Category: Brand

Introduction

Acco Brands Corporation and V.F. Corporation are two companies listed in a website called AnnualReports.com. These two companies released their annual reports recently and are the subject of discussion in this report. The two companies also fall under the consumer goods sector and release reports to various stakeholders every year. Acco Brands Corporation designs, creates, manufactures, and markets several conservative computer based office products in regions serving North America, Europe, and the Australian continents (Acco Brands Corporation, 2012). On the other hand, V. F. Corporation brands lifestyle outfits such as jeans, footwear, and other types of apparels (V.F. Corporation, 2007). The main objective of this report is to compare several aspects of the annual reports as presented by each of these corporations.

Discussion

Acco Brands Corporation and V.F. Corporation exhibit obvious differences in the manner in which their annual reports are organized and presented. Organization of a piece of communication in written format needs to follow various styles and formats to achieve a certain effect on the consumers of the organization’s brands. Looking at the two reports, one notices completely different reports basing on style and organization of information. For instance, while Acco Brands focuses more on details through written word all through its report, V.F. Corporation follows a completely different format of using catchy and well colored photos and graphics to ensure readers understand information well. Both companies however do a very good job in presenting the information that they need to convey to their target audiences. This is done through the use of facts and figures which are properly arranged in charts and tables. Acco Brands Corporation annual report covers 2012 while V.F. Corporation report summarizes operations in 2007. As a result, I can confidently conclude that the companies achieve the sole goal of showing the necessary conclusions that can be easily interpreted by shareholders concerning the performances of the companies.

Going through each of the single reports of the companies sampled here, there is a mutual manner in which the goals, plans, and challenges faced by the organizations are discussed by the top managers. Each report clearly outlines each of the products that the companies sell to satisfy their markets. Distribution and sale of each of these items is discussed in length in the reports signaling either success or failure in achieving any set goals. All the challenges faced are detailed properly in the balance sheets relative to the financial proceeds collected from the operations of the companies. The roles of the management and that of each of the stakeholders are also well documented within the reports. It hence remains clear concerning who takes responsibility regarding the failure or success of each plans as set out by the management.

As earlier mentioned, each of the reports as presented by the two companies varies greatly in style and format. Acco Brands Corporation for instance details much information in written form and the use of a few tables and charts especially when discussing the financial statements (Acco Brands Corporation, 2012). V.F. Corporation on the other hand focuses greatly on the use of pictures and images in expressing its views and information (VF Corporation, 2007). These formats could serve to enhance or detract audiences from the information being presented. For instance, too much use of pictures and images could end up causing little information diffusing to the reader’s minds. However, being visually appealing, it may enhance the interest of people into reading what is being presented in the reports. Looking at a report that is too much detailed with information and expert analysis has the advantage of instilling trust in the stakeholders. However, the disadvantage may be that it may cause lack of interest to read on the part of stakeholders who are not experts or not well schooled.

References

Acco Brands Corporation. (2012). Annual Report Pursuant To Section 13 Or 15(D) Of The Securities Exchange Act Of 1934. Web.

Acco Brands Corporation. (2012). AnnualReports.com. Web.

V.F. Corporation. (2007). AnnualReports.com. Web.

VF Corporation. (2007). Summary Annual Report. Web.

Multiple factors can explain the difference in demand for generics and patented drugs. The value of perceived quality can be considered as one of the main reasons behind purchases and the level of demand. According to Dave, Kesselheim, Fox, Qiu, and Hartzema (2017), the use of generic drugs in the US has increased significantly making then the primary option for consumers. This change has reportedly resulted in substantial savings for the health care system and the patients paying for their insurance. The prices for this type of drugs also increased recently, which implies a connection between demand and the market environment. Thus, it is possible that insufficient competition on the market of generic drugs has led to the changes in prices.

Lower levels of utilization also affected the prices of drugs, according to Gatwood et al. (2014), who noted that medications were among the goods with inelastic demand. Nevertheless, the authors also found that brand-name alternatives became less preferred in a situation of a price increase, and the use of generics is reliant on the prices of other drug types as well. Thus, some changes may be observed for medications that have cheaper alternatives, although they are very small. While more expensive brand-products may be substituted with generics, people make that choice less frequently than it was expected (Gatwood et al., 2014).

The changing prices of generics also affected the elasticity because their increase stopped consumers from switching from a preferred brand of medication to an alternative. The situation in other countries that have different insurance policies may differ from these observations. Danzon, Towse, and Mestre-Ferrandiz (2015) found that in self-pay states, the prices for different types of drugs were higher because there was no protection offered by insurance.

References

Danzon, P., Towse, A., & Mestre-Ferrandiz, J. (2015). Value-based differential pricing: Efficient prices for drugs in a global context. Health Economics, 24(3), 294-301.

Dave, C. V., Kesselheim, A. S., Fox, E. R., Qiu, P., & Hartzema, A. (2017). High generic drug prices and market competition: A retrospective cohort study. Annals of Internal Medicine, 167(3), 145-151.

Gatwood, J., Gibson, T. B., Chernew, M. E., Farr, A. M., Vogtmann, E., & Fendrick, A. M. (2014). Price elasticity and medication use: Cost sharing across multiple clinical conditions. Journal of Managed Care Pharmacy, 20(11), 1102-1107.

Introduction

Studies have proved that organizations or brands with higher marketing-to-promotion ratios tend to dominate the markets with sales volume almost double of their competitors. It has also been proved that heavy-up marketing not only enhances the sales of an organization or brand immediately but continues to work for years even after the advertisement has stopped running (Kopalle 2000). This mainly happens with television advertisements. Even newspapers and magazines are effective in enhancing the sales of a company. Marketing through printed media and radio helps to increase brand familiarity among the common people. More exposure guarantees development of more purchasing interest among the customers. So, it is to be seen whether marketing has positive effects on consumer attitudes in Saudi Arabia in terms of Brand and Purchase Intention. Thus, Sponsorship and Sales Promotion in Saudi Arabia should also be evaluated.

Aim

To evaluate the impact of marketing on consumer attitude to the brand and purchase intention in Saudi Arabia with a comparison with sponsorship and sales promotion.

Research Question

1. What is the overall impact of marketing on consumer attitude to the brand and purchase intention in Saudi Arabia?
2. How is sponsorship and sales promotion effective in changing consumer attitude in Saudi Arabia?

Hypothesis

It is assumed that the overall impact of marketing on consumer attitude to the brand and purchase intention in Saudi Arabia is substantial enough with help of proper sponsorship and sales promotion.

Literature review

Through the various changes that have taken place in our recent studies and measurement of marketing techniques, it has been found that marketing definitely works better than not marketing. It is certainly more beneficial than promotions and it works on almost any type of media, like print, radio, internet or television. It pays to advertise not only for consumer oriented products but also for industrial ones (Kopalle 2000). Marketing helps to launch new products and also to boost the sales of established ones. In fact, marketing is also beneficial in recessions as it enhances the state of the companies. Studies have indicated that those organizations or brands which have a higher marketing-to-sales ratio then their competitors have a greater profitability that can be calculated by their return-on-interest (ROI) and better market share through share-of-market (SOM) (Nair 2004).

Marketing only works when we follow the general pattern of a continuous cycle. The first step is to test the marketing media (Kim 1992). Apart from the traditional sources of media, nowadays there are many other sources, like cold calling and cost-per-click campaigns (Petrison 2006). These mediums need to be tested to determine which one works best (Nair 2004). Then we should properly evaluate the results to see which strategy returns a high ROI and rank the marketing methods accordingly (Hansen 2009). After we have evaluated the marketing medium which works best for us, we should invest into it and eliminate the other marketing mediums. We need to repeat this cycle constantly so that the present campaign is better then the previous ones so as to find an optimized method (Nair 2004).

Marketing that creates a positive attitude and persuades the consumers by creating liking and arousing desires and feelings in them for a particular product or brand is more effective and impacts the sales volumes more than others do. But most of the time marketing requires patience, time and above all repetition. The products must be worthwhile and consistent for good marketing to work and deliver what it promises to the customers (Hoek 2008). A good marketing strategy, brand perception, knowledge of its benefits and enhancement of its values are the key elements to successful marketing. Thus, it is evident that the more the consumer sees a brand or product in a newspaper or website or TV, the more they will tend to like it (Meenaghan 2003). Effective marketing can change markets by improving profit margins. Marketing has both long term and short term powers. Through the former it conveys new information, builds awareness and enhances credibility and through the latter it can convey brand image and develop a positive reputation of a brand or organization. The great power marketing possesses can seldom be recognized and achieved in reality and those organizations that can consistently develop effective marketing campaigns will have a prosperous future since good marketing is like an invincible cloak (Meenaghan 2003).

Methodology

For the study, qualitative method would be used. The basic advantages of qualitative measures are multiword. Firstly, it presents a completely realistic approach that the statistical analysis and numerical data used in research based on quantitative research cannot provide. Another advantage of qualitative measures is that it is more flexible in nature in terms of collected information interpretation, subsequent analysis and data collection. It also presents a holistic point of view of the investigation. Furthermore, this approach of research allows the subjects to be comfortable thus be more accurate as research is carried on in accordance to the subject’s own terms. The best statistical method would be to interview long well formulated day-to-day working procedure at a specific and well selected location and in this case, it would be the three selected events mentioned. Throughout the procedure, it should be noticed whether there are specific variables within the testable population or not. These variables would be extremely important while evaluating the basic data in the final stages where the adjustments would be made to the formulated data in accordance to the observations. However, it is important to take into account the aspects of fundamental variables of an individual such as ethnicity, religious belief or positive support from the sales structure of the management and individual.

Conclusion

We have seen that marketing works during times of recessions too. This is because through marketing it is possible to gain long term brand building and exposure which most businesses tend to sacrifice due to the pressures on the bottom line which shows the profit or loss. During recessions consumers spend less and when the organizations reduce marketing, it has a negative affect on the consumers as this further reduces their spending motivation deepening recession (Hansen 2009). Good business policies, on the other hand, suggest that when the competitors are reducing their advertisements, an organization that increases or at least maintains its marketing enjoys an increase in its sales volume. Recessionary marketing impacts the consumers even after the recession period. But for marketing to work it must be good and effective since it is not necessary that all types of marketing must work equally well (Hansen 2009). Under such conditions it is assumed that impact of marketing on consumer attitude to the brand and purchase intention in Saudi Arabia with a comparison with sponsorship and sales promotion would work quite well.

Timetable

The total dissertation procedure would take 11 weeks. Literature Review would take three weeks, it would be followed by Conduct Interviews/Collect data, and it would take two weeks. Transcribe of Interviews would take another two weeks followed by Analyze Data would take one week. The Draft Final Report would be in one week and Feedback in another one week followed by Submitting Final Report. There would be an additional week to counter any unforeseen circumstances that may suspend the work.

References

Hansen, J. (2009) Exploring memory for product names advertised with humour. Journal of Consumer Behaviour, 8(2-3), pp. 135-148.

Hoek, J. (2008) Ethical and practical implications of pharmaceutical direct-to-consumer marketing. International Journal of Nonprofit and Voluntary Sector Marketing, 13(1), pp. 73-87.

Kim, P. (1992) Does Marketing work? A Review of Evidence, The Journal of Consumer Marketing, 9(4), pp- 5-21.

Kopalle, P.K. (2000) When (not) to indulge: the role of consumer expectations and brand goodwill in determining advertised and actual product quality. Managerial and Decision Economics, 21(6), pp. 223-241.

Meenaghan, T. (2003) Sponsorship and marketing: A comparison of consumer perceptions. Psychology and Marketing, 18(2), pp. 191-215.

Nair, B. (2004) Marketing Communication, Intl Specialized Book Service Inc. Sydney.

Petrison, L.A. (2006) Database marketing: Past, present, and future, Journal of Direct Marketing, 11(4), pp. 109-125.

Abstract

This study aims to find out the preference of consumers when made to choose between luxury brand clothing or cosmetics in their purchase and use. It focused on the preference of women aged 18 to 35 who use the internet on what to spend for more: luxury brand clothing (with possibility of an alternative for counterfeit) or cosmetics using a survey questionnaire. The objectives were concerned with the respondents’ preference on a given period. It used purposive sampling of female internet users to gauge their spending over a limited period of time on cosmetics and luxury brand clothing (or counterfeit).

This paper shall use primary and secondary data. The primary data consists of surveys on 100 females, 18-35 years old who are active internet users. A set of questionnaire was sent to them with close-ended questions and choices of answers. The secondary data focuses on published and previous literatures and studies with regards to luxury brand, fashion marketing, strategies, cosmetics, and even counterfeit products.

The findings of this study suggests that the majority of the respondents preferred to spend more on clothing, although luxury brand clothing preference was notable only to a minority of the respondents. While there are those who have also spent some amount for cosmetics, preference for clothing was more evident. However, it was noted that counterfeit products have an effect on the purchase decision of surveyed consumers.

Introduction

Fashion and the way individuals look have become a basic and important factor in their existence. While individuals find ways to improve and enhance the way they look basically through the necessary use of clothing previously understood for basic protection, today, clothing has emerged as an immediate expression of the personality as well as other aspects about an individual. This has resulted into the boom of the fashion industry which now has unprecedented scope and no sign of limitation.

On the other hand, cosmetology and the use of cosmetics reigned in so much research and marketing considerations as the quest for physical excellence and improvement of looks become the trend. People of all ages, races and beliefs were not spared especially when globalisation has taken a giant step towards converging the marketplace. While traditional cosmetics had been limited to facial colour improvisations which were generally disposed off over a short or limited period of time, more forms that are semi-permanent as well as permanent cosmetics have emerged.

There is consistent evidence in research that what is beautiful is good as well as physically attractive is valued positively. It follows that good-looking people are associated with desirable personality traits and are also treated more favourably by others (Eagly, Ashmore, Makhijani & Longo, 1991). These suggestions were perceived by the majority as generally acceptable and that both manufacturers in the clothing and cosmetics industries only have to agree. Marketers likewise have taken various methods and strategies to maximise gains in line with physical appearance and beauty.

Both luxury brand clothing and use of cosmetics serve as factors to achieve goals that may include improved physical looks, higher self-esteem, as well as expression of individualism or lifestyle. It has never been clear, however, whether consumers would prefer to use one medium over the other to achieve the goals mentioned. Fashion and clothing have been extensively accepted as a lifestyle and personal expression. There has been minimal information on how consumers may prefer one over the other or that clothing and cosmetics fare against one another amongst consumers.

This study shall focus on gaining information among respondents and presumably consumers about their preference on spending, expenditure, or choice when made to pick between cosmetics or luxury brand clothing. It is, however, clearly defined and limited in this study that cosmetics may be luxurious brands but that luxurious brands shall be indicating fashion or clothing only.

Another consideration of this study, is the extent of influence counterfeit clothing has on cosmetics and luxury brand clothing consumption. Counterfeit have been in existence for quite some time but it has never been as lucrative and destructive to legitimate brands as today. Globalisation has brought forth a worldwide exchange and trickling down of fashion from one point to another previously in a manner of time and decades. Today, trickling down of fashion from the purveyors, that is a strata of society looked up on, to the masses have been described as a matter of minutes. It is of note that counterfeit also had the same path as luxury brands and affects negatively legitimate design and labels.

This study will determine among 18-35 year old females whether they prefer to spend on luxury brand clothing (counterfeit) or will rather buy and use cosmetics over a period of time. Result would provide an insight to the ever tightening competition in the consumer market with regards to physical appearance and lifestyle expression.

Aim of the Study

This study will try to investigate if consumer preferences are different when making purchase decisions of luxury brands within the fashion and cosmetics industries. Likewise, it will also consider the impact of fake luxury items on the decision making process.

Objectives

The objectives of this study are:

1. To establish a definition of luxury goods
2. To investigate the purchase decision process when buying luxury brands
3. To assess if there are differences on consumer behavior when purchasing clothing versus cosmetics
4. To explore consumer willingness to buy and use fake articles

Research Questions

This study used the following guide questions to reach its objectives:

• What is luxury brand?
• What are cosmetics?
• What is counterfeit?
• What are the trends in luxury fashion?
• What are the strategies used in marketing cosmetics or luxury fashion?
• What are the perceived customer attitudes when it comes to purchase on fashion or cosmetics?

Relevance of the Study

The resulting information to be gained in this study will provide an insight among marketers within the fashion and cosmetics industries as to the existence or absence of competition among them when it comes to consumer decision.

The clothing and cosmetics industries have been hand-in-hand in most or the majority of market positioning, target, communications, and even branding and association. It is therefore necessary to obtain an insight if there exists any form of competition between luxury fashion clothing and cosmetics in order to carefully address marketing and communications concerns. Likewise, this research will also provide decision-makers information about the impact counterfeit may have on luxury brand clothing, as well as its impact on the purchasing decision of consumers on clothing and cosmetics.

Review of Related Literature

Introduction

Lifestyle is a continuing way of how individuals or groups may do and express their preferences generally through consumption and activities. In defining their preferences, a certain lifestyle of consumers is expressed. The purpose of this research is to provide an overview on how female consumers express their lifestyle through preference of luxury brand clothing over cosmetics consumption.

Through published studies and earlier researches, this paper shall proceed to define key terms fashion, clothing, cosmetics and luxury, counterfeit, as well as trends in marketing, strategies to get to the customer, branding, positioning among others. These are all tools and ways to which the objective to gather the preference of the consumer when made to choose between luxury brand clothing, cosmetics, or even counterfeit, will be achieved.

Brands

Keller (1998) suggested that successful brands depend upon the creation of high levels of brand awareness as well as distinctive and positive brand images. Brand image is the role of brand names and its aspects serve as cues that provide perception of product attributes, benefits, affect and overall quality (Cote, Leong and Scmitt, 2003). It facilitates recall and inference of previously learned brand attributes or associations used by consumers to evaluate a product under consideration or in the consumers’ choice. Brand cues such as name, logo, packaging design among other readily perceived attributes usually provides basis for discrimination among consumers, but memory in associating this brand cues also come from prior learning of product quality (Alba, Hutchinson and Lynch, 1991)

Brands & Consumers

Prior knowledge about brands result from memory traces of prior consumption experiences as well as abstraction or summary evaluations which Chattopadhyay and Alba (1988) suggest as easier to remember. Learning from direct experience can be more effective as compared to secondary sources or indirect learning from advertising (Wright and Lynch, 1995).

Discrimination, however, between brands as perceived by consumers has been considered difficult even in cases where there exist substantial differences between competing brands (Hoch and Deighton, 1989). Consumers usually buy and use products sequentially and not simultaneously which does allow effective comparison and contrast for alternatives. Likewise, significant delays between consumption experiences and subsequent purchase occasions impede retrieval for brand quality so that confusion may be present in consideration of brand experiences.

Tsai (2005) suggested that in consideration of repurchase intention, brand dimensions of perceived image, emotional experience, perceived quality and price acceptability as well as symbolic value, affective value and trade off value are generally considered. These are all considered in this research as there seem to be always a pattern on the choice of consumers with regards to purchase decision from first buying experience to a subsequent purchase for a certain product, brand or label.

Dunning (2007) provided that there is the role of self-image motives in consumer behaviour and that consumers are dynamic, motivated agents who evaluate themselves and the world around them consistent with a set of sacrosanct beliefs and self-motives. Belk (1998) supported that these beliefs and motives lead to consumer behaviours with the tendency to think of possessions as extension of the self. However, Dunning (2007) suggested people are aware of their choices and that self-beliefs reflect these choices.

Cosmetics

Cosmetics are generally understood as substances used to enhance, maintain an attractive appearance, or protect the human appearance or odour of the skin widely used all over the world today. These products include skin-care creams, lotions, powders, perfumes, lipsticks, fingernail and toenail polishes, eye and facial makeup, permanent waves, hair colours, hair sprays and gels, deodorants, baby products, bath oils, bubble baths, bath salts, butters and many other types of products. One kind of cosmetics is called “make-up” generally referring to coloured products that alter the individual’s appearance. Manufacturers today distinguish cosmetics as either decorative cosmetics or care cosmetics (Lewis, 2007).

It is estimated that the worldwide annual expenditures for cosmetics is about £9.5 billion (Mayell, 2004). The oldest and the largest of the major firms engaged in cosmetology is L’Oréal founded by Eugene Schueller in 1909 as the French Harmless Hair Colouring Company. According to Lewis (2007) the market for cosmetics was developed in the United States of America during the 1910s by Elizabeth Arden, Helena Rubinstein, and Max Factor. These organisations were later expanded when Revlon was established just before World War II and Estée Lauder after the war.

The different products under cosmetics include lip improvement products lipstick, lip gloss, lip liner, lip plumper, lip balm, lip lustre, lip conditioner and lip boosters; foundations which is used to colour the face and conceal flaws to produce a desired impression, usually a mood like sporty or healthy, or even gloom that come in liquid, cream, powder or mousse form, and powder, or face illuminator used to set the foundation with a matte finish; rouge, blush or blusher, cheek stain used to colour the cheeks and emphasize the cheekbones and may be in powder, cream and gel forms; bronzer, used to create a more tanned or sun-kissed look; mascara and lash extender, lash conditioner used to enhance the eyelashes that comes in different colours and may be even waterproof; eye liner and eye shadow, eye shimmer and glitter eye pencils as well as different colour pencils that provide colour and emphasize the eyelids such as larger eyes as a sign of youth; eyebrow pencils, creams, waxes, gels and powders are used to fill in and define the brows; nail polish, used to colour the fingernails and toenails; concealer, usually a powder or a thick opaque cream used to cover pimples, various spots and inconsistencies in the skin; skin care products such as creams and lotions to moisturize the face and body, sunscreens to protect the skin from damaging UV radiation, and treatment products to repair or hide skin imperfections such as acne, wrinkles, dark circles under eyes (Lewis, 2007), and many other forms and categories that come out in succession in the market today.

Cosmetics are also be categorised by the form of the product and the area for application. These may be liquid or cream emulsions, powders, both pressed and loose, dispersions, and anhydrous creams or sticks (Lewis, 2007).

The recent years, however have seen not only the increase of over-the-counter cosmetic products as market for prescription or surgical cosmetic procedures boomed. Product and services range from temporary enhancements, such as cosmetic coloured contact lenses, tattoos, to major cosmetic surgery on nose, lips, dental, and other skin enhancement procedures. Techniques such as micro-dermabrasion and physical or chemical peels, remove the oldest, top layers of skin cells allowing younger layers of skin to appear, providing a more plump, youthful, and softer skin. Tattooing as a permanent application of pigments has also became a popular option (Lewis, 2007).

Cash (1985) suggested in a study that examined individual differences in a largely sex-specific facet of grooming, facial cosmetics use among 75 female college students, higher-quantity users were found to be more sex-typed on bipolar but not unipolar sex-role identity, somewhat more profeminist in attitudes, and less external in locus of control for achievement success. The study used the Cash Cosmetics Use Inventory, which assesses the quantity and the situational-dispositional pattern of cosmetics use. The subjects completed personality measures of sex-role identity, sex-role attitudes, social self-esteem, and locus of control. The study found that women who were more situationally variable in their pattern of use did not differ in sex-role identity but were more liberal in sex-role attitudes and more internal vis-a-vis affiliative outcomes.

Workman and Johnson (1991, p 63) found in another study on a single factor experiment with three levels of cosmetics from heavy, moderate to none, “85 undergraduate females viewed one of three coloured photographs of a professional model wearing either heavy, moderate, or no cosmetics and indicated impressions of her attractiveness, femininity, personal temperament, personality, and morality by checking 7-point Likert-type scales.” The study also revealed no significant difference on impressions of personal temperament or personality traits based on cosmetics use concluding that cosmetics use significantly affect impressions of attractiveness, femininity, and morality.

As early as 1952, it has been noted that cosmetics use result in negative impressions (McKeachie). Young women that used lipsticks were perceived by young male students as more frivolous, less talkative, more anxious, less conscientious, and more interested in the opposite gender as compared to young women without lipstick. This, nevertheless, has been changed over time as 30 years later, cosmetics provided positive effects as those wearing facial make-up had been rated as clean, tidy, feminine, physically attractive and mature looking. On the personality side, they were also perceived as more secure, sociable, interesting, poised, confident, organised and popular. The positive perception was suggested to be attributed to physical appearance of the person (Graham and Jouhar, 1981).

Use of cosmetics throughout the years, however, provided two opposing impacts both on user and viewer. Cash et al (1989) a change in perceived physical appearance in the context of self-applied cosmetics was noted as males judged women from photographs as more physically attractive. Women also believe to be more attractive when wearing their customary cosmetics. However, increased attractiveness has been found to have a negative impact on perceived personality in cases where heavy make-up is used. Johnson and Lewis’ 1988 study found that wearing even moderate make-up triggered negative opinions as being less moral and less romantic. However, it was also suggested that cosmetics use has a different meaning for different social or age groups (Huguet, Croizet and Richetin, 2004).

The modern beauty industry, however, emerged with the diffusion of personal hygiene care and beauty ideals as globalisation also diffused distribution channels and ways of purchasing among consumers.

Luxury Fashion

It is recognised that the total luxury market is growing to US$2 trillion by 2010. However, the market is still basically controlled by some 35 companies from Europe and the US (60%) led by brands Giorgio Armani, Gucci, Versace and Christian Dior (Just Style, 2006). Luxury fashion represents about 5 percent of the total luxury market translating to about US$50 billion led by LVMH, Gucci group and Christian Dior Couture (Just Style, 2006).

The UK clothing and fashion industry remain as one of the more palatable as the market maintains some £32 billion in 2002 alone. LVMH Moet Hennessy Louis Vuitton posted a 2005 revenue rise to €13.90 or £9.57 billion from the previous year’s €12.48. Next, in September 2006, reported as first half pre-tax profits of £1.519 billion, 45 percent coming online. Gucci, under the Paris-based PPR SA that also houses Yves Saint Laurent, Fnac and Surcouf, is included in the report of PPR SA with a 2006 July-September revenue of €4.26 billion or $5.35 billion (AP, 2006).

British, UK or London fashion have always been set apart despite the forces of non-UK brands, specifically European or American, and segmentation has actually been categorised as: McFashion, UK or London style, international superbrands, and the micro markets (Priest, 2005). Coined by Lee (2003) after the McDonald marketing phenomenon of uniformity and predictability, McFashion has been classified as disposable, quick fix international fashion, trendy, and affordable by the mass market.

Other qualities of McFashion may include star qualities that shine and busts in a short period, or those which fill high street cheap chic stores working to formulas. These had been described as the speedy trickle down version of high couture exemplified by celebrities that are replicated, but not exactly copied to give room for versatility, in a matter of ten minutes (Lee, 2003, and Jackson, 2006). Brands of this nature include items that are found and purchased at Gap, H & M, Zara, Marks and Spencer, Arcadia group, Asda, Tesco, Sainsbury, Primark and New Look (Priest, 2005).

International superbrands include designer brands that are familiar in most major cities of the world that include Giorgio Armani, Yves Saint Laurent, Gucci, Guess, Burberry, Louis Vuitton, and Veneta Bottega, Chanel, among others and are at the opposite side of the polarised UK market. As couture is the word, it has been suggested to be incorporated with designer label (Priest, 2005) with the message that the label is critical, super-luxury, rarity and quality. Despite its characteristics, these designer labels remain big business with high stakes as influenced by class, film and music stars, sports personalities and everything glamour. Driven by the media circus, couture and ready-to-wear shows, international houses acknowledge of limited loyal customers, barely 200 with majority of sales as wedding dresses (Priest, 2005).

It has been reported that UK men and women spent £1.4 billion on these items in 2002 yet its value kept rising up to 40 percent with prices at premium. Women accounted for 57 percent of purchase. Interestingly, rarity on designer labels is slowly if not yet phased out as Tim Jackson (2002) from the London College of fashion quoted foremost names in fashion superlabels Tom Ford of PPR acknowledging globalisation as inevitable, John Marc Simon of Comite Colbert and Daniel Triboulliard specify China, Taiwan and Korea as the major destinations of the majority of luxury labels.

In these instances, acceleration of new wealth in new markets as well as the global fusion of what people and consumers watch on their movies, television and media emerged as the driving forces as growth is the main target of all major designer houses. Likewise, higher level of taste, education and worldliness as a result of education, travel and growing sophistication are the other forces that define new middle market customers that are ready to pay for premium, well-designed well-engineered and well-crafted good (Silversteine and Fiske, 2003).

Nevertheless, in the UK and London scene, fashion is still considered extraordinarily rich: a creative mix distinctively UK since the 1960s called “Swinging London” or “Cool Brittania” and other marketing slogans. UK’s design school products, acknowledged at around 3000 annually add up global influence in the fashion sense as most are not exclusive designers but design technologists, fashion buyers and purchasing agents, stylists, fashion journalists, pattern cutters, publicity communications specialists and a broad range of fashion and media-related jobs (Priest, 2005).

While others may start out new labels of their own, work on a freelance basis, others have tied up with merchants to go international or promote their own brands such as the case for Stella McCartney, Katharine Hamnett, John Rocha, Betty Jackson, Alexander McQueen, and Paul Smith (Priest, 2005).

There are also those that maintained low profile with constant and steady clientele, remained small, and can only be found in creative or trendy areas of cities in the UK rejecting commodisation of fashion. These designers and their outlets remained alternatives if not the constant drivers of style and unique creations as supported by a group of creative friends, journalists and those in-the-know. In fact, although this phenomenon, recognised to be around for forty years now, have shown local presence in most major cities but maybe falsely credited to be of London in origin (Priest 2005) as other cities, mirrored through media, are perceived with their own versions.

Priest (2005) further categorised London or UK fashion into another “micro markets’ with similarities to UK or London style fashion although placed in a bracket of “hedonistic, self-focused baby boomers, and they have forsaken the trappings of retirement for clubbing, hiking and pleasure seeking.” This segment is further described to react against brands and branding although influenced by brand values, preferring to be their own stylists as may be the result of education encouraging personal views and exposure, aim for personal gratification, style recognition, ethics and individuality (Priest, 2005).

This group has been recognised as mood consumers heavily influenced by the increased consciousness on health, well-being and spirituality, recognition of quality and craftsmanship, and the so-called “added value” or products that go well-beyond purchase and wearing.

Luxury Fashion Trends in the UK

With the rise of global marketing pushed harder by the broadband internet connection, mobility and growing economies outside the western sphere (Europe, Canada and the United States), various fashion and clothing trends that have been identified include the threat of low-priced new players against established fashion brands, the diffusion of established western markets, the global expansion of luxury brand consumers from an elite group to mass consumers, and the continued mobility of the fashion trendsetting elite beyond the clout of movie, recording and television celebrities.

Being able to identify signature designer details from precious metal on a handbag, lush fabric of a dress, or sole of a shoe without having to flaunt wearing and owning them has become the trend. “Stealth wealth” comes with the premise that if one is “truly among the fashion elite you don’t need labels or logos to showcase your style and wealth. The new mantra is: ‘If you’ve got it – don’t flaunt it,’” Jackson (2006) reported on luxury fashion trends.

Counterfeit

Counterfeit version of luxury brands and even the accessibility of these designer logos to the new rich masses from Korea, China to India, have made religious western fashionistas hide their designer looks from the mainstream who wants to scream about wearing them. Asia has accounted as much as half of the $80 billion global luxe industry and this did not only make designer labels accessible but are easily counterfeited as “genuine fakes” (Chadha and Husband, 2006) decreasing its appeal to trendsetters. Yale University professor Ravi Dhar accounts it as “It’s the same thing at play here […] It’s showing off by not showing off,” (qtd., Jackson, 2006).

This trend may have been a take-off from not-readily identifiable uber-premium designers like Bottega Veneta whose styles are not as readily identifiable and easily counterfeited such as Burberry and Louis Vuitton but this understated style becomes detectable only by fellow designer loyalists considered as part of the elite (Jackson, 2006). Burberry’s reportedly started downplaying its trademark plaid when British soccer thugs called “the Chavs” started being identified with the brand’s signature plaid, making Burberry’s high end customers in the UK shun the brand as they did not want to be associated with the subculture society (Jackson, 2006).

“Dressing the part” in purse parties no longer set apart a wearer of designer labels that are either easily and constantly counterfeited or easily bought at eBay. Logo-free items with subtle labelling but well-made and classic are preferred as the celebrity-obsessed culture takes cues from awards shows and entertainment rags. Radley Cramer, director of the fashion program at Marist College in New York was quoted saying, “If you go back 200 years in history, the royals would set the fashion standard and it would take about 10 years for the trends to trickle down to the masses […] Today, celebrities are the new royalty and the trends take 10 minutes to trickle down. Therefore, the trendsetters out there are constantly reinventing themselves,” (qtd., Jackson, 2006).

