CONSUMER PERCEPTION TOWARDS BRAND PREFERENCE OF MOBILE PHONE SERVICE PROVIDERS
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Due to the dynamic business environment and stiff competition in the global market, both local and multinational companies review their marketing strategies to gain competitive edge and survive in the market (Aaker, 2012). Companies in the global business environment position their products and services from the psychological aspect of consumers to determine their performance in the competitive business environment (Ambler and Tim, 2010). Macro forces which include; political, economic, social and technological forces have influenced consumer behaviour toward various products and services produced in the market (Anand and Bharat, 2011).
Competitive strategies that have been developed by local and internal companies to gain competitive edge revolve around product strategies, pricing strategies, promotion strategies and distribution strategies (Anderson, et al, 2010). Due to intense competition in the mobile phone industry and changing consumer needs and wants toward their products and services in Nigeria, mobile phone players in the industry have been necessitated to introduce innovative products and services, segment markets, and positions their products in the market from the psychological aspect of consumers which include; motivation, learning, attitude and perception in order to improve their performance (Bordley and Robert, 2011).
Consumers make decisions on a daily basis by means of the consumer decision-making process. It is documented in literature (Schiffman, Kanuk & Hansen, 2008) that the consumer decision-making process comprises a number of stages, namely need recognition, search for information, evaluation of alternative options that could meet the consumer’s expressed need, purchase and post-purchase evaluation. The decision-making process as a whole, as well as each stage in the process, is influenced by a number of external influences (such as family, culture and reference group) as well as internal influences (such as perception, motivation and personality) (Schiffman et al., 2008).
Hawkins and Mothersbaugh (2010) explain that perception begins with consumers’ exposure and attention to marketing stimuli and ends with their interpretation of the stimuli. Consumers’ perception is not only determined by the characteristics of the stimuli, but also the characteristics of the consumer him- or herself. It is therefore essential that marketers obtain a thorough understanding of their target markets as well as how consumers will perceive various marketing-related stimuli. Four elements of the marketing mix, namely product, place, distribution (or location in the case of a store) and promotion, could influence consumers’ perceptions of the business, and therefore their selection of a store. Customers perceive the product’s value based on its benefits which, in turn, is influenced by the product’s performance, features, quality, warranties, packaging and labeling (Schiffman, Kanuk & Hansen, 2008).
Brand perception is a term used to describe the way consumers view a particular brand of products. Consumer perception applies the concept of sensory perception to marketing and advertising. Sensory perception relates to how humans perceive and process sensory stimuli through their five senses, consumer perception pertains to how individuals form opinions about companies and the merchandise they offer through the purchases they make (Schiffman, Kanuk & Hansen, 2008).
Merchants apply consumer perception theory to determine how their customers perceive them against other competitors. Companies use consumer perception theory to develop marketing and advertising strategies intended to attract, retain and manage customer relations for long term survival in the competitive market (Balmer et al, 2011). Consumer perception theory is any attempt to understand how a consumer’s perception of a product or service influences their behavior. Consumer perception is used by marketers when designing a campaign for a product or brand (Hawkins and Mothersbaugh, 2010).
A brand is associated with an image, a set of expectations or recognizable logo (Davis et al. 2010). The goal of a brand is to set a product or service apart from others of its kind, and influence the consumers to choose the product over similar products simply because of its associations. Consumers can evaluate a product along several levels logo (Davis et al. 2010). Consumer perception involves augmented properties, which offer less tangible benefits, such as customer assistance, maintenance services, training, or appealing payment options. In terms of competition with other products and companies, consumers greatly value these added benefits when making a purchasing decision, making it important for manufacturers to understand the notion of a “total package” when marketing to their customers (Hawkins and Mothersbaugh, 2010).
Aaker (1991) defines a brand as the “name, term, design, symbol, or any other feature that identifies one seller’s product distinct from those of other sellers”. A brand is often the most valuable asset of a corporation. Brand equity is a set of brand assets and liabilities linked to a brand, its name and symbol that add to or subtract from the value provided by a product or service to a firm/or to that firm’s customers (Keller, 1998). Although the assets and liabilities on which brand equity is based will differ from context to context, they can be usefully grouped into five categories: brand loyalty, brand name awareness, perceived brand quality, brand associations, and other proprietary brand assets (Keller, 1998).
Brand owners manage their brands carefully to create shareholder value, and brand valuation is an important management technique that ascribes a money value to a brand, and allows marketing investment to be managed to maximize shareholder value. Although only acquired brands appear on a company’s balance sheet, the notion of putting a value on a brand forces marketing leaders to be focused on long term stewardship of the brand and managing for value (Keller, Kevin Lane, 1998).
A brand is a product, service, or concept that is publicly distinguished from other products, services, or concepts so that it can be easily communicated and usually marketed (Keller, Kevin Lane, 1998). A brand name is the name of the distinctive product, service, or concept. Branding is the process of creating and disseminating the brand name. Branding can be applied to the entire corporate identity as well as to individual product and service names.
Brands are usually protected from use by others by securing a trademark or service mark from an authorized agency, usually a government agency. Brands are often expressed in the form of logos, graphic representations of the brand (Aaker, 2012). A company’s brands and the public’s awareness of them are often used as a factor in evaluating a company. Corporations sometimes hire market research firms to study public recognition of brand names as well as attitudes toward the brands (Aaker, 2012).
