How the Knowledge and Associations of a Brand Influences Decision Making

How the knowledge and associations of a brand influences decision making

Introduction:

Consumer behaviour is in essence; a discipline dealing with how and why consumers purchase (or don't purchase) products and services. These purchase decisions are influenced by consumers' needs and attitudes, and may also be affected by consumers' particular lifestyles. However, consumer decision making is not a one-way process. Sellers market their products so that they become recognizable by more and more people, and to differentiate their product if there are many other companies offering a similar product. This process usually involves applying a logo, slogan or design, and is referred to as branding. A brand is thus, the idea or image of a specific product or service that consumers connect with by identifying the logo, slogan or design with the company who owns the idea or image (Brick Marketing 2005-2013). Brand is often used as a surrogate indicator of quality. Brand awareness and reputation thus influences many consumption decisions. Branding has a particular influence on the 'information search' and 'evaluation of alternatives' steps of the so called consumer decision making process.

We analyse the effect of branding in the market for new motor vehicles, specifically focusing on the Skoda Yeti. The yeti is classified as a 'compact SUV' with a target market of 28 to 45 year old men and women with young families. Its urban and rural capabilities coupled with its spacious interior make it an attractive option for those who; enjoy off road activities, consider having an individual style as more important than fashion trends and who tend to live varied lives which demand all round flexibility in transport solutions. Its competitive price tag makes it ideal for those who; are risk averse, seek value in their purchase, and have savings and access to funding but are particularly budget conscious. In the compact SUV segment, the Skoda Yeti encounters seasoned competitors, such as the Kia Sportage, the Hyundai Tucson, the Nissan Qashqai and Suzuki Grand Vitara. Skoda Yeti claims leadership in this very popular, but densely populated, class (NetCarShow 2010).

Information search:

For our purpose here, information may be considered to be knowledge obtained about some fact or circumstance. And in the context in which we are dealing, such knowledge is to be used in a consumer behaviour situation (CiteMan 2010). Consumers undertake both an internal and an external information search (Belch and Belch 2007). Consumers will firstly turn to any relevant information from long-term memory to determine whether a satisfactory solution is known (Quester et al 2011). This use of information is referred to as internal search. If a resolution is not reached through internal search, then the search process is focused on external stimuli relevant to solving the problem (Quester et al 2011). This is external search. In the purchase of an automobile, external sources of information are likely to include; the internet, friends and family, car dealerships, and advertising. As the purchase of a new car is a considerable financial outlay for most households, it is important that Skoda (for arguments sake), has a well presented website, and markets products so as to generate positive word of mouth amongst consumers. This will ease the external information search process, undertaken by potential consumers.

There is a strong link between brand awareness and information search. Brand awareness refers to customers' ability to recall and recognize the brand under different conditions and link the brand name to certain associations in memory. Based on the in depth interview results, approximately 50% (5 out of 10) people in the target market of 28 - 45 year olds were aware of the brand, however only 10% (1 out of 10) of the sample set were aware of the Skoda Yeti itself. Thus people are unlikely to draw on memories regarding the Skoda brand when in the market for a new automobile. This is understandable given Skoda is a very new player in the Australian market place, having only been introduced to consumers in 2007. Thus the external information search becomes ever so more important to Skoda with respect to brand awareness and knowledge. Consumers need to be made aware of the strengths of the brand, in particular, the competitively low price tag, and the inherent quality of the product, due to its association with Volkswagen, a global giant of the auto industry. Skoda must therefore, initiate a marketing campaign, which not only informs consumers of the brand and products,