Customers' Perceptions of Brand Positioning of Home Appliances, Using Perceptual Map Technique

Transcription

1 International Journal of Management Perspective Vol.1, N. 4 Pp Customers' Perceptions of Brand Positioning of Home Appliances, Using Perceptual Map Technique Gholam Hosein Khorshidi*, Ali Fayyazi Azad** 1 Abstract One important concept which plays a critical role in marketing is positioning and especially brand positioning. In recent years, the increasing amount of various types of imported products in home appliances industry and the protective policies regarding domestic products set by the Iranian government have led to a new competitive phase in this industry. In this study, for identifying the competitive position and status of the companies' brands which are active in home appliances industry, Emersun Company (Domestic producer, Iranian Brand) and LG Company (Korean Brand) were selected to be assessed through the perspectives of their customers, their most valuable asset. Here, an attempt has been made to draw a perceptual map of Emersun and LG companies' brands based on fundamental concepts of the marketing science. A number of retailers of two companies' in three areas; Shari'ati, Amin-Hozoor, and Jomhoori Streets were selected through stratified sampling.then 390 customers of these retailers were randomly selected. Questionnaires were used as research instruments to get customers views. The questionnaire's validity was established by banking experts and marketing university instructors, and its reliability was checked by Cronbach s a (Alpha) Coefficient. According to the results obtained from the tests and the perceptual maps, LG Company is found to have a better position in comparison with Emersun Company in the three marketing mix variables except price. Thus, it could be concluded that LG Company is in a better position than Emersun. Accordingly, the policy makers of these two companies are recommended to take the results of this study into consideration and draw perceptual maps on a regular basis to strengthen their competitive positions. Keywords: Positioning; Brand; Perceptual Map; Home Appliances. * Associate Professor, Shahid Beheshti University ** MA, Shahid Beheshti University (Corresponding Author).

2 22 International Journal of Management Perspective 1. Introduction With passing the time, the global conditions of humans lives have unbelievably changed. Such changes in markets have resulted in new rules. Studies show that myriad of factors influence customers decisions. Through an organizational perspective, such factors are divided into two broad categories: factors under the control of the organization, and factors out of the control of the organization. The most significant factors under the control of the organization are: marketing mix, which include product, price, distribution, and promotional activities. Organizations utilize these in their target markets to stimulate the desired reactions to influence demands [15]. In fact, companies, with the help of their marketing mix, are able to trace and pursue requests and views of a product, and design that product, service, or idea in a way that best serves these opinions [12]. From another perspective, nowadays, experts regard lack of knowledge of customers and markets as the main reason for companies losses. Accordingly, most companies, today, need to be market-oriented, pay close attention to customers wants and needs, and act flexibly to succeed in the future [9]. From another point of view, electronic home appliances industry plays a crucial role in the economic system of any country. Firstly, there is an increasing need for products of this industry, which have a direct relation with improving life quality, and population growth. Secondly, employees in this industry, at all levels (including low-level factories producing equipments and supplying raw materials), constitute a large section of the working force of society. Nonetheless, with the imports of goods, the market share of some of the Iranian companies has decreased, in a way that some companies have closed down, some others are operating below their breakeven points, and others are trying to keep their share in the current market. Additionally, the success of a product in a specific target market depends on how well the brand of that product finds a place in the target market, or, in other words, what place or position it can gain in the target market [15, 17]. The process of positioning helps a company select the appropriate position and maximize the chance of success for its brand [2]. In actual fact, domination over the market is only possible when we know the market, when we know who our customers are and what they want, and when we can find a place in our customers minds. Positioning provides a company with the opportunity to differentiate itself, its products, and its brand and to fulfill the needs of its customers better than its competitors [3, 6]. 2. Literature Review Positioning. Positioning means finding a place for a product in the customers minds in the target market, with regard to the competing companies products, in a clear, outstanding, and desired manner [10]. Positioning is a path that every company needs to step in right from the beginning. The main reason for this fact might be that nowadays customers are facing a maelstrom of advertisements and information [13]. In today s world where millions of dollars are daipyim spent advertising, customers are not able to revaluate a product after each time that they use it [8].

