1

BRANDING

IT’S IMPACT ON THE CONSUMER PURCHASE

DECISION-MAKING PROCESS

KURT VON MOOS

DECEMBER 2005

EURPOEAN BUSINESS SCHOOL LONDON

2

ACKNOWLEDGMENTS Writing this dissertation has been an extraordinary journey that ended one chapter in my life,

only to begin another. This journey could never have been completed without the love and

support of the special people that surround my life.

First and foremost, I would like to thank my mother, Maureen von Moos. You have given me so

many opportunities in life. I have come to owe you so much, that all I can offer you is my

unconditional love and gratitude.

To my Grandparents, Nazek & Ben, not a day goes by that my soul does not miss you. I hope you

can look down today, and finally be proud of me.

I would like to also thank Burton Paul, for inspiring me to achieve more. Thank you for being the

older brother I always wish I had.

To my dear friends, Nicolas & Peter, your friendship and support have meant the world to me.

You two will always have a special place in my heart.

I would like to extend a very special thank you to David & Birgit. Your constant support and

friendship was instrumental in me preserving my sanity. Thank you both so much.

And to Natasha…you’ve changed my life. I love you.

3

EXECUTIVE SUMMARY Modern day marketing has greatly evolved. Companies now use consumer driven approaches to

further their abilities to satisfy the countless emerging needs and wants of the modern consumer.

Amongst these consumer driven approaches, branding has emerged as one of the crucial activities

required in the building of a loyal customer base and the creation of an effective brand image.

The main aim of this research paper is to ascertain what the main impacts of branding are on the

consumer based purchase decision-making process. In doing so, the author aims to determine the

extent of the correlation between the activities of branding and consumer purchasing as well as

put into perspective the main functions and values branding can offer companies in terms of

guiding valued customers through the often complex process of purchase decision-making. The

author has set out to use the example of Apple Computers, Inc.’s iTunes Music Store UK as a

real life study of how the UK’s leading legal online music provider applies these concepts.

Via the use of an online survey and various economic models used to ascertain the external and

internal factors affecting the iTunes Music Store UK, the author has determined that iTunes

Music Store has focused on the enhancement and extension of its brand image to cater to the

learning process, attitudes formation process and perception of consumers in the UK market for

digital music industry. In doing so, iTunes UK has secured a 85% market share in the United

Kingdom. Their success can be attributed to their use of branding to create a loyal and in some

instances, fanatical following of digital music lovers. As a direct result, Apple as contributed to

the fight against online music piracy, which as resulted in a 10% decrease of illegally

downloaded music.

This dissertation has found that branding has an large impact on the learning and attitudes

formation process that takes place during consumer purchasing activities. As a direct result,

consumers form meaningful links to a brand image, brand name or company, that leads to

sustainable sales as well as the sustainable satisfaction of consumers wants and needs.

4

TABLE OF CONTENTS

1 Chapter 1 - Introduction

1.1 Introduction

1.2 Research Aims & Objectives

2 Chapter 2 – Literature Review

2.1 Introduction

2.2 Understanding Branding

2.2.1 Branding in Today’s Markets

2.2.2 The Development of Brand Equity

2.2.3 The Competitive Advantage of Brand Loyalty

2.3 Branding’s Influence on Consumer Purchasing Behaviour

2.3.1 Impact on the Consumer Learning Process

2.3.2 Impact on the Consumer’s Perception of Brands

2.3.3 Impact on Consumers’ Attitude Towards Brands

3 Chapter 3 - Methodology

3.1 Introduction

3.2 Defining Research Methodology

3.3 Research Aims

3.4 Research Philosophy

3.5 Research Approach

3.6 Execution of Strategy

3.6.1 Survey

5

4 Chapter 4 – Analysis & Findings

4.1 Introduction

4.2 The Questionnaire

4.2.1 Respondent Profile

4.2.2 Brand Attributes

4.2.3 Brand Benefits

4.2.4 Brand Values

4.2.5 Brand Cultures

4.2.6 Brand Identity

4.2.7 Conclusions Drawn from the Survey

4.3 External Analysis of The Legal Music Downloads Industry in The United Kingdom

4.3.1 Market Overview

4.3.2 P.E.S.T.L.E. Analysis of the Digital Music Industry

4.3.2.1 Political

4.3.2.2 Economical

4.3.2.3 Social

4.3.2.4 Technological

4.3.2.5 Legal

4.3.2.6 Environmental

4.3.3 Porter’s 5 forces

4.3.3.1 Threat of New Entrants

4.3.3.2 Threats of Substitute Products

4.3.3.3 Bargaining Power of Buyers

4.3.3.4 Bargaining Power of Suppliers

4.3.4 Listing of Opportunities and Threats

4.3.4.1 Opportunities

4.3.4.2 Threats

4.4 Internal Analysis of Apple Computer’s iTunes Music Store UK

4.4.1 ITunes Music Store UK Company Overview

4.4.2 ITunes UK’s Strategic Capabilities and Competitive Advantage Model

4.4.3 Resource Audit

6

4.4.3.1 Physical Resources

4.4.3.2 Financial Resources

4.4.3.3 Human Resources

4.4.3.4 Intangible Resources

4.4.4 Strengths and Weaknesses

4.4.4.1 Strengths

4.4.4.2 Weaknesses

5 Conclusions and Recommendations

5.1 Recommendations

5.2 Conclusion

6 Bibliography

7 Appendix A

7

CHAPTER 1

INTRODUCTION

8

CHAPTER 1: INTRODUCTION

1.1 Introduction

Modern times reflect key changes in the marketing strategies employed by companies seeking to

sustain competitive advantage. The financial health of these companies is now dependent on the

amount of information that is collected in regards to consumer purchasing habits. These

companies have resorted to the adoption of behavioural and sociological studies in order to

collect this pertinent data and to further the corporate understanding of consumer purchasing

patterns. The study of these fields are an attempt to establish a correlation between consumer

spending and the key factors involved in consumer preferences in terms of attitudes, cognition,

perception and learning.

Companies shifting their focus from a product/market driven line of attack to consumer driven

marketing activities reflect this evolution of marketing. As a direct consequence of this shift,

companies are now attributing much more importance on the reaction consumer display in

regards to the 4Ps (product, price, promotion and place) and have further implemented three

additional Ps, physical layout, process and people (Kotler, 1999).

Current market trends show that the homogeneity of product has increased, meaning that few

functional differences between key competitors currently exists in most highly competitive

markets. This decrease in product differentiation is considered to be the direct result of high

levels of competition that exists within today’s markets, as well as the technological advances of

production and distribution methods. Because these advances have diminished the ability of

technological innovations to offer sustainable competitive advantage and have made product

differentiation extremely difficult (Levitt, 1983; Kotler, 2000)

As a direct consequence, branding has emerged as a significant feature of contemporary

marketing strategies and is now considered a key organizational asset (Kotler, 2000). The

symbolic values associated with brand names have become the basis for product differentiation,

9

with leading strategies attempting to emulate key factors that are conductive to key behaviours

associated with consumer purchasing patterns.

An example of the impact branding has on the consumer purchasing decision process, is how

branding is applied to the legal music downloads industry. With nearly 230 providers online, it is

a highly competitive industry that is still expanding at a furious pace. With over 180 million

music tracks purchased online in the first quarter of 2005 alone, (IFPI National Groups, 2005),

web based giants such as Apple’s iTunes Music Store, Napster, Tesco, Emusic and Kazaa are all

competing for domination in this digital marketplace. Only one however, the iTunes Music Store,

has achieved near domination with 8o% market share in the UK in 2005 (OCC, 2005).

With the advent of the iPod digital music player and the iTunes Music Store, Apple has become

one the most followed companies of the 21st century. Steve Jobs, CEO of Apple, is seen as being

a key contributor to Apple success story, by transforming and further developing Apple’s brand

image, by making it more accessible to a wider audience and extending the Apple brand into the

legal music download industry. Spotting a gap in the market and considering that record

companies were loosing an estimated 4.6 billion dollars annually (RIAA, 2005) with illegally

pirated music files being downloaded via file-sharing servers, Apple pioneered the sale of legal

music on the Internet, via their iTunes Music Stores. This has earned Apple 240 million dollars in

revenue from music sales in the second quarter of 2005 alone and has lead to the sale of an

estimated 30 million iPods since its launch in 2001. By the beginning of 2006, it is predicted that

Apple will sell its 1 billionth song (Smith 2005)

The following dissertation aims to ascertain the theoretical impact of branding on the consumer

decision-making process as well examine its impact in real-life, via a critical evaluation of

Apple’s use of branding to influence the consumer decision-making process of consumers in the

legal music downloads industry in the United Kingdom.

10

1.2 Project Aims and Objectives

As the author as established, the importance of understanding branding and its impact on modern

day markets is vital to the health and growth of most industries. The aim of this thesis is to put

into perspective the functional values of branding as well as assess its role in the consumer

purchase decision-making process. In order to further understand consumer behaviour with

regards to branding, this research paper aims to gain an in-depth understanding of the process and

attributes that lead to the customers’ evaluation of brands and the key drivers to building brand

loyalty. This will be brought into focus by a critical evaluation of how Apple has used this

process to secure an 80% market share in the legal music downloads sector in the United

Kingdom. In order to meet these outcomes, the author has set the following research question:

“ Determine the impact branding has on the consumer purchase decision-making possess

by assessing its use by Apple Computers, Inc. to influence the purchase decision-making

process of consumers in the legal music downloads industry in the United Kingdom. “

In order to fully answer this research question, the following objectives have been set:

• Set a valid and sustainable research question in order to achieve a non-bias and accurate

understanding on the topic in question;

• Present the key concepts behind branding, its values and its usage in modern day

marketing campaigns by reviewing current literature pertaining to the subject matter;

• Determine whether a correlation between consumer identities and perceived brand

identities is present;

• Determine the impact of branding on the consumer purchase decision-making process;

• Evaluate Apple’s iTunes Music Store UK’s current situation by conducting both external

and internal analysis;

• Critically assess the impact of branding via an evaluation of Apple’s usage of branding to

secure its market presence in the legal music downloads industry in the United Kingdom.

