The Influence Of Brand Image On Consumer Behaviour

Project and Seminar Material for Marketing

The Influence Of Brand Image On Consumer Behaviour


Abstract


The purpose of this study was to examine the effects of brand image on customer behavior in the Nigerian banking sector. The study was guided by the research questions that were aimed at answering how marketing mix strategies affected brand image and customer behavior in the Nigerian banking sectors; how brand positioning affected brand image and customer behavior in the Nigerian banking sector; and how demographics affected brand image and customer behavior in the Nigerian banking sector.

The study used descriptive research design. The design was used to determine the effects of brand image which was the independent variable on customer behavior which was the dependent variable in this study in the Nigerian banking sector. The target population in this study was 2050 in number. For this study, the sampling frame came from a list of loyal customers who banked with Diamond bank. Stratified sampling technique was used to select the respondents from among the list of loyal customers obtained from Diamond Bank. After the population had been divided into different loyalty period strata, each stratum was then sampled as an independent sub-population, out of which individual elements were randomly selected. The sample used was 10% of the target population which was 205 since the target population of 2050 was large.

Secondary data was collected from previous researches and works done by authors on the same subject matter. Data was collected from the target population using a structured questionnaire. The administration method selected for distributing the questionnaires was the “drop and pick” method.


Chapter One


Introduction

1.1 Background of the Study

The growing need to maintain a competitive edge and customer loyalty in the industry segment predetermine the significance to maintain unique and outstanding brand of services and product that commands consumer satisfaction and loyalty. The research seeks to investigate how Diamond Bank branding impacts on customers’ behavior. Diamond Bank Plc began as a private limited liability company in March, 21, 1991. (The Bank was incorporated in December 20, 1990). Ten years later in February 2001, it became a Universal Bank. In January, 2005 following a highly successful private placement share offer which substantially raised the banks equity base, Diamond Bank became a public limited company. In May, 2005, the Bank was listed on the Nigerian stock exchange. Moreover, in January, 2008, Diamond Bank Global Depositary receipts (GDC) was listed on London Stock Exchange, the first bank in Africa to record that fact. Today, Diamond Bank is one of the leading banks in Nigeria – respected for its excellent service delivery, driven by innovation and operating on the most advanced banking technology platform in the market. Diamond Bank has over the years leverage on its underlying residence to grow its assets base and to successfully retain its key business relationship. And like a diamond, the Bank’s strength make it even more valued. In 2008, to ensure the Bank grows with the need of the customer, the Bank streamlined its operation into three district strategic business segments; retail banking, corporate banking and public sector. Diamond Bank continues to develop and to build on its live competences, by continually cutting from the rough, the Bank have improved on services and other banking facilities. However, like cutting from the rough gem to create a diamond of the finest quality the banks continuously builds on its brand. Hence, the nature of this research to investigate the impact of branding on customers’ behavior with a case study of Diamond Bank plc.


1.2 Statement of the Problem

Research in consumer behavior shows that we have a consumer driven society where the ultimate motive of business products and service is to satisfy consumer expectation makes them happily and remain loyal to the brand.

Therefore, a perfect understanding of consumer behavior is determining.

  1. The psychology of the consumers and how they make decisions between depending on their needs and brand awareness
  2. How service or products providers make to implement the best branding strategy for their product a service (e.g culture, family, signs, media).
  3. The various stages a consumer gives through before purchasing a product or service.
  4. What factors determine consumer’s loyalty or repeat purchase of the brand” is crucial in meeting customer’s satisfaction and brand image.

Therefore, an attempt to reach out to the consumer effectively demands a suitable banding strategy since consumer buying decision making and loyalty is affected by various branding strategies. In an industry characterized by stuff competition an effective branding strategy is significant not only to attract customers but to create customer loyalty to the brand. Therefore, this research seeks to investigate the impact of branding on case study of Diamond Bank Plc.

One of the key challenges of commercial banks has been on starting and maintaining client loyalty. Banks have been experiencing high degree of client switching from one bank to another. Service managers are noticing more regularly a lack of loyalty and retention even among delighted and satisfied customers. This condition has been referred to as “the satisfaction trap” (Ghaziri, 1998).

Brand image shows that there are several customers who are seriously loyal to products even when they are substandard compared to the alternatives. In fact they are staunchly loyal to the extent that they regularly pay premium prices for these products. This puzzling phenomenon may be credited to lack of understanding of the causes of customer loyalty and retention in several service industries. This has enticed a lot of scholars in marketing practice and theory to scrutinize the subject of brand and customer loyalty in relation to client retention.


1.3 Purpose of the Study

The purpose of this study was to examine the effects of brand image on customer behavior in the Nigerian banking sector.


