Dxblends Cafe – The Impact of Brand Image on Consumer Buying Behavior and Brand Loyalty

 

Use MGT524 word document to write the following: Please write the following parts of the research paper:2. Research context & Background (400 words)4. Research question(s) or research problem and hypotheses (300 words)6. Literature Review (100 words) add 1 intro literation review about Brand image impact on customer buying behavior and brand loyalty7. Methodology (500 words). Quantitative method (online survey will be used for this project, SPSS will be used for analysis

2.      Research context & Background

The number of entities in each industry has compounded over the past few years, leading to unprecedented competition in most, if not all, sectors. For example, a PRNews Wire report reveals that the coffee shops market worldwide is expected to grow by 4.1% by a value of US$58.7 billion in the coming years (“Global coffee shops industry” 2019). This data exemplifies the significant manner in which the coffee industry is growing as new players penetrate the market with various product offerings.

As the market becomes more saturated with sellers and competition increasing, entities choose to enhance their marketing strategies to remain relevant and visible. This move by the majority of companies has led to the significance of multiple concepts of marketing strategies such as brand positioning and brand image in brand management, as firms work towards differentiating their products from competitors. Entities have also been striving to trademark themselves in the consumers’ minds such that they become the number one choice in every purchase decision.

As mentioned, brand positioning has become a critical aspect of business sustainability and brand management in the contemporary business environment. Janiszewska and Insch (2012) note that brand positioning is an essential concept that conditions a brand’s competitive market position. Arguably, the better a brand is positioned at the functional and emotional level in the consumer’s mind, the more it is likely to influence an entity’s competitiveness in the long run. Studies also emphasize that brand positioning is crucial from a consumer’s standpoint. Notably, Azmat and Lakhani (2015) observe that brand positioning is vital in grabbing consumers’ attention and retention by forcing consumers to purchase a particular brand product or service. This information suggests that for firms to thrive in the fast-growing and competitive sectors, they have to adopt brand positioning strategies that enhance their preference among consumers.

Brand image is also a key component of marketing strategies and a critical aspect in brand management. Isoraite (2018) posits that consumers are more likely to choose a brand image representing their needs, values, and way of life. Sallam (2016) also adds that a strong brand image creates a superior brand message over its rivals. Therefore, as firms select a brand image, they must ensure that it is exceptional and unique from its competitors and closely related to consumers’ needs.

In essence, this background has provided a fundamental overview of brand image and brand positioning in brand management. Additionally, the report provided a brief idea of how DXBlends could develop its brand image. Moreover, the report highlights the potential effect that brand image and positioning could have on consumers’ purchasing decisions.

3. The purpose of the research

DXBlends’s current marketing strategy is very basic and informative only with very low presence in the market unlike the other local café brands that have been famous in the community.

This report aims to discover how a brand should trade mark themselves in the mind of a customer through their bespoke marketing strategies. Also, the report will evaluate the effects of brand image on loyalty and purchasing behaviour.

The objective is to conduct market research to gain customer insights in order to better positioning and differentiate their brand in order to build brand awareness. The market research outcome will help with coming up with a SMART marketing plan for DXBlends. This report will recommend the marketing plan that enable DXBlends to attract xx segment.

4. Research question(s) or research problem and hypotheses

Over the past decades, organizations have become more aware of the importance of brand image and positioning on the development and retention of customer loyalty. This aspect explains why a majority of entities have been working towards enhancing their brand image to create a good perception of their products among consumers. The coffee shop industry has not been an exception to this trend either. For example, scholars today attribute Starbuck’s successful penetration to other markets and increased sales to its unified brand image. Notably, Paek et al. (2012) posit that Starbucks’ unified image is an essential flagship of entry in countries such as China. Paek et al. (2012) also add that the brand image is the most important factor that increases goods’ value. In essence, organizations today have spotted the essentialness of having a strong brand image and are working towards strengthening it to enhance competitiveness in their respective sectors.

Despite the significant attention directed to the study of brand image and its impact on consumers’ loyalty and purchasing behavior, no research has explored the empirical relationship between these variables in DXBlends’ context. Based on this premise, this report aims to evaluate the impact of DXBlends’ brand image on customer loyalty and buying behavior by conducting an online survey and analyzing the data to determine whether there exists a correlation between the variables. The report also examines whether consumer loyalty may impact consumer buying behavior in the cafes’ context. The planned evaluation attempts to answer these questions:

Does DXBlends’ brand image impact customer loyalty?

