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TITLE OF THE PROJECT
A study on brand switching :
Taking Shampoo as product category
Submitted on fulfillment of the
Study Oriented Project BITS C323
BY
Ahana Ghosh
2008B1A7575H
UNDER THE SUPERVISION OF
Ms Swati Alok
Management Department
BIRLA INSTITUTE OF TECHNOLOGY & SCIENCE, PILANI
HYDERABAD CAMPUS
April 2011
1
CERTIFICATE
This is to certify that the report entitled, “A study of brand switching: Taking Shampoo as
product category “ submitted by Ahana Ghosh of ID No. 2008B1A7575H, on fulfillment of the
requirements of BITS C323 Study Oriented Project embodies the work done by her under my
supervision.
Signature of the supervisor
Name: Ms Swati Alok
Designation: Faculty, Management Department
Date:
2
ACKNOWLEDGEMENTS:
I thank the Instructor In-Charge of the Bits C323 Study Oriented Project course for providing
me the opportunity to take-up the course.
I would like to express my profound gratitude to Ms.Swati Alok, my SOP Instructor,
for giving me this opportunity and providing constant guidance and bearing with me for all the
errors that I have committed .I would like to express my heartfelt thanks to her for guiding me
constantly throughout the course of the project and by providing me with adequate amount of
course material required for the study.
3
CONTENTS
1. Objective----------------------------------------------------------------------------------------------------6
2. Literature review-------------------------------------------------------------------------------------------6
2.1Definition of brand and brand loyalty----------------------------------------------------------6
2.2 Evaluating the effect of Consumer Sales Promotion on Brand Switching and Brand Loyal
segments ----------------------------------------------------------------------------------------------8
2.3Theories explaining brand switching---------------------------------------------------------10
3. Factors affecting brand switching----------------------------------------------------------------------11
3.1The relationship between advertising and brand-switching----------------------------------------11
3.1.1Objectives of advertising-----------------------------------------------------------------------------11
3.1.2Studies on customer segmentation and product category----------------------------------------11
3.1.3Advertising effectiveness-----------------------------------------------------------------------------12
3.2Hierarchy models of customers’ responses to advertising------------------------------------------12
3.3The relationship between promotion and brand-switching-----------------------------------------13
3.4Customer satisfaction and brand-switching----------------------------------------------------------13
3.5The influence of price consciousness-----------------------------------------------------------------13
3.6 Brand Relationship and Peer Influence---------------------------------------------------------------14
5. Research methodology-----------------------------------------------------------------------------------15
6. Questionnaire design-------------------------------------------------------------------------------------16
7. Limitations of the study----------------------------------------------------------------------------------17
8. Data analysis and interpretation of data collected from sample------------------------------------17
9. Interpretation of data collected from brand switching segment------------------------------------18
10. Interpretation of data collected from brand loyal people------------------------------------------22
11. Analysis of the research--------------------------------------------------------------------------------25
12. Data analysis and conclusion-------------------------------------------------------------------------27
4
13. Suggestions----------------------------------------------------------------------------------------------28
14. References-----------------------------------------------------------------------------------------------30
15. Annexure: I----------------------------------------------------------------------------------------------31
5
Objectives:
To study the effect of advertising and promotion on customers’ brand choice for
shampoo.
Study the impact of advertising and promotions on brand switcher and brand loyal
segments of shampoo.
The importance of promotional tools, the attitudes towards advertising, and the reasons
for changing shampoo brand will be tested.
The impacts of advertising and promotion will be evaluated by adopting the hierarchy
model: aware-try-switch-repeat purchase.
Investigate the influence of peers, family, and brand relationships on switching intentions
amongst young consumers
Literature Review-
Brand switching is when a consumer or group of consumers switches their allegiance from one brand of a certain type of product to another.
This brand switching may be temporary, (example: if Pantene is not available at the shop a consumer may buy Dove as their next preference) or it may be longer lasting, perhaps for example in the case of products that last longer or from which switching away is harder.
It is possible to research consumers in a marketplace to determine their attitude to brands and their likelihood to switch from a brand they are using at the moment, and in particular to which other brand they might switch. This allows the building of a picture of likely brand switching behaviour. If consumer propensity to switch is known the market can be modelled to indicate future market share. Such modelling could also indicate the relative positioning of the competing brands on some variable asked in the research.
