Determination of factors affecting brand in marketing

RESEARCH PROJECT
(BMBR5108)

DETERMINATION OF FACTORS
AFFECTING BRAND IN MARKETING



STUDENT’S FULLNAME : HUYNH VAN BINH
STUDENT ID : CGSVN00015023
INSTRUCTOR: : Dr. PHAN DINH NGUYEN
INTAKE : MARCH 2013
Class: : MBAOUM0313-K08A




Ho Chi Minh, September 2014
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Advisor’s signature

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ACKNOWLEDGEMENT
First and foremost, I would like to give special thanks to for being an excellent
professor, advisor, thesis committee chair, and mentor. I appreciate all the insight and
time he put into helping me with my thesis. I am also grateful to him for teaching me
the basics, and advancing my knowledge and expertise. I’d like to thanks Dr. Phan
Dinh Nguyen, who helped me in the data analysis. Many thanks my classmates in
MBA class.
My special gratitude is extended to all instructors, staff and students of Ho Chi Minh
City Open University for their support and the valuable knowledge during my study.


Huynh Van Binh










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ABSTRACT

The marketing effort orientated to towards strengthening the brand means to increase the
degree of knowledge of the brand name. In this paper we want to show the relationship
between marketing effort and brand awareness and brand image.
Starting out from a theoretical review, we set out a model of effects of the marketing effort
-as the brand's antecedents- on brand awareness and brand image. In order to test the
defined structural model and research hypotheses empirical research was conducted on the
sample of undergraduate students of the Ho Chi Minh City Open University. The structural
model of the effects of marketing mix elements on brand equity is defined in line with the
existing theoretical findings.
Research hypotheses are defined according to the identified structural model. Research
results indicate that the structural model has an acceptable level of fit to the empirical data.
The estimated structural coefficients and indirect effect coefficients indicate the direction
and intensity of effects of each analysed element of marketing mix on brand awareness and
brand image.
Finally, implications of research results for the theory and practice of brand management
are analysed and discussed.
KEY WORDS: Brand Image, Brand Awareness, marketing effort, Measurement,Model.
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TABLE OF CONTENTS

Acknowledgement
Abstract ………………………………………………………………………………………… 3
Table of Contents Figures …………………………………………………… 4

1 Chapter1 : Introduction ……………………………………………………………………… 6
1.1 Introduction ………………………………………………………………… 6
1.2 Research Background ………………………………………………………
1.3 ResearchMotives …………………………………………………………… 7
1.4 Problemstatement …………………………………………………………… 8
1.5 Research Ojective …………………………………………………………… 9
1.6 Research methodology and design …………………………………………………………. 10
1.7 Research Procedure ………………………………………………………………………… 10

2 Chapter 2 : Literature review ………………………………………………………………. 12
2.1Introduction………………………………………………………………………………… 12
2.2 Brand ………………………………………………………………………………………. 12
2.2.1Brand Awareness ………………………………………………………………………… 14
2.2.2Brand image ……………………………………………………………………………… 15
2.3Marketing efforts…………………………………………………………………………… 17
2.3.1Advertising 13…………………………………………………………………………… 18
2.3.2Distribution intensity…………………………………………………………………… 18
2.3.3Store image ………………………………………………………………………………. 19
2.3.4Price deals ………………………………………………………………………………… 20
2.4 Relationship between marketing effort and brand awareness and brand image…………… 24
2.5 Conclusion …………………………………………………………………………………. 25
3 Chapter 3 : Methodology …………………………………………………………………… 27
3.1Introduction ………………………………………………………………………………… 27
3.2Research design …………………………………………………………………………… 27
3.3Item generation …………………………………………………………………………… 28

3.3.1Introduction………………………………………………………………………………. 28
3.3.2Operationalization of measures………………………………………………………… 29
3.4 Preliminary study ………………………………………………………………………… 33
3.5 Main survey………………………………………………………………………………… 35
3.5.1Brand selection………………………………………………………………………… 36
3.5.2Sampling ………………………………………………………………………………… 36
3.6 Conclusion …………………………………………………………………………………. 37