Does DXBlends’ brand image influence consumer buying behavior?

Does consumer loyalty influence consumer buying behavior?

The developed research questions suggest these hypotheses, which will be proven after the quantitative study:

H₁: DXBlends’ brand image has an impact on customer loyalty

H₂: DXBlends’ brand image influences consumer buying behavior

H₃: Customer loyalty influences consumer buying behavior

5.      Research Ouput

6.      Literature Review

Brand image is an essential concept in today’s business marketing strategies; it determines the manner in which consumers perceive or remember a particular brand. Durmaz, Cavusoglu, and Ozer (2018) posits that image is thought to affect consumers’ purchasing intentions in product sales. For example, a study conducted by Durmaz, Cavusoglu, and Ozer (2018) revealed that brand image affects consumer loyalty significantly and positively. However, some studies contend the relationship between brand image and loyalty. For example, Zhang (2015) avers that brand image exerts no direct influence on customer loyalty. Instead, this effect is achieved through other mediating factors such as customer satisfaction. Brand image is also thought to affect consumer’s purchasing behavior. This perception is proven by an empirical study conducted among teenagers, which shows a practical relation between brand image and buying behavior (Durrani et al., 2015). In essence, brand image has a positive impact on brand loyalty and consumer purchasing behavior.

The growing demand for coffee and stiff competition in the specialty coffee sector calls for immediate action to enhance a brand’s visibility and ultimately boost its competitiveness and sales. One way in which firms can attain these goals is through appropriate brand positioning. Scholars define brand positioning as a competitive warfare tool that helps customers recognize the real difference among competing products by creating a distinctive image in the consumers’ minds (Saqib, 2020). In essence, brand positioning involves shaping consumers’ perception of a brand.

Scholars aver that there are numerous tactics of brand positioning. In their study, Heinberg et al. (2019) focus on nostalgic brand positioning in emerging and developed markets. The authors posit that nostalgic brand positioning is “a strategy designed to evoke positive effect in an individual by creating associations with the past” (Heinberg et al., 2019, p. 2). This brand positioning technique enhances brand equity in the market by emphasizing elements such as emotional attachment, brand authenticity, and local brand iconness. Grebosz-Krawczyk and Pointet (2020) also support this view and posit that nostalgic positioning appeals to consumers’ emotions, experiences, and memories. The authors also recommend this brand positioning strategy for fashion, food, luxury products, and cosmetics, especially perfumes.

Prior studies have tested the correlation between consumer emotions, satisfaction, and loyalty intentions. A survey conducted by Kuhn (2018) reveals that a coffee shop customer’s dining experiences influence customer satisfaction and positive consumption emotions. The positive consumption, in turn, mediates the dining experience and consumers’ loyalty intentions (Kuhn, 2018). In essence, consumers’ emotions are vital in influencing subsequent purchase intentions and brand loyalty. This perspective supports the idea of the ability of nostalgic brand positioning, which is based on emotional attachment, authenticity, and memories, to influence customer loyalty to a given brand.

However, the literature also reveals that nostalgic positioning does not yield uniform benefits in all markets. According to Heinberg et al. (2019), nostalgic positioned brands in developed markets reap minimum gains from enhanced brand innovativeness, unlike in emerging markets. Hence, this view suggests that brand innovativeness is well suited for emerging markets such as the UAE’s coffee specialty sector.

Besides brand positioning, market targeting is also a vital element in a firm’s operations. Petrovski and Neto (2017) aver that market targeting is critical for Kano Model’s effectiveness. The Kano model is among the earliest proposed models of measuring customer satisfaction (Rotar & Kozar, 2017). Lin et al. (2017) also add that the Kano model helps understand customer needs by identifying and classifying the quality attributes. For a firm to effectively use the Kano model to assess and enhance customer satisfaction, it must have a clear audience selection from whom the requirements of their demand can be derived. Kotler also mentions that targeting is essential because it helps firms identify a specific set of consumers and avoid resource wastage (cited by Petrovski & Neto, 2017). Arguably, firms with a clearly established set of consumers can identify the former’s requirements and direct resources to complete satisfaction of these needs, thus avoiding wastage as would be the case of serving an undefined population.