3 Customers' Perceptions of Brand Positioning of 23 Perceptual Map. Perceptual maps have been used as a strategic management tool since These maps have unique potentials to simplify the complex relations between market competitors and customers decision making criteria. A perceptual map is a process in which the perceptions in the minds of the respondents are revealed [4]. This map shows the respondents perceptions of a company, products, competitors, etc, and it is usually depicted two-dimensionally [5]. Perceptual mapping shows the perceptions of the customers in two dimensions in a way that a manager can easily find out what position his brand and product hold in the minds of the target market customers in comparison with his competitors [1].Overall, a perceptual map draws a picture or map of the market. This map shows how a product with a specific feature, such as fame, price, quality, etc, is attended to in the market. It also shows which products are competing with each other in the customers opinions and how one product can reach the highest level of sale and customers preference [7]. 3. Problem Description The main problem of this research is to survey the brand positioning of Iranian versus imported Korean home appliances from the perspectives of the residents of Tehran, using perceptual map technique (the cases of Emersun and LG freezers and refrigerators). Determining and gaining a suitable position in the customers minds is of high importance. Therefore, recognition of customers wants and opinions can make a company aware of the position of their product and brand in comparison with their competitors. It also further helps a company to take the required action to maintain its status quo or modify it [11]. As a consequence, the key question of this study is whether there is a difference between the opinions of the Tehrani customers towards the positioning of the brands of LG and Emersun refrigerators/freezers. Additionally, the secondary questions of this study are: 1. Is there a difference between the opinions of the Tehrani customers of LG and Emersun refrigerators/freezers, regarding the product itself? 2. Is there a difference between the opinions of the Tehrani customers of LG and Emersun refrigerators/freezers, regarding the prices? 3. Is there a difference between the opinions of the Tehrani customers of LG and Emersun refrigerators/freezers, regarding the distribution system and selling channels? 4. Is there a difference between the opinions of the Tehrani customers of LG and Emersun refrigerators/freezers, regarding the promotional activities?

4 24 International Journal of Management Perspective 4. Methodology Research Model. In order to answer the research questions, a conceptual model has been adapted from Walker Positioning Model [15]. With regard to the fact that this study aims to survey the current position of the brands of LG and Emersun products (refrigerators/freezers), the following suggested positioning model, which is adapted from Walker s, is presented below: Chart 1. The suggested research model of this study Data Collection Instruments. Two questionnaires have been used in this study as the main instrument of data collection. The first questionnaire is comprised of a set of the most important criteria effective in positioning the brands of refrigerator/freezer products. These criteria have been obtained via Delphi Method. Accordingly, an elite group of Home Appliances Industry experts, marketing masters, and specialists familiar with refrigerator/freezer market were chosen. The second questionnaire was designed based on the opinions gathered through the first questionnaire and was distributed among the customers of LG and Emersun companies. This second questionnaire was formed from 4 marketing mix variables and 19 questions, which are discussed below. Besides, a five-point Likert Scale was used in this questionnaire.