4 Chapter 4 : Research results ………………………………………………………………… 38
4.1Introduction………………………………………………………………………………….
4.2Descriptions of sample………………………………………………………………………. 38
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4.3Scales assessment ………………………………………………………………………… 40
4.3.1Reliability testing ………………………………………………………………………… 42
4.3.2Exploratory factor analysis ………………………………………………………………. 42
4.4Testing the research model and the hypotheses ……………………………………………. 45
4.4.1Testing correlations between all constructs ……………………………………………… 46
4.4.2Testing research model………………………………………………………………… 47
4.4.2.1 The relationship between marketing efforts and the brand awareness………………… 48
4.4.2.2 The relationship between marketing efforts and the brand image………………… 49
4.5Testing the effect of brand awareness and brand image on the year in college:……………. 51
4.6Findings and conclusion ……………………………………………………………………. 52
4.6.1Findings …………………………………………………………………………………… 53
4.6.2Conclusion ……………………………………………………………………………… 53
5 Chapter 5 : Conclusions and implications ………………………………………………… 54
5.1 Introduction………………………………………………………………………………… 54
5.2 Conclusions of the study …………………………………………………………………… 54

5.2.1 Summary of all hypotheses……………………………………………………………… 55
5.2.2 Conclusions of the study ……………………………………………………………… 55
5.3 Implications of the study …………………………………………………………………… 57
5.4 Limitations and recommendations for further research……………………………………… 58

List of References………………………………………………………………………………. 59
Appendix………………………………………………………………………………………… 63

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Chapter1 : Introduction

1.1 Introduction
This chapter portrays general introduction for the current study with which research
background, research motives, research objectives, and research procedures are
background, research motives, research objectives, and research procedures are
provided as the rationale for this study. An introduction to the methodology to be
used and the scope of the study is also addressed in this chapter. At the end of the
chapter, the structure of this study is provided. The Outline of this chapter is shown
in figure 1.
1.2 Research Background
Kathman (2002) described the importance of brand building based on today’s
market situation. The author said that as the use of new media (e.g., internet), the
rate of transformation in marketplace, and the speed of globalization increase, the
role of branding becomes more important than any other season. Kathman added
that market fragmentation, product diversity, and short-life-cycle brands also show
the importance of building brand equity in the present market situation. The author
concluded that brand building is the only way to thrive their business in today’s

market situation. The author also added that, in these days, we have many products
and brands and the market is segmented so much that make it difficult for the
audience to recognize or recall the brand.
Studies on branding issue receive the great attention in marketing area in other
countries. The growing interest is reflected in the proliferating conferences, articles
and press attention on branding, as well as the companies’ huge investments on this
area. Brands are powerful strategic weapons which, if handled correctly and
managed sensibly, can provide their owners with considerable rewards in terms of
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market share growth and corporate profitability (Aaker, 1996).
Branding has always been crucial for anyone who wants to sell something to gain
credibility (Keller, 2003). Yet, the concept of a brand which represents the specifics
of a product or a company, like a name which describes the character of the person
it belongs to, is a new one in Vietnam. Most Vietnamese firms are small or medium
sized and have not dealt with problems related to the branding issue. The media had
not highlighted it until several Vietnamese brands were recently appropriated
overseas (VnExpress, 2002; VET, 2003).
The severe shortage of commodities in the late 1980s and early 1990s consolidated
manufacturer’s lack of awareness about branding, particularly bearing in mind the
low per capita income of Vietnamese people. But the mushrooming of new
producers and service suppliers and the arrival of foreign competitors has caused
things to change drastically. An abundance of goods and services of higher quality,
advanced technologies, and shorter product life spans have forced local businesses
to think seriously about building brands which can give them long term and
sustainable development (VET, 2003). Right now, building brands is a very
important issue in developing country as Vietnam, and it can be considered to be a
useful topic for conceptual development and managerial relevance.

