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Role of Brand Equity and Brand Identity on Preferences of Smartphones among Students

1. Dr.M.Jyothsna, Associate Professor and Head Dept. of Marketing( First Author)

GITAM Institute of Management, GITAM University, Rushikonda,Visakhapatnam 530045

Fax: 0891- 2790037

Jyothsna_mallela@yahoo.co.in

2. Dr. S. Mahalakshmi, Assistant Professor, Dept. of Finance, ( Second Author)

GITAM Institute of Management, GITAM University, Rushikonda,Visakhapatnam 530045

Mahalakshmi.s35@gmail.com

3. Mr. P. Naga Sandeep, Research Scholar,( ( Third Author)

GITAM Institute of Management, GITAM University, Rushikonda,Visakhapatnam 530045

SANDY.P.5005@GMAIL.COM

Abstract

Brands are one of the most valuable assets of a company . High brand equity levels are known to lead to higher consumer preferences and purchase intentions. Brand Equity measures like Brand Awareness , Perceived Quality, Price and Brand Association and Brand Identity Measures like culture, self image and personality are considered for the purpose of this study.When a consumer perceives high brand equity he is willing to pay premium prices. Brand loyal customers act as advocates for a brand by engaging in positive word of mouth. Self image includes the attributions a consumer makes and a consumer thinks that others make to the typical user of the brand. Brand personality traits in a product are akin to a person’s traits. Today there is stiff competition among smartphone companies. To stay ahead of competition they should take regular feedback from customers. Marketing strategy must be carefully chalked out. The purpose of this research is to understand how different components of brand equity and brand identity measures influence students in their preference between Apple and Samsung Smartphones. Primary data was obtained through questionnaires collected from 200 students. Likert scale and weighted average was used to arrive at the results.

Key Words: Brand Equity ,Brand Identity Measures ,Brand Personality , Marketing Strategy,Smartphone.

1. Introduction

The Smartphone has brought in a revolution in the way we live. This small device has taken the role of communication, role of a computer, brought in an ease of doing shopping, browsing the internet and many other activities. With mobile apps for every activity its role in today’s world is just phenomenal. According to Nielsen report “900 million mobile phone users stay connected while they’re on the go”. This tremendous growth is due to the users desire to be in touch with their friends on social networking sites and be connected with their associates. Cost of device is on the downward trend. The number of features that smartphones offer includes playing the role of a calculator, an alarm clock, a navigator, music player and recorder, photography and videos etc. which has given a boost to sales of smartphones. In a developing country like India the growth opportunity is exponential. Today people are in a hurry to exchange their traditional phone for a smartphone.

2. Purpose

The purpose of this research is to understand how different components of brand equity and identity influence students in their preference between Apple and Samsung Smartphones. The focus is on building brand equity, personality, identity in Smartphones. Apple iPhone was introduced in 2007 and was the first phone to support multiple touch display.. This phone was able to support a lot of operations such as Google maps, Wi-Fi, Bluetooth, radio, 2megapixel camera and iTunes. This was the last era of those Smartphones that never used android operating system as it was introduced in 2008. From its inception as a small export business in Taegu, Korea, Samsung has grown to become one of the world’s leading electronics companies, specializing in digital appliances and media, semiconductors, memory, and system integration. Today Samsung's innovative and top quality products and processes are recognized all over the world.

3. Review of Literature

A brand’s image is a key component of brand equity, or brand value (Aaker, 1991). Keller (1993) defines brand image as different types of brand associations as well as the favorability, strength and uniqueness of these associations. Hammond (2008) ,defines brand as “ A brand is the total emotional experience a customer has with your company and its product or service” Brands are one of the most valuable assets that a company has. High brand equity levels are known to lead to higher consumer preferences and purchase intentions (Cobb-Walgren et al. 1995). High brand equity brings an opportunity for product line extensions and acts like a shield against promotional tactics of rival companies. There are two types of brand equity – financial and customer based. The first type of brand equity is from a financial market’s point of view where the asset value of a brand is appraised (Farquhar et al. 1991, Simon andSullivan 1990). Customer-based brand equity is evaluating the consumer’s response to a brand name (Keller 1993, Shocker et al. 1994).

