ABSTRACT
In this study, we explore how the entrance of new international brands affects market dynamics in a market where national, international and private brands are present. The entire focus of the present research is to understand the phenomena of consumer choice and preference in the backdrop of ozoro polytechnic’s female students. We model consumer choice in the context of these different categories of brands by using a multinomial discrete choice model. The estimated model provides us with several diagnostic findings of managerial interest especially with respect to what kinds of hair relaxer product attributes differentially affect choice probabilities of different categories of brands – the international, the national and the private.
CHAPTER ONE
INTRODUCTION
In growing economies especially for common frequently purchased hair relaxer products, the market often contains both private and national brands. A private brand is likely to come from a small local manufacturer or a local retail chain. A national brand on the other hand, is also a domestic brand but is a much larger player in the country, and typically spends substantially more on marketing expenses than a private brand. As the economy continues to emerge and consumers prosper along with that, the market now becomes attractive to global companies who often possess in their product lines, brands of international repute; such a brand if present in an emerging market can be viewed as an international brand. In the current research we use a choice modelling approach to empirically examine the very interesting dynamics between the categories of international brands, national brands and private brands.
Firms are increasingly expanding globally as they realize that this is a significant source for potential sales and profits growth. For instance, the share of global trade has increased significantly over the recent past at 6 per cent annually between 1990 and 2008 compared with a 3.1 per cent growth in world, indicating the importance of such activity to firms.
The increased activity of firms in the global arena has created a challenge for international marketers as they need to compete against local products in diverse consumer markets and segments. Specifically, once introduced into a new country, an international brand needs to be positioned against local operating brands. The task of identifying appropriate brand positioning strategies, is a complex one as it involves different local brands that, in some cases, have never been considered as competitors by the company marketing the international brand. Furthermore, female students in ozoro polytechnic are likely to significantly vary in their preferences and perceptions compared with those in the home country market of the international brand. Among other things, variations in the cultural backgrounds of consumers in different countries might have a significant impact on their preferences for international and local brands.
The increased popularity of global brands, and the relatively similar big city customer profiles across countries (Quelch, 1999) are having an effect on the way marketers view the attractiveness of international hair relaxer. If marketed well overseas, such brands can not only be revenue generators in the short run, but also have the potential to avail of at least some economies of scale across countries in the long run. The key to marketing well of course is to be able to compete well with others including existing local brands such as national and private brands.
A typical market is characterized by the presence of many different kinds of brands Consumers have to make their own judgments about the properties of these brands before making a choice. In consumer markets, the origin of the brand often provides cues that help female students in their choice-making process. One way to identify brand origins, for example, is to check whether it is a manufacturer brand or a private label brand. Academic researchers are increasingly studying the dynamics of these two kinds of brands on actual choice (for example, Sethuraman, 1996). In advanced countries, these two types of brands are major players, and research has brought out interesting insights into how consumers react to them.
In other countries, which have been more recently exposed to international marketing, the situation is actually more complex. The presence of international brands, their own national brands and their own private brands often characterize such markets. Consumer perceptions and preferences with respect to this interesting mix of brand categories, have received little attention in the academic research literature.
Exploring of current brand positioning and preference in such countries where introduction of international brands occurred in the relatively recent past, might be a good approach for getting more insights into the dynamics of international brands. In other words, such countries present an opportunity for academic researchers to examine how the market changes after some years have elapsed since the introduction of such international brands. It would also provide a base to forecast market dynamics in new similar markets.
The literature has mainly focused on category competition between local brands (that is, between national and private brands). There is relatively little research, however, that explores the driving forces behind brand preferences for international brands in international markets in the backdrop of consumers’ choice between international and domestic brands. Issues such as identification of the salient product characteristic-types that drive brand preference and choice, and variations in such saliencies and effects in the presence of consumer segment heterogeneity, have not been fully addressed. The purpose of this study, therefore, is to fill this void in the literature by analyzing the preference for hair relaxer by female students between the categories of international, national and private brands.
In the present research, we use data from the school saloon to examine this scenario. In the school environment, the sequence of brand introductions was the following: First came national brands, then private labels and more recently, international brands. It is logical to expect that female students would react differently to the positioning of these brand classes. Their perceptions of the brands’ positionings should also affect consumer choice patterns. This article explores these aspects.
The characteristics of international brands have been discussed by Quelch, 1999. Similarly, Nandan and Dickinson, 1994 have outlined the properties of private brands. Of course, there is no dearth of articles on national manufacturer brands. However, there is very little research on how consumer choice is affected by the unique qualities of these different brand categories in an emerging market. Here, we try to fill this gap in the literature.
