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Abstract

The study was carried out to develop an understanding of the intricacies and utility of brand effectiveness. Starbucks expansion in Bangladesh was chosen as the scenario for which the effectiveness of brand effectiveness was tested. Primary data was collected through the survey questionnaire while secondary data was collected through a comprehensive analysis of peer reviewed publications pertaining to the subject of the study. It was observed that Starbucks brand effectiveness can be expected to provide only moderate assistance to Starbucks market development if it was to expand into Bangladesh. Starbucks will have to engage in measures designed for the specific purpose of customization and adjustment to the preferences and properties of the Bangladeshi consumers and market respectively.

Introduction

Context

A brand distinguishes the goods and services of one seller from those of competitors. A powerful brand identity creates a major competitive advantage; a well recognized brand encourages repeat purchases. Thus, a brand acts as a signal to consumers regarding the source of the product and protects customers and manufacturers from me-too products that may appear identical. Brand image consists of consumer knowledge and beliefs, stored in memory as associations, about brand attributes and the consequences of brand use (Porter and Claycomb 1997).

Branding gives a product an identity and a personality. It allows the consumer to perceive the product as an entity with tangible and intangible characteristics rather than a product that can be bought for cash. In addition, it also allows the consumer to acquire a feel of the characteristics of the product rather than simply use the product. As a result, the consumer believes that it s not the product that he/she is purchasing but it is the experience of using the product that the payment is to be made for. The practice of branding is a considerably old one but the last century has served as a platform for a significant degree of development in branding and branding practices.

Branding is now seen as a highly refined marketing strategy. It represents a consistency across the value chain of the brand. Also, brand development in recent decades has shown a tendency to surpass regional boundaries. This is because the presence of consistency in brands serves to provide the value chain members of the brand with a strong financial position. This allows the brand promoters to engage in well funded high-end marketing campaigns when expanding.

Brands affect consumers not only because of the knowledge systems that consumers carry about brands in their heads; they are also part of a psycho-social-cultural context. Consumers therefore engage in certain types of relationships with brands, similar to personal and intimate relations they form with other people. Brand relationships may be the result of imagination or actual participation in brand communities, so-called subcultures of consumption. The relationship process can generate cognitive benefits as well as positive affect and emotions that result in a bond between the brand and the consumer (Schmitt and Geus 2006).

Brand effectiveness is determined from the quality of competitive intangibles on an operational, day to day basis (Standfield 2005, p. 34).

The effectiveness of a brand is incorporated in the degree to which the brand is able to capture market share. The more the effective the brand is, the better the fundamental perception of the brand amongst the consumers. Brand effectiveness allows the product to stand out amongst the consumers and enables the brand to take a key position amongst the consumers. The more effective the brand is, the more the consumers choose to give it a priority when considering purchase decisions.

Fundamentally, the brand effectiveness of a product enables the product to stand out amongst other brands and communicate the brands characteristics to the consumers. It is the extent to which a product is successful as a brand. It is for the same reason that a general evaluation of a products brand effectiveness is based on intangible elements and most of these elements are associated with the consumer.

Key Brand Effectiveness Metrics [include] Online ad awareness: whether consumers remember seeing a companys advertising campaign, Brand awareness: the extent to which consumers think of or recognize the brand, either aided or unaided, Message association: the extent to which respondents attribute characteristics to a company or product that were the subject of the ad campaign, Brand favorability: the extent to which consumers perceive the brand positively [and] Purchase consideration/intent: likelihood that consumers will buy the advertisers product or service (Internet Advertising Bureau 2010).

The implications of a products brand effectiveness become apparent when the product is tested for the extent to which it can retain market share. This in turn tends to have an influence on the brands availability in the market. In layman terms, the effectiveness of a brand is put to test when a consumer or industry analyst considers the most prominent brand in the industry. The effectiveness of the brand is reflected in the sequence in which the individual recalls the products. However, this is a significantly premature test and is rarely resorted to. A more adequately designed test of brand effectiveness is one that tests the brands association with its key characteristics.

When seeking to develop a brand, a common approach is to develop associates between the brand and the characteristics that differentiate it from its competitors. The product is brought forth in terms of the utility that it provides and not merely in the form of a good that is available to the end user. A product that manages to achieve an adequate level of brand effectiveness will be present in the consumers perception through the associations that the consumer harbors. In uncomplicated terms, a products brand effectiveness is the degree to which the product is successful as a brand. A product with a high brand effectiveness experiences considerable brand differentiation.