Brand Loyalty - Loyal customers spend more than non-loyal customers, act as advocates for a brand by engaging in positive word of mouth, and are therefore "at the heart of a company's most valuable customer group" (Ganesh et al., 2000, Zeithaml et al.,1996).

A brand association - is the most accepted aspect of brand equity (Aaker 1992). Associations represent the basis for purchase decision and for brand loyalty (Aaker 1991).Brand associations consist of all brand-related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes (Kotler and Keller 2006).

Perceived price - The choice of a brand that customer makes depends on a perceived balance between the price of a product and all its utilities (Lassar et al. 1995). When a consumer perceives high brand equity he is willing to pay premium prices .

Perceived quality is the customer’s judgment about a product’s overall excellence or superiority that is different from objective quality (Zeithaml 1988). Objective quality refers more to technical and measurable aspects of products/services. As it is difficult for consumers to judge these objective quality aspects it may not contribute to brand equity (Anselmsson et al. 2007).Perceived quality is hence formed to judge the overall quality of a product/service. Perceived quality could be having intrinsic attributes and extrinsic attributes (Zeithaml (1988) and Steenkamp (1997). The intrinsic attributes are related to the physical aspects of a product (e.g. colour, flavour, form and appearance); on the other hand, extrinsic attributes are related to the product, (e.g. brand name, stamp of quality, price, store, packaging and production information (Bernue´set al.2003). It’s difficult to generalize attributes as they are specific to product categories so for our research purpose no distinction is made.

Brand awareness –(Keller,2003) defines awareness as ”the customers’ ability to recall and recognize the brand as reflected by their ability to identify the brand under different conditions and to link the brand name, logo, symbol, and so forth to certain associations in memory”.

Self-image is sometimes derived from the customer’s social image. It is consumer’s perception of the esteem in which the consumer’s social group holds the brand in. It includes the attributions a consumer makes and a consumer thinks that others make to the typical user of the brand ,Lassar et al. (1995) say this contributes more to brand identity.

In spite of the economy being on the upswing and the increase in disposable income, Indian consumers are very price sensitive and clear in their priorities. Consumers are still not ready to spend unnecessarily on branded products unless they offer superior quality at affordable prices. Status of the product or brand also plays a role on what a customer perceives as reasonable price.

Jennifer Aaker describes what brand personality traits are in a product which are akin to a person’s traits. It contains 15 traits organized into five factors as follows:

Sincerity —down-to-earth, hones, wholesome, cheerful

Excitement —daring, spirited, imaginative, up-to-date

Competence —reliable, intelligent, successful

Sophistication —upper class, charming

Ruggedness —outdoorsy, tough

4. Research Methodology

Structured questionnaire was administered to students by using stratified random sampling method. Both primary and secondary sources of data were used for this research study.

Primary data was obtained through questionnaires collected from 225 students, out of which 200 respondents answers were analysed for the purpose of this research, as they answered the questionnaire completely. The secondary data was gathered through journals, books, articles, web reports and other published material. The design of the questionnaire is comprehensive covering all the concepts of this research like brand equity, brand identities and brand personality which are relevant for our research study.

5. Validity- The matrix is incorporated in the report as a way to show the validity of the work.

Matrix - Table 1

Concept

Question

The purpose of the question asked.

Filter Question

Which of the following brands do you own today: Apple or Samsung

This question determines if the respondent should undertake the survey or not.

Gender

Male, Female

To know the preferences based on gender

Qualification

Under Graduation , Post Graduation

To know the preferences based on qualification

Purpose

purpose of usage of your smart phone

Purpose of usage ;Calls and messages , Games and applications , Music and Photos , Internet and E-mails

Time

Time spent on using smart phone

How much time is spent on the phone

2. Do you agree with the following statements, please consider: on a scale from 1 to 5 ((where 1 is the strongly disagree and 5 is strongly agree)

Brand Equity

Apple is a strong brand in the market. Samsung is a strong brand in the market.

