Chapter I Introduction
1.4 Thesis Structure
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1.3 Research Objectives:
The main objective of research consists in the study of purchase behavior, satisfaction, and loyalty of customers' of Brand's, and to further examine the interrelationship among "brand image," "perceived values," "customer satisfaction,"
and "customer loyalty" four variables. Based on the above research backgrounds and motives, I propose the five following research objectives:
1. To explore the theoretical and practical meaning of “brand image,” “perceived values,” “customer satisfaction,” and “customer loyalty” for Brand’s management.
2. To investigate whether “brand image,” “perceived values,” “customer satisfaction,”
and “customer loyalty” are significantly associated with one another.
3. To investigate whether “customer satisfaction” and “customer loyalty” are significantly associated with each other.
4. To examine how perceptions and consumption behaviors are revealed by consumers with different demographical profiles on “brand image,” “perceived values,” “customer satisfaction,” and “customer loyalty.”
5. To make suggestions for Brand’s and sharpen its marketing strategy by gathering results from quantitative analysis and qualitative in-depth interviews.
1.4 Thesis Structure
The thesis comprises five chapters. The first chapter is introduction, which states the backgrounds, motives, objectives, thesis structures, and process of the research.
Literature review, purported in Chapter 2, is the retrospection of related studies regarding the concepts of brand image, perceived values, customer satisfaction, and customer loyalty. Chapter 3 is the methodology, grounded on the literature review of the former chapter, conceptulizes a theoretical model for the above four variables, and
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further proposes the research hypotheses, operational definitions of the constructs of each variable, question items of the constructs. Data collection, tools and methods of data analysis is explained in details in the chapter as well. The process and results of data analysis is exhibited in Chapter 4, which displays the results of data collection, the examination of the validity and reliability of each scale and each hypothesis in the research. Discussion and conclusion are displayed in Chapter 5, which generalizes the results of quantitative online survey and qualitative in-depth interviews, and finally points out the limitation of the study and makes suggestions for the future research.
Research process in the study is shown in Figure 1.
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1.5 Research Process
Clarification of research motives and objectives
Literature review of relative contribution
Establishment of research structure &
hypotheses
Design of questionnaire
Distribution of questionnaire
Collection of data
Analysis of data
Discussion & suggestion
Figure 1. Research Process
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Chapter 2 Literature Review
2.1 Health Foods
2.1.1 Definition of Health Foods
No unanimity exists within the denotation of “health foods,” so ambiguity emerges as well when we confront with terms such as “health-care foods,” “functional foods,” “dietary supplements,” “nutrient foods,” and even “nutraceuticals.” One of commonly accepted definitions of health foods is “the food which is absorbed by oral intake and proved to be with health care effects” (Huang, 2004). Therefore, the terms of foods with health care effects or special nutrients are diverse in many countries, but they all refer to the following three features: (1) to provide specific nutrients (2) to moderate biological function and with health benefits (3) only suitable for selective use by certain groups (Chen, 2007).
Even if consumers realize more about the above features on health foods, still, they might be baffled when differentiating the terms between “health-care foods” and
“health foods.” According to the ITIS project conducted by FIRDI in 2010, health-care foods, which include functional compositions but lack of health claims, contain a broader sense by than health foods (see Figure 2.1). By contrast, health foods products with health claims can only be legalized after being proved the effects by Department of Health, Executive Yuan. Likewise, the report from CGPRDI (2010) indicates that
“health-care foods,” an umbrella term encompassing “specific nutrient foods,”
“functional foods,” “dietary supplements,” and “health foods,” implies a more generalized concept (see Figure 2.2). For the main product series of Brand’s, as the case in the study, are all authenticated as “health foods”[note 2] by Department of Health, Executive Yuan, the term “health foods” is used in the research.
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Health Foods
Source: Modification from ITIS (2010)
Figure 2.1: Classification of health-care foods and health foods
Functional foods
Specific nutrient foods Health foods
Health-care foods Dietary supplements
Source: China Grain Products Research & Development Institute (2010) Figure 2.2: Category of health-care foods and others
Include function compositions
Don’t have efficacy claims
The products are over 3000 items
Proved by efficacy
Accord with HFCA
The authentication products are 184 items (2010/10/31)
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2.1.2 Regulations: Comparison of Taiwan and Other Countries
Since health foods are broadly defined with many terms, they are also under different regulations in different countries. In Taiwan, Health Food Control Act, announced in 1999, has specifically denominated the term “health food” as food with health care effects. Unlike functional food or dietary supplements, authenticated health foods are supposed to guarantee the effects for reducing the occurrence of disease with scientific evidence.