Prior to 2005, Thomas (2004) already noticed and predicted trends and fads in fashion highlighting the fact that “fashion is moving so fast that we need to decode quickly the distinctive details that create a new key piece. Today, designers present a fresh catwalk idea, and within a few weeks they are horrified to find that more than one high street store is already selling the cream of their designer collection ideas.” She added that in instances like this, the higher end gets the bulk of the problem as those who desire exclusivity loses the very thing that sets them apart from those who know nothing about fashion.

Thomas (2004) emphasised that there exists logo fatigue as also acknowledged elsewhere (Klein, 2000) and that only China and Japan desire for logos in dressing. “Only chavs really wear logos,” Thomas added with the vindication that craft should be individual, personalised and customised in order to “empower the consumer with some measure of self-selection and personal designing input…”

For formality, counterfeit goods are considered reproductions that look identical to legitimate products in appearance, packaging, trademarks and labelling (Ang, Cheng, Lim and Tambyah, 2001). The difference is that counterfeits were made to deceive although several terms may be confused with counterfeit, such as pirated goods, imitation goods and grey-area goods as Prendergast, Chuen and Phau (2002) suggests that counterfeit goods are copies made and sold to deceive consumers into believing the products are authentic, pirated or “bootlegged.”

As such, consumers may purchase products with the knowledge that they are fakes. On the other hand, imitation goods are copies that are similar but not identical to the authentic items and imposter fragrances may be categorised as such as these imitate designer fragrances that sell at much lower prices. These are called knock-offs. Gray-area, meanwhile refers to goods that are genuine trademarks and are sold outside authorised distribution channels.

According to the ICC Counterfeiting intelligence Bureau (2004), counterfeit product sales reached an estimated US$376.2 billion and have cause hundreds of thousands of job loses worldwide. Green and Smith (2002) reported that companies such as Louie Vuitton, Cartier, and Gucci expend a great deal to combat counterfeiting.

Market Segmentation

This paper will also explore on market segmentation as defining the markets of both luxury brand, counterfeit and cosmetics could provide a deeper understanding on strategies applicable on the process of marketing these products.

Market segmentation, positioning and the marketing mix all play pivotal roles in consumer marketing, specially luxury fashion, and those who counterfeit them, as well as cosmetics. For enterprises, locating and targeting unique market segments is a necessity in order to become competitive in the marketplace (AMA, 2005). Creative market segmentation strategies allows a business organisation a strategic advantage over its competition as underserved niche are uncovered, and gunning marketing and financial resources into that niche (Neal, 2005). Each segment responds differently from others to the variations of marketing mix. Four basic criteria were set by Green and Tull (1978) as follows:

1. That the segments must exist in the environment and not be a figment of the researcher or management’s imagination
2. That the segments are repeatedly and consistently identifiable
3. That the segments must be reasonably stable over time
4. And that one must be able to efficiently reach these segments through specifically targeted distribution and communication initiatives.

As such a firm is expected to either adopt the mass-market strategy or a market segmentation strategy and never anything in-between (Neal, 2005). In the process, senior management is involved in the strategic decision in the effective market segmentation where alternative marketing strategies are executed in pricing, promotion, and distribution systems. Likewise, it is not enough that research and development can execute product or service variations. The whole process involves manufacturing to produce the variations, finance to report costs, profits and margins, with the marketing research able in monitoring and measuring customer response (Neal 2006).

For most firms, the practice is to develop market segments for each product category, discern current and proposed positions within each of the segments, then select its target market based on the opportunities that exists in each segment (Neal, 2005). It is also necessary that a firm sets initial forecasts of market demand before fine-tuning its marketing mix to achieve optimum results in positioning and penetration. The basis for segmenting a market may include: “Product class behaviours; Product class preferences; Product class-related attitudes; Brand selection behaviour; Brand-related attitudes; Purchasers’ attitudes toward themselves and their environment; Demographics; Geographics; and Socioeconomic status,” (Neal, 2005).

There are two methods for market segmentation:

• A priori segmentation – this grouping may result from a company tradition, recognised industrial groups or other internal or external criteria where a firm chooses to break customer groups by a generally accepted classification procedure related to variation in customer purchase or use of a product category. Samples include: “Standard Industrial Classification (SIC) groups; Geographic regions or sales territories; Basic demographic groups (e.g., sex, age, household composition); Purchase or usage groups (e.g., heavy users, light users, nonusers); VALS (SRI’s Values and Life Styles classification system); and PRIZM, or similar geodemographic classification systems,” (Neal, 2006).
• Post hoc segmentation is based on the results of research study undertaken for the purpose of market segmenting formed by aggregating buyers who respond similarly to a set of basis questions with a selected basis variables that may include: “Product attribute preferences; Values; Product purchase patterns; Product usage patterns; Benefits sought; Brand preferences; Price sensitivity; Brand loyalty; Socioeconomic status; Deal proneness; Lifestyles; Self-image; Attitudes and opinions toward one’s environment; and Dealer loyalty,” (Neal, 2005).

As market segmentation involves partitioning a large market into smaller groups, firms and business organisations in the luxury fashion and cosmetics may deal with each segment by specifically providing which is most needed by the customer in a certain segment, allowing price and product changes a reasonable range for the segment to avail. In some instance, the firm may also pursue just one segment or all of the segments with enough profitability. Appropriate segment is evaluated against the organisations own strengths weaknesses and strategic objectives (Dutka, 2006).

Two segmentation techniques are as follows:

1. Perceptual Mapping – it is a tool to discover how consumers differentiate products or organisations where relations are portrayed by the relative position of points on a two-dimensional map. Distance between points indicates the degree of relationship between the variables while points that cluster reveal those which are closely related.
2. Decision Tree Analysis – uses cross tabulations to examine results of a particular survey question and can be very complex in determining specific categories as analysis must identify as many practical and potential combinations. Isolation of relationships follow and is tested by a statistical method to ensure that the data conveys real insight (Dutka, 2006).

Positioning

Burberry back in 1998 had its annual profit drop from £62m to £25m that led to criticisms of Burberry as an outdated business with a zero fashion cachet. But the company made a u-turn with significant improvements in its business performance through re-positioning strategy (Moore and Birtwistle, 2004).

Positioning is considered an art of tailoring the image and presentation of a product or service to appeal to a selected or targeted market segment (Dutka, 2006) enabling marketers to draw a direct link between product attributes and specific customer needs instead of crafting a general appeal. Positioning strategies already existed for decades and is closely related to market segmentation as the process involves identification of potential customers. It is used in today’s diverse marketplace as an essential marketing tool for success. Coco Chanel was identified to have used product positioning as early as the 1920s with self-styling promotion using neutral tones of beige, sand, cream, navy and black coupled with soft fluid jersey fabrics in simple shapes (Thomas, 2004).

Product positioning reduces costs for ineffective marketing and advertising to remain competitive in the increasingly complex business environment.

In positioning, association or brand association may matter. Fashion brands gain competitive advantage with the associations they have, from the retail shop to the buyer or wearer, and in a common department store or retailer shop, through design aspects within the concession shop (Gretz, 2000). Design has been used as a key solution in providing differentiation from other concession shop products within the store. Elements include store façade, interior, décor, lighting, atmosphere, fixtures, and design of hangers. Details become necessary for brands to become highly visible (Gretz, 2000).

Concession and host retailer also develops alliance that affect the brand image of luxury fashion. From the start, manufacturers chose the appropriate retailers that must carry their brand names lest a negative association could impact to its existing and prospective consumers. Composite brand alliance was defined as an indirect form of brand extension (Park et al, 1996) while a close relationship between brands combined with the impersonal business relationship shape the interaction between brands and shaping awareness in co-branding (Uggla, 2001).

Marketing Mix

The marketing mix is an approach in crafting and implementing marketing strategies emphasising the blending of factors to obtain organisational and consumer objectives (Borden, 1964) as inspired in a James Culliton article. The target market in cosmetics, luxury fashion and even counterfeit industries, is foremost considered in blending the elements by understanding the wants and needs of the market or customer.

“When building a marketing program to fit the needs of his firm, the marketing manager has to weigh the behavioural forces and then juggle marketing elements in his mix with a keen eye on the resources with which he has to work,” (Borden, N. 1964 pg 365). Certain marketing mix is usually prepared for every product offering or each market segment which is also dependent on the organisation. McCarthy (1960) suggested the following as the most common variables in the marketing mix:

• Product is the luxury fashion brand
• Price is usually exorbitant for the masses
• Place or distribution is through retail shops that is frequented by trendsetters and the fashion elite
• Promotion is the communication between the organisation’s product to its target consumers using marketing strategies and advertisements.

Marketing Luxury Fashion

There are a variety of ways to build a luxury fashion brand but the consumer play a major role in its success or failure. McRobbie (1998) delineated two pillars of the British fashion as the art school establishments and fashion media represented by women’s fashion magazines. So that the thousands of fashion design graduates of London have two ways to go: build their own names or tie-up with established fashion houses. In this instance, the consumer was not included in the picture as she noted how many have gone bust after a year or two. But trends identified as the British or UK fashion which may be categorised in this instance as “independent” by this researcher taking from the so-called “indie” label of the recording industry, as well as the micro market (Priest, 2005) created a niche for small and struggling designers with the value only superbrands could muster and equal.

Luxury fashion has always been identified with established brands, as most talented names also start out with established brands prior to branching out on their own, or until a designer name that is about to make it are bought by established fashion houses. But brands notwithstanding, certain qualities are always associated with luxury brands: craftsmanship, comfort, durability, and style. Other qualities may depend on place or country of origin, material, and subliminal messages that are part of the branding as Kotler (1994) defined:

• Attributes – such as expensive, exclusive, well-made, modern, classic, durable or comfortable
• Benefits – which include functional as the garments may be worn for years, and styled to last for several seasons, as well as emotional benefits of the feeling of wealth and security, affluence, importance and admiration, pleasure and high self-esteem
• Values – such as classic, quality, artistic or traditional
• Culture – as that of English tradition, the monarchy, class system and pride in history and craftsmanship, or the Italian style and originality of design.
• Personality – of which a brand projects age, maturity, occupation, wealth, social status, or aristocracy
• Use – conveys profession, age, career or position, social status, and even personal or professional achievement.

This illustrates that luxury fashion brand is more than a name, and has achieved the status of an identifier where individuals wearing or preferring certain brands or style develop a bond which may not be achieved in any other way. As clothes were acknowledged as a form of non-verbal communication since it has become so visible component of the individual’s daily device, Kaiser (1990) suggested that it helps individuals organise and make sense of his or her social experiences.

In establishing luxury brands especially for new players, repurchase intention marks an apparent motivational state of consumers to repeat a buying behaviour and that there is a designated consequence of perceived value (Chang and Wildt, 1994). This led to brand marketing and communication efforts to enhance perceptions of brand purchase value to elicit favourable repurchase behaviour (Munger and Grewal, 2001).

While it was postulated that the economic value of functionality and substitutability was once considered as the prime model for trade-off purchase (Dodds, Monroe and Grewal, 1991), other marketing researchers (Fournier, 1991, Belk, 1995) argued that contemporary consumer behaviour should be closely associated with post-modernism as a socio-cultural phenomenon, or individuals consuming is not for basic needs but in pursuit of self identity, social groups and culture or even subculture. Further, it links consumer purchase behaviour to symbolic meanings of products in relation to the self, social and cultural context where individual consumers exist.

Nevertheless, emotion is still considered as a factor in the stream of consumer behaviour (Elliott, 1997 and Shawarz, 2000) putting emotion or affect ahead of cognition as a main factor in consumer behaviour. That consumers have a general propensity to seek out affective situations, enjoy emotional stimuli, and exhibit a preference to use emotion in interacting. A holistic approach was also proposed for the investigation of brand purchase value (Mano and Oliver, 1993 and Schmitt, 1999) while others link it to a multi-dimensional construct affected by symbolic, emotional and cognitive factors ( Sweney, Sotar and Lester, 1996).

Sai (2005) suggested the above structure to validate consumer purchase behaviour. It is to be noted that people buy luxury products because they cost more and does not necessarily proven as better in aspects than the cheaper brands (Dubois and Duquesne, 1993) but Silverstein and Fiske (2003) argued that luxury brands are used to enhance one’s social status and that even middle class attain the perception of prosperity, individual wealth as well as differentiation from others.

Summary

Basing on the present literature, many factors, strategies and conflicts are considered by marketers of cosmetics and luxury brand clothing, and even counterfeit providers, when it comes to dealing with consumers and market positioning. Consumers are constantly seeking ways to express their lifestyle through preferences and this is highlighted most obviously by their physical appearance, directly impacted by clothing and cosmetics.

However, it is of note that while both cosmetics and clothing are defined self-expression of lifestyle as well as used to providing a positive image on a social aspect, they are not necessarily given an equal ranking on importance. It is of note that clothing provides a basic purpose while cosmetics provides complementary one as maintenance or enhancement of physical appearance. It seemed that while clothing provide and define a physical appearance, cosmetics add up or improve what already exists.

This paper shall proceed to determine consumer decision when faced to choose between cosmetics and luxury brand clothing, in the presence of counterfeit.

Methodology

This study used survey method question on a purposive sampling of female internet users aged 18 to 35. The method hoped to provide a clear distinction on the preference of the respondents in order to achieve the objectives of this study. A list of electronic mail addresses were purchased from vendors. The list specifically asked for are females at age group 18 to 35. 200 e-mail addresses was provided of which originally sent an emailed inquiry prior to sending out the questionnaire. The original target quantity of respondents was 200, but due to limited resources and time, a total of 100 respondents who were able to finish and submit their answers properly were considered the final. Careful consideration as to the research method used was given in order to satisfy research objectives (Saunders et al, 2000).

Since permission was sought to each participant prior to sending out the questionnaire, and since the participants are considered matured at the age given, sufficient ethical consideration had been carefully applied in this research.

Data was gathered through collection of the respondents’ feedback or answers. These were tabulated as soon as it was deemed sufficient, or that all questions were properly answered in the given limited choices. Those which did not meet the criteria — incomplete answer to questions — were removed from the final list.

Research Philosophy

This section will discuss the research plan in details including the research philosophy, the research approach and research strategies used. Saunders et al. (2003) defined the research process ‘onion’, consisting of five different layers. This study shall provide a mix of research strategies to obtain its objectives.

The research philosophy may be framed within an interpretivistic or phenomenology philosophy, exploring, “The subjective meanings motivating people’s actions,” (Saunders et al 2003: 84). Inductive reasoning applies to situations where specific observations or measurements are made towards developing broader conclusions, generalizations and theories (Saunders et al. 2003, pp.87-88). An inductive research approach is considered the most appropriate for an interpretivistic research philosophy.

Therefore, this research will follow an inductive approach which will enable a greater understanding of the meanings humans attach to events “in which you would collect data and develop a theory as a result of your data analysis,” (Saunders et al, 2003).

In addition, an exploratory research strategy will be used in order to create a deeper understanding of consumer preferences with regards to the use of fake cosmetics as opposed to fake fashion. “Exploratory studies are a valuable means of finding out what is happening; to seek new insights; to ask questions and assess phenomena in a new light,” (Robson, 1993; 42).

Survey Method

The survey is a non-experimental, descriptive research method which is considered very useful when a researcher wants to collect data on phenomena that cannot be directly observed. Surveys are used extensively in research to assess attitudes and characteristics of a wide range of subjects, from consumer to business as well as business to business interaction, among others. In a survey, the researcher or researchers sample a population, which means that not everybody are expected to participate within a given area, locality or group of population. According to Basha and Harter (1980), “a population is any set of persons or objects that possesses at least one common characteristic. In this instance, there are at least three common characteristics of respondents, being their age categorised under an age group bracket of 18 to 35 years old, internet users, and all females.

Five preliminary steps were taken in embarking upon this research project:

• choose a topic
• review the literature
• determine the research question
• develop a hypothesis and
• operationalisation or figuring out how to accurately measure the factors this research wish to measure, that is the preference of the respondents on choosing between luxury brand clothing or cosmetics purchase and use (Meyer, 1998).

Likewise, for this research survey, two additional considerations were of prime importance: representative sampling and question design.

Cross-Sectional Survey

This study further uses the cross-sectional survey. This is used to gather information on a population at a single point in time, being started in November for the preliminary communication with the prospective respondents. However, it is to be noted that the questionnaire have indulged the subjects to recall their spending habit during the months of September, October and November. This was necessary to provide a limited time frame inclusive of the survey questionnaire. The survey ended in December, all at the same time when a minimum target of respondents was able to provide completed answers to the questionnaire sent to them.

The cross-sectional research have the data gathered from the research participants at a single point in time or during a single, relatively brief time period typically collected from multiple groups or types of people in cross-sectional research. This goal was achieved by not necessarily limiting the participants to their location, group affiliation, and other identifying status.

Purposive Sampling

Purposive sampling is a non-probability sampling strategy that targets a particular group of peoples, in this case, females aged 18 to 35 and internet users. This was chosen on the premise that the ideal population for the study is large and locating and recruiting would be very difficult due to limited resources and time, and of which purposive sampling was left as be the best option.

In this process, for almost a minimum period of fourteen (14) days, the researcher sent letters through electronic mail (e-mail) in a list of e-mail addresses obtained from legal vendors for voluntary online respondents (QuestionPro, 2007).

The list has 200 female respondent e-mail addresses with their age range limited between 18 to 35 years old. The first letter was sent inquiring whether or not the respondent would be available and willing to answer a questionnaire about their expenditure, plan and preference on purchasing luxury brand clothing and cosmetics. About 183 sent back a reply stating their willingness. Consequently, the questionnaire was sent to the 183 with a given time frame to return their answers. Only 113 were able to send back their answers but after careful consideration, only 100 respondents were considered for final presentation due to the completion of their answers as well as determination of purchase action.

Other consideration on the study was the time-frame used in the questionnaire. The last three (3) months was used covering the months from August to October as basis for determining purchase or consumption practice on the respondents as this will gauge the active consumer from the passive. The given period may also determine a sequence and pattern as well as a definitive preference.

The age group of 18 to 35 has been chosen as this group represents independent, self-sustaining and with their own income. This means that the age group decides on their own in their buying or purchase habits. The female gender was chosen as previous studies already pointed out how females are more picky or meticulous as well as conscious with what they wear or how they look over males. Likewise, online users were preferred over other group of population as these are quite easier to communicate with, speedier, and more practical to deal with. These are the underpinning rationale for choice of demographics.

Limitations of the Study

Since the respondents were only 100 females that generally represent the whole and a wide range of females using or not using luxury brand clothing and cosmetics, a bias may be obtained where consequential preference of the majority of the respondents may not represent the general majority within or beyond the age group as well as the consumer population in general.

This limitation, however, has been previously considered and may not directly affect a consensus as each of the respondents are picked randomly with only age and gender as consideration and may have come from a wide variety of peoples, cultures and classes. Another bias provided for was using the internet for respondents. It is very possible that the respondents; population would be limited to people with internet access. It was opined that “Internet users are not representative of the general population, even when matched on age, gender, etc.. This can be a serious problem, unless you are only interested in people who have Internet access.

In many business surveys this limitation might not be a problem,” (Survey System, 2008). This problem is addressed with the rationale that the internet has grown exponentially the fast few years that many class of consumers are fairly represented. Likewise, with the products concerned only on luxury fashion, cosmetics and even counterfeit, it is to be understood that the general internet users have or are regularly exposed to these products as these are now available extensively online.

Two limitations were also presented as for using questionnaire. Emailed questionnaire is structured and limited. It was not possible for the researcher to probe the respondents’ answers. (Stat Pac, Inc., 2008). However, it is to be understood that the opinion of the respondents when it comes to luxury fashion, cosmetics and even counterfeit are not necessary to reach the objectives of this study.

Questionnaire

The questionnaire used in this survey collects data on the spending habits of the 100 female respondents at the age range 18 to 35 years old. A consideration has been for the subjects to recall their last three months spending habits on cosmetics, luxury brand clothing, or even counterfeit. Likewise, the questionnaire also addressed the conscious preference of the respondents on which to spend for when pressed to choose one of the three items identified. Designing good questions proved to be much more difficult as already noted by many researchers before. But Busha and Harter (1980) provided a guideline with the following suggestions that this researcher tried to address:

• When the nature of a survey does not warrant usage, avoid slang, jargon, and technical terms.
• As much as possible, develop consistent response methods.
• Make the questions impersonal as much as possible.
• Avoid biasing later responses by the wording used in earlier questions.
• Try to sequence questions from the general to the specific.
• If closed questions are ever used, develop exhaustive and mutually exclusive response alternatives.
• Try to place questions with similar content together in the survey instrument.
• Provide questions that are as easy to answer as possible.
• In using unique and unusual terms, use clear definitions.
• An attractive questionnaire format that conveys a professional image is very acceptable.

The Questionnaire went as follows:

• Age:

• If given a choice to spend on any of the three items below, which would you give preference (please number from 1 to 3, with 1 as the most preferred purchase)
  • Cosmetics
  • Luxury brand clothing
  • Counterfeit brand of good quality at much lower price.
• If you were to choose between luxury brand clothing and counterfeit of almost indistinguishable difference with the original, what will you choose?
  • Luxury brand clothing
  • Counterfeit brand of good quality at much lower price.
• When would you prefer to buy luxury brand clothing (please check one)?
  • All the time I buy clothing
  • At least 5 times a year
  • For very important occasion only (at least 2 times a year)
  • Never.
• If you were to spend a considerable amount of money just once, which would you choose?
  • Cosmetics and counterfeit luxury brand clothing
  • Luxury brand clothing
  • Cosmetics only.

Closed-ended questions are used in the survey to determine specifically the choice answer of respondents in order to provide a solid structure to which the result may be based. In addition, closed-ended questions also are easier to analyse of which all answers are given a number or value so that a statistical interpretation can be assessed. In addition, the simplicity of closed-ended questions, make it more specific and likely to communicate similar meanings. In comparison to open-ended questions, respondents use their own words making it difficult to compare the meanings of the responses Allan and Skinner (1991).

The closed-ended question also fits it on the survey as closed-ended questions take less time of the interviewer, the participant and the researcher, and makes it a less expensive survey method. It was also suggested by Allan and Skinner (1991) that the response rate is higher with surveys that use closed-ended question as compared with those that use open-ended questions.

Research Time Frame and Schedule

The following Gantt chart provides an overview of the research process from the gathering of lists for probable participants until a complete survey was finalised.

Research Ethics

Research experts posed that several ethical issues must be considered when designing research that will utilize participants who are human beings as follows:

• The researcher should consider the safety of the research participant. This may be accomplished through careful consideration of the risk and benefit ratio, using all available information to make an appropriate assessment.
• The researcher must obtain informed consent from each research participant. This was obtained in writing through electronic mail in the case of this research. The participants were given enough time to reply to the email inquiry and the researcher was able to gather about 180 or so willing respondents. As the respondents were not at all pressured to reply, they were allowed opportunity to carefully consider the risks and benefits as well as to ask pertinent questions. There were those who asked if there would be other requirements except for the age and gender issues which were promptly replied by this researcher. Likewise, the researcher have emphasized that the email addresses and the answers will be kept confidential to protect the identity and privacy of the respondents.
• The researcher also enumerated how privacy and confidentiality concerns are approached. It is necessary that researchers are sensitive to not only how information is protected from unauthorized observation. They are also informed if and how the respondents may be notified of any unforeseen findings from the research that they may or may not want to know.
• The researcher also considered how adverse events will be handled with regards to the participants’ protection for privacy and their participation in the survey (Saunders et al, 2003, p. 131, and the University of Washington, 2007).

All these issues were considered prior to the dissemination of the first letter of intent among the obtained list of respondents. As the list provider was responsible in filtering the list of female participants’ email addresses, it was taken into good faith by the researcher that all respondents were females. Only their age was asked stated in the questionnaire in order to ascertain their qualification for the set age range. It was also included in the letter of intent that all participants’ addresses and responses will never be taken out public, nor would be disseminated elsewhere. The respondents email addresses would be deleted to the address book of the researcher once the completed answer sheet were emailed back.

The email addresses were promptly deleted once the final list of respondents’ answers was collected. This ensures that no more communication shall follow and the electronic communications between researcher and respondents was automatically halted. Since then, no form of contact had been made between the researcher and the respondents.

Ethics refers to “the appropriateness of your behaviour in relation to the rights of those who became the subject of your work” (Saunders et al, 2003, p. 178). The communications with respondents that closely followed Saunders et al (2003) recommendation with regards to ethical consideration are presented under Appendices.

Reliability and Validity

It is important to consider the reliability and validity of this study as there is the need to know whether the goals are being attained and that whether the measures used is consistent with what this study aims. Reliability is understood as the extent to which an experiment, test, or any measuring procedure yields the same result on repeated trials as the lack of agreement of independent observers to replicate research procedures, or the ability to use research tools and procedures that yield inconsistent measurements could lead to unsatisfactory conclusions. This will also unable to reach theories or make claims about the generalisation of the research. Reliability is critical for many parts of peoples’ lives, including manufacturing, marketing, information, amongst others (Huit, 1998).

Reliability, likewise, has been defined in terms of its application to a wide range of activities with four key types: Equivalency Reliability, Stability Reliability, Internal Consistency, and Interrater Reliability (Huit, 1998).

Validity has been defined as the degree to which a study reflects accurately or assesses the specific concept being measured or studied. Validity is concerned with the research’s success at measuring what was set out to be measured. Researchers are concerned with both external, meaning the extent to which the results of a study are generalisable or transferable (Campbell and Stanley, 1966), and internal validity referring to: the design and care with which the study was conducted; and the extent to which the researchers have taken into account alternative explanations for any causal relationships they explore (Huitt, 1998).

Summary

The whole primary research process of conducting survey and gathering the response of the respondents took place as carefully planned. All agreements between researcher and respondents were applied to ensure their privacy and protection. All data were collated and tabulated as necessary in order to provide the necessary goal of obtaining the preference of respondents with regards to purchase and use decision with luxury brand clothing, cosmetics and counterfeit.

Data Presentation

When asked whether the respondents purchased luxury brand clothing for the last 3 months, 48% said they did, while only 27% said no. As for purchase for any cosmetics products for the last 3 months, 40% said they did, while only 32% said no. As for spending a considerable amount on their income on luxury brand clothing for the same time frame, 28% said they did while 44% said they did not.

About 12% spent a considerable amount of their income on the same time frame for cosmetics, while 88% said they did not. As for the direct question on preference between luxury brand clothing against cosmetics, 36% said they go for luxury brand clothing while 32% said no. 12% preferred cosmetics over luxury brand clothing. As for counterfeit, 90% admitted to have purchased counterfeit while 10% said they never bought counterfeit.

Figure 2 provides an immediate overview on preference of the females at age group 18-35 on luxury brand clothing over cosmetics use.

The following is a tabulation of percentage of the answers of the 100 female respondents:

Table 1.

• If given a choice to spend on any of the three items below, which would you give preference (please number from 1 to 3, with 1 as the most preferred purchase)
  • Cosmetics 12 (1)
  • Luxury brand clothing 36 (1)
  • Counterfeit brand of good quality at much lower price. 52 (1)
• If you were to choose between luxury brand clothing and counterfeit of almost indistinguishable difference with the original, what will you choose?
  • Luxury brand clothing 10
  • Counterfeit brand of good quality at much lower price. 90
• When would you prefer to buy luxury brand clothing?
  • All the time I buy clothing 10
  • At least 5 times a year 48
  • For very important occasion only (at least 2 times a year) 12
  • Never. 30
• If you were to spend a considerable amount of money just once, which would you choose?
  • Cosmetics and counterfeit luxury brand clothing 64
  • Luxury brand clothing only 24
  • Cosmetics only. 12

As for the preferences, 52% said they will spend on counterfeit, 36% on luxury brand and 12% prefer cosmetics. 90% have admitted to choose counterfeit closely resembling quality and material of luxury brands while 10% remain loyal to their luxury brands. 10% also admitted to always buying luxury brand clothing. When asked where to spend a considerable amount of money for just once, 64% would spend on cosmetics and counterfeit brand, 24% would spend on luxury brand clothing while 12% would spend on cosmetics.

Figure 3 provides a summation on the negative effect of counterfeit over luxury brand clothing.

To clearly provide an overview of which was the most preferred in the respondents’ expenditure, resulting pie graphs are provided below.

Analysis

In consideration of the respondents’ answers on the survey, it was evident that counterfeit products have an influence in the decision-making process of purchasing. In fact, the overwhelming majority of all respondents prefer counterfeit over luxury brands when faced to choose between the two (90%). When cosmetics are included in the choice, counterfeit brand also prevails (56%).

Nevertheless, a consistent percentage showed loyalty on luxury brands and would choose luxury brand clothing over cosmetics or even counterfeit. Also, a majority at 36% prefer luxury brand clothing over cosmetics. Same percentage of 36% also showed consistence when given the chance to spend on luxury brands, cosmetics or counterfeits.

Another consistency in the survey is the preference of 12% to have spent on cosmetics over the last three months. Overall, there is a relative influence on the purchase and use decision of cosmetics and luxury brand clothing. But more importantly, counterfeit affects the decision-making process of the majority of consumers in this survey.

The survey results suggests that luxury brand clothing, whether legitimate or counterfeit, is preferred by more consumers of the given age group and gender. This could imply that clothing is a preferred self expression or lifestyle as much as it is a basic necessity for protection. This could be understandable as it should be noted that cosmetics serve as an enhancement and not a basic necessity as much as the protection gained from clothing, therefore, it is much preferred by consumers.

Discussion

The key data of findings of the study provided that there is much preference for spending and use of clothes, luxury or counterfeit, than spending and use of cosmetics. It is also found that counterfeit greatly affects consumer decision when it comes to buying luxury brands and cosmetics.

The findings relate to objectives through provision of solid evidence among online women consumers aged 18 to 35 that there is a higher preference for purchasing physical and bodily appearance-related products such as clothing and accessories. This paper sought to investigate the purchase decision process when buying luxury brands of which the respondents showed was clearly influenced by the presence of clothing, genuine luxury brands or counterfeit. It is noted in this study, however, that luxury brand users are loyal and would stick to genuine articles. In assessing if there are differences on consumer behavior when purchasing clothing versus cosmetics, it was also found that while there is general preference for clothing, loyalty is established between luxury brand users and cosmetics users, so that buying attitude is consistent.

In exploring consumer willingness to buy and use fake articles, the study yielded mixed but related answers: the majority opt for counterfeit when they have a choice; a solid group opts for genuine luxury brands, and another solid group prefer buying cosmetics.

In investigating different consumer preferences with regards to the use of fake cosmetics as opposed to fake fashion

All of the findings supported what was researched. While a consumer behaviour model would help to find these matches, this study suggests that the necessity of clothes not only forms of protection but also as form of expression and personality enhancement made it a preferred buy among consumers. Cosmetics, as earlier noted in the review of related literature, basically provides enhancement and maintenance of physical appearance, without a very solid necessity or practicality.

What were found in this study also solidly relate to literature that clothing fashion is a bigger and much more exploited industry than the cosmetics industry although both are related to physical appearance and marketed hand-hand. The paper provided sufficient answers to the research objectives as well as tied the findings with the literature previously presented with the objective to investigate the purchase decision process when buying luxury brands.

Conclusion

This study was able to establish through the mentioned literature on luxury clothing that luxury goods or brands are those which are patented, authentic and genuine trademarked products which targets the market segment with the highest income group, as well as having expensive costs as compared to same brands or products existing in the market.

The purchase decision process for many consumers when purchasing luxury brands was associated with premium first-hand experience as well as careful scrutiny and established reputation of a retail outlet. However, other factors may be considered, among them the desire to be identified to a certain group or class, popular perception about a brand, media message on a certain luxury brand, among others. As for cosmetics, the desire to enhance one’s physical self, as well as the promise of brands or products through media messages, advertising and communications serves as the factors that persuade consumers to buy or purchase the brand or products.

In consideration of the above findings, this study found that there are a defined percentage of women who prefer to spend on luxury brand clothing as much as there is also a definite percentage who had spent on cosmetics over a given period. A trace of luxury brand loyalty can also be interpreted in the survey.

However, expenditure of women has shown preference on clothing, luxury brand or counterfeit, when it comes to choice between cosmetics and clothing. Counterfeit existence in the market shows a big influence in the buying preference of the majority as they admitted to prefer almost the same or the so-called “genuine fakes” merchandise over luxury brand clothing.

