Kellers Model Of Customer Based Brand Equity Marketing Essay

Kellers Model Of Customer Based Brand Equity Marketing Essay How do consumers evaluate service brands: An investigation of the performance of Harrods as a service brand to get their brand image Background of the Research Branding has been one the most exciting yet phenomenal marketing concept of the 21st century. A brand can be viewed as a promise made with consumers, the promise of providing consistent quality and satisfaction (Balmer Greyser, 2003). Therefore the term brand can be defined as a name, symbol, design or a combination of these to identify a product in the marketplace (Keller, 2006). Brands have become very important in recent years and are part of our everyday life and with so much choice available it becomes difficult to choose a particular branded product. Usually consumers tend to select products that are familiar to them, products that tend to have a clear meaningful set of values, attributes and brand names that are trusted (Keller, 2006). Both physical goods and services can be branded, however there has been a vast focus towards the branding of physical goods and very little work carried out on the branding of services (OCass Grace, 2004). The growth of services has been rapid across the world and it has become important to understand the tools that can be used to brand a service to initiate differentiation. Branding of physical products tends to be simpler because the consumer is able to hold, touch and feel the end product. Branding a service is slightly more complicated due to its intangible nature, because youre not going home with an item but more of an experience that occurs with services. Many scholars such as de Chernatony and DallOlmo Riley (1999), Berry (2000), McDonald, de Chernatony and Harris (2001) and OCass and Grace (2003, 2004) have taken an approach to create a framework that can be used towards branding a service. Most of these frameworks are created to measure services that are intangible such as banks, hotels, airline, financial and consultant services. This study will be focusing on the branding of Harrods services. The study has been motivated by the nature of service branding and the frameworks that have been created by scholars previously mentioned. However not all of these frameworks are applicable for this study and therefore will be concentrating only on the framework created by OCass and Grace (2004). The main reason being the framework created by OCass and Grace (2004) is the only one that measures service brands from the consumers point of view. The service brand model by OCass and Grace (2004) will be used against services being offered by Harrods. Harrods is basically famous for the luxury and high class products it offers, however this research emphasises on the services it offers. The main services Harrods offers are as follows: Karim Fayed hearing centre Beauty Sports Fitness Financial and property services Home lifestyle The studio Interior Design Innovation Furniture and interior design Food Fashion and accessories Fine Jewellery Weddings Occasions Corporate gifting services Healthcare Airport Services This research is not particularly focusing on one service it provides, rather it takes all these services in general and the respondents would be the customers of Harrods who have used any of its services. Aims and Objectives The main aim of this project is as followed. What are the service branding factors taken into consideration by consumers when selecting a luxury brand service provider; Harrods? The following objectives have been suggested and need be reached for a successful achievement of the project aim a) To identify, examine and discuss the relevant service branding associations consumers hold towards service brands b) To identify and discuss all the relevant service branding associations directly linked towards Harrods Services c) To examine how important are the service brand association for Harrods service consumers d) To evaluate the influence these associations have on the purchase of services from Harrods Literature Review Overview What is Brand? A brand is basically a trademark or a distinctive name of a product or manufacturer, it conveys and portrays the image of the product; word brand refers to a name, term, symbol, sign or design used by a firm to differentiate its offerings from those of its competitors, to identify a product with a particular seller, Kotler, (1999) stated. Developing a good brand has become a major task for many organizations today because it provides a number of advantages. Strong brands help the firm establish an identity in the market place (Aaker, 1991). A successful brand has a recognizable name which provides specific attributes to the consumer (i.e. quality, elegance, value). According to The Economist (1988) the basic purpose of branding is to build the products image, this image will influence the perceived worth of the product and will increase the brands value to the customer, leading to brand loyalty. From the marketing perspective, Kotler (1994) believes brands convey a few meanings to th e consumers like: Benefit: The help and benefit sought provided by the firm to its consumers, which is transformed by its attributes Culture: The brand reflects an organizations image and equity Personality: The brand is regarded with certain characteristics Users self-image: The brand reflects or consistent with consumers self-image Brand Value: Both physical and mental values provided by the brand to its customers Attribute: The functions of the product brand provide Companies normally develop brands as a source or mode to attract and keep customers by promoting value, image, prestige, or lifestyle. Hence, a brand is not just a symbol but comprises of core product, packaging and marketing communication, which includes many important meanings and values of a firm; the objective of brand building is to develop more valuable profits and benefits to the company. Relationship of Brands and Their Equity According to Motameni and Shahrokhi (1998) today brands play an important part in marketing strategy because it has become an important marketing component for the company and a source of information for the consumers. Branding and brand equity has been a key topic of