Importance Of Brand Leadership For A Fmcg Brand Marketing Essay

Published Date: 23 Mar 2015

The main objective of this report is to understand the importance of brand leadership for a FMCG brand. The report develops further by analyzing the previous literature on Branding, Brand leadership, and Brand Loyalty which is implied to a FMCG brand. Finally, it underpins the Brand value which enables Irn Bru to create Brand Loyalty.

1.2 Objectives:

To identify the Brand Leadership model used by Irn Bru.

This is based on Aaker et al. (2000) brand leadership model; an analysis would be carried out in order to compare the model with Irn Bru operations.

To identify consumer motives behind purchasing Irn Bru.

By the help of a devised survey questionnaire, consumer behaviour toward purchasing of Irn Bru will be analysed

To investigate why loyalty develop from consumer perspective in FMCG market.

Academic literature and dimension of brand loyalty will be used to investigate this objective. Focus group will be brought under practice to indentify these factors.

1.3 Background:

With an increase in the level of competition, and companies offering more than one similar product into the market, it has become necessary to brand the product in order to differentiate it from others. Brands play an important role in modern society, and allow products to be easily identified within the market. The concept of "branding" is used in many aspects of human life i.e. it could be a product, religion, sports, culture etc. As companies are expanding globally, the concept of branding has been recognised as an utmost important factor. Not only to attract set target markets, but also to attain brand leadership. The main aspects of branding include: building a successful brand, differentiating amongst its competitors, and maintaining the brand image in the market. Due to the intensity of the modern market, there has been increase in the spending on marketing; branding is a major aspect (Aaker, 1991; Simmons, G. 2007). Generally, a brand is considered as a product, service, a presence or personality which rides on the mind of consumers. Branding, according to De Chernatony & McDonald (1992), has been characterized as the process of creating value by offering convincing and constant customer experience, which in turn satisfy their needs and wants and keep them coming back. Organisations have started referring to themselves as a 'branding organisation' once customers have realized the value of a brand.

With diversity in the market, it has become extremely important for companies to create and maintain high brand awareness and identify how it varies from that of the competition. Internet has proved to be a medium that enables consumers to explore the benefits provided. The increasing number of internet users indicates that global brands can be viewed, and interacted from a single point. Also, the increasing number of online purchases reflects the future of brands. Since more than one company manufactures similar products, the question that arises is: which brand is a market leader? Brand leadership has opened a new gateway for the brands who seek to be on the top of the market. Brands can be an important asset for the company, and in the future they will be an increasingly prominent feature of business dealings.

AG Barr was founded in 1830 with the foundation of Robert Barr's cork-cutting business in Falkirk. In 1875, his son diversified the company into aerated water production, and in 1887 operations were extended to Glasgow. The Glasgow-based company was re-named AG Barr in 1904. Its core brands included: Irn-Bru, Tizer and Orangina, the latter of which is produced under licence from Pernod Ricard. The company also distributes Lipton on behalf of Unilever Bestfoods in impulse and cash and carry outlets. In 2001, the company established an agreement with Pepsi Bottling Group to distribute Irn-Bru in Russia. The company will continue to focus on its core brands and markets. High brand loyalty for carbonates brand Irn-Bru has seen it maintain sales in a declining market sector The Company's main strength lies in its Irn-Bru brand, which shows no sign of a sales decline and seems unaffected by the general switch to fruit/vegetable juice amongst carbonates consumers. To a certain extent it is possible that consumers of Irn-Bru are not much concerned with the health issue; whilst, comparing to other carbonated brands. In order to meet the needs of their potential consumers, Irn-Bru has launched a low-calorie version for the consumers preferring diet carbonated drink. The main strength of Irn-Bru is the inclination of consumers toward Scotland's other national drink. The performance of Irn-Bru in Scotland is astonishing, despite the economic downfall. The catchy advertisements and the tag line 'Phenomenal' has continuously portray the tradition and the uniqueness of the Irn-Bru. AG Barr has also pursued a strategy of diversification through acquisition - the company bought Strathmore mineral water in 2006 and acquired both the TAUT sports drink range and the exotic juice drinks manufacturer Group Rubicon in 2008. (GMID, 2009).

Rationale for the topic:

According to Aaker et al. (2000), the emerging paradigm of strategic brand leadership is replacing the classic, tactically oriented brand management system. Leadership has become an important aspect of the brand, as it leads to innovation. A key element of brand leadership is brand vision. The ability to see the future of the company through the customer's eyes is important, as it sets into motion a long-term strategy for the brand. It is vital to discover how consumers perceive the product and what their view points are, as brand value is highly based on it. Measuring loyalty towards a product is equally important as it will enable Irn Bru to reflect on their strategies.