A common scenario in which a brands effectiveness is put to the test is one in which the brand has to enter a new market. Such a scenario is commonly referred to as Market Penetration. Essentially, market penetration is where an organization gains market share (Johnson, Scholes and Whittington 2009, p. 344). However, in a detailed context, Market penetration is used in several different situations. It is sometimes used for a new product to gain market visibility and market acceptance, and to build a user base& This might occur when there are low barriers to entry in the market. More commonly, market penetration is a strategy used by a company that is not the market leader and is trying to increase its market share (Daly 2002, p. 76).

Under general circumstances, market penetration requires moving an already existing product into an already existing market which has remained unexposed to the product so far. Market penetration requires that the product is brought to the market so that they adopt it. Expansion measures commonly incorporate market penetration measures. When engaging in market penetration, there is a need to penetrate the market so that they accept the product.

However, in order to do so, there is a prerequisite that lies not in the market but in the product being brought into the market. This prerequisite is present in the form of the brands effectiveness. Market penetration requires that the product holds a certain degree of relevance and recognition amongst the consumers. In most cases, the product in question is expanding into a new market that represents a new economy and consumer group altogether. One such hypothetical scenario is that of the expansion of Starbucks into Bangladesh.

Starbucks adopted a market penetration strategy in 1982. This strategy has brought Starbucks a long way from its humble origins. The market penetration strategy was incorporated in the recognition of an unfulfilled niche that Starbucks targeted and served by opening outlets through which coffee could be served to consumers (Philip 2009, p. 46). Starbucks continued its growth through the implementation of a mix of market development and product development strategies that allowed it to grow across the United States and grow to a point where it could engage in international expansion.

The growth plan is one that has only recently come forth. As a part of this aggressive growth plan Starbucks also outlined plans to expand its presence and accelerate profitable growth in both the U.S. retail business and in key international markets. Noting that Starbucks currently has less than four percent of the U.S. coffee market and less than one percent of the global coffee market, Schultz detailed the companys plans to capture significant market share gains& The reframed Starbucks business proposition will deliver great coffee to every customer, in every format, and in every place they want it (Deb Trevino 2010).

It is imperative to realize that the term brand effectiveness implies that the product in question has been subjected to branding and is recognized as a brand by consumers. In this regard, the brand will experience a certain level of brand equity and will be distinctive and distinguishable in terms of its trademark characteristics.

Introduction to Starbucks

Starbucks origins date back to 1971 in Seattle. In those days Starbucks was knows as Starbucks Coffee Tea and Spice. Initially Starbucks coffee range was limited to selling coffee beans. However, in the early 1980s, the establishment was renamed Starbucks and ready-made coffee was sold over the counter. With the passage of time, Starbucks moved into selling snack food items as well as to ice cream and tea along with the trademark coffee.

Through the 1990s, Starbucks developed business ties with music establishments and took advantage of technological development to exercise extensive product differentiation. It was also during the 1990s that Starbucks became famous for opening a new store every day. Also, the Starbucks brand first set foot out of the US in the mid 1990s.

Starbucks Coffee Company is the leading retailer, roaster and brand of specialty coffee in the world, with more than 6,000 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim  wherever there is a demand for great coffee (Starbucks Corporation 2005). Starbucks is now a leading coffee seller and rivals worldwide coffee providers like Costa Coffee (The Economist Newspaper Limited 2010 2010).

Relevance of the Study

In order to carry out this market penetration, Starbucks will need to exercise extensive market penetration and will therefore require extensive brand effectiveness. In addition, it has been observed that there are no studies present that explore Starbucks in the context of Bangladesh. In this regard, this research shall play a crucial role in exploring the utility of Starbucks brand effectiveness in the context of economies such as that of Bangladesh.

A preliminary analysis has revealed that no research has been carried out to explore the potential for the expansion of Starbucks into Bangladesh. Also, there is a serious absence of studies involving the brand efficiency of Starbucks as a key cause of its success. In this regard, this study holds a significant degree of relevance.

The research will therefore reflect its utility in three key areas. Firstly, the research will explore the utility of brand effectiveness in the context of market penetration into a developing economy. Secondly, the study will serve to shed light on the brand effectiveness of Starbucks. Thirdly, the findings of the study will serve to explore the efficacy of the consideration of brand effectiveness as a credible measure of the potential for a brands success.

The development of brand effectiveness holds relevance because it goes beyond the perimeter visited by branding practices in general. Brand effectiveness calls for a higher measure of awareness of the product on the consumers part. While the traditional concept of branding encompasses the brand equity and the consumers perceived value of the brand, brand effectiveness serves to identify the measure to which branding has been successful for a product.

