New Brand Strategies in the Digital Era. The Evolution of Consumers' Behaviour and its Influence on Traditional Brand Management


Textbook, 2020

77 Pages

Alena Horch (Author)


Excerpt

Table of Contents

Acknowledgements

Abstract

List of Figures

List of Tables

1 Introduction
1.1 Background
1.2 Research Aim and Objective
1.3 Structure of the Study

2 Literature Review
2.1 Theoretical Framework of Brands
2.2 The Age of Digitalisation
2.3 Instruments of Digital Brand Management
2.4 The Evolution of Consumer Behaviour in the Age of Digitalisation
2.5 Chapter Conclusion

3 Research Methodology
3.1 Research Process
3.2 Research Philosophy
3.3 Strategy and Choice
3.4 Data Collection
3.5 Sampling Approach
3.6 Reliability and Validity
3.7 Data Analysis
3.8 Ethics
3.9 Chapter Conclusion

4 Research Findings and Discussion
4.1 Decision-Making Process
4.2 Significance of Digital Marketing Tools
4.3 Consumers' Online Expectations
4.4 Chapter Conclusion

5 Conclusion
5.1 Final Remarks and Managerial Implications
5.2 Limitations
5.3 Suggestions for further Research

References

Bibliografische Information der Deutschen Nationalbibliothek:

Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über http://dnb.d-nb.de abrufbar.

Impressum:

Copyright © Studylab 2020

Ein Imprint der GRIN Publishing GmbH, München

Druck und Bindung: Books on Demand GmbH, Norderstedt, Germany

Coverbild: GRIN Publishing GmbH | Freepik.com | Flaticon.com | ei8htz

Acknowledgements

The journey as a postgraduate student was an exciting and thought-provoking experience for me. During this time, there were several people who helped and supported me.

First and foremost, I would like to thank my superior, Dr. Ilenia Bregli, who has guided me through the dissertation process by providing help, support and knowledge on every step of this way. I am very grateful for the time she has given to the study and have been delighted to have her as my tutor.

Second, I would like to show gratitude to all the participants who took part in the research for scarifying their precious time for the completion of the study.

Moreover, I want to take this opportunity to express my special thanks to my parents for their support, love and continuous encouragement; for offering me this opportunity to achieve my ambition and giving me strength during my studies abroad.

Last, but not least, I would like express my sincere thanks to Johanna Geske who always has been on my side here in Lincoln, Marcel Pielenga who mentally supported me during my studies and my best friend Caroline Schöbel who has accompanied me on my way despite the long distance.

Abstract

During the last years, research on consumers' online behaviour has become an important topic in marketing science. Therefore, this thesis concerns online consumer behaviour of Millennials in Germany, focussing on their decision-making process, online engagement and customer loyalty. In order to build a theoretical basis for this research, existing literature regarding the chosen topic area is reviewed. Upon this, the methodological framework is introduced; this study applies a qualitative research method, based on semi-structured interviews of 15 participants. Following this, the analysis of data is carried out to highlight changes in consumers' purchase behaviour in the digital age and their online engagement. Based on the findings, digital tools were assessed for the likelihood to influence consumers' behaviour in favour of a company. The author arrives at the conclusion that the purchase decision-making process of Millennials has become significantly more complex and it is becoming increasingly difficult to reach the target audience at the moments which most influence their decisions. Moreover, the findings revealed that marketers have to choose a new approach in order to gain customer loyalty. Therefore, recommendations were suggested for deeper understanding consumers' online behaviour. Finally, the thesis gives some directions for future research related to consumers online behaviour.

