Keywords: Brand decline, Persian Caviar Company, structural equations, marketing

Transcription

1 Factors affecting the brand decline and ways of coping with it Amin Faramarzi pour M.A student of Marketing Management, Department of Management, Kish International Campus, University of Tehran, Kish Island, Iran Dr Mohammad Haghighi Associate Professor, Department of Business Administration,University of Tehran, Abstract: This study seeks to identify the factors affecting the brand decline in Persian Caviar Company. Therefore, the information of 150 consumers, who used the caviar products, is collected and analyzed using the exploratory factor analysis, confirmatory factor analysis and structural equations. The research results indicate that the high prices, poor quality and competitive activity are among the factors which have positive impact on the brand decline. It is also found that the appropriate marketing can prevent the brand decline. Based on the obtained results, there is no significant correlation between the way of packaging and the rate of access with the brand decline. Keywords: Brand decline, Persian Caviar Company, structural equations, marketing 1- Introduction The research on consumer behavior investigates the attitude, way of selection, purchase, use and consumption of goods, service, ideas and experiences by individuals, groups and organizations to meet their needs and desires. It is not simple to understand the consumer behavior. The customers may express their needs and desires in a way, but act differently. They may be unaware of their inner deeper motivations or react to effective factors which change their opinion at the last moment. However, the marketers should investigate their customers' demands, subjective and buying perceptions, and their buying behavior. The marketers should know the mental effects of market brands on the consumers' behavior and attitudes as well as how the customers make decisions about buying a certain brand in order to achieve the success (Ismail et al, 2006) because the customers select the products with regard to their knowledge about various brands; on the other hand, the producer seek to build the loyalty in their customers to their brands (Esen Gurbuz, 2008). A brand will become successful if the brand managers have a proper understanding of its constituting assets. Building the motivation in customers to involve them in strengthening and developing a brand is a way which leads to the greater efficiency and effectiveness. The customer engagement and involvement in works, product or service differentiation, and admiring the people instead of inciting them to buy, and giving the reward for purchasing a product all lead to the customer participation in building and strengthening a brand (Anderson et al, 1997). The current era contains the accelerating and unpredictable changes, and the companies are faced with the toughest competitive situations, which have never experiences before, due to the factors such as the uncertain boundaries between markets, fragmentation of markets, shorter product life cycle, rapid change in customer buying models, and more aware and knowledgeable customers (Wong and Shoal, 2002). The brand maintenance and development is one of the perennial measures of companies, but 1

2 some of the top brands have been removed or weakened in various markets of Iran in recent years. This condition is certainly due to numerous reasons and we should think about the revival of brand. Conducting the various studies and benchmarking other countries and investigating the way of dealing with the brand crises and overcoming them or reviving the brand, the researchers and consultants in marketing park of Iran have achieved the results and gave these localized factors to consulted companies and these companies have been able to control most of the damages to brands as a result of internal factors (e.g. advertising, production, marketing, etc.) and external factors (e.g. customers, political, social, economic, and environmental factors, etc.) with respect to these components. However, the brand revival is a difficult process which treats the brand and is cost and time consuming. The prevention of brand decline is the proposed solution by the consultants in marketing park of Iran; and three issues, namely, the consumer recognition, creating the differentiation and innovation, and re-position of brand in minds customers' minds, should be investigated for reviving the brand in the case of weakness in brand. The brands are always influenced by a combination of internal and external environmental factors including the weak advertising and marketing, economic stability of company and customers (Moven, 2007). Nowadays, due to the importance of brand concept in customers' purchase, some of the experts have considered is as a full product and believe that the customers often buy the brands instead of products. The preparation and consumption of caviar has the historical roots, and there are even the signs of carrying the sturgeons after salting from the Caspian Sea in Iran to Ekbatan. Caviar is one of the most important export products in the fishery sector. According to the statistics, the caviar production has been declining over the last twenty years. Due to the disturbed catching conditions and caviar production in the Caspian Sea after the collapse of the Soviet Union and the intensification of its decline because of the excessive catching and fishing by the newly independent countries, the discussion of producing the farmed sturgeon was raised and the successful research and pilot practices were conducted in 2010, but none of those successes were as much as the several hundred percent of reduction in Iranian caviar. In the case of continued such this situation, the sturgeon will become extinct in the near future. Currently, ninety percent of the world's sturgeon is living in the Caspian Sea and they have a negative population growth and are highly exposed to the extinction. Four hundred tons of caviar is demanded in the world annually, but due to the disturbed ecosystem of the Caspian Sea, its global production does not exceed one hundred and twenty tons. Therefore, it is important to identify the factors affecting the decline of caviar industry. An overview of changes in the manufacture and export of caviar in recent years indicates the turmoil of current situation in this industry. Due to the reduced supplies of caviar in recent years, the Convention on International Trade sought to ration catching the sturgeon and exporting the caviar from the Caspian Sea in 1998 for the endangered species of the United Nations (Sites). Thus, the importance of understanding the factors affecting the specific features of this industry has been increased and it is essential to conduct a variety of studies in this field. The study is conducted with the aim at investigating the causes and factors affecting the decline of caviar industry.