For the same reason, a product with high brand effectiveness can be expected to fare well in multiple markets. High brand effectiveness allows the product in question to acquire rapid customer recognition and therefore accelerates the development of brand loyalty for the product in question. It facilitates the communication of marketing and promotion strategies for the brand and also serves to play a key role in reducing market penetration expenses. A product experiencing high brand effectiveness enables the manufacturers to engage in product line expansion while being able to derive benefits for the newly launched product through the already established brand.

Objectives

The objectives of the research are

  • To understand the relationship between brand effectiveness and the overall strength of the brand.
  • To develop a comprehension of the dynamics of brand effectiveness.
  • To establish the relevance of brand effectiveness for expanding organizations.

Research Aim

The research aims to explore the effectiveness of branding by delving into the efficacy of brand effectiveness. The purpose of doing so is to explore the manner in which a brands brand effectiveness can help it to acquire market share. This will enable the establishment of a study of the manner in which the characteristics of a product influence the consumers purchase decisions through the presence of the goods as a brand in the consumers perception.

Brand effectiveness, in this case, shall be considered as a comprehensive evaluation of a brands strength and capability through which it can capture market share. The study will specifically seek to develop an accurate representation of the brand effectiveness of Starbucks and shall seek to make use of this case study in an attempt to acquire a thorough insight into the practical attributes of brand effectiveness.

Research Questions

The research shall be carried out while maintaining a clear focus on the following research questions. In this regard, the research questions will assist the scope of the study in engaging the subject of the research. It is imperative to realize that the research questions will not seek to limit the context of the research but will mainly provide it with a direction for the primary and secondary research.

  • How can brand effectiveness provide an adequate measure of the strength of a product as a brand?
  • What attributes does Starbucks incorporate as a brand that enables it to exercise brand effectiveness?
  • Does the brand of Starbucks incorporate the brand effectiveness required to succeed in Bangladesh?
  • What measures can Starbucks take to develop its brand effectiveness and customize it to cater to the Bangladeshi market?

Hypotheses

The research shall be carried out with special attention to the following hypotheses. The hypotheses shall play a two-fold role of assisting in ensuring that the research does not deviate from its scope while simultaneously providing the study with a direction upon which the conclusions can be drawn.

  • H0: A companys ability to penetrate a new market can best be observed through the measurement of the companys brand effectiveness.

The positive validation of this hypothesis will indicate that the measurement of the brand effectiveness is an adequate perspective into the degree to which the brand in question can be expected to be successful. In addition, the positive validation of this hypothesis will also indicate that branding, as a marketing strategy is the ideal functional operation that should be considered in cases where the product has to enter a new market.

A negation of the hypothesis will occur in the event that the research surmises the market penetration power capabilities of a brand to be reliant on other characteristics besides brand effectiveness. In addition, such a negation would also indicate that the measure of brand effectiveness does not provide an adequately comprehensive insight into a brands market penetration capability.

  • H1: The brand effectiveness of Starbucks is adequate for its launch in the Bangladesh market.

The positive validation of this hypothesis will indicate that the research has found Starbucks brand effectiveness to incorporate all the characteristics and traits that are required in order to ensure its success in Bangladesh. The positive validation of this hypothesis will also indicate that the research has found Starbucks brand effectiveness to be of a nature such that it accommodates the characteristics of the Bangladeshi consumers.

Scope of the Research

It is imperative to realize that the study will focus solely on brand effectiveness and will not make the mistake of confusing brand effectiveness with other characteristics of a brand. In addition, the study will take special care to ensure that brand effectiveness is covered with regard to its literal meaning and in the context of the strength of the brand instead of in an alternative or derived meaning.

The highlighting of this aspect of the research is important in light of Shaws (1999) identification of the common interpretational errors that occur in examinations of brand effectiveness. Shaw (1999) highlighted that spending money on advertising does not necessarily indicate effective brand building. Trademark protection, although necessary, does not of itself create brand value& Small niche brands, for instance, may be more profitable than so-called leadership brands (Shaw 1999, p. 85).

In addition, the study will continue to converge on the subject of Starbucks as it progresses. In this regard, the study will engage in an approach that will initiate by acquiring what can best be termed as a general understanding of the subject; and will then proceed to establish a comprehensive insight into Starbucks brand effectiveness.

Dissertation Structure

The study will be carried in the stages that can best be understood through the sequence of the chapters of the dissertation. In this regard the dissertation structure will play a key role in the development of the research.

