ADVANCED COMPETENCE IN ACADEMIC

WRITING AND PRESENTATION

submitted in fulfillment of the requirements for the degree of

Bachelor of Arts
(B.A.)

at the Faculty of Electrical Engineering

of the Fachhochschule Südwestfalen (Campus Soest)
Summer Semester 2023

Submitted by:

Sanket Maharjan

Matriculation Number: 30034808

Study Course: Business Administration with Informatics
E-Mail Address: sank_07@hotmail.com

Submitted to: Catherine Niestroj

Soest, 2023
Table of Contents
Statement of Authorship ............................................................................................................ I
1. Introduction ........................................................................................................................ 1
2. Literature Review............................................................................................................... 1
A. Branding and its importance ....................................................................................... 1
1. Traditional branding elements and strategies .......................................................... 2
2. Digital branding strategies ....................................................................................... 2
3. Non-Fungible Tokens .............................................................................................. 3
3. Theoretical framework and model applicable to branding ................................................ 4
A. Behavioral Sequence Model........................................................................................ 4
B. Moran method ............................................................................................................. 5
4. Comparison of branding using the Behavioral Sequence Model....................................... 5
A. BSM for Baby Boomers .............................................................................................. 6
B. BSM for Millennials.................................................................................................... 6
C. BSM for Generation Z................................................................................................. 6
5. Comparison of brand equity............................................................................................... 7
6. Findings and Analysis ........................................................................................................ 7
7. Discussion .......................................................................................................................... 7
8. Delimitation of study ......................................................................................................... 8
9. Conclusion ......................................................................................................................... 8
10. Recommendation for future research .............................................................................. 8
References .................................................................................................................................. 9
Statement of Authorship
I hereby declare that I am the sole author of this academic paper and that I have not used any
sources other than those listed in the reference list and identified as references. I further
declare that I have not submitted this paper to any other course/module to obtain a grade.

Soest, 30.06.2023
____________________ ___________________
(Place, Date) (Signature)

I
 Impact of Branding on Consumer Behavior and Brand
Equity from Traditional Branding to Non-Fungible
Token Branding
Abstract
The paper starts by clarifying branding and its crucial role for businesses and consumers. It
defines traditional branding and introduces strategies for traditional followed by digital
branding strategies. Moreover, it clarifies Non-Fungible Tokens (NFTs), their emerging
trends and branding implications. Finally, it uses Behavioral Sequence Model (BSM) to
understand consumer behaviour and clarify brand equity through the Moran method.

1. Introduction
A company's brand is its most valuable asset. Consumers often use it as a tool to compare
products and determine their uniqueness (Sasmita & Suki, 2015). This builds trust and
confidence, making the decision-making process easier for consumers and reducing problems
associated with product quality. In addition to branding, brand equity refers to the level of trust
that consumers place in a specific brand compared to its competitors (Sasmita & Suki, 2015).
This trust results in increased loyalty and a willingness to pay a higher price for the brand.
However, traditional branding methods are no longer effective in engaging Millennials and
Generation Z. Understanding how to use branding effectively is crucial as these generations
will play a significant role in the economy once the baby boomers retire.
This paper focuses on consumer behaviour and its impact on brand equity, which are critical
to shaping the future success of any company. It begins by comparing the evolution of branding
to the evolution of the Web. From Web 1.0 to Web 2.0, branding shifted from TV, newspapers,
and placards to social media platforms. With the technology shift from Web 2.0 to Web 3.0, the
focus is shifting towards blockchain and metaverse (Nath, Basishtha, & Dhar, 2014).
Within the blockchain, Non-Fungible Tokens (NFTs) also known as digital assets are moving
brands to a virtual world. Luxury brands, sportswear, beverage, and fast-food restaurants have
started to create and sell NFTs to their customers. It is often at higher prices than the actual
products themselves (Joy, Zhu, Pena, & Brouard, 2022). However, it is uncertain how long this
trend will continue and what the benefits of NFTs are for companies and consumers. Therefore,
this paper compares branding with consumer behaviour through Behavioral Sequence Model
(BSM) to get insight into companies’ and consumers’ shift towards NFT and uses the Moran
method to evaluate brand equity from traditional branding to NFT branding.