5 Customers' Perceptions of Brand Positioning of 25 Primary Variables Product Price Promotional Activities Distribution Table 1. The primary and secondary variables of the study Secondary Variables The company s reputation and popularity The variety of sizes, designs, and colors of refrigerators/freezers The durability of the refrigerators/freezers The quality of the motor of the refrigerators/freezers The beauty and the appearance of the refrigerators/freezers The quality of after-sales service of the refrigerators/freezers The guarantee duration of refrigerators/freezers Creditability (having standard marks, certificates, and energy labels) The price level of refrigerators/freezers TV commercials The company s support from social or other events (sports, charities, etc) Trusting in the company s commitment in holding lotteries and awarding the prizes The company sellers treatment of the customers The company s print and outdoor advertising activities (newspapers, magazines, billboards, catalogues, etc) The quality of the company s relationship with the customers The location of the company s agencies The availability of the products in the agencies at the time of purchase Easy accessibility to the accessories of the product (if necessary) The wide geographical coverage of the company s agencies Statistical Population and Sample. The statistical population of this study is comprised of the customers of LG and Emersun retailers in the three areas of Shari ati, Amin Hozoor, and Jomhoori Streets. The sample size is, 384 customers of LG and Emersun, which selected by randomly sampling survey. thses customers visited any retailers of these two companies in the three areas of Shari ati, Amin Hozoor, and Jomhoori Streets at the time of doing this research, were randomly chosen. Since it is always possible that a number of the filled out questionnaires do not contain the required information for use in the research analysis, or that a number of the questionnaires are not sent back to the researchers, or are lost, 400 questionnaires (200 for the customers of each of the two companies) were distributed. Finally, from among the returned questionnaires, 390 (195 for each company) were complete and analyzable. Reliability and Validity of the Questionnaire. To establish the validity of the questionnaire, it was handed to 6 university instructors (being experts in the science of marketing management and statistics) and also a number of experts in the field of home appliances industry. The pretest was run by a sample of 40 customers, who were chosen from the population based on the method of simple random sampling. Using SPSS, Cronbakh alpha for the variables of this study was calculated to be.868, which is regarded as a satisfactory reliability. 5. Results and Discussion In this section, the technique of perceptual map was used to determine both the brands' positions according to the customers perspectives, and answering the primary research question. At this stage, the secondary variables' mean calculated by SPSS was used to draw perceptual maps reflecting the brands' positions of both

6 26 International Journal of Management Perspective companies in customers view. At the end, on the basis of two-by-two surveys of four primary variables, six perceptual maps were drawn. The current positions of the brands of LG and Emersun refrigerators/freezers are shown in the above maps. What is readily evident in all the above perceptual maps is that the refrigerators/freezers of the both companies are, from the customers perspectives, on ideal positions on the maps. The difference in the positions of the two brands in all maps will be analyzed through statistical tests.

7 Customers' Perceptions of Brand Positioning of 27 Testing the Hypothesis and Answering the Research Questions The Main Research Question. Is there a difference between the opinions of the customers living in Tehran towards the positioning of the brands of LG and Emersun refrigerators/freezers? Table 2. The results of Man-Whitney U Test, comparing customers perceptions The Primary Variable The Results of Comparing Customers Perceptions Z Asymp. Sig. (2-tailed) Product LG Better than Emersun Price Emersun Better than LG Distribution LG Better than Emersun Promotional Activities LG Better than Emersun Based on the results of Man-Whitney U Test, H0 is rejected with 95% certainty, since the calculated number of the variables is less than the chosen.05 alpha decision level, and H1 (i.e. existence of a significant difference among the means of the customers opinions' rankings) is confirmed. Thus, there is a difference between the opinions of the residents of Tehran toward the positioning of the brands of LG and Emersun refrigerators/freezers. As it is shown in Table (2), the LG product has a better position than Emersun's in all the marketing mix, except the price. Answering the Second Research Questions Question 1: Is there a difference between the opinions of LG and Emersun customers of refrigerators/freezers, regarding the product? Table 3. The results of Man-Whitney U Test, comparing customers perceptions of the product Based on the results of Man-Whitney U Test, H0 is rejected with 95% certainty, since the calculated number for the variables is less than the chosen.05 alpha decision level, and H1 (i.e. existence of a significant difference among the means of rankings of the secondary variables of the product) is confirmed. Therefore, a difference between the opinions of LG and Emersun customers regarding the product exists. With regard to the table above, LG Company is in a better position than Emersun according to the secondary variables of the primary variable of the product. LG's appropriate knowledge of the market, orienting the activities towards customers needs, and also making an attempt to offer modern products and superior