In several studies, brand awareness and image are considered the most important
components of brand equity (Keller, 1993). However, only a few studies delved into
how these components are correlated with products or services.
1.3 Research Motives

To date, there have been a number of studies that have attempted to examine how
consumers think about, respond to, and classify brands within their minds. Branding
literature has provided theoretical perspectives to help marketers understand the
construct of brand. Brand equity has become a hot topic for chief executives,
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accountants and academics as it is tipped to join other critical measures of long-term
business performance. At the same time, the 'knowledge economy' is becoming an
accepted It is perhaps framework for management thinking, planning and
organisation surprising, therefore, that the designated marketing function in so
many companies has done so little to advance the management of one of their most
value-adding has done so little to advance the management of one of their most
value-adding activities - brand knowledge. Indeed, it is nearly 40 years since
Theodore Levitt pointed out the unique perspective of marketing: "The difference
between marketing and selling is more than semantic. Selling focuses on the needs
of the seller, marketing on the needs of the buyer. Selling is preoccupied with the
seller's need to convert the product into cash, marketing with the idea of satisfying
the needs of the customer by means of the product and the whole cluster of things
associated with creating, delivering, and finally consuming it.” During those four
decades, marketing departments have grown as substantially as their budgets, huge
quantities of data swamp the brand teams and yet the evidence suggests they have
not strengthened their grip on
'knowing and understanding' their users better. Over the same period the reputation

of the marketing function has declined in many companies.
1.4 Problem statement

Based on the importance of brand awareness and brand image to the company’s
surviving, we manage to investigate to what extent the students know about the
brand of motocyces (brand awareness) and what kinds perception of the brand of
motocycles as reflected by the brand association held in target customers’memory
(brand image).
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1.5 Research Ojective
The aim of this paper is to find out the effect of the marketing effort, measured by
means of the perceptions of the consumers, on two dimensions of brand equity:
brand awareness and brand image. This paper is included within a major
investigation that seeks to develop and to contrast a model which allows the
measurement of the brand equity through: the influence of the marketing effort of
the companies (measured by means of actions of prices, product, distribution and
communication) on dimensions of brand equity -brand awareness and brand image.
The marketing effort, translated partially to (1) perceived advertising spending, (2)
distribution intensity, (3) store image and (4) Price deals , is considered as (a)
antecedent in the formation of the level of knowledge of the brand name (Rossiter
& Percy, 1987; Aaker, 1991) and (b) determinant of the associations linked to its
image (Alba & Hutchinson, 1987; Yoo, Donthu & Lee, 2000).
From the theoretical review on brand value we construct a theoretical model of
causal relationships between the marketing efforts and the dimensions of brand
equity_ brand awareness and brand image. This is defined as a set of assets and
liabilities linked to the brand, which adds or subtracts value to or from a product in
its relationships with customers (Aaker, 1991). To contrast the model, the linear

regression model is applied.
Following, Yoo et al. (2000), we analyse how each of the components of brand
equity is affected reviously by the perception of the market about the marketing
effort the company develops concerning brands.
To verify our model we carry out an empirical research of a consumers' sample of a
durable goods (motocycle) which we submitted to a questionnaire of attitudes. Once
its reliability and validity was determined, this questionnaire could be used for the
application of the structural model. To serve this task, two questions need to be
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answered:
Q1:Is there a relationship between marketing effort and two dimensions of brand
equity: brand awareness and brand image?
Q2: Is there any difference of brand awareness and brand image among year in
college?
1.6 Research methodology and design

The study comprises two phases: The pilot study and the main survey. The Pilot
study includes qualitative and quantitative stages. Qualitative stage was conducted
to collect the appropriate response scheme from students at University of
Technology. These items will be measured in the pilot quantitative study for their
relevance and reliability. Finally, the main survey was carried out to test the
research hypotheses, answer research questions and fulfill research objectives
Cronbach alpha was used to measure the reliability of the scale, exploratory factor
analysis was applied to identified correct factors and multiple linear regression was
performed to test the significant relationship between each marketing elements
dimension on brand awarenss and brand image.
1.7 Research Procedure

The procedures of this study are shown in figure 1
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Figure 1-2 : Structure of the study
















Identifying Research Objectives

Collecting and Exploring Related
Literature

Establishing Research Framework

Data Collection

Data Analysis
Conclusions and Suggestion
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Chapter 2 : Literature review

