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THE ELEMENTS OF MARKETING MIX AND ITS EFFECT ON CUSTOMER

BASED BRAND EQUITY

NANGRANI VARUN-BO51

KHAIRA VEDANT-BO52

MALOO VEDANT-BO53

PATHELLA VEDANT-BO54

MITHIA VISHESH-B055

INTRODUCTION TO THE STUDY

A widely accepted definition of the marketing mix is the four Ps - product, price, place and
promotion as proposed by McCarthy (1960). The marketing mix represents the controllable
elements of marketing that collectively form the basis for customers’ perceptions of an
organization . Different organizations based on different needs and purposes apply one or
more elements of the marketing mix to degrees that may differ by organization.

Effective use of the marketing mix is important to any organization. For any brand those
areas include price, brand image, distribution intensity, advertising, and price promotion, all
of which can affect consumer choice and customer based brand equity.

To define the marketing mix elements in brief:-

Price is defined as the only element in the marketing mix that produces revenue; the other
elements produce costs. In the marketing mix model, companies adjust price to gain expected
profits and/or market share from the revenue.

A product is an item that satisfies a need or a desire. This can be a physical item, a service or
a virtual offering. It is produced at a cost and is subsequently made available to the right
audience at a price.

As part of the marketing mix, promotion includes all activities that involve communicating
with the customer about the product and its benefits and features. Once a company has
worked on the product and price elements, it is time to start a conversation with the consumer
about the product.

In the marketing mix, the process of moving products from the producer to the intended user
is called place. In other words, it is how your product is bought and where it is bought. This
movement could be through a combination of intermediaries such as distributors, wholesalers
and retailers. In addition, a newer method is the internet which itself is a marketplace now.

Through the use of the right place, a company can increase sales and maintain these over a
longer period of time. In turn, this would mean a greater share of the market and increased
revenues and profits.
Correct placement is a vital activity that is focused on reaching the right target audience at the
right time. It focuses on where the business is located, where the target market is placed, how
best to connect these two, how to store goods in the interim and how to eventually transport
them.

To define Brand equity:

Brand equity is defined as a set of brand assets and liabilities linked to a brand, its name and
symbol, that add to or subtract from the value provided by a product or service to a firm
and/or to that firm’s customers. Moreover, the responses of customers in the marketplace to
the brand of a product positively correlated with the brand equity of this product. Brand
equity is categorized into five dimensions, including brand loyalty, brand awareness,
perceived quality, brand associations and other proprietary brand assets. Of the five
dimensions, from the consumers’ perspective, brand loyalty, brand awareness, perceived
quality, and brand associations are the most important four dimensions of brand equity.
Brand equity either increases or decreases brand value for customers. Brand equity can
influence customers’ decisions when purchasing products. Well-recognized and
acknowledged brand images for customers will become highly valuable assets for a firm to
take advantage of in competing in the market place.

Therefore, focusing efforts to enhance a firm’s brand image and maintaining adequate brand
equity are important strategies for managers and their firms. Brand equity creates value not
only for customers but also for firms. Therefore, when consumers have a positive perception
of a brand, the firm will have a competitive advantage.

To define customer based brand equity:

Customer-based brand equity is defined as consumer reaction to different brands from


marketing strategies when consumers have diverse brand knowledge. Brand knowledge
includes two components - brand awareness and brand image. In addition, brand awareness
relates to brand recall and recognition performance by consumers and brand image refers to
the set of associations linked to the brand that consumers hold in memory.

PURPOSE OF THE STUDY

The broad general purpose of this study was to investigate the relationship between elements
of marketing mix and customer based brand equity.