1.4 Research Questions

This study was guided by the following set of research questions:

  1. How do marketing mix strategies affect brand image and customer behavior in the Nigerian banking sectors?
  2. What is the effect of brand positioning on brand image and customer behavior in the Nigerian banking sector?
  3. How do demographics affect brand image and customer behavior in the Nigerian banking sector?

1.5 Significance of the Study

1.5.1 The Management of Diamond Bank

The study may be beneficial to the management of Diamond bank as it may enable them address the issues of concern and implement the positive results of the finding on the research to improving their strategy on brand image and customer behavior.

1.5.2 The Employees of Diamond Bank

The study will benefit the employees of Diamond bank, especially those in direct contact with the customers, the sales and marketing staff in empowering on how to improve brand image and customer behavior, providing satisfactory services to the customers and establishing a long term relationship.

1.5.3 Other Competitor Banks

The other competitor banks will find this study useful by establishing what Diamond is doing concerning the issue of branch loyalty and customer behavior and they will be able to apply the same knowledge, while adapting any prevailing issues of concern to them.

1.6 Scope of the Study

This study was carried out at Diamond Bank, Ikeja Branch and conducted among its 4000 regular customers. Data collection period was December 2020 to March 2021. The study covered three variables namely: marketing mix strategies, brand positioning and demographics. This study was met by non-cooperation from respondents who took it as a waste of time. Respondents were however educated on the importance of the study. Most respondents feared that they would have disclosed confidential information which would be used by their competitors to their own advantage. To overcome this, the researcher assured them of confidentiality and that their response would be used for academic purposes only. The use of questionnaires reflected what the researcher had in mind which did not necessitate the information that was required for the study as the research topic entailed.


1.7 Definition of Terms

1.7.1 Marketing Mix

Marketing mix refers to the set of actions, or tactics, that a company uses to promote its brand in the market (Kotler, 2003).

1.7.2 Brand Positioning

Brand Positioning is how a product is perceived in the minds of the consumer in relation to competitors‟ brand in the market (Toit, 2013).

1.7.3 Demographics

Demographics are statistics that companies keep on business clients and consumers on a product or services (Ghaziri, 1998).

1.7.4 Customer Behavior

Customer behavior is defined as the activity that a selling organization undertakes in order to reduce customer defections. Customer behavior is more than giving the customer what they expect; it is about exceeding their expectations so that they become loyal advocates for your brand (Rosenberg and Czepiel, 1993).

1.7.5 Customer Loyalty

Customer loyalty is both a behavioral and attitudinal tendency to favor one brand over all others, whether due to contentment with the service or product, its performance convenience or performance, or simply comfort and familiarity with the brand (Dick and Basu, 2004).


1.8 Organization of Chapters

It is important to note that chapter one covers the background of the study whereby brand image is defined. Banks have recognized the significance of meeting customer needs since they have different personalities. This will help them to establish the determinants of customer loyalty in order to enhance customer behavior. Branding has become one of the most important aspects of business strategy. A good and effective brand normally has attributes which endure them to their loyal customers.

In chapter two looks at literature review on the three main variables forming the research objectives. The research objectives address marketing mix strategies, brand image strategies and demographic variables that affect brand image and ultimately customer behavior. Chapter three looks at the research methodology used. Chapter four has focused on the results and findings of the study and chapter five gives the discussion, conclusions and offers the study recommendations.


Chapter Five


Discussions, Conclusions and Recommendations

5.1 Summary

The purpose of this study was to examine the effects of brand image on customer behavior in the Nigerian banking sector. The study was guided by the research questions that were aimed at answering how marketing mix strategies affected brand image and customer behavior in the Nigerian banking sectors; how brand positioning affected brand image and customer behavior in the Nigerian banking sector; and how demographics affected brand image and customer behavior in the Nigerian banking sector.

The study used descriptive research design. The design was used to determine the effects of brand image which was the independent variable on customer behavior which was the dependent variable in this study in the Nigerian banking sector. The target population in this study was 2050 in number. This target population was selected from the list of loyal customers of the bank. For this study, the sampling frame came from a list of loyal customers who banked with Diamond. Stratified sampling technique was used to select the respondents from among the list of loyal customers obtained from Diamond Bank. After the population had been divided into different loyalty period strata, each stratum was then sampled as an independent sub-population, out of which individual elements were randomly selected. The sample used was 10% of the target population which was 205 since the target population of 2050 was large.

Secondary data was collected from previous researches and works done by authors on the same subject matter. Primary data was collected from the study population through the use of questionnaires to meet the study objectives. Questionnaires were administered on a “drop and pick” method to the selected respondents. The respondents were given a week to fill in the questionnaires. The study used quantitative method of data analysis. To ensure easy analysis the questionnaire was coded according to each of the research questions to ensure accuracy during the analysis process. The data collected was classified into meaningful categories (coded), edited and tabulation of the same was done. The MS Excel spreadsheets were used for the initial tabulation, analysis and drawing of charts based on the respondents responses while Statistical Package for Social Science (SPSS) Student Version 16.0 which is a unified and comprehensive package was used to analyze the collected data thoroughly and conveniently.