interest to the researchers of marketing for many years. The term brand can be explained as a name, term, sign, symbol, or design, or a combinations of them which is intended to identify the goods and the services of a seller or a group of sellers to differentiate them from those of competitors (Kotler, 2005. pp 42). This topic of branding and brand equity has been a detailed research topic in the marketing literature. Aaker (1991) and Keller (1993) have gave some thorough insight into brand equity, and both have provided theoretical schemes that link brand equity with various consumer response variables. Brand equity has emerged as a marketing imperative, so too has the need to fully understand and manage brand associations (OCass Grace, 2003). Aaker (1996) has defined brand equity as a set of assets (and liabilities) linked to a brands name and symbol that adds to (or subtract from) the value provided by a product or service to a firm and/or that firms customers. Aaker has also identified five assets of brand equity: brand awareness, brand loyalty, perceived quality, brand associations and other proprietary brand assets. Aaker (1996) also presented brand isentity model which is very important in elaborating the concept of brand identity. Fig. 2.1 Source (Aaker 1996) The brand is a very important tool for marketers as consumers use it as a reminder to conclude certain product attributes such as quality (Krishnan Hartline, 2001). Lim OCass (2000) stated that brands are seen to be valuable assets and sources of differentiation that plays a vital role in marketing strategy. Branded goods make it simpler for consumers to identify the product in the marketplace (Lassar et al, 1995), brands also reduce the consumers search costs, perceived risk and signals the quality of the product (Keller, 2006). Kellers Model of Customer Based Brand Equity On the hand Keller (1993, 1998) has proposed a knowledge based framework which is a customer based brand equity model. The framework consists of two dimensions commonly known as brand awareness and brand image. The model consists of product related and non product related attributes (OCass Grace, 2003; Keller, 2003). The product related attributes are explained as the components of the core product or service wanted by consumers (Keller, 1993). The related attributes of service can be described as the process that takes place before, during or after receiving the service. For example when a customer uses a dry cleaning service they are paying for getting their clothing cleaned and the price charged is usually for the unseen elements such as the use of premises, detergent, cleaning equipment and employee expertise (OCass Grace, 2003). The non product related attributes refers to all other attributes that are external to the function or the process of the service offering (Keller, 1993). The four non product related categories are: price, user and usage imagery, brand personality and feelings and experiences. Price is considered a non product related attribute as it remains external to the purchase or consumption of a service (Keller, 1993, 1998). In terms of branding the price does not directly reflect the service or performance. Moreover price is established as an important association in brand image evaluation and a strong quality indicator (OCass Grace, 2004, Keller, 1998). User imagery is related to the type of person who is going to use the product or service (Keller, 1998). The attributes are usually formed by the consumers own experience via contact of brand users or by the image represented by marketing communications. On the other hand usage imagery illustrates the situational factors in which the brand is used (Keller, 1998). For example time of day, week or year, location, or type of activity. The user and usage imagery typically reflects the conventional users of a product or service in the context within which it is used. Brand personality has been defined as set of human characteristics or traits that consumers attribute to a brand (Keller, 2006, p.369). In simpler terms brand personality can be expressed by both demographic and psychographic characteristics, providing a concept upon which the brand can be positioned in the consumers mind. Brand personality or personality characteristics are used to target consumers, hence attracting that particular market where the people can relate themselves to how they see their ideal self (Keller, 2006, p.66). A well established brand personality has the ability to increase emotional ties with the brand along with developing trust and loyalty. According to Keller (1998) feelings and experiences which are also non product related attributes, have become important in terms of consumer evaluations of brands, often occurring through the evaluation of advertising. In the context of services, it is important to evaluate the feelings and experiences of service brands. For the reason that production and consumption occur simultaneously in services, the service experience is the active structure of meanings associated with the behaviours, thoughts and feelings that occur during consumption, which directly impacts on the consumers perceived brand image (Keller, 1998, 2006). The measurement of brand equity has also been a high interest area of study. There are direct and indirect measures for brand equity. The direct approach is an attempt made to assess the value added by the brand to the product (Keller, 1993). The indirect approach focuses on the identification of the potential sources of brand equity (Aaker, 1991; Keller, 1993). Both these approach can be given a merit, however Keller (1993) argues that direct and indirect approach to measuring brand equity are complementary and should be used together. Concept of Service Branding in the Marketing Literature Basically branding is basically an effective marketing strategy, tool and technique which have been utilized with great results for organizations and enormous success in the past (Rooney 1995). Nowadays, branding is facing a new popularity due to new and innovative applications. Though there have been times when branding was less than successful. Now marketers are working to get the appropriate applications in the given settings. All the problems regarding branding strategy in current