Literature Review

The customer based brand equity can be predicted by the elements of marketing mix such as price,
advertisement, spending, delivery, and product. Brand equity is mainly influenced by store image,
distribution intensity and pricing deals. These factors were analyzed using marketing mix scale and
customer brand equity scale. There is an inverse relationship projected between price and consumer
based price equity. When it comes to brand equity price has more weightage over advertisement. (Hui
Chu Chen, 2017) It was noticed in certain papers that consumer goods, awareness and quality
influences the most and price does not play a major role in the same e.g. Mobile phones. The
distribution intensity of a product also plays a mandatory role in maintaining brand equity. (Shafi,
Syed, Irfan Madhavaiah, 2013) The four P’s of marketing are not completely reliable whereas, the
marketing strategy which focusses on customer preferences and demands should be adopted. Social
media platforms also play a mandatory role in creating brand awareness and brand equity. (B.K.
Suthar, R Lathangi, Dr. Shamal Pradhan, 2014) There exist a significant positive relation between
brand loyalty and factor of marketing mix. Brand loyalty is simply created by customers perception
towards the product. (Abhishek Misra, 2015) Brand equity is an important factor in the competitive
market. It’s mostly believed that high price leads to high quality. Advertising develops brand
awareness and high associations. (Futhian S, Slambolchi A, Hamidi K, 2015) The pricing of a product
affects brand equity through effective perceived quality. Maintaining brand loyalty which is
significantly impacted by corporate image which is created by maintaining proper pricing, a good
distribution channel and smooth after sales promotion. (Hamid Taboli, Neda Pariz, Masoud Vafada,
2017) The short term actions of a firm in the field of promotions, price deals, etc. lead to the creation
of a permanent or a long term brand value or brand loyalty for a firm. The introduction of new
products is beneficial for a firm only if the marketing promotions are carried out efficiently to achieve
or maintain brand loyalty (Rebecca J, Slotegraaf, Koen Pauwels, 2008) Perceived quality is one of the
most important variable of brand equity. This was concluded after performing various analytical
techniques by Parisanezami. (Parisanezami, 2013) The impact on brand equity cannot be generalized
as it depends on the firm and variables which are more relevant to a firm but, might not be for another
and hence, there can also be other models designed for impact on brand equity. (Mirza Hassan
Hosseini, 2013)

Research methodology

To conduct this study we have used primary data obtained from a questionnaire filled by 100
random people in a shopping mall in malad.

We have then used an excel tool to obtain graphs for the purpose of estabilishing which
marketing mix element affects the customer based brand equity the most.

The questionnaire contained all the elements of marketing mix which are
price,promotion,product and place mix.

Limitations of research methodology

1)Sample size does not represent the entire population.

2)Those who were not brand loyals could not complete the study

3)Information is not 100% accurate as it was filled in a haste.

DISCUSSION AND ANALYSIS


Count of Are you a brand loyal?

No
Yes

The above graph depicts the importance of creating,developing,maintaining and measuring


the brand equity for a company.In a country like india where the consumer is the king,we can
see from our sample population that about 94 people were brand loyal to one or the other
brans such as FMCG brands,consumer durable and non durable brands etc.Only six people
were not brand loyals and we had to make up a hypothetical situation for them to complete
the questionnaire.

Thus in order to survive the cut throat competition,companies need to continue keeping
customers happy so that they remain loyal to their brand for a long period of time.

Count of Income

20%

0-20000
40%
100000 and above
20000-50000
24% 50000-100000

16%

As we can see in the above graph most of our respondents have a monthly income of less
than 20000 rupees(40%).This greatly affects the criteria that determines their brand
loyalty.As we know the per capita income of india is substanically low,companies should be
very careful while making a decision regarding pricing of the product.
What has led you to become Brand Loyal?
60

50

40

30
Total

20

10

0
Distribution Price Product Promotion

Relationship of brand loyalty and price

As we can see in the above graph,price is the major determinant in a person being loyal to a
particular brand.We can relate this to the income level of our respondants as well as relate it
to the socio- economic scenario in our country.

INCOME LEVEL

• LOW INCOME CLASS:

India as a country has a very low per capita income and the market is very price
sensitive.India is a growing market and thus there are a lot of entrants into the market which
creates an atmosphere of severe competition.As we can see in our income graph,most of our
respondants have an income level of less than 20000 rupees.This makes them highly
responsive to the prices of the products.Any increase in the price of the product might make
them change their loyalties towards a particular brand.Thus,there is an inverse relation in
price and brand loyalty for lower income groups.