Brand switching research shows that if a particular competitor was most likely to steal customers away from any particular company and the company could then focus their creative attention on that particular threat to their business.
A simple indicator of consumer satisfaction in a competitive market is the buyers’ repeat purchase rate over time. Brand switching analysis is also useful to forecast the brand dynamic evolution. This approach is based on the analysis of purchase sequences.
Definition of brand and brand loyalty :-
6
The American Marketing Association defines brand as 'a name, term, sign, symbol, or design, or a
combination of them, intended to identify the goods or services of one seller or group of sellers and
to differentiate them from those of competitors' (Kotlei 1995). Aaker (1995) defines a brand on
different levels, stating that a brand is not merely the physical product, but is also composed of
brand attributes, symbols, brand--consumer relationships, benefits of self-expression, customer
profiles, associations with the culture of the country of origin, and corporate identity. In essence,
the brand provides a simple means for the customer to distinguish it from its peers. Padberg stated
that in the marketing process, a brand provides a means of communicating economic information;
it facilitates product recognition and protects the customer from the risks associated with buying
an unknown brand.
De Chernatony & McDonald (1998) stated that 'A successful brand is an identifiable product,
service, person or place augmented in such away that the buyer or user perceives relevant, unique
added values which match their needs most significantly.
A brand’s success results from being able to sustain these added values in the face of competition.
'Successful brands deliver benefits to satisfy customer needs. These needs include rational needs
(such as features, packages or the price of a brand) and emotional needs (such as prestige,
distinctiveness, style or the social reassurance of a brand).
Brand loyalty refers to the consumer's behavior of repeatedly purchasing a specific brand over a
certain period of time. This is based on past behavior, and the local consumer is highly likely to
purchase the products of a specific brand currently and in the future. According to Aaker (1995), a
powerful brand enjoys a high degree of brand loyalty. Related brand choice theories claim that, in
order to increase the sales volume or marketing shares of a particular brand of products, it is
necessary to either strengthen the brand loyalty of existing customers o r try to persuade the
consumers of other brands to switch. The former is called inertia or brand loyalty, and the latter
brand switching.
7
Brand awareness and brand association are linked to consumers' brand preferences. Ehrenberg
asserted that salient brands are high in both intentions to buy the brand and brand loyalty.
Ehrenberg stated that since the selling brand tends to be copied quick ly by competitors,
competitive brands lack variation between each other. Similar brands have different market shares
because of the different number of people to whom each brand is salient. Ehrenberg further argued
that the main function of advertising is to reinforce an existing consumer's propensity to buy a
particular brand.
Evaluating the effect of Consumer Sales Promotion on Brand Switching and Brand Loyal
segments-
Sales promotions are generally looked at as tools that undermines the brand; yet a tool that is
necessarily meant to
speed up sales. Consumer sales promotion take up a large share of the total marketing
expenditure despite which
it remains an area that still attracts attention as an essential component of the promotion mix
meant to increase
short term sales. It is therefore not surprising that most of the marketers resort to sales
promotions to attract the
competitor’s market share. Economic status was not a defining factor effecting consumer’s brand loyalty.
Howard and Sheth (1969) proposed that in frequently purchased product categories,
especially low-priced categories, households may routinise their brand purchases by using the
same brand repeatedly over the time. This means that the currently chosen brand has a higher
probability of being chosen in the future than other brands. This brand inertia is a totally
routinised behaviour or a behaviour based on the situation factors, such as non availability of
other brands, high switching
costs etc., with a low relative attitude towards the brand.Such customers might switch to a
competing brand if an alternative is available to them. Therefore such a repeat behaviour cannot
be considered as loyalty in the long run (Dick and Basu, 1994). On the other hand, households
8
may not repeat purchase the previously chosen brand and switch brands in search for variety
(McAlister, 1982; Kahn, Kalwani and Morrison, 1986). Therefore, currently chosen brand will
have a lower probability of being chosen in the future than other brands. In such a scenario,
marketers will benefit only if a customer shows loyalty or
commitment to re-buy a preferred brand consistently in the future, thereby causing repetitive
same-brand purchasing despite situational influences and marketing efforts having the potential
to cause switching behaviour (Oliver, 1999).