Keywords: Brand Management, Consumer Behaviour, Digitalization, Digital Marketing Tools, Decision-Making Process, Customer Loyalty, Millennials, Germany

List of Figures

Figure 1: A Brand is more than a Product

Figure 2: Brand Benefits for Consumer

Figure 3: Different Types of Media Classes

Figure 4: Search Engine Result Page in Google illustrating the Natural and Paid Listing

Figure 5: Most Active Social Media Platforms in Germany

Figure 6: Consumer Decision-Making Process

Figure 7: The Traditional Brand Purchase Funnel

Figure 8: The Circular Decision-Making Journey

Figure 9: The Leaky Bucket

Figure 10: The Loyalty Ladder

Figure 11: Research Onion

List of Tables

Table 1: Development of Internet Usage in Germany

Table 2: Essential Components of a Website

Table 3: Click-Through-Rates according to Position and Search Engine Result Page

Table 4: Different Types of E-Mail Marketing

Table 5: Research Strategies

Table6: Sample Composition

Table 7: Consideration Set

Table 8: Frequency of Online Purchases

Table 9: Social Media Usage

Table 10: Advertising E-Mails

Table 11: Consumers' Perception of Brand Communities

1 Introduction

1.1 Background

Against the background of dynamic and global markets as well as heterogeneous target groups, brand management is considered to be of great significance in order to keep pace with the increasing competition in the German market. Brands are seen as the central element of a company, thus representing the most valuable business component. Hence, it is essential that they are carefully developed and managed. However, in the digital era it is now no longer appropriate to handle brands as a linear, relational, exchange-based partnership (Louro and Cunha, 2001). With the introduction of the Internet in the late 1990s, a global digitalisation process was initiated which is increasingly affecting today's society and the economy. No medium has spread faster than the Internet: within just over twenty years, the proportion of Internet users in Germany rose from 6.5 per cent (1997) to 90.3 per cent (2018), of which 77.0 per cent are using it on a daily basis as shown in Table 1. This means, that currently 54.0 million Germans are online every day (ARD/ZDF, 2018; Nielsen, 2016).

Abbildung in dieser Leseprobe nicht enthalten

Table 1: Development of Internet Usage in Germany

(ARD/ZDF. 2018, 399 [adapted by the author])

According to research conducted by ARD/ZDF (2018), consumers spend on average 3.5 hours in the World Wide Web every day, with a rising tendency. This development has introduced many new ways for companies to connect with their customers and has implied substantive changes in the way consumers communicate, interact and engage online with brands online (Martin and Todorov, 2010).

It can be said that the Internet offers consumers an enormous amount of information, a wide range of providers and lower search costs. This has significantly shaped consumers' research and purchase behaviour (Daniel and Klimis, 1999). Through the constant availability of a large amount of information, whether it is in regards to the details or number of sources, it has become much easier to gather and evaluate competing offers at any place. Nowadays, consumers can inform themselves about different retailers at the same time, previously unknown retailers are easier to reach and their products or services can be compared simultaneously. Moreover, today's consumers use various channels in parallel: from retail stores to product catalogues and webshops to online marketplaces or mobile shopping apps and there is no clear distinction between online and offline customers anymore (Hsiao et al., 2012).

It is obvious that the above-mentioned developments have changed consumer behaviour and therefore, the purchase behaviour in the digital age does not necessarily follow the traditional one (Koufaris, 2003). Nowadays, customers want to be much more involved in a real dialogue. They want to be convinced that a brand plays a relevant role for them. While in the past the brand was solely determined by the company, in the digital age, the customer becomes the active protagonist, who has a significant influence on brand development.

Thus, it is necessary to adopt a different approach to manage brands. Meanwhile, it is essential to develop and implement a sophisticated Omni-Channel strategy to reach customers across different communication channels. However, it is crucial to know how to serve parallel sales channels tailored to the target group.

1.2 Research Aim and Objective

The aim of this research is to investigate changing consumer behaviour due to the age of digitalisation and its impact on traditional brand management. In particular, the focus is on the changing decision-making process and factors that can enhance customer loyalty.

In order to achieve the overall aim, it is broken down into the following research questions which derive from the assessment of the existing literature surrounding the topic:

- How has the consumers' purchasing decision-making process changed in the digital era?
- How do consumers connect and engage with brands in the changing landscape of the digital age?
- How can customer loyalty be gained through digital channels?