3 2- Brand The brands may have the short or long life time; the circumstances may be created in the market under which a company cannot maintain its brand. When a brand cannot be revived any longer, the best way is to exclude it from the market. The companies should evaluate the health of their brands considering the changing economic conditions. The life of a brand can be increased in the case of taking special measures. According to the responsibility of any company, it should identify at what stages of life cycle its brand(s) are and whether they can be revived or not. According to the marketing managers' current problems, their efforts to create and maintain the brand have been without planning, and because of the lack of knowledge about the features of brand and the proper methods of brand management, they cannot effectively link the product with a brand. (Herremans, 2000) According to Hamidi, the features of a successful brand are the superior quality, consistency with consumer needs, and the high competition with domestic and foreign competitors' products, but according to the leading causes of brand quick decline and death, the companies have only introduced themselves as the valuable brands through the advertising instead of planning or have not continued these efforts, which are often too costly, after introduction as a brand. Furthermore, the loss of ability to compete with domestic competitors or export products as the result of instability in the local major decisions is among the reasons for the death of a brand. There are numerous dangers for a brand decline; some of them are as follows: (Hamidi, 2013). 1. Using the strong advertising; 2. The lack of precise understanding of consumer and actor's expectations and taking the measures based on our perceptions and imagination; 3. Emphasis on the competitive and normal aspects; 4. Selecting the items which are unimportant to consumers and will not lead us to win in a competition. 5. The failure to prove an important benefit and assuming it approved Aaker has summed up the brand equity in five dimensions: The brand loyalty, awareness, associations, perceived quality and other exclusive assets of brand. Claire has discussed the brand equity (brand knowledge) in the form of brand image and awareness. Both authors have emphasized on the similar aspects; both have focused on the importance of brand awareness and have raised it as the hypothesis of creating the strong brand. The quality dimension is discussed in both definitions, but Aaker has explicitly discussed it. Claire has considered the perceived quality as a component of brand image, and discussed it in the form of benefits and features and at a more abstract level (Seyed-Javadin and Shams, 2007). The dimensions of image or brand associations are seen in both definitions, but Claire's definition of brand image is broader, so that according to his definition, the brand image includes all "customer brand perception which is reflected through the associations that are created in his mind". The brand loyalty is one of the differences between these two definitions. As Aaker has considered the brand loyalty as a factor for determining the brand equity, Claire has taken into account it as one of the consequences of strong brand and brand assets (Anselmsson, 2007). According to another definition, the brand equity is defined as the customer loyalty and brand image. According to Farquhar (1989), the brand equity is the incremental benefit or value added which is added to product through the brand name (Smith, 2007). 3