Existing literature also proposes multiple consumer targeting strategies, with the most common being differentiated and mass targeting. According to Gioko (2017), mass targeting, also known as extensive targeting, aims at a broad consumer market that desires the same product attributes. Nadube and Didia (2018) also state that extensive targeting is suitable for firms with established businesses in related markets. This information suggests that mass targeting may be well-suited for large firms with numerous businesses in the same market.

On the other hand, differentiated targeting is proposed for businesses with different nature of product portfolio. As noted by Akbar et al. (2017), differentiated targeting, also known as micromarketing and niche marketing, focuses on specialization, constricted markets, and long-term relationships. Compared to large firms, SMEs are more suited for differentiated targeting because of their low-cost budget. Besides, SMEs’ need to build consumer loyalty and develop a close and lasting relationship with their clients deems differentiated targeting suitable in their operations.

As firms outline their set of consumers, they must also craft an appropriate marketing strategy to understand consumers’ needs and wants better and ultimately drive purchases. According to Bianchi et al. (2017), social media is among the methods integrated into contemporary businesses as a high strategic priority and a medium of engaging with customers. As a strategic priority, social media marketing qualifies for holistic brand management in SMEs, as proposed by M’zungu, Merrilees, and Miller (2019). Appel et al. (2020) argue that the widespread use of social media as a marketing strategy by marketers is supported by the significant audience available on social media and across various sites.  For example, a Facebook report shows that as of September 2018, the site had 2.27 billion and 1.49 billion monthly and daily active users (Facebook, 2018). As averred by Bianchi et al. (2017), s-commerce is a combination of social and commercial activities occurring on social media platforms. Social media as a tool for engaging with customers and initiating sales gives rise to a new concept of s-commerce in marketing.

Studies also examine social media marketing as a holistic concept in marketing. According to Godey (2016), social media marketing efforts incorporate five aspects; entertainment, interaction, trendiness, customization, and word of mouth. The interactivity dimension entails facilitating content and views sharing with a firm and other customers (Yadav, 2018). Notably, a social media strategy that is interactive is ideal because it allows consumers to share content about a product, enabling firms to gain an insight into consumers’ expectations of a product.

Studies also reveal that personalization is essential in social media marketing. Yadav (2018) argues that personalization reflects the degree to which an e-commerce site offers tailored services to fulfill customers’ preferences. According to the author, personalized social media marketing is ideal because it shrinks consumers’ information costs and augments the latter’s decision quality and shopping experience. Therefore, the more personalized a social media marketing strategy is, the more likely it is to enhance consumers’ shopping experience, satisfaction, and brand loyalty.

Studies also show that informativeness, trendiness, and word-of-mouth are critical dimensions of a social media marketing strategy. On the one hand, Yadav (2018) avers that informativeness is the degree to which social media marketing offers accurate, comprehensive, and useful information, while trendiness is perceived as the degree to which social media provides trendy content. On the other hand, word-of-mouth is the perceived degree to which e-commerce’s customers share experiences on social media. Possibly, a trendy, informative, and word-of-mouth based social media marketing strategy is ideal because it provides customers with relevant and up-to-date ideas that can trigger a purchase decision.

If used appropriately, social media marketing efforts can enhance the brand’s equity, customer loyalty, and satisfaction. This view is supported by empirical evidence from a study conducted by Yadav (2018), which shows that e-commerce exhibits a positive influence on customer loyalty towards online sites. Besides promoting brand equity, social media marketing is also a cost-effective strategy for promoting a SMEs product considering its low budget.

As firms define their brand positioning, targeting, and marketing strategy, they should ensure that all this information is contained in a strategic marketing plan. Izvercian, Miclea, and Potra (2016) observe that marketing activity planning is essential in SMEs because it enables the firms to define their short term and long-term goals oriented towards sales and consumer needs and desires. The authors also believe that marketing activities help firms adapt to their sector’s internal and external environmental changes. A study conducted by Felica (2015) also reveals that a marketing plan is vital in business because it helps coordinate and regulate all marketing activities within an organization. In essence, scholars view marketing planning as a critical activity that determines a firm’s survival in the industry and ability to meet its short- and long-term goals.

