ABSTRACT

Building strong brand equity to attain competitive advantage is a top priority amongst many firms but it is not always an easy task to accomplish. Due to the increased globalization and competition, the management of a brand has become of importance and thus presents an interesting area to study. With the adoption of effective brand equity strategies, many companies may compete effectively and efficiently. This study, therefore, set out to investigate the influence of brand equity on consumer choice in buying branded bottled water, with special focus on the contributory roles of its various elements in influencing consumer choice, as well as the moderating role of the industry context in affecting the relationship between brand equity and consumer choice. The specific objectives of the study were to investigate (i) the influence of brand awareness on consumer choice (ii) the influence of brand loyalty on consumer choice (iii) the influence of perceived quality on consumer choice; and (iv) the influence of proprietary brand assets on consumer choice. Moreover the study sought to determine the moderating influence of the Industry context on the relationship between brand equity and consumer choice. A cross-sectional explanatory design was used. The target population in this study was 264,808 registered customers in supermarkets and procurement employees in the selected supermarkets in the Nairobi Central Business District. The study was conducted in the context of the Kenyan retail supermarkets in Kenya. This context was chosen due to the prominence of the supermarkets in the retail industry in Kenya and on the basis of the limited research conducted on branding in the Kenyan context. Convenient sampling was adopted to select the supermarkets and systematic sampling was conducted to select customers from an ordered sample size from the supermarkets 400 population sample size. Both primary and secondary data were used. Primary data were collected using semi-structured questionnaires and an interview guide. Secondary data were collected through records and documents review. Descriptive statistics were used to summarize the properties of the mass data. Inferential statistics were derived using Pearson’s correlation and logistic regression analysis. Content analysis was carried out for qualitative data. The study used the Statistical Package for Social Sciences (SPSS) 19 and Stata 11 as a tool to process and analyse data. The research results were presented in percentages, tables, charts and graphs. The findings show that all the objectives of the study were significant at 95% confidence level, there was significant impact of brand awareness, perceived quality, brand loyalty and other proprietary brand assets on consumer choice. Furthermore it shows brand loyalty as the most dominant factor established whose platform should be built by the other three dimension of brand equity to enable a firm to influence choice habits amongst consumers. The study recommends that brand equity should be used to play a leading role among product related strategies in establishing a marketing strategy for bottled water manufacturers.

CHAPTER ONE INTRODUCTION

Background to the study

Consumers are overwhelmed with a vast array of choices in today’s retail marketing environment. This is especially because they are exposed to so many items in the market and they have to make quick decisions based on the items they ought to buy and which can be catered for by their disposable income. The decision the consumers make determines the item they select and eventually buy. The manufacturers, on their part, have to be innovative and creative to ensure that customers get to pick their items if their firms have to remain competitive in the market. Branding of their items is one the strategies that companies such as supermarkets may adopt to attract consumers to their goods and to ensure these goods get picked and re-picked.

According to Leighton (2012), the average supermarket has over 50,000 Stock Keeping Units (SKUs), while the average retail shopper buys around 50 items in 50 minutes. Therefore, consumers make a decision while facing around 800 items per minute. However, consumers are not able to attend to all of the items on display, let alone weigh up all of the available options; they must decide what to buy from what is presented to them during purchasing. Similarly, Ogbuji, Anyanwu, & Onah, (2011) asserts that for consumers to make fast decisions, they need to use mental shortcuts or heuristics which will guide them in their choices. These cues which are present in the environment will guide the shopper’s attention and aid their decision making while in the store.

The distinction between goods /services provided and products that are in competition in the market is the starting point for brand marketing which is crucial to the success of organizations. In recent years the issue of brand and particular brand equity (BE) has attracted the attention of researchers in the field of marketing and institutions that are evaluating brand equity. Perhaps the most powerful mental shortcut available to the consumer is branding, which accordingly, enables consumers to simplify customer decisions, reduce risk and define their expectations. Branding builds an image on a product which allows consumers to quickly select efficiently from an array of products. The purpose of branding is to draw a consumer’s attention to certain products which allows them to recognize familiar products and serves as a cue for retrieving stored information from memory about those products (Leighton, 2012).

Most brands include intangible assets that are allocated a significant share of this value to self (Aaker & Joachimsthaler 2000). This has been observed differently in different industries and different years, for it is difficult to compare fast moving consumer goods with industrial goods; as such, their characteristics differ greatly. In this regard the creation or development of new products as well as the high refractive index of new products has led manufacturers to brand strategy development.

Moreover, there has been limited theoretical framework that has built upon the original model developed by Aaker (1991; 2004) and Keller (1993; 2001) that has been done to

map the mechanisms underlying customer-based brand equity in delivering customer value. Consumer choice relates to the fact that different outcomes result from the marketing of the product or service because of its brand element, as compared to outcomes, if that same product or service did not have brand identification (Tuominen, 2000). This study assumed that choice would be based on the aspect of branding specifically. According to Stahl, Heitmann, Lehmann, and Neslin, 2012, “the Influence of brand equity on customer acquisition, retention, and profit margin” only analysed the relationship of the value of the brand to the lifetime value of the consumer. So long as the brand is strong, it will lead to consumer purchase but if it is weak, the consumer will most likely seek other alternatives.