4 3- Research methodology This study is applied in terms of objective and has the survey type according to the data collection method. It is correlative in terms of data collection and is done through the structural equation modeling (path analysis). The library and survey methods are utilized for data collection, so that the library method is used in the theoretical section for designing the questionnaire, and the field method (questionnaire) is applied for data collection. The statistical population of research consists of all consumers who consumed the products of Persian Caviar Company. The sampling has cluster and random method and the samples are selected by visiting the caviar dealerships in Tehran City. The minimum sample size is equal to 150 according to Morgan Table. 10 caviar dealerships are studied in Tehran. This study applies the descriptive and inferential statistics to analyze data, so that each variable is initially described through SPSS software in tables, graphs and as the statistical indices, and then the structural equation modeling, Chi-square test, SPSS and LISREL software are utilized for data analysis, hypothesis test, and generalization of results from sample to statistical population. The research model is estimated according to Figure 1: 4- Research Findings Figure 1- Conceptual model of research 4-1- Exploratory factor analysis of factors affecting the brand decline Different measurement tools including the exogenous factors are utilized to assess the factors affecting the brand decline. On this basis, a set of 22 items are extracted and written as a part of research questionnaire. Afterwards, the exploratory factor analysis is performed on all variables through SPSS software, and then the results of exploratory factor analysis are described on the factors influencing the brand decline. 4

5 The sampling adequacy should be examined to confirm whether the set of research data is appropriate for factor analysis or not. Kaiser-Meyer-Olkin (KMO) index or Bartlett's test can be applied in this regard. To approve the sampling adequacy, the KMO index should be higher than 0.6 or the Bartlett's test should be significant. The results of KMO-Bartlett test are presented in Table 1. According to the results, the stages of exploratory factor analysis can be conducted on the data. The amount of KMO index confirms the sampling adequacy and the confidence level of zero for Bartlett's test also indicates the suitability of factor model. Table 1- Results of KMO-Bartlett for factors affecting the brand decline Kaiser-Meyer-Olkin (KMO) index Bartlett's test Chi-square statistic Degree of freedom 231 Significance level At the next stage, we should identify the number of latent factors. Therefore, the Table 2 indicates the results of determining the number of latent factors based on the eigenvalues. The column of eigenvalues indicates six factors with eigenvalues greater than 1, thus the proposed factor structure will have 6 factors which explain about % of variance and this is a reasonable amount. Table 2- The total explained variance for factors affecting the brand decline Factor Total Eigenvalues Percentage of explaining the variance Percentage of explaining the cumulative variance The Scree Plot is another way of determining the number of latent factors and it is shown in the following figure. This plot also indicates the presence of 6 latent factors which are defined according to horizontal axis in terms of the fracture site. 5

6 Figure 2- Scree plot for determining the number of latent factors affecting the brand decline The final structure of factors is presented in rotated matrix. Table 3 shows a matrix which contains the proportion of variable variance explained by factors. The rotated factor matrix could put the variables in 6 factors. The results of this matrix are the bases for grouping the variables, and thus a number of variables, which have high factor loadings (greater than 0.7), are allocated to each factor. Item Table 3- Matrix of factor loadings after rotation of factors affecting the brand decline Marketing Rate of access Low quality Factors Competitors' activities Packaging method High price s s s s s s s s s s s s s

7 Item Marketing Rate of access Low quality Factors Competitors' activities Packaging method High price s s s s s s s s s The appropriate factor loadings indicate the proportion of factor structure, and they do not induce the need to remove any item in this questionnaire. Based on the distributed variables in each factor and according to the available theoretical literature and the concept of items, the six factors are called the marketing, rate of access, low quality, competitors' activities, packaging method, and high price Confirmatory factor analysis of factors affecting the brand decline Despite the fact that the exploratory factor analysis of structure for the factors affecting the brand decline proposes the factor structure with 6 factors for this structure, it is better to conduct the confirmatory factor analysis by measurement model in LISREL software in order to ensure that the factor structure is fitted with collected data, and also the adjustments should be made on the model in order to connect these factors with dependent variable with the least possible difficulty at the next stages of testing. Table 4 shows the English symbols of variables applied in enablers of service agility. Table 4- Symbols of factors affecting the brand decline Variable Rate of access Low quality Competitors' activities Packaging method Marketing High price Applied symbol in model Access Quality Activity Packaging Marketing Price The model indices are shown in Table 5. These indices should range from 0 to 1, and the closer to 1, the more appropriate model. The amounts of these indices are appropriate in this study. Therefore, the model is also acceptable in this regard. Given that the indices of model fit indicate the goodness of fit, it can be concluded that an appropriate model is 7