11

CHAPTER 2

LITERATURE REVIEW

12

2 CHAPTER 2: LITTERATURE REVIEW

2.1 Introduction

In this chapter, the author seeks to establish an academic foundation from which both further

research will be built upon. Its purpose will be to enhance the readers understanding of the

various concepts that branding involves, as well as its theoretical impact on the consumer

purchase decision-making process. The chapter is written under Murphy’s (1992) findings that

stipulates that as distinguishing characteristics of products becomes less noticeable, the likelihood

of consumers using branding related cues rises. offerings,

2.2 Understanding Branding

To gain a clear insight into the definition of “branding”, one must first clarify what this literary

review refers to as “products”. Referring to Baker (2000), one can consider a product as being

anything that can satisfy the economic, psychological or functional needs of a potential customer.

Baker (2000) furthers this definition by stating that the extent of which a “product” meets the

above-mentioned needs, is determines the product’s “value”.

The often-complex process of branding is a need that has been inspired from the highly

competitive nature of most modern day industries. This competition has lead to product offerings

that have become increasingly difficult to differentiate for reasons stated in Chapter 1. In order to

address this problem, branding has become a widespread tool used by companies to highlight

their products in increasingly saturated markets. In doing so, companies enable themselves to

showcase their core competences that they feel are needed by consumers (Hamel and Prahalad,

1994).

In modern day marketing, it has now become the brand itself that differentiates a company’s

products available for purchase (Levitt, 1983). If one looks at Apple Computers as an example,

many claim that a shift towards brand orientated marketing techniques have allowed them to

break into the digital music market and further their presence in the IT market. However others

13

believe that this is by no means a new “shift” but rather the efficient furthering of an already

effective brand image. Considering that Apple has always been at the forefront of creative

advertising and brand associative techniques, with publicity stunts such as the “1984”1

commercial, the “Think Different. Think Apple”2, advertising campaign or the more recent

“iPod+iTunes” commercials involving celebrity endorsements.

So what exactly is branding? Kotler (1999), defines branding as a “name, term, sign, symbol or

design, or a combination of these, intended to identify the goods or services of one seller or

group of sellers and to differentiate them form those of competitors.” Feldwick (1995) furthers

the concept of differentiation that Kotler (1999) touches on, by comparing a brand to “a

recognizable and trustworthy badge of origin and a promise of performance.”. His research

emphasizes the relationship between the product and the consumer as being instrumental to the

branding process and the positioning of offerings within the social environment. He considers

that a brand reflects a company’s intangible guarantee that the product will meet consumers’

expectations.

So far, the above-mentioned literature restricts the effects of branding to a consumer’s

interpretation of how a specific brand relates to his or her personality based traits. Macrae (1996)

however, elaborates by introducing the additional element of “Brand Essence”, which he defines

as being the soul or very reasons for being of a company. Macrae (1996) furthers this definition,

by stating that a company must consider its own employees with the same importance as its

targeted consumers, because both are of equal importance. He justifies this by shedding light on

the fact that it is the employees that promote the products or services in direct sales situations, not

the company. This concept of branding establishes a clear link between a company’s internal

working with the outside world of consumers, via their brand.

1 Aired during the 1984 Super Bowl in the USA, the “1984” Apple commercial was a big budget advertisement themed after the George Orwell novel, 1984. This commercial was groundbreaking in that it was the first to establish

personal computers as commodities, rather than simple office tools. 2 Groundbreaking marketing campaign that established and contrasted Apple computers from competitors and

illustrated consumer usage of computers for the first time. This campaign was replaced in 2003 by the “Switch”

campaign, that incites users to “switch” from Windows based computers to Mac OSX based computers.

14

If one examines Apple Computers, one can easily see Macrae’s (1996) definition in practise. The

famously relaxed and welcoming atmosphere of the “Apple Stores”3 is produced by the trained

staff, who must all be proficient in the employee-training manual which reinforces the

importance of employees sharing the same level of brand commitment as consumers. This allows

consumers and staff to interact seamlessly and has turned Apple Stores into both a place of

business and a cultural hotspot for the 16 – 35 year old market segment (Bajarin, 2005).

In modern day branding, the creation of tangible values as well as intangible values is

quintessential in allowing customer the means to distinguish one brand from another (Hankinson

and Cowing, 1993). The reader will appreciate that it is this ability in particular, that separates a

“brand” from a mere “product”. King (1991) captures this by defining a product as a factory-

made tangible that can readily be copied by competitors. King (1991) continues with his

distinction by clarifying that a brand is an intangible asset that is unique and timeless. This

simple yet powerful definition insinuates that a brand is the core identity of a product. Kotler

(1999) expands on the concept of identity by stating that a brand is capable of conveying up to

six different levels of meaning to a targeted audience. This is known as the “Six Dimensions of

The Brand”

Attributes A brand will communicate specific attributes, such as prestige

Benefits A brand strengthens a product’s attributes by communicating a

set of benefits that makes it more attractive

Values A brand represents a company’s core values and belief system

Culture A brand is representative or target a target audiences socio-

cultural characteristics

Personality A Brand can project behavioural personality patterns of

targeted consumers

User The brand, in some cases, can emulate the end user

3 There are currently over 125 Apple retail stores spanning the USA, Canada, Japan and the UK. They continue to be

a driving force behind the company’s most recent success, with sales revenue of over 663 million dollars in the last

quarter

15

Kotler’s (1999) extensive work on the understanding of branding can be seen as the middle

ground between Macrae (1996) and Feldwick’s (1995) schools of thought. Despite Kotler’s

initial definition seeming overtly simplistic, his expanded definitions and views on the various

dimensions of brands, provide a deeper understanding of how branding can be so much more

than simply symbols, designs and catchy slogans. Kotler establishes branding as the creation of a

deep bond between the company and the consumer.

From the consumers’ perspective, brand names are as fundamental as the product itself in the

sense that they simplify the purchasing process, guarantee quality and at times form as a basis of

self-expression. Hence, should a company market a brand name as nothing more than “just a

name”, it would be missing the entire purpose of product branding. The challenge lies in

developing a deep set of meanings for the brand. Once a target market segment can visualise all

six dimensions of the brand, it will have established a strong rapport within the consumers’

purchase decision-making process.

2.2.1 Branding in Today’s Markets

A central function of branding is the facilitation of the consumer choice process. Due to the

complexity of having to select a product amongst thousands of similar offerings, consumers will

instinctively attempt to simplify their choice process by selecting brands that have satisfied them

in the past. Assael (1993) supports this concept by stating that consumers, especially in situations

of low-involvement, heavily rely on previous consuming experiences when attempting to select a

product to satisfy their present needs. Thus, one can conclude that pleasant past experiences is

highly conducive to consumers associating benefits to a brand. One can conclude that a central

function of branding, is its ability to negate the need for a consumer to seek out information when

a need or a want has been recognized, but rather, lead him to a brand that has been satisfying in

the past.

One must acknowledge however, that frequent purchasing of a brand can not always be linked to

previous experiences, but can alternatively be formed by embedded perceptions. A consumer

might strongly favour a brand with no prior purchasing experience. This type of consumer

16

behaviour is based on stimulus provided by direct exposure to advertising campaigns, a

company’s PR efforts or even a high concentration of local distribution in an area that is in close

proximity to a consumer (Assael, 1998).

In terms of companies’ views on branding, it can induce the natural differentiation of their

offerings, which ultimately, will produce a state of competitive advantage. According to Adcock

(1998) differentiation is the process of creating a set of unique differences so as to separate one

company's products from another. The value of this uniqueness will determine the level of its said

“differentiation”. This in turn will allow companies to seek out higher asking prices. It must be

noted however, that differentiation comes at a cost. Therefore, differentiation can only allow for

competitive advantage if the cost of differentiating is significantly lower than the revenue earned

by the sales.

Differential advantage allows companies to showcase their offer in respects to other competitors

in the same marketplace. A competitor could easily copy a digital music player. However,

competition will not be able to copy the personality that is associated with the brand name of, for

example, Apple’s iPod4. Porter (1980) clearly established the importance of differentiation by

stating that one of the main requirements needed for acquiring said “competitive advantage” in an

industry, is by differentiating one’s product line. Should a market’s segment players hold no

differential advantage, consumers would likely revolve their decisions around pricing. (Foxall

and Goldsmith, 1994).

Branding is not the sole source of differential advantage, as it can be obtained by the efficient

implementation the 4Ps of the marketing mix (Diaz de Rada, 1998). However studies have shown

that the most efficient and long lasting strategy that is easily accessible to any company is to

focus on brand differentiation, rather than the development of pricing policies as a sole way of

reaching profitability (East, 1997).

4 Apple’s iPod is the current best selling digital music playing devices. Designed for seamless integration with the

iTunes music store, the iPod is a light weight portable hard drive capable of holding up to 15000 songs, 25000

photos and 150 hours of music.

17

2.2.2 The Development of Brand Equity

The amount of clout controlled by different brands will vary. Some are deeply embedded in

global culture and are thus, highly recognizable, whilst other are virtually unknown to consumers.

When attempting to place a value on a brand, one refers to “brand equity”. Chay (1991), defines

brand equity as a “set of associations and behaviours on the part of a brand’s customers, channel

members, and parent corporation that permits the brand to earn greater volume or greater

margins than it could without the brand name and that gives the brand a strong, sustainable, and

differential advantage over competitors” (Chay, 1991, p.30). This explanation creates a clear link

between a product’s value, be it financial or intangible, and a brand name. Aaker (1991) furthers

delves into the subject matter, distinguishing between several perspectives from which one can

view brand equity. These include, amongst others, the financial perspective, the consumer-based

perspective and finally the brand extension perspective.

Using the financial perspective, one measures brand equity by determining how much more

consumers are willing to pay in direct relation to the brand name. This gives marketers essential

insight into the financial value of the brand. When viewing brand equity from this perspective,

one must naturally consider overhead, such as costs of advertising.

Using the consumer-based perspective entails considering how the attitude strength of a

consumers is directly influenced by the brand name. This perspective operates under the

assumption that the consumer has had extensive experience with the product in question.

Viewing brand extension from the brand extensions perspective involves evaluating whether a

brand is strong enough to launch as a launching pad for an extended product range. If one

considers Apple Computers, the success of the iPod music player was largely dependant of the

high brand equity of the brand name and more specifically, their brand image. According to

Alreck and Settle (1999), the consideration and development of brand equity is vital as its

benefits are wide reaching. One can consider brand equity as an asset, as it can increase cash flow

via the widening of a company’s market share and the allowance of higher pricing policies.

18

2.2.3 The Competitive Advantage of Brand Loyalty

Meenaghan (1995) states that there is a palpable correlation between the efficient branding of a

product or service, and the display of brand loyalty in consumer purchasing patterns. In this

instance, loyalty is defined by Oliver (1999) as a “deeply held commitment to rebuy or

repatronize a preferred product/service consistently in the future, thereby causing repetitive

same-brand or same brand-set purchasing, despite situational influences and marketing efforts

having the potential to cause switching behaviour" (Oliver, 1999, p.34).