2.1 Introduction
The previous chapter introduces an overview of the study background, the research
objective and the research motives and research procedure. This chapter searches
and reviews relevant theories in the literature. The aim of this review is to propose a
research model of marketing efforts and brand awareness and brand image, to
generate hypotheses that will be tested in chosing motocycles of the students to
answer the research questions and to confirm the research model.
Figure 2-1 : The structure of Chapter 2












2.2 Brand

Brands can be defined as a “name, symbol, term, or sign that are intended to
identify the goods and services of one particular firm” (Kotler, 1991, p. 442).
Consumers’ consumption choices are often based on brand names that help to
differentiate one product from another. Branding researchers have tried to
conceptualize the value of a brand or brand equity (Faircloth et al., 2001). In the
general sense, brand equity can be defined as the “marketing effects that are
Introduction
Brand
Marketing efforts
Relationship between marketing mix and
brand awareness and brand image

Conclusion
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uniquely attributable to the brand” (Keller, 1993, p. 1). In other words, because of
the product or service’s brand name, different outcomes may result from the same
marketing activity (Keller, 1993). Customer-based brand equity is centered on the
idea of how a consumer’s knowledge of the brand affects the consumer’s response
to the brand’s marketing activity (Aaker, 1991; Keller, 1993). From the perspective
of the Customer-based Brand Equity model, brand knowledge is the key to creating
brand equity, because it creates the differential effect that drives brand equity. What
marketers need, then, is an insightful way to represent how brand knowledge exists
in consumer memory.
An influential model of memory developed by psychologists is helpful in that
regard. The associative network memory model views memory as a network of
nodes and links, in which nodes represent stored information or concepts and links
represent the strength of association between this information or concepts. Any type

of information can be stored in the memory network, including information that is
verbal, visual, abstract or contextual in nature. Consistent with the associative
network memory model, brand knowledge is conceptualized here as consisting of a
brand node in memory with a variety of associations linked to it. In particular,
Keller (1993) suggests that brand knowledge consists of two components – brand
awareness and brand image – which are discussed in detail in the next two sections.
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Figure 2-2 : Dimensions of Brand Knowledge, Keller (1993).

2.2.1 Brand Awareness

The ease and likelihood to which a brand name comes to mind describes the
concept of brand awareness (Keller, 1993). Brand awareness reflects the strength of
a brand’s presence in the consumer’s minds (Pappu, Quester, & Cooksey, 2005),
and it is related to the strength of the brand node or trace in memory in relation to
the consumer’s ability to identify the brand in various conditions (Rossiter &
Percy,1987). Brand awareness can be demonstrated in the forms of brand recall and
brandrecognition (Keller, 1993). Brand recall occurs when the brand name is
evoked bymemory in response to a cue such as a product category name
(Hutchinson & Raman, 1994). Distinguishable from brand recall, brand recognition
can be conceptualized as the consumer’s ability to verify previous exposure to the
Brand knowledge
Brand Image
Brand Awareness

Uniquess of
Brand
Associations
Favourability of
Brand

Associations
Stregth of Brand
Assocuations
Types of Brand
Associations
Brand
Reconition
Brand Recall
Attribute
Benefits
Attitudes
Functional
Experiential
Symbolic
None Product
Related
Product
Related
Price
Packaging
Usage Imagery
User
Imagery
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brand when the brand is given as a cue (Keller, 1993). In other words, brand
recognition occurs when the consumer is exposed to the brand and is able to
identify it as being