Chapter two-Literature Review

2.1 Brand and the concepts:

'A brand is not a name. A brand is not a positioning statement. It is not a marketing message. It is a promise made by a company to its customers and supported by that company. I may have intelligent agents that can go out and assemble pages of reports on every camcorder on the market, but I don't have time to read them. I'll buy Sony' (Sterne, 1999 cited in Rowley, J. 2004). Due to the different characteristics of product, brand enables to distinguish one brand from another ( Riezebos, R. 2003). One of the main concerning areas in the field of marketing is branding. As brands have grown beyond the national boundaries, it has become vital to manage and operate them with a strategic view. This will enable companies to focus on the specific brand, rather than company as a brand. As the level of competition has risen, companies tend to focus on their branding strategies. A well derived strategy will lead a brand to attain high awareness and success in the market niche. As defined by Pickton and Broderick (2001), branding is a strategy that helps the company and their products to leverage in to the market and it also build brand value for the owners of the brand and also the consumers. Whereas, Randall G (2000) has a presented a different approach: 'Branding comprises of all fundamental strategic process going within the company; it is a part of marketing, but not restricted only to marketing department'. Based on the benefits offered by a brand, the consumers form a purchasing decision, and evaluate it depending on their needs and wants. According to Temporal (2001), as the importance of branding is increasing, fast moving consumer goods industry is highly benefited by these strategies. Companies have more than one product in the marketplace, and by viewing the soaring profits in this sector. Companies have tried to differentiate it from their rivals, so that consumers find it easy to purchase. Henceforth, brands provide guarantee package to the consumers in terms of value, quality and reliability. Consumers will generate loyalty toward a brand, if the promised quality, value and reliability are full field. As identified by Murphy (1991), Branding adds value to the overall product, and from consumer perspective it provides a self confidence. However, Rowley (2004) has argued by stating that brands not only consist of value, and it also acts an information hub. This enables consumers to eradicate the time spent on searching a specific product offering.

2.2 Brand Equity:

The goal of the brand leadership paradigm is to create strong brands. Brand equity is defined as 'the set of associations and behaviour on the part of a brand's customers, channel members and parent corporation that permits the brand to earn greater volume or greater margin than it could without the brand' (Wood, 2000). Appendix 1 depicts, according to Aaker (1991) major assets of a company can be brought together into five main types: Brand Loyalty, Brand name awareness, Perceived quality, Brand association, and other proprietary brand assets such as copyrights, patents, trademarks. Appendix 2 shows the brand equity chain, where the description provided on the brand leads to the strengthening the brand and this results in creation or building of brand value. Keller (2003; cited in Atilgan et al. 2005) defined Brand equity from a customer based point of view as Customer based brand equity occurs when the consumer has a high level of awareness and familiarity with the brand and holds some strong, favourable, and unique brand associations in memory'. One of the main reasons for a company to brand their product is to attain organisational goals of attracting and creating amongst their consumers by provision of cost efficient products, as it will aid company to acquire higher margin of profit (De Chernatony & McDonald, 1998). Strong brands are the core products of the company and in order to gain a recognition and financial reward, it is important to build a successful brand.

Appendix I: Aaker's theory on Brand Equity

Appendix 2: Brand Equity chain

Source: Wood (2000)

2.3 Brand Leadership:

Leading brands are perceived to be relevant, unique and compelling. They inspire customer loyalty and enable organizations to charge price premiums. They increase bargaining power with business partners, make it easier to hire and retain talented employees and provide organizations with clear strategic directions and platforms for future growth. Together, these lead to well above average financial performance and a market valuation that far exceeds book value. (Aaker, 2000) Leading brands are organizational assets that must be preserved, enhanced and leveraged for the benefit of their organizations. Aaker & Joachimsthaler (2000) developed a Brand Leadership model which will enable companies to build strong brands for the future. It comprises of four challenges which an organisation should consider.

2.3.1 Organisational Challenge:

Every organisation should structure and process their functions that will lead them to be a strong brand in the market place. A clear organisational hierarchy should be made so that brands are not at the mercy of ad hoc decisions made by those with no long term interest. When a company increases its portfolio, and extends the production line, every manager from a different production line should provide a common set of inputs, outputs and knowledge that will benefit the organisation. The inter-communication will enable the sharing of insight, experience and brand building initiatives. As companies are going international, there lies a trend which companies struggle to confront with, and organisational challenges are raised. With the increasing competition for talent growing amongst business networks, current economic activities rationalise the challenges which are created within the firm. In order to gain competitive advantage, change in organisational strategy is important as response to market need is important.

