Factors Affecting Brand Preference. The Case of Beer Brands in Nekemte Town, Ethiopia


Master's Thesis, 2020

97 Pages, Grade: 3.65


Excerpt

TABLE OF CONTENTS

CONTENTS PAGES

ACKNOWLEDGEMENT

ABBREVIATIONS AND ACRONYMS

TABLE OF CONTENTS

LIST OF TABLES

LIST OF FIGURES

ABSTRACT

CHAPTER ONE: INTRODUCTION
1.1 Background of the Study
1.1.1 Background of the Study Area
1.2 Statement of the Problem
1.4.1 General Objective
1.4.2 Specific Objectives
1.5 Significant of the study
1.6 Scope of the Study
1.7 Organization of the Paper
1.8 Definition of Key Terms

CHAPTER TWO: REVIEW OF THE RELATED LITERATURE
2.1 Theoretical Review
2.1.1 Concept of Brand and Brand Preference
2.1.2 Evolution of Brand Preference
2.1.3 The Concept of Brand Preference
2.1.5 Factors Affecting Brand Preference
2.2 Empirical Review
2.2.1 Related Study in Developed Country Context
2.2.2 Related Study in Developing Country Context
2.2.3 Related Study in Ethiopian Context
2.2.4 Identified Research Gap
2.3 Conceptual Framework

CHAPTER THREE: RESEARCH DESIGN AND METHOD
3.1 Introduction
3.2 Description of the Study Area
3.3 Research Design
3.4 Research Approach
3.5 Data type and Data source
3.6 Target Population
3.7 Sampling Techniques and Sample Size
3.7.1 Sampling Techniques
3.7.2 Sample Size Determination
3.8 Data Collection Instruments
3.9 Validity and Reliability
3.9.1 Assessing Validity
3.9.2 Assessing Reliability
1.10 Data Analysis Techniques
3.11 Research Ethics

CHAPTER FOUR: RESULTS AND DISCUSSION
4.2 Demographic Profile of the Respondents
4.3 Descriptive Analysis
4.3.1 Descriptive Analysis of Perceived Quality
4.3.2 Descriptive Analysis of Product Price
4.3.3 Descriptive Analysis of Promotion
4.3.4 Descriptive Analysis of Product Availability
4.3.6 Descriptive Analysis of Situational Factors
4.3.8 Descriptive Analysis of Social Media
4.3.9 Descriptive Analysis of Brand Preference
4.3.10 Grand Descriptive Analysis of the Variables
4.4 Correlation Analysis
4.5 Regression Assumption Tests
4.5.1 Normality Test
4.5.2 Linearity Test
4.5.3 Multi-Collinearity Test
4.6 Simple Linear Regression Analysis between Perceived Quality and Brand Preference
4.7 Simple Linear Regression Analysis between Price and Brand Preference
4.8 Simple Linear Regression Analysis between Promotion and Brand Preference
4.9 Simple Linear Regression Analysis between Product Availability and Brand Preference
4.10 Simple Linear Regression Analysis between Social Factors and Brand Preference
4.11 Simple Linear Regression Analysis between Situational Factors and Brand Preference
4.12 Simple Linear Regression Analysis between Brand Image and Brand Preference
4.13 Simple Linear Regression Analysis between Social Media and Brand Preference
4.14 Simultaneous Multiple Regression Analysis
4.14.1 Model Summary
4.14.2 ANOVA
4.14.3 Coefficients

CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary of the Findings
5.2 Conclusion of the Findings
5.3 Recommendations
5.4 Future Research Direction

Reference

APPENDIX A

APPENDIX B

ACKNOWLEDGEMENT

The completion of this work would not be possible without the support and the help of many people whom I owe great thankful. However, words are not enough to give their rights. I would like to express my deep gratitude and appreciation to Dr Geremewu Teklu for his valuable comments and constructive suggestions. His critical comment and encouragement have contributed a lot to the successful completion of the study on time. I feel blessed to have the opportunity and be honored to work under supervision, guidance and gain some of his knowledge. I am grateful for the time and efforts he devoted for me. I would like to express my heartfelt thanks to my co-adviser Mr. Waktole Feyisa, whose identifiable efforts in stimulating suggestions, constructive comments and encouragement to complete the thesis on time. Particularly, I would like to thank my beloved wife Mrs. Dinke Marga for her encouragements and support with all her strength.

I would like to take the opportunity to thank the members of the academic staff at Wollega University Commerce department for their help during the period of my study. My special thanks to all my colleague and class mates who share with me all the happy and sad moments during my journey.

Finally, I would like to acknowledge with much appreciation for those who gave the permission to use all required information and the necessary data to complete this study. I also appreciate the contributions of all my respondents who devoted their valuable time for filling the questionnaires in this difficult situation. I am also deeply thankful to my informants. Their information has helped me to complete this thesis.

ABBREVIATIONS AND ACRONYMS

Abbildung in dieser Leseprobe nicht enthalten

LIST OF TABLES

Table 3.1 Reliability analysis of variables

Table 4.1 General demographic profile of respondents

Table 4.2 General demographic profile continued.

Table 4.3 Descriptive statistics of perceived quality constructs.

Table 4.4 Descriptive statistics of product price constructs

Table 4.5 Descriptive statistics of promotion constructs

Table 4.6 Descriptive statistics of product availability constructs.

Table 4.7 Descriptive statistics of social factors constructs

Table 4.8 Descriptive statistics of situational factors constructs

Table 4.9 Descriptive statistics of brand image constructs

Table 4.10 Descriptive analysis of the social media constructs.