In order to study this problem, we use a choice modelling approach, employing the multinomial logit model. We use the choice model to uncover salient attributes that are involved in female students’ choice decisions. Estimation of the model provides interesting insights into how different product attributes drive choices often differently for different categories of brands. Such diagnostics lead to useful managerial implications. We also use a preference regression approach to uncover the preference drivers for the three different categories of brands.
In the next section of the article, we provide a background of our research and draw on the literature to develop some theory and a set of hypotheses. The following section contains a description of our model and the data used to estimate the model. Next, we report the results of our empirical analysis. We end the article by summarizing our findings and highlighting the managerial implications.
1.2 BACKGROUND
In the marketing literature, there has been extensive investigation of national brands and the emergence of private brands and generics (Blattberg & Wisniewski, 1989; Mulhern & Leone, 1991; Blattberg et al, 1995; Sethuraman, 1996). These studies were mainly concerned with promotional schemes, price differentials and so on. In addition researchers have investigated female students’ perceptions of national, private and generic brands to better understand the differences and similarities between them (Bellizzi et al, 1981; Wilkes and Valencia, 1985; Nandan and Dickinson, 1994; Prendergast and Marr (1997)). Using this type of information, some authors have suggested marketing strategies for these types of hair relazer brands. However, relatively little work has been done on what drives female students’ preferences and choices toward such hair relaser brands; in particular the issue of how product attributes affect consumers’ preferences less explored.
The introduction of new international brands in such an environment needs to be sensitive to cultural differences among consumers in a foreign emerging market. For example, consumers might have different attitudes with respect to the brands’ country of origin. In our research we pay special attention to this issue.
In our study, we model consumers’ perceptions about product attributes in order to be able to provide insights into the question of how product attributes affect consumers’ preferences for different brand types. Specifically, we consider the case of the categories of international, national and private brands.
In order to depict the setting of an evolving market environment, we consider the school environment that experienced a process of deregulation and international brands’ introduction relatively recently, and can be used as an approximation to the expected behaviour of other markets that may go through this process in the future. In the school environment major structural changes and reforms in the economy occurred to increase the level of competitiveness in consumer markets. Additional TV channels were added, thus greatly increasing consumers’ exposures to TV commercials in general, and to international brands in particular. Until then, there were only a few TV channels that did not have too many commercials. These types of de-regulations simultaneously increased female students’ awareness of international brands and affected their choice dynamics.
In different foreign markets, there are many cultural differences among consumers that can influence the success of international brand introduction in these countries. Although marketers consider these differences, they are not fully explored (Roth, 1995). There is a thought that the broad main core attributes of brands can be kept across countries, and their execution can be adapted to local tastes (De Chernatony et al, 1995). Standardization and adaptation approaches should consider potential differences in preferences and attitudes toward local products.
Concentrating on the Israeli market enables us also to explore types of cultural differences among consumers that can be found in other markets, too, in terms of the level of importance of buying local products. Long ago, it had been advocated and promoted in Israel that buying is a ‘good’ thing to do. Even recently the ministry of industry and trade had launched a campaign that advocated the buying of local products (Chen, 2009). Along with an increased demand for local products, this act also alleviated some of the potential pressures to allow for the importing of foreign products. On the basis of this background, we believe that consumers will have quite a different perceptual perspective of the three brand types. We expect choice and preference differences between the low importance of buying local products segment and the high importance segment.
1.2 STATEMENT OF PROBLEM
Hair relaxer, otherwise known as hair straightener, is used on hair that is naturally curly or wavy in order to attain a straighter, sleeker look. Care of using wrong hair relaxer .Hair relaxers are used by millions of black women, wrong hair relaxer possibly exposing them to various chemicals through scalp lesions and burns.
1.3 PURPOSE OF THE STUDY
- To find out the actual thing that determines female students choice of hair relaxer.
- Identify the kinds of hair relaxer in the market.
- It is to know the history of hair relaxer.
- It is to show and teach female students what makes relaxer good.
1.4 RESEARCH QUESTION
- how do I make preference on hair relaxer?
- Does female student use any type of hair relaxer they sales in the school environment?
- What are the qualities of good hair relaxer?
1.5 SIGNIFICANCE OF THE STUDY
All research works are aimed at finding solution to already existing problem. This study will help female students in making preference of hair relaxer in order to prevent damage and burns to the skin and scalp, it is strongly recommended that this process be performed by a professional with a prior record of straightening experience. However, this study will help to identify other areas of research interest.
1.6 SCOPE OF THE STUDY
Many producers of hair relaxer have been written or saying a lot thing concerning about their product in order to promote their product and increase their market. But this study is limited to ozoro polytechnic.
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