Two divergent streams of research characterise the literature on the operational loyalty concept:
the stochastic approach, which is purely behavioural and deterministic approach that considers
loyalty as an attitude. Accordingly, two broad categories of consumers exist- one that displays
only behavioural loyalty which is very likely to switch brands if their routine purchase pattern is
disrupted. They are called “Habitual Buyers.” The other category is of “True” brand loyal who
show commitment to a specific
brand which goes beyond just repetitive behaviour. Therefore, both behaviour and attitude which
a consumer has towards a specific brand combined together provides comprehensive
understanding of brand loyalty.
Manufactures are constantly trying to get their brand noticed among a plethora of brands
available. Efforts by organisations are not only directed at getting their brand noticed by the
consumer but also to get the consumer interested enough to buy it on every subsequent purchase
occasion. In this context, differences in the effects of marketing mix variables on the consumers
with different purchase characteristics, such as loyalty have caught the attention of marketers.
Growing number of researchers and marketing practitioners have undertaken systematic efforts
to understand the relationship between brand loyalty and the factors that influence it during the
past few decades (Lau et al., 2006). Use of sales promotion directed at the consumers is one of
the factors influencing brand choice behaviour (Dodson, Tybout and Strenthal, 1978) that has
increased the interest of the marketers who are extensively
using it to increase sales.
9
Theories explaining brand switching-
There are many theories that are available to explain how consumers make product
and/or brand choices.
1.The 'expectance-value model' argues that consumers assign scores to two parameters and make
a mental calculation before making a decision. The first parameter is the degree to which
consumers expect a pleasurable outcome. The second parameter is the value the consumers
ascribe to a favorable outcome. This model is insufficient to explain the phenomenon because
people have limited brand information and limited mental processing capabilities .
2.The economist's view of consumer behavior hypothesizes that consumers seek information until
the marginal value that is gained is less than the cost of securing knowledge of the product. This
model is also not acceptable since in many cases consumers are unable to acquire 'perfect'
information.
3. De Chernatony and McDonald propose a more accepted model for brand buying behavior. It
argues that the making of a brand purchase is determined by 'consumers seeking and evaluating
small amounts of information. Consumer relies only on few piece of information with which they
feel confident to help them decide how the brand might perform.' The amount of information that
consumer seek may be determined by various factors such as time pressure, previous experience,
advice from friends and the level of involvement in the brand purchase.
In recent years many researchers have studied brand choice and switching. The scope of these
studies not only includes the analysis of the factors that affect the consumer's brand choice and
switching, but it also helps to analyze the future demand situation.
There has been always a shift in consumer brand loyalty and favours it can be because of lack of
consistency in quality, high cost of raw materials or profit motives so as to increase the sales
figure.
10
Factors affecting Brand Switching-
1.The relationship between advertising and brand-switching
There are different points of view towards the influences of advertising in terms of brand-
switching behavior. Especially, the hierarchy models of customers’ responses to advertising. A
variety of research studying on the process of how customers will be influenced by advertising.
There are many intermediate effects before the final purchase.
Objectives of advertising-Advertising can be used to attract new customers, it is mainly a tool
to maintain existing customers and make them continue to buy the same brand. According to
Lavidge and Steiner, the purposes of advertising mentioned by researchers are mainly from two
aspects: short-term and long-term effects. The short-term impact is aimed to attract more
consumers and boost immediate sales, whereas the long-term effects could be providing
information and educating customers to distinguish one brand from others, building up brand
image and improving customer loyalty, and eventually increasing sales. Research conducted by
Deighton, Henderson and Neslin (1994) discovered that sales increase comes largely from brand-
switching rather than repeated purchase during an advertising activity. That is to say, the
influence of advertising on those customers who already bought the product promoted is less
obvious than on those new customers. According to Ehrenberg (2000, p39), “advertising’s main
role is to reinforce feelings of satisfaction with brands already bought”.