2.3.1.2 Brand Strategy:

Strategies are always used to gain sustainable competitive advantage, which could reflect from any part of the organization's operation. The marketplace is the evaluator of this advantage. Brand strategy is the process whereby the offer is placed to evoke the perception of advantage (Arnold, 1992). Almost all the features of Brand Management are driven by the overall brand strategy; otherwise a company might be leading with a confused perception and image of the brand. Strategy gives focus and direction to brand management and provides the platform that enables brand managers to gain consistency in all their brand related activities (Temporal, 2002). According to Reizebos (2003), a brand strategy is based on two parameters: differentiation and added value. Differentiating refers to the practice of trying to establish the difference between a company's own product and that of the competitor. This signifies that the intention of the brand strategy has a competitive character. By targeting the differentiation strategy, the firm tends to deliver a brand competitive advantage. The other fundamental trait of a brand strategy is 'added value', which refers to the fact that a brand has more value for consumers than the bare product. In order to create such an added value, the brand must be meaningful for the consumers (Reizebos, 2003). Appendix 3 shows different branding strategy approaches adapted by brands, and their advantages and disadvantages (Drummond & Ensor, 2001).

2.3.2 Brand Architecture:

Pertomilli et al. (2002) defines brand architecture from a company perspective as a combination of strategies which include managing, organising and operating in to the market with their brands.

2.3.2.1 Branding in FMCG sector:

Branding plays a significant role in FMCG sector, as there are myriad of products in the market. Due to presence of high number of products, it acts a powerful instrument in creation of differentiation and higher store presence. Since the competition is intense in this sector, it is highly important for firms to make their brand identifiable from others. Packaging, graphics and promotional activities such as advertisement is used to attract consumers (Ellwood, 2002). Brands operating in this sector are highly cost efficient and production is carried out in masses. A high capital is required to establish production of FMCG brand, as production cost is high; such firms enjoy the benefits of economies of scale. As identified by Moffett et al. (2002), products are not confined within a region or country. With increase in globalisation, brands can be found in any part of the world. Companies need to consider the global implications of marketing and try to gain brand leadership in the marketplace. For the FMCG sector, advertising plays a pivotal role and is the best channel to communicate with the targeted audience. Moreover, with the advancement of internet and information provided on it, consumers tend to opt to review product information online before purchasing it. With high competition and many brands offering same product quality, it is very difficult to generate brand loyalty in FMCG sector.

2.3.2.3 Benefits of Branding in FMCG sector:

A successful brand is one which evokes the consumers by creating and sustaining a strong, positive and lasting impression. (Fill, 1999). For a FMCG company, it is important to create trust towards its brand in minds of consumers. This trust is being built by providing better quality and satisfaction. Once the trust is created, it subjects to the top most choice of the consumers mind set and leads to re-purchasing actions. The approval of customers signifies that branding, from consumer perspective, is a method which reduces the time taken for decision-making and related perceived risk of the product. This shows that the brand name provides information about the quality, price, and attributes of the product without requiring the consumer to undergo the time consuming process (Fill, 1999).

2.3.2.4 Branding in the soft drink sector:

With the fierce competition in the soft drink industry, firms are fighting for market share. Companies should reflect upon their branding strategies, as they are of paramount importance. Companies should extend their brands to various market niches in order to meet the needs of the consumers. The scope and opportunity in this market is high, as products can be differentiated by infusing different flavours. It would be appropriate to emphasize that the value which the brand adds to the product is intangible, however, its presence is undeniable and with immense significance. Considering the characteristics of soft drinks, branding is an ideal marketing tool which allows companies to position and differentiate between the offered product and its incremental value.

International product portfolio analysis

The Boston Consulting Group (BCG) originated an early version of product portfolio analysis. The BCG version classifies a company's products into four categories: stars, cash cows, problem children, and dogs. The classification is based on market share and market growth rate. The optimum product portfolio for one market is different from that of another. Product A, for example, may be a star in country X, and a dog in country Z. Individualizing the use of portfolio techniques for each country will help define different product portfolios for each foreign market. Although portfolio analysis of products for international sale is relatively new, it can assist the company in determining how to allocate resources among different markets.