2. Literature Review
A. Branding and its importance
Based on Keller (2003), with the increasing complexity of the world, individuals and
businesses have overwhelming choices. Therefore, branding is crucial to distinguish from
competitors and to connect with purchasers. In addition, branding establishes mental
associations that enable them to form deeper relationships with their customers. This strategy
streamlines the decision-making process for customers, allowing companies to charge premium

1
prices to their loyal buyers. In brief, an effective branding strategy allows businesses to thrive
in the marketplace.
To build brand equity and implement branding strategies effectively, it is essential to convey
to customers that there are significant differences among brands within a particular product or
service category (Lane Keller, 2003). The principle behind branding is to make sure that
customers do not view every brand as interchangeable. These distinctions are in the form of
product attributes or benefits. Innovators thrive by continuously changing and exploiting
competition.
1. Tradi琀椀onal branding elements and strategies
According to Farhana (2012), brand elements such as brand names, URLs, logos, symbols,
characters, spokespeople, slogans, jingles, packages, and signage are sometimes referred to as
brand identity. These elements play a significant role in increasing brand awareness and aid in
establishing positive, strong, and distinctive brand associations. By incorporating these
elements effectively, businesses can create a powerful brand identity that resonates with their
target audience resulting in increased brand loyalty and recognition.
When branding was initially introduced, it was used for the association of a specific product or
set of products empowering consumers to identify the characteristics of the product (Farhana,
2012). According to the American Marketing Association, branding set one seller or group of
sellers apart from their competitors either through name, term, sign, symbol, design, or
combination of these attributes.
Grzesiak (2015) explains that traditional branding is based on a one-way communication
approach where advertisers utilize media such as TV, press, and radio to reach a broad audience
and maintain control over the message. This method was applied until the 1900s to establish a
corporate image and communicate the value of the brand through the above-mentioned indoor
medium or conventional outdoor media such as posters, billboards, or leaflets.
2. Digital branding strategies
Brand managers that were reproducing pre-internet marketing strategies on the Internet realized
the ineffectiveness of the unidirectional communication model of mass media for computer-
based settings (Christodoulides, 2009). To achieve success in branding in the age of the internet,
businesses need more than one-sided communication. It needs to foster strong relationship
building, encourage interactivity, and provide individualized experiences. Post-internet
branding is about allowing customers to have discussions about the brand through social media
platforms where they are connected. In addition, they form their own opinions about the
companies and brands, that is commonly misaligned with the brand image, companies desire
to project. This community that is using Web 2.0 applications to obtain what they need rely on
each other, rather than companies. Therefore, moving the balance of power from firm to
consumer.
The emergence of the internet created a pathway where brands could connect with consumers
on an individual and collective level (Christodoulides, 2009). The range of branding mediums
expanded from TV, press, and placards to blogs, widgets, user-generated ads, social media
groups (such as Facebook and Myspace), podcasts, videocasting, Second Life, and video
sharing platforms such as YouTube.

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 3. Non-Fungible Tokens
Non-Fungible Tokens (NFTs) also called digital assets can be bought and sold the same as
physical assets; however, they are intangible in nature (Chohan & Paschen, 2023). The term
“non-fungible” means it cannot be compared with another asset. Therefore, it cannot be
exchanged for another asset. The value of each NFT is determined by its uniqueness. Some
factors that determine the unique identity of NFT are appearance, rarity, and usefulness.
NFT can be considered as proof of ownership for digital assets (Chohan & Paschen, 2023). By
use of blockchain technology, it records the possession right of intangible and tangible items
such as videos, images, event tickets, and real-world artwork. It consists of three distinct
characteristics that make it compatible to resolve proprietary rights issues in digital markets.
Firstly, NFTs are unique and cannot be exchanged as fungible assets such as fiat currency or
bitcoin, whose values are fixed and can be traded for equal value in the same or different
currency. Therefore, NFTs are not just connected to value but also to ownership, commercial
rights, and additional features. Secondly, it is unalterable ensuring the authenticity and integrity
of each token. Lastly, NFTs are transparent as their ownership and properties are publicly
visible once verified and recorded on the distributed ledger.
a) Emerging trends in NFT
There are many types of NFTs projects. These include gaming, metaverses, sport, art, and utility.
The first project, Gaming NFTs can be used in video games such as Trading Card Games (TCG),
Strategy Role-Playing Games (RPG) or any other fun-based games (NonFungible, & L’Atelier
BNP Paribas, 2021). In the second project, Collectibles are tokens that are meant to be collected.
It can include gamification and interaction of collectables with each other or among collectors
and players. The third project, Metaverses are the digital parallel universe that can be accessed
through a computer, virtual reality headset, or a smartphone. It allows users to have unparallel
experiences and can be contrasted with Virtual World Second Life and the current movie Ready
Player One. The fourth project, Sport NFTs are made over by highlighting sports players’ and
teams’ personalities. The fifth project, Art NFTs allow marketplaces, individual artists, or
project to sell or create content in the form of NFT. It could be physical artwork or created by
Artificial Intelligence. Finally, utilities consist of NFT domain names, tickets, and assets that
allow specific rights or access to their owner.

