Application of Consumer Based Brand Equity with Umbrella Brand FMCG-Staples products

Dr. P. Ganesan Professor in Marketing School of Finance and Banking Mburabuturo Gikondo Kigali Rwanda sumigans10@rediffmail.com

Mr.V. Sampath Vice President (Operations) VIT University Vellore 632 014 Tamil Nadu, India Ms.Anussha MBA Student VIT Business School VIT University Vellore

Key Words: Umbrella Branding, Brand Equity, Staple Foods, Consumers

Application of Consumer Based Brand Equity with Umbrella Brand FMCG-Staples products

With various objectives including saving and/or reduction of marketing costs, goods and/or services firms adopt the concept of Umbrella branding. The companies with single-product (such as four wheeler Car Company) and multi-product company (such as FMCG Company) follow the strategy of umbrella branding for its product(s). The premise of umbrella branding is not making any difference between the markets also, that is, there is no different between developing economy market (like Rwanda an East African country) developed economy market (like USA or UK). Wernerfelt (1988), in his study used the term Umbrella Branding (for the first time in the economics / marketing literature) in explaining the signalling model and stated " ..... a monopolist can use umbrella branding to send a noise-free credible signal about the quality of a new product. In the present context, whether a firm is a monopoly or not, trying the strategy of umbrella branding for its product and/or services to take several advantages from the market. Many empirical studies have examined the umbrella branding products / services with respect to advertising efficiency (Tauber, 1981), impact of recall and recognition (Leigh, 1984), effect of promotional activity (Manchandra, Ansari and Gupta, 2000), and spillover effects of advertising and other market mix/sales promotion strategies (Erdem and Sun, 2002). Wernerfelt (1988) emphasized that the umbrella branding serves as a nondissipative signal in a supergame model in which the firm introduced a possibly infinite stream of new products. In an another study Erdem (1998) provides a framework to analyse the impact of marketing mix strategies, consumer perceived risk, and consumer choice behaviour in a different category. The present study, in respect of Umbrella branding, not re-researching the advertisement effectiveness and efficiency or spillover effects with Indian context. There are pleathro of studies on measurement of brand equity based on dimensions proposed either by Aaker (1996) and / or by Keller (2001) with single product and / or services. These pleathro research on brand equity done accorss product and services to mention few: Durable

products-cars, television (Ravi Pappu, Pascale G. Quester and Ray W.Cooksey, 2005) and watches (Lassar, Mittal and Sharma, 1995), beverage industry (Eda Atilgan et al., 2005), washing machines (Villarejo-Ramos and Sanchez-Franco, 2005), apparel brand (Kim,

Knight and Pelton, 2009 and Hyun-Joo Lee, Archana Kumar and Youn_kyung Kim, 2010) . To mention on Services Brand equity: three service products like movie theaters, hair salons and pest control (Krishnan and Harline, 2001), bank credit cards (Marisa Maio Mackay, 2001), e-tailing (Christodoulides et al., 2004), hotel brand equity (Kayaman and Arasli, 2007, Woo Gon Kim, Bongran Jin-Sun and Hyun Jeong Kim 2008 and Jing Bill Xu and Andrew Chan, 2010), B2B financial services (and Taylor, Hunter Lindberg, 2007 and Galina Biedenbach and Agneta Marell, 2010), logistic services (davis, Golicic and Marquardt, 2009) and hospital marketing area (Kim et al., 2008). It can be noticed that the majorty of

researchers have done the work based on single product or services. The present study differs in terms of assessing the brand equity of Umbrella brands under Fast Moving Consumer Goods (FMCG) Staples food product category which includes Atta, Salt and Spices. Research Questions and Model 1. Does brand equity differ among the place of residence of the respondents between product category Atta / Salt / Spices? 2. Is there any similarity across the product category on the impact of Brand Equity factors on the dependent factor (a) Brand Loyalty and (b) overall Brand Equity across the product category Atta/Salt/Spices? and 3. What the brand loyalty index and brand equity index across the product category Atta / Salt / Spices? Model Specification The model consists of Brand Loyalty / Overall Brand Equity as the dependent variable(s), the Brand Equity factors: Brand Knowledge, Brand Image, Perceived Quality, Customer Satisfaction, Price Deals and Brand Personality as independent variables. Brand Loyalty act as an additional independent variable when overall Brand Equity is a dependent variable in an another model. Model A (without dot-lines) from hypotheses (1a to 1f) depicts the positive effect of the explanatory variables: brand knowledge, brand image, perceived quality, satisfaction, price details and brand personality with the dependent variable brand loyalty. Model B (with dot-