The study showed that customers of Diamond Bank were not sensitive about product and service prices charged and the fee they paid for their accounts was reasonable and they were not likely to leave Diamond because of prices. This showed that customers were engaged by the employees and that they were served in the shortest time possible. From the findings, the study concludes that Diamond Bank has a wide network of service points like branches and ATMs which make it convenient for customers to access services and that the customers are happy and satisfied with the services offered by the organization.


5.2 Conclusions

Effects of Marketing Mix Strategies to Consumer Loyalty and Retention

The study showed that customers of Diamond Bank were not sensitive about product and service prices charged and the fee they paid for their accounts was reasonable and they were not likely to leave Diamond because of prices. The showed that customers were engaged by the employees meaning and they were served in the shortest time possible. From the findings, the study concludes that Diamond Bank has a wide network of service points like branches and ATMs which make it convenient for customers to access services and that the customers are happy and satisfied with the services offered by the organization.

Effects of Brand Positioning to Consumer Loyalty and Retention

The study concludes that customers liked the physical appearance and the level of cleanliness of the banking halls in Diamond, which made them want to be associated and to stay with the bank and the branding material and the stationery used to do banking was clearly legible and easy to understand. The study also concludes that Diamond Bank advertisements were placed in the media and press regularly and its internal and external signage was clear and visible. The study also concludes that Diamond Bank employees represent the right image of an international bank that is caring and listening and are always pleasant and this differentiated them from other banks in the market.

Effects of Demographics to Consumer Loyalty and Retention

The study concludes that Diamond Bank uses simple information such as age of the clients to determine new products and they also use the level of consumer spending and habits to determine what type of products suits their customers. The study concludes that the level of income affects loyalty to the bank and that the organization tries to do everything it can to maintain customer loyalty regardless of the customer‟s age. The study concludes that Diamond Bank has a very strong culture that is inclined to meeting customer needs as opposed to employees meeting their performance objectives and the bank does not target the high end customers. The study concludes that Diamond Bank values all its customers and it has segmented its customers depending on income levels.


5.3 Recommendations

5.3.1 Recommendations for Improvement
5.3.1.1 Effects of Marketing Mix Strategies to Consumer Loyalty and Retention

Diamond Bank needs to take a fresh look at their customer loyalty and retention strategy. With the decline in customers‟ perceived value of loyalty programs and the new customer sovereignty, they need to ensure that their strategy is relevant and meaningful. The bank needs to differentiate their program by identifying and connecting with the unique characteristics of their customer base as well as align loyalty and retention programs with marketing strategy. If marketing is doing its job by effectively segmenting and targeting to attract the right customers for the business, this makes the job of loyalty and retention that much easier.

5.3.1.2 Effects of Brand Positioning to Consumer Loyalty and Retention

The institution needs to build brand evangelists, not bargain shoppers. If a loyalty program centers on offering customers special deals, it trains them to wait for the discount, the organization needs to shift its loyalty focus to deepening the relationship with the customer and building evangelists. Loyal customers are less price-sensitive and more resistant to competitor overtures and they are also a huge marketing asset.

5.3.1.3 Effects of Demographics to Consumer Loyalty and Retention

Organizations should be able to launch marketing activities that can reflect social class, using prominent logos to fill their products with more symbolic value of wealth and to meet the psychological needs of consumers. Diamond needs to be able to employ an effective marketing mix strategy that meets the demographics of all its customers. The study recommends a strategy that aims to enhance customer satisfaction levels by enhancing their expectations and overall experience. The organization has to continuously deliver beyond what the consumers have experienced and expected before, not just in terms of products or services but also by paying close attention to various other hidden demographic factors such as the brand image, lifestyle enhancement, esteem enhancement, the marketing mix, sales team feedback, and psychological factors.


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Frequently Asked Questions


How does brand image affect the consumer’s buying behavior?

Brand image has a major impact on the consumer’s buying behavior. If the brand image is positive, the customer’s behavior towards the brand is also positive. Once a customer becomes satisfied with a brand, he/she becomes loyal to it.

What factors influence consumer perceptions of a brand?

A very important factor that influences consumer s perceptions of a brand is strong brand image. The main purpose of this article is to study and analyze the role of brand image on consumer behaviour.

What is the effect of consumer section on a brand?

The perception that a consumer section holds about a brand directly results in either positive or negative effect. If the effect is positive, physical value is realized as marketing as consciousness or goodwill. If the effects are negative, tangible or intangible value is also negative.

What is the role of brand image?

The concept brand image has drawn significant attention from academics and practitioners sin- ce it was put forward, because it played an important role in marketing activities.

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