In considering Oliver (1999), one can conclude that brand loyalty is a direct consequence of the

ability to better satisfy the desires of a customer that main competitors do. Therefore, Oliver

assumes that one can estimate the extent of loyal that can be achieved by understanding the

personal characteristics of the targeted consumer market segment. Building on this concept,

Quester and Smart (1998) have questioned this, by suggesting that it is not uncommon to find

irrational attachments to products in humans, as a people. Levitt (1983), however, counters this

by putting forward his findings suggesting that consumers form attachments to specific products

as a direct result of a company’s effort to create a personable link between them and the

consumer. These links are essentially induced by the creation of attributes that stem from the

appearance of the product, the design and outer package of the product, or even the identity

emulated by the brand itself. Coupled with the fact that past experiences heavily influence

consumers, Levitt (1983) concludes that there is nothing irrational at all in consumers forming

deep seeded attachments to certain brands. He continues by stating that the very existence of

these attributes are key in providing competitive advantage, seeing as without them, competitive

pricing would become the only factor used by consumers to distinguish company offerings.

It now becomes clear that a modern day marketer’s principal objective is to build sustainable

forms of loyalty between a company and its consumers, instead of focusing solely on the

individual sale of products. According to Oliver (1999), a loyal customer is one who will prove

his commitment by spending additional time, money and effort to obtain the brand of his

preference. If one looks at Apple, with its recent success with the iPod music player, one might

immediately recognize the effects of customer loyalty. Despite offering songs only playable on

19

iPods, the iTunes music store sales represent 80% of the legal music downloads market in the UK

(Smith 2005). Despite constant rumours of new entrants, and vain attempts by Napster or Virgin,

customer loyalty to the iTunes music store remains unshaken. (Smith 2005) This real life

example is reflected in Alreck and Settle’s (1999) statements which outline how the formation

relationships that are conducive to consumer loyalty, are achieved via the creation of a strong link

between the consumer and the brand. If sustainable, a loyalty that can isolate rival competition

will be created. A potent brand image or brand name will sustain what is referred to as a

“consumer franchise” that will expand, once the number of customers that become loyal to that

brand and refuse a rival products (irrespective of varying pricing policies), reaches a

predetermined number. According to Kotler and Cox (1980) and Cowley (1996), companies with

a strong consumer franchise, will experience a degree of isolation from its competitors

The financial implications of selling and promoting products to a new consumer is estimated to

be six times grater than that of maintaining a loyal and returning customer database. (Thakor and

Kohli, 1996). Thus, it is easy to understand why it would be more profitable for companies to

focus on the creation of such a loyal customer following. Other benefits include a rising value of

brand equity experienced by companies who maintain customer loyalty by implementing a series

of strategic marketing campaigns that focus on achieving dominant market share in a specific

industry (Cowley, 1996; Kapferer, 1995;Kotler, 1999)

Dun (1997) and Chevron (1998) both suggest that modern day marketing has become a quest to

gather as much information pertaining to consumer behaviour as is possible. The continue to state

that this quest will eventually lead to information that will enlighten companies on how to

accurately tailor to specific needs and wants of their consumers by considering purchasing

behaviour. Graham (2001) believes that in doing so, product offerings will be more efficiently

targeted, as this is vital to the success of branding, for branding is only efficient with a specific

segment of consumer and not the entire market. This can be illustrated by considering the legal

music downloads industry. When some people think of iTunes, the online legal music download

store, the words “quality legal music” flashes through their minds, while others could think

differently associating the online store with a high priced, limited content provider.

20

2.3 Branding’s Influence on Consumer Purchasing Behaviour

The preceding section of this literature reviewed has sought to define the term branding and

explain its functions and values as an instrumental marketing tool used in attaining differential

and competitive advantage. The following section of this literature review will seek to enlighten

the reader on the impact branding has on the consumer decision-making process. The author

seeks to achieve this via the use of consumer decision making academic models. First however,

one must gain clear insight into the definition of consumer buying behaviour in order to

understand the impact branding has on it.

In defining “consumer buying behaviour”, one may refer to Assael (1987) who distinguishes four

types of consumer buying behaviours (See figure 1). He bases these four consumer types on the

varying degrees of involvement and the degree of differentiation amongst the brands in question.

Figure 1: (Assael, H, 1987, Consumer Behaviour and Marketing Action, 6th edition, p. 67

21

Consumers who are described as displaying complex buying behaviour will expand their beliefs

regarding a particular product as a starting point. This stage will eventually lead them to develop

positive attitudes regarding the product. This intermediary stages lead them to the final stage of

their behavioural pattern, where they consciously make the choice of purchasing the product.

Referring to the Assael’s model, one will notice this type of consumer engages in highly involved

purchasing experiences being fully aware of the range of brands available and their levels of

differentiation.

Assael (1987) classifies consumer who exhibit Dissonance-reducing behaviour as consumer who

are highly involved in the purchasing experience, however see few differences between brands.

For this reason, the consumer will seek information on the differentiation of the product offerings

and will not be particularly price sensitive when seeking functionality. In the event that this

consumer finds him or herself in a market that displays low levels of differentiation, the

consumer might result to purchasing influenced by convenience. Like consumers who display

complex buying behaviour, consumers with dissonance-reducing behaviour will seek to establish

personal beliefs regarding the product. If fostered adequately, these beliefs with eventually

transform into attitudes regarding the product offerings. These attitudes, if favourable, will lead

to a thoughtful purchase.

Assael (1987) considered consumes displaying habitual buying behaviour as consumers who did

not experience the same sequence as the previous two behavioural types. Instead of basing their

decision-making process on seeking product information pertaining to functionality or

characteristics, this type of consumer will purchase based on information gathered passively, via

the company’s promotional efforts, by it through the medium of television, radio or print

advertising. This behavioural type, as can be seen on Assael’s (1987) model, with low-level

involvement products. Differentiating this consumer type is the fact that they being the process

with beliefs already embedded in their mind, which they have learnt passively, rather than

actively.

Variety-seekers are the last behavioural type contained in Assael’s (1987) model. Their typical

buying situation is summarised by low-level involvement in a market that displays high levels of

22

product differentiation. Common to this type of consumer, is “brand switching”, in order to

satisfy their need for diversification.

In order for the reader to fully ascertain the effects that branding has on the consumer decision-

making process, the author has selected an academic model that explains not only the process of

consumer decision-making during purchasing activities, but one that facilitates the understanding

of pre and post purchasing activities as well. Thus, the author has selected the Howard-Sheth

Decision-making model by Howard and Sheth (1969).

The model’s core assumption lies in that the key to determining behaviour exhibited by

consumers is to fully understand the consumer thought process. The Howard-Sheth model

illustrates that cognitive decision-making is the process in which consumers mentally process

information that influences his or her selection of brands. For the purpose of this research, the

author shall focus on the final three variables of the model, as it is of most relevance in

determining the effects of branding on the consumer decision-making process.

23

2.3.1 Impact on The Consumer Learning Process

At its most basic definition, one can define the consumer learning process as being a time period

in which a customer is heavily exposed to the branding process of a product or service. The

branding process can include any aspect of the promotional strategy, including audio/visual

forms of promotion. By learning from this information, whether it is a conscious process or not,

the consumer will develop strong feelings towards a brand. For marketers, branding has a vital

effect on the learning process, because it is self-growing. Once consumers start to purchase

product, others will vicariously learn from them. Vicarious learning is when consumers begin to

copy the behavioural patterns of their peers by making changes in their own lives to reflect what

they have “vicariously” learnt (Bandure,1977) If one considers the legal music downloads

industry, one might struggle to understand why a consumer would be willing to pay for a musical

track, on say the iTunes Music Store, when he or she could just as easily obtain the same track,

for free, via the may file-sharing softwares that exists. Apple’s use of celebrity endorsements has

caused of movement of loyal consumers who in essence, vicariously learn from both the

celebrities that endorse the services and the lifestyle it offers, as well as family and friends who

have adopted the product as well (Thurrott, 2004).

In searching for a more academic view on consumer learning, one can understand the process as

modifications to a consumer’s behavioural patterns that are the direct consequence of either past

experiences or information gathered during all aspects of the purchase decision-making process.

These modification are caused by information that has essentially been saved as a set of

meaningful associations in the consumer’s mind. (Dodds,1991). Foxall and Goldsmith (1994)

elaborate on this by implying that these above-mentioned associations provide the consumer with

a link to the brand image of offerings in respects to the promotional tools used to further this

brand image. These tools include both physical characteristics of the product as well as pricing

policies. All the elements that are retained by the consumer stem from what they have been

exposed to during their individual learning process. This is ultimately, what will shape their

views and attitudes in regards to brands.

24

It has been found that the learning process discussed above acts as a catalyst in creating

emotional and evaluating responses. These responses are embedded in the consumer’s memory

span, which will be recalled when faced with a purchase decision-making process. Thus,

understanding the learning process is key to marketers who seek to efficiently use promotional

methods to influence consumers, because the imprints they create in the mind of consumer will

later on be recalled when selecting a product or brand (Conoway, 1994)

2.3.2 Impact on Consumers’ Perception of Brands

One may refer to Foxall (1980), where Engel defines perception as “the process whereby stimuli

are received and interpreted by the individual and translated into a response” (Foxall, 1980,

p.29). At this point, it is important to note that this process is unique to each individual, as

perception is highly dependant on a consumer’s individual beliefs structure.

Foxall (1980) states that perception is crucial in the decision-making process. In a market where

branding is used, products are no longer only purchased for their functional characteristics, but

primarily for the social or in some cases, psychological identity they express (Foxall, 1980).

Building on these concepts, One can elaborate on these concepts by outlining two determinants

that influence a consumer’s perception of brands. These two factors are stimulus discrimination

and stimulus generalisation (Erdem 1998)

Erdem (1998) raises a fundamental question by asking whether a consumer has the ability to

“discriminate” between the various methods used to stimulate a consumer. His findings show that

when a customer is introduced to a brand, whether this is done via advertising, packaging, word

of mouth marketing or any other form of stimuli that affected them during their decision-making

process, their levels of awareness of the brand will gradually increase via their ability to learn.

Once their levels of brand awareness has increased, Erdem (1998) continues to say that their

purchase decision-making process will be influenced by their perception of the brand in question.