lines) from hypotheses (2a to 2g) exhibits the positive effect of the explanatory variables: brand knowledge, brand age, perceived quality, satisfaction, price details, brand personality and brand loyalty with dependent variable brand equity

Brand knowledge Brand image

2b 1b 1c 2c 2d 2e 1f

1a 2a Brand loyalty 2g Overall Brand Equity 2f

Perceived quality Satisfaction Price deals

1d 1e

Brand personality Methodology

Under this study, it is intended to identify the Brand equity under Umbrella Branding Product Lines of the ITCs (Indian Tobacco Company) staple product. Descriptive and Analytical The selected study area

approach was employed in order to answer the research questions.

for conducting the study is Coimbatore District, including the Coimbatore Corporation which one of the growing metropolitan city in Tamil Nadu, India. The study area is selected on the basis of convenience, however, the target shops are from rural, semi-urban and urban areas of Tamil Nadu, southern India . Women both working and housewives who purchase staples are the sampling unit. Since the population is large and unknown, non-probability sampling method - convenient sampling is followed in the selection of the sampling unit. The customers (that is consumers of Branded and Unbranded Staples) are selected based on the convenience sampling. The size of the 330 respondents was given the responses related to the study. The primary data were collected on brand equity measures with the help of structured questionnaire. However, at semi-ruban and urban area, the required information was collected through self-administered survey method and Personal Interview method was adopted in the rural areas respondents (because the questionnaire was designed in English language only). The five point Likert scale is used to indicate the degree of agreement and disagreement with a variety of statement related to the perception of the respondents towards the parameters of measuring Brand equity (the scales of Brand Equity

Dimensions are adopted from the study of Aaker, 1991). In order to analyze the primary data collected both conventional and non-conventional tools were employed. With regression equation, by adopting the Analytical Hierarchy Process (AHP) as suggested by Saaty T.L (1994) and adapted by Punniyamoorthy and Prasanna Mohan Raj (2007), the brand equity index is measured between three products: Atta, Salt and Spices. Table 1 reveals the reliability values of the dimensions of service quality and business performance of organizations of the business customers. It is noted that the cronbach alpha values are higher than suggested value. Though the adapted scales reliability values should be greater, in this case the values not below the value 0.747 with atta, 0.782 with salt and 0.787 with spices. Table 1: The reliability value for the brand equity dimensions Brand Equity Dimensions Brand Knowledge Brand Image Perceived Quality Satisfaction Loyalty Price Deals Brand Personality Overall Brand Equity Results and Discussion The ANOVA test was employed to understand and measure the staple products brand equity dimensions are same across the stores: modern stores, supermarkets, retail outlets, and grocery stores. The results of F-value (Table 2) demonstrate the brand equity dimensions between staple products: atta, salt and spices. The brand knowledge between four types of store is the same with regard to atta (F=0.973) and salt products (F=1.652), but is different with respect to spices products (F=4.227) with statistically significance. The mean value of spices also supports the statistical significant F-value. Except the brand knowledge dimension, there is no difference between four types of stores with all other brand equity dimensions: brand image, perceived quality, satisfaction, loyalty, price deals, brand personality and overall brand equity. Atta 0.934 0.950 0.949 0.747 0.904 0.899 0.929 0.962 Salt 0.931 0.979 0.961 0.913 0.941 0.876 0.782 0.933 Spices 0.949 0.976 0.935 0.863 0.934 0.853 0.787 0.936