Positioning a new product/brand depends upon the firm's ability to describe product attributes that will generate a flow of benefits to buyers and users. The international marketer planner must put these attributes into bundles so that the benefits created match the special needs of each targeted market segment or subculture. Product positioning then is viewed in a multidimensional space, commonly referred to as the"perceptual space" or "product space" (Johanson, 1985). In terms of perceptual space, a particular version of a product is graphically represented as a point specified by its attributes. Competitors (local and international) and other products are similarly located. If points representing other products are close to the point representing the new product, then these are products similar to the new prototype. If the prototype is positioned away from its closest competitors in the world markets and its positioning implies positive features, then it is likely to have a significant competitive advantage. This mapping process is appropriate for each foreign country/market segment contemplated.

2.3.3 Brand identity

2.3.3.1 Competitive Analysis:

According to Cohen (1988), competitive analysis permits the understanding of differential competitive advantage, as well as the comparative advantages in relation to competitors. Intense competition requires operations to be carried out with maximum efficiency. The key to this is large-scale production to reduce the value of fixed costs per bottle. With increasingly sophisticated vehicles and rising investment costs, the optimum economic scale increases (Rees, 1999).

Industry Analysis Using Porter's Five Forces

According to Besanko (2007), in order to devise and execute successful strategies, a firm must understand the nature of the markets in which they operate and compete. In 1980, Micheal Porter developed five forces to analyse the extent of competition. 'Understanding the nature and strength of each of the five forces within an industry assists managers in developing the competitive strategy of their organization.' (Campbell D., 2002, p.134)

The Five Competitive Forces for Irn Bru:

A structural analysis of the UK carbonated soft drinks industry examines the impact the various forces have on this industry. Firms operating in the carbonated soft drink market in the UK, face tough competition from the rivals. Every soft drink organization should review its rivals' products, analyse any potential new entrants in the market, understand the demand of substitute products, review the consumption pattern and demand amongst the buyers, and identify appropriate suppliers. Porter's five force model is used to analyse the magnitude of competition. The intensity of competition within the industry is quite high, with regular advertising wars taking place; on the other hand, sales are increasing and the products are differentiated. There are high barriers to limit entry such as: the high capital required for production and distribution, increasingly advanced and specialised technology, lack of access to distribution, and strong consumer loyalty to recognised brands.

A final, but very critical, point to bear in mind is that the forces themselves change over time. Sometimes in a predictable way, other times not. However, it is usually possible for the firms to have some influence over these changes. If no action is taken to counter the forces, it is extremely likely that the forces will grow stronger over time. Each firm needs to consider the actions that it could take to counter the forces, or position itself in such a way as not to face their full impact. For example, merging with a rival not only eliminates a competitor but also reduces the number of competitors in the market as a whole, something that can benefit all rivals by reducing competitive intensity.

Threat of Rivalry:

In the UK's soft drink industry, Irn Bru faces the greatest competition from its arch rival Coca-Cola and Britvic soft drinks (Appendix, X). Their presence all round the globe shows their potential strength, and demand in the consumer market. As can be seen from the table, Irn Bru has made constant strides in an upward direction by gaining market share.

Manufacturers' retail value brand shares in carbonates, 2006-08

2006

2007

2008 (est.)

% change

£m

%

£m

%

£m

%

2006-08

Coca-Cola GB, of which:

1,296

65

1,302

65

1,334

66

2.9

- Coca-Cola

934

47

942

47

968

48

+3.6

- Fanta

127

6

124

6

115

6

-9.4

- Schweppes

96

5

102

5

111

6

+15.6

- Dr Pepper

61

3

61

3

65

3

+6.6

- Sprite

57

3

56

3

60

3

+5.3

- Lilt

21

1

17

1

15

1

-28.6

Britvic Soft Drinks, of which:

277

14

280

14

305

15

+10.1

- Pepsi

215

11

224

11

252

12

+17.2

- 7-Up

24

1

28

1

30

1

+25.0

- Tango

38

2

28

1

23

1

-39.5

AG Barr - Irn-Bru

82

4

86

4

91

5

+11.0

Other

96

5

94

5

88

4

-8.3

Own-label

239

12

235

12

200

10

-16.3

Total

1,990

100

1,997

100

2,018

100

+1.4

Source: Mintel, 2009

Loyalty towards brand names is another factor to measure brands performance. Brand loyalty in the soft drink market is another component which Irn Bru has to deal with from its rivals. Coca Cola and Pepsi are well established brand names all around the globe. Due to high brand awareness and product availability, they attain high market share. The presence of Irn Bru in the international market is very limited. Perhaps, due to its authenticity, it is famous in Scotland, and has struggled in other international markets (e.g. Russia, South Africa, Australia, America and Canada). The soft drink industry is mature, with nominal current growth and limited ability of firms to increase revenues at the pace they may have become accustomed to in the past. Of course, new markets, such as in Middle East or Southern Asia, may result in major new growth opportunities. The current makeup of the industry line-up leads to higher levels of competition. On one hand, key rivals offer different products, but similar in size, which increases competition. Differences in companies' philosophies, cultures, and histories result in varied strengths and weaknesses, and lead to different strategies in pursuit of competitive advantage; the overall predictability of the industry development decreases and industry volatility increases. Irn Bru has a strong presence in the Scotland, due to the fact that it is the country of origin and a strong culture is associated with it.