Studies on customer segmentation and product category
According to Raj (1982), advertising may have strong influence on lower loyalty customers by
attracting them to switch to the brand advertised, and higher loyalty customers will probably
respond to the advertising with repeat purchase and increase their purchase quantity. Bucklin and
Gupta (1992) argued that “response-based segmentation” is more valuable than demographic
segmentation in the real business world. In Dillon and Gupta (1996, p.38)’s study, customers
have been segmented into five groups based on their “brand perceptions and their response to
marketing mix variables”, and both customer and marketing’s elements have been studied to
investigate their relations with product category and brand purchase behavior.
11
Advertising effectiveness
In Ehrenberg (2000)’s opinion, repeat purchase accounts a large amount of sales volume of
frequently purchased products, and research on advertising’s main effectiveness should not only
be limited in discovering the ultimate purchase behavior or the persuasive effectiveness of
advertising, rather every stage of the process of responsiveness needs to be investigated, because
there is no strong evidence to prove the effectiveness of persuasive role of advertising. In
addition, long-term effects may be resulted from the reinforcement of advertising. Customers
may switch back to the brand which they usually buy after the promotion and advertising
campaign, in order to form a new purchase behavior and create repeat purchase, advertising
reinforcement is crucial and necessary. The increasing sales may not be the only criteria for the
high effectiveness of advertising, rather advertising effectiveness need to be measured based on
three objectives: developing brand awareness and providing product knowledge, creating brand
preference and positive feeling, building up trust and stimulating purchase. There is a positive
relation between liking and effectiveness of advertising. In other words, if the TV advertising is
more likable, customers may be more likely to be persuaded. Moreover, the more relevant and
meaningful advertising is more effective than the advertising which only has better entertainment
function.
Hierarchy models of customers’ responses to advertising
There are two levels of studies, namely “aggregate-level” and “individual-level” studies, the
former uses market-level data, such as brand advertising expenditures or market share; the latter
use single source data such as individual brand choice. One of the examples of aggregate-level
studies could be the research on the relationship between the impact of advertising sales and
advertising spending. Hierarchy effect models assume that the influence of advertising on
consumers is a process, and there are several steps and intermediate advertising effects in this
process. One of example of hierarchy advertising effect model is “AIDA” model: “Attention-
Interest-Desire-Action” studied by E. St. Elmo Lewis in 1989. Given that customers may not
change their brand preference immediately from one brand to another, how consumers move
from one stage up to next stage and finally move to actual purchase stage is an essential problem
for understanding customers’ brand-switching behavior, and it is also useful for increasing the
12
effectiveness of marketing communication. Lavidge and Steiner (1961) argued that the changes
of all the stages of influence should be evaluated, rather than only measure the development of
brand awareness or sales stimulation.
The relationship between promotion and brand-switching
According to Gupta (1988), the impacts of price and promotions on which brand customer will
choose, when they are willing to buy the product, and how much they are going to buy are
significant. Laroche et al. summarized three main advantages of sales promotion, including
“triggering unplanned purchase, encouraging customers to purchase nonpromoted merchandises,
accelerating the number of shopping trips to the store”. Clearly, promotion has been considered
one of the stimuli of brand-switching and repeat purchase. There are two possible explanations
for the increased sales resulted from promotion, one is the increased purchasing quantity from
existing consumers, and the other is the new purchase from new consumers. Existing consumers
may store more products that they do not need immediately, they may store pile the product
during promotion activities. If all the increasing sales from existing consumers in short-term,
there may be no significant changes or increase in sales in a long-term period due to the store
piling (Gupta, 1988). Therefore, the main purpose of promotion could be attract more new
customers, rather than stimulate existing consumers to buy more same product.
Customer satisfaction and brand-switching
It is true that dissatisfaction can cause brand-switching, and customers may express their
dissatisfaction through switching to other brands. However, dissatisfaction is not the only reason
causing brand-switching, and satisfied customers may not stay on the same brand (Kasper,
1988). Customers’ brand choice decision does not seem simple, and other influential factors need
to be studied. Kasper (1988, p.395), suggested that the influences of “product and store
characteristics, marketing mix variables, and antecedents of behavior like involvement, attitudes,
and cognitions on brand-switching and loyalty for durables, nondurables, and services” all need
to be examined at the same time.