This research paper is limited to the German market as previous research has not studied this market and this specific area has extensive research gaps. Moreover, the focus of this study is on the behaviour of Millennials, encompassing the cohort born between 1980 and 2000 (Lee and Kotler, 2015). This age group is regarded as the first generation of 'digital natives' who grew up in the digital world. Due to this fact, fundamental changes, in particular concerning consumer behaviour and leisure activities, can be recognised compared to previous generations such as Generation X or Baby Boomers (Smith and Nichols, 2015). The following section will provide an overview of the structure of this research.

1.3 Structure of the Study

This thesis is laid out in strategic format and is divided into five chapters which serve to systematically answer the above-mentioned research questions.

In chapter 1, the author gives a general introduction to the topic of this study including background information about the digital development and the importance for today's consumers. Additionally, the aim of the research is presented.

The next chapter examines and discusses the existing literature detailing the age of digitalisation and digital marketing tools. Following this, the literature review then provides details regarding consumers' decision-making process as well as customer loyalty. So far, little research in marketing science has been done for the underlying research problem. Thus, studies and researchers from related fields, in marketing and brand management, are used. Several links can be made between research on digitalisation, marketing instruments and brand management which will serve as a theoretical basis of this study.

The third chapter deals with the research methodology which was chosen for this study. It examines and explores the theoretical research approaches which includes the research philosophy and design, data collection method and the discussion of reliability and validity as well as ethical considerations.

In the following section, chapter 4, the author presents the findings of the primary research. This includes a detailed analysis and discussion as well as how these findings lie within current research and theory.

In chapter 5, the final chapter of this thesis, the author concludes the previous chapters and answers the research questions. Additionally, managerial implications are provided and limitations as well as possibilities for further research are outlined.

2 Literature Review

This chapter serves the purpose to put the research questions into perspective by reviewing the related literature and describing the current understanding of the digitalisation age and the effect on the consumer decision-making process as well as customer loyalty.

The first section of this chapter defines the term brand as well as the benefits for consumers. Due to the increasing use of the Internet, which has led to a new area of research in consumer behaviour, the following two sections will examine the evolution of the digital age and further present new digital tools. The fourth section of this chapter then assesses the effect of the Internet environment on consumer behaviour. The chapter includes a discussion of the changes in the age of digitalisation and its effect on consumers. It stresses the relevance of adapting to the changing consumer behaviour as well as considering the boundaries of current understanding of how decision-making processes are made online and customer loyalty can be gained.

2.1 Theoretical Framework of Brands

2.1.1 Defining Brands

The concept of branding has existed for many decades but has changed over time. Even though this term has been widely examined and discussed in academic literature, there is no generally accepted definition of the brand construct. Definitions vary from the brand as a proof of origin up to complex constructs of characteristics such as personality, emotional influences and associations in consumers' minds.

At the beginning, in the middle of the 19th century, the origin of actual brand understanding emerged. At that time, a brand served merely as a proof of ownership or origin to differentiate goods in the context of the onset of mass production from anonymity (Bastos and Levy, 2012).

According to the American Marketing Association (1960), a brand is as a "name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of a seller or group of sellers and to differentiate them from those of competition". This definition views a brand primarily as a means of identification and differentiation of goods and services of a seller to their competitors. The focus is on the product and the producer whilst the consumer is left out of the picture and hence this definition is considered restrictive in its scope.

Later on, Aaker and Joachimstaler (2002) also suggested the product as being the central element of a brand which includes general characteristics such as features, quality and functional benefits. However, they added that a brand includes much more such as associations, brand-customer relationships and personality as shown in Figure 1.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: A Brand is more than a Product

(Aaker and Joachimstaler, 2002, 52 [adapted by the author, 2019])

On the contrary, Laforet (2010, 14) focuses rather on the consumer and argues that "a brand is more than simply a trademark or a sales and marketing tool […] a brand is also a complex entity in the mind of consumers". The concept of brands as an association in minds the minds of consumers is adhered by several authors (e.g. Arnold, 1992; Keller, 1993; Joyce, 1963). As this is the first definition that puts the consumer in the centre of brands, it will be considered as the most relevant for this research.