Threat of new entrant:

Entry to the market, on a large scale, is difficult. The risk of new entrant in the soft drink industry is low. The presence of renowned brands like Coca-Cola and Pepsi, and their strong distribution channels in major grocers, public houses, and fast food outlets dominate the industry. Moreover, as the market is saturated, growth tends to be minimised. Such situations prevent new entrants from entering the market, and competing against strong brands. With high fixed cost attached i.e. labour, warehouse, logistics and economies of scale, it is difficult for new entrants to compete with established brands. Market saturation and high fixed costs, the levels of barriers are increased, and henceforth, entering into the UK soft drink market is difficult. Furthermore, because the products are have already acquired the impression of good experience, and reputation matters, very heavy advertising would be a necessity to gain a foothold as a brand producer. Entry as an own label producer might be possible, but it would demand a large scale operation to keep costs down and be as competitive as the existing large own-label producers. Even with the removal of trade barriers and generally greater harmonization within the European Union, major continental firms have appeared to be reluctant to plan a takeover on the UK market. There are at least several strong brands for every consumer segment currently in the carbonated soft drink industry. Consumers do have a choice, and many have developed brand loyalty. It would be difficult for new entrants to sufficiently differentiate their products and to build brand identity and loyalty.

Threat of Substitute:

There are number of substitute for carbonated soft drinks e.g. mineral water, fruit juice, energy drinks, tea, coffee etc. Water and sport drinks provide more variety that appeals to the consumers who seek the healthier options. However, carbonated soft drinks have gradually been gaining market share at their expense and this trend does not appear set to reverse. In addition, carbonated soft drinks have a particularly strong appeal to the youth market (10-25years), which is where most of the sales can be traced to. Overall, the threat appears relatively weak, especially to the core youth market.

Power of suppliers:

Soft drink industry suppliers do not hold a strong competitive pressure. There are usually several suppliers to choose from for any of the soft drink components; therefore, the rivalry between suppliers is high, and companies have many options, including manufacturing components themselves, which some of them still do. Again, relatively weak pressure exists, with the exception of sugar producers and plastic suppliers. The work force is not highly organised, nor is it militant.

Power of Buyers:

The large numbers of consumers willing to purchase a bottle of carbonated soft drink mean that the actions of a single consumer will not have a notable effect on a company's performance. At the same time, however, these consumers face low switching costs and have varied degrees of brand loyalty, which requires companies to spend significant resources on capturing and retaining that individual consumer. Over 65% of sales are sold through multiple grocers. The top five grocery chains account for nearly 70% of all grocery sales and are thus in a strong bargaining position. Some 8% of sales are through fast food restaurants, and 6% sales are through public houses. (Mintel, 2009) The remainder of sales are relatively weak buyers, including off-licences, confectionaries, newsagents and restaurants. Soft drink manufacturing companies distribute the products to these stores so that they can be sold to the consumers. The top grocers buy soft drinks in bulk, as it allows them to purchase goods at a cheaper price.

The strongest pressures come from the power of buyers and the fairly intense non-price competition within the industry. Nevertheless, overall the industry seems to be in a fairly healthy position: the leading firms are very profitable and industry growth is expected to be steady around 8% over the period 2007-9. Cola, as a product, appears to be reaching maturity, but other segments offer prospects of development and growth. This plays to an advantage in the hand of Irn Bru, as the product offered is completely contrary to the Cola's. At the same time, the firms are actively competing on quality and bringing new products to market, as well as being innovative in terms of reducing costs by investing in new technology and machinery, developing new forms of packaging and offering better distribution services. The danger is that the firms may not be able to sustain the route to growth and instead may seek growth through techniques such as undercutting rivals' prices in a market share game. In this situation, profits are likely to deteriorate rapidly if destructive head-to-head price competition becomes the main competitive instrument.