The influence of price consciousness
13
According to Oliveira-Castro et al. (2005), consumers may response price promotion differently
for different level’s brand, and their goal would be to gain the maximum benefits including both
utilitarian and informational benefits, as well as minimize their purchase costs. Krishna (1992)
suggested that customers have varied expectations for different brands, consequently, they may
respond to price-oriented promotions differently. That is to say, customers’ different price
expectations for brands will probably affect how they will react to the promotions. However, if
customers have price expectations for some brands, they may purchase fewer products from less
preferred brands and wait for the price promotion for their preferred brands.
Brand Relationship and Peer Influence
Peers influence the purchase decision but the relationship building with a brand is also dependent
upon the user and on the usage of the brand.As young consumers move to establishing
independent identities, they depend on peers to obtain ideas, information, and viewpoints. Peers
influence the boundaries of information search and acquisition and, on many occasions, the use
of a brand (Singh, Kwon and Periera, 2003). Simultaneously, brands also provide inputs and
consumers form relationships with brands along different dimensions (Escalas, 2004). To the
extent that peer influence results in brand choice, it will influence the relationship with the brand.
The role that peers play is nonetheless important but as far as getting involved with a brand is
concerned, it is very individual-specific; what they do with the brands to add meaning to their
life cannot be derived from what peers suggest. However, as young consumers move out of the
orbit of parental influence,peer influence tends to rise (Feltham, 1998). An increase in peer
influence should weaken brand relationships as the opinions of peers would take precedence
over any brand relationships that the young consumer may be forming.
The following is a flowchart demonstrating how advertisement and promotional tools affect brand switching behavior-
14
Research Methodology-
4.1Primary source
A questionnaire was prepared.Through this questionnaire, we are analyzing how advertisement,
sales promotion and price consciousness affects brand switching behavior.
4.2 Sample Profile
The respondents for this objective are under the category of 17-21 years of age and are from
BITS Hyderabad Campus.
4.3: Samples size : About 50 Questionnaires will be floated to the respondents and data will be
collected and analyzed from the questionnaires.
4.4: Data analysis instrument : The data collected will be analyzed using pie charts and bar graphs.
15
Questionnaire design :
Questionnaire survey will be used to collect data, because survey questionnaire is a more useful
method to gain the perceptual information from customers, and customers’ attitudes towards
advertising and promotion are crucial for the study.
There are four parts includes in survey questionnaire : brand switching ; price consciousness,
customers’ responses to advertising, and customers’ responses to promotional tools.
First, customers’ brand switching behavior will be evaluated. The related questions include “the
reasons for changing brand, the numbers of brands changed during a period”. The influences of
advertising/promotion in terms of brand-switching and customers’ attitudes towards
utilitarian/informational benefits will also be evaluated.
The part two of the questionnaire will investigate the price sensitivity of customer. Three
questions will be asked to test to what extent customers will be influenced by price change.
The third part will focus on customers response to advertisement .Customers’ brand switching
behavior related to advertising contents will be tested.
The influences of advertising on different stages of customers’ responsive hierarchy will be
investigated. The purpose of studying on the hierarchy is to understand on which stages
advertising will have strong impacts. In this research, a new hierarchy model (awareness—trial
—purchase—repeat purchase) will be adopted to investigate advertising/promotion effects on
each stage. This hierarchy model will be used to present the process of changing attitudes and
behaviors with the stimulation of marketing actions. There are two main advantages of this
hierarchy model. First, both emotional and behavioral changes are included in the model; second,
both primary demand (repeat purchase) and secondary demand (brand-switching) are contained
in this model. Therefore, the effectiveness of advertising/promotion on both attracting new
customers and accelerating repeat purchase could be tested.
16
The last part of the questionnaire is to test brand switching and promotional tools. Mainly, six
promotional tools will be tested in terms of their effects on brand choice behavior. These six
promotional tools include price discount, freebies, sachet attached to newspapers, extra
grammage, buy one get one free offer, postpone purchase till favorite brand is available in
market .
Limitations of the study:
Sample size is small and also all the sample of same age group and hail from approximately
same income level family group.
Data analysis & interpretation
The following is the analysis of data collected from 50 students in BITS, Pilani Hyderabad
campus. Only the top two subcategories under each category were selected and the data was
interpreted for each sample.
