Academic Research学术研究连载

走进中国工业品牌管理与竞争的新常态

Entering into the “IB and HB branding management Era”

                               by Dr. Yang XiaoTong

 Edited by Eric and authorized for release

OVERVIEW

We are continuing throughout this part with our foregoing systematic discussion on the mathmatical modelling of the complicated relationship between Ingredient Brand and Host Brand, which is to be concluded with a broader concept of the composite loyalty as an effective measure of the influence of a successful branding strategy.                    

(2) Intermediate variable – Perceived host brand quality

In Zeithaml’s opinion (1988), perceived quality is something more abstract that is very different from the actual excellence of a specific product or service in terms of functionality or performance. Universally, it is determined by an overall assessment to be made by customers of all the attributes or benefits which can be recalled in the minds of customers. As far as our study on perceived host brand quality is concerned, we will use the above recognized definition, not being limited to other similar concepts of quality, such as objective quality concept (Dodds & Monroe, 1984; Jacoby & Olson, 1985; Holbrook & Corfman, 1985; Hjorth-Anderson, 1984; Monroe & Krishnan, 1985), product-based quality, manufacturing compliant quality (Garvin, 1983) and so on. Allowing for the fact that perceived quality varies from one respondent to another (Zeithaml, 1988), we define it as an overall judgment a certain purchaser is to make on what is thought to be either excellent or beyond his or her expectations. The judgment involves performance-related opinions and overall perceptions to the quality of a specific product or service, whether or not it is excellent or superior functionally (Peixun Wu, 2012). From a user’s perspective or equally a consumer’s perspective, this is quite a similar pathway to adding on the user-based perceived quality as raised by Garvin (1983). According to the argument by Desai & Keller (2002), ingredient branding is to transfer the most critical characteristic a given brand has as core value into another brand as a building block. Intrinsically, perceived quality is not limited to what manufacturing quality is traditionally defined as in a narrow sense. Like the progressive process described by Young and Feigen (1975), which is product→functional benefits→actual interest→grey value chain as emotional rewards, From the perspective of customers, it is quite a both difficult and complicated process to make assessment of a particular set of mining equipment in terms of its inherent quality. It is also true even after the equipment is purchased or put into service for a period of time (Zeithaml, 1988). Therefore, some external information associated with those trust-based products (Darby & Karni, 1973), such as host brand, ingredient brand and the likes, can assist the customers in making the right choice of purchase to minimize the risks involved in the decision-making process. Meanwhile, we have also given considerations to the huge effect those chief production managers from the user side have on the purchasing department or division when buying decision is to be taken, which is a significant contributor to making up different levels of respondents in groups and will make our study more pragmatic and more credible with a broader base of sampling data.

As far as our study is concerned, ‘host brand’ is defined as commercial brand that is representative of the complete equipment manufactured by our surveyed equipment makers, with a minimum of one subject ingredient brand included. During the course of studying, we will measure perceived quality among the customers with the Five-indicator table developed by Dodds and others (1991) , focusing on five (5) product-leveled dimensions: Reliability, Manufacturing techniques, Quality, Dependability and Durability.

(3) Regulated variable – Self-Owned Ingredient Brand Trust

There are a number of scholars arguing that, ingredient branded products refer to those materials or components that will no longer have independent images once they are integrated into the host branded equipment. So, to break the unfavorable anonymous status, a proportion of the upstream manufacturers start to make efforts to enhance brand building through raised brand awareness and brand popularity. The positive result is, increased trust in ingredient brand signals reduced risk of purchase leading to more efficient decision-making process. Among all the parts that constitute the complete equipment, ingredient is required to be a major part of it other than a minor one (Kotler & Pfoertsch, 2010). As we mentioned above, making accurate assessment of a complete set of mining equipment is really a tough thing to a vast majority of industrial customers. It’s even the case when the equipment is already purchased or put into use on job site (Zeithaml, 1988). In this sense, when facing choices among a variety of trust-prioritized products (Darby & Karni, 1973), industrial customers often tend to make trust-based judgment from a series of external information like brand preference. Realistically, brand trust is indeed a key dimension to the measure of brand equity (Aaker, 1991; Kapferer, 1991) and plays a big role in keeping customers loyal (Berry, 1993; Reicheld & Schefter, 2000). In our opinion, ingredient brand along with the trust derived from it is fairly beneficial in terms of making the whole decision-making process for purchase of industrial products more simplified and more efficient to reduce the risks to the minimum. With the advance of technology driven by intensified market competition, more technical advantages are available to add on the trust in those ingredient products (Zeithaml, 1988). In our study, self-own ingredient brand trust, or OIBT for short, is meant to denote the extent to which ingredient branded products are recognized by their customers as fit for purpose. Back to ingredient brand, it covers all sorts of component products manufactured by the host machine makers, detachable for separate sales, and also critical in guaranteeing the desired levels of quality or performance with the complete host machines (Chaudhuri & Holbrook, 2001). In terms of measuring brand trust, we will put our focus on OIBT from the dimensions proposed by Delgado-Ballester et al. (2003), so as to demonstrate the role management of OIBT plays from the perspective of marketing. For example, some of the questions from the survey are, ‘I trust the brand’, and ‘I think I will trust the brand completely’. At the same time, in order to verify the importance of the ingredient products involved in our study, we put a highlighted question before all other questions on each questionnaire to avoid or mitigate any possible misjudgment from subjective settings, thus making the survey more reflective of the truth.