The significant difference between four stores with spices product is attributed by the brand awareness and association of the brand knowledge dimension which indicates the breadth and depth of recall due to promotion strategies of the company are high with atta and salt, thus results the brand knowledge among the customers of four types of store is same. The promotion strategies with spices product created the brand strength among customers is not the same between the stores in general and very low with grocery stores (as indicated by the mean scores). Table 2: Brand Equity Dimensions Brand Knowledge Brand Image Brand Equity Dimensions between staple products and between shops Atta Salt Spices 1 2 3 4 1 2 3 4 1 2 3 4 .89 .51 .58 .61 .41 .32 0.44 .27

3.90 3.69 3.50 3.39 1.36 2.18 2.26 1.82 1.56 1.87 1.37 F=0.973 F=1.652 F=4.227* 3.71 3.24 3.26 3.25 .96 1.70 1.83 1.82 .99 1.11 .68 F=0.489 F=0.826 F=2.151 Perceived .93 1.68 1.99 1.91 .93 .98 .58 .58 .93 .98 .58 Quality F=1.149 F=1.276 F=1.276 Satisfaction 3.85 3.45 3.31 2.99 .60 1.68 2.02 1.70 .55 .91 .65 F=1.985 F=2.036 F=0.687 Loyalty 3.87 3.30 3.27 3.09 .67 1.52 1.95 1.65 .63 .89 .62 F=1.145 F=2.065 F=1.408 Price Deals 1.40 1.17 .96 1.39 .50 .59 .54 .77 .35 .52 .47 F=1.157 F=0.361 F=0.790 Brand 2.30 2.67 2.48 2.49 0.50 0.85 1.11 0.73 0.60 0.56 0.75 Personality F=0.191 F=0.953 F=0.631 Overall 1.35 1.88 2.23 2.56 .55 .59 1.48 1.15 .55 .23 .54 Brand Equity F=1.927 F=4.102* F=1.334 Note: 1 is Modern stores, 2 is Supermarkets, 3 is Retail outlets, and 4 is Grocery stores

The regression results of the determinants of brand loyalty and brand equity (Table 3) produces the mixed results of the hypotheses stated in respect of the three products: atta, salt and spices. The adjusted R2 value (atta = 0.88; salt = 0.911; and spices = 0.94) of the brand loyalty model explains the high percentage of variation in brand loyalty of the products selected is explained by the brand knowledge, brand image, perceived quality, price deals, brand personality and satisfaction. With the determinants of brand loyalty, only satisfaction is a strong predictor and had positive impact on the brand loyalty with all the three products: atta ( = 0.87, t=18.62), salt ( = 0.754, t=16.20), and spices ( = 0.726, t=18.41). The

estimated coefficients of customer satisfaction on brand loyalty supports the findings of K.H. Kim et al., (2008). In addition, brand image variable is positively influencing the brand loyalty with salt ( = 0.121, t=2.27) and spices ( = 0.123, t=2.74) but with atta, the positive impact is statistically insignificant ( = 0.01, t=0.28). Thus among the hypotheses, only 1d is accepted and other hypotheses 1a, 1c, 1e, and 1f are not accepted. Hypothesis 1b is partially accepted with salt and spices but not with atta product. Table 3: Determinants of Brand loyalty and Brand Equity Atta Brand Loyalty 0.01 (0.06) 0.10 (1.83) 0.01 (0.28) 0.00 (0.16) -0.01 (-0.40) 0.01 (0.30) 0.87 (18.62*) Brand Equity 2.317 (5.01) -.265 (-1.15) .172 (0.88) .066 (0.87) -.001 (-0.01) -.130 (1.53) -.412 (-1.18) .541 (1.65) .004 1.09 Salt Brand Loyalty .039 (0.62) .029 (0.63) .121 (2.27**) .025 (0.742) .040 (1.00) .029 (0.81) .754 (16.20*) Spices Brand Brand Equity Loyalty .492 -.040 (2.97) (-1.26) -.078 .037 (-0.65) (1.69) .158 .123 (1.13) (2.74*) 0.265 .090 (3.07)* (2.07*) -.303 -.042 (-2.94)* (-1.45) .075 -.028 (0.83) (-1.09) -.159 .726 (-0.83) (18.41*) .624 (3.16*) 0.30 0.94 11.93* 440.47* Brand Equity .167 (1.64) .087 (1.22) .026 (0.18) -.055 (-0.39) -.070 (-0.76) .286 (3.52*) -.152 (-0.70) .094 (0.38) 0.06 2.70*