An excellent example is that of Apple Computers. Many believe that it is the iPod and the iTunes

music store that saved the company from financial ruin (Haddad, 2003). During the launch of the

25

iPod, heavy importance was placed on advertising and promotion. As brand awareness levels

rose, consumers quickly adopted the iPod as the defacto digital music player of this century. The

strong brand presence had far reaching effects. With the launch of the of the iTunes music store,

which was designed to work specifically with the iPod, consumers perception of Apple and their

infamous iPod had a direct influence on them when selecting a online music store.

The perception of brands is crucial to both the marketer and the customer. If one considers that

frequency of purchases varies from consumer to consumer, one can understand that the influence

of perception is vital. By providing relevant information for the consumer market, marketers

enable the creation of symbolic links between the consumer and the brand image. Thus,

consumers will have the relevant tools needed to distinguish between the brands on offer and

therefore be persuaded in their selection. In the event that a consumer is a new user with no

product experience, he or she will not be able to make relevant decisions based on the actual

product. Thus, the brand image again, become vital in directing the consumer to a specific

product.

In order to better understand the relevance of branding on the consumer purchase decision-

making process, the author refers to Cherantony (1993), who has suggested that four key factors

are responsible for directing a potential consumer towards a particular brand.

Perceived Quality In time, consumer will have faith in a brand’s integrity via

their perceived quality of the brand in question

Building Excellent Service

When a company implements excellent after service sales, this

endorses the perceived quality of the brand and facilitates

activities in the pre and post purchase moments of the

decision-making process. As discussed previously, this is key

in the creation of loyal customers.

Standing Out in the Consumer’s

mind

By striving to differentiate one’s brand from another,

companies hope to become embedded in the users culture and

mind. This is the most effective way to insure consumers

26

positively perceive the brand and product. This eventually

leads to extremes forms of competitive advantage.

Investing in Differential

Markets

When one seeks to establish a brand, it is essential to select a

market in which it is possible to create differentiation.

Otherwise, the concepts of branding will not be possible.

Brands have a large impact on the perceived risks consumers associate with the consumer

purchase decision-making process. The author has found there to be six risks that are perceived

by consumers during all aspects of the decision-making process and further outlines how brands

can appease the consumer’s mind in regards to these perceived risks (Keller, 1998).

The first perceived risk a consumer might encounter is one of a functional nature. The consumer

might worry whether the product will meet his or her expectations. In the creation of a

trustworthy brand, marketers seek to raise the level of perceived quality in order to specifically

address this risk.

Consumer might also perceive a physical and/or psychological risk that might dissuade them

from continuing the purchasing decision-making process. For instance, in the download of

illegally distributed music, the consumer might face ethical problems in committing copyright

infringement or might worry about the risk of being jailed if caught. Thus, one can understand

why the iTunes music store so heavily emphasises the legality of their services, as well as the

superior quality of their products of badly copied music, distributed illegally.

A fourth possible risk that might be perceived by the consumer, is one of an economic nature.

Price sensitive consumers will question whether the product is in fact properly valued at the

quoted asking price. Again, marketers will strive to counter this by highlighting the perceived

value of a product in the branding process. If properly done, consumer can become price

insensitive by forming a strong bond to a brand and therefore isolating him or herself from

competitors.

27

Socially speaking, a fifth risk a consumer might perceived to be detrimental to the buying process

is whether his or her selection of a brand will cause embarrassment in a social setting, amongst

his or her peers. Marketers address this issue in the creation of the brand image. By emulating

current market trends and fashions, marketers strive to identify and differentiate their products as

being the selected choice of revered people. Thus, one can now explain the use of celebrity

endorsements, such as the iPod commercials used by Apple to further their social standing

amongst consumers.

Yet another economic risk consumer might consider, is the opportunity cost of seeking out

alternative products, should the selected one fail to satisfy their needs and wants. Reflected in a

loyal consumer base, is a brands ability to deliver on the satisfaction guarantee. Thus, one can

understand that branding is key in addressing this issue in the consumer’s mind.

2.3.3 Impact on Consumers’ Attitudes Towards Brands

Carpernter and Nakamopto (1989) consider a consumer’s attitude towards a brand to be his or her

final evaluation of the brand in question. An attitude can be considered to be either positive or

negative, depending on the outcome of their learning and evaluating process.

The evaluation of consumer attitudes towards brands has quickly become a major part in

conducting marketing research. Briggs and Cheek (1986) explain this by having found a

correlation between consumers having positive attitudes towards a brand and that same consumer

deciding to purchase the said brand. Therefore it is fair to assume that the development of

positive attitudes towards brands can lead to not only the sustaining of competitive advantage,

but in the bettering of the financial health of a company.

According to Chay (1991) and Muehling (1987) branding has been fount to be key in formation

of positive attitudes towards products, especially those involving low-levels of consumer

involvement. However it has been noted that there are factors that might negate the effects of the

formation of positive attitudes. One being that the effects of positive attitudes can dissipate

should the consumer not purchase the product within a certain timeframe. Another factor that

might negate the effects of positive attitudes might be an overtly high pricing policy, which might

28

have a contrary effect to the consumer’s positive attitudes towards the brand and result in a non-

sale.

A real life situational example of this can been seen in the promotion of the iTunes Music Store

and its pricing policy. Offering amongst the cheapest legal music downloads in the UK, iTunes

uses heavy marketing campaigns to build strong positive attitudes in the minds of consumers.

They have further strengthened these attitudes by highlighting the ease of access of their service

as well as their stringent pricing policy, keeping rates at £0.79 per song since their launch in

2001. This has inspired a level of trust in the consumer and has therefore created a loyal customer

base for Apple’s online music services as well as their other product lines.

In considering attitudes towards brands, one must ponder whether theses attitudes all remain at a

conscious level, or whether branding can instigate attitudes at a sub-conscious level. Vecchio

(1992) has raised Sigmund Freud’s theory that individuals are rarely aware of how their own

psychology shapes their visual behavioural patterns. This suggests that at an unconscious level,

consumer might have beliefs that shape their attitudes towards products. By acknowledging

Freud’s theories, one can conclude that branding can be used to target sub-conscious desires that

rest at a primal level. This can explain the use of primal sexual imagery, or the frequent use of

age discrimination to insight target segments of the consumer market to associated themselves

with particular brands.

29

CHAPTER 3

METHODOLOGY

30

3 CHAPTER 3: METHODOLOGY

3.1 Introduction

In order for the reader to understand the methodology used to compile this dissertation, the author

has included this chapter in order to clarify how an effective methodological philosophy can

contribute the successful production of a un-bias and critically dissertation, as well as

comprehend the process underwent by the author to reach the pertinent conclusion outlined in

chapter 5.

This chapter also serves the purpose of justifying and authenticating the research procedures

employed by the author in order meet the set objectives and answer the main research question of

this thesis.

3.2 Defining Research Methodology

Wikipedia.com defines “research” has being is “an active, diligent, and systematic process of

inquiry in order to discover, interpret and/or revise facts. This intellectual investigation should

produce a greater understanding of events, behaviors, or theories, or to make practical

applications with the help of such facts, laws, or theories. The term research is also used to

describe a collection of information about a particular subject” (www.wikipedia.com)

Methodology is considered to be the “way in which information is found or something is

done. The methodology includes the methods, procedures, and techniques used to collect

and analyze information.”(www.google.com)

3.3 Research Aims

As outlines in chapter one, the author has clearly defined the research question : “ Determine the

impact branding has on the consumer purchase decision-making possess by assessing its use by

Apple Computers, Inc. to influence the purchase decision-making process of consumers in the

legal music downloads industry in the United Kingdom” . In order to achieve pertinent

conclusions, the author set the following objective to be met in order to produce a non-bias

31

dissertation that provides the world of academia with a critical assessment of the said research

question. The objectives outlined in chapter one were as follows:

• Set a valid and sustainable research question in order to achieve a non-bias and accurate

understanding on the topic in question;

• Present the key concepts behind branding, its values and its usage in modern day

marketing campaigns by reviewing current literature pertaining to the subject matter;

• Determine whether a correlation between consumer identities and perceived brand

identities is present;

• Determine the impact of branding on the consumer purchase decision-making process;

• Evaluate Apple’s iTunes Music Store UK’s current situation by conducting both external

and internal analysis;

• Critically assess the impact of branding via an evaluation of Apple’s usage of branding to

secure its market presence in the legal music downloads industry in the United Kingdom.

In order to meet the above objectives, the author outlines a systematic and methodologically

sound action plan :

! Explore literature pertinent to the key concept of branding and its impact on the consumer

decision-process. Literature to be used include books, journals, research papers, websites and

any other source of literary knowledge that can provide an un-bias and relevant view on the

relevant concepts

! Conduct a survey using two groups of respondents. Group A is to contain iTunes Music Store

UK users and group B is to contain non-iTunes users. Both groups must be composed of

respondents that are actively and currently consuming digital music over the Internet at least

two times a month. The author will then conduct a survey pertaining to their views on iTunes

UK and how its brand image has effected their purchase decision process.

32

! Critically evaluate external and internal environmental factors that affect Apple Computers.

This is to be achieved via the use of academically proven business models, in order to ensure

the validity and reliability of the produced information.

! Use the information gathered from the internal and external environmental analysis an relate

this information to Apple’s use of the branding process in order to influence the consumer

purchase decision-making process.

3.4 Research Philosophy

The author has chose to incorporate two research philosophies in order to effectively meet the set

outcomes. Firstly, the author has employed a philosophy of positivism, in the sense that the

observance of social realities pertaining to the effects of branding on consumers in a real life

market will be conducted. The compiling of this methodology and the lengths to which this

methodology has been structures is all derivative of a positivistic research philosophy.

The author will also use a form of realistic philosophy in that the author will aim to understand

external realities in order to understand the causes of influential and behavioural characteristics in

the consumers of legally downloadable music over the Internet.

3.5 Research Approach

The author’s approach to research will essentially by inductive, in the sense that via an extensive

literary review, as well as in depth industry analysis, the author will see to understand the impact

of branding on the consumer purchase decision-making process, rather than test a pre-conceived

hypothesis.

The author did have the option to use a deductive approach in which he would test a pre-

conceived hypothesis. However, it is of the author’s opinion that this would limit the scope of

research, by focusing too much on the hypothesis and not enough on all other factors that might

influence the consumer decision-making process.

33

3.6 Execution of Strategy

.

3.6.1 Survey

The author has compiled a survey to be used to determining the effects of branding on the

consumer purchase decision-making process.