• UPPER INCOME CLASS:

This group of people take pride in owning a product that is highly priced and which serves as
a social status.They percieve that higher prices mean better quality of product and it is these
high prices that make them loyal to a particular brand.For ex:A person who wears a rolex
watch will not be best pleased if Rolex reduces their prices significantly and may switch his
brand to maybe HUBLOT.

Relationship of Brand loyalty and Product

As we can see in the graph,The product is the second major determinant of brand loyalty.If a
consumer has a good experience after using a product of a particular brand,he is more likely
to purchase the same product as well as try other products of the same brand under the pretext
that the product quality is standardized.The consumer is also more likely to spread good word
of mouth for the brand if its product is of good quality and is value for its price.

In an age of cut throat competition where companies are having price wars,those who have a
superior product are the ones who are likely to survive.

For ex:Pepsi and Coke are priced in a similar range,but it is the quality of the product that
makes indivdiual consumers loyal to one or the other brand.

What has made you aware of the brand?


45
40
35
30
25
20
15
10
5
0
Attractive Prices Availability Promotional efforts Superior products

Relationship of brand awareness and promotional efforts

As we can see from the above graph brand awareness is enhanced by promotional activities.If
the business organisation takes efforts to communicate to the public about their offerings,this
will lead to creation of brand awareness.

If the consumers are unaware of the firms offerings,they are never likely to try the product
and hence there will be no brand equity.

For ex:-xiaomi has superior products but never spent money on promoting their products and
this eventually lead to a stagnant sales volume even though the quality was top notch.Thus,in
order to increase their sales the company has started spending money on promotion efforts
which is helping the company.

Relationship between brand awareness and availibility(place mix)

As we can see in the above graph,the ease with which the product is available in the market
also helps a consumer to be aware of a particular brand.In the fast moving world of today if a
product is not available,the consumer would readily move to the next best alternative and this
would be a customer lost.
Therefore,it is the duty of a company to make efficient use of its place mix in form of
distribution channels to ensure that the products are available in majority of the areas.This
constant exposure of the product to the consumers is essential to make the consumers aware
of the brand.

For example,some companies who used to solely focused on e selling have started expanding
their operation base by selling in retail stores as well.

CONCLUSION

Two main elements comprise of customer based brand equity that are brand loyalty and brand
awareness.We can successfully conclude that price,promotion and availibility has a
significant impact on brand loyalty and brand awareness and thus has an even greater impact
on customer based brand equity.

Thus,if a company wishes to survive in this day and age of competition,they must devise
marketing stratergies aimed at improving the customer based brand equity and they must also
change with change in times and in the needs and preferences of consumers.

"Your brand is what people say about you when youre not in the room"

- Jeff Bezos,Ceo of Amazon.

BIBLIOGRAPHY

Omicsonline.org. (2018). [online] Available at: https://www.omicsonline.org/open-access/the-


relationship-between-elements-of-marketing-mix-and-brand-equity-2223-5833-1000173.pdf
[Accessed 15 Mar. 2018].

Rajh, E. and Ozretić Došen, Đ. (2009). The Effects of Marketing Mix Elements on Service Brand
Equity. Economic Research-Ekonomska Istraživanja, 22(4), pp.69-83.

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https://www.cleverism.com/place-four-ps-marketing-mix/

Abstract:
This study was conducted with the aim of reviewing the impact of marketing on brand equity
elements. Marketing mix elements include price, product, promotion and availability while
brand equity elements selected were Brand loyalty and brand awareness. The primary data
was collected using a questionnaire filled by 100 random people in Mumbai, India. The
findings showed that Price had the most significant impact in brand loyalty while brand
awareness was affected mostly by Promotion techniques and availability. Also this
relationship may differ from one brand to another but this were our findings based on a
general consumer overview.

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