Table 4.11 Descriptive analysis of brand preference constructs

Table 4.12 Grand descriptive analysis of the variables

Table 4.13 Inter - correlations results of variables

Table 4.14 Normality measurement table

Table 4.15 Multi-collinearity test

Table 4.16 Model summary, ANOVA and Coefficient of perceived quality and brand preference

Table 4.17 Model summary, ANOVA and Coefficient of product price and brand preference

Table 4.18 Model summary, ANOVA and Coefficient of promotion and brand preference

Table 4.19 Model summary, ANOVA and Coefficient of brand availability and brand preference

Table 4.20 Model summary, ANOVA and Coefficient of social factors and brand preference

Table 4.21 Model summary, ANOVA and Coefficient of Situational factors and brand preference

Table 4.22 Model summary, ANOVA and Coefficient of brand image and brand preference

Table 4.23 Model summary, ANOVA and Coefficient of social media and brand preference

Table 4.24 Model Summary of factors affecting brand preference

Table 4.25 ANOVA result of factors affecting brand preference

Table 4.26 Coefficients of factors affecting on brand preference

LIST OF FIGURES

Figure 2.1Conceptual framework

Figure 4.1 Histogram of normality test

Figure 4.2 Normal p-p plots of linearity test

ABSTRACT

Now a day’s marketers are struggling to increase their brand preferences by customers and trying to avoid competitors from grabbing of these acquired customers mind. The purpose of this study was aimed to examine the factors affecting consumer brand preference of beer products in Nekemte Town. The study tried to identify the influence of eight determinant factors of brand preference on beer consumers. This study adopted explanatory research design supported with deductive research approach. The population of the study was comprised of beer consumers in the town. Convenience and purposive sampling techniques were used to trace the final respondents. Data was collected from 351 respondents by using five-point likert scale structured questionnaire. Correlation and regression analysis techniques were employed to calculate the magnitude of association among the study variables and to determine the percentage of change caused by the explanatory variables on brand preference. The finding from the association analysis reveals that the explanatory variables were statistically significant and associated with consumers brand preference for beer products in Nekemte town. However, the finding from the causation analysis reveals that four predicting factors i.e. product price, product availability, situational variations and social media were statistically significant and their coefficient of determination (R2) equals to 0.627, which indicates that 62.7% of the variation that occurred in the consumer’s preference of beer brands was explained by the model, while the remaining perceived quality, promotion, social factors and brand image were statistically insignificant at (P<0.05). Based on these findings, the researcher recommends that Heineken Brewery Share Company (HBSC) which wants to be on the cutting edge of competition was advisable to develop effective pricing strategy to make the their product price affordable for beer consumers and it was better to use social media advertising strategies which emphasize on creating awareness and leaving a positive impression on their pages in order to increase consumer’s preference for the company beer brands and improve their positioning.

Keywords: Brand preference, brand image, perceived quality, marketing mix elements, beer brands, Nekemte town

CHAPTER ONE: INTRODUCTION

1.1Background of the Study

Brands have been constantly reviewed and redefined in the marketing literature and there are numerous definitions for brand. A definition of a brand according to (Kotler & Keller, 2012) “A brand is a name, term, sign, symbol, design, or a combination of these elements that is intended to identify the goods or services of a seller and differentiate them from competitors”. For consumers, when deciding between brands which are in the marketplace will include brands as an element to determine the qualities of the product rather than employing their time to enhance their knowledge of the product in information searching activities. Therefore, consumers use brands as cues to make decisions to purchase or try products.

Preferences result in attitudinal loyalty, as the customers tend to develop an attitude of liking or preferring certain products to others (Jakpar et al., 2012). Consumer preferences act like an intention-related stimulus by placing the most preferred brand as the object of intention (Van Kerckhove et al., 2012). It is suggested by Van Kerckhove et al. (2012) that the consistency between consumer preferences and choices is an indication of preference stability. Erdem et al. (2005) demonstrate that the action of repeating behaviour is a consequence of consumer preferences; different tastes or associations attached to the brand expecting its utility or value.

According to Fishbein (1965) brand preference is closely related to brand choice that can facilitate consumer decision making and activate brand purchase. Bither & Wright (1977) indicated that consumer preferences and choices tend to be more consistent. Therefore, preference provides a more accurate prediction of consumer choices comparing to attitude.

Brand preference has been conceptualized in many ways in the marketing literature. In some studies, brand preference has been equated with brand loyalty (Rundle & Mackay, 2001). There has been a long standing interest from marketers to understand how consumers form their preferences toward a specific brand. Brand preferences represent consumer dispositions to favor a particular brand over another (Lee et al., 2006). It refers to the behavioral tendencies reflecting the extent to which consumers favor one brand over another (Hellier et al., 2003).

Brand preference of an established brand is normally determined by the perception of the brand consumers. Brand preference is an important tool for associating a brand and influencing customers in making purchases of product brand of particular types from the firms (Rahmani et al., 2012). The consumers need to have a trust in their preferred brands for continued offering of the desired benefits. According to Mccarthy & Perreault (2011) a preferred brand builds an organization to establish itself in the market and earn an edge in the competition. To win the brand preference competition by making a brand preferred over other brands in an established category or subcategory is tough and expensive. A stronger brand would always have a better understanding of needs, wants, and preferences of consumers than the brands that are not competitive (Keller, 2003). According to Jain & Sharma (2012) study on brand awareness and consumer preference; brand quality, price, easy availability, family liking, were found to be the most important variables for brand preference.

Perceived quality is not the actual quality of the product but the consumer’s subjective evaluation of the product (Zeithaml, 1988). A product is perceived to be high quality when potential consumers recognize the superiority and differentiation of a brand in relation with other competitor brands (Porral et al., 2013). Therefore, a highly perceived quality element will influence the brand preference of beer products. Consequently, according to (Jin & Yong (2005) consumers always compare the quality of alternatives with regard to price within a category. Macdonald & Byron (2000) stated that price can be used as a reason for brand preference in two ways; either by going for the lowest price in order to escape financial risk or the highest price in order to achieve product quality. Promotion can influence what consumers think about products, what emotions they experience in purchasing and using them and what behaviors they perform including shopping in particular store and purchasing specific brands (Peter & Donnelly, 2007). According to Kotler & Keller (2009) product availability is a major factor when it comes to customers’ brand preferences. Availability issues which include the number of locations and outlets at which alcohol is purchased coupled with length of bar opening hours affect total alcohol sales (Pettigrew & Donovan 2003; cited in Eliam, 2015).