The definition of health food in Japan was modified by FOSHU act (Food for Specific Health Use, FOSHU) in 1991, which refers to foods containing ingredient with functions for health and officially approved to claim its physiological effects to human body. In short, FOSHU are the foods with the additional value of physiological adjustment function.
In the U.S., with the statement from DSHEA in 1994(Dietary Supplement Health and Education Act, DSHEA), a dietary supplement can be viewed as a product contained a "dietary ingredient" intended to supplement the diet, categorized as “food”
instead of “drug” by The Food and Drug Administration (FDA). Thus, dietary supplements are not permitted to label its product as a cure/treatment for a specific disease, but they are allowed to promote structure/function claims (e.g. "glucosamine helps support healthy joints").
Regarding the regulation and denomination of health foods, Food Supplement Directive announced by The European Union in 2002 specifically requires that supplements should be demonstrated to be safe in dosage and purity. Though countries in the bloc of EU takes different stands on the health claims of food supplements;
however, product labels of food supplements in most countries can be classified as functional foods and foods for particular nutritional uses, and drug claims are inhibited as well. To make comparisons of health foods regulations in the world, Table 2-1
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summaries the definitions and acts in the above regions.
Table 2-1: Regulation, Legal Term, and Act in R.O.C, Japan, EU, and U.S.A.
Region Year Legal Term Definition Act
R.O.C 1999 Health Foods “Health Foods” shall denote foods with health care effects, having been labeled or advertised with such effects.
In order to reach the specific health-care purpose, and the special use foods absorbed in the daily meal. to be safe, both in dosages and in purity. Food
supplements cannot be labeled with drug claims but can bear health claims and nutrition claims
A product that is intended to supplement the diet and contains any of the following dietary ingredients: vitamin, mineral, herb (or other botanical), amino acid,
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2.1.3 Functional Drinks and Oral Beauty Products
To disentangle with the terminology, functional foods or drinks can be conceived as the practice of fortifying foods or drinks with added ingredients with health effects on the consumer (Stanton et al., 2001). The major concerns for consumers to purchase functional food products encompass information on the label, price, convenience, perceived quality characteristics and brand name (Krystallis, Maglaras, and Mamalis, 2008). Past research studied on the characteristics of functional food products and contended that most of them are predominantly female, well educated, high earners, aged 35 to 55 years, and actively interested in health (Childs, 1997). In fact, these categories may not well portray the consumers in the rapidly growing market.
Nowadays many young adults (aged 24 to 35 years) become more interested in functional foods or drinks that enhance their physical condition and energy levels (Krystallis, Maglaras, and Mamalis, 2008). In Taiwan, with the busy lifestyles and the change of dietary habits (e.g. eating out becomes more and more common), consumers quest for food with high quality, added value, and convenience. Functional fluids made as soft drinks are therefore a burgeoning market aware by some studies (Tallon, 2007).
To meet the various demands from the consumers who grow more and more fastidious, manufacturers make great efforts on innovation of the utility of functional drinks. It is even intriguing to find that a noticeable phenomenon for functional drinks with
“beauty claims,” which purport the ingredients or preparation with the improvement of the appearance on skin or enhancement of physical condition. A possible interpretation for the trend can be that a youthful and attractive appearance influences people’s self-confidence, social relationships, and even career success (Reis et al, 1982), according to Kelton Group Survey for the Restylane Report of Age Impressions conducted in June 2006. “Oral beauty products” (OBPs), products designed to reduce the impact of skin aging, are therefore produced and favored recently. A survey
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conducted in June, 2011, by InsightXplorer, a market research company has shown that Taiwanese consumers’ concerns for purchase beauty drinks are price, nutrients, flavors, efficacy of beauty, and brand awareness. Inspiring by the above phenomena, the study aims at a better scrutiny for cognitive and social factors which influence consumers’
purchase for beauty drinks. Different approaches are explored in the following sessions of literature review.
Note 1: Cerebos Pacific Limited Taiwan branch had gained the authentication of UKAS-ISO9001 and ISO14001 by Taiwan Accreditation Foundation in 2009.
