Relationship Between Consumers’ Behavior and Branding in Family Business

5143 words (21 pages) Business Assignment

16th Jun 2020 Business Assignment Reference this

Tags: Business AssignmentsMarketingBusinessBrandingConsumers

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1.0 Introduction

A family business or privately-run company is an organization whose proprietorship and the executives are concentrated in at least one or more families, with in any event one individual from the family is in charge and controls the business while others are being prepped or considered for managing the business in the future (Joseph, 2014).

Family business are practical in the economy of any country; since fruitful family business can contribute fundamentally to the monetary improvement of the nation (Ylvije and Elez, 2013); they are principle drivers in business generation, development advancement, rivalry creation and wealth generation for an economy.

Brands are imperative to business owners; they fill in as a concentration for purchaser loyalties and in this manner create resources which guarantee future interest and consequently future incomes (Chovanová, Korshunov and Babčanová, 2015). They therefore bring soundness into organizations, help prepare for aggressive infringement, and enable venture and intending to happen with expanded certainty (Loken, Ahluwalia, Houston, 2010). Branding is the way toward making a relationship or an association between an organization’s product and enthusiastic impression of the client to produce segregation among rivalry and building devotion among clients (Hislop, 2001); therefore, brand management is an essential component of holistic promotion (Kotler et al, 2013). Consumer behavior indicates the outlook with regard to experience, ideas and services of a product (Ashraf, Naeem and Shahzadi, 2017).

1.1 Background of the Study

While many scholars have worked on the link between branding and consumer behavior in large private and public companies (Ashraf et al., 2017; Zhang, 2015; Chovanová et al., 2015), focus on family businesses with regards to the relationship between branding and customer behavior is relatively new. For instance, Wiesner and McDonald (2001) assessed the importance of Human Resource Management in family businesses and argued that research with regard to them is a recent phenomenon. Family businesses are characterized by a set of unique features (Wiesner et al., 2004), they have limited human, material and financial resources (Huang, Soutar & Brown, 2002). As a result of these limited resources, it is usually more difficult to invest huge monitory commitment in brand management.

Family businesses focus on allocation of resources to achieve their maximum short-term advantage, which frequently leaves them to respond to external influences as they occur rather than taking a proactive approach (McAdam, 2002). Family businesses also have less market power than large organizations and as a result they are more subject to market changes (McAdam, 2002) as a result of change in customer behavior. However, sometimes a family organization can be more responsive than larger organizations and adapt to market changes as they occur (McAdam 2002; McDonald and Wiesner 2002) because of their closeness to their customers. It is based on this backdrop that this study seeks to assess the relationship between branding and customer behavior in selected family businesses in Lagos, Nigeria.

SECTION 2.0

2.1 Aim and Objectives

The aim of this study is to examine the relationship between branding and consumers’ behavior in family businesses. While the objectives of the research are to:

a)      Assess the impact of advertisement on consumers’ behavior in family businesses

b)     Assess the relationship between brand image and consumers’ behavior in family businesses

c)      Assess the relevance of brand association to consumers’ behavior in family businesses

d)     Assess the impact of brand loyalty on consumers’ behavior in family businesses.

2.2 Statement of the Problem

Every organization is expected to face hurdles of exceptional demands and challenges, while maintaining the highest form of productivity and work force attrition. Family business in particular have to deal with relative lack of control over their environment, commingling of business and personal priorities, and lack of resources to carry out the magnitude of change that is appropriate to meet accurately diagnosed problems or recognized opportunities.

Despite playing major role in the economic growth of a nation, Family businesses can be very slow and diminishing. In spite of their many contributions, family businesses are plagued by high failure rates and poor performance levels (Jocumsen, 2004); past studies have revealed that they are characterized by estimated failure rate of more than 80% across all industries in developing nations (Okurut et al., 2011 and Temtime and Pansiri, 2006), and more than 70% of family businesses fall within their first three years (Akingbolu, 2014).

In addition, it have unraveled that there is a fall in market growth occupied by various firms in Nigeria, due to inadequate utilization of their organizations’ resources, and lack of implementation of specific change management policies (Uchegbulam, Akinyele & lbidunni, 2015). As such, the internalization of economy, dynamic nature of the environment, greater competitive firms, the need for continuous innovation, product customization and growing use of ICT forces family businesses to face challenges of improving their competitiveness. These difficulties are peculiar to family businesses because their economy of scale and their resources are less than those of large firms (Uchegbulam et al., 2015).