After reviewing the existing literature on the development of different brand definitions, the next section will provide the reader with a deeper insight into the brand benefits for consumers.

2.1.2 Brand Benefits for Consumers

According to Meffert et al. (2002) brands hold great meaning and value for consumers as shown in Figure 2. Brands are centred on the consumers' expectations of a certain product and the seller's promises to deliver to its customers (Meffert et al., 2002).

Abbildung in dieser Leseprobe nicht enthalten

Figure 2: Brand Benefits for Consumer

(Meffert et al., 2002, 10 [adapted by the author, 2019])

Generally, a brand provides guidance in the selection of products or services which refers to the orientation function of a brand. Therefore, it can be said that the orientation function serves the convenience of consumers in terms of reducing search and information costs. Comparing the opportunity cost of a labelled product may be cheaper than a non-labelled product (Kotler and Pfoertsch, 2010). In addition to the orientation function, brands have a relief function. The purchase decision process is accelerated and simplified by the repurchase of labelled products or services, according to Kroeber-Riel and Weinberg (1999). Moreover, awareness, competence and identity are the basis of consumer confidence. Especially with asymmetric information, brands have a crucial trust function (Burmann et al., 2017). Furthermore, as part of quality assurance, brands provide the consumer with a clear signal for performance and reduce the risk associated with the purchase (Kotler and Pfoertsch, 2010). However, according to Belén del Río (2001), brands can also be used as an expression of personality and therefore, can fulfil a prestige function in the social environment. In this case, consumers transfer certain attributes of the brand to themselves. Additionally, brands have an identification function that can be decisive for the definition of the self-image or social group affiliation.

After reviewing the existing literature on brands and their benefits for consumers, the researcher will elaborate on the changing age of digitalisation in the next section.

2.2 The Age of Digitalisation

Digitalisation is currently one of the major trends which has a significant influence on today's society and businesses (Parviainen et al., 2017). According to Gartner’s IT Glossary (2019), “digitisation is the process of changing from analogue to digital form”. On the contrary, Brennen and Kreiss (2014), rather put the focus of their definition on the social life and interaction between people which might be more appropriate in today's context of marketing. The authors define digitalisation as "the way in which many domains of social life are restructured around digital communication and media infrastructure" (Brennen and Kreiss, 2014).

Since the invention of the World Wide Web in the early 1990s, a dynamic development of the Internet and its users can be recognised (Hairong, 2011). Currently, about 90% of the German population have Internet access, of which 77% are online daily (Statistisches Bundesamt, 2018). Consequently, the sale of products is increasingly shifting to the Internet, ensuring high growth rates in the online business. In 2018 alone, the value of goods bought online in Germany has increased by 10% to 63 billion euros, according to a study conducted by the German institution for retail research IFH (2018).

However, the effects of digitalisation go far beyond online businesses. Due to the increasing number of digital devices, especially smartphones, a growing number of people are accessing the Internet through mobile devices. In the meantime, 81% of consumers in Germany use the Internet via smartphone - in 2010 this share was just about 25% (Statistisches Bundesamt, 2018). Within a few years, the smartphone has developed to a central device that shapes the everyday life of the vast majority of people from morning to night (Solis, 2018). The development has led to changing consumer behaviour and stronger interaction between customers and companies (Keller, 2009). Nowadays, consumers are better informed, more active, and in contact with brands through multiple channels (Cook, 2014). Anyone who used to search for information about a product in the past went to the store and asked the seller. Today, many consumers gather information online when they are at home, on the road or even when they are in the store. This blurs the line between the online and offline customers, and consequently shows that a strict division of two distinct groups no longer exists (Chiang et al., 2018).

In the next section, the author will introduce new instruments which emerged due to the digitalisation.