8 28 International Journal of Management Perspective services in line with the world market are the reasons for this superiority of the LG Company. Question 2: Is there a difference between the opinions of the customers of LG and Emersun refrigerators/freezers, regarding the promotional activities? Table 4. The results of Man-Whitney U Test, comparing customers perceptions of the promotional activities Based on the results of Man-Whitney U Test, H0 is rejected with 95% certainty, since the calculated number for the variables is less than the chosen.05 alpha decision level and H1 (i.e. the existence of a significant difference between the means of the rankings of the secondary variables of promotional activities) is confirmed. Therefore, according to the above table, LG Company is, on the whole, in a better position than Emersun Company regarding promotional activities. Among the reasons for this higher position are LG's considerable investments in different kinds of advertising, paying attention to customers, and also holding sports events. Emersun Company s focus on TV commercial motto Beautiful, Spacious, and Reliable can be considered as one of the effective factors in this area. Question 3: Is there a difference between the opinions of the customers of LG and Emersun refrigerators/freezers, regarding the distribution? Table 5. The results of Man-Whitney U Test, comparing customers perceptions of the distribution

9 Customers' Perceptions of Brand Positioning of 29 Based on the results of Man-Whitney U Test, H0 is rejected with 95% certainty, since the calculated number for the variables is less than the chosen.05 alpha decision level, and H1 (i.e. the existence of a significant difference between the means of the rankings of the secondary variables of distribution) is confirmed. Therefore, there is a difference between the opinions of the customers of LG and Emersun companies, regarding the variable of distribution. In the items where LG Company is in a better position than Emersun, the difference is eye-catching, while in the items where Emersun Company is in a better position than LG, the difference is small. After all, according to the table above-with regard to distribution- LG Company is in a better position than Emersun. Emersun factory is located near Tehran, and this could be regarded as a privilege for this company. On the other hand, the number of LG representatives throughout Tehran (which are almost three times more than Emersun agencies) could be considered as one of the reasons for the mentioned results. Question 4: Is there a difference between the opinions of the customers of LG and Emersun refrigerators/freezers, regarding the price? Table 6. The results of Man-Whitney U Test, comparing customers perceptions of the price The Variable The Results of Comparing Customers Perceptions of the Price Z Asymp. Sig. (2-tailed) The price level Emersun Better than LG Based on the results of Man-Whitney U Test, H0 is rejected with 95% certainty, since the calculated number for the variables is less than the chosen.05 alpha decision level and H1 (i.e. the existence of a significant difference between the means of the rankings of the secondary variables of price) is confirmed. Therefore, there is a difference between the opinions of LG and Emersun customers, regarding the price. As it is shown in Table (6), Emersun Company is in a better position than LG. The prices of Emersun products are almost half the similar LG products' prices. Among the reasons for this price discrepancy are fairly cheap raw materials and workers and also the supporting policies of the Iranian government toward Iranian producers. Other Findings. This section deals with the research findings which have not been discussed before. Using the Friedman Test, to recognize the strengths and weaknesses of LG and Emersun refrigerators/freezers, all the secondary variables are ranked here. Table (7) is reporting the result of the signification test of the difference between customers' perspectives. For the sake of brevity, separate tables of rankings for each variable are not included. Table 7. Fridman Test n 195 X² Degree of Freedom 18 Level of Significance.000