Pie chart demarcating Brand Switching from Brand loyal people-
48%
52%
No. of Brand loyals No. of Brand switchers
26 people were found to be brand switchers.
24 people were found to be loyal to the brand of shampoo used by them.
17
Product category which is more prone to brand switching-
Shampoo70%
Electronic gadgets30%
Therefore, it can be concluded that products, like shampoo, involving low risk and low
investment are more prone to brand switching.
Interpretation of data collected from Brand switchers-
Factors playing an important role for switching to other brand
Advertising31%
Peer influence38%
Other factors31%
18
Therefore, it is seen that peer influence plays the deciding factor for brand switchers. Sales
promotion and price difference does not play a key role.
Brand of shampoo currently being used by brand switching sample
Dove25%
Sunsilk8%
Pantene25%
Others42%
From the chart, it can be seen that most of the sample uses some other brand of shampoo. Dove
and Pantene have an equal share.
Reasons for brand switching:
1 3 5 7 9 11 13 150
1
2
3
4
5
6
Value for moneyWord of mouthAdvertisementsPromotionDissatisfaction with the previous brand used
19
Therefore, it can be said that word of mouth and dissatisfaction from the previous brand are the
key reasons which lead to brand switching.
Customers’ responses to advertising contents
1 3 5 7 9 11 13 150
0.5
1
1.5
2
2.5
3
3.5
4
PackagingCelebrity in advertisementGood brand imageProduct qualityValue for money
Therefore, money value contents and information about product quality in the advertisement are
important factor for brand switchers. The influence of the interestingness of the advertisement,
the celebrity used and the packaging doesn’t affect these samples.
Behavior response to advertisement-
20
1 3 5 7 9 11 13 150
0.5
1
1.5
2
2.5
3
3.5
4
Repeated buying of the brandBuying the brandTrial of the productAwareness about the brand
From the above histogram, it can be seen that for brand switcher advertisement creates A)
awareness about the brand and B) makes the consumer to try the brand.
Factors influencing sales promotion
1 2 3 4 5 60
0.5
1
1.5
2
2.5
3
Postpone purchaseExtra grammageSachet attached to newspapersFreebiesBuy 1 get 1 free offerPrice discount
From the above graph, it can be seen that brand switchers are not ready to postpone their
purchase if the brand of their preference is not available. Freebies attract brand switchers.
Price discount also attribute to brand switching.
21
Customer satisfaction
1 3 5 7 9 11 130
1
2
3
4
5
6
7
Hair grows in bulkReduces dandruffMakes hair silky and smoothReduces hairfall
The brand switchers are not particularly satisfied by the brand of shampoo they currently use.
Therefore, some people even did not agree to one of the attributes as were not completely
satisfied by the brand currently used by them and were ready to switch over.
Interpretation of data collected from Brand loyal people-
Brand of shampoo currently being used by brand switching sample
Sunsilk17%
Dove50%
Pantene17%
Others17%
Most brand loyal people use Dove.
22
Reasons for brand switching:
1 3 5 7 9 110
0.5
1
1.5
2
2.5
3
Value for moneyWord of mouthAdvertisementsPromotionDissatisfaction with the previous brand used
The study indicates that brand loyal people value their money and also word of mouth also
plays an important role for them for choosing their shampoo.
Customers’ attitudes towards advertising contents
1 2 30
0.5
1
1.5
2
2.5
3
PackagingCelebrity in advertisementGood brand imageProduct qualityValue for money
23
From the above graph, it can be seen that good brand image content in an advertisement and
information regarding product quality plays the key role for brand loyal people.
Behavior response to advertisement- (aware-trial-buy-repeat model)
1 3 5 7 9 11 130
0.5
1
1.5
2
2.5
3
Repeated buying of the brandBuying the brandTrial of the productAwareness about the brand
It is seen from the data that for brand loyal people advertising leads to repeatedly purchase their
preferred brand. Therefore, advertisement plays a key role for repeated purchase of the same
product.