2.3 Instruments of Digital Brand Management

It can be said that digital brand management has significantly changed traditional marketing. In fact, digital brand management allows the company to communicate directly with the customer on different online channels (Karjaluoto et al., 2015). However, the main challenge of brand management in the digital age is the holistic management of marketing tools in a considerably complex Omni-Channel Marketing (Neslin and Shankar, 2009).

The term Omni derived from Latin and signifies 'all' or 'universal' which refers to linking all channels and platforms in the marketing context (Juaneda-Ayensa et al., 2016). Thus, Omni-Channel Marketing aims to provide consumers with a holistic shopping experience across all platforms. It should be ensured that the customers' buying process is straightforward and harmonised by linking the entire digital identity of a company (Shah et al., 2006; Gupta et al., 2004). According to Verhoef and Lemon (2016, 176) Omni-Channel Marketing can be defined as “synergistic management of the numerous available channels and customer touchpoints, in such a way that the customer experience across channels and the performance over channels is optimized”.

Therefore, it will be examined which online communication media can best be implemented for planned brand communication and customer engagement. In general, these digital media channels can be divided into three different groups as shown in Figure 3.

Abbildung in dieser Leseprobe nicht enthalten

Figure 3: Different Types of Media Classes

(Kreuzer and Land, 2017, 53 [adapted by the author, 2019])

In the digital context, the term paid media refers to media for which a company pays to have an online placement, for example online advertising or search engine marketing. On the contrary, owned media are online activities that are fully controlled and owned by a company itself. This could be for instance a corporate website, blog or a Facebook page. Traditionally, earned media signifies publicity which is generated through PR. Nowadays, however, it also includes word-of-mouth which can be aroused through social media, viral media marketing or conversations in blogs, communities and social networks. A company cannot buy exposure but they can earn it by providing value to the user (Chaffey and Ellis‑Chadwick, 2019; Kingsnorth, 2019).

In the following subchapters, the main digital communication tools will be explained and applied to digital brand management, namely: corporate website, search engine marketing, social media, e-mail marketing, display advertising and brand communities. Due to the limited scope of this work, only the previously mentioned tools are included as they are considered to be the most common and effective digital tools which are used in practice (Gibson, 2018).

2.3.1 Corporate Website

Earlier research has shown that the Internet and corporate websites are becoming increasingly important as a digital tool for the communication between companies and consumers (e.g. Kent et al., 2003; Gomez and Chalmeta, 2011; Aziz and Kamaludin, 2015). A corporate website constitutes the central element of digital brand management and basically serves to inform consumers about the brand. Nowadays, consumers often research online if they want to buy something or if they are looking for a service provider (Bei et al., 2004). Consequently, companies whose website is displayed online have better chances to win customers. If a company does not have a professional website, they may lose customers to the competition (Smith, 2016).

A website offers extensive space for information whereas other marketing tools such as advertisements or banners often provide limited space. On a website companies can display detailed information for the customer; from the company history to services, references and pictures or videos. Through forums, chat rooms or support pages, a website can serve as a bidirectional dialogue channel (Ingenhoff and Koelling, 2009).

The increasing dynamism of technologies on the Internet is steadily expanding the scope for designing websites. For users to find their way through the website, however, special attention must be paid to the user-friendliness according to García et al. (2017). Based on this, Trifonova (2018) added that the user-friendliness also plays an essential role in the choice of the terminal device: The website needs to be displayed optimally on a computer, tablet and smartphone optimally. Moreover, according to Juska (2018), there are three essential components of a website as shown in Table 2 below.

Abbildung in dieser Leseprobe nicht enthalten

Table 2: Essential Components of a Website

(Juska, 2018, 32 [adapted by the author. 2019])

2.3.2 Search Engine Marketing

Today, there are more than 1.5 billion websites worldwide (Internet Live Stats, 2019). Therefore, the current challenge is to ensure that a company's website or online presence can be found among all those pages which can be optimised by search engine marketing (Hanlon, 2019). Search engine marketing (SEM) is a branch of online marketing and encompasses all measures for attracting visitors to a web presence through web search engines (Fill and Turnbull, 2016). With a market share of 95%, the search engine Google is ranked the highest and constitutes the predominant one in Germany, followed by Microsoft's search engine Bing and Yahoo (Global Stats, 2019).