According to Amadi & Ezekiel (2013) depending on the strength of identification with reference group an individual may conform to the standard, norms and values of the group. Consequently, purchase behavior for a brand will alter so as to come in line with the group preference for a brand of beer. Moreover, according to Vazquez et al. (2002) consumers evaluate brands in different manner based on the situation. A consumer might choose a brand on being in different situations and will therefore, be motivated to drink a certain brand (Yang et al., 2002). The effect of this may not be homogenous even though consumers face the same objective environment, different motivating conditions and brand preferences may arise. Further, according to Chi, Yeh, & Yang (2009) a customer’s purchase decision is influenced by their motivations and preferences in purchasing a specific brand and the image of a brand is an important cue in this process. Alwi & Kitchen (2014) contend that the image of a brand is a total attitude judgment of an object, which is based on two dimensions of attitude, namely cognitive and affective dimensions.

Social media is the online environment where people with common interests come together to share their thoughts, comments and ideas (Weber, 2007). Social media was heavily involved in current lifestyle for both urban living and rural living, so social media was counted as a powerful medium for the effective communication between product and customers (Prentice, C. & Handsjuk, 2016). Furthermore, customer’s interaction was a valuable tool and cost less to construct and link to consumers’ brand preference.

Understanding of consumer preference and what constitute beer brand preference would help breweries in maintaining their current customers and attract new once. Currently there are a number of beer brands that operating in the country. Wining the brand preference competition by making a brand preferred over other brands in such market is presumed to be difficult and costs a lot of hard work. Therefore, this study was conducted to examine the factors affecting brand preference in case of beer brand products in Nekemte town.

1.1.1 Background of the Study Area

In an increasingly more diversified beer market, with more to join soon, Heineken, one of the world's largest brewers, comes to own old brands in Ethiopia, and yet disrupts the market with a totally new brand. It named this brand Waliya. The French company BGI, since 1922, has operated in Ethiopia, acquiring St. George beer (Addis Fortune, 2014). Brands like Meta and Bedele are also older brands in Ethiopia but have since been acquired by foreign companies and re-branded. The beer industry in Ethiopia has gone through tremendous growth in the last two decades. It transformed into one of the most competitive industries in Ethiopia with millions of birr spent on advertisements alone. The competitiveness of the industry has led to more investment the farming sector such as in malt production (Mulugeta et al., 2017).

Beer industry in Ethiopia has been growing in recent years including a surge in demand associated with increased urbanization, population growth, and rising incomes. From a level of just one million hectoliters in 2003/04, 1.56 million hectoliter in 2006/07 and nearly 3.1 million hectoliters in 2008/09 total annual production capacity of the breweries in Ethiopia to around 10.5 million hectoliters. In addition, the country has also been importing beer from different countries. Unfortunately, investing in brewery is capital intensive undertaking and needs specialized knowledge and skills (Getye, 2019).

1.2Statement of the Problem

Companies are facing wider range of competitors who offer a similar product to same customers (Kotler, 2005). In this increasable competitive market, companies are attempting to gain better position for them by becoming more customer-oriented (Hartmann, 2007). In every product category consumers have more choices, more information and higher expectations than ever before. To move consumer from trial to preference, brands need to deliver on their value preposition, as well as dislodge someone else from the consumer’s existing preference set. Preference is a scale, and brands move up, down and even off that scale with and without a vigilant management strategy (Kotler, 2012). Changing consumer demands and preferences require new ways of maintaining current customers and attracting new ones.

The brewery industry is extremely competitive, with private labels greatly influencing the environment (Bernand, 2012). It is indispensable to deal with the competitors, changing customer tastes and preferences (Das, 2012). To improve the beer market share, the marketers need to understand customer insight in. In today’s marketing environment, consumer preference is continuously changing and becoming highly diversified, buyers were exhibiting diversified, unanticipated and surprising purchase behavior (Nakmongkol, 2009). In these circumstances it becomes necessary for firms to ascertain diversified needs, desires of consumers and produce product accordingly (Batra, 2015). Marketer’s ability to create strong brand depends on thoroughly understanding customers profile about why they prefer one brand over competitors (Njuguna, 2014). Companies with better and superior information can able to develop better product and execute better marketing programs towards their customer (Kotler & Keller, 2012).

According to Ali (2014) much of the brand preference research has been through probability models to test the impact of marketing mix variables as a predictor of brand preference of beer consumers. More specifically, empirical studies on the determinants of customer preference and satisfaction within the breweries industry are limited to holistic approach rather than sector specific. Moreover, different empirical studies such as (Kim et al., 2010; Hauston, 2008; Cengiz et al., 2007) have identified positive effect of marketing mix on preference for the brand. On the other hand some contemporary studies also found that there is no relationship between marketing mix variables and customers brand preference. According to Bagwell (2007) study the effects of promotion on brand preference and concluded that promotion has no significant effect on customers’ preference of a particular product.

According to Musia (2013) factors such as customers’ tastes and preferences, perceived value, perceived quality, and perceived price equally contribute towards customer’s satisfaction in the brewery sector. Product price constitutes buyer’s remorse, if value derived does not equal cost of the product. In contrary to (Musia, 2013; Ali, 2014 & Bruijin, 2011) Ethiopian beer products are retailed in similar prices and producers have little competition in price sphere. Thus, consumers are in their free will to substitute one for the other without worries of price.

Aquilani et al. (2015) studied the consumer preference perspective on the craft beer in Italy by comparing consumer profiles between purely commercial beer consumers and commercial beer consumers who had already tasted craft beer. The study factors were brand, price, availability in bars, pubs and restaurants, availability in stores, and packaging. The result showed that the attractive factors on possibility of purely commercial beer drinkers to taste craft beer were aroma, perceive quality, frequent beer drinking, and drinking by oneself.

Similarly, Amadi & Ezekiel (2013) studied on factors influencing brand preference of beer consumption in Nigeria. As stated in study, identifying factors have a great impact on understanding how and why brand preference and choice vary in the product category of beer. The independent variables used in the study include; advertisement, peer group influence and situational variation of the consumers and the dependent variable were brand preference.