Constant Brand Knowledge Brand Image Perceived Quality Price Deals Brand Personality Satisfaction Loyalty Adj. R2 F-Value

0.88 221.39*

.911 303.27*

The results on brand equity dimensions and its effect on overall brand equity indicates no dimensions have had significant effect on the overall brand equity of atta which also supported by the adj.R2 (0.004) of the regression equation related to atta. Thus, all the hypotheses: 2a, 2b, 2c, 2d, 2e, 2f and 2g are not accepted. With salt product, among seven variables loyalty ( = 0.624, t=3.16) and perceived quality ( =0.265, t=3.07) are significant variables and have had positive impact on the overall brand equity. Thus, among the hypotheses: 2c and 2d are supported, and 2g is not supported. The hypotheses 2g related price deals (=-0.303, t=2.94) has negative effect on overall brand equity of salt, indicates the customers are price sensitive to the salt product due to the availability of other brands and private label in the study area. The seven dimensions of brand equity collectively explains 30

per cent of variations in overall brand equity of salt. With spices product, except hypothesis 2g viz., brand personality ( =0.286, t=3.52), no other variables predicts the overall brand equity of spices. The adj.R2 (0.06) which is very low illuminates only 6 per cent of

variations in overall brand equity of spices explained by the brand equity dimensions. Umbrella brands brand loyalty did not have direct effect on brand equity of atta and spices, supports the empirical findings of K.H. Kim et al., (2008), but not with salt. Also, the brand equity empirical estimates are similar to the beverage industry study of Eda Atigan et al (2005) with respect to atta and spices. The parameter estimates of perceived quality did not support the findings of Eda Atligan et al., (2008), but supports brand loyalty on brand equity. Table 4: Brand Loyalty and Brand Equity Index across the Staple Products Products Atta Salt Spices Brand Loyalty Index 8.034 7.059 6.748 Brand Equity Index 42.98 39.69 7.69

The estimated partial coefficients of the brand loyalty determinants and brand equity dimensions (Table 3) with their relative weightage with average scores on five point scale was used to construct the brand loyalty index scores and brand equity index scores for the products: atta, salt and spices. The brand loyalty index score exhibits (Table 4) among three products under the same brand name, atta enjoys high score (8.034) compared to that of salt (7.059) and spices (6.748). The brand equity index scores for the umbrella brands reveals atta with highest brand equity score of 42.98 weights, followed by salt with 39.69 weights and spices with 7.69 weights.

Conclusion and Managerial Implications

The present research had little diversion from the plethora of brand equity research studies with applying customer brand equity measurements with umbrella brands of staple products: atta, salt and spices on the one hand, and comparing four types of stores with the selected products. The comparison of atta brand with four types of stores elucidates no significant difference and the similar findings observed with salt brand. Though other six dimensions did not exhibit any difference, brand knowledge significantly differ between stores with spices. The examination of effect of brand equity dimensions on brand loyalty with umbrella brands

signifies the satisfaction is the strong predictor on brand loyalty with all products, additionally the brand loyalty of salt also influenced by the brand image and brand loyalty of spices influenced by brand image and perceived quality. The effects of brand equity dimensions on umbrella brands brand equity did not show evidence of the commonality across three products. Brand equity dimensions are not the main determinants of the umbrella brands brand equity, the marketing activities of the company from the product attributes, image of the channel members including store, heavy promotion strategies etc do have strong effect on the brand equity of the umbrella brands.

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Further Readings Boonghee Yoo and Naveen Donthu (2001), Developing and validating a multidimensional consumer-based brand equity scale, Journal of Business Research, Vol.52, pp.1 14. Isabel Buil, Leslie de Chernatony and Eva Martinez (), A cross-national validation of the consumer-based brand equity scale, Journal of Product and Brand Management, Vol.17 (6), pp.384 392. Judith H Washburn and Richard E Plank (2002), Measuring brand equity: An evaluation of a consumer-based brand equity scale, Journal of Marketing Theory and Practice, Vol.10 (1), Winter, pp.45 62.