The first step was creating a survey that could adequately gage the impact of branding

specifically on the consumer decision process. Thus, the author used Kotler (1999) model of six

dimensions of meaning for a brand in order to create a survey that could reflect the various

elements of learning, perception, and attitude formation in the consumers mind.

The second step, was finding the appropriate group of individuals for the survey. For these

purposes, the author created a chain email that was sent via the www.hi5.com network. The

author chose this particular network as it contains individuals whom are frequently on the internet

and thus have access to the iTunes Music Store and the various techniques of branding used by

Apple.

The initial email was sent out to a network of over 2000 people, in which it outlines this

dissertation, as well as stipulated the requirements sought in a survey group. The requirements

were listed as follows:

“Searching for individuals who actively seek digital music online . This music can be of a legal

or illegal origin. If you meet the following requirement, please reply to this email for you chance

to take part in a study that will determine how iTunes Music Store UK has used branding to

affect YOUR purchase decision process! Do you :

! Seek and download music at least twice a month online? ! Use the Apple iTunes Music Store UK? ! NOT use the Apple iTunes Music Store UK? ! Are the bill payer of any legal purchases of music?

34

! Have 5 minutes to spare in order to contribute to a university level dissertation? If you have answered yes to all of theses questions, please reply to this email for your chance to

take part in this study”

Once the authored had received replies from fifty people who actively used iTunes UK and fifty

people who did not use iTunes UK, the survey was forwarded to them via email for completion.

35

CHAPTER 4

ANALYSIS & FINDINGS

36

4 CHAPTER 4: FINDING & ANALYSIS

4.1 Introduction

In the first three chapters of this dissertation, the author aimed to provide a solid academic

foundation on the subject of branding, its value, its many functional uses in a modern day

economy and finally, its theoretical impact on the consumer purchasing decision-making process.

This was achieved by reviewing published academic research on the subject matter and putting it

in to context by using real life examples. In order to ascertain the impact of branding on a real life

consumer market segments, the author set a research question that entailed the critical evaluation

Apple Computer’s, Inc. use of branding to influence the purchase decision-making process of

consumers in the legal music downloads industry in the United Kingdom.

This chapter is essentially structured in four parts. The first section will determine the effects of

branding on both frequent users of the iTunes music store, and non-users of the iTunes music

store UK by analyzing result from a questionnaire provided to two sample groups, iTunes UK

customers and non-users of the iTunes UK service.

The second part of this chapter will determine external industry factors affecting Apple. This will

allow the author to determine how Apple has configured their approach to branding with respects to

the above-mentioned external factors

In section three of this chapter, the author will examine the internal factors affecting Apple, in

order to determine how Apple has approach the branding process with regards their internal

capabilities and resources.

In the final section of this chapter, the author will determine how Apple’s branding process has

been affected by external and internal forces and how in turn, this has affected the consumer with

regards to his or her purchase decision-making process.

37

4.2 The Questionnaire

The following section presents the findings from the questionnaire distributed (Please refer to

Appendix 1). In the analysis, the author seeks to highlight how Apple’s means of branding has

affected both users and non-users of the iTunes UK service.

4.2.1 Respondent Profile

The first section of this questionnaire aims to ascertain the key demographic information that

makes up the respondent’s profile. The results have be divided into two groups, users and non

users of iTunes UK. The sample size of each group was caped at 50 respondents.

In the first group , which were users of iTunes, respondents were composed of 67% males,

indicating a more male orientated sample group with 45% being between the age of 21 to 30. The

dominant consumer behaviour type for iTunes users the complex buying group, closely followed

by the habitual buying group.

For the second group of non iTunes users, this sample group was predominantly female, at 58%

with the majority being between the ages of 21 to 30. The main buyer behaviour for this group

was the complex buying group, closely followed by the dissonance-reducing buying behaviour

type.

By looking at the respondents profiles from one group, one can initially conclude that there is a

slight penchant for males to favour iTunes. It is clear that the target age group is between the ages

of 21 to 30 and that both group, are mainly composed of complex buying behaviour types,

suggesting that both groups have indeed for a set of beliefs and attitudes towards iTunes, and

have chose accordingly whether to favour the brand or not.

38

4.2.2 Brand Attributes

In terms of how the perceived brand attributes affected both groups of consumers, iTunes users

strongly believed in the importance of a recognizable brand, suggesting they favourably viewed

iTunes as a brand that could satisfy their needs. 71% of respondents confirmed this by clearly

stating that the saw great importance in being associated with a famous brand.

The non-iTunes users on the other hand did also favoured being associated with a famous brand,

with 54$% of respondents claiming that being linked to a famous brand was important for them.

However, in choosing iTunes, only less than half of the respondent group, at 43%, admitted that

the iTunes brand was important to them choosing whether to use the service or not.

It becomes clear that the majority of iTunes users heavily favoured the brand before hand,

confirming dominance in complex buyer types within the group. It also become clear that

Apple’s efforts to portray their brand image as reputably as possible, clearly was a factor in

whether or not to chose the service.

4.2.3 Brand Benefits

82% of iTunes UK users felt that added functionality was important in them choosing to use

iTunes, whereas only 46% of non iTunes users found functionally important. Quality was also

much less of an issue for non users with only 21% of non users sitting that quality was an

important factor for them. The iTunes users group however found that 63% of them considered

quality to be a determining factor in the purchase decision process.

This suggests that the iTunes user base perceived the brand to have high levels of quality,

whereas non users where not particularly focused on this dimension of the product. The relatively

his percentage of users seeking out functionality and quality also suggest that Apple has placed

particular emphasis on the dimension of benefits.

39

4.2.4 Brand Values

85% of respondents felt that the iTunes brand image conveyed a sense of excellence whilst 61%

claimed to have felt more secure shopping on iTunes than on another provider. These statistics

are interesting in that they show that a strong sense of brand value has been created amongst this

sample group. If one considers the process of consumers forming beliefs, attitudes and finally

adopting the product, once can see that the brand image of iTunes has instilled a sense of security

and guarantee in quality. Both factors are conducive of brand loyalty and competitive advantage.

4.2.5 Brand Culture

86% of iTunes users found that the brand image iTunes portrayed exuded excellence compared to

a much lower 59% of non-users. What is interesting to note, is that even though the majority of

non-users think iTunes it’s a good brand, they still chose not to use it. This is perhaps partially

explained by only 19% of non users thinking that shopping on iTunes would make them safer

than anywhere else, compared to a much higher 66% positive response from iTunes users. It is

particularly clear in these two statistics that non-iTunes users have less brand culture than users.

This perhaps explains their choice of non-purchase.

4.2.6 Brand Identity

The final two questions of the survey reflected the sense of brand identity felt by iTunes UK

consumers and non-consumers. For the sample group who were iTunes users, 78%% believed

that the brand image of iTunes UK matched their own identity whilst only 39% of non-users felt

the same way. This perhaps can explain their choice of non-purchase. The questionnaire

continues to reveal that 40% of users don not care whether purchasing on iTunes is safer, leaving

only 12% on non-users stating that they would feel safer. When compared to a iTunes users, 28%

felt safer with 26% not caring.

This section of the survey was fairly indicative of the fact that the very large majority of iTunes

users felt a strong sense of personal identity in the iTunes brands, which has clearly influenced

their purchase decision. Whilst a low 39% of non-users feeling a link in terms of identity clearly

shows a correlation between perceptions of brand identify on active consumers of iTunes UK

services.

40

4.2.7 Conclusions Drawn from the Surveys

The survey conducted was clearly indicative of the importance that branding has on the consumer

purchase decision-making process. A clear majority of respondents who feel a bond between

themselves and the iTunes brand have chose to become consumers. Non-users clearly have little

emotional or personal investment in the brand and seem to not have perceived or transformed any

mental associations into desires to become consumers. One must therefore conclude that the six

dimensions of meaning of a brand has a pertinent impact on how consumers view brands.

It must also be duly noted that there exists a clear discrepancy between the consumer behaviour

types contained in each group of respondents. Although the dominant consumer behaviour type

in both groups was the complex behaviour type, which indicates that this is the dominant type for

digital music consumers, there was a higher percentage much higher percentage (27% vs 17%)

of habitual buyer types in the group of iTunes users than there was in the non iTunes users. This

is suggestive of the fact that consumer behaviour types react differently to the various dimensions

of meaning that are portrayed by products.

4.3 External Analysis of The Legal Music Downloads Industry in The United Kingdom

4.3.1 Market Overview

In 2001, it was estimated that record companies lost 4.6 billion dollars in annual revenue as a

direct result of illegal music sharing over the Internet (RIAA 2005). The widespread popularity

of illegal music downloads was largely attributed to the lack of music providers online and high

compact disk prices. Youths and elders alike flocked to the Internet in order to fill their hard

drives with illegally obtained music for their enjoyment.

Having spotted a gap in the industry, Apple Computers, Inc. launched in 2001 the iTunes Music

Store in the United States of America in an attempt to curb the circulation of pirated music on the

Internet by offering a legal source of digital music downloads. Having negotiated agreements

with key players in the music industry, such as Warner Music Group, EMI, BMG, Universal

41

Music Group, Sony Music and several other independent labels, Apple secured the rights to

distributed via the means of an online music store, an extensive catalogue of music, available to

purchase via download, at the flat rate of $0.99 per song. The launch of the iTunes music store

was coordinated with the launch of the iPod, a revolutionary new digital music player that offered

seamless integration with the iTunes music store. This combination enabled users to purchase

music online and seamlessly integrate it on to their iPod using the straightforward synching

capabilities of iTunes. This move by Apple created a new industry that would prove to raise

much controversy since its creation: The legal music downloads industry. By the 15th of June,

2004, Apple expanded its Music store to cater the UK market by opening a iTunes Music Store

UK, which provided residence of the United Kingdom with a UK billing address legal digital

music solutions. ITunes UK began offering single track downloads for £0.79 per

song.(www.apple.com)

In November of 2005, the International Federation of Phonographic Industries (www.IFPI.com)

announced that over 16.9 million single tracks have been downloaded in the first 9 months of

2005. The IFPI continues to say that the figure represents a large rise in legal music downloads,

compared the 2.7 million tracks legally downloaded during the same period of 2004. (De Freitas,

2005)

Compared to 1.1 billion downloads in 2003, this figures seems insignificant. However, several

companies in the UK, including Apple Computers, saw this in a different perspective. To them, it

was 1.1 billion possible customers. In 2005, the IFPI confirmed the viability of the legal music

downloads industry by declaring a 10% fall in illegal music downloads between 2003 and 2005

(De Freitas, 2005)

In 2005, the viability of the legal music downloads industry has been recognized by several

companies around the UK. This has sparked intense competition for market share domination and

is largely seen as a battle of the brands. In order to secure more new customers and more

importantly retain a loyal consumer database of returning customers, companies such as Apple

Computers, Napster and Tesco’s have resulted in reassessing their branding strategy in order to

influence the purchase decision-making process of consumers in this industry.