Clothing definitely is the preference for lifestyle expression among the sample of women surveyed. This may be due to the fact that clothing still serves as a necessity, a product that keeps the body safe from outside elements such as weather. Likewise, clothing is used regularly on whatever occasion or reason due to its basic service to the user. On the other hand, consumer may do without cosmetics as not all events in their daily existence require its use. Toiletries, however, are of a different plane. Individuals may proceed with their ordinary and regular routine without having to enhance their physical appearance, while individuals need a form of clothing at most of their daily schedule, from sleeping, waking, to economic or leisure activities. These may explain the prevalence of consumer preference on clothing against cosmetics purchase or use.

As for purchase between counterfeit clothing and cosmetics brands, literature provided that most cosmetics products popularly imitated which are designer perfumes are most often marketed as imposters and are clearly acknowledged by consumers as such. This study, however, did not take into consideration the preference between luxury brand clothing or luxury brand cosmetics. As for counterfeit clothing, it was established that majority of the respondents have an idea about their counterfeit purchase as they admitted to have preferred counterfeit closely resembling originals despite the prior knowledge. The high result of the preference however, indicates a negative impact on legitimate luxury brands that needs to be highlighted.

Recommendation

Since there is a definite limitation as to the population of this survey, it is highly recommended that further study in consideration of income, gender, or even race and age of respondents be undertaken and considered. It is highly probable that the majority of respondents in the survey were part of a segment market that may not be on the segment of luxury brand buyers as well as those who may not prefer use of cosmetics. Various and more extensive studies are needed to clearly identify problems that occur within the purchase decisions on luxury brands, counterfeit and cosmetics amongst various market segments. Definitely, each has a market segment that may not necessarily be the segment of another.

Cosmetics, likewise has grown exponentially when it comes to kinds and quality so that it is also necessary that a defined “form” or “kind” of cosmetics be established on further research on the matter. Cosmetic surgery, semi-permanent as well as permanent cosmetics and toiletries form various groups that may have different groups of consumers. These considerations against preference, event or situation should be carefully considered in order to gauge a clearer picture on the consumer preference.

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Introduction

Consumer behavior investigates the consumer’s decision-making, psychological responses to the products and services, and disposal of items. It aims to facilitate business growth by understanding market demand and targeting specific groups. Cultural beliefs, social hierarchy, and family structures form the consumers’ purchase-making mind, affecting their shopping choices. When consumer behavior consultants like me conduct surveys, they obtain valuable information to influence customers’ decisions and change the brand’s targeting.

The Survey Sample Results

The survey consists of 16 open-ended questions answered by 18 respondents targeting the customer’s behavior. The first question justifies that before buying a product, customers consider their beliefs, accounting for 44.4%. Meanwhile, 44.4% of customers compare alternatives, and 33% conduct research before shopping. Half of the respondents believe this purchase positively affects their mood, and only 11% think of the other people’s reaffirming. The two most favored answers for the reasons for purchase are the product’s ability to make life easier with 33% of votes and the necessity of a product with 27.8%. The fifth question demonstrates how customers reject the items due to the brand’s involvement in illegal activities, with half of the answers. For 38.9% of people, family and friends influence purchase decisions, but only two people are affected by celebrities. Most customers are influencers accounting for 33.3%, and they believe that their social rank determines their purchases. Therefore, 66.6% buy products belonging to a particular group, and symbols and artifacts are the primary influencers of purchase-making.

As a consumer behavior consultant, the last questions give me a chance to understand my clients’ backgrounds. Most respondents are males accounting for 72.2%, and only 22.2% are females. Half of the respondents are aged 41-55, while others are younger. 61.1% of respondents are employed, and 55.6% have an average household income between 45,000 and 120,000 dollars. According to these findings, consultants adjust the targeting strategies.

The Sample Survey’s Key Findings

Culture’s specific beliefs, ethics, and practices shape the consumer’s mind. This survey proves that abstract cultural influencers such as social norms comprising socially approved behaviors play a vital role in decision-making. Usually, consumers violate or follow social norms because they are unformal (Melnyk et al., 2022). In the tenth question, respondents identify norms as ineffective as they oppose standard behaviors in a society. However, the fifth question demonstrates that most customers refuse the product only if the brand is involved in unethical actions, proving the controversial perspective towards social norms. Therefore, customers prefer to choose brands with a good reputation that do not break social norms, but when making purchases, they mostly do not rely on social norms defining their age, gender, or ethnicity.

Beliefs and symbols are culture’s abstract components that affect the customers’ decisions the most, while artifacts are culture’s most influential physical components. Han & Kim (2018) believe that consumers’ purchase-making decisions vary across cultures, like values and beliefs. No wonder most customers prefer products that align with their values and beliefs, according to the first question, which points out the importance of cultural factors. Meanwhile, material objects from the tenth question also match the second question’s findings justifying that people tend to compare different products. They focus on the alternatives’ availability, price, and quality when making decisions. Therefore, material artifacts are the motivation behind purchasing items.

The survey’s results show people’s preferences in shopping based on social rank and hierarchy. It fits into the most widely used cultural dimensions theory provided by Hofstede, distinguishing five dimensions: power distance, uncertainty avoidance, individualism, masculinity, and long-term orientation (Steenkamp, 2019). The eighth question illustrates the power distance of the strength of social hierarchy, showing that street shoes like Skechers facilitate customers belonging to a particular social group. For example, dominant luxury brands are associated with high prestige, excellent quality, and loyalty, bringing together individuals from one social rank and of equal respect (Steenkamp, 2019). People usually purchase products according to their material artifacts, meaning that more financial opportunities provide better products. People are having more financial opportunities usually purchase better products.

Consumers are susceptible to the external influences of reference groups, who are individuals guiding appropriate values and affecting customer purchase-making. In buying Skechers, people refer to their friends and family as the membership reference group, pointing to the main functions of the family, such as emotional support and economic well-being. In extended families, consumers rely more on their families as influencers, but in nuclear families, they rely on their peers and friends (Fernandes and Panda, 2019). Moreover, customers act as influencers and deciders with the power to determine purchases in their families, which may be justified by the fact that most people taking a survey are adults aged 41-55. The ninth question highlights the importance of value-expressive reference groups based on the identification process. Respondents aim to belong to a particular reference group as they want to enhance their self-image by being associated with a brand (Zhu et al., 2019). Therefore, every consumer has motivations to buy a product, but mostly their families and peers affect the possible options.

Current Consumer Behavior Trends

Drawing suggestions from the survey findings improve business growth and focuses on important trends. Skechers should primarily focus on the convenient street shoes for the employed adults, who praise authority, social ranking, and cultural beliefs. The company should have relatively fixed product prices to maintain the current customers’ loyalty from a lower social class (Manstead, 2018). However, if the company aims to provide to the upper middle class, then it should improve the product’s quality and improve the brand’s reputation.

One of the uncovered survey findings is the effect of sensory stimulation on consumer choice. The first question shows that people rely on their sense stimulation, with 33% of respondents with five sensory stimulation and the rest of customers with only one sense being stimulated. Marketers often use images to evoke consumer time-related associations to increase sales (Biliciler et al., 2022). This successful strategy would help Skechers target the groups since creating such slogans with high-entropy images attract many new customers.

Many companies employ celebrities and social media influencers to promote their products. Primarily, young consumers rely on online communities more than they rely on family, friends, or colleagues (Al-Rawabdeh et al., 2021). However, Skechers should not rely heavily on celebrities as the survey results show that older consumers do not follow their opinions. Moreover, when a celebrity gives low rates to Skechers, they do not stop buying it as if the company was involved in illegal activities. Therefore, the company should persuade consumers to purchase a product by making it more available and preventing corruption and forced labor.

Conclusion

To conclude, the environment and cultural beliefs affect individuals’ choices when they purchase products. Some of them seek products that do not interfere with their cultural beliefs and symbols, while some look for items that help them maintain their social status or earn a new one. When companies address the beliefs and family structure and adhere to the social norms, they obtain a better reputation. Therefore, Skechers focus more on the customers’ motivations to buy the product to increase its sales.

Reference List

Al-Rawabdeh, H., Ghadir, H & Al-Abdallah, G. (2021) ‘The effects of user generated content and traditional reference groups on purchase intentions of young consumers: A comparative study on electronic products’, International Journal of Data & Network Science, 5(4), pp. 691–702. Web.

Biliciler, G, Raghunathan, R & Ward, A. 2022, ‘Consumers as naive physicists: how visual entropy cues shift temporal cocus and influence product evaluations’, Journal of Consumer Research, 48(6), pp. 1010–1031. Web.

Fernandes, S and Panda, R. (2019) ‘Influence of social reference groups on consumer buying behavior: A Review’, Journal of Management Research, 19(2), pp. 131–142. Web.

Han, M. and Kim, Y. (2018) ‘How culture and friends affect acceptance of social media commerce and purchase intentions: a comparative study of consumers in the U.S. and China’, Journal of International Consumer Marketing, 30(5), pp. 326–335. Web.

Manstead, A. (2018) ‘The psychology of social class: How socioeconomic status impacts thoughts, feelings, and behavior’, Social Psychology, 57(2), pp. 267-291. Web.

Melnyk, V., Carrillat, F. & Melnyk, V. (2022) ‘The influence of social norms on consumer behavior: a meta-analysis’, Journal of Marketing, 86(3), pp. 98–120. Web.

Steenkamp, J. (2019) ‘Global versus local consumer culture: theory, measurement, and future research directions’, Journal of International Marketing, 27(1), pp. 1–19. Web.

Zhu, X, Teng, L, Foti, L & Yuan, Y. (2019) ‘Using self-congruence theory to explain the interaction effects of brand type and celebrity type on consumer attitude formation’, Journal of Business Research, 103(2), pp. 301–309. Web.

The sky’s the limit when we are put in a situation where we have to choose between the best, decide on the price and figure out what brand would be the most feasible to purchase cheerleading shoes. Though most teams dwell a considerable amount of thought in the art and design of issues, factors such as comfort and price should be given enough for thought.

Are the shoes big or heavy? Do they have enough padding and support? Etc are some of the main questions that must be attended to before finally zeroing down on one.

The average price of cheerleading shoes varies from $50 to $60. One should thus, consider if it falls within their price range. Are they sturdy enough to last them a year at least. Ergo, plenty of time can be taken to select the best shoe on the block in the process. The quality, sport and construction of the shoe can make a huge difference between a sprained ankle and safety conscious cheering. Even then, if one’s unsure of what to wear and how to go about it, advice may be sought from the school’s physician or advisor or representatives from various companies. For instance a team that is meant to perform partner stunts and pyramids will have to select a show that will be different from a team that never has to perform any of these aforementioned functions. However canvas shoes that offer no support are a big no for cheerleaders. The risk is too dangerous to be taken up. Nonetheless cheerleading shoes should always be light and flexible. Most cheerleading shoes are available in the market with color cards.

There are various kinds and brands of cheerleading shoes available in the market. Hanes Sport is one of the most renowned cheerleading shoes available in the market. Its light weightiness and excellent quality at an affordable price makes it one of the most attractive cheerleading brands around which certainly seem irresistible to most customers. If you have never tried a Hanes Sport shoe before, then this could certainly prove to be a bargain worth the price due to its quality, price and attractiveness.

One of the leaders of the market; Converse which is available in different types such as Converse kick out, converse dismount and converse chant which are all available at extreme prices. Features such as the Molded EVA midsole allow the cheerleader optimum cushioning and flexibility. The other support features such as the Leather/synthetic upper makes the break in easier and the support system easier as well.

Another feather in the cap of this brand is the superior traction for all surfaces. The Antimicrobial treatment for the sock liner creates better sanitary preventive measures. The different adult sizes and colors have made this brand one of the most heavily demanded shoes of today. The fact that it’s available on such low prices makes it all the more irresistible for all those who swear by this brand.

Another customer favorite; Power is available at some of the lowest prices and its wide range from Maximum edge, freedom, edge, excel all make it a must buy for any cheerleader today due to its super light weight, durability, synthetic leather, enhanced hand grip, stability etc.

As far as the prices are concerned, power freedom has by far been the cheapest. It is offered at $19.4 while most other cheerleading shoes are offered at $34. Nike, Adidas and Infinity all offer their shoes in the range from $50 to $40. Ergo, the best bet could be power for its cheap costs and high flexibility.

Hence, all shoes are certainly worth one’s money and the quick delivery time makes it all that more appealing. So, what is stopping you from hollering your way to the nearest store?

Introduction

In highly competitive industries such as the fast food or quick service restaurant (QSR) industry, a strong brand name typically marks the difference between success and failure.

A strong, recognizable brand allows a QSR firm to best its competitors simply because customers have an expectation of the brand that translates into a form of emotional attachment or security, the so-called brand loyalty concept wherein consumers return to the QSR of their choice again and again to repeat a known emotional experience.

As long as the brand understands the consumer’s expectation and does not deviate from it, this relationship can continue over decades or even over a lifetime. Particularly in the QSR industry, wherein very little variety exists between the products that the top QSR chains serve, brand strength typically separates the wheat from the chaff.

As a result of this marketing reality, a great deal of scholarly and commercial interest in brand equity, brand awareness, brand personality, brand loyalty and the impact of these on the consumer purchasing decision process has surfaced in recent years.

Statement of the Problem

Effective QSR brand management depends on positive brand equity (Keller, 1993; Kim and Kim, 2004). Keller (1993) characterized customer based brand equity as the proportional impact of brand knowledge on a customer’s response to the brand’s advertising or marketing efforts, compared to his or her response to the same product – in this case, fast food – from an unnamed or unknown producer.

The successful marketing of a QSR brand must go beyond generic consumer responses to price; rather, it must condition the consumer response emotionally and psychologically, to the end that the consumer chooses the QSR brand based on an experience that he or she wants to repeat.

To achieve this end, the brand management team must understand the complex interplay that occurs between brand awareness, brand association and consumer choice.

As Keller (1993) explains, “brand knowledge…involves both brand awareness…recall and recognition…and brand image or associations. Based on these definitions, a brand has positive…customer-based brand equity if the consumer has a favourable…reaction to the product, price, promotion or distribution of a brand, relative to the same marketing mix element of the generic product or service” (Keller, 1993, p. 5).

Conversely, a brand will encounter negative customer based brand equity if the consumer’s reaction to the brand’s marketing is unfavourable, or if the consumer has a negative reaction to the brand category – in this case, fast food.

However, as evidenced by the global success of the Subway chain, consumers can still have an unfavourable reaction to a brand that represents the product category without condemning the product category as a whole (Reynolds, 2011). Consumers that choose Subway over McDonald’s, for example, have not rejected the entire QSR product category; they have simply found a QSR product offering that serves their needs.

The researcher’s aim for the study was to observe this complex interplay between brand equity, brand awareness, product category and consumer choice using QSR customers in London as the research subjects.

The study sought to understand the factors that affect customer decision making process in London, specifically in regards to the top six QSR firms in London: McDonald’s, Subway, Yum! Brands, Domino’s Pizza, Eat Ltd., and Prêt a Manger.

The research problem was to understand the extent to which London consumers care about the brand name of fast food firms, and understand the extent to which brand names have an effect on buyer behaviour.

In addition, the researcher set out to learn if the top six fast food firms attract more customers around London compared to lesser known brands or local merchants that provide the same products. The study endeavoured to determine to what extent the brand name gives QSR fast food firms a competitive advantage.

Purpose of the Study

The aim of the study was to determine the relationships between the brand names of top fast-food restaurants in London and consumer decision-making. The researcher set out to understand the relationship between brand and buyer behaviour in the London QSR market.

The qualitative research method of document analysis used in this study allowed the researcher to study a wide range of primary and secondary research in order to cement a theory around brand recognition, brand awareness, brand strategy, consumer spending, consumer decision-making, and the influence of the economic climate between 2009 and 2011 on all of these factors.

Objectives

1. What do the fast food customers in London think of fast food restaurants, and how important is the brand name of a fast food restaurant to them?
2. Do customers really care about brand name, or do they simply select it due to the low price?
3. How do customers compare their regular fast food restaurant with its competitive firms?
4. Do fast food firms gain any competitive advantage due to their brand name?
5. Do marketing/promotion campaigns attract people from competitive brands?

Hypotheses/Research Questions

1. What do the fast food customers in London think of fast food restaurants, and how important is a brand name to them when making food choices?
2. Do fast food customers in London really care about the brand name of a fast food restaurant, or do they select it due to the low price?
3. How do the fast food customers in London compare their regular restaurant with its competitive firms?
4. Do fast food firms acquire any form of a competitive advantage due to their brand name?
5. To what extent do marketing and promotion campaigns attract people from competitive brands?

Background of the Study

In this study, the researcher endeavoured to determine the extent to which brand strength affected buyer behaviour amongst London QSR consumers. The overall goal of the study was to discover what attitudes London QSR consumers hold in regards to the top fast food chain restaurants that they frequent. The researcher also set out to understand the role that QSR brand name plays in London consumers’ food choices.

The researcher sought to understand if QSR consumers in London genuinely care about the fast food brand names, or if they simply select a certain brand’s offering based on how little it costs when compared to its QSR competitors that offer the same type of food.

The researcher also endeavoured to determine how London QSR consumers view their regular restaurant compared with its competitive firms; again, if such a comparison does indeed take place, the researcher sought to find out if the comparison is based solely on cost, or some other emotional or psychological factor.

Finally, the researcher set out to determine if QSR firms gain any competitive edge based on the power of their brand name and associated brand loyalty, and to gauge the success or failure of marketing and promotional strategies and campaigns designed to attract brand loyal consumers to competitor QSR brands.

For the purpose of the study, the researcher chose to focus on the top six fast food restaurant chains currently operating in London: these include Subway, McDonald’s, Domino’s Pizza, Yum! Brands – which include KFC, Taco Bell, and Pizza Hut – Eat Ltd., and Prêt a Manger (Gale Cengage Learning Company Profiles, 2010; Euromonitor International, 2010; IBIS World, 2011).

Definition of Terms

Quick service restaurant (QSR)

QSRs or quick service restaurants refer to fast food restaurants or chains that serve food typically in 10 minutes or under. Quick service restaurants do not offer table service and typically do not serve alcoholic beverages.

Brand

The term brand refers to a product that differentiates itself from its competitors in the same product category through the use of a distinctive visual symbol, logo, sign, name or design that consumers associate with the company that produces the product (Austin, Mattila and Siguaw, 1999; Kapferer, 2008; Keller, 1993; Kim and Kim, 2004; Parsa and Kwansa, 2002).

Brand management

Brand management refers to the strategic marketing and advertising efforts made by the company to increase market share via the success of the brand.

Brand managers employ various marketing and advertising strategies such as celebrity endorsement or product placement to advance their brands ahead of its closest competitors (Austin, Mattila and Siguaw, 1999; Heding et al., 2009; Kapferer, 2008; Keller, 1993; Kim and Kim, 2004; Parsa and Kwansa, 2002).

Brand equity

Brand equity encompasses both a financial definition and a consumer perception definition (Austin, Mattila and Siguaw, 1999; Heding et al., 2009; Kapferer, 2008; Keller, 1993; Kim and Kim, 2004; Parsa and Kwansa, 2002).

The financial understanding of brand equity refers to the actual value of the brand in tangible, demonstrable financial terms such as sales figures and earnings portfolio boosts (Austin, Mattila and Siguaw, 1999; Heding et al., 2009; Kapferer, 2008; Keller, 1993; Kim and Kim, 2004; Parsa and Kwansa, 2002).

The consumer definition of brand refers to the relationship that develops between the consumer and the brand (Kapferer, 1997). The most obvious means to demonstrate brand equity occurs in the consumer’s perception that the brand functions more successfully than its competitors (Austin, Mattila and Siguaw, 1999; Heding et al., 2009; Kapferer, 2008; Keller, 1993; Kim and Kim, 2004; Parsa and Kwansa, 2002)

Brand loyalty

Brand loyalty refers to the behaviour of a brand’s core consumers who will champion the brand above all others. These consumers often function as free marketing tools for the company (Austin, Mattila and Siguaw, 1999; Heding et al., 2009; Kapferer, 2008; Keller, 1993; Kim and Kim, 2004; Parsa and Kwansa, 2002).

Tremendous brand loyalty gains have been made across all markets through digital marketing brand loyalty programs and social networking relationships that companies develop with their core customer base via “viral branding” (Holt, 2004, p. 28).

Brand awareness

Brand awareness refers to the consumer’s basic knowledge and memory of a particular brand in a particular product category (Austin, Mattila and Siguaw, 1999; Heding et al., 2009; Kapferer, 2008; Keller, 1993; Kim and Kim, 2004; Parsa and Kwansa, 2002).

An example in the QSR category would be consumer awareness of burger chains in the product category of burger producers, such as McDonald’s, Burger King, and Wendy’s.

Brand personality

Consumers often imbue certain human qualities to the most successful and pervasive brands such as edginess or innovation (Austin, Mattila and Siguaw, 1999; Heding et al., 2009; Kapferer, 2008; Keller, 1993; Kim and Kim, 2004; Parsa and Kwansa, 2002).

An example of brand personality in the QSR category would be Jared Fogle of Subway, an individual that personifies Subway’s goals of attracting health-conscious consumers.

Brand engagement

Brand engagement refers to the relationship that develops between a brand and its core consumers, to the extent that the consumers consistently choose the brand over its competitors and do not accept substitutes (Austin, Mattila and Siguaw, 1999; Heding et al., 2009; Kapferer, 2008; Keller, 1993; Kim and Kim, 2004; Parsa and Kwansa, 2002).

An example of brand engagement in the QSR sector would be a consumer who will not accept a Whopper in lieu of a Big Mac.

Customer value proposition

A customer value proposition refers to a particular strategy that a company employs in order to provide a complete customer experience to its consumers.

The customer value proposition essentially forms the bedrock of brand management, as the customer value proposition is a company’s declaration that explains why a consumer should buy one product or choose one service over those offered by competitors in the same product or service category.

As Kaplan and Norton (2004) note, the strategy deployed in the customer value proposition “is based on a differentiated customer value proposition. Satisfying customers is the source of sustainable value creation” (p. 203).

The customer value proposition ultimately describes the worth of the experience that a company offers its customers through the products and services that it provides (Lee, 2011). This value creation offering underpins many elements of brand management, particularly brand engagement and brand loyalty (Kaplan and Norton, 2004; Lee 2011).

Customer behaviour

Customer behaviour is best described by the concept of benefit segmentation, which explains why people buy products according to the apparent or stated relationship between a product and the fulfilment of the customer’s needs (McDonald and Dunbar, 2004).

Customers may choose products according to a variety of different features, including price, availability, or for the fulfilment of emotional needs such as status and self image (McDonald and Dunbar, 2004).

Customer decision making process

The customer decision making process functions as an adjunct to customer behaviour. The decision making process begins with the recognition of a need, be it functional, psychological or emotional (Pradhan, 2009; Tybout and Calkins, 2005).

The customer then progresses to the information stage, wherein the customer informs herself about the product and its availability (Pradhan, 2009; Tybout and Calkins, 2005).

The next stage entails evaluation, wherein the customer assesses the options available to him, based on his research. The final stage is the purchase decision stage, which can be influenced by multiple factors including the customer service experience (Pradhan, 2009; Tybout and Calkins, 2005).

Customer perception

Customer perception is best understood as an adjunct to customer satisfaction, and it is intimately tied to the customer decision making process (Tybout and Calkins, 2005).

Customer perception is commonly understood as the interplay between both the customer’s perception of a product’s performance and the extent to which the product meets the emotional and psychological expectations that the customer accrued prior to the acquisition of the product (Tybout and Calkins, 2005).

Summary

Chapter I introduces the research study and provides some introduction into the study of brands and brand management. Chapter I also includes a description of the statement of the problem for the research, the research questions, the purpose of the study, and a listing of the terms used in the study and their corresponding definitions. This chapter also contains a description of the background of the study.

Literature Review

The value of brand equity as an influencing factor in customer purchase decision making cannot be overstated.

In the fast food industry, a number of global fast food brands that are headquartered in the Western democracies build an integrated marketing strategy with a global focus; these powerhouse brands leverage the strength of their brand name around the world to benefit from large groups of consumers that they do not have to spend additional marketing dollars to win over.

The significant cost savings that strong brand equity creates, in addition to the free advertising and marketing activities that global brands receive from their brand ambassadors all over the world, make brand loyalty a viable tool for fast food firms that seek to gain a competitive advantage in the fast food product category.

In order to produce a loyal global following of brand engaged consumers, fast food firms need to glean insight into the complex emotional and psychological relationships that exist between consumers and brands.

Market researchers need to understand fundamentally the inner working of global consumer behaviour; it is necessary for fast food firms to investigate and appreciate the buying behaviour and purchase decision process of consumers as a function of brand equity.

A clear understanding of consumer attitudes toward global fast food brands and consumer perception of global fast food brands becomes paramount as a means to translate brand equity into cost savings and increases in revenue.

The researcher anticipates that the results of this research will add insight to the current body of literature in the areas of brand awareness, brand equity, brand engagement, brand attachment, and the impact of these factors on the fast food consumer’s purchasing decision process.

The following study set out to determine the extent to which brand strength affected buyer behaviour amongst London QSR consumers. The researcher’s goal was to discover what London QSR consumers truly think about fast food restaurants, and to learn how important the fast food brand name is to them when they make their food choices.

The researcher sought to understand if QSR consumers in London genuinely care about the fast food brand names, or if they simply select a certain brand’s offering on the basis of its low cost compared to its QSR competitors.

The researcher also undertook to determine the nature of the comparison that occurs between a London QSR consumer’s restaurant of choice with its competitive firms, if such a comparison does indeed take place.

The researcher looked for information to indicate whether or not the comparison is again based solely on cost, or if there something deeper, an emotional commitment that a consumer makes to a certain brand over another. For example, does a QSR consumer only defect to a competitor QSR brand when his or her brand of choice fails his or her expectations somehow?

Finally, the researcher set out to understand if QSR firms gain competitive advantage on account of the power of their brand name and associated brand loyalty, and to gauge the success of marketing and promotional strategies and campaigns designed to draw brand loyal consumers to their brand’s main competitors.

For the purpose of the study, the researcher chose to focus on the top six fast food restaurant chains currently operating in London: these include Subway, McDonald’s, Domino’s Pizza, Yum! Brands, Eat Ltd., and Prêt a Manger.

Yum! Brands operates a number of individual QSR brands including Pizza Hut, KFC, and Taco Bell. Subway, McDonald’s, Domino’s Pizza and Yum! Brands are all American companies. Eat Ltd. and Prêt a Manger are both companies founded by U.K. citizens: Eat Ltd. remains privately owned, while Prêt a Manger was recently sold to a U.K. private equity firm in partnership with Goldman Sachs (The Telegraph, 2008).

Keller (1993) defined customer based brand equity as the “differential effect of brand knowledge on consumer response to the marketing of the brand” (p. 2).

In Keller’s (1993) model, “customer based brand equity involves consumers’ reactions to an element of the marketing mix for the brand in comparison with their reactions to the same marketing mix element attributed to a fictitiously named or unnamed version of the product or service.

Customer based brand equity occurs when the consumer is familiar with the brand and holds some favourable, strong, and unique brand associations in memory” (p. 2).

In his seminal work Conceptualizing, Measuring, and Managing Customer Based Brand Equity, Keller (1993) examined the idea of customer-based brand equity from the perspective of the individual consumer, and outlined several ways in which the creation and maintenance of brand equity could be administered, measured, and strategically applied to marketing campaigns and advertising materials.

The existence of powerful positive emotional associations that remain exclusive to the brand and denote authority over all other brands who produce and sell the same product or service remains crucial to the success of a brand in the extremely crowded QSR industry.

An example is the individual consumer’s favouring of the Big Mac over the Whopper; both are burgers, yet the McDonald’s consumer will choose the Big Mac due to the positive associations he or she has built up over time with the McDonald’s brand in his or her memory, while the Burger King consumer while choose the Whopper for the same reasons (Keller, 1993; Kim and Kim, 2004; Parsa and Kwansa, 2002; Simovic, 2010).

Brand personality remains an extremely important leveraging strategy for the brand management of fast food chains in the tight QSR market (Kim and Kim, 2004; Parsa and Kwansa, 2002).

Brands must create a psychological distance in the minds of consumers to distinguish themselves from their competitors. As Parsa and Kwansa (2002) explain, QSR brands must “develop a brand personality to successfully differentiate their restaurants from their competitors and to maintain the trust and loyalty of their patrons” (p. 212).

Brand personality is the “set of human traits that consumers attribute to a brand” (Parsa and Kwansa, 2002, p. 212). Dominant QSR brands share the common characteristic of a recognizable brand personality. They successfully distinguish themselves from their competitors through their “robustness, desirability, distinctiveness, and consistency” (Parsa and Kwansa, 2002, p. 212).

Brand personality refers to the consistency of the brand across cultures and across time zones; the most successful QSR brands featured in this study are multinational brands that operate in many different countries yet maintain consistency of employee uniform, store décor, and product offerings in all of their stores.

In earlier times when the market was less crowded, the strategies that restaurant brand managers developed in order to build their brand’s personality focused on differentiation between various newly created products and services (Austin, Mattila and Siguaw, 1999; Parsa and Kwansa, 2002).

Brand management focused on convincing consumers of the “corresponding functional or utilitarian benefits those products or services” offered (Austin, Mattila and Siguaw, 1999, p. 48).

Within the last two decades however, as competition raged and the number of competing firms continued to multiply, the ability of brand managers to “differentiate brands on the basis of functional attributes alone” has ultimately proved ineffective against the constant and unmitigated competition in the QSR industry.

Therefore, as competition intensified, brand managers have changed their tactics to employ “symbolic meanings increasingly [to] form a basis for [the] brand’s positioning and differentiation” (Austin, Mattila and Siguaw, 1999, p. 48).

Increasingly, the brand managers and marketing professionals behind the major QSR brands invest their energy and budgets into the creation and development of “meaningful and distinctive brand personalities in the minds of consumers” (Austin, Mattila and Siguaw, 1999, p. 48; Keller, 1993; Kim and Kim, 2004; Parsa and Kwansa, 2002).

In order to distinguish a brand from its competitors effectively, the brand must develop a personality that is “distinctive, robust, desirable, and constant” (Austin, Mattila and Siguaw, 1999, p. 49).

For many years, QSR industry players grappled with “inconsistent, meaningless, or undesirable brand perceptions” (Austin, Mattila and Siguaw, 1999, p. 49). An example is the QSR industry’s struggle with price wars (Austin, Mattila and Siguaw, 1999; Keller, 1993; Kim and Kim, 2004; Parsa and Kwansa, 2002).

When the QSR industry expected consumers to pay attention exclusively to the cost of the fast food products, the result was a heated and interminable price war between the major brands that “sapped customer loyalty and diminished revenues” (Austin, Mattila and Siguaw, 1999, p. 49).

The solution to the ineffectiveness of price wars for the main QSR chains such as McDonalds was to focus instead on the development of a solid and appealing brand personality that sticks in the minds of consumers, and builds and maintains brand loyalty over time (Austin, Mattila and Siguaw, 1999; Keller, 1993; Kim and Kim, 2004; Parsa and Kwansa, 2002).

Brand personality can sometimes take the form of a particular spokesperson such as Subway’s Jared Fogle, or even a particular image, such as the McDonalds golden arches. In essence, the brand personality provides a comforting sameness of product offering to consumers that distinguish it from its competitors. This offering for the most part remains emotional and has little or nothing to do with cost.

More recently, Kapferer (2008) wrote of the critical rift that has developed between marketing scholars as to a unified definition of a brand, and the most effective means of measuring the brand’s strength. Kapferer (2008) explains that in regards to brand equity, “there is a major schism between two paradigms.

One is customer based and focuses exclusively on the relationship customers have with the brand…from total indifference to attachment, loyalty, and willingness to buy and rebuy based on beliefs of superiority and evoked emotions. The other aims at producing measures in dollars, euros, or yen” (p. 9).

As the consumer’s attention span continues to fragment, Kapferer (2008) asserts, the most successful brands are those that “convey certitude [and] trust” (p. 11).

The economy, in Kapferer’s (2008) words, has become “an attention economy. [There] is so much choice and opacity that consumers cannot spend their time comparing before they make a choice.

They have no time and even if they did, they cannot be certain of being able to determine the right product or service for them” (p. 11). In this economy where consumer attention becomes premium, successful brands provide a service for the time-starved consumer (Kapferer, 2008).

Successful brands function as a “time and risk reducer” (Kapferer, 2008, p. 11). In the QSR industry, the brands that encourage consumers to buy over and over again are those that save time and remove all chance and risk from the food purchasing activity.

In essence, QSR brands that provide the service of reassuring the consumer that they will receive exactly what they expect to receive appear to be those that sustain the highest yield of repeat buyers and fully engaged loyal brand champions.