According to the literature, SEM can be divided into two categories which include search engine optimisation (SEO) and pay search (pay per click) marketing (PPC), although in practice they should be integrated (Chaffey and Ellis-Chadwick, 2019).

Abbildung in dieser Leseprobe nicht enthalten

Figure 4: Search Engine Result Page in Google illustrating the Natural and Paid Listing

(Google, 2019 [adapted by the author, 2019])

SEO describes the optimisation of a website to ensure that a web page for certain keywords achieves the highest possible position or ranking in the natural or organic listings as shown in Figure 4. To achieve this, a page must be optimised in such a way that the search engine is able to read and analyse it as best as possible (Chaffey and Ellis-Chadwick, 2019). The higher a result is listed, the higher the chance of a visit. According to a study conducted by Pretrescu (2014), 71% of consumers search for results only on the first search results page and do not consider the following pages. The first hit of the search result achieves the highest click-through-rates (CTR) accounting for approximately 30%. The second position still has a CTR of approximately 14% and position 6 to 10 fall significantly. The results of the second page of search results are just once clicked in 3.99% of all cases whereas on page 3, it is only 1.6% with desktop users. For mobile users these results occur slightly higher as shown in Table 3.

Abbildung in dieser Leseprobe nicht enthalten

Table 3: Click-Through-Rates according to Position and Search Engine Result Page

(Pretrescu, 2014)

While SEO focuses on organic optimisation of webpages, PPC involves paid advertising in search engines (Hanlon, 2019). Here, companies pay the search engines for placements in the sponsored section, directly at the top of the search results pages as shown in Figure 4 (Ryan, 2016). According to Sen (2005), it is a faster way to obtain visibility. However, according to a study conducted by Sistrix (2019), only 6.8% of the total clicks on Google go to paid ads whereas over 93% of all measured clicks are organic. Therefore, PPC can be considered as a less effective tool but should not be disregarded altogether.

2.3.3 Social Media Marketing

During the last decade, a significant change in social media marketing could be recognised. In the early stage of this marketing tool, it was rather used mainly by business-to-consumer companies as a niche tactic. However, it has continued to expand across various industries and is now used by almost every type of organisation (Sharma and Soundarabai, 2017).

Kaplan and Haenline (2010, 61) suggested that social media is "a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of User Generated Content". They are used to communicate and connect users via the Internet which supports the dissemination of knowledge and opinions. Meanwhile, however, social networks not only facilitate the interpersonal interaction but also serve as sources of information (Westerman et al., 2014). According to a study by Nanji (2018), social media are the second source of referral traffic to other sites, whereas Google and other organic search opportunities are ranked as number one.

The Social Media Atlas 2017/2018 exposed that 90% of Internet users in Germany are registered in at least one social media channel (Leichsenring, 2018). According to a study conducted by Hootsuite (Ghazvini, 2019), the ranking of the most popular social networks shows that YouTube is the most used social network in Germany, followed by WhatsApp and Facebook. These and other social platforms were ranked as follows:

Abbildung in dieser Leseprobe nicht enthalten

Figure 5: Most Active Social Media Platforms in Germany

(Ghazvini, 2019 [adapted by the author, 2019])

Consequently, this development created new customer touchpoints for companies. It enables companies to provide a brand experience as well as the exchange with the brand within a different environment (McKinsey, 2017). In particular, social networks increase the engagement and integration of consumers in business activities (Voorveld et al., 2018). However, integrating consumers into brand development is also considered as a dilemma in contemporary brand management. On the one hand, consumer integration can keep the brand up to date and build or deepen relationships with customers. Additionally, social media can increase brand awareness and strengthen the brand image, especially when a brand campaign spreads virally. On the other hand, consumers can also damage the image of the brand and thereby, seriously affect the success of a brand (Brexendorf and Henkel, 2012).