42

4.3.2 P.E.S.T.L.E. Analysis of the Digital Music Industry in the UK

In assessing the external environment that surrounds the iTunes Music Store UK, the author has

conducted a P.E.S.T.L.E. analysis in order to determine the key external factors that have a

significant influence on the current market for legally downloadable music in the UK

P.E.S.T.L.E. provides a framework from which to consider these external factors, by dividing the

analysis into key categories. These categories include political, economical, social, technological,

environmental and legal aspects.

4.3.2.1 Political

! The European Commission has been referred a case by the British Office of Fair Trade

regarding the discrepancy of pricing policies of digital music provider in the UK. Online

music providers have justified this by quoting varying prices of distribution due to the

conversion of currencies across international borders

! Despite being part of the European Union, the UK has retained its currency, the British

Pound. Political debates on whether the UK should join are rampant. Should the UK adopt the

Euro currency by joining the Euro zone, possible complications could ensue regarding the

pricing policy of digital music providers in the UK. One must consider current UK status in

the EU

! Current political hot topics, such as the war on terrorism and homegrown attacks have had a

detrimental effect on the economy. Because the purchase of musical tracks is considered a

luxury purchase, one must consider consumer spending trends in relation to disposable

income in the UK

! Increasing pressure from the US Government to root out internet piracy and ongoing

investigations being carried out have caused a consumer views on illegal music to drastically

shift since 2003

43

4.3.2.2 Economical

! The difference in currency exchange rates makes it difficult to define a single pricing policy

that would be fair to both global and UK users. This sense of unfairness can lead consumers

to seek alternatives, such as illegal files sharing over the internet

! Heavy financial losses in CD sales have forced Record Companies to embrace to arrival of

legal online music distributors. Because there now exists a necessity to establish some form

of online distribution of music, record companies will be more willing to negotiate

distribution rights with legal online music providers

! Unchanging interest rates in the UK allow record companies to more readily offer price cuts

to online music distributors. This will enable providers to offer a wider catalogue of musical

content in order to reach a wider segment of music lovers in the UK

! The financial risk of being sued over Internet piracy is conductive to consumers choosing

legal music providers as an alternative to Internet file sharing

4.3.2.3 Social

! A noticeable change in consumer lifestyle dictates that more shopping is being performed at

home. Therefore, an increase in online music sales has become noticeable in both the UK and

international markets

! An aging population in the United Kingdom is having a wide effect on the types of music in

demand in the music industry in the United Kingdom.

! As digital equipment is becoming more embedded in the average consumer’s lifestyle, the

demand for easy access to online distributors of music is increasing

44

4.3.2.4 Technological

! Technological developments in Internet connections available in the United Kingdom and the

wider availability of high speed Internet access is enabling more people to connect to online

music retailers

! Growing sales of portable digital music players are making more consumers seek out higher

quality music downloads and other forms of digital suppliers

! The increasing levels of technological knowledge amongst consumers are raising the standard

in music quality sought by the seekers of digital music. As expertise in the area of online

music progresses, consumers are becoming more demanding.

! An increase in the amount of viruses that are rampant on the internet are dissuading users

from downloading pirated music and favoring the use of legal and trustworthy suppliers of

digital music

! The increasing trend of Internet connection providers to limit the amount of information that

can be downloaded over a given period of time over users internet connections are limiting

the capabilities of consumers to download the desired amount of music

4.3.2.5 Legal

! Increasing court cases regarding the piracy of digital music are forcing consumers to seek

new methods of acquiring music online. Namely, through the channels of online music

providers. With increasing court cases appearing in France, Switzerland, Germany, the UK

and Finland, these scare tactics have essentially contributed to the reducing internet piracy by

nearly ten percent

! Antitrust laws in the United Kingdom limit the opportunity for companies to merge in order

to provide fuller and more divers catalogues of music.

45

! Increasing knowledge of copyright law amongst consumers are pushing consumers to seek

more ethical way to procure copyrighted materials such as music

4.3.2.6 Environmental

! Increasing concern about the environment is pushing consumers to seeking more digital

alternatives to commonly consumed products, such as music.

! With a rise in ecological awareness, consumers are displaying increased loyalty to companies

who are implementing efficient environmental polices regarding the production and

distribution of their products.

4.3.3 Porter’s 5 Forces

Porter (1985) states that their exists five forces in any industry that drive competition. These

forces include competitive rivalry, threat of new entrants, threat of substitute products, bargaining

power of suppliers and bargaining power of buyers. In creating the five forces model, he allows

one to outline the competition. The author has used this model bellow to determine the extent and

threat of competition in the legal music downloads industry

46

Source: Adapted from M.E. Porter, Johnson et al (2005), Exploring Corporate Strategy, Prentice Hall, ed 7:

Competitive Rivalry

(High)

• High levels of competition

in the UK, including Napster, MSN Music, HMV, and Tesco’s.

• Retailer of hard copy music,

including Amazon.com, Tesco’s, HMV, Virgin Mega Store

Threat of New Entrants

(Low-Medium) • Increasing agreements

between providers of musical content are creating more competition

• Record Companies might

mobilize to set up their own online music stores

Bargaining Power of

Buyers

(High)

• Music is available free on the internet, although illegal

• Highly Competitive rivalry offers choice and lower prices

Bargaining Power of

Suppliers

(Low to Medium)

• For the moment, Record Companies have no choice but to help online music providers due to internet piracy

• Record Companies

could collude to ask for higher royalties

Threats of Substitute Products

(High)

• Free but ILEGAL Pirated Music

• High Street Music Stores

47

4.3.3.1 Threat of New Entrants

Increasing pressure from record companies on online distributors of music have spawned

rumours of that record companies will soon chose to no longer provide online distributors with

content. Should this happen, records companies could merge together in order to create their own

source of distribution for online music. Antitrust laws would most likely prevent such a

monopoly from forming, however the law would not prevent trade agreements to be formed by

record companies, a system of royalties payments could be established.

Another factor that should be considered is increasing agreements between companies that are

seeking to break into the industry are being formed. With companies such as Virgin and HMV

are forming partnerships that could lead to price war which would result in the survival on the

fittest.

4.3.3.2 Threats of Substitute Products

The most competitive substitute to legal music is illegally pirated shared files that can be trade

via file sharing servers over the Internet. This substitute is currently more popular that legal

music and is costing the music industry an estimated 4.6 billion dollars a year.

Other competitors are high street music stores that sell CDs and music DVDs. Competitors such

as Virgin, HMV, WHSmith and Tesco’s provide users with an alternative to digital music: a

tangible hardcopy in the form of a CD. This threat is relatively low however, as the proliferation

of free pirated music has caused immense financial troubles in this industry.

48

4.3.3.3 Bargaining Power of Buyers

Buyers bargaining power is high. This can be justified by the fact that music can be obtained free

of charge over the internet. Coupled with the fact that there now exists a multitude of online

providers, buyers have the choice and freedom to freely chose amongst the multitude of

companies that offer the same products at cheaper prices. Therefore, companies are now heavily

depending on branding and other forms of promotion to desensitize consumer from price and

attempt to create loyalty based on advanced functionality and a more extensive selection of hard

to find music tracks.

4.3.3.4 Bargaining Power of Suppliers

This threat is low to medium. Record companies are forced to embrace the arrival of legal

retailers of digital music, as it is currently the only alternative to illegal music downloads. For the

moment, record companies will seek to expand agreements with legal music providers such as

iTunes or Napster in order to increase revenue of music sales as this source of income is

becoming increasingly difficult to maintain with the existence of music piracy.

4.3.4 Listing of Opportunities and Threats

In this section, the author aims to provide a listing of external opportunities and threats relevant

in the legal music downloads industry

4.3.4.1 Opportunities

! Consumers are more willing to explore alternatives to illegal music downloading in search for

better quality musical recordings as their understanding of the varying qualities of digital

recording increase

49

! Record companies are more willing to establish working relationships with online music

providers in order to further music sales as internet piracy takes its toll on the industry. At the

moment, online legal music stores provides the sole means for which record companies can

efficiently provide music to internet users

! Increasing access to the internet in the United Kingdom provides consumers with more

opportunities to download music

! Increasing technological awareness is pushing internet users to seek more functionality out of

their browsing experience. Online music retailers can provide consumers with more options

in regards to music consumption than illegal providers can. Such functionality can be seen in

users reviews of music, the creation of online playlists or the option to give music as a gift by

purchasing gift vouchers redeemable at online stores

! Increases in viral infections of computers are forcing consumers to seek safer sites on which

to download music. Current providers of illegal downloadable music cannot guarantee the

privacy nor the technological safety of the user

! Current market trends show consumers are more willing to purchase digital music as it is

easier to store than CDs and cheaper to acquire in the long run, as online providers allow the

purchase on single tracks as opposed to then entire album

! Increasing pressure from the United States of America are resulting in the conviction of users

of pirated music. This is having an effect of dissuading the average user from downloading

illegal music as the consequences now involve jail time

! The success of digital music players are creating a higher demand for digital music, as

consumers seek to fill their players with desired musical tracks. With the advent of the iPod,

digital music as now become of sought after fashionable accessory

50

! An increase in consumers shopping from home suggest there now exists a wider market to

market legally downloadable music. More users are investing in high speed internet access

which is facilitating the process of seeking music

! Higher levels of digital integration now exist. For the average consumer, this means that he or

she can more easily incorporate digital music into his or her lifestyle by either containing it in

a portable music player, a computer or a telephone

! Increasing endorsements from celebrity musicians fearing that their copyrighted material will

be pirated are facilitating the branding process, making both digital providers of music and

the digital music tracks themselves more attractive to the consume

! Globalization is reducing the geographical boundaries of musical tastes, resulting in more

consumers seeking a wider variety of music to be purchased. Due to the high cost of

distributing all musical materials internationally, legal digital music downloads would

provide a cost efficient way of satisfying the evolving musical tastes of modern consumers

4.3.4.2 Threats

! Record companies are becoming increasingly frustrated with online music store policies.