seen or heard previously (Hutchinson & Raman, 1994; Keller, 1993).
Researchers have considered recall as a higher level of memory performance than
recognition (Aaker, 1991, Washburn & Plank, 2002). In other words, if a consumer
is able to recall a brand outside a store when given the product category as a cue,
then the consumer surely can recognize the brand when exposed to it in a store
(Keller, 1993, Rossiter & Percy, 1987).Aaker (1991) explains brand awareness as
having many levels ranging fromrecognition (being identified as seen or heard
previously) at the lowest level, tobrand recall (being evoked in a response to a cue
such as product category) at midlevel, to the highest level, the dominant brand or
the only brand that can be recalled by a consumer directly from memory (high level
of awareness), it can be assumed
that the consumer should be able to recognize the brand when exposed to a brand
(the low level of awareness). Brand recall and brand recognition provide cues to the
consumer which aid determining the set of brands to be considered for consumption
(Baker, Hutchinson, Moore, & Nedungadi, 1986). Brand recall and brand
recognition have been explored to determine a general understanding of the brand
awareness construct
2.2.2 Brand image
Along with brand awareness, brand image is an important component of brand
knowledge (Keller, 1993). Brand image has been conceptualized as perceptions
about a brand as reflected by the brand associations or anything that is linked to the
brand in a consumers’ memory (Aaker, 1991; Keller, 1993). Brand image is shaped
by the associations made by consumers and is used to differentiate brands in a
product category.
Brand associations contain meanings about a brand for the consumer (Keller, 1993).
A brand’s image results from the favorability, strength, and uniqueness of brand
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associations that are held by the consumer (Grace & O’Cass, 2002; Keller, 1993).
Positive and unique brand associations that are strongly held by consumers enable
consumers to build strong, favorable attitudes and emotions toward a brand (Aaker,
1991).
Brand associations may include attitudes, attributes, and benefits about a brand
Faircloth et al., 2001; Keller, 1993). First, brand attitude, or the overall evaluation a)
consumer has of a brand (Wilkie, 1986), may result from the consumer’s
perceptions of brand associations in regards to the brand (Aaker, 1991; Keller,
1993). Beliefs related to product/non-product attributes, brand benefits, and quality
perceptions have been discussed as primary influences of brand attitude (Zeithaml,
1988). Brand attitude functions as a point of reference when the consumer is
exposed to the brand by having a direct influence on consumption (Lutz, 1991).
Next, what a consumer thinks the product is or descriptive features that characterize
the product are referred to as attributes (Keller, 1993). Attributes can be grouped
into two types: product-related and non-product related. Product related attributes
are those that “relate to a product’s physical composition,” (Keller, 1993, p. 4).
Product-related attributions could be directly linked to the product performance.
Nonproduct related attributes have been defined as “external aspects of the product
or service that relate to its purchase or consumption” (Keller, 1993, p. 4). For
example, user imagery is a non-product related attribute that a brand might posses
when associated with characteristics such as user demographics and psychographics
(Keller, 1993). Another non-product attribute example is usage imagery, which
allows the consumer to associate the brand with the typical situation in which the
product would be used such as time of day, the location, or particular activities
(Keller, 1993). User and usage imagery attributes may help to formulate brand
personality, which is a type of brand association that captures “human
characteristics that are associated with a brand” (Aaker, 1997, p. 347). Personality
descriptors given to the brand are often an outcome of inferences that are made
about the users or usage of the brand or a combination of both (Plummer, 1985).
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Finally, brand benefits are what consumers think the product or service can do for
them and reflect the personal value that consumers attach to the brand
(Keller,1993). Benefits may be functional, symbolic, or experiential (Park,
Jaworski, &MacInnis, 1986). Functional benefits more commonly satisfy needs
associated with problem removal or prevention (Kim, Forsythe, Gu, & Moon,
2002). Symbolic benefits tend to be related to non-product related attributes and
often associated with underlying needs of social approval, self-esteem, and self-
concept (Keller, 1993; Solomon, 1983). Experiential benefits relate specifically to
how a consumer feels when using the product and often satisfy cognitive
stimulation and sensory pleasure needs (Orth & De Marchi, 2007). Keller (1998)
proposed that brand equity comes from the effects of brand marketing which was
regarded as consumer brand knowledge. He showed that brand knowledge is one
kind of memory mode of associative networks which are composed of brand
awareness and brand image. He suggested that brand images are reflected by types
of brand associations, favorability of brand associations, strength of brand
associations, and uniqueness of brand associations. Brand image is a result of
consumers decoding of all the signals delivered by the brand such as brand name,
visual signs, products, sponsoring, and advertising (Kapferer, 1994). Danesi (2006)
proposes that the use of brand name enables consumers not only to recognize
certain goods and distinguish them from others, but also to associate connotative
meanings to them. Therefore, it allows consumers to decode brand image.
2.3 Marketing efforts