2.3.4 E-Mail Marketing

In addition to the company's websites and social media channels, emails, as part of online marketing, are among the most effective forms of online advertising (Gibson, 2018). The discipline of e-mail marketing is assigned to direct marketing and mainly serves companies to further expand and consolidate existing customer touchpoints. Piñeiro-Otero and Martínez-Rolán (2016, 53) defined e-mail marketing as "an online system using e-mail to distribute announcements and commercial information". In particular, due to the frequent use of smartphones, this tool allows companies to reach a large customer-base regularly and cost-effective by sending electronic messages (Chaffey, 2006). E-mail marketing can be divided into two different types as shown in Table 4.

Abbildung in dieser Leseprobe nicht enthalten

Table 4: Different Types of E-Mail Marketing

(Vocell, 2015 (adapted by the author, 2019])

Even though it can be a quite effective tool for online marketing, it has been criticised during the last few years. The main reason for the negative attitude towards this tool is supposed to be the increasing number of spam e-mails which consumers receive on a daily basis. As they are more often buying and reading online, their e-mail address end up in the mailing list of several shops, blogs or public providers (Fariborzi and Zahedifard, 2012). Consequently, they have an overflowing inbox and the recipients often only take a few seconds to decide wether they want to open or delete an e-mail. This results in a big challenge for businesses: their advertising e-mails have to arouse interests within the first few seconds. They should arouse interest straight away by being tailored to a certain target group or being personalised to individual consumers (Ellis-Chadwick and Doherty, 2012).

2.3.5 Classic Online Advertisement

In addition to the increased number of possible communication channels in the age of digitalisation, new media also offer new design options and modes of action. Typical instruments of classic online advertising are for example display advertising (Singson and McNulty, 2017).

Previous research has shown that display advertising is a very effective marketing tool, in particular for promoting products and providing information as well as in generating traffic to a website (Saadeghvaziri et al., 2013). In addition, display advertising often increases brand awareness which can result in a positive brand attitude (Huang and Yang, 2012; Fang et al., 2007). This involves static and animated graphics that are incorporated into a website. After the user clicks on the banner, it will go directly to the advertiser's campaign website or home page (Gay et al., 2007).

These banners can also occur as pop-up-windows or floating ads. Pop-up-windows are placed advertisements which appear in a small box in front of or behind an open page whereas floating advertisements float for a specific time period, typically 5-30 seconds, over the top of the page (Miller, 2005). The versatile design elements can contribute to the liveliness, uniqueness or concision of this type of advertising. A disadvantage, however, is that many users have a so-called ad blocker on their computer, which prevents the opening of pop-up pages (Hansel, 2004).

2.3.6 Brand Communities

As a result of the development of Web 2.0 and social networks, a growing number of online brand communities have been created. Online brand communities regularly network and exchange information about brands and products. In science, the relevance of brand communities is already known, as Laroch et al. (2012) emphasise, consumers' increasing interest in brand communities. This might be due to the fact that word-of-mouth is one of the most effective ways to increase brand awareness. In fact, consumers are 84% more likely to trust a recommendation or referral if it comes from a friend, which stresses the importance of communities (Karpis, 2018).

According to Muniz and O'Guinn (2001, 412), a brand community is described as "a specialised, non-geographically bound community, based on a structured set of social relationships among admirers of a brand". Fundamental characteristics of brand communities are the consumers' identification with the brand but also with the community (Marzocchi et al., 2013). Therefore, it can be said that the identification is considered as one of the most important drivers of the brand communities' success as well as the positive effect on several brand objectives such as valuable feedback and product innovations, customer satisfaction and brand loyalty (Algesheimer et al., 2005; Bagozzi and Dholakia, 2006; Benson and Hendrén, 2013).

After examining the relevant instruments of digital brand management, the researcher will elaborate on the effect and impact of the digital age on consumer behaviour.