In addition to the challenges highlighted, it is imperative to note that in current retail environment, consumers are beleaguered with abundance of brands and products (Chovanová et al., 2015), as result, family businesses are now saddled with the responsibility of paying more attention to both customer behavior and branding of their products or services. This is the reason why this study seeks to link branding activities such as advertisement, brand image, brand association and brand loyalty with customers’ behavior in order to enhance decision making for productivity enhancement of family businesses in Lagos, Nigeria, which is characterized by high economic dynamics.

2.3 Research Questions

The research questions to be answered in this study include:

a)      How does advertisement affect consumers’ behavior in family businesses?

b)     What is the relationship between brand image and consumers’ behavior in family businesses?

c)      How does brand association influences consumers’ behavior in family businesses?

d)     What is the influence of brand loyalty on consumers’ behavior in family businesses?

2.4 Significance of the Study

Today’s organizations need to tackle the problems of dynamic and uncertain environments in order to be successful. It is necessary for them to pay attention to branding and consumers’ behavior in order to understand how changes in their competitive environment are unfolding; and actively look for opportunities to exploit their strategic abilities, adapt and seek improvements in every area of the business, building on awareness and understanding of current strategies and successes.

Branding as emerged as an expedient element of the general business strategy, being a means of intensifying business opportunities (Singh, 2013). Family businesses have not given due attention to developing their effective strategies in the past; they are localized in functioning, and in order to sustain their competitiveness, they have to benchmark their assets, processes and performance with respect to the best in their industry. There is therefore a need for developing a framework for quantifying the competitiveness by adopting a holistic approach (Rajesh, 2008), such as brand management.

Furthermore, to ensure survival in a highly competitive environment such as Nigeria, family businesses have to learn to whether the storms of competition and beat today’s ferocious market forces and volatility by providing quality products, distinct product features and well packaged value adding products that satisfy customers’ need at affordable prices with effective promotional strategy.

The expediencies of loyal customers have been highlighted in extant literatures (Khan, Nadir and Mukhtar, 2016), this is because, this set of customers is capable of spending more, buying more regularly, more interested in knowing about a product, less susceptible to competitors’ promotions and are more likely to recommend a product or services (Khan et al., 2016). As a result strengthened positive relationship between brand and customers is very useful in enhancing the productivity of family businesses.

The outcome of this study is expected to hence the competitive strategies of family businesses from formulation to the implementation; through the provision of baseline information for choosing an appropriate branding strategies that drive positive customers’ behavior.  Furthermore, the gap in literature and limited research of family businesses in Nigeria is expected to be bridged by the outcome of this research. This study will assist business owners to have clearer understanding of branding strategies that most family based firms have ignored in the past through the provision of better knowledge on the most adoptable ones.

SECTION 3.0

3.1 Literature Review

Numerous studies have been undertaken on the relationship between branding and customers’ behavior. For instance, Chovanová et al. (2015) assessed how branding strategies influence consumers with regards to their purchasing strength of a product as well as the process of making decisions to purchase. Their study unraveled that the purchase of branded products as well as the fondness of brand origin is related to the age of customers. Fatima and Lodhi (2015) investigated how branding strategy such as advertisement affects the buy behavior of 200 respondents who use various cosmetics product, while instituting awareness and enhancing their perception. The study adopts both correlation and regression analysis and revealed that advertisement is expedient in instituting awareness, and could guarantee a positive perception of the consumers. Nevertheless the study revealed a positive relationship between consumers’ awareness and perception; and served as a decision support tool for management of cosmetics product.

In addition, Khan et al. (2016) assessed the relationship between branding variables such as price, product quality, country of origin, family and friends and status symbol; and customers’ behavior using multiple regression analysis. The study revealed that the most noteworthy feature that motivates the purchaser about their decision to purchase is branding. While Ashraf et al. (2017) further examined the influence of consumer buying behavior on a number of branding variables such as brand loyalty, brand association, brand image and advertisement based on footwear industry. The study revealed that the variables have positive interrelations, but had low correlation when compared spatially.