2.3.3.2 The Brand Positioning Concept:

According to Kotler (1997), 'Positioning is the act of designing the company's offering and image so that they occupy a meaningful and distinct competitive position in the target customers' minds'. The positioning of a brand is not about the quality which products provide, but it is what consumer thinks about the brand. For positioning, it is important how a consumer perceives the product rather than its physical nature. According to King (1991; cited in Fill 1999), advancements in technological fields have allowed products to offer similar functional and physical appearance, where consumers choices and decision will be based on the brand name. Henceforth, positioning origination as a brand will evoke actual and potential customers. According to McCormack (1984, cited in Olsson 2004), positioning is a factor which determines what consumers are actually purchasing while buying any product or service; and subsequently communicating related imitations and inspirations to the buyer. An organization should primarily evaluate and identify where they stand in the market spectrum and then position it accordingly.

2.3.3.3 Branding from Consumer's Perspective:

A brand provides not only a source of information, but also performs certain other functions which justify its attractiveness and its monetary return, when they are valued by buyers. According to (Kapferer, 2008), there are eight main functions (Appendix 4), Identification and practicality are mechanical and concern the essence of the brand i.e. to function as a recognized symbol in order to facilitate choice and to gain time. Guarantee, optimisation and badge function reduce risk i.e. consumers will buy the best product in its category carrying the consumers' self image. Continuity, hedonistic and ethical functions have more pleasure side of consumers. Ethics show that buyers are expecting more and more responsible behaviour from their brands.

2.4 Brand Building programs:

Online Branding:

Companies in this technological era are changing their strategies, and managing their brands online. Internet plays a vital role in creating awareness, informing consumers, and leveraging brands to the next level. Internet is a medium that consumers views to gain brand and product knowledge before purchasing them. Many multinational brands rely on their online strategy, as it reaches out easily to the target audience. Henceforth, the implementation of online branding has increased, and has defined a new integrated marketing communication strategy for the companies. Rowley (2004) identified seven possible objectives of online branding.

Awareness of the service should be raised online and offline;

the usage of online branding should be encouraged toward higher level;

the communication between the users and firm should be improved;

users should encourage to visit the website frequently;

users should be encouraged to use the provided wider range of online services;

people should remember and evoke the brand mark;

Changing people's perception and attitude toward the company.

As identified by Constantinides (2002), loyal and existing customers tend to be much more sensitive about the product, when compare to the non-existing customers. These customers may constantly update themselves by company's offering and make the usage of online availability of the product. Henceforth, stringency should be maintained via multiple channels in order to communicate to the target audience. Online branding and website should be designed in a way that it appeals to the large consumer sector. The message put across should be in the relevancy to the brand and should persuade customers to form a purchase decision. Innovation should be the core of the company's online strategy, as a differentiated website will not only attract, but also convince to buy the product. The development of the website should be continuous, as consumer trend and preferences changes within time. Market research would enable the company to track the product performance, and reviews available will aid the company to make changes accordingly. Henceforth, internet plays a vital role in branding, and help customer to identify positive attributes offered by the company.

Hypothesis:

H1: Compare the brand leadership model with Irn Bru's current operation, and seek the difference.

H2: With the increase in consumption of other soft drinks, the brand loyalty of Irn Bru has decreased.

Chapter three- Hypothesis

This chapter has for purpose to determine and formulate the questions which are important to resolve and study in order to respond to the subject.

The author does not own all the information that he would like to have to deal with her subject. Therefore, he has to constitute the elements that he does not have and which are useful for the achievement of her dissertation. These questions will be the foundation of the author's research and will allow to lead her to a conclusion.

Chapter four- Methodology

3.1 Research Method Design Model:

Interview

Observation

Survey

Quantitative

Qualitative

3.2 Quantitative Research:

Quantitative research defined by Muijs (2004) 'Explaining phenomena by collecting numerical data that are analysed using mathematically based methods'. In this method, a structured questions are constructed which has predetermined response options. For example, usage of Likert scale 1 to 5; 1 stand for lower proportion, 5 stands for higher proportion. To analyse the data, quantity of the research conducted is more of concern, rather than language (Groucutt et al., 2004). In this dissertation, as the one of the main objectives was to measure the brand loyalty of a FMCG brand (Irn Bru); a quantitative method was chosen. In order to generalize the results, the use of a quantitative approach made it very easy to analyse the consumers' responses. One of the most important factors was get a considerable number of respondents for analysing the result.