In Ethiopia Fereja & Demeke (2019) was studied on factors determining consumer beer brand preference in Addis Ababa. In the study as independent variables pricing, perceived quality, situational variations, advertising and reference groups were used by the researcher. This study is only limited to civil servants and condominium surrounding areas.

Generally, many studies were carried out to identify determinants of brand preference and why competitors prefer one product brand over competitors brand in particular product categories. However, the various factors influence might vary with different product categories and in country context. With the significant long-term growth potential of the beer industry in Ethiopia, the consumers’ psychological state is also changing; there are lots of factors now a day that significantly affects the choice of preferred beer brand for the consumers.

Therefore, the motivation for the current study emerges from the fact that not much has been done on the factors affecting brand preference on the beer brands in Ethiopia. Most of the existing researchers’ variables were not supported by recent theoretical and empirical reviews. Moreover, the existing research indicates a contradiction between researchers on the marketing mix influences on consumers brand preference of beer products. Further, most of the existing research overlooked the influence of social media, brand image, product availability effect on brand preference.

Thus, the major purpose of this study was to examine some relevant factors of brand preference and to fill the theoretical, empirical and methodological gaps identified in various studies related to the perceived quality, price, promotion, product availability, social factors, situational factors, brand image and social media influences.

Therefore, this study was conducted to examine factors affecting consumers brand preferences of beer products in Nekemte Town.

1.3 Basic Research Questions

The study was conducted to answer the following research questions:

What are the influences of 4P’s on consumers brand preference of beer brands in Nekemte Town?

What are the influences of social factors on brand preference of beer brands in Nekemte Town?

What are the influences of situational factors on brand preference of beer brands in Nekemte Town?

What are the influences of brand image on brand preference of beer brands in Nekemte Town?

What are the influences of social media on brand preference of beer brands in Nekemte Town?

1.4 Objective of the Study

1.4.1 General Objective

The general objective of the study is to examine the factors affecting brand preference of beer products in Nekemete town.

1.4.2 Specific Objectives

The study will have the following specific objectives:

To examine the influence of 4P’s on brand preference of beer brands in Nekemte Town
To identify the influences of social factors on brand preference of beer brands in Nekemte Town
To analyze the influences of situational variations on brand preference of beer brands in Nekemte Town
To determine the influences of brand image on brand preference of beer brands in Nekemte Town
To examine the influences of social media on brand preference of beer brands in Nekemte Town

1.5 Significant of the study

This research would help to identify consumers’ brand preference and guide brewery factories to adjust their marketing strategy with consumer’s preference. Consequently, understanding brand preferences contributes to build strong brands and able to develop long-term relationship with consumers. Additionally, this study would have importance in providing a better ground for beer company’s sales managers, business professionals, business initiatives and policy makers.

The research would helps for research practitioners who are interested in improving their knowledge in the subject of brand preference. Moreover, the research would also contribute an insight point as a stepping stone for further study in the area to future researchers.

1.6 Scope of the Study

The study is delimited in terms of geographical, conceptual and methodological aspects to achieve the objective of the study within the time and budget framework. The research is delimited to Nekemte town. Conceptually, it is limited to eight factors affecting brand preference of beer products.

1.7 Organization of the Paper

This study will have five chapters. Chapter one deals with background of the study, Chapter two deals with review of related literature, Chapter three will deals with methodological issues, Chapter four will give explanation for the result of data analysis and the last chapter will discuss the findings summary, conclusion and will make recommendations respectively.

1.8 Definition of Key Terms

Perceived quality was the customer’s perception of the overall quality of a product or service.

Price is the perceived pricing in terms of the specific monetary value that a customer attaches to goods and services

Promotion encompasses everything to do with the way an organization communicates persuasively with people to influence them towards making a purchase.

Product availability is the easily and readily accessibility and the convenience to gain the products on time.

Situational variations factors particular to a time, events, occasions, festivals and place of observation which have a demonstrable and systemic effect on behavior.

Band image is a unique set of associations in the mind of the customer concerning their favorite brand.

Social media was referred to the collection of online communications channels to community-based input, interaction, content-sharing and collaboration.

Brand preference was referred to a unique customer’s perception toward particular brands by believing that a particular brand performs better than the others in the market.

Consumer preference t he consumer’s ability to evaluate, prioritize and choose goods offered on the market on specific terms.

CHAPTER TWO: REVIEW OF THE RELATED LITERATURE

2.1 Theoretical Review

2.1.1 Concept of Brand and Brand Preference

According to Kotler & Keller (2012) “A brand is a name, term, sign, symbol, design, or a combination of these elements that is intended to identify the goods or services of a seller and differentiate them from competitors”. According to Chaudhuri & Holbrook (2001) a brand is essentially the sum total of the particular satisfaction that it delivers to the customer who buys that specific brand, the sum total being its name, ingredients, price, packaging, distribution, reputation and ultimately to its performance.

The term brand preference means the preference of the consumer for one brand of a product in relation to various other brands of the same product available in the market. The choice of the consumers is revealed by brand preference. Brand preference is the extent that respondents preferred and intended to stay with their service provider (Holbrook, 2007). In some studies, brand preference has been equated with brand loyalty (Rundle & Mackay, 2001). Brand preference can be defined as the subjective, conscious and behavioral tendencies which influence consumer’s predisposition toward a brand. Understanding the brand preference of consumers’ will dictate the most suitable and successful marketing strategies (Mohan & Sequeirq, 2016).

2.1.2 Evolution of Brand Preference

As cited by Fereja & Demeke (2019) consumers appear to have high willingness to pay for particular brands even when the alternatives are objectively similar. The majority of consumers typically buy a single brand of beer, cola, margarine (Dekimpe et al., 1997) even though relative prices vary significantly overtime and consumers often cannot distinguish their preferred brand in blind tastes.

At the extreme, brand preferences could be entirely determined by experiences in childhood (Berkman et al., 1997). Existing empirical evidence provides little support for the view that past experiences have a long lasting impact on brand preferences.