Brand engagement or brand attachment refers to a phenomenon that some of the older, more well established fast food brands such as McDonalds’s enjoy with their core customer base (Holt, 2004; Kapferer, 2008; Keller, 1993). Brand engagement is a process that begins with brand awareness and depends wholly upon the consumer’s “proximity to the brand” (Kapferer, 2008, p. 72).

Essentially, as Kapferer (2008) notes, the QSR consumer will develop a relationship with the brand of his or her choice based on proximity, which then “moves from a feeling of presence…awareness, recognition…to a feeling of relevance [or] it’s for me, to the perception of performance and a clear advantage, and ultimately to a genuine affective attachment” (p. 72).

This relationship is emotional and long term and again, often has little to do with price, although low price in some cases may serve as the entry point for brand awareness.

As Kapferer (2008) notes, brand engagement refers to a phenomenon far more complex and penetrating than simply a “repeat purchase” (p. 72). Rather, brand engagement speaks to the consumer’s long term, “personal involvement with the brand” (Kapferer, 2008, p. 73).

A brand that has succeeded in achieving engagement with its customers affects their buying behaviour in the product category (Holt, 2004; Kapferer, 2008; Keller, 1993). As Kapferer (2008) explains, in full brand engagement, “if the brand were not there, the client would prefer to wait than buy an alternative. For the consumer, there is no substitutability” (p. 73).

In the QSR landscape, an example of full brand engagement might be if a McDonald’s customer seeking a burger encounters a Burger King, he or she will not purchase a burger there, regardless of hunger level or time constraints, but will keep walking until a McDonald’s appears.

Two elements must exist in order to sustain this type of brand engagement with the consumer: the first element is attachment, quantified by a powerful awareness of the brand, wherein the customer feels “closeness with the brand” (Kapferer, 2008, p. 73).

The second element refers to customer satisfaction, namely, a firmly held belief on the part of the customer that the brand consistently performs better than its competitors (Keller, 1993; Kapferer, 2008; Kim and Kim, 2004)

QSR firms belong to the particular product category of fast foods, and in some cases, the product category has become negatively linked to the brand, and vice versa.

This study revealed two areas in which the brand and product category had merged negatively in the minds of consumers: the area of rising obesity rates, especially amongst children and young adults, and in the area of cultural aversion, since four of the six top QSR chains in London are owned by Americans.

Keller (1993) outlined that in the cases of very strong or very old brands such as McDonald’s, “some product category associations may become linked to the brand, either in terms of specific beliefs or overall attitudes” (p. 6). Consumer attitudes in regards to a particular product category typically function as a vital indicator of customer response and consumer reaction (Keller, 1993).

In the QSR category, most fast food chains share the negative product category association in the area of child obesity rates. The exception would be Subway, which has successfully branded itself as a healthful alternative to fast food, while still preserving its quick service restaurant categorization.

The current research study reviewed the work of a number of researchers who have studied brand awareness, brand equity, brand engagement and consumer behaviour and the consumer purchasing decision process as it applies in the QSR industry.

Kim and Kim (2004) conducted a study that revealed the essential dimensions that underpin brand equity and investigated the impact they had on the performance of several chain outfits in the QSR category.

Kim and Kim (2004) analyzed the data gathered from a survey of 394 shoppers in Korea; the researchers asked the shoppers to complete a questionnaire that gauged the consumers’ brand equity. Kim and Kim (2004) discovered in this study that “brand awareness, perceived quality, brand loyalty, and brand image are important dimensions of customer-based brand equity.

Brand awareness appeared to be the dimension that gave the greatest boost to QSR firms’ performance, even though brand awareness had relatively less importance in the brand-equity construct itself” (p. 116). Kim and Kim (2004) found that brand loyalty, which represented a substantial aspect of the “construct of brand equity in QSR chains, did not exhibit a significant relationship with firms’ performance” (p. 116).

Kim and Kim (2004) discovered that brand equity has a constructive impact on a firm’s performance; according to their research, more than half of the variations in performance can be accredited to brand equity for QSR chain restaurants.

To determine the connection between brand equity and consumers sales in QSR chains, Kim and Kim (2004) used a simple bivariate regression model and regressed brand equity on sales; these figures showed that brand equity accounts for over half of the sales variation.

“When brand equity components such as brand loyalty, brand awareness, perceived quality and brand image were regressed on sales in a multiple regression, these components explained over 70 percent of the variations in sales” (Kim and Kim, 2004, p. 117). According to this study therefore, “strong brand equity is significantly correlated with revenues for quick-service restaurants” (Kim and Kim, 2004, p. 116).

Ramasamy and Yeung (2008) utilized a panel data structure for their study that examined the top 50 firms in the United States between 2000 and 2005 to determine the “nexus between brand value and various measures of firm performance” (p. 322). The researchers were successful in validating a connection between the measure of brand equity or brand value and “multiple profitability ratios and stock market performance measures.

The contemporaneous relationships between brand values and profitability are significant even after controlling for unobserved effects through panel data estimation techniques” (Ramasamy and Yeung, 2008, p. 322).

The study results indicated that firms with entrenched, robust brands remain “more profitable, and the significance of brands’ effects on internal profitability is very consistent regardless of the selection of measures and thus could not have occurred by chance” (Ramasamy and Yeung, 2008, p. 322).

This study also indicated that brands with strong brand equity tend to enjoy consistently higher performance in the stock market (Ramasamy and Yeung, 2008).

Schmitt and Zarantonello (2010) demonstrated that brand experience varies amongst different groups of consumers.

The researchers surveyed 1134 respondents in 10 Italian cities between October of 2007 and 2008 using a questionnaire that highlighted a particular brand and asked the consumers surveyed to rate that brand according to their experience of it. The researchers then used cluster and regression analysis to investigate the relationships between brand experience and purchase intention among the respondents.

The researchers discovered that among consumers, different “experiential appeals” exist, depending on the consumer’s brand preference and level of brand engagement. As Schmitt and Zarantonello, (2010) explain, “on one extreme, there are holistic consumers, who seem to be interested in all aspects of experience; on the other extreme, there are utilitarian consumers, who do not attach much importance to brand experience” (p. 532).

In the middle, there exist what the researchers call “hybrid consumers” (Schmitt and Zarantonello, 2010, p. 532). As Schmitt and Zarantonello, (2010) note, these consumers remain engaged with specific brands in specific ways, namely, “hedonistic consumers…attach importance to sensorial gratification and emotions, [while] action-oriented consumers…focus on actions and behaviours” (p. 532).

Also, customers whom the researchers label as “inner-directed consumers” are more interested in creating an internal experience of the brand such as “sensations, emotions, and thoughts” (Schmitt and Zarantonello, 2010, p. 532). Brand equity and brand engagement, according to Schmitt and Zarantonello (2010), will occur in varying degrees according to the orientation of the consumer.

De Pelsmacker and Dens (2010) conducted a study to investigate the relationship between branding strategies for the launch of a new brand and the launch of a “line extension” of products from a well-established brand (p. 50).

The researchers studied “advertising execution strategies…informational, positive emotional and negative emotional…and product category involvement…low and high…on consumers’ attitudes towards the product, purchase intention and the parent brand” (De Pelsmacker and Dens, 2010, p. 58).

Results indicated that the extension of a new product from an existing brand fares much better than a new brand in terms of purchase intention and positive brand attitudes.

De Pelsmacker and Dens (2010) also found that “advertising strategy has little impact on consumer responses to line extensions of familiar brands …For well-known, high-quality brands, the negative evaluations of negative emotional appeals are not reflected in product and brand evaluations.

[Thus], it is apparent that brand extensions are more positively evaluated than new brands. As such, launching new products as extensions of established brands seems a viable strategy over new brands” (De Pelsmacker and Dens, 2010, p. 59).

Bentley, Kavanagh and Thornton (2009) conducted research into the customer purchasing decision process as it pertains to the fast food product category. In this study, the researchers set out to determine the relationship between the availability of fast food and the consumption of fast food in key market areas (Bentley, Kavanagh and Thornton, 2009).

The principal goal of this study was to demonstrate a causal link between the increased consumer purchasing of fast food and the proliferation of fast food chains and restaurants in target market areas (Bentley, Kavanagh and Thornton, 2009).

The study took place in Melbourne, Australia and included a sample of 2564 households; the research reflected a 64 percent response rate to a food purchasing survey that the researchers mailed to a random sample (Bentley, Kavanagh and Thornton, 2009).

The study focused exclusively on lower income households in Melbourne and its surrounding suburbs, specifically those with an income of 400 dollars or less per week before taxes (Bentley, Kavanagh and Thornton, 2009).

The fast food chains featured in this study include McDonald’s, Red Rooster, Kentucky Fried Chicken, Hungry Jacks, and Pizza Hut; Red Rooster and Hungry Jacks are Australian fast food restaurant chains.

The researchers further parsed the sample into a number of categories based on age, education, country of origin, profession, gender, and the composition of the households represented in the study, including “single male adult without children, single female adult without children, a single adult with a child or children, two or more adults without children, or two or more adults with a child or children” (Bentley, Kavanagh and Thornton, 2009, p. 31).

The results of this research uncovered “an independent association between the variety of fast food restaurants and fast food purchasing; an increase of one different fast food chain within the 3 kilometre network areas increased the odds of monthly fast food purchasing by 13 percent” (Bentley, Kavanagh and Thornton, 2009, p. 34).

However, the researchers cautioned that this remained the sole statistically significant finding of the study in models that has been adjusted (Bentley, Kavanagh and Thornton, 2009). As Bentley, Kavanagh and Thornton (2009) explain:

No significant relationships were found between density and proximity after the inclusion of individual socio-economic predictors suggesting these were important confounders.

[However] it is important to note that although we only had one significant finding in models adjusted for all confounders the relationships were all in the same direction; they were all suggestive of a possible relationship between greater access and increased purchasing (p. 34).

While this study demonstrated a link between availability of fast food and increased customer purchasing of fast food, the study largely sought to discover the relationship between socio-economic factors and fast food consumption (Bentley, Kavanagh and Thornton, 2009).

As such, the study authors caution that “a potential for bias…potentially exists within research related to dietary behaviours and neighbourhood health effects” (Bentley, Kavanagh and Thornton, 2009, p. 35).

Therefore, the study authors “recommend that future research carefully disentangle the relationships using DAGs, particularly in relation to assessing the potential mediating role of fast food store access for socio-economic associations and intake” (Bentley, Kavanagh and Thornton, 2009, p. 35).

New Products and Product Innovation

Gammoh, Skiver and Voss (2011) conducted a study to investigate the impact of brand equity on consumer choices, specifically in the area of new products. The research sought to understand how brand equity affects a customer’s evaluation of “continuous [versus] discontinuous innovation of new products” (p. 65).

The researchers also endeavoured to understand and the regulating impact of brand equity on a consumer’s knowledge of a particular product category.

In the QSR industry, product innovation remains tends not to represent as much of a driver for revenue and sustained business compared to industries such as the technology industry; however, as the researchers note, product innovation is “critical to companies’ success,” particularly in the area of product originality and perceived consumer value (Gammoh, Skiver and Voss, 2011, p. 65).

This study found that previous research had ostensibly overlooked the vital role that brand equity plays in both the consumer response to a new product as well as consumer evaluation of a new product or innovation (Gammoh, Skiver and Voss, 2011).

As Gammoh, Skiver and Voss (2011) explain, “an implicit assumption in previous research is that the brand itself does not affect on the consumer’s response to the innovation type of the new product introduction.

However…comparisons between continuous and discontinuous innovation fail to account for specific effects due to different levels of brand equity of the new product.

Brands vary in their levels of brand equity, and thus may realize differential responses to continuous or discontinuous new products” (p. 65). In other words, a powerful brand may be assured of a more favourable consumer response to whatever new products it creates and markets simply by virtue of its robust brand equity.

In this study, the researchers sought to demonstrate that the fundamental value of the brand in brand equity terms will have a direct impact on a consumer’s assessment of a given product innovation when it is introduced to the market. Using a 2×2 between-subjects research design, the researchers employed a consumer scenario as the stimulus for the study using a sample of 29 participants (Gammoh, Skiver and Voss, 2011).

The researchers included a product description which established the name of the firm and the brand name, as well as a brief overview of the level of innovation that the new product reflected.

The researchers found a direct correlation between brand recognition and the sample’s response to the product innovations; the most well known brand consistently received the highest ratings in brand recall, brand familiarity and consumer attitudes (Gammoh, Skiver and Voss, 2011).

The results of this study underscored the “positive influence of well-known and high-equity brands on consumer evaluations of new product introductions, regardless of the innovation type” (Gammoh, Skiver and Voss, 2011, p. 75).

Gammoh, Skiver and Voss (2011) concluded that “high brand equity provides consumers with more information about the broad array of the benefits of the brand and thus reduces their perceived uncertainty about the potential benefits and risks associated” with a new product or innovation (Gammoh, Skiver and Voss, 2011, p. 76).

The strength of the brand itself and the equity that it has developed with consumers provides the warm introduction for whatever new products or innovations the company produces.

This study provides key insight into brand management in the realm of product innovation, as high-equity brands enjoy less risk, “since consumers are just as likely to positively evaluate those products,” based on their pre-existing positive engagement with the brand (Gammoh, Skiver and Voss, 2011, p. 76).

Customer Value Proposition

Lee (2011) conducted a study of Chick-fil-A, a QSR located in the United States, in order to determine the principal factors involved in QSR operational superiority from a brand standpoint. This study focused exclusively on the customer value proposition as a means to understand the relationship between consumers and a fast food particular brand to which they provide consistent loyalty.

Lee’s (2011) hypothesis for the study involved the service profit chain model, and the researcher set out to investigate the customer value proposition with the following assumptions in place: “customer loyalty drives profitability and growth, customer satisfaction drives customer loyalty, service value drives customer satisfaction, employee retention and productivity drives service value, employee satisfaction drives retention and productivity, and internal quality drives employee satisfaction” (Lee, 2011, p. 118).

According to Lee (2011), the “service-profit chain model, a firm’s operating strategy, and [a firm’s] service delivery system could offer better service value to customers and service value drives better customer loyalty and…financial performance” (p. 117).

In this study Lee (2011) identified several of the principal elements necessary for success in the QSR industry, specifically in regards to building and maintaining brand equity through customer loyalty. The profitability of a QSR firm and the continuous growth of its income returns are motivated predominantly by customer loyalty; customer loyalty, in turn, remain a direct consequence of consumer satisfaction (Lee, 2011).

The satisfaction of the QSR consumer is primarily influenced by the value of the product or service according to the consumer’s perception (Lee, 2011). In the QSR industry, Lee (2011) notes, customer satisfaction remains crucial as a means to drive revenue and maintain market share.

The main drivers of success in customer satisfaction oriented industries such as the QSR industry include quality, speed and customer service (Lee, 2011).

Lee (2011) further delineates herein: “quality refers to the overall quality of the food at your chain, the quality at a particular restaurant, the overall quality of the brand, and the quality of the brand at a particular restaurant” (p. 117).

Of these three factors, Lee (2011) argues that speed is the most relevant in terms of building and maintaining brand equity and driving sales. “In the Quick-Service Industry, speed is imperative; for the average Quick-Service Restaurant, nearly 55%-75% of their sales are accounted for through drive-thru” (Lee, 2011, p. 118).

This study concluded that in the quick service restaurant industry, a QSR builds its customer satisfaction – and in turn its brand equity – largely via the experience that the firm’s employees have with the company.

Lee (2011) argued that a high quality of employee experience correlates directly with the consumer’s experience of the brand; in essence, the employee becomes engaged with the brand and functions as its most reliable and effective ambassador.

A successful relationship between the employee and the brand has translated into significant success for such brands as Starbucks (Lee, 2011). Similar research has shown the same results with non-fast food companies such as Southwest Airlines, Harley-Davidson, and Enterprise Rent-a-Car (Lee, 2011).

As Lee (2011), the customer value proposition and the employee value proposition are essentially mutually enhancing, as the “customer value proposition is to deliver an excellent experience to customers in quality, speed, and customer/employee service… high quality, fast delivery, healthy food, and excellent customer service help to sustain a high level of customer satisfaction” (p. 119).

Promotions and Strategies

Researchers Leone and Raggio (2009) and Seddon et al. (2010) presented studies to indicate that the QSR category benefitted slightly from the recession.

Consumer traffic increased slightly at some QSR chains, and “steady traffic at fast food outlets came at the expense of full-service, mid-tier casual dining establishments. Consumers were attracted to the fast food restaurants because of their lower prices. Brand value for the category grew by just 1 percent” (Seddon et al., 2010, p. 74).

As Leone and Raggio (2009) explain, “it is important to highlight how short-term actions can impact long-term brand value.

If we consider a brand to represent a promise of benefits and brand equity to be the perception that a brand meets an important promise of benefits, then it is clear that what is happening during recessionary times is that consumers are more likely to consider whether or not value is part of the brand’s promise” (Leone and Raggio, 2009, p. 86).

The migration from casual dining establishments to QSR chains reflected consumer response to reduced discretionary income, which will change now that the recession is subsiding, thus these new customers may only be temporary.

Subway’s $5 Footlong

Subway’s $5 Footlong product proved to be a huge hit in 2010. Seddon et al., (2008) found that during the lean times of the recession, the $5 Footlong represented a “compelling value proposition [that] boosted Subway’s sales” (p. 74).

The successful $5 Footlong promotion, “along with the brand’s commitment to freshness, enabled Subway to surpass Wendy’s and Burger King in market share last year” (Seddon et al., 2009; Seddon et al., 2010).

Subway’s success during the recession positioned it to compete with McDonald’s. As Seddon et al., (2010) explain, “with 32,000 restaurants in 92 countries, Subway is about to overtake McDonald’s in number of locations” (p. 74). Subway’s brand value increased 9 percent since 2008. (O’Leary, 2010; Seddon et al., 2008; Seddon et al., 2009; Seddon et al., 2010)

McDonald’s McCafe

Multibranding offers firms the opportunity to leverage existing sales units that tend to produce lower sales volumes than the core brand (Enz, 2005; Oches, 2011). Researchers Frazer et al. (2007) studied the McCafe co-branding strategy that McDonald employed in Australia to determine the success of this tactic “in franchising as a strategy to stimulate and rejuvenate growth in a mature franchising sector” (p. 442).

The researchers posited that development movements such as “multiple unit franchising mobile franchising and co-branding occur because of the sector’s need to find new means of expansion beyond the standard model of franchising” (Frazer et al., 2007, p. 442).

McDonald’s in Australia had experienced decreasing market share in its Australian operations in the early part of the 21^st century due to consumer concerns with health, obesity, and the impact of the fat and salt content of the standard McDonald’s menu on heart disease.

The researchers examined the McDonald’s and McCafe co-branding strategy that the company undertook at that time to invigorate its brand in Australia and attract a new target market of consumers.

The McCafe co-brand strategy which evolved in Australia, was investigated in order to find out what “incentives and inhibitions associated with this successful co-branding initiative” existed (Frazer et al., 2007, p. 442).

McDonald’s Australia introduced the McCafe co-branding strategy in 1999; the company adopted the sub-brand as a mainstream program for the McDonald’s brand in 2001, when the “New Tastes Menu was introduced throughout Australia” (Frazer et al., 2007, p. 442).

The original purpose of the McCafe co-brand initiative was to infuse life into the flagging the McDonald’s brand equity at that time. The researchers found that the co-branding strategy worked in the case of McDonald’s because the brand was mature and robust enough to sustain and grow a sub-brand.

In the case of Australia, target audiences began to revisit McDonald’s on account of the McCafe strategy; effectively rejuvenating the brand in a market where it has fatigued slightly due to concerns over obesity and heart disease (Frazer, L. et al., 2007).

The study demonstrated that McDonald’s was able to move from a stand-alone brand to the position of “master brand, [effectively] parenting its own brand equity and that of McCafe” (p. 443).

DiPietro (2005) conducted a study of Yum! Brands’ campaign to increase sales through multibranding. The company placed two or more of its brands KFC, Taco Bell and Pizza Hut in the same commercial building in a co-branding strategy to boost sales.

DiPietro (2005) pointed to “same-unit sales for 2003 have not grown over 2002, showing that cobranding may be holding sales steady during fluctuating times for quick-service restaurants, but it is not growing the sales of the restaurant units over time” (p. 96).

Cobranding and multibranding often appear as a feasible sales strategy for firms with multiple QSR assets; however, DiPietro (2005) found that the research “indicates that restaurant cobranding raises potential problems in three areas. First, cobranding may cannibalize both sales and image of one brand with the addition of another brand in the same restaurant space.

Second, cobranding may cause operational confusion, because managers and employees will have to learn two different operating systems. Third, cobranding may increase costs because of the need to train employees in two systems. As an additional point, cobranding may also confuse consumers with regard to what a restaurant is offering” (p. 96).

Product positioning in the QSR industry represents an additional competitive strategy that many of the top fast food chains in London, and in most urban areas for that matter, tend to uniformly employ.

Location remains a key element of branding strategies of the main QSR firms surveyed in this paper, particularly the powerhouse burger brands McDonald’s and Burger King, which tend to compete directly in close proximity with each other for QSR customers.

In major urban areas such as London for example, McDonald’s and Burger King will typically be found on the same strip or block; the same is true of food courts in malls and other many other major QSR locations such as bus terminals, airports and train stations.

Thomadsen (2007) conducted a study in order to examine the phenomenon of consumer choice and product positioning and location between competitors in the fast food industry.

For the purposes of this study, Thomadsen (2007) deemed the competition to be asymmetric given that McDonald’s holds a much higher market share than Burger King. The study focused on the two burger giants McDonald’s and Burger King and investigated “optimal product positioning strategies…in the context of retail outlet locations in the fast food industry” (p. 792).

Thomadsen’s (2007) study examined the relationship between the two firms’ revenues and product differentiation, within the context of the product homogeneity prevalent in the QSR industry. As Thomadsen’s (2007) notes, both McDonald’s and Burger King provide “products that are very homogeneous within each chain.

This product homogeneity – which is observed not just in the food, but also in the menu boards, uniforms, and architectural style – is a large component of the value that comes from being a member of a chain, and both McDonald’s and Burger King’s success can be largely attributed to the vigilance with which their founders enforced this homogeneity” (p. 793).

This statement also explains the strength of both firm’s brand equity, namely, the lack of deviation from the core consumer experience that each firm offers.

The study showed that both McDonald’s and Burger King were more successful when they avoided direct competition in close physical proximity, provided that the firms operated in a large urban market such as London.

The prices for the products offered by both McDonald’s and Burger King were the lowest when the two chains operated within close proximity, and increased as the distance between the stores increased, “approximately leveling off once the outlets are about 2-2.5 miles apart” (Thomadsen, 2007, p. 797).

However, as Thomadsen (2007) notes, “in small market areas, McDonald’s would prefer to be located together with Burger King rather than have the two outlets be only a slight distance apart. In contrast, Burger King’s profits always increase with greater differentiation” (Thomadson, 2007, p. 792).

Thomadsen’s (2007) study also discovered that proximity tended to hurt the smaller QSR firm. As Thomadsen (2007) explains, “when Burger King and McDonald’s are located together, Burger King, as the weaker firm, is unable to attract many consumers from McDonald’s by lowering its prices” (p. 798).

Despite this, nine times out of ten, Burger King and McDonald’s stores will be found close together in most large urban centres. Thomadsen (2007) hypothesizes that “offsetting these incentives is the desirability of locating centrally to appeal to the most customers” (p. 792).

The study also revealed that when a Burger King store is “positioned differently enough, it finds that it is attractive to enough consumers that it begins to find that it can use prices to attract customers” (Thomadsen, 2007, p. 798). Thomadsen (2007) posits that the McDonald’s corporation remains more aggressive in its quest to locate optimal locations compared to its competitor Burger King.

On the other hand, as Thomadsen (2007) notes, “Burger King…always works to avoid direct competition with McDonald’s unless there is a large demand source, such as a mall, which would provide Burger King with enough customers to overcome its inability to be a strong competitor against McDonald’s” (p. 803).

From a revenue standpoint, Thomadsen’s (2007) study revealed that the variable profits that the McDonald’s corporation earns tend to decrease when the nearest Burger King competitor is located in a separate yet proximal location of half a mile or more (Thomadsen, 2007).

As Thomadsen (2007) explains, this price drop occurs “because most consumers would patronize a McDonald’s outlet over a Burger King outlet if the outlets were located in the same place.

However, when the outlets are located apart, some consumers who prefer McDonald’s will instead eat at a Burger King because they are geographically located closer to the Burger King outlet” (p. 798). Similarly, Thomadsen’s (2007) study showed that physical location affects consumer decision making.

As Thomadsen (2007) explains, “some consumers who prefer Burger King’s food will be closer to McDonald’s and eat there instead, but because more consumers prefer McDonald’s food, the net flow of customers is from McDonald’s to Burger King” (p. 798).

Both firms will generally gather around a “large, concentrated source of demand in the market” (Thomadsen, 2007, p. 801). This phenomenon can be observed in many other QSR firms also.

Thomadsen (2007) hypothesizes in this study that all QSR firms, in this case McDonald’s and Burger King, will concentrate in the area of highest demand such as mall food courts. As Thomadsen (2007) explains, “if there were a large mall located in the center of the market, then each firm would choose to locate at the mall even though the other firm would locate there, too.

Similarly, if the center of the market were a “downtown” area with a greater concentration of demand, both firms would choose to locate in the downtown area…This can explain why McDonald’s and Burger King outlets are often located together in high-demand areas” (p. 801).

The same is also true of many other QSR competitors such as YUM! Brands and Subway. As a rule, these QSR firms knowingly face stiff competition – and as this study demonstrates, lose revenue as a result – in order to exist in the locations with the highest fast food consumer traffic (Thomadsen, 2007).

Apaydin (2011) conducted research into the consumer purchasing behaviour across multiple product categories, including the fast food product category, in relation to brand loyalty, brand awareness and brand image.

Apaydin (2011) sought to understand the relationship between consumer perceptions of global brands in a number of different categories and their decision making and buying choices using a sample of 182 Turkish college students.

The purpose of the research was to ascertain if these global brands possessed some supplementary emotional associations with the consumer sample that the same product offerings from local brands did not have.

As Apaydin (2011) notes, if global brands do have additional associations in the minds of consumers, “this has significant contributions to brand image and knowledge, and it enhances brand value which is likely to affect consumers’ brand selection and loyalty behavior” (p. 26).

The researcher’s aim in this research was to determine the emotional relationship between global brand choice and brand loyalty as a function of the consumer’s self image.

Apaydin (2011) posited that if a global brand were associated with self concept or self worth, then it would be chosen above cheaper local brands in the same product category. As Apaydin (2011) explains, “brand loyalty was measured with the statement…I make my purchase according to my favorite global brand, regardless of price” (p. 28).

The results of this study were surprising and differed greatly previous studies. As Apaydin (2011) notes, the research demonstrated the global economic recession exacted a significant influence on consumer purchasing decisions in the fast food product category.

The consumers sampled in this study did not adhere to brand loyalty to the same extent that they have in previous studies. Apaydin (2011) “observed that global brand loyalty is far less than expected, which is not in line with the literature.

The possible reason might be related with global economic recession, which had a big impact on buying behaviors of consumers and strategies of companies. The period of the survey coincided with the economic recession which almost all countries have been experiencing for the last two years.

As this research was carried out in these years, the results are likely to be affected from it” (p. 32). The price sensitivity demonstrated by consumers during uncertain economic times became the most significant determinant of consumer purchasing behaviour in the fast food product category.

Apaydin (2011) presented an additional limiting factor of the study as the “lack of importance of these criteria as a basis for hamburger brand selection” (p. 32). The results suggest that fast food consumers do not necessarily equate the selection of fast food brands with self image.

As Apaydin (2011) explains, “respondents most strongly disagreed with parents and friends being influences on brand purchase, being loyal to brands, [brand] reputation…and brand choice being a reflection of self image” (p. 32).

Rather, the results indicated the consumers sampled chose a particular fast food brand based on the criteria of “value and variety seeking and convenience, which are explained by multi-brand, quality, novelty, price, time, and promotion. Different from the others, time is an important variable for the selection of this product type, which supports the reason why people prefer fast food” (Apaydin, 2011, p. 32).

Contrary to the results of previous studies in a similar vein, as Apaydin (2011) explains, “close environment is not effective for this group in the selection of the global brand” of fast food.

The main factors effecting consumer choice remained speed and cost, and the researcher concluded that the recession had a much stronger impact on consumer purchasing choices, one that superseded brand loyalty in the fast food product category (Apaydin, 2011).

Healthy Eating Lobby

In the U.K., concern over the ingredients – particularly fat and salt content – and the high caloric load of many QSR chains’ offerings continues to increase as the obesity rates in the U.K. begin to mirror those of the United States (Bassett et al., 2007; Gereffi, Lee and Christian, 2009; Glayzer and Mitchell, 2008).

Obesity rates for British males have doubled since 1993, according to Glayzer and Mitchell (2008), and the researchers predict that based on current rates, “by 2050, 60% of men and 50% of women, and 25% of children will be obese” (p. 4).

Especially among children and teenagers, the U.K. population experienced a ballooning of waistlines in recent years and as a result, many healthy eating lobbyists have targeted the fast food industry (Consumers International, 2009; Keynote, 2010).

The issue for the healthy eating lobbyists remains convincing fast food restaurant chains to post caloric information at the point of purchase as a means of influencing the fast food consumer’s purchasing decision. As Glayzer and Mitchell (2008) note:

Restaurants, fast food outlets and other takeaway establishments are currently excluded from any requirement to provide nutrition information at the point of sale. Voluntary schemes are in place in some areas, but formats vary, as do levels and type of outside assessment.

The Food Commission met with the Food Standards Agency in July 2008. The agency is currently conducting consumer research to determine what type of information would be most helpful, and is in discussion with fast food companies.

This has led to chain restaurants, including Burger King, McDonalds, KFC and Subway, committing to taking steps to offer more healthy options and to provide nutritional information to consumers, however none of these chains will offer prominent information on menu boards (p. 13).

The current public health lobby of the United Kingdom therefore does not intervene in the fast food industry to the same extent as its counterpart in the United States. However, as obesity rates continue to rise in the United Kingdom, the healthy eating lobby will likely exert more pressure on the fast food industry, and this pressure may have an impact on consumer purchasing decisions and ultimately on brand loyalty and brand equity.

In recent years, many studies have been conducted in order to investigate the impact of the healthy eating lobby on brand equity, brand loyalty and consumer purchasing decisions in the QSR industry. A number of studies have attempted to identify a causal link between consumer awareness of healthy eating habits and how this awareness may or may not affect their purchasing decisions when it comes to fast food.

These studies are of particular importance to the study at hand, given that this researcher seeks to ascertain the relationship between brand name fast food restaurants and consumer purchasing decisions.

Several studies suggest that the consumer purchasing decision has been affected by the healthy eating lobby, both in the United Kingdom and in the United States, while others suggest that the healthy eating lobby has effectively vilified certain fast food brands, namely McDonald’s.

Whether or not the healthy eating lobby succeeded in minimizing or tarnishing the brand equity of QSR chains such as McDonald’s and reducing the brand loyalty of fast food consumers remains a focus of this research, as does the impact of the healthy eating lobby on fast food restaurant chains’ revenue.

In addition, this study seeks to determine if consumer purchasing decisions change when consumers are made aware of the caloric load of the fast food products they consume.

Several studies suggest that when fast food restaurants inform their consumers about the caloric content of the meals they order, consumers may change the order to a smaller meal or a meal that contains less calories, but the consumers remain with their fast food brand of choice rather than purchase lower calorie fast food from a competitor.

Glayzer and Mitchell (2008) assert that the trend of eating outside the home – more often than not at fast food chains – has contributed to the higher rates of obesity and heart disease. As Glazer and Mitchell (2008) assert, “eating out has become a major part of everyday life in the UK. Almost 30 percent of household expenditure on food is now allocated to eating outside the home [and] 30 percent of people surveyed eat out at least once a week.

This figure has doubled since 2003, when the average was 13 percent. Within the 18-24 age group the average number of people who eat out at least once a week is even higher, at 61 percent (p. 8).

Fast food firms such as McDonald’s tend to take the brunt of the healthy food lobby’s criticism, a fact that may contribute to the increased share of such QSR competitors of Subway, Eat Ltd., and Prêt a Manger in London. Glayzer and Mitchell (2008) posit that most QSR firms serve fare that is “high in calories, saturated fat, sugar and salt, served in large portions, and priced in a way that makes large serving sizes more appealing” (p. 8).

Bassett et al. (2007) conducted research into the impact of posted caloric information on the purchasing behaviour of fast food consumers at the point of purchase using a comprehensive cross sectional survey.