3.2 Family Businesses

Family Businesses have been defined by numerous authors (Wiesner and McDonald 2001), with differences across nations and industrial sectors (Atkins & Lowe 1996). There is no harmony in the size range for describing family businesses between countries even within the same country there could be disagreement in the means of describing the size of family businesses (Akojede, 2015). Commonly, the standards for defining a family businesses have incorporated the population of employees (size), type of ownership, degree of independence, nature of managerial processes, use of business planning, turnover rates and value of assets (Atkins & Lowe 1996).

Atkins and Lowes (1996) evaluated of the foundation for describing a family businesses based on 50 empirical studies, and observed that 34 of the studies employed employee population as the standard for determining size. For instance, in the United States of America (USA) an upper limits as high as 500 and as low as 100 have been applied to small business (Osteryoung et al., 1995). In the United Kingdom (UK), population as high as 500 have also been applied (Duberly & Walley, 1995) and, more commonly, an upper limit of 200 (Atkins & Lowe, 1996). The Australian Bureau of Statistics (ABS) defines small manufacturing businesses as having between 20 and 100 employees and medium-sized firms as having between 101 and 200 employees (ABS, 1990). Wiesner, Banham & Poole (2014) in support with the ABS, have adapted employee population with the size range of 20-200 employees as being family businesses on the basis that organization smaller than 20 employees in size would be unlikely to have organisational change issues to equal degree that firms in the range would be experiencing (Wiesner et al., 2014).

The function of family businesses as a medium for economic expansion and enlargement has been well recognized in the economic literature and documented in most countries (Akojede, 2015). For instance, in many of the recently built-up nations, more than 98 percent of all industrial enterprises relate to the family businesses sector and constitute large portion of the labour force (Akojede, 2015). According to Akojede (2015) family businesses benefit from competitive advantage over big enterprises in servicing discrete local markets.

3.3 Branding Strategies

A brand is an idiosyncratic name and mark which that identifies the goods and services of a business and distinguish them from the business or firm’s competitors (Ashraf et al., 2017). Branding strategies was grouped into brand association, brand image, brand loyalty and advertisement by Ashraf et al. (2017), and are summarized below:

3.3.1 Brand Association

The brand association entails product and services characteristics and customer reimbursement which enhances the purchasing attitude of consumers. Keller et al. (2011) asserted that brand association could be subdivided into three major groups, which include benefits, attributes, and attitudes.

3.3.2 Brand Image

Brand image is conceptualized as the consumers’ emotional discernment towards a particular brand (Malhotra, 2008). It is a rationalization of a firm’s offer that entails a figurative connotation attached to consumers through precise remuneration.

No specific definition has been established for brand image; however, it has been defined based on four perspectives, which include blanket definitions, meanings and messages, personification, cognitive or psychological elements (Dobni and Zinkhan, 1990).

3.3.3 Brand Loyalty

Brand loyalty correlates with brand equity, which results the dedication of consumers to a particular brand as a result of positive feeling towards a brand despite been tempted to purchase from other brands. Brand loyalty implies a brand has firm spot in the market and there is a very minute chance of consumer switching to another brand, while their willingness to purchase from the brand increases (Ashraf et al., 2017).

3.3.4 Advertisement

Fatima and Lodhi (2015) defined advertisement as a creative endeavor that shapes the consumer’s motivation in order to purchase a peculiar product as well as to alter or construct the discernment of the product in the psyche of the patrons. Advertisement petition functions as a purveyor that arouses the psychological intention of the purchaser for buying.

3.4 Customers Behavior

Zhang (2015) posited that a good number of researchers have used customer satisfaction and customer loyalty as consumer’s behavioral variables. Customer satisfaction is simply referred to as customers’ universal appraisal of the by and large shopping understanding of some definite product or service (Fornell, 1992). Oliver (1980) unraveled that consumers’ performance-specific anticipation and prospect disconfirmation are the sole signal of customer satisfaction. Particularly, when the product recital supersedes anticipation, customer satisfaction raises; however, if expectation does not exceed the product performance, customer satisfaction is bond to decrease. Given that product performance is a significant constituent of brand image, firms could identify the possible influence of brand image on consumer satisfaction through the identification of the perceptual differentiation in the direction of a brand linking the existing consumers and non-users of the trademark (Zhang, 2015).