Introduction

The introductory chapter shall serve to essential purposes for the study. Firstly, the chapter will provide the study with a basic insight into the subject of the research. This will be done through the establishment of the context of the study. The context will provide the study with a clear idea of the purpose of the research and its relevance.

Literature Review

The second chapter will constitute the exploratory study performed in lieu of the research. The chapter will make use of peer reviewed publications in an attempt to develop a clear understanding of the central perceptions that exist with regard to the subject of the research. In addition this chapter will also serve to develop an understanding of the research that has been conducted in the area of the subject of research. Former studies dealing with brand effectiveness shall be given special relevance as well as publications that explore the branding characteristics of Starbucks.

The literature review will play a key role in unraveling the complications pertaining to the research variables. Most of the literature review will explore the topics related subject of the research. However, the central aim of the literature analysis will be the contribution towards the development of a conceptual framework. The conceptual framework shall represent the epicenter of the literature analysis.

Research Methodology

Once the fundamental groundwork has been established through the first two chapters of the dissertation, the third chapter will provide the study with an insight into the research design that the study has to follow. This shall constitute particular attention to the primary and secondary research sources selected for the study as well as data collection, handling and analysis procedures that are to be followed. The chapter will also present an insight into the potential limitations that are present in the context of the adopted research design.

The relevance of the research methodology chapter is incorporated in the fact that the initial drafts for the research were based mainly on the development of a research methodology. The research methodology present in this dissertation shall be identified only once the research design has gone through countless drafts.

Findings

Once the research design has been established, the research process will then move on to implement the research design. This will be followed by the collection of data which shall be subsequently presented in the analysis chapter. This chapter will serve to bring the collected data into a form where it can be analyzed so that inferences can be derived during the concluding phases of the research. In addition, this chapter will also provide a basic understanding of the findings.

The findings chapter will also provide a basic insight into the outcome of the research. It shall serve as a reflection of the authenticity of the research process. For the same reason, the presentation of data in this chapter may have a certain raw characteristic to it, but this unprocessed form shall prove to be vital in order to ensure that authentic observations have been made from the implementation of the research design.

Once the data collected has been adequately presented and brought into a form from where it can be analyzed, the next stage will be to evaluate the data. A particular characteristic of this chapter will be the development of relationships and the identification of patterns across primary and secondary data.

Conclusions & Recommendations

The concluding chapter of the research shall take a highly decisive approach towards the study process. This chapter will seek to make use of the inferences derived from the preceding chapters to respond to the research questions considered during the earlier stages of the research as well as to identify the validity of the research hypotheses. The chapter will bring the research to a concluding note along with a set of recommendations customized towards facilitating Starbucks entry into the Bangladeshi market and/or any brand in a similar situation.

Self Reflection

The last chapter of the dissertation shall be only indirectly related to the subject of the research. This chapter will go one step beyond the actual research and shall provide an insight into the researchers individual perspective into the entire research process. The study shall be analyzed with regard to the manner in which it was carried out and the researchers opinions on the execution of the research shall be provided.

Literature Review

Characteristics of Brand Effectiveness

In order to develop brand effectiveness, the brand has to incorporate three vital characteristics: brand recognition, brand recall, and spontaneous brand recall. The incorporation of all three characteristics in a brand allows the brand to acquire a standing where it is not only recognized by the consumer but exists actively in the consumers perception of the brand in the respective product category of the brand.

Product sporting significant brand effectiveness is recognized readily by the consumer when the consumer comes into interaction with the brands name or considers the products in the brands product category. A product incorporating an exemplary degree of brand effectiveness is one that comes to the consumers mind when the consumer chooses to visit the product category to begin with.

The reference to the product category is more than sufficient to trigger cues that relate directly to the brand in question. This enhanced nature of brand recognition is often referred to as brand recall. In this case, the consumer finds himself/herself in a position where the perception of the brand supersedes the perception of other products in the product category. It can therefore be surmised that in order to have brand effectiveness, the brand in question must be one that the consumer can readily differentiate from other brands in the product category and is able to recall the brand as an important constituent of the products in the respective product category. Furthermore, brand effectiveness also calls for the consumer to be able to recall the subject brand before any other brands come to mind when exposed to the product category.

A preliminary investigation into the body of literature pertaining to brand effectiveness revealed that the traditional approach towards research into brand effectiveness is one that makes use of a combination of different brand characteristics. In this regard, it can be justly derived that brand effectiveness is in fact the combined mix of the ideal presence of a number of factors. Therefore, the literature analysis will seek to break down brand effectiveness into its constituting principles so that a thorough insight into the dynamics of brand effectiveness can be acquired.