The researchers endeavoured to distinguish the nature of the fast food consumers’ food purchases, the nature of their observation and evaluation of the posted caloric information, as well as how the fast food patrons used the caloric information (Bassett et al., 2007).

The researchers compiled a random sample of 7318 respondents (Bassett et al., 2007). The study participants were gleaned from 300 fast food restaurant chains from roughly 1625 locations throughout the five boroughs of the city of New York that the researchers deemed eligible (Bassett et al., 2007).

The sample included 11 fast food restaurants: Wendy’s, Au Bon Pain, Subway, Burger King, Domino’s, Kentucky Fried Chicken, Taco Bell, McDonald’s, Papa John’s, Pizza Hut, and Popeye’s (Bassett et al., 2007).

The stated goal of this study was to determine if fast food consumers altered their food choices or their fast food brand choices or both once they learned the caloric value of the meal that they had chosen (Bassett et al., 2007).

As Bassett et al. (2007) explain, the results of the survey demonstrated a slight reduction in caloric intake in response to the posted information; however, those surveyed did not take their business to a fast food competitor that offered a less calorically rich meal:

Those who reported seeing and using calorie information purchased 99 fewer calories than those who reported seeing the information and that it had no effect…

There was no significant difference in mean calories purchased by patrons reporting seeing but not using calorie information and patrons who reported not seeing calorie information…

[However], objective measurement of calorie content through examination of receipts confirmed that patrons who reported seeing and using calorie information purchased fewer calories than did those reporting that they did not see or use calorie information (p. 1458).

Thus, this study determined that point of purchase displaying of the caloric load of fast food meals prompts the consumer to purchase a lower calorie meal; however, the respondents sampled in this study did not deviate from their fast food brand of choice.

Rather, they chose a lower calorie alternative from the menu. The results of this study therefore support the idea that the brand equity fast food firms build with their customer sustains itself despite concerns for health and obesity.

Dixon, Elbel and Vadiveloo (2011) conducted similar research into the efficacy of product labelling in the fast food industry. The backdrop for this study was similar to that of the United Kingdom.

Concern in the United States with rising obesity rates prompted public health legislators in the states of New York and New Jersey to mandate the labelling of caloric intake of fast food meals in the same major QSR chains featured in this study, including McDonald’s, Burger King, and Kentucky Fried Chicken.

Using a sample of 1,170 adults aged 18 years or older, Dixon, Elbel and Vadiveloo (2011) surveyed consumer purchasing behaviour in the fast food chains which had adopted the legislation. The researchers aimed to determine if the product labelling effectively reduced overall caloric intake in the sample group.

The researchers examined the sample “to determine whether the degree to which patrons noticed and reported using the calorie information was related to food purchasing patterns,” namely, healthier food choices or reduced caloric intake (p. 52).

The results of this study supported the researchers’ hypothesis that calorie labelling in major fast food chains would have an impact on purchasing decisions; however, the results did not support the idea that fast food consumer would choose a competitor of their fast food brand of choice such as Subway, regardless of the caloric reduction this chain offers compared to McDonald’s, Burger King, or Kentucky Fried Chicken. Rather, the results indicated that the adults sampled would choose food items of lesser caloric value at their fast food brand of choice. As Dixon, Elbel and Vadiveloo (2011) note:

[the respondents] who reported noticing and using calorie labels to inform their food choices consumed more salads and ate out at fast food restaurants less often than adults who did not notice the labels.

Adults who noticed calorie labels but reported not using the information also ate at fast food restaurants less often and were less likely to order caloric beverages than adults who did not see the labels. This suggests that calorie labels may provide some benefit to all consumers who observe them, regardless of whether they report using them (p. 32).

The researchers caution that although the results of this study offer hope for public health legislators in the area of obesity and its concomitant health problems such as diabetes and coronary heart disease, “it is not possible to definitively attribute these favourable differences to calorie labels, because adults who notice labels may differ from adults who do not notice labels.

Adults who notice labels, for example, may have a stronger interest in health, which influences their food purchasing decisions” (p. 32). While the decision to choose healthier options in the fast food product category, according to the results of this study, may rest with the individual fast food consumer, brand loyalty appears to prevail in the face of higher calories.

Carbohydrates not Fast Food

Several studies have come to light that counter the theory that fast food is the main culprit behind the expanding girth of adults and children in both the United Kingdom and the United States.

Rather, a number of researchers from several different disciplines offer the explanation that consumer purchasing decisions in the area of carbohydrate intake represent the main driver in the obesity epidemic, specifically, the prevalence of high carbohydrate snack foods.

Patterson, Richards and Tegene (2007) conducted research into the hypothesis that obesity stems from a rational addiction to carbohydrate rich snack foods rather than fast foods per se.

The main research question that guided this study asked that if fast food “consumers are rational, utility-maximizing agents as economists assume, how can their demand for food be so clearly suboptimal from a health perspective?

This study…tests whether consumers’ rational addiction to specific macronutrients constitutes a viable explanation for the rising incidence of obesity” (Patterson, Richards and Tegene, 2007, p. 309).

Rather than blame the fast food industry for the skyrocketing obesity rates, this study points to the role of carbohydrates and between meal snacking as the main driver in weight gain. As Patterson, Richards and Tegene (2007) note:

Despite the fact that much media attention and public debate has centred on “high-fat” fast food as a likely culprit in the obesity epidemic, our finding suggests a focus rather on increased consumption of high-carbohydrate foods.

Drawing such a conclusion would be questionable if there were only marginal differences in the nutrient content of the foods included in the model. However, our analysis considers snack foods, a category that includes intensive sources of dietary fat… [such as] potato chips… as well as others that are very high in carbohydrate…[such as] pretzels [and] cookies (p. 317).

The results of this study provided a potential alternative explanation for the obesity epidemic, one that does not directly implicate the fast food industry.

This study suggests that the consumer purchasing decision process in the area of snack foods is unduly and negatively influenced by an addition to the micronutrients in carbohydrates, and that snack foods require legislation and regulation rather than fast foods. Whether or not this and other studies will convince the healthy eating lobby remains to be seen.

Legal scholar Todd G. Buchholz (2003) conducted a study to examine the obesity epidemic from a legal perspective. This study remains of particular interest to the healthy eating lobby, as several lawsuits have been filed against large fast food brands such as McDonald’s in an attempt to seek compensation for obesity health complications (Buchholz, 2003).

This study revealed some interesting facts in regards to the actual caloric load of the average fast food meal. As Buchholz (2003) notes, “fast food has expanded menus for changes in taste and health concerns. Fast food meals today derive fewer calories from fat than they did in the 1970s. Fast food [also] has a smaller percentage of calories from fat than a typical home cooked meal in 1977” (p. 1).

Fast food menus typically contain a high amount of protein; for low income individuals especially, Buchholz (2003), fast food restaurants offer an economically viable means to get protein into their diets.

In addition, Buchholz (2003) notes, should the impact of the healthy eating lobby lead to an increase in obesity lawsuits against fast food chains, several negative effects may results, including “lower wages for [fast food] employees, lower stock prices for [fast food] shareholders, [and] higher prices for [fast food] consumers” (p. 2).

Several fast food chains that have come under fire from the healthy eating lobby have taken steps to offer healthier fare at their restaurants through strategic alliances with purveyors of healthy foods and beverages.

An example is the co-branding strategy that occurred in 2007 in the United Kingdom, when McDonald’s U.K. began selling children’s smoothies manufactured by a U.K. company named Innocent in its Happy Meals (Ritson, 2007).

Innocent built its reputation as an eco-friendly, anti-corporate entity devoted to selling healthy drinks; thus, critics of the co-branding initiative argued that Innocent would lose business as a result of the affiliation with McDonald’s, which many U.K. consumers deemed damaging to their children’s health.

McDonald’s, on the other hand, viewed the co-branding strategy as a means to actively promote healthier choices as part of its standard menu.

Ritson (2007) observed that while both brands had built solid equity in the United Kingdom, consumer purchasing decisions might be affected, since a significant disparity existed between the McDonald’s fast food consumer and the Innocent smoothie consumer.

However, the co-branding strategy in this case worked, Ritson (2007) argued, because both brands were established. As Ritson (2007) explains, “brand theory has…become more nuanced.

Many strong brands are able to build brand equity even if they retail in some incongruous locations” (p. 19). Furthermore, Ritson (2007) notes, co-branding theory supports the idea that when too robust brand enter into partnership, both brands ultimately benefit from a co-branding strategy. This benefit will be felt regardless of the pre-existing characteristics of the brand’s core consumer base (Ritson, 2007). As Ritson (2007) explains:

When two brands’ products are associated, both brands win. The positive associations and loyal consumers from each brand are transferred to the other. Innocent will become more mainstream and engage with another 5 million potential consumers. McDonald’s will become fresher, healthier and trustworthier.

Better still, none of the negative associations from either brand are likely to cross over, as co-brand research suggests only positive associations are exchanged. So Innocent won’t become tarnished with ecological unsoundness or junk-food associations (p. 19).

In the fast food industry besieged by the healthy eating lobby, McDonald’s U.K. has definitely become the target of choice, therefore any affiliation with a healthier alternative will likely bolster its sales.

London Based Fast Food Consumer Outlook on American Brands

Fullerton et al. (2010) conducted a study examining the relationship between brand attitudes and consumers in countries outside of the United States and discovered an unexpected outcome of the ongoing health eating lobby which has targeted many fast food firms, including McDonald’s, in recent years.

Fullerton et al. (2010) reported that when the respondents in their study were “describing Americans, the keyword fat was invoked by almost one-fifth of respondents, while fast-food brand McDonald’s emerged as the most disliked brand.

Perhaps, in the minds of international young adults, McDonald’s is linked with a constellation of negative attributes, including cultural imperialism, business globalization and American obesity” (p. 249).

The study surveyed the attitudes of 67 international students attending college in London toward some of the most powerful American brands, including the fast food giant McDonald’s (Fullerton, Kendrick and Randolph, 2010).

The study revealed that the relationship between international consumers and American brands remains complex and relatively individual; in many cases, the effect of American values and way of life is rejected while products and brand that originate in the United States remain widely sought after and welcomed.

“Numerous polls and studies reveal that while international audiences grew to think worse of American foreign policy, they still liked American people and businesses and they kept up their purchase patterns of American brands” (Fullerton, Kendrick and Randolph, 2010, p. 246).

Thus the impact of cultural attitudes, favourable or unfavourable, toward top fast food brands from the United States appears to exact an influence on customer’s purchasing decisions, particularly in the case of global, high equity brands such as McDonald’s.

Chan et al. (2007) conducted a study that examined the relationship between brand attitudes towards products engineered in the United States and preferences for brands that originate in the United States among university students from Australia, Hong Kong and Singapore. The researchers used a sample of 556 students attending higher education institutions in those three countries.

Of the sample surveyed, the QSR giant McDonald’s was consistently named as a favourite brands by students from two of the countries: in Australia, 9.9 per cent of the students named McDonald’s as a favourite brand, and 11.5 per cent of the students from Hong Kong also named McDonald’s.

Interestingly, this study also demonstrated that McDonald’s was one of the “most frequently mentioned US brand that the students in Australia said they disliked… [and] another 7.5 per cent [of the students from Hong Kong] included it on their least-liked brand list” (Chan et al., 2007, p. 10).

Roberts (2004) has coined the trademark qualities of what he calls a “lovemark brand [as] emotional attachment and intense loyalty” (p. 12). For the QSR brand, this study suggests that consumers within the same demographic may view McDonald’s as a lovemark brand while simultaneously viewing it as a loathemark brand (Chan et al., 2007; Roberts, 2004).

The pervasiveness of the McDonald’s brand indicates that brand awareness and brand equity is so high that consumers may harbour polarizing brand attitudes within the same demographic.

In a study gauging attitudes toward American brands in three Pacific Rim countries, Fullerton et al. (2007) applied the term loathemark to a brand or a concept that evoked hatred and rejection to both itself and the country it represents. The researchers noted that the same brands, such as Coca Cola, McDonald’s and Nike, could achieve both lovemark and loathemark status among international consumers (Fullerton et al., 2007).

This study provides further support for the complex relationship between fast food consumers in the United Kingdom and fast food brands that originate in the United States, and how this relationship affects the consumer purchasing process in the fast food product category.

De Bres (2005) conducted research into the impact of the penultimate American fast food brand, McDonald’s, on the culture of the United Kingdom. De Bres (2005) argues that the McDonald’s corporation has become more than a mere vendor of fast food; rather, the restaurant chain “does not modify its way of doing business to adapt to foreign cultures, but changes local cultures to meet its own needs” (p. 115).

As a result of this attitude, De Bres (2005) posits, the brand has earned the ire of many a cultural critic, including the vilifying comment by Watson (2002) that the McDonald’s brand represents a “saturated symbol for everything that environmentalists, protectionists, and anti-capitalist activists find objectionable about American culture” (p. 352).

However, the impact of cultural distaste for American values amongst London QSR consumers does not appear to definitively affect their purchasing decisions. As Fullerton (2005) notes, “the death of Brand America is greatly exaggerated…For example, the French do not hold especially favourable attitudes towards George W. Bush, but they have no problem eating at McDonald’s on the Champs-Elysees” (p. 132).

The main criticism of McDonald’s from a cultural perspective is its status as “an icon of global homogenization of both landscapes and culinary tastes that are identified with” implicit American values and lifestyles (De Bres, 2005, p. 124). In addition, the McDonald’s brand maintains a “cultural hegemony which disregards local popular culture and conventions” (De Bres, 2005, p. 124).

In the United Kingdom, De Bres (2005) argues, the McDonald’s brand “has established a sense of place that is recognized worldwide, [and] in doing so other, older notions of identity and belonging may be challenged” (p. 124).

From the perspective of culture, the global fast food brands such as McDonald’s have successfully infiltrated foreign cultures and as such stand as purveyors of the cultural ethos that describes their country of origin.

While De Bres (2005) notes a McDonald’s consumer survey in 1994 lambasted the brand as “loud, brash, complacent, uncaring, insensitive, insincere, suspicious, disciplinarian, and arrogant,” the success of the fast food chain in the United Kingdom cannot be denied (p. 125).

Demand for McDonald’s products remains high. This reality, as well as the finding of the other studies reviewed in this chapter, appears to support the researcher’s position that brand equity and brand loyalty toward fast food chains, even those that originate in foreign countries such as the United States, will supersede cultural opposition in the London fast food consumer purchasing decision process.

Summary

Chapter II contains the literature review. The literature review has been divided into several subsections that discuss various elements of the topic; these subsections are designed to support and expand upon the research questions that guide the study as a whole.

These subsections include new products and product innovations, the customer value proposition offered, discussions about promotions and strategies, and the impact of the obesity epidemic and corresponding healthy eating lobby on QSR firms’ brand equity, brand loyalty, and sales. Chapter II also contains an overview of some studies that investigate the London consumer outlook on American brands.

Methodology

The following chapter outlines the methods used to investigate the central research question: does brand name have an impact on the customer decision-making process in the top five London fast-food restaurant chains? The study utilizes both primary and secondary research in an effort to determine the answers to the guiding research questions.

The primary research method consists of a random survey that the researcher conducted in London using a random sample of London fast food consumers as participants. The secondary research method utilizes the qualitative research technique of document analysis to develop the thesis that cost rather than brand name exacts the largest influence on customer decision-making processes in London fast-food establishments.

The sample of participants that the researcher used for the fast food consumer survey was selected randomly from consumers based in and around the greater London metropolitan area.

A large segment of the consumer population in London city proper has been identified as regular patrons of fast food establishments such as Subway, KFC, Domino’s Pizza, and McDonald’s; therefore, exploring the buying behavior and purchasing decision processes demonstrated by this group may offer some new insights for both fast food firms and marketing researchers.

The size of the primary research sample was 120. Of this sample, three sub groups were delineated into smaller groups of 30 participants, according to the age of the respondent: respondents aged 18 to 30; respondents aged 30 to 45, and respondents aged 45 to 60. A total of 120 adults completed the survey, which was then evaluated using statistical analyses.

The researcher endeavoured to determine a measure of brand loyalty among the respondents for the fast food firms featured in this study: Subway, YUM! Brands, which includes KFC, Taco Bell and Pizza Hut, Domino’s Pizza, McDonald’s, Eat Ltd., and Prêt a Manger.

Within the product category of fast food, the goal of the survey was to measure brand loyalty and its impact on the London fast food consumer’s purchasing decision process.

The researcher anticipated that varying degrees of attachment and loyalty to global fast food brand names would become apparent vis à vis the survey; therefore nine individual survey questions were developed and used in the survey to measure different instances of the London fast food customer’s purchasing decision process and buying behavior in the fast food product category.

While the sample size remains on the small side, the researcher expects that the respondents’ answers will nonetheless offer some key insights into the complex relationship between fast food consumers, global fast food brands, and consumer purchasing decision processes and buying behaviour.

The information gleaned from these responses will be of value to both fast food firms seeking brand equity measurement and demonstrated instances of brand loyalty in action.

The researcher also anticipates that the results of the survey will be of value in an academic capacity for market researchers, and will contribute to the existing body of knowledge circulating in regards to brand equity, brand awareness, brand loyalty, consumer behaviour, and the consumer purchasing decision process in the fast food product category.

Survey Questions

The researcher crafted the survey questions in a manner designed to reveal brand engagement in the London fast food consumer and ascertain the extent to which brand engagement, brand attachment and brand loyalty affected the consumer’s purchase decision process. The researcher posed the following questions to each of the respondents, according to his or her corresponding age group:

1. Do you care about the brand name when you are selecting a fast food restaurant?
2. If the answer to the first question is yes, does the fast food restaurant need to be a globally recognised brand?
3. In your opinion, why do you believe that globally recognised fast food brand names are better than local or unrecognised fast food brands?
4. Do you believe there is a significant difference in product quality between globally recognised fast food brand names and local or unrecognised fast food brands?
5. Would you be willing to spend more money for a branded fast food product?
6. What is the maximum amount you would be willing to spend on a branded fast food product per person in the current economic environment?
7. Would you be willing to change your regular fast food branded restaurant in case of a price increase?
8. Would you be willing to switch from your regular fast food branded restaurant to a normal restaurant if it offered higher quality food?
9. Do marketing and promotion campaigns from competitor fast food branded restaurant change your image about other brands?

Survey Format

The survey was designed to attract responses pertaining to brand awareness, brand equity, brand loyalty, brand engagement and brand attachment among London fast food consumers.

The researcher posed questions in a manner which would demonstrate the impact of brand equity on the consumer’s purchasing decision process. The survey questions were sufficiently open ended to facilitate unbiased responses from the participants, while maintaining enough specificity to be useful markers of brand engagement and brand attachment.

Study Design

The research design of a study refers to the methods that the researcher employs to obtain the information for use within the study (De Vaus, 2001; Denzin, 1970; Schumacher and McMillan, 1993).

The design of the research must facilitate objectivity to the best of the researcher’s ability (De Vaus, 2001; Denzin, 1970; Schumacher and McMillan, 1993). The research design also needs to permit the researcher to respond to each of the research questions in the most unequivocal manner possible (De Vaus, 2001; Denzin, 1970; Schumacher and McMillan, 1993).

The goal of this study was to determine the impact of fast-food brand names on buyer behaviour in London. The purpose of the research was to ascertain the extent to which London-based quick-service restaurant consumers factor brand recognition or brand awareness when presented with choice between the top five competing fast food firms in the city.

The researcher intended to glean whether or not the brand name has an effect on customer decision-making processes in London, to what extent the brand name helps fast food firms to attract more customers around London, and to what extent cost factors in to decision-making process, independent of brand awareness.

The researcher also sought to understand how the strength of a brand name may or may not give fast food firms a competitive advantage over one another.

Document analysis refers to an orderly method of examining and appraising various forms of documents as a means to acquire meaning and relevance for a research study.

In the same manner as several other analytical procedures and techniques found in qualitative research, document analysis entails that the collected data be investigated and decoded to discover relevance, acquire understanding, and build upon the existing base of observed knowledge in relation to the phenomenon or phenomena under investigation (Bowen, 2009; Corbin and Strauss, 2008; Patton, 1990; Rapley, 2007).

The principal research caveat that the researcher encountered – which will be discussed under study limitations – is that in document analysis, the documents under investigation “contain text…, words…and images that have been recorded without a researcher’s intervention” (Bowen, 2009, p. 28).

The documents that a researcher might use for a study based in the document analysis method of qualitative research vary widely. The researcher may choose to employ a number of items for “systematic evaluation” once he or she has deemed them relevant to the research questions (Bowen, 2009, p. 28).

These items include “advertisements, agendas, attendance registers, and minutes of meetings, manuals, background papers, books and brochures, diaries and journals, event programs [and] printed outlines, letters and memoranda, maps and charts, newspaper clippings and articles, press releases, program proposals, application forms, and summaries, radio and television program scripts, organisational or institutional reports, survey data, and various public records.

Scrapbooks and photo albums can also furnish documentary material for research purposes” (Bowen, 2009, p. 28).

This study utilizes a range of print sources, consumer surveys, academic journals, official government statistics, economic reports, and business backgrounders, as well as electronically based sources such as computer generated material and material created and disseminated for and by the Internet to meet the research goals and purposes hitherto discussed, and expound upon existing knowledge in the field of brand management (Bowen, 2009; Corbin and Strauss, 2008; Labuschagne, 2003).

The critical method employed in document analysis procedures requires the acquisition, distillation, and critical evaluation of the data gleaned from within the documents that the researchers assembles; decoding occurs at the same time that the researcher synthesizes the information obtained from the documents (Bowen, 2009; Corbin and Strauss, 2008; Denzin and Lincoln, 2011; Labuschagne, 2003).

Thus, the researcher determines the relevance of the documents to the research questions as he or she encounters them. The document analysis research method generates data such as extracts, quotes, or full cited passages that the researcher then classifies according to any significant themes that develop (Bowen, 2009; Corbin and Strauss, 2008; Labuschagne, 2003).

Key themes, groupings, and patterns emerge specifically via the close analytical relationship that develops between the researcher and the content (Bowen, 2009; Labuschagne, 2003).

As a research technique, document analysis remains perfectly suitable for qualitative case studies or “intensive studies producing rich descriptions of a single phenomenon, event, organisation, or program” (Bowen, 2009, p. 29; Stake, 1995; Yin, 1994). The documents collected using the document analysis research method provides several different purposes of use to the qualitative researcher embarking upon a study.

The material collected as part of document analysis research method gives the researcher access to areas of research that would remain unavailable in other qualitative research practices and methods such as surveys and interviews. As Bowen (2009) explains, “documents can provide data on the context within which research participants operate.

The information contained in documents can suggest some questions that need to be asked and situations that need to be observed as part of the research documents provide supplementary research data.

Information and insights derived from documents can be valuable additions to a knowledge base documents provide a means of tracking change and development documents can be analysed as a way to verify findings or corroborate evidence from other sources” (p. 29).

For the purposes of this study, the researcher chose the document analysis research method for the following reasons:

Economical Technique

Compared to other forms of qualitative research, the document analysis research method occupies less time for the researcher, as it “requires data selection, instead of data collection” (Bowen, 2009, p. 29). Efficiency-wise, the document analysis research method surpasses other research methods.

Ease of Use

Compared to other forms of qualitative research, many of the documents used in this study were available via online sources. As Bowen (2009) explains, “many documents are in the public domain, especially since the advent of the Internet, and are obtainable without the authors’ permission” (p. 29).

Low Cost Alternative

Compared to other forms of qualitative research, the document analysis research method of data collection remains more cost effective. Similarly, researchers often employ the document analysis research method when the acquisition of new data cannot be made economically viable.

As Bowen (2009) explains, “the data …contained in documents…have already been gathered; what remains is for the content and quality of the documents to be evaluated” (p. 29).

Less Intrusion and Built-In Guards against Reactivity and Reflexivity

Reactivity in psychology and sociology refers to the phenomenon that occurs when research subjects internalize the understanding that they are being observed and alter their behaviour as a result (Heppner et al., 2008).

In research design, “the dependent variable should be sensitive to some characteristic of the participant, but the assessment process itself should not affect the characteristic directly; that is, the dependent measure should indicate how the participant functions normally.

Sometimes, something about obtaining scores on dependent measure alters the situation so that false readings are obtained…For example, a person may smoke less when asked to record the number of cigarettes smoked” (Heppner et al., 2008, p. 331).

The documents obtained via the document analysis research method remain inconspicuous and lacking in reactivity because they are “unaffected by the research process” (Bowen, 2009, p. 29).

The document analysis research method of data collection safeguards against the “the concerns related to reflexivity…or the lack of it…inherent in other qualitative research methods” (Bowen, 2009, p. 29). Similarly, reflexivity in qualitative research refers to the impact that the researcher will have upon the research (Bowen, 2009; Finlay and Gough, 2003).

Reflexivity is the ongoing “project of examining how the researcher and intersubjective elements impact upon and transform research” (Finlay and Gough, 2003, p. 4).

Reflexivity necessitates an ongoing attentiveness to the researcher’s role in the creation of meanings that stem from interpersonal communications, and requires the recognition that the researcher can and often does influence the findings of his or her research, consciously or unconsciously (Bowen, 2009; Finlay and Gough, 2003).

In the document analysis research method, observation does not affect the documents themselves, because they are static, non-human subjects (Bowen, 2009).

Constancy

In the document analysis research method, the gathered documents remain fixed, stable objects appropriate for several re-examinations and reassessments as the research project progresses (Bowen, 2009). The constancy of the documents also means that the presence of the researcher does not transform their content (Bowen, 2009; Merriam, 1988).

Accuracy

For researchers, the presence of precise names, dates, occurrences, facts, and information found in the document gathered during the document analysis research method makes these documents particularly beneficial during the study phase (Bowen, 2009; Yin, 1994).

Treatment

The documents collected as part of the during the document analysis research method typically cover a wide range of historical periods, proceedings, and facts (Bowen, 2009; Yin, 1994).

These documents also record numerous settings, contexts, and points of view; therefore, the documents treat a far more broad range of perspectives, cultures and socioeconomic backgrounds than a single researcher could gain access to in a single survey or interview setting (Bowen, 2009; Yin, 1994)

Throughout the study, the researcher intended to demonstrate the ability to recognize relevant data from the document sources collected and to detach it from the data that the researcher deemed irrelevant or secondary (Bowen, 2009; Corbin and Strauss, 2008).

The researcher also relied significantly on thematic analysis to conduct this study. Thematic analysis refers to a type of pattern identification that emerges from within the data sources, as they are being studied, that proves relevant to the research questions (Bowen, 2009; Fereday and Muir-Cochrane, 2006).

The method of thematic analysis follows a thorough, close reading of the documents under investigation; the data under review is closely analyzed to discover inherent patterns (Bowen, 2009; Fereday and Muir-Cochrane, 2006).

The researcher performs a thorough evaluation of the chosen data and determines specific “coding and category construction, based on the data’s characteristics, to uncover themes pertinent to a phenomenon” (Bowen, 2009, p. 33).

These rising themes eventually derive the categories that organize the overall structure of the study and the phenomenon under analysis, in this case buyer behaviour and brand recognition (Bowen, 2009; Fereday and Muir-Cochrane, 2006).

The secondary research method of analysis utilizes the qualitative research technique of document analysis to develop the thesis that cost rather than brand name exacts the largest influence on customer decision-making processes in London fast-food establishments.

The researcher posits that brand recognition plays a significant role in the decision-making process of the London fast food consumer. The study also analyzes other consumer surveys conducted in London between the years 2009 and 2011 to determine the impact of the global recession on London-based consumers’ fast-food restaurant preferences.

Purpose of the Study

The aim of the study was to determine the relationships between the brand names of top fast-food restaurants in London and the consumer decision making process.

The ultimate goal of the research was to demonstrate a causal link between brand engagement, brand loyalty, and brand attachment and the consumer decision making process when choosing fast food restaurants in London. The guiding research question that informed the study sought to answer the question do London fast food consumers care about brand names when choosing fast food restaurants?

The consumer survey facilitated the creation of useful primary research and a sample of respondents indicative of a larger group of consumers.

The researcher conducted the consumer survey in an effort to access the target market most likely to provide useful and timely information for the purposes of the study, as well as those most likely to offer pertinent responses to the research questions based on their own real time experiences with the brand.

The qualitative research method of document analysis used to analyse the secondary research in this study allowed the researcher to study a wide range of primary and secondary documents in order to cement a theory around brand recognition, brand awareness, brand strategy, consumer spending, consumer decision-making, and the influence of the economic climate between 2009 and 2011 on all of these factors.

Research Questions

The following research questions guided the study:

1. What do the fast food customers in London think of fast food restaurants, and how important is a brand name to them when making food choices?
2. Do fast food customers in London really care about brand name, or do they select it due to the low price?
3. How do the fast food customers in London compare their regular restaurant with its competitive firms?
4. Do fast food firms acquire any form of a competitive advantage due to their brand name?
5. To what extent do marketing and promotion campaigns attract people from competitive brands?

The researcher made every attempt to interpret both the primary and the secondary sources of research collected using these five questions as guides.

Data Collection

Data collection is a vital element of a research study that helps to legitimize the research findings; it also affords the study with credibility and maintains the integrity of the study and the researcher’s purpose.

The results of the consumer survey were collected using the surveys distributed to a random sample of fast food patrons among the top six fast food firms in London: Subway, McDonald’s, YUM! Brands, including Pizza Hut, Taco Bell and KFC, Domino’s Pizza, Eat Ltd., and Prêt a Manger.

For the purposes of this study, the grounded theory developed by Glaser and Strauss (1967) directed the collection of documents used to create the body of secondary research. Grounded theory refers to the uncovering of a viable theoretical direction for research gleaned from the data itself (Glaser and Strauss, 1967).

As Bowen (2009) explains, “in grounded theory research, as in other forms of qualitative inquiry, the investigator is the primary instrument of data collection and analysis” (p. 29). In this dual role of investigator and analyst, the researcher “relies on skills as well as intuition and filters data through an interpretive lens” (Bowen, 2009, p. 29).

As both investigator and analyst, the researcher concurrently mines and examines the data that has been extracted from the selected documents in a form of hypothetical sampling, or as Strauss and Corbin (1990) explain, “sampling on the basis of concepts that have proven theoretical relevance to the evolving theory” (p. 176).

In data collection based on grounded theory, the theory that guides the study evolves via the concomitant collection of data, and the researcher serves the simultaneous functions of theory designer, theory builder, and data filtration unit (Bowen, 2009; Charmaz, 2011; Glaser and Strauss, 1967).

Data Analysis

The results of the consumer survey were examined using analyses of variance. The analyses were conducted to determine whether or not the survey results demonstrated a significant statistical difference between the responses across the three different age groups represented by the survey.

The researcher endeavoured to measure brand loyalty as indicated by score – high scores were interpreted to indicate a particular loyalty with a corresponding global fast food brand.

In addition, the attitudes and beliefs that determine the consumer purchasing decision process and buying behaviour in regards to the brand were examined. The researcher interpreted the results according to the age group reflected by the responses.

For the purposes of this study, the constant comparative method developed by Glaser and Strauss (1967) directed the data analysis. The data analysis was established upon an inductive methodology. The constant comparative method “does not supplant the skills and sensitivities required in generating theory.

Rather, the constant comparative method is designed to aid the analyst who possesses these abilities in generating a theory that is integrated, consistent, plausible [and] close to the data….

Still dependent on the skills and sensitivities of the analyst, the constant comparative method is not designed…as methods of quantitative analysis are…to guarantee that two analysts working independently with the same data will achieve the same results.

It is designed to allow, with discipline, for some of the vagueness and flexibility that aid the creative generation of theory” (p. 103).

As such, the researcher aimed to make out patterns and models within the data collected that supported the theoretical goals of the project, while simultaneously recognizing and cataloguing relevant theoretical elements located in the data that could lead to further insights (Bowen, 2009; Glaser and Strauss, 1967)

Study Limitations

In regards to the primary research, the main limitation of the consumer survey remains the small size of the sample. At 120 respondents, the sample may be too small to reflect the buying behaviour and the consumer purchasing decision process undertaken by the London fast food consumer when choosing a fast food restaurant.

Also, the sample itself did not take into consideration any other factors besides age which might influence brand loyalty and the consumer purchasing decision process such as gender, socio-economic status, religion, race, or country of origin.

Aside from the basic limitations of reactivity and lack of reflexivity inherent in all forms of qualitative research previously discussed, the document analysis research method utilized for the secondary research component contains several limitations that may affect the outcome of the study.

The most significant limitation of the document analysis research method is that the documents themselves may lack crucial details (Bowen, 2009; Yin, 1994). Documents created outside of the research paradigm are by nature created for another purpose besides research; their original purpose affects the quality and quantity of valid research that they contain.