2.4 The Evolution of Consumer Behaviour in the Age of Digitalisation

2.4.1 Consumer Decision-Making Process

2.4.1.1 Decision-Making Concepts

The process which consumers go through until they reach their purchase decision has been captured in several concepts. One of the main models in the research of consumer behaviour is the decision-making process, developed in 1983 by Cox et al., which breaks down the purchase process into five basic steps as shown in Figure 6.

Abbildung in dieser Leseprobe nicht enthalten

Figure 6: Consumer Decision-Making Process

(Solomon et al., 2016, 331)

At the beginning of every purchase process the consumer recognises a specific need. Consequently, in the second stage, they start searching for information about corresponding products or services which are most suitable to satisfy their needs. In this stage, it is the aim to get to know the potential products and brands and, above all, their characteristics. In the third phase, which is referred to as the evaluation of the alternatives, previously determined information is analysed. When all the above stages have been passed, the consumer then decides on what to purchase and where. Once the purchase has been made, the consumer analyses whether the product was useful or not.

The decision-making process represents the consumer as an information processor and problem solver who passes through a range of mental processes. Within these processes, the consumer evaluates numerous substitutes and determines to what extend the specific product might satisfy their needs. Concerning brand management, the concept of the brand purchase funnel adds on how to reach these consumers in the moments that most influence their decisions. It is the aim to reveal those moments when consumers are open to influences which is referred to as the so-called 'moments that matter' or 'touchpoints'. Those touchpoints are represented through the metaphor of a funnel.

Based on this concept, it can be determined how many customers are preserved or lost in the process from brand awareness to brand loyalty as shown in Figure 7 below.

Abbildung in dieser Leseprobe nicht enthalten

Figure 7: The Traditional Brand Purchase Funnel

(Stankevich, 2017, 8)

At the beginning of this process, consumers have some potential brands in mind. Subsequently, they begin to weigh options and make decisions which results in a systematic reduction of their initial consideration set. In each stage, the customer can drop off the funnel and it is the marketers' task to avoid the situation where consumers leave a stage, by adapting their brand message. Finally, they will arrive with the one brand they chose to purchase. If a customer likes the brand or product, they might decide to repurchase a specific product. In the case where customers only purchase a certain brand, it will result in customer loyalty.

One of the aspects that these models have in common is the evaluation stage. Customers usually find themselves unsure which brands to choose and compare them to find the one that best suits their needs in terms of price, features and customer service. By actively influencing this stage, companies can make sure that they are not only present at this stage, but that they are displayed correctly when compared to their competitors.

However, research has shown that linear customer journeys are no longer appropriate. Due to the increasing number of products and digital channels, the concept fails to identify all key buying factors and touchpoints (Court et al., 2009). Nowadays, it becomes more difficult for companies to predict moments in which consumers are narrowing and broadening their consideration set (Thygesen, 2018). Therefore, it is more complex to reach consumers in the moments that matter.

Following this, in the next section, an assessment will be made of the influences of the digital environment on the traditional decision-making process.

[...]

Excerpt out of 77 pages

Details

Title
New Brand Strategies in the Digital Era. The Evolution of Consumers' Behaviour and its Influence on Traditional Brand Management
Author
Year
2020
Pages
77
Catalog Number
V509719
ISBN (eBook)
9783960958369
ISBN (Book)
9783960958376
Language
English
Tags
MarketingBrand Management, Consumer Behaviour, Digitalization, Digital Marketing Tools, Decision-Making Process, Customer Loyalty, Millennials, Germany, corporate website, search engine optimization, e-mail marketing, seo
Quote paper
Alena Horch (Author), 2020, New Brand Strategies in the Digital Era. The Evolution of Consumers' Behaviour and its Influence on Traditional Brand Management, Munich, GRIN Verlag, https://www.grin.com/document/509719

Comments

  • No comments yet.
Read the ebook
Title: New Brand Strategies in the Digital Era. The Evolution of Consumers' Behaviour and its Influence on Traditional Brand Management



Upload papers

Your term paper / thesis:

- Publication as eBook and book
- High royalties for the sales
- Completely free - with ISBN
- It only takes five minutes
- Every paper finds readers

Publish now - it's free