For many reasons, consumer behavior is crucial in business management. From the
marketing perspective, a good understanding of consumer behavior is required for effective business analysis and forecast that correctly identifies why consumers prefer a particular product, service or brand in a highly competitive market.
According to Antonides and Van Raaij (1998), consumers’ purchasing habits are constantly changing. It is therefore necessary for retailers and manufacturers to regularly assess consumers’ spending pattern and utilize available data to produce innovative products/services as well as improve communication, distribution and marketing channels, which are prerequisites for achieving consumer satisfaction, market visibility and sustainable growth.
Although some free-thinkers argue for the importance of informing end-users about the alternatives open to them in the competitive market, consumption can be seen as “concrete, physical and observable behavior” like the purchase of snacks. By contrast, consumer behavior includes mental operations, which are not directly observable, like a decision to engage in low-fat dieting and to reject cakes and snacks (Kotler & Armstrong, 1999).
Additionally, consumer behavior can be impulsive like for an example, an order in a bar. It is therefore a habitual behavior like buying the same brand every time (loyalty) or taking the same train to work every day.
Consumers can be loyal toward different objects: a project group, a brand, a convenience store etc. This is a reflection of consumers’ satisfaction toward different objects, and this satisfaction may lead to brand loyalty, according to Söderlund (1997).
The word brand is derived from the Old Norse word brand, which means “to burn” as brands were and still are the means by which owners of livestock mark their animals to identify them (Wiley, 1992). It is the same for 21st century brands; products are marked so the consumers can identify them.
According to Melin (1999), a consumer’s relationship to a specific brand can over time develop to brand loyalty. The consumer will choose the specific brand and purchase it regularly. By creating a strong personality and identity, the brand will achieve product differentiation and, eventually, maintain long-term market visibility notwithstanding the industry’s competitiveness. It is
the brand that in the first place creates the personality and identity for a product but quality also has a large impact (Keller, 2003).
Brand Equity is an important conception within the marketing area and corresponds to the values that a product associates by carrying a certain brand. Aaker (1991) points out the importance of the components constituting Brand Equity; brand loyalty, name awareness, perceived quality, brand associations and other proprietary brand assets− patents, trademarks etc.
We have decided to make a limitation and only explain perceived quality and brand loyalty, because the other parts of brand equity are outside our dissertation’s framework and we find them irrelevant for this work.
Brand loyalty of the consumer base is often the core of a brand’s equity. It reflects how likely a consumer will be to switch to another brand, especially when that brand makes a change, either in price or in product features (Aaker, 1991). A brand generates a quality signal to the consumers, which in return can lead to brand loyalty (Keller, 2003). The level of consumer satisfaction is connected to the consumers’ expectations and experiences but is also affected by the image and the reputation the product has (Bergman & Klefsjö, 2003).
Quality is a very important factor for the consumers and their choice of product . It can be strong enough to lead to brand loyalty (Sörqvist, 2000).
The quality concept has changed over time but was originally defined as “in accordance with demands and specification.” Today, the most common definition of the quality concept is “ability to produce or provide unique goods/services that meet consumers’ needs and expectations” (Sörqvist, 2000, p 11). This involves “doing things right” and “doing the right thing.”
Consumers’ expectations will also influence how they experience the product quality (Sörqvist, 2000). Perceived quality, according to Aaker (2002), reflects a measure of “goodness” that spreads over all elements of the brand like thick syrup.