These companies may seek to create their own online music store in an effort to raise revenue

and cut distributor fees

! The illegal music download industry currently represented an estimated 1.1 billion downloads

in 1993. Although it slightly decreased to 900 million downloads in 2005, it still represents

the majority of all music downloads on the Internet. Being free, illegal music is highly

attractive to the average consumer. Therefore the only means of competitive differentiation of

legal providers, rests in the effective branding of their offerings, added functionality and

security. Unfortunately, these are factors that are readily looked over by most consumers of

digital music

51

! A current lack of payment options dissuades many consumers from purchasing legal music

online. Seeing as the majority of downloaders are younger customers who have limited

methods of payment

! An increasing trend of Internet services providers to limit the amount of information that can

effectively be downloaded during a set timeframe limits the ability of consumers to download

the desired amount of music. This in turn, limits the potential amount of sales that can be

experienced by legal providers of digital music

! Most digital music players have no restrictions on the type of music files that it can play.

Therefore, the average consumer can still easily play either legal or illegal music on them.

This incites consumers to use legal providers of music in a limited capacity, as the will use

illegal providers for the bulk of their needs, and legal providers in the rare instances when

they cannot find the desired music

4.4 Internal Analysis of Apple Computer’s iTunes Music Store

4.4.1 ITunes Music Store UK Company Overview

The iTunes Music Store UK is currently the industry leader in legal music downloads. Offering a

range of over 1.5 million music tracks, iTunes commands a 80% market share in the United

Kingdom. Designed to be used with the iPod, the iTunes music store offers seamless integration

for users seeking to purchase and store music on their computer or digital music player, share

recommended mixed tape style playlists online or offer the gift of music via the purchase of

online virtual girft vouchers. Launched in 2001, iTunes Music Store UK was the first in a series

of European iTunes music stores to offer a legal alternative to pirated music on the Internet and is

said to have pioneered the industry for legally downloadable music.

52

4.4.2 ITunes UK’s Strategic Capabilities and Competitive Advantage Model

In order to determine iTunes UK’s key strategic capabilities and sources of competitive

advantage, the author will us the strategic Capabilities and Competitive Advantage model

(Johnson, 2005). This will enable the reader to gain a clear understanding of how iTunes UK

compares to competitors in the market place and its key components that allows it to experience

competitive advantage

Resources Competences

Threshold

capabilities

! Online catalogue of over 1.5 million

downloadable track

! Easy to use interface

! Seamless Integration with iPod and

personal computer

! Instant Download Capabilities

! Owns songs rather than lease

! Leading development team

! Perceived as a fashionable brand

! Music catalogue expands on a

daily basis

! Offers exclusive pre-release

downloads

! Offers celebrity endorsed mixed

tape style playlists

! Offers access to a library of local

artists as well as international

! Employs a stringent flat fee policy

of £ 0.79 per song

! Allows the download of individual

tracks

53

Capabilities

for

Competitive

Advantage

! Comprehensive agreement with key

record companies

! CEO Steve Jobs is an integral part of

the company

! Excellent Brand image

! Loyal Customer Base

! Agreement with television studios

for future sales of TV shows and

music videos

! Guarantees high quality

downloads

! Ensures user privacy

! Formed high levels of consumer

loyalty

! Has 80% market share

! State of the art search engine

enabling consumers to find tracks

easily

Source: Adapted from Johnson et al (2005), Exploring Corporate Strategy, Prentice Hall, ed 7

4.4.3 Resource Audit

4.4.3.1 Physical Resources

! The iTunes Music Store UK specializes in the sales of intangible music tracks via and

intangible online music store. Thus, has no physical resources

4.4.3.2 Financial Resources

! Apple Computer’s financial resources are at the iTunes Music Store UK’s disposition

! Pepsi Cola “Song for a Pepsi” scheme

4.4.3.3 Human Resources

! Steve Jobs, CEO of Apple Computers

! Celebrity Endorsers

54

4.4.3.4 Intangible Resources

! The iTunes Online Store

! Extensive catalogue of Music

! Loyal consumer database

! Effective Brand Image

! Support of various donation funds, such as the Hurricane Katarina fund

! Access to exclusive content

! Excellent working relationship with Record Companies

! IPod integration

! Access to music videos and TV shows

! Extensive search engine allows users to find music easily

! User rating system

4.4.4 Strengths and Weaknesses

4.4.4.1 Strengths

! Allows users to own music as opposed to leasing it. Most competitors offer a monthly

subscription with access to a limited catalogue

! The iTunes Music Sore UK’s content is updated daily

! ITunes UK has achieved contractual agreements with record companies in order to secure

content

! Offers a straightforward pricing policy of £0.79 per song

! Allows users to download single tracks as opposed to the whole album

! Offers exclusive content

55

! Enables users to create custom profiles in order to facilitate finding music that is relevant to

personal tastes

! Offers state of the art search engine that allows users to easily find the requested music

! The iTunes music store has a strong brand image that communicates the strong identities

formed by Apple Computers

! Offers the possibility of purchasing gift certificates that are redeemable online

! Access to specialized visual content such as music videos and television shows

! Offers educational discounts

4.4.4.2 Weaknesses

! Tracks cost £0.79 to purchase as opposed to being free illegally

! Tracks only playable on iPods, thus offer little compatibility

! Offers little live customer support, although help is available via email. However this process

can be time consuming

! Does not provide a customer log, in the event that the customer accidentally deletes of loses

his purchased tracks

! Content is restricted by geographical location

Limited methods of payment can be restrictive towards younger customers

56

CHAPTER 5

CONCLUSIONS & RECOMMENDATIONS

57

5 Conclusions and Recommendations

5.1 Recommendations

Following the analysis of this dissertation, the author has determined the impact of branding on

several aspects of the consumer decision-making process. In lights of the conclusions drawn, the

author can now make the following pertinent recommendations.

! The process of branding has proven to have a large impact on the consumer decision-making

process. However, in order to be most effective, it is recommended to ensure that the

branding strategies are targeted at specific consumer behavior types, as the complex behavior

type, dissonance-reducing buying behavior types, habitual buying behavior type and variety-

seeking behavior type all react independently and differently to various modes of branding

stimuli. The author as shown that this was reflected in the primary research conducted.

! In light of the previous point, the author recommends further research into the variations

discovered between consumer behavior types. This would be essential in determining which

consumer behavior types react most productively to which branding strategies. The results

could be used by iTunes Music Store to create more meaningful promotional activities that

would positively affect the learning, perceiving and habit forming aspect of the consumer

decision-making process.

! The author further recommends to Apple Computers, Inc. to conduct regular surveys

pertaining to consumer behavior, in order to ascertain the effectiveness of the branding

strategies over established periods of time. As it has been shown, stimuli can lose its effect if

purchasing activities are not followed shortly after the stimuli has been experienced

! The iTunes music store is clearly branded to reflect brand benefits, brand values and brand

identity. However this is not reaching consumer who show little interests in such meanings

and are more concerned with price. It is the recommendation of the author that iTunes lower

online prices to reflect the popularity of individual songs rather that maintain a flat price

58

policy, in order to incite users of illegally obtained music to seek alternatives to pirated

music. This would allow for an expansion of the iTunes consumer database as well as widen

the appeal of its brand image, by maintaining reassuringly moderate prices for those

consumer types interested in importance of a reputable brand image.

5.2 Conclusions

The purposes of this dissertation was to establish the impact branding has on the consumer

purchase decision making-process, as well as determine how Apple Computers, Inc, via the

techniques of branding, affect the consumer purchase decision-making process of consumers of

legally downloadable music.

It has been found that there is indeed a correlation between the effects of branding and the

consumer purchase decision-making process. It is apparent in how branding influences the

process of learning, the creation of beliefs and the formation of attitudes in various types of

consumer purchasing behaviour.

However, it must be noted that is also evidence to suggest that the four different types of

consumer purchasing behaviour, namely the complex behaviour type, dissonance-reducing

buying behaviour types, habitual buying behaviour type and variety-seeking behaviour type, all

exhibited different reaction to branding stimuli. Therefore, one can conclude that it is essential

that marketers individualise the branding process in regards to these four types of consumer

behaviour in order to achieve maximum efficiency.

In terms of how Apple’s iTunes Music Store uses branding to influence its consumers purchase

decision-making process, it has been found that Apple has chosen to focus on the meanings

exhibited by brand benefits, brand values and brand identity. They have achieved this by

extending the already existing brand image of Apple Computers and the ensuing brand image of

the iPod, to the iTunes Music Store. This has effectively lead to the domination of the UK market

for digital music. However, the author must question the sustainability of such branding, as its

link to Apple computers does not satisfy in any long term way, the needs and wants of the

59

consumer of digital music exclusively. It does satisfy however, the Apple Computers and related

products friendly consumer of digital music.

This exclusion of Apple unfriendly music consumers has lead to iTunes forming an iPod

exclusive customer base. Seeing as the iPod is also the dominant digital music player in the

industry, this has extended to the dominating iTunes market share. However, with the advent of

new digital music players as well as the emergence of new online music providers, this strategy

will have long-term sustainability.

Thus, the author has concluded that it is essential to the long-term health of Apple Computers to

segregate its iTunes brand image and Apple Computers brand image in order to widen the appeal

of their brand identity to meet the needs, wants and expectations of not only the non-iTunes user

group who participated in the primary research of this dissertation, but the rest of the consumer

market segment of legally downloadable digital music.

60

CHAPTER 6

BIBLIOGRAPHY

61

.

BOOKS

Aaker, D. (1991) Managing brand equity: capitalizing on the value of a brand name, New York:

Free Press.

Aaker, D. (1996) Building strong brands, London: The Free Press.

Adcock, D. et al. (1998) Marketing Principles and Practice, London: Pitman Publishing.

Assael, H. (1993) Marketing principles and strategy, New York: The Dryden Press.

Assael, H. (1998) Consumer behaviour and marketing action, 8th Edition, Boston: Kent

Publishing Company.

Baker, M. (2000) The marketing book, 4th Edition, Oxford: Butterworth-Heinemann.

Bandura, A. (1977) Social learning theory, US: Prentice Hall.

Cowley, D. (1996) Understand brands, London: Kogan Page.

East, R. (1997) Consumer behaviour: Advances and applications in Marketing, London: Prentice

Hall.

Foxall, G. (1980) Consumer behaviour – A practical guide, Guildford: Biddles Ltd.

Foxall, G. and Goldsmith, R. (1994) Consumer psychology for marketing, London: Routledge.

Hankinson, G. and Cowking, P. (1993) Branding in action, Maidenhead: McGraw-Hill.