time include the selection of a proper brand name. Coonan (1993) stated that this fundamental issue will impact on the success of a branding strategy. Marketers have to choose the advertising strategy to support and communicate the name, once a name is selected. Hence keeping the brand in a strong position is a critical concern. New areas of branding include corporate, industrial, and service branding. These non-traditional branding environments are becoming the future for marketers using branding strategy. To add to the new branding areas, there are new branding techniques. These techniques include brand extensions and ingredient branding. New strategies, techniques, and arenas for branding have to be managed. The organization must support and identify with the strategy. The goals, objectives, and mission of any organization should be in line with the branding strategy employed. There has been a lot of work carried out on branding and brand equity by academic researchers like Keller (1993, 1998) and Aaker (1991, 1996), but majority of their work has been focused on physical goods branding. In the last decade there has been many frameworks created to assist marketers to realise how consumers think about, and respond to brands, as a result enabling marketers to implement effective consumer centred marketing activities. Turley and Moore (1995) have stated that there is an increased growth of service economies throughout the world, but the branding literature has mainly explored branding in terms of physical goods, whereas the branding of services has been minimal and left out of the picture. Several researches have been done on services marketing that has focused on topics such as measuring service quality, service failure to service switching but the examination into branding of services has not been undertaken (OCass Grace, 2004). Keller (1993, 1998) and Aaker (1996) have suggested branding frameworks that can be applied to measure brand equity, however these frameworks are excellent when used towards physical goods but are not fully adaptable for service brands as some attributes need to be taken out or completely adjusted. Keller (1993, 1998) has created a construct known as dimensions of brand knowledge which is an in-depth analytical view of the brand from the perspective of the consumer. The model has been criticised because only a small section of the model has been empirically tested to date and the model overlooks the variations found in the area of consumer evaluation concerning goods and services (OCass Grace, 2003). Keller (1998) has however argued that hi s model can be applied to both branding of goods and services. With respect Berry (2000) has criticised that these models by Keller (1993, 1998) and Aaker (1996) have some aspects in common across the two domains of goods and services, but the application of these models can be questioned. The reason being the marketing principles of goods and services are inconsistent because the difference between the two domains. The core offering of goods is different from the offerings of a service, because core service offering of a service is more complex and largely compromises of elements such as processes, people and physical facilities (Tax Stuart, 1997 cited in OCass Grace, 2004). As a result the evaluation of service brands by consumers maybe different as there maybe the need for more or newer attributes required in examining service brands than physical goods brands, hence the models by Keller (1993, 1998) and Aaker (1996) are inconsistent and cannot be completely relied on when eval uating consumer perceptions of service brands. Service When exploring the concept of service Youngs contribution is very important. Youngs (2000: P 43) says, A service, combined with goods products, is experienced and evaluated by customers who have particular goals and motivations for consuming the service. Gronroos (1990) stated that service is an activity or series of activities of more or less intangible nature. He also stated that service normally, but not necessarily, takes place in interactions between the customers and the service employees and/ or physical resources of goods and/or systems of the service provider, which are provided as solutions to customers problems. Young (2000) has mentioned three areas of service, to elaborate it in much better way. First is that service takes place via interaction of consumers and the service provider, it can be a company or an individual. The other factors are the physical resources or the environments playing a vital medium role in the process of service production and consumption. Third service is needed by consumers to provide certain functions such as problem-solving. Boone and Kurtz (1994) have worked on services and according to them each of service characteristics is as follows: 1. Intangibility: Customer cannot sample a service before purchasing it that appealing to customers sense of sight, hearing, smell, taste, and touch. 2. Inseparability: Customer perceptions of the service provider become their perceptions of the service itself. Often Customers are unable to judge the quality of a service before purchase. 3. Perish-ability: The organization cannot put an unsold service into storage. 4. Difficult to Standardizes: It is mostly impossible to standardize offerings among sellers of the same service or even to standardize the service of a single seller. 5. Buyer Involvement: It is very important that buyers are often involved in the development and distribution of services. 