SAVONIA UNIVERSITY OF APPLIED SCIENCES UNIT OF BUSINESS AND ADMINISTRATION, KUOPIO THE ROLE OF BRAND IN CONSUMER BEHAVIOR CASE: HOW SNEAKERS HAVE TURNED INTO STATUS SYMBOLS Andrea Rubini Business Administration Bachelor‟s thesis International Management June 2010 SAVONIA UNIVERSITY OF APPLIED SCIENCES UNIT OF BUSINESS AND ADMINISTRATION, KUOPIO Degree Programme, option International Business – International Management Author Andrea Rubini Title of study Role of Brand in Consumer Behavior. Case: How Sneakers Have Turned into Status Symbols Type of project Date Pages Thesis 01/06/2010 48 + 1 Supervisors of study Executive organisation Minna Tarvainen, --- Jari-Pekka Jääskeläinen Abstract The main purpose of the current paper was to study and analyze the role of brand in consumer be- havior. In fact, although intangible, brand seemed what mostly can influence our decisions during a purchasing process. Moreover, the study has introduced the fresh concept of lovemark, the ultimate manifestation of loyalty. The research method for this thesis was qualitative. Nevertheless, no questionnaire was prepared. The data gathering and the results were based on literature (either books or online material), preced- ing studies and companies‟ real cases. In addition, as there was no net division between theories and data, in order to have a more practical approach, the thesis concerned sneakers as product case. Even thought the research area was proven too wide, the thesis was able to identify the key factor that might determinate the influence of brand during the buying process. It was also possible to dis- cover that loyalty to a brand can be either behavioral (unconscious) or attitudinal (conscious). Therefore, loyalty to a brand can be just a coincidence. On the other hand, for its own nature, there is no behavioral approach to lovemarks. To sum up, brand awareness is a progressive process that influences the final decision when the customers are already brand, and not product, oriented. In sneakers case, as the product itself has already a strong core value, it is hard to determine the boundary between love to the shoes and loyalty to the maker. However, we can be quite positive to the fact that lovemarks‟ sneakers are the combination of both the product and brand. Keywords Brand, consumer behavior, brand management, brand loyalty, lovemarks, sneakers Note --- CONTENTS 1 INTRODUCTION ...................................................................................................... 5 1.1 The thesis work process ..................................................................................... 5 1.2 Structure of the thesis ........................................................................................ 8 2 THE BRAND BEHIND THE ITEM ....................................................................... 10 2.1 The concept of brand ....................................................................................... 11 2.2 The brand identity ............................................................................................ 12 2.3 Brand building ................................................................................................. 17 3 THE PURCHASING FACTORS: PRODUCTS AND BRAND AWARENESS ... 19 3.1 Product vs. brand during the buying process ................................................... 20 3.2 Brand awareness .............................................................................................. 24 3.3 Brand positioning ............................................................................................ 24 3.4 Brand extension and brand stretching ............................................................. 25 3.5 Brand confusion ............................................................................................... 26 4 BRAND EQUITY AND BRAND LOYALTY ....................................................... 28 4.1 Brand image and associations .......................................................................... 29 4.1.1 Celebrity branding................................................................................. 29 4.1.2 Emotional branding ............................................................................... 31 4.1.3 Social branding ..................................................................................... 32 4.2 Brand loyalty ................................................................................................... 33 4.3 Brand switchers ............................................................................................... 34 5 LOVEMARKS ......................................................................................................... 37 5.1 One-to-one marketing ...................................................................................... 38 5.2 Digital marketing and internet communities ................................................... 39 5.3 Customization and personalization .................................................................. 41 6 DISCUSSION .......................................................................................................... 44 REFERENCES ............................................................................................................ 49 APPENDICES Appendix 1 Gallery of the most significant and trendy sneakers .......................... 55 LIST OF FIGURES Figure 1. Branded markets vs. Commodity markets ................................................... 20 Figure 2. Brand Equity Model According to Brandt and Johnson .............................. 28 Figure 3. Brand Religion Model According to Kunde ................................................ 31 Figure 4. Lovemarks Power Grid ................................................................................ 37 LIST OF TABLES Table 1. Decision Making Set based on Kotler‟s model ............................................. 21 LIST OF IMAGES Image 1. Converse All Star ......................................................................................... 10 Image 2. Adidas Nizza Hi vs. Converse All Star ........................................................ 12 Image 3. Brand adaptability: Adidas performance, Originals and Style ..................... 14 Image 4. Nike logo history .......................................................................................... 15 Image 5. Adidas Originals packaging ......................................................................... 16 Image 6. Display of Converse All Star: private collection ......................................... 22 Images 7 & 8. Nike star vs. Adidas team .................................................................... 23 Image 9. American‟s Cup Men sneakers by Prada ..................................................... 25 Images 10 & 11. Beckham for Gillette and Adidas .................................................... 27 Image 12. Air max logo ............................................................................................... 30 Image 13. Puma‟s campaign Play for Life .................................................................. 32 Image 14. Adidas web-store on Second Life .............................................................. 41 Image 15. Screenshot of miAdidas webpage .............................................................. 42 Image 16. Personalized Adidas Stan Smith ................................................................ 43 Images 17 & 18. Brand vs. Product ............................................................................ 47 Images 19 & 20. Nike Cortez and Adidas Stan Smith ................................................ 55 Images 21 & 22. Converse All Star and Puma Clyde ................................................. 55 Images 23 & 24. Fred Perry Liberty and Asics Onitsuka Tiger .................................. 55 5 1 INTRODUCTION “People get awareness through media about the brands and they have become brand oriented. (…) In conclusion one can say that because of some odd factors (people) have become brand oriented to show their status symbol” (Pakistan Observer 2010). The buying process is a combination of mental and physical activities that ends with an actual purchase almost daily. Thus it is interesting to study the connection within “what we buy” and “why we buy it”. In this scenario, brands play a leading role in customer decision making. In present days, brands not only represent the name or the symbol of the company that produce products (or provide services). Nowadays consumers are so genuinely con- nected to brands that when they purchase any product (or utilize any service), brands so often influence their final choice. As the connection within brand and consumer behavior seems very interesting and appealing, the purpose of this thesis is to create deeper consideration of “what brand is”, as a concept, and “what brand does”, as a factor, in buyers‟ decision making process. 1.1 The thesis work process The research goal and product case The aim of this work is to study how brands affect customer behavior and its gradual involvement during the purchasing process. In order to have, in my opinion, a more attractive, updated and practical study, the thesis will regard sneakers as product case. In fact, there is not going to be a net divi- sion between theories and data; basically, every chapter is a constant interaction be- tween “theoretical knowledge and information” and “fact and figures”. 6 The inspiration for this particular product as study case for the