62

Hamel, G. and Prahalad, C. (1994) Competing for the Future, Massachusetts: Harvard Business

School Press Boston.

Howard, J and Sheth, J. (1969) The theory of buyer behaviour, New York: John Wiley.

Johnson G & Scholes K. (2002). Exploring Corporate Strategy, London:Prentice Hall

Kapferer, J. (1995) Strategic brand management, London: Kogan Page.

Keller, K. (1998) Strategic brand management, New Jersey: Prentice Hall.

Kotler, P. et al. (1999) Principles of Marketing, 2nd Edition, Europe: Prentice Hall.

Kotler, P. (1997) Marketing Management: Analysis planning and implementation, US: Prentice

Hall.

Kotler, P. (2000) Marketing management, Millennium Edition, US: Prentice Hall.

Kotler, P. and Cox, K. (1980) Marketing management and strategy, US: Prentice Hall.

Murphy, J. (1992) Branding a key marketing tool, London: Macmillan Press.

Porter, M. (1980) Competitive Strategy, London: Macmillan Press.

Vecchio, R. (1991) Organisational behaviour, 2nd Edition, US: The Dryden Press.

63

Journals

Alreck, P. and Settle, R. (1999) Strategies for building consumer brand preference, Journal of

Product and Brand Management, Vol. 8 Issue 2, pp.130-144.

Carpernter, G. and Nakamopto, K. (1989) Consumer preference formation and pioneering

advantage, Journal of Marketing Research, Vol. 26, pp.285-298.

Carpernter, G. and Nakamopto, K. (1996) Impact of consumer preference formation on

marketing objectives and competitive second mover strategies, Journal of Consumer Psychology,

Vol. 5 Issue 4, pp.325-358.

Chay, R. (1991) How marketing researchers can harness the power of brand equity, Marketing

Research, Vol. 3 Issue 2, pp.30-37.

Chevron, J. (1998) The Delphi process: A strategic branding methodology, Journal of Consumer

Marketing, Vol. 15 Issue 3, pp.254-264.

Cheratony, L. (1989) Understanding consumers’ perception of competitive tiers, Journal of

Marketing Management, Vol. 4 Issue 3, pp.12-19.

Cheratony, L. (1993) Marketers and consumer concurring perceptions of market structure

European, Journal of Marketing, Vol. 23 Issue 1, pp.156-157.

Conoway, F. (1994) The mature consumer, Discount merchandiser, Vol. 34 Issue 5, pp.150-153.

Dodds, B. (1991) Effect of price, brand and store information on buyers product evaluations,

Journal of marketing Research, Vol. 26, pp.307-319.

64

Diaz de Rada, V. (1998) A simple consumer or different types of consumer: An analysis of

social types according to their consumer habits, British Food Journal, Vol. 100 issue 7, pp.326-

336.

Dun, G. (1997) Brand management, Harvard Business Review, Vol. 75 Issue 2, pp.9-11.

Erdem, T. (1998) An empirical analysis of umbrella branding, Journal of Marketing Research,

Vol. 35 Issue 3, pp.339-351.

Graham, J. (2001) If there’s no brand, there’s no business, Canadian Manager, Vol. 26 Issue 1,

pp.25-27.

King, S (1991), Brand Building in the 1900’s, Journal of Marketing Management, Vol.9, pp3-13

King, S (1989) Brands on the Balance Sheet, The Economist, March

Levitt, T. (1983) The globalization of markets, Harvard Business Review, May/June, pp.23-26.

Meenaghan, T. (1995) The role of advertising in brand image development, Journal of Brand

and Product Management, Vol. 4 Issue 4, pp.23-24.

Muehling, D. and Laczniak, R. (1991) The moderating effects of ad message involvement: A

reassessment, Journal of Advertising, Vol. 20 Issue 2, pp.29-38.

Muehling, D., Stoltman, J. and Mishra, S. (1989) An Examination of the cognitive antecedents

of attitude-toward-the-ad, Current Issues & Research in Advertising, Vol. 12 Issue 1, pp.95-118.

Quester, P. and Smart, J. (1998) The influence of consumption situation and product

involvement over consumers' use of product attribute, Journal of Consumer Marketing, Vol. 15

Issue 3, pp.220-229.

65

Thakor, M. and Kohli, C. (1996) Brand origin: Conceptualization and review, Journal of

Consumer Marketing, Vol. 13 issue 3, pp.27-32.

Websites

www.apple.com

www.google.com www.hi5.com www.ifpi.com

www.riaa.com

www.wikipedia.com

Web-Based Magazines

Bajarin, T (2005) Redefining Computer Retail, TechoPundits, March

De Freitas, V (2005) Legal Music Downloads Take Off, Webuser, November

Haddad, C (2003) How Apple Spells Future: I-P-O-D, BusinessWeekOnline, Jully

Thurrott, P (2004) With iPod Success, Apple Takes "Network Effect" from Microsoft, Paul

Thurrott;s Wininfo, November

66

Appendix A

SURVEY

1. Gender

a) Male 67%

b) Female 33%

2. Age Group

a) Under 20 15%

b) 21 to 30 45%

c) 31 to 40 25%

d) 41 & above 15%

3. Select you buying behavior (Refer to Page 2)

a) Complex Buying Behavior 31%

b) Dissonance-Reducing Buying behavior 23%

c) Habitual Buying Behavior 27%

d) Variety-Seeking Buying Behavior 19%

4. When deciding wether or not to choose iTunes

UK, was it important to you that it have a reputa-

ble brand name?

a) Yes 69%

b) No 31%

5. Would you say that being associated to a famous

brand is important to you?

a) Yes 71%

b) No 29%

6. Where functional features important to you when

deciding to purchase on iTunes UK?

a) Yes 82%

b) No 18%

7. Was the audio quality of the music being better

than substitutes a deciding factor in you choos-

ing to purchase on iTunes UK?

a) Yes 63%

b) No 37%

8. Do you think the iTunes UK brand image conveys

excellence in terms of quality ?

a) Yes 86%

b) No 14%

9. Would purchasing music on iTunes UK give you

an element of comfort, as opposed to purchas-

ing music elsewhere online?

a) Yes 66%

b) No 34%

10. When choosing wether to use iTunes for the first

time, did you consider any previous information

you had heard about iTunes UK?

a) Yes 97%

b) No 3%

11. Do you perceive the iTunes UK brand image to

match your own identity?

a) Yes 78%

b) No 22%

12. Would purchasing music at the iTunes Music

Store UK make you feel more distinguished as

person than if you were to purchase or download

music elsewhere ?

a) I think I would trust iTunes more 28%

b) There are a lot of safe place to buy music online.

iTunes is not the only one 42%

c) I dont trust iTunes. 4%

d) I could not care less 26%

THANK YOU FOR YOU TIME. TO SEE THE

RESULTS OF THIS SURVEY, PLEASE VISIT

WWW.JUSTLOOKINGPICTURES.COM

page 1 of 2Survey for iTunes Users

COMPLEX BUYING BEHAVIOR

When choosing a product, you firstly begin to have certain beliefs about it. You then form specific

attitudes towards it and then, maybe purchase it

DISSONANCE-REDUCING BUYING BEHAVIOR

You spend a lot of time researching different products online or in stores. You will most likely be at-

tracted to expensive products, because they usually are more functional or of better quality. You will

buy the product first and form your attitudes to it later.

HABITUAL BUYING BEHAVIOR

You dont really shop around a lot, nor do you extensively research online or in stores products that

you are interested in. You usually just stick to your brand you know, cause you always read or hear

about them. So you assume they must be good.

VARIETY-SEEKING BUYING BEHAVIOR

You switch between brands ALL THE TIME. Nothing makes you happier than trying something

new.

page 2 of 2Survey for iTunes Users

1. Gender

a) Male 58%

b) Female 42%

2. Age Group

a) Under 20 19%

b) 21 to 30 41%

c) 31 to 40 17%

d) 41 & above 23%

3. Select you buying behavior (Refer to Page 2)

a) Complex Buying Behavior 35%

b) Dissonance-Reducing Buying behavior 27%

c) Habitual Buying Behavior 17%

d) Variety-Seeking Buying Behavior 21%

4. When deciding wether or not to choose iTunes

UK, was it important to you that it have a reputa-

ble brand name?

a) Yes 43%

b) No 57%

5. Would you say that being associated to a famous

brand is important to you?

a) Yes 62%

b) No 38%

6. Where functional features important to you when

deciding to purchase on iTunes UK?

a) Yes 46%

b) No 54%

7. Was the audio quality of the music being better

than substitutes a deciding factor in you choos-

ing to purchase on iTunes UK?

a) Yes 21%

b) No 79%

8. Do you think the iTunes UK brand image conveys

excellence in terms of quality ?

a) Yes 59%

b) No 41%

9. Would purchasing music on iTunes UK give you

an element of comfort, as opposed to purchas-

ing music elsewhere online?

a) Yes 19%

b) No 81%

10. When choosing wether to use iTunes for the first

time, did you consider any previous information

you had heard about iTunes UK?

a) Yes 74%

b) No 26%

11. Do you perceive the iTunes UK brand image to

match your own identity?

a) Yes 39%

b) No 61%

12. Would purchasing music at the iTunes Music

Store UK make you feel more distinguished as

person than if you were to purchase or download

music elsewhere ?

a) I think I would trust iTunes more 12%

b) There are a lot of safe place to buy music online.

iTunes is not the only one 46%

c) I dont trust iTunes. 2%

d) I could not care less 40%

THANK YOU FOR YOU TIME. TO SEE THE

RESULTS OF THIS SURVEY, PLEASE VISIT

WWW.JUSTLOOKINGPICTURES.COM

page 1 of 2Survey for NON iTunes Users

COMPLEX BUYING BEHAVIOR

When choosing a product, you firstly begin to have certain beliefs about it. You then form specific

attitudes towards it and then, maybe purchase it

DISSONANCE-REDUCING BUYING BEHAVIOR

You spend a lot of time researching different products online or in stores. You will most likely be at-

tracted to expensive products, because they usually are more functional or of better quality. You will

buy the product first and form your attitudes to it later.

HABITUAL BUYING BEHAVIOR

You dont really shop around a lot, nor do you extensively research online or in stores products that

you are interested in. You usually just stick to your brand you know, cause you always read or hear

about them. So you assume they must be good.

VARIETY-SEEKING BUYING BEHAVIOR

You switch between brands ALL THE TIME. Nothing makes you happier than trying something

new.

page 2 of 2Survey for NON iTunes Users