(4) Controlled variables

We will also introduce some additional variables which are of less importance but are set to have effect on boosting trust in host brand and ingredient brand. So, to avoid overstating such an expected effect, these variables will be set in a controlled manner, such as scale of a given firm. In general, as far as a single coal mine is concerned, design capacity doesn’t mean its actual output, which needs to be matched by the real demand for mining and conveying equipment that could be able to meet the planned capacity. Besides, the requirements are quite rigorous to the process of manufacturing. When the economy is booming, quality requirements for stability and efficiency tend to be higher. The larger a firm’s capacity is, the heavier mining equipment is in weight and the stricter standard is to be set on manufacturing to make the host machines more efficient and more intelligent. Accordingly, downtime losses would be enormous once unexpected failure happens. Therefore, making purchase of critical ingredient product is required to go through more rigorous procedures of decision making in rational mentality. Another controlled variable we need to pay attention to is the working age in purchasing positions, which requires both good judging skills and cumulative working experiences in the relevant posts. The higher your working age is, the stronger your previous trust inertia and cognition will be. In addition, a reinforcing factor is, industrial market is a market that is more in favor of those professional suppliers, who are often staffed with both competent and experienced practitioners to support their business. A third one is educational background. To the entire coal-mining industry in China, technical personnel hold an increasingly important position for its further development. In general, production operation of a specific mining project is largely reliant on the level of your staff’s educational background as a whole. The higher that level is, the more likely your managerial expectations will be fulfilled on a wide range of business performance indicators like safety, efficiency, stability, innovations and so on. Apart from that, a fourth one we should not ignore is the extent to which a specific product is considered critical. It will be illustrated separately latter on in our study. Lastly, we will take some intrinsic attributes, such as importance and technical uncertainty of ingredient branded product, as a final one for our subsequent illustration as well. This is due to the fact that industrial equipment can be further sub-categorized depending on a series of different applications, which can affect the role ingredient products play as an integral part of it. By doing so, we are able to ensure all the products and brands we pick are fully compliant with our classification of defining importance. All the five controlled variables we mentioned above are set to have direct effect to some extent, for which we will make detailed data analysis one by one based on the results from our surveying.

(5) Induced variables – Customer satisfaction and Customer loyalty

Relevant theories concerning customer satisfaction are in collective belief that there is a functional relationship between user loyalty and user satisfaction. In marketing, customer satisfaction can be interpreted as the overall assessment or evaluation made by a customer from comparison of what he or she expects from a product or service to the real experience in consuming that product or service. In other words, it is cumulative emotional appeal a customer has from the perception of a product or service, providing a way to measure how good it is in quality.

Customer satisfaction is fundamental to customer loyalty, whereas customer behavior analysis is a basic part of the theories concerning customer loyalty. As the analysis assumes, highly frequent purchase is a good indicator of customer loyalty as it is hard for a firm to monitor how customers behave psychologically. In this sense, customers’ behavior is best reflective of their loyalty. In terms of measuring it, Tucker defined it as repeat purchase for three (3) consecutive times, while Lawrence defined it as four (4) times in a row as to repeat purchase. Besides, Raj, S. P. raised a different point of view to both arguments above, claiming customer loyalty should be expressed as a ratio of the number of times a given brand is picked, to the total number of times all brands of the same category are picked by the same customer. Jacoby and Chestnut took a further step to explore what implications loyalty would have psychologically. According to Richard Oliver’s explanation, customer loyalty was defined as natural intention or sense of responsibility for continued repeat purchase of preferred product or service, regardless of any influence imposed by those external factors such as marketing, switching or the likes.

In conclusion, customer loyalty is more than behavioral loyalty which features repeated purchase. It is also inclusive of attitudinal loyalty which is a combination of both positive, preferential attitude and repeat purchase (Yong LIU, Yun JIA, 2006). Therefore, composite loyalty is what could be fully reflective of customer loyalty, not only in behavior but more importantly in attitude. Back to our study, we will also take composite loyalty to measure how much does a customer stay loyal to the subject brands. In this case, we will do the survey in these two (2) dimensions with two (2) corresponding questions, which are ‘I will continue to use the product of this brand name in the future’, to measure behavioral loyalty and ‘I don’t care whether or not the price of the brand I’m using is slightly higher than that of another brand’, to measure attitudinal loyalty.

Thank you awaiting our next release…..

For contact with the author, please email to shanshan@towermind.com;

For contact with the editor, please email to yangls@skiplifting.com