Figure 1 Number of transactions involving a non-fungible token (Adapted from NonFungible, & L’Atelier BNP Paribas,
2021)

Figure 1 shows the number of transactions involving NFT projects. Even though the
transactions involved in NFT decreased from 2018 to 2020, new projects in gaming and sport

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were added in 2020. Moreover, a transaction in the metaverse is in upward trend. It means
Generation Z mostly engages with NFT in the gaming platform, metaverses, sports or using
NFT as collectables.
b) NFT and branding implica琀椀on
Digital replicas of a physical product, visual illustrations of a brand’s logo in the digital world
or a ticket for events are some examples of using NFT as a brand (Colicev, 2022). By moving
the brand to the digital world, a brand can target customers i.e., Generation Z who has a
presence in the virtual world rather than the physical. This strategy allows businesses to boost
their brand recognition. Moreover, branded NFT can also act as standalone brand components
through the exposure of brand elements during the pre-purchase stage (Colicev, 2022). At the
purchase stage, a brand can encourage customers to purchase NFT twin along with the physical
products, enabling cross-selling opportunities. Finally, at the post-purchase stage, companies
can design a system of flexible ownership rights that strengthen perceived ownership of brand
identity. Furthermore, by fostering community at every stage, companies can leverage
customer engagement in NFT communities. At purchase, businesses can offer unique perks and
access to NFT communities and build brand attachment through improved loyalty programs,
myths, and narratives.

Figure 2 NFTs and the stages of the marketing funnel (Colicev, 2022)

3. Theoretical framework and model applicable to branding

A. Behavioral Sequence Model
To gain a better understanding of marketing communications strategy based on how purchasers
go through the decision process, Behavioral Sequence Model (BSM) can be used (Rossiter &
Bellman, 2005). With this model, the main decision stages for Customer Decision Stage can be
outlined. Once the decision stages are evident, players involved (initiator, influencer, decider,
purchaser, and user) in the decision stages from need arousal till usage is determined and the
position of touchpoints to reach customers are discovered. This information is further processed
by knowing the timing of the decision and how the consumer made that decision.

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 B. Moran method
Moran’s approach is centred on monitoring the price elasticity of demand for a brand’s product
(Rossiter & Bellman, 2005). It differentiates between “upside elasticity” and “downward
elasticity” of price elasticity of demand. This segmentation leads to two forms of brand-item
equity: value equity and uniqueness equity. Value equity depends on change in price and is
represented by upside elasticity as shown in Figure 3. A small price reduction allows the brand
item sales to rise steeply. This is because the consumer believes that the product has more
benefits than the price currently offered to them. However, brand item uniqueness does not
depend on price rather it depends on its originality. Since consumers believe the offered product
is irreplaceable. Therefore, customers are loyal to this brand and are willing to pay a premium
price.

Figure 3 Sales changes in response to changes in relative price: hypothetical example (Rossiter & Bellman, 2005)

4. Comparison of branding using the Behavioral Sequence Model

To compare branding with consumer behaviour, Behavioral Sequence Model (BSM) is being
used. The model shows how branding evolved (brand methods of communicating with
consumers) as each generation (Baby Boomers, Millennials, and Generation Z) moved from
Web 1.0 to Web 3.0. It hypothesizes, Web 1.0 users as Baby Boomers, consequently, traditional
branding methods are applied. Web 2.0 users are Millennials, so, digital branding methods are
applied. Finally, Web 3.0 users are Generation Z, therefore, NFT branding methods are applied
for this generation.

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Below are three tables based on this model:
A. BSM for Baby Boomers

Figure 4 Traditional Branding Behavioral Sequence Model (Maharjan, 2023)

Brands communicated brand messaging to Baby Boomers, through television, newspaper

placards, and leaflets that preferred to shop in physical stores.
B. BSM for Millennials

Figure 5 Digital Branding Behavioral Sequence Model (Maharjan, 2023)

Brand awareness is carried out to Millennials while surfing the internet through blogs, and
user-generated ads that prefer shopping through e-commerce websites.
C. BSM for Genera琀椀on Z

Figure 6 Non-Fungible Branding Behavioral Sequence Model (Maharjan, 2023)

Brand messages are communicated to Generation Z, while playing video games, using
augmented reality or virtual reality glasses. Brands can persuade this generation by showing
the benefits of purchasing NFT.