Factors influencing sales promotion
1 20
0.5
1
1.5
2
2.5
3
Postpone purchaseExtra grammageSachet attached to newspapersFreebiesBuy 1 get 1 free offerPrice discount
24
Therefore, it can be seen that brand loyal people are ready to postpone their purchase if their
preferred brand is unavailable and are not ready to switch over to any other brand despite
attractive sales promotion.
Customer satisfaction
1 3 5 7 9 11 13 150
0.5
1
1.5
2
2.5
3
3.5
4
Hair grows in bulkReduces dandruffMakes hair silky and smoothReduces hairfall
Brand loyal people are extremely satisfied by their shampoos. They believe that their respective
shampoos have kept their promises of reducing hairfall,making their hair silky and smooth,
helped reduce dandruff, and made their hair grow in bulk.
Analysis of the research-
The following diagram represents the effect of promotional tools on brand loyal and brand
switching category of people.
25
The following diagram represents the effect of advertisements on brand loyal and brand
switching segments.
26
Data analysis & conclusions:
In shampoo category, there are many changes which marketers have to notice in the market
place, especially increased competition and customers’ new preferences. Marketers and
researchers are more and more concerned about the severe competition resulted from product
similarity and large numbers of competitive brands in the same market. The growing intensity of
competition pushes companies to study their competitors, and most important, to understand
their customers including both existing and potential buyers.
Finding out the key factors which influence brand switching is important for companies to
improve customer satisfaction and maintain existing customers. Especially in shampoo category,
where customer loyalty is relatively low to some extent due to the similarity of products and
services and low level of risk involved in switching. . However, to our surprise, in a sample of
50. ; no. of brand loyal and brand switcher were same. (24. 26 respectively)
Price consciousness has been assumed has relation with brand-switching, however the
result shows that there is no strong relationship between brand-switching and
customers’ price sensitivity in case of shampoo category. It is been seen that
dissatisfaction from the previous brand and product quality are the key factors which lead
to brand switching.
Advertising is more effective on the stage of awareness and product trial for Brand
switchers (mean=1.75) whereas for brand loyal people advertisement leads to purchase
and repeat purchase. (mean=1.5)
Brand switcher who are high in price consciousness (shown high perception for value for
money) , tend to prefer free gift, price discount . It means that high price consciousness
customers are more likely to switch to other brands when they are attracted by these
promotional tools which are not the case with brand loyal customers. Thus price discount
and free gift plays important promotional tool for customer to switch to other shampoo
brand.
Brand loyal customers are more likely to change to other brands because of the contents
about good product quality and good brand image, whereas the effectiveness of the
aspects about good value for money impacts brand switchers. The celebrity in
27
advertising and the interestingness of advertising is less important to lead to brand-
switching.
Customer satisfaction level is very low in case of brand switchers as compare to brand
loyal segment.
It can be concluded that marketers should emphasize on promotion and advertisement
tools in order to prevent brand switching.
Suggestions:
In this age of cut-throat competition in the fast moving consumer goods sector(eg.
Shampoo),which is prone to brand switching,because of low risk involvement,marketers should
adopt strategies that would help them retain their current customers and influence other
customers to buy their products.
Marketing agents should emphasize on improving the quality of their products and keep
to their promotional promises so that their current customers do not switch over to some
other shampoo due to dissatisfaction.
Advertisements should be done in all form of media ranging from
newspapers,magazines,kiosks,billboards to television and internet advertisements.
Advertisements create an impact on the mind of the consumers. Brand loyal people go for
repeatedly purchase of the same product. At the same time, it makes consumers aware of
a particular shampoo and try the shampoo, this happens in the case of the brand switching
segment.
Effective promotional tools should be adopted by marketing strategists such as freebies,
which tend to attract the brand switching segment of people. Free sachets accompanying
electricity bills and newspapers make consumers to try a particular product free of cost,
and in future , the consumer purchases the product if he/she is satisfied by it’s initial
performance.
Strategists should emphasize on building good brand image. Roping in renownned
celebrities as brand endorsers can be made secondary,good packaging is also not
necessary for increasing sales as these factors clearly do not affect the sample studied.
28
Shampoos should be designed in such a way such that they keep to their promotional
promises and customers do not switch over to other brands as a result of dissatisfaction
with the present one.
