Consumer Behaviour - Digital Assignment 1

Mohammed Fawaaz A.
20BBA0095

“WHY PEOPLE PREFER OR FIRST CHOOSE THE BRAND AND THEN THE
PRODUCT”

Reason 1: The consumer is protected by the brand and reputation.

Let's not forget that brands are utilised by customers to guide and protect them, rather than to
exploit them. Initially, they were thought to be distinct from the consumer, a visual indicator of a
specific degree of quality.

They are now believed to be in the hands of the customer.

Strong evocative brands now not only evoke a certain degree of expectation, but they also elicit a
greater emotional, purpose-driven connection, as businesses aim to deepen connections with
everyone affiliated with their organisation.

To put it another way, branding (expression) and reputation (impression) are becoming increasingly
entwined. Brands become more responsive and open to criticism as a result, and negative news
spreads quickly, magnified by social media. As a result, businesses urge individuals to participate in
a form of 'market democracy,' allowing them to vote with their cash on a regular basis.

"To allow disconnects between brand and reputation undermines not only reputation but also sales,
employer appeal, community and government support," says Phil Riggins of Leidar. Furthermore,
as corporations attempt to keep ahead of the competition, the drive to remain relevant in people's
lives promotes a perpetual cycle of higher-quality innovation.

As a result, it is the brand, not the customer, that is at stake. Consumers are protected by strong
brands because, in order to maintain them, businesses must deliver innovative, relevant products
and services in the proper way at competitive rates, as well as a quality guarantee.

 Reason 2: Share success is driven by strong brands, which can be assessed.

Strong stock market performance helps a wide range of stakeholders, including corporations,
individual shareholders, workers, institutional investors, savings institutions, pension funds, and
retirees.

According to Brand Finance, a business valuation and strategy consultancy that has been tracking
the values of the world's top branded companies for over ten years, an investment strategy based on
the most brand-focused companies (those where brand value makes up a high proportion of total
enterprise value) would have yielded a return nearly double that of the S&P 500 average.

While a strong brand isn't the only way to ensure good stock performance, it may assist to reduce
investment risk and protect portfolios. Less risk leads to improved market confidence and financial
audience support, which in turn stimulates and encourages further investment.

Strongly branded businesses are more resilient to economic downturns, with better demand
predictability and more dependable, steady forecasts. With more clarity about revenue and profit,
it's easier to forecast economic returns.

As a result, brands are increasingly being regarded like any other asset, being monitored and held
accountable for a particular amount of return and, more significantly, delivering verifiable benefits
for shareholders. Since 2010, a worldwide brand valuation standard (ISO 10668) has been in place,
which includes a range of appropriate valuation methodologies and procedures.

Reason 3: Brands provide consumers more options and keep the economy competitive.
When there is just one provider to pick from in controlled markets and planned economies, brands
are useless. If consumers are unable to transfer suppliers, one provider will be less motivated to
research and commercialise new ideas.

Brands provide the means of competition in liberalised markets by allowing market participants to
differentiate one rival from another and assisting them in evaluating – swiftly and effectively – one
offer against another.

 Furthermore, brands promote and support competition based on factors other than price, such as
quality, innovation, and reputation. Indeed, competition may centre on all four, making it stronger
as a result.

As a result, most liberalised economies' sectors now provide more variety, greater value, and even
better performance than they did in 2004. Brands are crucial in deregulated markets; without them,
efforts to liberalise markets would fail.

Reason #4: Brands assist the economy in adapting and growing more quickly.
Markets are constantly adapting, which is frequently hastened by technological progress. Brands
provide for a more dynamic interaction between buyers and sellers, allowing marketplaces to
change more swiftly. New and innovative goods are often accepted initially by 'pioneers' and
'opinion leaders,' with their benefits requiring further explanation to reassure the general public.

As a result, brands not only simplify choosing, but they may also serve since a form of 'education,'
as they assist in overcoming buying uncertainty. Brands frequently pique people's interest in new
products and services, causing market disruption in 'crusted' marketplaces.

Overall, brands have a big role in the adaptation and growth process, which is critical in a
competitive economy. Branded items that don't deliver on what customers want will swiftly fade
away, creating way for new, more effective alternatives.

Reason #5: Brands help businesses develop across geographical and cultural boundaries.
Brands assist firms in bridging geographical and cultural divides. Global brands are extremely
valuable to their native countries. This will be especially important after Brexit, when we want to
considerably boost commerce with non-EU nations.

Exports of British products and services to overseas markets are aided by brands, which contribute
to our trade surplus. They support jobs and create economic stability in the United Kingdom.
Failure to develop strong foreign brands has a negative impact on the domestic economy and
represents a missed opportunity.

 Brands are critical to worldwide success and a major source of international competitiveness.
Because they speak a 'international language,' they can assist in bridging cultural divides.

Strong domestic brands, on the other hand, are beneficial because they can provide an effective,
consumer-centric response to overseas competition. Strong brands will attract employees and
business partners to communities at a local level, boosting the economy throughout local areas.

According to reports from the World Intellectual Property Organization (WIPO), emerging
economies appear to be over-investing in branding in order to boost their competitiveness compared
to wealthier nations.

Take China, for example: according to the most recent Brand Z survey from 2017, China now has
thirteen of the world Top 100 brands, up from only one twelve years ago. While some Chinese
companies may not be really global, their value is rising, and they will alter the global competitive
scene.

Reason #6: A strong brand benefits all parties involved.

Branding has grown more important not only for FMCG and retail enterprises, but also for a
broader spectrum of B2B service providers and beyond. They also aid in the definition of 'not for
profit' organisations, charities, governments, and tourism.

Consumers, prospects, supporters, shareholders, legislators, business partners, regulators,

employees, and even competitors benefit from a clear brand strategy because it provides a
foundation from which to communicate purpose and vision to all stakeholders: consumers,
prospects, supporters, shareholders, legislators, business partners, regulators, employees, and even
competitors. The importance of a brand extends far beyond visual identifiers, and it has the ability
to influence company performance in a variety of ways.

Internally, brands have played a significantly more prominent role in the previous few years. They
can assist in attracting and retaining top talent as well as loyal employees.

"Executives appreciate being associated with powerful brands and, as a result, accept much lesser
remuneration at organisations that hold strong brands," says Nader Tavassoli, Professor of

 Marketing at London Business School. According to other study, people who work for organisations
with strong brands are more satisfied with their jobs.

Reason #7: Brands hold companies responsible for their behaviour.

Brands eventually result in more exposure and interaction, which may help sales but also makes a
company more visible and susceptible. As firms want to maintain their brand identity, social media
and other driving factors have forced them to become significantly more open.

Brands assist in ensuring that companies are held accountable for their conduct.
Consumers and journalists alike scrutinise well-known branded firms to see if they meet the letter
of the law and societal expectations, whether it's accounting standards, environmental protection, or
ethics.