The documents might have been intended to sell, persuade, dissuade, or assert a particular agenda. As such, they may or may not contain the detail sufficient to answer the research questions (Bowen, 2009; Yin, 1994). In addition, the details that the documents do contain may be cursory or irrelevant.

Secondly, in the case of documents produced for purpose besides research, the researcher may encounter issues related to lack of retrievability (Bowen, 2009; Yin, 1994).

As Bowen (2009) explains, “document created independent of a research agenda…are sometimes not retrievable, or retrievability is difficult” (p. 33). In addition, in some cases the researcher will encounter intentional obstacles to the retrieval of the information contained in the documents (Bowen, 2009; Yin, 1994).

Thirdly, documents created for purposes other than research may contain an inherent bias associated with their original purpose (Bowen, 2009; Yin, 1994). This phenomenon, known as “biased selectivity” occurs when a document or collection of documents deliberately omits a key event or piece of information (Bowen, 2009; Yin, 1994, p. 80).

This inherent selection bias on the part of the document’s originators affects the objectivity of the whole document and must be taken into account by the researcher. As Bowen (2009) explains, “in an organisational context, the available…selected…documents are likely to be aligned with corporate policies and procedures and with the agenda of the organisation’s principals” (p. 33).

Summary

Chapter III describes the methodology of the research and outlines the design of the study. This chapter contains an overview of the data collection and data analysis methods used to interpret the findings from the consumer survey that served as the primary research component of the study.

Chapter III also includes a detailed description and explanation of the document analysis research method used by the researcher to conduct the secondary research component of the study.

This chapter contains a description of the grounded theory approach used by the researcher in the collection of the research data, and also describes the constant comparative method the researcher employed to analyze the data collected (Bowen, 2009; Glaser and Strauss, 1967).

In addition, this chapter contains the research questions that guided the study and the consumer survey questions, and describes the limitations of the chosen research designs and methods that may affect the outcome of the study findings.

Findings

Robust brand equity remains significantly associated with increased revenues for fast food restaurants (Kim and Kim, 2004; Lee, 2011). Several previous studies featured in this literature review have demonstrated the direct correlation between brand recognition, brand equity, brand awareness, brand image, brand loyalty, and the consumer purchasing decision process.

Studies also support the theory that fast food brands with strong brand equity enjoy a higher degree of perceived quality among the consumers that have become attached to that brand. Fast food consumers that display brand loyalty will actively choose their fast food brand over competitors, often despite marketing and promotional tactics such as lower prices (Kim and Kim, 2004; Lee, 2011)

The following study endeavoured to test the power of brand names as a means of influencing the buying behaviour and the consumer purchasing decision process of fast food consumers in the city of London. The goal of the survey was to determine the extent to which brand equity and brand loyalty factors in to the consumer’s purchase decision.

The researcher’s hypothesis for the study is that brand equity affects consumer choices and consumer buying behaviour. Brand awareness, brand equity and brand loyalty demonstrated significant effect on the purchasing decisions of the consumers surveyed.

The results also demonstrate that brand loyalty affects the choice of restaurant to the exclusion of other factors such as availability and cost. The results also indicate that the quality of the food purchased remains of paramount importance to the London fast food consumers that the researcher surveyed.

The researcher separated the primary data into nine different tables that corresponded with each of the survey questions. For the primary data, the researcher utilized a total sample size of 120 adult respondents.

This sample was then further delineated into a sample size that corresponded with each group: 30 participants in the age group represented by 18 through 30 year olds; the age group represented by 31 through 45 year olds, and the age group represented by 46 through 60 year old.

These samples included fast food adult consumers located in the city of London. These respondents were chosen at random. The participants received survey questionnaires in regards to their purchasing behaviour for the brand name fast food retailers in London. The results of each question are listed below:

Sample Size for Each Age Group: 30 (30×3 =120)

Table 1. Survey Question: Do you care about the brand name of the restaurant when you are selecting a fast food restaurant?

Table 1 indicates the responses to the question do you care about the brand name if you are selecting fast food restaurant? The respondents were asked the question and then given the following choices of response: Yes I do, Not at all, Maybe, and Other. In the age group represented by 18 to 30 year olds, the vast majority of the respondents – 21 out of 30 – responded Yes I do.

16 of the 30 respondents in the age group represented by 31 to 45 year olds answered Yes I do, while 11 of the 30 respondents in the age group represented by 46 to 60 year olds answered yes I do. The results of the survey responses to this question indicate that younger fast food consumers in London are more brand loyal and are more influenced by the brand name of a fast food purveyor when they make their purchasing decisions.

Table 2. Survey Question: If the response to the first question was yes I do, does the fast food restaurant need to be a globally recognised brand in order for you to choose it?

Table 2 indicates the responses to the question if the response to the first question was yes I do, does the fast food restaurant need to be a globally recognised brand in order for you to choose it? T

he respondents were asked the question and then given the following choices of response: Yes, No, Depends on the food that I’m looking for, and Other. In the age group represented by 18 to 30 year olds, the vast majority of the respondents – 23 out of 30 – responded Yes.

18 of the 30 respondents in the age category represented by 31 to 45 year olds answered Yes, while 18 of the 30 respondents in the age group represented by 46 to 60 year olds also answered Yes.

The results of the survey responses to this question indicate that while younger fast food consumers in London are more likely to choose a brand name fast food restaurant and are more influenced by the brand name of a fast food purveyor when they make their purchasing decisions, the same is also true of older clientele.

Table 3. Survey Question: According to you, do you think that globally recognised brand name fast food restaurants are better than unrecognised fast food restaurants?

Table 3 indicates the responses to the question according to you, do you think that globally recognised brand name fast food restaurants are better than unrecognised fast food restaurants? The respondents were asked the question and then given the following choices of response: Yes, because that means the food is better, Yes, because that means the service is better, Both one and two are correct, and Other.

In the age group represented by 18 to 30 year olds, nearly 50 percent of the respondents – 11 out of 30 – responded Yes, because that means the food is better. 6 of the 30 respondents in the age category represented by 31 to 45 year olds answered Yes, because that means the food is better, while 8 of the 30 respondents in the age group represented by 46 to 60 year olds also answered Yes, because that means the food is better.

6 of the 30 respondents in the age category represented by 18 to 30 year olds answered Yes, because that means the service is better. 3 of the 30 respondents in the age category represented by 31 to 45 year olds answered Yes, because that means the service is better, while 5 of the 30 respondents in the age group represented by 46 to 60 year olds also answered Yes, because that means the service is better.

Overwhelmingly, the respondents in the age category represented by 31 to 45 year olds and 46 to 60 year olds chose both answers.

The results of the survey responses to this question indicate that while the fast food consumers in London reflected in this survey are far more likely to hold a higher perception of the quality of the food produced by a fast food brand name when they make their purchasing decisions. Consumer perception of the quality and superiority of the brand over its competitors therefore remains consistent across all three age groups.

Table 4. Survey Question: Do think there’s a significant different in products between globally recognise brand names and others?

Table 4 indicates the responses to the question do think there’s a significant different in products between globally recognised brand names and others? The respondents were asked the question and then given the following choices of response: Yes, No, Sometimes, and Other.

In the age group represented by 18 to 30 year olds, the overwhelming majority of the respondents – 22 out of 30 – responded Yes. 23 of the 30 respondents in the age category represented by 31 to 45 year olds also answered Yes, while 21 of the 30 respondents in the age group represented by 46 to 60 year olds also answered Yes.

Only 4 of the 30 respondents in the age category represented by 18 to 30 year olds answered No. 5 of the 30 respondents in the age category represented by 31 to 45 year olds answered No, while 4 of the 30 respondents in the age group represented by 46 to 60 year olds also answered No.

Overwhelmingly, the respondents in the age categories represented by 18 to 30 year olds, 31 to 45 year olds and 46 to 60 year olds chose Yes as a response.

The results of the survey responses to this question indicate that the fast food consumers in London reflected in this survey are far more likely to believe that the quality of the food products offered by a fast food brand name is superior to its competitors as well as to unrecognised brands in the same product category.

Therefore, the responses to this question indicate that fast food consumers are predisposed to choose global brand names based on an assumption of superiority, which in turn affects their buying behaviour and their purchasing decisions. Consumer perception of the quality and superiority of the brand over its competitors again remains consistent across all three age groups.

Table 5. Survey Question: Are you willing to spend more if it’s a branded product?

Table 5 indicates the responses to the question are you willing to spend more if it’s a branded product? The respondents were asked the question and then given the following choices of response: Yes I will, No, Maybe, and Other.

In the age group represented by 18 to 30 year olds, nearly half of the respondents – 14 out of 30 – responded Yes I will. 13 of the 30 respondents in the age category represented by 31 to 45 year olds also answered Yes I will, while 13 of the 30 respondents in the age group represented by 46 to 60 year olds also answered Yes I will.

12 of the 30 respondents in the age category represented by 18 to 30 year olds answered No. 6 of the 30 respondents in the age category represented by 31 to 45 year olds answered No, while 4 of the 30 respondents in the age group represented by 46 to 60 year olds also answered No.

3 of the 30 respondents in the age group represented by 18 to 30 year olds answered Maybe. 10 of the 30 respondents in the age group represented by 31 to 45 year olds also answered Maybe, while 9 of the 30 respondents in the age group represented by 46 to 60 year olds also answered Maybe.

Overwhelmingly, the respondents in the age categories represented by 18 to 30 year olds, 31 to 45 year olds and 46 to 60 year olds asserted that they would be willing to spend more money for a brand name fast food product.

The results of the survey responses to this question indicate that the fast food consumers in London reflected in this survey are far more likely to forgo cost savings in order to choose a global fast food brand name product. These results further indicate the consumer perception of the quality and superiority of the global fast food brand name over its competitors. Again, these results were consistent across all three age groups.

Table 6. Survey Question: What is the maximum amount you are willing to spend on branded fast food restaurant (Per Person) in current economic environment?

Table 6 indicates the responses to the question what is the maximum amount you are willing to spend on branded fast food restaurant (Per Person) in current economic environment? The respondents were asked the question and then given the following choices of response: 0 to 5 pounds, 5 to 10 pounds, 10 to 15 pounds, and 15 to 20 pounds.

In the age group represented by 18 to 30 year olds, nearly half of the respondents – 12 out of 30 – responded 0 to 5 pounds. 18 of the 30 respondents in the age category represented by 31 to 45 year olds also answered 0 to 5 pounds, while 16 of the 30 respondents in the age group represented by 46 to 60 year olds also answered 0 to 5 pounds. 10 of the 30 respondents in the age category represented by 18 to 30 year olds answered 5 to 10 pounds.

7 of the 30 respondents in the age category represented by 31 to 45 year olds also answered 5 to 10 pounds, while 7 of the 30 respondents in the age group represented by 46 to 60 year olds also answered 5 to 10 pounds.

7 of the 30 respondents in the age group represented by 18 to 30 year olds answered 10 to 15 pounds. 4 of the 30 respondents in the age group represented by 31 to 45 year olds also answered 10 to 15 pounds, while 6 of the 30 respondents in the age group represented by 46 to 60 year olds also answered 10 to 15 pounds.

Finally, 1 of the 30 respondents in the age category represented by 18 to 30 year olds answered 15 to 20 pounds. 1 of the 30 respondents in the age category represented by 31 to 45 year olds also answered 15 to 20 pounds, while 1 of the 30 respondents in the age group represented by 46 to 60 year olds also answered 15 to 20 pounds.

These results indicate that the fast food consumers reflected in this survey are willing to spend upwards of 10 pounds on a fast food meal from a global brand name in the recovering economic environment.

Table 7. Survey Question: Will you be willing to change your regular restaurant in case of a price increase?

Table 7 indicates the responses to the question will you be willing to change your regular restaurant in case of a price increase? The respondents were asked the question and then given the following choices of response: Yes I will, No, Not sure, and other.

In the age group represented by 18 to 30 year olds, a small number – 8 out of 30 – responded Yes I will. 9 of the 30 respondents in the age category represented by 31 to 45 year olds also answered Yes I will, while 13 of the 30 respondents in the age group represented by 46 to 60 year olds also answered Yes I will.

17 of the 30 respondents in the age category represented by 18 to 30 year olds answered No. 16 of the 30 respondents in the age category represented by 31 to 45 year olds also answered No, while 11 of the 30 respondents in the age group represented by 46 to 60 year olds also answered No. 2 of the 30 respondents in the age group represented by 18 to 30 year olds answered Not sure.

3 of the 30 respondents in the age group represented by 31 to 45 year olds also answered Not sure, while 3 of the 30 respondents in the age group represented by 46 to 60 year olds also answered Not sure. Finally, 3 of the 30 respondents in each age category answered Other.

These results overwhelmingly indicate that the fast food consumers reflected in this survey are brand loyal; they are not willing to change the brand of restaurant that they have become attached to, and they are willing to spend more money to stay with the brand of restaurant that they have become attached to, even in the recovering economic environment.

Table 8. Survey Question: Will you be willing to switch from your branded restaurant to a normal restaurant if they offer higher quality food?

Table 8 indicates the responses to the question will you be willing to switch from your branded restaurant to a normal restaurant if they offer higher quality food? The respondents were asked the question and then given the following choices of response: Yes I will, No, Maybe, and Other.

In the age group represented by 18 to 30 year olds, a small number – 9 out of 30 – responded Yes I will. 16 of the 30 respondents in the age category represented by 31 to 45 year olds also answered Yes I will, while 15 of the 30 respondents in the age group represented by 46 to 60 year olds also answered Yes I will.

14 of the 30 respondents in the age category represented by 18 to 30 year olds answered No. 6 of the 30 respondents in the age category represented by 31 to 45 year olds also answered No, while 4 of the 30 respondents in the age group represented by 46 to 60 year olds also answered No.

5 of the 30 respondents in the age group represented by 18 to 30 year olds answered Maybe. 7 of the 30 respondents in the age group represented by 31 to 45 year olds also answered Maybe, while 8 of the 30 respondents in the age group represented by 46 to 60 year olds also answered Maybe.

Finally, 4 of the 30 respondents in the age category represented by 18 to 30 year olds answered Other. 1 of the 30 respondents in the age category represented by 31 to 45 year olds also answered Other, while 3 of the 30 respondents in the age group represented by 46 to 60 year olds also answered Other.

These results indicate that the quality of the fast food that the consumers reflected in this survey eat remains more important among the older age groups, which may indicate an increased concern with health based on age.

Table 9. Survey Question: Do marketing and promotion campaigns change your image about other brands?

Table 9 indicates the responses to the question do marketing and promotion campaigns change your image about other brands? The respondents were asked the question and then given the following choices of response: Yes, No, Sometimes, and other. In the age group represented by 18 to 30 year olds, nearly 50 percent of the respondents – 12 out of 30 – responded Yes.

9 of the 30 respondents in the age category represented by 31 to 45 year olds also answered Yes, while 11 of the 30 respondents in the age group represented by 46 to 60 year olds also answered Yes.

14 of the 30 respondents in the age category represented by 18 to 30 year olds answered No. 12 of the 30 respondents in the age category represented by 31 to 45 year olds also answered No, while 12 of the 30 respondents in the age group represented by 46 to 60 year olds also answered No.

3 of the 30 respondents in the age group represented by 18 to 30 year olds answered Sometimes. 7 of the 30 respondents in the age group represented by 31 to 45 year olds also answered Sometimes, while 6 of the 30 respondents in the age group represented by 46 to 60 year olds also answered Sometimes.

Finally, 1 of the 30 respondents in the age group represented by 18 to 30 year olds answered Other. 3 of the 30 respondents in the age group represented by 31 to 45 year olds also answered Other, while 5 of the 30 respondents in the age group represented by 46 to 60 year olds also answered Other. These results overwhelmingly indicate that the fast food consumers reflected in this survey are brand loyal.

Nearly 50 percent of the respondents surveyed remain unaffected by the marketing and promotional efforts of the competitors of their brand of choice.

They are not willing to change the brand of restaurant that they have become attached to, regardless of the promotion, and they actively seek to remain loyal to the global fast food restaurant brand of restaurant that they have become attached to, even in the recovering economic environment.

Secondary Data

The researcher compiled information from the Greater London Authority’s report Spending Time: London’s Leisure Economy, an overview of the various players located in the city of London in the product category of eating out, take out foods, and fast foods. The documents collected from the Greater London Authority provide valuable insight into the dining out market of the city of London in the 21^st century.

London represents one of Britain’s largest dining out markets. According to the Greater London Authority (2005), the city of London houses 6,128 licensed restaurants; this figure represents an astonishing 22 per cent of all of the restaurants located in the United Kingdom.

The Greater London Authority (2005) estimates that in 2002, the total amount of revenue generated by dining out and take out or eat-in fast food restaurants in Britain was approximately £15.5 billion.

Market calculations compiled by the Greater London Authority Economics demonstrate that the demand for traditional restaurants generates £5 billion, while fast food restaurants earn £3 billion annually (Greater London Authority, 2005). An additional £1.75 billion in revenue is generated by fast food take out service and drive thrus (Greater London Authority, 2005).

Overall, the fast food industry represents a total value to the London economy of £1.43 billion. Over £0.9 billion is from eat-in restaurants and over £0.5 billion is fast food takeaway. (Greater London Authority, 2005).

The main competitors of the fast food industry, other than fast food brands that occupy the same product category, include ethnic restaurants, casual dining establishments, coffee shops, cafés, and pubs (Greater London Authority, 2005).

The ethnic restaurants in the greater London area have been appraised at a value of £3 billion (Greater London Authority, 2005). Coffee shops and cafés located in the city have also been assessed at a value of nearly £2.7 billion (Greater London Authority, 2005).

According to the Greater London Authority (2005), these figures conceal certain transformations in dining out market, particularly in relation to fast food. Burger chains and global fast food brands burgers represent 11 per cent of the total eating out market; however, growth is deemed sluggish (Greater London Authority, 2005).

In contrast, the areas of growth in the dining out market include “restaurant pubs and gastro pubs with 9 per cent of the market, and pizza and pasta restaurants with 5 per cent” (Greater London Authority, 2005, p. 31).

Within the eating out market in the city of London, many different players compete for market share. As the Greater London Authority (2005) explains, “while small, privately run enterprises make up the majority of the market, large multiple operators are shaping the dining culture of Britain.

Sixty-eight per cent of the dining market consists of independent operators. Restaurants and cafés are a market that independent entrepreneurs can readily enter” (p. 31).

However, independent operators that lack the brand equity of global fast food firms often struggle to compete effectively and generate consistent clientele (Greater London Authority, 2005). This phenomenon has been witnessed extensively since the beginning of the recession, although independent operators still produce market gains in lunch traffic and takeout food services. As the Greater London Authority (2005) notes:

Independents are strong at the low end of the market in sandwich bars and takeaways, and the mid-market of white tablecloth’ restaurants. Ethnic restaurants are characterised by independents and family businesses, although a few multi-outlet chains have emerged in London. Independent operators are being squeezed by the growth of chains, especially in the mid market and the coffee shop and café market (p. 31).

According to the Greater London Authority (2005), many of the global fast food brands featured in this study are “growing through ownership and franchise” (p. 31). This is especially true of fast food firms that have built much of their brand equity on the strength of their franchises such as Subway and Domino’s Pizza.

The fast food market in the city of London is dominated by “large companies and their familiar brands” (Greater London Authority, 2005, p. 31). The landscape of fast food in London remains largely the province of the global fast food brands that originate in the United States. As the Greater London Authority (2005) explains:

The burger market is led by McDonalds which has around 1,200 outlets in Britain and over 200 in London. Burger King has 700 outlets nationwide and almost 100 in London.

Other recognisable fast food brands have a large presence in London, such as KFC and Pizza Hut which each have over 80 outlets in London. Chains are shaping the mid-market for restaurants, illustrated by Italian-style outlets such as Ask and Pizza Express” (p. 31).

In the dining out market in London, the area of greatest recognisable growth occurs in the coffee market, particularly in the proliferation of coffee shop chains such as Starbucks. “There is intense competition between hundreds of coffee shops on the high streets of central London.

Starbucks is the leading chain with over 100 outlets in London. Costa Coffee and Prêt a Manger have up to 90 outlets” (Greater London Authority, 2005, p. 31). Coffee chains at the present time do not compete directly with fast food establishments.

Top Six Fast Food Brands in the U.K.

In 2011, the annual revenue of the QSR industry in the U.K. amounted to over 5 billion pounds (IBIS World, 2011). The quick service restaurant sector in the U.K. houses over 27,000 competitors and employs over 166,000 people (IBIS World, 2011).

Subway

Fred De Luca and Peter Buck founded the privately held Subway, also known as Doctor’s Associates, in 1966 in Bridgeport, Connecticut, USA (Doctor’s Associates Inc., 2010; Gale Cengage Learning Company Profiles, 2010; Haymarket Business Publications, 2009).

At that time, the chain was called Pete’s Super Submarines; De Luca and Buck changed the name to Doctor’s Associates, Inc. (DAI) when the second Subway store opened (Doctor’s Associates Inc., 2005; Gale Cengage Learning Company Profiles, 2010).

From then on, Subway has grown to become one of the largest franchise outfits in the world; as of March, 2011, the company operates 34,187 stores in 95 countries and territories worldwide (Doctor’s Associates Inc., 2005; Gale Cengage Learning Company Profiles, 2010).

Subway’s franchise model underpins much of the company’s success. As Simms (2011) notes, Subway’s “franchise model allows rapid expansion with low risk to the parent company. If the franchisee succeeds, so does the parent company.

If they fail, the company just moves on” (n. pag.). Subway is now recognized as the top single brand global QSR chain; after Yum! Brands, the Subway restaurant chain is the largest global restaurant outfit (Charles, 2008; Doctor’s Associates Inc., 2005; Gale Cengage Learning Company Profiles, 2010).

The company’s headquarters are located in Milford, Connecticut; five international centres oversee its global operations (Doctor’s Associates Inc., 2005; Gale Cengage Learning Company Profiles, 2010).

The London Subway franchises are supported by the regional office located in Amsterdam, Netherlands, which also looks after all of the European franchises (Doctor’s Associates Inc., 2005; Gale Cengage Learning Company Profiles, 2010).

Subway boasts an aggressive and rapid expansion mandate. According to Simms (2011), “in 2002, Subway announced plans to open 2,000 outlets in the UK and Ireland by 2010. So far it has made it to 1,507, but claims to be opening new outlets at the rate of five every week” (n. pag.).

The Subway restaurant chain earns $15.2 billion in revenue every year (Doctor’s Associates Inc., 2005; Gale Cengage Learning Company Profiles, 2010; Haymarket Business Publications, 2010). In 2011, Subway was named to the top 10 of Entrepreneur Magazine’s top 10 in Franchise 500 list and boasts an innovative celebrity endorsement marketing platform (Close Up Media, 2011; Daley, 2011).

McDonald’s

McDonald’s represents one of the world’s first “borderless” QSR multinational corporations (Technology Strategies, 1996, p. 19). In the QSR industry, McDonald’s is the global stalwart. The first McDonald’s appeared in London in 1974 (Gale Cengage Learning Company Profiles, 2010).

In terms of global business operations, including assorted franchisees as well as McDonald’s Restaurants Ltd., the McDonald’s Corporation takes the top spot in international QSR profits (Euromonitor International, 2010; Gale Cengage Learning Company Profiles, 2010). According to Euromonitor International (2010), the McDonald’s Corporation continues to be the “number one player within fast food” (n.pag.)

The company accounted for a 16 percent share of fast food sales in 2010, although compared to 2009 the share increase was minimal (Euromonitor International, 2010). According to Euromonitor International (2010), “after rationalising its outlet portfolio in 2009, the company opened only one new unit in 2010.

McDonald’s appeared more focused on establishing its credentials as a socially responsible company and improving its menu offerings in 2010. The company has a long list of breakfast offers, including pancakes and syrup, bagels, bacon, sausage and Oatso Simple porridge. Its latest menu offering includes wraps” (n. pag.).

McDonald’s long history of operations begins in 1948 in San Bernadino, California, USA (Walkup, 2007).

McDonald’s has been credited with the creation of the fast food industry as we now know it; the company “created its own supply chain, especially for its major ingredients, because of its enormous needs,” and has trail blazed a number of areas which QSR industries continue to thrive in today (Gale Cengage Learning Company Profiles, 2010; Walkup, 2007).

The company spearheaded much of the growth experienced in the QSR sector, and the company “gradually made changes that were innovations in the industry.

For instance, it made its first public stock offering in 1965, developed the Big Mac in 1967, opened its first McDonald’s Playland in 1971, debuted in Hong Kong in 1975, added breakfast in 1977, launched its first national Happy Meal promotion in 1979 and added Chicken McNuggets in 1983” (Walkup, 2007, p. 27)

From a brand perspective, McDonald’s is one of the oldest and also the most robust brands on the planet, one that seems impervious to controversy and criticism. “For many people, McDonald’s represents the epitome of corporate globalization. Yet McDonald’s did not invent globalization. Where McDonald’s has been successful has been in making an already strong brand even stronger through the globalization process.

There are many businesses which would describe themselves as global or multinational. But truly global consumer brands are few and far between…

Truly borderless companies combine transferable management practices and culture with a set of brand attributes which are recognized by customers wherever the company does business” (Technology Strategies, 1996, p. 19). In 2010, the McDonald’s corporation earned $1,908.90 million in sales and employed 37,644 people in the U.K. (Gale Cengage Learning Company Profiles, 2010).

Domino’s Pizza

Domino’s Pizza UK and IRL PLC (DOM) operates the Domino’s Pizza franchise in the U.K. as well as the Republic of Ireland (Gale Cengage Learning Company Profiles, 2010). The first Domino’s Pizza opened in London in 1999, and the company earns $306.40 million in sales annually (Gale Cengage Learning Company Profiles, 2010).

Similar to the success of Subway, the Domino’s Pizza franchise model remains a sound growth engine for the brand. As Kühn (2009) notes, “the Domino’s and Subway franchise model has allowed them to be pretty recession proof, and many individual businessmen have found them to be sturdy investments” (n. pag.).

Thomas and James Monaghan created the Domino’s Pizza Inc. company in 1960; the company went public in 2004, and has been traded on the NYSE ever since (Gale Cengage Learning Company Profiles, 2010). According to the Gale Cengage Learning Company Profiles (2010), “Domino’s Pizza has been one of the top pizza delivery companies in the United States, selling over 1 million pizzas a day.

In addition to its pizza delivery business, Domino’s Pizza maintains and operates a network of company-owned and franchise-owned stores. The company operates within three business segments: domestic stores, domestic supply chain and international” (n. pag.).

The company’s international division oversees the 3,726 franchise stores that operate outside of the U.S., including the London stores (Gale Cengage Learning Company Profiles, 2010).

Headquartered in Ann Arbor, Michigan, USA, the Domino’s Pizza menu contains standard Italian American fare such as pizza, and pasta; specialty entrees and sides include “pasta bread bowls…oven-baked sandwiches…chicken side dishes, breadsticks and salads, as well as beverages and desserts” (Gale Cengage Learning Company Profiles, 2010).

According to IBIS World (2011), the “average revenue per each Domino’s store was…about £670,000 in 2009, although 68 stores achieved annual revenue in excess of £1.0 million” (n. pag.) According to Kühn (2009), Domino’s Pizza increased its earnings portfolio “by a whopping 50 percent” in 2009 in the U.K. (n. pag.).

YUM! Brands

YUM! Brands Inc. earns $11,343.00 million in sales annually and employs 378, 000 people in the U.K. The YUM! Brands moniker represents the umbrella term for a group of quick service restaurants that the company operates worldwide, including the “KFC, Pizza Hut, Taco Bell, Long John Silver’s, and A&W All-American Food Restaurants brands” (Gale Cengage Learning Company Profiles, 2010, n. pag.).

According to Gale Cengage Learning Company Profiles (2010), YUM! Brands operates in a host of quick service categories, including “chicken, pizza, Mexican-style food, and quick-service seafood categories” (n. pag.). In December 2009, YUM! Brands officially owned and operated over 37,000 restaurants in 110 nations and territories worldwide (Gale Cengage Learning Company Profiles, 2010).

YUM! Brands, Inc. was founded in 1997 in Louisville, Kentucky, USA; at that time, the company was known as TRICON Global Restaurants, Inc. (Gale Cengage Learning Company Profiles, 2010). The company rebranded to YUM! Brands in May of 2002; it is now traded on the NYSE. YUM! Brands aggressively expands in both the European and Asian markets (Kühn, 2010).

In June of 2010, the company relaunched Taco Bell in the U.K., following a failed attempt 30 years ago. As Kühn (2010) explains, YUM! Brands “first tried to establish Taco Bell in the UK in the late 1980s when it had three sites in London and one in Birmingham. However, the restaurants were closed by the mid-1990s” (n.pag.).

Taco Bell is YUM! Brands’ most successful firm in the United States; the company believes there is a market for Mexican food in the U.K. as well (Kühn, 2010). In early 2011, YUM!

Brands announced that it would be selling off two of its businesses – Long John Silver’s, a quick service seafood chain, and A&W brands, a burger chain, in order to concentrate on its core money makers – KFC, Pizza Hut and Taco Bell (Gale Cengage Learning Company Profiles, 2010; Kühn, 2010).

Eat Ltd

Privately owned Eat Ltd. was founded in 1996 in London by Faith MacArthur and Niall MacArthur and has grown to include 100 stores as of 2011 (Gale Cengage Learning Company Profiles, 2010; Kühn, 2009). The company’s annual sales surpassed $2,234.40 million pounds in 2010 and the company employs 1,512 people in London (Gale Cengage Learning Company Profiles, 2010; Kühn, 2009).

Eat Ltd. specializes in sandwiches, soups, baked goods, salads, wraps, sushi, and breakfast offerings such as porridge and muffins, and markets its products as “healthy fast food” (Gale Cengage Learning Company Profiles, 2010; Kühn, 2009).

Kühn (2009) reported that Eat Ltd. boosted its portfolio earnings by 36.4 percent in 2009, and attributes the continued success of the chain to the fact that “Britons are also shunning posh business lunches and choosing instead to head to Eat or Prêt a Manger for a sandwich” (n. pag.).

Prêt a Manger

Prêt a Manger is a sandwich shop based in London. Founders Julian Metcalfe and Sinclair Beecham established the chain in 1986 in London and in 2010, the company earned $453.80 million pounds in revenue (Gale Cengage Learning Company Profiles, 2010; The Telegraph, 2008).

The founders sold Prêt a Manger in 2008 for 350 million pounds to Bridgepoint, a private equity company based in the UK, and Goldman Sachs in the United States (Gale Cengage Learning Company Profiles, 2010; The Telegraph, 2008).

Prêt a Manger specializes in freshly made sandwiches, soups, and sushi (Gale Cengage Learning Company Profiles, 2010; The Telegraph, 2008). It also operates a service that distributes all of the food that it does not sell to the homeless individuals living in London (The Telegraph, 2008). The sandwich chain boosted its earnings portfolio by 29.7 percent in 2009 (Kühn, 2009).

Impact of the Recession

Overall, household expenditure on eating out has decreased by 13.2 percent in the U.K. since 2006 (Department for Environment, Food and Rural Affairs, 2011). Since 2007, according to research compiled by IBIS World (2011) and Euromonitor International (2010), two market research firms located in London, the U.K. QSR industry has been in decline.

In the years between 2007 and 2011, IBIS World (2011) documented a decline in QSR industry revenue. The decline in QSR revenue has been attributed to “subdued growth in demand and fierce price-based competition on menu items between industry operators.

The recent global economic downturn has caused falls in real household disposable income, particularly as the unemployment rate remains at or above 8.0 percent” (IBIS World, 2011, n. pag).

According to IBIS World (2011), QSR industry revenue fell at a rate of 2.9 percent annually between the years 2007 and 2011, to a projected total of 4.8 billion pounds in the year 2012.

Forecasters anticipate that the QSR industry revenue will grow very little in 2011 in the U.K. – only 0.1 percent (IBIS World, 2011). Forecasters characterize the flat line growth as normal, “given the prevailing economic uncertainty and low consumer sentiment” in the U.K. (IBIS World, 2011, n. pag.)

QSR operators noted a shift in consumer behaviour in the U.K. as a result of the recession (Department for Environment, Food and Rural Affairs, 2011; Euromonitor International, 2010; IBIS World, 2011). Accordingly, market researchers describe a “polarisation within fast food, with some operators continuing to offer less expensive meals while others provide healthier food menus” (Euromonitor International, 2010, n. pag.).

The multinational franchise and chain stores such as McDonald’s, Domino’s Pizza, YUM! Brands, and Subway conduct business at the far end of the fast food offerings spectrum, while a significant number of smaller, locally owned and operated outfits operate at the other end.