Any marketing effort will be positively related to brand equity when it leads to a
more favorable behavioral response to the focal product than to the equivalent
unbranded product. As proposed in the conceptual framework, managerial efforts
manifested in controllable marketing actions are related to brand equity through the

mediation of the dimensions of brand equity. Therefore, to create, to manage, and to
exploit brand equity, the relationships of marketing efforts to the dimensions of
brand equity must be determined.
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We investigate consumers' perceptions of four selected strategic marketing
elements: advertising, price deals, store image and distribution intensity. The
selected factors do not embrace all types of marketing efforts but are representative
enough to demonstrate the relationships between marketing efforts and brand
awareness and brand image.

2.3.1 Advertising

Advertising originated from the word “adverture” in Latin language means
attractiveness, charm and allurement. According to the Vietnamese dictionary,
Advertising means “propagandize, introduce goods, services or undertakings to
consumers in many way with the purpose of persuading them to buy these goods or
services and thus promote the goods and services”. According to the Oxford
dictionary, advertising is drawing attention to or describing favourably (goods or
services) in a public medium to promote sales or making them generally or publicly
known, or seeking by public notice to make them so known. Advertising is a paid
form of a nonpersonal message communicated by business firms, non-profit
organizations, or individuals and is transmitted to a target audience through mass
media such as television, radio, newspapers, magazines, direct mail, outdoor
displays or mass - transit vehicles. The main objectives of advertising is informing
and persuading consumers to purchase specific brands offered by the advertisers,
thereby getting profits. However, advertising is also used to inform, educate and
motivate the public about non-commercial issues, such as AIDS, political ideology,

energy conservation, religious recruitment, deforestation and charity. Thus, as far as
language alone is concerned, the notion of advertising not only covers the giving of
information about goods and services to promote sales but also its use to inform,
propagandize and motivate the public regarding social and cultural life.

2.3.2 Distribution intensity

Distribution intensity has been commonly defined as the number of intermediaries
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used by a manufacturer within its trade areas (cf. Bonoma and Kosnik 1990; Corey,
Cespedes, and Rangan 1989; Stern, El-Ansary, and Coughlan 1996).
Sometimescalled “place”(causing the marketing mix to be referred to as the “ four
Ps”), distribution is also concerned with the phycical movement of products. With
distribution, marketing managers are concerned with marketing structure and
channels of distribution_those wholesalers, distributors, retailers, agents, and other
responsible for getting goods and services to customers. Ideal distribution intensity
would make a brand available widely enough to satisfy, but not exceed, target
customers' needs, because oversaturation increases marketing costs without
providing benefits (McCarthy and Perreault 1984). There are three broad options -
intensive, selective and exclusive distribution: outlets used (e.g. cigarettes, beer).
Intensive distribution is usually required where Intensive distribution aims to
provide saturation coverage of the market by using all available outlets. For many
products, total sales are directly linked to the number of customers have a range of
acceptable brands to chose from. In other words, if one brand is not available, a
customer will simply choose another.
Selective distribution involves a producer using a limited number of outlets in
ageographical area to sell products. An advantage of this approach is that the

producer can choose the most appropriate or best-performing outlets and focus
effort (e.g. training) on them. Selective distribution works best when consumers are
prepared to "shop around" - in other words - they have a preference for a particular
brand or price and will search out the outlets that supply. Exclusive distribution is
an extreme form of selective distribution in which only one wholesaler, retailer or
distributor is used in a specific geographical area.
2.3.3 Store image
Store image has a long history of changing conceptualizations. This change ndicates
the difficulties that researchers have in defining the construct (e.g., Sewell,1974).
Martineau (1958) is the first one that put the concept of store image into retail
business. He first defined store personality or image as follows. The way consumers
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define their favorite store is based on the functions and characteristics of store, aura
of psychological attributes, store’s atmosphere, and store’s advertising, etc.
Functions and characteristics of store include choice of product, price of product,
customer service, and quality of product, etc. Aura of psychological attributes and
store’s atmosphere include the friendly service of employees, great smile of
cashiers, or any interesting activities from store. Hirschamn and and Krishnan
(1981) stated that store image means consumer’s general concept of value
consciousness when he or she compares his or her favorite store with others. In
current years, there are lots of convenient stores, supermarkets, and hypermarkets in
retail business. To be able to compete with others, retailers customers, and
therefore, how to create a good store image is one of the most important things for
retailers. For consumers, store image is an important message for them to know the
quality of store brand product. If retailer has a good store image, consumers are
willing to go there for shopping, and they will also recommend to their friends.
Therefore, retailers could attract more consumers by establishing a good store