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5. Comparison of brand equity
Brand equity is applied to brand-item equity. It uses the Moran method that divides brand-item
equity into value and uniqueness (Rossiter & Bellman, 2005). Furthermore, from value and
uniqueness, four combinations can be drawn. According to Moran, having high value and high
uniqueness is the most advantageous position. In this position, a brand can use advertising
followed by a promotion. This strategy is also called the ratcheting strategy. With this strategy,
sales respond sharply to very small price reductions. In contrast, having low value and low
uniqueness is an undesirable position. So, businesses need to use R&D to figure out the benefits
that add value and at the same time differentiate the brand. In the case of low value, high
uniqueness, this position is somewhere in the middle and could be made better by broadening
the distribution of the brand item and raising the price to an acceptable amount. Finally, for
high value, and low uniqueness, companies need to look for a superior benefit or invent it
according to consumer demand.
To implement this approach, the use of two Gucci products is used: Gucci sneakers and Gucci
handbags. According to Joy et al. (2022), Gucci Virtual 25, the world’s first virtual sneaker, is
priced at $12.99, which is significantly more affordable than physical sneakers that cost above
USD 600. Additionally, it also states that the virtual Gucci handbag was sold for USD 4115,
which is more expensive than its counterpart. Thus, by applying the Moran method, it can be
concluded that Gucci Virtual 25 has high value and high uniqueness, as there is a sharp decrease
in the price of the Gucci sneaker, while the Gucci physical sneaker has low value and high
uniqueness due to its expensive price and Gucci’s reputation. As for the Gucci handbag, the
virtual handbag is considered to have low value and high uniqueness, since its price is higher
than the physical product, whereas the physical Gucci handbag is regarded as high value and
high uniqueness due to its lower price and strong brand reputation compared to its digital twin.

6. Findings and Analysis

The Behavioral Sequence Model shows the process through which it clarifies how consumer
behaviour shifted with the evolution of technology and branding. This is justified using three
generations (Baby Boomers, Millennials, and Generation Z). While trying to compare
consumer behaviour in the context of web and branding across all three generations, no suitable
data were available. As a result, a hypothetical model is created using Behavioral Sequence
Model.
Moran’s method shows how brand-item equity can be classified based on pricing for value
equity and originality for uniqueness equity. The approach compares virtual and real products
of Gucci product offerings based on Joy et al. (2022) finding.

7. Discussion
Behavioral Sequence Model is constructed for individuals from different target groups (such
as Multi-Brand Loyals, Unfavorable Brand Loyals, or Positive New Category Users).
However, to simplify and to understand consumer behaviour from traditional branding to NFT
branding, each generation is considered as individual and for each generation a separate BSM
is created. This was done to avoid complexity in the model.
In the case of the Moran method, brand-item equity is applied for finding brand equity, since
virtual products and NFT are digital items from brands. This finding could be used to
understand the value equity that helps in selling the unit product at a faster pace, when the price

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fall below the actual price or implied price without compromising the overall profit margin or
to understand uniqueness equity to safeguard against sales declination while there is a price
increase, ultimately, boosting profits at marginally decreased sales (Rossiter & Bellman, 2005).

8. Delimitation of study
BSM does not consider individuals from target groups rather, it considers each generation as
an individual. In addition, while comparing the price of Gucci products, it does not consider
the reason behind the purchaser’s motivation to purchase the item at that given price.

9. Conclusion
Branding started from one-way communication during Web 1.0 and evolved to interactive
communication in Web 2.0. With the emergence of Web 3.0, renowned luxury brands such as
Gucci started to sell NFT at premium prices. This shows that, with the advancement of
technology, each generation adapts to the technology that is being introduced and has benefits
associated with their behaviour. Therefore, in this highly competitive market, understanding
consumer behaviour is critical for companies’ success. Companies that adapt to new technology
either by being first movers or competitive followers will determine companies’ survival and
ultimate success in the long run. These companies can persuade their loyal customers to
purchase their products at premium prices, allowing companies to profit even with the low
sales margin.

10. Recommendation for future research

Brand equity can also be applied to corporate brand equity. It uses Interbrand’s brand valuation
procedure that is accepted by the world’s leading stock markets (Rossiter & Bellman, 2005, p.
18). This would give insight into the brand’s evaluation during different time intervals allowing
us to understand the effects of branding on brand equity for different generations with the
change in branding approach and technological advancement.

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