This question is aimed at measuring brand equity As Aaker (1996) mentions strong brands have strong brand equity, where customers associate this brand to be strong.

Brand Loyalty

I will go for another brand when I buy a new smartphone next time.

I feel committed to the smartphone brand I use.

I would recommend my friends to buy the same smartphone brand I use.

This question aims to know loyalty of respondents towards the smartphone. Customer loyalty is viewed as the strength of the relationship between an individual’s relative attitude and their repeat patronage, Kellar,(1993).

Brand Association

I get attention and importance in public with the kind of smartphone I use.

This question tries to ascertain how students associate themselves with a certain class or social group

Perceived Quality

I’m satisfied with the quality of my current smartphone.

This question tries to find out how students perceive the quality of the smartphone they use.

Price

Even though other brands would offer the same features for the same price, still I will choose my current brand smartphones. My smartphone is worth the price I purchased it for.

This question is designed to perceive if students think they get value for money spent on the smartphone.

Brand

Awareness

Apple brand logo is attractive and looks familiar to me. Samsung brand logo is attractive and looks familiar to me.

This question aims to measure brand recognition, as it is perceived that strong brands have high awareness, and customers easily recognize the brand logo and symbols.

Brand Identity Measures

Culture

I consider Apple a youth brand.

I consider Samsung a youth brand

This question measures the culture the student wants to belong to.

Self-Image

My Smartphone brand is a part of my life style

This question measures perceived image the student has about his Smartphone.

Personality

Personality, Excitement, Ruggedness

Competence, Sophisticated

Based on Aaker’s matrix of brand personality, each attribute was taken to measure the Smartphone’s personality.

6.Results and Discussion

Table 1: Demographic profile of the Respondents

Gender

Educational Qualification

Gender

Frequency

Percentage

Education

Frequency

percentage

Male

126

63.0

Under Graduation

103

51.5

Female

74

37.0

Post Graduation

97

48.5

Total

200

100.0

Total

200

100.0

The demographic profile of the respondents’ (Table 1) explains about their gender and educational qualification. Among the total 200 respondents, nearly 63% (126) of them are male and the remaining 37% (74) of the respondents are female. Thus majority of the respondents are male. Subsequently, according to the educational qualification, 51.5% (103) of the respondents are undergraduates and the remaining 48.5% (97) of the respondents are post-graduates. Therefore, majority of the respondents have completed only under graduation.

Table 2: Purpose of usage

Purpose of Usage

Weighted Average

Rank

Calls and messages

2.685

1

Games and applications

2.315

4

Music and Photos

2.535

2

Internet and E-mails

2.505

3

The purpose of mobile phone usage has been analyzed by applying weighted average technique (Table 2). Among the various purposes, calls and messages have been ranked first with a weighted average score of 2.685, followed by Music and Photos with a score of 2.535. The weighted average score of Internet and E-mail is 2.535 has been ranked third. Finally, Games and applications have been ranked last with a weighted average score of 2.505. Hence, it is inferred that majority of the customers are using smartphones mainly for the purpose of making calls and sending messages.

Table 3

Statements of Apple Users

Strongly Disagree

Disagree

Neutral

Agree

Strongly Agree

Even though other brands would offer the same features for the same price, still I will choose my current brand of Smartphone

10

(10%)

2

(2%)

16

(16%)

23

(23%)

49

(49%)

Apple is a strong brand in market.