Thus, as IBIS World (2011) notes, while large franchise stores make up a smaller share of the QSR industry firms – about 20 percent – they nonetheless “account for about 60 percent of industry revenue and 66 percent of total employment.

These establishments typically have a greater number of staff per establishment, with Domino’s averaging about 33 people per location in its UK operations, and each franchisor usually owns about 4.5 stores” (n. pag.). In 2010, the sale of fast food items by QSR firms London increased by 2 percent in “current value terms” (Euromonitor International, 2010, n. pag.; Woods, 2011).

Competition within the sector has not diminished as a result of the recession (Consumers International, 2009; Consumer Reports, 2011; Euromonitor International, 2010; IBIS World, 2011). Rather, the nature of competition between the brands has changed.

As a growing number of fresh and healthy fast food chain outfits such as Eat Ltd., Prêt A Manger, and additional Subway franchises come into the London QSR market, fast food stalwarts such as McDonald’s offer more health conscious meals while simultaneously marketing value meals aggressively (Euromonitor International, 2010; IBIS World, 2011).

As Euromonitor International (2010) notes, “McDonald’s continued to offer a £1.99 meal while other players, such as Prêt a Manger and Eat Ltd., offered healthier calorie marked meals” (n. pag.).

In the period coming out of the recession, 2011 and 2012, Euromonitor International (2010) anticipates that the sales of fast food items will “continue to grow…by attracting both lunch time and breakfast crowds, [although] over the forecast period, fast food sales are expected to decline slightly in constant value terms” (n. pag.).

Economic Climate in the U.K.

The study revealed multiple discrepancies between the documents analysed in terms of consumer behaviour in the QSR sector, specifically in light of the recession. These discrepancies will be discussed in detail in the literature review section of the paper.

In the U.K., the measure of inflation – the Retail Price Index, or RPI – increased by 8.4 percent between the years 2006 and 2008, and then decreased by 0.5 percent between the years 2008 and 2009 (Department for Environment, Food and Rural Affairs, 2011).

Since 2006, the Department for Environment, Food and Rural Affairs (2011) points to an overall increase in prices of 7.9 percent. In the average U.K. consumer household, changes in spending behaviour since 2006 have been noted as follows:

• “household spending on food and drink up by 2.1%;
• eating out spending down by 8.9%;
• all alcoholic drinks spending down by 11.9%;
• spend on alcoholic drinks bought outside the home down by 19.5%” (Department for Environment, Food and Rural Affairs, 2011, p. 10).

In terms of regions within the U.K., disparities exist in terms of patronage to fast food and fast casual dining establishments. In London, the overall percentage of expenditure on restaurants and bars was the highest of all regions in the country at 35 percent (Department for Environment, Food and Rural Affairs, 2011).

As the Department for Environment, Food and Rural Affairs (2011) notes, the overall percentage of expenditure on restaurants and bars is “lowest in the West Midlands at 28 percent. In England as a whole, people spent 31 percent of all the money they spent on food and drink on eating out purchases.

The percentage of spending on alcoholic drinks outside the household is highest in London at 59 percent and lowest in the South East at 50 percent” (Department for Environment, Food and Rural Affairs, 2011, p. 39).

While London consumers still comprise the largest market for fast food chains, the QSR customers are nonetheless responding to the recession by reducing the amount of discretionary income that they spend on restaurants and bars, “including reducing their total expenditure on take-away and fast foods” (Department for Environment, Food and Rural Affairs, 2011, p. 9).

The Department for Environment, Food and Rural Affairs (2011) published its revised report Family Food 2009 in May of 2011 and noted the following significant behavioural changes in the average U.K. consumer’s discretionary spending – including those residing in London:

The amount of food eaten out is on a long term downward trend. Measured in grams, the amount of eating out was 15 percent lower in 2009 than in 2006.

In terms of money spent in actual prices…not adjusted for inflation…it was 1.8 percent lower at £11.33 per person per week for all food and alcoholic drinks. Food and non-alcoholic drinks spending was £8.26. There are downward trends in purchases of most categories of eating out food and drink since 2006.

The most significant reductions in amounts bought include confectionery down 20.4 percent, alcoholic drinks down 20.5 percent, crisps, nuts and snacks down 18.1 percent and soft drinks…including milk drinks…down 17.5 percent. There are no categories with a significant upward trend since 2006 (Department for Environment, Food and Rural Affairs, 2011, p. 9)

In order to put the impact of the recession on consumer spending in perspective, the Department for Environment, Food and Rural Affairs (2011) offered the following insight: “in 1975 households spent the equivalent of £25.20 on household food and drink.

This is not directly comparable with the 2009 figure of £23.86 as it does not include spending on confectionery and soft drinks, and excludes Northern Ireland households.

It does show that spending in real terms is lower in 2009 than in 1975” (Department for Environment, Food and Rural Affairs, 2011, p. 9).

These findings remain significant in terms of the QSR industry post-recession. What this means to the QSR brands in London is that consumers in London are spending less, thus competition between fast food chains will likely continue to be aggressive, as firms must compete for a smaller share of cash-strapped consumers’ discretionary income.

Several events conspired to create the situation that faced the average U.K. fast food consumer in London between the years 2009 and 2011. The recession created six quarters of flat growth, from which the U.K. emerged officially, according to the Department for Environment, Food and Rural Affairs (2011), in the year 2009.

Food prices rose in general during that period also, according to the Department for Environment, Food and Rural Affairs (2011), due to “commodity price rises, fuel price rises and the weakening of sterling against the euro” (p. 9). Once the U.K. economy officially transitioned out of the 2009 recession, the last quarter of 2009 saw an increase in the pressure on discretionary spend.

As the Department for Environment, Food and Rural Affairs (2011) notes, “the relative affordability of food can be monitored by the share of total household spending that goes on food purchases. In 2009, on average food and non-alcoholic drink accounted for 11.5 percent of all household spending.

The percentage of all household spending that goes on food and drink has been increasing since 2005 and 2006, when it was 10.2 percent. This indicates that food is now exerting greater pressure on the household budget” (p. 9).

As a rule, consumers in the U.K. have adjusted their spending behaviour since 2009 “by trading down to cheaper products, but not by buying significantly less.

Food groups where the reduction is due to a large drop in quantities purchased are bread, flour, fresh fruit and processed fruit and fruit products…Purchases of alcoholic drinks for household supplies decreased in 2008 but in 2009 increased 12.9 percent to return to 2007 levels” (Department for Environment, Food and Rural Affairs, 2011, p. 9).

Another area that affects the bottom line of London’s QSR brands is consumer confidence. According to Ryan (2011) “a gauge of Britons’ assessment of their present situation fell 3 points to 18…[while] an index of shoppers’ views on whether it’s a good time to make a major purchase, such as a house or car, dropped 2 points to 75.

Data…showed unemployment jumped in the third quarter as the number of young people looking for work climbed above 1 million for the first time in at least 19 years” (n. pag).

Grim outlooks on the job front have persisted into 2011 (Department for Environment, Food and Rural Affairs, 2011; Ryan, 2011). In the fall of 2011, the number of unemployment claims increased from “5,300 to 1.6 million” (Ryan, 2011, n.pag). Similarly, the rate of inflation in the fall of 2011 sat at 5 percent (Ryan, 2011).

While QSR firms have intensified the marketing of value meals, according to Ryan (2011), “pressures on household budgets have also intensified, with underlying wage growth running at less than half the rate of inflation and the jobs market showing renewed signs of weakness” (n. pag).

That said, Ryan (2011) notes further discrepancies in consumer spending behaviour, as sales continued to bring in shoppers in 2011, despite the sluggish economy, gloomy forecasts, and high unemployment rates.

However, as Ryan (2011) cautions, although “sales defied forecasts as shops lured cash-strapped consumers with discounts, the gains may not last, as Britons struggle to shake off strains from labour market slack, above target inflation and the biggest fiscal squeeze since World War II.

The data suggest that demand on the high street has continued to grow, despite the current intensity of the fiscal and inflation squeezes on consumers…overall real consumer spending is likely to continue to fall sharply for some time to come” (n. pag).

The continued economic instability witnessed in London will more than likely exaggerate the competition amongst the QSR chains and the locally owned and operated fast food establishments. As Euromonitor International (2010) notes, QSR firms “initially benefited from increasingly busy consumers having less to spend eating out.

But other types of food service outlets are also identifying the reasons for more consumers visiting fast food units, and they are looking to counter with price discounting and promotions” (n. pag.). This increased competition will likely create a decrease in the constant value sales of the QSR sector over the course of 2012 (Euromonitor International, 2010).

The researcher set out to determine the impact of these combined economic factors, as well as the continued instability of the euro and the European debt crisis, on QSR brands in London.

Discussion

In recent years, an increased interest in the development and management of brand equity as one of the principal drivers of a QSR chain’s financial success has become apparent in the brand management literature. Successful brand management occurs when QSR firms comprehend the value of brand equity and successfully leverage it to produce optimal operational and financial performance.

Brand management in the QSR industry entails managing an ongoing relationship with the consumer; in light of the recession in the U.K., additional pressure to maintain that relationship now exists, as well as additional competition for less discretionary income.

This study analysed the work of other researchers, as well as global brand surveys and statistical documents between the years of 2009 and 2011, and examined them in light of the research questions.

The goal of the research and investigation of these documents was to determine what other researchers had learned about the consumer behaviour of QSR customers in London, and to ascertain the impact of the recession on these buying choices.

Studies and surveys that examined the impact of brand name, brand equity, brand recognition, brand loyalty, brand awareness and brand engagement on consumer choices were chosen, as were documents that noted the increase or decrease of brand value and consumer response to promotional campaigns such as value meals.

The literature review also contains several studies that detailed the impact of fast food on health, particularly as obesity rates in the U.K. have been climbing in recent years, which the healthy food lobby attributes to increased consumption of high calorie fast food meals.

Finally, the literature review looks at studies that attempt to understand the London based consumer outlook on American brands, and whether or not this has an impact on their buying behavior when making food choices.

As a rule, the study determined that brand awareness and brand equity remained the two most significant factors that affected fast food customers in London as they made their food choices. Brand awareness typically leads time-starved consumers to choose a recognizable brand such as McDonald’s or Subway over an unrecognized or lesser known brand in the same product category.

An additional factor was cost: low cost meals and value meals boosted sales for many firms. However, lower priced value meals in competing firms did not necessarily draw consumers away from the brand they had engaged with – this demonstrated brand equity in action.

The study determined that low price affects some consumer decisions; however, on its own the literature examined did not support the idea that a lower priced meal at a competitor firm was enough to draw the brand engaged consumer away from his or her brand of choice. Thus while fast food customers in London might compare their regular restaurant with its competitive firms, a price war will not necessarily win their business.

Fast food firms do acquire competitive advantage as a result of their brand name, as brand awareness creates the secure value proposition that many consumers in the midst of the recession sought.

The marketing and promotion campaigns that QSR fast food firms undertook during the period examined did display some success at attracting customers from competitive brands, particularly in the case of the McDonald’s McCafe co-branding strategy and the Subway $5 Footlong Promotion.

Brand name and brand engagement remain two of the most valuable assets a QSR firm can have in the competitive QSR landscape.

For many QSR firms, the power of the brand name and the strength of what the brand means to consumers will tip the balance in favour of the brand over its competitors, even in a cash-strapped consumer environment. Thus, effective brand management adds value to the firm and strengthens its competitive edge.

While simply speaking a brand is the name or logo associated with a particular product, brand management actually refers to the consumer experience of the product, and as a result requires time to develop.

As Holt (2004) explains, “although a product has a name, a trademarked logo, unique packaging, and perhaps other unique design features…the brand does not yet truly exist. Names, logos, and designs are the material markers of the brand.

Because the product does not yet have a history, however, these markers are empty. They are devoid of meaning….The difference is that these markers have been filled customer experiences…Over time, ideas about the product accumulate and fill the brand markers with meaning. A brand is formed” (p. 3).

The vast majority of successful QSR chains contain familiar brand attributes that remain constant through each incarnation of the brand and through all of its franchisees. Examples include the familiar yellow décor of the inside of a Subway restaurant, the McDonald’s Happy Meal, and the blue uniforms that all Domino’s Pizza employees the world over wear.

The visual markers of the brand support the emotional and psychological experience that the consumer has with the brand; these markers also underpin the consumer’s investment in the brand. In the highly competitive QSR industry, a powerful brand remains “critical to the success of [fast] food service firms because strong brands often provide the primary points of differentiation between various competitors.

Strong brands aid customers in better visualizing and understanding intangible products and services. Furthermore, they reduce customers’ perceived monetary, social, or safety risks in buying services, which are difficult to evaluate before purchase” (Kim and Kim, 2004, p. 116).

Robust brands that can withstand market hills and valleys tend to be created when the company goes after individuality in executing and broadcasting the value proposition it has to offer consumers (Holt, 2004; Keller, 1993; Kim and Kim, 2004).

Effective brands communicate their uniqueness, establish emotional bonds with their customers, continually characterize, reiterate, and profit from the consumer’s elevated perception of the QSR chain’s performance, and promote buy-in from employees (Holt, 2004; Keller, 1993; Kim and Kim, 2004).

In the QSR arena, a robust brand with powerful and resilient brand equity supplies the company with several important benefits (Austin, Mattila and Siguaw, 1999; Riezebos et al., 2003; Verma, 2009).

These include enhanced consumer loyalty, diminished susceptibility to the shocks of the market and of competitor marketing tactics, increased profits, a higher likelihood of a positive consumer reaction to price increases, greater effectiveness in promotional communications, and a greater likelihood that the brand will extend into other categories (Holt, 2004; Keller, 2001; Keller, 1993; Kim and Kim, 2004).

As Kim and Kim (2004) note, brand effectiveness and extension opportunities remain key goals for QSR brands. Like other brands, QSR chains seek to develop powerhouse brands, yet the nature of the QSR chain industry is such that the achievement of that goal can be challenging, and price wars have proven ineffective and damaging to the industry as a whole. As Kim and Kim (2004) explain:

Given that many QSR chains’ products and services are not inherently differentiated and the channels of distribution are not distinctive, customers often have only price and brand equity to differentiate one brand from its competitors. In the absence of strong brands, the only remaining ongoing marketing mechanism is price manipulations, usually in the form of discounting.

Indeed, the QSR industry has heavily relied on price promotions as an important marketing activity. That emphasis has resulted in continual price wars that have damaged customer loyalty and reduced revenue (p. 116).

The study endeavoured to understand the influence that brand awareness, brand equity, brand attitudes and brand engagement has upon consumers in London when making food choices, specifically in the QSR sector.

This study revealed that while cost certainly plays a role in that decision, particularly in recent years during the U.K.’s economic downturn, brand engagement continues to exert a powerful effect on London QSR consumers. The decision to buy repeatedly from a particular QSR brand and not another stems from a complex emotional and psychological relationship that successful QSR firms cultivate over many years with their customers.

Summary

Chapter Four contains the primary and secondary research and findings. This chapter contains three subsections: a brief overview of the top six fast food restaurant chains in London, the impact of the 2008-2009 recessions on the fast food industry in London, and the economic climate that the U.K. has faced since the 2008-2009 recession, particularly in light of the struggling euro and the European debt crisis.

Conclusions

The results of this research supported the researcher’s hypothesis that evidence of brand allegiance would be available through close analysis of both the primary research and the secondary research compiled for the study.

The study participants overwhelmingly demonstrated a preference for their particular fast food brand of choice; the participants also showed a predilection for large global brands such as Subway and McDonald’s, and these preferences demonstrated a significant impact on their purchasing decisions.

The large majority of fast food consumers will demonstrate varying perceptions of global brands, from indifference to full brand engagement.

The results of this study support the findings of other studies that suggest that in the product category of fast foods, global brands appear to possess some supplementary psychological and emotional associations exclusive to the brand, associations which local or unrecognized brands do not demonstrate.

The phenomenon of brand loyalty evidence in this study and similar studies demonstrates the competitive advantage that fast food firms with robust brand equity enjoy, even during one of the worst economic downturns to hit the globe since the Second World War.

Thus, this has significant contributions to brand image and knowledge, and it enhances brand value which is likely to affect consumers’ brand selection and loyalty behavior

One of the most significant features of this study that the researcher discovered via the consumer survey was the prevalence of consumer perception that global brands remain of higher quality than local brands or unknown brands.

A vast majority of the participants of the fast food consumer survey agreed that there is a significant increase in the quality of the fast food products produced by global brands such as Subway and McDonald’s.

The reasons for this perception, as given by the respondents, were a nearly unilateral belief that the food is better at a global brand fast food restaurant than the same food at an unrecognized fast food restaurant, and the belief that the quality of the customer service at global brand fast food restaurants is superior to that of unrecognized or local fast food restaurant brands.

These sentiments, as shared with the researcher through the respondents, echoes the core definitions of brand equity. The results clearly demonstrate brand loyalty, even in the face of higher prices, as nearly half of all the respondents in all age groups answered yes to the question would you be willing to spend more for a branded fast food product?

Jacoby and Chesnut (1978) defined brand loyalty as “the biased behavioral response expressed over time, by some decision making unit with respect to one or more alternative brands which is a function of psychological processes” (p. 36).

Essentially, a consumer who has become attached to a certain brand will choose the brand above competitors for reasons other than economic ones – typically as a response to an emotional or psychological need that the brand name fulfils.

In the case of the fast food consumer who has engaged with a particular brand, he or she will not accept substitutes within the same category, regardless of promotions, lower cost, availability, or even as this study demonstrates, armed with the knowledge of the caloric load that his or her fast food meal of choice contains.

Thus, a brand loyal fast food patron will demonstrate a positive attitude towards his or her brand of choice and this preference will affect the consumer’s purchase decision process.

The brand loyal consumer will choose a given fast food brand over a competitor brand, and the allegiance and favouritism shown toward this brand in preference over other brands will have an indefinite quality.

As such, the brand loyal patron may remain loyal to his or fast food brand for the duration of his or her life and demonstrate fundamental fidelity to that brand over the long term (Apaydin, 2011; Austin, Mattila and Siguaw, 1999; Jacoby and Chesnut, 1978; Keller, 1993; Keller, 2001; Lee, 2011).

The above factors must be present in the consumer purchasing decision making process in order for actual brand loyalty to exist. The definition put forth by Jacoby and Chesnut (1978) underscores the influence that the consumer’s attachment to his or her fast food brand of choice will exact on his or her purchasing decisions and fast food restaurant choices.

Examining global brand loyalty and global brand buying behaviour and consumer purchasing decision processes needs to be understood in terms of the “principle of the covariance of attitudinal and behavioral loyalty” (Apaydin, 2011, p. 28).

In addition, brand engagement, brand loyalty and brand attachment contain both behavioural and affective elements that research must factor in to any interpretation of results (Apaydin, 2011).

Brand loyalty per se, can withstand economic threats to its existence, as evidenced by the results of this study, as well as numerous others (Apaydin, 2011; Austin, Mattila and Siguaw, 1999; Jacoby and Chesnut, 1978; Keller, 1993; Keller, 2001; Lee, 2011).

In the fast food restaurant industry, brands and brand names are increasingly seen as providing a key insight into differentiation, as well as a distinct competitive advantage in the market place for fast food firms, an advantage that can be leveraged and maintained over many years and even decades (Apaydin, 2011; Keller, 2001; Lee, 2011).

A number of studies, several of which appeared in the literature review of this research, demonstrate the power of brand equity and brand loyalty as an influence on the consumer purchasing decision process.

In the fast food restaurant industry, brand equity and brand loyalty affects consumer purchasing decisions in multiple areas including price, choice of menu, location, and the variable health concerns represented by a meal from a fast food brand of choice versus a local or unknown competitor fast food brand.

The trend of globalization which began in the mid-1980s has been responsible for the unprecedented growth of a number of the fast food chains featured in this study, most notably McDonald’s, YUM! Brands, Domino’s Pizza, and Subway. The impact of globalization exacts unparalleled changes on the methods that major brands employ in their marketing campaigns and in the marketing of their consumer fast food products.

A number of large global brands that began in Western and developed nations have been reached unprecedented numbers of customers as a result of the concomitant developments in technology, media and consumer mobility (Lee, 2011). As a result of globalisation, global fast food brands such as McDonald’s, Subway and Domino’s Pizza have effectively created a homogenous global culture rooted in consumerism.

This culture expands across borders and across languages and gives rise to a global consumer society firmly oriented toward global brands (Apaydin, 2011; Austin, Mattila and Siguaw, 1999; Lee, 2011; Kim and Kim, 2004; Parsa and Kwansa, 2002).

A number of the fast food firms featured in this study originate in developed countries such as the United States.

These firms have developed a globally integrated marketing strategy; their brand name enjoys global brand recognition, and attracts brand ambassadors from every corner of the globe (Apaydin, 2011; Austin, Mattila and Siguaw, 1999; Lee, 2011; Kim and Kim, 2004; Parsa and Kwansa, 2002). A robust brand name and strong brand equity allows fast food firms to benefit from a number of advantages. As Lee (2011) notes:

Basic scale economies of longer production series of identical packaging, one-brand communication spillovers, and worldwide media purchases mean lower costs and increased productivity. Therefore…it is vital to explore and understand the behaviors of consumers towards global brands and their perception of global brands. To be able to create loyal global consumers, gaining an insight of global consumer behavior is necessary (p. 26).

The researcher found significant differences to exist between the surveys reviewed as part of the secondary data and the survey conducted as part of the primary data.

The reason for this may lie in the fact that many of the surveys reviewed for the secondary data component took place during the final days of the recession in 2009 and during the recovery period in 2010, while the survey conducted for the primary research component took place in 2011, a time when economists predict that the United Kingdom is beginning to emerge from the global downturn of 2008 and 2009.

Economists anticipate the growth rate to increase in the year 2012. According to Flanders (2011), while the economic news is anything but rosy, the figures are beginning to demonstrate upward momentum when compared to the recession:

The Office for National Statistics…revised up our quarterly growth rate in the three months to September by exactly that amount. Pedants will point out that the figure for the previous quarter was revised down, by 0.1% – meaning we are pretty much exactly where we thought we were.

And the current account deficit hit a record £15.2bn, or an alarming 4% of GDP. However, we know these trade figures jump about a lot from quarter to quarter. The average current account gap for the first three quarters – at 2.7% of GDP – is below the 3.1% of GDP for the same period in 2010 (n.p.).

Research Questions

1. What do the fast food customers in London think of fast food restaurants, and how important is a brand name to them when making food choices?
2. Do fast food customers in London really care about brand name, or do they select it due to the low price?
3. How do the fast food customers in London compare their regular restaurant with its competitive firms?
4. Do fast food firms acquire any form of a competitive advantage due to their brand name?
5. To what extent do marketing and promotion campaigns attract people from competitive brands?

The researcher analysed the results from the primary research consumer survey as well as the documents analysed in the secondary component of the research in order to provide answers to the study’s guiding parameters.

Based on these interpretations, the researchers concluded that fast food customers in London do think of fast food restaurants when making food choices, and the brand name of the fast food restaurant does remain an important influencing factor on both their choice of restaurant, their food choices, and their purchasing behaviour.

While fast food customers in London did appear to be affected by the global economic downturn, their loyalty to their brand name fast food restaurant did not waver; rather, the respondents overwhelmingly agreed that they would spend more money in order to remain loyal to the fast food brand name to which they had become attached.

Low price did not appear to be a significant enough incentive to draw brand loyal patrons away to a fast food competitor. In addition the fast food customers in London do not appear to compare their regular restaurant with its competitive firms; rather, the marketing and promotion efforts of competitive brands fall largely short of their goals to poach brand loyal patrons.

Lastly, the results of the consumer survey indicate that fast food firms acquire an absolute rock solid form of competitive advantage due to the power of their brand name and the strength of their brand equity.

The researcher concluded that brand equity serves as a guarantee of patronage and a major source of revenue for the global fast food brand names featured in this study, including Subway, Domino’s Pizza, McDonald’s and YUM! Brands.

Recommendations for Further Research

Based on the researcher’s experience while conducting this research study into the effect of brand names on consumer purchase decision making in the fast food product category in London, a few recommendations came to light. The main recommendation suggested would be to conduct the same study using a significantly larger sample of participants.

While the sample should remain random, future researchers may also wish to include details about the sample that may influence both brand loyalty and purchasing behaviour in addition to the age of the respondents, such as gender, socio-economic status, country of origin, profession, education, religion, and race.

Summary

Chapter Five contains the study conclusions reached by the researcher. This chapter also contains a reiteration of the research questions in light of the primary and secondary data. This chapter also offers some recommendations for future research.

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Introduction

Residents of the United States are ready to refuse products for any reason. Harsh statements by top managers, low salaries, or the use of harmful products are the most popular reasons for customers to stop buying products. This often has the effect of managers apologizing for the company’s decisions or abandoning their ideas. However, there are also moments when the effect is quite the opposite.

Consumer Boycotts Are Effective

The consumer boycott is often associated with the economic impact on the brand. However, as it will be noted later, this is an ineffective method. Thus, it is worth noting that a boycott should not always be aimed at reducing the company’s profit. Sometimes it is more effective to attack the brand image. Indeed, the more social networks and the media discuss it in a negative way, the more likely it is that the company’s management will change course (Beck, 2019). There is an economic reason for this: studies claim that the share price of a particular company declined every day when the media mentioned a boycott of this brand’s products (Beck, 2019). However, if the goal of the boycotters is to force the company to reconsider its views, then this approach can be called successful.

For example, such a situation happened with Nike in the nineties. The brand of clothing and sporting goods on the rights of a monopolist mercilessly exploited workers in developing countries and answered activists’ questions that they were not involved in this (Birch, 2016). The campaign against Nike became so large-scale that it even affected the brand’s sales, prompting Nike to abandon the sweatshop system of work (Birch, 2016). The American brand still has gaps in ethical reports. It does not make its supply chain and production completely transparent. However, this still does not compare with the beginning of the nineties when production ethics were not even out of the question.

Refusing to make purchases is a common practice for those who want to emphasize their disagreement with specific decisions of managers and employees of the brand. The cases with various companies show how solid and substantial public condemnation can be for an entrepreneur (Watson, 2015). Nevertheless, there is a significant difference between a small family business, where almost every client is essential, and the market’s giants. In this case, it becomes a challenging task to affect the performance of the company significantly.

Consumer Boycotts Are Not Effective

Actions should confirm the intentions of the boycott: it is difficult to prove a consumer’s determination if it does not go beyond words. This is the reason why boycotts are always difficult to be carried out: over time, the number of people inevitably decreases, and information guides are forgotten (Friedman, 2001). However, even if all these conditions are met, there is no guarantee that everything will work out. An example is the boycott of Nestle, which has been going on for more than forty years, but it is difficult to talk about the results of which, even after almost half a century.

It should be understood whether the Nestle boycott can be considered effective. From an economic point of view, it is unlikely: the company’s revenues are estimated at billions of dollars, today Nestle is one of the wealthiest companies in its segment (Mihai, 2021). However, the widespread and, importantly, negative-public attention made it possible to achieve essential decisions on the ethics of advertising breast milk substitutes on the issue of the easy availability of these substitutes and their actual and potential impact on children. If people take these changes as a starting point, then the Nestle boycott, of course, can bring the solution of all these crucial issues closer.

Conclusion

If a person decides to boycott Nestle, then they need to stop buying any of the company’s products, and this is an impressive list of brands. Certainly, people can find a replacement for each of them for the same money, but the search takes time and desire. It is difficult for customers to change their buying habits, and most people are more concerned about the price-quality ratio than questions of production ethics.

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Friedman, M. (2001). Ethical dilemmas associated with consumer boycotts. Journal of Social Philosophy, 32(2), 232–240.

Mihai, A. (2021). Why Nestle is one of the most hated companies in the world.ZME Science. Web.

Watson, B. (2015). Do boycotts really work?. The Guardian. Web.

Luxury Brand Imitation

Brand imitation refers to copying attributes like design, logo, and shape of a renowned product. Doss and Robinson (2013, p. 427) define brand imitation as “a product that borrows or copies some special attributes of a famous or leading product such as name, shape, or color”. According to Doss and Robinson (2013), the act amounts to a breach of the core value of the original product. Different states have laws that prohibit imitation of luxury brands. Brand imitation deprives the original product designers of the right to reap benefits from their innovation. Additionally, it leads to companies losing significant market share. Mostly, customers opt to purchase the imitation as it goes at a low price. Today, brand imitation poses a major threat to branded companies.

The reason for focusing on brand imitation is the danger it poses to the growth of companies and innovation. As per Doss and Robinson (2013), brand imitation is a great crime in the 21st century. Currently, imitated products account for at least seven percent of the global market. The vice is highly concentrated in the luxury product sector. As companies continue to invest in the development of prestigious products, counterfeiters are increasingly targeting them. Growth in technology has made it easy for people to imitate brands. Geiger-Oneto et al. (2013) allege that it is hard for a person to notice a counterfeit brand. One requires paying attention to the unique features of the original product. Below is an example of a counterfeit T-shirt.

According to Geiger-Oneto et al. (2013), imitators can target all kinds of luxury brands. Nevertheless, there are areas where imitation is particularly practical. Mostly, they target sectors with limited legal protection. Geiger-Oneto et al. (2013, p. 361) claim that they target sectors where “complementary assets cannot be mustered to protect innovators”. The industries that are highly prone to imitation include fashion and apparel companies. This report will focus mainly on the apparel industry. The study will concentrate on the imitation of branded T-shirts and handbags. Limited legal protection of the branded handbags and T-shirts makes it easy for people to imitate these brands. Besides, technology has made it possible for counterfeiters to come up with diverse appealing designs for handbags and apparel. Below are images of different varieties of handbags from My Other Bag brand, which are replicas of Louis Vuitton handbag brands.

Popularity of Imitations

To combat imitation, it is imperative to understand the factors that contribute to customers purchasing counterfeit goods. Scholars have conducted significant research to determine the factors that contribute to the imitation of luxury brands (Lee, Chen & Wang 2015). A majority of people who do not respect the law are likely to purchase counterfeit goods. Besides, customers with prejudice against big companies have a high propensity for buying imitated brands. The customers argue that the companies sell original products at exaggerated prices. According to Triandewi and Tjiptono (2013), individuals who wish to assert their status but do not have money to purchase authentic brands can purchase counterfeit products. Curiosity amid customers is another factor that leads to the popularity of imitated brands. The desire to experiment with certain brands leads to customers purchasing counterfeit products. Today, every woman yearns to own a handbag from Louis Vuitton brand. However, not every woman can afford to purchase the brand. As a result, some customers purchase counterfeit handbags due to the desire to experiment with the brand. Below is an image of handbags from My Other Bag brand that use designs from the Louis Vuitton brand.

Numerous factors have contributed to the popularity of imitated products. They include celebrity endorsement and low prices (Modi et al. 2014). The apparel industry is fond of using popular personalities to endorse brands. The clothing companies use musicians and actors to advertise their products. Consequently, everyone craves to be associated with the brand. Today, many counterfeit products use celebrity endorsement strategy to win customer loyalty. Modi et al. (2014) argue that the use of celebrity endorsement strategy makes it hard for customers to distinguish counterfeits from the original brands. One of the renowned counterfeit brands is the Homies sweatshirts and vetements. Popular musicians like Kanye West and Rihana wear such apparel. Whenever the celebrities wear products their fans take photos and share them on social media. Counterfeiters take this opportunity to produce identical merchandise. The flashy and audacious designs of the counterfeited products captivate the clients. Eventually, they develop an interest in the products resulting in the popularity of the brands. The figures below represent images of brands worn by renowned celebrities.

Past studies show that experience with counterfeit brands and stance towards fiscal and hedonic advantages of pirated products influences consumer buying behavior (Pierre 2012). The theory of planned behavior holds that there is a connection between stance, behavioral intent, and behavior (Pierre 2012). Some consumers purchase counterfeit brands due to materialistic minds. Many consumers value owning and displaying luxury products. Thus, they are likely to purchase counterfeit brands if not in a position to own the original products. People feel the same regardless of whether they are wearing authentic or counterfeit luxury brands (Pierre 2012). The more they continue to wear counterfeit brands, the more the products become popular. Today, many people wear counterfeit Louis Vuitton T-shirts due to their popularity. It has become hard for most customers to differentiate the original T-shirt from the imitation. Below is an image of a counterfeit Louis Vuitton T-shirt.