3.5 Theoretical Framework

3.5.1 Innovation Theory

Innovation is simply the adaptation of novel thoughts to products, processes, or other parts of the activities of a firm that result to an increased valued added advantage (Uchegbulam et al., 2015). This value is depicted in a broader way to entail advanced value added for the firm and remuneration to consumers or other organizations (Uchegbulam et al., 2015).

Schumpeter (1984) presented two important definitions of innovation as regard to branding; which include product innovation and process innovation. The product innovation is the opening of a new product or addition of more value to an existing product’s brand; process innovation is the introduction of a new procedure for producing or delivering goods and services. Schere (1984) posited that innovation and technological change of a nation emanates from its entrepreneurs (Uchegbulam et al., 2015). He instituted the word Unternehmergeist, in German that signifies “entrepreneur-spirit”, and argued that it is the doing of new stuffs or the stuffs that are previously being done in a new approach, staunched directly from the labors of entrepreneurs (Uchegbulam et al., 2015). family businesses proprietors are primarily seen as entrepreneurs; and the agreement that family businesses participate in vital purpose in innovation has resulted to some perceptiveness on the methods by which family businesses advance and launch new products and services (Uchegbulam et al., 2015). Family businesses can possess an innovative benefit because they do not have strict management systems (OECD, 2000). Making of decision in family businesses is not inflexible and it doesn’t comply with a harsh hierarchy; the resolution to innovate is agreed upon by a little number of persons. Innovative move also excels in systems that are not limited by bureaucratic restraints (OECD, 2000). The innovation theory was adopted for the study, because the findings of this study is expected to influence the adoption of innovations for enhancing brands which is expected to improve the consumers’ behaviors of product and services offered by family businesses.

3.6 Conceptual Framework

This review is hinged on the concept that branding variables such as advertisement, brand image, brand association and brand loyalty correlate with consumer’s behavior in family businesses. The conceptual framework is presented in 1.

Figure 1: Relationship between Branding Variables and Customers’ Behaviors in Family Businesses (Adapted from Ashraf et al., 2017)

3.7 Conclusion

This review is aimed at providing a general overview of the topic “relationship between consumer’s behavior and branding in selected family businesses in Lagos State”. Having established the problems associated with running a family business in Nigeria, it was established that paying attention to relationship between branding and consumers’ behavior could further inform enhanced decision making, which generally increases the purchasing power of consumers. The reviews unraveled that similar studies have been done in some countries and industries other than Nigeria and family businesses. Hence, studying further on the topic would fill this gap in literature.

SECTION 4.0

Full Reference of Peer Reviewed Text:

Chovanová, H., Korshunov, A., Babčanová, D. (2015). Impact of Brand on Consumer Behavior. Procedia Economics and Finance. 34: 615 – 621

4.1 What review question am I asking of this text?

The selected article presents a study on how branding affects customer decision making process; hence my review question based on this text is, what branding variables were used as independent variables, and what method was used to derive this aim?

4.2 What type of literature is this?

The reviewed article is a mainly research literature, having no link with other types of literature.

4.3 What sort of intellectual project for study is being undertaken?

The authors of the selected article undertook a knowledge-for-critical evaluation type of intellectual project, and were found to be very concise and objective. This study was able to answer my research questions by addressing it through data gathered from the survey. In addition, article offers recommendation to its target audience.

4.4 What is being claimed?

The research is a knowledge-for-critical evaluation type of study, which clearly juxtaposes the motivation factors as regard branding that affect customer behaviour are quality, prices packaging and traditions. In addition, it could be observed that the authors claims are well articulated throughout the work, however, the abstract concisely summarised the claims of the authors. More so, the authors indicated tentativeness their claims based on tested hypotheses, while the authors claims are explicit based on the scope of the work.

4.5 To what extent is there backing for claims?

The authors did not corroborate their claims to any authors, hence the extent of the claims are in particular with the authors research. It could be observed that even though the claims were based on the authors’ research, it was robust, having used an adequate sample size.

4.6 To what extent are claims consistent with my experience?

The claims are consistent with my experience to a large extent. Since it was strongly shown that branding affects customers’ purchasing ability.

4.7 What is my summary evaluation of the text in relation to my review question or issue?

The text has been well presented, most especially regarding how the objectives were tackled and how both descriptive and inferential statistical methods were used to back their findings. However, the authors could have provided stronger backing to their claims, if they had corroborated their findings with closely related works.

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