5

(5%)

8

(8%)

7

(7%)

13

(13%)

67

(67%)

Samsung is a strong brand in market

17

(17%)

13

(13%)

26

(26%)

21

(21%)

23

(23%)

I get attention and importance in public with the kind of Smartphone I use

11

(11%)

10

(10%)

31

(31%)

16

(16%)

32

(32%)

I’m satisfied with the quality of my current Smartphone

3

(3%)

6

(6%)

16

(16%)

28

(28%)

47

(47%)

My Smartphone is worth the price I purchased it for

12

(12%)

5

(5%)

11

(11%)

33

(33%)

39

(39%)

I will go for another brand when I buy a new Smartphone next time

38

(38%)

11

(11%)

15

(15%)

14

(14%)

22

(22%)

I consider Apple a youth brand

15

(15%)

2

(2%)

17

(17%)

28

(28%)

38

(38%)

I consider Samsung a youth brand

16

(16%)

19

(19%)

13

(13%)

34

(34%)

18

(18%)

I would recommend my friends to buy the same Smartphone brand I use

6

(6%)

9

(9%)

17

(17%)

21

(21%)

47

(47%)

I feel committed to the Smartphone brand I use

5

(5%)

10

(10%)

12

(12%)

26

(26%)

47

(47%)

Apple brand logo is attractive and looks familiar to me

7

(7%)

4

(4%)

17

(17%)

13

(13%)

59

(59%)

Samsung brand logo is attractive and looks familiar to me.

31

(31%)

16

(16%)

26

(26%)

15

(15%)

12

(12%)

My Smartphone brand is a part of my life style

4

(4%)

16

(16%)

20

(20%)

16

(16%)

44

(44%)

Table 4

Statements of Samsung Users

Strongly Disagree

Disagree

Neutral

Agree

Strongly Agree

Even though other brands would offer the same features for the same price, still I will choose my current brand of Smartphone.

12

(12%)

9

(9%)

16

(16%)

31

(31%)

32

(32%)

Apple is a strong brand in the market.

7

(7%)

12

(12%)

17

(17%)

31

(31%)

33

(33%)

Samsung is a strong brand in the market.

9

(9%)

3

(3%)

21

(21%)

36

(36%)

31

(31%)

I get attention and importance in public with the kind of Smartphone I use.

9

(9%)

11

(11%)

34

(34%)

28

(28%)

18

(18%)

I’m satisfied with the quality of my current Smartphone.

6

(6%)

15

(15%)

24

(24%)

25

(25%)

30

(30%)

My Smartphone is worth the price I purchased it for.

5

(5%)

10

(10%)

28

(28%)

30

(30%)

27

(27%)

I will go for another brand when I buy a new Smartphone next time.

19

(19%)

11

(11%)

20

(20%)

17

(17%)

33

(33%)

I consider Apple a youth brand.

10

(10%)

24

(24%)

26

(26%)

14

(14%)

26

(26%)

I consider Samsung a youth brand.

6

(6%)

9

(9%)

22

(22%)

36

(36%)

27

(27%)

I would recommend my friends to buy the same Smartphone brand I use.

8

(8%)

8

(8%)

26

(26%)

30

(30%)

28

(28%)

I feel committed to the Smartphone brand I use.

10

(10%)

15

(15%)

20

(20%)

32

(32%)

23

(23%)

Apple brand logo is attractive and looks familiar to me.

8

(8%)

10

(10%)

20

(20%)

25

(25%)

37

(37%)

Samsung brand logo is attractive and looks familiar to me.

3

(3%)

14

(14%)

34

(34%)

28

(28%)

21

(21%)

My Smartphone brand is a part of my life style

8

(8%)

11

(11%)

19

(19%)

25

(25%)

37

(37%)