image (Dodds et al., 1991). In addition, brand loyalty has a very close relationship
with store image. Consumers will not be loyal to their favorite brand if they realize
that store do not have a good store image. Although retailers have been using low-
price strategy to promote store brand product for a long time, more and more
retailers start to implement marketing strategy by using store image in current years.
Retailers have noticed that most consumers do not know what kind of product brand
they really want before shopping, they usually decide what kind of product brand to
buy when they are shopping in retail store. If retailers have a good store image, they
could attract more customers (Chang, 1992). In addition, consumers’ purchasing
behavior will increase when retailers have a better store image. (Chen, 1996)
Moreover, consumers are willing to spend more money and go shopping again in
retail sore if retailers have agood store image (Lin, 1994).
2.3.4 Price deals
Price promotions are related to price deals for a fixed number or the increase of the
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number of products with the same amount of money (Blattberg, Briesh and Fox,
1995; Raghubir and Corfman, 1999). In brief, customers can get same items at a
lower price or get extra items at the same price. Since price promotions create
higher values, they can serve as economic motivation for customers to buy
products; therefore, many retailers often initiate price promotions to stimulate the
need or encourage nonusers to try certain products (Gerstner and Hess, 1992;
Raghubir and Corfman, 1999).
Price promotions are dominant forms in sales promotions in today’s market
(Buzzell, Quelch and Salmon, 1990). However, many problems related to price
promotions are raised and discussed. Raghubir and Corfman (1999) indicate that
price promotions may make customers associated promoted products with low
quality so that they fail to achieve the sales growth. Gedenk and Neslin (1999) also

argue that price discounts may bring a detrimental impact on future brand
preferences. Similarly, Grewal, Krishnan, Baker, and Borin (1998a) imply that
frequent price discounting may diminish customers’ perception reference prices of
customers, which lead to the reduction of profitability (Blattberg et al, 1995;
Hardesty and Bearden, 2003).
2.4 Relationship between marketing effort and brand awareness and brand
image
The level of advertising spending has been found to have a positive relationship
with advertising recall, which is a measure of brand awareness. Advertising plays a
pivotal role in increasing brand awareness as well as creating strong brand
associations. Repetitive advertising schedules increase the probability that a brand
will be included in the consideration set, which simplifies the consumer's brand
choice, making it a habit to choose the brand (Hauser and Wernerfeldt 1990). Thus,
a greater amount of advertising is related positively to brand awareness and
associations, which leads to greater brand equity.
When the consumers perceive a high effort in advertising, this constitutes an
indicator of the confidence that the persons in charge of marketing have in the
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product (Kirmani & Wright, 1989). The perceived advertising spending has positive
effects, not only on brand equity as a construct, but also on each of its components:
brand loyalty, brand awareness, perceived quality and brand image (Cobb-Walgren,
Ruble & Donthu, 1995). So, between the different advertising actions by the
company and the dimensions of the brand equity causal relationships can be
established.
The effort in advertising as a basis for attaining brand awareness is positively
related to the intensity of the advertising investment (Deighton, 1984; Hoyer &
Brown, 1990). The brands achieve knowledge through marketing communications