6. Service quality is actually high variable in all aspects. When goods and services are compared on the grounds of their characteristics following table can be helpful in doing comparison. Fig. 2.2 Comparison of products and services and service branding implications (Source Grace and OCass 2003) Kristen (2008) stated that when its about providing service, knowing the expectation of customers and the customers perception of the service encounter is a vital component to delivering superior service. Delivering superior service, especially in the hospitality industry creates a myriad of opportunities for the service organization to surpass the competitive and become a recognized leader in the service industry. It only stands to rationalize that the concept of the service encounter directly affects satisfaction, loyalty and future behavioural intensions; which in turn, has a direct affect on the organizations success and financial stability. There are four basic unique features of services: intangibility, inseparability of production and consumption, heterogeneity and perishability. Heterogeneity of Service Brands The advertising that positions the brand should be met by frontline staff as if imitating the brand. Regular planning, control, automation and regular reviews of performance improvement and consumer reaction should be made use of to overcome heterogeneity and quality control difficulties of service brands (Chernatony Riley, 1999). The human element in service condition cannot be subjected to quality control measures as a product from a factory, thus each service experience is potentially distinctive, where consistency can prove difficult to achieve on a regular basis (Berry, 2000). Berry (2000) believes the concurrent product and consumption of services can enable to customise the service brand to serve the needs of particular consumers better, thereby making the practice of marketing the responsibility of every employee. The previous branding strategy is unlikely to accommodate differing consumer needs because of the rigid structure and almost inflexible approach. By making brandin g an internal as well as external activity, may help ensure consistency across time and differing situations (Chernatony Segal-Horn, 2003). Internal branding also known as internal marketing, has received great deal of attention and an area of vast interest, which has created a consistent organisational culture revolving around the brand concept. Within the service company the brand concept needs to be understood, which allows the brand to become an internal cohesive device, enabling employees to retain flexibility to deal with different people and situations, while conforming to the brand concept. As a consequence employee relations and internal communications are essential means to motivate and retain consumer conscious employees and ensure greater consistency in service quality (Chernatony Riley, 1999). Employees with positive attitudes and behaviour can increase consumer satisfaction with the service brand, which results in increased market share and sales. Intangibility of Service Brands The factor of intangibility of the services of the organization makes it hard for customers to identify and assess the quality of a service and differentiating between other competing brands. There is also a concern to firms as they find it difficult to set accurate prices for services. To overcome this problem number of branding strategies can be implemented. It has been suggested the size and reputation of companies, which are perceived associations of the firms brand name, that are used by consumers as an indicator to measure the quality when selecting between very intangible services (Chernatony Riley, 1999). It has also been noted by Balmer and Greyser (2003) that consumers are willing to pay higher premiums for services of a company with a strong reputation. Moreover firms that recognise the company name as the brand name, categorised by a distinctive corporate identity, personality and image is considered an important service branding strategy, providing endorsements recognit ion and acceptance as well as making the service more meaningful hence tangible (Balmer Greyser, 2003; Berry, 2000). Another service branding strategy that has been encouraged is the use of unique logos or physical facilities that consumers can immediately associate with specific service providers by offering relevant tangible clues (Chernatony Riley, 1999). Many researchers have considered the branding of goods and services have their similarities; however specific nature of services requires tailored approaches (McDonald, de Chernatony and Harris 2001). Since every service is based on series of performances, service brands become a target of being perceived as commodities. To overcome this problem McDonald, de Chernatony and Harris (2001) have taken a different approach and recommended to make service brands more tangible to provide consumers with favourable set of perceptions. The authors have distinguished an effective way to carry this out is by using physical components associated with the service. For example making changes to the physical elements associated with the brand such as staff uniform, consistent office decorations to the type music played in store. However making these changes doesnt assure that consumers will have a positive view when assessing the service, because the actual service the company provides cannot be imp roved due to these changes being made. Inseparability of Service Brands As consumers are involved in services production, their expectation usually differ between encounters, mainly due to the fact how they interact with different service providers. The main influence of satisfaction with a service brand is caused by the similarity between expected and perceived behaviour, making it complex to control service quality (Summers, 1996 cited in Chernatony Riley, 1999). Moreover there is an increased emphasis towards selecting and training staff to provide a service that is consistent, however it has been argued firms should emphasis the use of corporate branding to establish a favourable consumer nature towards the company (Balmer, 1995). According to this perspective, the company brand provides consistency to the employees behaviour while maintaining consumers expectations. On the other hand it has been stated that by involving consumers in the production process, firms are better able to adapt services to individual needs. Perishability of Service Brands Service brands face a great challenge not only does the firm have to build a strong image and reputation to attract consumers (Balmer Greyser, 2003), but also preventing competitors from making promises that attract consumers away, even before the service brand has been experienced. Services cannot be stored and the service encounter often does not involve any transfer of ownership. In services such as life insurance or pensions the service is purchased long before the benefits have been received and evaluated. To overcome these