10 30 International Journal of Management Perspective Emersun Refrigerator/Freezer A) The product: Based on the rankings of the variable of product, the secondary variables are ranked as follows (from the best to the worst status): reputation and popularity (1 st ), the variety of sizes, designs, and colors of the product (2 nd ), the beauty and the appearance of the product (3 rd ), the guarantee of the product (4 th ), the quality of after-sales services of the product (5 th ), the quality of the motor of the product (6 th ), the durability of the product (7 th ), and creditability (having standard marks, certificates, and energy labels) (8 th ). B) The Promotional Activities: Based on the rankings of the variable of promotional activities, the secondary variables are ranked as follows (from the best to the worst status): TV commercials (1 st ), the company sellers treatment toward the customers (2 nd ), the quality of the company s relationship with the customers (3 rd ), the company s print and outdoor advertising activities (newspapers, magazines, billboards, catalogues, etc) (4 th ), trusting in the company s commitment in holding lotteries and awarding the prizes (5 th ), the company s support in social activities or other events (sports, charities, etc.) (6 th ). C) The Distribution: Based on the rankings of the variable of distribution, the secondary variables are ranked as follows (from the best to the worst status): easy access to the accessories of the product (1 st ), the availability of the products in the company's official stores (2 nd ), the wide geographical coverage of the company s representatives (3 rd ), and the location of the company s official stores. (4 th ). LG Refrigerators/Freezers A) The Product: Based on the rankings of the variable of product, the secondary variables are ranked as follows (from the best to the worst status): the quality of after-sales services of the product (1 st ), reputation and popularity (2 nd ), the beauty and the appearance of the product (3 rd ), the quality of the motor of the product (4 th ), the variety of sizes, designs, and colors of the product (5 th ), creditability (having standard marks, certificates, and energy labels) (6 th ), the durability of the product (7 th ), and the guarantee of the product (8 th ). B) The Promotional Activities: Based on the rankings of the variable of promotional activities, the secondary variables are ranked as follows (from the best to the worst status): the company s print and outdoor advertising activities (newspapers, magazines, billboards, catalogues, etc) (1 st ), the company s support in social activities or other events (sports, charities, etc) (2 nd ), the quality of the company s relationship with the customers (3 rd ), the company sellers treatment toward the customers (4 th ), trusting in the company s commitment in holding lotteries and awarding the prizes (5 th ), and TV commercials (6 th ). C) The Distribution: Based on the rankings of the variable of distribution, the secondary variables are ranked as follows (from the best to the worst status): the wide geographical coverage of the company s representatives' (1 st ), the location of the company s official stores (2 nd ), easy access to the accessories of the product (3 rd ), and the availability of the products in the company's official stores (4 th ).

11 Customers' Perceptions of Brand Positioning of Conclusions and Future Works The results of this study shed light on the strengths and weaknesses of LG and Emersun refrigerators/freezers from the customers perspectives. There is a significant difference between the customers opinions regarding the position of the brand of LG and Emersun refrigerators/freezers in a way that, except for the price, LG Company is in a better position in comparison with Emersun Company. Using the perceptual maps in this study, these two companies can make the appropriate decisions (some of which are presented as recommendations below) to promote their refrigerators/freezers' brands. For instance, the longest distance between the companies is seen in product and distribution, product and promotional activities, and promotional activities and distribution (charts 2, 3, and 6). This shows LG's superiority over Emersun Company in those three sections. The shortest distance between the companies, on the other hand, is seen in product and price, price and promotional activities, and price and distribution (charts 4, 5, and 7). It is worth mentioning that Emersun Company s superiority over LG Company concerning price has resulted in the reduction of the distance in those three sections. Recommendations Made on the Basis of the Results of the Study to Improve the Positioning of LG and Emersun Refrigerators/Freezers Recommendations to LG Company: -Should apply different types of pricing strategies, such as offering discounts -Should Pay attention to the principles of stock management and storing products and accessories -Should put more emphasis on TV commercials for refrigerators/freezers Recommendations to Emersun Company: - Should improve the quality of the products and accessories - Should focus more on after-sales services and improving the quality of the mentioned services - Should increase the number of official stores and after-sales service offices - Should take advantage of other promotional activities, such as outdoor advertising and sales promotion - Should model after the products of successful companies in the market Regarding the vast domain of marketing research and the importance of perceptual map technique in representing the status of Iranian market in various industries, it is recommended that researchers carry out the applicatory research by using this technique and its different branches in other industries.

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