A. Brand Equity Measures

Respondents were asked if they think Apple is a strong brand in the market.It is seen Apple commands high brand equity. In table 3 : Among Apple users 13% agreed and 67% strongly agreed that Apple is a strong brand in the market. Table 4 :Among Samsung users 36% agreed and 31% strongly agreed that Samsung is a strong brand. Samsung has high scores but they are not higher than Apple. As suggested by Aaker (1996) it proves that strong brands have strong brand equity, where customers associate this brand to be strong. Brand Loyalty-Respondents were asked if they will go for another brand when they buy a new smartphone next time. Table 3: Of Apple users 38% strongly disagreed and 11% disagreed that they would buy another brand. As illustrated in Table 4 out of the total Samsung Users 19% strongly disagreed and 11% disagreed that they would go for another brand. This shows that there is greater loyalty among Apple users towards their brand. Apple users have strong commitment towards the brand they use. This is illustrated in Table 3 where26% and 47% Apple users agree and strongly agree about their commitment. In Table 4: 32% and 23 % agreed and strongly agreed about their commitment towards Samsung. Word of mouth and recommendation by their peer groups play an important role in purchase behavior and loyalty of young students.21% and 47% of Apple users agreed and strongly agreed that they would recommend friends to buy the same Smartphone brand that they use 30 %and 28% of Samsung users said they would recommend. Though Samsung user’s recommendation of 58% is high it is not higher than that of Apple’s 67%.

a) Brand Awareness

According to Kellers, (1998), one of the greatest advantages of brand awareness is the customer can recall the product easily when that category comes to mind. When respondents were asked if brand logo is attractive and looks familiar as per Table 1 13 % agreed and 59% strongly agreed. This is a very high percentage which shows how familiar and popular Apple brand logo is .Table 2: 28% and 21 % agreed and strongly agreed about Samsung’s logo being attractive and popular.

b) Perceived Quality

Table 1:28% and 47% agreed and strongly agreed about being satisfied with Apple’s quality of Smartphone .Table 2 : 25% and 30 % agreed and strongly agreed about being satisfied with Samsung’s quality of Smartphone. As mentioned by Aaker (1991), perceived quality deals with the customer’s perception of the overall quality or superiority of a product or service with respect to its intended purpose, relative to its alternative. Apple has strong positioning strategies in the market. It differentiates itself by its innovativeness and uniqueness.

c) Price

33% and 39% agreed and strongly agreed about Apple Smartphone being worth its price while 21% and 28% of Samsung users agreed and strongly agreed about Smartphone being worth its price. Though function wise they may be similar due to Apple’s strong image customers perceive the price to be in line with the Smartphone and they are able to charge skimming price.

d) Brand Association

Respondents were asked if they believe they get attention and importance in public with the kind of smartphone they use. (48%);16% and 32% of Apple users agreed and strongly agreed with this while 31% were indifferent. (46%);28% agreed and 18% strongly agreed while 34% were indifferent .The study found both Apple and Samsung users feel they are identified with the kind of Smartphone they use. As Smartphone and brands are closely associated many people associate brand with certain kind of class or group.

B. Brand Identity Measures

a) Culture

Users of Apple were asked if they consider their Smartphone a youth brand. (45%).While 17% and 28% agreed and strongly agreed that Apple is a youth brand(47%) 13% and 34% of them thought Samsung was a youth brand. Users of Samsung were asked if they consider their Smartphone a youth brand.(40%); 26% and 14% agreed and strongly agreed that Apple was a youth brand (58%) 22% and 36% agreed and strongly agreed that Samsung was a youth brand. The comparison of the empirical data on Samsung and Apple Smartphone disclosed that though both the users considered the brands to be youth brands more number of respondents voted for Samsung. This could be because of the price of Apple which few people could afford to pay especially young people. So majority of the youth preferred to own Samsung. This reflects the culture of youth.

b) Self-Image

16% and 44% agreed and strongly agreed that Apple was a part of their lifestyle. 25% and 37% agreed and strongly agreed that Samsung was a part of their lifestyle. Consumers create images of themselves through the products they use. Many Apple users strongly agreed that Apple was a part of their lifestyle. On the whole though, 62% felt Samsung was a part of their lifestyle.

c) Brand Personality

Table 5:

Combined Score Of Apple And Samsung Phones’ Attributes of Brand Personality

Brand Personality Attributes

Weighted Average

Rank

Sincerity

3.710

4

Excitement

3.915

2

Ruggedness

3.330

5

Reliability

3.935

1

Sophistication

3.825

3

A combined score of Apple and Samsung phones’ brand personality has been measured based on the five important attributes namely Sincerity, Excitement, Ruggedness, Reliability and Sophistication. Among the five, reliability has been ranked as the first important attribute of brand personality having a weighted average score of 3.935, followed by excitement which has 3.915 as its weighted average score. Sophistication has been considered as the third important attribute followed by Sincerity with the weighted average scores of 3.825 and 3.710 respectively. Ruggedness has been ranked as the least important variable and it has a weighted average score of 3.330. Hence, it is seen that reliability plays an important role in building the brand personality.

Table 6

Apple

Samsung

Sincerity

3.990099

3.424242

Excitement

4.19802

3.626263

Ruggedness

3.356436

3.30303

Reliability

4.148515

3.717172

Sophisticated

4.039604

3.606061

Brand Personality: According to table 5 and 6 above, the empirical data obtained suggest that of the entire five personality traits that are associated with the Apple Smartphone, excitement has the highest score closely followed by reliability and sophistication. The last trait is ruggedness. Except for ruggedness all traits were almost equally important in Apple. In comparison to Samsung, Apple scored higher in all personality traits.

7. Findings and Suggestions

An interesting observation made from this research study is that students are more influenced by the brand image of the Smartphone. In order to build a strong customer brand loyalty, it has to create a higher customer perceived quality, given that brand loyalty and perceived quality are intertwined. Out of students who own Apple phones 80% of Apple smartphone users and 44% of Samsung smartphone users feel Apple is a strong brand. Out of students who own Samsung phones 66% feel Samsung is a strong brand and 64% feel Apple is a strong brand. Strong brands have strong brand equity, where customers associate this brand to be strong. Apple’s logo seems to have a strong image in the minds of the consumer. Hence there is greater brand awareness among Apple users. Product differentiation is a marketing strategy which distinguishes the product from the other competitors. Apple has carved a niche for itself here. The perceived quality supports the skimming price strategy used by it. People associate brand with certain kind of class or group. This brand association is felt strongly by both the groups of users. Out of the parameters used to measure Brand Equity like Brand Awareness , Perceived Quality, Price and Brand Association, Apple has higher scores. Brand Equity is higher among Apple users. Both Apple and Samsung users consider their smartphone to be a youth brand but the score was higher among Samsung users. The reason could be the high cost of Apple phone which many young people can not afford so most new users of smartphones are opting for Samsung. In the area of culture Samsung has scored higher than Apple. Even while associating themselves with self image Samsung has scored higher than Apple. While associating themselves with characteristics of brand personality Apple scores higher on all the parameters namely: Sincerity, Excitement, Ruggedness, Reliability and Sophisticated. Out of the Brand Identity Measures namely Culture, and Self Image Samsung has a higher score. But in brand personality characteristics Apple scores higher.

If we look at the market share of Samsung, including all age groups, it has retained its number one leadership position in the worldwide smartphone market with a 21.4% share in 2015Q2. Today there is stiff competition among smartphone companies. To stay ahead of competition they should take regular feedback from customers. Marketing strategy must be carefully chalked out. Apple’s logo, perceived quality and product differentiation are its assets. This is where Samsung needs to improve to compete and build brand equity.The skimming price strategy adopted by Apple is a two edged sword. On the one hand it creates an image of perceived quality and on the other hand it is keeping many young people away from buying it. So they have started associating themselves from Samsung. Apple must think of ways of attracting young people. Those who are Apple users or Samsung users have started strongly associating themselves with the brands personality characteristics. Apple has a slightly higher score than Samsung here. If Apple is not alert it may soon lose its competitive advantage to Samsung. If we look at the market share of Samsung, including all age groups, it has retained its number one leadership position in the worldwide smartphone market with a 21.4% share in 2015Q2.

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