2.1.3 The Concept of Brand Preference

In marketing literature, the word preference means the desirability or choice of an alternative. Preferences are above all behavioral tendencies (Zajonc & Markus, 1982). Brand preference is defined variously as the consumer’s predispositions toward a brand that varies depending on the salient beliefs that are activated at a given time; the consumer biasness toward a certain brand; the extent to which a consumer favors one brand over another. The term “Brand Preference” means the preference of the consumer for one brand of a product in relation to various other brands of the same product available in the market. The choice of the consumers is revealed by brand preference. Brand preference is the extent that respondents preferred and intended to stay with their service provider (Holbrook, 2007).

Rossiter & Bellman (2005) suggest different levels of preferences and their corresponding states of loyalty. There is strong brand preference for single or multiple brands; the state at which consumers can be loyal to a certain brand. Moderate brand preference refers to the state of brand switching, where there is no inclination towards a certain brand and consumers are more likely to switch from one brand to another. Neutral preference refers to how consumers can be unaware of the brand or loyal to other brands. Negative brand preference occurs when consumers are not, and will not become, loyal (Rossiter & Bellman, 2005). Each brand preference level represents a market segment; therefore, marketing managers design strategies, targeting consumers at each segment, based on the level of preference.

There has been a long standing interest from marketers to understand how consumers form their preferences toward a specific brand. Brand preference is closely related to brand choice that can facilitate consumer decision making and activate brand purchase. Knowing the pattern of consumer preferences across the population is a critical input for designing and developing innovative marketing strategies. However, forecasting consumer’s preferences between brands is not an easy task (Fishbein, 1965).

The measurement of brand preference was hard to determine, but this could be done by indirectly quantifying repurchasing and the referral program. Brand preference was the important factor because it could promote repurchasing intention and also had an impact on the referral program of the enhancement or its avoidance (Prentice & Handsjuk, 2016). The development plan to create brand preference was the focal point.

2.1.4 Brand preference and Consumer

In every product category, consumers have more choices, more information and higher expectations than ever before. To move consumer from trial to preference, brands need to deliver on their value preposition, as well as dislodge someone else from the consumer’s existing preference set. Preference is a scale, and brands move up, down and even off that scale with and without a vigilant management strategy (Kotler, 2012).

Theories of adoption have often been use to explain how consumers form preference for various goods and services (Rogers, 1995). Generally, those theories emphasize on the importance of triability, relative advantage, risk, lost, social approval, product characteristics. Equally, several studies have long speculated that brand preference could be a function of past consumption which could enter expected utility directly (Becker et al., 1988). At the extreme, brand preference could be entirely determined by experience in childhood (Berkman et al., 1997). All have tremendous impact on the position of our brand in the consumers preference set, but the relative importance of each factor depends on the nature of industry under consideration, location and social characteristics of the consumer of different brands.

In the brewery sectors value of a product can take the form of money, brand and preference among others (Oh, 2007). Value of a product is reflected in the way customers be reflected in the way customers offer return businesses to the brewery firms. According to (Christian & Sunday, 2013) brand preference is a measure of the extent to which customers will choose a specific brand at the expense of other present brands, and is or are willing to accept substitutes when that brand is not available.

Bettmanet et al. (1998) pointed out that choice is concerned with the selection and consumption of the brand. Brand preference can be viewed as a motivator of brand choice. Bither & Wright (1977) indicated that consumer preferences and choices tend to be more consistent. Therefore, preference provides a more accurate prediction of consumer choices comparing to attitude. Sagoff (2003) suggests that the relationship between brand selection and brand preference is subject to market conditions. In perfect market conditions, consumers will choose from their preferred alternatives. While in the imperfect market choice is subject to situational factors such as availability; whereby, consumers’ brand choices can be inconsistent with their preferences.

Surprisingly, Amir & Levav (2008) noted that marketing managers are more interested in brand preference than brand choice to signal repeated purchases, since consumer preferences tend to be constant across the different contexts, rather than choice-limited to a distinct context. Kay (2006) indicated that evidence of brand strength is its success, illustrating its ability to win consumer preferences and construct long-lasting relationships. Consumer brand preference is an essential step in understanding consumer brand choice; has therefore always received mentionable attention from marketers.

Lee et al. (2006) recommended that brand preferences represent consumer dispositions to favor a particular brand. It refers to the behavioral tendencies reflecting the extent to which consumers like one brand over another. Brand preference is close to reality regarding reflecting consumer evaluation of brands. In the marketplace consumers often face situations of selecting from several options. According to Grimm (2005) consumer preferences for brands reflect three responses: cognitive, affective and cognitive or behavioral. The cognitive components encompass the utilitarian beliefs of brand elements. The affective responses refer to the degree of liking or favoring that reflects consumer feelings towards the brand. The cognitive or behavioral tendencies are denoted by as the consumers predicted or approached act towards the object. It is the revealed preference exhibited in consumers choices.

Chernev et al. (2011) assumes that the association of behavioral outcome, such as willingness to pay and brand preference. These are presumed to be associated with the behavioral tendencies. Dhar (1999) suggested that purchasing decisions are the behavioral outcome that precedes differentiation between several alternatives and make purchasing decision; a subsequent result of consumer preferences. Van Kerckhove et al. (2012)) suggested that brand preferences facilitate consumer’s choice by enhancing their intentions towards the favored brand. Actual purchasing behavior is likely to correspond to intentions; the mechanism of intention formation provides evidence of persistent consumer preferences. Thus, Sriram (2006) asserted that changes in consumer brand preferences are reflected by the brand performance and market shares. In addition Schoenfelder & Harris (2004) suggested that brand preference combines the desired attributes and consumer perceptions; thus, it offers an indirect and unobtrusive way to assess salient features. Therefore, according to Alamro & Rowley (2011) uncovering consumer brand preferences are considered critical input to design successful brand strategy, brand positioning, and gives insights into product development. Consequently, understanding brand preferences contributes to build strong brands and able to develop long-term relationship with consumers.

2.1.5 Factors Affecting Brand Preference

Brand adoption or preference has been receiving increased attention in extant literature. Cooper & Schindler (2014) noted that most new innovations come with high risks as most of them failed in the marketplace creating the need for marketers to have a clear understanding of success factors in brand adoption. According to Chalotte (1999) theories of adoption have often been used to explain how consumers form preferences for various goods and services.