Research shows that a large fraction of SMEs has either a “hasty” marketing plan or no plan at all. For example, studies conducted among Romanian SMEs revealed that two-thirds of the study respondents did not have a marketing plan or had a “hasty” marketing plan (Izvercian, Miclea & Potra (2016)). Studies conducted in Indonesia and the United States also revealed a high failure rate among SMEs, mostly attributed to the informal strategic planning process and lack of appropriate systems to help track organizational performance (Febriani & Dewobroto, 2018). Al-Maskari et al. (2019) also argue that some of the SMEs’ challenges are partially due to financial and operational issues. This view is supported by Izvercian, Miclea, and Potra (2016), who posit that the lack of financial resources, openness to a marketing orientation, and marketing research are significant contributors to a weak strategic marketing plan. The synthesis of this information suggests that SMEs’ adoption of a well-developed marketing plan may be constrained by financial factors and the former’s failure to conduct adequate marketing research.

7.      Methodology

The methodology used in this report will give an overview of the relationship between a strong marketing strategy and building customer loyalty and satisfaction. The report will also discuss the design, data collection methods, and sampling techniques used in the study. Moreover, the report will outline the variables, questionnaire design, data analysis, and ethical considerations of the study.

7.1 Approach/Design

Qualitative and quantitative methods are the fundamental approaches used in research. Scholars posit that qualitative research is inductive and mainly reconnoitres human beings’ experiences towards social phenomena to explore the essence of such occurrences. Conversely, quantitative research is a deductivist, objectivist, and positivist design that collects, quantifies, and analyses data (Salvador 2016). In essence, quantitative research helps deduct the relationship between the variables under study, while qualitative research attempts to interpret occurrences.

This report aims to study the relationship between variables; therefore, it utilizes the quantitative research design. This design helps analyze the data gathered from the questionnaire and examine whether there exists a relationship between brand image, customer loyalty, and consumer purchasing behavior. Quantitative research also helps evaluate the strength of the relationship between the variables.

7.2 Data Collection Method

Data collection differs across research depending on the nature of information required to make an analysis. In this context, online surveys are the primary data collection method. Online surveys have many benefits such as cost-effectiveness, reduced dissemination, and response time when used in research (Loomis and Paterson 2018). The survey questionnaire is created to evaluate customer loyalty and purchasing behavior in DXBlends as influenced by the latter’s brand image.

7.3 Data Sampling

The study consists of a sample size of 200 consumers selected using a random sampling technique. A random sampling technique is chosen because it has the greatest freedom from bias (Taherdoost, 2016). For participation in the study, consumers must have shopped at least once in DXBlends. The survey questionnaire is published in DXBlends’ intranet system to allow a vast reach to the café’s consumers.

7.4 Design of the questionnaires

The online survey questionnaire consists of four parts with close-ended questions. The first group of questions requires the filling of the participants’ demographic information. Participants are required to fill questions about whether DXBlends’ brand image influences their loyalty and buying behavior in the second and third set of questions. The fourth part of the questions has a 5-point Likert-scale, and respondents are expected to rate the degree to which customer loyalty influences their buying behavior.

7.5 Variables

The following section discusses the two variables: dependent and independent, used to test the report’s hypothesis.

7.5.1 Dependent Variables

Customer loyalty and consumers’ buying behavior are the two primary dependent variables in this research. The two variables are the central focus in the three research questions related to examining consumer loyalty and buying behavior and the relationship between the two variables. The argument by Durmaz, Cavusoglu, and Ozer (2018) on the effect of brand image on consumer loyalty forms the basis for the two research questions.

7.5.2 Independent Variables

Brand image and customer loyalty are the primary independent variables in this report. These variables consist of three questions that test the former’s effect on the dependent variables. The first and second question tests the impact of brand image on customer loyalty and consumers’ purchasing behavior. The third question tests the influence of customer loyalty on consumer’s purchasing behavior.

7.6 Data Analysis tools

The obtained data is analyzed using the SPSS tool. This tool is selected because of its ease in processing complex statistical survey data. Arguably, the use of SPSS ensures that adequate data is mined from the surveys to facilitate the research’s completion.

7.7 Ethical consideration

Ethical considerations are of top priority in the planned research. Some of the ethical aspects considered in the study include privacy and autonomy and crediting authors for their works. Notably, the study participants’ information will not be shared with third parties and will be used primarily for the intended research purpose. Moreover, any information obtained from other original writers will be cited appropriately to give credit to the authors.

 

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