Customers consider the price of a product before opting to purchase. One factor that encourages customers to purchase imitations is their prices. Counterfeit products go at low prices. The study shows that customers who have experience with counterfeit products claim that they are as good as the genuine brands (Pierre 2012). Thus, they do not consider the quality of the brands. It underlines the reason why some customers will always purchase imitated products. The inability of the manufacturers of the branded products to change clients’ opinions about counterfeit goods makes it hard for companies to fight imitation (Pierre 2012). Below is an image of the handbag from My Other Bag, which is an imitation of Louis Vuitton’s handbag. The handbag on the right is a Louis Vuitton brand while the one on the left is its imitation.

According to Romani, Gistri, and Pace (2012), intellectual property laws are weak regarding the protection of luxury handbags. For a product to qualify as an imitation, it must be proved to be a parody. Unfortunately, counterfeiters know how to design their products in ways that they look genuine. Romani, Gistri, and Pace (2012, p. 818) posit, “Counterfeiters do not require getting a license in relation to trademark uses for purpose of parody”. It underlines the reason Louis Vuitton did not win the case against My Other Bag. The counterfeiters make sure that their products cannot be confused with the original brands. Besides, they are keen not to be liable for trade dilution. The judgment passed in the Louis Vuitton vs. My Other Bag case revealed the degree to which counterfeiters can imitate luxury brands without plagiarising. Lack of stringent laws that protect intellectual property makes it easy for imitators to circumvent legal risks. Today, My Other Bag continues to use Louis Vuitton’s brand to caricature the company’s superior luxury image. Below is an image of My Other Bag tote that was in contention.

Benefits of Imitation of Luxury Brands

According to Romani, Gistri, and Pace (2012), fashion and apparel companies benefit from imitations in numerous ways. The availability of counterfeit products helps to communicate with high-end clients the desirability of the authentic brand as a component of a rising fashion trend. In other words, at times, imitation of luxury brands serves as an advertising strategy in disguise. Counterfeit products are of low quality. As such, high-end customers can easily detect them. Besides, the availability of imitations in the market signifies that the apparels or handbags they copy are enviable. Romani, Gistri, and Pace (2012, p. 823) hold, “Counterfeits communicate the fact that even those who cannot afford the original brands still want them”. Therefore, they serve as free advertising for branded products. Branded companies do not require using a lot of money to popularise their products. The presence of counterfeit products in the market is adequate to inform high-end clients of the availability of the branded merchandise.

A study in the United States found that the sales of counterfeit luxury brands like handbags and T-shirts do not affect the returns of genuine brands. Consumers can easily distinguish counterfeits from authentic brands. In most cases, clients use counterfeits as trial versions. Triandewi and Tjiptono (2013) hold that at least 40% of clients who purchase counterfeit handbags end up buying the actual brand. Triandewi and Tjiptono (2013, p. 25) argue, “There is reciprocal causation between consumer purchase intention of counterfeit products and consumer intention to buy originals”. The intention to buy counterfeit products has a positive impact on the desire to purchase authentic goods. Conversely, the desire to buy original brands has a negative effect on the intention to purchase counterfeits. The purchase of counterfeit luxury brands arouses the desire to own the original products.

Imitation of luxury brands helps to boost the value of the original products. According to Romani, Gistri, and Pace (2012), products that are not copied are deemed of poor quality. Such products do not trigger consumer demand. The demand for quality products increases with an increase in their presence in the gray channel. Some scholars argue that imitation of luxury brands damage their popularity. On the contrary, it helps to strengthen their attractiveness. Counterfeited brands such as Gucci, Louis Vuitton, Nike, Burberry, and Adidas continue to do well in the global market. The turnover of the counterfeited brands continues to increase signifying growth in their value.

The solution to Imitation of Luxury Brands

Implementation of stringent laws or the creation of anti-counterfeit technology will not help to resolve the problem of imitation of luxury brands like handbags. The fight against counterfeit brands should be directed to the consumers. Doss and Robinson (2013) allege that branded companies should leverage demand and supply in the fight against counterfeits. Organizations should ensure that they provide the products that customers require. Taking away the demand for imitations will go a long way towards curbing the production of counterfeit brands. Doss and Robinson (2013, p. 30) aver, “The lasting quality of a luxury Louis Vuitton Speedy 35 handbag is not even close in style and substance to the phony one purchased after onerous negotiations in disreputable Canal Street basement”. Clients who yearn to be legitimate members of high society are unlikely to purchase counterfeit products. Buying fake handbags would affect their social status. A decrease in the demand for counterfeit products would result in a decline in the production and supply of unoriginal brands.

Conclusion

The imitation of luxury brands is on the rise across the globe. Numerous factors have contributed to the demand for counterfeit brands. They include the endorsement by celebrities, the cost of original brands, and consumer’s perception of the authentic products. The absence of strong intellectual property laws also encourages imitation of luxury brands. Counterfeiters have devised ways to avoid trademark violations and dilution. As a result, they can easily produce brands that parody original products without violating intellectual property laws. Imitation of luxury brands can benefit the original product. It can serve as advertising in disguise. The presence of counterfeit products in the market communicates the appeal of the original brand. Branded companies should leverage demand and supply in the fight against the imitation of luxury products rather than depending on intellectual property laws.

Reference List

Doss, F & Robinson, T 2013, ‘Luxury perceptions: luxury brands vs. counterfeit for young US female consumers’, Journal of Fashion Marketing and Management: An International Journal, vol. 17, no. 4, pp. 424-439.

Geiger-Oneto, S, Gelb, B, Walker, D & Hess, J 2013, ‘”Buying status” by chosing or rejecting luxury brands and their counterfeits’, Journal of the Academy of Marketing Science, vol. 41, no. 3, pp. 357-372.

Lee, H, Chen, W & Wang, C 2015, ‘The role of visual art in enhancing perceived prestige of luxury brand’, Marketing Letters, vol. 26, no. 4, pp. 593-606.

Modi, A, Patel, J, Shukla, Y & Gadhavi, D 2014, ‘Consumers’ attitude and purchase intention towards counterfeit of luxury brands’, International Journal of Business and Emerging Markets, vol. 6, no. 3, pp. 145-162.

Pierre, V 2012, ‘Luxury and counterfeiting: issues, challenges and prospects’, Journal of Brand Management, vol. 19, no. 7, pp. 541-543.

Romani, S, Gistri, G & Pace, S 2012, ‘When counterfeits raise the appeal of luxury brands’, Marketing Letters, vol. 23, no. 3, pp. 807-824.

Triandewi, E & Tjiptono, F 2013, ‘Consumer intention to buy original brands versus counterfeits’, International Journal of Marketing Studies, vol. 5, no. 2, pp. 23-32.

Driving Forces: Liz Claiborne, Inc.

Liz Claiborne is a name popular in the apparel and fashion business. The brand speaks for itself. Its growth has been unprecedented that can be attributed to several factors. The firm has a different type of business strategy: it manufactures products through subcontracting companies throughout the world. Claiborne’s managers occupy two buildings in New York while their workers are working in factories in more than thirty countries worldwide. But there is more to this that has attributed to the firm’s successes in the past.

During World War II, Liz Claiborne fled the Nazis to study art and to start a career in the apparel and fashion industry. Her special design was for the American working women so they could have an alternative to the traditional dark tailored suits. She introduced a classic style for women that would last for years with a price that is not exorbitant. (Siggelkow 55)

Liz Claiborne had the urge and the motivation. While working in a company that manufactured sportswear, she thought she could do more.

It was not only sportswear that she had in mind, it was something formal that the ordinary American woman could wear, be comfortable of her clothing and be proud about it. She worked for her dream, i.e. to make a powerful brand that would empower the working, professional women who are left with no other choice but to wear the traditional dresses not fit for the modern American woman.

An initial driving force of Liz Claiborne was the emerging demographic at the time she founded her company; this was the working women of America. In 1960, there was an estimated 21.9 million American women working in different industries. This was an ever growing working class because by the 1990s, it grew to 53.5 million, an equivalent of 45 percent of the working class of America. (Siggelkow 54)

Ms. Claiborne had noted the lack of choice the working American woman had at that time when it came to career clothing. The young Liz was then a designer of women’s sportswear in a company known as ‘Youth Guild’.

She knew that the market segment of the working American women was growing and that she had to grab the opportunity because she felt she had a role to play with respect to fashion and apparel for American women. When ‘Youth Guild’ closed down, Ms. Claiborne saw a greater opportunity.

Along with her husband Arthur Ortenberg, who was also involved in the apparel industry as a consultant, Liz Claiborne opened up a company to design apparel for the professional women of America. (Siggelkow 54)

She wanted to save the American women from being too traditional through their clothing and formal wear. She knew she could do something. By her creative design and experience she started the Liz Claiborne Lines, providing the women of her time a casual but unique American wear. Claiborne products also include fragrance products. Now, Liz Claiborne brands are for high-end fashion apparel that includes the moderate fashion apparel for women of all ages and nationalities.

Claiborne’s strategy all through the years has been subcontracting. Her style was to go to different countries, particularly in Asia, provide workshops and do presentations for her new designs and fashion, then go back to her headquarters in New York. The companies she worked with knew her strategy and so they offered their expertise for her designs. (Siggelkow 55)

Liz Claiborne is a global organization. It is global not only in the sense that it operates internationally but also it is working under certain circumstances, and this includes the structure, the motivation, the market, and so forth. In the age of globalization and high-technology, Liz Claiborne’s strategy has become effective.

Distance is no longer a problem because of the popularity of the Internet. Claiborne’s designers and managers do not need to go to other countries to demonstrate and instruct their subcontracting companies on how to follow their designs. They can use the Internet and teleconferencing to do it. It can use screen-based activities. Features of the Internet provide interactive methods or networks.

There are many opportunities and realities the world has offered because of globalization. Transportation has been revolutionized allowing people to travel faster than the speed of sound. Technology is the powerful force that now drives the world toward a converging commonality.

Outsourcing has become a trend in the age of globalization. With countries like China and India and the rest of the Asian countries now offering cheap labor, global firms can outsource their production that are labor-intensive. Global companies can utilize the services of outsourcing companies which offer cheap labor. Their costs are relatively low. Liz Claiborne has tapped the emerging market and the cheap labor that could also facilitate an effective supply chain.

This is what the firm has been doing. In the beginning, Liz Claiborne and her husband would personally go to Asian countries, particularly Taiwan and Hong Kong, to demonstrate and instruct the employees of subcontracting companies on their designs. But this is now easily done. There is no need of personally going to those places where subcontracting is being done. The Internet and teleconferencing can provide the necessary tool for two parties to interact and communicate.

Globalization has become phenomenal due to the high-technology tools that have sprung these past decades. ‘We have become globalized’ means we can now connect and conduct business with the rest of the world so easily. With just a computer with internet connection, we can connect with anyone around the world that has an Internet connection. Any sort of business can be benefited with Internet applications.

‘Globalization is happening, faster and faster. But it is far from complete, and far from inevitable. Globalization can disrupt, but it can also empower. What does it all mean, for real people in the real workaday world?’ (Larsson 3)

Advancement made in communication and the internet makes it very easy to connect with people in the other side of the globe. The global age is here and will continue to dominate man’s activities – businesses for that matter – for many years ahead, centuries perhaps, with more and more industries emerging everyday as a result of new tools, innovations, and inventions made by man. Because of these advances, changes, innovations, or development, and new industries are formed.

Liz Claiborne has international-based brands. These brands are for retail outlets but they also have MEXX, which has become an international name. They have partnered brands which are for men and women. Liz Claiborne brands also include Dana Buchman, Kensie, Monet, and many more.

But the strategy has evolved; they have retails for domestic and international markets. Since Claiborne is a global organization, it licenses third parties to provide cost-effective utilization and sale of Claiborne products. (Liz Claiborne Inc. – Company Overview)

Another driving force for Liz Claiborne is its philanthropic activities. Liz Claiborne believes that one way of continuous successes in the corporate world is to give back. By this, Liz Claiborne formed the Liz Claiborne Foundation, a vehicle of Claiborne’s corporate social responsibility (CSR). Claiborne has close contact with the communities they have businesses with and the various civic organizations for partnerships. Their primary focus is on women who are victims of domestic violence. (Liz Claiborne Inc. – Philanthropic Programs)

Managers can drive forces either up or down. This happened to Liz Claiborne. There were low sides in business for Liz Claiborne. In 1992, problems started to surface. Its sales were down and market capitalization went down fast at $1.3 billion by the closing period of 1994. A series of strategies in operations and marketing, implemented by the new CEO Paul Charron enabled Liz Claiborne to rise again. The company’s capitalization went up to $3.2 billion. (Siggelkow 54)

Organizational performance is responsible for this trend. The managerial capabilities of Claiborne were responsible for the downward trend of the sales and its losses in the stock market. The top management team (TMT) of Claiborne that could have identified opportunities was a driving force for the firm to lose those opportunities. The opportunities are internal and external factors. (Kor and Mahoney, 2000; Bosch and Wijk, 2001 as qtd. in Chen 1)

Knowledge and expertise of the managers failed to identify the factors that could have maintained Liz Claiborne’s lead in the apparel and fashion industry. And when the company changed the CEO, there was sudden upturn in the sales of the firm, including the price of its share. This was because the new CEO, Paul Charron, instituted drastic operational and marketing reforms.

Key Success Factors

Designing and marketing are two of Claiborne’s specialized techniques in business. Their premium brands include Juicy Couture, Lucky Brand, and more. JC Penney has the sole right of manufacturing and distribution of some of the department store-based brands. Liz Claiborne was accompanied by her husband and two other partners Leonard Boxer and Jerome Chazen when they started the fashion apparel company that later became a multi-billion dollar business. (Liz Claiborne Company Heritage)

Originality and innovations are some of Liz Claiborne’s success factors. She was a designer by birth and her quest to help women like her made her a true designer for the professional women. Liz Claiborne is said to be the inventor of “imported fashion merchandise”. She imported the products she designed (Collins 106).

While the rest of her competitors were working under one roof, or that their workers and managers were working in one building and one factory. Claiborne perfected the concept of subcontracting to different factories in Asia and the rest of the world. Subcontracting has become a trend because of Liz Claiborne’s successes.

Prices were low despite the fact that they were considered designer level. These were compatible with Calvin Klein and Bill Blass, but still affordable for the professional women.

Another success factor is Claiborne’s ethical standards which are said to be the backbone of a successful organization. This is what Claiborne aimed to do. Their ethical standards are guided by the virtues of honesty, integrity and their accountability to the people. Because of this, they have gained respect from their customers and partners. (Liz Claiborne Inc.: A Portfolio of Brands)

The strategy of selling is also one of a kind. Claiborne’s first strategy focused on selling via large department stores. In the United States and Canada, Claiborne accounted for about 9,500 locations filled with products on apparel and fashion. This was aided by four of the largest department stores, namely Dillard’s, May, Macy’s and one which was composed of several stores, Federated Department Stores.

Liz Claiborne introduced a presentation format unique from other fashion designer companies. They used what Liz Claiborne called “Claiboards” and “Lizmap diagrams”. These presentation materials contained sketches and pictures including notes and instructions on how their products should be presented to the public.

The pieces of merchandise were grouped together and each group had its own name or label. Claiborne’s strategy is to sell their products as a collection rather than ordinary clothing or apparel. Presenting their merchandize as a collection is an effective way of selling to a great number of loyal customers. (Siggelkow 56)

According to the Liz Claiborne website, department stores used to have a classification-oriented style of selling. This means pants were sold in one section of the store, skirts in another area, and shirts are also separately sold in another department.

This provided difficulty to women in that when they would try to assemble an outfit, they would have to transfer from one place to another in the department store. In order to solve this problem, Liz Claiborne Inc. managers talked it out with department owners and retailers on the way the different sportswear collection would be presented. They should be in one location. (Liz Claiborne Inc.: Company Heritage)

Consultants travelled to many places to ensure that Claiborne’s products were arranged and presented to the public correctly. For all these stores, a special space was provided to present the entire Claiborne collection. The presentation of the merchandize proved effective as many provided positive feedback. (Siggelkow 56)

Among Claiborne’s strategic innovations is the use of technology in its processes. The company website is a 24/7 interactive method wherein customers can make suggestions and also air their complaints.

Claiborne also uses technology in their design of products. They use computer-aided manufacturing (CAM) in the design of apparel and fashion products. This is one of the productive means of the company, the use of computers. Speed in manufacturing and quality of products are one of the benefits of using CAM. Other large and successful companies in different industries also use CAM.

Another computer method used in making designs is computer-aided design (CAD). Integrating these two concepts – CAM and CAD – allow for more speed, accuracy and quality of the design. Combining CAM and CAD provides ways for a new process known as computer-integrated manufacturing (CIM). CIM enables manufacturers to design the product and to control the machinery that makes the products. (Pride et al. 288)

Claiborne is also affected by the growing tide of globalization. It is a knowledge-based organization, and its workforce is composed of a pool of talented and expert designers. Claiborne has invested on its employees. The company also aims for customer satisfaction and loyalty; its products and services are quality-oriented. The company sees to it that the company adheres to quality management and best practice.

Their strategy is customer-driven, a success factor effective up to today. Claiborne aims for talents and customer’s focus and loyalty and also sees the importance of focusing on their employees because they see the relation between contented employees and contented customers.

Satisfied employees result in satisfied customers. Meeting the customer’s needs and wants is a business trend in the age of globalization. Liz Claiborne aims for customer loyalty while keeping cost of production low. This is shooting two birds in one shot but difficult to achieve; difficult because meeting the customer’s needs and wants at the same time minimizing cost of production do not ensure quality product or service. Claiborne focuses on quality in design.

Most of the companies nowadays, particular the global ones, prefer standardized products which can be manufactured by outsourcing companies from China, in order to minimize production costs and the flow of supply chain.

The apparel industry is labor-intensive; its process of manufacturing requires the services of more people, which is unlike other manufacturing processes where they use machines and robots to manufacture the products. Claiborne’s strategy of subcontracting may be similar to outsourcing strategy. It has been proven effective.

Liz Claiborne does not own factories where they can produce quality apparel. Claiborne’s strategy has long been introduced since its inception as a global company. Products are produced by companies throughout the world. But quality is not sacrificed. They have their own quality control checked by their own managers. (Collins 104)

Application of Information Technology

Customer interaction is now enhanced by technology and the Internet or the World Wide Web. Customers can ask questions or complain through company websites or through emails. Modern information technology used in supply chain includes Electronic Data Interchange (EDI) which is the information transmission backbone of manufacturing companies and supply interfaces. The popularity of the Internet has led to the introduction of Internet-based EDI.

Another important factor that brought success to Liz Claiborne is its application of knowledge management. Knowledge management has made it successfully handle the cost, quality and the different improvements for the organization and its branches overseas.

Knowledge management is significant to Claiborne’s global operations and in the study of innovations and adoption. When we say knowledge, we usually understand this to mean theoretical knowledge or practical knowledge, but it also includes experience and skills. In the age of globalization, knowledge is both a product and resource.

Knowledge and knowledge management are significant developments in the new globalizing environment. Competitive advantage among organizations is more pronounced with the knowledge people possessed, or what is termed, ‘people-embodied knowhow’ (Rodriguez and de Pablos, 2002, p. 174). Firms are focusing on what their people know, and invest much on intellectual capital.

More success factors are attributed to the right fashion they have introduced to the public. From the firm’s initial demographic of the professional women of America, Liz Claiborne has introduced almost any brand for men and women; thus the brand “Claiborne” (for no gender) has stayed for men and women’s clothing.

Their fashion styles introduced to the public are long lasting. Claiborne has a strong brand that they could boast of. These brands have their own particular niche focus. The firm also has a decentralized form of management with departments and units making their own decisions. These decisions are automatically carried out with speed and accuracy. (Scribd.com)

Competencies

Brands are a name that cannot be taken away by competitors. Sometimes, it’s the brand that competitors are trying to beat and not the product, although the brand speaks for the products. Claiborne has multiple quality brands like Kensie, Kensiegirl, DKNY, etc. These brands are international names and they compete with well known other brands like Zara of Inditex and Hennes and Maurits (H&M), etc.

Added to the brands were the so-called apparel seasons to meet customer demands and taste. Liz Claiborne was concerned with the buying patterns of customers in order to guide their production processes. Other companies in other industries usually do this particular in-house survey to determine customer demands and loyalty. Some of these companies come from the automotive industry, like for example Yamaha, Honda or Toyota. (Bower and Hout 49)

Liz Claiborne opened retail stores aside from going wholesale and selling their products through exclusive contracts with department stores. In 2006, Liz Claiborne competed with other retail stores like Apple, Bose, and Nine West, to find ways to test customer loyalty and following. The stores boasted the company’s exposure to their customers, not only on the market segment that the company serves. (Anderson)

In 2008, Liz Claiborne Inc. granted license to Elizabeth Arden, Inc. for the latter to manufacture, sell and distribute Claiborne fragrance products. These fragrance products include JuicyCouture, Usher, Mambo and other fragrances. (Elizabeth Arden, Inc.)

E. Scott Beattie, the CEO and Chairman of Elizabeth Arden, Inc. said that the licensing agreement was a strategic move for both firms that could also bring competitive advantage on their respective companies.

The alliance also brought benefits such as improved market share and more profits for Arden in their American fragrance stores; improved supply chain and a wider organizational perspective; increased customer and more sales from a wider audience. Growth in earnings and sales for the company was expected by 2009. (Elizabeth Arden, Inc.)

The licensing agreement was made effective with some conditions such as the fulfillment of the requirements of the law known as the Hart-Scott Rodino Antitrust Improvements Act of 1976. (Elizabeth Arden, Inc.)

Elizabeth Arden, Inc. was founded by Miss Elizabeth Arden in 1919, with specialty in beauty products. Like Liz Claiborne, its mission was to initially ‘serve’ the American woman and it first focused on this particular market segment. Through the years, its strategy has been for continuous innovations. They have tapped other market segments aside from the women demographic. (Elizabeth Arden)

Many of Claiborne’s brands have been carried or sold by big department stores. But department stores nationwide suffered a setback; many of them are not earning that big anymore probably because of the recent economic downturn. The once popular and big chains of department stores have been closed. One chain, the Marshall Field, had been changed to Macy’s. Claiborne lost a bit of its popularity. (Boone and Kurtz 376)

Liz Claiborne had to part ways with some of the big department stores that sold its products for years. Claiborne is now exclusively contracted by JC Penny to sell its men’s, women’s and other product lines for ten years. In short, Claiborne moved from Macy’s to have an exclusive contract with JC Penny and no other department store shall have the opportunity to sell Claiborne products.

Under this agreement, JC Penny also has the exclusive right – if it wants to – to buy Claiborne products in five years. The arrangement also states that Claiborne will continue to be designer of the apparel and fashion products and JC Penney will do all the other responsibilities like production and marketing, procurement of raw materials and promotion and distribution of the finished products to end users. (Boone and Kurtz 376)

JC Penney had in the past demonstrated that it could successfully market Claiborne products.

With respect to Claiborne subcontracting style, Claiborne developed a special bond with apparel suppliers in Asia. In Hong Kong, the company Fang Brothers made their factories available for Claiborne.

Fang Brothers was a growing company in the 1960s until it expanded to other countries like Thailand, the Philippines and Malaysia. It also expanded to Panama and Ireland. The Fang Brothers was good at the strategy known as “triangle manufacturing”.

In this particular strategy, U.S. companies and other importers would place their apparel orders through companies, for example Fang Brothers who, because of over capacity, would place the same orders to affiliate factories located in other Asian countries that offered lower cost of production. (Collins 108)

In Europe, Liz Claiborne’s competitors include Zara and Hennes and Mauritz (H&M). Zara and H&M are said to be low-cost competitors. Liz Claiborne goes for quality although its prices are not so exorbitant. Zara and H&M have been expanding to markets of the same segment. (Ryans 4)

Zara is owned by Inditex and is into the international apparel market and fashion, which are customer-driven markets. It is continuously growing and said to be leading in Europe. Following closely is Hennes and Mauritz (H&M) which outsources most of its products at lower cost. Like Liz Claiborne, Zara is quality-oriented. It produces 60% of its products and introduces quality management. Unlike H&M, Zara ensures that its customers are satisfied and hopes to come back to buy more of its products.

Zara is more liquid but, like the rest of international firms, is affected by the growing tide of globalization. It is a knowledge-based organization, and its workforce is composed of a pool of talented and expert individuals. Inditex, Zara’s mother company, sees to it that the company adheres to quality management and best practice. The company’s financial standing is as healthy as ever. (Inditex)

Zara and H&M have been closed competitors of Liz Claiborne, quite a feat for the two since Liz Claiborne is more of a traditional and considered “higher end manufacture” in the industry, while the two are considered low-cost. They however have been expanding and their financial standings are also considered healthy. To solve the problem of competition, Zara and H&M have used high-profile endorsers such as Madonna and Kylie Minogue. (Ryans 15)

This also challenged the firm of Liz Claiborne. In responding to the challenge of competitors on low prices, Liz Claiborne also had to act or she could lose some of her following and some profits. Claiborne used the same strategy by producing apparel and fashion products of low cost, something very affordable to the working women.

Talking of globalization, this has affected even the smallest firm. But it has worked in Liz Claiborne’s advantage. Liz Claiborne manages a pool of expert managers but not an entire workforce. Production line is handled by subcontracting firms. Claiborne goes to a country and instructs supervisors of firms doing the production. It has only to make sure that the design is being followed to the smallest detail. After that, the Claiborne and her managers go home to their headquarters.

Globalization has modernized the concept of human resource. International HRM explores how global organizations manage the demands of ensuring that the organization has an international coherence and cost-effective approach to the way it manages its people in all the countries it covers, while at the same time ensuring that it is responsive to the differences in assumptions and in what works from one location to another.

This is very relevant to managing an organization of different culture. There are countless other issues that have to be addressed by the assigned senior manager and staffs.

Claiborne’s managers do not manage a workforce in a factory setting. They just have to present their design and go home to their headquarters. Finished products are presented to them. And finances would be taken care of by their people on a contractual basis. Although this strategy of Claiborne’s is not new, it has been perfected by the firm.

Distinct Competitive Advantages

Claiborne’s strategy is marketing orientated which requires that a number of changes takes place in the organization, in practices and in attitudes. Implementing the marketing concept requires more than paying lip service to the ideas inherent in the concept. Behavioral sciences can lead to an understanding of buyer behavior.

Liz Claiborne saw the opportunity when she founded the company, along with her husband and a few trusted friends in the apparel and fashion industry. She knew the business and how to run it. She had discovered her niche and her market segment, capitalizing on the gender she was most acquainted with and her creativity and experience.

Liz Claiborne knew what to sell and to whom. She analyzed the future of the company and the market she was in. In doing this, a company can shift focus to analyzing what the future holds with the customer. This may include determining if the customer may still want to deal with the company, or buy products from the company or shift to other competitors. The information on customer satisfaction is vital in the improvement and enhancement of the product. This information and data can be linked back to the manufacturer for further quality enhancement.

Liz Claiborne became aware of this when the firm attained competitive advantage. Competitive advantage became more visible when in the year 1999. Liz Claiborne produced more than 120 million pieces of clothing from 256 factories around the world that supplied these products (Collins 105). Liz Claiborne had used this strategy since the 1970s and has come to perfect it with ease and accuracy to make the firm ahead of the competition.

‘Strategic competitiveness is achieved when a firm successfully formulates and implements a value-creating strategy.’ (Hitt et al. 4)

This value creating strategy was attained even during Liz Claiborne’s early years as a firm producing apparel and fashion products. It gradually grew and came to its height of corporate success.

In 1976, Liz Claiborne started with a capital of $250,000. It was a small capitalization that became big. Five years later, it went public and earned revenues of up to $116 million, becoming a part of the Fortune 500 list. This was a feat by a woman at that time. Fortune also said that Liz Claiborne had become the top earner with respect to the year-end equity in the 1980s.

Then in 1991, Liz Claiborne earned more than $2 billion with its shares of stock rising. An investor who bought $10,000 worth of shares from Liz Claiborne was assured of a profit for investment of up to $610,000 (Siggelkow 54). In 1996, Claiborne’s profit reached $155.7 million, even surpassing Wall Street’s prediction (Kernaghan 36).

Claiborne’s top management was successful at the beginning, although later it experienced rough sailing. They effectively used strategic management by focusing on the capabilities of their human resource, designers and managers who were properly screened, tested and trained.

A successful strategic management allows for competitive advantage or edge for the organization. In strategic HRM, strategies and people are involved; in other words, the firm was putting people together, including their talents, skills and capabilities, to make the business successful.

The concept of strategic HRM is based on the important part of the HRM philosophy that emphasizes the strategic nature of HRM and the need to integrate human resource strategy with the business strategy (Armstrong, 2000, p. 6). The top management team (TMT) failed to deliver the necessary managerial capabilities to its senior and medium-level managers that forced Claiborne’s sales and stocks to go down.

The top management team which is responsible for the managerial capabilities of Claiborne failed in their strategic management. When the firm replaced the CEO with a new one, Paul Charron, who instituted reforms, the sales and stocks rose.

Moreover, Claiborne’s supply chain also adds to its competitive advantage. The firm has focused on quality, least cost, and effective utilization of the resources to provide the goods and services to the end users at the shortest possible time. Supply chain management is traditionally focused on least-cost transaction, but the new trend in business-to-business transaction is long-term relationship.

Claiborne’s subcontracting firms are from Taiwan, Hong Kong and other countries in Asia. Claiborne maintains a good relationship with these firms, assuring the conditions for a safe and fast delivery of products to the end users.

This strategy can test the customers and consumers. The question that is always in the mind of the marketing manager is: “will the customer come back?” One significant strategy in meeting the needs and wants of customers is introducing an approach to supply chain that aims back at the customer. Satisfying their needs and wants is always a challenge to marketers. Knowing the customers’ needs have become a foundation for which a company is founded.

Customer focus is vital to supply chain. The customer wants to be understood, and the marketer can interpret this by answering what he/she wants of the product. The information can be inputted back to the customer for enhancement of the product. If it is service-oriented, the company has to modify the service. Supply chain has to be continually improved in order to attain customer satisfaction and loyalty, while customer focus can reflect satisfaction and loyalty.

An excellent supply chain management can attain customer satisfaction; at the same time, customer satisfaction may lead to loyalty, although satisfaction does not necessarily lead to loyalty. Before loyalty can be attained, customer closeness is crucial; meaning some activities have to be geared towards contacting the customer in order to acquire more data and information about the product, and how the customer reacts to the product, including suggestions for improvement.

Acquiring more profits, which is one of the major goals of companies, seems to be not a sure goal. It is also one of the difficult objectives to achieve. There are more and more products being manufactured but there are fewer customers who buy these products. Companies, or global business and organizations, have to find their segments and customers because they have more products to sell. There is a surplus of products and less customers.

In other words, organizations around the world compete to gain more customers, and one way of gaining more customers is to win their trust, answer and meet their needs and wants, and make sure that they come back. It is not enough that they buy the company’s products; it is important that they come back; this is loyalty.

Supply chain is an important factor to consider in attaining customer satisfaction. When a product is being bought by a customer, it must be delivered quickly, with ease and comfort of delivery, and must have the desired quality that the customer asks for.

Subcontracting has assured Liz Claiborne of an effective supply chain. The firm sees to it that their designs are followed and manufactured on time. Marketing however has been changed every now and then to answer the demands of the changing times.

As stated in the section for ‘Competencies’, Liz Claiborne entered an agreement with Elizabeth Arden, Inc. for the manufacture and sales of Claiborne fragrance products. This is one way of creating a fast and effective supply chain. Elizabeth Arden, Inc. is a former competitor that has turned into an ally and promoter of Claiborne products.

Claiborne products are manufactured by manufacturing companies through subcontracting and now delivered exclusively by JC Penney. JC Penney has acquired exclusive rights to manufacture and sell Claiborne products. JC Penney can provide an effective supply chain for Claiborne products.

Innovations and changes are continuously introduced into Claiborne’s strategies. This is to answer organizational and customer needs. An example is Claiborne’s introduction of what they call “fashion moderates”, from branded and costly fashion apparel to “fashion moderates”. The price has been lowered to meet customer demands and expectations. (Collins 104)

The company also emphasizes diversity in the organization and in the workplace. The strategy is to emphasize inclusion that should be a part of the organizational culture and cultural fabric. Inclusion is synonymous with diversity. It allows a collection of ideas and concepts to help in everyone’s advancement and the organization’s. Training and development are a part of this so-called cultural fabric. (Liz Claiborne, Inc.: Diversity)

The firm also emphasizes inclusion to its various suppliers and associates. They regard inclusion as very important to company principle and philosophy. It is a shared responsibility that should be practiced by every executive and employee. Senior executives should be leaders to promote inclusion. All of their associates share the responsibility of honoring everyone’s contribution for the fulfillment of the organization’s objectives.

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