Generally, Wee (2003) noted that these theories emphasize on the importance of different characteristics of the products in brand preference. The relative importance of each factor depends on the nature of industry under consideration, location and social characteristics of the consumers of the different brands. Marija (2010) gives several other factors where it is found that consumer can prefer the brand that gives the value in pre-consumption phase (brand, quality and label) and post consumption phase (taste, convenience where taste is the essential part of intrinsic quality dimension). Consumer’s previous experience with brand also influences their preferences and product acceptance.

Therefore, for this particular study the researcher will assess the following factors that affect brand preference. Such as: perceived product quality, price, promotion, product availability, social factors, situational factors, brand image and social media influences.

2.1.5.1 Perceived Quality

Aaker (1991) defines perceived quality as the customer’s perception of the overall quality of a product or service and their behavioral sense of accepting it. It is an intangible and overall feeling about a brand. However, it is usually based on underlying dimensions which include characteristics of the products to which the brand is attached such as reliability & performance.

Product quality is an important determinant for the customers for choosing a brand that helps in the development of brand reputation. Quality belongs to the product perspective of a brand's identity whereas perceived quality is how a brand's quality is seen by the consumers. Perceived quality is a source of consumer satisfaction it makes them to repurchase the product, which leads to loyalty (Uggla, 2001). Product quality affects purchase because perceived quality creates personal shopping value and encourages a regular purchase of the brand (Snoj et al., 2004). Higher product qualities not only enhance utilitarian value but also reward the consumer emotionally by providing more gratifying experience (Babinet et al., 1994).

According to Ashton (2010) researchers like (Paswan et al., 2007) and McDougall find that perceived quality is the core relationship between quality and value that comes as an implication of improve service element associate with it and the value paid for. In other words, if a product cost is too high and consumers are not willing to pay for it, its value is said to be not perceived by consumers; instead consumers may prefer to purchase lower quality product with a reasonable price. So, price is one of the determining factors for perceived value.

Perceived quality could be specified and classified into two factors: product quality and service quality. Product quality is divided into seven dimensions which as believed by (Aaker, 1991) may affect consumer’s perception about the product’s quality. In regards with a product quality dimensions are performance, reliability, conformance with specifications, features, service ability, perfect fit and finish.

2.1.5.2 Product Pricing

Kotler & Armstrong (2006) define price as “the amount of money charged for a product or service, or sum of the values that consumers exchange for the benefits of having or using the product or service”. In addition, Groucutt et al. (2004) point out that price is the only variable of the marketing mix that is considered purely for revenue generating. Moreover, Kent & Omar (2003) perceived pricing in terms of the specific monetary value that a customer attaches to goods and services.

According to Mulushewa (2019) researchers like, McDonald &Sharp (2003) stated that price can be used as a reason for brand preference in two ways; either by going for the lowest price in order to escape financial risk or the highest price in order to achieve product quality. Cadogan & Foster (2000) argued that price is probably the most important consideration for the average consumer. Moreover, according to Peter & Donnelly (2007) the price of products and services often influences, whether consumers will purchase them at all and if so, which competitive offering is selected? For some offerings, higher prices may not deter purchase because consumers believe that the products or services are highly quality or more prestigious. However, many of today’s quality conscious consumers may buy products based on price than other attributes. Therefore, a better understanding of how consumers use price information in choosing among alternative brand within frequently bought product categories helps to evaluate it and knowing the intensity as compared to other factors or reasons (Mulushewa, 2019). Farahmand (2008) conceptualized that price within the auspices of the value assigned to something bought, sold or offered for sales, expressed in terms of monetary units. According to Ahmad & Vays (2011) it also pertains to how buyers view a product’s price, as high, low/fair, which ultimately affects consumers’ willingness to buy the product. Moreover, according to Sahay (2007) price presents a unique opportunity to create loyalty, retain existing customers and attract prospective customers.

Abedniya (2011) contended that the issue of reference pricing also presents manifold challenges to marketers. According to Anttila (2004) reference pricing refers to the price against which consumers compare the listed price of a product or service with the discounted price. In this way Dunne et al., (2014) indicated that consumers evaluate whether a price is too low or too high as they make their product choices. When a consumer perceives that a retailer charges high price for a product, the consumer also perceives that the retailer possesses an air of luxury, which may lead to repeat purchases. According to Yelkur (2004) due to the sensitivity of price to different segments of the market, some retailers have resorted to introducing generic products or house brands to cater for the price-sensitive section of the market. Jin & Sternquist (2003) suggested that this strategy is promised on the view that for some consumers, high price simply means giving up more resources for the product whereas some consumers perceive that high prices are a signal of better quality and prestige.

According to Ali (2014) alcoholic beverage companies view prices in terms of their ability to generate profits, sales, and consumer traffic, as well as how they affect the stores image. Alcoholic beverage firms use price adjustments as adaptive mechanisms to accommodate changing market conditions and operating requirements. Both upward and downward adjustments are needed from time to time to adapt to the dynamic retailing environment (Lewinson & Delozier, 1982; cited in Ali, 2014).

According to Gabriel (2001) price plays a major role in influencing consumer’s brand preference. Price is related to the brand value and not to the brand function or performance, and is a particularly important attribute in brand selection. Empirically, prior studies demonstrate that price plays an important role in brand purchase and consideration decision (Erdem et al., 2005).

2.1.5.3 Promotion

According to Peter & Donnelly (2007) promotion can influence what consumers think about products, what emotions they experience in purchasing and using them and what behaviors they perform including shopping in particular store and purchasing specific brands. Moreover, according to Foxall (2012) traditional promotion involves all the marketing tools currently available, most evident marketing channels that are used in developed countries, such as TV and the internet. They have been characterized by being cost efficient as having the ability to have a wide reach and at reasonable prices. Awareness has been regarded as being an influential factor in consumer decision making. This is because it influences the type of brand that enters the consideration set. Brand awareness also influences the type of brands selected from the consideration set (Macdonald & Dumbar, 2007).