29
References-
1. Evaluating the effect of Consumer Sales Promotion on Brand Switching and Brand Loyal
segments by Komal Nagar
2. Brand Relationships and Switching Behaviour for Highly Used Products in Young Consumers
by Arvind Sahay and Nivedita Sharma
3. Examine the Factors Influencing Brand-switching: the Effects of Advertising and Promotion
by Xueling Luo(2006)
4. Other sources from the internet.
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Annexure :1
Questionnaire:
Advertising/promotion and brand-switching
(Shampoo Dove and Pantene)
Q1: Do you usually change regarding which brand of shampoo to buy?
A)Yes B)No
Q2: Have you changed shampoo brand during the last six month?
(1) No, I have not
(2) Yes, I have
Q3. Which brand(s) of shampoo have you purchased during the last 6 purchases
1----------------- 4----------------
2.---------------- 5----------------
3--------------------6------------------
Q4: Which factors plays most important role in switching to other brand of shampoo.
A)Advertising B) Sales Promotion C) Peer Influence D) Price difference
Q5: For which of the following product category will you tend to switch brand frequently?
A) Shampoo B) Electronic gadgets C) buying a Car
Q6: Which brand of shampoo are you currently using?
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A. Dove B) Pantene C) Sunsilk D) Head & Shoulders E) Others
Brand Switching
Q7. Please select the level of your agreement for each following statement. 1=strongly
disagree, 7=strongly agree )
Serial
no.
Questions Rating
1 The reason for changing shampoo brand is usually because of your
dissatisfaction with the previous brand.
2 I am usually stimulated by promotion.
3 I am usually attracted by advertisements.
4 I am usually encouraged by good word-of-mouth from other consumers who
have already tried the new brand product.
5 I usually change to another brand because of its reasonable price and good
value for money.
6 I usually change to another brand because it is a high level of product with
relatively higher price.
Price Consciousness
8P. Please select the level of your agreement for each following statement. 1=strongly
disagree, 3=strongly agree )
Serial no.Questions Rating
1 I usually buy shampoos when there are freebies accompanying them.
2 I buy the lowest price shampoo that will suit my needs
3 When I am choosing shampoo, I rely heavily on price
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Customers’ attitudes towards advertising contents
9PP. The following content/information of advertising can make me buy another advertised
shampoo that I do not usually buy? Rank 1 to 5 with top most criteria being ranked 1. and
the least preferred option ranked 5 .
Serial
no.
Questions Rating
1 I switched over to another brand because of the good money value of the
brand
2 I switched over to another brand because of the product quality
3 I switched over to another brand because of the good image of the brand
4 I switched over to another brand because of the celebrity in advertising
5 I switched over to another brand because of the interesting and likable
packaging and promises
Effect of Advertisement
10A. What role the advertisement plays in your brand switching intention the most? Rank
1 to 4 with top most criteria being ranked 1 and the least preferred option ranked 4.
Serial no.Questions Rating
1 Advertising usually makes me aware the shampoo product brand
2 Advertising usually makes me try the shampoo product brand
3 Advertising usually makes me buy the shampoo product brand
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Effect of Promotional Tools
11. Which factors of “sales promotion” influence your brand switching intention the most?
Rank 1 to 6 with top most criteria being ranked 1. and the least preferred option ranked 6 .
Serial no. Questions Rating
1 I have switched to a competing brand due to
Price Discount (e.g. Rs. 5 off)
2 I have switched to other brands due to Buy
One Get One Free
3 I have switched to a competing brand due to
Free Gifts (e.g. free soap)
4 I have switched to a competing brand due to
Samples (e.g. sachet in newspaper or in a store)
5 I have switched to a competing brand due to
Extra Grammage (e.g. 20% extra)
6 If my favourite brand is not on promotion,
I will postpone the purchase till it is on
promotion
Customer Satisfaction
12CS.Please select the level of your agreement for each following statement. 1=strongly
disagree, 4=strongly agree )
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Serial
no.
Questions Rating
1 My shampoo has reduced my hairfall to a considerable level as compared to
the shampoo previously used by me
2 My shampoo has made my hair silky and smooth
3 My shampoo has helped in reducing dandruff to an extent more than
pantene
4 my shampoo has made my hair become thicker
(Thank you for your help!)
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