difficulties it has been suggested the company should build strong brand image and reputation as one of the branding options available. Another problem arising from the characteristic of perishability is the difficulty in synchronising supply and demand. Service firms need to formulate strategies either to cope with fluctuating demand or make adjustments to match capacity and demand more closely, or they will not only face financial problems but branding iss ues as well (Chernatony Riley, 1999). The brand as recognised by consumers, encapsulates both the quality of the service and the efficiency with which the service is provided. Chernatony Riley (1999) have provided an example that the brand image of a supermarket chain depends not only on the price and the product they stock , but also how quickly and efficiently customers can pay for the good and exit the store. Long waits at queues can adversely affect the image, unless ways are found to speed up the queues or persuade consumers to shop outside peak times. Therefore organisation systems become part of the branding process that enable the delivery of promises with regards to service quality, speed and efficiency. Frameworks of Branding of Services Because of the unique features of services, consumers have a complex time evaluating the content and quality of a service prior to, during and after the usage of the service. It has been stated by Krishnan and Hartline (2001) branding is more important in services due to the complexity faced by consumers in assessing the purchase of a service. Branding of services is critical for the reason that consumers view services as a commodity. Branding of services has not been a well researched area; hence the literature is slow in development and primarily basic in nature (de Chernatony Segal-Horn, 2003; Grace OCass, 2002). Berry (2000) has suggested service brands should be distinctive, relevant, memorable and flexible and should be named same as the company rather than another name. The intangibility of services makes it difficult for consumers to evaluate the quality of the service. Regarding the growth of services across the world and the incompatibility of brand equity frameworks used for services, academics such as Berry (2000) Chernatony and Riley (1999) McDonald, Chernatony and Harris (2001) have tried to resolve this issue by creating a framework that can be examined towards consumer service branding. Chernatony and Rileys model Chernatony and Riley (1999) have carried out research with brand consultants about what they thought the difference is between goods and service brands and how they address this issue and in doing so they have come up with the double vortex brand model. The study was implemented using qualitative approach consisting of semi structured in-depth interviews with selected brand consultants in the UK. The purpose of the interview was to find out how brand consultants make sense of brands and do consultants have similar views regarding the components of the brand. The aim of this model is to find out can branding be equally used towards goods and services, and consultants perceptions towards the principle of branding a service is similar to branding for goods. In order to describe in simple terms the complex nature of brands the authors Chernatony and Riley (1999) had discovered that all participants had adopted a mental model of some description. Brand elements such as functional capabili ties, symbolic features, signs of ownership, distinctive name, service, shorthand notation and legal protection were all referred by consultants that were interviewed and these elements are used to make the double vortex model. Service Branding of Service Brand Equity Berry (2000) has taken a different approach by analysing strategies of 14 mature service companies and has created the service branding model of service brand equity. Berry (2000) believes that brand equity is made up of two components: brand awareness and brand meaning (brand image). The following has also been argued by Berry (2000) that the most important source of brand awareness is the companys presented brand, being the companys controlled communications. The controlled communications typically consists of advertising, service facilities, the appearance of service providers, the company name and logo (Brassington Pettitt, 2006). The secondary impact on brand awareness is the external communications, which is usually information consumers receive about the service that are uncontrolled by the company. Brand meaning on the other hand is said to be mainly influenced by customers experience with a particular service company (Berry, 2000). The reason being service businesses are sa id to be labour intensive, consisting of human interactions and performance, rather than machinery. Berry (2000) has emphasised that this construct plays a critical role in building the brand. The secondary influence on brand meaning is said to be the companys presented brand and the external communications. The service brand model by Berry (2000) has introduced new conceptual elements such as servicescapes, controlled and uncontrolled communications, which are significant towards branding of services. These are the typical elements which are missing from the brand knowledge model constructed by Keller (1998). Service Brand Model In response OCass and Grace (2003, 2004) have created their own version of the service brand model. This model has been constructed by adopting various measures from other branding models and potential branding dimensions applicable for services to create an integrated approach to resolve issues in consumer service branding. The authors believe by identifying the dimensions within the consumers consciousness they can gain greater knowledge of what brands mean to consumers as well as begin to understand to what extent such dimensions impact on the brand attitudes and purchase intentions of service consumers. This construct specifically gathers first hand responses of consumers evaluation of service brands in terms of how they see the brand, what expectations they have and overall feelings attitudes towards the service brand. This model by OCass and Grace (2004) includes the following dimensions: core service, interpersonal service, perceived values, se