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2.2 Brand Image
2.2.1 Definition of Brand Image
The importance of branding is evidenced in many studies. To build up a successful brand leads to business success for it differentiates from the competition, establishes reputation, and evokes the relevance with target customers (Aaker, 1996;
Keller, 2003). A brand is considered as a company intangible which generates additional value for firms (Calderon, Cervera, and Molla, 1997). Due to its financial contribution, a brand is also viewed as an intangible asset for business (Feldwick, 1996).
A brand can be conceived by the definition from the American Marketing Association (1960) as “A name, term, sign, symbol, or design, or a combination of them which is intended to identify the goods or services of one seller or a group of sellers and to differentiate them from those of competitors.” Concerning from the viewpoint of relationship building, McKenna (1991) suggested that a successful brand keeps a good relationship between customers and company.
Despite of the profits which brands can produce for business, a brand can also provide benefits for consumers. Ambler (1997) posited that brands are valuable for consumers in three aspects: (1). Economic benefits: consumers gain benefits from brands for facilitating competitions, ensuring the value of transaction, lowering the purchase risk, maintaining standard quality of products/services, and offering more product choices. (2). Functional benefits: brands benefit consumers by providing product assortment of added value. The differentiation of products satisfies different needs for consumers. Brands also ensure the quality and reliability for consumers, improving the efficiency of their decision making. (3). Psychological benefits: brands simplify consumers’ information processing and offer a solution for their problems. In
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addition, brands provide social benefits by allowing consumers to identify and gain more self-esteem and by various social groups. Richardson, Dick & Jain (1994) also argued that brand image is usually utilized by consumers as an extrinsic cue for evaluation of product quality. Consumers infer or maintain the perceived quality of the product by brand image.
As discussion above, Farquhar (1989) offered a great annotation for brands. He argued that a brand provides tangible and intangible value, beyond its functional value, which makes a product or service more recognizable and attractive. Also, a brand represents a sense of trust between customer and company, which makes it resilient against competitors’ promotional pressures and offers profits in a long term.
Martin and Brown (1990) noted that brand image refers to the consumers’ concept generated from their beliefs on the brand. Kapferer (1992) stated that consumers build up a brand image in minds after perceiving, summarizing, and interpreting the message received from the brand. Bhat and Reddy (1998) offered an explanation from the cognitive perspective that brand image can be viewed as an informative clue facilitating consumers’ decision making by using the clue to decide the importance of each attribute within a product category and selecting the optimal brand from other competing ones.
In the similar respect, Aaker (1991) defined brand image as a set of associations of a brand, organized with a meaningful way, containing the underlying value and exhibiting consumers’ perceptions and expectations of a brand. Peter and Olson (1994) purported that brand image encompasses consumer knowledge and beliefs, embedded in memory as associations, about brand attributes and the effects of brand use.
Agreeing with the “brand image as associations” perspective, Keller (1993) found out once consumers possess a strong, favorable, and unique brand associations held in their memory, they are more likely to form a positive overall brand attitude in mind which
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further influences their decision making.
Romaniuk and Sharp (2003) proposed a composite definition for brand image, denoted as consumers’ brand perceptions derive from purchase experiences, marketing communications and word of mouth. Brand image can be conceived as descriptive information, benefits, evaluations of specific aspects of the brand, and consumption situations. In their interpretation, any information related to the brand name is likely to be linked, stored in memory, and finally integrated in a part of brand image by consumers.
Dobni and Zinkhan (1990) considered that brand image differs within different consumers’ interpretations since it is a perceptive concept. They recapitulated from the previous research with the conceptualization of brand image as follows:
(1). Brand image is the brand concept held by the consumer.
(2). Brand image is formed through consumer interpretation as subjective and perceptual phenomenon, whether reasoned or emotional.
(3). Brand image is not inherent in the technical, physical, or functional aspect of the product. Instead, it is influenced and molded by marketing activities, by contextual factors, and by the perceivers’ own characteristics.
(4).The formation of brand image is relatively more influenced by the perception of reality than the reality itself.
Different from the cognitive and consumer-oriented perspective, Park, Millberg, and Lawson (1991) emphasized the abstractive meaning of a brand which is unique and originated from a special configuration of product features. The abstract meanings of a brand, as their explanation, are deliberately created by a firm’s effort at the arrangements.