8 estimated. Therefore, the model has desirable proportion to collected data. Thus, the fit of final model is approved for measuring the factors affecting the brand decline. Table 5: The values of model fit for the factors affecting the brand decline Indices Index Value Comparative fit index CFI 0.92 Incremental fit index IFI 0.92 Goodness of fit index GFI 0.90 Adjusted goodness of fit index AGFI 0.90 Bonett- Bentler index or normed fit index (NFI) NFI 0.90 Figure 3- Factor loadings for the factor affecting the brand decline 8 The output results of LISREL software for fitting the factors influencing the brand decline are shown in Figure 3. According to the Figure 3, it can be concluded that the factor loadings for all observed variables are above 0.8 which indicates the goodness of these values. In other words, it can be concluded that the observed variables in the

9 model can appropriately explain the relevant variables. Furthermore, Figure 4 shows the t-test of significant loadings for the factors influencing the brand decline as well as the significance of all factor loading coefficients (the observed value is higher than the critical value of t statistic (1.96)). Furthermore, LISREL software also shows the nonsignificant relations in red at the output. In addition to estimation of coefficients and errors in the model, LISREL software provides a series of proportion indices by which the overall fit of model can be tested as follows. RMSEA index is one of the most important indices in the structural equations. According to the overall view, if this index is less than 0.1, the model has excellent fit. If it is from 0.1 to 0.5, the model fit is good, and if from 0.5 to 0.8, the model fit is medium. Based on the output of LISREL software (Figure 4), the RMSEA index is equal to According to the above-mentioned cases, it can be concluded that the model has excellent fit. Furthermore, the normed Chi-square index is one of the general indices for calculating the free parameters in measuring the fit indices and it is obtained through dividing the Chi-square by degree of freedom in model. If this value is from 1 to 5, it is favorable. Based on the output of software, this index is obtained equal to 3.23 which is also a good value. Figure 4- Significant of factor loadings for the factors influencing the brand decline 9

10 4-3- Investigating the reliability of factors affecting the brand decline Cronbach's alpha coefficient is utilized in this section for confirming the internal consistency of factors affecting the brand decline. If the obtained Cronbach's alpha coefficient is greater than 0.7, it indicates the acceptable reliability of questionnaire. According to the obtained value of Cronbach's alpha coefficient for the total questionnaire and each factor, it can be concluded that the obtained value is greater than 0.7 indicating the desired reliability of questionnaire (Table 6). Table 6- Cronbach's alpha for the factors affecting the brand decline Questionnaire Number of items Cronbach's alpha coefficient Access Low quality Competitors' activities Packaging method Marketing High price Inferential findings The conceptual model of research is fitted in order to investigate the research questions. The research model is examined for goodness of fit through LISREL software and the path chart in order to ensure the goodness of fit with collected data. The results of fitting the conceptual model of research are presented in Figure 5 and the significant coefficients in Figure 6. According to the output of LISREL software in Figure 5, the RMSEA index is equal to According to above-mentioned cases, it can be concluded that the model has the excellent fit. Furthermore, the normal Chi-square is also obtained equal to 4.49 and this is suitable. The model indices are shown in Table 7. Based on the above-mentioned cases, the values of these indices are suitable in this research. Therefore, the model is also acceptable in this regard. Given that the indices of model fit indicate the good fitness, it can be concluded that an appropriate model is estimated. Therefore, we can investigate the coefficients of research variables and questions. Table 7- Values of model fit indices for the factors affecting the brand decline Indices Index Value Comparative fit index CFI 0.87 Incremental fit index IFI 0.92 Goodness of fit index GFI 0.90 Adjusted goodness of fit index AGFI 0.90 Bonett- Bentler index or normed fit index (NFI) NFI