According Juddy (2016) a study conducted by (Hoyer et al., 2012) that pioneered the research at the individual decision level examined the effects of brand awareness on consumer choice. According to the study it was revealed that awareness impacts heuristically on the perceived quality of the brand. Similarly, according to consumer behaviour theory, product choice is regarded as a highly involving problem-solving process (Foxall, 2012).

According Ali (2014) to promotion involves both providing the consumer information regarding the alcoholic beverages’ store and its product or service offering as well as influencing the consumer perceptions, attitudes, and behavior towards the store and what it has to offer. Sponsorship contributes to the building of the brand/product and corporate image. Direct marketing is an interactive system of marketing which use one or more advertising media to affect a measurable response and/or transactions at any location (Betts & York, 1994). Trade promotions at the same time need negotiations with customers, but again the decision must be designed by the manufacturers and have specific targets (Randall, 1991; cited in Ali, 2014)).

2.1.5.4 Product Availability

The easily accessibility of a product has a great influence on the customer buying behavior (Boadu, 2012). Brand availability is key brand performance driver and distribution strength is certainly a major factor that drives brand preference and ultimately brand loyalty (Srinivasan & Park, 2005). Consequently, according to Pettigrew & Donovon (2003) availability of alcohol in outlets is one of the important structural factors that affect consumption among youth. Availability issues which include the number of locations and outlets at which alcohol is purchased coupled with length of bar opening hours affect total alcohol sales (cited in Eliam, 2015).

According to Kotler & Keller (2006) product availability is a major factor when it comes to customers’ brand preferences. Further, Jo (2005) averts that consumers are likely to prefer buying from an organization whose product availability is assured. Many at times are supply hiccups that result in shortages in supplies or complete run-outs. Product and service availability is therefore, a measure of supplier or retailer reliability (cited in Juddy, 2016).

A research was done to determine the customer preference based on the availability of retail store, it was found that income and the young age customers are having a favorable effect on the choice of the retail store, apart from occupation and the adult customers (Ravilochanan & Shyamala, 2012).

2.1.5.5 Social Factors

Social factors affect consumer behavior significantly. Every individual has someone around influencing their buying decisions. The important social factors are: reference groups, family, role and status (Perreault et al., 2014) .

A person’s reference groups are all the groups that have a direct (face to face) or indirect influence on their attitudes or behavior. Groups having a direct influence are called membership groups. Some of these are primary groups with whom the person interacts continuously and informally, such as family, friends, neighbors, and coworkers. People also belong to secondary groups, such as religious, professional, and trade-union groups, which tend to be more formal and require less continuous interaction (Singh & Sarma, 2015). Reference groups influence members in at least three ways. They expose an individual to new behaviors and lifestyles, they influence attitudes and self-concept, and they create pressures for conformity that may affect product and brand choices (Kotler & Keller, 2012). Perkins (2000) revealed in his study that peer influence was much stronger predictor of beer consumption than other background factors including parents’ attitudes, gender and religion.

Kotler (2002) states the roles and proportional influence between a wife, husband and children vary with in every culture. A family forms the environment for an individual to acquire values, develop and shape personality. This environment offers the possibility to develop attitudes and opinions towards several subjects such as social relations, society and politics. A family creates first perceptions about brands or products and consumer habits (Kotler & Armstrong, 2010). The family is the most important consumer buying organization in society, and family members constitute the most influential primary reference group (Keller, 2012). From parents a person acquires an orientation toward religion, politics, and economics and a sense of personal ambition, self-worth, and love.

Howland (2016) justifies the logic that within any target population, the basic social unit of family affects market and product dynamisms. Ideally, the basic unit of a society is the family. Marketing prospects and interventions need to influence the lowest social unit (family) to ensure successful consumer influence and impact. The correlation between marketing approaches, product-brand creation and business success is justified by the affiliation to social factors.

Individuals play many different roles in their lives. Each role consists of activities and attitudes that are expected from an individual to perform according to the persons around him (Kotler & Armstrong, 2010). Social status reflects the position that individuals have in social groups based on such things as money and wealth, education or occupation. In many societies status is important and people want the admiration of others. Social status can be acquired by being successful in life or being born into money. Product and brand selection often reflects the social role and status (Wright, 2000). People choose products that reflect and communicate their role and their actual or desired status in society. Marketers must be aware of the status-symbol potential of products and brands (Kotler & Keller, 2012).

2.1.5.6 Situational Variations

As cited by Yimer (2017) people consume products by themselves, with friends, on the beach, at carnivals, at parties and while having dinners with their boss or other relatives. Moreover, within these situations an individual may prefer a brand over the other because benefits sought out by consumers can differ based on the situation the consumer is in (Yang et al., 2002).

According to Belk (1974) “Situations may be defined as those factors particular to a time and place of observation which have a demonstrable and systemic effect on behavior”. Consumers evaluate brands on the situation (Vazquez et al., 2002). It is suggested from previous research that situational factors are a better predictor for consumer behavior than measures involving attitudes. Research has indicated that consumer preferences change according to the environment in which the consumers find themselves (Quester & Smart, 1998; Lai, 1991 & Belk, 1974).

According to Lai (1991) there are three types of situations that are used in marketing strategy among situational factors: communication situation, purchase situation, and consumption situation. The effects from environmental factors are not homogenous but rather heterogeneous (Miller & Ginter, 1979; Yang et al., 2002). Therefore, a consumer might choose a brand based on being in different situations and will therefore, be motivated to drink a certain brand (Yang et al., 2002).

According to drinking studies, around 80% of young people’s total alcohol consumption occurs at a public place (Knibble et al., 1991). The greatest occurrences of drinking are in the home or in bars (Wilks & Callan, 1990). In addition, heavy and light drinkers tend to drink twice as much during “happy hours” in bars than they do during times that are not involved in such promotions. Therefore, there are some interaction effects of brand benefits based on situational factors (Babor et al., 1978; Orth, 2005).

According to Yang et al. (2002) results from a research study using a probability models to determine preferences indicated that marketers do not have to make their brands congruent to consumers or their environment. It is suggested that the source of brand preferences must be understood in order to have an impact on situational factors that influence brand choice (Yang et al., 2002).