Brand Performance means the value the brand has to provide to the organization and customers (Keller & Kevin, 1998). Brand performance in the market can be measured through; top-of-mind brand associations, perceived brand delivery against the most important customer benefits, attitudinal loyalty toward the brand, brand differentiation, price sensitivity, vitality (a measure of brand marketplace momentum), quality perceptions, value perceptions, accessibility perceptions, emotional connection to the brand, values alignment with its customers, distribution, market share, brand sales and brand profitability (Keller & Kevin , 1998). Investments into a brand have to be designed for the long run. Marketing plans have to be laid out in a way that it is possible to determine the return-on-investment, market share, volume of sales and profits generated from the brand (Aaker, 2012). Brands should be taken out of the general business assets and moved to associate companies which deal exclusively with brand utilization. The business purpose of a brand utilization company is the achievement of brand performance (Keller, 1998).
1.2 Statement of the Problem
Today is the world of inventions and innovations and that lies in a customer who is dynamic and his beliefs, attitude and his satisfaction level. It is needless to affirm that marketing is a new way of thinking about how companies and other organization can develop beneficial change with target customer who is always inclined in seeking to satisfy some needs and wants. hence the problem is how we can find more customers for what services we provide, customer satisfaction and the new services provided by the competitors, how the company can live up to their expectations and understand the different aspects of customers’ views. However, the innovations there are still antecedents of brand preference that firms should seek to pursue if they are to succeed in this era of stiff competition and this study is aimed at shedding into some of them (antecedents) as perceived value in service quality, corporate image and employees’ attitude (customer care attitude) to ascertain how they favorably or adversely affect customers’ brand preference for mobile phone services providers.
Brand has the essential importance for the success of enterprise, having in mind that, in contemporary business conditions, it is more difficult to realize wanted business results without the brand (Keller, Kevin Lane, 1998). Branding process has become more important and provocative than ever before and products without brand are fewer in market. The escalating cost of establishing brands in a competitive market as consumers become more immune to promotional activities creates greater pressure to leverage existing brands into new product categories (Aaker, 2012).
Telecommunication Companies in Nigeria are experiencing difficulties in the market due to negative brand perception of their products in the market. Some of these contributing to negative brand perception include; consumer experience with a brand, consumer opinions with a brand, type of advertising a brand and shifts in the economy. The mobile phone industry in Nigeria is tremendously expanding at a high rate. Nigeria, consumers, businesses and government continue to benefit from the positive developments in the mobile sector. The mobile phones have become an integral part of everyday life in Nigeria. Stiff competition, decreased volume of sales, decreased profits and shrinking market share has become major challenges in the market.
A study carried out by Onyango (2008) on challenges of brand management on medium sized companies in Nigeria clearly indicated that most brands in the market perform poorly in terms of revenue generation to the company due to negative brand perception by customers. Another study carried out by Anyim et al (2010) on the impact of brand rejuvenation on pharmaceuticals companies in Nigeria clearly indicate that negative attitude towards brands by consumers generally affect the overall company performance.
A study carried out by Kariuki (2012) on determinants of adoption of mobile phone banking by the base of Pyramid customers of Commercial Bank of Nigeria indicate features of mobile phone influenced the adoption. Another study by Walter (2012) on factors affecting the success of Private Label Bread Brands of Large Supermarkets in Nairobi, Nigeria indicated that supermarkets with strong brands performed better measured in the sale of bread sales. However, the studies were too general and did not address the impact of consumer perception on brand performance taking mobile industry in Nigeria as a case study. Arising from the above studies, it is clear that, there are many areas about consumer brand perception and performance that have not yet been fully addressed. It is for this reason that the study will seek to establish the influence of consumer perception on brand performance taking mobile phone industry in Nigeria as a case study. The study will be guided by the following research question: What is the influence of consumer perception on brand performance in the mobile phone industry in Nigeria?
1.3 Objectives of the Study
The general objective of this research work is to evaluate customers’ perception towards brand preference of mobile phone service providers (MPSPs) using MTN Nigeria as a study point. However, other specific objectives are to;
i. ascertain the impact of service quality on customers’ brand preference.
ii. determine the effect of corporate image on brand preference.
iii. assess the effect of employees’ attitude (customer care) on customer loyalty.
1.4 RESARCH QUESTIONS
The following research questions will guide this study;
i. What is the impact of service quality on customers’ satisfaction?
ii. What effect does corporate image have on increased market share?
iii. What is the effect of employees’ attitude (customer care) on customer loyalty?
1.5 STATEMENT OF THE HYPOTHESES
The following hypotheses will guide this study;
H01: There is no significant relationship between service quality and customers’ satisfaction.
H02: Corporate image have no significant relationship with increased market share.
H03: There is no relationship between employees’ attitude (customer care) and customer loyalty.
1.6 SCOPE OF THE STUDY
The scope of this research work is limited to the Telecommunications Industry specifically MTN Nig in Asaba, Delta State, her staff, management, customers and other stakeholders. The antecedents of brand preferences are outlined to view their corresponding effect on customer loyalty mobile services providers. The study covers the various variables (antecedents) such as perceived quality in service delivery, employees’ attitude (customer care) and corporate image as being able to affect the perception of customers in their preference of a given mobile service provider (MTN Nigeria) over others thus granting the firm competitive edge over rivals in their designated industry.
1.7 SIGNIFICANCE OF THE STUDY
The following are the significance of the research work;
To add to existing knowledge on antecedents or factors which can yield brand preference for a firm’ services. It will aid fellow researchers in future research work. The study will enable marketers to understand and unravel the antecedents to brand preference of subscribers and then control brand switchers by providing customized services for their customers. This study will also promote healthy competition as each service provider strives to differentiate service offerings to maintain customer base.