and the advertising investment is the main promotional tool for products in the
consumer market (Villarejo & Sánchez, 2005).
Hypothesis 1 : The major perceived advertising spending that the company invests
in the brand positively affects brand awareness. The associations linked to the brand
are mental pictures that the consumer perceives after recognising them in the
messages that the company sends. The positive associations that form a high brand
image are transmitted to consumers through advertising and advertising strength
(Keller, Heckler & Houston, 1998).
Hypothesis 2 : The major perceived advertising spending that the company
undertakes for the brand positively affects brand image.
Distribution intensity. Distribution is intensive when products are placed in a large
number of stores to cover the market. To enhance a product's image and get
substantial retailer support, some companies tend to distribute exclusively or
selectively rather than intensively. It has also been argued that certain types of
distribution fit certain types of products. Consumers will be more satisfied,
however, when a product is available in a greater number of stores because they will
be offered the product where and when they want it (Ferris, Oliver, and de Kluyver
1989; Smith 1992). Intensive distribution reduces the time consumers must spend
searching the stores and traveling to and from the stores, provides convenience in
purchasing, and makes it easier to get services related to the product. As distribution
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24

intensity increases, therefore, consumers have more time and place utility and
perceive more value for the product. The increased value results mostly from the
reduction of the sacrifices the consumer must make to acquire the product. This
increase of satisfaction provokes a favourable predisposition towards the brand by
which the associations linked to it are improved and, therefore, the brand image is
increased. The intensive presence in the establishments supposes a major degree of

knowledge of the brand too, so the increases in the distribution intensity will have a
positive effect on the recognition the perceived of intensity level in the distribution
and the components of the brand equity are established, we set out the hypotheses
relative to the causal relationships between these variables:

Hypothesis 3 :The level of intensity perceived with which a product is distributed
as a brand positively affects a _brand's degree of awareness.
Hypothesis 4 :The level of intensity perceived with which a product is distributed
as a brand positively affects its _brand image. Besides the fact of the influence of
the store image on the quality perception, to be present in establishments that have a
positive image supposes for the brands a major attraction in order to be accepted by
the consumers. The customers will feel attracted towards the establishments in
which they find brands that they identify with the same perception of quality that
they attribute to the retailer. In this respect, diverse works (Zeithaml, 1988; Rao &
Monroe, 1989) show how the good image of the retailer provokes a high level of
satisfaction in the consumer. Simultaneously this increases expectations of quality
which transmit to other nearby consumers who will thus feel attracted towards the
establishment with the hope of finding brands of high quality. This attraction
towards the store and towards the associations linked to the retailer will make the
distributed brands receive the reflex of the same associations. This is why the store
image determines brand image and the set of
positive associations linked to it.

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The importance of channel design and management as a marketing tool of
increasing brand equity is growing (see Srivastava and Shocker 1991). In a
distribution channel, retailers encounter a firm's ultimate consumers. Selecting and

managing retailers is therefore a firm's major marketing task in satisfying
consumers' needs. In particular, distributing through good image stores signals that
a brand is of good quality. Dodds et al. (1991) find significant positive effects of
store image on perceived quality. The store name is a vital extrinsic cue to
perceived quality. The quality of a given brand is perceived differently depending
on which retailer offers it. Customer traffic will be greater in a store with a good
image than in one with a bad image. Good-image stores attract more attention,
contacts, and visits from potential customers. In addition, such stores provide
greater consumer satisfaction and stimulate active and positive word-of-mouth

communications among consumers (Rao and Monroe 1989; Zeitham11988).
Therefore, distributing a brand through an outlet with a good image will create more
positive brand associations than distributing through an outlet with a bad image.
_Hypothesis 5 : The store image positively affects the set of associations linked to
the brand and that agree with its brand image.
Sales deals in general, and especially price deals, have been considered to weaken
brand equity in spite of the short-term benefit that they provide to the consumer.
Sales promotion may not be a desirable way to build brand equity because it’s
easily copied and counteracted (Aaker 1991) and only enhances short- term
performance by encouraging sales and momentary brand switching (Gupta1988). In
the long run, sales promotion may convey a low-quality brand image. In fact, in the
long term, brand image can appear to be of poor quality and worn out. Activities
based on lowering prices can place brands in danger by provoking. Consumer
confusion; instability and variability leads to an image of unstable quality. In this
regard, using price deals means deterioration in brand equity in both perception of
the brand’s quality and its image. Also, price promotion campaigns do not last long