Biel (1992) postulated that brand image is a set of attributes and associations triggered by the brand name. Brand image consists of image of maker (corporate),
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image of user, and image of product; the above three aspect can be further classified into two components: functional attributes and soft attributes. Functional attributes denote the consumers’ perceptions for the tangible features of a brand, such as price and convenience of usage. Soft attributes refer to the intangible and affective features such as feelings of excitement, happiness, and innovativeness.
The study agrees the definitions given by most studies that the brand image derives from the associations. Specifically, brand image in the study is defined as all the perceptive associations of customers who had been purchased Brand’s InnerShine beauty drinks. Those perceptive associations encompass the functions, attributes, benefits which customers relate to Brand’s.
2.2.2 Construct of Brand Image
Park, Jaworski, and Maclnnis (1986) suggested that brand concept image (BCM) is driven by consumer needs, which can be categorized as functional needs, symbolic needs, and experiential needs respectively. Hence, BCM can be measured by the above three aspects. A brand with functional concept is able to solve the externally generated problems for consumers. The functional aspect stresses on its functional efficacy and the ability for problem solving. The products such as cooking utensil can be included in the assortment for it is designed for satisfying consumers’ functional needs.
Symbolic concept of a brand concerns to fulfill consumers’ internally generated needs for self-enhancement, role position, group membership, or ego-identification. Luxury goods and boutiques are considered as association of high status. A brand with experiential concept can satisfy consumers’ internally generated needs for the pursuit of excitement and variety. Tourism products in the sense can better fulfill the experiential needs.
Aaker (1996) proposed a measure across product class and posited that brand image can be measured by association or differentiation two aspects, based on four
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indicators as follows: value, brand personality, organizational associations and differentiation.
(1). Value: it reveals a brand-as-product perspective and examines whether a brand provides functional benefits (e.g. products of the brand offers good transactional value).
(2). Brand personality: it displays a brand-as-person perspective and investigates the emotional and self-expressive benefits of a brand, and also reflects user imagery.
(3). Organizational associations: it conveys a brand-as-organization perspective and examines whether some abstract characteristics (e.g. being innovative, striving for high-quality) of the brand is admired or trusted by customers.
(4). Differentiation: it tests the extent for the products or services offered by the brand being different from other competitors.
Concerning brand image is directly related to product attribute, some studies focus the measurement on products and contended that physical attributes along with functional, emotional, and self-expressive benefits offered by a brand should be taken into account (Gwinner and Eaton, 1999; Davis, 2002). Summarizing from the previous studies, Martinez, Polo, and de Chernatony (2008) purported an integrated scale developed from Aaker’s (1996) and the product-oriented measurement as general brand image (GBI) and product brand image (PBI) scales.
For a better understanding whether multifarious consumption needs are satisfied by the brand, the study will adopt the scale developed by Park, Jaworski, and Maclnnis (1986) to measure brand image of Brand’s InnerShine beauty drinks through functional, symbolic, and experiential brand concept image three indicators. Besides, Aaker’s (1996) “organization association” measure will also be used to test the overall brand image perceived by the Brand’s InnerShine beauty drinks customers.
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2.3 Perceived Value
2.3.1 Definition of Perceived Value
Perceived value of consumers as a prevailing issue in marketing research has been discussed in both empirical studies and theory-driven papers. Previous findings noted that delivering superior customer value is the key for a company to gain sustainable competitive advantage (Ravald & Gronroos, 1996) and long-term success (Woodruff, 1997). In micro perspective, customer-perceived value has been found as the primary indicator to the purchase intention (Chang & Wildt, 1994).
The concept of perceived value is well captured in the research from Zeithaml (1988): “Value is the consumer’s overall assessment of the utility of a product based on perception of what is received and what is given.” From the perspective of economics, perceived value can be viewed as the perceived worth in monetary units of the set of economic, technical, service, and social benefits received by a customer in exchange for the price paid for a product, taking into consideration the available suppliers’
offerings and prices (Anderson et al., 1993). Urbany and Beardon (1989) demonstrated that perceived value is the buyers’ net gain (or trade-off ) from acquiring the product or service. Many studies also reach an understanding with the above viewpoint (Day,
offerings and prices (Anderson et al., 1993). Urbany and Beardon (1989) demonstrated that perceived value is the buyers’ net gain (or trade-off ) from acquiring the product or service. Many studies also reach an understanding with the above viewpoint (Day,