respondents consider that brand name relative to desired attributes is “Very important”, 27% of the respondents believe “Importantt”, 11% answered “Not important”, and 19% replied “Not always”.

â–º The table below shows the result of the question asked related to wether the respondents prefer a well-known brand products:

To find out whether people always perfer brand products, the respondents were not asked about specific brand products. The majority ,47% of the respondents, replied that they “Always” prefer brand products, 20% “Frequently”, 18% “Sometimes”, and 15% answered that they “Never” prefer brand products.

â–º The following figure shows the results of the question asked whether the respondents see brand logos as a symbol of customer status:

As many as customer 43% of the respondents “Yes” wgich means that they see brand logos as a symbol of status. 20% of the respondents replied “No”, 27% responded “not always”, and 14% of the respondents believe “Not necessarily”.

â–º The following figure shows the results of the question asked whether the respondents see brand logos as a symbol of customer status:

After having asked the respondents about the enhancement of self esteem, it is interesting to find out how people themselves feel. 36% of the respondents answered “Yes” brand image increases self esteem and 17% of the respondents replied “No” brand image does not increase self esteem. 27% of the respondents answered that brand image increases self esteem“not always” and 21% respondents replied “Not necessarily”.

Research Analysis

This chapter presents the analysis of the primary research findings and shows its connection with the theory, which is the base for this thesis. The different parts follow the structure of both the theoretical frame and the primary resaerch findings.

Through this survey it was considered how brands affect consumer decision in car choice. Brands play an important role in customer’s choice when purchasing a car. The result of the survey is very positive and shows that brands influence customer’s choice in the car industry.

Brand Equity

The theory shows that a brand is composed of a set of brand assets and liabilities that are connected with the brand. These connections are related to brand name and symbol and add or subtract from the value provided by a product to company and for the customers. Brand equity factors are deeply connected to the brand name and symbol. When brand name or symbol is changed, this affects all assets and liabilities. The factors of brand equity are explained by David Aaker. These factors are:

1. Brand loyalty

2. Name awareness

3. Perceived Quality

4. Brand Association

These factors are responsible for adding and subtracting value for customers. Brand equity helps customers to construe processes and to store quantities of information which are related to the customer’s specific product and brand preferences. This also affects customer confidence and purchase decisions like past use experience or familiarity with a brand and its characteristics (Aaker, 1991).

Brand Loyalty

Brand loyalty shows customer preferences to purchase a particular brand; customers believe that the brand offers the enjoyable features, images, or standard of quality at the right price (Bolton, 2002). Brand loyalty represents an encouraging approach towards a brand resulting in regular purchase of the brand over time (Tuominen, 1992). Brand loyalty is shape of continue purchasing a conscious to regular buying the same brand (Solomon, 2005).

42% of the respondents replied that they are loyal to the specific branded cars. Customers trust a brand and become more loyal with the previous positive experience.

The survey results illustrate that most people are loyal to a specific car brand. Over time they purchase the same car brand because the specific brand has satisfied the customer’s needs and in turn has gained the trust in the brand. The study also explains the customer’s preferences to purchase a particular car brand in shape of regular purchasing. Some people are even using the same car brand for generations. Customers believe that the brands offer them high standard of quality and price fairness. The results also indicate that most of the people are brand loyal to well-known car brands.