4.3 Qualitative Research:

As defined by Corti and Thompson (2004, p.326), Qualitative research aims "to capture lived experiences of the social world and the meanings people give these experiences from their own perspectives". Qualitative research enables to understand consumer behaviour, and it elucidate with in depth reasons of the behaviour. One of the objectives of this dissertation is to 'To identify the Brand Leadership model used by Irn Bru'. The qualitative research tends to assure the reliability of the data, and it also entails the validity of the information, as it is taken from the company. According to the author, qualitative research will enable to evaluate the above mentioned objective. A pre-prepare questionnaire with open-ended questions will lead to identify and compare the brand leadership model of Irn-Bru to Aaker's brand leadership model. In order to compare the data, reliable and valid information is needed, so an interview will be the best option to test the hypothesis.

Another objective of this dissertation is to 'To investigate why loyalty develops from consumer perspective in FMCG market'. This area comprises of different opinions from the consumers based on their experience. Conducting a focus group enable to identify the reasons and also reliable information from consumer perspective. This will allow a discussion between the panel, and different opinions are exchanged. However, many authors have criticized this method (Edmunds, 2000; Denzin & Lincoln, 2000), as according to them this research lags behind the validity and reliability. Indeed, the participants does not quantify the overall perception of the consumers, therefore it questions the validity of the findings. Moreover, the efficiency of the qualitative method can be questioned as the information provided by the company may tend to be bias that it to protect the company's image. Therefore, the author has to maintain neutrality in the questions, as it would help to extract maximum information from the interviewee and consumers.

3.3 Research Approach:

As identified by Trochim (2006), there are two main methods of reasoning: inductive and deductive approaches. A deductive approach is informally called 'top-down' approach. The deductive process initiates by identifying the related theories to the subject, as described in the literature review. It is narrowed down by constructive hypothesis to test the objectives. Based on the hypothesis, relevant data collection method is selected. The collected data will test against the generated hypothesis, which would confirm the originality in the theory. An inductive approach is contradictory to deductive approach. Where it initiates from specific observation, finding patterns and regularities, designing tentative hypothesis, and finally developing some conclusions. This report is compiled by applying the concept of deductive approach.

Theory

Hypothesis

Observation

Confirmation

Figure 2: Process of deductive approach

3.4 Data Collection Methods:

3.4.2 Secondary Data:

Secondary data is obtained for this dissertation is collected from company's annual reports (2009), trade association, government sources and other relevant publications. The data collected from these sources are termed as secondary as they are collected by other organisation, analyse and tabulated by projecting on tables, charts and summary of these obtained data. Secondary data is advantageous, as it enables author to understand the concepts briefly. Moreover, it is less time consuming and without any financial investment. (Boyd et al., 1985). To gain the subject knowledge, current literature on the topic was explored, investigated and reviewed. This data collection method enabled the author to search articles with validity and reliability. Implication of various theories and ideas on FMCG branding, Loyalty toward FMCG product, Brand leadership was brought into practice and were collected via academic books, published journal articles and statistical databases. Keywords used to search include: marketing, branding, FMCG, brand leadership, challenges in branding and brand loyalty. References found in books and journals were also reviewed to find additional items of related literature. Several websites, forums and blogs were used for collecting secondary data. In this dissertation, the literature which has been used was chosen through a subjective judgement method.

3.4.1 Primary Data:

The main reason to collect primary data is to increase the reliability of the research. Primary data is generally collected by or for the user of the data, so that, it can be analysed and tested on specific generated hypothesis. The data can be re-calculated or analysed again several times as the original data is present with the user (Boyd, H. et. al, 1985). The primary data is obtained from an interview with the assistant brand manager of Irn Bru. Devised questions were asked, on the basis of organisational challenges faced during this economic turmoil, and the future of the brand. In order to acquire information about the loyalty of the product, a survey was conducted in the form of questionnaire at two major retail outlets in Edinburgh i.e. Tesco and Asda. By considering consumer behaviour toward purchasing Irn Bru, and to reach the target audience who consume Irn Bru, retail outlets were selected. The data entered in the questionnaire was done in front of the author, where the questions were explained in more detail to each respondent. Finally, to measure the consumer loyalty toward FMCG products, a focus group comprising of 10 persons was conducted. The panel were asked about their loyalty with FMCG products, and why they were loyal to that brand.

Participants

Consumers from different background in Edinburgh were selected to gain primary data. The conducted survey was on random basis i.e. The questionnaires were conducted without any bias or discriminations. This is a cross-sectional study, where the data was collected at a single point of time. Considering the limitation associated with this dissertation, the sample comprises of 45 consumers from different background, but the precision was not compromised. As the questionnaires were filled in front of the author, it is expected that all the received responses were honest, and were correctly up to their understanding and knowledge of questions.