11 Figure 5- Standardized coefficients of structural equations Sub-question 1: Is there a significant correlation between the brand decline and the price level in Parsian Gas Refining Company? To investigate the question above and according to the Figure 5, it can be concluded that the price has an impact of 0.43 on the brand decline in Parsian Gas Refining Company. According to the t-statistic of this coefficient in Figure 6, it can be argued that the obtained coefficient is statistically significant (The obtained t statistic is higher than the critical value of 1.96). Sub-question 2: Is there a significant correlation between the brand decline and the quality level in Parsian Gas Refining Company? To investigate the question above and according to the Figure 5, it can be concluded that the quality has an impact of 0.38 on the brand decline in Parsian Gas Refining Company. According to the t-statistic of this coefficient in Figure 6, it can be argued that the obtained coefficient is statistically significant (The obtained t statistic is higher than the critical value of 1.96). 11

12 Figure 6- Significance of structural equation coefficients Sub-question 3: Is there a significant correlation between the brand decline and the rate of access in Parsian Gas Refining Company? To investigate the question above and according to the Figure 5, it can be concluded that the access rate has an impact of 0.01 on the brand decline in Parsian Gas Refining Company. According to the t-statistic of this coefficient in Figure 6, it can be argued that the obtained coefficient is not statistically significant (The obtained t statistic is lower than the critical value of 1.96). Sub-question 4: Is there a significant correlation between the brand decline and the packaging method in Parsian Gas Refining Company? To investigate the question above and according to the Figure 5, it can be concluded that the packaging method has an impact of 0.08 on the brand decline in Parsian Gas Refining Company. According to the t-statistic of this coefficient in Figure 6, it can be argued that the obtained coefficient is not statistically significant (The obtained t statistic is lower than the critical value of 1.96). Sub-question 5: Is there a significant correlation between the brand decline and marketing method in Parsian Gas Refining Company? To investigate the question above and according to the Figure 5, it can be concluded that the marketing has an impact of on the brand decline in Parsian Gas Refining Company. According to the t-statistic of this coefficient in Figure 6, it can be argued that 12

13 the obtained coefficient is statistically significant (The obtained t statistic is higher than the critical value of 1.96). Sub-question 6: Is there a significant correlation between the brand decline and the competitors' activities in Parsian Gas Refining Company? To investigate the question above and according to the Figure 5, it can be concluded that the competitors' activities have an impact of 0.35 on the brand decline in Parsian Gas Refining Company. According to the t-statistic of this coefficient in Figure 6, it can be argued that the obtained coefficient is statistically significant (The obtained t statistic is higher than the critical value of 1.96). 5- Summary and Conclusion Based on the theoretical literature, we have identified the factors which could affect the decline in Parsian Gas Refining Company and then investigated them using the exploratory and confirmatory factor analysis techniques. On this basis, these factors are called the marketing, access rate, low quality, competitors' activities, packaging method, and the high price. In general, the following suggestions are offered according to the research literature, applied methodology, analysis of collected data, and conclusions in the form of structural model: It is suggested that the managers in Parsian Gas Refining Company should make the prices of products compatible with the purchasing power in caviar consumers in order to survive in the industry and sell the caviar products. It is suggested that the managers in Parsian Gas Refining Company should improve the quality of their products in order to prevent the market decline, so that they will be able to retain their customers by improving the quality and prevent the brand decline by attracting the new and satisfied customers and making them loyal. It is suggested that the managers in Parsian Gas Refining Company should perform the appropriate marketing in order to prevent the brand decline. For instance, they can change and improve the rate and method of marketing by making the changes in the product to meet the customer demands, use the customer opinion about the product, give the necessary and sufficient information about the products, and use the new marketing techniques. It is suggested that the managers in Parsian Gas Refining Company should consider the competitors' activities in order to prevent the brand decline and take into account different factors such as the quality, price, customer orientation, and marketing, etc in order to compete with other companies, and prevent the brand decline by improving the shortcomings and utilizing the proper principles of competition. References 1. Hamidizadeh, Mohammadreza (2012), Investigating the correlation between the personality dimensions, brand equity and the moderating role of moral traits; Quarterly Research-Scientific Journal of New Marketing Research. 13

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