Building strong brands is one of the most important goals of product and brand management. Strong brands result in higher revenue streams, both short term and long term. Therefore, the stated goal of strategic brand management is to build brands that last for decades and can be leveraged in different product categories and markets (Schmitt and Geus 2006).

In order to ensure that the consumer makes a repeated purchase, the brand has to take a positive position in the consumers perception. Also, a repeated purchase only comes across if the consumer develops a relationship with the brand.

A relationship is formed if the consumer feels that the initial purchase delivered all that the consumer had been promised prior to the first purchase. In this evaluation, the consumer puts together the nature of the firsthand experience, word of mouth, and feedback from other external sources to develop a complete picture of the degree to which the product in question met the consumers expectations (Schmitt and Geus 2006). If the product meets the customers expectations, the consumer feels motivated to make a repeated purchase. This cycle repeats until the consumer begins to purchase the product without evaluating the experience. Thus consistency leads to repeated purchases which eventually translate into brand loyalty.

Brand Effectiveness as a Measure

Brand effectiveness can be used as a measure of how the product can be expected to perform in a certain market. However, doing so requires a thorough analysis if the product and of the market. This is because of the fact; that while a products identification as a brand qualifies it as a strong product, the effectiveness of the branding of the product may vary from region to region. The brand cannot be expected to perform just as effectively in one market as it did in the other.

Variables such as consumer preferences, demographics, cultural concerns, economical stability, and other factors vary from region to region; thereby bringing about change in the effectiveness of the brand with respect to the region in question. The significance of brand effectiveness is incorporated in the fact that while branding is a productive practice and the identification of a product as a brand is a positive characteristic for a brand, the effectiveness of the branding is dictated by the outcome the scenario provides.

The branding of a product can serve to identify a product as a brand but product quality or consumer preference may keep the product from acquiring a significant position in the consumers list of possible preferences every time a need for the respective product category arises. Brand effectiveness is therefore a sub-concept for branding; and serves to identify the qualitative magnitude to which the product in question can be expected to benefit from its position as a brand in the market. It is for the same reason that a major part of the literature on the subject of brand effectiveness pertains to the effectiveness of branding practices and the utility that these practices provide to the brand in terms of higher sales volume.

Consumer Involvement

The hierarchy model described seven steps in the purchase process: 1. Unawareness, 2. Awareness, 3. Knowledge, 4. Liking, 5. Preference, 6. Conviction, 7. Purchase. These steps can be grouped into three general processes: 1. Gaining awareness and knowledge about a product, 2. developing an attitude toward the product, and 3. making a purchase decision. In other words, they are thinking, feeling and doing (Wu 2001).

It can be observed that making a purchase comes only once the consumer develops an attitude towards the product in question. And in order to develop an attitude towards the product the consumer has to be aware of the product and has to have knowledge of the products utility (Wu 2001). The presence of this knowledge can be termed as a key constituent of brand effectiveness. A brand with a high degree of brand effectiveness can be judged as one about which consumers have a significant degree of awareness and knowledge whereas a brand with a low degree of brand effectiveness cannot be expected to be equally popular amongst the consumers.

However, it is imperative to realize that consumer involvement tends to deviate from this model in the case of first-time purchases. In such scenarios, the consumer tends to experiment with a product that he/she is not fully aware of. This may lead the consumer into adopting the product and engaging in a repeated purchase of choosing to reject the product altogether. Such a scenario commonly takes place when the consumers knowledge and awareness of the product is only minimal and external variables from a high-involvement setting motivate the consumer to deviate from pre-established habits (Wu 2001). Peer pressure and high intensity marketing campaigns are factors that are commonly considered to be responsible for the inducing of such scenarios.

Consumers buy low-involvement products such as coffee. Although the consumption of coffee is less subject to the influence of peers, branding is still important as brand awareness alone could lead to the consumer choosing a product based on the familiarity of the brand (Radder and Huang 2008).

Brand Recognition

Brand recognition plays a critical role in the development of brand effectiveness. Brand recognition is the area of brand effectiveness that addresses the fundamental aspect of the association of the brand in question with its central characteristics. Brand recognition also contributes towards the development of brand effectiveness through the development of brand equity. This is because the presence of brand recognition is a necessary pre-requisite for consumers if they are to develop a favorable impression of the brand.

A favorable impression cannot be expected to fall into place unless consumers recognize the brand as a differentiated product to begin with. The practical influences of brand recognition come into play when the consumer is in the market and considering available options for purchase. The presence of a positive impression for the brand can be expected to translate into a preference for the brand at the consumers end at this point.

This also comes into play when considered

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