3.6 Sampling Process:

Sampling is a process of selecting a few sample from a bigger group to become the basis for estimating or predicting the prevalence of an unknown piece of information, situation or outcome regarding the bigger group (Kumar, 2005).To ensure that a measure can be determined of market potential, it is necessary to undertake some form of quantitative research. To run through it, an overall element of sample is selected, and it is tested by the help of questionnaire. This kind of research is designed to measure consumer opinions, attitude and behaviour to the various brands, products or services (Groucutt et. al 2004). For the sampling process 45 respondents were selected randomly, where X% were male and Y% female. As it was carried out at retail store, the respondents that filled in the questionnaire all belonged to different age groups, enabling the analyser to figure out the trend amongst the consumers.

3.7 Questionnaire Design:

Questionnaire designing is of critical importance. Any mistakes or ambiguity on the questions can lead to the whole research programme being of little or no value. Before the questionnaire is developed, thought must be given to the purpose of the proposed survey. Questionnaires are all about gaining information that can be used for making marketing decision (Groucutt et. al 2004). Tull, D., Hawkins, D. (1990) identifies two types of issues which may arise while structuring questionnaire: (1) How much time will it take to complete the entire questionnaire? (2) How much effort is required by the respondent to complete the questionnaire? For example, 1 open-ended question may take a respondent 5 minutes to answer, and a 25-item multiple questionnaires may take the same amount of time. Moreover, much more effort may go into writing down a 5-minute essay than in checking off choices on 25 multiple choice questions.

Format: In this report, two kinds of closed-ended questionnaires were used. Structured questions were formed, where respondent can rate their answers on a Likert scale, and a checklist of features were used, where the respondent was required to select the best applicable option. The questionnaire is shown in Appendix XY.

Enticement: One of the methods to encourage the respondent to take the survey is by providing them some sort of enticement. This may be in the form of a gift or prize draw for the participants. For this report, a chocolate bar was awarded to those who took the survey and filled the questionnaire.

3.7.1 Pilot Study:

Pilot studies are specifically used to test ideas or methods and explore how they can be applied in a better way. No design is ever so complete that it cannot be improved by a prior, small-scale exploratory study. Pilot studies are almost always worth the time and effort. Carry out a pilot study, if any features of design need further clarification (Willett 1990; cited in Maxwell, J.2005). A pilot study amongst ten respondents was carried out before the final questionnaire was launched. The author identified that the previous questionnaire would not be appropriate to use for measuring the brand loyalty of Irn Bru, as it lacked in data.

Interviewing techniques

Interviewing is one of the most used data collecting method from the people. Any person-to-person interaction between two or more individuals with a specific purpose in mind is termed as interview. According to Kumar (2005), interviews are divided into two parts, unstructured interviews and structured interviews. In order to collect data on the operations of Irn-Bru, and match them to the brand leadership model; a structured interview was conducted. "Semi-structured, or focused, interviews sit somewhere between the fixed questions and forced responses of surveys" (Pranee L. et al, 2005, p.56). A The author believes that the best way to have more efficient data is to have a heterogeneous group. In a focus group, exploration of perceptions, experiences and understanding of a group of people who have some experience in common with regard to the brand loyalty in the FMCG sector. Tape recorder was used in one-to-one interview, and as well during the focus group. It is utmost important for the author to be able to recall the answers and examples provided by the interviewee and participants.

4.8 Summery of chapter

In this chapter, the author has discussed and analysed the different research methods used in previous research. This has enabled to justify the selected research method in compilation of this dissertation. By looking at the objectives, and the generated hypothesis a combination of both Quantitative and Qualitative research were brought into practice. Qualitative method included an interview with the assistant brand manager; where questions regarding the organisation and about the brand (Irn-Bru) were discussed. The focus group of 10 persons from different background, and based on their experiences with the FMCG products, loyalty was measured. A quantitative approach was selected to measure the consumer motives.

3.8 Limitations:

Constraints are present in any type of analysis; carrying out a faultless study is impossible. Almost every study faces biases and constraints. As a result, constraints should be taken into consideration, in understanding the result of this report while additional caution should also be taken while generalizing its outcomes. It is probable that the information gathered for this report would differ if the survey was conducted with a sample in different geographical locations. The author also wanted to identify the motives behind purchasing Irn Bru between different age groups of consumers; but every consumer holds their own opinion about the product. The other factors which would cause limitations in this report could be: biased opinions on behalf of the respondents, reliability and validity.