Situation variation depends on the product category used for research (Belk, 1974). Beer is an important category to use because it is a narrowly defined product category in accordance with researching situational drivers (Miller & Ginter, 1979). Drinking beer is considered an activity that may occur in distinct situations. Therefore, there should be a clear variance according to their changing environment (Yang et al., 2002).

2.1.5.7 Brand Image

Brand image could be defined as a brand that is brought to the consumer’s mind by the brand association (Keller, 1998). The brand image is defined as consumer perception of a brand as reflected by the brand association held in consumers’ memory. Brand image is said to result from the favorability, strength, uniqueness, and types of brand associations held by the consumer. Within the model Keller (1998) depicts various types of brand associations such as attributes (product-related and non-product related), benefits (functional, experiential and symbolic) and attitudes. In particular, non-product attributes are categorized into: price, user imagery, brand personality and feeling and experiences.

Brand image can be also defined as consumer’s thoughts and feelings about the brand (Roy & Banerjee, 2007). Kim (2008) explained that brand image is not absolute; it is relative to brand images of competing brand. He described that brand image is also formed on the basis of direct experience with the brand. Iversen & Hem (2008) have stated that the brand image represents consumers' personal symbolism consisting of all the definitions and evaluations related to the brand. Keller (2009) has defined brand image as "consumer perceptions of preferences for a brand, as reflected in various types of brand associations held in consumers' memory." The mental image that consumers have about a brand has formed as a result of marketing communication, consumption experience and social effects.

Chernev et al. (2011) detailed the definition of band image as a unique set of associations in the mind of the customer concerning what a brand stands for and the implied promise the brand makes. According to them, it is a blend of all tangible and intangible qualities that impact how the customers perceive an organization. Associations need to fortify the novel brand identity and esteem if they wish to change the way the brand image is passed on Reham et al. (2016) stated that brand image is a crucial determinant of customer purchasing conduct. Because of the importance of brand image for the customer behavior, a significant consideration has been paid by advertising experts about the variables that can effect on the brand image of an organization.

As Cited in Abdulmageed (2018); Keller & Kotler (2016) assert that a positive brand image serves as a shield for a company and will keep on working for the business in bad times. A brand with an outstanding brand image and reputation may witness occasional impediments, however, a good image usually influences customers to forgive these occasional setbacks because the brand had always delivered in the past (Aaker, 1991). Conversely, a brand with a poor brand image would be criticized and abandoned for any failure and it would have no pardon (Aaker, 1991). Keller & Kotler (2016) recommend that the attainment of a positive brand image based on core values and any other values that differentiate it should be of vital importance to every business.

A brand with a good image will enable a company to charge premium prices (Keller, 2012). A brand with a positive brand image will gain a huge profit margin and will be less prone to competitor’s actions (Aaker, 1991). There will not be the need to offer products at a cheaper price or to give price discounts as the brand is sought for because it is really wanted (Keller & Kotler, 2016). The company can take advantage of the positive image it commands to charge premium prices (Aaker, 1991).

2.1.5.8 Social Media

Based on Kaplan et al. (2010) social media can be defined as a comprehensive term for web-based applications which enable the internet users, online customers to be more precise, to exchange as well as create information, share views and experiences with friends, relationships, colleagues etc. The brand communication on social media, however, can be broadly classified into two, firstly from marketers’ end and the other being done on consumers’ part in terms of conversations they engage themselves on the social networking sites like facebook, twitter, telegram, etc.

Social media was heavily involved in current lifestyle for both urban living and rural living; so social media was counted as a powerful medium for the effective communication between product and customers (Prentice & Handsjuk, 2016). The augmentation of social media marketing had been the popularity marketing trends for alcohol beverage business (Nicholls, 2012). Popularity of social media came from cost efficiency, geographic expansion, and business opportunities (Barreda et al., 2016). The challenges from the widespread and active use of social media marketing on alcohol beverage were the younger target audiences (Nicholls, 2012). Some countries legislated an alcohol marketing regulations in order to control the effort and exposure of alcohol in social media marketing (Brodmerkel & Carah, 2013).

The crucial advantage of social media was to allow more customers’ interaction by comments about products and brands. At the same time, the company still maintained non-interactive section such as information, activities, and news on the social media as well. The consequence from both perspectives of social media established and strengthened the relationship with customers; besides, social media influenced brand preference (Prentice et al., 2016). Furthermore, customer’s interaction was a valuable tool and cost less to construct brand preference (Prentice & Handsjuk, 2016). Likewise, social media induced brand recognition in the virtue of advertising and media commentary (Kladou et al., 2016).

However, the disturbance of using social media could create risks from the negative comments when customers experienced any product issue so that marketers must notice and planed well to resolve this threat (Powers et al., 2012). Then, customers’ interaction could be a link to customers’ brand preference. Besides, social media influenced brand preference (Prentice & Handsjuk, 2016).

Consumers are increasingly using social media sites to search for information and turning away from traditional media, such as television, radio, and magazines (Mangold & Faulds, 2016). The product reviews by consumers on social media can produce a positive or negative brand buzz and the messages on these virtual platforms affect consumer buying decisions (Vij & Sharma, 2013). The work of Eisingerich et al. (2015) focuses on the differences that exist between traditional word-of-mouth and social media word-of-mouth.

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Details

Title
Factors Affecting Brand Preference. The Case of Beer Brands in Nekemte Town, Ethiopia
College
Wollega University
Course
Marketing Management
Grade
3.65
Author
Year
2020
Pages
97
Catalog Number
V1040483
ISBN (eBook)
9783346470164
ISBN (Book)
9783346470171
Language
English
Notes
Thanks for all Ker Contributors!
Tags
factors, affecting, brand, preference, case, beer, brands, nekemte, town, ethiopia
Quote paper
Hika Debela (Author), 2020, Factors Affecting Brand Preference. The Case of Beer Brands in Nekemte Town, Ethiopia, Munich, GRIN Verlag, https://www.grin.com/document/1040483

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